Transcripts For CNBC Power Lunch 20240622

Of the office we begin with a tense situation in greece. The 10year note is sitting around 15 and have soared 60 this year. A referendum is set for sunday with greeces Prime Minister urging a no vote. Lets go live to athens chief International Correspondent Michelle Carusocabrera joins us there with i believe also the president of Athens Chamber of xlers commerce . Yeah, the chairman of the Hellenic Chamber of commerce, good to have you here. Excuse the music, there is is a small communist rally going on. Shall i call you camomrade . Michelle, this is a country of extremes. In the first century, existential comemunism has died 20, 25 years ago but here in greece it is rampant. You can hear them chanting. There you are. This is greece. We know that this crowd will vote no in sundays referendum they hate the euro they hate everything about euro et cetera. How do you think the vote will go on sunday . Im cautiously optimistic that we dont have a strong yes vote. Vast majority of greek people this has shown in every poll is in favor of the euro. I know the question which has been set on the ballot paper on sunday for this charade referendum is not yes or no to the euro but behind everyones mind, it is yes or no to the euro and it will be a strong vote for yes which is going to be registered. Listening to the graek government officials on television today, they are telling the greek people that the banks will reopen after the vote. I find that very hard to believe. Is that your understanding . Absolutely not. Fully one who knows basic elements of when youve got capital controls being applied to a particular economy to a Banking System it has never been valid for one week. I think it is absolutely impossible unless there is a deal, a deal that passes all the parliaments of the eurozone. A deal that is struck here in greece, signed and sealed and then the ecb has to send funds because at the moment the only available funds in the greek Banking System does not exceed 600 million euros. So you can imagine that when banks do open the credibility factor has to be at an acceptable level so that we dont have exactly the same phenomenon of greeks rushing to it the banks to withdraw their remaining deposits. Its absolutely impossible for tuesday for banks to be open. I personally envision if everything goes smoothly and we have a strong registration of is around the 20th of july. Wow. That could really be devastating for the economy. Thank you so much for joining us ahead of this key vote thats coming up on sunday. Guys back to you. The other big debt threat out there is puerto rico. What a week the governor saying the island cannot pay its debts. Puerto rican bonds getting hit very hard this week. Cnbc contributor alexandra labenthal, is the damage already done to my bond funds if i own ones that have puerto rican debt in them or could more trouble be on the horizon . Well its been a slow erosion for quite some time. This last week was a bad week. In fact i just took a look at one of the funds, oppenheimer new york, which holds a number of puerto rico bonds and if we have a moment we should talk about the oppenheimer funds, it was down 2. 6 or not week whereas the muni market in gel was flat general in flat. The week ended okay. The electric made its payment. Gos made their payment. But there is still a lot to come and theres still the bond funds and the hedge funds and Insurance Companies as well that are going to have to be sitting down with the government and working out some type of deal. You mentioned oppenheimer. Weve had the Portfolio Manager or managers on from that company. They have a strong point of view on puerto rican bonds. They believe in their position sincerity. What do you think . Well what i wanted to say and im sorry i missed their interview they have a very very large percentage of puerto rico bonds in their funds. They have always been a very highincome fund group. And theyve come out with a very strong stance about defending those the credit of the puerto rico bonds. So if people hold op himpenheimer funds, they should certainly be taking a look at how those funds perform. Look, as somebody whos spent her life and certainly her family in the Municipal Bond world, do i believe very strongly in an issuers willingness to pay the validity of a general Obligation Bond as many first in line in the capital structure. But certainly whether its puerto rico or detroit over the last year has shown us that when you do get to the bottom of the barrel and the money isnt there, there does have to be the realization that something has to be done. Thank you very much. Think one of the key points that you make there expressly and implicitly is that if youre a bond fund owner, no matter what you need to know what is in your fund, whether it is a bond fund or a stock fund. You need to know what it owns. Yeah. If i can very quickly say, in any bond fund or any mutual fund, look at your Top Ten Holdings and if you have more than one fund you may find you actually have the same holdings. The same things. Alexandra, great point. Have a great weekend. Right now the baker hughes weekly writden out a day early because of the fourth of july holiday. A gain of u. S. Active oil rigs. A again the caveat here Oil Production still remains near record high levels but still a gain of 12 oil rigs to 640. This represents the first time that the baker hughes weekly u. S. Oil rig recount has gone up since december of last year. Well watch for any impact on crude which will close in about 90 minutes from now. Currently sitting at 57. 27 a gain of. 5 so far. Another crazy trading day overnight in china. Shanghai and shenzhen stock markets plunging 4 . Its been a volatile week. But take a look at this on monday and tuesday we saw 10 swings intraday in the shenzhen. Wednesday had an 8 swing in trading. Last night had a 7 swing. Just its incredible. Lot of people liken the chinese stock market to gambling in macao, ty. It really is turning into a bit of a gamble at the employment. Dont know what youll get on a day to day basis. We talk about little moves in the vix. Those are big moves there, folks. Federal regulators today holding safety hearings into recalls announced by Fiat Chrysler. Phil lebeau is in chicago following that for us. Were monitoring that hearing in washington, d. C. Essentially it comes down to the national Highway Traffic Safety Administration holding a rare public hearing to ask take yootFiat Chrysler to explain how it has handled or they would say at nit nhtsa, mishandled a number of recalls. According to nhtsa, they were either slow in communicating people who were involved in recalls or they were delayed or hadnt done the repairs quick enough. Millions of dollars in fines are possible. There is the outside chance nhtsa could eventually move to have Fiat Chrysler refund the cost of those vehicles to buyers, though most believe thats unlikely to happen. Shares of Fiat Chrysler since its ipo last fall. A lot of this is because of the euro and the benefit there in terms of manufacturing some of their vehicles specifically jeep vehicles in europe. Those vehicles are sold here in the u. S. Some of this is also because is celebrating gains in the auto industry. The hottest brand right now is Fiat Chryslers jeep brand. Sales here in the u. S. Up 20 . Folks, its growing five times faster than the market overall in terms of sales and the jeep brand is expanding globally. Well continue watching this hearing going on in washington. It is coming at an interesting time because that jeep brand, redhot. There anticipate not a hotter brand out there right now in terms of the mass markets. Jeep drivers look redhot, dont they . They like driving around with the top down in the summer. Stay with us phil. Lets get more insight into Fiat Chrysler right now. The former president of chrysler, bob lutz former general chairman of General Motors. Bob, you should know a thing or two about this. Is there an element of Fiat Chrysler being singled out . Well i dont think theyre being singled out but it has been interesting to observe that over the last few years whenever theres a nhtsa investigation or nhtsa inquiry, such in jeep rearend collisions and everything the company has taken a very aggressive, somewhat denying stance and has been pretty feisty which to those of us in the industry always seemed like you like to see somebody push back if they really dont think theres a problem with their vehicles. But i think every Automobile Company has learned over the years, you cant fight city hall. Even if youre right. Youre going to be wrong. And, frankly, theyre going to get you. I think there is a generalized feeling that chrysler is somewhat reluctant and defensive. It could be wrong, but i think thats the impression that theyve created and i think this is payback time. Bob . Sorry to interrupt you there. I have a quick question. In all your years in this industry have you ever seen a situation like this where you have Fiat Chrysler with one of the hottest brands going right now with jeep and another brand thats doing well with ram trucks growing sales as quickly as theyre doing that and yet when you look at the reliability ratings, whether its consumer reports, whether its j. D. Power, they are consistently at the bottom. Im not talking about one time. Im talking about consistently. Yet its as if the buyer is going out there dont put that together with the possibility of buying a particular vehicle. Sills tell you what it is. If you look at the absolute scores, the worst performing brand today in the surveys would have won the survey would have been the triumphant winner would have beaten lexus and toyota seven or eight years ago. So the overall quality level has gone gotten so high that you can still split hairs and say, well, somebodys at the top and somebodys in the middle and somebodys at the bottom. But the overall quality is so high now that nobody perceives the difference. Frankly, the public has wised up and has figured out that these quality ratings just are irrelevant to them anymore. Thats basically whats happened. Thank you, great discussion bob lutz. Airline stocks down hard this week. The department of justice investigating carriers over collusion saying carriers are intentionally growing capacity at a slow pace to keep airfares high. Gordon bethune, a cnbc contributor and one of my favorite guests because every time youre on you say something, doggone it im going to ask you a simple question. Are todays Airline Executives dumb enough to collude or are they just being smart in the ways they are running their businesses and manage pentagon capacity . Thats it tyler. Theyre smart people. The smart people usually come up with the same correct answer two and two is four. Thats not collusion. Thats just making the correct answer to the issue of how many seats do we want to try to sell. You shouldnt try to sell more than you can sell. Thats right. It seems to me that in the past there was a race to the bottom with airfares and a race to the bottom in terms of having more seats flying between new york and cleveland or cleveland and chicago and they couldnt fill them so they were running their planes at a lot. Its basic fath. Math. Look how many people lost their pensions employees lost their jobs. Those guys are gone. Youre only as good as your dumbest competitor. Those guys are gone and weve got about four Mainstream Airlines all run by very intelligent people and theyre making a business and paying their employees. I think thats great. We hear a lot listen. I dont know what kind of evidence the department of justice has at all. I dont think any of us it truly do at this point. But be that as it may, the point is repeatedly made that 80 of the Airline Traffic in this country is run through four major carriers. But thats not so unlike a lot of other businesses in this country, whether its cell phone providers or my cable opportunities in my local town. Absolutely tyler. Those four guys are headtohead in almost every market. Theres lots of competition between Sarasota Florida and spokane, washington. Everybody will get you there so its very price competitive. But theyre not trying to buy market share, because you cant do it because your competitor is just going to match it and youll both lose money. Thats whats going on. Bethune in matheson in vigorous agreement here thanks tyler. Whats that saying . Great minds think alike. Something like that . Birds of a feather . At least one great mind in that conversation. Bp announcing a multibillion Dollar Settlement to try to end lawsuits over the Gulf Oil Spill disaster five years ago. Is bp now free and clear . Also another Big Health Care deal to. Sectors been soaring to far this year. Speculation, m a, you name it. All ahead in the second half. Payments company xoom corp. For 9. 9 97 million. It plans to keep all of paypals current customers. Tesla reported a 52 increase from the year prior. Centene set to buy healthnet. Health net soaring, centene hitting record highs earlier but paring those gains. People in tennessee had to flee their homes after a Train Derailment near knoxville. It was carrying flammable and poisonous liquids. No one killed by seven sheriffs deputies were sent to the hospital after they inhaled some fumes. Bp agreeing to a multi multibillion Dollar Settlement after that big oil spill. This is is a record setter on a couple of different fronts. It is the largest environmental settlement innocent history of the United States. Its also the largest settlement of any kind in terms of a civil settlement with one entity by the department of justice in the department of justices history. Heres how it all breaks down in terms of who gets what. The grand total here 18. 7 billion. Louisiana gets 6. 8 billion. You see all the different states there getting a large chunk of money. Florida, 3. 3 billion, on down to mississippi at 2. 2 billion. All of the gulf states benefiting here. Floridas attorney general said the goal here in coming up with this deal was ultimately not to have protracted litigation that goes on and on and on. Take a listen. We think this is going to help our state recover and move on. The last thing that we wanted was to be tied up again in a black hole of litigation that could have gone 15 20 30 years that perhaps our grandchdren would have seen the results of b certa aeein with that be sentiment. The statement now from bps chairman it resolves t compys lgest remaining legal exposures, provides clity costsndreates certainty of payment for all partiesinlved mandy and tyler, the money here is going to go to a variety of different funds, environmental cleanup, general state funds, also to help students in the area. A lot of different beneficiaries of this money which will be paid out over a long period of time. This deal will still need to be approved by a federal judge. Thank you very much eamon javers reporting from washington. Another big deal in health care. The sector has been a highflyer this year up 10 well outperforming the broader markets. Will that rally continue for the rest of the week . Weve got your second half playbook, folks. Coming up right after this break. Welcome black to power lunch. Shares of car rental giant hertz are hitting their worst levels today. Ryan air the european budget carrier, says it will take legal action against hertz after the company term narted its car rental supply agreement with that carrier citing a breach of contract. Both sides are now responding to this whole situation. Remember tyler, hertz used to be a 31 stock just last summer. It is now around 17, 18 a share. And activist investors carl icahn and Janus Partners among the two biggest holders of hertz shares. Dow and s p 500 pretty much gone nowhere in the first half. Not so the nasdaq. But one area of the market that does continue to be on fire health care. The sector is up about 9 so far this year. Will this rally continue . Bertha coombs here with your second half playbook in health care. Were seeing merger Musical Chairs throughout health care. In the second half the big five insurers all at or near alltime highs could finally figure out whos left standing. The Big Questions how they pair up, how long it will take how expensive and leveraged will the deals be and will regulators okay these big deals . By revenues United Health is the giant with 143 billion annually. Anthem is pursuing cigna. Combined Company Revenues would be 116 billion. As would a potential aetna humana combo. Thats much bigger than their nearest competitors. Hospitals are also near alltime highs, and big gainers this year. Analysts raise estimates for the sector after last Weeks Supreme Court Obamacare Ruling but this fall providers face a big tech challenge with the switchover to a complex new billing code system. Providers are basing for payment glitches and delays. It is a big test for the electronic records firms. Theyve vowed to compensate payments for doctor glitches. Those are the kind of tieups we could see next in health care more firms combining in different sectors. Back to you. Bertha coombs. Thank you. Rising mortgage rates, soaring rents, fed rate hikes ahead. Whats ahead for housing in the second half. Plus todays powerhouse is home to two fortune 500 companies. It is the nations 54th largest city. And there is no individual income tax here. Can you name that city . And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. A new season brings a new look. A chance to try something different. This summer, challenge your preconceptions and experience a cadillac for yourself. Take advantage of our summer offers. The 2015 cadillac srx, a crossover with space safety, and style. Lease this from around 339 per month. Hello, everyone. Im sue herera. Heres your cnbc news update this hour. George soros and Steven Spielberg are said to be among the biggest backers of a super pac backing the Hillary Clinton campaign. Super pacs can take donations of unlimited size. Miss Clintons Campaign reported on wednesday that it has raised 45 million since midapril. Some flight delays today after a United Express flight heading to d. C. Was diverted to ohio. An airport Spokesman Says one of the passengers made threatening comments aboard that flight which had departed from st. Louis. Officials in North Carolina are trying to find a pattern in the series of shark attacks there. There have now been seven shark attacks off both north and South Carolinas coasts in the past three weeks. The latest came tuesday when a 12yearold boy was bitten about 15 feet off the shoreline. The size of a c iffos signature really does matter pft university of marylands Business School finds cfos with larger signatures tend to be more likely to exploit others and bend the truth. Interesting. Thats the cnbc news update this hour. I wonder if theyll all start changing their signatures. Thank you very much for that sue. Gold prices closing right now. Gold currently sitting at 1,163 moving down. 3 . Silver copper palladium and platinum, all in the red. Moving over to the bond market on the back of the latest jobs report this morning, Rick Santelli at the cme. The report wasnt bad. It wasnt good. It was kind of peas poreridge reflected in the middle. The 2day chart gives you a better idea of how the action really fits in. 2. 48 is the high yield close. We sit at 2. 28. A june 1st of 10s, does today change the notion . It still seems rates have a bias to drift higher. A 2day of the dollar index doesnt show a lot of volatility. If you zero in on theeuro versus the dollar still continues to be what drives most traders. I will say you wouldnt associate and aggressive interpretation of the fed. In the final seconds i have happy birthday america 239 on the fourth but i would like to wish all of the support staff and futures traders whose pits are going to close partially today, maybe the rest on monday but thank you for a great job. You are the cornerstone of much software that now moves electronically and there floor will still be vibrant with option trades but i wish to give one big salute to all the personnel ive worked with these many years close to 36 years, job well done. Tyler, back to you. And well said Rick Santelli. Thank you very much for that tribute to your esteemed colleagues. We appreciate it. To all of you, happy fourth of july. Major averages up for much of the early part of the sessions in terms of equities but theyve lost their gains, now sporting modest losses. Bob pisani is at the New York Stock Exchange to fill us from. Drifting lower on light volume. S p, really this is a lack of bids. No really enthusiastic selling overall. Bond rates lower. Look at the utilities. Telecom and reits all moving to the up side. Yields down. That means banks generally tend to move to the downside particularly the regional banks and thats generally what were seeing in that particular group. A lot of people have been asking me about what will happen on greece . How you can play that. On a yes vote we could expect the euro to rally and you would expect certain sectors like spain, italy, france and germany, these are etfs you can buy to rally. We asked our partner about that and they do see rallies in this group when you see rallies in the euro. If there is a no vote you can expect a flight to safety a bit. I would expect bonds in europe to rally and i would expect bonds in the United States to rally like the tlt, 20year treasury. This is just depending how you feel that referendum will go. A lot of people ask me about etf volume in general and ask me how important it is. Etf trading is a percentage of total daily value of stock trading. Right now it is about 28 . Thats high and it is getting higher. It is getting bigger every single year, tyler. Almost a quarter of all the volume, the value of stock trading is now etf. Again, june biggest month in a long time. Back to you. Thank you very much bob. Matt tuttle from tuttle tech technical management it has been for the s p the worst week of losses in about 14 weeks. Youve made a buy. Youve been taking advantage of this. Right . Yeah. We bought monday and we bought tuesday. The way we look at it this markets been mired in this trading range all year. And what happened the other day put us at the bottom of that range. I know what happens in greece over the weekend is going to dominate trading but at the end of the day i think this is a great entry point to get in at the bottom of of this trading range. Eventually well break through the top. What will be the catalyst for breaking through the top . Earnings . Resolution in greece . Something else . Yes, yes, and yes. Its earnings, its a resolution to this greek crisis. We dont think the feds going to raise Interest Rates until 2016. You decide that after you saw the jobs this morning or no no. Weve actually been calling for that for a while. At the beginning of the year i was really worried that we were going to be totally and completely wrong. But everything ive been saying lately is pointing to 2016 for us. What about you, jack . Youre on the bond side of things. I was looking at numbers here. We saw another week of outflows for highyield bond funds. Emerging market dead funds. Obviously muni bond funds. A lot of outflows there. Is this something you expect to continue or change in the coming weeks . We dont. We know the Second Quarter was a challenging environment for fishgsed in fixed income. I just dont think thats going to continue. The markets have gotten ahead of themselves. Everybody wants the Global Economy to pick up but i just dont think thats going to be the case. I certainly dont see a lot of inflation pressures building so im not in the camp i dont think the yields in the bond world are going to continue to drift higher. What do you think is going to be happening to bonds in light of what we saw with the jobs market this morning . For example, matt was just saying that he doesnt expect a hike until 2016. Okay. Two quick points. One is that certainly i think there is more uncertainty of actually when the fed is going to tighten, whether september or december. I think the more important question is what is the pace of the tightening look like. Will it be shallow, they will go slow. I think they still think they have some things positive from a growth standpoint but it is a diss inflation disinflationary growth spur. I dont dont see it flowing through to inflation. When the fed does tighten, they will will go very slow. Were going to leave it there. For more go to powerlunch. Cnbc. Com. I want to add before you jump in, ty both of you fuelly think that china is a whole lot more worth watching than greece. 220,000 jobs created in june. Expected, 230,000. Jobless rate ticked lower slightly. Mayor, what do you think of the jobs report here . Key word is consistency. Youve had consistent job growth. This continues to pattern, it continues to trend. But of course you still have high youth unemployment. What the numbers dont reflect is continued high unemployment in many urban communities. So more needs to be done and wage stagnation. We dont have the wage growth that youd expect in this kind of tightening job market. Its a good report. Its a consistent report. But theres a lot more work to be done and i say too early to raise Interest Rates. Some of the revisions, ron, were a little bit i guess disappointing. If you were Rick Santelli maybe i shouldnt say that how would you grade it. But how would you assess it . Im going to channel my inner santelli. Give this jobs report a c. The number of jobs revised in the last two months have gone down significantly. The job growth we had for this past month sure on focus it looks like tts up by 220,000something. But then we had 432,000 folks who left the workforce. You have a net loss of 200,000 jobs. I think on the whole you are looking at wages are stagnant, you are were looking at the fact that folks just dont have that confidence. With 93 Million People out of work in this country. We can sure do a lot more and this jobs report was not a step in the right direction. As mayor morial says ron, one of the key things here is trying to get wages up. A lot of municipalities have pushed through higher minimum wage laws. Is that the way to get wages up . Or what has to happen for that to happen . No. I think thats absolutely a mistake, tyler. I think if you look at the private sector, theyre the ones who are fueling economic and job growth in this country. If youre a white castle and you decide that you want to increase the amount of money that you are paying your employees, you should do that. When you say youll raise the minimum wage to 10, 15 an hour, all thats going to do is hurt younger folks who are looking to enter the job market and it will retard Economic Growth. You agree with that and what about the president s proposal to increase overtime . The evidence simply doesnt support what rons saying. Over time that arguments been made. It is really a hollow argument that doesnt have any substantiation. We do need to push up wages. How do you do that . Id prefer the Public Policy step of a National Increase in the minimum wage. Because that hasnt happened you have avenue got this patchwork of states and municipalities doing it. Thats the reality. It may not be best. It is better to have a national standard. I also think we need broad Public Investment in infrastructure. I think that would push the economy and i think ron has historically agreed to that. I think the president s step to change the overtime rules is a necessary step because heres a president trying to do what he can with a congress that doesnt want to act. Do you see ron, the move to broaden the income or raise the income limits for which people would be entitled to overtime . Do you soo he thatee that in the same way that you see raising the minimum wage . I should point out that i dont think that overtime number has risen since the 1970s or 80s. I do. Again, i think this is the instance where the president is using his pen and his phone to act rather than working with the congress to try to promote economic development. Look, what the president s overtime rules will do for Public Sector for me thats fine. If the president wrantsants to do that and thats Something Congress supports thats fine. But to say private employers should automatically extend these increases in salary i think will only lead to them deciding are we going to reduce the hours or reduce the employees. Pass a philosophical matter mayor morial why should government set a wage in the first place . If a worker wants to work at 5 an hour and a Company Wants to pay him 5 an hour why shouldnt they be free to do that . It is all about who we are as a nation. Work and dignity go hand in hand. If a person works, they ought to be able to support themselves. Thats the idea for people to be economically independent. Its tragic that many people work and still cant pay their rent pay for food pay for the necessities of life. Thats really what we have to strive for and understand that when we do that. Workers who are at that level in the economy will spend their money back in the economy and therefore continue to prime the economy. We remember 70 of Economic Growth in this country derives from consumer spending. There is an economic reality. But this is who we are as a nation. Idea that work and dignity go hand in hand. Ron, why dont you aggress that question of whether government really has a role in setting wages at all or is it really a private compact contract between a, woulder and erworker around a willing employer. Mason, come on over here. I want to introduce you to the crowd. I think as we see the mayors fine son joining on set, i think this is the role the private sector. The government has legitimate role to play as far as providing a social safety net. But it is the private sector that creates the multitude of jobs in this country. If government wants to help Us Government wants to create economic opportunities, they should restrict have the amount of regulations that are hurting this country. The obamacare bill is going to hurt the amount of people who are getting in the workworkplace. The cadillac tax will hurt their position pmt government position. I think the government should get out of the way rather than being more intricately involved to make sure to find a way our businesses can have a climate to create economic opportunity. Have a great weekend, ron. What are you doing this summer, mason . Camp. Camp . Day camp or sleepaway camp . Sleepaway. How long you going to be gone . Two weeks. All right. Fine. Good to have you with us. How old are you . 13. 13. Great. Have a great summer man. One nation one flag. Right. Mandy, take it away. Wes waiting for the courts to decide any day now whether Sports Betting in new jersey will be legalized, and if so will more states follow suit. That is ahead. 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Frank sinatras palm springs sanctuary also known as his villa magio, the tenacre compound has three separate homes, a pool, a tennis court, a hel ipad and parking for 25 cars. Five bedrooms six bathrooms, two kitchens and seven stone fireplaces, all with breathtaking views of palm springs and the coachella valley. Its been a rough year for some of the big social media stocks. So far youve got linkedin pandora, yahoo yelp all down sharply. Can we expect a bounce back in the second half of the year . Thats ahead in the second hour of power lunch. Plus a watermelon being blown up with the help of small fireworks. All part of a safety warning ahead of this fourth of july weekend. Ou qualify for a sittinghams card today i can offer you no interest for 24 months. Thanks to the tools and help at experian. Com, i know i have an 812 fico score, so i definitely qualify. So what else can you give me . Same day delivery. The ottoman . Thank you. Fico scores are used in 90 of credit decisions. So get your credit swagger on. Go to experian. Com become a member of experian credit tracker and take charge of your score. Please rear this weekend to be safe above all. Those were dummies. Here are this hours power points. One, Greece Funding needs deepen. The imf warning greece needs an extension of its European Union loans and pro tensionally a large debt writeoff. The latest poll results for sundays referendum show 41. 7 vote yes, 43. 2 vote no. The u. S. Oil rig count is up 12 to 240. This is the first rise since december and finally, federal regulators holding safety hearings on the recalls announced by Fiat Chrysler about 11 vehicles are in focus and millions of dollars of fines are possible. If you missed any of the stories in the past hour go to powerlunch. Cnbc. Com. The second laugh of the yearhalf of the year is under way. What are the key sectors to watch the second half . One is housing. Diana olick has a look. Reporter ty, it will be all about affordability. Well tell you what direction that could head in this the second half of this year coming up next on power lunch. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com im melissa lee. Coming up in the second hour of power lunch, one top analyst says car sales could drop by 40 because of this one thing. Hell tell us what that is ahead. Another down day for china. How can you make some money off of china . Plus the president about to speak on new overtime rules. Will they hurt the Restaurant Industry . A great debate is teed up at the top of the hour. The first half of the year in the books, gone. Boom. Second half is under way. Were drilling down on the key sectors you probably need to watch in the next six months. This hour we look at housing. What is the number one thing to watch for in the back half of the year . Diana olick has been looking into the housing crystal ball. Reporter it is all about prices. For both buying and renting. Home prices are still rising but at a slower pace than this time last year. Not the case for rents which are at record highs in some markets, as demand far outpaces supply. Yes we are seeing more new multifamily construction and deliveries of those units. But okayccupancy is at an alltime high despite predictions last year more rent yours would turn into buyers. The key for buyers is twofold. First the mortgage market. Rates are expected to rise slightly and new rules could stem access to credit in the second half of the year. Second, supply. Housing starts are rising but at a far slower pace than demand. Now builders are still trying to hold on to their Pricing Power which is a lot easier to do when theres slim supply. Some are starting to give which could stoke sales in the second half of this year. That is it for the first hour. Have a great weekend. You, too. Im sticking around. Youre heading off. Lets get to melissa lee for the second however power. It is 2 00 on wall street and youre watching the second hour of power lunch. Im melissa lee. Tyler will be with us for the hour. As we head into the long holiday weekend, the dow has had about a 100point swing on this jobs thursday. The dow is now down by 58 points. Take a look at how crude oil is doing, up. 5 , 57. 26. And gold trading lower today, 1,163. 60 an ounce. Tesla shares increasing today. Phil lebeau joins us with more on the tesla story. Reporter melissa, notice that stock now over 270 a share. Its had a nice move today. Heres why. When you look at 2q deliveries came in a little bit higher than many wall street analysts were expected. 11,507 deliveries. Most of the notes id be checking prior to this expected between 10,500 10,750. Again, the number exceeded expectations. But for tesla it is the fullyear deliveries and once they hit the target that they said later this year. The total target delivery is 55,000. Thats their projection for this year. Deliveries start to ramp up late third quarter, into fourth quarter. Thats when we expect to see the first model x delivered. Though there is chatter about whether or not it will be on time. Quickly, some discussion today about a bank of America Merrill lynch regarding what the future holds for tesla. John murphy the analyst there says regardless of an investors view, on the ultimate level of electric vehicle penetration that will occur in the Global Market over time competition in this segment is ramping meaningfully and will increasingly pressure tesla. Thats the latest on tesla today. Back to you. Thank you, phil. Todays gain on tesla shares is very nice but look at how the stock has done over the past three years. Up more than can you guess . 800 . And the stock is getting back towards its alltime high. It is up 20 over the past year. Alltime high was 291 a share. That was set last year. Teslas isnt the only automaker reporting strong sales. With the exception of General Motors Fiat Chrysler toyota and ford all reporting an overall increase in sales for june. One auto analyst sees a big threat emerging in the future. Saying Driverless Cars may cut u. S. Auto sales by 40 in the next 25 years. With us brian johnson, senior auto analyst with barclays. Lets get to the Driverless Cars in a moment. First, what do you make of teslas stock. And what about paying attention to the 55,000 target at the end of the year. With the First Quarter and Second Quarter deliveries that would imply 33,000plus for the balance of the year. How backend loaded is teslas delivery schedule going to be . Its very backend loaded. They really need the x to launch with some initial deliveries in 3q then ramp up to 10,000 to 12,000 units in 4q. Frankly, if they miss that im not sure if the market at this point cares. It is fairly bulletproof. One of yurl colleagues calls it a cult stock. We do see longer term competition but were just not sure what if anything sets tesla back. Thats why we keep it as an equal weight. Equal weight not a buy at this point. Correct. Lets talk about Driverless Cars. Everyone knows they are on the horizon but in terms of pufting a number to how many cars on the road that will be displaced, nobodys come up with a number. You say 50 of vehicles with risk rfof displacement will lead to auto driving. You say it will be a gradual decline well see at the big three . Yeah. We could see a gradual decline depending on when the first fully selfdriving cars become available. Google says 2020 on open roads for public consumption. Continental ag a leading german auto partsmaker says 2035. If they come on 2025, 20. 30 2030, it will be a gradual process. 60 of the population wants a car to go to point a to point b. The way you are thinking about Driverless Cars are not only going to be the ones owned by fleets maybe operated by the likes of an uber but also families could own a driverless car, so therefore the number of vehicles owned per household will decline as well. Yes. Absolutely. We really see three types of cars in the future. The traditional car, which will be rural areas, traditional work trucks which could be selfdriving but it is still one car per user. Family autonomous vehicles. We use in our report of picture of mercedes concept. A hyperluxurious car that instead of a family having three cars they could go with two or two cars to one, drive one partner to work goes back picks up the other partner, for errands around town and then is available. What we call the shared autonomous vehicles. Think of those as uber or lift without the driver. That really are called upon dispatched much as uber and lift are today. And take people around without the need to own any car. So this is really bad news for gm and ford as you point out in your note. Theyll have it to decrease north american production by a lot, more than half at this point. Johnson controls leers, delphi theyll also feel the impact over this 25year time. In terms of whos in the drivers seat dont mean to use that pun but sort of came out who would be the sort of the top play based on this trend . Our top play based on this trend is mobile light which makes the current semiautonomous software burned on to a chip for driving. It is a leader in that marketplace. Longer term its going to migrate from highway auto pilot which is coming out in the next couple years to fully autonomous. Theyre really the pure play at the center of this. Longer term there will be fewer cars to put it on but a substantial proportion of those will have either mobileye or boshs boschs software on them. Now to explain the growth right here yesterday on power lunch, the government looking into whether or not some of the nations top airlines have been colluding in the limited number of available seats to keep fares high. Seth, good to have you here. Very few of us know how much evidence the Justice Department may have in this case and why they were led to such a probe, but as an Airline Traveler it is easy isnt it to see why some people might think these airlines are colluding. One airline charges for extra leg room they all charge for extra leg room. One airline flies new york to l. A. For 600 they all fly new york to l. A. For 600. And then theres the anomalyies that you cant play from new york to minneapolis for 600 its 900. And they all charge 900 its easy to see why some people would think its fishy here. Right . On top of all that for the past several years, really for the first time in history weve had airfares rising in real terms on a consistent basis. And airlines finally of course earning consistent profits as a result. Now if you look just at that i mean its hard to look at this market and say that it sort of smacks of collusion because airlines are still not putting up Profit Margins that would make most industries jealous. Theyre only doing well by their own awful standards. And over the past day a lot of people have said four airlines control 80 of the industry. Well i mean four Cell Phone Companies control a lot more of that industry. In most industries it is like that. So airlines have simply made their industry look a lot more like others. Pitss just that compared to the yeah air fares have had to rise. Theyre doing well by their own horrible standards. Thats going to be the quote of the day, seth. Can you believe that Airline Executives i asked Gordon Bethune an hour ago are dumb enough and in the past some of them were dumb enough to do some really stupid things. But do you believe they would be dumb enough to collude . Im not sure i can answer that as colorfully as gordon. Thats the question though. Now look if doj thinks that they can come up with these guys sitting in a smokefilled room so to speak i guess now videotaping or Something Like that conspiring to constrain capacity, thats one thing. But if the argument here is oh my gosh we cant fly to disney world for 150 round trip anymore on the backs of the shareholders who are wiped out during those bankruptcy, on the backs of our neighbors who are pilots and flight attendants who lost their jobs. Thats the whole where theres smoke, theres fire thing doesnt really work here because again, theyve only sort of created a situation where, yeah they keep their heads above water on a sustained basis. By the way, it is good even as a consumer to not be buying tickets from airlines if we dont even know theyll be in business by the time we fly anymore. Still a pretty decent balance, but just a bit more expensive than it was a few years ago. S p at the lows of the do you with less than two hours left in the trading week. Western union the biggest lodzer er loser right now. Jack, we noted markets are closing in on session lows at this point. Volatility index even before a threeday weekend we typically see the vix go down. How are you . Hi. What do you make of the weekend that had the referendum in it . It is a question of what happens in greece not only that, you have some macro events fourth of july weekend. Weve heard about the high level of terrorist i guess the urgency of being able to be careful and watch what were doing around us. All of that has added to the tension. All weve really seen is people running for protection people buying put protection seeing people selling calls on this. What they dont seem to be doing is running for what i call the flight to quality. They dont seem to be running for the bond market the way you would normally see. What that tells me is that what is going to happen in greece is going to probably turn into what i call a buybuy scenarios. If they vote yes, then it is an automatic buy. It is instant gratification. If they vote no then wait a day or two, let the global margin call settle, then more than likely we see the market take off again. A byebye scenario. Wlaeps whats the bigger backdrop . You actually expect Second Quarter earnings to come in stronger. You expect a good market setup into the second half. I do. In the first half we saw this great rotation out of fixed income. All that cash coming out of the 10year, the 30year, its in the hands of Portfolio Managers. Remember it says Portfolio Manager on their door now hoarder or keeper of cash. That money has got to be put to work. One of the best alternatives our u. S. Equities. When you look at the u. S. Equity market right now, understand we still have all those fundamentals in for what i consider to be a very good second half. If that happens, look for 5 or 10 very quickly. It is going to be one of those rallies floebnobody can get into and nobody can expect as its happening. Jack thanks from chicago. For the rest of the hour sports gambling in new jersey. Would it give Atlantic City a much needed boost . And what is it like in greece right now . Michelle carusocabrera is there talking to local Business People and brings us one plans view. Later president obama announces new rules for overtime pay. Will that hurt the Restaurant Industry . All that and much more coming up on power lunch. Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. Atlantic city new jersey has lost onethird of its casinos over the past year. What about the ones that remain . Morgan brennan spoke to the head of one of those casinos. A lot has changed in Atlantic City since last year. We have seen onethird of the supplies been cut down in Atlantic City since last year. One that have survived and are reinvesting in their properties have started to grow. Thats true of the Golden Nugget which has seen revenue increase 38 this year. I sat down with the vp and general manager to discuss the Gaming Market stabilization and also what it would mean if there casinos were greenlighted in other parts of new jersey. There are four proposals. Youre just cannibalize anex existing market. I dont think the meadowlands will agree. You will you a probably see two more casinos close. How about Sports Betting . We know that the Third District court of appeals is getting ready to rule on Sports Betting in new jersey really any day now. If it were to rule in favor of new jersey and the other plaintiffs in that case it could have national repercussions. What does it mean for Golden Nugget . Are you building a sports book we most likely would and it would be a great amenity to add to our offerings but it is not going to be a game changer in Atlantic City or any other jurisdiction. Because it is not expected to be a game changer, not every uns optimistic that the court will rule in new jerseys favor. I spoke with someone sho he a wagering sports bet something still years, not months away. We wait for the court to decide any day, what are the odds of Sports Betting in new jersey legalizing and if it gets approved will more states follow along . Here with me president of maglan capital, and also a sports gambling attorney. There arent so many of those, are there, david . No there are not. Thankfully not. What is your sense from where you sit as to whether or not Sports Betting will become legal in new jersey and should it . I think in some way, shape or form it will get legalized in new jersey whether it be through this court case or the head of the nba is looking to have a comprehensive overhaul of Sports Gaming in the United States. He favors it right . But, daniel he wants it regulated, not the unregulated kind of betting that goes on now. Well, thats right, tyler. The problem from the nbas perspective with new jerseys approach is that it would be unregulated gambling without any government oversight, and adam silver and the other sports leagues would be concerned that this would lead to a state by state switchon with complete unregulated Sports Betting and the leagues want it regulated to be able to prevent match fixing to preserve the integrity of the games and to monitor unusual betting activity. But new jerseys version, while it is not regulated, will certainly be monitored because the sports books, the casinos, the race tracks have every interest in making sure that this is a fair game and they will be the first ones to report any suspicious or untoward activity to the leagues. Couple of thoughts here david. Number one, silver is ahead of the other commissioners. Even if he doesnt like the idea of unregulated are Sports Betting. Number two, dont we already have a lot of Sports Betting mass massacre masquerading around . I think were at the cusp of a revolution of Sports Betting in this country. The illegal market is enormous. Illegal. Correct. Bookies. Correct. Estimates are between 80 billion and 380 billion. The total casino Gambling Market none of this is bet on nfl games, is it . Yeah. Right. The total Casino Market is just 35 billion. The current total legal Sports Betting is just 4 billion. So it will be a meaningful creative amount of revenue to the casinos. At the same time as new jersey is getting into gear to make sure that it gets this piece of revenue stream and, by the way, this is Chris Christies way of giving Atlantic City something for going ahead and allowing gaming casino gambling, throughout the state of new jersey while nevadas already getting geared up as well in order to make sure that their arm in terms of book making stretches throughout it the United States and is not just limited to nevada. So this is going to be some fierce competition for an enormous revenue stream. Meaningful revenue. Daniel, should Sports Betting be more broadly legal than it is today, and what is your view of those daily fantasy leagues that are out there . I use leagues advisedly. Well, tyler, daily Fantasy Sports is a growing industry but it represents only a fraction of the potential of the sports Gambling Market. A lot of experts believe that the total amount of entry fees in Fantasy Sports nationally is under 4 billion. The Sports Betting market the illegal market is 100 times that amount. 400 billion 400 billion. Is it inevitable that it will be legal . Should it be . It will be. It is not only inevitable but it will happen either as a result of this case or as a result of federal regulation at the congressional level. This new jersey case is all about the timing of when Sports Betting becomes legal, because if new jersey wins and we will get a decision any day or any week now, you can look for pennsylvania, delaware minnesota, South Carolina indiana, to enact similar sport wagering laws in reliance on the 3rd circuits decision. Then it the train will have left the station. Let me ask. If betting becomes more broadly legal, is it a threat to the integrity of any of these professional sports or College Sports for that matter . I dont in hess sarl think so from the folks that i know that bet on games on an illegal basis, it will not go ahead. How about beyou, daniel . It will further protect the integrity of the games because it will bring the half a billion dollar annual wagering industry out from under the underground and it will be in the sunlight where it can be regulated and monitored like the securities industry, the leepgzagues want to know the level of betting activity who, what where and when. In the present environment they are completely in the dark. Thank you, gentlemen, very much. Thank you. Thank you for having me. Still to come we keep talking about greece from the big picture perspective. What it means for markets. But what about real people . Not knowing whether theyll be able to get money out of the bank. What is it like in athens where Michelle Carusocabrera is talking to real people . Life without money. Well bring you that coming up. Plus i get paid for this. Im kevin may and i get paid for this. What it takes to be an animal acupuncturist coming up on power lunch. Got a pretty volatile market ahead of the long holiday weekend. Vix spiking almost 6 . The dow more than 50 points. S p 500 is just point point off session lows. Russell the worse major indices, down. 9 . Western union and dupont also down. Cognizant and United Health all down. Time for our regular series where we feature people who have very cool jobs. Today meet a man whose clients are furry, fourlegend and full of needles by the time hes done with them. Im kevin may. And i get paid to be an animal acupuncturist. Were treating soreness and poin throughout the body the neck and the back. Hips. Animals that sometimes cannot take certain medications or theyre not responding to certain medications, musculoskeletal pain. So arthritis, sore muscles, dogs or horses that have nerve problems. Like paralysis or pain related to pinched nerves or the spinal cord. That acupuncture really helps a lot with that. Dogs dont like needles in their toes at the end of their toes and toe nails. Thats a little bit too painful for them but theyll take it in their paw. Where a horse, those points are actually powerful points. It just helps us to treat when it comes to pain or whatnot. One of the most interesting cases we worked on was a camel who was arthritic in his left front leg. We got to treating him, he got to moving around better and moving around better around they were pretty happy with him to be payable to come in and do something that nobody has been able to do. And to help turn that patient around. Thats when it is quite rewarding. I just get up and play with everybodys animals, go home with a smile on my face. Now the smallest animal that may has done acupuncture on was an arthritic lizard. To find out the largest animal go to power lunch dot krchltpowerlunch. Cnbc. Com. President obama about to announce new overtime rules. It will mean more money for workers but higher costs for businesses especially restaurants. Well get both sides of issue. Oil flirting with going negative. We head to the nymex live for the crude close when power lunch returns. Hello, everyone. Im sue herera. A new report out suggests progress in the fight against aids. The science journal says that an experimental vaccine has prevented half a group of monkeys against a virus thats similar to aids. Jan son, the drug making arm of Johnson Johnson is behind the vaccine and already testing it on humans. A train containing a toxic substance derailed earlier today in tennessee and caught fire. Dozens of people have been told to leave the area and residents are also being told not to drink the water. Potential headway in the Nuclear Talks with iran. Frances foreign minister says hes hopeful Global Leaders and tehran can make progress this weekend. Deadline is next tuesday. Japan facing the United States in the World Cup Final this sunday after beating england. England blew the game in the last minute by scoring against itself basically in its own goal. Sundays japan u. S. Game will be a rematch of the 2011 World Cup Final. The u. S. Lost that game on penalty kicks after the game ended in a 22 draw. Mustsee tv. Thats our cnbc news update this hour. Back to power lunch. I felt so sick for that girl from england i know. It was just heartwrenching. It truly was. But now the u. S. Gets to play their rival, japan. They got a good record against japan though. They really do. It is a very strong team on both sides. Jackie deangelis now for the oil close. Good afternoon. It was actually a very interesting oil close because after being positive up about 1 for most of the day we turned negative at the close. 56. 9 56. 93 is where is settled. Todays pop while it lasted not really convincing to traders. Just buying the dip mentality. Didnt have enough strength to really break through but whats interesting about it is it shows you the sentiment traders had as they were going into the holiday weekend. They are watching the developing developments in greece and Nuclear Talks with iran. Rig counts went up rigs up 12. That was a surprise and thats when we started to sell off. Chinese stocks seeing even more downside in the overnight session. How can traders here cash in on the next move . Lets ask the trading nation. Stacey gilbert, boris schlossberg. Just yesterday i was talking to the nation about china and there was talk about a beijing put. So much for that. Right. Exactly. One thing i would keep in mind is that i think in some ways we are talking about a tale of two chinas here. You have your ashares which an etf like ashr would track, then your h shares. They are moving less correlated or less in singe with each other than weve seen historically over the last several years. I do believe there is a space station in whats happening between ashares and hshares. Keep the bear case about valuations being too lofty in Chinese Markets theyre tiply referring to the hshares because they are cheaper. The bull case for china here is Economic Growth potentially and well as an accommodative government. Id like fxi options to position for an up side if there is an up side pop. Because that volatility level is high, buying outright options right now is more expensive than it is historically been. But if you look at the fxi call spread, you can see almost a 200 return on your initial investment of that call spread. It is a different way, it is less risk potentially more reward with a rally here in china. Boris, how would you like to trade china . I see nothing but bad news ahead. I think we have a secular slowdown. You can throw everything but the kitchen sink at the chinese economy and it doesnt seem to be responding. If the chinese blows up and has a huge bubble on top youll see massive ramifications all over europe. Australia has ridden the whole chinese move and now will ride everything down. To me the great short is the Australian Dollar teeterh teetering at the 75 cent level. As the fortunes of china reflect themselves in the fortunes of australia. For more trading nation, head to tradingnation. Cnbc. Com. To greece now where a pivotal referendum occurs on sunday. Greeks will vote on whether or not to accept unpopular reforms in exchange for billions of bailout money. Barks banks closed all this week ahead of the referendum. The shuttering of the banks taking a big toll on Business Owners who are caught between their government and their customers while this drama unfolds. It is paralysis basically. Michelle is live in athens and she joins us now. Hi tyler. Thats because this country is so reliant on imports. You need a functioning Banking System to pay overseas suppliers. As a result there is an increasing worry about shortages in the coming days or come weeks. We visited one of the oldest pharmacies in all of greece and spoke with the pharmacist there and he tells us that already his customers buying habits are changing. My grandfather was a pharmacist. He established his pharmacy across the street. And then he moved it in this part of the square back in 1918 i think. Im a pharmacist. My children are pharmacists. So were keeping the tradition going on. Theres no credit facilities. Must keep your absolute needed stock. You cannot overstock. Are you seeing a shifting in the purchasing habits of the customers . Yes. Some pharmaceuticals, infant milk, products for fewer cosmetics. Cosmetics is not on their top list right now. People are very concerned and on the verge of being a little bit panicky. This is not a healthy attitude but it is its a reality. Im in favor of european viable solution. I cannot see my country outside of europe. It is going to be the worst thing that we can experience. Can you ever think it would get this bad . Not really. We hoped that we wouldnt find ourselves in this situation and we dont know what lies ahead. Reporter the leaders of the country keep telling the greek people that the banks will reopen soon perhaps the very day after the referendum within days. Banking experts think thats incredibly unlikely that youre liking looking at weeks before things get settled and before there is enough confidence to reopen the banks here. So the economys going to suffer for some time tyler. All right, im take it michelle. Thanks so much. Weeks without access to capital. Thats amazing. Less than 90 minutes in the trading week left. U. S. Stocks continue to trade lower. Were just off the session lows in fact. Lets bring in the chief Investment Officer with bmo private bank. Jack, michelle set the scene in greece. Say there is a selloff on the referendum that the vote is actually no. Would that be a buying opportunity . I think thats another way of slicing the question is there more beyond greece the impact . Is there contagion risk there . Yeah. Youve got to really slice it up, melissa. I dont believe theres contagion risk. I dont believe theres economic risk. However, there is headline psychological risk and we could see a selloff. The simple fact is that the markets expensive. Weve got fed phobia and maybe thats an offset. But the simple fact is if you look at the price to sales ratio over the last 20 years, were trading at probably 25 premium to that doesnt mean the market has to drop 25 , but to me it suggests even if we get a pullback, unless it is severe i would not view it as a buying opportunity for investors. Certainly traders. But for those investors that have a three, four fiveyear time horizon, there are probably cheaper values to come some time between now and then. You dont think Second Quarter earnings are going to come to the rescue . They start in earnest on july 7th with alcoas report. Weve got earnings expected to be done about 5. 5 . Revenue down about 3. 5 . Not a pretty picture. Clearly i expect 80 of the companies to outpace analyst expectations but i do think the fact remains that earnings will likely be negative year over year. Revenues, too. Thats going to underscore this valuation question and i think could put pressure at least at the very least a headwind for growth ahead. So while momentum is still strong we still have a fair amount of liquidity, clearly sitting here in north america, we want from our perspective, wed love to see the greeks vote yes on the referendum, just because we want to avoid the Political Risk associated with it. But i will say, this quarters Earnings Report is going to be a nailbiter because theyre not going to be great. Jack thanks so much. Jack ablin. Up next nancy pelosi weighs in on the scandal surrounding former House Speaker dennis hastert. Find out what the exspeaker lass tohas to say about another exspeaker when power lunch returns. Announcer and now, the latest from tradingnation. Cnbc. Com and a word from our sponsor. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Right now on our website, we profile some of the most powerful people in politics. Check it out at powerlunch. Cnbc. Com. Our own john harwood recently sat down with former House Speaker and current House Minority leader nancy pelosi to talk about lots of issues including recent revelations involving her former colleague, dennis hastert, himself a former speaker. Take a listen. When the very sad news broke about speaker hastert a couple weeks ago, some people observed the irony that at a time when the Republican House was pursuing the impeachment of president clinton over a private scandal, the thenspeaker the speakerelect, and then person who succeeded the speakerelect all had private scandals of their own. There were indictments every time you turned around and subpoenas from the Justice Department. Not from the congress. So there was just a moral fiber that wasnt there. And of course it was spelled out with katrina when crow in iism and incompetence were spelled out so clearly. Do you think thats a characteristic of the modern Republican Party . No i dont. That that fiber is not there . I think it was hard to understand why they tolerated what they did. But and i never thought that there was any vulnerability in terms of the speaker. But let me just say this. Mr. Nobody really regarded mr. Hastert as the speaker of the house. They couldnt have tom delay be the speaker so they had to find somebody innocuous, cooperative, who could be the speaker. Thats how we all saw it. If you wanted to get in an engagement, you didnt go to the speaker for that. You went to mr. Delay who really ruled the roost. You saw hastert as a figure head. Absolutely. That doesnt make this any sadder. The damage they were doing was not springing from him. But acquiesced to by him. Fascinating comments there. You can watch more of johns conversation with nancy pelosi on power lunch dot c New York Stock Exchange. Not all Business Owners are on board with the president s plan. Well debate that when power lunch returns. Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. The futures so bright out here i ought to wear shades. Were here in aspen to talk big ideas. Shells marvin odom is going to join us. Were also going to talk to a mexican billionaire, eager for his thoughts on a number of topics. Goldie hawn will talk to us about mindfulness. Ill age 30 years and gain 30 pounds and learn how much of a struggle it is for those folks in that position. Well look forward to that. Youre looking at a live picture of president obama speaking in wisconsin. Hes selling his new plan to increase the number of people eligible for overtime pay while some argue it will help the middle class others are concerned. White castle says the president s plan we are joined by David Mcdougal, ceo of backyard burgers. Welcome. Good to have you with us. Have you looked at the numbers of your employees who, under the president s plan would suddenly be eligible to receive overtime pay who dont, cant now because they earn too much . How many people would it affect in your company and what would it cost you . In our business we have 22 general managers that are salaried. All of them currently would then qualify for the overtime pay, according to the president s proposal. That does not include our franchisees which have 39. I cant say ive estimated what the cost will be, but certainly it is going to be an increased cost. Are those general managers paid by the hour . You said they are paid by a salary why. Would they then receive overtime . They fall between that our general managers fall between that 35,000 and 50,000. The new proposal you need to make a minimum of 50,400 to be exempt from overtime. The other piece to that is our general managers receive additional benefits bonuses, enhanced health care et cetera. You think this would be a bad idea for you and your business. What would it cause you to do in terms of changing your pay structure or changing the number of people 0 you hire or how you pay them . For a handful of general managers, we would likely push them up over 50,000400. For the rest we would put them at an hourly rate as an hourly general manager. They would still make the same. I had a Conference Call with all our gms today to ensure them that their compensation wont change, but again, it would look different because it would be based on an hourly plus set overtime factor. A set overtime factor as opposed to something different. Would it cause to you hire less do you think . It would depend. One thing about a general manager is they take ownership for the business and there are times that they do have to work additional hours. That would clearly incur additional costs. You pay them overtime now or dont . They are salaried. They have additional benefits and maybe rest the hourly team does. Additional benefits in the form of equity . Monthly bonuses, health care benefits. They get two to four weeks of personal time off each year. How is business overall . Business has been good. We had a very good first half of the year. Im optimistic about the second half of the year. This along with a number of other things implementation Affordable Care act which we did in january, 15 minimum wage in paid sick leave are all things that certainly are concerning me. We appreciate you being with us David Mcdougal ceo of backyard burgers. The president talking today about the jobs report in that rally. John harwood is live in washington with more on this. Weve just seen the president in an extraordinarily good mood speaking to a crowd at the university of wisconsin lacrosse hailing the Supreme Court decisions on gay rights and also on the Affordable Care act and talking about the growth in jobs today, even though it was a mixed report in terms of how economists reacted to it this president cast it as good news. Weve seen 64 straight months of private sector job growth which is a new record. 12. 8 million new jobs all told. Thats good. Weve got more work to do. Weve got to get wages and incomes to keep going up. Of course that is a lead in to the president s discussion of that overtime proposal, which would allow managers making more than 23,000 up to 50,000 to get overtime pay. As you just illustrated, this is very very controversial with criticism from republicans and employers. Thanks for that. Its been a rocky year for some of the biggest social media names. What is in store for the second half . Josh is looking into social medias crystal ball. Investors have been liking some social media stocks defriending others. Well have a roundup when power lunch continues. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. You are looking at two airplane fuel gauges. Can you spot the difference . No . You cant see that . Alright, lets take a look. The one on the right just used 1 less fuel than the one on the left. Now, to an airline a 1 difference could save enough fuel to power hundreds of flights around the world. Hey, look at that. Pyramids. So you see, two things that are exactly the same have never been more different. Ge software. Get connected. Get insights. Get optimized. I accept that im not 21. I accept im not the sprinter i was back in college. 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Analysts know core users are heavy consumers of the service but attrition of new users is very high. Ceo search introduces uncertainty as well. Dick costolo is out. Jack dorsey is in as interim ceo. Who could be permanent ceo . They could be anyone from adam bain to Ross Levinson former interim yahoo ceo. Finally linkedin down sharply from that february high on its last Earnings Call the Company Offered disappointing guidance but 75 of Analysts Covering linkedin say it is a buy, including rbcs mark mahaney saying the Company Boasts one of the strongest Revenue Streams in the space with plenty of Margin Expansion opportunity ahead. Yelp is down 11 on reports the ceo has said we are not looking for to be acquired at this point. Right. Certainly was a lot of excitement about who might be interested in yelp. I heard microsoft. With yelp, the problem is they are still strong net revenue growth. Youve got 90,000 paying customers, but there were real concerns including international where there has not been enough traction according to analysts to justify the valuation. Kiss disappointing news for yelp down this year. Tonight on fast money at 5 00, the burger wars. We are blind tasting them and trading them. Sign me up. Have a great fourth. That will do it for power lunch. Coincidentally, this is the closing bell. Im Bill Griffeth at the New York Stock Exchange. Its great to see you, about ill. Im kelly evans at the aspen ideas festival here in colorado. Lots of ideas. One hour of trading left before the long holiday weekend. Investors focused on this mornings jobs number and the crucial vote coming up in greece on sunday. Even if greeks vote yes on this referendum it is still unclear when