after hours. qualcomm, las vegas sands and josh's beloved american express tonight at 5:00. that does it for us here on the halftime report. all right, everyone. we start this hour with a cnbc exclusive. big numbers on the american housing market coming in right now. diana olick has them first, she's live in washington. >> reporter: hi, tyler. stronger home sales now have mortgage bankers feeling better about their business. in an exclusive to cnbc the mortgage bankers association tells us they are revising their forecast of purchase mortgage volume higher this year from 730 billion to 801 billion. a sharp jump they say, based on the following. increased pull-through rates. that is borrower applications being approved and turning into loans. borrower behavior as in better application quality.

and less cash in home buying and lender underwriting. we've talked a lot about some loosening in the market. more adjustable rate loans and even interest-only loans coming back. freddie mac made some changes when it comes to student low debt as well. that should give branks and non-bank lenders a boost in earnings for the year. >> we actually have more housing data out today. mortgage makeses edging up ever so slightly 0.1% last week but existing home sales, that's where i really want to focus in on because they came in quite strong. right? >> yes, mandy. we're seeing healthier sales in june. prices, not so much. sales gained a larger than expected 3.2% in june for the month, up 9.6% for the year. that's the strongest monthly pace in over eight years. but they came at a very high price. the median existing home price hit $236,400. that's the highest ever. it is due to tight supply up less than half a percentage point from a year ago, just 2.3 million homes for sale.

it is also due to more expensive homes selling. sales of homes priced below $100,000 actually fell from a year ago. back to the mortgage picture, purchase application volume is up 18% from a year ago. the loan size is shrinking a bit which could mean more first-timers are getting into the market. but that hoent shownasn't shown up yet. first-time buyers just 30% of the market since june. if you want to hear from the realtors, it is on instagram now. diana olick on instagram. >> you're going all modern on us. we've got a whole lot more analysis on the housing market later in the show as well with an economist. back to the stock market the dow, the s&p and nasdaq are all moving lower just past 1:00 p.m. here on the eastern coast. the russell 2000 are just moving marginally higher. let's get to bertha coombs in times square to find out more about what in particular is happening? >> it is a total big cap drag

story today. we have the russell 2000 right at the slot line. mid caps are also just fractionally positive today as well but you see the 1% drop in terms of the large caps. that's almost exclusively in terms of the point drop coming from microsoft's miss and microsoft's 3% plunge today. apple, though they've come significantly off of the lows, overnight it went close to its 200-day moving average and seemed to hold support there. we are seeing apple on pace for a 100 million share day. hasn't seen that since it hit an all-time high back during its april earnings. and before that was the day that carl icahn tweeted he was buying when apple was down heavily back at the end of january. we'll see if that happens today. the real collateral damage is really slipping over into the chip stocks. chips had been the worst performers and the wireless chips today in particular avago

and xpi. on the flip side you are seeing some of the companies today that are hitting all-time highs. two surgical among them. after much better than expected divinci systems its robotics had better reporting in terms of operations with those. then you also have thoratec getting bought out by st. jude medical for $3.6 billion. already this year we have a record number of health care deals topping about $395 billion according to thompson reuters. that's more than we saw all of last year. there's still a few deals that are out there being talked about that are very well in the pipeline, mandy. >> thank you very much bertha coombs. big time for alzheimer's. eli lilly and biogen both out with highly anticipated data from their alzheimer's drug trials. >> start with biogen shares

coming under some pressure today on what some are calling controversial results from its alzheimer's testing. importantly it seemed to slow cognitive declines when you looked apartment the trial more effectively at higher doses. there was one closely watched middle dose which did not show statistical significance in two measures on cognition. that's why some folks are disappointed in this data. a lot of analysts say this changes nothing but piper jaffray did downgrade the stock calling the data sloppy, loafer lowering its stock price to $410. eli lilly has recovered some of the losses earlier in the day, trading about flat now. analysts say the data on a similar drug came about in line with expectations. a lot more going on. we'll tell you more in the next hour. let's get back out to what's happening with housing with

existing home sales nearing 8 1/2-year highs. is it safe to say housing might be in some sort of recovery? let's bring in nela richardson, good to see you. what i find very interesting here we're seeing prices at record highs seeing a lot of demand there, but we're seeing very little supply. if i'm not wrong, supply is around record lows for houses on the market. why is that demand not bringing out more people selling their homes? >> you know the buyers recovered faster than the sellers. it is as simple as that. many sellers want to buy where they live. they want to be in the same neighborhoods and that neighborhood may have already outpriced you. you might not be able to afford the neighborhood that you could have afforded eight years ago. those mortgage products that were available eight years ago have disappeared and prices have gone up near after year after year, month after month. i think that's part of the reason why we're not seeing the translation into inventory that you would expect. >> we're never afraid of their

investment in housing until the financial crisis. then they became very afraid. do you think that that fear of loss of money, that fear of going under water is one of the things that's restraining the housing market? >> there's fear on both the buyers and sellers. for the sellers, it is a fear. these are different sellers than they were two years ago. two years ago it was investors selling. now it is traditional people selling, moving up. that means today's seller is tomorrow's buyer. there is a fear that they won't be able to find something in their price range. for buyers -- we're already starting to see this fear play out in the data -- there is a sense of fatigue that they've been asked over and over again to go to the max of their budget and they don't want to do it anymore. they are afraid that they are going to buy at the top of the market and that is -- no one wants to do that no matter how much money they have in the bank. >> i know how to do that. i've done it a lot. oh so many times i can't even tell you. >> it's not a good feeling.

is it? >> i've been there, too. but if you break down these housing markets one by one, i see top of the list here is denver. i was in denver just a couple of weeks ago and it felt like some kind of like mini boomtown was going on there. do you think that kind of pace. home sales in a market like denver is going to be sustainable and which markets would you expect to follow? >> for denver specifically it's the fastest market we've seen. the median home the typical home, stays on the market for six days. some -- that means 50% of homes are off market even faster than that. it is not just the denver natives who want to buy there. there are a lot of people relocating to denver. austin is another market that we're seeing. there's these typically affordable markets that are now taking off and their prices are grow region their supply is shrinking as more and more people search for affordability. we're getting the behind of herd

belafr inhavior in housing that you see in the stock market. >> wow. thank you so much for joining us. why stock buybacks are distorting earnings growth. bob pisani will join us with that story. we've also got all the alzheimer's data out today. the best biotech buys coming youry way.

no fifth grader's ever sat at the cool table. but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. now get a swiss gear backpack for only $10. office depot officemax. gear up for school. gear up for great. female announcer: get three years interest-free financing on brand name mattress sets. plus, get free delivery, and sleep train's 100-day low price

guarantee. sleep train's interest free for 3 event ends sunday. ♪ your ticket to a better night's sleep ♪

recapping the headlines. wells fargo is now the world's most valuable bank with a market cap approaching $300 billion. that's $42 billion more than jpmorgan and $120 billion more than citigroup. shares of pet foodmaker blue buffalo soaring during its debut. company trading as much as $27 per share. that's well above its ipo price of $20 per share. and breakfast lovers rejoice because fast food giant mcdonald's may offer all-day breakfast nationwide beginning in october. the company saying preparing breakfast alongside hamburger and fries presented operational challenges. mcdonald's shares currently up just by .2%. the stock buy-back craze has continued into the second quarter. according to our bob pisani investors are being deceived -- deceived about earnings growth because of it. let's bring in bob from the new york stock exchange. that's a strong word bob. i wonder whether you really mean

that they just don't understand the arithmetic of what buy-backs do to ets numbers. >> i'm concerned that lowering -- increasing the buy-backs helps the bottom line but it doesn't do anything in terms of organic growth. people need to understand when they're getting when you have buy-backs. the fact -- buy-backs are very big and an important part of the overall earnings picture. right now 92 companies have reported in the second quarter. 20 have reduces their shares outstanding by at least 4%. what you want here is results that incur with shared reductions, actual real share reductions. because with that that's when you get an improvement in the earnings per share. look what the big one is out there. apple. they are the biggest one out there in terms of how much they spend on buy-backs. they have reduced their share count by 4.7% in the last year. that's remarkable. that's an improvement of 4.7% earnings per share, all other things being equal. in the last two years, they reduced it by 10%.

those are incredible numbers going into the bottom line and helping things out. other companies are doing this aggressively well, too. not just apple, but bed bath & beyond has reduced their share count by almost 16%. delta, sherwin-williams harley-davidson, a whole bunch of companies that have just reported reduced their shares by more than 4%. other companies that been doing this for years and years. ib mr. is ibm is a good example. they've reduced their share count by 22% since 2010. independently of whether they've had any real organic growth. it is just financial engineering. the mother of all this with exxon-mobil. they've been reducing their share count since the mobile deal in 1999 and they have take been doing it every year collectively since 1999. they've reduced their share counts by 40%. my point in all this is

investors love buy-backs because when you get share reductions real share reductions, you improve the earnings per share. my problem is that there are a lots of investors who are concerned about what they call the quality of earnings. other investors are looking for real organic growth real revenue growth real growth in their business. this doesn't happen when you buy back your shares. there are other ways you can spend your money besides buybacks, you can invest in companies and invest in growing your company. that's not what's going on right here. the new york stock exchange trade reporting facility did report briefly some incorrect trades earlier this morning. that happened 10:00 eastern. very brief five-minute period where there were some incorrect trades that were reported. that's been fixed. everything seems to be fine. there was a brief period for a short while ago for a few seconds where some of the touch screens froze here as well. none of this seemed to have affected trading at all. i just bring it it up because given what happened a little while ago with that outage there is a little bit of sensitivity to any of these

kinds of little glitches that occur. we'll keep our eye on it and let you know if anything else happen. >> what you're saying about earnings per share, is that when you reduce the number of shares out there and spread the same profits over them automatically earnings per share is going to go up. you seem to be saying that for those companies have that buybacks, earnings per share is not meaningful a profit measure as -- what? >> organic growth. i mean, look. >> organic profits. >> yeah. my point is this. a real investor will look for, is the company growing its own business organic growth internally. the products they sell. can they show that they're growing in some way. that's what you really want to invest in long-term. not saying there's anything wrong when people improve their earnings per share by doing financial engineering with be which is what this is like reducing the share count. it is perfectly legitimate. but think about it, if you are a really quality investor you want to know how that company is

doing, are they really grow region long-term their business. that's not what you get when you get reduction in the share count. >> all right, bob. thank you very much. airport workers threatening to walk off the job at two of the nation's busiest airports. we have the latest on how this could affect your travel plans ahead. plus -- >> hupup next if life gives you lemons, this start-up says spike your lemonade. >> craft cocktail in a can originated in my family's bar in long island new york. >> i love the taste. which is essential. >> what's the wholesale cost for one of these cans? >> stay tuned to find out. ikely to go away on its own. so let's do something about it. premarin vaginal cream can help. it provides estrogens to help rebuild vaginal tissue and make intercourse more comfortable. premarin vaginal cream treats vaginal changes due to menopause and moderate-to-severe painful intercourse caused by these changes.

don't use it if you've had unusual vaginal bleeding breast or uterine cancer, blood clots, liver problems, stroke or heart attack, are allergic to any of its ingredients or think you're pregnant. side effects may include headache, pelvic pain, breast pain, vaginal bleeding and vaginitis. estrogens may increase your chances of getting cancer of the uterus, strokes, blood clots, or dementia so use it for the shortest time based on goals and risks. estrogens should not be used to prevent heart disease, heart attack, stroke or dementia. ask your doctor about premarin vaginal cream. everyone loves the picture i posted of you. at&t reminds you it can wait.

no fifth grader's ever sat at the cool table. but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. now get a swiss gear backpack for only $10. office depot officemax. gear up for school. gear up for great. ♪ ♪ ♪ it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.

welcome back everybody. it is time for today's "power pitch" where one bartender entrepreneur is trying to raise the bar this summer. does her start-up have what it takes to be the next big thing? >> hi my name's bronya. craft cocktail in a can originated at my family's bar on fisher's island floshg. i've been in the industry for over ten years and saw a demand to create a better option for the ready-to-drink category. super premium grade ingredients which includes vodka, whiskey, all natural lemon and honey. served in a 12-ounce can. does not consist of any

artificial preservatives. they are served at $10 a cocktail or at off-premise locations for $15.99 for a four-pack. we've sold over 1,500 cases in the past year on track to sell over 8,000 cases this summer. so join me this summer and enjoy fisher's isle lemonade in a can. >> welcome to today's "power pitch." you just saw bronya's pitch. now let's meet the panel. good to see you all. thank you very much for joining us today. >> first of all, love the taste.

which is essential. i had several backstage. the value of a great brand in this sector comes from a, having great taste, and b, having massive distribution. can you tell me how you get to 100,000 cases and what's it going to take to get there? >> right now what we're trying to do is hammer down really in our market right now which is fisher's island new york connecticut, rhode island, mass and now long island. we've seen growth within year one and year two and i think we're just making time going down the eastern coast. >> to me this product screams lifestyle. chilling on the beach, watching the sunset. have you done any partnering up with sponsorship in similar category like beach volleyball tournaments or sailing or surfing tournaments? >> actually sailing specifically. we've done a lot of race weeks as well as martha's vineyard, the taste. we're trying to go after that lifestyle within the new england communities. >> talk to me about your long-term vision for the company. will there be products for other

regions in the u.s. or non-beverage products? what's the master plan? >> right now really focused ond creating the foundation with what is our original product lemonade from the bar, the house recipe. i think after this with growth going down the east coast, within the coastal communities flavor would be great. so extensions keep going with other cocktail recipes. >> can you describe who actually you're targeting and when and where they drink it? >> we're hoping they're drinking it after 5:00 p.m. really the millennials are really where we focused at first but going from 21 to 60 years old an everybody's really enjoying lemonade. >> as a beverage bar i'm always concerned with cost. what's the wholesale cost for one of these cans? >> the wholesale cost is $75 per case. it is 24 to a case. it is a little over $3 a can the wholesale cost. we try to keep our margins in line with the industry standard given the fact that it is liquor, not malt not beer it

is going to be a little higher than the average craft beer or something like that. but given that we've come from a bar and that we'd personally buy it ourselves, then everybody is making the fair margins. >> i know there pea a natural angle to your product. tell me a little bit more about how that plays out in the ingredients. >> we really try to bring down the sugar content being that it is sweetened with granulated sugar and honey. the natural is a lemon, not art artificially corn syrup filler like you see on the market. we are not organic but we try to be as stripped down to the natural ingredients as we can bay. >> to my taste it is still a little sweet. have you had that feedback zp. >> i think it varies. with the honey, you can taste that. you can definitely taste some of the whiskey notes and smokeyness and vodka that's there for the kick. >> it does have a good kick. i can verify. we need to know if the panel is

in or out. >> i love the taste of the product. it was delicious. it's all natural. the story behind it means a lot to me personally. however, it is a really crowded space and i think it is going to be hard to get distribution across the country so unfortunately, i'm out. >> david? >> well the taste is great and the packaging is awesome. i think with the right distribution and the right sponsor/partnerships i think it is a home run. >> it is no doubt this is a really competitive industry but with that said i absolutely loved the branding on this. i'm really drawn to it and i love the family history behind it. i think that she's got some really great momentum going on the sales side so i'm in. >> and a little bit of advice thrown in for fun. what's your reaction? >> i love this opportunity. thank you all for your feedback. i think that is just the beginning and we're going to keep going. >> clears everybody! let's head to the beach.

that was fishers island lemonade. thanks to our panel. that is today's "power pitch." cheers everyone. we all heard what the panel had to say. we want to hear from you as well. are you in or out on fishers island lemonade. go to my site on twitter, or powerlunch.cnbc.com and tell us what you think. tyler, would you be in or out? >> i'm in and i haven't even tasted it. >> but you were licking your lips all the way through. >> i have a powerful thirst. all right, mandy. thanks. to the bond market we go. rick santelli tracking the action at cme. >> the ranges but a two-day of 10s show compact or not we're drifting below yesterday's range. most of the trade today after the initial high yields that we saw that was reversed by intel announcing some big supply.

what's that doing and why is it happening? most likely it is fed related and it is summer. the high-field etf, we're basically trading at the low yields of the year. if you look at the lqd, the investment grade etf, that's the lowest level since december two years ago. if you look at barclays spreads, they're widening. most likely the weakness in treasuries they say is caused by ongoing weakness in equities. but every survey still has many investors starting to believe september rate increase and this is reflected in these spreads. >> thank you, rick santelli. let's go to dominic chu now for a "market flash." >> remember our conversations yesterday about life lock the company that looks after identity thieves? the shares are rebounding after plunging by around half yesterday. the stock took a hit after the ftc really accused the company of violating terms of a setment over deceptive terms of

advertising and other practices. lifelock is denying the allegations and says they'll take it to court if they have to. stock again lost half its value yesterday but is now up 19%, 20% on this bounce. the question becomes whether the bounce is legitimate with momentum or whether we see any more weakness in the stock. today's mystery chart is one of the worst performing commodities this month. we will give you the answer ahead on "power lunch." the mercedes-benz summer event is here. now get the unmistakable thrill... and the incredible rush of the mercedes-benz you've always wanted. but you better get here fast... yay, daddy's here! here you go, honey. thank you. ...because a good thing like this won't last forever. see your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. but hurry, offers end soon. share your summer moments in your mercedes-benz with us.

hi. hi. hi. hello. hi. hi. hi. hi my name's josh. kelly. my name is raph. steve. my name is anne. tom. brian. krystal. and i am definitely not a robot. i'm one of the real live attorneys you can talk to through legalzoom. whether it's for your business or your personal life, don't let unanswered legal questions hold you up. because we're here. we're here we're here and we've got your back. legalzoom. legal help is here. what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs. because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day.

i like your place. oh, thank you, make yourself at home i'll be right back. hm. she's got x1. alright. huh, hm, ohh... monster? she seemed so nice at dinner. i'm back! ahh! uhh... whatcha doing? ohh, just... watchin' law & order. awww, you're nervous. that's so cute. call and upgrade to get x1 today. ♪

i'm courtney reagan. here is your cnbc news update for this hour. a grand jury will indict charleston church shooter dylann roof on a federal heat crime charge according to multiple media reports. roof already faces nine murder counts on the state level. prosecutors haven't said whether they'll seek the death penalty. the department of veterans affairs says it is facing a budget crisis and may have to close some va hospitals next month. va secretary robert mcdonald was on the hot seat on capitol hill where he was criticized by some lawmakers for failing to tell them earlier about this budget

crisis. the university of california is raising the minimum wage for its employees and contract workers to $15 an hour by the fall of 2017. it becomes the nation's first public university system to set its own base hourly wage. hbo says it has struck a multi- multi-year multi-platform deal with sports commentator bill simmons. hbo will be his exclusive television home. he was the top personality at espn until they parted ways in may. that's the cnbc news update for you this hour. let's get immediately down to john harwood in washington with some breaking news. >> reporter: treasury secretary jack lew is now releasing the trustees report for medicare and social security which comes out every year to assess their long-term soundness. very little change from last year's report. the social security main portion that pays normal retirement benefits is projected to be able to pay full benefits and with its reserves through 2034.

that's one year later than last year. then 75% of benefits are funded through 2089. that indicates the system needs to be overhauled somewhat. on the disability portion of social security, that runs out of its reserves next year in 2016. same as last year. republicans have been making that a big issue. overhaul of that portion of the program in program. in terms of medicare the hospital insurance trust fund will run out of its excess reserves in 2030. thereafter it will need some additional funding. part b which covers doctor visits of medicare and part d which covers prescription drugs are adequately funded for the foreseeable future. not a significant change in this report but another reminder that congress does need to beef up the funding either through higher taxes or lower benefits on both of these programs. >> john when you describe those break points that's when the trust fund runs out?

not when the trust fund begins to run a deficit year over year? >> it is where the trust fund begins to run a deficit. that doesn't mean they have no ability to pay benefits after that point. just means they can't pay full benefits after that point. >> john thank you very much. john harwood. gold prices closing right now. let's look at what they are doing and the other metals as well. a rough stretch for gold and continues today. down almost $12 an ounce today at $1,091. another 1% lower. silver silver, copper, platinum palladium, all lower. copper the big loser down 1.75% at this hour. >> gold etfs at their lowest since 2008. the dow, nasdaq and s&p are showing quite a bit of red with the nasdaq xos fit sit the biggest percentage loser out of the three. this is the second down day for

the dow, s&p and nasdaq. something we haven't seen in about a month's time. jeff you're feeling a little defensor. you hold 8% to 12% cash right. what are you waiting for? what are you you worried about? >> there are a lot of unknowns. >> there are always unknowns. >> but really you add the fed reserve with the rate increase greece and china, no resolution yet. look at earnings as we're in earnings season, expectations are -- earnings are -- or stock prices rise by the expectation of earnings going up or the earnings that are actually happening. we're looking for acceleration in the second quarter -- or second half of the year. first quarter we've a bit defensive. >> just to push back for about two seconds on some of the worries you put out there, you could arguably say they've been priced into the market. >> it is not to be -- when i say defensive, we're 8% to 12% position of cash.

doesn't mean we're out of the market. we're looking for where are the sectors that can make money. we do like japan with a strong dollar and rising -- the fed rate over there, and the bank commissions doing all they can to raise value in their stock priceses, we are prices, we're seeing some awesome opportunities in europe as well. >> you like europe you like japan. this is your department here glen. you're the global strategist. what do you think of those two areas compared to the united states? >> i think we're broadly in line in the sense that developed markets are the vanguard of global growth right now. way out ahead of emerging markets. so the u.s. is kind of at the vanguard of the developed markets but you also have uk reboundsing from a very weak beginning of the year. you have europe where the fumts have been driving persistently upwards. >> between now and the end of the year which of those various

markets you mentioned are going to give you the biggest bang for your buck? >> i think i'd probably look at europe in the sense you have this confluence of factors. policy pushing in the right direction, credit growth is responding and growing very quickly. and a tailwind from a relatively weak euro. all of those kind of push in the right direction, whereas compared to the u.s. where we're still fairly sanguine. i think the story is very different. we're in the long of a sort of flat business cycle. all economic indicators say there's still some room to run this cycle, hence equities should do okay. but there financial markets have arguably run out a little bit ahead of the economy. >> thank you both very much for coming in today. go to powerlunch.cnbc.com to see which sectors ben says may be the surprise to the up side this earnings season because basically expectations have been beaten down so low. to julia boorstin for a "market flash" on twitter.

>> twitter announcing some updates to its developer tools. now its answers mobile analytics tools will give developers more granular information about how exactly people are using their apps. the move is designs to draw more developers to rely on twitter for their app infrastructure and advertising through its mo pub tools which can drive revenue for twitter. twitter also announced its second annual developer conference in october, all part of their push to better compete with google facebook and yahoo! to provide those tools and ads to its developers. trading down about 2.75%. the gaming giant las vegas sands reporting earnings after the bell. analysts are already lowering their expectations after weak volumes from macao. could the damage even be worse than they fear? plus portuguese pizza pros locked in a fierce competition. we will show you this piping hot video straight ahead on "power lunch."

push your enterprise and you can move the world. but to get from the old way to the new you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that is still to come.

welcome back to "power lunch." home builder stocks are rallying following better than expected home sales numbers. d.r. horton lennar pultegroup all up. house appliance maker whirlpool may be factoring into that trade. a lot of home builders in focus. some people like new york style. some like chicago., the deep dish. we might have to start giving portugal style a pizza a trial if this video is any indication. 26 of the best pizza pros in than country competing in the portuguese championship of pizza in porto. pizzas were judged on two criteria, taste, of course and beauty. every attendee got the chance to taste the slices of their choice and some of the more acrobatic styles of pizza making.

>> am i missing something? one of those pizza bases that the guy was tossing had massive holes in it. >> it looked like a swiss pizza. all the mozzarella would fall right through. looks delicious. that and some hard lemonade and you've got a whole meal. angie's list fell short of expectations as memberships fell 26%. angie's list posting steady losses since going public in 2011. shares down by 20%. amazon expanding its handyman on demand home services division to more cities across the u.s. the service connects consumers with service professionals in their area. shares sitting flat in amazon. and home improvement giant home depot buying jacksonville florida based interline brands for $1.6 billion -- sorry. allowing home depot to enter the maintenance repair and operations space.

the shares up by .7%. a fire on a royal caribbean cruise ship has been reported out of jamaica. let's bring in simon hobbs with the latest on that story. >> hi tyler. the fire was on "the freedom of the seas" picture here but currently in jamaica. flames broke out in a mechanical space on the freedom just as the ship was pulling into the port of falmouth. this photo from a guest onboard, the captain mustering all zbefts to guests to asemly stations but the ship's fire system extinguished the blaze. royal caribbean reporting that all systems are functioning. that's important for all investors. beyond passenger safety, provided propulsion isn't lost and customers aren't strayeded at sea, images of which can affect industry-wide bookings and importantly pricing. events like this are not material for investors. in fact since the carnival

"triumph" famously drifted without engines for days in the gulf of mexico 2 1/2 years ago, royal caribbean's stock has more than doubled in value and carnival's is up 40%. as we mentioned before the break, las vegas sands set to report its earnings after the closing bell today. the stock has traded lower by about 3% over the last quarter but has been attempting to comeback over the last month despite ongoing concerns in macao. rachel roth dp manman and harry curtis. harry, start with you. feels like estimates have already been coming down but are those consensus estimates that we are looking at today even still too optimistic? >> we think they are too optimistic for this quarter, for the second half and into next year. >> why? >> weakness in macao. it's not only -- it's well known that their revenues are soft but we're starting to see some

weakness in their non-casino revenues including the hotel revenues. and i expect that their margins are going to also disappoint. >> they are heavily invested in macao. rachel the question is -- how key is macao to the stock price of las vegas sands going forward, and when will macao pick up? >> macao is basically the driver of the company at this point. it is the vast majority of their earnings and it is certainly what investors are focused on. it is going to be key to get the stock moving from here. the key question is going to be margins as everybody's calling for margin declines. >> you're still positive on the stock? >> absolutely. i think if you're looking out over a 12-month period remember the stock market's always forward looking and it is not about where trends are today. it is about where they are going to be next year. i think trends will be the same or better next year than they are this year. in addition you'll collect your nearly 5% dividend yield which

is great in this market just for weighting. >> let me ask a dumb question which i'm quite expert at -- that is what's going on in macao and why? why is the business there challenged challenged, not just for lvs? >> i think that the issue for the past 12 months has been the loss of premium players. but i think for the stock we have to look forward to next year when there's going to be over a 20% increase in capacity. that's it the reason why we're not high on the stock because even with the most recent capacity increase gaming revenues have still trended a bit lower and clearly demand is not lifting with the supply growth and we think that's going to continue unless there is a significant policy shift by beijing. >> so basically when you say premium players, harry, you are referring to those coming from mainland china and you've got to wait for a chinese pick-up

there? >> i'm less so -- i'm less worried about the impact of the chinese economy as i am about actual policies coming from beijing. >> right. okay. thank you for clarifying that. rachel, i understand there's also an ongoing legal dispute, a wrongful termination suit which is kind of hanging over las vegas sands as a company. is this something that hangs over the stock as all for you? >> i don't think so. i think most of those sort of i guess we could call them legacy issues. but issues have been circulating of that nature for several years and i really don't think that's what's been overhanging the stock. i think the key question here is as harry correctly points out, is whether or not you can have a market on a same-store basis stabilize and then you can have the new projects come in and incite some new demand for growth. if the market can sho even a slight improvement, the stocks will work from here. >> rachel and harry, thanks very much for joining us today. thank you very much mandy. service personnel at jfk and

laguardia are set to go on strike 10:00 p.m. tonight, folks. we'll tell you what it's all about, which carriers will be affected and what it could mean for your travel plans. that is ahead on "power lunch."

kids are expensive. so i'm always looking to get more for my money. that's why i switched from u-verse to xfinity. they have the most free on demand tv shows and movies on all my devices. it's perfect for me because my kids are costing me a fortune. i'm going to cabo! [ music plays ] don't settle for u-verse. xfinity is perfect for people who want more entertainment for their money.

here are this hour's "power points." mortgage bankers say they are raising purchase volume to 801 billion. home builders rallying after existing home sales for june hit a nearly 8 1/2-year high. shares of lifelock rebounding today after yesterday's sell-off climbing 20% today so far. if you missed any of the big stories of the past hourowerlunch.cnbc.com powerlunch.cnbc.com. we'll break down the reports and tell you what it means for your money. "power lunch" back in two.

hi my name is tom. i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here we're here and we've got your back. legalzoom. legal help is here. no fifth grader's ever sat at the cool table. but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. now get a swiss gear backpack for only $10. office depot officemax. gear up for school. gear up for great. ♪ ♪ ♪

it took tim morehouse years to master the perfect lunge. but only one attempt to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank. [ piercing sound ] daddy! lets play! sorry kids. feeling dead on your feet? i've been on my feet all day. dr. scholl's massaging gel insoles have a unique gel wave design for outrageous comfort that helps you feel more energized. dr. scholl's. feel the energy! when the moment's spontaneous, why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess.

side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. a huge update rolling out in moments in the fight against alzheimer's. we'll have that and the company involved. and the guy who helped hack that jeep is here on how he did

it and if your car is at risk, all that in just a couple of minutes. back to you all. earnings time. 20% of the s&p have reported their profits so far. 70% of those have beat the street estimates. 10% have met them and 20% have come up short. reporting today, coca-cola, beat. though the stock has lost a bit of its fizz down less than 1% as you can see. boeing beat the street. its stock cleared for takeoff. american express reports after the bell. really big difference in volume. look at all the volume in coke and boeing compared to amex. sara you go first. >> you mentioned the beat. volume growth at coca-cola stood out most this morning driven by 1 % growth for the main coca-cola brand, 6% for coke zero. but the real strength coke is seeing right now is in teas bottled water and double-digit

growth in fairy. the new milk partnership. diet is still dropping. coke though makes most of its money overseas so the strong dollar hurts especially against emerging markets currencies like brazil. overall sales of coke would have been up. results still show progress for coke which in a transition year they keep saying. top line growth still somewhat elusive. we'll wait until next year. boeing also beating the street. phil, that stock moving up today. >> tyler, there is an old saying that when you look at boeing shares as the commercial airplanes business goes, so goes the boeing stock. what we saw today, better than expected performance from the commercial airplane division. delivery soared to a record high of 197 in the second quarter. operating cash flow has such been a crucial focus for so many investors, it was a very strong $3.3 billion in 2q.

that's why even though the company revised its earnings per share guidance for the year down about 50 cents, it is down to $790 per share. stock is up today because you see what's going on with the commercial airplane division. bottom line is this -- that business is strong right now with a $500 billion backlog and that's what investors are focused on. american express reports after the bell. mary thompson will be all over it. what are investors expecting to hear? >> looking for a deline on revenue and earnings on a year over year basis. focus will always be what spending is and spending growth is expected to be around 6%. keep watch on how corporate spending is doing. the company made an interesting note in the first quarter when growth in corporate spending actually slowed. i'll be listening for that conthe conference call. lastly investors want to know about initiatives the company has to replace the lost revenue from costco canada like its

plenti rewards program and other initiatives as well. >> mary, thank you. sara, phil, thanks very much. what are we doing? we are going to hand it over to brian. it is a little early, but why not? we've done all we can do mandy! >> we've given everybody what they deserve and even a little bit of what they don't deserve. >> i don't know if they deserve an extra two minutes of us? >> you got it whether you like it or not! >> that's just the kind of people we are. we just give a little extra. we're like super tramp, we're going to "give a little bit." oil getting slammed once again. i'm brian sullivan. melissa lee here as wells. more on the oil stock slide in a minute. but first, we've got to go back to phil lebeau because we have breaking news not on boeing but it is a big airline

and airport story, phil. >> reporter: over the last week we've heard of talk of a potential strike that involved about 1,200 workers, people who work for a contract employer known as aviation safe goordz.guardssafeguards. they are baggage operators, wheelchair handlers they do some security. they were threatening to go on strike at jfk tonight and tomorrow at laguardia. they just announced they are suspending plans to go on strike. there will not be a strike at either of those airports tonight or tomorrow. workers say they have agreed to sit down and negotiate further with command security workers. that's the name of the company that's the overall parent company for these 1,200 workers. again the bottom line is there will not be any type of a picket or strike at jfk or laguardia starting tonight. brian, back to you. >> i'll take it, phil lebeau. let's get a check on the

broader markets overall. they are lower but we want to home in on the bright spot in the market that would be the financials. the xle, the etf that tracks the financials, this is a in you high -- the xlf. pardon me. that's a new high. new highs for jpmorgan citi as well as bank of america but you know the bigster is in technology. apple a big part of that on the back of apple's weakness we are seeing apple suppliers suffering in today's session. take a look. all lower across the board. on a day when the semiconductor index is down by more than 2%. all of this putting the nasdaq under pressure. take a look at what's probably in your portfolio and that would be the qs. we highlighted this earlier this week. the construction to qs is such that the four biggest stocks make up a big percentage of the market cap. the qs are feeling more of the pain than the nasdaq overall because of apple and facebook. google had a new all-time today.

happening right now, a big update in the fight against alzheimer's. biogen about to kick offer a presentation on its experimental alzheimer's program. . company announcing some data on this earlier today. that sent the stock down. more now with meg terrell. >> we'll wait to see whether this presentation that's going on now here in washington will reverse the stock. it is under some pressure. we told you about biogen and eli lilly in the last hour but there are a lot of companies working in the alzheimer's space and there is a lot of hope that multiple of them will be successful in slow seg the cognitive declines you see in the space from companies like lilly and biogen. roche is also work rging in the space. the alzheimer's association with a is talking about a higher dose of roche's drug. other companies are working on drugs to just aleveleviate symptoms of alzheimer's.

allergan is working on a combination drug that works on symptoms alzheimer's. another stock on move is axovant. there was an update on its program which was in phase two. they're combining their experimental drug with one that's on the market. they're having an investor meeting later today. we'll see if they reverse those losses but the company's stock down about 4% right now. back to the biogen data though we talked about a little bit last hour though it is controversial some say, analysts are still optimistic about it on the whole saying it has a 50% probability of success in later stage studies they are planning to start this year. if history is a guide, that's pretty optimistic. since 1998 there have been 120 failures of alzheimer's drugs in development and only four approved. a lot of hope that one of these will be successful. we are seeing signs that they

may work but more to prove. back to you. >> meg, thank you. are there other companies that may win by helping to defeat alzheimer's? let us bring in now eric schmidt. you have an outperform rating at a $409.50 price target on biogen. is there anything that you heard today that will make you want to either raise or lower that rating and price target? >> no brian. i think today's data sets were pretty much as previewed. remember we had already gotten an update on this trial back in march so the incremental news a today was on the margin fairly modest. we are right where meg indicated most of wall street was. we believe this a coin toss as to whether or not this drug works in the subsequent or later phase trials. beauty is from biogen's standpoint, if there is even a reasonable chance at all that this product works, the market is so substantial, maybe $10 billion, 15 billion mr.$15 billion,

you just to have some money invested in biogen. >> any good news is incremental? >> no. i would say consensus view is pretty close to our own view that this is a 50%-50% proposition. it going to be a big buyer event. we won't get these ultimate data sets for another three or so years but that's going to be the all-time biggest biotech binary probably in the history of our industry. >> in this market environment are you do seek refuge sort of speak in the larger tech biocap stocks. you had a note out earlier about amgen. are people underestimating the power they have there? >> we think so melissa. we think people are generally underestimating the earnings power of almost all of the larger profitable biotech stocks. especially in a marketplace where just a lot of other sectors are not performing. we've had our share of misses early on in this earnings cycle

but the big cap biotechs are benefiting from an older population benefiting from obamacare and more coverage for more people. they're certainly benefiting from aggressive u.s. pricing environment as well. >> all right, eric schmidt, a pleasure. thank you. we get a news alert now. over to mary thompson. >> the new york department of financial services is asking for information on symphony. you might recall that is an instant messaging system that's been opbasically backed by a number of big banks including goldman sachs. the dfs wants to know how symphony plans to retain certain documents and messages within that system because regulators are concerned how they may have to access some of this information in the future. dfs says it is concerned that this private system could allow for some kind of market manipulation. keep in mind symphony is being touted as a bloomberg killer. again, an instant messaging system that's been invested in by a number of big banks. it has a soft launch coming up

at end of this month and a hard launch coming up in september. the dfs asking symphony for more on how it plans to maintain those documents and messages sent between traders. nasdaq still taking a hit following a barrage ever tech earnings. bertha coombs is at the nasdaq with more. >> no good news from yahoo! or from microsoft. really it is the disappointment of apple that's causing the down downdraft. on days we might see it trade more than 100 million shares today, interestingly apple's cash board continues to jump. $203 billion. that's enough to give every man, woman and child in the united states $653 cash. eye-popping number. the big caps overall today are the losers. microsoft one of the big drops after its numbers missed with the loss that they posted.

biogen on the disappointing news on its trial. illumina a big loser. thoratec at an all-time high putting numbers today for buyouts when it comes to health care, brian, at a record $3795.8 billion in deals this year. to follow up on that it is not every day that a company reports nearly $11 billion in net profits, says it is sitting on $200 billion in cash beats most estimates on everything and the stock falls. that's exactly what's happening with apple. let's try to make sense of this. dom, apple may be down right now but you have some exclusive cnbc data on what happens to the stock in the month following an earnings release. >> that's correct. let's take a look at to this put it in context for our viewers here. if you look at the overall

picture for the last two 1/2 years, we have not seen a move down towards these levels since september of 2013. that was the last time it dropped below something called -- something the traders call the 200-day moving average. basically the longer-term trend line for the overall stock. it's come close a number of times an again coming close recently here. we are still down on the day as bertha just told us but off of our worse levels today. the request he is why are investors even stepping up to buy this stock if things were so disappointing. here's another interesting part. according to our data partners at kensho there is a little bit of positive bias here every once in a while for apple stock. over the last five years, we looked at performance one month after an earnings report. first of all, across all observations over the last five years, it's up about 3.8% the day after. already decently in terms of the one-month later approach here. it's positive a little over half the time. 55% there. but when earnings beat like it did this past time the average

gain is around 4.5% almost 5% here a month after those earnings are reported. it's positive 58% of the time. one of the reasons why some investors may be feeling a little more bullish on apple stock has to do with some of these statistics. interesting though we'll see if that holds. the last time we saw apple trade toward these levels relative to its average, september of 2013. >> interesting stats but for apple and a lot of other companies it is specific metrics like the phone and in fact that's primarily what's behind today's big drop in apple shares down 4.5%. let's get a shareholder's take. tim's firm owns more than 100,000 shares of apple. you say it is a great quarter. the stock is down 4.5%. if you take a look at the phone shipments, in your notes you said it's crazy because compared to the end of the previous quarter we were expecting. less. they come in at 47 1/2 and it is

disappointing. but it is 4% lower than whisper numbers. it is all about momentum isn't it and proof that the growth cycle for the iphone 6 is still intact. are you confident it is still intact with this setback? >> i think you hit the nail on the head about whisper numbers and all sorts of really short-term trading ideas that people have about apple. we concentrate on the long term. we really look at valuation, we look at their ability to grow earnings in the future. those stories are still intact. whether they sold 43 million phones this quarter as people thought they were going to or 50 million as the number grew to over the past three months we still see significant growth. we see growth domestically in the market share and we sew growth internationally in their presence in china. real long-term story for apple is still very much intact. >> how many quarters are you going to -- i don't want to say wait. yes, versus expectations and on wall street, tim you know it is all about meeting expectations and on this particular metric apple did not, hence the stock fall.

but how many quarters do you say the long-term story is intact? because wall street is taking a step back from this stock today saying this is a data point that shows me that perhaps this upgrade psyche slcycle is not as strong as people were expecting. as time has gone on people expected this to be stronger and stronger particularly into the holiday season. >> right. this is their seasonally weak quarter. i think it's not a number of quarters that we're willing to wait. we're going to focus on whether they still generate a lot of cash flow and whether they still put earnings up on the scoreboard. they continue to do that. so whomever this was a disappointment for perhaps their expectations got too high. but long-term investors tend to ignore these short-term variations in the stock. a lot of the fear around the stock i think is around the concern china's economy is slowing. that would be a cyclical change

in china's economy which we as long-term investors would be willing to wait through. rather than what a nokia or blackberry became when their stocks began to fall. we're long-term holders. we don't waist ourwould certainly add new money if it came in to that client's portfolio right away. >> tim, thank you. apple's close to intraday highs. like apple, it is just about as bad for microsoft today. that stock down today as investors seem aggravated by the company posting its largest loss ever. but your next guest maintains his buy rating and has a $54 12-month price target. that whopping $7 billion charge from the now ill-fated nokia deal doesn't seem to be scaring you off the company's stock.

why not? >> well it is getting the bad news behind them as the company sheds a lot of the dead weight that was associated with the nokia acquisition, they can now really focus on the growth drivers in the business which really come down to the cloud services. >> okay. cloud is going to be the future of it microsoft, i assume going forward. how's cloud looking? >> the booking numbers were in constant terms were pretty impressive. 8% growth in commercial bookings compares very favorably to some of their major competitors like ibm, oracle s.a.p. hp. they're managing this longer term transition of getting a lot of their existing customers off on-premise computing into their cloud services which includes office 365, dynamic crm, the a azura cloud services. they are able to sell higher prices or premium services

because when companies move from running their exchange e-mail server to office 365, they end up saving sometimes 30%, 40%, 50% off the bat because they don't spend anymore money on hardware. that's free budget that allows microsoft to upsell it. we're seeing that in the numbers. >> is windows 10 going to be meaningful for microsoft? do upgrade cycles matter any more? >> not like they used to. it's become a strategy for microsoft to give itself a footprint on -- the goal is 1 billion devices over the next several years. for them it is not so much pass a revenue bump because they live in an open world where people have android and ios devices, but it is going to be important for a new range of new form factors. i think one of the little bits of news that's come out since the company's done its reorganization is they just put the person in charge of the surface in charge of all of mishlg soft's premium hardware

which is going to include the phone. the surface was really a standout product. it was actually up -- it was up significantly, over 117%. if you bring some of that engineering and imagination to the phone and potentially launch some more innovative form factors, i think that could really drive a good business. >> ed mcguire pleasure. thank you very much. we have a developing story on the politics front involving a timemaker and developer by the name of donald j. trump. eamon javers what's up now? >> donald trump has filed his presidential financial disclosure forms. it's 92 pages. it lists a whole bunch of assets, a whole bunch of liabilities. we're trying to figure out whether what donald trump declares here matches his claim from earlier in the month that he's worth a net worth of $10 billion. some of the number crunchers at our headquarters have done the numbers here. what they're say something at a minimum what trump is declaring here are assets worth at least

$1.4 billion. and liabilities about $265 million worth. inwant to put a giant asterisk net to that number. the way this form is written it discloses assets in broad ranges so it is very difficult to tell in some cases the ranges are sim simply more than $50 million. very hard to determine what he is worth. but assets worth at least $1.4 billion. in his finances he's still getting royalties from his book "the art of the deal" push blishd in published in 1987. he has a mattress licensing deal with s sechlt rtaerta. and he also receives a monthly pension from the screen actors guild. it is a s.a.g. producers pension. it doesn't give a dollar amount at paul.all.

>> what did he presume or act in? >> presumably "the apprentice." >> it would make sense the aparentist asapren aprentice aprentice. speaking fees, books, licensing deals, real estate, stocks, hedge funds. he gets income from just about every single thing that you can get income from. >> a lot of people criticize trump. i won't say politically one way or other what people think. but economically if you've got a 92-page sheet detailing your income, that's not bad. >> it's longer than my sheet. >> mine takes a half a sheet. eamon javers, thank you very much. so much done so much still to do. hackers taking control of a jeep while it was driving on the high wrai. highway. is this something su need to worry about? it is wednesday. why not a mystery chart. can you guess what that chart is

if you're on the radio i guess you are out of luck. that's the second worst performing commodity over the past month. we'll reveal the answer later on in the show.

female announcer: sleep train's interest free for 3 event! ends sunday. it's your last chance to get three years interest-free financing on beautyrest black, stearns & foster serta icomfort even tempur-pedic. plus, get free delivery, and sleep train's 100-day low price guarantee. but hurry! sleep train's interest free for 3 event ends sunday. ...guaranteed! ♪ sleep train ♪ ♪ your ticket to a better night's sleep ♪ all kinds of craziness going on on your screen. with oil down the oil stocks are getting slammed and in many ways these names are now getting hit harder than they did a few months ago when they got all the attention. i'll show you a screen of my screen that i look at here on ot

big screen. i know it is impossible to read. ignore the names because all that you care about really is the colors. okay? let me give you a few stats. there are no oil and gas production companies whose stocks are higher in the past month. zero. big eight. -- exxon, shell, bp observation dental, et cetera they're down an average of 15% in the past three months. there are at least 17 oil and gas production companies now trading more than 75% below their 52-week high. check this out. this far right is three months. this is what i look at every day. red means down. melissa, i know you guys talk about this a lot on "fast money." i don't know if the extent of the oil stock rout has fully been noted. oil is not the only commodity that's getting hit. besides oil, you've got copper coal, iron ore also down considerably so far this year. since i'm guessing you probably

doesn't use iron ore in your day to day life. here's why you care. this could impact the federal reserve's decision on interest rates. at least so says larry mcdonald and megan green. larry, what is your connection from commodities to janet yellen? >> well as we discussed earlier this year brian, there's a price to pay for six years with the interest rate policy. it doesn't come for free. a lot of side effects. about 56$56 trillion of debt been issued since 2008 and a lot of debt issued in the commodity space. we have an index of our systemic risk indicateorsindicators. over the past 30 years the fed has never raised rates during a significant, profound decline in commodity prices. >> okay. now i'm going to push back a

little bit larry. because we talked about in our morning meeting. i said i love larry but i disagree with little bit with your thesis. our team is bringing up the crb sort of index on commodities. the stuff you are looking at can't we all ascribe that to china and say that's not a fundamental part of our story, that the deflationary aspects are not necessarily from a negative implication of what's happening here. more like this is a china problem. >> absolutely. but the problem is -- i see that visually but you got to remember -- and this is what economists forget in the united states. in the '80s and '90s the u.s. was 60%, 65% of global gdp. today we're 24%, maybe 25% of global gdp. so fed policy has been dictated over the last two, three years. a lot of punches that the fed has taken in terms of credibility have come from outside the u.s. i think that's the problems that

i think the markets are dealing with. >> that's a fair point, hard commodities, copper iron ore, coal they're down. but agriculture, particularly corn and wheat up. that means a lot more to our audience, i'm betting. do you believe the commodity move will influence the fed at all and do you believe they will raise rates this year? >> it depends on whether you think the fall in commodities is transitory or not. if you think that actually there is just an oversupply generally of commodities -- which i do -- it is not transitory so that does have an impact on inflation which is one of the things that the fed is of course looking at. so i actually don't think that the fed should hike this year but i this ink that they will, unfortunately. i mean janet yellen said during her testimony even that a fed hike would be coming in 2015. in my view that's a mistake but i do think that janet yellen risks losing credibility if she doesn't go ahead and follow through with that. i think the risks are balanced

between being exogenous. greece and those chinese equities aren't solved by any stretch of the imagination. but also domestically, there are a lot of indications that there continues to be a lot of slack in the market and janet yellen is looking at that very closely. without wage growth we won't have a lot of upward pressure on inflation. i think the fed should wait as long as they can before they start hiking. >> next week there is a fed meeting. but it doesn't have a press conference so everyone's kind of sloughing that off. thank you both very much. appreciate it. yesterday the aforementioned donald trump went off senator lindsey graham. both vying for the republican presidential nomination. a short time ago lindsey graham fired back. john harwood is at the white house. john? >> reporter: brian one of the fascinating stories of the next few weeks is how republican rival presidential candidates and the republican political establishment push back against the guy with the 93 pages list of his income sources.

lindsey graham did it with humor today in conjunction with a firm that was founded by political operatives poking fun of the idea that donald trump read out lindsey graham's cell phone. >> it if all else fails, you can always give your number to the donald. this is for all the veterans. >> this is going to continue. republicans have to handle this carefully because if donald trump should decide to run as an independent, this could create real problems for their party in 20116 2016. for now he'll be on the first debate stage in cleveland on fox in two weeks. >> couldn't he have just replaced the sim card? >> i think that wouldn't have had the same entertainment value. >> john harwood, thank you very much. the energy market about to close for the day and it's been a dramatic day for oil. we are head live to the nymex. will oil close below $50 a

barrel? we'll find out in three minutes. are you moving forward fast enough? everywhere you look, it strategy is now business strategy. and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now... to what it needs to become.

no fifth grader's ever sat at the cool table. but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. now get a swiss gear backpack for only $10. office depot officemax. gear up for school. gear up for great. welcome back to "power lunch." i'm jackie deangelis reporting from the floor of the nymex. we're getting ready for the oil close in about 15 seconds or so.

actually oil is trading at session lows at this point, $49.24 is where we stand. we'll get that close under $50 today. let me put this in context for you. we got a report from the department of energy about a build in inventories. 2.5 million barrels for the week last week. what traders are looking at is total stocks here. what i can tell you, it was buried deeper in the report that total stocks for crude are up 25% year on year so we're back to the story about a supply glut, not only in this country but globally. also talking about the production numbers down just a hair. still at peak levels really in terms of what we've seen in the united states. we're watching this close right now, down $1.60 at this point. >> this is going to hit the balance sheets of a lot of these companies because there's something important to remember. when you talk to a republican and been company and say you put out a company that says they have x-proven reserves, those reserve

numbers are based on the closing priced of oil. as the closing prices of oil over a year go down the value of the proven reserves could also go down for a lot of these companies. >> absolutely. speaking of prices at this point we've really breached a technical level that could push us lower from here. this is significant to watch. >> it is ugly. just a couple of names up over the last three months on my screens. oil not the only thing getting walloped lately. gold now down for the tenth straight day. folks, that would be the longest losing streak for gold since all the way back in september of 1996. gold down almost 60% in% in almost two weeks. the fbi says the chattanooga gunman who killed five service members acted alone with no help from anyone else and investigators are treating him as a home-grown violent extremist but added it is too early to determine whether he was radical itzed before the

attacks. the memorial for the shooting victims is growing as more and more people stop a by to pay tribute leaving american flags, flowers, balloons and stuffed animals at the site. the penalty phase in the james holmes theater shooting trial is under way. a jury convicted holmes of first degree murder. now a month-long penalty phase by that same jury will decide his fate. prosecutors have said in the past they will seek the death penalty. the man who flew a gyrocopter that landed at at u.s. capitol has rejected a plea deal that would have sent him to jail for ten months. lawyers for douglas hughes says he believes federal guidelines calls for a sentence of less than six months in jail. "power lunch" is back after this quick break.

can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver? you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you helping with the questions you need answered to get your brand new business started. we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them. legalzoom. legal help is here.

it is time for "trading nation" because traders trade better together. today let us trade amazon.com. their earnings are out tomorrow. should you buy the stock ahead of it? todd gordon and andrew berkeley. first off, andrew what are you saying fundamentally about amazon? is it worth our viewer and listener's money? >> absolutely, we like amazon.

we think it is a good core holding. ahead -- or in conjunction with some pretty solid results out of some of the internet names so far this quarter, things can be a pretty good quarter when the results fundamental thesis essentially is secular play on e-commerce. but really the new driver's been this web-based cloud computing services which is really allowed the analyst community to get behind the stock for the first time this year which is really not been the case in a long time. we like the stock going into it. it is up quite a bit. it is kwaut quitequite a few upgrades. i wouldn't be surprised by a bit of a pause but we think the company's focusing on profitability here an that's allowing animal inging analysts to continue to move their numbers forward. we'd be buyers. >> fundamentally, buyers. how does it look technically? >> looks technically set to be a wild ride. we did something on post-earnings reactions an on

average amazon will moves 8.1% that's over the last two years. options markets tomorrow are pricing a 9% move up or down. one of the reasons that those averages have been pulled up the last two reports from amazon have given us a 12% move. to andrew's point on the strong fundamental thesis be prepared because we could see some serious volatility. that being said let's take a step back and look at the longer term chart. we look at the chart all the way back to 2010. this is a semi-long scale, it is a little bit of a geeky technician thing but basically it gives a greater weight to certain price movements. you see that trail that it's being respected on the semi-long chart. brings us to the $600 level in the is exnext 12 to 16 minutes. head to our website for more "trading nation." cyber security experts able

to hack into a jeep and issue commands to its steering brakes and engine. fiat chrysler issued a software update to xat potential hacks in a statement saying similar to a smartphone or tablet vehicle software can require updates for improved security protection to reduce the poe sengs risk for unlawful access to vehicle systems. the io active researcher is one of the hackers who broke into the jeep. chris, great to have you with us. >> thanks for having me. >> what exactly were you able to do? i think that's just another way of asking you how scared should we be? >> we were able to connect to the jeep over its 3g data connectivity and from there reprogram different chips in the car so we could send commands to control physical attributes. we were able to hack it remotely. >> was that software specific to jeep? is it proprietary software or is it written by an oem and perhaps are in other vehicles on the road?

>> the u-connect system belongs to garmin and a portion of it belongs to jeep and a portion to sprint. >> what you were do was happening even before we truly have autonomous vehicles on the road. i don't think people realize the march toward aton muss driving, it is a slow creep. there are features added every day to cars every sing sl day which make them more relipt on software. as you look out here on this road, chris, are you seeing more opportunities to hack into vehicles and what do you think the worst case scenario could be? >> we're seeing more connectivity with vehicles because customers demand it and to be honest with you, it is great. we get to do things over the internet in our cars. we do need to think about software security when we do all these things instead of just push to market. that being said charlie and i have spent the last three years of our life doing this research and a year on the jeep alone. so it is not easy to do.

>> do we need to be afraid of it, chris? >> i'm more afraid of someone texting and driving and running into me than i am of someone hacking my car. >> so why do this? >> we want to raise awareness. manufacturers are now taking software security more seriously and we're helping them move forward. hopefully we've done our job if we can help people make more secure products. >> is the most secure decision to buy an older cars? >> i wouldn't. i think these cars have more safety than they do a method for someone to attack you. >> i assume you are working on another car to attack. which other car are you working on right now and do you think that is the car that is next most vulnerable? >> i'm actually not working on another car. at io active i head our vehicle security division so i'm going to help work with our clients to make safer vehicles and help them with all their software security needs. >> chris, great to speak to you.

thanks for coming on. >> cheers. >> fascinating stuff. coming up next a big, bold buy on america's second biggest company. plus four other stock calls. "street talk" is up next. .

it is time now for "street talk" where every day we dig out -- we're having some fun here. key analyst calls working to find opportunity. let's get serious and do this. first stock, exxon-mobil. despite being negative on oil overall, goldman sachs adding ex inging exxon to its conviction buy list. a couple of drivers, dividend growth, production growth strong refining and a strong balance sheet. stock down 11% year to date though so far. >> the other part of this call is sell chevron. both of them have been terrible

performers over the past 12 months. >> all of the big ones have. >> only bp is up year to date of the big eight. second stock here ebay. post paypal stinoffspinoff. raymond james taking a wait and see approach on traction from new initiatives. shares are fairly valued. as a part of the call paypal initiated an outperform. >> people are hating on ebay after paypal. the stock has made a lot of people a lot of money in the last five years. >> now what. that's the question. >> now what. here we go. next up stock three two stocks in one -- there again, oil. carr requirement zo oil and gas and cnncho resources.

about 40% up side. credit suisse also upgrades consho to outperform with a $147 target. also about 40% up side. as i noted earlier, as of this morning there were no oil and gas producer shares that are higher in the past month. zero. >> this is a tough call. concho is a favorite of our friend mike kelly of global hunter. cs overall initiated the enp sector as an outperform. >> there is a lot of sell side people coming to the defense of oil and gas. if they can't rally on a big sell side push that would make me a little nervous. >> a wti rally would help. next up we talked about it a lot yesterday so i had to bring back lifelock. pacific crest coming out today downgradeing to sector weight. the market shift will be on legal risks and not on

fundamentals. analysts expected a settlement on the order of $20 million but the move to a potential court case suggests that they couldn't agree to mutually agreeable terms which adds to some risk to the story. >> i knew you were going to pull this call out of there. i saw it this morning and said melissa's going to do this just to jab me. >> not to jab you. to follow. you. >> it is an important call lot of downgrades out there this morning. small comfort to the investors. you're still way down on lifelock. finally, our last stock is always the under the radar name the smaller company. amc entertainment. the leewood, kansas based movie theater. upgraded to a buy from neutral. 30% up side. they like the valuation and recent yield to buy. >> analysts also noticed this stock has outperformed the industry's box office and the

content cycle looks pretty good for the next three years. >> wrapping it up on "street talk." big news on social security. we'll head back to washington right after this quick break. stick around. equals great rates. it's a fact. kind of like shopping hungry equals overshopping. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this. push your enterprise and you can move the world.

but to get from the old way to the new you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that is still to come. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

wow, busy hour from d.c. another news alert from washington. let's get back now to john harwood harwood. john? >> the short version of the headline is that social security and medicare need more money still. not an overwhelming amount not right away but soon. the trustiest report for the trustees of medicare was released by jack lew. showed that social security's reserve the excess surplus money that it has will run out in 204 2034. a year actually later than projected last year. the social security disability program will run out of reserves next year. that means neither one will be able to pay full benefits at that point. republicans and conservatives are in particular making a case for reform of disability insurance now. the hospital insurance trust fund will run out of money in 2030. that has run out of the surplus. and that is the same date that was projected last year the part

"b" and part "d," they are fully funded for the indefinite future. president obama's focus at the white house is on extending the authorization of the export/import bank, conservatives have targeted as crony capitalism. meeting with small businessmen. the entitlement programs are going to figure in the presidential campaign that's only accelerating now, brian. >> i'll take it. john harwood, our thanks to you. it's been five years and a day since sweeping wall street reforms passed under dodd/frank. and with it comes unintended consequences. mary thompson with a look at that. it's given activists new ways to seek changes at companies while possibly increasing executive pay and volatility. also made big banks even bigger. as a percentage of banking assets held at the six biggest

banks is up from 2010. while the st. louis fed says there are 1,200 fewer than there were in 2010. says this is due in part to the financial burdens placing on smaller banks forcing them to merge to survive and taking a critical source of credit out of smaller communities. also crimping consumer lending because banks need to set aside more capital. lastly, he says the law makes markets less liquid because the requirements mean banks today keep smaller inventories of securities to buy and sell from investors. in the meantime hall points out proposed rules on clawbacks could lead to higher pay. rules could prompt managers with no control over the statements to seek compensation for the risk posed to their pay by others' mistakes. i'm probably going to say, look you're going to have to give me more money with that part of my

pay package. saying the yearly vote is giving activists another way to highlight problems at companies and a very public way to make their case. brian, back to you. >> all right, mary thank you very much. we've got even more breaking news this hour. let's get to kate rogers. >> well, tasked with examining wages within the fast food industry under governor cuomo in new york. recommending $15 an hour. this hearing is underway right now. this is how it would work basically $15 an hour would apply to businesses in new york city by 2018. businesses throughout the rest of the state in the industry would have until 2021. it would apply to fast food businesses that have chains of 30 or more locations in the state. it's also significant because right now the minimum wage in new york is $8.75. that's a huge raise for them. that's set to hit $9 an hour by the end of the year. the hearing is still underway

and we will certainly bring you updates as they continue to develop, brian. back over to you. >> thank you very much. meantime one last look at today's mystery chart. again, this is one of the worst performing commodities over the month. a big drop. one of you smart people already got it somehow. we'll give you the answer coming up. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn! prilosec otc. the number 1 doctor-recommended frequent heartburn medicine for 9 straight years. one pill each morning. 24 hours. zero heartburn. no fifth grader's ever sat at the cool table. but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. now get a swiss gear backpack for only $10. office depot officemax. gear up for school. gear up for great.

you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you helping with the questions you need answered to get your brand new business started. we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them. legalzoom. legal help is here. time now to reveal today's mystery chart. the second worst performing comedy is lumber.

down 9% since june and showed it the first time and somebody on the twitter machine got it. >> good for you, craig. if you're listening, you got it nailed it. >> that the guy with the miami hurricanes logo? the "u"? >> somebody else wrote into me and got it, as well. let us bring in a lumber trader at the cme. look at it not doing well and think, gosh is this a negative leading indicator. is it? >> start off by saying it's been beaten down. the chart looks pretty ugly but there is light at the end of the tunnel. the cups have been swinging away those bats if you caught it last night. couple of home runs late in the game. that's going to increase the demand for lumber going forward. that's going to be something to keep an eye on. on a more serious note. if you pull the chart out further, we made 3 1/2 year lows in may and then rallied 25%. so this pullback that we've seen

here in july is really welcomed by a lot of traders. a lot of people looking at economic indicators. one of the ones we look at is new home sales. now, when we bottomed out in may, we saw new home sales increase 2.2%. and saw buyers come into the market. that was in oversold market. we're looking at the rsi, the relative strength index. that was below 30. the selling was exhausted. saw buyers coming to the market. and then we saw new home sales invited into the market. and now we're the a 50% retracement level between that may low and june high. this is a very key number. new home sales coming out friday. that's going to be the line in the sand. love the cubs. love you for coming on. i've got 20 seconds left in the show and got to give my cohost time to promo "fast money." >> thank you ryan. we've got a lot of big earnings after the bell. qualcomm, on a day when

semiconductors are weak. as well as las vegas sands, american express. we'll give you the trades ahead of tonight's open on "fast." >> how about jumbo shrimp? "closing bell" starts now. >> welcome to "closing bell." here at the new york stock exchange. >> tough to keep with brian sullivan sometimes, isn't it? mind is always going there. tectonic weakness. disappointing reports from apple and microsoft last night are weighing on the dow and nasdaq today. and investors now await numbers. more news from qualcomm and texas instruments in the bell. the chip sector has been in tough times these days. >> and it's more than just after the bell. american express, las vegas sanz, all expected to report in just an hour from now. >> other