walmart and say it's indicative of the whole economy, because i think we have multiple economies in this country. the sfef -- i think footlocker is really exciting. that's the name i would want to be in. >> pretty good comeback for stocks. that story is picked up right now on "power lunch." \s thank you very much. i'm tyler mathisen add cnbc. melissa lee is with me from nasdaq. do you see how i matched my tie to your dress? >> i did that on purpose, tyler. happy to be with you today. >> as well. disney is up 15% so far and higher in today's session. the media giant plans to bring "star wars" to its theme park. julia boorstin has the details. >> reporter: melissa, hi. disney isn't just bringing disney to the theme parks, bob iger said they are building two new entire lands.

>> we're creating a jaw-dropping new world that represents or largest single-themed land expansion ever. >> the two 14-acre parks in the work, will both feature rides on the force awakens, as well as the flight of the mihm falcon. no disney's updating the popular jedi training cad me. these "star wars" plans not only show disney is make the most of the acquisition of lucasfilms back in 2012, but they also highlight the long-term growth opportunity particularly of of the u.s. parks. he says this will give leverage to raise prices, and says it will add up to a double-digit growth opportunity in the launch year for these new attraction, crockett saying it also helps

alleviate investor concerns about the durability of the traditional tv business. now, plus after spending billions overseas to build a new shanghai park, which is set to open next year, shifting the focus back here to the u.s. will help disney stayed ahead of university, which has been pouring billions into its new rides including a harry potter world. >> julia, thank you very much. it may be the boldest analyst call of the day, shares of tesla moving up now, about 3.5%, morgan stanley naming it at this time top pick of all. morgan saying that tesla is uniquely positioned to dominated market for autonomous vehicles and connected cars. tesla shares up almost 15% this year. should you buy the stock? we'll debate that, folks, in the next hour.

meantime, to the wildfires out west, firefighters are battling fires up and down the west coast. fire erupted late sunday afternoon in northern los angeles county, quickly spreading and burning several structures to the ground. wow. in chelan, washington, destroyed dozens of homes and businesses in the central part of the state. that's where we find lee an gregg with the latest. >> reporter: the fire has grown to more than 56,000 acres and has destroyed approximately 75 businesses and other structures, including this warehouse behind me, an apple processing plan that employs 800 people, and it's the beginning of the busiest time of their year. six helicopters and fixed-wing aircraft are joining in the battle, along with national guard personnel. resources of strained because of

so many major fires now burning in the west, in idaho a fire has burned approximately 50 homes and 75 structures. in oregon, another major fire has destroyed more than 25 homes and officials expect that number to grow. also, major fires burning in california and in montana. again, today efforts will be on the ground and in the area to try to save homes and move toward containment of these fires. i'm leanne gregg, back to you. more hot weather ahead. jen carfagno has the latest. >> we've had two days of 90-plus heat in new york city, we'll get another one. the ridge of high pressure hassh but they winds out of the south bringing in the higher humidity air is what is making it uncomfortable. so we have both, the heat and

the humidity. temperatures going up to 92 in new york city. new york city thinking only 88 degrees. we won't be able to say technically the heat wave is in progress. it will still be pretty uncomfortable out there. nine days of 90-plus so far this year. thanks to you, jen. stocks meantime wiping out their losses made earlier. the s&p 500, take a look at this, trading above the 50-day moving average. if it closes above the 50-day, it will be the first time since august 10. also oil cutting its losses, but still under pressure. wti crude had been down almost 1%. ty? >> melissa, is the u.s. economy facing a slowdown? new dada on u.s. manufacturing, raising some red flags, but the housing data flashing green to a rate hike. our senior economics reporter steve liesman is here to

untangle it all for us in the context of the data dip -- >> if you're not confused, you're not paying attention the the debate over the fed raising rates reaching a new lovell as the temperatures rise in august. lousy manufacturing data this morning in the form of the big negative print for the empire state manufacturer, but homebuilder confidence soaring to a ten-year high. add that to the continued conundrum -- growth in jobs or low pressure -- the inflation data is not rat the fed looking for some improvement, so new deflationary impulse also come from the stronger dollar, which comes from the chinese devaluation, lower commodity prices and lower oil prices, but better growth data. q3 runnings a bit above trend. all of that makes the fed minutes and inflation the most

significant releases, but don't force, a lot of what we're talking about has happened since that fed meeting at the end of july. the cnbc rapid update running at 3 had the 4 for the second quarter, a numb her originally reported at just 2.3. just a bit above trend with a rain of 0.7 to 3%. not put it all together, and here's what they're saying on wall street about the fed in september, right now over at jpmorgan -- we are sticking with our september call. another company with the name morgan, morgan stanley. we believe they will decide to take a pass. they are sticking with their december call. the ragesing debate likely to continue in september. >> let's talk about the newly appointed president of the dallas federal reserve. you just reported it within the last half hour or so succeeding

richard fisher, certainly one of the most prominent members. >> did you want to say outspoken? >> now a cnbc contributor. correct. >> is the new guy cut from the same cloth as the old guy? >> in one sense for sure, a former investment banker. this guy was robert steven kaplan replacing richard finder will take place in september, was a former goldman sachs banker, also a management professor at harvard, written a bunch of books will leadership and management, been on cnbc discussion it. >> there he is, yeah. >> been on a bunch of boards. the dallas fed at least the last two times, says somebody has come more from a private sector. >> he runs a nonprofit -- >> do you have to live in the region to be the president of the bank? >> my guess is he does not. he's an associate dean at harvard. i don't believe that's a criteria.

the way it works is that the local board or the distribute board nominates, it's then approved by washington, so i don't think it requires a residency. >> interesting. steve, thank you very much. terrific. do dominic chu. >> the big air liar stocks are flying high. another with the rest of the market they have been ticking higher, but watch names like southwest, american, jetblue, all up between 1 to 3%, trades -- you can see they're all in the green, messilia. back to you. homebuilder confidence hitting record highs, but so are rental prices. w50e6g9 the real read on housing ahead. plus oil plunging from here. what top analysts and strategists are telling us right now. you're watching cnbc, first in business worldwide. ♪ ♪

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welcome back to power. the company looking to diversify away from the traditional patent will thissing business. pentair acquired -- and has been pushing the company to make deals. and reuters sis williams company is a target for a bid by smaller oil and gas, spectra energy. williams put itself up for sale

in june after rejecting a buyout bid. tyler? >> melissa, time now for the "power lunch" countdown housing edition. diana olick joins us from michigan. homebuilder confidence at its highers level. they have their swagger back, why? >> reporter: it's because of confidence among consumers. yes, it did bump up one point on the monthly sentiment survey, but that was enough to put it as a level not seen since november 2005. what's interesting is current sales condition and buyer traffic both improved, but failed expectations over the next six months? that one stopped just flat. it had been improving. that may be because builders were a bit concerned about rising interest rates. also what's still out of whack is that builder sentiment and housing starts usually move in conjunction with each other. they are way apart right now. we are still seeing very low housing starts even as builder confidence improves. they're happy about their build,

just not building a lot more homes. second topic is rising rents it appears they may be there to stay for a while. why? >> reporter: absolutely, because there aren't enough apartments. we talked about rents reaching record highs, occupancy reading record lows. we're told by zillow three quards of markets of not affordable, renters would have to pay more than 30% of their income. and that's considered unaffordable. now suddenly you're seeing the multifamily housing starts improve, but it's just not enough to meet that ever-growen not just demand from millenni s millennials.

and they're staying is renters longer. what does this mean for the market? >> reporter: it means we're just not seeing the robust sales we want to see in this housing recovery. it used to be in the '70s a person would rent for about 2 1/2 years, now zillow is saying the average person is rending for six years before they buy the first home. as you said, they may still be living with their parents for a while, then they choose to rent, then they choose to buy. it's because millennials are waiting to get married and have babies, and those are the two triggers. and the high rents, they're having trouble to saving for a down payment. diania olick, thank you very much. u.s. stock dividends have been on a tear, but is this coming to an en? s&p damma projecting, barring a surprise like a google or

berkshire hathaway, they will fail to keep the streak alive. currently running behind the pace of the previous three years. you can get more on thistory on polyerlunch.cnbc.com. estay laee lauder showing - company's revenue did fall below some estimates, nearing its worst levels. back over to you. >> thank you, dom chu. a check out of oil prices. prices are plunging back 20% to around six-year lows. how low can it go from here? what wall street top analysts and strategists are telling cnbc. morgan brennan is live in ohio. >> reporter: hey, melissa, take a look at this. this is csx's north baltimore intermossal facility. they all the tout -- it's not

just the terminal -- we have that story when "power lunch" returns. 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? but your stellar notebook gives hanyou the gumptionlc. to reach for the sky. that's that new gear feeling. this week, these office depot brand notebooks just one cent. office depot officemax. gear up for school. gear up for great. 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.

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we heard about it with cars, now trains are getting martyr. railroads are connecting sensors and software to cut down on delays, boost fuel fishes and ultimately run more trains. morgan has more. >> reporter: that's right. call this rail infrastructure 2.0.

do not simply create new routes. instead technology has to make the existing networks more efficient. ge is launching the tier 4, and that was designed in part with big data in mind. it can help -- is including trip represent mizing. >> they about a traffic control system, optimizing is the meet and passing of different trains to make the most important to the fastest and to pay other strains to get -- a one mile an hour improvement for one customer is worth $200 million a year in save us to them. >> reporter: other companies so focusing on passenger railways as well. including manufacturing smack lock motives for am track, adding communications-based technology to some subway lines out in new york city.

also implementing a storage unit on the trimet line that captures energy that is created when trains come to a stop, so siemens says a lot is just starting to come to the u.s., including self-driving trains, which is already working in paris and singapore. another piece of automation that's being implemented here in the u.s. is positive train control. this is a wifi-based system that is being put in place by passengers and freight rail to identify all the trains on a network and interview, saying, if one can't be stopped by the conductor. now, the railroad carriers are required, officially required to have ptc in place by the end of the year. it's questionable about how many carriers will be able to meet that dilled lines, but this is coming at an estimated cost of upwards of $10 billion just for this technology for the overall sector. back to you. >> morgan brennan, thanks for that story. keeping an eye on oil,

prices continue to fall. are we headed for an oil price in the 30s? jackie deangelis has the results of a cnbc oil survey. >> good afternoon. this was an exclusive survey, the second time we did it, because we thought it was an important time to get the pulse of the industry. we polled analysts, traders, those investing in funds as well, to get their sense on where oil prices is going. we found a shift in expectations, for the short term we're talking september and october, about two tlirds of the respondents told us they expected prices to range in the 30 to 40, so that is imminent. it tells us the bottom is not just in yet. we found more of the people polled are thinking prices will stay low for a prolonged period of time. they were looking to see the range of 30 to 50 in the longer term, where previously they were looking at $60 or $70. quite a rebound in prices.

when we asked what factors were most important, citi most of the respondents said it was a supply issue and they're specifically looking at u.s. production. just behind supply was the dollar, especially because of what we have seen happening in the eurozone, you want to pay attention to that. a small group of people said you want to watch the technicals. finally when it comes to u.s. supply, 60% thought we were dws to flatline or rise by the ends of the year. if thought piece are correct, then that would be what keeps oil prices low for an extended period of time. at for that 3 handle, look out. it could be coming soon. let's stay with the commodity right now, gold prices getting ready to close. let's get a look at where they are right now, and we'll move to to silver, copper palladium and platinum. about a half percent, moving on to silver, copper, pa laidius and platinum, and there you see

two are up, two are down. copper and palladium a bit lower. now, i am going to give you a check on the bond marks, that means that, of course, the bond yields have been declining just a big across the entire spectrum. the ten-year, which is the one most people look at most intensely, i suppose, because it's tied to mortgage rates, there it stands at 2.147%, the 30-year a little under 2.9%. that, folks is your bod report for a monday. melissa? >> liberty interactive, for buying zulily, the stock below its ipo price. plus new lows are they now

shaming flyers into buying more expensive tickets? that story is straight ahead.

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hi, everyone. here is your cnbc news updid i. the national labor relations board overturns a historic ruling that gave northwestern football players the go ahead to form the nation's first college athletes union. john kasich exchanging footballs with alabama governor bentley after bentley endorsed his bid for the presidency, the two appearing any alabama sports hall of fame. thousands calling for the resignation of the president in their country. it's the third day of nationwide protests against her government. an emotional jason day

before he takes the final putt. his score of 20 under par is the best in the history of the majors. he defeated jordan spieth, who is now ranked as the world's top golfer. that is the cnbc update this hour. congratulations to him. thanks so much, see. stocks are close to session highs. 17 jess 548, the s&p 500 up by just about half a person at 21.01. the nasdaq is the best of the three. qvc announcing they will buy zulily. here's dom chu with the look at the performance of some other ipos, and it could be a minksed

back. >> renaissance capital tracks a lot of these ipos, and they run an etf that track them. they took some stats, and this is why it becomes disconcerting. earlier in the year and a little built beyond, we saw basically the broader market, the s&p 500, we'll call that the broader market had been tracking fairly well. since february, we see a nice sharp outperformance in recent ipos over the past couple years over the s&p 500. here on the right-hand side of the screen, you'll notice we're back to about even as tracked by their index as well as the s&p 500. so all of a sudden the broader market is now performing in line with recent ipos. take a look at some of the stocks that have been the biggest drag. according to kathy smith over an renaissance capital, she looks at three stocks in particular that have weighed on the ipo index they track. alibaba, for one, we've known

that big slide, huge pop, that then, and you've seen that steady decline, about $75 and change, one of the biggest drags. another big drab is in that tech-related space. this is twitter shares, coming up on the two-year anniversary in november of being a public company. they are still part of this renaissance ipo, and they have been trending steadily down, and then you can see what's happened here as well, to one other big drag. those shares also dragging on the ipo index, you can see down about 10%. so again those three stocks are the ones, according to kathy have been drags down the overall performance. >> we're looking at ipos that have come out in the past two other three years? >> it's a good question. what these guys do at renaissan renaissance, they take an ipo, wait five days and then included it in the index.

you don't get the first few days shenanigans that happen. they hold them for about two years. >> okay. >> that index is what we are seeing. this ipo index tracks companies that have come public recently, but not on that first day of trading. >> so you sweat out that initial pop. >> there is for five trading days. >> when you point to the start of the measure there, that's actually not day 1, that's day 5? >> no, no. the charts themselves reach back to the ipo. the index's methodology, so when you look at the overall value -- allied is just the one you're liking as. the index is waiting five days, and then you hold them for two years or with a quarterly review. >> i just wanted to get in touch with my inner wonk. embrace it, and some traders are saying this is possibly one

indicator that things may be a little overextended for the overall market. at least the recent hot once kind of tail off, it may be at least one yellow flag. >> dom chu, thank you. melissa, over to you. market volatility rising due to concerns about china and the fed, so where should investors put their money? bill stone, the chief investment strategist, and the investment strategist at is best trust. did the empire state number today throw a wrench in the expected bedtime line of a hike in september? >> i don't think it necessarily did. the manufacturing activity we have seen here across the u.s. has been somewhat weak, but there are signs to suggests we are in fact bottoming. if you look at the fed, you have to realize there's a dual man dade. on the employment side, i believe they can check the box. the inflation side is certainly lagging, but i think it would take a lot to delay the fed.

>> so you think they need some tool in the toolbox in case something worse happens? >> i do believe so. look, let's keep in mind the u.s. economy is clearly improving. you look at the consume el assume of the equation that's doing well. i think everyone is focusing on the soft wage data, but there is a lag there, and i don't believe the fed wants to wait until they say the wage pressure rise before coming out with the first rate hike. >> i'm thicking of germany in particular, there are some concerns off the back of the gdp number, and you're looking at eurozone pmi data. are you concerned -- it's a crowded -- and then also we're seeing cracks -- just in the past month, the dax is down 7%, it seems like every singling session.

>> i was certainly disappointed, i actually just got back from austria on sunday. at least from the ground things like pretty good. obviously it's hard to tell, but the numbers certainly are a bit weaker than i certainly was hoping for. i do think, though, the story remains intact. the fact is it's going in the right direction. maybe you're right, too many people may have gone on this in the sense of it drop expectations many, perhaps a bit too high, but at the end of the day, i still feel good. we see the earnings season, earnings season has gone fairly well. the economy is going -- just show a contraction overnight, but it's a difference between, you know, the economy and what the corporations are doing a bill. >> joe, what do you prefer, overseas or the united states? >> i think when we look

globally, we continue to believe the u.s. is certainly the right place to be, but i would echo some of these comments, when you look overseas, particularly if you look in europe, you are coming off a low. we narrowly avoided a triple-digit dip, and now you're starting to see expected problems actually begin to rise. i think as long as the ecp remains in place, providing stability and support, of course, you have to remember to hedge the currency when it's appropriate. >> interestingly you both like health care. i wonder if you're concerned at all about the slowdown in recent week. biotech being about 20 percent of s&p health care at this point. >> you know, certainly it's one of those things, i gill i would say it's kind of on the margin. they were so on fire, but overall, i still feet pri good. biotech has its companies that

are extremely expensive, it has some stalwarts like amgen and others that aren't necessarily -- i guess i'm not quite as worried that the median stock is necessarily way overpriced there. >> joe, i like technology. technology is pretty broad, so what sort of sectors within tech railroad looking at? >> to be honest you're looking at tech across the board. some of the new tech, where there's just so much disruption going on within the industry, i'm really looking at it through the lens of innovation. it comes down to security selection. when you look at tech and biotech, which we just talked about, of course, valuations in certainly stocks can look frosty, but broadly speaking, if you put your portfolio manager hat on and look at the companies, there certainly are opportunities. >> and bill, i'll finish this up, by asking within consumer

discretionary, what do you like? we have seen disappoints reports out of kohl's, macy's, and it also includes things like home builders in this discretionary group. >> i wouldn't necessarily say home builders, but home supplies, we have them really i think this week in terms of earnings, and i think, you know, you've had some segments on it earlier about the housing market. it look like it's part of this real recovery story, so i do thif some of those home building supply kind of companies are one of the really nice niche places to continue to look at. >> guys, thanks so much for your time. bill and joe, always great to see you. >> thank you. >> go to powerlunch. cnbc.com to see why joe is avoiding emerging markets. steelers' harrison asked them to give back their

participation trophies, and it starts off a debate. and more is ahead in the power run-down, two minutes away.

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to reach for the sky. that's that new gear feeling. this week, these office depot brand notebooks just one cent. office depot officemax. gear up for school. gear up for great. given the prospects for solid profitability, and the force is with disney shares today, getting a nice boost on news the company will be adding "star wars"-themed lands to disneyland at the disney worm theme parks. don't go anyway. it's dime for the power run-down. dominic chu and julia boorstin. steelers linebacker james harrison has a new adversary. rather, he's facing off guess immediate okayry, taking to

instagram to criticize the participation awards his 6 and 8-year-old sons received. he says head's going to return them until they earn real trophies for winning. the post receiving more than 12,000 likes. does this make him a father of a year or a mean curl murgeenly dad? >> i have two boys of my own, and i have read a lot about how you deal with praise. what i've heard the most -- and this has been written by a number of experts -- is the idea you want to praise effort. so i think that the question is participation versus effort versus outcome. i think it might be a little rough to pull the trophies away from the guys, but i think there has to be some balance between praising effort and giving everyone a trophy for just show up. >> i've got to agree with julia, i think it's about balance, but we work in a tough business.

media, wall street is a tough business, technology is a tough business. for young people, i know i wind coddled at the kid, but at the same time i wasn't beat over the head every time i did something wrong. you want to know if people can adapt to situations and perform their best. i'm not saying participation trophies are not valid, but you can't knock him for saying, at least, let's do something, let's make you stand out before you get that recognition. i think that's what he was trying to say. i don't think it was him trying to be a mean man. >> i say kudos to him. sports is a met aforfor life, and in life, not everyone is a winner. kids need to learn that lesson. i think this is coming from somebody with no kids, so -- >> i'm kind of with you on that. i have a couple boys. i would say if you're getting an award for just showing up, maybe that's not right.

>> no good. >> but there are ways that you can recognize efforts, supportsmanship, whatever, most improved player. those can be very meaningful. i use to win sportsmanship and nothing else, because i wasn't have good. >> that makes two of us. next topic "new york times" publishing a bombshell. it went on and on with a longs story. it basically says amazon is a tough place to work, apparently one of the most successful tech companies in history, so says the times writers, is not a great place to hang out. the chief firing back, saying he would quit the company described in that "new york times" article, maybe he should have his "the washington post" write something. how will the story impact amazon? is this one example of a more widespread growing normalcy of very harsh, abuse maybe, in the white-collar world? melissa, what do you think? >> op zone shares are up 1.2%.

that's just one measure. when it comes to the workplace employers should do what they need to do within legal limits, of course, to ensure the workplace accomplishes the goals of the business. if employees don't like it, they don't have to work there, but that is the price for working for a company that has been immensely successful in a highly executive world. >> yule gentleman? >> reporter: reading this articles was just amazing. i was totally engrossed. the line i found most compelling is where overachiever go to feel bad about themselves. the criticism of the workplace was pretty powerful. i think that amazon is more likely to get away with it and less likely to have ma make changes, because it's not in silicon valley. there's so much competition for talent in silicon valley, that i think there is where we seed companies like facebook and netflix making changes to make their workplace better for their

employees. i think there's been a lot said about how making a workplace more friendly to people with families will get a higher quality of employees, but because you're competing with fewer other major companies in seattle where amazon is based, i think there's less drive to make changes to make people want to stay there, because they don't have to worry so much. >> as we look at jeff bezos' comments, dom, where do you come down on this? silicon valley basically has a reputation of being a pretty humane place to work, free lunches, lots of extra perks, so forth. >> i can bring my dog to work at goog google. >> amazon is not in silicon valley. amazon is in the retail business, and maybe you compare it with apple under steve jobs, which was an equally demanding place to work, if not more so. >> here's what i would say. i'm a free market capitalist by nature.

i think this will be a self-correcting mechanism. the moment you start losing out on talent, that's when you know it resonates. i would be curious how all of those thousands of amazon employees really feel. look at that tweet. this has taken out of context stamped ought over it and symptomatic of a growing reliance on hyper bolle to score points. let's move on to delta air lin lines. if you buy a economy list, you'll be the last to board, the last to get overhead bin space, if there is any, no refunds, no early boarding, none of the good stuff. delta says they're not shaming their passengers. they're trying to move them into paying more. they're just making them aware of what they're buying. what do you say, dom? >> i believe it's transparency. the reason why is i fly coach,

and i have been in group 4 and 5 before, and i've been the last to get on the plane, have got to for a i got my way back to get my bags dropped off, so there is something to be said. this is a day and age, remember, where airlines are trying to squeeze as much profit as they can, so this is transparency. >> me lacea, julia, quick thoughts. >> ditto, i have no shame for paying the lowest fare. >> julia? >> reporter: all i've got to say is the number of complaints again airlines is up 20% in the first half of this year over last year. i'm not surprised. airlines are doing whatever it takes, and they are oftentimes just making you anxious about what that experience is going to be like. >> pay extra for the cheese casher. julia, melissa, dom, thanks so much. still ahead, we're going inside amazon. one former vice president tells us what it is really like to work at the giant. and horror story from

airbnb, and uber, but who shares in that economy? don't go away.

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you probably remember this video. professional surfer mick fanning

coming face-to-face with a shark last month in south africa. by some miracle he made it out of the water unharmed. he's back in the water for the first time since that encounter, participating in the 2015 world surf league in tahita. he did not disappointed, and told reporters he is stoked to be back. melissa. this hour's powerpoint, the dallas fed naming a new many. the fast issuing warning letters to manufacturers of microscopes with bug outbreaks. and stocks at session highs, consumer discretioniarieses utilities are the best performers. if you missed any of the big stories in the past hour check out our website. melissa, one of the world's biggest bond fund managers going all in on housing, his three

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we have a big hour on tap. attention homeowners, a big-time bullish bet on house. you. plus more in the biggest casualty yet in the air price collapse. we will take you live to the oil close at 2:30. you've heard of the sharing economy, but have you heard of the scaring economy? new concerns in the new economy that all -- in all of your markets and oil in a couple minutes. hard to believe, but true. see you then. east coast flights back to normal after a computer problem in an air traffic control problem over the weekendedlied thousands of flights. the faa says the problem is resolved, but in truth the air traffic system in this country hasn't really changed much in the past 40 years, so is it time for a big overhaul? and more important, who would foot the bill? insight from marla westerfelt at the eno center for transportation.

thanks for being here. >> thanks for having me. we heard a couple weeks ago that the controllers are tired, doing a lot of work on little sleep, making mistakes. is it broken? >> i wouldn't say that the system is broken. we have the safest airspace in the world, but there is room for improvement. at eno, we've looking at ways to update the system. we have come to the consensus with a number of stakeholders that it is time to separate out the regulation and operation that is currently happening with air traffic control. >> what are the three things that ought to happen now? and what would they cost? >> well, the first step is having congress release some legislation. next month the transportation infrastructure, the committee that handles transportation issue says planning on releasing a big that is going to likely propose taking out air traffic

control and create ago nonprofit corporation, but in order for that to move forward, the senate will also have to act to have a similar piece of legislation. but in doing this, we'll be able to likely modernize the system in a much more expeditious fashion. >> so that's one thing that ought to happen. what are a couple more? with that -- so it would be a private corporation, a nonprofit? what would it be? there are definitely different models. we had stakeholds are from the aviation, from airlines, from academics, from the labor unions, come to talk to us about how to move forward with the system. we came to the consensus that there should be a government corporation, which means the government owns it or a nonprofit model. both of those models have the opportunity to improve the system that currently exists. >> would it mean a single provider of these air traffic control services?

>> yes, yes. >> so you're not dealing with a lot of different ones. i've heard area line executives, for example, say if the tsa were run by private companies, it would be a heck of a lot more efficient. do you think it would be more efficient if a private, not-for-profit company ran the air traffic control? >> i absolutely think it would be more efficient. it's because they are able to make investment decisions that are separate from the budgeting of the federal government. they don't have to deal with sequestration or government shutdowns. they are also able to make thor decisions quickly. currently in you want a large procureme procurement, it makes many months to many years. by the time it's approved, that technology is out of date. >> marla, thank you very much. we could go on and on. i'm fascinated. >> it's a fun topic. >> we'll have you back. >> thank you, marla.

>> thank you. that will do it for the first hour of power. melissa is sticking around, brian will step in. take it away, guys. \s >> thank you. it's noon in prove on, utah. stocks and oils both struggling to find any kind of solid direction. happy monday. melissa is at the nasdaq doing double duty. the dow jones industrial average up 61 points, so near the highs of the session, gold is up slightly. oil is flat. will we close down for oil, stay tuned, but the top story is not oil, but natural gas. let's get back to jackie d. >> nat gas is 242. trader told me they think it's the result of supplies -- overall supply up 25% above where it was last year.

they sort of feel like we're winding down in terms of the severe weather, and the summer is kind of over, so we're in good shape, but one telling me the farmer's almanac is saying it could be the coldest winter we have seen in years. so seeing a bit of resistance, and they're coming back down, 272 is where we stand. funny thing about oil prices is we're up eight cents today. you and i talked about this earlier. the fact we're seeing the expiration of the september contract could be causing some volatili volatility. -- we did have a stronger dallas as well pushes us down. i don't think we'll necessarily sees a negative close, but in the last two minutes it could be very hairy. >> there's a lot of big bets, and we could see jockeying among the investors, hedge funds,

whatever, and we'll see you again in a few minutes. thank you. concerns over china, a but new part of the oil story. if china slows further, we could see demand drop off even more thus increasing supply. michael cohen is head of energy commodity research at barclays. we've already have an oversupplied world, how much does a slowdown in china further oversupply this market. >> we're already in a situation where in the first half of the year, we saw some high product stock building, so it's not clear how much industrial demand supported the overall chinese oil demand story. we also saw some lackluster electricity demand, so these things were kind of inconsistent with the overall positive signs that we saw from the apparent demand from china. in other words, we saw these very, very high levels of imports, but in a sense some of that actually went into product

stocks. that is the reason why we're cautious on the chinese oil demand story going forward. how much of a psychological impact may be there as well? >> right. so we saw also with the yuan devaluation and the chinese equity market, all of these concerns are part and parcel with what's going on with the overt statistics that we see from the chinese government, and so all of is it in com bins gives a bit of a doubt -- or provided more doubt about the overall economic growth story. we recently revised downward or economic growth estimates, so we expect it to be about 6.8, high 6s, 6% for the coming year. >> we just showed on our screen, that you think oil could go into

the low to mid $30 per barrel range. why, how and how long could it possibly stay there? >> from a technical perspective you're correct. i think we do definitely see in the short term the possibility that prices could go up -- just into the high 30s, actually, but from a fundamental perspective, and the view we have held since april is we expect prices would actually rebound into the mid 60s by the end of the year, possibly reach an average into the 70s for brent by the end of 2016. >> and you're sticking by that? we have about 4 1/2 months to go in the year and we are in the low 40s. >> we are sticking by that forecast. i think there are a couple things the market is discounting. first iraqi oil production will not be able to be maintained at these levels, and we think the demand isund underestimated. that's more in line with our estimates that we put out last month, so we revised upward into the 1.5, 1.6 million barrel a

day level for 2015 and 2016, and we think production will start to falter. and we expect it to be down about 100, 200,000 behaviors a day. that reality coming through is going to support the market in our view. >> michael, it's a pleasure. thank you. >> thank you. that collapse claiming another victim. kkr sam sung resources announcing plans to file for bankruptcy protect. kate, it's interesting, not only would it be one of the biggest casualties, but they're not actually filing for it, they're saying they're going to file for bankruptcy. correct? >> that's right. there's a few different moving plans. if the plan matched and approved by the board in mid september for after an august 17th payment is missed and the 30-day grace period. this would be the culmination of a month of discussions p. after

meetings with creditors. or opt for a chapter 11 with as part of the plan a $450 million cash infusion, ultimately they're going to the latter. samson is a bit unusual in that other shale drillers are -- which caught people unawares, as you know, this tulsa-based driller has struggled. and really this was problematic as an investment almost from the moment that kkr and the other original buyout partners gout in and what at the time was a record-setting 7.2 billion leveraged buyout. the plus investment now would appear tore wiped ute. others are likely not happy. others were in favor and would be part of the group contributing to new capital along with the hedge fund silver

point and colorado-based company. they'll still be seeking backing, though, and one participant sdripd the conversation to me as fluid. unsurprisingly samson paper trading at rock bottom prices and it's not great for kkr, which just last year faced another bankruptcy filing. in that case, later renamed energy future holdings, so unfortunately another black eye there. >> kate kelly, thanks so much. we have braking news, sue? >> melissa, this concerns the irs. you might recall a while back we told you about the big data breach at the irs. right now they say that computer breach is much, much bigger than originally thought. it basically doubles the total number of potential victims. now they estimate at about 334,000 people may have had their tax information compromised. in all, the thieved used

personal information from a total of 610,000 taxpayers in an effort to access old tax returns, which they then used those numbers to get into current databases. in all, out of those 610, they were able to get information from 334,000 taxpayers. that is double, melissa and brian, what we thought before. back to you. >> unbelievable. sue herera. thanks for the update. tesla shares are up after morgan stanley boosted the target to $465, up from 28 on, the note specifically calls calling out the potential for autonomous driving. joining us now is ivan fineseth, the auto analyst at tigers financial partners. you have a neutral rating which seems to be the opposite of morgan stanley. do you acknowledge there is perhaps a case for tesla possibility to be part of the story? >> i like adam's enthusiasm for

the company, i don't -- pill also an excited for computer-driven cars, but i think this technology is at least five years or greater before we see it available on the ka respect we can then purchase. >> you know, just on social media, commentary, a lot of people are poking holes in adam's note. it's relees on the notion that mobility will be part of the story, basically raising the price target to double, so it wouldn't necessarily be reflected in the next year when it comes to sales or profitability. at the same time, ivan, this is a stock that trades on momentum, as you know, and could factor these things in before they actually hit the bottom line or the top line. so is there a point at which you say, you know what? tesla mobility could be something that will almost be as big as tesla motors, as adam jonas puts forth? >> i don't see it that way.

i'll see what will drived stock, as what drives any stock, is the sales of the product as they roll out new models, as they have the model x coming, and future models, and sell more cars. whether it hack the self-driving or computer driving capabilities can be an option in that car, as it will probably be an option in many cars. i don't know if that's the pure driver, as much as it is the quality and the features and the performance of the car that is the driver or the seller of the cars. >> again you have a neutral on the stock. do you think investors could shook add this stock ahead of the model launch? >> i'm excited about it, i think it will be a great car and do very well. i think the stock is up today because they closed the financing for an amount greater than they originally wanted to go to market for. i think that's also positive. so people may have concerns, so the fact that they have can consist listenly raise more and

more money is positive, and i think the x will be very well received. >> ivan, thank you for your time. brian? >> melissa, thank you. here's what is on the menu. we're going inside amazon, one former vp tells us what it is like to work at amazon. also ahead, three reasons why you might want to invest in housing right now. later on, a look inside the dark side of the sharing economy, some calls it the scaring economy. you're watching cnbc, first in business worldwide. a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school.

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i'm a gas service my nrepresentative. n. i've been with pg&e nine years. as an employee of pg&e you always put your best foot forward to provide reliable and safe service and be able to help the community. we always have the safety of our customers and the community in mind. my family is in oakland, my wife's family is in oakland so this is home to us. being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. together, we're building a better california.

let's get you caught up on some stock movers. estee lauder reporting better than expected forecast. it is pleased with the performance deentitle economic headwinds and challenges. warren buffett's berkshire hathaway, according to the latest filing they chilled 8 million shares of charter. and record highs in today sessions, including public storage, nasdaq, and martin marietta. you can see some of those names a pullback, but again in the books, brian. a.m. zone's ceo jeff bezos saying he will not tolerate shockingly callous management practices that were described in the "new york times." the story claims amazon has a

real cruel working environment, based on a number of interviews with employees and ex-employees. cnbc has obtained a memo to employ embrace -- i strongly believe that anyone working in a company like one that is really described in the "new york times" would be crazy to stay. i know that i would leave such a company. nabbia is a former amazon vice president who worked directly under jeff bezos. peter kafka as well. nadia, did your time at amazon match up? >> for me it was fun and surprising to read that articles. it paints the amazon as the company, and a very ambitious hard-driving jeff ahead of is the company. in realities it's not the company which drives people. it's about people and employees who work hard, having fun, who

are obsessed with customers, who are innovating the future, and having a really good time. >> you know, it's funny, nadia. this morning i half joked the article could have been titled some people angry at large corporation, have jerk bosses. was the company itself a positive thing? and there were just, like at every company, jerks? >> again, i don't think it's about the company. it's an amazing culture and people who work for the can company, and it's the people who care about customers and care about innovation, and that's what it's about. >> peter, you study companies for a living. what is your take on that article? i mean, most people i've talked to said, hey, get in line, that's every company, especially in technology these days. >> it is a lot of companies certainly on wall street, a lot of investment bankings and certain in technology, especially startups whether they

need to overachieve. you generally don't hear about it quite as much. that said, i certainly got inbound e-mail and texts from people who said this could be many companies, netflix, for example, tesla, uber. by the way, that article talk about the fact they don't offer free food at amazon. they don't at google and facebook. the reason they do is because then you don't leave the office. that said, there was an amazon employee quoting an executive saying we used to burn people down into the ground. we don't do that anymore. i think admitting maybe the problem has gotten fixed, but acknowledging that is in your dna is telling. >> and maybe it's all relative. does it not matter, peter, because they're non-silicon vall valley, they don't have to compete as much.

>> oh, no you're definitely competing for the best and brightest. they're trying to -- you're competing against apple, facebook, everyone for the best talent. the fact you have to hop on a plane to go to seattle isn't that important. >> i would have to disagree. in seattle we have a very vibrant technology community. many startups, and it's just as exciten an environment to work for and employees have many choice toss go and work for startups or for microsoft or exceedia, or many other companies. >> we've got to go. it's interesting, this morning i looked on glass door.com, which is a review site for companies and management, this is this morning, so it's not new comments, had an 82% approval rating from current and former employees. nadia, would you work for bezos again? >> i would work for bezos anytime. i owe him for my career. the amount of innovation and

customer obsession i learned from him, what i'm using every day. the article portrays jeff as evil and ambition. he's a very fun person. he laughs a lot. he plays games, over the weekend we played a game with him and throwing water balloons at each other, and everybody was having fun. that's a side of jeffs which is real. >> probably the most epic laugh in history. nadia, a pleasure. peter, a pleasure as always. we'll see you both again. up next u. one of the world's biggest bond fund manager going all in on housing. mark keysle will join us ahead. will those futures contracts cause havoc? stick around. no student's ever done the full hand raise in ap calc.

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in august rising to the highest level in more than a decade. one housing bull says strong housing data could point to a fed liftoff. that is mark kiesel, chief investment officer of global credit. mark, a pleasure. we like convicted calls. how all-in are you on the outsing story in both credit and programs equities. where are you investing? across the whole spectrum? >> hi, brian. we are basically invested in housing in a big way. we think this investment thesis has legs. in fact we're only mid cycle. this is an industry, brian that's growing at 15% in the u.s. economy that's growing at 4 to 5. we think housing will grow at 10 to 15% going the next two, three years. you want to stay home builders,

home improvement -- >> wait a minute, 10% growth, okay, let's go through the list of the housing bears. they're pretty good arguments, mark. you have a pretty aggressive view. they have student loans debt. nobody is having any baby, credit is not available and everybody is broke. >> right. our arguments are really threefold. number one, it's the state of the consumer. 3 million private sector jobs, 700,000 job creation over the last year in the 25 to 30-year-old, strongest in 15 years. 30% are living with their parents. secondly, inventories, you're at 15-year lows, both in terms of absolute inventories, and inventories as a percent of population. the pentup demand we think will start to come through, because basically you've added 1.5 million in household formations. that's now starting to see a

significant recovery. if you look at the details, brian, of the earnings report, this is the third reason. credit is starting to pick up in the economy. the supply of credit through the banking channel, all the major four banks reported double-did you get growth in credit availability, and demand for credit is coming back. you're sewer that pent-up demand come back into the marketplace. you literally have 5 million people who lost their homes. they could potentially come back. we see a lot of pent-up demand. >> i guess my concern is higher interest rates. we're in a market now, mark, where my god, people consider a 4.5% mortgage a high rate. the fed will raise rates, maybe in september. interest rates will probably go up, isn't that going to be a drag on housing? and if not the overall economy? >> brian, good question. by the way, we agree with you.

we think rates are going higher, but at the front end of the curve. we see the fed normalizing short-term, but the yield curve constitutionally flattening, so the mortgage rates, main they go a bit higher, but the reality is the job growth and pent-up demand for housing more than offsets a modest rise in longer-term rates, which we think will rise is it -- as the fed normalizes, the fed nunds rates. going all in, making the defense of it there, mark kiesel, a real pleasure, thanks, buddy. >> thanks, brian. the final oil trades are crossing for the session. let's get to jackie d. >> brian, 26 minutes away ago, the question was if we would be in positive territory irnow we're down 47 cents. stick with "power lunch." i'll tell you why we're seeing in negative sentiment, when we come back. you totalled your brand new car.

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for a free quote today,call liberty mutual insurance at see car insurance in a whole new light. liberty mutual insurance. hello, everyone. here is your cnbc news update. russian foreign minister sergei lavrov meeting with his armenia counterpart in mosco-- iranian

counterpart in moscow. the dent at practice of the dentist who killed the lion in zimbabwe has resoaped. saying in a tweet -- it's beginning to see patients again. palmer, however, is not at the office. when two robbers attempted to rob a store armed with a foot-long knife, the casher responded by pulling out a much larger sword. he got into a quord fight before the robbers gave up and escaped. they're still on the loose, however. tracy morgan is coming home. the comedian who has been recuperating from injuries he suffered in a vehicle crash last june, will guest host of "saturday night live" broadcast on the 17th. it's been a long year of recovery for him. that is the cnbc news update. >> i'm glad to see tracy morgan getting back to business and going home to snl, but could we

please get back to the sword fight? the guy has a sworn and attacks just randomly robs a storey a guy has a bigger sword, which i believe that type of sword is technically a sim atar. >> it may be. the morale of the story -- don't rob stores. >> maybe that may by the morale, and don't ever rob that guy. >> no, never, ever. >> are you. >> run that all day, it would double the ratings. jackie, you know from which -- is that a sim i tar or a sword? >> i don't even know what you're talking about, but i do know about out prices. september wti, that is very significant, intraday we had fallen under $42, we haven't closed there recently.

this move 209 down side showing you where sentiment is at the moment. gasoline being sold off today, despite the fact we do have some refinery issues around the country that are causing problems. meantime traders are telling me they are expecting to see the free handle, and we could see it sooner than probably expected, brian. back to you. >> jackie deangelis, thank you very much. it is time for street talk. we're digging through analyst reports every day. let's go. first stock, w & r grace the analysts thinks it's on the cusp of a stronger pricing cycle in parts of the chemical business, and also said in a current environment of heightened might roar economics, investors will like it, nearly 7% free cash flow yield. about 15% up side.

>> and it is on 52-week high watch, about 50 cents off the 52-week high. >> second stop, appearing, we can't go a day without talking apple, 12-month fair value stirmt, the analyst says it may remain under pressure for fear of iphone declines, but the stickyness, that would mean a quick return to growth, and same free cash flow for several years. by the way, the analyst has declined in phones likely happens in december, and the holiday quarter was big. it's a comp issue, not a market share issue, they say china is the biggest unknown. >> i believe that's sandy hargraves, right? >> yes. >> kind of neutral on the stock, so a big turn bullish for him. new trader favorite j.c. penney, b. riley starting coverage, calling it a speculative turnaround with a debt local story with, quote, lots of work

ahead, but notes the real estate value has a 1250 targets on the name, about a 40% up side, but this was an $80 stock back in february. >> the most recent earnings report, though, really giving some ammunition, now we see evidence of the turnaround story, especially when you consider we had some high-profile misses from 9 likes of macy's. a fresh mark. and this is happening ahead of earnings, cutting into the market perform, from 28 from 44, the analyst sees a risk of negative comps, in several key categories, including produce, dairy and seafood. tfm lacking ability to, and there's stilt no permancy, so a lot of unknowns, but i know this, the average price target, the analyst that is cover stockssh so the analysts are behind the game on this one. >> klx incorporated.

florida-based chemical company, upgrading it from a buy to a neutral. a $48 targets, they give two different views, the analyst j.b. gross saying the stock is oversold in part bass the market is placing too much emphasis on the oil and gas part of the business, but groh notes that that's only about one fifth of the revenues, in other words, the thesis is basically like this is being thrown out of the oil and bass bathwater that shouldn't be. >> we should know that they are reporting on august 25th, and there are some high expectations going into this report. rbc just out with a note. they expect this company to beat on earnings. this is one to watch next week. >> klxi, there we go. thank you. it's time for trading nation. traders trade better toes. let's look at biotech. after a tough month, the popular ibb etf is up nearly 2% today.

greg johnson, a technician with piper jahvid ray, and you see it bouncing back for real long term? >> yeah, our team is very constructive on biotech. i look at it and say you can look at it from a fundamental perspective our flow of funds perspective. what we are seeing at the desk level is something very different from our analysts from a longer-term perspective. generally the generalists have backed up and supported the sort of buy the dip and sort every been there to really support this phase. you know, looking at a relative value trade. i think they are overweight for the most part. the groups, again, solid fundamentals, but looking at another sector like energy, showing so cheap that you could see a relative value shift from the generalists going overweight to just equal weight, and take a lot of steam out of thinks

names. i don't necessarily see people stepping in to buy the dip like i've had in the past, and i absolutely see people interested and dying to buy energy. my point is, from a relative value perspective, the better train is to not step in and buy the dips. >> not to buy the dips in biotech. craig, do you agree or disagree from a technical perspective? >> from a technical perspective, i disagree. over the last three years we've had they catherine of questionable periods where it's really testing the investors' resolved to come back and say, yes, we're going to hold support. this again to look to me to be one of these pertains up to buy these biotechs once again. all the way back since 2011, still remain above the 40-week moving average. and from our perspective, we want to be buying this dip, primary trend is up, we still think the energy sector, call it

a relative value, a relative strength to short for years, and will remain so for years. >> differ views there. david says be careful. guys, thank you very much. for more trading nation, for more of dave and craig and a host of others. right on deck. a frightening story that might give new means to the sharing economy. plus a lightning storm to end all lightning storms, where else? in south florida. the incredible time lapsed video, that does not? include sim i tars. and right now a word from our sponsor.

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the lightning you are seeing, happened in singer island, florida, near palm beach. this is a time lapsed video set

to, of course, queen. lighting up the night sky. heavy storms have been hitting south florida. they could continue this week. this "bohemian rap pseudo"just keep it going. tells of a young man staying in madrid and being attacked by his host. she contacted airbnb. they didn't help her. should they protect themselves, or should they do more? our own jon fortt and josh lipton as well. you get bad seeds everywhere you go? do they have responsibility for stuff like this? >> i think the key is airbnb did not contact the authorities in madrid when this customer's mother contacted them. that's something that a hotel probably would have done.

so it's a care of airbnb maybe bringing their studs up to what hotels do, and enforce that. they're growing incredibly fast. hundreds of thousands staying anywhere at one time. sure you'll have outliers, but yes, you do have to el prepare. >> you people living through the cracks? the person was staying in a room of the host. the host was there. it wasn't like hi rentsed out the whole place. if you're in a car with somebody, in somebody's house, is there a risk of growth that's too quick? i think if you're involved in the sharing economy, you certainly have this responsibility to make your services as safe as possible, as secure as possible, but there are differences. i mean, to your point, they're

just going to have infrastructure and services, security personnel, you're not going to have if you're renting out a room, an a35r789, a house, a hotel. that's not what you're going to have when you go to airbnb for i think customers. there is this trade-off. you get a room, an apartment, a cool house and cheaper price, but you're also giving up something as well. airbnb is young, adapting, and changing its policies, as they told cnbc in response to that story. >> at the same time, these companies are garnering jaw-dropping valuations, these scary stories underscore the unknown of regulation creeping into the system. don't tell me that some congress people out there are going to hear about these scary stories and not try to propose some sort of regulation, jon. i'm wondering if investors are factors in that unknown enough? >> melissa, i think that's part of the reason why companies are

raising so much money. they know there are legal costs, regulatory costs that they're going to run into. this is a challenge. we do have to think about the scale of what this company is trying to deal with. also, there are trayoff. we're not actually renting from a hotel company. what's the level of responsibility, the level of service that a customer is going to need in order to feel like they can use our service again and again? it seems like from a third party's perspective maybe airbnb fell short of that. they need to allow for situation where a person might find themselves in danger. they need to think through them, because this is a business different. sure, this could happen in any kind of bed and breakfast situation. >> but there is a good lesson from this story. it's not putting -- but let people know where you are.

a friend a family, right? jon, josh, thank you both. another roller coaster day for the markets, sharply lower at the open, and rising. we're up right now 54 points, a decent start to the week. more market advice, more practical advice for your portfolio, as you are, of courses watching cnbc, first in business worldwide. but utilities can now predict where the power will go out, within a few city blocks. working with ibm, they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.

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the nasdaq is positive. jack, great to have you with -- you are carb. what are you seeing? what was interesting to me is what you were pointing out you seeing in the credit market. that is a concern to you. >> sure. probably one of the most recent metrics that we have sort of concern is the credit markets, spreads, the yield that lender require to extent, has started to widen a bit. that's generally a negative for

equities, not a timing tool. it doesn't necessarily mean that, you know, the market is going to drop right away. in fact, the last time we widened to these type of levels was july of 2007, so, you know, we still had a year and a quarter or so before we had problems in the equity market. >> still you're getting cautious, raising cash. how do you think the markets will react if you think the fed raises interest rates as everybody expects in september or even though everybody thinks the fed will raise interest rates in september. >> yeah. it shouldn't be a huge surprise, although futures, you know, still suggest slightly less than 50% chance of a september tighten. i think that it certainly will be largely symbolic, but if it does put equity investors on notice that no longer do we have this, you know, favorable risk environment perhaps the high valuations, i will say, the market's not cheap certainly

could cause some downside risk for equities. >> and going abroad looking outside the u.s. like northern european countries such as sweden, why? >> their currency is trading about 20% cheap to fair value, so if, you know, they should either benefit through exports and economic activity and if that's not the case, as that currency goes back to fair value you'll have that tailwind, you know, so forth. but just getting back to the fed for a second, i just want to underscore the wedge that the fed has created between the financial markets and the economy. while i think the economy is still solid and we still have a, you know, solid underpinning for growth the fact is that the financial markets really decoupled from the economy the end of 2013, early 2014, and that's where i see a concern that, you know, as a housing prices are reaching record levels both here and abroad, as

equity prices, yields are all-time low, as picassos are trading for $170 million, my sense is that as the -- we start to see a tightening environmental liquidity that could start pull something of that excess down. >> got it. jack, thank you. good to see you. shares of zulily are spiking as the company is being bought by liberty interactive. we'll speak with the man who runs the network. "power lunch" will be back. gre. gre. it's a fact. kind of like shopping hungry equals overshopping.

your deal of the day is a deal company itself being bought. liberty interactive qvc paying $2.5 billion for the retailer and flash site zulily. qvc ceo mike george joining us to talk about this deal closely, but quickly first you're in seattle your take on "the new york times" article on amazon if you would? >> well, you know, amazon runs their business and we have huge respect for them so i don't know that i want to comment on the article other than to acknowledge the be a obvious, they're an amazing competitor, they've redefined the industry and all of us work hard to find our own niche and compete successfully. >> okay. let's move on to this deal here. zulily, the stock, you know, fell dramatically, obviously that's the stock, that is not the core business here. it didn't look like from a market perspective it was doing that great, mike. what made you attracted to zulily? >> yeah.

we love the business. i've been talking to our team at qvc about zulily for the last couple years, used them as a role model for someone taking a new approach to the web, focused on the kind of experimental shopping, discovery, freshness, newness, high customer engagement, customers want to come back every day to see what's new. all those attributes it's like qvc, both companies trying to create inspiration to create the joy of discovery, to bring customers back every day with new ideas to add value to their lives. and so we're less worried about the stock market and more about the power of these two brands to build what we think will be an absolutely distinctive digital business far into the future. >> so mike, it's interesting, over the two years you've been talking to zulily the business

has changed, it was growing quickly and in the last year it has slowed in terms of growth considerably. long delivery times of two to three weeks in a day and age when amazon prime customers expect next day delivery and no return policy. what's your plan here for zulily to reignite growth that it had before maybe when you started talking to them initially? >> well, you know, zulily is still growing at a very attractive rate and so it may not be going through the kind of hyper growth of 100% plus rates they had in the early years but no company can sustain those growth rates. it is still a company growing strongly, taking share, and driving great both repeat purchase and bringing in new customers. and i think that's because they're trying to do something unique. bring on thousands of new items a day at amazing values and they're very open and transparent with their customers that in exchange for being able to bring on all of those great

items from the small boutique venders, it's going to take longer to get the product to the customer. the customer understands i think that exchange and they're happy with it and i think you see that in the kind of repeat purchase rate they enjoy. so again, i think it's a perfect fit. no one wakes up in the morning planning to buy some specific item on zulily or on qvc. our job is to inspire them with something wonderful and then they're less worried about the shipping times. >> what does zulily bring to the qvc table, mike. i'm asking this because even at the current purchase price, the forward p/e is about 68 and the current p/e is 232, investors want to know what plan is and how it will help qvc? >> i think we, through this acquisition, have an opportunity to significantly accelerate the growth rate of both companies.

i think it will take time and we'll learn as we go, but there's no question this becomes a powerhouse business, $10 billion in revenue, $5 billion in e-commerce revenue, one of the largest e-commerce retailers in the world, over half of that business on mobile, one of the largest mobile commerce retailers in the world, and a thousand merchants across the two companies around the world that makes it one of the largest teams of merchants of any retailer in the world whose mission every day is to discover something amazing and new to bring to our customers. put all that together and i think you get a company that can grow its customer base, we can expose zulily's 5 million customers to qvc, qvc's 14 million customers to zulily and grow the two at a greater rate. >> got to leave it there. mike george, qvc ceo, thank you. we will what's on fast tonight? >> home builders, technical analysis of the sector tonight

at 5:00. >> look forward to that. thank you very much. take care. "closing bell" starts right now. hi, and welcome to "closing bell." i'm kelly everybody vance at the new york stock exchange. i'm bill griffeth, my luck, wint on a diet and lost height. very tall. oil prices dropping again today, trading now below $42 a barrel at wti, intraday, but we have someone who says gasoline prices in many parts of the country will not be falling any time soon and he will break down more on these refinery issues especially in those parts of the midwest having problems. >> working on my posture. hedge fund giant