tpp, as i mentioned in my answer previously in the asia pacific region, this is a region where growth is very prominent. and in such a region for people and goods and money under proper rules to flow free lyly without a doubt we'll make affluent the customers participating in the tpp, in the asia pacific. and the people in the countries will be able to lead affluent lives. i believe this will feed into this. for these purposes as soon as possible with the general public's understanding, early conclusion of the tpp we'd like to make efforts. and in this context japan and the united states with president barack obama and myself, we want to exert leadership to bring about an

early conclusion of the tpp. furthermore, on the aiib aiib in asia there's a tremendous demand for infrastructure. and the financial system to respond to this is very important. on this recognition we see eye to eye 2009 china and myself and i think this is a point on which we see eye to eye between many countries. for japan to participate in the aiib is a decision which we have not taken yet. but to create such an enormous financial institution. and since this will have an enormous impact on asian countries as fair governance is necessary of the institution. in particular the board to review individual projects and to approve of this is

indispensable. and sustainability. and the environment and society. and the impact of this should be considered. we need to secure this. it's not only about the lenders, but the borrowing nation zs. for example, various infrastructure projects may not be sustainable. it might have too much of a burden on the environment. if this is the case this will bring negative results for the citizens lichg in the countries. it will prove to be a burden. and so in that sense a proper review as to whether lending the money to a country will be of benefit to the country, rigorous review is very important.

so from such a standpoint the two points to be secured i believe is very important. so from such a standpoint japan and the united states should cooperate and we need to continue dialogue with china and it is my intention to do so. >> let me agree with prime minister abe when it comes to the asia infrastructure bank proposal that's been made by china. asia needs infrastructure. there are a lot of countries that have difficulty financing infrastructure but if they got that infrastructure put in place and developed they could grow much more rapidly and that's good for everybody. it's good for that country. it's good for the world economy. it's good for us. we want more markets to be able to get our goods in and sell our services that are some of the best in the world.

and china's got a lot of money. it's been running a big surplus for quite some time. so to the extent that china wants to put capital into development projects around the region, that's a positive. that's a good thing. so let me be clear that we are unopposed to other countries participating in the asia infrastructure bank. that is simply not true. it sprung up out of one story after the brits decided they were going to join up. and then folks have just been running with it. and there have been all these editorials subsequently based on these reports not from any official position of the united states government but from a series of behind-the-scenes quote. what is involved is exactly what

prime minister abe said which is if we're going to have a multilateral lending institution then you have to have some guidelines by which it's going to operate. that's how the world bank operates. that's how the imf operates. there maybe weighted votes in terms of who's the biggest contributor, but you've got to have some transparency in terms of how the thing is going to operate because if not a number of things can happen. number one, money could end up flowing that is misused or doesn't have high accounting standards, and we don't know what happens to money that is going into projects. as prime minister abe said, the projects themselves may not be well designed. they may be very good for the leaders of some countries and

contractors. but may not be good for the actual people who live there. and the reason i can say that is because in the past some of the efforts of multilateral institutions that the united states set up didn't always do right by the actual people in those countries. and we learned some lessons from that and we got better at making sure we were listening to the community and thinking about how this would affect the environment and whether it was sustainable. and so our simple point to everybody in these conversations around the asia infrastructure bank is let's just make sure we're running it based on best practices, based on what we've learned from the entire post-war era and how other multilateral finance mechanisms have worked. and if in fact the asia

infrastructure bank that's being set up ends up having those kinds of safeguards is run in a way that ultimately is going to lead to good infrastructure and benefit the borrowing countries then we're all for it. and we look forward to collaborating with the asia infrastructure bank just like we do with the asia development bank and the world bank on a whole bunch of stuff. so this could be a positive thing. but if it's not run well. and what we don't want to do is just be participating in something and providing cover for an institution that does not end up doing right by its people. because when these countries borrow money, even from a development bank for a boondoggle project that doesn't work, they're oftentimes still

on the hook for paying that money back. and there have been experiences like that across continents and across decades. with respect to tpp, it's never fun passing a trade bill in this town because people are understandably concerned about its potential impacts on specific industries but also the general concerns people have had about globalization and technology displacing workers. we're addressing those systematically. here's what i'm confident about. this will end up being the most progressive trade bill in history. it will have the kinds of labor and environmental and human rights protections that have been absent in previous agreements. it's going to be enforceable. it's going to open up markets that currently are not fully open to u.s. businesses. it's going to be good for the u.s. economy.

and because i always believe that good policy ends up being good politics and confident we're going to end up getting the votes in congress. and congress by the way, will have a lot of time to review it when and if it's actually completed. so this whole notion that it's secret, they're going to have 60 days before i even sign it to look at the text and then a number of months after that before they have to take a final vote. thank you very much everybody. >> all right, folks. welcome to "power lunch." along with mandy drury i'm tyler mathisen. that is president obama wrapping up his news conference with japan's prime minister abe. the president fair ranging, talking everything from the asia infrastructure bank to the ongoing unrest up in baltimore. >> indeed. john harwood is at the white house, and we will get to him in just a second. but first, to eamon javers in baltimore. what's the situation there like now, eamon? >> hi, mandy. we're here at baltimore city hall, and as you can see, there's a heavy maryland state

police presence here. also maryland national guard here on the scene at baltimore city hall. the epicenter, though of the rioting last night was up in west baltimore at the intersection of pennsylvania and west north streets. we were there just a little while ago maybe within the hour and we can tell you there's a big crowd there. the crowd is gathering and swelling. we saw the reverend jesse jackson there. a big police presence. they've got several streets blocked off. armored vehicles on the scene there. but what was most impressive about what we just saw in west baltimore just now was the local community coming out on the street. we saw towson university students coming out with brooms and trash bags to clean up some of the wreckage. we saw mothers with small children. we saw a group of teachers all the out to send the message that they want peace and calm in their city today. but guys i can tell you that the crowd was growing and we did see some police activity there. we saw police detain at least one individual up in west baltimore just a little while ago. so the anxiousness will build throughout the afternoon as we go into the evening hours.

as we know from history, that can be some of the most dangerous time when you talk about riots in major urban areas. guys, back to you. >> when, eamon, does the curfew go into effect? >> the curfew's going into effect at 10:00 tonight. there was some question about why that curfew didn't go into effect last night. 10:00. what we're dealing with here is a city that's at least partially shut down. we've got the ports shut down the schools shut down. the orioles have decided they're going to postpone tonight's baseball game, as they did yesterday. so a lot of the daily life in this city just simply can't happen now that the police are out in the strees and there's fear of riots spreading further throughout the afternoon and into the evening, guys. >> eamon javers thank you very much. president obama, meantime, wrapping up a news conference with japan's prime minister shinzo abe. it happened just moments ago as you saw. our chief correspondent john harwood is live at the white house. a far-ranging performance, john. >> it was, tyler. he talked as we expected about

the transpacific partnership. he made a pitch for that. he made a pitch for the expanded defense cooperation between the united states and japan, said it wasn't a provocation or threat to china. but his most passionate and lengthy responses to questions came on a question from our colleague chris jansing on baltimore, and the president had a very long response in which he first of all expressed solidarity with the police and community that had been affected by violence. he said it wasn't a protest at all. take a listen to the president. >> that is not a protest. that is not a statement. it's people -- a handful of people taking advantage of a situation for their own purposes, and they need to be treated as criminals. >> but the president also went on to say that -- he called out the united states for in the past when episodes like this happened that americans and various institutions feign concern about the problems but don't do much about them at all.

the underlying poverty, the disadvantage that many of those young people who were committing acts of violence yesterday come out of and he challenged congress to take up some of the proposals that he's had, investments in education and other things to try to deal with that. didn't express much optimism that that's going to happen however. >> john harwood, thank you very much, for filling us in. we'll also be watching tomorrow for prime minister abe's speech to congress by the way, which on the birthday of japan's wartime emperor hirohito. dominic chu, we have some breaking news on the nfl. what are you hearing? >> the nfl is going to seek -- or is going to end its tax-exempt status. it's been the subject of a lot of controversy with regard to why the nfl enjoys that 501c6, or tax-exempt status as a trade organization. well, the nfl has conducted its own study and they've now decided that they will again, end their tax-exempt status. they say it will have no material effect on their operations. they really didn't have that kind of an operation that paid a lot of taxes before.

remember, they're very much a pass-through vehicle where the leagues and the league office kind of send those revenues to each other and to the league office so, it becomes pretty much a moot point. but still an interesting headline here, mandy, that the nfl is going to end its tax-exempt status. back over to you. >> okay. thank you very much. dom chu. we also have breaking news in the bond market right now. five-year notes up for auction. rick santelli tracking the action at the cme. you gave the two-year note auction a c yesterday, ricky. what about today? >> definite improvement. the five-year found a lot more love. b-plus is the grade i gave it. pricing structure, 1.38. 138 base points is the yield. that is a full basis point under the 139 basis point issued offer. price solid. 256 to cover about average. 61.2 on indirects a little above average. 5.6 on direct. a smidge below average. it definitely earned its b-plus. tomorrow will be the last of the coupon supplied for the week. 29 billion seven-year notes.

tyler, back to you. b-plus. >> all right, b-plus. rick, thank you very much. we're going to cover the markets and more when we come back after this quick break. you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪ ♪ there's got to be better cards than this. [ male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com. first round's on me.

shares of ups soaring. profit beat, revenue missed. heard that story before? what's driving growth now? let's bring in morgan with a close look. >> ups beat estimates by three cents.

profit climbing 14% for the quarter. and that was largely driven by strong domestic growth. we saw package volumes increasing 2.4%. now, this was the first quarter with higher rates and new pricing initiatives. charging by weight and size for all ground packages. export activity jumped 9% in europe as well where ups has a big presence. currency currency, particularly the euro weakening against the dollar that's what cut into revenue, which missed for the quarter. lower fuel also pressuring revenue as surcharges to customers have come down. those cheaper fuel prices did add to the bottom line. and in terms of gienz ups reiterating the outlook in january when 2015 earnings were revised lower. ceo curt kuehne is retiring to be replaced by richard brett. that effect, mandy, is supposed to take place in july. taking a look at those shares of ups, they are up more than 3% today on that earnings beat. >> thank you so much morgan.

over to you, ty. >> are you kicking yourself for not buying those beaten-down energy stocks a month or so ago? yes, says mandy. check out the xle energy etf. it's up 7% over the past month. pretty nice return for a month's time. but what's going to happen when these companies report earnings this week? dom chu is watching those stocks for us and has some inside investing edge. >> i wish i could tell you what the future's going to be. but a lost traders and investors within looking at some of these big numbers that will be coming out from exxon and chevron. those are the two major that's are going to report. exxon on thursday and chevron on friday. let's take you through the expectations for exxon mobil here reporting on thursday. estimates for 82 cents a share in earnings. revenues of $53.2 billion. that's why it's the biggest oil company in america -- in the world here. options pricing right now almost 2% move up or down in the stk for exxonmobil. a little more volatile. check out what it's done over the past four quarters the past year ever since we saw those highs in oil last may and june.

up 2 1/2% last quarter. the quarter before that up 2.4%. then down 4.2% and down 1% as we kind of hit that summer and fall earnings season. that's one to watch here. take a look at exxon shares. those shares, they haven't taken as big of a beating as some of the other stocks in the energy sector. still, though, down about 13% over the course of the past year. chevron's the other one we're going to watch. estimates here 79 cents per share on earnings. revenues of $24.4 billion. the options market right now not pricing in as much of an expected move here. about 1 1/2% up or down. and you can see here it has been less volatile general lyly ever since those peaks we saw on oil last summer. down by half percent. down .2%. if you look at the chevron chart not one of those companies that's done tremendously bad given the sharp fall in oil prices. just some of the numbers you're going to want to watch. the s&p 500 energy sector is expected to have a 64% decline in earnings per share and a 36%

decline in revenues. certainly a sector to watch. >> and the second quarter will be very interesting too, dom, as oil prices have come back just a bit. >> just a bit. >> dom, thank you very much. hunting for opportunities in this snarkt we've got three bargain stocks that are flying under the radar right now. and we're going to give you the names in a moment. 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.

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staggering stats coming out of apple's quarterly earnings last evening. the stock hitting all-time highs today. can the growth continue? josh lipton at our new san francisco bureau. hi, josh. >> tyler, the iphone is really what drives apple's business of course. that last earnings report that product did not disappoint. and more importantly, bulls are convinced there are still a lot of fans all over the world waiting to upgrade to that iphone 6 and 6 plus. to recap apple did ship 61 million iphones in the quarter. that was better than expected. apple also said though that only 20% of iphone users have upgraded to the 6 and 6 plus. that's why the team at morgan stanley says we are still in the very early stages of this iphone upgrade cycle. part of the iphone's success is certainly because of that very strong demand we saw in china.

ceo tim cook talked about that on the call last night. take a listen. >> i've never seen as many people coming into the middle class as they are in china. that's where the bulk of our sales are going. >> now, it wasn't all good news in that report. ipad shipments of 12.6 million that missed analysts' expectations. when i talked to cook, though, he said he was still very confident in the ipad. he talked about the product pipeline, the focus on the enterprise, the partnership with ibm. he said ipad business would in his words come back. cook also said the stock was in his opinion undervalued. that's part of the reason apple decided to expand this capital return program to $200 billion. we'll find out if investors still think apple is fairly valued at these levels. that stock is up more than 55% in the past 12 months. guys back to you.

>> thank you very much josh lipton. stocks, let's take a look at what they're up to right now, recovering from some early losses. trying to avoid back-to-back losses in a fairly volatile trading session. where are the opportunities in this market? joining us job pavlik chief strategist at boston private wealth and mark travis president and portfolio manager at intrepid capital funds. great to see you guys. bob, why do you feel this is have a strange market? >> well, the market's hovering around all these all-time highs yet the volume isn't all that strong. there's a lot of concern about earnings earnings dproeth, what the fed's going to do what's going to happen with quantitative easing, what's going to happen with greece. so i think this market is really just sort of hanging around waiting. i think a lot of people are worried to be out of the market. i think a lot of people are thinking growth is going to return in the q2 economic reports and they think earnings growth is going to come back as well. i do believe economic news is going to show a snapback in economic activity. i'm not so sure you're going to

get all that earnings growth coming along with it but i do think you're going to see potential for a little bit of weakness near term. especially as we head into june. people are still not fully committed to thinking -- >> and you would be a buyer on any sell-off on any weakness wouldn't you? >> any kind of selling pressure that develops from that. i'd definitely be a buyer. if it's skauzcaused by something like a greek exit i'm going wait by the sidelines. >> what about you, mark? >> well mandy, i think year to date we've got the dow up about 1 and the s&p up 2. the russell 2000's a little more explosive, up 4 or 5. half the s&p's subject to dollar strength. so that's kind of a headwind. i just don't think there's a lot of compellingly cheap equity securities. not only in the u.s. but across the globe. i think a lot of people have kind of jumped into the russell 2000 under the notion that they're not as exposed to the dollar head wind. but you know, at 55 times

earnings the russell 2000 is certainly not a bargain. and you know i think it's hard to find compellingly cheap securities on the metrics we use at intrepid capital. >> mark unfortunately because we've had so much breaking news we do have to leave it there but i want to mention to our listeners and views you like chorus entertainment, patterson eti energy and leucadia national are some of those stocks you think are still looking like quote, bargains. and you can also go to powerlunch.cnbc.com to see why bob is concerned about investing in europe. that is powerlunch.cnbc.com. ty? >> mandy, check out the biotechs. those stocks down big today. taking a beating recently. have they become sort of too hot to handle? where are the opportunities in that space? the person who runs fidelity's biotech fund will join us with his take. his $15 billion fund is up 13% this year. we'll be right back. 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

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shooting up before coming down after reports that iranian forces commandeered a container ship in the persian gulf. the marshall islands-flagged maersk tigris ship is managed by

singapore-based management. let's take a look at how crude is doing. brent crude at 64.79 slightly to the down side. wti crude, however-s holding just slightly in positive territory 57.14. as for gold prices they're closing right now. gold by the way has been sitting around a three-week high. the dollar has been dropping. the dollar is currently at an eight-week low. we're at 1213 for one troy ounce. silver, copper, palladium and platinum all moving higher except for palladium. >> rick santelli on the back of the five-year note auction. what's the action like rick? >> if you look at intraday because we had a five-year note auction, it's hard to pick out the auction because the stencil of the day was already yields moving higher. a two-day of tens reflects that. not only are they moving higher today, they're moving higher in deference to yesterday's high. this is the 30th session since the last fed meeting. and what's ironic is the high yield closing that whole interim period has been 199 and here we are in tens, 1.97 1.98.

if you look at a march 1st start to the euro first dollar you can see we are getting -- with the first day of a two-day fed meeting the dollar's been on the weak side the last two sessions, strong euro bringing down equity equities like the dax and interest rates are climbing to their highest level since the last meeting. bring on tomorrow's statement. mandy, back to you. >> thank you very much for that, rick santelli. tyler. >> all right. thank you very much. mandy, a state of emergency in effect now in baltimore. those violent protests clashes with police yesterday afternoon and overnight after thousands mourned a man who died from an injury suffered while in police custody. people have burned down buildings. they looted stores last afternoon and night. there's a heavy national guard presence today, a curfew in place now between 10:00 p.m. and 5:00 p.m. city schools closed.

some businesses like cvs set to close at 7:00 p.m. tonight. tonight's game between the baltimore orioles and the white sox has been postponed just like last night's game. the rains, the footballvens, the football team there, announced they will cancel thursday night's draft party. >> the port of baltimore is just across the river from where these events transpired. a massive economic force generating 100,000 jobs. 3 billion wages and 300 million in tax revenue. out of 360 u.s. ports baltimore ranks number one for automobiles, farm, construction and forest products with $52 billion worth of cargo ships in and out each year. a force to be reckoned with. on the phone is the man in charge james white, head of the maryland ports association. welcome to "power lunch," mr. white. we have heard reports that the port of baltimore is closed. is that the case? >> the port of baltimore is open for business. we have nine ships in today and

about 17 or 18 gangs of i.l.a. members that are working our ship. we have a cruise vessel that docked there this morning about 8:30. we have 2,500 people getting off and another 2,500 getting back on. we had a somewhat apprehensive start this morning with cabs transporting the passengers to and from the ship. but that quickly resolved itself, and it's business as normal. >> did everyone all the employees get to work okay? >> yes. as i said we had an apprehensive start in the morning. but we have full complement of labor out working the ship. truck moves. on an average day we average about 2,500 trucks in and out of our marine terminals, and we'll probably hit that if not exceed that today. >> okay. well, james white, thank you very much for updating us on the situation there.

that was james white, who oversees the operations at the port of baltimore. tyler. >> and staying with baltimore, business leaders weighing in today on the crisis in that city. our brian sullivan is out west at the milken global conference. hi brian. >> hey, tyler. thank you very much. that's right. we're going to talk to don peebles, ceo of peoples corporation about development, about real estate. don, welcome. obviously, what we've got to talk about baltimore, we've got to talk about what's going on there. not only are you from that renal, you're an urban developer. you're involved in local politics. what do we do here? how do we solve baltimore now and how do we solve baltimore or d.c. or whatever might be later? >> well look this is boston -- this is baltimore, it's ferguson it's new york city, it's everywhere. what you're seeing now is a sense of hopelessness for urban african-americans. if you look at baltimore, the real challenge there is the unemployment rate for african-american men is almost

40% and so you have this tremendous wealth disparity. that's what we're seeing there. is there's a sense of hopelessness and frustration. these types of police abuses have been taking place for decades. it's just now technology has put a mobile phone and video recorder in almost everyone's hands. >> and obviously, the police issues and that stuff, that's a separate -- that's a separate discussion from the one that we're going to have here at the milken conference. let's take it from the economic point of view. you referenced the unemployment rate. how do you fix the job problem? how do you fix the economic problem? >> do you it through entrepreneurship. a big part through entrepreneurship. you take the government for example, and look at our city new york city. new york city is 64% people of color. it's 64% minority. yet 2.7% of the city's contracts are with minority-owned businesses. baltimore has a better number but not much better. washington, d.c. if you notice

they don't see this type of unrest there because you have a much higher level of entrepreneurship. so the idea that minority-owned businesses locally based minority-owned businesses will actually hire minority residents. >> that's a long-term solution. it's going to take a long time. and it's not going to be easy now to convince people that certain parts of baltimore are where they need to be doing business. how do you solve that? maybe the crisis also of confidence. >> well, i think this is a long-term solution for a problem that's been long coming. so i think we need to focus on long-term solutions, also short-term solutions. i think the government and the governor has made it a point that he said the violence is ending. so they're going to stop the violence, control things and i think that it's up to the city to give the business community comfort that this is a safe place to invest. we are active in development in washington, d.c. and philadelphia. so both bookends of baltimore.

and the natural place for us to grow is baltimore. >> when this settles down, people will say the government needs to rebuild. but the private sector needs to rebuild too, don. >> absolutely. >> companies like yours have an obligation to baltimore and to everywhere. the private sector needs to participate. >> we do. we have to do it though in a profitable manner. and how we do business is important. i think all of us and all of us as entrepreneurs have a dual responsibility. we need to make a profit for our shareholders and our investors but also make sure that the economic activity that we engage in is all clus i. don, i all-inclusive. >> i appreciate your flexibility. this is not what we were planning on talking about. i'll send it back to you guys at cnbc. >> thank you very much brian sullivan. we'll get back to you shortly. in the meantime let's look at the biotechs how they're doing today after that sharp slide yesterday. the fidelity select biotech is what we're looking at there. it is up about 13% this year and up over 40% over the past year.

is the biotech sector popping or is it still a good investment in meg terrell is live in boston with the man who runs fidelity's biotech fund. meg. >> mandy, thank you so much. rajiv kal, thank you for joining us. >> thanks a lot, meg. happy to be here. >> mandy was just alluding to a bad day yesterday in biotech. we have these sections of time when people get really worried because biotech's been going up for so long. so the question i think everyone wants you to answer is are we in a bubble? >> okay. well, first of all, i wanted to thank the mth people here as well as the world innovation forum. if you look at the work that the scientists are doing there, i think you're going to feel very optimistic about the future. i'm working 24/7. i just spent the last few days at the liver meeting at the prostate cancer foundation meeting. and when you see a patient that's suffering from prostate cancer, that has failed all therapies and they're given a new innovative therapy and you see mri findings and all the tumors are gone that's very

exciting. and that's just one example of the numerous amazing things i'm seeing on a daily basis. the stock market does what it does on a short term. it's understandable after this huge run people are going to want to take profits. people tend to be short-term-oriented. but i think if people really focus on the fundamentals in the sector and really understand this great period of innovation and really focus on buying the best companies with the best drugs that are the highest rate of success, best management teams, and importantly tack lyly take a long-term view, we're thinking three years out, ten years out, i'm thinking 2020 when i invest in these companies. and if you do that i think this is going to be an extremely rewarding period for our shareholders and most importantly for patients who can really benefit from this great time in innovation in medicine. >> and so you think the valuations really make sense, how much some of these companies have gone up. that's supported by the promise of their therapies. >> again, i'm not going to

comment on the short term. but if you look at the largest biotech companies and compounded earnings growth over the last three or four years, it's 30% to 40%. and then when you look out in the out years again and look at consensus earnings estimates and you look at how they're trade relative to the s&p 500, you look at some of the largest companies and you look at their free cash flow yields despite all this growth and an exciting pipeline that's coming down the road there's reason to be optimistic i think. a double-digit free cash flow yield for one of the most efficient, most productive biotech companies today that has grown tremendously that has cured a lot of diseases in the last ten years is a pretty attractive place to be. it's hard to argue that if you're trading at less than the s&p multiple at some of these companies that you're in a bubble. >> unfortunately we're short on time so we've got to go. rajiv kaul thank you for joining us. >> awesome. thank you. >> meg thank you very much.

courtney reagan now for a cnbc news update. >> thank you very much tyler. here's what's happening at this hour. the search for survivors of the earthquake in nepal is heating up from several nations including germany, japan, and china. more than 5,000 people have died while more than 8,000 have been injured. more than 400,000 houses have been destroyed or damaged. oklahoma's supreme court court has given harold hamm in a victory. they ruled in favor of hamm in his dismissal in the billion-dollar divorce case saying his ex-wife can't get more money from him after she cashed his original $1 billion check. at least one person was killed and as many as 80 others injured after two commuter trains collided this morning in johannesburg. both trains were traveling from pretoria when one hit the other from behind. and a rare world war ii british fighter plane is expected to sell for millions of dollars when it goes up for auction this summer. this spitfire plane is one of only two left in the world to

have been restored to its original condition. that's the cnbc news update for this hour for now. back to you. >> thank you very much court. apple the big story after yesterday. today gopro is in focus. the stock is up about 90% since its june ipo. so we'll give you what to watch for when they report. still ahead. 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.

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a helicopter shot of crowds massing as -- in baltimore. after last night's violence there caused many damage -- much damage to businesses. some were torched. others were looted. multiple injuries to police and multiple arrests. this some of the worst of the violence last night took place in west baltimore. not quite sure what this intersection is. curfew is in effect in the city beginning at 10:00 p.m. tonight. earlier for younger people as

the city tries to get its arms around the outbreaks of violence following the death of an individual in police custody some days ago. let's go to dominic chu now for a market flash. >> tyler, bumpy ride for honda motor stock today. the stock is on a steady decline hitting its worst levels of the day. the automaker is expecting a flat profit for the year ahead while fourth quarter results missed analysts' expectations. honda says that recall costs and slower sales in the u.s. and japan are the main reasons why those profits did disappoint tyler. back over to you. >> thanks very much. here's an importantreminder. i don't care what kind of rush you're in. do not -- do not, look at, that pass a stopped school bus on the right. this video from graham washington showing an suv -- look at this. blowing by a stopped school bus, nearly striking three kids who are about to get on it. police say the driver had to go into a ditch to pass the bus and didn't stop to check on the

kids. law enforcement now looking for the vehicle, described as a gmc jimmy with a sunroof and tinted windows. mandy. >> shocking footage. okay. well, the fed kicking off a two-day meeting today. what did the nation's top money managers investment sfrat jifts, and economists think about the stock market and the u.s. economy right now? steve liesman has the exclusive results of our cnbc fed survey. >> thanks guys. the u.s. economy getting buffetted by a bunch of trouble in the past couple months. and that's created a weak first quarter outlook here. but the cnbc fed survey shows that respondents, market participants, including economists, analysts and fund managers think the economy is going to plow through these problems. 66% say what we're going through right now is a temporary slowdown. 32% say it's a combination of temporary and permanent factors. only 3% say it's a sign of a more permanent weakening in the economy. and you can see that when you

look at the economic forecast. growth is pretty much the same as it was in the march survey. 2.7%. a touch higher for this year. 2.8%, just a touch lower for next year. part of that lower outlook as a result of,000 economists think that the stronger dollar is going to bring down economic growth. the probability of recession, though, came down a bit. just 14.7 bers.next 12 months. that's the recession probability. let's look at the outlook for the market and interest rates. for december 2015 a bit of a gain here, not a whole lot but from the current level of 2109 the s&p is seen closing the year at 2156. and if you look at 2016 up to 2259. all of this happens in an environment of low interest rates. you can see over the time period we've had here go back to july 2014. we're looking for an end 2015 ten-year yield of 3.4%. but with each successive survey

that's come down. come down with inflation. come down with some of the issues we've been talking about. now it's seen at 2.3% up from the current level of 2%. at 2.9% in 2016. you can read all about this on cnbc.com. the full story of the cnbc fudd survey. back to you guys. >> thank you very much. steve liesman. tonight on cnbc really packed line-up for you. he's at cnbc's one market with the ceos of t-mobile sales force, workday, and palo alto. a murderer's row of top techies. done miss it. ty? >> the numbers are in for apple and they are eye-popping to say the least. sales, revenue, market cap, and cash. everything's great at apple. we're going to debate that. wall street's never seen numbers like this. but is the company now too big to grow? that's ahead on "power lunch." ♪ burning through the sky, yeah ♪ ♪ 200 degrees ♪

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.

apple shipped 61 million iphones this quarter. more than analysts had expected. a big part of the iphone's success came from strong demand in china. next we learned the consumer discretionary stocks are the worst performing sector. whirlpool the leading -- leading the declines with an almost 7% move to the down side. citing slow demand in brazil and a stronger dollar. and last but not least, we heard from president obama and japan's prime minister abe. together they announced plans for a better trade alliance and are committed to getting a deal done. and if you missed any of these stories over the past hour you can visit us at powerlunch.cnbc.com. tiler. >> mandy thanks. home prices in 20 metro cities rose 5% in february. year over year this according to s&p 500 case shiller. today's yahoo! power poll asked how has this power price increase influenced you? 13% say i plan to sell property soon. 7% say i plan to buy before

prices rise. 80% say no effect. whatsoever. all right. small boat big problem. get a load of this monster great white giving these unsuspecting folks the scare of their life. get ready to chow down on that story and many more as "power lunch" continues. stay with us. so when the time comes to decide whether to scale in or scale out... you can make your move wherever you are. and start working on your next big idea. ♪ ♪

i'm brian sullivan live at

the milken conference in los angeles. coming up at the top of the hour nearly 350 billion in investment advice principal financial's jim mccaulken will join us. where he is putting his money now. plus a tech trifecta. three stocks in silicon valley you need to have on your radar right now. an apple and twitter debate as well. and we are keeping a close eye on the tense situation in baltimore, maryland. we'll have a live report from baltimore coming up. melissa joining us at 9 top of the hour. tyler, for now i'll send it back to you. >> thank you very much brian. we're looking forward to seeing you in the next hour. in the meantime after easing off in 2014 we've seen home prices start to accelerate again this year. but are home prices in some areas too frothy? and where are the home prices exactly overvalued in terms of location? looking around the map and she's got some answers for us. >> hey, mandy. i want to start with what we learned today, that the home ownership rate fell to the lowest level in 25 years, and a lot of that has to do with what you're talking about, the ever-rising home prices.

heath up again and showing in-some real froth in certain local markets. take a look. the nation's top 20 markets saw 5% year over year gains in february according to case shiller. up from 4 1/2% gains in january. so again prices accelerating. now let's go local. two major markets, san francisco and denver saw the biggest gains, both around 10% year over year. but san fran didn't surpass its bubble peak. denver did and so did dallas. but these markets are actually not considered overpriced. instead, houston, austin phoenix, miami, even vegas, which is still way below its bubble peak are considered overpriced. either because their recent gains were fueled by cash-heavy investors or because their growth came due to a huge imbalance between supply and demand. that's houston and austin which of course now are worrying about energy. back to this home ownership rate. while the number of homeowners

dropped slightly the pool of total households both owner and renter is growing but it's all on the rental side but it's still growing and that's a good thing. if you get the math, it does send home ownership rates down. if you want more on, that all the math laid out online, realtycheck.cnbc.com. tyler? >> that'll do it for the first hour of power. brian and melissa will carry it forward from here. bri. >> tyler mandy, thank you very much. welcome to the second hour of "power lunch." and once again we are bicoastal. live from los angeles here at the milken institute global conference. melissa joining us from new york city back at the nasdaq marketsite. the dow is up just about 60 points, but melissa, once again, this is where many of the power players are in the world and we're going to bring our viewers here. we've got some great interviews lined up for you all hour long. so hello from los angeles. >> hello to you, brian. and in terms of market action, it's all centered here at the nasdaq marketsite. we kick off the hour in fact with what we are calling a tech trifecta. first up we're digging in on

apple's big quarter, then we're turning our attention to two names reporting after the bell twitter and gopro. but let's kick it off with apple. the stock hitting new highs at the open before pulling back. this after the company reported another monster quarter. here's our question today. has all the good news been priced into the stock? let's bring in angelo zino of s&p capital iq and andy hargraves will join us shortly. angelo, let's start with you. you just raised your price target to 150. what makes much more optimistic based on this quarter given so much optimism was already in the stock? >> yeah, thanks for having me. really two key reasons for the increase in the target price. the first had to do with the commentary we heard about the iphones. clearly it was a great beat. 61 million shipments. but more importantly is the fact that we've only got about 20% of the active base here that's actually shifted to the iphone 6 and 6 plus. which leaves you an enormous amount of upside potential in the coming quarters. and that's really kind of the

first point. the second point being the capital allocation strategy. right? unbelievable number. and at the very least that does provide some nice upside to the bottom line number here over the next two years. >> andy hargraves of pacific crest, you've got a 12-month fair value estimate of $133 which is a little bit low grer where the stock is right now. essentially you're saying that the stock could be dead money from now. i'm just curious, when you hear tim cook saying that only 20% of the iphone base has actually upgraded to an iphone 6, were you more -- were you -- i mean walk us through in terms of how this impacts your -- because most people think the upgrade cycle could be much more powerful than we previously thought. >> yeah, yeah. i think that was the intention of the comment. the funny thing is when you ask about previous cycles they say they haven't run the analysis. we've tried to run the analysis and the numbers that we come out with are that the upgrade percentages this time around are quite a bit higher than what we've seen in the past. and that's one of our concerns-s

that i think what you're seeing is you're pulling demand in from future periods and the next iphone cycle is likely to be a lot less impressive than the current one. >> the other issue, angelo-s if you're pulling that forward and you're going to have let's say, blockbuster continued demand for iphone 6s in the next quarter, the next quarter, you are going to come up on very tough comps still. and that's going to be a headwind for the stock. >> you're absolutely right. and part of the reason for our hold recommendation. but if you look at what apple's doing right now, they're outstripping the market by 2 1/2 times. at the very least we think the momentum will continue over the next two quarters with them outperforming the market until you start hitting that december quarter. whereas, you know i think they could potentially at least kind of start running in line with the overall smartphone space or at the very least kind of maybe just slightly underperform which i think will be good enough given some of the new products that are rolling out. >> the last 100 apple interviews

we've done or at least i've done all we talk about is either the phone or the watch. this used to be called apple computer. when do we start talking about the computer business of apple again or does it not matter anymore? >> so no -- >> go ahead. >> i think it's semantics. all of these are computers. the watch is a computer. the phone's a computer. it's just they sit in your pocket and on your wrist. if you're talking about pcs, i would say the answer is never. and if we're talking about the importance of mac, somethingtion gone terribly wrong. >> we're going to wrap it up in guys. thanks so much for your time. angelo zino and andy hargreaves. that's what you get when you're dealing with a bicoastal show and you've got an anchor aught a noisy conference. let's deal with twitter right now. that's the next report we're expecting. the stock down more than a percent right now. the company reporting earnings

after the bell. rob sanderson senior analyst with mkm partners. buy rating on twitter. arben basketia with stern ait has a stern rating. rob, let's start off with you. is twitter going to have somewhat of an apple problem? it's had a massive run-up going into this quarter. up 23% as you point out in your note from the previous quarter to now. >> i think the expectations are certainly high going in because of -- reflected in the stock move. with what we're expecting on a turn in user growth sustainably better user growth outlook, then the stock's going to be revalued higher even from here. >> arvin, do you feel the same way or do you think a lot of good news is in the stock at this point? arvin, can you hear me? i think we're having some problems with arvin. so rob, we're going to stick

with you. in terms of m.a.u.'s active monthly users are you expecting to see a deceleration and is that going to be an issue for investors in the after hours? >> no i think the opposite. part of the reason or the biggest component of the reason the stock is up so much intraquarter is because of the confidence of management on the q4 report with respect to the user growth outlook i think things are turning at twitter in terms of some of the user churn problems they've been having. i think they're tightening that down. and you're going to see even better outlook on maus going forward. >> you know rob, it's brian sullivan in los angeles. we talk about snapchat, what's app, instagram, myspace, whatever it might be. how does twitter stand out? you've got facebook and everything else. the competition for eyeballs and time and screen time is so high. how does twitter stand out? >> i think what we're seeing across the board is a very dramatic change in media consumption and distribution.

where people are spending their time, you know more so away from traditional media into these new things. don't forget, we're creating a whole large opportunity for media consumption with mobile devices. people always have them with them. the consequence of all this is really a systemic change in the way we market to consumers and it's really an exciting time for the whole community. and yeah there's competition for those eyeballs but i think there's also a really robust opportunity developing. >> rob-g to see you. rob sanderson of mkm partners. and tomorrow do not miss we've got an exclusive interview, "squawk alley" does with the twitter ceo, dick costolo, at 11:00 a.m. eastern time on cnbc. gopro also reporting earnings after the bell. the stock up about 90% since its june ipo. josh lipton in our san francisco newsroom with the three things to watch for when gopro reports tonight. josh. >> well, melissa, the first

number gopro investors are going to concentrate on is the number of cameras gopro has sold. cameras still account for more than 90% of this company's revenue. the street thinks gopro sold 1.3 million cameras in the quarter. we're going to drill down harder into those results and find out what the mix of cameras was. the hero 4 versus the cheaper models. second, how quickly and aggressively is gopro moving into those international markets? especially china. you can expect to hear a lost questions on the call about that. gopro does face local competition in that market. but bulls are excited about its growth prospects there. and finally, gross parnlgins. in q4 gopro did report a gross margin of 48%. the bogey the company needs to hit today, 44.5%. you mention, melissa, the stock is up 90% since the ipo but it's down more than 50% since that high. still charles anderson over at doherty and company, i was

talking to charlie today, he's telling his clients to buy gopro. says expectations are now more realistic. he's excited about that runway for growth overseas. we'll have a better sense of how true that is in just about two hours. melissa -- i'm sorry, sully, back to you. >> hey, josh thank you very much buddy. i'll take it from here. coming up from the milken conference, $342 billion workout of investing advice. principal financial's jim mcclarken will join us as well. herb greenberg with the stock he says should have never, ever gone public. plus we are keeping an eye on the tense situation in baltimore, maryland. a live report there as well. alexander lebenthal. we've got a lot to do. don't go anywhere. we're back in two minutes. stick around. >> time exchange market snapshot is sponsored by interactive brokers. your mom's got your back. your friends have your back.

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is this a dangerous time? it is a yieldless world. there's no yield anywhere. half the government debt out there is trading probably at zero or even negative real interest rates. i'm sure you've got clients saying i need income somewhere, should i buy greece should i buy puerto rico. >> well our investors tend to be conservative. so they're investing in investment grade. in fact, aa aaa. investors are not in puerto

rico. i've said this multiple times. they should not be in puerto rico -- >> if they on it should they sell it? >> i said this i think the last time i was on with you. so many of these bonds rin shurd and that is the silver lining. those insured bonds insurance companies will pay interest on time and principal on time. if there's a restructuring they will pay those bonds as if they are still the exact same bonds. >> is tla restructuring coming? >> restructurings are more than likely coming and some defaults -- >> puerto rico will default on some of the g.o. some of the debt? >> the puerto rico electric power authority does not have enough cash on hand to make their july payment right now. restructuring right now, the talks are nowhere. there was a court case that threw out the restructuring. again, bear in mind there's g.o.s, sales tax, there's electric power authority, there's highway authority, and now this oil tax bond issue is up in the air. it's a falling knife that's just

fallen a lot further. >> we'll leave it there. thank you. >> alexander levinthal. >> take a look at shares now. trading down .6%. >> let's get to phil lebeau with what has happened with ford. seems like it's mostly about the f-150. >> it is mostly about the f-150 when you look at north america, melissa. the fact they are getting better than expected returns on those f-150 that have been sold so far. you'd expect a little optimism. people looked at the numbers and said you missed on the top, missed on the bottom line what happened. in terms of the earnings this is basically because analysts put them at a lower tax rate than they actually came in at. they were falling three cents short on the earnings side. revenue coming in lighter than expected. some of this is primarily because of the currency issues with the portfolio of businesses over in europe. so when you look at the first quarter a couple of things stand

out. north america continues to be the place where ford is making money. same story as you saw with general motors. 1.34 billion is what ford made in north america in the first quarter. europe and south american losses, they're not as bad as they were but there are still losses there. however, when we talked to the cfo earlier today, he pointed to his optimism about the second half of the year and when the new models really start to move into showrooms. >> well i think you're going to love the balance of the year particularly in the second half. and that's something that we talked about today. we also talked about it back in january. based on our product launch particularly in north america and new capacity we have coming on stream in asia pacific and mid-year we're really expecting the story of the year to be breakthrough but built on very strong performance in the second half. stay tuned because the second half's going to be very very strong for ford. >> and we've known that this was going to be a backloaded year for ford. and yet when you look at these

shares they have done nothing over the last year. by comparison i want to show you group one automotive. reported earnings today, beat the street handily. the stock is trading lower today but like so many in the auto space, melissa, these stocks with the exception of ford and gm have a nice move over the last year. however, when you look at ford same as when you look at gm it's as if investors are looking at them saying you made a lot of money but you know what? i'm not terribly interested in what you are right now in terms of that investment. and that's what we've been seeing for the last nine months or year. >> yep. phil lebeau thanks for that. baltimore on edge at this hour. we've got a live report from downtown baltimore when "power lunch" returns. 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

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baltimore police holding a press conference live right now. with the city still reeling and on edge. and baltimore is where we find our own eamon javers with a live report. eamon. >> hi, brian. that press conference taking place just a couple of blocks from where we are here. we're at baltimore city hall. the police that are briefing now have just said there are 144 car fires here in the city of baltimore last night. they've also said there are

about 135 arrests overnight and into today. we're also looking at one person in critical condition in the wake of a structure fire last night. that according to the police who are briefing root now. but as you guys saw and the whole world saw, horrific scenes of violence here in the city of baltimore last night. fires, looting, damage to property, damage to people. police trying to get control of the situation. this morning we went out to the place that was the epicenter of that looting last night in west baltimore. and what we saw was a scene of calm. a lot of the people in the neighborhood and the community coming out, trying to help clean up their city. brooms, trash cans, trash bags doing what they can. university students, teachers parents and small children out there trying to fix their community this morning. but guys a very heavy police presence today at city hall. we've got the maryland national guard out here. we've got state police out here. they're expecting that the crowds will continue to swell in west baltimore. we've seen that throughout the afternoon. we've seen some aerial shots of

that location where the rioting was last night. as crowds continue to stream into that area. we've got community leaders and civic leaders and others there. but there also may be some people who are bent on more violence and more destruction tonight. police are going to keep a very wary eye on all of that as we go into the evening hours in baltimore, guys. >> we will be watching. eamon javers thanks for that. we are following another developing story out of the u.s. supreme court. justices hearing arguments today on the constitutionality of same-sex marriage. let's get to cnbc's hampton pearson live at the supreme court. hampt. >> after hearing nearly two hours plus of those arguments it looks like the supreme court justices plan to set a very high legal bar before possibly saying yes to the notion of giving same-sex couples a constitutional right to marry. those trying to make that case were challenged by among others justice anthony kennedy at one point saying the definition of marriage between a man and a woman has been with us for millennia. justice stephen breyer "you want people outside the ballot box, nine people in particular

to decide this issue. why can't states just wait and see?" from chief justice john roberts "if you prevail, there's more -- there's month more debate. closing debate closes minds. people feel differently if they have a chance to vote on it." now, while that argument was going on there were nonstop demonstrations outside the court on both sides of the issue. the response of those on behalf of supporting marriage equality say it's a question of extending individual liberty to gay marriages just as the court did years ago when it struck down state laws that banned interracial marriage. allowing states to take a wait and see approach the petitioners argue, will continue to discriminate and give second-class status to gay and lesbian couples. and from the solicitor general, if you leave this to the electoral process, you will have a house divided. the second question before the justices whether or not gay marriages in one state have to be recognized by all states whether there's a ban in effect

or not. pretty much a standoff. and frankly depends on how the court decides the big issue. of course we expect a decision at the end of the term in late june. brian, back to you. >> all right, hampton, thank you very much. coming up more from the milken institute global conference in l.a. including why a big move back into cities could be a big-time investment opportunity for you. 350 billion worth of advice coming up. but first let's talk oil. jackie d., take us into the oil close at the nymex. >> good afternoon to you, brian. after some early vol timt today we appear to be stuck at this $57 level. traders telling me what the catalysts are, how we could break out and what the levels to watch are. we've got that story when we come back on "power lunch."

i'm courtney reagan, and here's your cnbc news update at this hour. the supreme court appeared closely divided on whether it should legalize gay marriage across the u.s. justice anthony kennedy, the likely swing vote asked tough questions on both sides, giving little indication of how he will vote. he does however, have a history of backing gay rights. hundreds of protesters

marched to the indonesian embassy in manila to call on the government to help stop the imminent execution of mary jane valeso, who on death row for a drug conviction in indonesia. she's one of nine convicts who were given 72-hour notices over the weekend that they will be executed by a firing squad. tyson foods, the nation's largest poultry producer says it plans to eliminate the use of antibiotics in its chicken by 2017. it's also looking toned antibiotics in its beef pork and turkey. lego broke ground on its first lego land in japan. the park will occupy a large site in nagoya in the center of the country. it will open in 2017. the eighth lego land worldwide. that's a cnbc news update for this hour. brian, back to you. >> courtney reagan thank you very much. let's go down to the oil close. jackie deangelis, some iran news and speculation this morning. sort of sending the oil markets into a bit of a frenzy a couple

of hours ago. >> yeah, it did, brian. initially we had some reports out that a u.s. ship was seized by the iranians. it was an erroneous report. we did see prices calm down a little bit. but we are going to close slightly higher here. about $57 or a little over that. traders telling me they're pretty tentative right now, looking at inventory numbers expected from the e.i.a. tomorrow. but more important than that they'll be digging into the report for production numbers. the key is if we're going to see a third straight week of declines in u.s. production. of course geopolitics still in focus, an eye on yemen as well and the dollar's taking a little bit of a breather so this is somewhat supportive for crude prices. in terms of level, 60 to the up side 55 to the down side we're really just stuck right in the middle. back to you. >> jackie deangelis, back to you. let's get more on the iran news that moved the prices. nbc's jim miklaszewski live at the pentagon. >> it turns out this was a cargo ship flagged to the marshall islands that was making its way

through the strait of hormuz into the persian gulf when it was confronted by at least three iranian revolutionary guard gun boats. those gun boats ordered the ship deeper into iranian waters. when the captain of the ship refused the orders one of the gunboats opened fire firing several rounds across the bow. the ship then complied but sent out a distress signal. the u.s. then dispatched a destroyer, the "uss farragut," and several warplanes overhead just to observe. it's interesting that when you pass through the strait of hormuz much of that is actually iranian territorial waters but because of the maritime laws everyone is allowed innocent passage. so what we're told here at the pentagon is there's probably no military role in resolving this and the iranians said this is a legal issue. don't know what that is did they fail to pay their electric bill, who knows. but anyway the u.s. says there's going to be no military

solution, that it will have to either be a legal one or diplomatic but currently that ship still sunder the control of iranian military forces. melissa? >> jim, thank you. >> you bet. >> it is time now for street talk. we do this every day. five storkz five analysts' recommendations. the bicoastal version here. i'm going to have to read this one, going prompterless. let's go stock one. freeport mcnamara and morgan stanley upgrading than. implies a 30% upside on the stock. also oil and gas play, melissa. we always think of it as gold and mining. there's a big line in gas too. >> faced the headwinds of being in the nexus of lower metals prices as well as lower oil and gas prices. the company is using to minimize its exposure to oil and gas by finding either a jv to investment or to actually spin off those assets with separately traded companies. that could be the turning point

here for fcs. the second factor microsoft. very bullish on how high shares could go. overweight rating but releasing some of the analysis which shows upside to 68 bucks a share. that is about 40% higher from yesterday's close. we should note the analyst day is tomorrow. we're expecting to get more details on windows 10. that could be another catalyst here, brian. >> you know it's loud here melissa. did you say $68 a share? >> 68. 40% upside from yesterday's close. yep. >> no pressure on the ceo and his team. they'd better wow everybody. windows 10 better wow and knock the socks off everybody for that. stock 3 is applied materials. i haven't talked about this one very much lately but goldman sachs reinstating the coverage with a buy rating. $24 target. so about 15% upside from these levels. however, same stock, different view. nomura downgrading the stock and cutting the targets.

two analysts with very different views on ahmet. >> this is the day after the company scrapped its merger plans with tokyo electron citing antitrust concerns. nomura also downgrading tokyo elect ronn to a sell rating. some pretty tough words for the sector here. fourth stock here whirlpool. huge miss on eps and revenue. this was a massive quarter. the stock is down 7% here. mkm addressing supporters saying latin america was really the big disappointment here. whirlpool says units in latin america down 10% to 20% for the full year but still the analysts at mkm are sticking with a buy rating and a $248 price target. the stock is now 183 now, brian. >> you know, latin america, it's our next stock too. currenty problems, the petrobras debt crisis but money seems to still be going into latin america. it's an interesting place. and that takes us to our fifth stock. always the under radar name it is based in argentina. mercado libre.

meli. they do business around the world. credit suisse upgrading it to an outperform. they bump their target. 191 from 136 a share. they like some of the new promotional cools. they say the near-term evaluation of the venezuelan bowl var is going to weigh on mercadolibre's numbers in the short term. >> 8% of revenues. this of course the e bay of latin america. a name we talk about on "fast money." but one to watch considering the huge bump. that does it for "street talk." let's get to trading nation. >> let's bring in the trading nation. cathy lee is a currency trade with bk asset management. and stacy gilbert is head of derivative strategy with susquehanna. good to see you both. kathy, the dollar index has lost some ground lately. which way do you think we're

going to go storm on the statement? >> absolutely right, mandy. the dollar's getting crushed going into the fed meeting. what's interesting about this is we got no press conference from yellen, no changes are expected but obviously april meetings a big deal because we've got such one-sided positioning right now. traders still very short euros, unwinding those positions thinking that could take the june rate hike off the table. the whole idea in terms of how to play the dollar is if you've got a two-week or two-month time horizon. i think for the most part we've got both improvements as well as deteriorations since the last fomc meeting. but i think traders are begging for a reason to basically unwind some of those additional long dollar trades. so chances are that given the weakness in labor data given the weakness in service and manufacturing data you could see a little bit of downgrade and language in the fomc statement and that could be just enough for traders in the short term to continue to sell u.s. dollars. again, two-week time horizon,

mandy, i think you could sell u.s. dollars off the rate decision. two-month time horizon the fed is still telling us they're going to raise interest rates. any decline would be looked at as an opportunity to buy. >> it all comes down to the time horizon. what about you stacy? what do you think is the best way to play the dollar? >> what we're seeing is in products like uup, we canlook to see investors actually build more bullish dollar position. buyers of 25,000 25 1/2 strike calls in uup expiring next week. so while the fed may not actually give us a huge event in terms of a movement in the dollar we do have non-farm payrolls next week as well. so this position is looking for roughly a 1% -- a little over a 1% move in the dollar index over the next two weeks. again, nothing crazy given recent currency moves. definitely would be crazy in historic currency moves.

fast forward. kathy had mentioned longer term. if we're looking to year end the narkt market's pricing in a 25% vulnerability that we get back to the levels we saw just a month ago. >> thank you very much to both of you for joining us today on the dollar. and for more trading nation you can head to the website. tradingnation.cnbc.com. brian, i'm sure you know it well. >> i do. i never forget the dots, mandy. never forget the dots. it's all about the dots with the federal reserve as well believe it or not. and coming up after the break, we'll talk about the fed meeting tomorrow with jim mcclarken, a principle principle. also a great demographic return he says could be driving investment returns. and you are not going to believe the video of a shark attack. some people on it, they are going to need a bigger boat. you've got to wait to see this video. coming up. stick around. >> and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> one mistake that many traders make is trying to pick the

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a terrifying moment caught on video. a 16-foot great white shark attacking this small boat off the coast of new zealand. the people on that boat were members of a discovery film crew working on a shark week special. apparently, they've been trying to slap a camera on the shark's dorsal fin when he turned on them. nobody was hurt and the shark eventually swam away. brian. >> that does explain it a little more than a shark randomly attacking a boat. they're trying to strap something onto the poor beast. no wonder. all right. well, at least everybody was safe. they will need a bigger boat. welcome back to the milken conference here, everybody. we're joend by jim mclaughlin ceo of principal global investors. you've got an interesting demographic trend. but first the federal reserve the meeting tomorrow. will we get any meaningful

change from the fed tomorrow? >> last month the word was patient and they decided not to be patient. but this month will they choose to be impatient? i kind of doubt it. i actually think the market is expecting really no change from the fed. almost anything the fed says that's different from last month could move the market. and the tick up in the ten-year suggests to me that the fed may look as if the rate rise is going to be a bit closer. >> you think we'll have a rate rise this year? >> oh, yeah. i think so. i think it's unlikely to be june because you'd have to have a very strong bounceback from the first quarter slowdown but i think it's most likely september, october. and the reason i say that is the slowdown in the first quarter was related to weather and was related to the west coast port strike. i don't think it was a real slowdown in the economy. and if i'm right, then the second and third quarter will be pretty good and the fed will be

looking at that in september. >> you talked about this on a panel yesterday. do you believe that pretty much all the data we've gotten from the first quarter because of the weather, the port strike, can be discounted? >> i think. so there are people who say it's a result of the stronger dollar hitting u.s. exports. i don't really buy that. most of the exports from the u.s. are not very price sensitive. i actually think this is much more to the other points. but time will tell. we'll see if that bounceback happens. >> i know melissa's got a question for you too. but i want to ask you because we talked yesterday about your push toward urbanization. not just new york city but even people in downtown l.a. st. louis, detroit. young people are moving back into cities. we know that. it's like the geico commercial. everybody knows that. but how do we take advantage of it? how do we profit from that trend? >> the first debate is whether it will continue. and i tend to believe it will because i see younger people less keen to have long commutes, more keen to get home quickly

and socialize online and in downtown areas, even after they have families. so how do we play this? i suspect in real estate you want to be in the attractive downtown areas. suburban offices, multifamily warehousing is going to be less attractive than the commercial real estate where people want to live. i think also you're going to see a very different consumption pattern. people will still spend the money but it will be on different things. it's not so much on the car. more on the cell phone bill. more on the web. and i think that change in preferences will lead to quite a change in the investment environment over the next decade or so. >> i think the overarching question right now is would you rather invest in a stronger u.s. economy or in other markets r&r central banks are inflating assets? >> yeah. melissa, that's a really interesting question. my belief is that the

fundamentals in the u.s. remain strong. the center bank's monterey stimulus is almost done. they're about to move later this year i think from zero short-term rates. the thangz that are keeping the u.s. going include innovation productivity, which has disappointed some but it's still improving. it's technology. it's cheap energy. cheaper even than it is in other parts of the world. i think add in a modestly improving housing market the u.s. has really reached a sort of escape velocity from monetary stimulus. the rest of the world hasn't and remains very dependent on central banks. my belief is the u.s. will be the most attractive place to invest over the next year. >> you know jim, we're going to leave it there. melissa, thank you. melissa probably hit on the biggest single topic at the milken conference right now, melissa, which is all these central banks everywhere, ecb, boj, possibly the bank of china and the u.s. and how that is

distorting the financial markets. that's kind of the lead theme this year at this year's milken conference. jim, it was a real pleasure. i'm sure you've got to run off to another panel. appreciate it. >> let's get to a market flash. dom chu. >> shares of aaron's spiking on a reuters report saying the electronic and furniture rental company has turned down several informal takeover approaches from its peer rent-a-center. they both conduct the type of rent to own market. aaron's up 3%. rent a center up after the earnings beat yesterday. back to you. >> coming up coach getting sacked. we are talking the handbag wars when "power lunch" returns. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates

to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.

coach shares getting hit hard right now, down about 7%. it was a miss of the top and bottom lines. total north american sales were down 24%. same-store sales were down 23%. let's bring in stacy woodlitz cnbc contributor, retail analyst for her thoughts on this turnaround story. stacy, this is supposed to be the quarter where management the new management was showing some progress. it's a pretty messy one. >> it is melissa. you said it right when you said coach is getting sacked today.

this is the quarter where finally the new designer his product is not only in factory stores it's in retail stores. it's out there. this was a wait and see. and comps are down 24%. so there's really no traction merchandise here. if you look at the two-ier trends they're down 44% on a combined basis for comps. so that can only be out done here by a name like abercrombie. it's not getting any traction here. >> it's pretty dismal when the ceo himself doesn't expect sales performance to improve materially for the balance of the fiscal year. that's signal to investors, we're not going to move too much. kors are not doing much better down 29%. 22% for coach. what is going on for these that used to own this space? >> absolutely. so, you know the sweet spot here is this aspirational 2 to

$600 price.here and certainly coach fell in a favor kors gained that. and kors is it everywhere is it fallingous of favor. some concern that kors is promoting more. i would argue this is a great opportunity to take a look at kors. the multiple is 14 times. coach is trading at over to times right now. i would also argue with coach getting less promotional, which is actually hurting coach sales, this could help kors. this will help them not be forced to get out there and overpromote. so i think that's probably one of the most interesting names out there. >> all right stacey. going to leave it there. thank you. >> thanks, melissa. coming up the one stock greenberg says should not have gone public. next.

southern california increasingly is becoming the king of bonds. think about this. a newport beach, you've got janice capital, bill gross. he's right next to his old firm at pimco. and downtown l.a. double lines jeff running more than $60 million. he's increasingly moving the partner. scott helping run more than $200 billion. don't forget about tcw. they've got more than $130 billion in fixed income and all

operate right out of here. yeah i know. you can forget about all the power and money in new york city. it's still the capital of stocks and hot dogs. when it comes to the bond market all the mojo is increasingly right here in southern california. >> don't forget blackrock, the biggest asset manager in the world is run by larry fink who is a ucla alum. that is the reason why we will be here again tomorrow. fed decision 2:00 p.m. eastern time. 11:00 pacific. we are going to be live here in los angeles at our bureau with a great round-table. big-time guests who talk about when the fed is finally doing to raise rates. hey, we don't expect it but you never know. it could be tomorrow. another reason why southern california is really the capital of everything is herb greenberg moved back from the east coast to san diego so he just adds to the cache and herb in his always controversial self coming out and saying there is one stock, a

store his wife apparently loves, is a great company but should not be a publicly traded stock. herb greenberg, mr. southern california, why are you hating on the container store? >> well, before the container store went public i told my wife keep an eye on this thing and see what your heerns is like. after it went public she was just telling me out of hand each visit because she loves the container store smep said boy, it's not the same. it's not the same. to me the container store is one of those retailers that once it went public it was going to have to start paying attention to cost, it was going to have to start putting up stores for the sake of pleasing wall street. it was going to get caught in that mess to perhaps be put in a position to not be what made it so good. i think you're seeing it in the numbers. look at this. the weather again, the weather last year was the worst in 35 years. now it's the worst in 36 years. it's just one thing after another here. traffic is going down. they've got a lot of issues. >> you know but, herb here's

the thing, are you knocking then a lot of companies that should not be going public or is it just one company that should not be because you kind of described the problem that, to be honest with you, a lot of people say when you go public from being private, maybe your focus adjusts to where it doesn't need to be. >> some are better than others when they go public. some retailers and restaurants especially face this pressure. by the one, that i also said should not be public is twitter which announces after the close is an entirely different situation. but there are many that shouldn't go public. there are some that go public use the cash become much stronger. and the rest is often history. this is just a case where you can sort of see it coming and now you see it quarter after quarter after quarter. >> so, herb, this really sounds like an indictment of the management management. it's not the company shouldn't have gone public but maybe they shouldn't have gone public with this management team that has allowed this to happen to this company. >> but this management team is what made the company so good. this is the management team that

pushed it as a private company. so maybe the issue is does this management team now been put in a position -- when you read the kauls you see what they say, where they really are having to constantly battle. you know for them it's battling do we spend too much spend too little, promote too much? i know this is the story you could say of every retailer. reremind me of restoration hardware in the very old days when restoration hardware went public. it was a disaster. it was good in san francisco and when they tried to really roll it out it didn't just resonate. >> what happens now, herb? i mean you say they shouldn't have gone public. is there hope for the container store? is there hope for your wife to return and contain things all over your house? >> she continues to return. i think they have a lot of competition different ways. she happens to be extraordinarily organized so she loves this container store. but i think that from the

perspective of what's going to happen is the container store the business and then you've got the stock. you always have to separate the two. at some point they'll catch up. >> will all right. herb greenberg -- >> would you say the management needs to think outside the box, herb? >> ah. >> i'm sorry. >> geez. >> you can say that in l.a. brian. >> thanks guys. let's get to dom chu. >> we have on the sports front here. we do know now the baltimore or rols in consultation with major league baseball are going to play tomorrow's game against the white sox at 2:05 eastern but that this game will be closed to the public. again, no public spectators will be allowed however they will play the game at 2:05 eastern. interesting move here. do not have fanses in stands but continue to play the game. they also do say that monday -- this weekend's series with the rays the tampa bay rays scheduled to be played in baltimore will move to tropicana field down in florida with the

orioles playing as the home team. they will also if necessary, reschedule monday and tuesday games to be single admission, double-header type plays so they can exchange their ticket on a dollar for dollar basis for any other game during the course ft season. again, more interesting news here. this time on the pop culture sports front because of what's happening in baltimore. >> i'll see you tonight at 25k. brian, i'll see you tomorrow. "closing bell" starts right now. thanks guys. welcome to "the closing bell". i'm kelly evans at the new york stock exchange. >> i'm bill griffith. volatility today for a time after a minor rally on the open this morning. there was what turned out to be erroneous report out that iranians had seized and boarded a u.s. cargo ship and a