literally if they held through it made 700 or 800%. # i am involved in every company we have and i'm happy to be involved. i spend a lot of my time on it. my wife asked me why and it's just what i do. we can't say anymore. go ahead. >> we are out of time. i want to thank you so much for joining us. david sector laz and so much more. i know we will talk to you soon. thanks very much. that does it for us as well. thanks for watching. power lunch begins now. >> halftime is over power lunch and the second half of the trading day starts now. >> welcome to power lunch, everybody. tyler will be joining us live from the iconic entrepreneur's conference in chicago momentarily, but for now we are going to start with the markets year to date. the nasdaq is up 7% 3% for the

s&p and 2 approximate want 5% for the dow. the next move is toews. housing stocks sharply hitting prerecession levels. what is behind the skbruchl which push higher on the back of that. the natural government announces a major investigation into dance cancer charities. we start with stocks. bob pisani is tracking the action there. he is in the nasdaq before a key interview 30 minutes. run us through the markets. >> it's a good news bad news day. the housing starts numbers had a very strong influence on housing-related stocks. look at the home builders up 2% to 3%. also the building products companies. masco has a good day. mohawk and all the companies involved in the building

industry. helping this is home depot's terrific numbers. not only did they beat, but raised go guidance. that is a good sign near a historic high. a stronger than expected start. comps up 6.1%. bottom line this was a great stock and a great run. i'm not surprised it's flat today. the downside is wal-mart. they are costing us 20 or 30 points and trending downward all year. not only were earnings shy, but the guidance a bit uninspiring. up 1.1% okay but not great. the bottom line is mid-and low end consumer continues to struggle and that being reflected at wal-mart. a new low for the year. the downside is as oil has shown signs of popping out, oil stocks have reversed their gains and moved downwards. we have big declines in the drillers like diamond offshore and cameron on the downside. the oil services group on the

downside. i will be back in a half hour with the first on cnbc interview with the man who invented the volatility index. he thinks it's an improvement and it may be possible to trade that as an asset class. >> pushing to new highs, they were a little lack luster. how much more can this last. # what is your read on the markets now? it can get more expensive. i started going through in 1987. if you go back to 1999 and when greenspan first talked about it.

you heard from the chair person and she thinks stocks are expensive. we had the psychological triggers of arrogance. i think this market may have more to go but that deant mean it's cheap. >> maybe oversees where they are in full effect. >> we have been so fed by qe and monetary policy for the past number of years, i'm not sure that we know what to expect when it goes. that's a real issue and that's a real risk that leads to complacency. the music is playing and they keep filling the punch bowls both in europe and the same in china. it's already happening in japan. we continue to see this qe and stimulus. it could continue this melt up in prices again if the rule is to buy low and sell high. this is not low. be careful.

>> steve, you are not called air deep value guy for nothing. is it hard to find in the market now? >> you have to look for deep value. like he said we are at an inflection point. that was an important level on the s&p and less resistance in the future than immediate support. we have mr. evans and janet yell ib. the traders will be out on friday. there is potential for an explosive move and it might be us. >> the people always talk about the fact that we are at record highs and it has been on low volume. on some cases very low volume. what do we need to see that confidence that we can have some kind of something behind this. what do we need to see that? >> you may not see volume. all sorts of funs and vehicles. this may be the new normal.

we may be kidding ourselves. when you see a volume of 3.5 to $4 billion in listed securities that might be a good day. we may have to readjust our thinking. >> maybe this is a new normal. one of the things we are having this morning is looking to maybe beef up and accelerate and front lobe and whatever you top the call it. with our markets and what it does for commodities and stocks. # we have seen the effects of this and stock prices go higher. we have seen stock prices and making a series of new highs. we expect to see the stock prices and they continue higher in their markets. it keeps us with a cheap source

of money around the world ask it keeps those interest rates low. that will keep our interest rates low because we have these international funds that are going to be chasing our very attractive, who would have thought i would say this. the 2.25% treasury. that keeps pressure on the rates and cheap money available and that should be good for the markets. >> one thing it is doing is pushing the dollar up big time today. i wonder if the correction in the ongoing dollar strength might be over. michael and steven, thank you very much for joining us. let's go from stocks to housing. a very bullish read this morning. housing stocks soaring to a 7-year high. in lancaster, california with a look at what's behind this. >> reporter: it's simple. it's a lack of supply of new and existing homes for sale. we saw such a nice jump in both single and multifamily housing starts. take a look. single family up nearly 17%

month to month and multifamily 32%. permits up just under 4%. like to see that a little bit stronger. you have to put this into a seasonal perspective. if you smooth out the last four months, we were where we were at the end of last year at 733,000 units. comair that to the height of the housing boom we are at about half that. compared to the year 2000 that was around 1.2 million single family. a good move but we have way more to go. >> one thing since you are out west, the big drought forcing home builders to change the way they construct homes. what are they doing? >> reporter: it's really in things you can see and things you can't see. definitely california home builders are putting water efficiency even above energy efficiency these days. you can see behind me they are using the astroturf and more

drought-resistant methods of landscaping. what's interesting here is that the sprinkler system comes from underneath. you are not watering up top. you are watering from underneath. but go inside the house. that's why they are turning to technology for home builders. appliances and fixtures. this home has a dishwasher that uses the last rinse cycle of water of one wash for the first of the next. they monitor itself so that residents know when they are using too much water. it's like a fit bit for the house. as for construction process itself, there is not a lot you can do. you still need to use water for concrete and dust mitigation and to keep the workers safe. the builders say new codes in california have reduced water consumption by about 40% since the year 2000. they point again to new technology. we will show you something cool

coming up at the end of this hour right around the side of the house. you don't want to miss it. >> can't wait to see it. thanks diana. let's go out for a market flash. >> dick's sporting goods posting more than expected sales and earnings. they were short of estimates and hitting the session highs right now. it's still down so far on the days. dick's sporting goods is moving off of the worst levels and down in the day. back over to you. >> the federal reserve bank is confirming that it was hacked. hackers took over part of the website to redirect users to fake pages, potentially making visitors vulnerable to mal wear and phish attacks. meanwhile, two chinese professors among a number of people charged with economic espionage by federal prosecutors. from washington with the latest

on that. >> it's an alleged case of chinese economic espionage in the heart of silicon valley going after the technology that is crucial in mobile phone technology. the radio frequency filters that filter out the signals that are coming to our cell phones. the two companies impacted are called avago and sky works. sky works is in massachusetts. what the doj is alleging in this indictment that a long running scam existed among chinese employees of the company as well as their confidants in china to exproep riate what they developed over the years and bring it to start a new company that competes in the same market with them. # thes professor was arrested on saturday as he flew from china to california to participate in a conference.

the question is whether or not this was a premedicated scam. did they come to the united states with the intent of stealing technology and bringing it back to china or was this a case simply a crime of opportunity in which case they allegedly saw an opportunity to profit from some of the intelligence that they were privy to as part of their duties in these companies. a complicated long running scam here. the government blowing the whistle on it. one arrest and five others charged. the others remain in china for now outside of custody. >> we look forward to hearing more about it. go pro ceo nick woodman is getting ready to speak giving a snapshot about the state of his business. the stock, by the way, tanking 20% this year. was it headed lower? plus the big battle or missing picassos. robert frank has the latest on that. >> two picassos stolen from the

stepdaughter have turned up in the collection of a russian billionaire who is charging the art dealer with fraud. the mystery coming up after the break. #

. breaking news out of washington. in about 45 minutes, te cata

the japanese company that manufactures air bags that are at the heart of a massive recall, they will announce a recall of 33.8 million vehicles due to defective air bags. this is a major victory at the top of the hour. there will be a press conference in washington and the transportation secretary. essentially this is doubling the number of vehicles recalled for defective air bags. it was at about $17 million and now increased up to 33.8 million vehicles. we'll get more details at the top of the hour. >> could be a record recall. thank you very much. we will look forward to hearing more on that. mastercard getting an upgrade and raiseing it from overweight to sector weight. they are in a benefit in europe. starbucks announcing a partnership with spotify.

the deal will allow the program members access to spotify music. sinking despite the first rise in almost three years. vodafone predicting growth after seven straight years. the stock is down by 3.5%. stolen paintings and a leading art dealer and russian billionaire. a picasso heir. all the ingredients for a major feud. it sounds juicy. >> the plot is thickening. two paintings allegedly stolen have turned up in the possession of a russian billionaire. the stepdaughter accused the art dealer of stealing two portraits of her mother. she thought olivier was storing the paintings for her, but they were sold. now, the dealer olivier was detained and released by french investigators and he is cooperating with authorities. the paintings have turned up in

dmitry's collection. he bought them in 2013 from a long time business partner of that other dealer thomas olivier. she was engaged in a public battle who sold him more than $2 billion worth of art. he accused him of fraught in january and as we reported he was arrested in monaco and now out on bail. the company said the methods are shocking and they are working with police. we don't know the names of the paintings or their value, but given that $180 million picasso these are very, very valuable. >> russian and french names. we got it all. >> okay. next time. let's go back to tyler at the conference in chicago. what have you got coming up for us? >> it has been a fascinating

morning so far in chicago. entrepreneurs and business investors and venture capital folks and later today, the group will hear from marlo thomas who is an amazing person at reinvention. that's one of her topics. her book is it ain't over till it's over. she will join us in a couple of minutes to talk about why entrepreneurs need maybe above all to be able to reinvent themselves. she cher has. we'll be right back. we'll be right back. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a redesigned cabin of unrivaled style and comfort. the 2015 c-class. at the very touchpoint of performance and innovation.

good afternoon. from the iconic conference in chicago, i am joined by a person who is iconic. one of the great stars from television and theater, not only that, but an author. she is a motivator if you read her book it ain't over till it's over. fantastic. it's great to have you here. we will speak about reinvention. it occurred that one is the ability to see around the corners and another is incredible perseverance and the third is the willingness you have done in your career to

reinvent yourself and say yesterday, i was that. now i'm going to be this. >> there is another personality element called never face the facts. if you do all the facts are against anybody from taking any kind of a leap in your life. you have to say those are everybody else's facts. now i'm going to create my. there is a wonderful saying that if you want to predict the future invent it. that's what an entrepreneur has. the idea that i can do this even though the odds me i'm not the that is going to get to do it. somebody will get to do it. why not me. on that's important. >> journalists don't like to let facts stand in the way. >> i'm not going to touch that one. >> details. your book has amazing stories of people who had to overcome adversity. >> a battered wife who had to

come out of fear that she would be killed and took her children and ran in the night and found a place, a safe haven. those stories are very strong and touching. there was a simple story where a woman always wanted to be a doctor. she was working as a doctor in a doctor's office. she said to the physician she was working with i always wanted to be a doctor and i regret that i never went for it. she was like 30 years old. he said you can still go for it. she said well if i went for it now, by the time i got out, you would be 40. he said you will be 40 anyway. that was such a simple precise way of looking at life. you are going to be 40 or 50 or 60 anyway. why not do what you top the do and not have anything hold you back like the facts or the number or your age. even if you only have 20 years left, if that's your dream, take

it. >> tell me about -- there is so much we can cover and we want to talk about st. jude's hospital. that was your father's legacy that you championed day to day. how much of your time do you devote and what is the satisfaction that you derive from it? >> in terms of the time it's so interwoven into my life i don't know where my life starts and st. jude starts and stops. the satisfaction that i am doing something that saves a kid's life. i meet parent who is say they picked the funeral music for their child and being given a death sentence at another hospital and we are doing the cutting edge research that will save this kid's life. no matter how tired i am i get up and get back on the road and want to work hard to raise the money and the awareness. >> we look so forward to hearing from you later in the afternoon. we have breaking news that we have to get back to cover.

it has been a pleasure to meet you. i will be watching. thank you so much. we will go back for breaking news to dominic at headquarters. >> something we have been hear being for sometime. deflate gate. tom brady. the headline here is bob kraft said the team will not appeal the penalty for its role in the deflate gate situation. remember they got a million dollar fine and the loss of two draft picks. he spoke at a press conference about why they are taking this course of action. take a listen. >> i don't want to continue the rhetoric that has gone on for the last four months. i am going to accept reluctantly what he has given to us and not continue this dialogue and rhetoric. >> they will not appeal the million fine and the draft picks

lost. the player's association are still working through that process. the patriots will not appeal and tom brady's penalty is pending. back over to you. >> thank you for the breaking news. # the market it is hit new highs. the investors find value. we have investors and six stocks coming your way. coming your way.

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that's the value of performance.

the compensation for jpmorgan won support from only 61% of shareholder votes cast at the annual meeting. that's according to a preliminary tally. the vote followed a recommendation from the firm iss not to endorse the pay package. a pakistani law enforcement agency raided the office of of a local it company after the "new

york times" accused it of making millions by selling fake college degrees. they accused them of marketing on the degrees. # missing in syria for nearly three years, she pleaded for information about his whereabouts. austin is still alive despite disappearing in august 2012 while covering syria's civil war. the only contemporary portrait of william shakespeare. the image was discovered in the 16th century book about plants by a botanist and historian. he not only knew the author of the book but helped him write it as well. that is your cnbc news update at this hour. >> not at all how i imagined him. disappointing when the image is shattered. gold prices are closing.

moving to the downside the five-day rally has run out of steam in the face of the stronger dollar at 1207. as the silver and copper and platinum, let's show you how the metals are doing. moving to the downside as well. rick santelli at the office. you get one solid day to point him and yields popped up. looking at the interday of 30s and remember a couple of things. the settlement at 223 and they came off. it's thin out there and they are moving at the pivot. helped 3%. the motivation is all foreign exchange and all the interest rates keyed off the big move at the ecb and pushed the euro off

and it fell flat. you can see by the interday. you look at boone's. they didn't stay down. in the middle ground between 56 and 56 basis points. it looks like it's topping out, like many fixed income markets, they don't give up the roost of the selling pressure easily. mandy, back to you. >> at the top. rick santelli and stocks are mixed. and lack luster. the d oirks w is down and the nasdaq has fallen throughout the morning session and it is currently sitting flat. where can you find value? dominic has been looking at three sectors and six stocks. what we wanted to look at were

the biggest sectors in the s&p 500. three later on in the closing bell. this sector that we are looking at is consumer staples and discretionary among the biggest in the s and p. we looked at analyst target prices for where they think it will go from current levels. moll son coors, the shares are trading at $76. they think analysts on average think we could see another 10% move for this particular stock. an interesting move here. another consumer staple stock watch is one being affected in the news all the time because of the bird flu. they do a lot of chicken productions and that sort of thing. it's up about 5% with momentum. it can go from $43 a share and rise at the current levels. that's what analysts are saying. if we move from staples to industrials, one that we want to

watch, do you think male processing pitney bowes. the stock is down about 15%. it's up month to date and analysts from here moving on to the next one. american airlines have been talked about for sometime. it could go up by 38%. >> look at the moves from october. >> and the price we are taking. >> we are starting to see stabilization. we will turn to the discretionary. whirlpool, they make appliances up and you can see a hefty amount up. analysts say it will go up by about 15%.

we will finish off on the consumer electronics side. best buy and the shares are up about 34%. they think here you could see an upside move of 23%. just a few stocks to watch. six there and next time on closing bell we will look at the three biggest sectors that is tech and financials and whoever is going on elsewhere. we will look at all of that with the closing bell. >> you have it all covered. >> trying to. >> all 20 fingers and toes. >> tyler, over to you. >> may we hope the projections come true. >> that's a vigorous debate about whether the markets are or are not overvalued. where does the value reside.

gentlemen, good to have you here. neither of you seem to think that u.s. equities even at these prices and valuations are overvalued. why do you say they aren't? >> first of all, the market is up 3% to 4% and people who say it's not an all time high you can't look at it in the vacuum. the al termative rates are so low. it validates a stronger market. there a lot of stocks where they have good stocks. the fact that alternatives to stocks are paying so little and maybe very, very highly

overvalued. >> it's important that you know your valuations. you are absolutely right. it's difficult to say that the stocks are cheap. they compare them to bonds for example. from a relative perspective, there is more upside. it's important to note that the fundamentals themselves look strong taking a look at the past earnings season. we know that energy really depressed the overall results, but putting aside the impact of lower oil prices corporate america is still very, very strong. i think that bodes well for future gains in the months and the quarters to come. >> you know andrew you mentioned a moment ago that you see pockets of prosperity and possibility in different sectors

and different companies. go there. me where you are seeing those pockets of value today by name or sector. >> sure. if you look at a lot of the bigger growth names, they really stalled out starting at the end of february and early march. a lot of them reported good earnings for the first quarter. the result is that fundamentals have gotten ahead of the stock prices. it's time for the catch up. there was a rotation in april and to some of the energy names. some of the financials. don't forget about these tech and health care names. i think they offer good value here and the hardest thing to do in this business and it's important to consider, you don't sell the winners as long as they e main intact and don't get too expensive. i see a lot of good ideas. there is no reason to bottom fish.

>> apple and activist. a final question where do you see value and what happens when rates start to move up? is it not to worry? >> i think we haven't had a federal reserve tightening rates in almost a decade. that in itself is going to create anxiety which may certainly lead to volatility. in the end it's important to keep in mind the fed is raising rates because they are on a better footing. i am not concerned about that from a long-term perspective. as far as where we are finding value, i want to be focused on those company which is stand to benefit from an improving consumer backdrop. you have this tail wind from lower prices. you haven't seen that materialize into spending, but i think overall the balance sheet looks strong. i want to be more positioned towards large cap stocks and not only are valuations more attractive, but of course all of

the stimulus you are seeing overseas is going to be supportive to foreign sales in the quarters ahead. >> joe, andrew, thank you very much for being with us. back to you. >> thank you, ty. you can go to power lunch to see why andrew and joe are concerned about europe that is powerlunch.cnbc.com. carl icahn reported today talking about his apple stake and he found a lot of value in apple stock. he first started buying shares in 2013 and guess how much he made since then? about $3 billion and he sees more have value to go. >> it just makes no sense that this company should be ten types earnings earnings

. >> the s&p 500 is getting a record interday high. the s&p is sitting at 21.32 up by 2.8%. by the way, the s&p had the ninth record close so far this year. just so far. not even halfway through. take a look at disney shares up slightly. the stock had a great run though, up more than 120% since october 2012. that is when disney bought lucas film for more than $4 billion. lucas made another $2.2 billion in the past 2 1/2 nears. the first "star wars" movie released under disney comes out later on this year and a lot of

people are very excited about that fact. carl icahn made billions on apple, but is it the greatest trade of all time? we asked to you weigh in on which trades belong in that hall of fame. take a look at this chart. let's take a look at what it's doing. currently 5735 down by 3.5%. then the etf tracking oil. we have it. we can show you what it's doing. next a new etf designed to track oil much more precisely. we will be back in two minutes's time. time. seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed,

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the goal is to remove a dixie cup hat that was achieved by one of the pleads as they are called after an hour and 38 minutes. we have a similar thing. >> we should institute that at cnbc. there is a new kind of etf that is more precise in the way it tracks an index's volatility. bob pisani is here to tell us about it. >> the father of the vicks, the volatileity intext is there all the time. he is joining us and these futures roll over and you have to pay more money for the futures. that reflects volatileity.

tell us about it. two classes. one reflects the vix and the inverse. why do you need two of them. people take the position that volatility will fall. they can buy down shares. what's the cost and does it reflect your vix? we have problems with these in the past. there two components. # >> that's about 1%. >> exactly. a cost on the up shares with 15 basis points per day to the down shares. there is not money that goes into the fund but a transfer

that is necessary because the short is providing an insurance premium to the up shares. >> people don't understand. it's the greatest product in the world. at some point a big event will occur. you are guaranteed to make money. you have to pay somebody to write the other side of that contract. you are buying an experience premium. >> exactly right. >> let's talk about how well it tracks the vix. we tried two examples. we took a day, may 4th and 5th the vix was up on that day. vxup was the sim ol, it was up 11.25%. it looked like it tracked pretty well. would you agree? >> absolutely. >> here's the issue i had. we looked at it for a month and the vix was up say 10%. pick one day. it was up 10%. that 15% cost that you are

paying erodes the value of that gain overtime. you are only up about 4.5%. this is a great product if you think volatility goes up or down in a couple of days. if you hold it for long periods of time the value of gains erodes. >> it's a trading tool. it's not a buy in. if you hold it for a length of time you will have to pay insurance day after day and that will erode the value. >> very quickly. is investing in volatility an asset class. >> for doesn't make sense whatsoever. >> the important thing is you will launch several new products and oil and natural gas in the next month or so that don't have this 15 basis point premium. you think it will track the etfs better? >> absolutely. again, it will be an investment and a spotty index. >> i would be impressed. we will watch that very, very carefully. that has been a big problem for

a long time. this guy is the father of the vix. we have a lot of intellectual behind that. we will be tracking this behind the commodities. thanks for joining us. back to you. >> the fear father. thank you very much. bob pisani. let's look at stocks on the move. upgrading royal caribbean from overweight to neutral saying they will benefit from china and the asia pacific region. take two is up sharply after beating estimates and the maker of the hit video game and they will buy that and stock is up a whopping 16%. it's still 4.07. the drought in california is giving way to new technology, making homes more water efficient. how exactly? that is straight ahead on power lunch. plus, hail the size of tennis balls making road travel in west

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>> this video was shown outside of texas showing hail falling from a storm that prompted a tornado warning. it was the size of tennis balls coming down hard and making road travel along interstate 20 particularly difficult. okay here this hour's power points. stocks rose by 20%. single family homes up 17%, highest since november of 2007 and the biggest percentage increase since february of 1991. six chinese professors have been charged with economic espionage for the benefit of the people's republic of china. they stole information from sky works solutions. finally we learned that the air bag manufacturer is expected to declare an estimated 33.8 million defective vehicles. this announcement could lead to the largest auto recall in u.s. history. if you missed any of the big

stories, visit our site at powerlunch.cnbc.com. tyler, back over to you. >> mandy, they may have rain and hail in texas, but there is a drought in california and it is forcing home builders to change sometimes dramatically the way they build. diana has the story from lancaster, california. >> it's the things they put into their homes. this may look like an outdoor toilet on the size of your house, but what's going on in there is the opposite of waste. opposite of waste.

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>> in a few minutes, a guest you cannot afford to miss. does he return to stock picking or is buying the way to go? we will ask him. the enterprise who built of america's fastest growing empires gives her advice to starting a company and if low gas prices are good for the economy, why do they have so many getting nervous? a big show in a few minutes. don't miss it. >> sounds like a big show. brand-new technology making homes more water-efficient. diana is live in lancaster,

california. give us more details. diana? >> reporter: you are looking at it. the first in-home water recycling system. it was just certified by the california waterboard about six weeks ago and comes from an australian-based company. it gathers all the soapy water into a tank and by soapy water i mean from the shower or your sink or the washing machine. not toilet water, i promise you. it takes that into a cleaning filter system and cleans the water and then you can use that water for irrigation and to flush your toilets as well. it will reuse 2/3 of the water in your home. home builders are all about this new technology. kb home bought into this technology in the san diego development. it costs between 8,000 to $10,000 per home to install. california builders are under a lot of pressure to build the most water-efficient home.

some districts like in irvine recycle through purple pipes, but that doesn't go directly back to the houses. this system does. the ceo of nexus water expects this could be a $15 billion industry. the price will come down overtime as more builders use it and interestingly they also have an app of course that goes with it that will monitor all of the water usage in your home. it's like a fit bit for water for your house to keep it healthy. >> more line of course. >> it's fascinating. i think it's australian. we know a few things about that. >> it is. >> is it for the first hour of power. . >> 2:00 on wall street. we mentioned that that, is where the u.s. department of transportation and nhtsa are

about to hold a news conference. you have to deal with a massive recall of those made by the japanese auto parts maker. they will monitor what officials say. if news around your safety or the auto industry comes out, we will of course bring it touchl back to the markets and a new record high where it's games all-around. >> it is. it's not just the dow setting a record. sitting another interday high in the session. the u.s. dollar take a look at that. staggering as we saw stocks on the front end load. they moved up with the purchase of assets and bonds to the may or june time frame. take a look at the big banks. here are the markets. the kre and etf and broker

dealer, they are outperforming by a significant amount. we are seeing nice moves in the banking sector. >> thank you. we are honored to start the show with your next guest. the man needs no introduction. we will give him one anyway. two books that were rereleased and new perspective for the investing and the first 50 years. we will call him the tireless jack mogul. he keeps working and advocating on power lunch once again. i will ask you how you do all of this. first to the markets. actively managed funds and tracking about the same this year. as the advocate for the funds. what is the role you see right now given current market conditions for the active manager? >> it's less of a case of right now, for example. it is a case of what's the best lifetime in investment program.

everybody knows that the s&p 500 will be ahead of the average manager and there will be times when it's the nature of the beast. over a long period of time for investors, it's cost and tax efficiency and consistency and need not to trade it ever. jump in and out and the market is by far without question the best choice for the lifetime. >> is it there anything about the current stock conditions or the global markets that worries you? >> there is a lot to worry about. no question. i would say this is a hard time to invest. there not a lot of good options as stocks and bonds and yields are extremely low. some people argue should you have no bonds. i would not make that argument. they are reasonably valued. right now it's about 5%.

compared to the 2 preponderance 2%. the premium yield risk premium is pretty good. i'm worried about everything. the sharp rise in interest rates lead to a decline in stocks. we had declines forever. i have been through four 50% declines and at least three. we get over them and march on. it's a good idea to not pay too much attention to the stock market and think about the long-term productivity in business and in my case particularly american business represented in the s&p 500. that will carry the day in the long run. >> well said and they ended up being very, very good buying opportunities for the long run if you have the stomach in between. when you look at the markets, i have a lot of people that ride in. they they will say there is no basis for stock strength. how much of this recent rally

for the last five years has been fed and qe versus good old fashioned corp. xyz corp's earnings are up. >> i don't like buying individual corporations because returns are predictable, but earnings growth somewhat resembles the growth of the gdp, the national economic output. that's a trend that is very measurable over long periods of years. it's not a good idea to be distracted by the market itself. in one of my books i wrote the stock market is a giant distraction to the business of investing. the value of american business doesn't change from day to day or week to week. that will be big premium over the intrinsic value or discount. it shouldn't matter to the investor and it can be successful. >> when you look at the s&p 500,

i wonder how you feel about that. the reason why i ask is there is a discrepancy and they trade at about 18 times and the dow trades at about 18 times. if one is to believe that they should be at dow 20,000 or so. do you think they should be trading at the same? there different idiosyncracies but still. the general level is high and that's scary because it can't say that way forever. i do advocate a cautious approach to investing. with money in short-term and intermediate term or both. not long-term. they can get really hit in the downturn. as i look at it we have a situation where, where are you going to put your money? if you

put it in the savings account, that will earn a quarter of 1% a year maybe. in the mattress it earns zero. you have to keep investing in stocks and bonds. i don't think the other alternatives like gold have any long-term return prospects at all. >> that's a great segue to my final question. there have been a generation of investor who is have gotten rich on your advice. you will get wealthy. and speak to the younger generations. give them a reason why they should invest in and trust. >> the u.s. stock market depends on the productivity of american business. it has a diffident yield. earnings should be around 5% if we are lucky. that's a 7% internal rate of

return. intrinsic rate of return on stocks. that's the best you can do. i would say go into the casino which is what wall street is today and bet on the entire stock market and then get out of the casino and never show yourself there again. don't play the game. the game is not worth playing. it's a loser's game and a buy and hold and not a short-term speculation. >> the tireless jack vogel. thank you, sir. >> thanks for asking me. >> sure thing. any time. >> topping corp ralt news encouraging news for housing. housing starts surging to an annual rate of $1.14 million, the biggest gain in 24 years. yes, 24 years.

check out housing related stocks year to date. they are down and pretty much it. 30 stocks on my screen only those four that are housing or housing related are down year to date. it has been quite a run for the home building stocks. bob is a home building analyst at rbc. david is chief economist with the national association of home builders. i will start with you. 26 of the 30 stocks on my screens higher year to date. you just heard jack say individual stocks are risky. is it time to sell those names? >> i still like them. we are bullish on building productions and loved what happened in 2014 with the recovery in the labor market. two derivatives of that trend. one, first time home buyer is here in full force. we have the best spring selling season since 2007. the other big development, great

news for companies like masco and mohawk. >> how much -- >> that's going to persist. >> how much of that number was simply a snap back from the weather and other issues we had in the and that growth will taper off. >> you know what this is the most bullish we have been since 2007. we think the real estate market is red hot. we are seeing continued appreciation and seeing good demand. this is a great time to be in the stocks. we underline fundamentals and they are not fully reflected. that is continuing an opportunity for the continued appreciation. >> i will pose that question to you. how do we know that number is not just demand that is pulled forward to the month of april? we did just get builder confidence the other day and that was down the fourth time in five months. how are we supposed to go through the data? >> it isn't easy.

i averaged all four months of the first part of the year. it's still ahead of last year. there is no question some of this was make up for a lousy winter particularly february and march. i think it multiimately is still a step forward and indicative of continued growth in the housing industry, particularly in the single family. multifamily rental market is very strong and continues to be strong. i see no problems there. the single family side is only about halfway back. we have a long growth path and until we get back to that roughly 1.3 million single family a year. >> bob and david, i have to jump in. i apologize. we will try to come back to you. we have to go to in washington, d.c. for the dot press conference. phil? >> let's take a live picture from the department of transportation. the transportation secretary anthony fox announcing that today, the air bag manufacturer

out of japan has agreed to declare nearly 34 million vehicles defective because they have defective inflators. that doubles the number of vehicles that have been recalled by various auto manufacturers. not by takata but auto manufacturers or air bags. the total number of vehicles impacted $33.8 million. this makes it one of the largest if not the largest auto-related recall ever in the united states. again, we will keep listening to this press conference but that is the latest news. nearly 34 million vehicles being recalled. back to you. >> quick question before you go. because there has been talk that if we ada couple million hondas we get to that $33 million number. is that 33 million more or with the total number? >> it's about 16 million more. this is a nationwide recall.

17 million more i should say. prior to this was manufacturers and auto manufacturer who is said takata is not declaring it defective, but now they were holding out against the efforts of the federal government now they have finally agreed with the consent order saying yes, we will recall all of the vehicles that have these defective air bag inflators that bricks the number up to 3.8 million. that doubles the number with the faulty air bags. >> i'm sure we will get a list of the impacted vehicles from the dot. i will put you on the spot and i do it because i know you know your stuff. the trust in takata has been hammered. who might then benefit? if gm said we are not with takata, is there somebody else based here? >> basically three. three companies around the world that are primary air bag

n europe and another in asia. they are likely to pick up most of any business that is the other way. keep in mind manufacturers set these plans in place years in advance. you can't switch on a dime and say you know what can you make air bags instead? each is customized to the cabin of each vehicle. you can't change on a dime and say i'm going to buy them from this guy over here. for the most part takata is not going to lose customers, but will lose a lot of money. they are not out of the woods in terms of legal ramifications here. in terms of will they continue manufacturing for the companies that they have supplied? most likely yes. honda is one of the primary customers and the close relationship because they are japanese companies. >> phil from d.c. and nearly 34 million impacted vehicles. we had to say goodbye to david.

thank you for your patience. i'm sorry it didn't work out as planned. that stock is up 28% year to date. thanks for your flexibility. let's go to dominic for a market flash. >> shares of shutter fly did spike lover after a report saying google is close to announcing a new service that will no longer be part of google plus. the support said they will allow the postseason images to other networks like facebook and twitter. they are confident it will be integrated. those shares are up by about 1%. a rocky trade for shutter fly and type operations. >> thank you very much. meantime here's what is up ahead. all in on go pro. one analyst who said that stock has more room to run. the one company spinning profits. the soul cycle. later on we are looking for the

best trade of all time. it's a tall order. we want your ideas. e-mail power lunch@cnbc.com. hit us up on facebook and write us a letter. we will lose it for next year's segment. back after this. back after this. it's part adrenaline and part adventure. it's part geek and part chic. it's part relaxation and part exhilaration. it's part sports car and part suv. and the best part? the 2015 gla. it's 100% mercedes-benz. [ 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.

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stock is picking up steam. go pro shares ever up about 2%. up 17% in a month.

let's bring in erin murphy. >> certainly it's a different story with the valuations. it's now trading about 65 times current, about 30 times forward. is that the right valuation at this point? >> we think this is a brand with significant potential. it's not just selling the capture devices, but documenting and sharing content. that's something that we think go pro has competencey and authenticity in creating the space. >> how do you factor that into a model. the notion of brand and the ability to share content. when on previous conference calls, the ceo made clear that it's not about that media channel. that's the advertising. >> i think you have to look at the big brapts like nike. you look at go pro that is

growing at a quicker pace and only about that content that is generating brand awareness. # that is harder to model, but it provides room for upside. >> there hardware comparisons that you use? this is a hardware company right now and their products could commoditized. >> it's different than looking at it as that category. it is creating a new space. it's not just about selling a specific unit. it's also about the content. families using them and creating

that mote. if you look at it as a hardware space, you look at the overall camera market from 80 to 90 million units. we see a tremendous amount of room to go and pave the way for this compelling capture device. >> great to speak with you. thank you. >> thank you. >> brian? >> attention all you entrepreneurs out there. the ceo of one of america's fastest growing fitness companies will join us with her best advice to building a brand and speak of entrepreneurs. mark cuban at the cnbc conference in chicago. he knows a thing or two about building a business. mark cuban on the back half of the show. stick around. blap you have to wear this thing? ♪ ♪ can it tell the flight attendant

to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

welcome to the iconic conference in chicago. after a very exciting and interesting morning of panels and presentations from some of the most inspiring enterprises in the country. >> i'm happy right now. it's the cofounders of school.

it doesn't exist years ago in 2006. began like so many ideas with a partnership on a napkin. she had been working in real estate and now years later, 41 locations. 12,000 writers a day. how did you go from a real estate person to someone this this field? >> when you love what you do you want to keep doing it. the courage came from a need we saw in the market. julie and i felt strongly that there should be a different fitness experience that we personally wanted. by creating that for ourselves and consistently listening to our customers, that's how we felt. you make it easy for people to sign up for classes. you broke the mold though of the

health club fitness gym membership and people sign up for individual ala carte class by class. why did you decide that was the better way to go? >> people are very busy. they have a lot of demands on their time and we wanted to be efficient. if the teacher was popular, you would have to get there 90 minutes before the class started. put your name on a list and wait 90 minutes to take the 45 minute class. we felt it was inefficient. we developed the first reservation system in fitness. that's since 2006. i think the early dna on that was about servicing our customers and making their lives earlier. >> you listen to customers. >> exactly. >> when i wrong tos or places where i have join and pay a

monthly membership i get angry when i don't use it. if i'm saying i will pay my $40 for this class and i do it i never have that problem. i know i'm going to go and do that class if i signed up for it. >> it's a different level of commitment. you make the commitment to yourself and the room and make the commitment to plan your week so that you are actually accountable to yourself and make sure you make the healthy choices that change your life. the inputs equal your outputs. >> one of the things thaw worry about or think about and i would worry about if i were in your business is the fats. you have a different wrinkle on spinning. what do you do to protect yourself idea? it wouldn't be all that hard for somebody else. it's not patentable.

you have got your trademarks, but how do you protect your property and concept? yoga has been around for thousands of years. there few ways to get cardio. this human body we need cardio. it's essential for heart health and a lot of things that make an impression and we are interested in the connection with the communities. when you build that and feel good, joy doesn't go. it keeps on building and building and building. that's why it matters. that's why people continue to do it and why their lives are changed. >> i miss the real estate business? >> i still get to do it by finding locations. we will have 55 by the end of the year. it's wonderful to be here.

>> people love soul cycle. >> we love it too. >> back to you. >> great interview. meantime, a big move lower in oil today. final trades are crossing and cruise chloes coming up as power lunch returns. blap ap 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

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>> here's your cnbc news update. president obama signing the blue alert bill into law at the white house. the legislation is named after two new york city police officers who were shot and killed while sitting in their patrol car. they started a blue alert communication system to distribute information about the injury or death of any law enforcement officer. russian foreign minster laz officer met with nato's secretary and told that russia must withdraw all troops and weapons end and support for the separatists before the meeting. he was ready to listen to what the union had to say. italian police charged 50 people suspected of fixing dozens of

soccer matches in the country. police are investigating 28 pro and d matches from the 2014 to 2015 season. doctors are calling surgery on sam smith a success. mass general released a statement saying kmith who turned 23 today should make a full recovery. we wish him well and a happy birthday. brian, back to you. >> thank you very much. you might have seen the flash on the screen. a big drop for oil today. jacky is live at the nymex where the sellers are out in force. >> crude going off the board at $57.26. july is 57.99. if i had to rank the reason i would start with a strong dollar. certainly adding pressure here. it creates volatility and it

wasn't that traders were not expecting it. they are playing the range as rachel used to say. buy the dip, sell the riff. not to say that the charts don't show, technicals don't show and we could go lower back to the $54 range before we go up again. this will be interesting and volatile as we go into the weekend. back to you. >> thank you very much. now it is time for trading nation. traders trade better together. head of technical analysis erin gibbs, ari, will financials keep outperforming? >> we think so. a lot of diversified names that will include the investment banks and brokers and one of the favorite new money ideas. we think they should be bought.

it peaked in december so we are moving back to that level. aside from a pause here we think we breakthrough. the big reason why is there is a strong trend into this level. we are making it higher. lows we have a rising 200 day moving average. we would be playing if are a break out on that. we think the upside target would be $27 coming from a $2 range. and we think that's the place. we are bullish for buyers. >> aaron gibbs, i know it's a big sector but what do you make of the sector right now? >> so much like her, i like the diversifies in the sectors as well as the financial sector. we are looking at 11% growth over 12 months and that is outpacing the s&p which has a a .5% expected growth. they are trading at the top of the valuation range, but when you definitely into the diversified, they are more

attractively valued. with today's housing numbers, we have seen a nice pop. financials and diversifieds even more so. >> thank you both very much. a reminder with two more segments. by the way, if you are looking for street talk the breaking news we had pushed out because of time. do not fret america. street talk will return tomorrow. that's a big load off your back. >> very disappointing. i was looking to sharing my stocks. tomorrow will come soon enough. the u.s. economy barely grew but steve liesman is digging into whether that number is way off. >> i don't know why. i think it raises the question to the first quarter. >> steve in. >> i guess i'm back on tv now. i have to go back. >> you are actually on live tv right now. come on over.

your phone call was on live tv. >> that's pretty amusing. sometimes you just have to let the audience know that you are on live television. >> i didn't have a chance to get my shoes on. you can just bend down like that. that's fine. overall, the first quarter comes in every week at the first quarter. why is that? it's like a nonspecific diagnosis from your doctor. we don't know what it is but something is wrong. that means that the data is showing seasonal patterns even though it's seasonally adjusted. they think it could be -- >> seasonal patterns. >> it tells you with the adjustments and that it may be wrong. >> i'm thinking mccormick spice.

what do you mean by seasonal? >> seasonal factors. when everybody goes to spend for christmas, we don't report 100% gain in retail sales. we expect an increase at christmas so the sales gains are based on how much you had last year versus this year. we don't say that they fell. we look at the decline and we adjust it. over a 30-year period, you should not show persistent weakness. something is wrong and after we did our story, the big news i think is that they readjusted it and didn't grow 0.2% but we grew 1.8%. a massive adjustment. >> it's not even close. >> there is our data over 30

years. you can see that it runs and the second quarter gets some of that back. that should not be happening. those are statistically significant caps that you shouldn't have if it were properly adjusted. other people have come forward. it was more like 2.25%. barclay's as well. >> the head of u.s. economics at bank of america. what steve is talking about, the differences are staggering where do you stand on seasonal adjustments on how effective or ineffective it is. it is an important thing because for us or economists, you have to react to the realtime data. if it is the case it is being under we are reacting to data

that is not capturing the true underlying economy. looking through the different papers that have come out from the san francisco and philadelphia get confirms in our own work. it has been understated. >> basically you are adjusting the seasonally adjusted data. it looked at the data that was reporting and saying let's run it through yet again and see if they can pick up resitual seasonality. it shows that you have that in the first quarter. it shows that the components have most of the bias. that said you can look at where they are now tracking. based off of the high frequency data. we are tracking and apply that factor. we are talking about a low,

maybe just over zero quarter. where do you stand. you see that big jump as well? >> it is softer and that is an excellent point which is part of this story behind the seasonality is q1 looks too weak, but q2 looks too strong. this year it looks good. that's another important point to make which is maybe you don't have that big bounce. >> if you watch game of thrones, it's the joy of quarters. it just wreaks. let's get back to tyler

matheson. a guy that owns the basketball team and is on a tank show. tyler? let me playoff of those numbers and ask does the economy feel as weak as the numbers suggested it did? >> all of my businesses are a lot of small businesses and a lot of shark tank investments. we feel growth and watching the sales and all the companies, it feels like it's growing. it's funny because having seen the gdp reports and the .2 and i didn't see it. it was great to see that what we were seeing matched what it had been. >> steve you are on.

>> i like your sweet and i want to read it. every front page of every biz section should have it on. # as an owner, how do you make sense of the data in realtime. you have to react to it because it's the best available. what do do you when it's not so great? >> when it's not so great, you look at your own numbers and compare them to the macro numbers. you have to take into consideration that whatever is happening there, we can counter balance it with effort on our side. when you see the number it sets the expectation. are things slowing down and does that impact other investments. the shark tank companies, i want them to sell more.

knowing now that the number reflects what it felt like i think it doesn't so much change what the companies do but investments perspectives that i have. >> how will later this year if interest rates go up how will you react to that? >> not at all. not going to balance at 5%. the marginal cost to my companies and the companies wa the stocks. >> a lot of not capital intensive. >> even the ones that are. the 1% is not not going to change. they will probably not move 1%. >> brian? >> back at cnbc and thank you for joining us. it's hard to hear there. let's go back to the data issue. you run a number of

organizations. how much do you view the data as a suggestion? we treat it like the bible s. that the wrong way to look at it? >> up until two days ago, it was the bible and now back to being a suggestion. the greater message is question authority. this is something we took for granted as being a biblical number and now credit challenges the authority and we realize that not only for the gdp number be wrong, but what others do we need to question? i think it really changes the perspective for an invest onnor. how people invested trillions of dollars up until two days ago changed. >> you look at your numbers very closely and trust them and you would sit there and go through analysis and say we are doing better than this. dallas and state of texas has

outperformed, but i'm invested in pittsburgh and california. i'm all over the world. i have to pay attention to the macro economics and as it applies to the u.s. it was shocking that you could be so far off. that's not like -- an adjustment. >> something else in the news that is the deflation of the football scandal. you may or may not have heard that they decided he is not going to appeal the penalties imposed by the league. $1 million and a loss of draft choices. mr. brady is going to appeal. do you think that the punishment fit the crime? roger goodell and any commissioner of any professional sports represents his owners.

there 25 professional football owners who called the commissioner and said you have to throw the book at him. the same owners called up and said it's horrible what they are doing. what underpins it i know my guys have done the same to me. they will say i didn't do anything. you want to trust them. apparently there is something there on the appeal and we will see what happens and what information tom brady is willing to disclose. does it fit the crime? honestly, i'm just a fan. i don't care. >> do you think that the nfl is a more dysfunctional organization than the nba? >> not really. i just think the numbers are different. when you have 53 players on each team that are all supposed to be warriors and beat the heck out of each other and become perfect

citizens off the field, you can look at a normal population of 20 or 30-year-old man, but any organization at the top of their field that is dominating has i had different set of challenges in maintaining the lead and staying at the top. those are the challenges that they are dealing with correctly. >> let's talk about the nba and how healthy it is in your view. it seems to be doing very well. there lots of cities that maybe haven't been competitive for years. golden state was not a particularly competitive branch. atlanta was not. they are now competing for the nba title. >> that's the nature of the game. i have been using it every year. it's not easy to win. they get a lot of credit and amazing players.

the league never has been any better. the confluence of the marketing we have done and the fact that social media has really pushed our players to define themselves in these grants and being on the basketball court you are much more visible. >> much more visible. >> that played to our benefit and now we are starting to see adam silver's position on gambling. i have been vocal about that we should work to legalize all forms of sports betting and not just in las as, but other states. that will push us even further. >> mark okay. speaking of social media. i have to ask this because we have a lot of viewer who is run businesses and try to figure it out. you are out there on your own doing it. your organization, the rockets sent out a tweet with a horse head and a gun emoticon. the guy who support that out got fired in reference to beating

your team. as a guy who runs the organizations and is outspoken tell them? >> look i probably would not have fired the guy but that's the rockets choice. >> you wouldn't have fired him. >> no. there's different types of social media. and twitter, the signal to noise on twitter is just way out of whack. we look at hat people tweet and we take it as really being gospel. i try to tell my guys it's more bar talk you can't take it personally. there's a lot of hate. the noise is out of whack. i wouldn't have fired him because i don't look at twitter as being a news source. i don't look at it as being something that reflects the organization. people make mistakes. the nature of social media. and then others have their own brand or image as well.

i would not have fired him. but, when we make a mistake you own up to it and you say look it was a mistake, you delete it and move on. look i have a company that allows you to go in and search for and delete all tweets because there's no value to leaving tweets out there for more than a month. so you can expect that whatever you say today on twitter is going to be completely out of context in a month, a year two years. >> mark thank you very much. i like spending some time with you. we'll see you on stage here in iconic in about 45 minutes or so. >> who is your nba team? you bullets? >> my nba team? >> say it. >> i grew up with the washington then bullets. now wizards. >> yeah. >> they are my team. >> as a virginia boy. just wanting to let you know they still have the colors back. tyler, great stuff. we'll be right back.

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