1.9% inflation rate. >> is it healthy when you were at 2.27% three hours ago? >> yes. that was not the right number. here's what i'm driving at. you have a real rate that is 47 basis points. a real 10-year rate is healthy. >> that's the last word. power begins now. >> halftime is over. power lunch and the second half of the trading day starts now. >> indeed it does. i'm mandy drury with brian sullivan. it is rally time and stocks are on a roll at this hour and they are even picking up. >> growth in the usa. steve liesman going through all of the data and he believes it said something important about growth in the second quarter. >> and the meal that ha has the food watch watchers aghast. 3600 calories the list of the restaurants with the highest calorie counts. the offenders. we begin with the major averages up for the second day in three

and the dow rallying triple-digits and closing in on the most recent 15-year interday high. financials and consumers. utilities and energy lagging and transports are surging again. ch robinson trekking for the best day since early january. seven stocks hitting near highs the goldman at levels not seen since december 2007 and zion's ban corp and not seen since the start of the financial crisis. >> cnbc releasing the second annual list of the fee management firms in all of america. ranking number one is creative planning. they are based in lee wood, kansas. power lunch.cnbc to get the list. let's welcome back in peter, the president and chief investment officer of creative planning. he joins us now. congratulations once again in the top spot of the second consecutive year. how have you done it?

the secret to your success. >> thank you for having me. we are happy to be number one again. last year you had me on and they didn't tell me what it was going to be about. they have a surprise about. that's not what anybody wants to hear. this year i thought maybe we would be number one again. i have to tell you, our success is really a combination of our people and our process. but also what's happened in the markets. your list is a list of the top independent firms. if you look at what clients and americans are looking for, they want an advisory that separates custody and an adviser where there is competence and they want no conflict. the combination of the ponzi schemes and the crisis and now all of the news about the fiduciary standard that attracted a lot of people to creative planning. >> we talk about your clients and how are they feeling about the market. >> i would divide them into two

segments. they feel fine. they have been through plenty of bear markets and know what we do. they understand our process and we are very big on educating our clients. for those that are new clients that had liquidity events there is a lot of private equity money with the low interest rates and the flood of confidence. the people that are having the first big event are looking at it differently. they look at the markets and they don't trust that the valuations especially in the united states are more tentative than those with us for a while. i know you have a global approach, but any one location or area in the market that you would say absolutely do not go there. # as far as the united states for

international, clearly more value overseas but we remain in both spaces. with all the greece stuff going on you put your clients into western europe. it paid off well. are you still heavily invested or have you trimmed? >> we have stayed invested in western europe and in the merging markets. to be fair we are always having exposure globally. while they were boosting those positions. >> do you not have a bet on china. why not? is it too hot to handle? >> we never take a bet and take all the emerging markets and it's like owning a few large cap u.s. stocks. the market capitalization of all of them is not that substantial.

we will give you a positive surprise. go to power lunch.com to get the complete list of the top fee-only wealth management firms. >> several personality readings came out today and remember we also have the fed's latest poll. the latest economy with the beige book will break down at 2:00 eastern time. we had a lot of numbers out. let's get what it means to steve liesman. >> speak of the rap, the data beat goes on. it's chronicling a modest recovery. not a huge snap back. just this week take a look at the data. there it is. just today, trade came in better than expected. car sales have been better than expected. all coming in beating estimates.

take a look at the misses over here. we missed on consumer spending and factory and services. we are tracking and we were down to minus 1%. we have come back a bit on the first quarter and up a tick today. the second quarter tracking also up a tick back towards 2.7. a modest rebound and not the huge surge we had a year ago. the range being 0.8. that's where we are. chronicling all the data and all the beats and misses. the market would trade it in for a good jobs number on friday. >> you are a smart man. she here this morning and does not see a fed rate hike this year. what say you? >> it has to do with the outlook for the economy. we will have a modest recovery

that continues in the third quarter. that will lay the ground work for the fall rate hike. >> it's a pleasure and we will see you at the top of the show. thank you. right now, the market flash. >> swiss agribusiness giant sin genta is spiking on reports from reuters saying that german chemicals company is considering a potential bid from the company. they received a take over bid from monsantao that it rejected. shares are up about 4% but off of the best levels today, still one of the merger, perhaps potential mergers you want to keep your eye on. >> our eye is on it. we wondered why movie theater popcorn is so expensive and why finding a convenient screening is heating up. the department of justice is investigating the theater chaps. we have that story. julia? >> the department of justice sent formal inquiries to three

of the nation's largest movie chains. sin mark disclosing yesterday that the doj contacted it related to an antitrust probe after regal entertainment and amc, the nation's two largest chaps received what's called a civil investigative demand looking into whether the theater chaps violated antitrust law called the sherman act. at issue is a practice called clearances that deals with the strike with movie studios to secure exclusive rights to play certain films in a particular market. the concern is that they prevent smaller chains from showing the biggest movies and making money on the biggest events of the year. the doj is investigating certain joint ventures. all three said they did not believe they violated any laws and said they are cooperating with authorities. the theaters have said agreements affected a small percentage of locations. one of the reasons why the chains want to protect this

practice is that it guarantees packed theaters in the face of competition for consumers's time and money from new digital alternatives including ones announced hours ago. show time's new over the top app launched july 12th and the company is saying it will cost $11 a month, $4 less than the hbo now app that was first to bring it outside the tv bundle. that's yet another channel facing theaters and other venues as everywhere continues to expand. >> that was quite video too. a lot of blood. thank you very much. at&t getting a boost. jeffries adding a telecom giant to the franchise list saying the street has an overly bearish view and the buy out should ease a number of concerns. hewlett packard setting november 1st for the date of the spin off of the pc and printer business for the hardware and services operations. google is higher as well.

the meeting with shareholders will talk about the outlook. google stock going nowhere in the past year. pretty much flat but higher today. >> they are the unhealthiest restaurant dishes in america. i'm sure they are delicious, but you have to see the jaw dropping calorie counts and the three most bloated stocks on wall street. we have those names. >> we are taking a look at the three major indeces. the dow, s&p and nasdaq and find the valuations from a price earnings perspective. they will come up next after the break. keep it here on power lunch. in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent.

ibm analytics is working to make education smarter every day.

welcome back to power lunch. an eyeopener of a different kind. you might be surprised to learn how many calories some have at chain restaurants. we have red lobster and a create your own combination meal and it's a whopping 2,710 calories that is being dubbed a nutritional ship wreck. we have here out back steak house supposed to be australian. it's a herb roasted prime rib. you have to have the sides and not just the steak. 2,400 calories. the cheesecake factory louisiana chicken pasta is 2,370 calories. that's just the food. it doesn't count the beers that you might wash it down with and

the sodium as well. those are really, really high counts. >> two quick comments on that. 3500 calories and anybody is one pound. that's a pound of food and drink and for 2500 calories i would rather go with ten snickers bars. that is literally ten snickers bars. that's a meal i can get into. >> calculate how many hours you would have to run to work all of that off. i'm exhausted thinking about it. anyway. >> that list got us all thinking not about food because we don't need help with that. with stocks. dom choo what are the most bloated stocks? dom is not there yet. we will go to a tease. dom is getting a snickers bar. we will be back after this short break. blap

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bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients and small businesses like yours. so you can take the next big step. extreme caloric food list got us all thinking not about food, but stocks. we locateddom choo and he is and healthy. what are the stocks. what are the metrics for saying a stock is bloated. >> we take a look at the stretch in terms of valuations. we looked at the composite.

# this stock trades with a current market cap of $12.5 billion. the price to earnings is 178 times earnings. this is the maker of design software for architects. certainly one of the stocks that people want to watch here to fill in or whether or not they make adjustments and that gets more in line. another one to watch is in the s&p 500. maybe this is not so surprising. there has been a tough part in terms of trading so far. # trades with the price to earnings multiple said around 426 times again earnings here. if you take a look at this stock, it's down about 5% over the last year. a tough part for the oil stocks. a lot of them oil and stocks being one of them. the most rich valuation comes from visa.

it trades at 31 times earnings. 31 times trailing earnings and this particular stock again is an interesting story here overall. $170 billion company, but visa right now is the richest in the dow. we excluded certain adjustments that skewed their numbers. it's an interesting look at the stocks and remember this is just the bearish case in terms of the overvaluation. analysts think they are an upside for each of the three names. analysts think there could be a sustained upside there as well. back over to you. >> i have to let out the belt a little bit. staying with the food theme, it's time for the power pitch. we gave one food start up. 60 seconds to make his pitch. let's see if the panel eats it up or spits it out. >> we deliver asian food in minutes. it's getting late you are

hungry and don't feel like cooking. you pull out your phone and open the bento app. it's one main dish and four sides. you start by choosing the main dish you have three options every day such as mongolian beach, vegetarian pao thai or poke. for side dishes they also rotate daily. spicy tuna roll or meatballs. after finalizing, you set your address and pay and you are done. a server immediately heads your way. they assemble and deliver your meal in average in 15 minutes. all for only $12. we cook all the food ourselves. it is hot or cold and fresh in the car. we are live right now in san francisco and expanding to additional cities later this year. >> welcome to today's power pitch. i'm mandy drury. you saw the pitch and let's meet the panel. this is an early stage venture

fund that invests in 50 mobile start ups. also with us board member from the angels and she invests and advises more than 25 start ups. in san francisco, mav ron's portfolio is consumer companies like peach, a lunch delivery service. jason, you are in the hot seat. >> the driver assembles within the drivery car. how do they comply with safety and san station standards. >> it is cooked and packaged at the kitchen. after that it is never opened and the driver never has access to it. we have gone through the regulations with the san francisco health department and cities we expand to in the future, we will do the same. >> i'm in san francisco so i had the chance to tryout the service last night. i can say that except for a small mishap with a leaky box, i

had a great experience. the chef who actually is the that delivered my food last night had some great experience in the food industry. you can tell us more about the team? >> sure. he is one of three cofounders. he has been a chef for 2o plus years and ran a restaurant in san francisco. he was also on the show top chef. our third cofounder is our cto, fantastic full staff engineer and the person behind the back end system that makes everything run. >> so there is a bunch of competitions based and i know you are familiar with it. how do you compete with that at a high level. >> we are focussed on asian food and delivering and the big difference is with the customization of a bento box, you are getting the exact meal you want. i had maple yesterday and they gave me a salad and i didn't want that. i couldn't choose something else, but it came with it.

>> customization is key. >> what have you learned about repeat use and how is this service integrating to people's daily lives and habits? >> repeatability has been unbelievable. we measure it with 28 and 48-day increments. the last time we ran it the repeatability was 25%. 28 days was 31%. customers are absolutely loving and repeat and ordering repeatedly. >> we all heard what jason had to say and we need to know if the panel is in or out? >> we began saying there is a lot of companies out here similar to this. as i learned more i realized that people can eat all the varieties of food far more frequently than typical other online deliveries. i'm in. >> you are in. >> it seems for consumers today instant gratification is not soon enough. i understand the need for fast delivery. but in this case the trade off is that you also have a more

limited selection and the food is also assemble and stored in a car. i think they will figure it out overtime but for right now, i'm out. >> in and one out. you are the deciding vote. >> i'm a huge fan of asian food and the on demand economy. at the same time i suspect a lot of these vertically integrated food services are going to scale more like restaurants or restaurant chains rather than venture scale businesses. it's a great option for a late night snack, but not as good as an investment. i'm out. >> what's your reaction? >> the profitability is something we think a lot about. one of the great things about our model is to have one location that services the entire city. not have to have that expensive real estate. thanks for the feedback. >> you're welcome. best of luck. thank you to jason and also to alicia and david and that is

today's power pitch. >> out there listening, are you in or out. for more on power pitch, wait for the next installment next wednesday. over to you. >> for the bond market where something interesting is happening despite the calls for lower yields. they are trading above this year's closing high. rick santelli in chicago. what is going on in bonds? >> it's pretty easy. rates are going up. the hard part is to try to handicap how all that fits in with mario and janet and all of that. they will have a lot of charts. buckle up. no matter which way you put the charts together not as aggressive as last year's bond flash crash. we settled at 1212 and hovering at 236. this will be the new high yield close for the year.

let's open it up to the last time we closed at these levels. november 12th of last year. you can see this. let's open up to make it a one-year chart. there is a lot of room on this. look at the left side of that. where we fell from you want to pay attention at this level. let's look at the two-day chart. every bit and more of a rocket ship up for him. considering they closed it at 48 and they came close to 90 basis points today. let's look at the chart the last time they closed. it was october 28th of last year. the last chart at the interday the euro versus the dollar, one of the days where the fixed income market was way wilder than the fx market although that hasn't been the case the last couple of weeks. back to you. >> the impact of that on the real estate market at the 2:00 eastern time hour. when many people think of

technology design, you think of new, modern sleek. when it comes to office space, why does technology love old buildings so much. that's ahead. meet the intern making $300,000 a year. yes, an intern. a crucial moment for many young wall streeters this saturday. the cfa exam. what is the better investment? the mba or cfa. maybe the bepto o bento box. we will debate. blap

hello, everyone. here's the update for this hour. law enforcement officials expressing concern about the growing use of encrypted communication and private messaging by supporters of isis saying that was complicating efforts to monitor them. they appeared before the security committee earlier this morning. los angeles leaders are meeting to take a final vote on becoming the biggest u.s. city to gradually raise the minimum wage to $15 an hour. the council is widely expected

to make that move. marking the end of a period of mourning following the death of her husband dave goldberg who died in a treadmill accident. facebook's number two executive took to the page in a profoundly moving post writing that she wants to give back what others have given me. american pharaoh has arrived in belmont park looking to become the first triple crown winner since 1978. in the days leading up to the race, he will wear a blanket as part of monster energy as part of an endorsement for that company. >> thank you very much. attention twitter investors. you need to hear this. one of the earliest investors is out. not knocking the company, but saying it needs to improve. chris was on the cover of fortune or forbes. a big time investor and has specific ideas.

you have the just released report. what is it saying? >> we laid out the vision for what he said what twitter can be. that's the title of an 8500 word detail of the way he can make it easier for hundreds of millions of more people to use twitter. he posted it in lower case capital.com. the stock market doesn't get that because they fail to tell the story to investors and users. he recommend that twitter make live events easier to monitor and participate in by creating a separate tab created by human editors. he advocates for the channels organized by sports and news as well as location and popularity. they need a human touch and to be edited by real people. he suggested a save button for articles and offers users see in

the news feed and read receipts so they can know if they saw a follow or retweet. it should not be so scary, suggesting nudges or questions to prompt responses so people tweet more. he has no inside information. he doesn't make the comment for the job. >> by the way, folks, chris sacca himself will be on closing bell today so do not forget to tune in. let's bring in jason from oppenheimer oppenheimer. great of you to join us today. jason, you have taken down your expectations of twitter by cutting the price tag. what are the suggestions from chris that you agree or disagree with. >> he is talking about how you make the product more appealing to more people. the war we are at right now

means everybody wants to be your source of information. whether it's facebook or instagram, that's what they are competing with. the problem that twitter has is the other platt foreigns are bigger and growing faster. when i look at the data for the month of april and you basically had 57%. snap chat grew 34%. they are now coming from a tradition from behind. the question is what can they do to reinvigorate user growth? >> i think the suggestion is really with the investor concern with the company tied to moderation issues as well. i think the periscope that helped with the first option is a very, very engaging app. i think it can help with using engagement and down the line.

i think what he mentioned collectively with all of the different product enhancements they launched over the past several months could coalesce and help them drive. i don't think it will happen any time soon. that's why i have that rating on the stock. i'm going to read you two sentences. an approach to improving twitter will not work. they need to take huge risks. also twitter can afford to build the wrong things but it cannot afford to build the right things too slowly. do you agree with either of the statements? >> i disagree with the first. i think twitter is going about it and taking more of a huge leap to increase growth as well.

they should take a slower approach. they should focus on the iterations rather than taking a broader leap. the second part i agree with 100%. >> what they were putting forward, they should buy nuzzle one of chris's portfolio companies. therefore turning it more into a news feed like twitter news. what do you think about that suggestion? >> i basically think for many people today's version. they have the tweets. # social media is when there is a two-way conversation. the question is can twitter come up with a way to be more than just a news reader and the users are engaging. ultimate what they want, twitter if you look at the statistics twitter based on usage is

monetizing just as good as yahoo and aol. to make an argument that twitter is doing a good job at monetizing, the question is how can they do a better job about getting the user engagement up and becoming more social media. >> quickly, sorry to jump in but we are running out of time. they talked to a lot of people and they don't get it or understand it. they bail off. the thing that sticks out to me. i will are the it again and tell me if you are overstating. twitter cannot afford to do the right things too quickly. he said not afford to. he is implying that they will run out of time for investor or user patience. that sounds like a dire warning from chris. >> twitter is not an intuitive platform like facebook. they will get run out towards the end of this year with the management team it they don't

find a way to turn an engagement around. >> do you think the days are numbered? >> i'm not ready to say that but i think investor patience with him will probably run thin towards the end of this year. he needs to find a way to increase on a platform. i agree with jason on that point. let us head down to new york city across the river. kate kelly is on the at exchange in brokerage conference and has a special guest. katie? >> i am here with cftc chairman who was kind enough to join us on the year anniversary of his year into the job. thank you for being here. >> it's a pleasure to be here. >> glad to have you. the hot topic is the oil market. it has been on a super wild ride and a decline of more than 40%.

a lot of day to day and week to week volatility. do you have concerns about misconduct and how are you approaching it? >> we engage in surveillance across all of our markets. we are focussing on the futures markets. the derivatives and we get a transaction tape and we get reports from large traders and if we see evidence of improper activity or concerns we will look into it and we will take action. the oil market is a global market. there very powerful forces at work here. everything from the shale revolution and outlook in this country. there very powerful market forces at work and i am not an economist and don't forecast prices. that's not my job. we will engage in surveillance

and take action where we see improper activity. >> speaking of regulation you broke news talking about the fact that you are considering new rules and registration requirements for proprietary trader who is replaced the pit traders and are using venues to trade commodities and other products. can you talk about what you are thinking about and the process? >> we are focused on firms that use the trade and make sure our core principals and our frame works is current with the markets. markets are dynamic and that's a great thing. what we have seen over the last several years is a much greater use of electronic trading and a particular automated algo rithimentic trading. financial futures such as interest rates and currency rates and also that would mean

locking at things are there sufficient controls in place. making sure this doesn't pose risk. it brought great benefits. efficient transactions and that's a great thing. you have been on the job for about a year. i am curious a day after we heard about this scathing letter that was written to your colleague, mary jo white suggesting she has not been tough enough on the industry. are you concerned about that? do you think it was out of line to make a personal critique and are you concerned about rumblings towards you? >> i have great respect with chair white and senator warren.

that was my favorite job to work for her in the government. i am not going to comment on the specifics because i have great respect for both of them. i will say that as far as my role and how i am conducting it we are in a different place. getting out the rules that implemented the responsibilities under dodd frank. we are making adjustments to the rules. minor really but that agency did a terrific job under very difficult conditions given the resources to create that framework. and we brought the biggest cases in terms of foreign exchange. >> two things that caught our eye. they had a blistering come back

and the wheat markets are dysfunctional and criticizing comments out of the cftc for the past. that will play out, but i'm curious about the trader is it plausible that others played a market like that? we didn't say it was substantial. he engaged in a pattern of trading that contributed to the order and balance in the e 500. we will be aggressive when we think people are engaging manipulation and whatever market they are doing it. we have authority in that area under dodd frank and we will use

them. >> we have to leave it there. thank you very much for joining us today. brian and mandy. chairman of the cftc. >> kateicle. old is all the rage when it am cans to office pace if you are a tech company in chicago. we are live with that story. >> i'm talking about that. not that. old is the new new. go inside these older buildings and what do you find? garage doors. i will tell you why.

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tech companies are increasingly going after older buildings for office space and giving them a very unique face-lift on the inside. diana is live in chicago. probably the single best architectural city in my not so humble opinion. the technology firms love it. >> they love this place and it's not silicon valley, but some call it silicon prairie as they set their sights on chicago downtown. not the buildings, but older prewar spaces. class b where lower rents allow not just for more space, but flexibility. on a prewar building and dialogue chat and the call tracking software company. busting out to make it private when they need them and not when they don't. kitchen and social areas, ping pong and basketball. just keeping them happy and tons of wiring. all in plain view. the money saved on rent goes

into that technology and that is what the employees want. not the moahogany walls. the merchandise market yelp came in with 335 mostly millennial employees. they busted out the old window line and opened up the walls and high ceilings and their own apple style bar and the beer bar to go with that and special places to hang. they are building out another floor and expecting more tech demand. the rents are usually about 30% less but higher demand. wherever tech goes and millennials follow. >> diana, looks lovely and very sunny. >> a terrifying fall while skiing in the swiss al ps and

collapses even deeper. what happens next? you have to stay tuned to find out. blap the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of it. for as the world keeps on searching for healthier... we're here to make healthier happen.

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>>. >> a frenchman made a terrifying fall? he dropped it another 15 feet deeper into the hole. he was rescued by a swiss guide and he was not hurt at all. that's a happy ending. >> early twitter investor posted a series of recommendations for twitter on his website. twitter failed to tell their story to investors and users. for the second year in a row, they created planning and topped the list of the top 100 fee only firms. we spoke to him earlier in the show and adps in the sector that created 201,000 jobs and thinks largely to a big gain in service sector jobs. >> take a look at this number.

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. the highest paid. by poets and quants. so yes, this particular case was arguably worth two years of your life and all that money for a piece of paper with money stamped on it. how does a business degree stack up? that clocks in at six hours and costs about $2500. which does wall street hold in higher regard? kurt shock with the cfa institute. i will begin with you. a lot of our viewers may not be familiar with it. it's a specific -- would we call it a degree or an award and

certification? >> it is very specific and hard. there multiple levels and do you say it would trump an mba? >> they are very different products. it trumps the mba in the sense that if you want to be in the investment management industry and specialize and focus in on the investment management profession, the cfa is the way for you to go. this weekend is our red letter weekend we have been working towards all year. we have 160,000 people around the globe that think this is an interesting and a very important credential to have. we are very excited about it. june 6th is the day we administer globally. at the same time both the career boost and the passport.

do you get one or the other or both? >> it depends on the individual circumstances and what they are looking to do with the career. in certain situations it may be advantage dwrous pursue and not to take two years out to get the mba. if the long-term aspirations are moving up the ranks and becoming a decision maker and strategist and they can get a good path. they are different ask not necessarily mutually exclusive. as opportunities do they do both. >> it's funny because you meet a lot of folks that do all kinds of cool stuff. everybody that had a cfa is in the investment community. >> it's a focused program and it sends a strong message to perspective recruiters or companies. and it's very well regarded.

once you have graduated and got your certification. which one of potentially gets you the better computation. it depends what you want to be in. they are highly sought after and they give designation in the investment management profession and it moves you up the ranks and gets you noticed much more quickly in the investment management than an mba. that said i think these are very compatible in the financial services industry for sure.

>> that does it for the first hour. thanks for letting me ride along. >> riding shotgun. >> watch out for that cre vas. you might fall in. we have to kickoff the second hour with breaking news. bring us the beige book. today mostly a 2% 2.5% rebound. growth was general low seen as optimistic and the districts are notably not in new york and richmond. the effective lower gas prices on the consumers were said to be mixed and some see it as a tail wind and others see no effect at all. residential and commercial real estate improve and home prices continue to rise. overall loan demand did increase and it was manufacturing where there were the problems. it held steady or increased and

the energy downturn did hurt in the decline in five districts. the things that were said about manufacturing by district. stead tow weaker in dallas and declining sharply in kansas city. both will have a big energy effect in them. # the asian flu came up and it cost plea $00 million in the minneapolis district. low oil prices and a dollar did help on jobs. the levels were up with the labor shortages in eight districts. # we saw slight growth. this is for you. truck drivers were needed in new york, cleveland and kansas city. >> we just talked about the cfa

and the truck driver. >> 0e6r8 not seeing a huge bounce back and a return to 2% or 2.5% growth. what sticks out again. there is a downside to lower oil and gas price. and the fed saying drilling felt manufacturing and thus that was impacted. there was a downsize to lower oil prices. that is acknowledging that. >> what i think a lot of people didn't know, how far away from the oil patch companies geared up. we went from five million barrels a day to 10. a lot of people were involved. there is a downside and we are waiting for the upside. texas is 9% of the population and has accounted for 23% of job

growth over the last five years. let's bring in the global strategic advisory. >> i haven't read every word of it, but we have a summary from steve. the fed is seeing enough progress in the economy that puts them on the path. # he did not think the fed would hike the rates and he had a lot of attention. the fed will where? september? >> i think it will be a high hurdle and i'm not saying it's impossible, but they have given a lot of signals. they top the get away from zero. they will see enough progress and it's a fancy word of saying you are getting paid more. it's a positive thing that is

going to happen this year. we have seen minimum wage hikes. that is out in 2020. give the fed that final nudge over that cliff. >> i think the fed has seen enough. without further wage increases. workers have not gotten the raise until recently and seeing it a bit in the cost index if not in the earnings. i think there is enough there or in the pipeline. >> you are one of the monetary policy experts, both highly published and highly sighted in a lot of research reports. is the fed making too much of the first-rate hike? is the difference between and one so much greater than the difference between one and two? should they not make that big of a deal about it? >> in terms of economics, there

is no difference between a funds rate of 50 or 75 or 25. they are incredibley low rates and concerned about the expectations, management exercise. they are concerned about can they commit to a path that doesn't trigger a bond market sell off and they don't know. as a result they are nervous about going more than 25 at that first meeting. as a matter of econ 101, it's not a big difference. >> you have a new secular outlook that is out. one of the reasons we are out there. we appreciate it. the new neutral revisited. a couple of key points stuck out. i have been banging the drum on energy. the trend away from scarcity and abundance creates big losers as well as winners. who will be the losers and the ultimate winners? >> internationally the oil exporters are losers and the importers are winners. within the economy, we you have a sector with cut backs and

capital spending of 50%. so it is certainly a game of winners and losers on balance and still as an importer and it benefits as does the globe. there big distribution impacts as well. they need to be factored in. >> you talk about global imbalances. the commodity glutton and not just energy. you lock at iron ore. it's not hurting the economy. we recognized the two things have play out. >> what it means is that those that surplus of the global flow of funds across borders. they coined the term as the global savings glut. >> it's a pleasure to have you on and the outlook is the new

neutral revisited. thank you. very little reaction. the dow is higher by ten points. it is up now by about points. the s&p is up by almost seven. the action is in the 10-year yield. the treasury yield is the highest since november of last year. let's get more into the action. the president of chase investment council. guys, great to have you with us. i will kick it off with you. what you are seeing with the move today in rates is pretty sharp, but this is a trend that has been going on since late january where we see a progressively higher 10-year yield and at the same time stocks are still able to make or stay at record highs here. does this mean it's the all clear? rate hikes are okay for stocks?

bonds look to be vulnerable here. equities look attractive. when you first start the cycle, stocks tend 20 do well in that environment. if inflation and it's a confirmation that the economy is doing better. as a consequence, they tend to fare okay. one of the things is starting to differentiate. not all stocks are going to be differentiated. we will see discrimination as we go through the rate hike for sure. >> my australian accent is coming out, but it's melissa and not mannedy this hour. i will toss that over to you. in terms of your take with what's going on with rising rates we are seeing in stocks.

is there a point in the yield where you say that really stalls. >> i don't think it's 2.3%. i think the old rule will take effect. >> we are in the clear for now. tripoint homes. you like home builders in general or is there something specific thaw like? oar oar it's an under the radar kind of thing. we own it in one of the funds. it has a great story because it has cheep land in prime locations. it hasn't been recognized yet. it's a very specific idea within

the home builder space that we think is unreactioninized in the market place. >> one of the picks is community health systems, an operator of hospitals. do you think there is impact from a potential humana dealer in general? >> that's an excellent question. we believe community health will do fine for the next couple of years based largely on the cost savings it's going to achieve because of the merger if the acquisition of hma last year. there is a battle for cloud here. insurers are combining to give themselves clout and hospitals are combining to give themselves clout. everybody is trying to play that game of who has more clout and who can negotiate better deals with the reports or the insurers. i think it's kind of a win-win for both parties if you have the industries to consolidate. >> thanks for your time. good day to you.

>> brian, over to you. >> thank you very much. >> looking at the top markets. housing. the number of people filling out mortgage applications took a big turn down. refinancing fell to their lowest level in more than a year. applications fell 3%. the headline number seems bad, keep it in context. new mortgage applications are 14% higher than they were a year ago. let's stay on the real estate story and bring in susan walker. professor of real estate and walker with the school of business. also our own diana who was in chicago today. i have a feeling that you will say yes, they were higher than last year but it was terrible to which i would retort yes, but if there no homes to sell. why would anyone take out an application to buy one. >> it's like you are reading my mind. last year were very easy comps. it was weak for home purchases and okay for refinances.

now we see refinance applications reacting to the over 4% rates and falling to less than half the share of total applications. housing purchase demand is not that bad. it's the refinances that are bringing that number down higher than a year ago. we want to keep that higher down 3% when you are looking at the first week in june. that's not great. for refinances people are afraid of going-over that 4% level which is where we will be for a while. >> it's 4% which is a couple of years ago which seem so low we would rush out and purchase the property. why are we so fearful of 4%. it's 4%. >> yeah 4% is a great number if you are looking at the history of this and if you want to be a homeowner. if you are refiing, you have probably done it. now we're to the north of 4%. we will not see a surge in refi

until that rate goes down. i don't think that will happen any time soon. >> is there a number that might be really the capping point for any kind of transaction? is it 4.5 or 6 or 7%? it shuts off real estate. >> no, first of all least two parts. the refi and home purchase. 4% is a great rate. it's not the 4% rate but that we haven't seen the wage growth and we have that lack of inventory that you mentioned and most importantly, lack of access to mortgages. to many people 4% looks like a great home purchase rate but if you can't get a mortgage at 4% it doesn't do you any good. >> leave us with this and give us your knowledge in real estate. do people buy a home because of the price or because of what interest rates and their monthly payment will be? >> it is the monthly payment no matter what the number is.

4% has nothing to do with what's happening of the market. it's a lack of supply. if you can't find a home to buy, you are not going to buy one. >> susan walker professor, it's a pleasure as well. thank you both. let us set the table for the rest of the hour. on deck apple's ceo is taking a jab at his biggest competitors over privacy. the best ways to bet on rising interest rates. later on why one wall street firm is hanging up on something that many of us use every day. stick with us. power lunch will be right back.

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>> per firing off a passionate speech last night. he did not name names, but it was not hard to read a criticism of companies like facebook and google by the words he said. regarding tech companies in silicon valley he said they are gobbling up everything they can learn about you and trying to monitize it. we meaning apple, think that's wrong. let's bring in john fort and tech reporter who is out west. john, this is interesting. google launched google photos and like most things it is free but when something is free, aren't you the product? >> you are. not just present you in the case of google photos past you and past family members are the product too. in the sense that the algo

rhythm will match pictures of a person back to baby pictures looking at the way they change overtime. google now service is able to track where you go day to day and figure out where your home is. where your work is based on patterns and suggest hey, here's how long it will take you to go to work because we know now is when you usually go to work. one part of this i might take exception to i know where tim took is coming from. the problem for me may not be the companies collecting this. consumers don't have insight into it. the marketing powers have them on me and decide to shut off certain things they restrict access. right now people are flying by. >> you have tim cook coming out. is apple that holy when it comes to privacy that they can wag their finger at google and others? >> this is effectively tim's way of saying we are not an ad-based

business. we don't need your data. google and facebook do and you don't know how you are using it. these services google and facebook and go beyond that twitter, pandora and pinterest. this is largely what makes the iphone run. it's a tremendously valuable service because of all the free things behind it. if we had to pay for the things would we be willing to spend as much on the phone itself or apple devices. this is something i think apple has to wrestle with. >> data may not have a price, but does it have a cost? >> certainly. i'm not sure how you are asking that question. there is a trade off. consumers have a trade off in how they get free information. with apple they are paying for services. they are paying with data. it's perfectly fair for tim coo being to say that's okay but

you need to know how that is being used. for cook to go after the business models which is how it appears. that may be disingenuous. >> the cost is us. we are selling a bit of ourselves. at this point is it just safety in numbers? are we overconcerned about privacy? is anybody going to be able to figure anything out about us? >> i don't think we are overconcerned. the issue may not be the companies like google and facebook themselves. their reputations and their livelihoods depend on that. there lots of third party businesses in the digital business that are collecting huge amounts of information about people. i wonder at what point somebody suggests policy to regulate this sort of thing. it is not popular to suggest legislation, but somebody has to step up to say for the

consumer's sake somebody needs to stay tran parent. >> i predicted this that facebook would offer a pay option. $50 a year and it's never going to happen. >> i think the closest you come is what's app. you do pay for it for certain functions. there certain pieces of the business that facebook will charge for. i doubt that experience because they are all about volume. they give a lot of tools to see who can see what that you are posting. they are good on the store as far as transparency. i wish the rest were as good. >> it was a great discussion. thank you both. >> the five big analyst calls we walk through that need to be on your radar. we call it street talk. one company wants to build a casino minutes outside of new york city down the road from here. here's the kicker. it might help save atlantic city. we will explain how when power

lunch returns.

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national running day. stock one, time-warner. this ticker twx. credit suisse outperformed and 25% upside. they also added to the global focus saying time-warner along with cvs had best strategies for exploiting their contebt with low legacy list. >> that has been the trend on wall street and media space so far this year. 123. about 25% outside. the company talked about new end products including drones. stocks and video into 400,000 drones next quarter alone. >> big call listen. the stock has been big and i just want to note it's about

2.50 above analysts. take two interactive up greating the video game company with a market performed. they see about 30% upside. they are not concerned about new game delays. earnings power that have stocks up about 40%. >> the other positive about the games, i know they are on your calendar. neither of them have to perform heroically in the eyes of the analyst in order for the company to hit. that is a positive. the nuance communications upgraded to outperform the $22 price target for fiscal year 16. they focus on internal operations. nuance shares of trade and an average forward parody. it is trading at a 30% discount.

they own about 18 or 19% of shares. the number one buyer has been hedge funs. a call for the under the kadar. the ticker is sgmt. the biotech focussing on investment products. it's a buy and a $31 target. about 30% upside and the average target is $30.50. >> tough chart. it's an under performer in biotechs as well as under performer with the broader markets. >> coming out in defense, that wraps up street talk. thank you. the final oil trades for the session and really interesting new data on how much oil is being pumped out by america. the price and the data still ahead. blap

i'm sue herera and here's the update. a major battle in the ukraine near rebel hill territory in the eastern part of the country. video from europe shows the ruins of a local market that was destroyed by artillery fire.

rebels reported 15 people including fighters and civilians were killed. a collision between a bus carrying italian tourists and a tractor-trailer in pennsylvania has left three people dead and many more injured. the accident occurring this morning on interstate 380 and no word on the cause. wal-mart said it will relax the dress code and raise the temperatures at the stores as part of an effort to improve working conditions. they raised minimum wages for 600,000 employees. the indiana lottery is debowing a new bacon scented game called appropriately enough bringing home the bacon temperature costs $2 with cash prizes topping out at $10,000. there is more. there is another prize. players will win a 20-year supply of bacon. that is your cnbc news update this hour. brian. that story was just for you. >> man. i'm not scratching or sniffing at it.

thank you very much. the final oil trades crossing bertha coombs is there for big time production numbers out today. >> production is up to just over 9.5 million barrels a day. when you look at it that way, our inventory numbers are not quite as bad. we saw a decline in crude inventoryies inventories. that was right in line with looking for it. the problem is that we saw this switch that includes diesel. that is a lot more than expected. the expectation had been around $1 million. heating oil is a proxy for diesel. we have seen the problems with the transports. it really implies that demand is down at least 1.5%. tomorrow we will get the gas numbers and friday it's all about opec. >> yes, it is. thank you very much. melissa? >> the yield on the 10-year in case you haven't noticed that.

the highest level since november. on cnbc talking everything from bonds to the fed. listen to what he had to say about the impact of the rate hike on the market. >> the best friend of the stock market for sure is zero interest rate policy. if the fed doesn't raise rates, they want it to tighten and it's positive for stocks because stocks love their friend mr. zero interest rate policy. >> we know the fed will raise rates. how should you position yourself for a rate hike? scott nations is president of the cnbc pro article about the great topic. great to see you. >> great to see you, melissa. >> you like the financials and specifically you like the xlf that attracts the financials. when does this move happen? we have seen a big move in the 10-year yield from the end of january to date. we have barely seen any move in the financials. >> that's right. we haven't seen that because

people have been waiting for all the bad news to get past the big bank anyway. the best news is the fact that net interest markets should be increase as interest rates increase. what is that margin? the difference between what banks had to pay depositors and what they get to charge borrowers, it's their growth margin. that should increase and it got to the lowest level forever if we go back to 1984 when the st. louis fed started keeping records. >> all right. you like that and we will ask that versus another instrument versus the regional bank. that is much more levered to arise with interest rates and it's outperforming as well as the broader market up 6%. >> that's right. on cnbc pro, i talk about four big etfs in the last week attracted nearly a billion dollars in net inflows. we liked it principally because

it is most tied to the banks. it's not a purely bank. it has diversification. it's the cheapest and you have to look under the hood. you have to see where the subsectors are. you can find out with more of the trade inside. brian? >> meantime air strikes bombing several military targets in the capital of yemen. plumes of smoke could be seen rising after multiple missile strikes. the camp and manufacturing complex are currently under the control of shiite rebels backed by iran. the saudi-led coalition is carrying on air strikes since back on march 26th. time now for trading nation. it is a nation after all because

they trade better together. we are trading the banks and financials. all up about 5 percentages. you have larry mcdonald and the trading nation team. we will start with you. are you surprised by the strength of financials recently and is there still opportunity for our viewers and listeners to buy them. >> i'm not surprised. we have good earnings coming out this year fors 2015 20% to the banks as well as good growth next year and expectations of interest rates are rising. you expect these guys to go up. these guys continued to peak out at about 12.5 times forward earnings for the past three years. we haven't been able to break above that.

1.5% away from the average target price. that says a lot about where they think the stocks could go any further. i am concerned about valuations. they think not, but you know better that interest rates have gone up in the last month. so too have the financials. they keep going up and will the stocks as well. >> the difference between the two-year treasury and the 30-year is about 55 basis points. banks borrow short. they are expanding and more profitable for the banks. if you look at what's happening in washington in terms of the risk this is important with the legislation and the rules that come out of washington.

they could favor the small versus the big banks. overall it is a much bigger winner in terms of the steepening curve. bank of the ozarks and they have done well. better than the names i mentioned. watch the smaller banks here and aaron is concerned about valuations. aaron and larry, thank you. >> for more trading nation head to our website. we do two more segments online just for you every day. a new group wants to make the airlines and at airports better. i mean how could they get worse? we will tell you what they are proposing ahead. could the plan to save a casino two hours away. the ceo of hard rock said everything that dies some day comes back. blap

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>> do you have your checkbooks ready because an unprecedented private collection with hair sports cars are get being ready to hit the block. the list of cars available is amazing. they include a booking and perhaps the crown jewel with the presale of $12 million. it is one of in existence and the racing-based vehicles ever built. also it's stunning. 1964 with the 250 lm race to the 24 hours lehmans twice. all of the original components with a very rare edition. if you have to ask the price, you probably can't afford it. 1 did sell last year for $11.5 million. robert will fe negle a trip to that. i will hate h. hard rock and the meadowlands

with plans today to develop a full-service where the jets and the giants play. it will be the first casino in new jersey and tax revenues may help build atlantic city. the chairman of hard rock international. when they told me about you and the segment, it will help fix atlantic city, you will kill it. how is it going to help? >> the thought is that the tax revenues that come from the casino will be used to create subsidies and the infrastructure to rebuild the image. that's the issue. >> you would be willing to take the money that you would pay to the government of new jersey with the express idea that that will be appropriated for atlantic city? >> that's correct. we feel there is a 3 to $4 billion bond that could be created. 200 or $210 million a year. that would change the image and

fix it. if there is going to be expansion, they want to see it. it's a great brand that needs a lot of work and the polling told us we will not get approval unless there is subsidy back to atlantic city. >> is it something that you need or have to do? >> nobody told us from government that it has to happen that way. it's up to the officials in the state to make that decision. what we have come up with rather than give 50 or $100 million a year that will never change the meter, we are staying at one time. >> for the viewers that are not familiar with the geography here, this is walkable for manhattan if you wanted to walk across the turnpike, but technically it is. donald trump tried to build a casino on an island next to the statue of liberty. do you think you can get this done?

>> yes. we think the time is now. new jersey used to be the number two state in the country as far as gaming. it is now second from the bottom. we can increase 4 to $500 million in tax dollars and subelement not just atlantic city but the others whether it's senior citizens and veterans and etc. >> if this gets done if you get everything you need when would the doors open on the caucus? >> hard rock meadowlands. >> we can get it by the early summer or next fall. >> that fast? nothing in new jersey happens that fast. >> we finished a $150 million building that we can start as the temporary and the major complex done in 18 to 24 months. >> all right, jim. interesting concept informed there. we do appreciate that. we will give it to you the hard way.

jpmorgan has a money saving plan and will probably not move the stock, but it might be something that we should all answer what that is and whydom choo is creepy. would you let the airline put your carry on bag on the plane if it meant taking off a few minutes earlier. power lunch returns

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. >> take a look at shares by etsy. just recently they remembered it is trading below the ipo price and has been for a couple of days. they had a very disappointing report and there were goods being sold on the price. 15-13 for the last trade. >> it will be negative as well. chesapeake energy chk, the worst performer in the s, and p 500. a firm that is a special

research shop, i was e-mailing with them back and forth and they have a sell rating at a $10 price target at 1369. they see a big chesapeake energy at limb pick global. also let's take a look at delta, united america, and jetblue. we're not randomly throwing those four stocks together we're showing you because they're all airlines. they're all trending higher. one activist group is trying to put an end to it. unite here is encouraging passengers to sign a petition to congress in wake of the fact that airline profits are soaring and delays and cancellations still feel all too common. the organization behind that campaign represents about 30,000 airport employees. still, it's a major problem. seth kaplan is managing partner at "airline weekly" and joins us now. i understand the group that's trying to do this is a unionized group that's trying to get more employees at airports. but who cares? they've got a point.

>> absolutely. and a lot of this is driven by weather, you know they use some numbers from 2014 which was a really bad year bad blizzards, compared to actually a rather good year 2012 a very mild winter. so you know, you torture the data enough, you can get it to say what you want. but, absolutely. i mean when you're one of those people who's impacted you don't care whose fault it is. you just want the situation to be better. >> you want the situation to be better. right now, you've got social media, right? certainly, my followers know that i'll batch infrastructure issues whenever i can, because it kills productivity in the united states. people sitting around airports on broken-down trains and whatever. is there anything, though anybody can do? >> yeah there are some things, brian -- and you know the good thing here, everybody's interests are sort of aligned. airlines -- not out of the goodness of their hearts but because it's good business, also don't want delays and cancellations. on the cost sides, they're extraordinarily costly to recover from it and sometimes depending on whether it's the

airline's fault, you're compensating passengers and so forth. and on the revenue side if you are a reliable airline, people will pay for that particularly your high-value corporate travelers. and when their corporations are signing those contracts with american, united delta, who's going to get me there reliably? so they want it too. >> agreed. but you talked about weather, and there are times when lightning, whatever, you can't fly, but the reason we can't fly in weather has less to do with the pilots and the planes and more to do with radar. radar is an old, antiquated system where you can only stack the planes a few miles apart. if we spent the money for the digital next jen radar, you could put more planes in a tighter area and fly during worse storms. but nobody wants to pay for it seth. >> no question brian. i think what a lot of people don't realize is you would think that the benefit of flying is that you could kind of fly in a straight line. you're in a car, you have to keep to the road but you can sort of fly where you're going. but it's not really that way. we really have highways in the sky and airplanes, yes, very

tanty kuwaited patterns flying all over the plait, out of the way, because with the system that has existed for all these decades, that's what they had to do. little by little they're getting a little bit closer to what they call free flight just basically doing what makes sense, but we're not even close to that and a lot of people think that would be a rather good investment. if you're going to spend money, in terms of just economic improvement, productivity improvement, not a lot of better ways to do it than that. >> seth, we want to get your take on this next story, which has to do with carry-on bags. this is an interesting story. delta airlines says it's going to pre-load carry-on bags for passengers on a select number of flights this summer. and this of course, in an attempt to speed up the boarding process. delta say it's being called early valet. the airlines are charging you for a bag already, if they don't charge the bag, then those bags don't have to be pre-loaded and they can just be checked. >> yeah you know that is one of the negative consequences along, obviously, consumers

don't like paying for bags. but it sort of pushes a lot of baggage into the cabin, melissa, and slowed down boarding times, which is costly for airlines. on a net basis, let's be clear, they're making money from it that's why they're doing this. but you have the ultra low-cost carriers like spirit who says no problem, we'll charge for a carry-on bag too. delta recognizing that people probably won't tolerate that but trying to figure out what they can do to speed up the boarding process. for decades, airlines have been trying to perfect this science and it's very frustrating trying to figure out how to board a plane more quickly. >> seth thank you. >> thank you. all right, coming up jamie dimon becomes a billionaire banker. plus, what really happens when you try to reach brian sullivan on a land line. dom chu put it to the test. take a look. >> thank you for calling cnbc. this is brian sullivan. this is an unmonitored voice mailbox. please do not leave a message on this voice mail. if you need cnbc urgently,

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you are looking at two airplane fuel gauges. can you spot the difference? no? you can't see that? alright, let's take a look. the one on the right just used 1% less fuel than the one on the left. now, to an airline a 1% difference could save enough fuel to power hundreds of flights around the world. hey, look at that. pyramids. so you see, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized. jpmorgan is cutting the cord on voice mail. the firm getting rid of it to cut costs. one source tells cnbc that each line costs about 10 bucks a month, which means the

annualized cost savings could top $3 million. brian, was that seriously your voice mail? >> that was. i didn't know dom was going to call me at all. i just want people to know if they call me i'm not going to check that voice mail so don't bother to leave anything. the only four voice messages i've gotten have been from like dom chu. he's like jon favreau in "swingers" when he's calling that girl -- >> you mean like a stalker? >> don't call me again, dom. >> you just don't like people. >> what did oscar wilde say? "hell is other people"? that's not true, i love people. jamie dimon can probably afford to pay for voice mail. he's a newly minted billionaire. let's bring in robert frank. >> you can inhurt your money or start a company and take it public. but jamie dimon has found a third way as a professional manager. bloomberg reporting today that the ceo of jpmorgan chase is now

worth $1 billion. his shares are valued at around $500 million. he has real estate worth over $30 million. the rest came from his compensation and investing the proceeds from his previous stint at citigroup. now, dimon has created a lot of shareholder value since becoming ceo. $110 billion, to be exact. the shares nearly doubled since he took over. dimon is not the first corporate manager to become a billionaire from shares in a company he didn't found or take public. that goes to roberto goizueta. the two other examples in finance, they didn't turn out so well. jimmy cayne was a billionaire before that company collapsed. dick fuld the ceo and chairman of lehman became a paper billionaire in 2007 just before lehman became the biggest bankruptcy in history. this i guarantee you will end better than those two. >> absolutely my friend robert frank. thank you so much, buddy. >> i'll leave you a voice mail. >> please don't.

melissa, what do you have on "fast "tonight? >> the unstoppable gopro rally. it is up more than 50% since just march. how much more can it go? 5:00 p.m. tonight. >> look forward to that. a little gopro action on "fast money." thank you for watching "power lunch," everybody, the "closing bell," one of these cameras is right, starts right now. hi and welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth here at cnbc headquarters. that means i must be doing a nightly business report tonight on pbs. and yes, i am. by the way, a busy market day, kelly. we had the adp jobs number was encouraging, a decent number. mortgage applications were disappointing. the beige book was a bit encouraging as well and stocks and bonds have responded, haven't they? >> bonds especially. and we'll get to all of that in just a moment. >> meanwhile facebook shares popping today. the social net