think it's too early. the deal hasn't closed. but it ratchets up the competition in cloud and storage in a lot of other names. >> stocks coming off their best week in some time. seven-week high. major averages up right now as "power lunch" begins right now. >> you need to be on the left today, not on the right. welcome, everybody, to "power lunch." along with mandy drury, i'm tyler mathisen. it is the biggest deal in tech history, yes, in tech history. dell buying emc, $67 billion. the other tech names that could be ripe for a takeover. americans slowly starting to believe lower gas prices are here to stay, but what are they doing with their gas savings? exclusive results of our cnbc all-america economic survey and guess what? you're actually going to be quite surprised. >> and he's one of the most successful sports coaches in history. he was belichick before belichick.

he was he was krzyzewski before krzyzewski. sir alex ferguson shares his secrets to successful leadership. >> indeed. but we do begin with that biggest tech deal of all time with dell buying data storage and security giant emc for $67 billion. the ceos of both companies on cnbc speaking about what this merger means for them and for investors. but this mega deal also raises questions about who is going to be next. i hope you've been doing some digging and you have some answers for us josh lipton in san francisco. >> well, mandy, let's walk through first just how this deal will actually work. so dell will pay $33.15 a share for emc. that's cash plus tracking stock linked to emc's interest in vmware. michael dell will lead the combined company as chairman and chief executive. the deal, which needs approval from em c shareholders expected

to close next year. the company will be a powerhouse in the data storage industry. that's a $36 billion market according to idc. brent braceland, an analyst at pacific crest, says this deal speaks to a bigger, broader trend that investors need to keep in mind. consolidation is coming to the i.t. hardware industry, he says, so companies selling servers, storage, networking equipment, many of these companies still do generate a lot of cash, but their stock prices are under pressure because of the threat from newer technologies like cloud computing. braceland highlights two companies for us to watch. one is net app, dat that storage company could generate $1 billion in cash flow next year and be worth north of 35 bucks a share in a consolidation scenario he says. that stock down some 20% already this year. the other is tara data which braceland says could also be worth $35 a share. however despite even that possibility, he says he's remaining cautious for now given what he calls the soft

fundamentals at work there. neither net app nor tara data responded to requests from cnbc. ab inbev raising its takeover offer now for the rivals ab miller. shares of the two now basically flat right now. i getion people are waiting to see what happens, morgan brennan. >> that's right. we'll call this round four because ab inbev upped its offer for sab miller to 43.3 pounds per share in cash plus a partial share alternative for the largest stakeholder. it works out to a $103 billion making it one of the largest takeovers in history. this after rejected offers of 4215 a share and 40 and 38 pounds prior to that. ab inbev noting the improved proposal hinges on the shop shareholder and bevco opting for

the partial share option. the key will likely be bevco agreeing to this. we have no word yet from sab miller regarding this latest offer though the board is reportedly meeting in london to discuss this today. we're getting down to the wire here. the brewer, which owns budweiser and stella artois, has until noon eastern on wednesday to submit a final bid. otherwise walk away for at least six months unless sab miller asks for an extension to continue negotiating. if a deal does emerge this week, the proposed powerhouse would claim nearly a third of the global beer market with total annual sales estimated at upwards of $70 billion. the deal is then likely to face intense regulatory scrutiny. >> and the santa domingo family known to be very, very tough negotiators in this. >> they are known to be tough negotiators and as we have heard from many analysts and david faber on our air, a lot of this hinges on them agreeing.

>> ewe're not talking storage devices, we're talking beer so this is very important. >> it's happy hour somewhere. >> it's happy hour all month, isn't it, with oktoberfest? oil prices sliding this hour. let's take a look. wti is down by 3.5%. brent is down by the same amount at $50.72 and opec is out with a new report on global oil demand. let's break it down. jackie deangelis is at the nymex with details. >> good afternoon. this is very interesting action today, especially after we tried to break through that $50 level and hold last week. obviously oil prices couldn't do it. we're sliding today. this is after a 10% run in a month. so certainly some profit taking here, and remember volumes are thin because of the columbus day holiday today. some skepticism is definitely edging back into this market. so let's talk about that opec report because this is how traders are reading it. they're looking at it and they're saying, okay, the cartel is basically telling us everything is fine.

we're going to see a meaningful drop in u.s. production next year, global demand is going to go up and we, opec, we don't have to do a thing. so a lot of traders thinking that's a little bit of a wishful thinking scenario. not to say it couldn't happen, but they are skeptical. the secretary-general of opec saying that the market is going to be in reasonable shape by the end of this year and then you had the kuwaiti oil minister saying there are no calls in opec to cut production. there's an imbalance here. not sure how the supply/demand equation will work out if opec doesn't take some kind of action. stocks are pretty steady this hour with the dow trying for its first seven-day winning streak of 2015 and the first since last december. right now we're a little mixed but flat. the dow is currently up by just 24 points. the s&p is slightly down. the nasdaq up by just 0.6 of a point. but nonetheless, they're all out

of correction territory by a considerable margin. we're watching the russell 2,000. it remains on the verge of exit. let's get more with bob pisani joining us from the floor of the new york stock exchange. welcome back, bob. good to see you. >> thank you, mandy. volume is not bad considering it's columbus day, but oil has been a problem. energy stocks, remember, big rally in the last couple weeks. take a look for example at chevron. as soon as oil started dropping and that was right after the open, the energy stocks went negative. there's chevron, a drag on the dow, down 1.75%. exploration and production stocks have been hard hit today. no particular reason. i think the primary reason is they have had a great run up in the last week and a half as oil has rallied and i think today people don't have a lot of faith in the fundamentals and are simply taking profits because some serious money has been made in the last week and a half. airlines doing very well today. jetblue, alaska air, american airlines, delta all doing well. railroads are on the downside

and that's balancing things out. we're getting some heat in the ipo market. i was quis surpriquite surprise find out ferrari has started their road show. you know ferrari, high end sports cars. they're talking 17.2 million shares at $48 to $52. this is about 10% of the company overall, and the important thing is they're getting it done. this has been a rather poor ipo market so far in the fourth quarter. we'll see what happens. the big story, of course, is the biggest ipo of the year is going to happen right this week. scheduled to price in the middle of the week is first data. big payment processor. this is a leveraged buyout company, 160 million shares, $18 to $20. at $19, that's about $3 billion. that would make it the biggest ipo of the year. on top of that, the same time, exactly the same time, what would be among the top ipos of the year also come. albertson's, the big food and drug retailer, they're the number three food and drug retailer in the united states after walmart. 65 million shares at $23 to $26.

that's about $1.6 billion. that's a pretty big deal as well. so a lot of stuff is being dumped on the market in the ipo market in the next week and a half. the reason, of course, is a lot of these deals need to get done. some of them, like albertson's, like first data, a lot of debt associated with the deal. some of the interest rates are rising. some concerns out there. this is a good time to do that deal. but it's been a tough ipo market. look at pure storage. there were 11 ipos scheduled for last week. only five made them out. pure storage was the best one to price at $17. that was the midpoint. it was the only one to price anywhere near the expected range, $17, and you can see it was disappointing in the first few days and just now trading slightly above that $17 range. so you might ask yourself, mandy, tyler, why would ferrari make an announcement like this in a weak ipo market? number one, they are profitable. number two, this is a good time to go because the market has been in a slight upswing in the last two weeks. it's all about timing, and

finally, they're sexy. it's ferrari. they have a name brand associated, and it's a sort of one off. it's a very, very unique product. i can kind of understand why they want to do to rigit right . >> when it doubt, fall back on the sexy. profitable helps too. let's head to the nasdaq and bertha coombs. >> not a whole lot moving like a ferrari here at the nasdaq. kind of flat ahead of big earnings this week from intel and netflix, but biotechs are finding some strength. they are off of their heiss at the moment. up 0.2%. eli lilly's failure on a cholesterol drug is seen as a positive for the so-called pcs k-9 drug makers. those include regeneron and amgen. they're the big players there with recently approved injectable drugs that lower the bad cholesterol in patients who don't respond to perian is deve

form. in tech, it's fairly flat, fairly mixed. nxp higher. activision ahead of the holidays and facebook with its new buy button that it's going to have in its feed. back to you. >> all right. bertha, thank you very much. americans are slowly starting to believe that lower gas prices are here to stay and that's one of the findings in cnbc's periodic all america economic survey. steve liesman here to break it down for us. i can see on the chart that you're going to tell us what people are doing or say they are doing -- >> say they are doing. it's all we can do right now. but we've continued to use the survey to get at this critical question for the u.s. economy. what's been happening to the savings from gasoline, and we've asked this several times. what we see here is a little loosening up. not all the way, not what you'd expect. let's go over here to those who

say they're doing nothing. that's come down just a bit. in other words, people are more aware of doing something with gasoline savings. what do they report? a very small decline, not really worth measuring here of those who are saying they're reducing debt. that's 18%, 19%. a little bit of an increase in those who say they are spending more. a bit of an increase in those who say they're driving more. this is the first stage before you start to spend it is this increase of those who say, hey, i got this extra money, and i'm saving it. let's look at the individual categories where we find people are doing these individual things. those who are reducing debt, white collar workers. not really all that surprising. why? i have enough to spend for my income right now. if i have a little extra money, maybe i'll improve my financial position. who are the savers? this one i'm a little bit skeptical of. 18 to 34. i don't know about you with your 22-year-old, i don't know if he told you he was saving a little extra money, if you'd believe him. that's what they tell us is the

biggest group saving right now. the northeast is a place you have had high gasoline prices but they've come down in the northeast because they don't have some of the blend issues they have in the west. some in the northeast using that extra money to drive a little further. and this one, the most interesting of all. the spenders are those who are already optimistic about their wages, and tyler, why is that interesting to me? because it tells me that it takes a little bit more than just lower gas prices for people to spend more. >> confidence breeds confidence. >> but you need a couple extra things. if it's just lower gas prices, well, i don't know, maybe i will save it, maybe i'll pay down my debt. but if you tell me i've got good wages next year and i'm opt misstick about my wages and i have lower gas prices, let's have a good time at the mall. >> steve, thank you very much. steve liesman with the all-american survey. >> i guess also the confidence they're going to stay low, those gas prices and maybe even go lower. thank you very much, steve. airline stocks are rallying right now. the names that are flying high coming your way. also a major technical glitch

grounding hundreds of southwest planes. we'll bring you the latest on that, plus the hacking economy. we've all been hacked, right? the cost to protect yourself from a hack attack is on the rise as well. cyber insurance premiums are going through the roof. we'll talk about what is driving that. and also soccer legend sir alex ferguson is in the house. he's going to be joining us and he's out with a new book on leadership. you're watching cnbc, first in business worldwide.

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welcome back to "power lunch." i'm mandy drury. volkswagen getting its credit rating cut by s&p. meanwhile, the german automaker in danger of getting a 2 billion euro loan recalled by the european investment bank. pets mart's talks to acquire petco have stalled. and reuters reporting that ge is near a deal to sell $30 billion in loans to wells fargo as the industrial giant moves closer to its core business. general electric a little changed in trade today though. let's get over to seema mody with a market flash. >> good afternoon. railroad stocks taking a hit as jpmorgan cautioned not to chase the recent surge to the sector ahead of third quarter earnings. norfolk southern kfalling the

most down 3%. that stock standing out as a worst performer among dow transports. the analyst points out norfolk is the one to avoid. the stock had shot up 11% in the nine sessions through friday but still down 27% year-to-date. ty? >> thank you very much. getting ready to pay more to protect yourself from getting hacked? cyber insurance premiums are skyrocketing and mary thompson has been looking into it. >> they are skyrocketing for some but not all businesses. so that's the good news there. of course, the cost of cyber insurance has been going up. some of the bigger companies and the most vulnerable industries, they are the ones seeing the biggest increases. other companies seeing more modest increases. now, aig is one of the largest providers of cyber insurance. this year the average premium increase for aig's 20,000 cyber insurance clients is tracking at 7%. that according to the global head of professional liability. big firms and highly targeted

industries including health care and retail along with firms who have been breached will pay much higher premiums. smaller and medium-sized businesses which make up half of aig's book are going to pay smaller increases and in some cases she said may actually see reductions in their premiums. cyber insurance is still a fairly new industry though one the insurance institute sees growing to $6 billion by 2020 driving demand is more than 90% data breaches. if the numbers in the second half of this year match those of the first. cyber attacks are a top five business risk with the average cost of a data breach for a u.s. company coming in at $5.9 billion last year. now, those costs of cyber insurance cover business interruption, customer care, forensics on a system to make sure it's cleared of mall ware and any kind of reputational protection for the company. as a developing market, the pricing and product structure, they're still dynamic leaving some insurers to cap the amount of coverage and limit liabilities they're willing to right for some of the biggest

clients right now leaving them financially exposed to this. >> so would the insurance have covered a big hunk of target's liability, for example, or home depot's liability to customers? >> yes, it would have covered a good part of that. specific parts of that, the business interruption, the credit protection that you have to provide for your customers after that. there are certain things written within the policy that it will cover and, of course, as you know as a homeowner every policy a little bit different. >> oh, yes. >> there are some things they won't touch. >> or medical insurance. there are certain things they deny. >> wind damage or water damage. >> mandy. >> southwest airlines says it expects its customer service systems to operate normally today after major technical glitches delayed hundreds of its planes. nbc's tom costello is in arlington, virginia, with the very latest. >> good day from reagan national airport in washington and it is a much better day for southwest airlines passengers than it was

yesterday. yesterday we saw 500 flights delayed, and that means thousands of people delayed, caught in these long lines that stretched for hours at some of the nation's major airports including l.a.x. and las vegas and phoenix. individuals who tried to come to the airport and then check their bags and check in were not able to do so. in many cases the agents tlsher the ticket acts were left writing out by hand paper airline tickets. if you printed off your boarding pass at home and even if you checked in at the kiosk at the airport you might have been able to get through much more easily and quickly than if you just showed up, tried to check in and check a bag. that was the problem. the airlines says again, 500 flights delayed. nothing canceled. several thousand people impacted but they worked through the night and the system should, they believe, should be operating normally today. in a statement southwest says to nbc news, we have some additional work to do today to get bags delivered and some

delayed or displayed customers into open seats. we have teams working as quickly as possible to accomplish that. so, again, on this columbus day, it does appear that it's all systems are go and operating normally today, but it may also be a bit of a catch up day for southwest as it tries to make sure everybody that may have been delayed yesterday finally gets to their good destination today. i'm tom costello at reagan national airport. back to you. >> tom, thank you. china stock market ending sharply higher. the shanghai index soaring more than 8% in just the past week. china gearing up for a big seek. seema mody looking at what investors need to watch. >> that's right. so much of the emerging market worries have been predicated around the slowdown in china. and crucial data this week will tell us whether china's economy continues to slow or is starting to turn around. that full story coming up next on "power lunch." the great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations.

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our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives. ♪ back to "power lunch." i'm mandy drury. emerging markets bouncing back recently. the eem up 3.5% in the past week alone. but any bad news from china could easily send it the other way. and we are expecting a lot of news out of china this week. seema mody has that story. >> that's right. it's the lack of news out of china over the past one week that is seen as one of the reasons emerging markets have been rebounding, but that changes this week. starting with trade data tomorrow a look at china's import/export picture will provide evidence on how much the

economy is actually falling. and if it's really bad, experts say there's a higher chance the chinese will devalue its currency again to boost trade. inflation on wednesday will tell us whether china is, in fact, dealing with a deflation problem, and bank lending a good indicator of how healthy the consumer is and whether they are taking out loans will come out by thursday. if this data disappoints, analysts say it could reignite the china growth fears. td ameritrade writing the prospects for the chinese america are almost an important driver as fed rate hike expectations. the chinese central bank announced a bank relending scheme. expectations are building of further stimulus efforts to be announced perhaps as early as this week and it's those hopes of further stim lis that are pushing the chinese stock market to a seven-week high. we've also seen the largest move in the chinese yuan against the dollar. just as boc announced its plan to weaken the currency in august. >> you hit the nail upon the head when you were talking about

a potential further currency deval as a thing to watch. >> absolutely. >> tyler, over to you. >> folks, the dow trying for its first seven-day win streak of 2015. a rise by the s&p 500 will be the ninth in ten sessions. big week for earnings. so we'll tell you how to position your portfolio. plus, he's one of the most successful sport coach this is history. former manchester united manager sir alex ferguson will join us with his secrets of successful leadership. its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is?

hi, everyone. i'm sue herera. here is your cnbc news update for this hour. funerals being held across turkey for the victims of saturday's twin bombings in the turkish capital that killed at least 97 people. the bombing occurred at a peace rally. thousands of people in multiple turkish cities paying their respects. it was the deadliest bomb attack this is turkey's history. "the washington post" calling the iranian conviction of james rezaian on espionage charges an outrageous injustice. while announcing the conviction, iran gave no indication what the picket would

punishment would be. he reportedly faces up to 20 years in prison. british police removing their officers who were standing outside their ecuadorian embassy in london watching over julian assange. they were stationed outside the embassy 24 hours a day for more than 3 years at a cost of about $17 million. assange is holed up at the embassy to avoid extradition to sweden where he is wanted for rape. pepsi says it's not concerned about the reaction to its new diet pepsi formula. they switched froms a per tame to sucralose last august and while the initial reashtion has not been positive sha, the comp says it's sticking with the new formula. that's the cnbc news update at this hour. mandy, back to you. >> thank you very much. from one dark liquid to another. let's look at what oil prices are doing. wti crude is currently moving to the downside by 4.5%, so steep losses at this hour and, of course, we'll keep on watching what is happening with crude prices going all the way to the close today which will be at 2:30 p.m. eastern. so in one hour's time from now.

just also keep in mind energy prices have attempted to rally about four times over the last year, in fact, as bob pisani has notened and each rally has failed. we're down 4.5% at $47.39 for wti crude. >> shall we look at gold prices? they're getting ready to close right now. let's mine the metals. gold is up about $8 at $1,164. that's 0.75%. moving on to silver, copper, palladium, and platinum, you see a mixed picture there with silver up by 6 cents, cop you are down at tiny amount. let's take a look at the markets right now. basically minor moves. the industrials up 32. the nasdaq up 3.5 and the s&p 500 absolutely unchanged. bob pisani is at the new york stock exchange and bertha coombs is at nasdaq. bock, you go first.

>> tyler, modest moves in the major indices although volume not bad considering it's columbus day. the dow jones, modest move to the upside. nike doing well. a terrific year for them overall. seven day this is a row if we do it for the dow. that's the first win streak seven days in a row in 2015. i think the last time this happened, i can't quite have the numbers there. i will get it back to you. i think the all-time record was 13. i have been asking the guys down here. i think 13 in a row is the all-time record here. meantime, speaking of new highs, small group of consumer stocks hitting new highs. your hormels, altria, color rocks, dr. pepper, reynolds american, all those guys, even starbucks another one at a new 52-week high. it's these consumer names that have been holding the market up tremendously. we had a great rally in energy in the last week and a half. a lot of that is given back on the oil to the downside, particularly in the exploration

and production stocks which had very big moves last week and a lot of people don't believe they're going to be permanent because they're taking a lot of profits today. >> thank you very much, bob. let's go to bertha coombs at the nasdaq. >> let's continue the theme, tyler. consumer stocks are among the strongest performers today. ross stores is the day's leader, o'reilly automotives generally among those in the new high list and it is again today along with starbucks. as we take a look, also mattel having a pretty good day. barron's is positive on the new management and the company's direction ahead of earnings noting the dividend yield has reached 7%. some other movers, amazon and etsy. look at this divide today. amazon is providing the biggest positive impact on the nasdaq 100. its entry into the handmade craft market weighing on etsy. the stock was initiated as a sell with a lock up expiration starting tomorrow following its

ipo. not looking very pretty for etsy today. back to you. >> okay. thank you very much for that, bertha coombs. let's get to seema mody for a market flash. >> nor weeken cruise line on a steady climb. up over 2.5%. the cruise line operator says it will add its first ship customized for the chinese market in 2017. keep in mind, shares are up 27% this year so one of the big outperformers. >> thank you very much, seema. big banks are reporting q3 this week. with me is zachary karabell and da dave. zach, i see you're not really making any major sector bets at this juncture but you are negative commodities in particular. >> yeah, i mean, look, granted that's not the most bold call with oil prices below $50 and china demand clearly lagging. i mean, even if we see good

numbers or rather less bad numbers out of china, a lot of that is going to be driven by chinese consumers buying nike and starbucks, not china consuming more iron. i don't see any massive global change in the commodity cycle. we're going to keep having more and more supply coming on over the next year. >> and yet, zach, the supply side has been gradually trying to come down to meet the right level of demand and also the u.s. dollar isn't strengthening the way it was before. >> supply side may be trying to come down but he had this huge capital spending over the past ten years anticipating a level of demand that just isn't there and people don't tend to pull the plug on projects that are 80% done. so you're either going to have so much supply or too many places to produce the supply. i think we're in a multiyear period of really, really low commodity demand. maybe not lower than now but that's not a reason to be in this particular space. >> nonetheless, dave, do you

feel overall the mood has shifted a little with the market? i'm talking about the broader market, not just commodities. before we were in a phase of look at all the things we can worry about. we were climbing that wall of worry. gradually over the past week or so we've come to the stage where we're saying, ox, there are a lot of things out there to worry about, but maybe they're starting to be priced in. are you at that stage yes? >> actually yes. i think he will end the year higher. we're in what we think is a durable economic expansion led by domestic demand here at home. that's a huge input into the corporate profit cycle. so we think the market is in relatively good steady he stead in the rally, the things that have been depressed are leading markets higher, emerging markets, stocks and currencies, even some money going back into

high yield bonds and within the u.s. equity market sector we've seen energy, basic materials, and industrials leading the way. i'm somewhat skeptical that leadership will continue, but it is a good sign that when investors decided to put risk on, they did it in a sober valuation sense. >> so, dave, if we talk in terms of bad news already being priced in so certain sectors of the market, would you be trying to pick the stocks or sectors that have already guided lower, have already sort of given you a pessimistic, you know, expectation and, therefore, hopefully with the bar low enough will do very well this earnings season? >> well, i think you always want to pay attention to valuations instead of just chasing what's already done well. i think we've had an interesting situation here in recent weeks. some of the things that had been market leaders have pulled back some, so i think there's some interesting opportunities there. as i said, i'd be a little bit

skeptical about, you know, piling into the more cyclical sectors of the market even though they have done well recently. we tend to focus on companies that have steady growth and cash flows over time. so we would still focus on that. >> okay. zachary and dave, thank you very much for joining us. go to powerlunch.cnbc.com to see why dave says the bull market is not yet over. ty, over to you. >> thanks very much. he's a legend in the sports world for his brilliant leadership of the world's most valuable club. sir alex ferguson in studio right here along with venture capitalist michael moritz from sequoia capital. we'll talk about leadership and so much more on "power lunch" next. excellent looking below the surface, researching a hunch...

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billion over the next five years in china to expand research and development in that country. the shares are slightly lower. jpmorgan chase has won a dismissal of a whistle-blower lawsuit that former vice president jennifer sharky had filed against the bank. they had charged the bank ignored warges of potential fraud by a client. and in airlines, boeing has brought pilot software training for an undisclosed amount. >> we do not toss out the word legend very often, but our next two guests certainly fit that bill. sir alex ferguson, one the greatest managers in the history of professional sports transforming manchester united from a middling football club to the world's most valuable sports franchise during his 26-year reign and venture capitalist sir michael moritz, founder of sequoia capital, the if irs

maj maj major -- their new book is called "leading." welcome to sirs. we've never had two sirs. how did this collaboration come about, michael? >> i had been interested in trying to find somebody to write about, an organization to write about. there just aren't many examples of people or entities like that, and i had always followed manchester united progress on the soccer field, and then was fortunately introduced to sir alex about eight years ago by a mutual friend of ours, charlie stilatano who is one of the most connected men you will ever meet in world soccer. >> and you had a background as a journalist, a writer for "time" where you and i shared some time together. michael refers, siralex, to the

idea of longevity and being able to replicate success. what is the secret to that longevity other than maybe having a patient ownership which certainly helps. there aren't that many ownerships that are patient these days. not many coaches, including your successor, at man united, are given much time. >> when i went into the job i made it clear what i believed. that conviction was to build a football club rather than a football team. understandably i wouldn't just take a job on because they're not doing well. they concentrated on that. i never saw that. i always thought i had to build a foundation that should last for a long time. and through that longevity i was able to keep the continuity, consistency of the football club going for such 26, 27 years. >> when you look at the similarities of whether it's leading a football club or whether it's leading a company, what do you think is the most

important secret ingredient, if you'd like. do you have to be a big personality, someone who perhaps people are a little afraid of or do you think you can be a mild mannered individual? what is that absolute secret ingredient as a personality? >> i think you have to command the respect of the people who work with you and for you and are around you, and you can't aspire to be loved because that isn't going to happen nor do you want people to be frightened of you. you want to be somewhere in the middle and have them respect and trust you and see you as fair. >> sir alex, were you tougher on your best players or less tough on them? >> my expectation of the top players was always high, and i always demanded a stern work ethic out of them and made them elevate themselves to the high bar of the great players, and in fairness, they all addressed that very well. i think to be a truly great

player, you have to have great talent but also the work ethic -- >> which would you choose. talent or work ethic if you had to choose between the two? >> i think the work ethic is really important. i think people who have a work ethic generally get there. >> hungrier. >> yes. there's a hunger inside them. several players, didn't have the talent of renaldo or rene, but they had that inside them and made them winners and they were very, very important to all my teams. >> i notice in your book leading essentially you say there are two words that a lot of managers forget and that's actually well done. >> yes. >> they will show up, be present, and secondly well done. there are so many managers who forget to do that. >> the thing, too, is sometimes you can get carried away with fantastic. well done. >> let me ask you both the same

idea and we touched on it a moment ago and that's the pressure to win. coaches are often not given much time. is there too much pressure to succeed quickly, question one, and question two, when is it fair for a leader to show real temper employees? >> in silicon valley, everybody feels great pressure to succeed, but it's also married with patience, knowing that you're not going to create something great, a new company, overnight, and that it's a very, very long journey. and so the happiest marriages in business, in technology, are where you have wonderful -- you are surrounded by people who have faith and trust in them and

eventually the results will come. it's different in the world of the manager running a large company. >> you have had a lot of success in picking companies, google, linkedin, yahoo!. what looks interesting to you right now? >> well, there are any number of incredibly interesting companies in silicon valley today and probably it is one of the most -- i know there's a lot of discussion about the valuations and all the rest of it, but it's one of the most interesting times that there's ever been in silicon valley with more interesting ideas and vibrant young companies than there's been in the last 30 years. >> let's talk about how coaching has changed, and i want to get back to the question of temper. you were known to have a little bit of a temper sometimes with your great stars. so my question would be has the era of, and i'm sure you've never heard language like that, the bad ass coach passed. the lombardis, the guys who throw tantrums.

do you have to be different and when can you appropriately show real temper with an employee. >> first thing, you've got to remember that losing your tem r temper -- my reasons were always that they didn't live up to the expectations i demanded or the club's reputation and history demanded. so longevity and getting to know me and trust me, they knew then that i could do it and forget about it the next day. tomorrow to me is another day. i'm onto preparing for the next match, so after the game when they didn't perform to the level i expected them to do, i could lose my temper. >> did you learn more from your losses than the victories? >> absolutely, without question. if you look at manchester united in the 20 years since the championship started, we were second five times. the next year we won it. >> so you learned from where the shortcoming was.

>> the resolve and the determination to take over that. >> talking of winning i will ask you to speculate a little here considering we have a largely u.s. audience. is the u.s. going to win the world cup anytime soon? >> i think within 20 years it could happen. >> yeah? >> i think the great thing now is when they want something done, they can get it done and improvement in the mls is very good. >> one final question. >> they've also already won one very important world cup. >> the women's. >> okay. >> let us not forget. >> my bad. >> i want to get your thoughts because you're here on the fifa scandals. the two top leaders of that organization on suspension now. how much of a mess is it? >> well, the good thing is there's an investigation going on now and it's driven from

america, as you know, through the fbi, and, you know, i think about -- i think the people in the organization. i'm like everyone else waiting to get a good result. >> joo if they drafted you to c in and run it, would you do that? >> i've gotten e-mail. no. >> they need a leader. you wrote the book. >> it's not my field. >> thank you so much. it ended too quickly. >> way too quickly. could have spent all day. >> we can start again. just a reminder your co-written book is called "leading" if there is anyone who would like to read it. who is benefiting the most from low interest rates? it's part of cnbc's all-america economic survey. the findings may surprise you. also a look at the sectors,

utilities, the biggest gainer. energy the biggest loser. big drop in oil prices today and, of course, stay tuned for the close which will be in 40 minutes time from now during the next hour of "power lunch." you're watching cnbc, first in business worldwide. 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.

welcome back to "power lunch." here are this hour's power points. the dow is still trying for its first seven-day winning streak of the year as it finishes higher. oil is very much under pressure taking a big leg down this hour. wti crude and brent is down about 4%. and utilities, consumer discretionary and health care are leading the sectors. if you missed any big stories, visit powerlunch.cnbc.com. ty? >> 144 companies have gone public so far this year. six so far this month. but when is it better for a company to go private? michael dell says it's been a good thing for his company, dell. should other companies take a page out of dell's playbook? that is still ahead. to feel well rested.thost aleve pm. the only one to combine a sleep aid... plus the 12 hour pain relieving strength of aleve. be a morning person again with aleve pm.

so wi got a job!ews? i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day arfolk southern.

hi, everyone. i'm brian sullivan. we're helping you make smarter investing decisions. what are the one or two things you most need to focus on right now? we'll find out. plus, even with a rate hike somewhere on the horizon, rates are still historically low. two benefits the most from nearly zero interest rate? the answer may surprise you. what companies need to dump out of the stock market?

we have a list of a couple companies that should follow dell's lead and go private. all that ahead as oil falls. we'll get more on that as well. but a lot more to do with mandy drury. >> it sounds like a herb greenberg kind of segment. i hope he's -- >> you read the notes. >> no i didn't. i was purely speculating. >> he's got his teeth and his -- he's got his teeth in it. >> okay. we'll leave it right there. hand it over to seema mody. >> shares of chipotle hitting session highs up 2%. the fast casual restaurant chain is hiring kurt garner to be the first person to hold a post there. the ceo says the position will help the company improve customers experience with technology. investors seem to like the news. the stock up by around 1.8%. >> seema, thank you very much. and thank you all for watching. this has been the first hour of "power lunch." >> it has, indeed. brian, take it away. >> i was going to say nickers in

a twist but i don't know if that's like you're not supposed to say that because maybe it has some other meaning. 2:00 on wall street, 11 dlk p.m. on manchester, england. happy monday. i'm brian sullivan. melissa lee is at the nasdaq. we'll get more on stocks in a second but we have to give you an update on oil because crude has given up a few days of gains. let's get to jackie deangelis live from the nymex. >> good afternoon, brian. i think that's exactly the point. we've had a very strong few days for oil prices, and this is some profit taking. not to be unexpected given the volatility we've seen in wti. we're seeing more than a $2 slide today and traders are saying this, what happened last week, we got excited about geopolitical events and also some optimism over some production coming offline. today that skepticism is creeping back into the marketpla marketplace. it's not impossible to potentially test that $50 level again and break through it, but

having said that, we are going to slide a little bit first as traders take some money off the table. back to you. >> i like your word actually. >> what's that? >> i created a word the other day celebragation. we will use your word skeptimism. >> i couldn't repeat it myself. >> i have to skeptimism about you. we'll see new 30 minutes. no doubt it is a trying time to be a stock investor. there are enough headlines and global worries to make your head swim between china fears, the commodity collapse, earnings eason. what exactly to you most need to be focused on right now and what can you just ignore? let's find out. joining us now mark la skinny and brian klaus of brandy wine global investment management. brian, what is the one or two things right now as a mutual fund investor you're the most focused on? >> i think there's two things

we're looking at right now and it's really china and the u.s. federal reserve. and it's the resetting of china's growth rates and expectations going forward as well as trying to understand the pace and how quickly and how fast the federal reserve is going to move because it's really about the impact of the u.s. dollar on global risk assets, and that issuance of u.s. dollar debt to the tune of about $3 trillion over the past five years that was issued by countries or corporations outside of the u.s. that have to repay it. as that dollar strengthens if we raise rates sometime in the near future. as we think about it, it's coming out of china, a new growth model and then the u.s. federal reserve and the pace of the hikes they're going to embark upon. >> mark, your advice to our investing and listening public out there, what should they be most focused on according to you? >> i think those are good pounds and we would agree. it's going to be a huge influence going forward. that said we get a bunch of data

economically outside of corporation earnings on retail sales, on consumer confidence. we think the consumer remains to be in great shape and will continue to be given improvements we've seen in the labor market. we get some manufacturing data this week. all in, i believe that the u.s. economy will stay sturdy in spite of what's happening in overseas markets allowing the fed if not this year early next to raise interest rates. we'll find out nothing has to break as a consequence of it and, therefore, on balance out 6 to 12 months i think equities will be much more favorable for investors to be positioned in than bonds or cash even if over the next three to six months we're probably a little more cautious given the fact that these cross currents are going to continue to create more volatility in the markets. >> focusing on corporate earnings though, mark, and i pose this question to you because i know you like pnc. are the bank earnings, the j. jpmorg jpmorgan, wells fargo, will they

be more critical to the market in terms of whether they can continue the gains or is it a netflix more important in terms of a momentum trade? what would you look to more for leadership? >> i would like to see leadership come out of the financials, there's no doubt about that. netflix and its growth rate is attractive. but fundamentally the banks are the key to the credit mechanism that allows for the economy to grow in a more healthier fashion. they have broad-based implications in everything from the housing market to commercial industrial loan activity to as well what we might ultimately see in terms of the profitability of these institutions that come as a consequence of the fed raising interest rates. so i'll be keenly watching the announcements coming out of the money centers as to what they think of loan activity and their prospects going forward. >> brian, a two-parter to you. do you think the fomc will raise interest rates in the next call it six months, whatever meeting,

the next six months, and number two, if so, how are you changing your investing strategy, if at all? >> those are great questions for us, and we appreciate them. so we do think that the fed will probably raise rates in the next six months. we're not sure they're going to do it this year. we think the global markets need to take a little bit of a respite from the fed so we would prefer to see them push it out into 2016. as you think about that, what we're thinking about with respect to our portfolios here at brandywine is what the impact is on the risk assets that we own, and we tend to own many global assets in nature and so we are acutely aware of the pricing impact that that new rate increase will have on our risk assets. so we're starting to think about whether or not the dollar has probably reached his peak here and whether or not that starts to roll over that would allow us to maintain the positions we have in some of these global assets that have really had a

ruff period of a go here in the third quarter. >> brian, you're thinking about -- it sounds like you're thinking about derisking ahead of the fed rate hike. is that the bottom line here? >> no, i'm not sure we'd call it derisking at this point given where valuation levels are on many of the assets. think about what's happened in the third quarter. much of that pain has already been taken. as an investor you want to think about whether or not you should be adding to positions or maybe holding at this point in time. one of the worst things could you do is probably crystallize that loss at this point assuming the fed does raise and the dollar as mark was talking about really doesn't impact the u.s. economy and the total global economy starts to grow again as china restimulates their economy. i think you probably just saw potential news coming out of china overnight that they're going to start to allow the banks to pledge their loans as additional assets. some estimates are that that's to about a tune of $1 trillion of new stimulus that could be coming.

>> mark and brian, guys, we're going to leave it there. it was a good discussion. thank you for joining us. >> thank you. we've watching shares of eli lilly falling sharply down by more than 8% after the company stopped development of a heart drug. meg terrell joins us live from boston. what a dramatic reaction in the stock. >> that's right. this was one of the most watched late-stage programs in eli lilly's pipeline. a cholesterol drug taken by pill which would potentially compete with these new cholesterol drugs we've been seeing from regeneron and amgen. lily saying they stopped that trial because an outside advisory board said the drug didn't look like it was going to meet its efficacy end point. analysts said this had potentially multibillion dollar sales potential. jeffries putting it $5 billion in peak annual sales. taking all of that out of estimates for eli lilly. we're seeing read through to other companies including merck. analysts are trying to parse out how many similarities we will see there.

some are taking this as positive news for this other class of cholesterol drugs, companies like amgen, regeneron, and sano sanofi. they are thought to be multibillion dollar drugs. there's another stock which is esperion. it also has an experimental oral drug in the pipeline taken by pill. initially you saw the stock drive of esperion when folks thought it was removing a class of competitors. now it's declining when folks got worried that you have to see more studies showings what the cholesterol drugs do. a big day regarding cholesterol drugs. >> esperion is that a cetp inhibitor like littlly's and mek he is or a different class of drug. >> a different class. >> meg, thank you very much. so what does it mean gr your

money in the pharma space. let's bring in tony butler covering in pharma. you think that the stock reaction is a bit overblown. at the same time your estimates for this drug and the impact on lilly was below consensus. >> it was. we risk adjusted the probability that the drug would come to market. part of that was due to the fact that previous drugs had failed. now, maybe for different reasons, but one should not have made the assumption that this was an unrisky program. >> right. the pfizer drug trial though, that was nine years ago. haven't there been developments in cetp inhibits that might have made this more probable? i'm asking because merck still has one under development so we're watching that stock react a little bit today. >> you're right. in 2003 was the pfizer outcome. in 2012 was the roche outcome. to be fair, merck has demonstrated some very good reduction in bad cholesterol,

ldl. what these drugs also do is raise good cholesterol, hdl, but the point is and the riskiness is we don't really know what high hdl cholesterol really will do to the overall cholesterol or risk reduction from cardiovascular events. it's at least our view it was a risky program. >> tony, i don't know what a ctew inhibitor is, but is eli lilly still worth our viewerevi money. >> i think people deal it with skepticism. i do think so. if you look back last month they revealed a risk reduction in cardiovascular events from a diabetes drug that they have on the market. the opportunity for that could be anywhere between $6 billion and $8 billion and no one had that in their estimates. other pipeline drugs are available in risky areas like

alzheimer's disease. we'll hear more on december 5th at the analyst meeting in boston. this is a beat and raise quarter in part because they're coming out of a long and extended patent reduction period. as a result i think the base business can continue to grow and i mentioned two programs that may give people hope. >> what is the impact if any on am onand regeneron in terms of the sales? >> it's a great question, too. we've done some work because we follow regeneron. we've done some work on these products and we drew a model, what would happen if a ctp inhibitor came to market, and if it didn't. to be fair in the absence of an inhibitor, we think that's drugs could be $6 billion in total sales and part of this is driven by individuals who can't get low enough on cholesterol but still have some level of cardiovascular risk. >> all right.

tony, thank you for coming on. we appreciate it. >> thanks, brian. >> all right. it is the question that has been the subject of much heated debate. exactly who benefits the most from low interest rates? we've got some surprising answers. plus, what company should follow dell's lead and get out of the stock market? herb greenberg is with us. he's got a list. and speaking of going public, ferrari will ipo this week. we've got video of cool cars coming up when "power lunch" returns. at ally bank no branches equals great rates. it's a fact. kind of like ordering wine equals pretending to know wine. pinot noir, which means peanut of the night.

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uber low interest rates have helped the rich get richer, but who else benefits. steve liesman is here with the results of the cnbc all-america economic survey. steve? >> brian, this is interesting here. we asked average americans if they were helped our hurt by low rates and 47% said no effect. among those who have been affected, it's 30% to 12% not hurt but look at the demographics. look by age group. as you get older to a point you are more helped and that's because as you will see in the next one it's also the wealthier here. 39% of 50 to 64. just on that last one if you saw when you were over 65 and older, 21% say it helps. it falls off a cliff among those who are primarily savers. as you get wealthier, you are more likely to say you have been helped by the fed's low interest rates. >> is it more likely to say you have been helped or more likely to know you have been helped.

let's say you're a state government ep plmployee. you don't know where your pension goes -- >> you wouldn't know you got better equity returns perhaps because -- >> maybe you're not aware what percentage of your retirement money is going into the stock market even if you didn't put it there, the pension plan that you pay into may have benefited. maybe you're not aware. >> it's a very good question and frankly we have not polled on this before and as far as i could tell nobody helse has. all you can know is how they feel about it. did they think about all the economic ways they were either helped or hurt by the fed? almost certainly not. some perhaps are more sophisticated. >> let's add joe lavorgna. joe, in your mind you heard the results of the survey. obviously the healthy think and probably are correct in saying we benefited the most simply because they own assets that have gone up. who has else benefited from the

central bank's largesse. >> neighbor who has been able to get a mortgage has benefited because rates are so low that if you're a homeowner, you have done okay. of course, as i'm sure steve would agree, a lot of people who can afford a home, who can afford a down payment, which is much higher than it was seven or eight years ago before the financial crisis, you have to have some money saved. but the other thing, brian, too, is with the equity market having done so well, even though people, even state employees have access to those funds indirectly, it's the wealthy who are able to contribute each month or each year that really have done quite well with much higher prices. >> joe, i want to throw something out controversial and i have had absolutely no success in convincing anyone here around cnbc that this is true. follow me on this, okay? yes, the wealthy have benefited the most when it's come to equity because they own the most equities. however, they have also had -- felt the most pain in lower

interest rates because as the wealthy, they hold the most bonds as well. i don't know how those two things shake out but the notion that the wealthy were only helped by equities and not hurt by low rates i think is a misnomer in the public opinion. >> i agree with that, steve, actually because i think what it is is when you look at some of the surveys and you talk to people, i talk to investor who have reasonable amount of wealth, there's a feeling that the equity gains maybe are ephemeral or not long lasting in the sense we could have these big gyrations in market prices whereas if you have cash you could earn a decent rate of interest and it's the wealthy who have the disposable income to earn some income on that. it's a problem. so they look at, yes, higher wealth portfolios, higher valuativalues even for their homes and yet don't really see a prospect of actually earning any money on savings and therefore people may have cash, a lot of it they're not earning anything on and don't want to take risk because of it. >> some wealthy have also been hurt by gold. all the pooh em that listen to

the radio commercials and they want to avoid the zombie apocalypse so they bury gold in the backyard. gold has gone down. >> gold is a very small part of the portfolio makes some sense. i would guess if you put a lot of money in gold, even if you're wealthy, that probably wasn't a good thing to do. >> try to sell it when there is a zombie apocalypse. >> one thing very quickly, one thing that can never be overcome by the economic discussion is the overall prevailing mood of pessimism in the economy that governs what we think about the fed, about the economy. we had a big jump in pessimism. >> a jump? >> unemployment is at 5.1% -- >> and maybe from the stock market decline. >> people -- wealthy people -- but the fact that rates are as low as they are for as long as

they've been and i have made this argument, the messaging of that is bad i think. not that the fed has to cheer lead the economy but when people look at the low rates and aren't earning anything on their savings, it makes them feel pes mess tick. some of the aggregate numbers you highlight are good but there's a prevailing view things aren't where they're supposed to be. >> those are good points and i might mention them tomorrow in a live interview we are going to have. >> with daniel tarullo. >> outlook for the economy, pessimism has surged in the last quarter. we have tarullo on bank regulation, the economy, and monetary policy. >> you have a billion people without access to fresh water and plumbing. we should sometimes put things into perspective, i don't know. life is pretty good. in america. on deck, will it be lucky number seven? the dow counting down to a seven-day win streak but not everything is positive today. we're going to tell you what stock just got an outright sell

rating. street talk coming up on "power lunch." stick around. (cole) alright listen up.

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time now for our daily street talk segment. analy analyst recommendations on the stock you need to know about. the first one is a cell call. it's etsy. starting coverage with a sell. $10 price target. says he's a fan of the etsy story but the stock price is too high to buy into it right now. he thinks it will fall and you can get in there. he notes the cost of acquiring customers, marketing, is up and gross margin could suffer. stock is at $12.81. he has a $10 target. >> that doesn't sound like an analyst who thinks you can get into the stock later on. the highest price it ever traded was on its ipo day and it's been lights out -- >> we're saying that more and more lately, melissa. >> i know. the highest point was at its

ipo. but take a look when amazon announced a handmade site, over. the stock has been flat on its back since then. we'll see if he can hold its level. next stock i am watching, one call but covers a lot of stocks, buffalo wild wings, dinequekity, darden and ruth's hospitality. downgrading all these stocks and the interesting reason is because they believe that the consumer is showing signs of a slow down. momentum could slow because specifically these macro indicators like jobs, pmis, those have slowed down. they think the consumer will eventually slow down as well. >> totally side note, i had a list last year of five overused words. i'm coming out with a new one. pivot on that list. it's a fancy way to say i'm wrong. >> you're backing off, reversing course. >> you got -- like fonzie, i'm sorry, he couldn't say it. it's wrong.

pivot is the new i'm wrong. >> but he was right for a lot of the year. >> just in general, we're going to pivot. stock number three, raulph lauren. a buy and a $142 target. 18% upside. dana telsey herself doing the upgrade. she spoke highly of the incoming ceo right here on cnbc when he was named to the job. just a note, ralph lauren the man sold 50,000 shares of the stock a few weeks ago but don't feel bad. he still owns about 450,000 shares worth $50 million. >> the optimism has really come back since the new ceo has announced. remember that barron's positive article a couple weekends ago. here is another one, a group of stocks, but it's all part of the same call. sin nap ticks, skyworks, and invensense. the apple downgrade is prompting

estimate cuts. the supply chain feedback in conjunction with carrier surveys indicates increased risk to component supplier outlooks. expect the stocks to remain range bound given the negative apple sentiment. so apple downdraft here. >> i didn't know this until i heard scott wapner talk about it in the noon show today is that apple is headed for its worst year since 2008. ouch. >> not pretty. >> no. your last stock is the under the radar name of the day. gtt communications. mclean, virginia, based company. stock has been red hot. up 240% over five years but cowan and company sees more gains ahead. they start coverage with an outperform and a $31 target. 30% upside. all analysts like it. >> kudos to you for picking an

under the radar stock i had no idea about. >> $100 billion for beer. more or less. inbev upping its bid for miller. will this deal get done? we'll ask a top beverage analyst and minutes away from the final oil trades of the day. after last week's run at $50, oil falling back in a big way today. we'll tell you where oil closes coming up. stick around.

i'm sue herera and here is your cnbc news update at this hour. facebook plans to take another step into e-commerce. the company will begin testing a shop section as an additional tab. it says the feature is designed to be a single place for people to share and purchase products. the president of al lifegualifolive garden has formally apologized to a kansas city police officer after he was asked to leave the weapon because he was carrying his service weapon. he was in full uniform with his family when an employee asked him to leave. gop presidential candidate ted cruz continuing his attack against republican congressional republican leaders. he said john boehner's resignation is a sign that the

republican leadership isn't doing its job. the baseball world still buzzing boo chase utley's slide that broke tejada's leg. utley appealing his two-game suspension. here is new york city's mayor bill de blasio speaking out on the play. >> it wasn't even close. it was a tackle. it was illegal. it was sickening. and i guess he has a right to appeal but that appeal should be immediately dismissed. he should serve that suspension. >> stay tuned. the series is tied at one game a piece and that's your news update at this hour. brian, back to you. >> all right. sue, thank you very much. all right. big day for oil and not in the good way that the bulls want. let's go down to jackie deangelis. you're looking down which i guess is tracking the price. because it's down. >> it is down, brian. actually quite a range today. i thought you were going to rib me on my word choice before. but looking at these prices today, 4704 s$47.04 was the ses

low. really quite a $3 range we were moving between. profit taking, yes. traders taking money off the table but also saying it's possible testing that $50 mark last week was -- they were getting ahead of themselves on geolittle ne geopolitical news and optimism that the supply /demand situatin would work out. we had the monthly outlook from opec today and they are certainly optimistic that we are going to see this rebalance happen but, of course, traders are taking that with a grain of salt. brian, you jinxed me. >> i'm in your head. i had no skeptimism you would be able to get through that segment without -- it happens. >> yeah. >> melissa, save us. >> all right. thanks, guys. anhueser-busch inbev not giving up et cetera bid for sa b miller. here is a look at how both of the companies are trading.

bud is down a quarter of a percent while sab is higher. car caroline levi is here. how much does the probability go up with the new bit? >> i think what the new bid does is keep the door open for negotiations because at this point up until this point sab hasn't let ab in to discuss anything. they're making -- they're proposing an offer. they haven't made a formal offer. unless they get some level of detail and communication from sa b they are not going to be able to do that. they have until 5:00 uk time on wednesday to make that happen. >> what do you think sab miller is thinking in terms of either it's ability to do another sort of deal or to go it alone? it's widely known, caroline, that there needs to be a lot of consolidation, particularly in the beer market and the light beer market.

>> jyou're absolutely right. i think sab has been really prepared for this negotiation. they may be negotiating cleverly. you moved up a little over a pound, no big deal and they may play it down to the wire. what we would hope for is the ask the uk regulators for an extension which would allow the process to take its course because if sab doesn't ask for an extension by 5:00 uk time, that's it for the next six months. ab has to walk away. >> i had a theory i heard when they announced this raise and i was thinking sometimes companies will do things to get you to look over here because they're trying to mask problems in the middle so they say, hey, look at this. do you think this whole offer is designed to mask problems at inbev? they don't want investors to really look deep at the company and go, man, they have to fix their house. >> i don't think they're naive enough to think we weren't looking deeply anyway. we've hadd an underperform ratig

for the last several months. america is an area where they've struggled to grow at all since they acquired budweiser. yes, i think there are issues at home and that's why they do need to do the deal sooner rather than later. but i think we're all quite well aware of the challenges here. >> caroline, going to leave it there. thanks so much. time now for our other daily segment "trading nation" trying to help you make the right investment decisions. today let's talk gold. gold has surprised some by jumping more than 5% over the past month but is the gld gold etf still worth your money? we've got boris schlossburg. rich ross looking at theg ld charts. boris, what do you make of gold's recent run? is it doomed to fail or the start of something wonderful? >> no, it's doomed to fail. gold is basically having a classic short covering rally. a couple reasons why gold has

rallied. one, the fed has backed off, therefore there's no yield on the dollar. the moment we get interest rate on the dollar i think gold goes back down. it had a natural bounce because of that. secondly, because other commodities have rallied. because commodities have rallied, it's done so in tandem. i think gold ultimately is still a sell on the rally. probably a pretty decent sell at these levels. >> can't be more clear than that. rich ross, are the charts that clear? >> you know, i tend to agree with boris. while we like what we see across commodities, currencies and emerging markets which would otherwise support higher gold prices, when you bring up the chart, i'll show you how to trade it and you can see areas of well defined resistance here. look, we're up 6% just from last month's low alone, up 8% from the lows we established in summer. but you come into horizontal resistance, up around 113, so

unless we break out above that, to boris' point gold remains a fade in but we're a buyer on a break above 113. you can see that 100 week moving average has been a ceiling on gold going back to 2012. until you can get back above 118 where that 100 week is, you have to be a seller of gold into rallies. above 113 you can trade 118 and above 118 all bets are off. >> thanks very much. boris saying sell gold at all costs. for more trading nation, go to our websites. tradingnation.cnbc.com. melissa? >> michael dell telling cnbc going private has been a good thing giving them great flexibility. when is it better for a company to go or stay private? we'll debate that ahead. and ferrari is revving up its ipo engine.

but some of the changes they're making has some long-time customers pumping the brakes. you're watching cnbc, first in business worldwide.

2 1/2 years ago dell surprised many by dumping the stock and going private. since then they've kept pretty quiet until today. the company doing the biggest tech deal ever buying emc for a stunning $67 billion and michael dell telling cnbc today that being private has helped them gain flexibility. so are there some companies that would be better off being private? let's bring in cnbc contributor herb greenberg and, herb, when we thought about this this morning, we thought herb would be before for this because which know you have said the public markets while great for a lot of

reasons is not great for everybody. who needs to dump out and refocus on the business? >> who needs people looking over your shoulders when you're trying to do certain things that would become a stock rattling moment the way dell perhaps would have done had he done what he's doing now in public? so you look at situations and you look at a company like twitter. we've talked about twitter a lot. look what they have had to go through when they're still evolving and they're trying to put on a certain type of a face and the distraction. but the one company, i have to tell you, one company that i will always look at and say why is this company public is the container store. you can see when that company went public what they tried to do in the operations if you go into the stores. you can see how it just hasn't worked out. the ceo has been on cnbc sort of -- you can see he's had second thoughts about it wishing he hadn't had to do it because, you know, it's a lot easier to talk about how great it is to be at the exchange -- >> what about twitter?

>> twitter, well, as i have said twitter should be a private company from the perspective of everything it has to go through? why does it have to be dragged through the mud? why does that have to be something management should have to think about? >> you could ask that about a lot of tech companies, right? the capital markets ideally -- if i need to mr. a factory and i ne sell stock -- technology companies have costs, mostly labor. maybe they're going public for the wrong reason. >> well, i think some of the tech companies obviously went public for the right reason. they got the capital and they did it right. it's a crap shoot once you go public because at that point who knows how it's going to turn out? but you go public to raise capital to expand for currency, for acquisitions perhaps, and for incentives for potential employees. those are three valid reasons to go public but beyond that if you're not ready for prime time, there are other ways to get

cash. marc andreessen has been one of the -- he's discussed this quite a bit, the concept of should you not go public, are you going public too early? that's what happens right now. they go public too early because they're pushed out by private equity. they're pushed out by venture, and, you know, maybe it would be better for everybody if it was just a little later. >> we're going to let you know. melissa and i talked about etsy. their high price ever so far in their public life was the day o. big diskoumenappointments. to quote a famous rap lyric, next time you go into a container store, protect your neck. herb greenberg, thank you very much. >> i don't even know what that means. what does a dell/emc deal men for teak? let's bring in ivan fineseth, the cio to covers technology.

when i heard about this i immediately thought that's bad news for hewlett-packard and in particular hewlett-packard enterprises. we're seeing the stock down at 1% at last check. what do you think? >> yes, it does make dell a much more formidable competitor on the service side and hardware companies have to become service companies in order to compete. hardware is so much of a commodity there's no value added. there's more value added on the service side and that's why dell is doing this acquisition. >> does your view on hewlett-packard become less optimistic because of this? >> we've been neutral on hewlett-packard for some time because of this. >> within the storage space, you think sandisk could be next. who might be an acquirer? >> well, you saw that western digital bought stack which is a manufacturer of solid state drives. sandisk is a leading manufacturer of flash memory and solid state drives. i think even seagate but they'd have a negative view kind of on sandisk but maybe western digital, maybe samsung or even hitachi who are the big

manufacturers of drives would be a buyer because sandisk is the leading manufacturer of flash memory and solid state drives. >> and then two other companies caught my eye. sin nappics and corvo which are both apple suppliers and pacific crest cut their estimates on them as well as a number of others saying the apple pessimism is tran lating. >> apple has a son of cash. they could vertically -- >> could be up for buying a chip company. >> absolutely. apple is the biggest company of corvo, sky works, and sin nap ticks. >> we've had you on about apple in the past. if they did that will that depress -- why would apple want to take on a commodity business like that and bring it in house? >> so they can have control over the design and the -- >> don't they already? >> for the most part, yes. but companies as they go through their life cycle and build up

cash they tend to vertically or horizontally integrate. it would be a natural move that a company would go. >> ivan, thanks for coming by. tigris financial. brian, over to you. >> thank you very much. ferrari arguably one of the world's most exclusive carmakers is prepping an ipo that is even high octane by sports car standards. mr. ferrari, robert frank, has more on that story. robert? >> check this out. the wait time for this ferrari is now about two years despite the price of $250,000. that's why ferrari is boosting production by 30%. but what's good for shareholderers may not be good for ferrari owners. we'll tell you why and, yes, we'll show you more ferraris after the break. i'm here at the td ameritrade trader offices.

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slide, down another 280 a share, malt maley putting out a note just a short time ago to clients saying not only is it below it's 200 day moving average but also testing it's august closing lows. that is the ticker that ferrari

will use when it debuts on the new york stock exchange, the road to going public has more twists and turns than ferraris named circuit. >> the ultimate road show just kicked off moments ago, ferrari kicking offer the sales pitch for the ipo at the st. regis in new york. they are planning to sell 90% of their shares, that would be twice the earnings valuations for most car companies with ferrari saying we are more like a luxury company. now, it's planning to power those ear things growth with ferrari theme parks and watches and other products but, yes, they are going to make more cars that has some current ferrari owners and collectors a little worried. if it's filing they say they will increase production by 30% to 2019 to 9,000 cars. remember, 2013 the company promised to cap production at 7,000 and scarcity is the main reason that ferraris hold their value better than just about any

other car. customers saying if ferrari drives more cars in the market those values for preowned cars could soften. ferrari say it's keeping up with the boom in global millionaires and billionaires. right now the wait for their new 488 ferrari is more than two years. so not much real threat from them going from 7,000 to 9,000. >> the population has grown, too. that 7,000 is a ratio to the population not the same as it was, robert frank, lucky calling. own one i just cover it. >> take a look at dwi crude plunging. one trader says the market is in for a rally is oil leading the way. we will tell you the reason for his energy optimism. that's just energy optimism. "power lunch" is back in government anger from virtually anywhere. it's been smashed, dropped and driven. it's perceptive enough to detect other vehicles on the road.

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. all right. take a look at where we stand on the s&p 500. tight range for the trading day. materials and -- the two sectors leading before are taking rest today. tonight on "fast money" at 5:00 we are going to talk about the one s&p sector that you do want to buy into earnings. >> any hint? >> it's not materials or energy. there are eight more guesses that you have, but tonight at 5:00 the one sector that you want to buy. >> that's a good tease. i don't know if you guys talked

about this at all lately, but wynn results has been the worst performer in the s&p for the better part of 12 months. it's the best performing stock in the s&p 500 over the past 12 -- excuse me -- past month. there we go. wynn has done very well very recently. when i look at the best performers over a month i'm not knocking the rally, but you have wynn, a bunch of beaten up oil names. i wonder if people are questioning the quality of this mini rally. >> i tweet that had last week on brian -- on friday, brian. wynn was up something like 17% just last week and then you also had a lot of the material stocks, the letter xs of the world, ak steels, console energy in the coal space, the energy space up, a lot of the beaten stocks. was that the leadership and is that the kind of leadership you want in a market rally? that's the big question for investors as we head into earnings season. >> i did not see your tweet. that could be a good flag for like the revolution naers of the internet generation, don't tweet

on me. and have a little blue bird instead of a snake. no. >> no. tread on me. okay. >> seema mody for a market flash. >> you always have the best ideas, brian. shares of etsy sinking 9% today on track for its lowest close ever. the lock up period for the stock does end tomorrow, 56 million shares will become eligible for sale including 22 million held by significant shareholders, the company sold 13 million sales in its ipo in april, raising $194 million. shares have more than halved since their opening day. also weighing on the stock a bearish research stock from krep. this will be a stock to watch as we head into the close. >> seem marks thank you very much. roberto free lander joining us by phone. your note always excellent but caught my attention this morning. you note that this rally has been led by nerng, a lot of

people questioning it. you think it can continue. how come? >> yes, i do. brian. thanks for having me. we had a weekly move in the s&p of 5%, 10% alone in energy since basically october 2nd. some of the burn back from a lot of the clients we peek with and folks are it's been led by short covering, we are oversold, debt count balance. the sectors that have led over the last week, gold miners, that the resources, energy, that the gas and software. most bottoms begin as vicious short covering because those were the names that were highly shorted on wait down come early mid summer. i think we get to the point where the short covering turns to something else where we have money managers and sale side analysts who get fearful of being left out of the rally and left out in the cold. >> yeah, roberto, unfortunately we have to leave it there but we will get you back on the program soon to continue this conversation. roberto free lander, thank you. >> i think a lot of people out

there will say that they need oil to stay above 50 in order to be a sustained rally here, but -- >> who would have thought that oil was important for the stock market? melissa lee, thank you very much. "fast money," big show tonight. thank you for watching. "closing bell" starts right now. >> hi, and welcome to the "closing bell," everybody, i'm kelly evans here at the new york stock exchange. >> welcome back. >> it's good to be back. >> i'm bill griffeth. happy columbus day, by the way, which means no bond market trading, thinly traded stock market. the action today has been in the oil pits. crude settling down more than 5% on news that opec's oil output rose in september. they are not cutting back because of low prices, they're pumping out here more, we will take you live to the nymex for details on that coming snup and dell buying