technology. you have a pull back and a small one, but one you think is an opportunity. >> i think that bristol meyer was a gift. it was 69 out in the 66s. >> a quick last thought, my trade is large over small. everybody hates them. small caps have rip and small. >> thanks for having me. >> power lunch starts now. >> halftime is over and power lunch on the second half of the trading day starts now. >> i'm mandy drury. tyler is out outside. causing concern, confusion and confidence. exhibit a, the amount of money americans are willing to spend per month on cars jumping to record levels. is that a good thing? also on the agenda wait until you see how much money they get from government subsidies and see who the other big winners are and the war on cancer. big news this weekend and again

today from the conference. it is moving stocks and it is also creating new hope. we do begin with the american auto industry with car prices soaring to all time highs and record numbers of americans are turning to leases to keep those payments as low as possibility. for you, the consumer as well. is behind the wheel for us. give us the lowdown. phil? >> the numbers are eye popping as are the people taking out good old fashioned auto loans. looking at the first quarter of this year. look at the average auto loan. the amount financed almost $29,000, up more than $1,000 compared to the first quarter. the average monthly payment up to $488. 67 months and between 73 and 84 months, basically to seven years, look at the growth there.

30% of all of the new car loans in the first quarter were to seven years in length. for a lot of people, they don't want to buy or stretch it out over seven years. they are turning to a two, three, or four-year lease. they were done through leases and the average new vehicles are between 400 to $500 a month. leasing has become so popular. take a look at shares of phi as chrysler, gm and fort. a heck of a huh over the last year since the ipo last fall. tomorrow we get auto sales and the expectation is that it will be a strong rate between 17.3 and 17.4 million vehicles. >> we will get that update from you tomorrow then. let's bring in steve liesman with an update on the economy. what is your reaction to what phil was telling us about more and more people turning to the

leases. or the year leases. >> i think it's a sign of potential problems but as far as i can tell not a systemic risk issue. just not enough money and the question whether or not the federal reserve has control over whether or not they can intervene in a market that can be a bubble out there. i have to ask a question. are you sitting down or standing up? >> i think i'm standing up. is that good or bad? >> i need you to sit down because i am about to report a rare upgrade to first and second quarter gdp. the spending data was lame. the income data was better and the construction data was better. if you look at the rapid update i have a .1 increase. that had gone down down down. second quarter also up a tick. another thing that had been quite a bit downwardly and now

with a range of 0.8 to 4. a massive up great to the forecast at 2.1. there is the atlanta get that was bringing up the rear. they were the most pessimistic. here's the commentary we got. credit suisse said this report supports our view of a current pick up in global growth momentum. jeffries said temporary factors have slowed activity, but we are encouraged by the size that they are fading and at last some unambiguousuous good news. don't get too complacent because we have a week of data. phil talked about some of it. beating expectations and construction spending also. to go to tuesday, factory orders and the economists with the 17.2 estimates for vehicle sales. wednesday, adp a big number when

it comes to gdp. and services. we will skip to friday and tell you that we have a non-payroll of 220,000 with the rate at 5.4%. you will have to continue to sit down throughout the week as i bring you how all of this data will continuously be impacting our sense of the big story out there which is how much if at all we are rebounding from the first quarter weakness to second quarter growth. >> i didn't just sit down but i fell down. the biggest question is what does it mooen for monetary policy? >> i finger we continue to be uncertain, one thing i didn't discuss was the pce inflation indication that came in and it was flat. it defied expectations. the fed is not getting that confidence, but moving to 2%. i will point out the financial thinks that september is difficult and december most likely for that first-rate hike

will have to convas in the survey. >> thank you very much steven liesman. a report raising serious questions about the billions of dollars that musk gets to fuel his empire. that includes publicly traded stocks like tesla or solar city. both sitting higher. both companies are not big player when is it comes to taking government handouts. ahmen is there with more. >> they found his company had taken about $5 billion over his lifetime and they might be focused on the new new thing, but they are focused on tax breaks and government subsidies as part of a relationship between government and american corporations. the libertarian institute estimates that the federal government spent almost $100 billion on direct and indirect subsidies just in 2o 12 alone. one of the biggest industries is

agriculture that the usda handed out more than 25 billion in corporate welfare that year. lots of companies that depend on federal authorities are also great at getting federal cash. in march, a left leaning group looked at the government contractors that raked in the most. here are the top four. boeing was $64 billion. general electric was $28 billion. exxon-mobil at $4 billion. all of these numbers are huge but they can't take into account the value that the companies get from regulatory changes that has to be extraordinary from being located here in the united states with the peace accident stability, and rule of law. including those for seeing over a decade or more. these are not annual numbers. >> that's a good point to make. >> let's get to morgan brennan.

>> shares of go pro were up about 5.5%. the stock is nearing session highs. they announced they were adding a touch display with a trimming feature. shares are up over 140% since they went public nearly a year ago late last june. >> 5.5% today. thank you, morgan. the world's biggest cancer meeting. researchers and big pharma are gather aring to discuss ways to fight the disease and drugs in the pipeline. there in chicago, meg has a special guest. >> i do. we are joined by the president of merck research labs. thank you for joining us. >> thanks so much. >> this was a remarkable year because of what's going on in immunotherapy. tell us why this is exciting and what it's doing for patients. >> the promise of immunotherapy has been just over the horizon

for decades, but about two years ago, we and others began to show that we could manipulate the immune system in such a way as to reveal the preexisting ability to actually eliminate tumors in patients. over the last couple of years, the results have expanded in increased in number and here in 2015 that this american society, we are seeing that in a dramatic way. >> the big theme is figuring out which are most likely to respond. you had exciting data in colon cancer. tell us about that discovery. >> it's quite remarkable. for sometime now, we believe it was probably not accessible to these manipulations. we thault there was a possibility that if we looked at certain kinds of toll on cancers, the immune system would be able to recognize them. they had a lot of mutations.

when a cancer cell has mutations, it will put abnormal proteins on the surface and it means that other cells can recognize the cancer as a result. so we look with the colleagues at johns hopkins where we compared normal colon cancer cells, but with cells from people in which the cells had a defect in their ability to repair dna. because dna is the genetic color that is responsible for making all the things that the cell needs. if you can't repair mistakes and the dna code a lot of them show up on the cell. those are exactly the kinds of things that the immune system can recognize and it can see the mistakes. what we showed is that in cancer cells in which they couldn't repair the mistakes we have a response rate of 62%. ask cancer cells where repair mechanisms were normal. there were no responses.

what that suggested and we can begin to stratify and look at patients and say let's look at this colon cancer and see whether or not it's the kind that would respond to this approach. importantly there some people who inherit defects in dna repair and they are good candidates for them based on the data. >> one last question for you. when there so many players in the space, you and bristol miors on the market, how do you win there? >> we have to tell you, what we have seen at this meeting and what we have seen, there so many patients who potentially could benefit from these drugs. we have cast a brought net and have shown in 13 different tumor types, five of which we aren't presented at this meeting, responses are so meaningful that we should pursue registration and ask the fda to let us do studies to register in those settings. that's a very, very broad place

for us to work. that's an opportunity to benefit an awful lot of people and i think as a result there is room for a lot of approaches and a lot of different drugs. >> thank you so much for joining us. >> thank you. >> thank you very much. disney may be looking to do an uber using different pricing depending on how busy the theme parks get. it's called surge pricing. first to brian sullivan at the conference happening in new york city. what have you got on tap? >> what i have on tap is to try to figure out if oil and gas prices go higher or lower by the end of the year. it's a simple task. we lined up a great list here from the rbc conference in new york city. over the next 110 or so minutes, we have four ceos and we will talk about oil, services gas, a marathon petroleum and superior energy and all kinds of stuff coming up. if you wonder if oil and gas will go up or down this is the

place to be. we will see you back on the other side of this break. power lunch is back after this. e financial noise financial noise financial noise financial noise

>> welcome back to power lunch. a rare earth process is expected to announce it is skipping a $32.5 million loan payment, possibly leading to a bankruptcy filing. shares are down over 50% in a

month. the discount retailer selling 330 stores to private firm sycamore partners to ease opposition to the planned acquisition of family dollar. they are up about 9% and today is up by 2.2%. they expect to reach $1 billion within two to three years. shares are up since last week and today it's up 1.7%. those are the headlines. let's get out to brian sullivan at the rbc energy conference in new york. brian? >> thank you very much. we talk a lot about oil and gas prices. the one thing we have not talked about enough and shame on us is labor capital and the services side of the oil businesses. that's what our next job is. one of the marine labor providers to help get production up. we are joined by the ceo and president. thank you very much for joining us. >> we talk about oil so much.

we don't talk about labor. we said we will demand 25 to 30% cuts across the board from all of our providers and sounds like they have gotten them. any sign that labor cost rates have stabilized. >> certainly the costs are going down. it escalated quite a bit over the last five years as we needed more labor and the basin and the shale and the basin that existed there. they lot of those calls are going down. >> huh $42 million in net income. the loss this year. all the different business units had a drop in revenue. is there any sign that any of those have stabilized? >> i think we are getting close to a bottom overall from the

cost standpoint. i think we are seeing signs is of overall stability that will drive it in the labor force as well. we have gone through a lot of cut backs and the changes in the way we compensate and reductions in wages. we have to look for stability. >> you don't see it getting better for the next couple of quarters. oil will go back to 60 and 70 and more stabilization in the industries like yours related to oil production and drilling. you are not saying that's the case. >> part of our challenge is 50% more service capacity than what we need. when you have that overcapacity situation and a lot of capacity and a lot of people that are looking for work it's hard to see where dramatic changes in the commodity prices will make a difference.

they had the highest per capita zip code. >> for changed quite a bit there is plenty of labor available and south texas today for what we need to do. before prices go back up to $95, we will be scrambling for people. absent that from a labor standpoint, we will have over the next few quarters the labor we need. >> is there anything you believe will stabilize. >> i will see deep water stabilizing. deep water floating rigs and globally there is a bit of oversupply. that took a step down in the first quarter are also stabilized. >> we are asking every ceo this question. new year's eve this year will crowd oil be higher or lower in price than it is right now? >> i think higher.

>> somewhere in the 65 to $70. >> mandy, the gas too. a lot left to go here. battery park city new york. >> one higher. we will see what the others say and get back out to them. thanks brian. national safety month, summer the deadliest time on the roads. the leading causes of accidents. which states have the highest and lowest death rates? plus when will we see a major correction in the bull run? maybe not yet. why stocks could go up another 6% from here. stick around. boys?

stop less. go more. the passat tdi clean diesel with up to 814 hwy miles per tank. just one reason volkswagen is the #1 selling diesel car brand in america.

. two people hurt and a 9-year-old girl in critical condition when a car crashed into terminal seven at lax airport. the car came to rest partially in a utility room. no word on what caused the crash. as we head into june did you know it is also national safety month. the national safety council is kicking off the month by revealing the annual list of americans's odds of dying from various causes. debra hirschman is president of the national safety council. good of you to join us. sounds morbid to have an odds of dying list but if you know your

own odds of dying, you can try to beat the odds, right? >> absolutely. we know knowledge is power and we put this list out to share with americans what the riskiest things are. people think about shark attacks or san andreas. number one at the box office. they think about earthquakes. lightning strikes. these things are rare and seldom are fatal. we have a lot more things to worry about. those are things like car crashes and prescription drug overdoses and older americans. >> what is the leading causes of unintentional death in america? >> the leading cause right now is prescription pain killer overdoses. we look at all age groups and this is a real risk as we look at the population. sometimes the thing that is the most deadly is something that people don't think about. right there in your medicine cabinet. >> you broke it downstate by state. the worst and the best in terms

of unintentional deaths? >> that's right. we know that some of the rural states are the hardest hit. west virginia is at the bottom. new mexico and montana. a lot of prescription drug abuse and also a lot of motor vehicle crashes on rural roadways. >> how can companies and employers support safety with their employees? we talked about cell phone policy, for example. if you are driving any vehicle with your work then it is up to the employee to have a good policy for that. are there other policies that perhaps employers can support? >> absolutely. we know that the causes of unintentional death are many, but there a lot of interventions that can be taken that costs society $820 billion a year. work companies, they are dealing with the majority of lot of

wames and productivity and worker's comp. companies have a huge stake whether they occur on or off the job. having a prescription drug program. they can download a free tool kit and same thing with the distracted driving. we have tool kits to take advantage and reduce their employees's odds of dying. >> you mentioned the website just then. if i went to the website, can i take the survey for finding out my own odds of dying? >> you can find information there about oughts of dying. we have a bunch of statistics and the data there. interventions that you can take yourself to reduce your odds of dying. motor vehicle crashes is buckling up and making sure you have a drug and alcohol-free driver and put the cell phones away. really important. >> keep everyone safe. thank you very much are if the good work. seven years into the bull run

and with soaring valuations, how much more can stocks go up. we ask that question every day. why they could rise another 6% from here according to one person. plus, new water restrictions for everywhere in california go into effect today. will they have an impact? plus, disney may be taking a page from uber's priciest theme parks depending on how busy they are. is that a good idea?

here's your cnbc news update. the speaker is holding a conference with the syrian counterpart. he said fighting terrorism in syria and iraq can be useful for the future of humanity. more than 20,000 people have been killed since march of 2011. flying over a beach in italy, the video as you see shows one colliding with the second before falling into the sea. the cause is still under investigation. the washington monument is closed to visitors due to

another electrical problem. elevator power was lost and an electrical issue closed also last week. and call her kaitlyn. exclusive photos of the former bruce jenner gracing the cover of "vanity fair" magazine. you can see the photos and read her story. it was shot by photographer annie leibowitz. that is the cnbc news update this hour. >> he looks fabulous. >> to the bond market rick santelli tracking the action for us there at the beginning of the trading week. what are we looking at? a big week of data today and for the rest of the week. >> new week, new month. we are all going to continue to monitor how the markets respond and react so aggressively you get good data points like construction spending to some extent. the income was good and the

spending was tight, but when you lumped it all together the 10-year speaks for itself. it is trading just high of 218. we settle at 212. even a five-year up and trading 154, up five basis points. nothing responding more aggressively than foreign exchange. the interday dollar up and not even on the highs of the day. what is contributing not only to the dollar strength on the euro side weakness but the yen. look at the dollar. close to 125. it will be another fresh high close going all the way back to 2002. mandy? >> incredible. thank you very much. rick santelli. disney stock. look at what the stock is doing today. it's interesting. a bit of a shake-up up by nearly 1%. julia is live in l.a. julia? lots of news. >> that's right, mandy.

disney's chief financial officer is stepping down effective june 30th and saying it will continue to serve in an advisory capacity and assist in the transition saying a new c rksfo will be 2345i78ed at a later date. he joined disney in 1986 as a director of of manning and development. it was considered in the running for disney's new role of chief operating officer in february. stags who was cfo before and took on his role running the parks is now considered apparent to bob eyeinger when his contract expires in 2018. mandy? >> the big story from disney from the supposedly happiest place on earth could be getting more or less expensive. the supply and demand pricing based on when you go. julia? >> exactly.

disney is looking into when the customer changed more for the most crowded times and less for off peak. disney sent the survey to guess about the idea of three types of tickets. they suggested pricing what they called gold ticket for any day and $115 silver for every day, but peak holidays and the holiday weeks would be $105. bronze is off peak. they charge $105 for the magic kingdom in florida for any day of the year and offers volume discounts if you buy multiple days as it would under this scenario. disney said no comment, but it does regularly survey guests on a variety of topics including pricing. you have to see if it decides to take action. >> mandy thank you very much. on the west coast, getting the latest on the drought there. hi, jane.

>> the day of reckoning has come. mandatory water restrictions go into effect starting today across the state to try to reduce overall usage 25%. and a crazy california. here's the latest. first, what drought? lake tahoe is full? a wet may returned it to full for the first time in months but it won't last because of the drought. second the swimming pool industry is fighting back claiming after initially filling up a pool uses only 1/3 of the water a lawn would use to cover the same area plus decking. we sat down with the metropolitan water district with 19 million customers. as use falls, revenue falls and rates will go up. listen. >> i think most customers feel if i'm using less my rate shouldn't go up. 80% of the costs are fixed. whenever you need to turn on the

tap, the water is there. it's not how much you use. >> there you go. we have a lot more right now on cnbc.com and including why his customers usually spend less every month on water than just about every other bill. right now at cnbc.com. >> the new trading week in the green. historically not a great month. bob pisani joins us now. a bit of a rocky start and we are doing okay now, bob. >> june is a crummy month. tenth overall. years when the prepresidential elections do better. i think it's about six. we are starting off well and take a look at the s&p 500. ism was strong and higher interest rates are not hurting the rally. right at the highs of the day. 3-2 and declining stocks. that's good and volume is about

average. broad callie andrally. this is a typical market day. the three leaders are health care technology and discretionary names and those are the ones leading today overall. if you look at the subsectors it's the same. leaders for the year are the leaders today. social media stocks are strong. that's a leader. biotech is also a leader. home construction is the itb. and the third one down there and the fourth are semi conductor stocks that have been strong. the intel also helping as well. china i mentioned several times this morning had a great overnight session. both the shanghai up 4% and good volume with the big etfs for china including the i shares china 25 which is fxi. >> it helps when the stayed media jaw bones it higher. >> yes. >> thank you very much for that. june does kickoff an

historically bad month, but legendary trader said he sees 6% upside from here. how do you play the summer months? joining us now is chief investment officer at oppenheimer funds and director of investment strategy. gentlemen, thank you very much for joining us. do you agree? >> i think the markets have some upside left to them. the economy will probably end up doing better in the next few months than over the last four or five months. as a result we will go higher. the question really is how much higher? i think modest expectations is probably the best strategy. >> modest expectations. what does that mean? >> meaning 3% or 4%. >> not the 6%. what about you? agree or disagree? >> we agree with that and think that the expectations economically have gotten ho hum this last gdp. it's not a reflection or a

reality and that's the reason they will have to revise the data along the way. if they are pushing ahead, stocks should rise. this idea of ho hum or more modest expectations, we think is reasonable. at 18 times normalized earnings the market is a little bit overvalued. not dramatically so and not the extreme that causes the market to contract, but definitely holes back returns. >> i believe we lost christian, but hopefully will get him back. i hate the phrase tina. there is always an alternative. give us an alternative. would there be better bang for the buck elsewhere or another asset class. >> in terms of the alternative, bond and cash returns are going to be held low by the low interest rates and therefore that spread over cash and bonds is penitentiary.

equities still deliver an above average spread over bonds and stock or bones and cash. investors will be pushed in that direction. the best alternative is internationally where the valuation discount is. >> internationally meaning china has retired and japan for the 12 straight days at record highs? where internationally? >> you have to remember the majority of the markets are behind the u.s. for the past three years or so. that leaves them in a position of being very attractive from a valuation standpoint and secondarily attractive because a lot of the earnings base and european and broadly international equities and japan and i would love a good amount of the complex, those are all still sitting at earnings levels that have significant room for an upward lift. you put the two together and there is a good long-term potential on the table if they are willing to diversify and

hold accommodations and not just u.s. stocks but international along the way. >> okay. diversified wins. thank you very much for joining us. jason and christian. you can go to powerlunch.cnbc.com to see why they said the u.s. market will be okay even with interest rates expected to rise this year. that is powerlunch.cnbc.com. >> let's go to a market flash. >> casino stocks and mgm and wynn resorts taking a hit on the weak may data. the gaming revenue fell 37% from a year ago, slightly better than the 38% drop that had been expected boy analysts and none the less this is the 12th straight month of declines. inspection and coordination saying a cigarette ban in casinos and head winds are playing a part in the contraction. you can see mgm, and las vegas sands down. >> a tale of two economies.

which do you live in? the that is improving or getting worse? that is ahead in the second hour of power. a big energy conference in new york. who have you got for us next? >> our next guest provides natural gas to many of the viewer who is live in the east coast. one of the biggest bills we have is our power bill. we will speak to the ceo about where he sees gas prices going and also are we going to get more pipelines or needed rail and infrastructure improvements on the east coast. a lot of big questions and big answers coming up when power lunch returns after this.

. >> nearly 600 cows were trapped outside of houston after getting swallowed by the swollen trinity river. volunteers pitched in to save the herd but sadly only about

half were rescued. on that sad note it has been a hard segue, but back out to you in new york. >> that is a tough segue. our next guest lives in houston and has been dealing with the rain. the ceo of southwestern energy. your employees and being in a houston-based company, what is it like. >> hard to get to work and pretty good shape for our employees. a couple of them had high waters, but everyone is good. >> good news. let's get to the matter of where we are here. let's get to the volatile and intriguing energy markets. you are primarily gas. all of our viewers may get their gas and the power company from you. can't get out of their way. below $3. is there any sign that we will see the firming any time soon? >> there is a lot of signs. if you think about what happened the last few years, a little bit of weather change goes from $3

to $4. if you look at the future again, we are supplying gas and power for the northeast. a lot of power plants and new industrials so the demand has increased unlike oil. there is a lot of hope. >> even $4 is historically cheap. >> we make a lot of money. . >> you read my mind. my next question will be and will be how exposed are you to the price changes in gas? gas prices go up and is that a good strategy? the changes and we can head and do things with the higher price. the more cash flow and the more we have to invest. for us as a company and for

anyone who is thinking about stock, it's the quality of the investment. we are in the best areas of the united states. the quality is something i need to lock at. >> we were joking and given your names, southwestern energy. # desperately needed. pipelines and it's easy to get the pipeline in the united states. are we able to get the infrastructure that will make it easier and more profitable to get your product? >> the infrastructure is happening and it takes time. in this case three to five years. they will reverse what is happening and the gas flow. on the oil side that's a little bit different. the trains go to specific areas

that are on the long haul. the trains will be here for a while. >> you are primarily gas and you have a fraction of an oil business that you got when you performed a bunch of assets from chesapeake. what will do you with the oil? do you want to be 1% or 2%? >> we make a lot of gas with the properties. we are in business to make money. we don't care if it's oil or gas as long as we make good money. mainly the gas business we will stay mainly in the gas business. if tomorrow a great oil popped up even on the property or somewhere else if it's great, we are glad. >> you are the second victim in the survey that we are giving here. we have a more official survey at the end of the 2:00 eastern time hour. new year's eve, we have the whistles ready to go into 2016. will the price of wti oil and natural gas be higher or lower than they are right now. >> both of them will be higher.

>> meaningfully so. >> in the case of oil, it will be mid 60s where it's pushing. >> everyone loves the mid 60s. >> they seem to. there is a lot of reason for liking it. on the gas side i hope it's cold new year's eve. if they are, we are not $3. we are $4. >> i really appreciate you coming on. you are a houston guy. we don't hope it's cold here. we want an indian summer all summer long. a real pleasure. there you go. we are two for two with ceos in the unscientific oil survey that said higher. probably the mid 60s. we are back in the 2:00 hour with two more ceos. >> maybe mid 60s feels like the ground. it's not wildly bullish, but higher than where we are right now. don't say victim. way to go in sell theing it.

say you are the chosen one here on cnbc. >> the lucky ones. >> there you go. the supreme court rules against abercrombie and fitch and in favor of a young muslim woman over work discrimination. we will bring you the latest in two minutes's time. we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours.

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. the supreme court ruled against abercrombie and fitch and in favor of a young muslim woman. >> the decision was 8-1 in favor of a young woman saying that the company's failure to wear a religious head scarf violated civil rights law back in 2008. the clothing firm had a look policy that prohibited employees from wearing head coverings. the justice scalia speaking said the company at least suspected that the practice was religious. that is her desire to wear a head covering quoting the refusal to not hire was not may make

it easier to file claims based on religious discrimination going forward. one of a number of key rulings from the high court today. back to you. >> thank you very much. hampton pearson. seems that americans are paying close to $500 a month for car loans. this could be due to the fact that the average price of vehicles reached a record high of $3131$31,000. water restrictions are going in effect in california to bring usage down 25%. we learned that disney is looking into a tiered pricing system which means they would charge more when visiting parks during peak seasons and days. if you missed any of the stories of the past hour you can visit our site. >> also new leadership. are there smoother skies ahead for the jet company some robert frank has that story.

>> net jet named a new ceo with pilots. we will tell you about the new captain and what the owner said about the dispute, coming up. blap it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.

>> welcome back.

if you want to know where oil and gas prices are going, great lineup for you. core labs will bring us their views and a survey of the other participants where they see prices going in the next 12 months. this is a tale of two economies. are we getting better or worse? we have a big debate ahead in the next hour 2:00 eastern time. out for the 1:00 hour and the strong way we always do. >> that's absolutely a word. i try to use it three times a day. net jets the private jet company has appointed new leadership. what are the new details. >> they will return to the

company as the president and coo. it comes amid a bitter labor dispute that brought on welcome controvercy skpet parent company. pilot's meeting in omaha were protesting what they say are unfair cost cuts in the contract. they also took out ads calling on them to remove him for the egregious leadership. the pilot praising the new team saying it's a chance to restore trust to all the employees. they don't break out the results, but the profits have gotten better over the last year and companies return to flying after the crisis. he leaves the company well-positioned for future success. labor disputes are rare for the companies. we have professional pilots and at the moment we have a difference of opinion about the contract that will get settled. you have to imagine that he had something to do with this change to get this publicity move on.

>> the best way forward. as you can imagine, we have a big second hour. over to you. # >> we are live here at the manager conference in new york city. we have a couple of ceos to talk about where oil and gas prices are headed. why this is so dog gone volatile. oil is below 60 and the markets are higher. good monday morning to you as well. we have melissa at the nasdaq as well. before we get to marathon petroleum, we have to talk about the economy. we have interesting and somewhat conflicted data so far this morning. we have personal incomes up. that's good. personal spending is down. is that bad or is it a reflection that consumers are saving and is saving such a bad

thing? jeffrey cleveland. i like to see income up. to you simply is the economy actually recovering or are we going to have a hangover from the first quarter for a couple of months? >> we should continue to recover, brian. as you may know there is a seasonal problem with the gdp data. if you look at it year over year the economy grew 3% year over year. the best showing since 06. my guess is this quarter will be somewhere around 2.5% or a shade better. it's less about the consumer for gdp, but what should be a recovery in the expert sector and going forward, the strong

growth combined with a good job market should get a recovery in consumer spending in the back half. . >> here is the great debate and one of the reasons why we are at the conference. when oil and gas prices tumbled, almost everywhere you saw the consumer is going to go on an unprecedented boom because now they have the tax break from lower gas prices. it is fair to say that has not materialized. why not and will it if we stay at the levels. >> energy as a share is a smaller piece of the puzzle. it was maybe two or three decades ago. we are less sensitive. gasoline prices are one piece of the total puzzle. more employment gains and more income gains. it's the classic case where people want to be bullish for

certain reasons and they focus on one particular change. they ignore many other piece of the machine. there is that. by and large, things are fine. i don't want investors to look at the april personal spending data and make huge ex-trapilations aboutex trap ex-trapilations. >> if you go back last april, the sales number was flat. 0.0. we look at the numbers now and they are .7. i'm sure jeff would agree in an economy growing 3 million jobs a year, how bad can it be. these numbers have been weaker than i would have guessed, the general trajectory should be good if the job market generates 200,000 jobs. >> you are thinking the fed has not changed? we are not seeing much of a reaction, but we are seeing a sharp sell off that would me they think that is still in

play. >> the fed is in play but it's a close call where they go in september as i think they will. they are worried about everything and i wish they would go, but i'm not running the fed. i guess september. >> and they settle the debate for us. i understand the fed is important,i get it. if we head 1/4 of 1% please me that is not going to derail the economy. >> absolutely not. no way. >> probably help. >> i welcome it. yes. the economy is fine. those that think that 25 basis points increase will pull the carpet out from under it i can't go wrong. >> before we go why is it welcome? >> we talked about it and market

participants obsessed with it. # >> going to leave it there. thanks for your thoughts. >> let's bring in bob pisani. how are the traders going out of here? >> the problem is this. we are at record high prices and pretty high valuations towards the high end with lack luster fundamentals. it's some good and some not so good. i don't think that inspires a lot of confidence into higher level economic growth at this point. that's why everybody is hyper sensitive to interest rates. we are at 220. i guarantee, if we go to 230 or

240, you will have problems. remember what happened a couple of weeks ago when we got into that range, the market rolled over. there is a band of resistance on the 10-year. everybody is still watching that 10-year yield. melissa? >> thank you. there is a few weeks away from second quarter earnings season but the investor said they is relation said i wouldn't be surprised if corporate earnings are negative for the year. the earnings declined 5.6% while sales dropped 1.8%. joining us is the senior vice president and manager advisers asset management. great to have you with us. i want to go into the pockets where there would be trouble. we are worried about transports and we see a change in sentiment. which are you watching? >> i am watching other areas of

transports. the rails have been weak ask they really need to start coming into the fold here once again. the disparity between the transports and the industrials. that's an area that i think we will have to watch carefully in this second quarter earnings season. on the flip side there a number of other sectors that will do well. >> you like aerospace defense and that's curious. you think particularly in the airline stocks and have been perhaps the defense may not do as well. >> i think those companies especially the companies involved with the military spending even though there has been a concern, the aerospace companies and the defense companies and the homeland security companies. they are what i like very much and fare very well.

that continues to be one of the better leadership areas. it's a brought deep leadership in that category. >> nominal rates are low and say the folks are wrong. say the yield goes higher. what yield would be the demarcation line between buying and selling stocks. is there a level that would make the market less attractive? >> that's a good question. that's a little bit out of my way. there is so much debate about an interest rate increase over the short run. maybe september or maybe later. it is baked in. they will get a negative reaction and rallying further. maybe the real problem here is

just that unsrpts overhanging the market but when they raise rates after the negative reaction they will go higher and be a sign that the economy is able to tolerate higher interest rates. i don't think interest rates are a higher with respect to the stock market. it's not being telegraphed any way i see. i see the typical signs of a market going into the later stages. you will see those areas that have technology and medical technology and clinical testing. even areas as mundane as the consumer staples will do quite well. investors are accepting more risk right now for more reward. in that they are looking for where the real earnings leverage is. that will put the spotlight on growth and the spotlight on

medium and small caps. i think that interest rates will not be a barrier for the market going higher. >> got it. we have the asset management. there is big stock moves right at it. this is puma. puma today is dropping. it was down by about 9% at the deepest losses of the session. this has been a rocky ride for this one. this is down 24% day basically on the data dumps and disappointing data about the breast cancer drug. this is down 11% right now. joining us now from the conference in chicago, michael, great to have you with us. about 130%. they were turning investors away

because so many were interested. what happened here. # >> we believe it's a reaction and there is an event that we will follow-up on and i'm feeling good about the subgroup data. >> you are defending us and it's an 11 or 12% pull back an opportunity to get into the stock? >> we have a note and believe it moves higher overtime. >> i want to get to bristol-myers because we saw is drop early on friday. that's unusual. there is data and fda accepting a biologics application under priority review and the

combination therapy. it was disappointing data for use in lung cancer. what's the deal and why is it moving higher today and is it going to be to pick up? >> i think the theme here and with bristol on friday you saw the pull back and the stock bounced back. i think the key is merck, bristol, astrazeneca and all these players and there is a huge race. you will see this and people are feeling good on bristol. and thousands of doctors are trying to figure out which drug is the best. it's pd 1 on top and multiple miloma.

and that's what you are seeing is hundreds of presentations about this. >> it's a kind of protein that other drugs are attacking. you had a note saying there many catalysts. stock is not moving too much today. what do you see in terms of catalysts in the near future? >> this is off the radar. we attended the meeting and importantly in multiple miloma and there was a study with merck and the drug. we think that is looking good and have lots of responses. they have a partnership with astra zen eak and they will start studies in that. we believe they will show responses and you will see that data doing the same interview. >> thanks so much for your time.

>> thank you very much. a lot more to do here with the global power and energy conference including an exclusive interview with a man who runs one of the biggest refinery operations and biggest gas station operations in america. we got back from saudi arabia and we will talk about opec and the price of oil and gas all with the ceo of marathon petroleum. don't you go anywhere. power lunch returns after this. blap what if there were only one kind of dog?

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it took seven hours, 24 minutes and 36 seconds, but a new world record. harriet thompson is the oldest to run and complete a marathon. she did it in san diego over the weekend. she is a two-time cancer survivor. her run raised thousands for the leukemia and himoma society. good work harriet thompson. from one marathon to the next. brian? >> i'm inspired by harriet. that is fantastic stuff. congratulations to her. a different kind of marathon now. marathon petroleum and one of the biggest gas station owners in america. also speedway that you will probably know the ceo will know you can get it wrong. >> let's get right to it.

how has the steep drop in the price of oil impacted marathon? >> the fall of last year when you have a falling cost is certainly helps you. pries come down and usually the price in the street is sticky on the way down and that turned around. the markets turned around and the prices start not to creep. it has been fairly balanced and looks like we are on the cusp of good demand numbers coming into the summer. . >> the refiners have been helped and valero and te sorrow and the smaller ones do well. you it will sell at thens of retail locations. whenever gas prices go up consumers tend to think the owner is gauging. when gas prices go down what

does that do to your margins? >> they do not remain constant. that's a teeter totter. we are also on the bell curve. >> okay. you can answer the great question. you are the perfect guy to answer the question. what's happening with all the gas price savings. it doesn't look like it's gone

into consumer spending. do you see your customers driving more and buying more gasoline when the price goes down? >> when you look at the eia data -- >> the driven miles is up about 5%. >> driven miles are up and you are seeing more efficiency in the fleet on the road. that efficiency comes slowly but you are seeing more efficiency. the aaa is measuring miles driven by gallons sold as well. they are waiting to be invested in the auto manufacturers and. >> and two quick final questions and you are on the business executive council. are they going to pump more oil?

>> they continue to say they will not give up around the world. >> more oil now than ever. they are responsible in the market place. their point is they made a mistake two or three years ago. a lot of production into the market. they were saying why should we depress our production. we ought to get this to the market place and ought to replace the production and the high cost in the market place. >> you will be the third of four in our completely unspecific poll asking all the ceos this. i will assume new year's eve this year you think oil prices

would be lower or about the same as they are right now? >> a little bit higher than today, but i believe we will see a lot of volatility between now and the end of the year. >> could see lower prices. >> we believe prices are going to come down again. i don't believe that the retreat, if you will of the crude price, a lot of people say it will be a v and some said an elongated u. i think it will be a w. >> do you think it will go back into the 40s? >> i think it could go below 50 again, but it will be back up to around 70 by the end of the year. >> gary, it has been in a my wrong the whole time. we try to get the names right and i was 50% accurate there. it's interesting. we could go back below 50 a barrel. >> up next here on power lunch, how they are helping to fight the war on cancer. back to the biggest cancer

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ceo as tesla motors and the driving source. thank you for joining us. talking about the government subsidies of which they tabulated at they are misleading

and exceptive to the reader. # everything that happens and including it just came out talking about the subsidies for fossil fuels.

as much as they get in a single year. >> there is very little mention of the benefits you believe they will be deciding in the future. being a prime example in nevada in exchange for the $1.3 billion in tax incentives from the state of nevada.

and how you are represented here. that makes the article even more inexcusable. we are talking about over $50 million a year over 20 years. in order for the factory to generate or receive estimates, we have to have an economic output of about $5 billion a year. the incentive is over 1%. i made that clear in the blog that i wrote.

we are not getting any check from nevada. all it is is over that period of time. they will produce 6500 jobs from the state and direct jobs. that doesn't count and features a construction of electrician and all the support jobs that will come indirectly. >> the test for any incentive package is how is that assessed by moody's as causing the rating to improve. that is something 245 made the nevada state credit better not

worse. if you considered the gigafactory, how crucial are those incentives in order to take that next step for developing the business. >> none of them are necessary. they are all helpful. they are necessary or absolutely unnecessary. both positions are false. they improve the rate at which a certain thing happens. the reason they are put in place, the voters want a particular thing happen and happen faster than might

otherwise occur. it happened faster than might otherwise let's talk about what you have asked for. it doesn't seem to be a lot new there. how much of the tax credits have you directly or the company directly asked for from the government, if any. >> the only ones that we bargain for are at the state definitely

the fast majority were not created by that. that was laz and the bay area. in the case of their credit. it's not anything coming from the government. buying their credits from tesla. #

that's not coming from the government. it's ironic but do you feel the other car makers have pushed some of this on to you because of hybrid or electric cars. >> some car companies don't want to go electric. i think most of it came from the oil and gas industry and some of it from the going almost is a bit of a bother, but for the oil and gas industry it's life or death. >> let me play and sorry to interrupt, it's melissa lee here. i think it's a good argument in terms of oil and gas industry. you make the point that you get

1/1,000s of that. what would you say to those critics. >> there electric cars that are affordable. it's a relatively expensive car and we expect to come out with the high volume affordable car and with the technology development, we need to achieve economies and prevent us from coming out with the electric

cars. they are directly helping the affordable electric car. in terms of the schedule is everything up and running for the production of it. >> there is a lot of things we can ask about and people are curious about, but i have a share holer meeting coming up and prefer to answer questions about tesla at that time. sorry, just because my family is in the business do you feel like it's ironic that people are bashing you over the subiddies when you have car dealership

associations that are looking to legislate your sales model out of business. >> yeah that is a difficult battle. they have been going through a car dealer or either through a franchise or direct. in the long run, we are likely to win. in most places the ftc is coming out in favor of allowing direct sales. the main thing, they are tiny compared to the oil and gas they see. # >> one last question.

i know you have to run. a few weeks ago, out in the bay area and he talked about having a chance to visit your facility and talk with you and tesla. we will see a mega merger or mergers within the auto industry and two, and they approached you about doing a merger. >> there is no way i can do that but i can say no. i had a great meeting with them and & a really enjoyable meeting.

and very informal. >> from your perspective for the auto industry as a whole, will we see a mega merger by 2018? >> i think they may know more than do. i don't really follow what our competitors are doing closely in terms of who is americaning with who. they have electric cars and make make it possible towards the goal at tesla from the beginning. that's to make the affordable car. the goal from the start and wish

we could have gotten there sooner. we are doing the best we can. >> joining us today and we will spend a few minutes talking to us. strong comments about his opinion about the l.a. times article. they say it's $5.3 billion in subsidies that tesla received. you heard them say that's ho not an accurate portrayal of the government tax incentives as well as subsidies that tesla received. >> l.a. times in 2013 wrote a similar article. what is interesting about the luck of timing he was citing massive subsidies. we are in the conference and have another ceo after the break. we are trying to figure out if they are in the cross hairs of

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>> we look at one thing technically and fundamentally. david, let's talk about china. last week we saw the shanghai take a 6.5% drop. how last week that seemed to be. what is the take on the chinese market right now? >> look, our take on the market is irrelevant. i wouldn't touch with your money. what pushed this market higher and a reason to jauchl in head first.

up 49% year to lady. stay away. no reason to be here. it's not driven by mundamentials. it's driven by euphoria. >> it's difficult to short the market and you never know which direction. they sold out of the chinese local banks. he resigned two days after finding that out. i found it to be interesting if you are a experience theorist you may look into that. stay away from the market. >> stay away. pretty clear there. we are not looking at the fxi. you are looking at the hong kong shares etf. how does it look? >> we are looking at the shanghai. take a keep breath.

what they think is happening. i didn't include this for sim plitity sake but we recovered it earlier. if you look at the high to low, we call volatility range. it got up to 200 points in 2007. i'm cautiously bullish and optimistic. this tracks those shares. we are in a well-defined channel contained in 2015. anything above $46 is a buy and we will look for continued ranges. >> todd gordon trading nation looking good in china.

don't touch it. coming up after the break simon hobbs. that is correct. a big interview. i can't keep up with them all. chairman of loews hotels. great to have you on and big conference. a talk about technology. not just at the travel agencies are reaching people's lunch anymore. >> great that you are here. what we are hearing is that all of the companies are focused on technology. it's about the guest experience and ho can technology help us make our hotels run better. how can we use it to enhance the experience. >> are we going to see this.

>> it's just as we know changing the world. we have to be cog cent and you have every major brand that is represented. >> we give them the key note here. the big ho stel married and executing extremely well in signing up a lot of hotels. huge numbers. others are suggesting at this conference, they are owners and that question of oversupply. so much coming on stream, maybe they will have to form. what say you? >> we are not seeing that just yet. they are up in this country. and most markets are increasing. international travel is so important to the united states. lots of people coming here with the dollar strengthening. the demand generators are good.

people are feeling good. the demand is outpacing supply. new hotels and look at here in new york city. 13% increase over the next couple of years in terms of inventory. as a whole, we feel good about the industry. >> we will leave it there. we are out of time. the call is to ka capitol hill. we will leave that for another time. back to you. >> all i can say about the last point is yes, please. thank you, much. more power lunch after this.

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♪ ♪ when you're living with diabetes steady is exciting. only glucerna has carbsteady clinically proven to help minimize blood sugar spikes. so you stay steady ahead. welcome back to the rbc conference in new york. we have a lot to do and a short time to do it in. david is the ceo of corr b labs.

you slam the industry and saying that i may get sub de put it's a pit to what the oil and gas get. your response? >> well when you look it's a high risk business, and so when you look at what are direct sub ties, there are are known. for the tax credits that he gets as well is on par what he would get that the oil industry is such a massive industry. >> okay. let's get back. you told jim kramer a while ago. you know him. >> yep. >> that we're going have a v shape and oil prices are going back back up. are you still stay being that? >> yes. >> it's nearly a record. >> yeah we're probably peeking right now. we expect the amount of oil produced in the united states by tend of the year will fall below

$9 million a day to 8.9. we're probably going to lose about 600,000 barrels of production. >> that sounds like a lot unless he ramp up production because they're now ten and a half million. >> we believe if you look at middle east production it's probably at the maximum amount that's safe to see from the reservoirs. if anything they're topped out for the middle east. >> please. so rbc did a survey here and this is a really interesting study. two questions what is the expectation for you during the second half of the year and flat to up five percent one. 62 percent says that we're going to go up by the second half of the year. what do you believe is the average price of wti next year? 43 percent said 50 to 60.

41 percent said 50-70. so i am trying to square my knowledge. if we produce more oil, how will they stay firm or go up. that's what the surveys suggest? >> well the amount of oil that's going to go up by the end of the year is in correct. >> so you're innot in the 62 percent. >> no. that's what the production decline curve is. when you look at the declining production, that's going to be about 6.7 percent. next that increases to over 11 percent and over 12 percent, so we will lose 1.7 billions of oil. >> that's the thing that people may not know about your company. i call it an oil and gas. you're the deep brains of this stuff. all kinds of high-tech stuff that figure out how to ex tract

how much hydrocarbon, so you know the guts of the industry. explain why the drilling rigs have fallen by half and then gone up. sn. >> well it's in reaction to what was made last year when the wells were drilled and we will see a decline beginning next month. >> next month? >> yeah, we had a carry over and then completed this year. when we look at the amount of comp completion, you need about 115 -- two months ago only 32 were completed. we're seeing the eagle roll over, we're going see the productions decline regard loefs what the rbc says. >> there were ten percent that says that we're down by five percent by the end of the year. dave, glad pleasure to have you

on. >> bryan, thanks. >> what do you have on fast tonight? >> a muddy waters and he calls a market and a pump and dump. that's tonight at 5:00 on fast. >> it's not even a call in show but that's the best part of it. it was fantastic. >> exactly. >> melissa, we will look forward to that at 5. the closing bell starts right now. a vague description. a single piece of evidence. a partial plate number. with an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. ibm analytics helps one hundred thousand officers work smarter every day. [ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution

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hi everybody, and welcome to the closing bell. i am kelly evans here at the new york stock exchange. welcome guys. great to have you along. bio tech and health care stocks on the move today. new results coming out of the super bowl for the cancer research. we will take you there live coming up. >> we have another interview for us. dominos is focussing on the digital. the company is hoping to be known for just more than pizza, and the