both. >> that's what i thought. steve weiss? >> i'm still waiting on amazon for tomorrow. i don't think it's too early to get prepared for it and that's going to be i think a very important quarter -- >> do you think it's going to be good? i have to go. sorry. >> i don't think it matters because they're going to release -- we got to go. >> my bad. that does it for us. "power" begins now. and we start this hour with a news alert from the auto industry. phil lebeau is live in chicago with details. phil? >> mandy this is a new study from j.d. power, and it shows us what we want when it comes to connectivity and technology in a vehicle, and it might surprise a few people. the latest study from j.d. power shows that when it comes to the latest most preferred technology in a vehicle, consumers want safety, not connectivity. connectivity rates much lower on the list. car buyers are willing, however, to spend for the technology between $2,000 and $3,500 if they find that technology is going to help them behind the wheel. what are the most desired auto

tech features? blind spot detection as well as prevention. we're already seeing that on a number of vehicles. night vision collision mitigation and avoidance systems well camera and rear-view mirror systems. think about it all of these are basically out there in the market already and we've seen them in other cars so we're comfortable with them already. by comparison the study found just 19% of those studied or surveyed i should point out, 5,300 people surveyed only 19% want autonomous drive cars right now and just 17% want in-car wireless connectivity. most interesting is that when i talked with the study's author mandy, she says when it comes to looking at new cars and you ask people what do you want, what system do you want in the car as far as the connectivity system and how it matches up with your phone, they want to check their phone first. if they have an apple, they want to go with the car that has apple features. this they have a google, they will say i want android auto. so it's an interesting look and there's more on cnbc.com about

what people want when it comes to the technology in vehicles. >> safety first, phil. safety first. thank you very much with the findings there. to the bird flu outbreak in the united states. mexico now banning imports of eggs and live birds from iowa. the financial ramifications of the virus could be huge. morgan brennan is at ground zero in harris iowa. morgan, what are you hearing out there? >> reporter: all right. well, first of all let me just tell you this is sunrise farms, and this is the latest and largest of the facilities to be hit by this bird flu outbreak which started in late 2014. so according to protocol, the farm has been quarantined until further notice and all of its nearly 4 million egg-laying hens will be euthanized with the help of state and federal officials. now, doing this prevents the spread of the virus and ensures it doesn't make its way into the food supply. though i will note that theu sda says this strain of bird flu poses little threat -- little risk to humans and even if it

were to get into the food supply as long as you are preparing your meat correctly, you will be okay. nonetheless, when a farm is infected, and there have been more than 50 cases across multiple states. you have 6.5 million birds that have been affected it comes at a huge cost to the producers, and that's in spite of the fact that they get a certain amount of federal aid when this happens. and it's not just in terms of the lost product or lost business. the actual disposal process itself is expensive. >> it can be hundreds of thousands of dollars in an operation like the iowa facility, the egg layer facility that's a really big facility. it could easily run into several to a few million dollars. >> reporter: so usda says it's also working on developing a new vaccine to prevent future outbreaks, but in the meantime here at sunrise, the disposal process, the depopulation process, if you will of this

flock is likely going to include co co2 but they haven't started the process and the reason is because officials are trying to decide where to dispose. whether to bury the birds on-site or take them some where else. >> a huge cost to the producers and the poor birds themselves. also a developing story involving the flash crash arrest that broke on "power lunch" yesterday. the trader accused of contributing to the 2010 market drop appearing in a london court today. cnbc's wilfred frost is live outside the courthouse with the latest. wilfred? >> reporter: mandy, thank you very much. yes, there has been conditional bail granted ahead of the extradition trial set for the 18th of august. he does face these charges alone but the late he was from credit suisse spokesperson is credit suisse had a, quote, standing banking arrangement with mr.

sarao's trading company. we believe that banking arrangement was established before the flash crash in 2010. as i said he has been granted bail but the conditions very very strict. he has to post 5 million pounds. he can't use the internet at all. he has to surrender his passport. his parents also have to surrender 50,000 pounds. all of this as you said at the top relates to 22 financial misconduct charges, one does indeed relate to the 2010 flash crash. important to note he faces these charges alone. the next step for the charges will be his extradition trial here in london on the 18th of august. with that from westminster magistrate court, back to you guys. >> vitamin shoppe popping on the news that karlsson capital has take an 5.3% stake in the

company. karlsson says it's undervalued. carlson capital also says it's been in talks with the board on some strategic alternatives. it believes there's some value to be unlocked there. right now you can see vitamin shoppe shares trading up over 9%. back to you. >> thank you mary. a lot of earnings out today. very busy week but let's drill down on the housing number. america's biggest home builder reporting 40 cents a share, 2 cents above expectations. revenue also topping estimates. horton posting a 30% jump in orders as the spring selling season got off to a strong start. you can see the stock is tanking, down by over 6%. d.r. horton stock is up 7% so far this year. well, let's stay with the topic because we're getting some bullish signs from the housing market. mortgage applications on the rise. existing home sales soaring. >> mandy, some very big numbers as you said today, but one red flag in a second. first, mortgage applications

specifically to purchase a home rose 5% week to week and are now 16% higher than a year ago. they've gained in four out of the past five weeks. so it should come as no surprise that closed sales of existing homes in march also took a nice jump to the highest pace in 18 months. but that comes at a very high price, and here is your red flag, folks. the median home price in march, $212,100. it was a gain of 7.8% from a year ago. those both condos and single family. if you look just at single family, it's on nearly 9% gain in prices. that's more than twice what the gains were just one year ago. now, the prices are the result of very tight supply in the market, just a 2% bump up in inventory from a year ago and we weren't exactly swimming in listings last year either. why so tight? well, builders are still not delivering near the normal level of new homes and current homeowners are afraid to list either because they're still under water on their mortgages or because they feel like they

won't be able to find anything to buy if they sell their homes. mandy? >> it really feels like it's fits and starts isn't it? in housing recovery is very bumpy. thank you very much, diana. let's look at what the stock markets are up to right now. it's been a seesaw session, i guess that's a way to describe today's trading. the dow was up 60 points, then down 61 now it's up by 40. anyway, today would mark the first gain for the dow and the s&p 500 in three sessions. the nasdaq meantime would register its third straight day of gains with the rise currently up seven points. the biggest dow gainers, visa mcdonald's coca-cola, earnings fueling those and energy and tech are higher consumer staples is moving to the downside. industrials was also trailing but now it's moving up as well. the biggest winners on the nasdaq 100, tesla and broadcom up. a gain of 5.4% on tesla and intuit is up by 2.4%. it is the world's most

indebted oil company, and it's getting ready to report its highly anticipated earnings report amid a national scandal. michelle caruso-cabrera is live in rio de janeiro, brazil. i assume we're talking about petro brass. >> that's right. petro brass is the state run oil company in brazil. it's been brought to its knees by a massive bribery scandal that investigators say lasted nearly ten years. will they finally report earnings tonight? that story coming up right after the break when cnbc is live from rio de janeiro. financial noise financial noise financial noise financial noise

welcome back. angie's list soaring. the consumer review service posting a surprise first quarter profit, but revenue was shy of estimates. the stock has plummeted 45% in the past we're np the outgoing ceo will be on closing bell. auto nations soaring, beating estimates on the top and bottom line but not helping the stock and mylan back to its ipo in 1973. david faber reporting mylan is offering a new offer for perrigo. they rejected an offer saying it's just too low. energy again a big story today. crude oil prices fell almost 2% yesterday closing at $55.26 a

barrel. today we're sitting at $56.34 a barrel. let's get out to brian sullivan who joins us now from the ihs wheat conference in houston. how is it going down there? >> you know it's going fine. i always love houston, great people, great town, and really there's two reasons we come to conferences. number one, learn stuff. number two, because it's an easy one-stop shop to corner some of the biggest and baddest ceos out there. billionaires, guys running companies, women running companies. they're all here in the energy business. it's a great place to learn and we had an opportunity to sit down with a guy that many consider to be the single smartest guy in the oil and gas industry, rich kinder who is the chairman around ceo of kinder morgan and i asked him about prices. is there a perfect price for crude oil? >> no i don't think there is because it varies so much with the amount of costs that our upstream colleagues are able to take out of the system and also

the tremendous improvements in drilling technology that they're able to put into place. you know there's a saying going around now that $75 is the new $90 and all of that, and i don't know. i'm not smart enough to figure that out, but certainly i don't think you have a long-term, sustainable future for fossil fuels with oil at $50 or $55. >> all right. so, mandy, in the television business we call that a tease. we took a small bit of the interview as a means to lure people into the next hour of the show. so the full interview with rich kinder, who by the way is smart enough to figure it out and if he's not, nobody is, that's going to air around 2:30 eastern time today. so the full interview with rich kinder. we have a lot of other interviews we've been doing. that's why we come here because learning is fundamental and it's good. >> you always save the best things for yourself, right? saving it for your hour of "power." look forward to that. you're always a tease, brian. >> thank you.

this is the benefit of also coming to a conference is the teleprompter doesn't transfer because i say what i want and i frequently do. >> i always do. thanks bri. later today we'll get new details of how much was stolen from brazil's big oil company, petrobras. the stock is down 35% over the past six months. it has however rallied on news the company would report its results. michelle caruso-cabrera live out petrobras' headquarters in rio de janeiro. >> reporter: the board is meeting right now looking over the audited financials from pricewaterhousecoopers and later they will take a vote on whether or not to release them to the investing public. if they don't, it will be a huge disappointment because you can see the move in the last week or so. it's climbed, the shares of petrobras, more than 50% on expectations that the numbers would come out. that huge rise though does not make up for the massive decline that we've seen over the last year as it seems day by day more details emerge about abribery

scandal that has lasted for a decade that has led to arrest of politicians and party members. once they get past this hurdle analysts say they face other big hurdles such as way too much government intervention into this company in the first place. consider this the brazilian government owns 52% of the voting shares of this company. they control the vast majority of the board members and, in fact, until recently the chairman of the board was also the finance minister of the country. they have one independent director who by the way refuses to stand for re-election because he is so frustrated and if you read the yearly report to investors, they say explicitly that they will sometimes make decisions that are in the interest of the government rather than in the economic interests of the company. one example that has impacted them very very hard gasoline. the country of brazil, the government, sets the price of gasoline, and for years they set

it at below the cost it was to refine it. even though petrobras drills so much, they still have to import oil to meet the local gasoline demand. so imagine oil is at above 100 bucks a barrel and yet they have to sell the gasoline at a loss. petrobras was one of the few oil companies in the world that was actually hurt by a rising price of oil and they're better off with a declining prousice of oil because of that policy related to gasoline prices. another big issue they face local procurement rules that force them to buy only locally in brazil. so that means numerous companies were created to help give them supplies, to help them build rigs, offshore et cetera, but what does that mean? that means sometimes they're paying more than they had to getting companies that weren't as good as they should have been which led to cost overruns delays in production and hence less revenue which has also impacted their bottom line. lots of issues for this company, the first one though in a couple

hours, we're going to find out if they're going to release earnings. everybody is betting yes, and the bottom line how much did the graft of the last ten years, can they give us a good ballpark figure about what kind of hole that's put in the balance sheet? guys, back to you. >> that's what we're watching out for. thank you very much for highlighting that, michelle caruso-cabrera. there's another energy giant and that's grass promazprom. the european commission announcing it will clamp down on the company's unfair monopoly escalating the standoff between europe and russia in some eastern european countries gazprom is pretty much the only supplier of gas. call it a sign of america's burr boonourbon booze. you will not believe how much this stuff is worth. up next, power pitch, a startup giving a boost to your

exercise game. >> the product that will change the way you approach yourwork workouts. >> how do you prevent some of the underarmors of the world from replicating what you're doing? >> stay tuned to find out. test or nothing. the smartest or nothing. the quietest or nothing. the sleekest... ...sexiest ...baddest ...safest, ...tightest, ...quickest, ...harshest, ...or nothing. at mercedes-benz we do things one way or we don't do them at all. the 2015 c-class. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. [ female announcer ] who are we? we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ ♪

we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours.

it's time noup for the power pitch where one entrepreneur gets just 60 seconds to try to convince a panel of experts that his or her startup has what it

takes to be the next big thing. >> hi my name is terry white. i'm the founder and inventor of the north more shore a product that will change the way you approach your workouts. as a former collegiate athlete and new to manhattan, exercise was important to me. but every time i left my apartment to go for a run, i had the same problem, i was stuffing my keys in my sock and carrying my phone in my hand and it just didn't feel right. so i came up with the solution. the north more short is an athletic compression short with two water resistant compressive pockets. one for your phone and the other for your keys cash and credit cards. water resistant to protect against sweat and compressive to keep your belongings secure. early presales and a successful kickstarter campaign have helped us build a strong and excited customer base. in only six months we sold over 3,000 units without any paid advertising. the north more short is represent tich of who we are and

what we believe in. we're here to raise the bar and to change the way people everywhere are approaching their workouts. >> welcome to today's power pitch. you just saw the pitch. now let's meet the panel. first board member of the new york angels alicia syrett. and from the bay area patrick chung, founding partner of xfund a venture firm targeting early stage investments and david wu general partner at maveron. the firm's portfolio includes ebay and groupon. okay. terry, usual in the hot seat. great to have you with us. alicia, first question goes to you. >> so terry, how do you prevent some of the big name competitors, nikes and underarmors of the world from replicating exactly what you're doing? >> i have become less concerned about the under armors and the nikes of the world mainly because at this point i think if they wanted to do it they would do it. >> patrick? >> at xfund we like to ask,

where are the main trajectories of growth coming from? what happens after the north more short? >> we're focused on customer acquisition, driving revenues and just increasing our overall awareness. what's next will largely be determined by our customer base. >> question to you. >> who is this customer and what is that guy looking for in the brand identity? >> i look at the customer as a that off the field athlete. as a former collegiate athlete myself i struggled to find the brand -- a brand to connect with. >> alicia? >> terry, you had a really sick sesful kickstarter campaign. how do you market the product why here after you have ex haubsed the demand amongest your bros? >> i like to stay eye to eye with my customer base. kickstarter allowed us to reach over 300 customers in 40 countries around the world. i think it will continue to grow

organically from there. >> david, last question. >> i have been told when it comes to iconic brands you should be able to close your eyes and visualize exactly what that everlane guy or lululemon gal is wearing down to the sithd color. what's been your approach to the design aesthetic? >> there have been a lot of cool blues and tones that are somewhat conservative but at the same time we've infused it with kind of an edginess and a brighter spark that represents what our guy is capable of. >> right now it's all about the guy but any plans to branch into women's wear as well? >> the pressure is there, and i'm considering it but at this point i'm focused on what i know and we will, you know entertain that as we grow as a company. >> okay. we all heard what terry had to say. we need to know if the panel is in or out. alicia? >> so as someone who works out very often, i can absolutely understand the demand amongst a

segment of the market. however, i'm not convinced yet that this is the killer app like yoga pants were for lululemon. they're off to a great start but it's still a bit too early for me so unfortunately, for now i'm out. >> okay. >> one out. what about you, patrick? >> you know, this is one of life's little annoyances that has not yet been solved. terry is going to have to really race to build brand, to really support a package of features that differentiate them for the long term otherwise he's going to get his knickers in a knot. however if he's near the lululemon or spanx universe you have a hit and they can come from the most unlikely nether regions so i'm in. >> what about you, david? >> it's one of those products you hit yourself in the head and go why hasn't anybody else built a pocket like this? at the same time when i look at venture scale breakout brands especially in apparel, most of them come from the brand, fashion, and design side rather than utility or a new feature. i like what you have done but

i'm going to be out. >> okay. we've got two outs. one in. what's your reaction terry? >> all feedback is great, positive or negative. i'm really excited to have been here and to have met the panel and thank you. >> we'll look forward to seeing your progress. thank you very much to terry white and to those on our panel, alicia patrick, and david, and that is today's "power pitch." what about you? are you in or out on willico's north more short in for more on power pitch go to powerlunch.cnbc.com. that's a lot of power in there. the new tool for day traders, many now using social media like twitter trying to become the next big investing star. is that a valuable investing resource or is it a dangerous minefield? it's all coming up. stick around.

new york state is reinventing how we do business by leading the way on tax cuts. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. all to grow our economy and create jobs. see how new york can give your business the opportunity to grow at ny.gov/business ideas come into this world ugly and messy. they are the natural born enemy of the way things are.

yes, ideas are scary and messy and fragile. but under the proper care, they become something beautiful.

hello, everyone. i'm sue herera and here is your cnbc news update this hour. secretary of defense ashton carter delivering remarks on sexual assault prevention to more than 250 members of the reserve officers training corps

at georgetown university. he said he is focused on stopping sexual assault and encouraged the students to make it their mission as well. hundreds of migrants continue to make the dangerous journey through the mediterranean to reach europe in hopes of a better life. 446 migrants rescued yesterday arrived at a port in sicily this morning. among them many women and children. did you try calling the irs this past month and you couldn't get through? you're not alone. its overloaded phone system hung up on more than 8 million taxpayers. for those who were not disconnected, the hold time was more than 30 minutes. limited copies of manny pacquiao stamps have gone on sale in the philippines. 500,000 copies of the regular edition stamps priced at 22 cents and 30,000 souvenir stamps priced at 90 cents were mostly sold in the first two days. espn reporting that a contract for the mega fight between

pacquiao and floyd mayweather scheduled for may 2nd well that contract still has not been signed. that's the cnbc news update at this hour. back to you, mandy. >> thank you. let's look at what gold prices are doing as they're closing right now. bring up the board and we'll show you what they're up to. currently sitting at $1,186 continuing to move further below the $1,200 mark. it's down by 1.4% or $16. as for silver copper palladium and platinum moving to the downside, particularly palladium off by 2.5%. that's it for me for the moment. you're probably sick of hearing from me. i'll hand it over to brian sullivan back down in houston. brian? >> your dulcet tones are far superior to my own. we're not sick of hearing from you one bit. earnings are a big theme as well. we're going it bring in sara eisen and phil lebeau. they have a couple companies to talk about. sara you and i have agreed to

disagree on the impact of your favorite topic currencies on earnings. i wanted to let you know that i haven't forgotten about currencies. a few minutes ago we sat down with the ceo of the italian oil giant, one of the biggest producers in the world, and i asked him about the impact of the stronger dollar on his business. here is what he said. >> it's impacting positively because i think at 90% of ours is outside europe and italy. most of our production and development and expenditure is in dollars. that is positive for us. >> so, sara i know that the stronger dollar may have a negative impact on american companies, but let's not our investor viewers forget if you're in europe perhaps the stronger dollar is a good thing. >> and that would suggest that you're actually admitting that it's not such a good thing for american companies. that's why it's called competitive devaluation. brian, here to talk about coca-cola because this was one of the concerns with coke coke

actually managed to surprise investors in a good way today. why? well, coke got a big boost from charging higher prices. and to your point, not as much of a hit from currencies as some had feared because it turns out coca-cola is protected with hedges at least from the major currency swings, the euro and the yen. not so much emerging markets though. even die yet coke only dropped 5% in north america. but the cf oo told me after the results a lot of factors that helped coke beat cannot be counted on for the rest of the year. for instance, the big jolt from aggressive pricing moves, that should moderate she says. it's why the ceo keeps emphasizing this is a transition year for coca-cola. that means productivity savings which are in early days still. it also means cost cutting, including layoffs, investing in the brands restructuring some of the bottlers in the system and if you add it all up what we saw here today is that there

is evidence as coke management has said that what they're doing is starting to work. big picture, coca-cola still needs to figure out how to deal with the changing consumer taste. millennials just aren't drinking as much soda especially diet soda to win back growth in beverages and, brian, coke is much more exposed, it is the most exposed than its competitors to the slump in soda sales. >> sara eisen, thank you very much. another company out with their numbers is boeing. lets bring in phil lebeau. i will say this, if you're trying to sell a $100 million jet in u.s. dollars, a stronger dollar is probably not what you want. give us some of the details of boeing's earnings. >> currency is not an issue for boeing because of how they price and sell in dollars. they're not impacted by currency swings. let's go over the numbers for the first quarter because people might be looking at the stock saying, whoa did boeing have a

bad first quarter? no, she actually beat the street by 16 cents. revenue however did come in a little light of what was expected on the street at $22.1 billion. so why is the stock under pressure? well, a couple things. first of all, the free cash flow was negative $486 million and the operating cash flow was $88 million. now, we should point out that the operating margin at 9.6% a little thinner than what was expected and what we saw last year at 10.2%. however, when you take a look at shares of boeing the company was quick to point out and listening in there were a number of questions, they're reaffirming their guidance when it comes to earnings revenue, and cash flow. so from boeing's perspective, the first quarter on some of those issues may not have been stellar in the eyes of some investors, but they expect it to continue to improve as the year goes on and they will be there in terms of their guidance by the end of the year. mandy, back to you. >> thank you very much for that phil lebeau and sara eisen. we'll get back to brian later on during the show.

let's take a look at how the markets are doing right now. currently it's been a bit of a seesaw day. the dow is up by 60 points again. look at that. 60 points for the dow. s&p and the nasdaq also in the green. let's hear from nicholask kocolas and darren richards. i see for the first time since the recession you have the majority of your equity exposed and not in the united states but in international markets. when did you make that changes? >> hi mandy. we started earlier this year. the qe in the eurozone was the impetus. for a long time europe was in such a poor situation that we knew they had to take some actions. once the european central bank initiated the $60 million a month for a year and a half that was a green light. i'm glad you did. for those who might be out there who haven't made the switch yet, is it too late to get into some of those international equities

like europe? >> no i don't think so. i think it's very early on. we haven't seen a lot of the positive benefits of the easing yet. i think it's just the money that's moved in there has done it based on the thought it's usually going to work. what we saw in the united states in 2009 was a fantastic year. we're starting to get that in europe right now. roughly 20% to the upside. europe hasn't rirecovered from the recession. i think there's certainly some room to for catch up. >> let's look at what's happening in the u.s. market. nick, i understand that you've been reducing exposure in a certain area large caps, and you're favoring small. >> that's right. darren hit a lot of the right points. we hear the same thing from the clients on our trading desk pretty much every day. they look atq1 earnings and see slowing revenue growth estimates that had to get down to see the results. it's not just oil and not just currencies. a slow u.s. economy dragging

down corporate earnings and they're looking to the first quarter to be the trough for the year but at 18 times earnings we're looking at a pretty expensive market. so large caps really aren't the place to be. >> which small caps do you like? >> you know small caps and midcaps actually. the midcap index is actually outperformed the s&p 500 by almost 2 to 1. looking at midcaps and small caps much more fruitful. you can buy the indices or you can look at individual names, but small cap, midcap that's the place to be. >> got it. thank you very much, nick and darryn. thank you for joining us today. you can also go to "power lunch".cnbc.com to see why darren is bullish on asia. that's powerlunch.cnbc.com. let's look at the bond market right now. i will do the honors for rick santelli who unfortunately is not there today but i will try to do my best. okay. we've currently got the 10-year yielding 1.967%. so yields are moving higher, so

the rided you're seeing means bond prices are going down. one of the reasons yields are moving high ser we've seen a sell-off in german bunds and that's caused investors to reduce their holdings in some of the other low-risk government debt. 30-years are sitting at 2.647% yielding their highest in five weeks. it's been more than a year and a half since 65 cases of ultra premium pappy van winkle bourbon disappeared from his distillery in kentucky. now police say they've busted a crime ring that's responsible for the heist. nine people have been indicted for stealing the bourbon valued at more than $100,000. police say it was an inside job. at least three of the people indicted were employees of distillery that is were targeted. state officials say the bourbon will probably have to be destroyed because of consumer safety regulations. that's the saddest part of the story. and a scary moment in the washington, d.c. metro when a

man in a motorized wheelchair fell on the tracks. his heroic rescue effort coming up on "power lunch." you can call me shallow... but, i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real mature. so you wanna get out of here? go national. go like a pro. man: you run a business. could be any kind of business. and every day you've got important decisions to make, like hiring. where are you gonna find those essential people you need? with ziprecruiter, it's simple. we post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates. then we'll give you the tools to help you manage, screen and rank your applicants

all so you can find the right one. try zip recruiter for free today.

a scary moment in the washington, d.c. metro when a man in a motorized wheelchair fell onto the tracks. but look at this. good samaritans saw the man fall and in less than 15 seconds they jumped onto the tracks to lift the man and his wheelchair as well to safety. the man was conscious and breathing when emergency workers arrived on the scene. he was transported to a local hospital with nonlife threatening injuries but it is not known why the chair drove off the platform. wow, look at that.

incredible. glad he was okay. in honor of earth day we wanted to point out that clean energy etfs are not just making a whole lot of green, they're beating the s&p 500 big time. let's take a look at the top five and their year-to-date performance. the guggenheim solar energy up 41%. the market vectors solar energy owe up 30%. ishares up 29%. followed by the power shares clean global etf up 14% and the market investigate fors global alter tiff energy up 13%. it is the most widely tracked measure of growth in the united states. it's gdp, gross domestic product. the dada moves markets and keeps this gentleman here busy day and night. however, cnbc aka, mr. liesman, has discovered a long standing

problem. >> there's a problem in the data that we found with one particular quarter that we thought only concerned the past five years or the past several years but then we do z aid a detailed investigation and it goes back 30 years. a substantial and persistent problem in reporting first quarter gdp data. it averages 2.7% overall in the time period. in the first quarter is only averages 1.87%. several economists we contacted said that difference is statistically difference. it accounts for six of the ten worst quarters since 1985. moving on, the next one, since 2010 this average looks like europe than it does like the u.s. overall it's averaged 2.3%. finally wall street doesn't seem to know it. it overestimates 80% of the time first quarter growth. take a look here you can see this very simply. what we lose in the first quarter being well below average is picked up but not all of it in the second quarter.

we can't tell if growth overall is underreported or if it's just shifting one quarter to the next. we did more work. is it a problem of negatives or positives? if you see here this is the first quarter. the yellow bars are expansions. the blue bars are recessions. first quarter is weak no matter how you slice or dice the data. we took off the last five years which had been extreme. still the weakest quarter. we looked at just recessions still the weakest. just expansions, still the weakest. we called the government. here is what they said after we reported our story. they think it's a result of what could be residual seasonality. it's a fancy way of saying seasonal patterns that remain even after we do seasonal adjustments. the number overall is not seasonally adjusted. it's adjusted by pieces. so the residential investment piece is seasonally adjusted. consumers are seasonally adjusted. and then they add it up and they don't overall seasonally adjust the number. they're looking into it and perhaps in the revisions they

will make some changes. the effect is significant. we're in the middle of a potential another weak first quarter. investors have this trouble, do you play the q2 rebound or is q1 a real signal of weakness in the economy and it's one they have faced persistently. >> do we just discount it? >> i don't think you can discount it. it's the only measure we have. it's not like we have something else. there's a problem in the data. overall it seems to even out in the second quarter. it seems like it's a pretty good bet to bet on the second quarter, but it could also be just a random thing that bad stuff over the 30 years might just be happening in the first quarter. >> great stuff. let's get to bill griffeth for a news alert. >> mandy, we're getting more details on what has been the worst kept secret in the world of technology. google getting into the wireless industry here with a service that they're going to call fi. details are sort of dribbling

out. what you get for a flat fee of $20 per month you get the basics, talk text wi-fi, tethering, international coverage in 120-plus countries. then beyond that you buy your data usage. it's $10 per gigabyte. so if you want to sign up for two dig gitgig gitabytesgigabytes, it's $206. you -- $20. you get a credit back for unused data. so fi is coming forth from google and i'm told that you have to go to the website and sign up to be invited to join fi. this is the new thing these days. so that's what we're getting right now in terms of the new report from google on fi and google as we see there is trading higher. it is trading at the high of the day, isn't it steve? >> bill griffeth are you there?

>> brian, yes, sir. >> who came up with the name project fi? when the giant at the top of the beanstalk said it, it was pronounced fee. >> yes it was, brian. i have nothing to respond to that with. >> seriously. >> you have me going right there. i'm thinking about that. by the way, one thing i failed to mention they are using sprint and t-mobile together for their wireless coverage depending where you are, whoever has the strongser network is the one you will use. >> i guess calling it project fee would have totally discounted the whole discounted data service type thing sof fi is perhaps better. thank you very much. we're going to go to a quick break. we have much more on "power lunch." we're right back after this. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic.

cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2015 e-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

let's check the markets. it's what we do. it's our bread and butter. we're up by 75 points. it's a real seesaw. we are up 60 on the dow. we were down 61 now we're up 75. let's see where we go from here. s&p and the nasdaq also moving

up and the russell 2,000 poking their head into the sunshine as well. a ferocious storm has been battering southeast australia for over 48 hours. flash flooding has stranded residents and left hundreds of thousands without power according to local media. the new south wales emergency services received over 8,000 calls for aid. new south wales is the state where cydsydney is. forecasts predetectiveict there will be more wind cyclones and flooding. if you missed any of the big stories visit powerlunch.cnbc.com. things are really heating up in mergers and acquisitions. a big love triangle is fompling in the pharmaceutical world. we'll tell you all about it when "power lunch" returns. rming in the pharmaceutical world. we'll tell you all about it when "power lunch" returns.

your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions backed by a trusted network of attorneys. so visit us today for legal help you can count on. legalzoom. legal help is here.

welcome back to "power lunch," everybody. i'm brian sullivan and here is coming up -- here's what's coming up on the next hour of "power lunch." we're live in houston texas, richard kind ser giveer is giving a keynote. he's the ceo of kinder morgan.

herb greenberg talking about social media and trading. follows in the wake of the fraud allegation yesterday for the guy over in london. we're going to give you an update on oil close and one of the world's biggest diamonds sold and you will not believe the price. we'll bring that to you as well. it's all coming up live once again from one of my favorite places mandy, houston, texas. just a couple minutes from now. hard to believe. >> brian, you are just being more efficient with your language, right? okay. black black blackstone's ceo sounded the alarm on china saying he sees excess in china's market. the shanghai composite has risen to a seven-year high. jef kilburg is a cnbc contributor and he thinks china is going to go higher from here. he just wrote a story on cnbc pro and you can get it on powerlunch powerlunch.cnbc.com. shanghai has gone parabolic. it was up another 2.5%. it's up 60% i don't know over the last six months or so.

you think its still got room to run. >> we focus on alternative investment strategies. this is a long/short trading idea. this is available for the retail folks. the thought and the core of the strategy is the u.s. economy, we are done with qe. despite the fact we have all the assets sitting on the balance sheet, we are done purchasing. china, the people's bank of china is just getting into it. they are going to see that market move. so i want to be short the u.s. stock market by buying sh that's the etf that gives us negative correlation to the u.s. stocks, but i want to be long hshr which gets you that exposure. that gets you that disparity. the markets go down you will see central bankers in china do more. it is a way to play. doesn't matter you don't have to sate the central banks. just embrace them mandy. >> i get it. you're trying to let the central bankers make money for you. they've done it here in the u.s. they're doing it in europe. doing it over in china as well. but come on what's the risk

here? i want to look out for the little guy, okay? for the average joe, if they're starting to pile their money in china, there's a lot of risk over there. how do they hedge that? >> well it's hedged by itself. it's a long/short strategy. buy 50% of the portfolio having short exposure via the etf. you are betting that the u.s. economy will have a little bit of a pull back while even if china comes back it goes down, what is going to happen? the central bankers will be forced to do more stimulus. we just saw some action that economy over there and that stock market is like a roller coaster. this is a way to capture that central bank anticipation. they're not going to go away. they're in the first couple innings in central banks out of the people's bank of china. this is a great way despite the fact we've seen the parabolic move you have already seen about. >> we have to leave it there. i have been told to wrap it up. there's my bell as well. thank you very much for joining us. always good to see you, killer. for this story go to powerlunch.cnbc.com and also if

you've got cnbc pro you can check it out there as well. and that is it for first hour of "power." the second hour and lots more power coming your way and it starts right now. thank you very much mandy. we are live here at the ihs energy conference in houston, texas. a big focus on oil but much more all throughout the hour as well. i'm brian sullivan. melissa lee is joining us from the nasdaq as well. we have the dow up 0.4% and oil is down, not considerably 30 cents per barrel but oil is the hot topic. one of the reasons we brought "power lunch" to the conference is because of the slide in oil and oil stocks. look at the drop in oil stocks by region. the stocks that operate primarily in the permian basin have been hit the least. they are down 20% since this conversation took place one year ago. the eagle ford shale, those

stocks are down 26%. the hardest hit regions are twofold. number one the bakken up there in north dakota. we've done the show from there a few times. the average stock there in one year down 30%. but no group has hit harder than the offshore oil drillers. they are down on average 44%, and of the 20 odd or so names on my screens, folks, some of them are down 60% and 70% in 12 months. investors say maybe some of these drops are bargains but only if the price of oil goes up in the next 12 months. so we've interviewed ceos yesterday and today and with every one we ask them the same question. 12 months from now, one year next at this convention, will the price of oil be higher or lower than it is today? here is what a few of them said. >> i think it's going to be higher. i really do. i was asked that same question just a month ago. felt a little more bullish. at that time 2016, about $57, $58. now we're $4 or $5 higher than

that. and i think that the number will certainly be -- have a seven handle on it. it will be well above $70 a barrel. >> i think it's lower for longer. i don't know how long. several years is absolutely a possibility. the rigs have come down from 1600 to 750 and yet oil production keeps going up. >> we're confident the current level is not sustainable. it will come back to higher level. expiration is, you know very long term part of this industry. we need to think long term. >> i believe it's going to be higher due to the fundamentals. oil is getting more and more difficult to extract. so i believe that the fundamentals will push up the prices. how much? that's a difficult question. >> all right. so three of the four ceos see oil moving higher. nobody is wildly bullish out there. bob dudley may be the outlier. the ceo of bp telling us lower or longer. they are preparing for a $60 oil environment. most people are optimistic as those in the oil business are

wont to be. what about rich kinder? come consider him the smartest guy in the energy field. he runs kinder morgan. they don't get oil but they do transport it. we asked him about the price of oil. we asked him whether or not the northeast will get a new pipeline. our exclusive interview with rich kinder coming up here in a few minutes on "power lunch." right now though let us talk about nomura. let us welcome in the analyst right now lloyd brown joining us. lloyd, i have to say this i got your report this morning. i opened it up. it was 353 pages long. so i want to be honest i did not read the entire thing. but i did read the part about where you suggested anadarko and concha resources are good bets. there are others you have buy ratings. why those names? >> thanks for having me brian. i think the risk/reward in the names today is compelling.

we see 2 to 1 risk/reward to the upside. what's happening in the group and i think what's interesting for investors is the debate that's going on between portfolio managers and equity analysts. portfolio managers look at the market and say it's at all-time highs. energy as you just showed a lot of these names are down 30% and 40% off their highs in the e and p space and the oil price is down 45% off its high. where do you want to put your money today, especially in a group where you're actively seeing money come out of it. in the north american shale is where you expect to see capex down 40% this year and, frankly, ultimately what will balance the market is what's happening globally is you're starting to see projects get delayed or canceled. >> i was also floored by the size of the report but let's just get to some common themes

here because one theme seemed to be you're less optimistic about a rebound in the natural gas market so maybe look for names that are less exposed to the gas side of the business? >> we think that's right. one of the real themes that's going on in the marketplace and why we like the shale stocks is the technology. and technology will continue to get more resource out of the ground and is why shale players like a pioneer that you're showing up there or like a concho will continue to improve their returns even absent the price. in natural gas, you're having the same thing happen today. the issue is that until you see that demand really start to materialize in 2017 that gas has nowhere to go. so we like a lot of the assets. we recommend range resources as one of the gas stocks because we think that they're going to have great capital efficiency going forward, but we do prefer the

oil names here to the gas names. >> and lloyd, are all your buy ratings on the assumption that the price of oil will be higher down the road than it is now because what if it's not? what if oil stays at this level or drops in a few months or a year, would you have to revisit your rate sntion. >> no. we're not arguing it's a v.d."v." i think it's going to be -- we have '16's prit at $62, wti above this year's price and '17's price above '16's price. portfolio managers should consider looking at energy as the price goes up. that's what drives the relative in the marketplace. but we've chosen stocks we think have the strongest balance sheets and have the ability to actually capitalize on the down cycle. we want companies that are prepared to really bring on production once the price starts to rise again. and really that's a '17 number

as nonopec nonproduction starts to come down but we think we're looking at stocks that really can capitalize on the weakness. >> all right. lloyd byrne, i think i called you lloyd brown earlier. i apologize for that. >> close should have. >> lloyd byrne. 350 page report. not close, i want to get it right. >> shares of abbott lobs a big winner. meg terrell is here with me to break down the report. meg? >> yeah. so on earnings they beat 47 cents to 42 cents. beating on the top line at $4.9 billion in sales versus $4.8 million. they maintained guidance at 210 to 220 a share. in the quarter looking like a lot of companies getting hit by foreign exchange. sales rose 10% on an operational basis but only 3% on a reported basis. kind of a big hit there. miles white saying international

nutrition and global diagnose sticks diagnostics can some of the strong drivers. they have nutritionals, they think so like ensure. they're also in medical devices, and then some pharma but they spun off most of their pharma business a couple years ago. there's one interesting twist. in the quarter they sold some assets to mylan and they still own some mylan stock. this bid on the table potentially giving abbott is a little bit of a boost raising the value of that deal they did with mylan. we don't know how it will turn out but william blair coming out with a note saying that could enable abot to enable abbott to do acquisitions of their own. ja >> let's talk about this love triangle. there are developments furthering the story. >> teva making a bid yesterday for mylan. mylan coming out and making an

offer for perrigo. david faber saying mylan is likely to return. there's maybe an unrequited love triangle going on. it will be interesting to see how that plays out. >> i want to bring in corey davis. great to have you with us. >> tlast for having me. >> i know you cover teva but how likely will teva be successful in that the market and the price action is telling us nobody thinks it's going to happen and there's a dutch poison pill which is another obstacle. >> i love to call this the love/hate triangle. what teva is trying to do here is they were the biggest generic company. you have the two titans of the industry, two big generic companies. it doesn't really make sense why you would put two generic companies together because they're so duplicative in what teva would get from mylan.

teva is trying to become more of a brand company. they're using mylan as a financial tool to fund what they should have been doing for the last five years which is planning for the expiration of their pat tent. by putting the two companies together you can extract $2 billion in synergies and that would help fund what they should have been doing which is buying more branded drugs to bolster the brand component of their portfolio. >> this sounds like short-term financial engineering then. it's not pipeline expansive, this deal. >> right. i think what it does it's not necessarily bad. but it buys them probably three years of real cost cutting so they can do what they should have been doing and buy more branded drugs or buy pipeline drugs to when they come out the other side have really good growth out there. >> i also have to ask you about that $2 billion in potential synergyies because are we going to see that coming mostly from the mylan side for the teva side? they have run into trouble before trying to cut costs in israel and can they even do

that? >> well, i think that's one big question out there. that was kind of an eye-popping number when it first came out. $2 billion. you can do it, sure if you want to and you can cut it from either said. teva has been very acquisitive in the past and i think they failed to integrate. they have their own cost cutting initiatives. you can do it but you have to be very aggressive in doing that and to their credit they vaent been aggressive on lots of fronts and we're finally seeing two teva should be doing being aggressive on lots of frondsts. they're finally waking up and doing it. >> they need to do something but do they need to do the mylan deal? do teva go for perrigo or some other company that could help their pipeline? >> there's lots of things they could do. i think what this gets them is that $2 billion in synergies to buy them time. gives them the flexibility in their p & l so they can tuck in other things -- >> further acquisitions even

after mylan. >> oh, yeah i think this is step one and they need to do step two, three, and four. >> ploblly going into more branded drugs than jen ashtion. >> thank you guys. brian? >> thank you very much. great discussion there. coming up when "power lunch" returns, our exclusive with kinder morgan's ceo rich kinder. we'll ask him about oil and gas prices and whether the northeast u.s. will get a new pipeline anytime soon. but first touting stocks on social media like twitter. fair, foul or maybe a repeat of late 1990 stock boardmania? herb greenberg weighs in when "power lunch" returns. ...and takes the wheel right from your very hands... ...this isn't that car.

the first and only car with direct adaptive steering. ♪ the 328 horsepower q50 from infiniti.

shares of twitter moving higher up more than a percent and up more than 6% over the past month. twitter reports first quarter earnings on tuesday. well "the wall street journal" out with an article on how a growing number of retail traders are using social media to gain investing fame. these traders are building big groups of followers by dispensing stock tips on sites like twitter and facebook. let's bring in the man who wrote that article, "the wall street journal's" daniel lang. also joined by herb greenberg a cnbc contributor and partner with pacific square research. daniel, let's start with you. it almost seems like it's not surprising that social media is being used for this. this is sort of like the chat rooms and the message boards, right, of a decade ago or so. >> yeah. it does seem kind of like an

intuitive thing. more and more people are saying that these platforms, social media like twitter and facebook it democratizes the process. you have almost people using the number of twitter followers that someone might have as an accurate proxy of how good they are and, you know, at the same time you have academics and experts who are saying look that's not the way you want to be doing it. just because a person is popular on twitter does not necessarily mean they're really good at trading. >> i think that's a great point and, herb that's why you don't like this idea, but, i mean just more broadly, people should be using this as just a data point, right? and if these guys aren't good, they're going to find out pretty quickly from their lee onlegions of follow ersersfollowers. >> -- message boards. the one thing people learn pretty quickly is that there would be somebody who they would

follow, and then that person would disappear and there was no accountability. the important thing is this whether you're talking twitter or stock twits or any of the social media, a lot of smart people on all these media. in fact, in twitter you and i both know hedge fund managers we follow who aren't under their own names but they're there and they're actually talking, that's good stuff. but when i saw daniel's article, the bart thatpart that just hit me was this guy saying i'm going to start a subscription service out of this. some people have really built businesses out of that even from the '90s. i looked at it and i thought in this environment it's so easy to make money and to look like a hero. what happened on friday? how were people feeling on friday when they were all suddenly wringing their hands because the market was going down? that's going to be the real test. >> that's a really good point. the thing that's most new about this that's different from the message boards in the past is that twitter is something that i have. it's something my parnlts have. my parents have a facebook

account so it's really the accessibility of these platforms that's changed, and not surprisingly you have people who are really able to build out their presence build these really prominent followings and almost leverage that into starting their own businesses. these paid subscription services in which members have to pay $100 a month to access that particular trader's best trading ideas. that's what's new. >> let me -- >> but i guess -- herb -- >> brian, brian, brian. one thing, let me just say one thing, back in the '90s i helped launch a guy named jim depore over at the street.com and real money and he came out of the motley fool message boards and message boards i had on america online at the time. so that has happened in the past and it is a platform daniel. so i think that's important. it's just again, who are these people -- what's the quality? who are they? that's all i want to know. who are they? >> and i guess my concern, too, herb, and listen there's a

great element of democratizing the markets here and good for the people who have built up their followings through hard work and time. my concern is a, we sometimes don't know who they actually or what they're doing on the front end. what's to stop somebody building up a following and becoming a self-fulfilling prove if i and then telling people i'm going to -- >> i'm going to push back on that. isn't that just called a portfolio manager or institutional investor? >> brian, that's a good point. >> listen except -- no melissa, you're wrong. >> why? >> i hear your point. because you have to reveal your holdings in a filing if you're -- >> only if of size that require -- >> the same thing is happening online actually sgroon but you have to release your filings. you have pages of regulations about what you can and cannot do. i hear your point. they buy the stock and they go on cnbc and they say whatever. but the point is they have to have filings, too. there's some control over it. that doesn't exist on social

media. >> that's absolutely true. it's definitely not something that's regulated but if you look at the twitter traders, they're not all cut from the same cloth. you would have some of the more serious ones and they'd be the first to tell you, look if someone is out there just touting penny stocks without -- and calling stocks after the price has already moved, they'll be the first to tell you, look that person is probably, you know, that's not something that you should really be following and you should be skeptical. but the thing about twitter, every post is time and date stamped. their argument would be you can always check after the fact check how the price of the stock moved. it's something you need to do your research. look at this person's track record to the extent they publicize some of the calls they've made and you get to make a decision on your own after that. >> yeah. all good points guys. great discussion. thank you. daniel wang of the "wall street journal" and herb greenberg. forget gps, satellite radio, even the dvd players for the kids. we'll tell you the technology

people really want in their cars. plus, a whale of a cameo. the story and the full video when "power lunch" returns. m] drivers to your marks... go! it's chaos out there. but the m-class sees in your blind spot... pulls you back into your lane... even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's 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 long-term 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 30-tablet trial go to cialis.com check out this video from

the gulf of mexico. a giant sperm whale is seen swimming around an underwater camera in the deep waters off louisiana. a group of scientists were on an expedition when they spotted the giant whale circling their camera. researchers say an encounter like this with the reclusive sperm whale is incredibly rare. wow. take a look at shares of tesla jumping 5% ahead of next week's expected home battery announcement. collin langen covers tesla atu ub o. we're also joined by phil lebeau. fill us in on the details. >> we're starting to get a few more details. we'll get the full details from the company next week but there are a number of reports that tesla has already taken prototypes of these home battery storage units, and they have been testing them with consumers as well as with corporations and businesses in california. and basically what you're looking at here melissa, is that you're opening up the possibility of another important revenue stream for tesla in

terms of the battery development and sales of these battery storage units and all of this feeds back into the gigafactory which they are developing. remember, they need demand for those lithium ion battery cells and for the battery components that they're going to be building out of that gigafactory gigafactory. >> do you think after the april 30th announcement or after the earnings report on may 6th that you're going to end up ratcheting up eps estimates or revenue estimates for out years given the new plans for the batteries? >> at this point when we look at this, long this is too big of a surprise. just last week he indicated there was going to be a nonautomotive disclosure. when they announced the gigafactory they indicated there would be part of the capacity would be going to stationary storage. some of this is anticipated. i think it's positive they're making progress on the stationary storage opportunity and hopefully we'll get more details about the products they're going to be offering in

that new segment. >> you know phil i'm going to ask you to opine a little bit here if you wouldn't mind. you had something on edmunds.com saying a lot of people who owned hybrid cars are not only not buying another one, some of them are moving to suvs. you have been around this industry for a while. what are the teslas and bmw an chevy volts of the world have to do in order to keep these buyers? what do people complain about the most? is it battery life? >> no. i think there's a perception that people who buy an ev will only buy an ev for the rest of their lives, and i don't think that's the case. i have friends who have had hybrids and they've gone on to buy suvs. also friends who had suvs who went on to buy hybrids. the fact we're seeing hybrid sales slightly lower and ev sales under pressure is a reflection on gas prices. at the end of the day the consumer when they go out to buy a vehicle, they're doing the back of the envelope math and they're saying what's my savings going to be, what are the monthly payments going to be? i took this and i looked at it and i said okay it's

interesting. it doesn't mean it's the end of the world for hybrids and evs. >> collin, i'm just curious at what point do we start calling tesla is a battery companies a opposed to a car company? does the needle tip to batteries and storage at some point in time? >> it's definitely possible. you have to talk post-2020. i think if you look at what tesla has indicated for the gigafactory, about a third of the capacity by 2020 if they hit their plan would be dedicated to stationary storage. even at that point it would still be 2/3 auto. clearly it's going to become almost nothing to over the next few years a much more relevant part of their business. >> phil lebeau, thank you. and collin langan our thanks to you. still to come brian's exclusive interview with rich kinder. that stock a big winner over the paths six months. but first the final oil trades crossing. we're taking you live to the nymex for the crude close when "power lunch" returns.

hello, everyone. i'm sue herera and here is your cnbc news update.

iraqi forces recaptured areas held by the islamic state group around the battleground city of ramadi. at least 12 militants were killed. iraq supported by u.s.-led air strikes have been making gains in recent weeks to take back territory seized last year by isis. residents of jerusalem observed a moment of silence to honor israel's fallen soldiers. a powerful storm hitting southeast australia turned one train station in sydney into a stream. the region has been dealing with heavy rains and cyclone strength winds for two days now. more than 200,000 people are still without power. and darth vader getting a golden makeover in japan. a gold mask along with commemorative coins unveiled ahead of the newest "star wars" film which hits the theaters later this year. a set of 11 coins costs about $8,500. may the force be with them. that's the cnbc news update for this hour.

back to you, brian. all right, sue. thank you very much. we do appreciate that. i believe it's time now for "street talk," melissa, is it not? >> not quite. >> we're going to do the oil close. i'm flying blind here. give me a break. i got a little room for mistake. jackie deangelis never makes mistakes. she's at the nymex with the oil close and we are, pardon the pun, sliding a bit into the oil close, are we not? >> that's right. good afternoon to you, brian. thanks for not forgetting about me. we have a little mixed action at the close. we are sliding on wti because the market digested that number the inventory number that is from the department of energy this morning. it was a build of 5.3 million barrels. it's appearing to weigh on the market because it appears we're not seeing those production slowdowns that we were looking for. at the same time you're looking at brent prices a little bit higher. that's because traders are looking at geopolitical events as supportive of brent right now. yesterday the exxon ceo said that he does think prices will

be low for an extended period of time, but traders telling me they're in the sweet spot right now. they are low compared to what we've seen in the past. a lot of traders still think that we're going to see $60 on wti before we see $50. back to you. >> all right. thank you so much, jackie deangelis. brian, now it is time for "street talk." i know you're excited. >> i was that excited to get to it. just couldn't wait. >> couldn't wait. first stock marriott international. up graded to a buy. it consolidated and the analysts liked the fact marriott has been an underperforming year-to-date. also the lodging cycle not over because there's limited supply growth, record occupancy, and economic growth in the u.s. and that is where marriott makes most of its money. the price target up to 100 bucks. >> yeah, and you just wonder though is that higher dollar going to impact all the travelers from europe and asia coming to the united states and maybe hurt marriott that way? time will tell. you will forgive me. i have a read here because i want to get it right. stock two, amazon.com upped to a

buy from a neutral. also raising the price target to $450 from $350. the analysts there think there is room for meaningful revisions up heading into earnings. this is interesting. they think amazon could benefit from some of the google's regulatory issues. >> it's interesting this call comes a day after bgc downgraded the stock. the call yesterday came from collin gilles. fx is weighing and the eternal concern when it comes to amazon about emphasizing spending over profitability. so that firm is going to a hold also ahead of earnings. next up mylan upgraded to a market perform. the price target guess to $82. the analyst doesn't know what's going to happen with the deal but the stock not likely to underperform during the long drawn out battle. >> mylan goes from hunter into apparently hunted. how quickly the tables have turned there. our last stock we're going to do

only four today, is always the under the radar name. try to find these little smaller names that don't make the headlines. today that stock is deppomed california-based specialty pharmaceutical company primarily in the field of pain management. piper jaffray starting coverage with an overweight. $37 target implyied about 37% upside from where the stock is currently trading. yoop >> that's a huge call given deppomed is up 100% so it's a double. >> i guess they could have been a few months ago but there you go. we'll give your analysts a break. that wraps up street talk. now let's roll right into our other daily segment, trading nation. traders do trade better together. we have two people together. aaron gibbs of s&p capital iq and larry mkdcdonald of societe

generale. we had the exxon ceo speaking yesterday, rich kinder speaking currently. what is your take on the integrateds fundamentally worth our viewers' money? >> the first thing to look out is over the last 100 years whenever you get a 50%, 60% drop in crude, typically the capital markets close down to the oil space. but this year the capital markets are wide open. we have a federal reserve with a zero interest rate policy that's continued and we've done $16 billion of high yield deals and there's been a number of second liens. when you look at the oil equities, you want to make sure you analyze how much debt has been layered on top of them because some of these second liens which are subbort nated pieces of paper really cram down the equity and present dilution risk over the next year year and a half. >> and i will say this though larry, just from some of the reporting we have done before we get to erin there are literally billions of dollars here that almost seem desperate. private equity sniffing around

this conference because of the net issue but they're looking for a home for their billions of dollars. don't be surprised to see some deals. erin people will often by exxon or chevron together they view them kind of as the same type of stock. your analysis says that's not the way to look at it. >> there's attractiveness in these companies as the price has gone down. they offer very attractive dividend yields, exxon with about 3% and chevron with 4%. but there are a few reasons that i really prefer chevron going forward and they are very different companies. chevron has quite a few new developments coming online with two of them nearing completion so right now they have targets to increase their oil production by 20% over the next 18 to 20 months versus exxon that's actually just been reducing all of their production targets and they're looking to only grow by 2% over the same period. now, exxon clearly is a little more diversified. they're expecting more growth from natural gases but even so

we're looking at a much higher growth and when you look at earnings, you're also looking at a 65% growth in earnings for 2016 over this year for chevron versus about a 40% earnings growth in exxon. so really just much higher output, much higher growth and on top of it you get a much higher dividend yield. so all in chevron is definitely my favorite. >> all right. erin gibbs, they like chevron at sb capital iq. larry mcdonald with a sage warning, saying if you're buying an oil stock, also look at the debt. we're going to send it to you, melissa. but there's so much talk of deals and so many billions floating around here that i will bet you, my friend a glass of your favorite scotch that we have at least -- >> very pricey. >> we will have a $5 million deal -- well okay. my favorite scotch which is cheap. a full buy out or a major equity infusion of at least $5 billion by fourth of july.

do you accept that bet? >> i don't know if i can take the other side of that. we might be on the same page of that one shockingly. >> buy me a guinness anyway. >> i will. you know i'd always buy you a ginness. anyway, shares of kinder morgan this is an outperformer in today's session, up 1.3%. it's one of the energy stocks that's held up over the past year, up 30%. we'll get back to houston for brian's interview with the ceo. plus, a 100 karat diamond sells at auction. we'll tell you how much it went for when "power lunch" returns. now, the latest from trading nation.cnbc.com and a word from our sponsor. >> there are really two schools of thought, fundamental analysis and technical analysis. some of the most successful investors use a combination of both. they use fundamental analysis to make sure they're picking quality stocks and technical analysis to select their entry and exit points. when you're formulating your trading plan, consider using a combination of both. tdd# 1-800-345-2550 even on the go. tdd# 1-800-345-2550 open a schwab account, and you could earn

tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 so if you get a trade idea schwab can help you take it on. tdd# 1-800-345-2550 we're getting a lot of questions tdd# 1-800-345-2550 about organic food stocks. tdd# 1-800-345-2550 [ male announcer ] sharpen your instincts tdd# 1-800-345-2550 with in-depth analysis by schwab experts. tdd# 1-800-345-2550 and if you want to run your idea tdd# 1-800-345-2550 by a schwab trading specialist, tdd# 1-800-345-2550 our expertise is just a tap away. tdd# 1-800-345-2550 what's on your mind lisa? tdd# 1-800-345-2550 i'd like to talk about a trade idea. tdd# 1-800-345-2550 let's hear it. tdd# 1-800-345-2550 [ male announcer ] see how schwab can help tdd# 1-800-345-2550 light a way forward. tdd# 1-800-345-2550 so you can make your move, wherever you are tdd# 1-800-345-2550 and start working on your next big idea. tdd# 1-800-345-2550 ♪ ♪ tdd# 1-800-345-2550 open a schwab account and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 call 1-877-670-3357. tdd# 1-800-345-2550 or visit schwab.com/trading. tdd# 1-800-345-2550 schwab trading services. tdd# 1-800-345-2550 your go-to for trading know-how. tdd# 1-800-345-2550 ♪ ♪ the technology changes the design evolves

the engineering advances. but the passion to drive a mercedes-benz is something that is common... to every generation of enthusiast. the 2015 dream machines, from mercedes-benz. today's icons. tomorrow's legends. visit the dream machine event today for up to $3,500 towards purchase. don't just visit new york. visit tripadvisor new york. with millions of reviews and the best hotel prices... book your next trip at tripadvisor.com today. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative

pricing model, honey? for all the confidence you need. td ameritrade. you got this. [ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. welcome bhakack to houston, texas. really an oil and gas conference. one of the reasons we come is because of the attendees. perhaps a guy that many consider

to be if not the smartest guy in oil and gas, certainly one of them and certainly one of the most successful. he is a billionaire. he is the ceo of kinder morgan and earlier today we sat down for an exclusive interview with rich kinder. some have said $75 would be a sweet spot. would you agree with that? >> well that's kind of the talk right now. again, i think it depends a lot on what kind of efficiencies we're able to ream out of the system, but it's a complicated scenario because it's not just a matter of u.s. onshore drilling that's heavily influenced obviously by the shale plays and the fracking but it's a question of, you know, in the long run you have enormously expensive offshore facilities that can't make it at this level of price. what that right level is i don't know. >> you know right now there's obviously forget about keystone. there's a huge pipeline i don't want to say controversy but debate in the northeast right now because northeast natural gas supply is booming.

we need the natural gas in the northeast. you've got northeast direct. can you give us an updated stlaths status on that? will we get kind erer morgan pipelines to the northeast? >> i think we will. it's just ironic the highest price for electricity and natural gas in the u.s. is in new england, and just a few hundred miles away you've got gas desperate to get out of the marcellus utica. there needs to be a connectivity between the two. all the pipes that run there now including or own tennessee system are completely full in the wintertime. all that capacity is spoken for by the ldc. so if we're going to continue to try to drouf price down and to have adequate supply to replace all the cole plants and the num lar plant being moth balled, we have to have more natural gas. i think in the end that game plan works and it wins and i

think the ferc and the governors and senior executives in the northeast will in the end recognize that, but there's no question that there's some definite opposition to it. the not in my backyard people and some environmentalists who think we should just choke off all fossil fuels and that's simply not workable at this point in time. >> what would it mean for kinder morgan if we get increased pipeline capacity to the northeast? >> well, we would have a good project and we're very close to launching that project as we've announced as recently as last week we have over 550,000 a day cubic feet mcf signed up for the project. we're getting very close to our critical mass and i think by summer or fall we'll be prepared to -- i hope to move forward with the project. now, we've got to go through ferc environmental permitting and all the naysayers and people who want to complain about things. we'll be able to vent those frustrations, but if you look at some of the polling data from the boston globe and other

places, i think really the rank and file new englanders realize that we can by getting more natural gas in there produce a cleaner environment because we're displacing coal or fuel oil being used for electric generation in the wintertime and we can also substantially lower their heating and electric bills. >> a lot of talk of deals. you're very well capitalized. are you on the hunt for deals? are you going to pick up some assets around america in this distressed environment? >> we're always looking for deals. we bought a bakken pipeline for $3 billion earlier this year and a set of terminals for about $160 million. but there's a lot of money out there, a lot of people looking at those deals, and i think the key is to have real intellectual honesty as you look at these deals and the way we built kinder morgan over the last 18-plus years is we've been very disciplined in our acquisitions. we're not doing anything craze biwith you we'd be happy to buy

some more sure. >> you can almost smell the private equity money here at the conversation. some say it is desperate money which would be dumb money. do you think we will sedum deals get done people who missed the first round six years ago and jump in and overpay. >> i think there will be some overpaying. there always is. >> not by you. >> not by us. i hope not. >> final question. price of oil higher or lower than it is right now one year from now? >> oh i think it will be marginally higher. >> not wildly higher. >> not wildly higher no. >> richard kinder it was a real pleasure. >> nice to see you. >> thank you very much. all right. let's bring in kate kelly. the magic of television rich kinder is speaking live in that room right now -- >> just as we're sitting here talking to him on tv. >> einstein was wrong. all right. your reaction to mr. kinder's comments either in the xv or what you heard and your reaction to the conference in general. >> just focused on kinder's last comment to you and the general

consensus we've built here. it seems like the producers we're hearing from this week are kind of bearish on prices of oil. the lower for longer amid volatile conditions. it's really been kind of the mainstream point of view. so back in new york maybe because there's so much financing rolling into the sector, $100 billion by some estimates just in recent months, it maybe feels like things are looking up and, you know, some have called for a bottom already in the second quarter. the trader andy hall has indicated in letters to investors that might be the case, that we've bottomed out recently but that doesn't necessarily seem to be the mentality here. i don't know if people think we're going a lot lower but they don't see an immediate upturn. >> as always you're bringing up an important and interesting point, kate, which is that the big integrated, the bps, lower for longer exxonmobils, they seem to be more cautious. the small and midguys seem to be

like things are going to get better. we'll be at 70 bucks. you wonder why. none of the ceos say anything about accident. >> we have to remember some of the oil majors -- somebody said to me over a drink, everybody is a buyer here. so who are the targets in? all the large companies are saying we have a list of people we might want to acquire over the right conditions. those who are targets are saying we feel good we can keep drilling. >> as they say in texas, i believe some people are all hat no cattle. >> i haven't heard that one. >> we rarely get a ceo to say what their break even point is. we pressure them all. >> and it varies from basin to basin. >> it was interesting though last night we had a taped interview with emilio la soya the ceo of mexican giant pemex. >> which recently opened up to foreign investment. >> listen to what he said about their price point. when you look at $50 to $60 a

barrel oil, wti, is that profitable for pemex to continue operating? obviously the older fields yes. i mean more new production. would you go after new fields at $55, 60 bucks a go after new fields at 55 60 bucks a barrel. >> the answer is yes and very much so. the average production of pemex, all in costs, once the oil is out in 2014 was 25 u.s. dollars. even at current prices all of our production portfolio is profitable. >> that's remarkable brian. that's probably on land more conventional drilling. one interesting thing about mexico, there's a lot yet to be done with oil and gas reserves and they haven't done a ton in the gulf. he said yesterday in his prepared remarks they would be doing unconventional drilling. 25 bucks, pretty compelling economics in this environment. >> we appreciate them sitting down with us. we appreciate you as well.

thank you. >> absolutely. >> a giant diamond and millions of dollars. that's coming up. that will keep you around. it took tennis legend serena williams, fencing champion tim morehouse and the rockettes years to master their craft. but only moments to master paying bills at chase.com. depositing checks at the atm and transferring funds on the mobile app. technology designed for you. so you can easily master the way you bank. being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier.

it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

a flawless 100 carat diamond sells for $22 million last night at sotheby's.

logon to "power lunch".cnbc.com. it's been a lousy investment over the last three years be with down more than 25%. where are rich people putting their money instead? robert franks has the answer. >> picassos and penthouses are outshining gold when it comes to securing the wealth of the wealthy. larry fink telling a conference in singapore yesterday that quote, gold has lost its luster and this are other mechanisms where you can store your wealth. contemporary art and real estate, especially in london and new york. on art, he said i don't mean that as a joke. i mean that as a serious asset class. if you look at performance, art and real estate are generally beating gold in at least the short term. over the past year gold is down 7%. new york prime real estate down 4% and art up 15%. over five years, gold also lagging behind up four compared to real estate up 38 and art up 61%. the ten-year picture is better for gold does better than real

estate. art, still the winner overall, up 252% over the past decade. it's not just performance. fink says because gold is widely owned through etfs, it's become a little less secure. melissa, back to you. >> thank you, robert frank. >> thanks. brian is going to be -- brian, you're going to be in california tomorrow. jet setting across the country. >> i am. i'm going to leave now to catch a flight. we're talking about the historic drought, melissa. it's not only an environmental story, it's an economic one. we'll bring it to you tomorrow from california. tune in. coming up next on "power lunch," facebook's preview because they're reporting inging after the bell. stay tuned.

e financial noise financial noise financial noise financial noise man: you run a business. could be any kind of business. and every day you've got important decisions to make, like hiring. where are you gonna find those essential people you need? with ziprecruiter, it's simple. we post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates.

then we'll give you the tools to help you manage, screen and rank your applicants all so you can find the right one. try zip recruiter for free today. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

facebook reports after the bell today. we'll get to john najarian in the second half. here's julie boursen in l.a. with a look at what to watch. >> there are three things to focus in on here. first, how quickly facebook is growing ad revenue, things to higher click-through rates. second the potential on facebook's newer ad formats. we'll look to insight into pricing and potential of its embedded video player and the fact that those video ads auto play. third, currency, 2 % from

europe, half of currency comes from overseas. >> julia boorstin thanks so much. let's talk to dr. jay, cnbc contributor and also monster.com. >> just as dan nathan said with you, the options have been extremely positive. right now, the straddle is trading for $4.66. that means, of course they're pricing in about 5.5% move between today and friday. most concentration, largest open interest change is right up at the 90 strike. so in other words, a little over $5 higher than where the stock is. >> are you buying into this? are you a believer in the facebook story. >> i am. >> yes. >> i have bought into facebook through a call spread and i believe it's going to beat after the bell and/or offer positive. >> ad revenues that has to be an important metric. >> daily active users, weekly active users and monthly active users are important to them. how the new video ads are

playing out is huge. >> they have to start monetizing a lot of these properties. >> and twitter has periscope now. you have that. ebay qualcomm, at&t, we'll cover them all. in the meantime, "closing bell" starts right now. thank you, hello and welcome to the "closing bell," everybody, i'm kelly evans down here at the new york stock exchange. >> i'm bill grijffith back here at cnbc headquarters. it's been a down and up day. we're at the highs of the session now, kelly. more earnings, that's what's getting a lot of attention right now. >> a lot more we're still digesting yahoo!'s report yesterday, we're looking forward to hearing from facebook. a huge show coming up. box ceo aaron levie, find out how he plans to compete in