t of the reasons why you're seeing the stock move to the upside. >> josh? >> i want to bring up shake shack, it has now made a parabolic move. don't feel bad taking some off the table here. >> thanks for joining us. "power lunch" starts now. good afternoon, everybody. along with mandy drury, i'm tyler mathisen. this is an all-access "power lunch." >> michael eisner here on "power lunch" today. >> and apple set to report numbers in about three hours likely moving the stock. check out the chart. apple up 62. yes, 62% in a year. >> and fresh off the ports problems on the west coast, we're about to get hit by a massive trucking strike. in the meantime we begin with apple with the tech giant

getting ready to report its earnings after the bell. let's take a look at shares. currently up by 1.9%. $132.73. that stock is up about 20% this year so far. most of that however, was before it joined the dow just over five weeks ago. what can investors expect to hear? what will it do for the stock? josh lipton is in cupertino, california. >> mandy, as you mentioned, apple's stock has moved sharply higher this year. but can ceo tim cook keep that momentum going? we'll find out after the close today. here's what the street wants to see. analysts are looking for earnings per share of 216$2.16 on revenue and $56 billion in revenue. drilling into the different product segments analysts think apple shipped 57 million iphones. apple is still the iphone

company, the product representing more than 50% of the company's total sales. analysts think apple shipped about 14 million ipads. that product has been a sort of disappointment to wall street. we'll see if that trend continues. analysts think apple shipped about 5 million macs. investors will keep a close eye on gross margins, expected to clock in at 39.5%. the team at rbc thinks that could surprise to the upside. two wild cards to watch fafter the close. any color or commentary object that new apple watch. mandy, back to you. >> thank you very much for that. what generally happens to apple's stock after it announces earnings? we did some number crunching for you. go to powerlunch.cnbc.com to find out the answers. and watching boeing the world's biggest airplane maker

meeting with investors to discuss its future. last week boeing reported earnings that easily beat estimates. the stock up 15% or thereabouts this year so far. a little less than that. phil lebeau is covering it all for us from chicago. >> last week when boeing reported earnings a lot of focus on the cash flow for the company. while it may have disappointed on earnings day, the rest of this year the company is keeping with its guidance. today at the annual meeting, most of the material was what we expected to be covered in terms of jim mcnerney ceo, giving an outlook for the future and very optimistic about the outlook. there have been some investors who have questioned what's going to happen with boeing charleston. will the machinists unionize there? they pulled having a vote last year because they wouldn't have enough support to get it ratified. after the meeting today, i talked with jim mcnerney about his expectation for when the machinists might vote again or might have an initial vote in

charleston. >> they didn't think they had the numbers evidently this time. we don't think they will anytime soon. but they will keep trying. we assume they will keep trying. so this probably will not be the last petition. >> and as you take a look at shares of boeing over the last three years, a number of people have said what kind of performance has boeing had? pretty nice. up almost 100% in the last three years. watch the back half of this year in terms of execution on the commercial airplane side. >> 90% gain anytime over three years. this is the tenth anniversary of airbus's a-380. there's a picture of one. i don't know whether it's too early to call this plane a flop. but they've had a hard time making sales. >> and the big question is what

happens in the future. they're talking about reengining the plane to make it more fuel efficient. and there would be modifications to the aircraft as well make it much more fuel efficient. they have not committed to this. but keep in mind, emirates is the largest customer and you want your largest customer to be happy. and emirates said we think if you worked with rolls royce, a new engine option would be the right way to go. most ultimately believe because airbus doesn't want to shut down the program completely will go with that new engine option. >> phil lebeau, thank you very much. breaking news in the bonds market. two-year notes up for auction. rick santelli tracking that action from the cme. what's demand like ricky? >> well demand right at 1:00 eastern when the bidding process ended for this dutch auction, i give the grade a "c," pretty much very average. keep in mind we have a fed meetings starting tomorrow.

we have the press conference and statement on wednesday and the two-year note is definitely a short enough instrument to be affected in a potential big way on surprises. let's go through it. $26 billion of those two years were auctioned and everything was pretty much average. the 54 basis points what it garnered at the dutch auction was the bid side of the market. $3.30, that's the bid to cover. it was a little light. average, 3.42. but everything else, 14.6% on directs. pretty much right on. we give the auction a "c." tomorrow, five-year, $35 billion, tyler, back to you. >> rick, thank you. dominic chu market flash. >> it's a relatively calmer day in the markets overall. but one industry group getting a lot of attention is biotechnology. very much in the red.

vertex biogen amgen each down. and one of the etfs that tracks it, ibb, you can see there, down by about 3.5%. it rests right now on a chart level that some people say could be support. something called the 50-day moving average. we'll see if people step up to by the ibb or the biotech industry overall. >> thanks very much. the biggest power plays in business and investing are all gathering in beverly hills which where we find brian sullivan. good morning to you, brian. >> it can't be the biggest because you're not here, mandy. it's almost the biggest power players. thank you very much. michael eisner ran disney, he has his own company now. everyone knows who you are. thank you for joining us. >> pleasure. >> tv five years from now, what's it look like will i have a job?

>> if you focus on content. so many distribution platforms, content is king. that platform whether it be cable, streaming, whether a d2 channel coming up podcasting news, the best content will get the eyeballs. >> so our parent company, comcast, time warner cable deal obviously off the table. people say the industry will evolve now faster than it ever has. >> well, comcast has known with very good management that content is what they want. they came after disney at one point. they tried to make a hostile advance on us, which was not successful. >> that was 11 years ago. >> yes. but then they retrenched. they bought universal. universal has motion pictures television nbc, cnbc. yes, they wanted to dominate the cable world which may have been a good idea or may not have been a good idea as far as the public is concerned.

but don't count comcast out in any sense of the word. >> our viewers are thinking eisner knows the business as well as anybody else. i want to make money from the industry's evolution. how do you do that? where do you make money in film television, media, whatever it is? >> well of course i would suggest you invest in disney. i would invest in any company that focuses on content andin its primary source of industry. >> who do you like? >> all the companies are doing pretty well. the cable companies have reinvented themselves, again, with "mad men" and many different kinds of shows and content. technology has moved the world forward. so netflix was a dream, an aspiration of reed hastings it's now the nightmare for cable companies and cutting the cord. we have a show called "bojack horsemen" which we do on

comcast, which is a fantastic show -- >> i know it. it's a little weird -- >> it's not weird. it's no weirder than you and i. >> that says something. if you were running disney today, would you have tried to buy netflix? >> i did recommend to bob iger -- when netflix went from $400 or $50 to50$500 down to $60 a share, it was a misunderstood disaster because it wasn't really such a stupid thing to do. i dove in as an investor. at that point, i recommended it to bob. however, bob was buying pixar, marvel, star wars -- >> he was busy and he was right. >> was he interested in netflix? i love it but i'm too busy or no? >> i think his concentration was within content. and netflix at that point was a technological distribution play, not a content play.

they then decided that their differentiation was in content. netflix decide that had. >> so there was some -- netflix was interesting to you at some point? now it's so big, do you think netflix could be taken over now? >> i tried to talk reed hastings into going private way back when. >> when they were a mail order company -- >> no, when they were having trouble during this period. and he said no if i try to do that, somebody will try to take it over. >> does netflix become the next disney without the parks or does somebody say finally, i don't care what i'm paying i've got to buy them? >> no, netflix is -- and amazon prime is this way as well. >> i was thinking amazon would be interested. >> i don't think they would want to pay that price and they don't need them. they have their own service. but netflix is a technological excellent way to distribute content and with the bandwidth

that exists now and with everything with the ability to be on demand this is amazing for a content maker, we put 12 episodes of "bojack horsemen" on on the same day in nine languages. used to do one a week and then french or german the next year. then you do japanese -- nine languages same day is a lot of work. >> last question so there's this movie coming out "star wars," you may have heard about it. it's a big deal, right? it's a disney move. everyone's talking about it. but when i look at the numbers for disney you realize that disney is a parks company -- >> no, no no. >> movie is about one-tenth of the business. >> not a parks company. >> but movies aren't that important to disney. >> yes, they are. >> why? >> look at "frozen." "frozen" created the most incredible consumer products incredible soon-to-be broadway show, incredible parks attraction. parks are a piece of the whole.

ditzny disney is a family-oriented company. and "star wars" that has a great director -- >> let me ask it a different way. is "star wars" going to be big enough to move a big needle? will it move the needle? >> the answer is yes. but there are a lot of needles. "star wars" will be pretty quicking everybody with these needles whether it's marvel or -- we have a company called tops. we have a "star wars" card trader app that's now the top 100 apps in the world and it's been out four weeks. "star wars" there's an appetite for those characters. and disney will have the merchandise, the theme parks. we already have -- we did two "star wars" attractions in the '80s. >> yes. but let's be honest. i say this as a fan. the last three "star wars" movies stunk. they were not good.

so you guys come in, buy the lucas film is it a dead franchise? can you resuscitate it? >> no first of all, no -- listen to this before bob bought it he watched all six "star wars" films. he made his assessment. maybe he agrees with you, maybe he doesn't. he then got j.j. abrams whose father -- >> who did "lost." >> yes. who will make one of the best "star wars" ever made. >> but there's faith? >> exactly. >> the fans are desperate for this to be amazing. the last three were not amazing. >> lay down. >> so what do you do? what do you do with "star wars"? you have the rides -- >> there's already two attractions in all the parks. it's just like pixar, like marvel. mostly like disney.

it is things that kids grew up with. it's in their dna. it's religion. these characters are the force. >> it's the force! >> right. >> michael eisner, it's a real pleasure. good luck with tops. >> thank you. >> thank you very much. they're bullish on star wars out here. everybody's talking about it. the movie's not out for another nine months and everybody's talking about it. mandy, i know you're a star wars fan, although apparently nobody else at cnbc has seen any of the movies. >> i don't think there's a single male on the globe that hasn't seen star wars. but the female's cnbc population has been slacking on that. let's take a look at the markets. the nasdaq and the s&p 500 hitting new highs today. is the u.s. stock market getting overvalued? or is it still undervalued? as we're watching right now, the

markets have turned negative. and we're asking the question would your money be better overseas, like europe or japan? jpmorgan's trillion-dollar man weighs in. and a new way for individual investors, the mom and pops to get in an private equity buyout deals. we'll show you how. [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. join the millions who have already enrolled

in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. ♪ ♪ o0

welcome back to "power lunch."

3-d systems shares are near the worst levels of the session, down by almost 5%. at least two brokerage firms have downgraded the stuck and four cut their price targets after it estimated first-quarter sales and profits that fell below average forecasts. that was on friday. chose shares are all to the downside. now let's go back over to brian williams in l.a. back over to you. >> dom, thanks very much. i want to talk about box, but first, i just saw you're wearing an apple watch. so you got it -- how do you like it? >> it's actually pretty awesome. i owned -- microsoft had a watch about ten years ago. >> unfortunate product. >> and it was really really good at telling you the weather. so now this is exciting to have something that keeps you up to date and it's fun to wear -- >> you're not involved with apple but you are a consumer. would you recommend it?

>> if you are already in the apple universe, i would definitely recommend it. it's a perfect accessory to your phone. they have to get the battery thing right. but so far, it's been pretty fun. >> spontaneous apple watch discuss breaking out here. you are on a panel here -- the conference, the viewers are like, where is sullivan and why is he doing this? it's the greatest conference -- you have a panel called what keeps a ceo up at night? you're a young guy running a company. permanent deflationary environment -- >> good thing for us. >> why? >> the cost structure of our business goes down every year. as hard drives get cheaper and cheaper, our core cost of goods sold gets cheaper and cheaper and all the value we build is the software layer on top of the instructure.

unlike some of the pure infrastructure platforms, our value proposition is the infrastructure -- >> i want to push back on that. if i run a jewelry line or restaurant, i want to charge more not less for my services or product. >> yes. >> you're saying you want to charge less? >> no. i want my cost to be less. but the value we provide above the infrastructure actually is the premium on top of that. so -- >> so your operating margin will go up, your pricing goes down but the operating costs go down faster? >> over the past four or five years, our price per seat -- the sort of price per user on the platform has gone up. even in a market where the underlying storage cost is going down the value we're providing is increased -- >> last question you do not fear the commoditization of cloud computing in digital

storage? >> we prefer it. the more value we can offer our customers. security collaboration, all the workflow around your data -- the more data you can put on our perform, the more value we can provide to our customers. >> back to mandy drury, but i have to ask you this mandy, is jarjar binx the worst character in a movie ever created? mandy said he wasn't that bad but -- >> i'm sure there's worse. definitely the worst? >> no there are worse. >> he's not the worst but he's up there. >> there were worse in the same movies. when you said those three movies stunk, that was being generous. i'm still going to see the movie, though. >> was he a dog or girgy or giraffe?

let's get out to mary thompson with a news alert. >> dupont is the currently best-performing stock among the dow 30. recommending that shareholders vote for two of the four nominees, board nominees that have been set up or put up by trion. dupont has come out and in response to the recommendation says that iss is wrong by basically supporting two of trion's nominees as well as some management recommendations. dupont says they are wrong by ignoring the success of our transformative strategy and the value destructive nature of trion's break-up agenda. dupont is confident shareholders will do their own analysis and recognize that dupont has the right plan in place right now. the rhetoric heating up in this proxy battle where trion is trying to take seats from some

of the directors on dupont's current board. the death toll has been rising all weekend in that devastating earthquake in nepal. it's in the thousands now. thousands more injured, many of them gravely. hundreds of climbers strandened on and around mt. everest. we have the very latest on this developing story after this short break.

qo:é@d8j8j8j

deutsche bank shares falling nearly 5%. scaling back its investment bank and retail operations in a massive overhaul focusing more on its asset and wealth management services. espn suing verizon over the carrier's new custom tv bundling program. espn claiming verizon violated the terms of their contract. and goldman upgrading seaworld to a buy. six flags getting a downgrade to neutral from the same bank. those are the headlines. back to brian sullivan in beverly hills -- >> actually we'll check with brian in a couple of minutes. this is the latest from earthquake-ravaged nepal. drone footage near the epicenter, devastation is not a strong enough word to describe what's going on there. centuries-old temples and homes have been devastated. rescue workers still searching for survivors.

the death count now above more than 4,000. 2,000 structures no longer exist, including some of that country's most priceless archaeological marvels. survivors and residents are fearing aftershocks. you see the tent cities. sanitation obviously is concern. video of the quake itself now. look at that as it shakes caught by a chinese photographer, on assignment shooting the moment the disaster struck. you see how violent a 7.8 earthquake shakes everything within its reach. and this video of the avalanche the quake triggered on mt. everest 6789 climbers with cameras tried to get to cover while some were shooting video. scores of climbers still stranded on the mountainside there. obviously in great danger.

>> absolutely devastating. back to what's happening with the markets. is the u.s. stock market overvalued? is your money better off overseas like europe or japan? plus apple earnings after the bell, the stock that is beat estimates more than 90% of the time and how their stocks trade afterwards. e financial noise financial noise financial noise financial noise 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.

i'm courtney reagan. here's your cnbc news update. thousands were on hand for the funeral of freddie gray the baltimore man who died after suffering a critical spinal injury while in police custody

earlier this month. mourners from across the country filed into the church. his death have sparked protests some violent, in the city. disney's espn unit has sued verizon communications over an alleged breach in contract relating to verizon's bundling package. they say verizon violated its obligations. this is the second largest seizure in thailand's history, a total of 511 elephant tusks were seized. kim kardashian speaking for the first time since her stepfather revealed in a tv interviewing that he is transitioning into a woman. she spoke exclusively to matt lauer on the "today" show this morning. >> he has found inner peace and

just pure happiness. that's what life is about. i don't know what life would be like if you always felt like you weren't yourself. >> that's a cnbc news update for this hour. back to you. >> courtney reagan thank you very much. biotech is getting bashed today. let's get out to the nasdaq and find out what exactly is going on there. bertha, over to you. >> we started off strong this morning. certainly driven by apple ahead of its earnings this afternoon. a number of folks really watching that capital allocation plan. they tend to announce it in april following their april results. apple about a dollar off of its all-time high today. we'll see if that continues to push forward. some analysts say that they see perhaps 5% move to the upside if it does beat. meantime mylan has rejected a deal from teva, crushing the sector today. no hopes for consolidation.

applied materials also abandoning its bid for tokyo electron over leg toir issues. but chips are actually going against the trend and moving higher. back to you. >> thank you, bertha coombs. it's been a pretty good earnings season so far, at least if you look at the u.s. how do you play it? dominic chu is here with a look at some of the stocks that almost always beat earnings. >> at least over the past few years. every quarter, the analysts at bespoke investment group take a look at the stocks that typically beat their earnings expectations. whether they're low or high is not for us to say. but they end up beating the expectation. so we here at cnbc and the cnbc pro team took a look further than that. we said take a look these stocks that bespoke looks at and we look at the ones with three years' worth of earnings history, they have the beat earnings estimates at least 9 out of the 10 times and have a market value of at least $1 billion.

among the highlights for this particular screen we ran, some interesting companies come up. three years' worth of earnings history. mastercard beats earnings estimates 94% of the time over the past four years. and the average move on the heels of earnings is a 3% gain. not bad for mastercard. linkedin averages a 4% after earnings come out over the last three years. and amtrust financial, they do a lot of insurance work. this company has not missed earnings expectations over the last three years and on average it goes up by about 4.5% of the time. interesting moves here to keep an eye on. none of these predict the future still interesting statistically and odds-wise to look at this story. >> when you've finally found a tool to predict the future accurately, let me know dom. >> i will be buying those stocks and sitting on a beach in

tahiti. >> thanks, dom. check out our website for more on this. now i know where we are in this program. good to be back. i'm completely lost and disoriented. stocks giving up gains today after they closed at record highs last week. can you still make money in u.s. equities or are their better opportunities elsewhere? richard mattigan rejoins us. welcome back. let's talk about u.s. stocks records for the nasdaq for s&p. are they too high-priced given the level of earnings and given what you foresee for the rest of the year? >> earnings is the big critical question right now. markets aren't overvalued to a degree that if you take energy outside -- and i hate people who say if you take out all the bad, the good is great. but still looking at 4% to 6% earnings growth with a negative outlook this year.

we think there's upside in the u.s. >> is there upside elsewhere in the world? >> my short answer is no. the one proving ground was being a global investor this year. putting some balance back into a portfolio, owning everything from europe through japan through emerging asia has been critical. nothing's cheap. that's the problem right now. >> you were saying to me a couple of moments ago that you are slightly overweight which is to say maybe 62% u.s. equities versus a market balance of about 55%. but critically, you say it's all in mid caps. why? >> we like the focus of stronger dollar and believe in it. we believe the fed will raise interest rates. that interest differential will continue to drive relative dollar strength. mid cap has about 80% of its sales focused in the domestic u.s. we think first quarter is the anomaly in growth.

we'll be back to 2.5% growth. so that play is obvious. m&a as well. you make a big deal about making mega deals. 90% of deals this year is $500 million and below. that's huge. >> the strong dollar it rolls off the tongue now. and if you look at what the dollar's been doing recently, it's stalled out a little bit. it hasn't actually had a couple of good weeks for a while. i'm wondering, do you consider that it's going to pick up its strength again or -- >> this may be counterintuitive -- >> it does completely change the investment equation not just for earnings commodities and all kinds of things. >> it changes how we invest for our clients. dollar-denominated clients will be careful in euro and vice versa. the answer is i hope it keeps improving so there's relative dollar strength. but nowhere to the degree we've seen.

we've seen 25%, 27% depreciation of the dollar. too much too fast is bad. >> what about europe? >> that was a wildly optimistic question the way you asked it. europe's finally got its thing together. for better and worse, the ecb was incredibly late in coming back into quantitative easing. they were incredibly bold. the troubling issue is with 30%-plus of euro sovereign debt now at negative interest rates, what is the implication of that to all relative value? that's going to put money in asset reflation back into equity markets in europe where the earnings really have to deliver. and we're not -- >> how big a danger is greece? >> bigger than people expect. i want to say rationally it's in everyone's interest for greece to exit not to happen. taking the finance minister today out of that discussion helps the dialogue around it. this will drag on may into june.

>> richard, great to see you. >> thank you. >> go to powerlunch.cnbc.com right now to see how richard is overweight mid cap stocks. let's get back to the bond market. rick santelli still tracking the action at the cme. anything changed since last we spoke, rick? >> yes, actually a lot has changed and very little of it had to do with the auction. intraday, you can't pick it out very well. let's go to the longest end of the market 30-year bonds. you can see we did see rates move down right after that 1:00 eastern auction but they started moving down sooner than that. so what was the culprit? i'll show you the culprit. i originally had an s&p 500 chart in here. but i had to switch it to the nasdaq on an intraday. why? because the nasdaq went negative around 11:50 eastern. the s&p didn't go negative until about 12:10 eastern. that's key.

interest rates are definitely following the markets down. but what used to be confusing isn't. look at this dollar index chart going back to the beginning of march. this is the lowest yield since the 3rd of april but it's close to another month back. and that's probably because of the fed meeting. if they don't raise rates anytime soon the dollar comes back but the equity markets are paying more attention to the nasdaq. back to you. >> thank you very much, rick santelli. nasdaq now down about 0.4%. wicked weather across the country, hail the size of tennis balls causing destruction in texas and kansas and deadly weather caught on gopro video off the coast of alabama. the latest ahead on "power lunch." i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80%

of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years. now i know i'll be able to stick with him. [ male announcer ] with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. so don't wait. call now and request this free decision guide to help you better understand medicare... and which aarp medicare supplement plan might be best for you. there's a wide range to choose from. we love to travel -- and there's so much more to see. so we found a plan that can travel with us.

anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only medicare supplement insurance plans endorsed by aarp an organization serving the needs of people 50 and over for generations. remember, all medicare supplement insurance plans help cover what medicare doesn't pay. and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now -- and down the road. i have a lifetime of experience. so i know how important that is. welcome back. stocks are turning negative as the dollar weakens. but not before the s&p hit another intraday high. how do you play this market? joining us bill stone, chief

investment strategist at pnc asset management and art hogan, chief market strategist at wonderlic securities. barron's poll shows that 5% of u.s. money market managers are bearish. seems like sentiment is too far on one side of the boat. >> i think that's interesting. congratulate you on that great boston accent you had right before the break. that was terrific. when you think about the truism here, it's where do we think money should be flowing and should be flowing into debt instruments or equity instruments? if that's your totality of choice, right now, i think we've got a europe recovering china working hard to stimulate their economy into recovery and u.s. albeit for a first-quarter slowdown with plenty of headwinds is recovering as well. to the extent you look at bullishness as a forward pricing mechanism, what do you think the next three quarters have to bear

and where will i get the best return? i think equity is expected to be that. it's always bothersome when somebody's on the same side of the boat. >> it could tip over. bill more bullish or bearish at this juncture? >> i think similar this, i'm long term remain bullish. certainly you have to be worried if that many institutional investors are saying they're bullish. i prefer to be alone in that sometimes. but what makes me feel better is they can talk about the fact that they're bullish, but it's hard when you look at the money flows and what they're being given, you're not seeing a ton of money move into equities. that makes me believe, could we have a pullback certainly, we could be set up for that. but is it the end of the run? i think with these flows, i don't think that's likely. >> bill i know you like europe and japan, but more importantly, do you like them more than the united states? >> that's a tough one. i think we're relatively even on that.

i think it's as much for us right now more of a within the international space, although i will say i'm warming to both of them. i'd like to see a little bit more assured around some of the earnings growth. one of the big differences there is while our earnings growth rates are probably mid to low single digits, both of them will grow earnings roughly in the 15% range. >> what about you, art, on the question of europe? i know you're worried you can get it on the currency right? >> well, that's true. you look at investment in europe as something that you and i shouldn't do. if you look at a year-to-date basis, if you brought the german dax, you're up 22% translate it back in dollars, you're up 10%. so if not for the ability to hedge, i think it's a dangerous game to play. i certainly think there are ways to play europe europe's at the beginning of a recovery.

they were late to the game in terms of monetary policy stimulus. but they still have structural issues. monetary policy doesn't work the same way in europe as it does here. i would actually instead of having to hedge a currency look at companies that still present great value to the united states. >> not all q.e.s are created equal. and you like jack in the box, sonic, steve madden, decker. bill, art, thanks for joining us. private equity for the common man. not exactly the common man, the very affluent common man, yes, maybe. next up an investor who's trying to broaden the entry point into private equity. we'll explain and give you the details. 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 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.

here are this hour's power play points. ahead of apple's earnings, the company shipped 70 million iphones in the first quarter. analysts are expecting only 55 million to be accounted for this quarter. smartphone sales represent about half of the company's revenue. gold prices closing moments ago, rallying up 2% back above $1,200 an ounce. and dupont urging shareholders to vote for dupont directors to hold seats on the board rather than giving up two

seats to nominees of the activist investor trian management. if you missed any of the big stories, visit our website. mandy? tornadoes and intense storms roaring through texas and parts of the midwest today. we've got the very latest for you. "power lunch" back in two. we've always been at the forefront of advanced electronics. providing technology to get more detail... ♪ ♪ detect hidden threats... ♪ ♪ see the whole picture... ♪ ♪ process critical information and put it in the hands of our defenders. reaching constantly evolving threats before they reach us. that's the value of performance. northrop grumman.

can it make a dentist appointment when my teeth are ready? ♪ ♪ can it track my crew's performance,

and protect their heads? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim? like, right now? can it download a track while i'm sampling it? can my keys find me? with the power of digital, analytics and automation now every little "thing" can provide even greater value. ok, so can it tell the doctor how long you have to wear this thing? the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

i'm brian sullivan live from the milken institute global conference. a huge hour is coming up for you at the top of the hour. first up speaking with scott minerd who has an interesting call about bonds. then bob diamond on where in the world he says is the single greatest place to invest right now. you'll hear where that is. and our friend boone pickens, making a call on oil, he'll be here as well. we're also talking apple ahead of their earnings report tonight, we'll find out what is squeezing apple. >> brian, thank you. if you've ever wanted to invest like the buyout king maybe your chance is here.

kkr launched a new fund that lets mainstream get access to some of its deals. smaller is relative as we're still talking about people of a minimum net worth of $1 million, welcome of about 200 grand or bigger instead of the typical $5 million net worth. this is all about getting access to private equity a category that's been available only to big institutions basically or to the ultra wealthy. but i want to ask you this, if i want to invest with kkr, why not just invest in kkr? >> private equity works differently than publicly traded equities. there are a broader array of underlying investments. >> what am i buying into if i

buy into your fund which then puts money into one of their funds? am i getting access to a certain tranche of deals or what? >> to be clear, the fund was designed to invest in a portfolio of kkr private equity funds. so kkr private equity funds directly have monies of $5 million or $10 million. we're accessing these in a pooled vehicle and selecting a diverse group of kkr private equity funds the same funds the institutions invest in primary, secondary and co-investments and this fund is available for a $25,000 minimum. you can buy it at merrill lynch for $25,000. you get access to the same private equity funds, a diverse group, that institutions do. >> would you be in favor, though, of lowering that threshold of $25,000? i ask that because you're certainly not the only ones trying to go beyond the ultra hitch.

there's carlyle, blackstone, trying to reach out to the individual investor. but even at $25,000, a lot of people would be locked out from that. >> this is the first fund that's been publicly registered. so this is historic. and it's available for regulatory reasons, to accredited investor, investors with $1 million net worth. we thought $25,000 was a reasonable minimum and we think the portfolio offers diverse access to kkr private equity. so we thought that was a good figure. >> how do i know what i'm actually investing in? when i buy your fund which goes into the various funds at kkr, who do i know about what the underlying assets of those funds are? >> you'll have the same information that any other kkr investor has with the 10ks they file. we'll disclose the holdings to the investor. so you'll be able to see whether you're in kkr north america, kkr

europe kkr asia. >> what about liquidity? how do i get my money out? are there tie-ups? how do i know what the value of my asset of my investment is day to day, week to week month to month? >> it will strike a monthly nav. private equity over the last several decades has dramatically outperformed the s&p 500 with lower volatility in '08. we call this the ill-liquid ty ill-liquidity -- this is suitable for investors with a longer-term -- >> longer meaning what? if i put money in today s there a tie-up? >> you have a two-year hold. after that there's quarterly redemptions with certain restrictions on those redemptions but similar to a private equity investment this is a five to seven-year hold for an investor. >> john, thank you very much. very interesting opportunity for people who haven't had an opportunity like this in many ways before. thank you. >> thank you. that will do it for the first hour of "power". >> it was good for you.

>> it was good for me. good to be back. >> brian over to you now at the milken conference. it is nearing 2:00 on wall street. 11:00 here at the milken institute global conference in beverly hills, california. this is probably the pre-eminent conference at least in the western conference with big money investors and all hour we'll bring you into this conference. if you can't make it out to beverly hills, don't worry, we have everybody covered. in the next hour, we have scott minerd, bob diamond and boone pickens will join us. it's all in just 60 minutes. hard to believe but true. >> a very big hour. we look forward to those. the number we are telling you guys to watch out there today is $56 billion. that's the record amount of money apple returned to investors last year alone and they're not likely done. apple reports earnings after the

bell. the street is expecting the company to boost its dividend and buyback program. let's get to josh with more. >> when apple reports after the bell analysts and investors are expecting a buyback bonanza here in cupertino. as you mentioned, apple already making history with its capital return program returning $56 billion last year in buybacks and dividends. so what can ceo tim cook deliver this time? the street thinks you'll see a new capital allegation program that's even bigger than the current one which is $130 billion. piper jaffray says anything less than $150 million would disappoint investors. they think you'll see $170 billion and not to be outdone, rbc thinks a $200 billion program is on the way. that just isn't a big, round i'm not familiar

big, round, impressive number. apple could do that capital return program and not even have to cut its cash pile which stands at $178 billion. investors own apple for its strong growth prospects, capital return is just gravy. we'll find out how much more gravy tim cook is willing to dish up when apple reports in just about two hours. back to you. >> josh lipton, thanks for that. stewart, you were expecting a capital return of $150 billion for this year. the question though at this point, stewart, i think for the street is not how many phones -- you're pretty bullish on the number of phones apple is going to have sold in the quarter. it's what is already priced into the stock which has had a pretty nice run going into this release. you think it's all in there at this point? >> i think much of it is the real wide cards we're looking

for are dividends to have significant numbers there. the share buyback programs sounds like it could be exciting. but of that $170 billion, there's only about $20 billion in the u.s. there are some limits as to how much debt apple wants to have. i think that limits the upside potential. in terms of units, we're seeing some data showing the iphone coming back to where it was before the iphone 6 came out. the issue we're looking at is maybe the iphone is coming towards a bit of a flat period of growth going into next year. and the issue around raising debt to support the buyback may limit the upside surprise as well. >> dan interesting because you see the same exact number of phones being sold for the quarter and yet you have an outperform rating on the stock. walk us through how apple can expand its p/e at this point. >> i view it as a near-term view. where the golden opportunity here is it's really in wearables, it's in apple pay, it's in apple tv.

and when we look at the apple watch, that's a huge door-opener. i think iphone, we're expecting some upside tonight and over the next few quarters. but looking out over the next two, three years, there's some eps leverage -- when you look at this new opportunity for apple -- i view them as a modern-day wright brothers. >> i get that, danny. you just initiated apple in april. but you're saying two to three years. to get to $185 in the next 12 months what are the catalysts in the next 12 months? i get the pay and all that for two to three years. but we're talking $185 in 12 months. >> sure. near term next two, three quarters it's all on iphone upside. front and center is really china. china is going to be the fuel in the engine here to lead to upside not just on top line but as we talked about on the capital allocation strategy

that's also going to add what i believe is significant upside to the name. i think you put it all together you've got the iphone upside story, you have china, you have the wearables with a company that's really, in my opinion, doing the best job out there in terms of technology. so i view that as really $185 we could see that sooner rather that be later. i think tonight is where we start the next chapter of growth. >> stuart, what's your expectation of how the stock trade is up 1.8% today going into the reporting. what happens? >> a lot of people are holding the stock for the dividend, for the buyback. and the fear is that catalysts end up fading away after this quarter. much of it depends on what the -- will they continue to send 6-pluses.

of course the risk is that we run out of catalysts after this quarter. >> guys, thank you. for more on apple's earnings, head to our website. brian? joining us now, scott minerd. we have the fed meeting in two days. most people seem to think the risk to financial assets is higher rates. you believe that the real risk is lower rates. explain why. >> there's a couple of reasons. the weather from the first quarter has really caused a lot of distortions. the economy is going to print a weak gdp number. the fed is not going to be wanting to talk about raising rates when there's a question about the economy. that's the first thing. second thing is q.e. in europe just continues to flood

liquidity in the system, driving down european rates. a lot of that capital is going to move to america eventually. and the third thing is research that we've done internally that shows based upon the trend that's been in place for 30 years in the united states the predicted value for the ten-year note within the next year is around 89 basis points. and i have to tell you something, that trend -- to get short that trend has been a widow-maker. >> let's back up. what you said, using fancy words like basis points, you're saying the ten-year yield is more likely to go down another 1% than up? >> that's right. >> why? how? >> well again -- >> who's buying it? >> the europeans. the chinese. the japanese. all of this capital is flooding into america and candidly there

aren't enough bonds even for u.s. investors to buy today. so the fundamentals under bond prices is that rates should be heading down and not up. >> when we look around the world, there are literally trillions of dollars in assets that have negative real yields in other words, it costs you money to own these versus you getting paid. >> right. >> we have never been here perform in human history outside of a few select areas of global wartime. how does this end? >> look brian, at the end of the day, it's going to end badly, right? eventually all of these assets around the world, as q.e. continues, are going to become more and more overvalued. we're seeing it. we're seeing in portions of the stock market. bonds, i would tell you, a bond yielding less than 1% in the united states for the next ten years, that's not an adequate return.

someday when the liquidity spigots gets turned off around the world, we are going to have a nasty hangover. but the party is still going on. the punchbowl is out. enjoy the party. make hay with it. >> the question is how much longer is the party going to last? no one seems to have a clear idea. >> no. and it's interesting because i think when the europeans begin to talk about ending q.e. just like we had a taper tantrum -- >> they're just starting. >> they just started. but when they talk about ending it and they say the earliest they'll end it is september of 2016 that's when we have to start getting worried. but interestingly enough the chinese now are talking about doing q.e. the we get the chinese in this party, this could go on for a couple of years. so i think for the time being, assets are -- >> we've talked about the risks. talk about something you like. you can buy anything as a global

cio. what are you sniffing around? what is an attractive investment right now? >> you have to start taking a serious look at the oil companies. the major oil -- >> the stocks? >> the stocks, that's right. chevron, exxon, major oils which will benefit even if oil prices just stabilize. the capex will eventually come out of the system over the next two to three years. free cash flows are going to improve. and for someone who invests for widows and orphans, like a lot of my clients are, a 4% dividend with the prospect of a positive return over the next few years, that's not a bad return. >> sounds good right now. scott, thank you very much. melissa, there you go. he likes oil. we'll talk about oil with a guy named boone pickens coming up in a couple of minutes. we have the former ceo of barclays bank, bob diamond, coming up. one place in the world he is investing he says could make

people richer than anywhere else. he's going to be our guest. more on tesla's big breakout. back after this. thank you for being a sailor, and my daddy. thank you mom, for protecting my future. thank you for being my hero and my dad. military families are thankful for many things. the legacy of usaa auto insurance could be one of them. our world-class service earned usaa the top spot in a study of the most recommended

large companies in america. if you're current or former military or their family, see if you're eligible to get an auto insurance quote.

welcome back to "power lunch." biotechs taking a big hit right now. the ibb on track for its worst day in more than a month now. down 3.7%. but it's not all red out there. a bunch of names hitting new awetime times including disney

monster beverage and lorillard. and espn is suing verizon. the sports network says verizon will be in a breach of contract if it allows customers to choose a smaller bundle of tv channels each month. and while wall street waits on apple's earnings, keep an eye on these names. unitedhealth, rent-a-center and general growth properties. brian? we are joined now by bob diamond, ceo of atlas merchant capital, the former ceo of barclays. thank you for joining us. before we get into where in the world you're investing, i want to talk about banks. scott minerd just said he thinks the ten-year yield is going to go lower. if i'm running a big bank and i hear yields are going down, i'm not happy with this. is this a bad time for big banks? >> well i think there's a number of things going on with big banks. but from interest rates alone, three virtually nothing in the financial services area that is

benefiting from continued lower and lower rates. so i think it's the sector. financial services is rooting for higher rates. i tend to agree with scott, not happening quickly. >> if i believe that interest rates are going down that's a bad thing for me? >> but there's a great investment case that's different than interest rates. you're right, if you're just looking at interest rates, that's not a positive for financials. but for us we're looking at it much differently because we're very, very bullish on financials. one, the valuation discount, brian. equity markets without financials since before the crisis are up 60% or 70%. in that same period, financials are down 20%. banks are down 30%. banks are down 15% just this year. and what we're looking to do at atlas is not just invest but we're operators, we rant to run them. who is the competition to buy banking assets banking businesses? for the last 10 or 20 years,

it's been the big banks. but the big banks are -- >> they're out of the game. >> they're out of the game. you have ge announcing half a trillion of potential assets, businesses coming on the market. you have banks in the eurozone, just the eurozone have already announced 1.2 trillion euros of not non-core businesses for sale. >> scott saez he thinks this q.e. things is keynesian policy and will end badly at some point. do you agree? >> skotd'scott's person when i ask what i would to think about something like that. i agree with him. >> how do we get out of this we're addicted to low interest rates? how do we get out of this? i have realtor friends who will say, 6% mortgage would kill us. i remember when 6% was cheap. now we're like, that will destroy the housing market. we've got to -- will we ever have normalized rates again? >> i look at it two ways. from the u.s. perspective, my own view is it's time to begin getting rates back to more

normalized levels. but on the other hand in europe, where i think the economy is weaker i really support what governor draghi is doing with q.e. i think europe was late and i think to really get the economy a boost, it needs fiscal activity along side the monetary activity. so labor market reform capital market reform bank reform there's a lot more that needs to go on to get economic growth and job creation in europe. >> scott referenced the possibility that china could start a q.e. program. we know what they're doing in japan. is it just continuing to lift all financial assets? are stocks everywhere just going to keep benefiting from this world that is seemingly awash in cash? >> certainly asset prices are going up as a result of that. you're absolutely right. >> i.t. is where you're investing. you and i talked last night a little bit about africa and

that's where your banking holdings is. banking has incredible prospects and possibilities but as a whole never lived up to what it could be. you're putting a significant amount of money into africa rwanda, zambia, why? >> first of all, i think the perception of the investment opportunity in africa lags the reality by at least five or ten years. if you look 15 years ago, 2000 to 2010 the compound annual growth in gnp was almost 5%, just behind the middle east. from 2011 to 2015, it picked up. even this year with the dramatic reduction in oil prices we're going to see 4.5%-type growth. the imf has already come out and said by next year sub-saharan africa will be back above 5%. the young population, the

demographics are awesome. the average age is less than half what it is in the u.s. urbanization, 52 nations in sub-saharan africa with over 50 million people. so there's a lot of very very positive trends. and we've just had a democratic election that was peaceful in nigeria. this is a big thing. >> bob diamond, we appreciate your views on banking, the financial markets and all your investments in sub-saharan africa. >> thanks, brian. still to come it is one of the biggest shutdowns in the history of higher education. corinthian college closing its doors overnight kicking out thousands of people. herb greenberg rang the alarm on this years ago. he'll join us straight ahead. plus wicked weather slamming a huge part of the south. more of this incredible video when "power lunch" returns.

(vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.

♪ if you're looking for a car that drives you... ...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. if i'm going to -- oh, my gosh. yeah got that one. >> check out this video from texas. hail pelting a man's car and breaking hz windshield.

the wicked weather spawned a tornado measuring one mile wide in the northern part of the state. in kansas baseball-size hail fell damaging cars and buildings. two tornadoes reported there. and deadly weather is caught on gopro video off the coast of alabama. a sudden squall moved in. that same storm capsized several boats. at least two people were killed. five others are missing at sea. a market flash now. >> we keep watching what's happening with the biotech stocks. off their worst levels of the session. but the ibb, you can see there down by nearly 4%. if you take a look at some of the big constituents in the s&p 500 that are down on the day in the biotech side of things vertex celgene, amgen, all taking a large-than-market down day here at least hopefully in

stride for some of these biotech investors. however, if you take a look at some of the other plays people are looking at right now mylan, teva teva trying to buy mylan, they're firmly rejecting it. perrigo also part of that three-way that maybe transaction that could end up happening. it's all a big mess. but those biotech stocks certainly one of the big contributors to why the ibb and the overall sector and industry group is the worst performing on the s&p 500 today. back over to you. speaking of a big mess corinthian college shutting down virtually overnight. it is leaving 16,000 students scrambling as their school shuts down. this just a week after the u.s. education department fining the company $30 million for misrepresenting job place of employment data. that stock is down 98% over the past year basically no longer a

stock. let's brickng in herb greenberg, our friend. for years, you have been critical of many of these, not all, but many of these for-profit colleges. what is your take on corinthian? this is a significant blow to the entire industry. >> in the press release they put out, they talked about how they job place of employmentment rates were equal to that of community colleges. i said that's not good because community colleges cost a fraction of the price and they may go free. but what you are also seeing in the industry -- corinthian is being held up as an example. but at the same time, in the industry you have tuition rates in many schools going down. you have regular non-profit schools getting into the business especially with online education. you look across the board, we've talked about it over time.

itt education, devry, apollo, those stocks are straight down. others like strayer have outperformed the group. it's trying to sort itself out as the industry goes through what i certainly discussed on cnbc quite a while ago, we called it the reset. that reset is continuing to occur. >> do you believe that this move by corinthian is a corinthian thing or should this paint a picture over the entire industry? >> i think it should paint a picture over some of the companies in the industry. remember job placement rates and how some companies were exaggerating them is a big deal. one company i spent a lot of time looking at was education management. it's now a private company trying to restructure its debt dealing with the government which is going after it as well. this is the company that has art institutes and culinary schools

and has job placement rate issues. so i think you're going to see -- look you're seeing some of them try and figure out how to go forward in terms of whether they cut their marketing expenses so much their enrollment goes down what do they do when they try to restart that? some are focused -- like devry are more focused in nursing or medical, they may not be hit as much. a company like capela is showing growth in its revenues. >> when you hear about a player going away and there are 16,000 students these students at least a fraction of them will go somewhere. so we see the market moves like itt today and devry going higher, are we do assume the students will go there and there will be a beneficiary auto ofout of all this? >> i don't know who the

beneficiary is in all this. the market may be telling you that. but the market's been wrong on this for a long time. >> herb thank you for joining us. see you soon. we have much more to come from the milken institute global conference right here in los angeles, including that guy, billionaire boone pickens. he'll be giving you his latest prediction on where the price of oil is going. but first, speaking of oil, final oil trades of the day are crossing. we're headed back to the nymex for that crude close all when "power lunch" returns.

[ 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.

i'm courtney reagan. here's your cnbc news update at this hour. israel has given the final go-ahead for new construction in an area of jerusalem. it's the first time in nearly a year that israel has issued building approvals in the area. six people were killed as police clashed with civilian protesters in burundi's capital. the country's constitution limited the president to two five-year terms.

south korea's prime minister resigns apologizing for the controversy but didn't mention the allegation against him. the white house unveiled its new china service ahead of tonight's state dinner for japan's prime minister. first lady michelle obama participated in the design. the china was paid for from a private fund administered by the white house historical association. that's the cnbc news update for this hour. now to dom chu with a market flash. >> we're watching shares of u.s. iron ore miners here on this idea that chinese iron ore futures hit a one-month high here. steel mills in china picked up buying of that raw materials. you see there, cliffs natural, bhp billiton vale some of the names investors are focusing on.

oil down today. let's get to jackie deangelis for the closing at the nymex. >> down slightly on the day. closing just around $57 a barrel. so what's interesting here is we've had seven straight weeks of gains, not surprising to see some selling but there's some support in this market as well. what's even more interesting is that the price of gas now at the pump is catching up to the oil price as well. the lundberg survey reporting the price for a gallon of regular is $2.58. that's up 5% or 13 cents in the last two weeks alone. of course analysts are expecting this price to creep up slowly as we get into the heat of the summer driving season. you're in california one of the more expensive places to buy gas. the cheapest play to buy gas is tucson, arizona, $2.20. here in new jersey we were under $2 not so long ago, brian. back to you. >> yes, but as we've talked about, futures prices new york traded gasoline up 45% in three months, gas prices are going higher, america.

time for street talk analyst recommendation all the stockses you must know about. this one could be a short opportunity, melissa. our first stock is eaton vance. 17% below the current price. they're worried about fees margins, they're worried about a lot of things. >> yeah. especially in a space getting so crowded with new people into this market to sell etfs. coming up next credit suisse upgrades. the catalyst includes a resolution of an indonesian contract dispute. and a new ceo, the analyst likes the actions he's taken. doesn't hurt that gold in today's session is above 1,200 bucks an ounce. >> and i'll tell you, if you own newmont mining, watch indonesia.

it's a massive story for newmont mining stock. stock three, a name we talked about earlier, disney guggenheim partners upgrading them to a buy. core operating results will continue to beat estimates and upcoming movies like "star wars," will drive profits at the parks. goldman sachs downgraded six flags but upgraded seaworld. did you catch that? >> yes. hitting a new high. it's not just the box office for star wars but all the merchandise that people are going to want to buy for their kids off the back of these movies. stock number four, texas instruments. after the huge stumble, raymond james upgrading this. price target, $62. dominant share in analog strong

channel relationships, high free cash flow. and even if the business for the group weakens from here, texas is one of the most defensive names in the industry. >> and it's a name we don't talk about much as@all. it's been disregarded. getting positive analyst commentary on a stock a lot of people haven't thought about for a while. our last stock, this one is truecar. it's an l.a.-based company, santa monica goldman sachs upgrading it from a buy to a neutral. their target on the stock, about 22 bucks. that's about 35% to 40% upside. >> and part of this is just demand for cars out there. truecar coming out with an estimate 16.8 million new units will have been sold the highest level for the month in about a decade. talk about demand for cars. speaking of cars tesla shares spiking on excitement over the yet-to-be-unveiled home battery.

let's bring in todd gordon and aaron gibbs. todd, let's start off with you. what does the chart show? right now, tesla's on a massive run. >> absolutely. looks like the shorts are being squeezed here. in my opinion, i think tesla has some upside to go in the near term but has a lot to prove. there's a lot of wood chopped around the $265 level. this was the high back in early 2014. we're coming into earnings on may 6th. the options markets are pricing about a $20 move in the expiration series that's going to cover the options. so current price, about $233. we have resistance $255, according to options. $265 according to the technicals. above there, i'm interested. near term has a lot to prove. >> $265 implies tesla has $30

some odd to the upside. >> absolutely. depends on your time frame. i think it will act as a magnet level. certainly trade towards it. but then protect stops or protect profits up to that level. if we break through, fundamentally, the story's changed. >> a lot of positive analysts notes. credit suisse saying the total addressable market increased by 75% because of recent improvements to the range. ending the anxiety range. both credit suisse and deutsche bank, the announcement coming on the 30th of this month, as potentially adding a tremendous amount of upside to the eps as well as the stock. how does it look to you fundamentally? >> the problem with all these predictions and these analysts -- particularly some of the positive estimates are there it is so far out in the future. tesla missed their four-quarters report. yes, coming up on the may 6th earnings report. right now, the target price

is -- for the fundamental target price is $267 about 13%, 14% above where it's trading now. when you consider you're looking at about 20% volatility around earnings, you're not getting paid for that upside when you look at volatility. on top of that we're looking -- it's trading at about 400 times forward earnings estimates. the estimates have come down for 2015 just four months ago down to 48 cents. that's an 83% reduction for just this 12 months. and they've also reduced it for 2016. all of these profits, all of this hopeful and wishful thinking for tesla, we're talking about 2016 and beyond, five, ten-year outlooks. considering how accurate wall street tends to be and just being able to predict the next 12 months, i'm hesitant about getting into a stock when we're looking at five years out. >> caution on tesla. thanks, guys, for that, todd and erin.

for more head to tradingnation.cnbc.com. the big trucking stocks all lower today and there is a potential roadblock on the horizon for many of the trucking names. plus oil has had a very big bounce recently. where is oil headed next? a guy that knows something about the oil industry boone pickens, joining us live. we'll do a two-segment interview when "power lunch" rolls on and returns right after this with this guy. tdd# 1-800-345-2550 [ male announcer ] your love for trading never stops 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 ♪ ♪ why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping

you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details. ♪ ♪ [ girl ] my mom, she makes underwater

fans that are powered by the moon. ♪ ♪ she can print amazing things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ ♪ my mom works at ge. ♪ ♪ we are finally getting past the shipping problems caused by the port strike. now there's another strike. could it hurt companies like swift transportation which has already down 12% this year? morgan brennan has the story. >> just when the country's biggest port complex which is

los angeles and long beach was starting to recover from all that congestion we get another strike. this time it's truckers specifically drivers hauling cargo around and from the ports classified as independent contractors. this dispute involves a few hundred drivers. specific nine transportation intermodal bridge transport, pacer cartage and harbor rail transport. trucking companies say the pay is already good, it has to be with the driver shortage we already see in place and that this strike doesn't represent the majority of workers. that's really the key. with only a few hundred out of 16,000 area truckers picketing right now, the ports are still operating with little disruption expected at least for now. keep in mind we've seen several similar strikes over the past year. they had little impact. but analysts say the bigger concern is a legal one, whether

these drivers ultimately succeed in being recognized as employees through california's courts. since last fall we've already seen two high-profile cases that have found in favor of these drivers. all of this could really have ripple effects for some of the big publicly traded trucking companies with larger operations at the west coast ports. like swift transportation and knight transportation, companies that are already down this year. and if you see more port troubles particularly if these strikes do wear on and we start to see more increased congestion, that could make it worse for them. brian? >> morgan, thank you very much. oil right around $57 a barrel right now. but oil's been moving over the past month, up about 16%. where is it headed next? to this guy joining us now at the milken institute global conference, boone pickens, well-known to our viewers. boone, thank you for joining us. >> sure. >> you were very bullish on oil

a couple of months ago. you said $70 and then $90, $100 by next year. looks like you're going to be right. are you standing by that call? >> yeah, i like it. >> why? >> well on friday you looked at what was happening at cushy draw. now we started draw, not fill. that's the first draw week. so you're taking out inventory, you're going to draw high gasoline use and production is rolling over. eagleford in decline, bakken in decline because they shut down the rigs -- >> i'll push back a little bit. >> i want you to. >> you said production is starting to roll over. it's down fractionally but still at a record high for america -- >> no, no no, no you're wrong

about record high for america. we were 10 million barrels -- >> the recent decade highs of about 9.3 million, 9.4 million barrels a day. >> that's right. >> still at incredible production rates? >> west texas will go next. and you are now at record inventory, record. a year from now, you will have -- you are moving towards record low inventory. >> we seem so far away from that point. i understand, boone, that drilling rigs future wells have come offline. i understand fracking depletes a well faster than normal drilling does -- >> declines faster. >> but every producer we talk to

is still pumping out as much well as they can from their best wells. >> sure they are. sure they are. a lot of those wells are paid out. >> what do you mean by that? paid out? >> they've recovered costs out of those wells. >> so 100% free cash flow, right? >> it's what? 100% what? >> it's all profit. >> did you say 100% free tax -- >> free cash flow. oh yeah right, exactly. that's where you are. they were barring to drill. that's about over with. i made the statement -- that was on the 23rd of december. we had 1,509 rigs running on oil at that point. today you're at 700 rigs, a little less, just under 700. >> are you surprised that there hasn't been more fallout from the steep drop in the price of oil? we haven't had any high-profile bankruptcies. are companies smarter than they were five years ago?

>> well, that drop hadn't been there. six months is how far you are into when it started coming off. so, yeah, it's going to get some if it doesn't recover here. but they shut the rigs down. listen, this has happened so many times. and i've been here for most of them. but if you look at the gas deal, it was 1,400 rigs. this was five years ago. and there are 200 rigs running for gas. >> don't steal my thunder. we're going to a break. i was going to ask you about gas. we'll talk about that. we're going to a quick break. boone pickens will stick around. we'll talk about gas and his other company, clean energy, a lot more to discuss with the legendary boone pickens from the milken conference right after this.

g us your aching and sleep deprived. bring us those who want to feel well rested. aleve pm. the only one to combine a sleep aid... plus the 12 hour pain relieving strength of aleve. be a morning person again, with aleve pm. 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.

welcome back to power lunch live. we're in l.a., we're going to continue the interview with boone pickens, he is standing by his call that oil goes higher this year and next year. one thing we have not talked about at all, shame on me for not bringing it up more is natural gas. we've kind of ignored it because of oils moved -- >> do you know why? >> why? >> it's so cheap, no one pays attention. >> why so it still so cheap? isle has gone up 25 cents in two months natural gas has gone down why? >> oil is starting to draw. natural gas is oversupplied oversupplied, oversupplied. >> is it oversupplied though? >> well yeah. no kidding. man, it just, it is cheap. >> is there any sign of that changing? any reason to go long? >> you're not going to have $3 natural gas next winter. >> where's it going to go?

$3 is cheap. are we going to see $5 natural gas? >> you could. you could. for sure. >> could or will? >> i'm not ready to call the turn on natural gas yet, other than to say, it will be more than $3 this winter. and long natural gas in the winter. >> long in the winter short in the summer? >> no short. some place in here there've been so much switching over to natural, the supply is going to feel it at some point. you're getting more natural gas in a transportation field. >> which you have another company you founded called clean energies public traded a stock collapsed, it's come back. right? i know you are the biggest shareholder. how's the outlook? >> growing 30% a year but i'm not ready to tell you and go out and buy clean energy, just watch the company, watch what it does.

but listen i'm talking to those truckers that are buying the fuel and are using the fuel. and i've talked to raymond trucking in jacksonville florida, they all trucks have gone to lng. all trucks over 500. jeff dylan. dylan trucking chicago. big trucker. and he is moving to natural gas. you've got fedex, yes, moving to natural gas. and, but i don't find like i did ten years ago. i asked him if you liked the fuel. they had all kinds of reasons to know. they didn't like it no more. all say, fuel that keeps giving. cheaper, he'll do the job, it's cleaner. dylan said they have business. and they never got his business before. why? natural gas. so, yes, this is going to happen. >> 12 months then, oil will be higher natural gas, you're not

ready to make a big bull or bear call. >> higher than it is today. >> in 12 months? >> it will be. >> you have a birthday next week as well. >> do you want to tell which one it is? >> thank you. >> you fell out your chair when -- >> i said you look great, you'll be 87 you look great. >> thanks. >> thank you for joining us. >> i do look good. >> you do. happy birthday. i called him the legendary boone pickens going into the break he said do you know what a legend is, it's a 75-year-old that still has a job. >> matt boone, looks good and has a great sense of humor. good stuff, ryan. the countdown to apple's earnings, higher ahead of the report. and a baby elephant falls down a well and the local residents act quickly to try to help him. we'll bring you that adorable video coming up.

good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action. e*trade opportunity is everywhere. playing for the usual phil? always stacy. at kpmg we've always believed

leadership is about vision and integrity, confidence inspiration and passion. pitching wedge. thanks phil. and always having the courage to take your best shot. see the best of the best at the kpmg women's pga championship. ♪ we will rock you anthem ♪ ♪ ♪ ♪ ♪ call 1-800-royal caribbean or your travel agent today there's some facts about seaworld we'd like you to know. we don't collect killer whales from

the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too. look how cute. a baby elephant falls down a fwhel india. you can see the little guy struggling, face first mt.in the muddy water. they dug him out, and freed the little guy. and he wasn't hurt. brian, what do you have coming up tomorrow? >> yeah we have more here melissa, thank you very much. we have good tillman from t.d. billionaire, biggest restaurant

owner in america. he'll give you the insight there. jim who runs on a couple hundred billion bucks, and the lead singer and drummer from the band lincoln park. one of the best-selling bands of all time. it's really a collective group of people here. we have a big sfloe los angeles tomorrow. thanks everybody for sticking around, and melissa,ly see you, quote unquote tomorrow. >> enand i'll see you tonight of course on fast money. we are going to decipher ahead of the earnings release, apple's stock is closed at session lows just under a percent at this hour. traders trading the conference call, also trading the chip names. i will see you tonight at 5%. meantime, closing bell starts right now. and hello, and welcome to the closing bell i'm kelly evans down here at the new york stock exchange. >> and i'm bill griffeth.

>> no all-time highs so far today, you hit them on friday with the s&p and the nasdaq, but that's not the case right now. >> no we are seeing markets under pressure. the small caps that wrest until particular, all eyes are on the biggest name in the nasdaq basically the world about to earn reports. >> if you want to buy apple before the report next hour you have one hour left to do it. you'll hear from one analyst who released a note this morning saying you should buy