been as high as 7,6, two points away from the record. "power lunch" will continue watching that. i'll see you tonight at 5:00. meantime, take it away, sue herera. halftime is over, "power lunch" and the second half of the trading day start right now. >> we welcome you to "power lunch." thank you, melissa, we're about 30-some odd points from 17,000. it's a big day on wall street. the dow on the up side, the nasdaq also moving into the green. today teens picking retail stocks. we hear a lot about how fin icky teens are. today we're going to bring them some names in the sector and see where they are putting their money to work. would they buy some of the stocks that we show them? that's coming up. six months after colorado legalizes marijuana, meet the investors behind the businesses. very special private equity funds. we want to know, would you put

your money into pot? you can vote on that coming up in a bit. and hurricane season is here. a storm is developing. the forecast is straight ahead. tyler continues on vacation. simon is down at the nyse. >> hey, sue, welcome to day one, down here on the floor of the new york stock exchange. it was a laggard. the broader market, never forget the s&p having a big six months, up 6.7%, that's for the russell up 3.8% so far this year. we begin the second half. >>. we're close to 17,000 on the dow. >> some exchange traded funds.

the mid cap 400 for the s&p, iwr, all up nicely today, but they're up on heavier than normal volume. this suggests to me, up on heavier volume suggests that money is flowing in, particularly into mid cap stocks. also wee seer some nice volume, there's the ishares, s&p 500, this is essentially the s&p 500. this is at a new high, but we're also seeing good volume here as well. we're seal volume on the other side, some selling in some of the bond exchange traded funds. this is a big one. that's the whole u.s. bond market, heavy volume selling here, and all this, corporate bonds, same situation. money going into stocks, particularly in etf stock funds and out of also some those

bonds. >> thank you very much. let's get a market flash withdom chu. >> simon, from the exchange-rated funds, you have to waffle go pro shares, the wearable camera company is surging again. you can see they're up towards those session highs. sibs going public last thursday after being priced at $24 a share, it's of course now doubled in valuation, a two-bagger here, at the current stock price, the market cap is nears about $6 billion. go pro, sue, interestingly enough, only four trading days, but on average up 20% each day. back over to you. >> pretty impressive, to say the least. topping june sales estimates, despite the recall theory, which is surprising a lot of people. what's driving the sales? >> a couple things, sue, when you look at the month of june, sales coming in better than

expected. in fact we're looking at a pace that could be above what we saw in may. a lot of people are looking at this, saying, look, relatively low interest rates. got a relatively healthy economy, and you have pent-up demand because of aging vehicles. put all that together, and you have an auto industry that continues to purr along at a nice clip. >> you had a piece on cnbc.com about the fact we might be close to topping out on sales. why? >> that's a study. every year they look at the auto industry. their conclusion is we're close to the peak. next year you'll have a sales pace of about 16.7 million vehicles, and things will gradually pull back. they believe as the fed -- that will cut into the purchasing power, the auto loan rates will go up. as a result you'll see some pressure on auto sales. >> today mark fields takes over as ford's ceo. in his honeymoon period, what's he going to be focusing on? >> you know, the fact that we

haven't seen him nor heard much from him as he was waiting to take over, that's an indication he won't change motion, at least not initially. ford is running exactly how mark fields wants it to run. i think you'll see them be relatively calm and under the radar here for the next couple months. at some point we'll start to hear from him, and he'll put his stamp on the company. but right now he doesn't nine to. let's drill down on gm. it's recalled a total of nearly 29 million vehicles worldwide just this year. a lot of us are wondering why that's not impacts sales and not impacting the stock. ron insana is here with me. the average age of a car is 11 to 12 years old.

now we're approaching 17 --s had the peak in 2007, and we have pent-up demand for cars. i would disagree with the study that phil cited with the fed raising rates any time soon. we don't know when the fed will start raising rates. very likely to be slow at the very start, so i don't think auto financing goes up that much. and wild pent-up demand for cars. right now up 152 points all-tiesh and we're edging ever closer. ibm was one of the biggest purchasers, and it continues to do so, marching higher by almost

3%. >> we may hit it in "power lunch", because this market seems to have a lot of momentum behind it. you want to make a quick comment on that? >> sure. there's nothing wrong with the market. we're in a relative valuation world. last time we saw the peaks, rates were going up. that are either the market went into a bear phase or crashed. that's not happening now and not happening now for the foreseeable future. this is the world we live in. >> weigh in on the financing point, how big a jump do you see if financing traditionally? >> not a huge jump. when you talk to the people that put this study together, they

point out it would take a bit of time, eventually it will cut into the purchases power. ron and jim cramer have hit a point, that pent-up demand is feeling this. at some point i want a car that doesn't have a tape ka set player or cd player, because nobody has those. that's really what's going on here. >> i think you're right. phil, thank you so much. >> you'll be speaking with simon in a few minutes? >> yes. >> we are as we begin the second half of the year, what will the next six months bring? seema mody will join us on if the worst-performing stocks in the first half could rebound in the second. dom chu on where the trading action will be. >> sure, simon. let's look at the five worst performing stocks on the s&p 500 so far this year, and you can see that all are from the

consumer discretionary space -- coach, whole foods, staples, bed bath and beyond, tractor supply. while experts say each name is dealing with company-specific challenges, analysts i spoke to say the underperformance highlights the broader concerns around the state of the consumer. whether these stocks can rebound says it comes down to marketing and investments to get traffic back in stores. also the new merchandise that comes out in december could also spurs, but she's staying cautious. whole foods, disappointing earnings resulted in shares getting hit, but some experts say the stock is oversold. staples, bed, band and beyond bo negatively impacted. the retailers need to focus on strength in this the online platform, but overall, it's just

interesting to see we're in the second half of the year. analysts still talking about a weather as a focal point. >> as it turns out at the nasdaq, it's the likes of price line and netflix that are surging today. >> it's no secret we have an up market in the past five years. all ten sectors are up since '09, but let's just hone in on the best performing sectors over the last two quarters of each of the last five years. the best second half performers. you have made money buying any one of these sectors overall, but the best single performer has on average interestingly enough on seema's side of things, the consumer discretioniaries stocks, so they're the big winners in the second half of the year. the average gain over the past five years, just the last six months of each year is almost

17%. those consumer discretionary stocks may be where the action is this time around as well. second place goes to the material stocks. the s&p 500, those material sectors have gained 16% on average to close out the six months of each of the last five years. now, ironically enough, the worst performing sector, the place you don't want to be, at least over the past five years, for the second half of the year comes from a sector that's gotten so much attention this year, and that's the utim stocks, we know they're the best performing sector year to date, but over the past five years, they post only an average gang of 5% to close out of the final six months of each year, and by the way, the only sector to actually post gains in every single one of the last five second halves of the year, only one sector, that's consumer staples. positive, simon, in every single last six months of each year for the past five years. that may be where the trading

action is, if history holds true. >> that's interesting. a lot of it i guess based on the run-up to the holiday season. we still have seema with us's well, let's talk more about the outlook, and also bring back cnbc contributor ron insana. you want something very interesting, very powerful to sue just now, that it was about relative valuations, and for as long as interest rates remain as low as they are, and the stock market is good and rising, the question becomes in the second half of the year, do we see interest rates rise either because inflation gets a grip in the bond market, or because janet yellen has to eventually admit that interest rates are on their way up. >> from her perspective, i don't think that's going to happen, and referencing it is fed williams yesterday, if you -- the preferred measure is still below 2%. 60% of monetary policy is at

zero, including the federal reserve. i think it's closer to the end of 2015, so i think we're in a fairly safe place here. inflation, if you're talking about drought, if you're talking about energy, tuition, health care, those are things that the fed can't do anything about. they're not going to fight those things and they'll wait for full employment, wait for inflation to be above their target. >> what about the siren calls, these very worried people that people say are gorging on debt, and it's going to be very dangerous when it turns, and they have to put a brake on it somehow. >> as mr. williams suggested yesterday, something we've talked about before, they're going to use what we call mach roe prudential regulation and address those issues head-on by discussion leverage levels, over-extension, over financing, by doing something about it, aside from using the blunt tool of interest rates. that's also, i think, a critical component of this. the fed is no longer going to

say the we think the banks are doing too much, we're raising rates. they're waiting for the real economy to reach full potential before they do anything with the rate structure. that's good news for stocks. it's interesting, the first special we ever did on cnbc was dow 7,000, which is 10,000 points ago. so we've come a long way, even despite the crises we've seen in the interim. >> time heals all things. thank you, ron. seema, we'll talk later in the show. we are still on dow 17,000 watch edging ever closer to that milestone. for now, hurricane season is here. a big storm is brewing in the southeast. it might not get to hurricane status, but it is going to move up the east coast this weesh. here is the weather channel's michael lowry. >> our first tropical storm has formed off the southeast coast, with potential disruptive impacts all along the eastern seaboard this holiday week. located about 100 miles east to

florida, winds of 40 miles per hour, drifting to the northwest at 2 miles per hour. first it will impact florida, so we have tropical storm watching up. that means tropical storm conditions, winds in excess of 30 miles an hour are possible. mainly for florida a rain maker. the national hurricanes center is forecasting this to move off to the north tomorrow into thursday, and threaten the carolinas, as we get into late thursday and friday, as a strong tropical storm other borderline hurricane, very strong winds, gusty winds, the potential for coastal flooding, and also heavy rainfall. if you're headed to the beach this holiday week, you want to stay tuned to the developments of the system. >> yikes. when we come back, would you invest in marijuana? we found two people who not only say yes, they're actual will you doing it, and they want you to do it as well. it's also today aviewer vote. go to cnbc.com/vote, to let us

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welcome back to "power lunch." the dow is hitting a record intraday high as it gets closer to hitting the big 17,000 market. leading the way higher, big names leading the way. ibm now picking up some steam. also visa, pfizer, travelers and merck. ibm and visa, of course are two of the bigger more important names, because they carry a lot of weight in the overall index, as we march just 20 points away from dow 17k, some of these big high-priced stocks push us over the edge. >> technically the technicians would say do you 17,000 is just a number, but psychologically it is important. it's important to the bulls, important to the retail investor as well >> most importantly round numbers gets the attention, it gets talked about on the radio. that's why it's important. it's not a technical level, but

psychologically let's acknowledge it's important. ron insana had the way most traders feel about this. we are living in a zirp world. zero interest rate policy. in that kind of environment, stocks where they are now, a relative valuation is still very high. that's why today you're seeing money going into stocks. some etfs had very strong values, maybe some money coming out of the bond market. thursday we're going to get the nonfarm payroll report. everyone is expecting over 200,000 formed that will be confirmation of a slowly improving economy. >> if you look at the first half of the year, there are very, very few asset classes, even if you go through most asset classes, and they've all rose in the first half of the year. that's a very abnormal situation. you don't normally see that.

to many people, this doesn't smell right. this is about central banks pumping in an awful lot of liquidity. there's just that little doubt that it doesn't end well. >> i agree, very weird that gold goes up 9% the first half, s&p is up 6%, emerging market stocks are up, blond market is up, commodity markets are up. >> all boats are floating. >> general consensus is the biggest driver here is keeping rates down globally, all central banks, even the european central bank trying to keep rates down. that's the primary driver. whether it ends poorly or not, that's open for debate. >> we're almost there. >> just four points shy of do you 17,000. we'll see if they do it on our watch. the momentum, bob and dom, certainly feels like they want to do this. the vix is down, we're seeing a sell outin the treasury market,

interest rates moving higher, and the money seems to be flowing pretty much into equities specifically today, but bob, what's the volume like? >> we should do 650 million on the floor on a normally day, but overall the rom since the beginning of maybe, it's they're starting to do a few cheers down there. >> less than two points. >> so the important thing is, the volume has not been nobody seems terribly concerned. there is a love the debate. remember, we change from about 1996, where all of a sudden you're doing 2 billion shares a day on the floor of the nyse, to suddenly overall volume at the

nyse goes to 8 billion shares. part of this was due to the 2008 financial crisis. i'm knoll sure that there's much concern about that technically as there would have been in the past. >> well, we're awfully close to what is the significant mover, which is the s&p. >> exactly. >> 22 points shy of s&p 2000. that is a huge figure for the technician. >> the most important thing is the incredible rotation that we have seen.

health care has been strong all year round. tech was strong earlier on, fell down a bit in march and april, particularly some of newer tech names fell down. that's when we saw it pick up in high yield stocks. all throughout the year, another group comes to the forein the last month, it's been energy stocks that have moved up. enchts i would also say, too, we've been talking about the the talk of slowing momentum, but there's been a sentiment that the path of least resistance has always been to the up side, no matter what kind of volumes we've had, so that's also something to consider, maybe there is not a meltup, but in essence, what is in -- what amounts to a slow grind higher

for the overall market, simply because that's where the least resistance is. >> and the momentum playing are coming back. let's bring in cnbc zachary karabell, head of global strategy for invest net. also brent shoop joins us with pmo global asset management. let me tick off with you. zach. >> we're at down 19,997. i wrote a piece a few years ago, dow at 13,000, only the beginning, which occasioned huge amounts of oh my god, you can't call that. i'm not highlighting this to pat myself on the back. i'm perfectly capable of being wrong as is everybody else, but as an indication of this kind of level of skepticism in the face of markets going up as well as relatively low volumes. until we see massive euphoria and people chasing things up, because they're scares of

missing the boat, all thinks harbinger of bubble and excessive action, you know, i do think we're going to continue to kind of float up, because the earnings of corporate americas and global corporations are the only dynamic place of growth you will find anywhere in the world. >> what is your take? >> sure, i believe what zach mentioned. there's a ton of money looking for a home. every time you find a market pullback, it, until that stops, i continue to think that markets move higher. >> can you argue on fundamentals that it should be here, and it should rise? is it a safe place to be, bret? >> sure. i think you actually can, if you look at the price of cash flow basis, for example, there's a ton of cash on balance sheets of corporations in america and they're dough plying it through buybacks, dividends, you're

seeing m & a, you'll probably see cap ex. price to earnings and price to sales. >> on this, simon, and i great with bret on this, look, safety is not a hallmark of financial markets. if safety is your primary goal, you have to be wary, because these are volatile entities. >> i reason i ask is, there will be people perched on the sidelines that are like, do i have to bike in now? what are my risks? if you miss substantially a large part of the rally, your risk/reward is changing. >> and therefore you delicately and gradually and incrementally enter into something, you don't plunge in because you think you've missed it and you're trying to get the last 5% or 7%. there will always be pullbacks, weird things could happen. who knows, and those things are always ever-present factors, but on a fundamental level, corporate america, corporate global are making money in a way that no national economy is, and

in the way that fixed income does not provide. that's why i think stocks are fundamentally doing well even if the valuation looks a little high. >> does it bother you, zach or bret, that we haven't had a significant pullback. a lot of people are saying we need to pull back, let's give back 10%, and then the market will be healthier. we never really saw too much of that. does that worry you at all? itches we saw a lot of it in 2008, '09, '10, '11. >> of course. >> i think having a period of time when you do not have that kind of pullback, whili dividend from what we've come to expect, it's hardly normal or a sign of something wrong. interest rates remain low, and it's not really spread that much. they do well at a low interest rate environment on a relative basis, are emerging market stocks looking to track, or is there no other play to pus the

u.s.? >> the emerges market they could transform our current outlook, but a lot of u.s. companies, as you all talk about daily, are the beneficiaries of that. so it's just investing in the s&p is investing in that. >> guys, let's broaden the conversation, kenny polcari is also joining mess on the floor. dow 17,000 just. >> right there. we're teasing with it. and just backed off it. it senses that it wants to go there. certainly it feels like they're going to push it there by the end of the day, but not with a lot of fanfare. what does it really mean other than a round number? it's not significant. >> you could hear earlier on people cheering on the floor. i'm not sure that those are sincere cheers. >> no. ritz not that they're mocking it.

it will besh because it's a round number, everyone will cheer about it,ual yet there's nothing to cheer about. do you understand? >> because people are making money hand over fist for another year. >> people are making money, but there's still a lot of people that don't believe this, that it's a manufactured rally, and what's going to happen when the fed starts to back away? is it going to hold in here? >> perfect time to bring in rick san telle, kenny. you've talked a lot, rick, about the central bank injections of liquidity for a long period of time. what do you make of that? is this a manufactured rally, given the liquidity that's flowing from around the world? >> first of all, in the past i wouldn't be surprised to see dow 18,000. even though i might not think it deserves economically to be at these levels, it is and i understand it will continue to overperform, to be an overachiever, but if i have to describe what's going on here, i would say being in chicago, we live close to indiana. there are a lot of casinos in

indiana. those casinos are in towns with horrible blight. the fact that the casino is making record profits doesn't change the fact when i go into the community there's a lot of closed storefronts and people unemployed. that's the way i look at the stock markets. >> exactly my point. >> the point is surely because there's so many people unemployed, janet yellen is going to ensure this continues and continues and continues. >> thus the manufactured rally. >> i think this is an apples and oranges discussion, which is there are economic realities both grim and challenging in parts of the developed world that did really well in the 20th century that have some extreme questions about the viability of that -- there are parts of the world doing extraordinarily well, whether it's china, even the slowing china, and then there's corporateland, which is doing extraordinarily well, because it gets the best of all of this. i don't think all those ducks have to line up in a perfect

cliched row -- >> the chairman of the fed, that's the point, isn't it? she is noticing that. that's front and center, and everything trails from that unemployment figure. >> bret, speak to that point, if you would, because not only is the unemployment factor something that the fed takes very seriously, but also the income inequality factor that is out in america that's broadband talked about a lot and ha a chilling effect, some people wanting to get into the market, because they are worried that perhaps if the fed stakes the punch bowl away a bit more aggressively, that they'll get caught. the retail investor is traditionally the last one into the rally. >> sure, i get taking it back to yellen if i could, the last press conference, she for the first time i think noted that rates could move higher or faster than what people

imagined. the fed has made it extremely expensive, because rates have been essentially pegged at zero, and she's promised to do more anytime the economy faltered. the word uncertainty came out over and over and over again, and she talked about not having a mechanical way to set rates, and they could -- if the economy does bert. i think she's trying to gradually start to take away the punch bowl which i believe could lead to volatility. any time you get a central bank that changes its policy, you get volatility. looking back to last year, 2004, you have some corrections. >> yeah, dominic chu is with us, of course, and you've taken a look, dom, at some of the top performing stocks, right? >> if you look at year to date so far, it's interesting that caterpillar would be driving the move higher. caterpillar is theary to date performers, and carries a fair

amount of wait with the overall index. stocks that have the highest stock prices hit more of the weight. also looking interestingly enough, intel and merck, all-star performers as well. they don't carry quite as much weight as a caterpillar does, but it speaks to the industrial, the technology side of things, they are more cyclical. that means that at least for the time being there's a sense for the dow are going to be do better, but the real question i have for the overall environment that we're in right now, because we do all kinds of reporting about the fed, about markets, about fundamentals, about technicals, right now from an investment strategy standpoint, you've got to wonder whether clients, whether customers and investors are thinking about how much the fed is part of the story, and how much the economic or corporate fundamentals are. when you look at the overall picture, it obviously will be a mix of all of them. if we keep talking about the

fed, rates and quantitative easing, and everything else, maybe that means they are still very much a part of the picture and that the microeconomic company-specific elements are not quite ready to take over the market leadership yet. >> when you see walk around main street america, there are empty storefronts. you don't get the sense that the market should be trading at 17,000 and everyone is throwing a party, and that's the difference. >> why does main street mesh have to be the determinant of the way in which assets are trading. i agree, you know, there are huge economic problems, but we're not investing necessarily in those parts of the economy that are correlated to those kinds of problems. >> oh, come on, chuck. that doesn't hold water. the fundamental issue, to your argument about the economy, and forget everything i had -- is that you're substituting what is the horsepower behind the corporate profits. if it was income, i would agree

with you, but it's debt. if you look at the quarterly report on credit and debt that was issued in may by the federal reserve, we had three quarters in a row where consumer debt increased. it's a dynamic we haven't seen since the crisis in '08. to make income and debt synonymous is where central banks ultimately will pay the big price. >> how would you describe the balance sheet? >> flip that to corporate america. >> they have massive amounts of cash. >> no, but it doesn't matter. if things get horrible corporations weather it, but it isn't corporation. it's about how the consumers weather it in when you're in a consumption economy. >> it's 320 million of a global consumer base. >> we had 40 years of basically income didn't move. all of this, the rich and the poor, and wealth -- no, no, no.

we had two people working to the extent we have never seen in history, and unless we can find a third significant other to go to work, it masks the notion that globalization took the emperor's clothes off, and that is, if you don't have a good education and a good skill set in a global economy, there isn't anybody that's going to pay you $35 to twist bolts anymore. >> i agree with you. >> i just don't agree with the prognosis. >> so zach, then let's flip it from what rick was saying about the consumer not being in shape. if you look at corporate america, corporate america is in very good shape with high cash. does the market and some of these corporations look fairly valued to you? undervalued to you? >> if rick's point is correct, this is all just, you notice a barbell that can't be sustained and it's going to snap in half. you can't have a consumer completely fading and corporate balance sheets that are completely thriving. in a global context, to some degree that's exactly what has been hang, and i think it's

going to continue to happen for some time, that is indeterminant, but longer than we think. i think the valuation people are willing to assign to stocks represents where they're willing to place some degree of faith about future growth. that's most evidence in corporate -- >> one of the major dynamics here, which we don't mention enough is the huge amount of their own stock, the companies are still choosing to buy back. at a time when we're still not seeing capital expenditure pick up in the economy, as we were promised, so they're buying back their own stock, flattening the earnings per share, and adopt, did you not investing in the economy in scale we fought. what are the long-term implications of that sniismts they're negative for the united states, but they are investing in other economies. we're investing in companies, many which have a global dimension that could be quite negative, and quite positive,

india is talking about opening up foreign investment, exactly as china did. maybe it will, maybe it won't, but if it does, we'll be talking about a different picture and much more positive picture of the corporations selling into that market, that are investing in infrastructure. that's not necessarily going to direct the united states, but it will help marginally. bob, you can weigh in on this, the m. & a activity we have seen this year has really been very strong. i don't know if that's a function of lower interest rates, a function of having a lot of cash on hand, maybe it's both. >> or high stock prices. >> or high stock prices. you can throw that into the mix as well. that seems to bode well for the market and the economy. >> and companies feel more comfortable buying someone else's proven flow. >> if you can't grow your own, buy your own. >> if i can interject, i think that will change a bit. you're seeing surveys compses are looking to increase cap ex. i think that has a lot to do

with the political and environment becomes a touch more certain. you look at that versus what corporations are doing, as the economic and policy uncertainty comes done -- are think the m & a is the here and now, cap ex is what they're going to do in the future. >> bret, stay with us, everybody. nobody move, because we're on dow 17,000 watch. you all have to say right there. polypill is watching for dow 17,000. we are back in two minutes' time as we close in on that milestone. this "credit report card" thing. can i get my actual credit report... like, the one the bank sees? [ male voice ] sheesh, i feel like i'm being interrogated over here. [ male voice ] she's onto us. dump her. [ pay phone rings ] hello? oh, man. that never gets old. no, it does not. [ female announcer ] not all credit report sites are equal. experian.com members get personalized help and a real credit report. join now at experian.com with enrollment in experian credit tracker.

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along. it's just going to trend lightly higher and higher. like we were talking about, the enthusiasm isn't in this market just yet. >> why do you say that? >> because investors don't believe in this numbers we are seeing so far. no one's really buying into it. no one is saying, yes, this is this big rally that we need and want. economic data has helped, earnings has helped. m & a activity, positive headlines have helped, but everyone is waiting for the next shoe to drop. >> what would you say to people watching at home? >> there clearly is money to be made. the market will move higher, it will move at a slower pace than last year. >> aren't you surprised at the rate we gained? we thought we would have minimal gains, but already up 6%, 7%. >> it might be too fast compared to last year. the summer is going to play out in a very slow pattern and we'll

see an acceleration toward the end of the year. investors had been very scared of this market. and the market keeps going higher and higher. >> run us through what -- >> you're right, we've been debating the impact of the fed on the markets, hawkish banter impacting the market's ability to move higher, but what's interested is if you look at history, technology tends to outperform in a rising rate environment, and with rates expected to increase, whether it be six months, eight months down the line, you're starting to see investors reallocate money into tech. over the past couple months. investors are watching the move in tech while we were focused on the dow, there are a lot of tagged components. large-cap tech has been in favor, as rates have been low, a lot of these tech stocks do offer a dividend. so that's something to keep in

mind. >> seema, that goes right to the story, that a lot of people, analysts, strategists have always thought that part 2, second half of 2014 was in fact going to be a better part of the year, was in fact going to see the market move higher. i think it will still see 10, 12%, are we going of -- 10 or 12% would be fairly normal, and that is what it feels like. the thing i think that frustrates me is i'm not getting, like jonathan said, you're not getting that rush, you're not getting that conviction from real asset managers, from long-term asset managers that want to put it to work. >> you know where you would get that rush from, guys? if the financials actually participated in this. they've been nowhere to be found. goldman sachs is still an underperformer, and tech and financials are two of the most heavily weighted sectors, and they are not participating. >> i tell you where you get a

rush, if you have 300,000 nonfarm payrolls, then you get it in the headlines, economic getting better, then you start seeing people talk about the stock. >> but that's what you need to see, right? we need the rush, is what we need. >> it's a really good thing we don't have it, the minute we have that and you start getting the chasing up gains? that's when i start getting nervous. and i think dominic, on the point about the financials, you don't want -- the minute it leads the market, you should be going the other direction. >> ten points away. let's get a market flash from dom chu. >> as you look at what's happening with the overall picture, we've talking about the dow jones, the s&p is also moving its way higher. up 17 points toward those session highs. we're closing on 1800 there as well, as we talk about the broader market, the dow is very important. netflix, delta, you name it, a lot of cyclical growth sectors

are doing well. you've got, of course, consumer discretionary, of course they're all important, so that's the reason why some traders are at least looking toward 17,000, yes, but they're much more concerned about the fact that the s&p is climbing up to its levels, because it is such a broader measure of what's happening. >> there's no holding cnbc stock back on a day like today. sarah eisen who is due with "street signs" in 15 minutes, is already on the set and anxious to play. >> it likely may happen during "street signs", so yes, we are of course are monitoring the activity. what stands out today, we went through the economic data that was released today, manufacturing at 10:00 a.m. came in a bit below expectations, but still showed expansion. that has been what has been underpinning this rally. what has frankly surprised a lot of people on the street that weren't expecting further gains. s that is a u.s. economy that is

recovering, that is expanding, not too much, to get the federal reserve to think about normal higher interest rates, but just enough to keep corporate profits expanding, even if we're not seeing the growth you would like to see during a recovery, but to keep margins high and profits going. that's why the outlook for earnings, which really kick off next week, is strong and showing at least 4% growth. that is what i'm hearing from strategists and traders, and wile you're seeing not just many gains today, but actual 1% gains. >> absolutely. everybody stay right where you are, we're on dow 17,000 watch with the market up strongly on the trading session, 16,988.27. "power lunch" is back in two. ae starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading.

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welcome back. our whole panel is with us, as we try to take apart this market. you all talk to clients all day long when you're down on the floor doing their business, and yet you both say you don't feel

this in your gut what would it take for you to be convinced that it has room to grow? is it jobs? >> i was just going to point out we don't hear the same rush when it sells off, either. there's not the panic when we've been down 200 points. we've been tempered so much to take a step back and wait and see if there's conviction to this market. but to answer your question, yes, it's going to have to be even like bob said, if you see a nonfarm numb her that blows, we're expecting 200, if it comes in at 250 or 270, that may change the psyche of long-term investors. >> why? >> because the data is getting that much better. >> and the fed has to act.

then everyone would say we can manage this. right now that's not the message that the fed is sending, because they continue to sit there and tell you rates will stay low. >> i think everyone down here would gladly trading slightly higher interest rates, and particularly higher wages, or a little bit of stress on the stock market right now. i certainly would. >> so when you get that evidence is when you'll get that change in psyche. even if the market backs off a little bit there will certainly by enough demand to push it higher. >> but you have to look at the quality of the jobs. >> that's true, but the retail investor continues to put money into fixed income.

jeff dunlach had a big inflow in june. we've seen them go to fixed income and bonds at the same time we're seeing new record highs in most of the major indices confirmed by the transports and others. everybody when they look at the dow is mesmerized by the return, but as we all learned, you're not supposed to be a market timer, so let's assume that you've held your position since 2005, so we all know it reached 14,000 right before the crisis in '07. so 3,000 points in seven years has an annualized return against the return of a 30-year bond of that increment, that same period of time, i think you would have done well on the fixed-income side. that's not to mention why everybody at the nasdaq is always say fresh 14-year highs. if you were holding a position from 5,000 since 2000, you would

still be a loser, so it all depends on where you start picking your points. i've got to get in another quick break and the panel will come in and we'll wind up "power lunch" and hand it over to "street signs." sarah, maybe it will happen on your watch. we're back in just a minute. ♪ when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with paper money to test-drive the market. all on thinkorswim from td ameritrade.

glee we are on dow 17,000 watch. zach, i'm going to go to you. if you're the visit investor setting out for the lion's share of this market, and you need the 17,000 market approaches, what do you do? >> start sending out. because then it's all going to go down. this is not a let's time this perfectly, and rick santelli pointed out it's not been a great market for 13 years. it's only when people feel like they have to get in now that you really probably should sell. >> sounds like good advice.

and you're staying involved. you're never picking the top, never picking the bottom and you're riding away. >> what is the better better? >> the stock market. you know, a house is a place you live. stock is the thing you buy. we don't want to be in a economy like 2005 to 2007. you don't want to be chasing your life investing dreams via real estate. you know, that's just something -- we're not doing that yet. i think that's an extreme positive. >> i would say zach makes a great point there, all of these assets have a role. they all have a place in your portfolio, whether it's real estate. there's still a case to own bonds right now, even with interest rates where they are. again, it's a process. there's a tool for every single job. >> there is, which means you have to have a plan, to kenny ace point. thank you, guys all.

pressure it very much. simon, it's been an interesting session having you with me. >> you bet. thanks, sue. that does it for "power lunch." >> now to the ladies on "street signs." 17,000 is just a number, but a number that's never been hit before. may even during this show. hello, everybody. welcome to "street signs." where you'll also joined by sarah eisen. >> more on your height range than brian sullivan, but not a bad way to kick off the second half of the year. >> bob. the important thing is the dow components that are moving us toward 17,000, it's a diverse group. i'mal