Hi, everybody. Good afternoon. Welcome to power lunch. Im Tyler Mathisen. Stocks were rallying big earlier. But were now well off session highs. The dow had been up 162 points. And had wiped out its losses for the week. Now, not so much. It joined the s p and nasdaq in being lower for the week once again, despite the gains that you see over my shoulder there of 70 points for the dow. Financials, tech, materials, industrials among todays biggest gainers. Melissa . Thanks, ty. Im melissa lee. Consumer sentiment coming in weaker than expected. Goldman sachs winning a legal dispute with libyas sovereign wealth fund, a ruling that goldman did not abuse the relationship and force the fund into deals that the fund claims led to more than a billion dollars in losses. And the Obama Administration eliminating 100 limit on the value of cuban cigars but american travelers can bring back from the island. To the earnings for the big banks here, clearly the big story of the day. Jpmorgan, citi, wells fargo, stocks higher earlier, now mixed. Wells fargo down for most of the session after releasing the first report since the fraudulent account scandal. Joining us is katie nix and eric wasserstrom. Eric, lets start off with you. In terms of what you saw from these banks, what is the read through . We had Capital Markets activity that seemed to be stronger than when many people expected but thanks to the brexit bump in june. Certainly that played a role, melissa. And i think you also saw that that long growth in the period wasnt as weak as many including myself anticipated that it might be. And that led to better spread income which is for most banks the most significant driver of revenue. So what is the read through to the rest of the sector that has not yet reported. What are the Key Takeaways . Basically three Key Takeaways. One, the revenue outlook a little more robust from this combination of better Capital Markets and better spread revenue from Balance Sheet expansion. Number two, credit remains very benign with several banks releasing previously built reserves for Energy Losses now that the commodity price is higher. But these two things offset higher expenses including both comp and noncomp and, of course, for wells particularly you had the issue of the forth coming legal fees. So, eric what is the biggest worry you have going forward. We know what happened. What are you concerned about happening . Well, i think that the go forward question remains largely macro, which is we seem to be inching closer to a fed hike, which, you know, would be modestly positive, but, you know, to what extent is this loan growth sustainable in 2 , 2. 5 gdp environment, thats the Biggest Issue for the institutions. What is your take on wells fargo now, eric, with the management change, the Conference Call under their belts . Whats next . I think the new ceo systtim n did a good job of articulating all the actions theyre taking which is predecessor for whatever reason failed to get his mind around how systemic some of these things appear to be and in fact prove to be. So i think theyre doing a good job of getting very, very significant remediation efforts under way. But i think in terms of the Financial Impact of that, i think he was very transparent that theyre as yet unknown. A no touch in your view . Yeah, i view the risk reward at around 45 as being basically even money upside down side. Eric, thank you. Well, be sure not to miss this, the wells fargo cfo John Shrewsbury will be a guest. A lot of questions, hopefully hell have some answers. Lets bring in now and question katie nix of northern trust. Welcome. Thank you. Financials have been one of your favorite sectors. They performed well. Many of the biggest banks are up double digits in the last 90 days. Do you still like them or have you been trimming into the strength . We havent been trimming yet, brian, but were considering trimming into the strength. We had an amazing several weeks here today included. But there is a nice tailwind. The question you asked about what this bows for next weeks results, a nice tailwind here, volatility in the currency markets, Interest Rate markets, fixed income markets will be positive for a lot of the banks. I feel like given the run that many of these banks have had, there is a little bit of earnings beat and a little bit of fed already baked into the absolutely. The market is anticipating that the fed will hike rates, this is also going to keep volatility high which will be good for the trading revenues of the banks. Two questions, on j pchlpmoj were the earning good . Theyre trading revenue very solid. But analysts, the pendulum swings to the extremes of both directions. But i think you can broaden out that question to include a lot of the s p 500. Analysts have gotten very when i was on squawk box with andrew, he pointed out that jamie dimon says that beating the estimates is a good thing. No problem. But beating last years number is even better. They didnt do that. No. It has been a tough environment. There is no doubt about it. We can look back at 2016 and see incredible head wind. The profits were higher. Exactly. And, again, can broaden that out to the s p 500. It has been a very tough road to hoe but a lot of the head winds will become tailwinds as we enter 2017. What gets you to trim your position in financials. What is the last piece of evidence that you need to pull the trigger and where will those dollars go . It is really probably predicated on the fed. Our base case is that the fed does not go in december. There is a probability they do. The market is anticipating over 60 probability that they do. If they do go into december, the next rate hike wont be for a very long time. It is going to be a very, again, challenging environment for banks. And if the fed does hike more aggressively than the market thinks, youll see the yield curve flatten out like a pancake and that will be hard for banks. Were going it look at fed policy and that will probably be dry when we trim the position. You dont think that 17 increase we have seen in the Kbw Bank Index that is the anticipation of the fed doing something by year end . It is on the heels of some really bad underperformance, though. Banks are just catching up right now and the fed has taken away the football many times here. And this time they seem resolute in terms of their desire at least to raise rates and so we think that the presents some fundamental improvement for these. Banks from a d minus to a c plus. All relative. Yeah. Thank you. Katie nixon, have a great weekend. You too. The Oil Rig Counts are out. It is friday after all. And guess what, were up for the seventh straight week. Baker hughes reporting that four more oil rigs were indeed put in place last week. This makes seven weeks in a row and i would say 16 of the last 17 or 18 weeks we have added drilling rigs, gas rigs by the way. Dont talk a lot about that. Rosa leven rigs. The price of oil is down a bit, but still above 50. Tyler . All rigged. The tax code crackdown, the Treasury Department out with new rules to curb tax inversions. Jack lew sat down for an exclusive interview with sara eisen and she joins us with the highlights. The treasury is going after companies that try to avoid u. S. Corporate taxes again. This time the administration is actually softening some rules that it laid out back in april after hearing from the Business Community and lawmakers. The rules have to do with how companies lend their money to subsidiaries to avoid paying u. S. Corporate taxes. Lew told us that while hes only treating the symptoms of a disease, the broken tax code, hes confident that actually a deal on Corporate Tax re form can get done pretty soon. I think that European Commissions actions put a bright light on the fact that if congress doesnt act, others are going to start doing things we think are unfair. We agree with europeans that it is wrong for companies to be able to avoid taxes almost completely. What we dont agree with is that the u. S. Tax base should be used by another taxing authority, another government authority. I think that the political situation in the new year is going to be an opportunity to deal with this. One thing we said in Business Tax Reform was you should do two things at once, tax the income overseas, but you cant use that money to cut tax rates because it is a onetime tax, use the money to pay for infrastructure. Again, that 2. 5 trillion that are sitting in overseas Bank Accounts from u. S. Corporations because of the high tax rate, so while there are exemptions in the current earnings stripping rule as it is called, there clearly has been an impact including the breakup of that 160 billion allergan pfizer merger earlier in the year as a result of the treasurys rules against inversions. So did you think as a sort of subtext there he was hopeful that there would be some political breakthrough in the new year . Absolutely. No matter how the election pans out because lews point is that what the European Commission did going after apple for 14. 5 billion in back taxes to the Irish Government, that was a wakeup call for American Companies and for American Government that if we dont start chasing after what is owed to the u. S. In terms of tax income, corporate earnings from u. S. Companies, other governments around the world are going to do that. We saw that happen with europe and the treasury doesnt have a lot of recourse when it comes to that. Thats being litigated because the u. S. Is fighting it, apple is fighting it and the Irish Government is fighting it. But he says youre going to see a lot more of this unless we get some sort of Corporate Tax reform deal, we have bipartisan agreement to have infrastructure spending. So if as lew says you can tie that repatriation lower tax rate to direct spending, that money coming back from overseas on infrastructure, then you could see a deal. Hasnt happened in this administration, this congress, but he is optimistic. All right, sara eisen, thank you very much. Showdown in the red sea. The u. S. Taking military action after one of its ships came under fire from rebels in yemen. Now iran is moving its ships into the region. We weigh in on that and how the u. S. Can win the cyberwar with russia. That and more straight ahead. The u. S. Military launching Cruise Missile strikes on yemen thursday morning, knocking out three coastal radar sites in areas of yemen controlled by iranian aligned houthi forces. Those strikes aimed at taking out radar that enabled the launch of at least three missiles against u. S. Navy ships, the ship the uss mason on thursday and sunday. The missiles fired against the mason failed to hit their target. Joining us to discuss this and other issues involving National Security former nato supreme allied commander admiral james dean yavides. Welcome. Good to have you with us. Great to be with you. Well talk a little bit about iran. I want to get quickly to russia and their mischiefmaking. A lot of mischiefmakers here. Do you think iran feels emboldened now by the fact that the sanctions have been loosened, money is flowing back into their economy, while Nuclear Program seems to have been at least stayed for a period of time, that they feel like they can flex their muscles and are doing it through the houthis . I think you categorized it exactly right, tyler. It is good news, bad news. Good news is hopefully theyre not actively in pursuit of a nuclear weapon. Were going to have to monitor that closely. The bad news is a lot of resources and theyre using them not just in yemen. Theyre using resources to undermine iraq, syria, and lebanon. So this is part of a larger Iranian Campaign that i think is going to be the backdrop to the middle east for the next decade. Why would these rebels or whatever you want to call them fire missiles on a u. S. Warship . They know we have got to fire back. What are they trying to do . What they would love to do is actually hit one of those destroyers and if they managed to do that and that is not an inconsequential potential outcome, if they managed to do that, they would have killed dozens if not 100 or so american sailors, conceivably may have sunk the ship. This is a pretty good sized Cruise Missile. So it is a huge upside for them if they hit. And they figure our response is going to be knocked down a couple of radar sites. Thats a good tradeoff from them, from a business perspective. I think were going to see more of this. You think thats what we would do. Lets say they do hit the ship because there is no signs that theyre going to stop firing anytime soon. What would be the appropriate american response . Are they trying to goad us into war . I think that remains to be seen. But i will point out that were seeing iranian warships flowing into this area. So you see a kind of setup for a confrontation here. I dont think it is at all inconceivable that iran wants to try and pull us into this in some way. And here is the good news. I used to command the same class of ship, uss barry, sister ship to the uss mason, our ships are very, very capable of defending themselves, so i think well be able to avoid this trap, but i think this is really an iranian objective were seeing unfold in front of us. A provocation for sure. Lets move to russia and the provocations that the u. S. Government thinks russia is bringing to the democratic process here. Talk to me about that, and how clear in your view the evidence must be for the u. S. Government to say that they have said. In short, do we need to share more of the direct evidence tying the russian government to the hacks of the dnc and electoral voting records in various states . Yeah, i think this one rises even beyond the level of a hack. When you try to insert yourself in the democratic process and the very heart of it obviously is the president ial election, i would categorize this as a cyberattack at this point. And in terms of how clear the evidence is, i think it is overwhelming. The u. S. Government absolutely would not be so far out in front in the commentary. My own sources in the government would tell me that this is a very clear level of provocation from russia. So i think how we ought to respond is in a proportional fashion, shouldnt go and drop the russian electrical grid over this. But we should, for example, certainly reveal the evidence clearly. Let the International Community see it and judge it, and secondly we should respond with something similar, that might be opening the financial records, very senior russians, showing where their overseas deposits are located, for example. We need to show the russians some steel or theyll proceed into what they see as mush at this point. There have been repeated cyberattacks on various aspects of the economy, not just the government, but to steal intellectual property of our corporations, et cetera. Why do you think this is finally the attack that is going to prompt the u. S. To respond with a proportional response . I think as i mentioned a moment ago it is the impact in the electoral process. I think that is a very, very significant act. Even compared with, say, the sony attack undertaken by north korea. Or the cybercriminal activities. Those are worrisome. This is our election, our national election. I think it really demands a level of response, distinct from what we have seen before. You have been an adviser to secretary clinton on National Security. I wonder how you feel about fbi director comeys characterization of her handling of confidential or classified material as reckless. And that that some of that involving her private server was mishandled, and that people have gone to jail for less. I think the secretary has responded to that pretty clearly now with both of the debates and repeatedly. The fbi director has laid out his view of the situation. The secretarys acknowledged it is a mistake. But my role has been to advise on international affairs, security, and cyber. Im not deeply involved in the political side of it. But how do you feel about it, apart from that . Do you view it as a viewly serious breach of protocol in. I think that as the secretary has said it was a mistake. I think director comey has categorized it as a very serious mistake. I think it ought to be regarded as such but examined in the totality of what has occurred. From what i can see, i dont see a serious material level of classified material that was breached as a result of it. I think it ought to be judged by the voters and will be. Admiral, thank you for your time today and your help analyzing the very thorny topics. Author of the accidental admiral. Hes at tufts university. There is his book. An unluikely pair of bffs coming to your tv screen. What is cooking for Rapper Snoop Dogg and martha stewart. That story is next. Amazing sleep stays with you all day and all night. With sleep number, you choose the exact firmness and comfort you want and so does your partner for the best sleep ever. Its the final days of the columbus day sale, with the queen c4 mattress set now only 1399. 98. Plus 24month financing. Learn more at sleepnumber. Com remember here at ally, nothing stops us from doing right by our customers. Whos with me . Im in. Im in. Im in. Im in. One, two, wait, wait. Wait wheres tina . Doing the hand thing . Yep we are all in for our customers. Ally. Do it right. Drop this like its hot. Martha stewart and snoopteaminga new cooking show. A sneak peek. The two are hosting a weekly dinner series on vh1 called martha and snoops potluck dinner party. There could be some pot in that potluck. Some very special must havffd brownies. Theyre calling it a half baked evening of cocktails, cooking and conversation, where nothing is off limits. It will begin airing on november 7th. Brilliant. Can you imagine the pitch process. Ive got an idea. Lets pair up snoop dogg and martha stewart, so logical. Who would you be paired with in a melissa lee cooking hour. Brian sullivan or Tyler Mathisen. We know the food before it is cooked. Who would it be . I dont know. Anybody randomly . You have an idea of who you should be paired up with, i know you do. Well reveal it later on in the program. Melissa . Thats not good. Check please. Think. Elizabeth warren says fcc chair Mary Joe White should be fired. Why she wants her i do my show with Elizabeth Warren. Ill do mine with Mary Joe White then. Thats next. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Welcome back to power lunch. We want to call your attention to what is happening with shares of twitter. Theyre down by about 6. 5 . This on the heels of an interview that sales force Ceo Marc Benioff had with the Financial Times in which he said, quote, in this case we walked away, meaning their bid for twitter. It wasnt the right fit for us. Again, this coming from the Financial Times. Twitter shares are down 6. 5 , meanwhile, shares of sales force. Com are up by 4 as well. Well keep an eye on this. We have reached up to sales force for a comment. Were watching twitter right now, and, guys, before we get into janet yellen, melissa, you talk about this all the time on fast money, does this almost then eliminate any potential buyer, at least ones resu s rum interested. Sales force was the last man standing at this party and apparently he has now walked away according to this interview with the Financial Times. Remember, that twitter deadline had been on the day of its earnings, i believe thats october 27th in order for all the bids to be submitted. To Steve Liesman now with breaking news on janet yellen. Janet yellen, the fed chair, talking here at the boston Federal Reserve conference on lessons from the great recovery the great recession. Wonders if it might make sense for the fed to run a, quote, High Pressure economy. And says that that would perhaps boost demand and tight labor markets. This is a theoretical discussion, unclear if she means that for now or one of the things these are the lessons that we have learned from the financial crisis. Talks about the benefits of that, could be more capital spending, it could be workers drawn in from the sidelines as well as more productivity gains. So all of that is fairly interesting in terms of her theoretically or just hypothetically wondering about this. She says one of the lessons, it could be possible that Monetary Policy is easier keeping rates lower during recovery. So if were in this kind of lower growth situation, and she says low rates are likely to persist in the global economy. Cutting shortterm rates in the next recession, she suggests unlikely to be adequate to fight the youdownturn that would happ. But does a caution that an easy policy for too long where the cost could exceed the benefits. Finally, the effect of the labor market on inflation seems weaker and shes questioning whether or not the Federal Reserve knows enough about the inflation dynamic and what causes it. Back to you. All right, steve, stick around. Lets bring in michelle myer, chief u. S. Economist at bank of america. Theyre calling for a december rate hike. Anything that you heard steve say or from chair yellen today that would make you change that december rate hike call . Seems like when the headlines steve gave, shes backward looking, thinking about what they have learned from this crisis and what they might be considering in the future. Doesnt seem like shes talking necessarily about what they need to do today. It is more about how do we rethink policy now that we know what has worked and what hasnt worked and some of the potential structural challenges. So i think the message has been very clear to me. The fed wants the slow cycle, they want a shallow cycle, but that doesnt mean they dont think it is still prudent to start the process of hiking this very slow normalization process. We heard from boston fed president rosengren this morning, one of the dissenters, who was talking about the cost and benefits of where they are right now with very low Interest Rates with very accommodative policy and how it is prudent to get started. So i think you have a growing voice within the fomc, who wants to get going with this hiking cycle and there is a general acceptance of michelle yeah, go ahead, yeah. Michelle, im wondering if i can play devils advocate here and talk about a fed chair who just talked about this issue of having given the economy a little room to run. This notion of running a High Pressured economy and the potential benefits of it kind of play into that. What are we lacking here, capital spending, want to bring people in from the get the full screen, we have low productivity gains. So the idea that she says here is this High Pressured economy that maybe we should be running or theoretically running and just so happens that the three things that would that are the things that are most wrong with the economy would be addressed by that, im just saying, maybe it is something to think about. Before you answer, michelle, and before you answer, michelle and steve, i apologize if i zoned out, i was trying to think of who i do my cooking show with, maybe you explained this. What do they mean when they say a High Pressure economy . And how would that be different . One where the inflation rate perhaps runs longer, runs higher than the current rate or the target rate and one where the Unemployment Rate runs low lower than perhaps full employment. Thats how i would think of it. It is this idea that the economy can overheat, that you can have policy, thats lower for longer, that, you know, you want inflation to run above target and want to see a gdp run above potential. But i kind of feel like thats what the fed is trying to do already. Think about the Unemployment Rate of 5 , youre starting to see rates grow, the core Inflation Numbers heading to 2 . Gdp growth is edging closer to what you would consider above potential, so i think theyre already engineering that type of policy, that Risk Management policy where they want the economy to overheat, to have a little bit more pressure. And that is dictating this very slow cycle of Interest Rates. All right, guys, well leave it there, thank you. Michelle myer and Steve Liesman, discussing Janet Yellens most recent comments. We want to get back to the market moving news here that we had moments ago that crm ceo sales force. Com Ceo Marc Benioff told the ft that the company has walked away from a bid for twitter. Were seeing the stocks move dramatically in response to the headlines. Twitter shares are off the session lows, but still down by just about 7 , crm shares for their part are soaring on the back of this. For crm, this would have been a fairly sizable acquisition given the size of the company itself and would have been the biggest acquisition to date. A lot of shareholders behind the scenes were already contacting crm ceo saying they would be against it and saw the stock react to the downside once those reports first surfaced. I want to give a shoutout to jim cramer. I dont know if hes here in the building or not. Jim was out interviewing benioff last week and he had to be coy. Hes the ceo, and things he cant say, but jim was out there saying, tweeting it, that basically the when benioff went to the shareholders and some investors, sort of floating the deal, they reacted to your point very strongly against it for a number of Different Reasons including the lack of ability to control the product and what jim meant, what we talked about is the fact that the reality is that twitter, while there is a lot of great people out there, has been unable to control the hate speech, recruiting tool for terrorism, that kind of a thing, and that sales force investors and shareholders simply felt that that would not be a good fit, they worriy eied about the cost, you have verizon fighting to knock down the price of the yahoo deal. Google said they almost wished that twitter would go away. Who is left . The other thing that you can think about is, you know, twitter set a deadline, october 27th, i believe, is the date for saying that all bids should be mitted by then. They wanted to finish up theed by ibidding process by then. For this stock to be knocked down and somebody else steps in with a lower bid. A smaller acquisition. Is there a private investor, a private Equity Consortium put together to take it . I dont know. It is too big. It is unlikely. Ill tell you why, private equity would buy the private company because they want to take it public. And take their take all their money, cash flow, whatever it is. I dont know if i heard of a company that has gone public and in a relatively short amount of time gone back private. To your point, the stock is down 43 over 12 months. As the price goes down, the interest level could get higher. Could come up. The premium on the stock, floated as 20 billion potential deal, the stock gets knocked down even more in that premium, makes that total deal size much smaller. It should also be known, the price action and twitter shares now, these are levels right now that we havent seen since about july or so. And some could argue that the stock should actually be much lower on the back of this news because back in july there was an embedded thought that there could be if everybody has essentially if the reports were right, that google, that disney, that crm had been interested and now walked away, and there is no one left at the table for twitter, that could make that asset look like it should be cheaper. And we talked i never bought the verizon stuff too. The majority of twitters growth is coming internationally. Verizon is a 100 domestic u. S. Company. Twitters growth is flat to declining in the United States by some metrics. Internationally there is some gross. You have to have a buyer that would care about the socalled fat pipe, the data feed that twitter provides. Everyone said the stuff we see on twitter, thats relevant. The real value is in figuring out what melissa lee and Tyler Mathisen and Brian Sullivan want, thinking about, talking about, desiring with the growth coming overseas, maybe there is an International Buyer that we have not mentioned, unknown, that is sniffing around. Lets bring in james chalkmock. Your reaction to this ft report that crm has essentially walked away from a potential twitter bid . Sure, not really surprised at all, really. Look at the Balance Sheet, you see the shareholders were against it. And when you look at the synergistic opportunities, were they the company to extract the most value out of twitter . We dont think so. So really not a surprise to us. Unfortunately what is happening now is that the last person at the table has walked away. What does jack dorsey do now . I think what jack dorsey has to do is first understand and communicate to not only the company, but also the public what their mission is going to be. Because theyre going off in a lot of different directions, trying to be characterizing the company as a news media outlet. And what type of price are they willing to pay for the content that theyre go to be acquire. I think that you need to do some type of gut check on what twitter needs to be. And more importantly need to be reasonable about the valuation that theyre willing to take because with the 20 billion, 30 billion numbers going around, you have 15 this week, that was the peak valuation. Is ill be more direct here, james, should jack dorsey step down . Hes trying to run two companies, man. Look, it is it is a difficult call, but it is very difficult to run two companies at the same time. With the stock trade higher if he stepped down. Were asking because hes not only running two companies, but brought back to run twitter to revive it and or to sell it, has it been revived . I think most analysts would say no. Has it been sold, apare apparen. The company is not moving in the right direction. The advancements that have been made have been made on back end. Havent seen much iterations on the front end at all. The deals were seeing is coming more from nono than jack dorsey. Maybe a change in the leadership is something that would be welcomed by the i think what youre mentioning is very important point about nodo, dorsey gets all the attention. Ail remi ill remind our audience, he comes from the banking side of the business, and potentially could dredge up a buyer. I dont want to put you on the spot. I know you called a 15 billion if im remembering, 15 billion valuation, the last note you put out, is there a potential foreign buyer givend stuff we talked about, maybe a softbank, maybe a European Company we have not dug into enough. Yeah, absolutely. Softbank is one that we tossed around before. Potentially you see the saudi royal family coming. And put some money in collaboration with other investors. But at the end of the day, does that solve twitters problem . We dont think so. It needs to operate within a larger organization. They can tap into the big companys resources, acquire the content they need, serve as a Distribution Channel for that content, and reach millions and millions of users around the World Without having to rely on reporting these user growth metrics and they can invest in the way that they can to in order to extract full value of the business. Is there right now they he need to be within a big company. Is it too big to be taken private . Maybe by management . I think so. Look, the you call it the 15 billion was the top valuation. 11 billion on the loan. These are still big numbers. Because even with all of these things happening, you have to remember this is the most widely available free market in the entire world. Everybody knows what twitter is. You talked about the interest graph and the data. There is value there. But being taken at 10, 11 billion. The 52 week low was 1373, traded around brexit when a lot of stocks were hit very hard. Is there a floor in your view to the stock now that all the reported bidders have effectively walked away . Yes, the way that were thinking about it, we have basically thrown fundamentals aside on this one. You cant look at the revenue metrics, the ebitda metrics because of the fact that we dont know what the revenue trajectory is going to look like in the coming quarters because their new business is cannibalizing their old business and the cost of each incremental dollar is going up. So this model that the street is modeling may not be accurate. Were looking at it on a peruser basis, comping that by microsoft at 60 for the daily active users, discounting that by 50 i dont get that metric. Why is one active user per twitter equal to the value of an active user for linkedin. Giving the benefit of the doubt there, the free marketing of the twitter platform. Thank you so much. James kakmak. Rick san ketelli tracking t action at the cme. It looks like well get critical closes again. Lets think about the auctions. The auctions for 3s went off at a level of 1. 045. Were offering under 98 base points. Big win for those who participated. Twoday of 10. The auction went off at 179. You see where the high yield is, right around 179. 30s, 30s, youre not doing well, were at 251, big chart since last fed meeting. This is what the dollar index has done. Looks like the beginning of a ski slope, straight up there. That is significant. Thats a good market barometer on what investors think they may do in december. Back to you. Thank you very much. Well, hwa how is this for transition. Chris rock, the comedian, landing a massive payday from netflix. Details coming up. First, the consumers have spoken. Which airlines performed the best and the worst on delays, lost bags and service . A whos the least bad . Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley 24 days to go until the election. Elizabeth warren is looking past that date, working hard to influence the selection of the next round of president ial appointees. Her first target, s. E. C. Chair Mary Joe White. Who joined us here yesterday. Eamon javers live in washington with that story. What gives . Well, look, Elizabeth Warren released this letter at 6 00 a. M. Eastern today. Now 1 48 p. M. Eastern and Mary Joe White hasnt been fired yet by barack obama and not a whole lot of people here in washington who think that she ever will be and thats not necessarily what this is about. First, what the letter actually said, Elizabeth Warren sent a letter to president obama this morning asking that he remove Mary Joe White as the chairperson of the s. E. C. , partly because Elizabeth Warren says she really wants the s. E. C. To move on a rule that would require Public Companies to disclose their political spending. Here is what she said in the letter. This brazen conduct of not moving forward on that rule is merely the most recent and prominent example of chair white undermining your administrations priorities and ignoring the s. E. C. s core mission of investor protection. So what is this all about if it is not about getting Mary Joe White fired in the shortterm . It is likely mostly about an incoming possible Clinton Administration. Elizabeth warren on capitol hill sending a message to the potentially incoming clinton team saying exactly who she wants on the s. E. C. And what she wants the s. E. C. To do. Elizabeth warren maybe carving out her role here as sort of an anchor to the left of the Clinton Administration and sending a little bit of a shot across their bough here today. Thank you very much. Eamon javers in washington. The Consumer Report cart is out on airline travel. Phil lebeau live in chicago with the good and the not so good. Phil . Were talking about the month of august. One of the busiest when it comes to air travel in the u. S. Here are the airlines that did the best in terms of ontime arrivals. No surprise, hawaiian almost always at the top of the list, followed by alaska and sky west. At the bottom, frontier is the only airline that did not land at least 70 of its flights on time. You see the other two, spirit and american, rounding out the bottom three. What stands out about this report card for august is that the number of complaints filed by passengers, people traveling, was up 14 in august compared to july. One factor could be what youre looking at here. Remember those delays and the outages with Delta Airlines in earl august, that could have been a key factor in the spike of the number of complaints in august. Look at shares of united and american, we heard from delta yesterday. Well hear from united and american next week. Back to you. Phil lebeau, thank you. Still ahead, the four stocks on our radar today, daily dose of street talk is straight ahead. [ clock ticking ] time. You only have so much. Thats why we wanna make sure you wont have to wait on hold. And you wont have to guess when well turn up. Because after all. We should fit into your life. [ laughing ] not the other way around. [ clock ticking ] time for street talk. We kick it off with Taiwan Semiconductor getting upgraded for Pacific Crest to a sector weight given a more positive outlook. Results exceeded expectations on margins. They missed gross margin guidance for two of the past three quarters likely because of pricing pressure from regaining the apple foundry business and lower 16 nanometer yields. But more positive now about 16 nanometer Gross Margins and that should help lift overall margins. I must said the other thing, 16 nanometer margins. Despite all that, the stock is up i came within a nanometer of saying the other thing. Semis are hot. Second stock, lion dill basil, chemical company, started as a buy and 95 target. They called the company a compelling play in tell calchem. The Analyst Thinks other products and unique yield flexibility should provide earnings insulation. 95 target on lyb is 18 upside. Maybe get a bid now that cyclicals are becoming more in favor, even though we have rising prices. Maybe buy twitter. Third stock, Union Pacific getting added to the focus list. Several catalysts behind the moves, more exposed to grain, which looked good in 2017. Should be further rotation into the stock. They say this a lot of investors are underweight this sector. The analyst points out that the consensus is a little bit too low for 2017, likely upward revisions coming in the future months. We always focus on tech, it is exciting and sexy and they move Union Pacific was a 9 stock 15 years ago. Now 97. So sort of this slow and go literally train stop made investors a lot of money over the years. Finally, idex labs. New jersey based maker of medical devices for veterinarians. They raised the target to 125 to 120. The analyst was optimistic, especially to the key view analysis machine help analyzing bacteria maybe an animal through a couple of drops of pee. What . A urine analysis machine. Okay. Earnings should be good and the analyst believes the company can make the 2017 targets. 125 price target is about 12 upside, total new jersey based, Veterinary Lab equipmentmaker. Who knew . Tyler. Mark cuban says trumps brand is scorched. Well ask another billionaire and republican if he agrees. And if this election is stressing you out, youre not alone. So many people are stressed out that the American Psychological association has put out tips on how to cope. Well tell you what they are next. And Halftime Report with scott wapner hits the fiveyear mark next week. They have an incredible lineup. Some of the biggest names in investing. Monday, david step, carl icahn, gundlach. After that, look for Halftime Report, the place to be, noon eastern. Power lunch back in two minutes. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. When youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Comcast business. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. Billionaire who begrudgingly supports trump, is he still backing him despite the events of the past week . If uber drivers arent employees, should they be getting unemployment if uber lets them go . Interesting case, could be a major issue for the company. Is the election stressing us out and prevent issiing us from goi shopping. The second hour of power lunch starts now. I was stressed out wish we could turn back time im Tyler Mathisen. Welcome to the second hour of power. Check of the markets with two hours until the closing bell. Stocks higher across the board. Not as high as they were earlier. Financials helping to lead the way. The dow industrials up 67 points, roughly stable from where they were an hour ago. Twitter, not so stable, tanking. The ft reporting that sales force says it is not interested in bidding for the company. Sales force moving sharply higher after that news. Brian. Your headlines this hour, Angela Merkel of germany saying there will not be german State Government help for the embattled Deutsche Bank. In good news for all you new jersey, new york commuters, u. S. Transportation secretary saying the government will speed up an Environmental Review for a possible new train tunnel between new york and new jersey. Florida Supreme Court saying a Death Penalty sentence will now require a unanimous jury, a new law would have allowed it if only ten jurors had recommended it. Back to the markets and your money on this friday. And who else but bob pisani on the floor of the nyse. Were up, but well off the highs. We have a couple of problems midday. Let me show you the energy index, xle, up earlier in the morning, but down now and energy down, oil came down midmorning, oil had problems staying around 50. This is a Leadership Group having problems in the last week. Health care, another Leadership Group having problems here. Lowest since june here and we have regulatory issues around pharma, thats been weak. Biotech as well as an issue. Then the whole bank thing, you heard the Early Morning numbers, the bank numbers p s better tha expected for all four of the banks reported here. Press release sounded good. We got na the Conference Calls, stocks coming down now. Some are negative. Why didnt we get a nice bank rally overall . Couple of issues. Number one, earnings down year over year, remember that. Number two, the body language in the Conference Call indicates that some of the estimates for the Fourth Quarter may need to come down, commercial long growth, not quite as robust as some people had anticipated, though no disaster. Finally, remember, a tendency for banks to come down after jpmorgan reports earnings. Talked to partners about that. Typically after jpmorgan comes out, and particularly after they beat by five cents or more, the bank index is down 1. 5 on average. Thats a fairly typical pattern. Thank you, bob. Donald trump set to hold a Campaign Event in North Carolina at this hour. Well show you a live picture here. Mr. Trump not at the event quite yet. Meantime, a whole lot going on the campaign trail. John harwood joins us with a wrap. This has been a brutal week for donald trump, his campaign is taking on water all over the place, more and more women are coming out and accusing him of sexual misconduct, of unwanted sexual advances. And the question is going to be what does donald trump have to say about that . His running mate mike pence was on morning shows today, and indicated that donald trump would be releasing information that that the women may be making up the stories, but more women have come out during the day. The Washington Post just published an account of a woman who worked at a nightclub in new york who said that donald trump put his hand up her skirt at a one evening at the nightclub and this is just part of what Donald Trumps life is like now ever since he said at the debate he never engaged in that kind of misconduct. Hes speaking in North Carolina. Thats one of the battleground states where hes behind. And hes behind in almost all of the battle grund states. Look at the new National Numbers from fox news, which came out last night. Seven point advantage for Hillary Clinton over donald trump. That margin is as big as president obama had had over john mccain in 2008, which produced an Electoral College blowout. Now, how does donald trump handle this today . Is going to do this from the podium . Yesterday, he delivered a speech that was striking in invoking a global conspiracy, not just from democrats, and Hillary Clinton, but also from paul ryan and republicans, he said something sinister was going on. Now, paul ryan has been speaking in wisconsin, at madison, to try to separate the house candidates from the top of the ticket making the case we have a policy agenda and were staying out of the personality contest at the top of the ticket. And one post script to that as we wait for donald trump to come out and speak, just as i was getting ready to go on air, i received a new analysis from one of the leading experts on house campaigns answering the question, is the house now in play now that donald trump is falling in the president ial race . The answer is, not yet. His estimate, this is David Wasserman of the cook political report, is that republicans are on track to lose between 10 and 20 seats in the election. Democrats need 30 to take control. Significant gap still there for the democrats. John harwood, thank you. Mark cuban never wanted to hold back his opinion on basically anything, including donald trump on power launch yesterday. Listen here. Certainly not teflon. His numbers keep on going down. I think there is plenty more stories to come out. I heard a few. I dont know if theyll ever become public. But, you know, i think this is just the beginning of the end or the middle of the end for donald trump and not just in his run for the presidency, but his brand, his properties, had his businesses, hes been scorched and hes, i think the whole thing has a real chance of going down with him. From one billionaire media mogul to another, lets bring in Stanley Hubbard of hubbard broadcasting and top donor. Were glad to see you back here again. You say that youre nation to ice to be with you you say youre no fan of mr. Trump but you plan to vote for him. Why . Absolutely. I think all this other stuff is something that should have nothing to do with the election. Hillary clinton and her people are in lockstep with everything that is wrong with washington. Trump is not and i think no matter what happened in his previous 30 years ago, 20 years ago with women, has nothing to do with what hes going to do if hes elected president. But he will do is appoint a Supreme Court justice who will read the law read the constitution as written, not the way they would like to have it written and thats more important to me than all the other side shows. If what mr. Trump did 20 or 30 years ago is not relevant, is what bill clinton 20 or 30 years ago relevant . Obviously it wasnt because he kept getting elected. The advantage he had, that mr. Trump doesnt have, is he had a wife named hillary who would come out and attack everybody who make claims against him. So lets talk a little bit, we had on last hour the admiral who i asked about the Hillary Clinton email leaks and her handling of classified material. I want to ask you whether you think mr. Trump is well suited to conduct Foreign Policy and foreign affairs. You think he knows enough . I think better suited than she is. Hell have good advisers. Hell know what the issues are and stand firm and say were not going to make a deal like we made with iraq. Thats the kind of thing i would like for from him. Mr. Hubbard, it is Brian Sullivan, youre a broadcasting executive, you own radio stations as well. We are obviously broadcasters as well. Donald trump is not only going after clinton, hes not only going after gop, hes going after the media. Your business, our business. What do you make of trumps war on the media . I think it is a shame. Hes wasting his time. Thats what hillary wants him to do. He should stick to the issues. What do we do in our country to get back on track tork crea, to more jobs. Forget all this nonsense. Who cares about he said, she said, forget it. Lets talk about the future. Do you think that there is a liberal media bias against him . Youre a trump supporter. I cant imagine your outlets are particularly liberal in that sense. Our outlets, all of our tv and radio stations play it right down the line. We do not get involved in politics. We report the news the way it is. We do not take sides. Where are most of your stations . Well, were in albany, new york, where you are, rochester, albuquerque, minneapolis, st. Paul, radio stations in seattle, phoenix, st. Louis, cincinnati, washington, d. C. , chicago, so were around the country a little bit. I guess what mr. Trump and those who agree with him that the media are liberally biased are pointing mostly at my suspicion is at national media, based in new york city, based in washington, based in l. A. , because there are a lot of Media Outlets like yours that are owned by individuals who are not liberal, and who are in who are outside of the nexus of the new york, d. C. , l. A. , the big eastern cities. Am i barking up the wrong tree there, mr. Hubbard . Youre not bashing inbarkin wrong tree. Donald trump just feeds them material to put on the air. If he were smarter about how he handles the media, he wouldnt have so much trouble. Does mr. Trump dont blame the media for the missteps you make. Does mr. Trumps conduct or alleged conduct toward women and what he has said in the direction of women who have raised issues about him, does it concern you . No, it doesnt. Because what is important is what would he do if he were president , what did bill clinton do when he was president . I dont make excuses for donald trump. I have no idea where the truth lies or where it doesnt lie about what the women are saying. What i do care about is who is going to appoint justices to the Supreme Court and hon and on and on for the future of our country. All right, stanley, mr. Hubbard, thank you for coming. We always like your point, hearing your point of view. We appreciate it. My pleasure. Thank you. Chairman and ceo of hubbard broadcasting. A new survey by the American Psychological association finds that most americans are completely stressed out by the elections. So to help deal with all this election anxiety you might be feeling, they come up with a few coping tips. Unplug. Take a digital break and go for a walk outside. Spend time with family and friends. Volunteer. Advocate for a state or local issue you support. Remember, in a democracy, your vote still counts. And perhaps most important, try to avoid political fights with your spouse, coworkers, or facebook friends. Should we go take a walk . Lets all take a walk outside and not talk politics. Lets unplug. Just advice in general for being less stressed. Im going to talk directly to the camera. Try being on this side of it. Cant get away from it. Yeah. My xanax is on xanax. It is unbelievable. You cant escape it no matter what. There are times ill give you some more advice, america, mute clinton and trump in your twitter feet timeline, even if just for a couple of hours. Youll have nothing. It refreshes. We were talking about twitter and what is going to happen to twitter. What is going to happen to twitter if they take trumps twitter feed away. He becomes a new company. A new company. Look at the traffic. On a serious note, twitter cant just, you know, kill it in this political season. They had nfl, they had this, the debates. It is tough. Here is the good news. It is almost over. Almost over. Not yet. There is cabinet appointments, and it goes on and on and on and on. Dont you feel like everybody could make their decision today . Yeah. Everybody knows. We know enough. If there is undecided voter out there, tweet us, let us know. Hey, bob from illinois, first time i have not yet decided. The candidates are so die metically opposed, i dont know how you cant have a lean. Unless there is some other blockbuster revelation, but at any rate it is not just stress lets take a walk. It is not just stressing you out, it is not just stressing us out, but apparently the election may femake us feel less confide to spend money. If you thought about cave diving around great white sharks, what is the worst thing you can imagine happening, the shark getting into the cage. Well, it happened. Well show you the video and the outcome next. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. A mixed bag of retail sales. Sales matched estimates. I hate to remind you, but christmas is only 71 days away. What can we expect from the massively important Holiday Shopping season . Steve sato, former chairman of the National Retail federation so hard from our perspective, my perspective, to get a handle on retail. Every time we get a good number, we get a bad number. Some Retail Stocks are doing amazing. Some are doing terribly. How do you read it . I think the consumer is healthy. Look at the forecast, most of the forecasts are in the 3 to 4 range. I think those are pretty good numbers. I say on the whole, it is good. But you have winners and losers. Thats going to be the key. The weakness in the Department Store channel, that is masking the strength of the overall consumer . Thats giving us a false read, if were take a look at that sector . Look at that one sector, thats false read. Look at amazon, the specialty retailers performing really well. I think youre going to see a comeback on the Department Stores. Fourth quarter much stronger than people anticipated. Why . We keep hearing the Department Store is dead, that they cant compete with amazon, they got inventory problems. Why has the Department Store coming back . I think youre going to see it is a dead cat bounce. You have a not exactly screaming i think that you have some fundamental issues, the Department Stores have to solve. But if you look at the Fourth Quarter, and the warm weather that we had a year ago, youre probably going to have one of the biggest swings of warm weather, to cold weather in november, december, and thats going to be good for anything that is apparel and cold weather based. So the Department Store should farewell in that environment. Having said that, they need to fundamentally change. You need some big changes in the Department Store. They need to have much more exclusive product, they have to have better experiences, they got to change their game. Do they need fewer departments in the Department Stores . I dont know fewer stores, macys closed 100 stores. You need fewer stores. Still 90 of retail is done in the stores as opposed to online. There is still a role for the brick and mortar. Look at amazon, now opening stores. Brick and mortar. Wai got friends in the industry, you got forget about amazon. Within a quarter mile radius in new york you got macys, lord taylor and saks and all just beating each other up over discounting. No one is going to win in that situation. Not only is it the discounting, but the number of stores that are being opened. Look at new york city. Nordstrom coming in, saks opens up downtown, Neiman Marcus opening up on the west side, all the mono brands are opening up. You have why has saks left new jersey . They left riverside mall. Theyre leaving short hills. Theyre opening up over in zahn d xanadu in the thing by the meadowlands. When . Where is tyler going to go in the meantime . Your former company is buying a bunch of assets around the world. Absolutely but go back to the thing that you have the winners and losers and there is the consumer is changing. Think about the consumer wants buy now, wear now. The consumer is fickle, thinking differently. They can search products it comes to a bargain, willing to search for a bargain, you think that trend remains. Look at the off price channel. Burlington coat factory is up 80 , 90 this year. The off price channel is enormously important because the consumer has perfect information. They know what things cost. If youre selling the same thing to somebody else, it is going go to the lowest price. I love a good Department Store. I love them. What about a bad one . I hate a bad one. The stock, where the merch is all there and you cant move by. I love a good Department Store. It takes me back to my childhood. Are you going to sit on santas lap . In terms of the experience of going it see santa, you went to Department Stores because it was special, you had the experience of going there to see santa and get your wishes expressed, but now the Department Store has to do that again. And it has to do it in todays version. Restaurants, bring in food. Would you buy individual retail equitys . The gap stunk last year. It is up 19 in three months, ultra ulta. Dicks sporting goods. Theyre more volatile than your momentum stocks that you talk about. You got to be able to buy anywhere, anytime you want to be able to do it, have differentiated product, got to have an experience that the customer wants. Those retailers that are doing it are going to win. Tyler dont wait. I want to go. I want to pick it up. I want it now. You can get it delivered right away. I think the best theater in new york is the first floor of saks at christmas time. Theyre going to spray you, theyre going to love you. Thank you, steve. Spray you and love you. Tell me im not right. Wonderful. Cant top that. Lets get to meg tirrell for market flash. Were checking out shares of ariad, the stock falling after a report stock falling after a tweet from Bernie Sanders about the price of its leukemia drug saying drug corporations greed is unbelievable. They have raised the price of a leukemia drug to almost 199,000 a year, citing a story by stat news about the price increases. That follows reporting that the price of the drug has increased from 115,000 the end of 2012 to almost 200,000 today. So sinking on that news. A quick question, this is somewhat different from some of the other drugs that lawmakers have been going after. This is one that was developed by ariad . Thats right. This one could be considered more similar to what we often see, several price increases. Four price increases this year. This company had some safety issues and the applicable patient pool shrinks. They increase the price. This is something you often see in the industry or the economics dont necessarily match up with the traditional laws of supply and demand. Just looking at the increases doesnt tell the full story . Thats right, melissa. Though some people are saying four price increases a year is too much. Meg, thank you. Meg tirrell, joining us from downtown. That stock is taking a beating, down 9 on the pack of this Bernie Sanders tweet. Big blow for twitter, plummeting more than 6 . Right now, sales force says thanks but no thanks. Thrill seekers may want to think twice before doing cage diving with sharks. 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Call now and request this free decision guide to help you better understand medicare. And which aarp Medicare Supplement plan might be best for you. Theres a wide range to choose from. We love to travel and theres so much more to see. So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Hi, everybody. Im sue herera. President obama campaigning in cleveland for Hillary Clinton, making another blistering attack on Donald Trumps character, saying people who are truly tough dont complain or make excuses. It is always interesting to me to see folks who talk tough, but then dont act tough. Because if youre tough, you dont make excuses. You dont start complaining about the refs before the games even done. A fresh wave of air strikes in aleppo amid clashes between Government Force and rebels. At least 358 civilians have been killed in eastern aleppo since the u. S. And russian brokered truce collapsed on september 19th. The u. S. And south korea conducting joint naval exercises in the waters off the korean peninsula. The six day joint drills are aimed at improving military cooperation between the two nations. And emergency room doctors say that they are seeing an increasing number of injuries related to mopeds and hoverboards. Last year alone hoverboards caused hour than 15,000 injuries. Mostly in children under 18. 13 were head injuries. Where a helmet if you do the hover. Thats the news update at this hour. Back to you, melissa. Thank you, sue. Time for the good, the bad and the ugly in todays trade. Lets hit the good first. Shares of Activision Blizzard are higher. Outperform, saying activision is faring better than its peers, that stock bid higher by 1. 7 . On to the bad, hp, down, cautious in the 2017 cash flow forecast. It will cut 3,000 to 4,000 jobs in the next three years. Thats down by 3. 3 . It is an ugly day for twitter. Sales force is telling cnbc that it is no longer pursuing a takeover of twitter. Well have much more on this in the next few minutes. Checking the markets now, they are off the highs of the day. But flurrying a little bit here in the last few minutes. Up 90 points on the dow industrials. The only market closing for the day, rig counts higher once again. To jackie deangelis. Good afternoon to you. Just about before the close, looks like were heading to the flat line in terms of crude oil prices, down most of the day. 4990 was your session low. Lets do a little bull and bear score card here and see where the street stands on what could happen to crude prices. The bearish factors include the build we saw in inventories yesterday. The dollar off the highs but still in the green, that pushes crude down. As you mentioned, rig counts were up again in the United States. More Expensive Oil makes it more attractive to pump. The bullish factor here, the draw on gasoline stocks people were concerned about, also u. S. Production down slightly, week on week and imports up week on week. Right now were tied three and three. Well be interesting to see what happens to crude oil prices next week. For this week, we finish just about flat. Back to you. Jackie, thank you very much. Just when you thought it was safe to go in the water, in a shark cage, this is incredible. If you dont like sharks, turn away. A great white shark breaks open one of those unbreakable shark cages with a diver inside. It smashed through the side of the cage. You can see, it is thrashing around in the cage, a guy is in there. The people on the boat, they dont know what to do. Here comes the shark popping out, covered in blood. There is blood. Everyone is thinking about the worst. Look at that. Shark, we would never show you the video. The dude climbs out. Unharmed. He was he kind of puts his hand over his chest like his heart is beating out. I imagine apparently i guess he sort of huddled in the corner as the shark thrashed around inside the cage. Im shorting the shark diving industry at this point. But thank god do not tease the shark. That is a big great white as well, the guy was in there. The shark must be injured crashing through the cage. They put chum and had tease the shark. They basically rile it up. For his enjoyment. Hes okay. I imagine the suit is a little warmer. John stumpf reportedly walking away from wells fargo with 140 million. Our examples like that one causing people to lose faith in wall street and investing . Well explore that in a moment. Man, im glad aflac pays cash. Aflac isnt Major Medical enough . No whos gonna help cover the holes in their plans . Aflac like rising copays and deductibles. Aflac or help pay the mortgage . Or child care . Aflaaac and everyday expenses . Aflac learn about one day pay at aflac. Com boat blurlbrlblrlbr no secret the market has taken a few hits in Public Perception recently. Mark cuban talked about just this. Just in terms of the stock markets, i think both eyes are black and the body is black and blue for a variety of reasons. Just so many Different Things add up. We talked about High Frequency trading in the past. Just there is a significant decline in the number of Public Companies. So is the stock market a level Playing Field for individual investors as well as the big institutions . Lets bring in kathy smith, the ipo fund manager and eric schiffer. Great to have you with us. Ill kick it off with you. You say that hedge funds no longer have that advantage that we all thought hedge funds did in terms of getting a piece of the ipo at the get go. Why . What changed . Sure. There is this perception that they do. And really it changed. The last few years, whether crowd funding or now nasdaq has this platform so it allows investors to get access to silicon valley, really hot preipo companies and can get in at a decent level, either very small or larger chunks. So this exclusivity that hedge funds used to have, thats a myth. It actually is very open to small investors. Thats a good thing. Kathy, i think you disagree. Well, i certainly would say that access to preipo investment has a high level of risk associated with it. Were talking about companies that are still private, they havent gone public and we know of Many Private Companies that may have seemed hot, but turned around to end up maybe not being so hot or being theranos, which is a very hot preipo company. So sorry to interrupt, we want to catch the arrival of martin shkreli, arriving downtown at a i believe a brooklyn courthouse. I believe it is in brooklyn. Appearing in his case there. And there is mr. There you have it. Hes holding a phone up as our producers point out. Looks like hes either taking a selfie or maybe periscoping this. He periscopes a lot. Periscope even at home sitting around playing the guitar and just doing sort of random everyday acts. And there he is walking into that courthouse where his hearing. Meg tirrell is stationed down there. Well go to her if there are any developments in this. Sorry to interrupt. Well, at any rate, i think theyre two entirely Different Things and the current state of the ipo market, yes, investor i it should get some reform, but it is a rational market, more pros are in it and the pricing is better. It has been a good place to be. You dont just need to get shares on the ipo. You can participate on the market and there is nice post first day returns. Youre the leading source on this. We were emailing about this for some data and the number of ipos is way, way down. I wonder, despite as you said, some have done well, is that because of a lack of faith in the Public Markets . I think we have to realize that there are two sides to the ipo market. One of the issuer and the other are the investors. And the investors have done very well. It is a challenge for the issuers because we have this huge private market that has developed with this other trading that is go on and we havent been able to get those through to unlock the value there because the Public Market is a lot more valuation sensitive than the private market is. It is upside down. Why have we had as few ipos, particularly in tech, as brian just mentioned . I think there are many reasons. Certainly it is about the companies themselves and where they may be from a maturation standpoint. Also, whether or not they truly want to go public. Many have access to really great sources of funding. With Interest Rates being so low, do they want to be out there in front of these the Investor Base that can just slam them on a quarterly basis, when they dont have the risk. And they can get access to money. I think thats another reason. But i think it is interesting that shes bringing up the fact that preipos shouldnt be invested into when in fact her fund is all about ipos. So many of the companies that have made it to her fund were in fact, invested in by and had access to through this Investor Base that im talking about. It is important that they get it. It is important that small investors are able to get in the market and having them have the a the companies have liquidity in early stages is a good thing. It is not a bad thing. Kathy, do you want to respond to that . I twha is happening with individual investors is that most of them because it has been i think we need reforms in the ipo market. They pacifically, they and their advisers turned to index and etfs instead of paying attention to stocks on a one by one basis. Then ill address the point of why stay private longer than go public. I think it is incredible, there are hundreds of private companies that wish they could go public, no private money wants to stay in these companies forever. Their game plan is to go public. They want an exit. Yes. They want an exit. It is not that they and time, that private Company Capital can dry up and many of the companies will wish they had gone public sooner. Do you think twitter wishes it hadnt gone public . I think that being public is helping twitter. Im sure made a lot of money. I think investors wish twitter hadnt gone public. For twitter, we know what the financials look like, it gives them an advantage and they raise capital. Thanks for your time. Sales force is walking away from twitter, marc benioff saying it is not the right fit for the company. Twitter sinking big on the news. Uber drivers, employees in the company or independent contractors . The answer to that question could be worth billions to the companys valuation. That story is next. 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The first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley two former uber drivers were found to be eligible to receive Unemployment Benefits after being fired by the company. Kate rogers here to explain why this could turn out to be a big problem for uber. Thats right. Two ubers 35,000 drivers in new york city have been ruled employees by the department of labor rather than independent contractors, which is what uber considers them. This ruling makes the drivers eligible for Unemployment Benefits and that is a big deal. Traditionally employees can be entitled to minimum wage, workers compensation, or insurance. These drivers were not eligible for additional benefits outside of Unemployment Insurance. The driver versus contractor issue has been taken up dozens of times and largely corporatele sided with uber. One driver received his benefits acording to the new york taxi workers alliance. Uber is appealing the decision and an uber spokesperson told cnbc nearly 90 of drivers say they use uber, the reason they use it is because they love being their own boss, adding as employees, drivers lose the personal flexibility they value most. What is important to note that new york citys ride handling and sharing apps are all regulated. Uber operates lick other black car services in the city. Black car drivers throughout the state operate as independent contractors. The new york dol could not be reached for comment and has not said why these two in particular were granted the benefits. We know that they do examine these cases on an individual basis. So these two drivers did get awarded Unemployment Insurance. There were four other drivers that did apply for the same benefits during that period of time and they were not considered employees. After you. You dont know why they so many questions. We dont know why they were fired or got that designation. Do we know if uber pays into the state Unemployment Insurance . Uber does not pay into the state Unemployment Insurance. So technically these drivers will be getting ui insurance from the fund, the state of new yorks fund. Uber doesnt contribute. Two ways to look at it. This driver who got the insurance just got lucky. And not a harbinger for anything else. Or hes sort of a predictor of what may happen in a larger scheme. This has been taken up dozens of times across the country. Two big cases out of california. Over employee versus independent contractor status. Uber and lyft got sued. They dont have to reclassify the employees as part of the settlement. Those were two big cases people were watching to see what happened. They were to set the pace for what could come across the country. This is the department of labor, not a specific court case. Thanks. Time for trading nation, because traders trade Better Together today. Lets talk about what else the big banks, jpmorgan chase. Melissa brought this up in first hour. It is one thing to Beat Estimates. It is another thing to Beat Estimates so low that basically anybody could have beaten them. Do we look at this as a good quarter or the expectations were so bad that anything would have been good . The expectations were low, and theyre still expecting about a 2. 5 contraction. But it is a good thing. At leit fast for the third quar. Volatility was a good thing for the banks. Most of them are beating estimates because of higher trading revenues because investors have been changing their portfolios and therefore trading more. Particularly as also as we expect rate hikes, brexit, all those things added to more Trading Volume and beating estimates. Look, this could continue. If we keep seeing volatility, if we keep seeing rate hikes, keep seeing investors in their portfolios, it could get better. Estimates are expected to be higher for next quarter. Were looking for 5. 5 growth, no contractions Fourth Quarter, and even 8 growth for 2017. So they are going to have higher hurdles going forward. Larry, your take on so far, because there is more to come, the banks, earnings and guidance going forward. Well, first and foremost, brian, when you look at the financials, you got banks in japan that are trading at. 3 to. 4 times book. Banks in europe. 6 to. 7 times book. And banks in the u. S. Are at 1. 1 times. So the u. S. Banks are the most expensive banks on the planet earth. And what we have learned since 2013, if you sit in the boat and wait for Market Driven panic that typically comes from fed trying to get a rate hike in, we have seen this twice now in the last nine months, youre much better off sitting in the boat and waiting for the banks to come your way than chasing rallies in financials that are susceptible to Deutsche Bank situations in europe, and weakening credit quality across the european banks as well. Larry mcdonald and erin gibbs, thank you. Well have you back on im sure pause more Big Bank Earnings to come. Thank you, both. For more trading nation, head to our website, tradingnation. Cnbc. Com. Power lunch back in two. The latest from tradingnation. Cnbc. Com and a word from our sponsor. Trading with the trend is key for many traders, so trend following indicators are important. The markets that are trending down, many traders watch moving averages which will generally have a downward slope. As long as the stock or index stays below the moving average, most trend traders believe the weakness in the market is being confirmed. Upgrade your phone system and learn how you could save at vonage. Com business are you surprised by this . Im not surprised. I think we have all known what a tough asset twitter is right now to buy. And while there are a lot of rumors and a lot of companies looked at the backs, i think a deal was always very unlikely and this kind of confirms what the insiders knew already. Why is it such a tough asset . What is it about it . Its growth. Snapchat has it. Facebook has it. And twitter doesnt right now. And yes monetization is important, but twitter hasnt had that either lately. So there are a lot of strategic questions hanging over the company. Could private equities step in . Tyler was making that point earlier. It is tough. I know a lot have looked at it, a lot of activists have looked at it, but it is a tough company and management has really, you know, been set in their ways. Thats the one thing i wonder, will it change now . We know that dorsey had been opposed to a deal. Well see what happens, but i think it is going to be tough to get a deal done in the shortterm period. Were going to turn to you, i remember on fast on september 23rd you said twitter was going lower, the stock was in the 20s then. You said you would buy it back at 14. Where do you think dwit etwitte from here . It is practically the 52week low on twitter . I dont see why it goes higher. The only reason it did go up is because of a short squeeze and takeover speculation. Thats the only reason the stock rallied . This was more of a common sense trade than anything else. You learned a lot about the Shareholder Base here. You learned a lot about the process as well and i think now were going to learn a lot about valuation. The stock really, if you look at it, ipo at 26 bucks, traded at 25 and change, i think people are talking possibly a 26 takeover. Thats crazy. Thats an insane valuation for this company. So i look at it and say i do think it is going to go a lot lower. I dont think there is a suitor out there at these prices. Maybe toward the 10 level itres Company Needs a tremendous amount of work. Has been mismanaged for years. I look and say, again, hands off until we get to a valuation that is reasonable. I was making this point here with brian and tyler earlier that the stock didnt actually it is a sharp reaction, but if you take it back to when it last rated at these levels, somewhere around july and there was still a notion out there that twitter shares twitter would be bought. And here we have all of the bidders reportedly walking away from the property. What is left at this point . Still got applied cover bid. People that covered all the way up to the people were shorting it, that 24, 25 level. So there still is there was a massive press on the shorts once there was a no deal cited from disney and no deal from google, no deal from facebook, what have you . Crm backing out or slowly backing out, the short pressed this thing pretty aggressively. Now underlying bid from covering. I think this thing could drift a lot lower. And, again, i say to you, valuationwise, this could be a this could be a 10 stock. I dont know. I would say there is no reason to step in and buy this stock here. The only reason a loot of plt a were in you got more here. Thanks, guys, david seeburg and jessica lessen. Inspired by snoop and martha, were teaming up for a new cooking show. Our picks for who melissa and tyler should team up with and their own picks for who they would want to team up with if they had a cooking show and they might. Thats coming up. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Hey, evan. So, youre stuck at a work thing. With directv and at t you can stream all your favorite shows without using your data. That makes you more powerful than a table for 60. Wednesdays are the new thursdays or the mandatory after party. How early is too early to leave . Youre not going anywhere. Im not going anywhere. Its your tv, take it with you. Watch all your live channels, on your devices, data free. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Our entrepreneurs of the week come from very remote places. They have travelled here to sell their hand made Home Products to the American Market and they are killing it. What do they know about our market place that even many of us who live here dont . Find out their secrets. Check please. Earlier in the show we talked about martha stu skprt snoop doggs new cooking show. We asked who should it be who did you pick . To be my cohost i would pick my wife first but that would sicken everyone. I would want to do a cooking show with mark cuban, jim cramer and charles barkley. My number two pick would be Kate Mckinnen performing as Hillary Clinton. Nice. A little this. Alec baldwin. You guys are in the same did you talk . I think alec baldwin is so talented in terms of being a comedian. I can cook. My pick would be stevie nicks. I made a pick for each of you. My pick for tylers cohost is paris hilton. Paris hilton. Thats hot. For melissa lee my pick would be manson. Wow. I want to see the cooking marathon. Ill produce it on bravo sunday nights 11 p. M. Fun show. Thanks for watching power lunch. Closing bell starts right now. Have a great weekend. Welcome to closing bell. Im kelly evans at post nine. Im bill griffith. Stocks losing in Early Morning rally. Oil prices hav come under pressure. Health care, bio tech in the red as they have been and financials which initially got that boost from some Bank Earnings this morning have since reversed course although we now see Jp Morgan Chase has gotten back into the green. So has wells fargo. Speaking of financials, wells