minutes, i'm talking -- >> i wasn't suggesting you can't make money in the financials. what you were going and the outlook that the guest was giving were two totally different time horizons. >> they was five years and i wasn't five minutes. that's the only thing i want to clarify with you. >> wto hug it out so we can close out the show. >> take it outside. >> "halftime" is over. the second half of your trading day begins now. welcome to "power lunch," everybody. i'm mandy drury and brian sullivan here in for tyler. one more time stocks staging a rally this hour despite ongoing worries about greece. today why it might not be so great for traders getting comfortable with a greek exit. >> but a big warning sign on housing. the number of homes said to begin construction falling. we'll let you know if this is something to be concerned about going forward. >> and remember the ebola outbreak scare. another deadly virus is spreading overseas and the cdc is on alert. the warning for an unprepared america. but we do begin with the health

of the american housing market. some concerning new numbers on home building down the road. let's get to diana olick in washington. why should we be worried? >> reporter: mandy, we saw a big drop in housing starts month to month, down 11%, but this is not the worrisome part because we saw a big jump in april and saw the giveback in may. what you really need to look at is the building permits and separate out the single family from the multi-family rentals. now you see what i'm talking about. permits are an indicator of future construction and much less prone to weather and monthly fluctuations. single-family permits rose by just 17,000. it is the highest since december, but not exactly fabulous. multi-family, that is where the party is, up by 118,000 to 592,000 annualized units. that's the most since 1989. now, if you're in the multi-family business, fantastic, you have the homeownership rates at the lowest in a quarter of a century and you're still building well below historical averages of

around 1 million annually so there's a lot of runway for multi-family rentals. let's get back to single family. you know i love a little dash of perspective so on starts we're running at 680,000 annualized how much it would be for year at this pace. compare that to the peak of 1.8 million during the housing boom and around 1 million at the 30-year average, so why aren't we building more houses given all the demand we have? i'm going to tell you coming up in the next hour on "power lunch." brian? >> all right diana, thank you very much. hunter s. thompson has nothing on alexis sirpios because the fear and loathing over the greek debt drama continues. a lot of moving parts and a lot of meetings all leading up to a june 30th deadline. if you are confused do not be embarrassed. chief international correspondent michelle caruso-cabrera knows what's going on and what do we need to focus on? >> so many chess pieces and we'll go through the key dates. the first event to watch for occurs tomorrow. every wednesday the european

central bank decides how much if anymore cash, they will give the greek banks. the exact phrase is ela, short for emergency liquidity assistance, how much more ela do they give or not? the size of that number gives us an indication of how fast greeks are taking the money out of the banks in the country. then on thursday all the finance ministers of the countries -- all the finance ministers of the countries in the eurozone are meeting. greece's finance minister is going to be at that meeting. i do not exaggerate when i say he drives the other finance ministers crazy, makes them very angry. at a minimum, it's going to be a day probably full of headlines. everyone is going to keep a close eye on greece over the weekend as well watching to see if the greek people get nervous and start to take their money out of banks even faster than they already have. if we see that continue the government might have to enact capital controls might, limits on withdrawals from banks which usually happen on the weekend and there could be an emergency summit with the greeks given an

ultmade theium. told maybe, maybe not. let's fast forward to the date that you mentioned, brian, june 30th, probably the most important date. that is the day that greece must pay the imf or else be in default. it's also the day their current bailout program officially expires. if they don't pay the imf, if they do not get an extension of the program, one or both of those could trigger the european central bank to cut off liquidity. >> unless they extend it again. >> right. >> and again. >> right. that's possible. >> and again. >> yeah, yeah yeah. you're getting to the point, making the point that -- >> every time we come to a deadline. >> mm-hmm. >> suddenly the end of the road. >> gets longer. >> gets paved another mile. >> absolutely. so we could see that all over again. >> and i think i know why the finance minister drives everyone crazy. he's so busy sitting for magazine shoots playing the piano. >> or going to conferences and speaking at events and things like that yeah.

>> he's a rock star. >> recorded the last year of group mannedings. >> i think he wants to be a rock star. >> that's the way he's fashioning himself. >> scarf, no tie, like a leather jacket. >> got the motor bike. >> his apartment smells of rich mahogany and deep leather. michelle thank you. >> see you later. >> ron burghardty. >> stocks here brushing off any fears about greece leaving the euro. staging a midday rally and bob pisani going to a very interesting meeting last night talking to hedge fund managers about their fears or lack thereof around greece and you put it in your excellent note this morning but lay it down for our viewers and listeners. are people worried or not? >> there's too much complacency out there. i went to this dinner about 20 hedge fund managers and people who invest money for hedge funds, and the exhaustion level on greece is incredible. people didn't even want to talk about greece. basically maybe it's better if they just leave the euro and go ahead and default. this is lazy and dangerous and complacent thinking in my

opinion. let's put up the greek stock market closed at a two and a half year low today. but there are all source of problems with this kind of lazy thing that's out there. a lot of people seem to think let them go to the drachma and the country will be more competitive and it will turn into a dirt cheap tourist mecca. the ecb will be able to increase the size of its ecb, its qe program and they will be able to manage the way through the crisis and the greek exit will bring the remaining members closer. again, i think this is very dangerous and complacent thinking. let me show you what could possibly happen. brian, this is me talking about potential -- what greece could turn into. you could have the possibility of a failed state on the edge of europe. hundreds of thousands of impoverished greek citizens fleeing the country, destabilization, crime and disorder increasing. the balkans becoming an even bigger mess, and how about this? how about a russian naval fleet in athens harbor? that's not a crazy idea. could potentially happen and i

think people haven't thought this all through right now so haircut on the debt meaningful public sector reforms and greece staying in the euro is the best scenario. brian, absent that i think you're absolutely right. muddle through is not a bad solution. extend the loans and move it out another six or eight months to find another solution. it is better than default and leaving the euro at this point. brian, back to you. >> excellent, excellent summation, as always bob pisani thanks very much. how big of a risk is greece to the market? let's get to the heart of it with our guests. ben, i mean listen you're a global equity fund okay? does greece keep you up at night? how big of a risk is this for you and your clients? >> well, firstly, we don't own anything in greece and don't any southern european banks. i think, you know you don't have to invest in areas that will be affected by greece you

know, for loss of capital, but i do think there will be volatility as a result of it. >> you know darryl it's interesting what ben just said because you don't have to be invested anywhere but i guess the idea is that greece is more than just greece. if it was just greece we wouldn't talk about it. it's the contagion effect on bigger europe that people seem to be concerned about. are you? >> not as concerned. we still think there will be an 11th hour deal brian. the reality is the contagion effect would spell into portugal. it would spill into spain and ultimately italy is the real concern, but we don't see that being a major factor. you should watch things like german bunds and the europe treasury market and the flight to dollar all signal movements that would indicate we would hit a higher stress point. none today are showing signs that greece is imminently a problem at the moment. >> yeah. you know what ben, and the u.s. stock market has doubled since the greek drama began in 2009. we are literally going on six

years. has it just been that the market didn't care or is there a belief that there is a fundamental either liquid or illiquid backstop from the imf or any of the other acronym banks out there that are going to protect greece ultimately? >> you know the biggest single difference in the last year is the european constant easing facility, so we didn't have that a year ago, and we didn't have it two years ago. i read a note this morning published on the 12th of june two years ago, nothing new has actually been written, but the one thing that's happened since is this question backstop and i think, you know the -- the point made previously was very salient f.that is used to step in and save the portuguese, the irish, the italian bonds from backstop then actually that's a big difference to a few years ago. >> bottom line darryl are you still buying u.s. stocks? >> yeah. we still think -- i mean when you look at latest earnings brian, you're still looking at

"x" energy earnings growth of 8% to 9%. q2 with the tailwind of the consumer the tailwind of the housing market not withstanding even this morning's data showing the q2 earnings are strengthening. we think the back half of the year prints good numbers. we heed it to be in evening growth because then it's still a good environment for u.s. stocks. >> i love when earnings matter. darryl and ben, thank you very much. appreciate it go. for more go to powerlunch.cnbc opinion come and see why darryl and ben are also bullish on japan. >> i remember the good old days when earnings mattered and fundamentals. let's talk about the fed kicking off a two-day meeting on rates. we'll get that decision tomorrow followed by janet yellen's news conference. the fed tackling two issues when to raise rates amid calls and criticism in congress over how it makes its rate decisions, but how much support is there for overhauling the fed? steve liesman here now with exclusive result of our cnbc fed survey. what does the survey say is.

>> this is really interesting, mandy, and what you'll find and see in a second is there is support for change at the fed from people who you would think would support the fed. our 39 respondents including a lot of economists fund managers and analysts. we asked three issues in senator shelby's fed reform bill. should the fomc not the board of governors, a technical issue, control excess reserves? an issue you'll be hearing more about when the fed hikes and tries to keep all the excess reserves in the fed and not out in the economy. well 50% say yes, 18% say no and 30% saying it doesn't matter a little more support than we found in other surveys. what about more transparency at the fed, a check for senator shell peay? releasing the transcript in three years, yes, 71% and no 18%, another check for senator shelby and reform and mandy, you'll be right in the shot.

>> i'll move out of the shot. >> should the new york fed president be approved by the senate nominated and this one shelby loses on 68% say no and 27% yes, that's an "x." the bill is very big. we picked out three important issues out this and on two of the three issues there is support for fed reform on wall street. one more graph i want to show you is our gdp outlook here. you can see it cratered for 2015 on the back that have contraction in the first quarter, so instead of 2.7 we're looking at 2.32. we remain 2.8% for gdp in 2016. >> since we were just talking about greece i don't mean to harp on but nonetheless two connection, very quickly. will janet yellen make mention of or even take into account what's happening in greece perhaps tomorrow, and, number two, what do the people in your survey think about greece and the likelihood of it may be leaving the eurozone? >> i'm going to use all the surveys to answer your question.

i think yellen brings up an account for greece. geopolitical risk and economic weakness are are the two biggest threats to the u.s. economy. in general they think the u.s. economy is in pretty good shape. all the threats come from overseas. when asked even in the statement janet yellen will point to what's happening overseas as the risks or threats to the u.s. economy. in our survey. >> yes. >> 50% believe greece will leave the eurozone in the next three years. what's interesting about that, not only that high level but ireland, portugal spain and italy, those numbers are very low so even while it went up for greece no sets of contagion right now. >> steve liesman, always good to talk to you. dominic chu for a market flash. >> >> from macro to micro let's talk about cloud storage box. shares pulling back a bit and did spike earlier. moving solidly on green on news the company will intergreat with microsoft office a little bit more substantially. the deal will enable users to brows, open and ed i had office

online files directly from box as well as automatically save all changes made in office online back to box in realtime. now, box does say the deal will drive business productivity. nonetheless, whatever you think about the situation, box shares are up on that bit of news. back over to you. >> all right, dom, thank you very much. do you like playing video games? sony nintendo and microsoft all raising the bar. they are taking gaming to a whole new level. joornts julia boorstin live at the e3 conference in l.a. julia? >> thanks so much. we'll be joined by playstation's chief to talk about the console worlds of virtual reality and breaking up the tv bundle. that's coming up right after the break on "power lunch." big day? ah, the usual. moved some new cars. hauled a bunch of steel.

kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class from mercedes-benz.

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money. welcome back. chinese e-commerce alibaba joining up with foxconn to team up for indian startups. shares down 17% year to date. struggling retailer gap closing 175 of its north american stores as it tries to cut costs and boost sales. shares of gap down nearly 9% year to date but higher today. and starwood hotels and resorts spinning off its timeshare business into a new public company called vistana signature

experiences which will be listed on the nyc under the ticker vse. bri? >> it's one of the biggest video game conferences in the world. julia boorstin there in los angeles with the ceo of sony's playstation and a first on cnbc interview. julia? >> thanks so much brian, and sean lang thanks so much for joining us of sony entertainment america. here at e3 there's been so much talk about gains and consoles and big headlines yesterday out of microsoft announcing that it's making its xbox 1 backwards xatdible with games from the prior system. >> right. >> do you think that that's going to make it more of a rival to playstation this holiday season? >> well, it's hard to say it could be more of a rival. microsoft and sony are real knee this video console business in america in a big way. i think their announcement about backwards compatibility is interesting for the platform. we already have them play the

3-4-with the pl 3 now. >> you charge a monthly fee for playstation now. >> about $20 a month. >> do you have plans to do similar to xbox? >> we have 350 games already in the marketplace for play 4 and we're 18 19 months into the platform. it's become our centerpiece of our business going forward. >> what's the the outlook in terms of the ps4 this holiday station? >> more than 420 million units into consumer homes. >> so a year from now you'll have 40 million in homes? >> that's what you said not me julia. >> what about virtual reality. yesterday you showcased your morus headset. >> yeah. >> at what point will that impact your bottom line? >> it's one of the most innovative pieces in gaming in a long, long time. what it brings to video gaming

kind of what the smartphone brought to the cell phone business. it's a complete step change something entirely new so we want to make sure that we spend a lot of time getting it exactly right. all will be based on what the experience is and what the content brings to that. won't rush it to market but on the floor today in the show you'll see up towards 15 of 20 games that's supporting the format. >> can you give us anything on pricing or specific timing? >> pricing and timing something we'll talk about next year but something we'll be able to send to the home in an effective way. >> how do you really compete with microsoft which has oculus as well as hollow lens. >> with morus which is supported by playstation 4, we have that marked the preceded if you will with the foundation technology to make it happen. i'm sure we'll find a good audience for consumers who want the technology. >> be care full out here at e3.

thanks so much for joining us. back over two. >> let's get to dom chu for another marked the flash. >> mandy, if you're watching shares of ncr corporation, used to be the national cash register company, they are up 14% right now. they did trigger a single stock breaker earlier on after reuters headlines that private equity giants blackstone and carlisle are said to have jointly bid on an amount of around $10 billion or more which includes debt to possibly take over ncr corporation. now, you may recall earlier this month deal reporters reported the company was maybe looking to shop itself around or evaluate bids and earlier this spring the journal had reported that the company was exploring strategic options but that a full sale of the company was not likely so again, reuters today saying that blackstone and carlisle have jointly bid what could be over $10 billion which includes a debt portion to take over ncr. that's idea stock is moving. back over to you, guys. >> thanks very much. dominic chu will keep an eye on

that, up by 2%. the mers verse in asia and the former deputy of health and human services will warn us about an unprepared america. remember how bad the ebola scare was here. that is next. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. with the tools and the network you need to make working as one easier than ever. virtually anywhere.

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plus hundreds more dead in saudi arabia where the disease originally spread, believe it or not, from camels and before that possibly from bats but how serious a threat is mers to the united states? and are we taking it seriously now? the former health and human services secretary and oversaw a nearly trillion dollar budget for bioterror and emergency preparedness. good to see you today. thanks very much for joining us today. how vulnerable are we to a spread of this kind of mers in the united states? >> thanks for having me mandy. >> the truth is we should not be vulnerable to mers. we should be able to control it. that said we said in the fall with the ebola outbreak that we should be able to control it, and there were some mistakes made and some problems along the way so as long as we do the right things in terms of infection controls which means that people who have the disease, who go into a health care setting do not spread it to others we should be okay. that said south korea obviously has not done such a good job on that front. >> you said we should be okay.

not a concern for us here in the united states? >> i would say it's not a concern if we do the right things. if we do not do the right things, if we have poor infection controls if we're not really thinking about how to handle it and let somebody go from one hospital setting to another hospital setting as you did in south korea, the patient zero so to speak in south korea engaged in the practice there that's known as dr. shopping going to multiple health care places to try and get a different diagnosis, that has the potential to spread the disease. >> if we go back ten years, avian flu, sars mers, ebola, a measles concern last year are we really seeing an increased risk and outbreak of some of these dangerous viruses and bacteria, or is it just increased media coverage and we haven't seen a growth in this at all. >> way to blame yourself brian. i think -- >> i blame the media, too, sometimes. >> i think the way to look at this is that with increased air travel and people more mobile and there's more i guess, more

encroachment on farmland as cities expand so there is a potential of more disease spreading, but the interesting thing with mers is it's a coronavirus as is sars and the fact that we've had two outbreaks of coronavirus in about a decade makes me think that the government should spent more time on preparedness for a coronavirus and see if we can come up with a vaccine platform or some kind of countermeasure to deal with the coronavirus since we don't have one. >> brian listed a vast number of various viruses you know that have posed different threats at different stages along the way, but which do you think is the biggest threat to the united states out of all of those, avian flu, swine flu, sars, ebola, et cetera et cetera. which one do you think -- we really don't have the systems in place for? >> the thing i worry about most is something that is -- that is both deadly but also highly contagious. ebola, for example was contagious but via touch but not airborne, so if we would get a pathogen that we did not have a

good vaccine for and it would easily spreadable or transmittable from person to person that's what i would worry, perhaps a new strain of flu that we don't have a vaccine for, and that's what makes me wory. >> none of the above really have a vaccine, do they? >> you mentioned news they do. ebola, we're working on -- >> to a certain degree. >> as i said coronaviruses we do need a countermeasure vaccine or antiviral or both but also mers and the coronaviruses seem controllable if you use the right infection control, so -- so i'm not in panic mode with any of these yet. >> okay. that's good to know. thank you very much. the president of the american health policy institute, lest the media should ever be brian accused of spreading fear and that kind of thing. just trying to put the facts out there. >> there you go. thanks very much. shares of the gap down more than 8% this year sales struggling for several quarters now. where is the company as part of its seemingly endless

turnaround? courtney reagan getting a rare exclusive with the ceo of gap and will join us from the gap headquarters in san fran. courtney? >> yeah, that's exactly right, brian. it's rare that we've had this opportunity. haven't had a sitting gap ceo on cnbc in about a decade and had allotted to talk about with art peck, not the least of which what happens to a company that's built on jeans when folks are wearing less and less denim and more and more athleisure. the answer coming up on "power lunch."

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. hi everybody. i'm sue herera. shiite militia fighting isis militants five miles outside of ramadi in iraq today. they are trying to retake the city. the fall of ramadi was a major defeat for iraqi forces. new and powerful eruptions from an active volcano in indonesia. villagers living within a three-mile radius of the volcano have been evacuated. authorities are monitoring the increased activity from mt.

mt. sinabung. and honda with a growing recall involving takata air bag inflaters that can explode with too much force including civics from the years 2001 to 2005 and accord models from 2013 to 2007 model years. united airlines calling it quits. it plans to end service in october at new york's john f. kennedy international airport swapping gates with delta to consolidate its operations at newark liberty airport in new jersey. united has failed to post a profit at jfk over seven years because of few connections to other cities. and that is the cnbc news update this hour. back to you, brian. >> all right, sue. thank you very much. let's get now to the bond market. rick santelli is at the cme. rick, what are you talking about today? >> well, you know first day of a two-day fed meeting. certain things traders actually do look for. sideways sometimes on the first day is what they look for, and that's exactly what we're getting. if you look at intraday of tens it's interesting to note we're

at the low yields and we get data and can argue permits was pretty good especially if you're a big fan of multi-families as diana olick has been talking about, but yields do shoot back up. the two-day chart tells you everything you need to know. today's range sin side yesterday's range and the last fed meeting april 28 29 and go back to the 29th. there's what your yields look like since the last fed meeting and looking at the dollar index from the same date you can see there haven't been huge moves and most of the moves seem to have been predicated in europe so interesting to see if there's any new news on normalization tomorrow. sully, back for you. >> thanks very much. shares of the gap are down about 8% so far this year. retailer announcing monday that it plans to close 175 stores 140 of them this fiscal year. the company will lay off about 250 workers all part of a restructuring plan after five straight quarters of declining sales. courtney reagan sitting down

with the ceo and joins us now. what were the highlights? >> very much brian. art peck says to your news he hates closing stores and ceding market share and will do whatever it takes to get back the share from the loss of those stores and sabrina simmons says the changes will be fully neutral. behind me at the investor meeting art peck is talking to the investors about what he sat down and discussed with me yesterday. part of that plan is fixing pricing, especially at gap and banana republic where 40% off has become commonplace. >> old navy is a different business and that wow price is something that's really important for the business. am i comfortable like in gap as an example with the amount of promotion we're doing? no i'm not and i've said that publicly. here's the simple reality of how you reduce your promotional levels. cute product that she loves, that if she doesn't buy it not

it's not here the next time. sounds like magic. the worst place to be in this business is when you're overinvested in product that she's not responding to and that's what's driven a lot of the promotion inside the business and that's what we're working to fix right now. >> peck says that wile it has athleisure at all of its price points from old navy at the old end to athleta at the premium price point it continues to resonate across all of the brands. >> old navy is a different business and that wow price is something really important for the business. am i comfortable like in gap as an example with the amount of promotion we're doing? no, i'm not, and i've said that publicly. here's the -- here's the simple reality of how you reduce your promotional levels. cute product that she loves, that if she doesn't buy it now it's not here the next time. sounds really like magic doesn't it, and if you think about where the worst place to be in this business is -- >> so base athleisure continues

to be such a hot commodity a big question, of course, is what happens to a company that really built itself on denim. art peck basically telling me that he thinks that denim sales are coming back, that he's very bullish on opportunities that is going to be happening for all of the brands there in denim again from lower price points to the higher price points. >> i really feel pretty bullish right now about the fact that whale we've seen kind of a denim hiatus for the last couple of years, that she and he are both coming back to denim and we're seeing it across men's, women's and in the kids and baby space as well. >> there's a lot still to be discussed, of course in the investor meeting behind me but i will tell you that because of that opportunity that we had yesterday, much of that's being said here is a little bit of what we've already heard from art peck so i think cnbc got a bit of a leg up on the meeting here today. mandy and brian, back for you. >> very interesting his comments about how the store closures do not preview the death of the mall though there are people who don't quite buy into that.

thank you very much courtney reagan. interesting interview. the top players in the gaming industry gathering in l.a. for the electronic entertainment expo known as e3. one of the companies in focus is take two interactive. shares of take two up more than 30% over the last year but down hmm about 1% year to date. here first on cnbc is scott zelnick, thanks for joining us today. what does e3 mean to your company and shareholders? >> well it's a great opportunity to show off our upcoming lineup and display a little bit of swagger and get to show off our product and our competitors and have some fun with each other at the same time. >> strauss video games are like movies and some hit and some miss wildly and your company is executing on all cylinders and you're executing well but the biggest problem on the stock is the lack of visibility on games. how confident are you that your future games will be hits?

>> well we -- you know we -- we look at what we've done over the past several years. every year since 2007 we've been able to launch at least one new hit title in addition to bringing sequels back to market and that's been reflected in our revenues which were almost 1.7 billion last year in our earnings last year, $1 a share, reflected in our guidance for strong profitability this year and reflected in our lineup. also we've had the highest quality rating among publishers for the past five or six years according to meta critic. all those give us a good deal of confidence. it is a hit-driven business we take nothing for granted. we have to get up every day and do it all over again. >> to brian's point, a buy on your stock of a price tag of 32 bucks and one thing this analyst is seeing he's looking to the next i hadration of red dead, a catalyst, all the way out to 2017. how do we know that that is going to be a hit? what do you think it is about

the nicks iteration that will make it a hit with the gamers? >> we have ten big franchises that have at least sold 5 million units with an individual release. red dead is one of them and we have a number of others borderland obviously grand theft auto bioshock civilization, our nba title. we have great news with wwe which is coming again, so while i wouldn't make predictions about any individual title, it wouldn't make sense to and we have to go earn that every day. we are proud that we think that we have the best collection of owned intellectual property in the business and a highly diverse collection and that delivers these results and the shareholder shall growth that you've seen in the past couple of years. >> as we've mentioned year to date the share price is down by 1% so i think shareholders are looking to more value here. thank you very much for joining us, strauss. house minority leader nancy pelosi is at the center of what's becoming the biggest rift ever between congressional democrats and the obama white

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what a better way to cool off on a hot summer day than with ice cold beverages. that's exactly what one bear did in new jersey over the weekend. this home video shows a black bear poring its way into an outdoor fridge at a home in kinalon while her two cubs were walking around in the backdrop. the bear got into the fridge and bit into two cold drinks. we don't know what kind of drinks were consumed. i'm guessing if it was beer there were happy bears out there on a hot summer's day. >> beer bear there you go. house minority leader nancy pelosi came out against the trade promotion authority bill and the bill was easily defeated

and the president and republican supporters of the measure are scrambling to find plan "b." john harwood asked nancy pleasy about that in an exclusive interview and joins us live from washington. john. >> i sat down a few minutes ago with democratic leader pelosi to talk about a stunning setback for the president's trade agenda at the hands of his own party. she wouldn't say what she had told the president immediately before or since that vote but she did address charges that she had betrayed her president. one of the headlines said pelosi knives obama. >> that's not fair. that's not fair. i've not been a big supporter of fast track. i don't think it's necessary. it's a convenience for the administration. it's an advantage for the business community, but it's a hardship for workers because there just -- it just isn't fair. this has reached like a tipping point. i wrote today in the "usa today" we need a new paradigm. we have conferences on this

that and the other, the g-7, the g-8, the g-20 the gee whiz. why are they not talking about having fair trade that lifts everyone up instead of trickle-down trade that advantages many some and questionable in terms of its advantage to some. i just don't think that this approach where there ees's some -- we can up or down the vote, that's okay. that part is okay but don't ask us to up or down the vote on fast track. that was too much. >> but if you stood on the floor on friday and said i trust the president to negotiate the best possible deal for american voters voters, vote for trade adjustment assistance wouldn't it have passed? >> i don't think so. hi to say what i believed and i said to members all along do what you believe. >> but you don't trust him in

his assertion that this deal is good for middle class economics? >> let me just say this. i certainly trust the president, and i think all of our members trust the president. we disagree with the president on that because this tpp has not even been completed in terms of it, and people can reserve the right to take a look at that when we see that and make a judgment. >> what we're going through now wouldn't allow it to be complete. >> it can be completed without it. i have great confidence in the ability of our country to negotiate, and if these countries want to be involved. >> are you concerned that blocking the president on this front weakens him and could weaken u.s. leadership in the world? >> no. what you saw on the floor on friday was an expression of concern of the american people. we are representatives. that is our title and that is our job description.

>> reporter: now the significance of what the leader said was she doesn't think that fast frac is even necessary to complete the deal. that means that if we're going to have a tpa, trade promotion authority pass the congress it may have to happen without assistance from democrats which is what blocked it last friday and by the way, if anybody is wondering why nancy pelosi was eating while i was asking her a question it was because we said down for one of our speak's interviews over ice cream. i was eating it as well, and you could see the rest of that when we release that in a few days time. >> quick question, picking up on something that she said john the intense debate over the past few weeks makes her convinced that we need a new paradigm, a new model for trade agreements and she had all these lofty ideas of lifting everybody up lifting up the worker but what would a new model for trade agreements actually look like? >> well you know the president says that the agreement that he's negotiating now is a new paradigm that is to say it is a progressive trade deal that he

said will lifted up average workers and what leader pelosi said, well even if it's better than the status quo it may not be as good as we can get so that's a pretty high standard to set and, of course both democratic -- recent democratic presidents bill clinton and barack obama have both believed in the process of trade expansion over opposition from the left and the question now is whether president obama, with help from the republican leadership in congress can overcome that opposition on behalf of the trade agreement and, of course the business community is highly interested in getting that done. >> okay. thank you very much john harwood, and you'll be able to see john harwood's interview with pelosi on powerlunch.cnbc.com with a little ice cream eating thrown in for fun. oil is big in texas, we know that, but did you know that gold is big in text yasz too? kate kelly live in austin texas with the details. >> reporter: i'm here in austin

where in addition to having monsoon conditions this afternoon we'll be talking about the texas bouillon depository the very first state-owned gold and precious metals vault and it could give the federal reserve a run for its money. the story when we get back. it's part adrenaline and part adventure. it's part geek and part chic. it's part relaxation and part exhilaration. it's part sports car and part suv. and the best part? the 2015 gla. it's 100% mercedes-benz. ♪ ♪ hp instant ink can save you up to 50% on ink delivered to your door so print all you want and never run out. plans start at $2.99 a month. right now,

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texas is establishing the first ever stayed-run gold and precious metals depository. why, and will it work? kate kelly is live in a very rainy austin texas with more. kate? >> reporter: hey brian. nobody tells texans what to do with their gold and they put that into writing with friday with a new bill signed into law by governor greg abbott that day that establishes the texas bouillon depository. this is the first state-owned gold and precious metals vault, vaults all over the country, one of which operated by the new york fed on behalf of other central banks and other investors but texas wants to establish its own. it will be a safe where people can store precious metals underground and it will establish a bank where people can write checks and use gold as a transactional legal tender. they are hoping to encourage that. they are also hoping that it will cause some major investors including the university of texas investor management

company, the nation's second largest endowment, to repatriate allotted of gold that's stored out of state, up to $1 billion in physical gold is the estimate but that's not a done deal. >> if it is created and that provides us with a lower cost then we're very happy to use it again, given it's already low cost, that differential probably won't make the difference between a good year and bad year for us. >> reporter: so the hope is that the costs will be lower and also that this vault will eventually get comax membership to bruce zimmerman when you just heard. the sponsor of this bill a dallas area private equity investor and republican says those are two things he's looking for and also thinks that this is something that can boost consumer confidence because it's another form of adding liquidity into the economy. one other key point, brian, for those historians out there, this vault should be safe from federal seizure. you may remember from 1933

president roosevelt essentially took back american gold a lasting memory and unpleasant one for some people. texas thinks it will be able to safeguard this against the future action like that. >> okay fascinating stuff. keep dry, kate kelly. blackstone group and carlyle are making a joint mid for ncr according to a reuters roar. shares of box are up on news that the cloud storage provider isn't grating more with microsoft office and take-two interactive ceo strauss zelnick has a good deal of confidence in upcoming products because the video game publisher has had a hit title every year since 2007. >> summer may only be just beginning but christmas only 191 shopping days away. and ups and fedex have done something that could spell trouble for retailers this holiday season.

morgan brennan, what is that? >> first of all, let me say this is giving me heart palpitations but for the personal carriers all about this peak holiday season. what that means for investors and also for online holiday shoppers when "power lunch" returns. >> let it snow, let it snow, let it snow. a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

ups is trying to boost its margins by doing away with some of the shipping discount. it's only six months till christmas which, you know it's six months but still they have to prepare this far ahead in advance, and what does it mean for the retailers this holiday season? morgan brennan has all the details. morgan? >> basically the takeaway here is if you buy a lot online particularly big heavy items you could be paying more come christmastime so ups is looking to do away with discounts on some oversized packages. that's according to the "wall street journal." the company wouldn't comment directly on that pricing plan but does tell me it's looking to meet customers' needs while ensuring ups is appropriately compensated for the valuable services we provide. appropriate compensation has been the theme this year for both ups and fedex which have raised rates and started pricing bay combo of size and weight for ground packages.

ups has also said it's even considering shipping surcharges for the upcoming holiday season. analysts say parcel carriers, particularly ups are looking to get the most out of their shipping networks and boost margins, basically no longer giving away space on their trucks and planes even if that means turning down some business. now this strategy is just starting to play out. it showed up in ups' last earnings with package volumes falling and yields starting to rise and analysts expect comments on pricing initiatives tomorrow as well when fedex reports quarterly results before the bell. meantime, taking a look at shares of both ups and fedex, fedex is up about 4% so far this year, one of the only transports in the green. ups is down about 10%. mandy? >> okay. thank you very much for that morgan brennan, in the last ten seconds we've got before the end of the show let's take a look at the markets here because the dow is currently up by triple digits, and i think it's back in the black for 2015. remember, it did dip into the

negative year to date but new it's back in the black. anyway we'll continue watching the markets and everything else in the second hour of power. brian, take it away and thanks very much for riding shotgun. >> sullivan's christmas shopping rule number one, if you don't buy anybody anything you're already done. humbug. it is 2:00 on wall street 11:00 a.m. in sacramento you're now watching the second hour of "power lunch." i'm still brian sullivan. sayra eisen joining us from the new york stock exchange. right now the dow is up triple digits, up over 100 points and gold is lower, oil slightly higher and still below $100 bucks a barrel. we begin this hour with the latest read on the health of the housing market. things are not looking too rosy down the road because housing starts fell 11% last month. diana olick is with us. diana, what happened, and are you going to blame the weather? >> reporter: no, brian, because it's too hot to build a house. right. i'm not blaming the weather. the monthly drop in may is not as much as you would think, saw a huge jump in april and this is

some of the giveback and what i'm looking at is where we are with historical perspective. single family starts running at 680,000, compare that to the peak of 1.8 million around the boom and around 1 million as a 0-year average, this as supplies of existing homes are super tight, so why are we not building more houses? it's because of this. land. specifically finished lots. that's where all the infrastructure there, the sidewalks, sewers, just not the houses. more than 60% of builders surveyed in may by the nahb said they were just not seeing enough finished lots and what there is, is really expensive. land prices didn't fall as much as everyone expected during the recession and have now surpassed their peaks in every major market in texas as well as in raleigh, denver charlotte and phoenix. that's all thanks to john burns real estate consulting and that's why builders are still at low volumes and what they are building is on the high end. >> the lower price points are just not financially feasible.

believe me if they could sell homes for $200,000 and make money doing it they would be doing it all day long. >> all day long. builders who bought land early at around 2010 through 2012 are better positioned and if you want to know who those builders are go online reality realtycheck.cnbc.com. >> home building and building products analyst at r & b capital joining us now. let's look at diana's charts higher and now lower and we say, gosh, we have a long way to go and can we also look at it and say should we not have been at those levels? >> we're having a protracted recovery. overbuilt due to easy access to credit. the credit is gone and now it's a gradual climb back to a steady stayed. we're thinking the next couple of years you're going to go back to 1.3, 1.4 million housing

starts, a long process, not overnight. the positive momentum we're seeing in the housing market will continue. that's the good news. >> just because sockpuppet.com was at 100 bucks a year ago and now is at $9 doesn't mean it needs to get back to 100. do you think we'll get back to those 2005 housing start levels in the next two years? >> that's unlikely a little frothy. much more tempered in our outlook. >> that was too much. that was bad. don't want to get back there. >> that's right. we have to tailor building to demand. demand is slowly recovering economy on the right track, talked about great job growth coming back. we'll see the return of the first home buyer. that trend is likely to continue. i'm not worried. i'm optimistic and i'm feeling good about the backdrop for real estate and the market. >> when you buy a home builder stock you buy a company and you buy largely different geography geographies. when you buy a home buildings product company is that a hedge against anything anywhere is. >> home builders are heavily

indexed to the sun belt california, texas, florida. if you're buying a building products company, you're servicing all the home builders in that area as well as everyone where else in the nation so we think that the gradual incremental growth housing starts run 5% year over year give us the companies with a lot of operating leverage of necessary volume which results in terrific earnings growth. >> if you buy a masonite continental building product, you're buying everything, correct? >> getting exposure to all the volume flowing through and like names like continental building products, one of our favorite stocks riding residential recovery, selling dry wall in the eastern half of the mississippi. great management 10% free cash flow yield, our favorite name out of 21 stocks right now. >> but you also like mace onnite which is to your door? >> incredible story, ceo is enforcing commercial discipline raising prices in a tough product category and great management team. they have really executed.

a lot of upside to this story, investor day at the nyse on friday. we're watching that closely. >> already. bob, always a pleasure. appreciate it. >> appreciate, it buddy. >> sarah eisen. under armour taking a page out of google's "playbook," the company launching a new share class of its own stock. dom chu has been digging into this story and joins us now with more. sort of complicated but ultimately it's a power play right? >> it is a power play and what kevin plank the ceo and founder of under armour has effectively done with the board of directors is solidify his position as the most influential person when it comes to under armour both strategically, creatively and everything else you can possibly think of. what they have now done under armour's board has approved the issuance of a new class of stock, a c class of stock, ticker not yet determined also wondering what's going to happen and when it will trade and what not. the important thing you need to know about the new class c stock is it does not have any voting rights at all. again, under armour will have a situation where they will have a

share class of stock that they can use as currency for possible acquisitions deals to maybe sign athletes down the line. that's not going to give away any control of the overall company. now, it's going to come in the form of a stock dividend that's what you need to know. every holder of class "a" and "b" shares right now, the ones that have voting power will have an additional share of stock given to them. that's going to be the big thing right now. that's the reason why everybody is watching but, again, corporate governance experts and academics will say that this is not good for shareholder rights because it places a lot of power in just one or two people's hands and that's why it's such a big deal. guys? >> well let's debate this a little bit. dom, stick around our good friend herb greenberg. you hate this kind of staff but it's kevin plank's company. to started it and build it. why shouldn't he retain control? >> as long as investors want to go along with it the power of plank will continue. remember, this is what's been going on all along and gives him the kind of control -- there's part of us that we want to

think, gee, it's happening now. does that mean we're like at sort of a peak and a maturity? >> it could be. here's the reason why people -- the pro and cons because we want to present both sides. con, of course like you said could be a sign of maturity or kevin plank has way too much power right now. >> it's his company. >> the other side of the story -- >> it's not his company, it's the shareholders' company. >> he built it in a dorm room. doesn't want someone coming in and taking it out from under him. i guess you could argue why they never go public. >> correct. if you look at the proportional amount of ownership he has it's around that 15%, 16% mark which means 85% of it is actually not his capital in the company whatsoever. he does have the creative vision, but the important part that we want to know here is the plus side. this stock again has grown exponentially around 2,400% between 2005 and now, so this stock has been on an absolute tear and shareholders have been

along for the ride so if you're in favor of this founder-led vision you can point to the stock gains. if you're against this type of move you can say to yourself in the end all that this does is solidify and entrench an existing manager or owner in this particular move. >> i'm curious, herb about an example that google did. we mentioned that it's pulling a google. we can look to google for an example and the stock is actually down 4% since this move happened, underperforming the s&p 500. is the idea there that it's just not for shareholder friendly or google a specific case because of other things going on in the business? >> you could argue with google it happened at the point where the growth was really starting to slow so in this case you could sort of make that same case. >> you can't compare the two. >> i can compare whatever i want to compare. >> there's nobody -- there's nobody that's big enough to buy google. >> i know. >> there are companies big enough to buy under armour. google can't use the you might get taken over throat.

>> that's the reason he's doing this. doesn't want anyone second guessing him. by the way, investors, i don't think most investors honestly and big corporate governance guy. i think most investors care about one thing. am i going to make money or lose money. >> i want to be clear. when i said it's his company, he owns it it's only his. >> he views it as his. >> what i meant was he doesn't want to lose control of his baby. >> part of this overall board decision, by the way, which was unanimous, wanted to point that out, and the independent directors as well. they also have a provision now where kevin plank has a non-compete which he didn't have before meaning if he left the company he can not do anything related for five years. they also will get rid of this whole dual class structure in the event that he is no longer with the company. >> that's the fascinating part of this thing because that tells you exactly what it is. if you look at companies and look at a company out there like citrix. >> elliott management. >> if you look at a situation

like that, ceo of that company, mark templeton loves the company. if he had that class of stock no one would be coming in there and i'll tell you something investors would see the stocks start to tumble so there is no check and balance on there. >> got to go and plenty of companies that have dual class structures. >> there are. >> i can think of a car company, by the way. dom, herb thank you very much. >> yes. >> find out more about under armour's new class of shares on powerlunch.cnbc.com. here is your power menu for the rest of the hour. up next goldman sachs about to do something it has not done in its 146-year history. what that is ahead. also we will introduce you to the hottest item at this year's e3 expo, and we are keeping a close eye on the energy market, a big tropical storm moving towards texas. a live report from the oil pits when "power lunch" returns.

♪ ♪ ♪ at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. 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.

all right. the stock market is at session highs. the dow has a triple-digit gain. a lot of concern about greece. may have heard about this the last six years or so. stocks still higher today and apparently at the top of the show i said that oil is just under 100 a barrel. clearly that was wrong. mouth, brain, all in different orders. oil is under 60 bucks a barrel in fact -- brent crude at 63.72 and wti at 60.08. sarah eisen, rescue me from my own mouth. >> ieresng t see oil higher, $60 a barrel and because we're seeing a songeolla at lst ainsthe euro. watching shares of goldman sachs. they are up more than 9% since the start of the year.

the bank reportedly about to do something it hasn't done in its 146 year history. let's get to mary thompson with the details on that. mary? >> the firm is planning on launching an online lending service for consumers and small businesses. a different market than the corporation served by its invest bank and the rich clientele served by its wealth management unit. the move down the income ladder in the very early stages of development. goldman signalled its ambitions in may. a memo from ceo lloyd blankfein says there's an area of opportunity for the bank as they further develop their approach. the loans will be funded by the deposits it has at gs bank. not known is how goldman will determine a client's credit worthiness and the size of the loans available that the "new york times" reported that would be between $15,000 and $20,000.

the best performing big bank stock in the last year and industry consultant who asked not to be identified said goldman's advantage like lending club and avant and lending tree is a deep and plentiful source of funds and the potential to sell these loans to institutional clients. on the flip side it has potential reputational risks if goldman has to resort it debt collection if a borrower defaults. >> thank you very much. let's talk about this from a stock angle and bring in a bank analyst from gaugh heim securities. a really interesting head line. goldman sachs, we call it a bank, it hasn't been and now it's kind of becoming a bank. is that a good or bad thing or a neutral thing for its stock? >> well at the moment i'm not sure that it's really full' relevant thing. the bank's balance sheet is currently about $865 billion and so obviously it will take a lot of $10,000 loans, $15,000 loans

to most needle and what it does reflect is the need for neurohigher margin area in which to grow. >> is this that area, giving it a home equity line to mom and pop for a new kitchen a growth market? >> well it's a growth market for them certainly since they are not in it currently. you know as we look at the consumer lending marketplace, you know it's something that typically has an r.o.e. of north of 20% and given that its core businesses are running in the low teens, you can see why that's compelling to them. >> i wonder why other big banks aren't doing as much sort of digitally disrupting the way consumers take out loans, and how forward thinking this really is if you are seeing startups across the board, getting a lot of money for doing this and many of them recently going public. eric? >> sure. so, you know if you look around the spectrum of lenders, for traditional banks, you know the other big banks that you see on the street corners of everywhere here in manhattan, for example you know they have an online banks, but, of course most of

their consumer lending is either done through their credit card businesses or through their branches for things like installment personal loans and on the other end of the spectrum you have the pure online companies that have more recently come into existence and so it seems goldman's strategy will exist somewhere between the two >> you think there's some element of pr. goldman sachs sort of secretive, right, arguably the poster child of a lot of the anger at the banks the last five or six years. do you think there's sort of an element of like hey, i used to hate goldman but now they gave me a car loan so maybe they are okay. >> i suppose it's possible but i doubt that that was a very significant motivation. >> i wonder if it will have an impact though brian on the millennial customers and consumers it's trying to target which are attracted to many so of the alternate startup forms of lending. >> you look at lending club and stuff like that. they have been getting a lot of traction, eric. do you think this is the beginning of something bigger for goldman? >> certainly, if you think about what underpins some of these -- some of these newer lenders,

it's, you know very innovative technology which goldman certainly can have or can develop and goldman has the advantage of significant capital and of course it acreates a tremendous amount of capital and has access to the secondary market through securitization platforms and does seem like a very logical place for the company to consider. >> a pleasure to get your views. eric appreciate it very much. >> thank you. facebook steps up its virtual reality game. we're headed back to the world's biggest gaming expo ahead and one big bank is telling smoke them if you've got them and the big tobacco bet ahead. the dow is up triple digits. where have you gone greece fears? they are still out there.

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on the verge of completing a $12 billion deal to buy three business deals from procter & gamble p & g trading higher on the report along with the overall dow. well-known consumer names, clairol hair care and cover girl koss metics. >> that's a big deal. thank you very much. meantime world's biggest gaming convention under way in los angeles. it may be called e3 but maybe it should be called vr1 because this year it's all about virtual reality. back now to julia boorstin one of the biggest players in the virtual space with the ceo of oculus. when do we get to test this out? >> it's pretty amazing. thanks so much brian. joined by the ceo of oculus. brendan, everyone here at e3 is talking about virtual reality, but this year we're also hearing about a ton of rivals. other companies in the vr space whether it's sony morpheus or htc's v, what distinguishes

oculus and how you can compete in an increasingly crowded field? >> everybody is a pioneer field and there's so much exploration going on in just figuring out how to make it really work how to deliver a comfortable experience and a sense of presence that you're really there, and we love to see what everybody else is doing and it really validates the market really proves that the market is real. it is going to work. people are showing up with some great experiences and a lot of people are innovating out there and we're doing the west we can to continue to pioneer and the only company with a soul focus and mission of delivering the best possible. >> you have the headset here. can you tell us when it's going on sale and how much it will cost? >> we haven't announced the final price or consumer date. it will ship in q1 in 2016 so next year. and here at the show we're starting to talk about our new touch controllers, an add-on to

the rift and this is the first time players in vr are feeling like they can see their hands and it's part of their experience and opens up a whole new category unlocks this entire segment of virtual reality experiences. >> other hand controllers for other companies so what makes this really different and how much is this going to cost as and add-on? >> we haven't announced the price. >> they keep asking it though. >> what makes the rift and the touch controllers different, is again, we have the sole mission of delivering the very best vr. we're confident this experience will be the best bar none and we've really focused on trying to make that an extension of your actual hand, your arm make it really feel like this is your hand inside of vr and hand presence is something that we really really believe in just like the goggles give you this kind of vision head presence head movement presence this gives you your hand presence. >> now facebook spent $2 billion to acquire oculus. when will they start to earn back that investment? >> well we look at it earning

back all the time. i mean this is something that we're at the very beginning of and we're pioneering and getting it out there. when we start shipping the consumer product we really do expect there will be a lot of people showing up that want to enjoy this. >> and just a quick final question because we're out of time. does being owned by facebook as opposed to one of the facebook companies here put you at a disadvantage? >> we look at it as an advantage because of how important not just gaming but the whole multi-player and social gaming is going to be to vr and how long of and kind of a future vr has and how committed facebook is to this entire effort. it's really incredible. >> great i can't wait to go try out the new system. brendan, thanks so much for joining us. guys, back over to you. >> thank you very much. >> meantime check out shares of act vision blizzard the world's biggest video game company and it's posting some solid returns this year, up about 24%. don't randomly mention acti

activision, and we'll have interview at 4:30 p.m. eastern time. >> oil is above there, just below 60 bouncing around and still higher for the day. we'll take you live to the nymex for the close when "power lunch" comes right back.

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hello, everyone. i'm sue herera and here's your cnbc news update at this hour. the white house is deeply troubled by what it calls the politically motivated death sentence against former egyptian president mohamed morsi. an egyptian court in cairo upheld the sentence against morsi earlier today. secretary of state john kerry says he's concerned by russian president vladimir putin's announcement that he would add more than 40 intercouldn't nal ballistic missiles to russia's nuclear arsenal it year. bootin made that announcement at the opening of an arms show in moscow. lawmakers on capitol hill asking tough questions on a hearing to find out exactly what information was exposed in a massive cyber attack on the federal government. the chairman of the house oversight and government reform

committee calling it the worst digital theft of government information in history. the attack has been attributed to chinese hackers. starbucks has expanded its mobile ordering system to include southern and central states in the u.s. customers at more than 4,000 locations can now order and pay through its mobile ordering app but only through their iphone. you're up to date. that's the news update. back to you, sarah and also brian. >> thank you very much. sue, back at hq. tropical storm bill closing in on the texas government and we're watching that for you. here's kate parker from the weather channel with the latest. >> a roughnecks several days across the state of texas on into oklahoma and on north. we have flash flood watches in effect right now as tropical storm bill starts to impact the lone star state. now, this flash flood watch is because of this. see this entire area, the yellows and oranges, anywhere in that region. could have rain bands that set up that easily drop greater than 8 inches of rain. not hard to imagine we could see

more than a foot of rain in some of the isolated spots. not just in south texas. look at this heading up i-35 straight to the dfw metroplex into tulsa and ft. smith, arkansas, the rain continues and this is going to be a significant amount of rain through friday, the end of your week. we could see areas that have had already over 2 feet of rain over the last two months. so we've got a lot of saturation and a lot of flood potential on the way. back to you guys. >> thank you very much. that storm could have a big impact on the energy market and let us get right to jackie deangelis. >> hi good afternoon to you brian. we saw gasoline move up on this news today and crude oil prices were up as well closing just around the $60 range, up about 50 cents on the day, and it's interesting because tropical storm bill could have an impact on the refiners, and that's what traders are worried about. we do know that the houston ship channel was closed yesterday because of concerns of rough seas as the ships were going through, and also flooding can be an issue at refineries.

about 145% of u.s. refining capacity is in the gulf coast. about 50% of natural gas. we do know that the oil platd forms really haven't been affected by companies like chevron and royal dutch she will have evacuated their non-essential personnel. this storm is one to watch and part of the reason we're moving higher in crude and gasoline today. back to you. >> all right. jackie thank you very much. it's time for street talk and analyst recommendations of stocks you need to build out. do it every single day. the first stock, sarah, goldman sachs adding it to their conviction buy list and they say with that deal rai has emerged as a best in class portfolio company with better pricing power and cost energies. they see 16% earnings growth and an 81% per share value. >> and they are newport and american reynolds camel under one roof. second leading stock, a semiconductor company cavium.

the target 85 bucks which is 15% upside. the analyst says the company is well positioned to gain share due to all the recent m & n activity and they note they had significant addressable market expansion potential. that stock has been on a tear up 41% over the past year. along with a lot of semis on all the deal activity. >> i was going to say to find that stock we had to do a cavium search. give a shout-out to needham. pack on june 4 they upgraded the stock, up 7% since they did the upgrade. can'tus services ticker pwr. a $37 target and about 25% upside. they say they are well positioned to capitalize on a strong consecutive growth cycle for capital investment. fancy way of saying we'll finally get money for infrastructure and spending will go up 80% through 2020. >> a big call on friday for the stock as well. jpmorgan initiated with $35

price target also higher. a stock here one that i follow closely. monster beverage. city is adding the stock to its u.s. focus list. shares remain buy rate and the target is 155 which implies about an 18% upside. the stock is already up 86% over the past year and slowed down a little, brian, on concerned about international. now the coke deal has closed buying a 17% stake in some analysts like ubs say they could increase that stake and buy more of that company. >> go back and look at companies that will make a lot of people millionaires and monster is not on that list but should be. this was a $20 stock five years ago. it's now 132 bucks. >> one of the best performers in the nasdaq going all the way from the dotcom bobble to 2000 where we are now. >> have you ever drank it? >> i don't drink energy drinks, a lot of people. fastest growth categories in all of beverages. >> i guess we'll have to take a sip one of these days. i'll be awake all night. >> finally, the fifth name -- >> don't need that.

>> the under the radar name of the day is dorian lpg, lpg is the ticker connecticut-based liquid natural gas shipping company. upgraded to a buy from a hold. they are saying vessel demand is tight despite a bunch of new ships and charter rates are up to around 19,000 per day and if you want to rent a very large crude carrier it will cost you $90,000 a day price on the stock $20 a share. >> and i wonder how that is to natural gas which has been under pressure. >> that's it for "street talk" on a tuesday. thank you. now time for trading nation. traders do trade better together and let us take a look all together at european stocks. they have been hammered lately mostly over you guessed it greece concerns, but is this just a short-term slump that may be a nice buying opportunity for you? let's find out. rich ross a technologies and erin ives erin first to you,

any greece-related hangover a good buying opportunity or ditch them if you got them? >> i actually see this as a potential and good buying opportunity and i would like to see it drop another 50 points to really get it closer to about 15 times forward earnings where i really see the sweet spot getting in. if we see continued concerns over greece the next couple of weeks and that's where it's time to get in. we're looking at 12% growth over the next year. that's well above the u.s. and, again, valuations are coming down to more reasonable points so i see this as a long-term good story. >> long-term good story. what about the charts that say long-term good chart, rich ross? >> yeah brian, the selling in europe can only be classified as exhaustive. let's bring up the charts and i'll show you why. today we'll look at the wisdom tree hedged etf taking the euro out. ekrags and allow it to trade europe as the europeans do. the first feature of this chart

is the head and shoulders bottom from which we emerged back in january when we get the announcement of european qe. we searched 23% upon breaking out from that bottom. however, this is where it gets interesting. 9% to 10% pullback at the 150-day moving average. that's created that textbook buying opportunity and today we get that intraday reversal and that tells us we're exhaustive. big buyer of europe down here. retest the old highs, as much as 10%, 11% upside here in europe and i'm a buyer right now. >> there we go. fundamentally good time. buyer on the chafrts as well, a double whammy for europe in a good way. erin, rich thank you. see you online as well. we do two additional segments every day. tradingnation.cnbc.com. we always say don't forget the dots. be like the fed, keep the dots. >> up next doing a little retail therapy. we're talking gap, sax and macy's when "power lunch" comes back. now your trading nation stats of the day and a word from

our sponsor. >> one mistake that many traders make is trying to pick the perfect entry price for a stock they would like to own. here's something to consider. why not buy part of the position that you have. that way if the stock goes down in price you have the opportunity to add additional shares at a lower price and lower your overall cost basis.

that's disgusting. a bridge in pennsylvania has been closed for the past two nights not because of bad weather or construction or infrastructure issues but because of a mayfly infestation. as you can see in that video, and if you're on radio sort of picture millions and billions of dead flies piling up along a bridge. the chief of the local fire department says there was at least an inch or two inches of dead mayflies on the road. the amount of mayflies have made it difficult for drivers to see at night and has led to a lot of accidents. i don't give a lot of advice but if you're on a motorcycle keep your mouth shut? that's gross. i don't even know how that happens. gap announcing it's closing 175 stars and laying off 250 employees at headquarters. in a rare interview the gaap ceo spoke with cnbc's courtney reagan on shifting its strategy.

have a listen. >> by these decisions today i think we streamline the organization and we frankly eliminated some of the complexity in the fleet that wasn't getting us very far. >> let's bring in robin lewis, ceo of the robin report and co-author of the new rules of retail and with us cnbc contributor jan niffin. >> look he's right-sizing the business and obviously taking some important cost-cutting moves, but isn't the problem with gap a fashion problem, a merchandising problem? do you know anything else about that, and is it a good investment? >> well, i wish that was their only problem. they do right now have a merchandising problem at gap but they do have too many stores probably 800 more the right number maybe 700, maybe 750, but they need to do with gap what they did with old navy and they are taking lessons from old navy. saying all the right words. i hope he can execute it, but i'm actually favorable on gap right now. i think banana is working

reasonably well. old navy is working great and gap can work if they do what old navy has done which is spruce up the merchandising and just run a better shop but they need to shorten the supply line and be better on cost structure. >> well, one of the things robin, is that they need to do is expand in omni channel, digital, and they have got the right ceo for that job. how do you feel about some of the changes at gap and whether it might be a good time to put your money there? >> well, i take a little more terminal view, if you want to call it that than my fan jan when i highly respect. i think they have a brand problem. i don't think it's a merchandise or leadership problem. i don't think it's an organizational problem. led gap imploded in the early 2000s, and it's never come back because of it being a brand problem. once ubiquity is the worst word in this industry. it's the death knell for fashion brands and when you reach ubiquity which the gap did early on you implode.

they haven't been able to bring it back, and now they get a generational problem because the millennials are into fast fashion and they aren't going to go even if gap went to fast fashion, i don't think the young consumers are going to go back to the brand. it's a brand problem, my opinion >> you know, and that's a good point. you're probably right and you guys have forgotten more about retail than i ever know. we always act like we can fix a brand and they got the fashion wrong. what about the fact that there's too many stores in america, 5,000 square feet of space for every man, woman and child. kids would rather have a $500 iphone than maybe two pairs of the latest jeans, right? is this not a brand issue but simply the fact that there's too many doggone choices in this country. >> 46 square feet of every, man and woman. >> i wouldn't disagree. >> why do we assume that we can just fix a brand? maybe there's just too many stores. they are bastardizing each other. >> there are too many stores. we'll see a lot of stores close and see big stores close like

best buy. we'll see macy's close some stores. we'll see small players close stores, but there can be winners, and i think gap can be an omni channel winner. old navy works and that's an old brand. the gap name brand has not been destroyed even though they have tried to destroy it two or three times. i think if it's run well they can be one of the winners, but, yes, there's going to be a lot of losers, and i think their is certainly out on whether gap could win but i think they at least have a shot as an omni channel player, and i think they have the right guy to do omni channel business. no, i don't think it's a slam dunk. that's for sure. >> guys let's talk -- >> i think it will muddle its way down just as sears is doing. i think will take a long time. they are very big, but i think they are in decline, and i -- i think what's his name left at the right time. >> i was going to ask you about off brands robin, but i think we've run out of time. i know you have interesting thoughts there because that has been, brian, one of the spots of strength. we'll have you guys back on and talk about where investors can

make money there. >> all right. good debate. thank you very much. >> thank you. meantime the race for the presidency just got even more interesting. donald trump announcing he's officially in the running. what effect will the donald have on republican primary? plus, a baseball hack no not a bad swing, a computer attack on another team apparently by a team you're not going to believe this next story if you are a cardinals fan. listen up. innovation starts... right here. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a redesigned cabin of unrivaled style and comfort. the 2015 c-class. at the very touchpoint of performance and innovation.

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♪ don't settle for u-verse. xfinity is perfect for people who want more entertainment for their money. all right. another quick look at twitter. twitter has been in the news a lot the last couple of days heading another 52-week low. earlier today traded as low as $53.31. slightly above 34 now. the low, by the way, on twitter is just under 30 a share. 29.50 and change. that was hit back in 2014 so that's the next number technically to watch for twitter but the pain for twtr continues. donald trump is running for president, again, and he used a fiery speech to announce his candidacy candidacy. take a listen. >> i am officially running for president of the united states

and we are going to make our country great again. >> all right. let's bring in our own eamon javers. the twittersphere and the >> reporter: he is serious. when you talk about donald trump, you've got to talk about some of the investments he made. he hired staff on the ground. i spent money on this. he thinks he's in it to win it. a lot of republicans disagree with him and say he is simply too bombastic to get the nomination. what you saw today was donald trump's ability to attract national media attention to dominate the twittersphere and bloggerssphere. >> this guy comes out swinging. whatever his chances are of winning the presidency i'm sure they are low. but if you are another republican candidate, i've got to be nervous. this guy has nothing to lose and

will say whatever he wants. >> the veteran washington political strategist john feehery said the big problem for republicans having donald trump in the case he could get a podium at the gop primary debate. he'll knock off a presumably more qualified candidate before that debate and will attract a lot of attention and force candidates to react to the things he is saying. today he said the american dream is dead. he said he will be the best job creator god ever created. there are things the other republicans have to respond to from donald trump. >> let's stick around. we have to get to one of the weirdest stories. dominic chou. apparently the st. louis cardinals are being investigated by the fbi for hacking into the computer system of the houston astros. tell me this is some april fool's joke. >> it is not a joke. this is less sophisticated than the stuff eamon javers normally

hits. what happened is the st. louis cardinals may have had certain representative s representatives from their front office hack into the houstones a astros. there is this idea there is personnel that go between two organizations. the current general was with the cardinals, he left and went to the astros. in a story that says was possible revenge, officials allegedly used old passwords, something not so high tech to go in and take a look at some of the propriety data the houston astros accumulated, like player statistics personnel decision. statistics data and numbers

matter to a baseball organization. in this case it could be one of the first cases of espionage between two professional sports programs. that makes the story so much more interesting. i should point out though that the cardinals, the astros and major league baseball all put out statements saying they are cooperating with the investigation and have no further comment at this time. >> we've got to go guys. somebody pointed out there was a player named luther hackman who played with the cardinals four years in the late 1990s or 2000s. is he a person of interest? probably not. thank you very much. king's park high school in suffolk county new york took the first trophy ever in the junior achievement plan competition. we'll talk with the winners. wave.

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♪ ♪ hp instant ink can save you up to 50% on ink delivered to your door so print all you want and never run out. plans start at $2.99 a month. right now, buy an eligible printer and get three months of free ink with hp instant ink. available at participating retailers. the most affordable way to print. hp instant ink. . dow is now positive for 2015. these are the first gains we've seen for the dow, s&p and nasdaq in three sessions. consumer staples are the leading group for the s&p 500. many of the industries are higher. industrials the only ones lower.

>> students are given the opportunity to compete if the junior achievement competition. this year travel and tourism. >> dom chu with us. he was one of the judges in the competition. patty, how did you come up with the idea for hello, let's go? >> we came up with the idea because we are all 18 17, so almost college age. that was on our minds. we wanted to do something we knew a lot about. this came natural us to. >> we should tell them what the business plan is in a nutshell. >> our business plan was a domestic tour bus company that would work with local colleges starting in the long island area. we would take international students from those colleges to

explore and see what the american lifestyle and culture is about. >> if i'm from france going to rutgers, i could see the sights of new brunswick. >> hofstra. >> is that the idea? >> and learn about the area you are in. not just learning about the popular tourist sites, but nuances of the city. >> is it launched? is it going or still an idea. >> it's still in the idea phase. now how do we take it from paper 0 and make it come to life? >> how do you do that? >> we are doing more research and what it takes. >> i assume you are still going to go to college. >> yes. >> are you going to try to continue this idea while freshmen at whatever university you choose? >> we will continue working with junior achievement. >> they also got a check. that's the meat. >> it's not a lot of seed capital in relative turns. >> but it's $2500 each. >> and the competition as a

judge, it was fierce. >> why did you pick them? aside from their style and grace. >> i was one member of a judging panel. we had private equity executives, a lot of different judges. it came down to whether or not the plan was viable and what problg ex-s were. of had a great business plan. the idea was you wanted to show you could execute it in real life. we felt this team was one of those ones who could do something like that. >> have you selected colleges yet? >> yes. binghamton. >> bentley. >> christopher newport. >> don't spend it all in one place. put it in the stock market. it will grow overtime. >> for more on the triple victory go to power lunch.cnbc.com. sara, we'll see you back tomorrow for a big, big show. we say that because the fed's policy statement at 2:00 eastern

time followed by a press conference possible we get an interest rate hike the first of nine years. most say no. >> there can always be hints. >> big fed show tomorrow. thanks for watching. congratulations, ladies. "closing bell" starts right now. hi welcome to "closing bell," i'm kelly evans at the new york stock exchange. >> i'm bill griffeth up here at cnbc headquarters. i'll be on nightly business report. a fed-fueled rally in the market today. janet yellen does not speak until tomorrow at this time as a matter of fact. we'll break down what's behind this news. >> today looks like the mirror image of what we saw in markets yesterday. we are also watching matchmaking in the managed care