tv Power Lunch CNBC August 8, 2014 1:00pm-2:01pm EDT
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>> josh. >> if you're afraid of junk bond lqe might be more your speed. i'm going to go with delta. look at the way that thing flipped around today. that does it for us "power lunch" begins right now. >> michelle, thank you very much. we're going to begin but updating you on several different stories. that's the kind of airport that the us -- that's been striking artillery did it early this morning. u.s. time, this as the sunni terrorist groups takes more ground from kurdish forces in northern iraq. i.s.i.s. has surrounded tens of thousands of ethnic minorities including christians. the u.s. has started air dropping those refugees food and water.
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for fear they might starve to death or become so dehydrated. michelle is family on the syrian border. erbil, and sue, bring us up to day. >> as the u.s. becomes involved, the dow right now is proving pretty resilient, up 64 points. the s&p is up about seven, the nasdaq is up nine. in terms of brent crude, it is on the down side by about a half a%, and comembers gold barely has a bit in it. the transportation has positive for the entire session. we're at 2.38%. yesterday you might realm that -- we have you covered across the board, with rick santelli morgan britain been at
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the nasdaq. >> it was a rough night overnig overnight. very deep in the red, then there was a tweet out. it says -- in ukraine and seeks to de-escalate conflict. the russian security council. this is a russian news agency that put this out. nonetheless -- or off of the above, look at the s&p 500. there you go were in the green right now. a lot of various groups have battered turned around. you'll see we have first decent bounce in home builders in a long time. it'sible, but stabilized a few days. same with the s.o.p., mentioned how weak they were on the oil. but they have stabilized as
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well. >> it's really a very mixed bag, even though the dow jones industrial average is on the up side. ukraine is -- wee not exactly sure what's going on. >> absolutely. >> it's going to be interesting hoses to you the rest plays out. hi, morguing? >> the nasdaq is making modest moves to the up side. keeping in mind both the nasdaq composite and nasdaq 1 hubz when they were down about 3.5%. today traders tell me it's all about the earnings, so let's starred with a gain irnvidia.
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they posted better than expected q2 results last night, also upped its guidance. also listle other stocks. >> to name a few. switching to the laggards, it's sinking about 4%. by about two cents, z zynga coming in as break even, but revenues outlooks and booking all less than expected. that stock is falling about 6%. sue, back to you? >> we're going to go to jackie at the nymex. she's covering gold and oil for us.
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they are backing off a little bit now. geopolitics clearly on everybody's mind. when we look at iraq, the disruptions are in the north, a lot of the production, and to see if we trickle down south. if we don't,noic likely to see any supply disruption. they're not really spiking on this news. there's two ways to look at this, according to traders. of course we could see supply disruptions, but at the same time if european demand comes down, it may not be that meansful. product rising, demand is coming down at the same time as evidence bringing in 9% less crude imports into the country, obviously a lot of demand comes
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out of china, so concerns about demand are keeping this market very balanced. i do want to talk about that. we saw a spike earlier this week on these geopolitical issues, taking gold over 1300. it's been a tough trade this year, a lot of people say we need to get a major disruption in the geopolitical space. other expect it to stay kind of flattish. back to you. >> thank you so much, jackie. we had a move to the down side in interest raids bring us up to date today. >> you know, it's so fascina fascinating, because the -- when. >> stock market came back. opened the chart up to may 1st of last year.
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many traders think 2.25 is in the cards. nothing new, over 70 basis points. continues to -- the last chart, well, this is important. this is a two-year chart. we continue to see much of the weaknessness in europe. continuing to handicap international undergrowth with respect to history. tyler, back to. >> let's go over to mary thompson. >> check out allerg eler again vailian. he set an august 20th hearing date to decide a fast-track schedule on the case. both stocks higher, or 1.5% and
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allergan helped. >> back to the story we led with, the crisis in iraq. this video just in, came in minutes ago. it is believed to be the first video of u.s. air strikes in iraq. you can see the dust cloud, the explosive quality there, reportedly two 500-pound bombs among the presumably other armament ammunitions dropped. this is just into the newsroom also, the first delivery of aid to those refugees on the mountaintops there. iraqi forces helping to distribute packages of food and water, it comes hours after american f-18 war planes did attack syrian terrorists who were firing artillery against the town of erbil, not far from sinjar. retired general mccaffery was on cnbc this morning, an he is not
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happy with how things are going so far. >> last night we had three aircraft dropped food and water to 50,000 refugees. today two navy aircraft dropped four bombs. you know, this is not decisive use of military power, we're not on the ground in the area. i don't think we know what we're doing. >> that's one person's opinion. let's hear from david deputula. he helped lead the no-fly zone efforts there for years. general, welcome, about to see you. >> thank you, tyler. >> he says a couple things. insufficient force, we don't know what we're doing. how do you react? >> well, tyler, it all goes back to what you want to have forces for, is to accomplish a set of strategic objectives that then lead to the assembly of a coherent campaign plan. in that context, general
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mccaffery is smp correct. now, there are different way toss go about this. i think it might be instructive to your viewers to understand that the parallels are amazing between what happened in april of 1991 in this exact same area and today, except the difference was in 1991 saddam hussein's forces were attacks the kurds and mistreating the tribes. today it's i.s.i.s. today what happened as a result of that is the u.n. security council passed resolution 688, which led to the establishment of the first no-fly zones. now, the application of force from the air could be extremely helpful appeared significant in halting i.s.i.s. and then rendering them ineffective. what needs to be done, however, is a comprehensive coherent campaign to do that, needs to be established. >> so, general, you anticipated
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my second question, and that was there are troops on the ground there, i.s.i.s., which apparently has zero airpower supporting them, but we are trying to take them down or cripple them with airpower alone. can airpower do that kind of job? >> well, first let me offer that airpower, land power, sea power are tools that are used in integrated to accomplish a set of objectives. which and to what degree you use each is important, but let's not fall into the mistake of assuming that one has to have u.s. boots on the ground. if you take a look at the model that was very, very successful in the first three months of "enduring freedom" in afghanistan, you'll see that we brought an enormous amount of airpower that facilitated the indigenous ground forces, the northern alliance, to basically
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accomplish the three u.s. critical security interests. that was to remove the taliban regi regime instill a regime friendly to the united states, and eliminate the terrorist camps. we did that by the end of 2001. that could be done again. the problem becomes, in that particular case, where we introduce large numbers of u.s. boots on the ground in an attempt to nation build and change a collection of 16th century tribes and establish a modern jeffersonian democracy. that was not a critical u.s. national security interest, but in this case we need to conduct the humanitarian relief that the kurds need and i.s.i.s. is pure evil, and they must be eliminated. >> all right. general, thank you very much. we appreciate you being with us. general david deptula, u.s. air force retired. thank you very much, sue. >> thank you. back to the market action.
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the dow jones industrial average is on the up side. the dia is the etf that tracks the dow 30. you can see it is up as well. we're solidly in the green with the s&p 500, and the qs, which tracks the nasdaq 100. in general we're up today pretty much across the board, and it has not been seven a great week, so we have a combined three quarters of a trillion dollars worth of advice from dan morris, global strategist, and the head of global mobile cease. gentlemen, welcome very much. thank you very much for joining us. dan, i'd like to start with you. does that influence your investment strategy, or perhaps even longer term. >> not necessarily these type tend to have a short-term impact on the market. so you certainly pay attention
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to them, you're conscious of it in terms of positions, but it doesn't change our outlook. >> wasif, what about you? >> same answer. we agree that gee on political event in the long run, really fundamentally strong assets. where are yew favorite places? i've heard a lot of people say they're favoring the big cap stocks. we like the u.s. generally. we think the performance with this sell jot recently has -- but that said, we do agree that large caps are probably better positioned.
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>> i know you feel that valuations are somewhat stretched. >> they are. the large cap because of virtues. but overall, they look to be more expensive. stocks overall aren't terribly expensive. when you look within stocks, the u.s. market looks more expensive. particularly in europe, despite the noise we are seeing around russian issues looks very attractive to us. emerges markets look attractive as well. >> you know, the global move to the down side in yields, and one
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veteran market watcher down here said to me that's the canary in the coal mine. would you agree with that stapes? and -- which was not supposed to happen this year, interest rates were supposed to go up this year. does that worry you as all? >> i don't think it's a canary in a coal mine. its think fundamentally they are quite different, corporate earnings with regards the u.s. treasury market. it's held 50% by foreigners, really more of a reflection of global growth, global outlooks, and it's going to reflect that more than we see in the u.s. upyarp investors are looking for high-quality sovereign debt, so they're holding even more treasuries.
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welcome back to "power lunch." i have a market flash, a big day for termira. take a look at shares up currently 38.1% tyler, back to you. >> thank you. hawaii with a collective sigh of relief at this hour. parts of iselle hit the islands this morning. they're not accustomed to this weather there. hilo took the brunt of the storm. more than 20,000 people lost power. there was some flash flooding. mike tieibaibbi rode out the st. >> reporter: tens of thousands the visitors come here are all
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feeling lucky. it was expected this would be a huge historic one-two punch, one after the other barreling down. instead, iselle came aschori at a tropical storm, and hurricane julio, which is following, is still a hurricane, already tracking to the north of the island chain. >> thank goodness summer schools throughout the island closed today because of the storm, but authorities say all the of the airports in the islands will remain open, at least for now. sue? >> wow, that's a surprise, given that weather. shares of post holdings plummeting after the cereal maker cut its earnings. stock is down 17% shares of
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zynga after they slashed full-year guidance and revenue came in lower than estimates. shares of mercado libre, the ebay of latin america posting better than expected results. payments up 77%. ty? >> sue a food scare, and another headache for mcdon't. plus the latest geopolitical hot spot is what's going on there changing. s in case of our ron insana, no, all right enforcing what he's already doing. that's next. from the phone company? that's enough time to record a memo. idea for sales giveaway. return a call. sign a contract. pick a tie. take a break with mr. duck.
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the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. welcome back to "power lunch." medivation. because of strong demand. two raised their ratings. it's at 82.44. sue, back to you. mary, first there was a food scare, followed by a labor ruling that could hold it liable. then today disappointing same-store sails. july comparable sales fell 2.5% for mcdonald's down % over the
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welcome back to "power lunch." i'm julia boorstin. media stocks are on the move. lion disgate up 6.5, to the highest levels it's seen since mid march. on comments on this morning's call that the company is, quote, deep into conversations, the potential theme park partners on four continents. kinga shares are down on weaker than expected revenue, earnings and user metrics, and new licensing deals with the nfl tiger woods and warner bros. are sparking concerns about lower margins, and zynga's inability to create valuable new brands. is is it time to dabble back in?
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>> you won't el about the geopolitical risks at all have an effect on the investor sentiment, especially because the chart we're going to show you is so interesting. it really s it's going to show you the 200-day moving average. what that is is trader-speak for the longer term batting average, if you will, for where the market should trade. every time you see there the little red-orange circles, it came down, it did it yesterday, goes there, touching it, but then you can see every time it does that, it goes right back up again. this rightmost one was just yesterday. it touched there, we closed up just above it, now we see this nice rally, so you wonder whether or not traders and investors are using this as a longer-term signal to get back into the markets. if you look -- if you're looking for individual stock plays, how about these ones now in
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correction shun territory. that means they've fallen by at least 10% or more. mcdonald's we know the struggles, american express, visa, some of these companies more associated with the consumer spending side of things. utx, pfizer, all companies now trading at least 10% off their 52-week high. the single stock in the dow that's the worst performer in terms of corrections since its recent highs, is that stock there, boeing, down 17%. they've had some issues with that you are dreamliners and everything else, but you wonder whether or not from a value perspecti perspective, some investors are saying boeing might be a place, if you're looking for single spots to buy. >> dom, thank you very much for that report. sue down to you? >> ty her, thank you very much. the trading action here, bob pisani, art carbon is waiting in the wings.
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>> take a look at the s&p 500. we're at the highs for today. there was a headline out of the interfax agency saying the russian defense ministry has said military exercises near the ukrainian border are over. they announced monday that they would be conducting military exercises near the and it would last monday through friday. now they announced the exercises are over, the market seems to treat it as though it's breaking news, but that's how difficult this is to figure out at this point. what is clear is the markets are stabilizing, beaten-up sectors are doing better. and it's a one-week chart. beaten up groups are now outperforming. remember how underperforming they were? that's the biotech etf, also we're see home builders also turn around as well. so a number of sectors.
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>> art cashing joins us now. bob gave us the headline, but that's what pushed us through that upside resistance, correct? >> the combination one-two punch was key. as what bob aptly said, they looked at a further easing of tensions, by follow through, by not continuing the war games, troops going back to bay. that moved us above the 1919, 1920 resistance. that produced the spike. >> i just want to bring michelle into the conversation. you know, michelle. everybody this morning was saying, wow, this market is kind of bulletproof, knolls reacting as much to the situation in iraq, yes now we see the market absolutely reacting to the geopolitical tensions. it could have easily been the other way around. >> certainly it's been the russia/ukraine situation that as moved the markets the most.
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i would say we've seen this movie before with russia. remember, we've seen putin now back down before when he had troops amassed on the border. because there was the sense the ukrainance might be able to retake back do netysk. and then only to see an increase in tension. the market is taking this now as very good news. i guess the question is, what does that mean?
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what does the russian security council mean? >> that plus the fact that they -- the head of the ukrainian rebels resigned, and was replaced by a native ukrainian, which gives a bit of wiggle room to it, but to echo what michelle was talking about, today has virtually 100% about ukraine. >> interesting given i.s.i.s. >> i.s.i.s. is a very serious problem, but a problem in the future. it's not going to be today or this weekend in all likelihood. if things are going to spin out with i.s.i.s., it will be over a period of weeks. >> yet we were down notably overnight. we turned around when that ukraine comment tweet came out from the russian news agency, but art, with the president announcing he was conducted even limited air strikes i this did have some influence on the overnight markets. >> on the overnight, yeah, but they got past it. the rest of the day has been all about ukraine.
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>> i would add we'll have to wait and see if nato can confirm -- it took several days the last time we went through this, there were troops on the border. this is, you know, the military games are over, it took several days before that actually happened. >> thank you all very much. appreciate it. art, i'll let you get back to your lunch. let's head uptown to the nasdaq. morgan brennan is following the movers there for us. >> making gains with the nasdaq composite since the last time we spoke. we're looking at 0.6% increase, 28 points, it's now trading at 4363. so definitely moving up, and actually making back the losses we have seen for the week, the nasdaq is set to close in positive territory for the week, so that's a big change just from the last half hour. i want to poibt out one of the most buzzed-about names here that traders are talking about.
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that's tekmira. the mark capital is less than $400 million, but this is a company with potential treatment for ebola that fda modified their hold on. it's up nearly 40%, about 38 is% last time i checked. want to move on to the internet stocks. it's been a mixed bag. amazon and google both up, though modestly today, but momentum names have been coming off. we're seeing a rotation there, yelp, groupon, netflix, also facebook down. i spoke to a stock strategist. he says we've been seeing moves into larger-cap companies as a safe haven play. he expects now that these markets are coming back, we'll see them -- moving into next week. sue, back to you. >> thank you so much, morgan. rick santelli is back to check the currency market for us. >> hi, sue. absolutely 5s 160 unchanged on
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the day. 30s 323 unchanged on the day, but all obviously down for the week. see that chart of the s&p versus the ten-year? certainly we could debate as to what moved the stock market. early it looked like it would be a continuation of maybe the way the dax is trading. they've stabilized a bit, but you know, the white noise of all of these stories and tweets and everything that's moving the equity markets will get filtered through the 244. that's the big marginal line for the weekly for folks to pay attention to. as you look at the chart going back, you can see how significant this level truly is, and of course we don't want to diminish the dax, trading under 9,000, sue, but also on thursday, we get a look at gdp and europe. that's where the meat is on this day in terms of significant market moves. tyler, back to you. >> rick, thank you very much. the world seemingly a mess, sunni terrorists are on the
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loose in iraq and syria and lebanon. they are surrounding tens of thousands of minorities, threatening to kill them. u.s. had dropped a few bonds on thinks terrorists, supplied food and water to the surrounded individuals. this is the israel/gaza border this morning. you hear the booms coming from the sky above. those are hamas rockets right there ending a 3-day-old cease-fire, israel struck back after hamas fired dozens of rockets into its territory today, and then, of course, there is ukraine. russia has been making noises, as though they might even invade, then back off, so that's what's making the market a little jumpy right now. the indication is that exercises there are winding down on behalf of the russians. so how do you factor all of these events into short-term stock decision making?
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abdale doolittle is founder and analyst at peak theories. jack, i know you think that russia is far more significant than either israel and the gaza area or iraq. what would you be doing today? are you buying anything? if so, what? >> tyler, i think that the market is dipping 5%, regardless of what was going on happen in russia. the market was going to see this happen. see, one of the things we have noticed over the course of the last year or so is the bull market has hon given us the 5% pullbags. i think what people need to do is to take a step back, a giant look at what's been happening to the marketplace and understand when the market gives you these 5% pullbacks, you need to put money to work.
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it's not going to give portfolio managers a plan to get in. >> so what have been adding to your port for i don'ts? and are you insulating those long positions with any kind of protection? i would say try to figure out a strategy that makes sense, but do not be long without protection going into the weekend? >> abe gail, you say you're basically on hold right now. what does that mean and what are you doing? >> there's just so much uncertainty out there. i don't know how jack can say this particular pertain of uncertainly, with what's happening in gaza is going to be capped at 5% to the down side.
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we really just don't know. there's just too much instability. i think it's tough to buy here. i don't think it's necessarily a time to redue exposure, but i think investors want to be on notice. especially consider what dominic has been talking about. i think it's going to go further. if you look at the dax and russell 200, they're below, so i think it's premature to say they won't escalate further. i think another instability is the fed under wind. i think you said to be defensive, not buying on it particular green day. >> abigail, we are representing you as like i a couple natural gas plays. i hope that's right, and if so, why? >> that's true, one possible
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bright spot and it's tenuous right now, but natural gas looks like we could see a nice rebound from the pullback. one way that investors could play this is the natural gas fund, an etf. this is an investment i am making for peak theories. there's a couple other names that may look attractive. it's tough to want to get excited about it. it may take those natural gas names down, too, but any strength that ung might be a nice spot to hang out. >> jack, abigail, thanks very much. have a great weekend to both of you. >> thanks, thank you. u.s. military with a targeted air strike against i.s.i.s., apparently dropping two 100-pound laser-guided missiles. what comes next? colonel john warden with with us when "power lunch" returns. plus eamon javers, on how u.s. forces are fighting
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against -- >> it's one of the biggest ironies of this round of u.s. military activity in northern iraq. the united states aircraft might be firing on military equipment on the ground that was paid for by american taxpayers. we'll tell you what the military experts are saying, when we come back. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
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to learn about our whole range of life event discounts. newlywed discount. new college graduate and retiree discounts. you could even get a discount when you add a car. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. the dow is now at session highs. the dow is having the best day since may 21st. up 157 points e. nearly a percent to the up side. it's big names like home depot, also united technologies, watt disney, american express, goldman sachs. that has a big impact on the dow because it's one of the
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higher-priced stock issues. back over to you, sue. >> dom, thank you very much. fighting the islamic state, the u.s. might be fighting against its own equipment. eamon they have captured u.s. equipment that was in the iraqi arm's hands. the bigger question is, do they know how to use that equipment? >> that's one of the key questions. the military experts say they've been surprised how quickly the isil, but when the iraqi army melted away we saw a lot of taxpayer-financed weaponry left on the battlefield. the isil forces have been able to obtain it. that looks like a mad max version of an american sum veal, clearly repurposed.
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other pictures photographers have -- show clearly american-made pieces of equipment in the hands of i.s.i.s. forces on the march in northern iraq. one of the questions is going to be, does this make isil a better force. american heavy machine guns and other types of weapons, but doesn't necessarily make them a sophisticated fighting force. >> eamon, thank you very much. let's talk more about this with colonel john warden. i guess the question is, is what we are doing enough in this particular case? it seems as though perhaps we have underestimated i.s.i.s. >> sue, it strikes me we have
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badly underestimated them, and we are tending to think of them as kind of a run of the mill terrorist organization like an al qaeda. these guys are very capable. they seem to be able to conduct sophisticated military operations and govern and occupy. this is a bigger thing than we have dealt with in a very long time. >> what should we do then? >> i think that there are two basic things we ought to do. first of all, we ought to make it clear that it's in our national interest to stop these guys and to drive them back at least back into the hills of syria. second thing we ought to be doing is looking for all of the regional players who might be ability to do it entirely on their own. third thing, as required, we need to go in and conduct some serious operations against the isil forces. >> you know, the air drops that
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have been going on, they're being escorted by f-18s. how do they get to those spots? what routes do they use? what countries do they have to cross? it seems very dangerous? >> to the best of my knowledge, the c-130s are probably coming from between basra and baghdad. the fa-18s are probably coming from carriers that are someplace in the persian gulf. the majority of the route is probably relatively safe at leasten they get into the object i have save, where it may be the isil guys have some shoulder-fired heat-seeking missiles, but we can deal with that. >> of course syria is there, turkey is there, those would be two possible routes. any thoughts on that? >> yes, and i would imagine that
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we all to be able to get a lot of cooperation from the turks, and the turks ought to be able to conduct operations on their own. syria, ought to be able to do the same thing, but we need to stop this business of aiding the rebels against syria so assad can focus on what is a significance problem for all of us. >> its such a complicated problem, involving so many different countries and so many different factions. where do you see this going? the president has said there would be no american boots on the ground, but we've only, you know, bailingly launched two offensives from the air. where do you ultimately see this going? >> well, from what i understand that we've done so far, all we have really done so far is drop a couple bombs on an isolated isil piece of equipment of some
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kind. that will have no impact on isil. the thing that concerns me is the idea that the president seems to think this is sore of a terrorist organization and we're dealing with a civil war that merely requires a national unity government to fix. i don't think that's it. this is a really serious group of people that have the capability to expand dramatically from where they are. if we don't stop them, they're going to be occupying a heck of a lot more territory than what we're doing at this point. >> obviously well organize the. colonel, thank you so much. we really appreciate your perspective and experience. >> all right, sue. sotheby's shares are plunging, auctioneer posting weaker than expected second quarter results. the decline in core earnings. more stocks to watch when polypolyreturns. at your credit report site. do you guys have identity theft protection? [ male voice ] i'm sorry,
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monster beverage, and now for a look at what's coming up on "street signs", we go to mandy. >> you know how it's been recently, iraq, russia, ebola, we've been lurching from one headline to the next, right? so we're going to focus on the most important headline. mcdonald's numbers, a bit of a mcfizzle. lots of things coming up top of the hour. make sure you join us for our feder special friday edition. life spa. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy, affordable, kid-inspired, chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients
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a big turn did not around on the markets. as a result, that move to the market to the up side, we were up about 164 points, just off the high of the trading session, with a gain of almost a full percent. the transports also having a good day. now up 0.7 of a percent. the yield moved a bit higher on the ten-year notes. the risk aversion that was in the market earlier this morning easing a bit. we were down below the 2.4
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market on the ten-year yield. now just sitting at the two-point for the market. ty, it will be very interesting. volume is very light, though. >> it does not feel like an up week, but now they're all higher for the week. that will do it for this edition of "power lunch." >> have a great weekend. here comes "street signs." new hour, new headlines from russia that is sending stocks higher. is the news really that new? hi, everybody. headlines out of russia, even as the u.s. bowels militants in iraq. plus we rank the rick to find out what should be most worrisome to you, and what might be the greatest mistake that mcdonald's is making. >> earlier on today,
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