about tess from companies like heineken and ford that said the results have been explosive. i'm pretty excited to hear about that. >> ten seconds. >> david einhorn, pxd, that's a big earnings report. >> thanks so much. >> thank you. >> thanks to all of you for watching. "power lunch" begins right now. >> scott, gentlemen, thank you very much. welcome to "power lunch." so glad you could join us. along with sara eisen, i'm tyler mathisen. mandy drury has the day off. we begin the new month with a bit of a modest rally. will october's gains keep on trucking? we will keep you how to play the remaining months of 2015. the s&p may have ripped higher but the big huge funds feeling a lot of pain lately. and is the american housing market turning into one of the haves and the have nots? why when it comes to home

ownership, it's coming down to just one number. we'll tell what you it is and what it means. let's check in with sara at the nyse. high, sara. >> good afternoon. hard to believe just two more months remaining until 2015 is done. just about 50 trading days left in the year. are we setting up for presents under the tree or coal in our stockin stockings? dominic chu is taking a closer look at that question. dom? >> sara, how many times have we talked about seasonality in the markets over our years together here. but let's take a look at this, everyone talks about the santa claus rally and the seasonably strong fourth quarter for stocks. well, let's take a look. our data partners at kensho crunched the numbers and for the last two months of any year over the last ten years, so november to december returns, the s&p is up on average over 1.5%. the dow the same, and they've both been positive in 8 of the last 10 instances. a decent-sized gain although some would point out because of the strong gains we saw in october, maybe those gains get a

little muted going into the last two months like we have this year. however, if you're looking for the stocks that perform the best during that ten-year period for the months of november and december, check out a few of these names. western digital. yes, this stock is in storage and yes, these storage stocks are at near -- 52-week lows, still on average western digital up 14% over the last two months of the year for the past ten years. it's up 90% of the time. john deere, agricultural farm equipment, up 9% on average. up 100% of the time. 10 out of 10 instances. advanced auto parts, it's been positive 10 of the last 10 november-december periods. as we talk about gains, this is the important part. seasonably strong but a lot of head wince, chinese economy, u.s. economy. we could have maybe a little less of a santa claus rally, ty. back over to you. >> thank you very much. october was a strong month for

the emerging markets. let's look right now at the u.s. markets which are near their highs of the day. there you see the emerging markets. look at the move over the past month, about 4%. will those gains continue into the remaining two months of the year? our seema mody has some clues. >> that's right. october has been a winning month for the emerging market bulls. emerging markets if you take a look at the etf gaining over 4%. just to put that move into perspective there have been only five occurrences sense the etf's inception when em stocks gained 4% or more in the month of october. but data suggests that the rally may not continue. in november and december, emerging markets trading positive only 40% of the time with an average return of just 1%. so what could hurt emerging markets' stocks in the last two months of the year in td securities says there are three potential headwinds. first, any negative surprises out of china as we saw in the october pmi number which shows

the manufacturing sector remains in a tough spod, a renewed drop in commodity prices, and the looming fed rate hike. the markets seem to be discounting the likelihood of a hike this year. there's a 50/50 chance of a december rate hike. that's why this friday is important. a strong job reports could mean more chatter of a hike. >> thank you very much. sara, back to you. -- getting off to a good start for the bulls. stocks trading around session highs at this hour. meantime, the window for the one red hot area of the market is rapidly closing. p bob pisani joins me to talk about that and ipos. i want to hit on today's action. china's manufacturing data was poor and normally that means china markets are down, japan is down.

that did happen but normally that translates into a bad day for our commodity stocks and that's not happening and it's very interesting that it's not happening. so look at these commodity names. u.s. steel will be reporting tomorrow, up 7%. alcoa, vale, free mort mack more ran. normally all the oil names would be down, but no. the refiners are up. all of them on the upside. this is a very unusual move moving contrary to china and a hopeful sign maybe these are starting to bottom. another beaten up group, pharmaceuticals. the last week or so all of them have stopped going down. i'm talking about the big names, fizzer, merck, even the biotechs have turned around. interesting changes from the trends we've seen. the ipo market, the window is closing fast. we have three, maybe four weeks left in the year.

nothing gets done in december and the week of thanksgiving. we're waiting for match, square, ballast point brewery. other the other names, albertson's, neiman marcus, univision, there's a good chance they won't even happen this year. this is not good news for all the other people out there who are waiting to go public in 2016. >> keep an eye out for any announcements. bob pisani, thank you. we have breaking news with phil lebeau. >> this is news from the epa. essentially they're holding a conference call announcing that there are new violations they are putting down on volkswagen overall but specifically to both volkswagen as well as audi as well as porsche. these new models that according to the epa violate clean air emissions ever all diesel models. we're talking about the 2014

tour rag, the 2015 cayenne, the 2016 audi a-6, a-6 quattro, a-7 quatt quattro, a-8. press conference call has just begun with the epa outlining the violations they are accusing volkswagen of. we will hop on that conference call and have more. >> that adr given up early gains. thanks. we're also watching shares of chipotle getting smoked. that stock down sharply after the mexican fast food giant closed dozens of its restaurant out west because of an e. coli outbreak. the stock is down 10% this year. right now it is down 2%. jane wells is live in l.a. with the latest. >> investors may be selling but the stock is coming back a bit

because you have guggenheim with a buy. suntrust, buy. piper jaffray, overweight. this as health officials in washington and oregon are taking cultures and having patients fill out food questionnaires to figure out the real kauz of why 22 people came down with intestal e intest al e co-li. the company temporary shutting down 43 stores in both states, done voluntarily. chipotle was not ordered to do so. they tell cnbc no cause has been determined yet, and, quote, timing of reopening will be dictated by the progress and pace of the investigation. that is the top priority now. >> the last meal was approximately a week ago, so it's possible that the risk period has passed. only time will tell. we'll know more next week if additional cases don't appear, that will be very good. we're hoping that will be the

case. at this point it's impossible to say whether the risk is ongoing. >> chipotle has had a few incidents in the last year. in southern california is shut one store down in august when dozens of customers showed symptoms of norovirus and in minneapolis they had a problem with salmonella. incidents have been linked to fresh vegetables and not undercooked meats. >> thank you very much. very topical story. shares of valeant rebounding. the pharma giant down 45% over the last month. the short seller is speaking exclusively with scott wapner just moments ago on "fast money halftime report." scott joins us with the lively

highlights. what did we learn? >> it is lively. investors had been on edge since midday friday when andrew left of citron put out a tweet and said on sunday i will have new allegations or more to the story dirtier than anything reported. we had him on. here is his report. citron's last word on valeant. the issue was there was nothing new today with citron saying for those of you expecting a kill shot, you can stop reading here. we will not be releasing new allegations against valeant in this piece as we believe it's not our responsibility to be the judge, jury, and executioner of the company's deeds to which some people will say maybe they already have. the stock has lost $60 billion in market cap. it's been cut in half since their very first report came out. citron's left was on our show and defended his actions. >> i'm not yelling fire in a crowded theater. when goldman sachs comes out

this morning and says there's too much heat around this company to actually make it investable and there be overhang on it, they've actually vetted the process i have gone through which is saying there's something really wrong here. >> well, for valeant's part after they got a view of this new report they said the following. citron admits in his latest report that it has no substantiation for our allegations against valeant given its last report was filled with demonstrably false statements about our business. we will continue to focus on running our business in an honest and transparent manner and meeting our commitment to the patients who depend on our products and the doctors who recommend them. i also asked left if he did regret making the analogy to enron. here is what he said about the statement that valeant put out about him a short time ago. >> i'm flattered. they've turned me into some character. what am i going to say? i couldn't get my kids off to

school today without a fight. i just don't understand how they can -- they should be more focused on what has happened to them over the past week. they should be more focused on the people who they're gouging prices of prescription medication who need the medication on the future changes in government laws, on their markets, their pbm relationships. and the fact they issue a press release on me. flattering? i don't know. >> it's fair to sayhe citron research helped shine a light on the valeant business that a lot of investors didn't know enough about. that's what i heard privately from them. maybe they should have known more about them. maybe valeant should have been more forthcoming. >> philidor, the contract -- >> one of the specialty pharma companies. >> that was at the center of it and this goes back to when

valeant booked sales, correct? >> right. >> that is what it was. have they, valeant, severed their relationship with philidor? >> they have along with a number of others. >> people say, okay, mr. left and citron research shined a light on something that needed to be brightened in the public eye. the question is to some did he go too far in the way he's done it, especially on friday putting out a tweet that promised some mor more explosive information today that sent the stock down 10% only to come out today with the last word on valeant if you were expecting a kill shot, you can stop reading here. >> thank you very much. sara, over to you. >> tyler, is the american housing market turning into the have and have nots? when it comes to home ownership in this country, why it may come down to one number. plus, october was one of the best months on record for the bulls, but hedge funds, not so much. suffering double digit losses. why they're hurting right now.

you're watching cnbc, first in business worldwide. plus, october was one of the

best months on record for the

welcome back to "power lunch." shares of coty are higher. the personal care products maker buying the beauty products of brazil nfor $1 billion in cash. tree house foods is taking a hit. it's buying conagra for $2.7 billion.

tree house's ceo will speak to cnbc tonight on "mad money" with jim cramer. and visa also under pressure today. the credit card giant missing profit estimates. the company also announcing a $5 billion stock buyback and saying it's buying visa europe for about $18 billion. visa's chief financial officer will be on "the closing bell" this afternoon to discuss what's driving that deal. that's 4:00 p.m. eastern time on cnbc. for now we go to dominic chu. >> we're watching shares of priceline. the stock hit a record high in trading today making it worth $74 billion total. the company is expected to report third quarter results a week from today. the stock is up 28% so far this year. it's one of those nasdaq companies, tyler, that's really powering some of the gains on the larger cap side of the equation. >> thanks very much. are you looking for a mortgage to buy a new house? you better have a really, really good credit score or chances are you could be left out in the cold. diana olick has that story.

what's going on, di? >> ty, it's so interesting that we're seeing not only this pristine credit level but so much more lending activity at this level for home buyers. the number of new mortgages made to buy a home are surging as cash-heavy investors move out and regular mortgage dependent buyers move in. but there's a growing divide in housing between the haves and the have nots. purchase mortgage originations surged 15% annually in q2 and are up 11% in q3. in june we saw the largest purchase loan volume in eight years. it's being driven almost entirely by high credit borr borrowers. only 20% of purchase originations over the last three months were borrowers with credit scores below 700. this is the average sacrcredit score, a record of 755.

only five points shy of what mortgage lenders consider the very top tier lowest risk which gets you the best rates. the median fico in the u.s. is around 720. fannie mae is instituting a new scoring model that looks more in-depth into a borrower's background. the hope being more will be allowed to qualify for a loan but that's a very hi-fico score going on in the market today. back to you. >> so is housing turning into a case of the haves and the have nots? let's bring in stan humphries, chief economist with zillow. stan, always great to see you. >> good to see you. >> i think some people might argue this is what ought to happen. in other words, that the higher -- one of the things that got us into trouble was that too many people with poor credit were being given mortgages. what do you say? >> yeah, well, i think in some respect what is we're seeing is settling into a new normal. zillow computes a mortgage

accessibility index. we're seeing it to be back to two-thirds of the way back to where it was in 2002. half of what it was in 2005 which arguably was i think by most standards too loose. we're looking at mortgage stoor standards which are like the 1990s standards. it has to do with the credit box. also skrhave a lot to do with w is above water on their mortgage. the people who are wealthier and more affluent homes are the least likely to be underwater. those in the bottom one-third of the housing market is most likely to be underwater on the mortgage and it makes it hard for them to actually obtain a mortgage because they don't have the equity in the prior home to bring into the new home. >> react to what stan said but as you closed your prior piece you said fannie mae was looking at standards that may take into account more or give more weight to things other than the credit

score so that more people would qualify. does fannie mae think not enough people are qualifying today, i assume? >> well, absolutely. it's what stan was just saying. not enough people. only the people who are wealthier who have that equity, who have the great credit line are being able to get the loban at the best rates. it's called trended credit data. it looks further back into how you pay your bills, not just if you have missed a payment or if you're up to date on your credit cards or up to date on your student loan payments. it goes back and gives you more of a trended credit history in going into that score, but, again, it's still going to rely heavily on what that exact number is. when you go to any lender today, whether it's a purchase or a refinance, they want that number before they're willing to give you that best rate. you could have lower credit, but you're going to have to pay mortgage insurance or pay a higher rate. it's going to cost you more. >> so, stan, if fewer people than in the past can qualify for mortgages, take me through the

thinking. what is the implication of that for house prices. if fewer people can buy, doesn't that put downward pressure on house prices or slow the gains? >> yeah, it does. what diana is describing, of course, is the fact that we've remained true to what's called risk-based pricing during this recovery. if you want to put 3.5% down on your mortgage, on your home when you purchase your mortgage, they're looking for offsetting factors like less debt or a higher credit score. we've remained truer to that offsetting principle during this recovery than we did during the run-up to the last housing cycle where we started to take the checks and balances off and we allowed people with low credit scores and a lot of debt to put low down payments and credit risk explodes if that's the case. generally, if you ask whether we're being held back by this, yes, we could sell more homes if we had looser credit standards. there's no doubt about that, but

we're sell being 5 million homes a year right now relative to our peak of 7 million homes. i think that many in the industry would like us to -- we'd always like to sell more all things being equal, but there's no free lunch. if you're going to loosen standards, then you do have to worry about increased credit risk in your mortgage forportfo. >> thank you very much. always great to see you. october was one of the best months on record for the bulls. the three major averages soaring about 8% or so, but the big hedge funds got slammed with double digit losses. we'll tell you why they're feeling the pain next on "power lunch." you pay your car insurance

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welcome back to "power lunch." i'm dominic chu. we're watching avis coming off its best levels today. barron's says the car rental company made double in the next couple years. they point to a strong management team and underestimates in terms of earning potential. avis' stock has dropped by over 20% so far this year but still, sara, something to watch in today's trade. >> thanks, dom. rick santelli twrakiracking the action at the cme group in chicago. >> thank you. all you need to do is look at two-day of 10s. not a lot of upper volatility because the upper bands are unchanged on the year which

pretty much matches the net difference on s&p and the dow year-to-date. if we look at a chart in april of 10s, it looks like the following chart of bunds except for the right side. we're diverging to the upside in yield. we want to monitor that spread closely. july 1st dollar index tells you everything you need to know. if that contract trades above 98, look for action although that stopped it. in terms of trying to get out of the exchange today, it's been rough going. we see all the exits have been blocked, although i hear that the cme exits are opening. there's a protest going on. now, names have been thrown around whether it's fair economy of illinois or another, but one thing we can tell you is that chicago, illinois, without a budget since may, tempers are running high, and these students, they seem to want to tax companies that are in the trading game. they should learn more about civics and how the world operates. it would be sad commentary based

on what the democrats and the republicans have done regarding a budget to chase more companies out of illinois. sara, back to you. >> i hope you make it out okay, rick santelli. live from chicago. a big boost for republican presidential candidate marco rubio getting the backing of a top fund-raiser and billionaire hedge fund titan. could this turn the tide on the entire race? plus, apple higher? the first wegekend of sales for its first apple tv device. are consumers piling in? (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like...

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hello, everyone. i'm sue herera. here is your cnbc news update for this hour. russia's prime minister confirming that both black boxes from the russian plane that crashed in egypt were recovered. they are expected to reveal what happened in the final moments of flight. in st. petersburg is plane arrived earlier carrying the remains of 144 of the 224 people lost in that crash. japan's prime minister and south korea's president holding their first bilateral summit in

3 1/2 years. they agreed to accelerate efforts to resolve the so-called comfort women issue that has been a source of friction between the two companies. comfort women refers to south korean women and girls forced to work in brothels for the japanese military during world war ii. the u.s. airman who helped thwart a terror attack in frns has been promoted by the air force. 23-year-old spencer stone was promoted from airman first class to staff sergeant during a ceremony that honored his valor. and having an animal around could be good for your kids' health. researchers studied more than 1 million children born? sweden over a nine-near period. kids exposed to farm animals had a 52% reduced risk of asthma. a 13% reduction if exposed to dogs. that's the cnbc news update this hour. back to you, sara. good news for fido. >> yeah, good news for all those kids who want dogs and their parents won't get them. >> that's right. >> thank you very much. let's look at gold prices closing now near a one-month

low. gold has been under pressure pretty much all week. last week was its worst week since back in august as the odds of a fed interest rate hike continue to go higher. that's helped the u.s. dollar. it puts pressure on gold. let's look at silver, copper, palladium, copper, platinum. weak data in china in terms of manufacturing. still, copper is managing to hold its gain. so are some of the other commodity stocks. let's talk stocks now because the best october in years is in the books and november is off to a pretty decent start for the bulls, bob, following the action at the new york stock exchange. >> and get better in the middle of the day. the internals are better than the dow looks. just take a look here. your key headline is disappointment over china's manufacturing numbers hurt china but it's not hurting the u.s. and that's very important. 3 to 1, that's a great number, advancing to declining stocks. volume on the moderate side.

let's look at some stocks. normally china manufacturing disappoints, our big industrial names are down. not today. oil obviously a knock on effect, down 1% from china. oil stocks are always down. not today and not even close here. noble, tesoro, it doesn't matter, everything is up. i don't know if it's the sort of a bottoming process but it's encouraging. you can see this impact on the dow here today. the biggest gainers on the dow are chevron and exxon. pfizer also doing well. the pharmaceutical stocks have stopped going down. that happened about a week and a half ago. so a couple of very important let's call them bottoming trends maybe. >> or maybe china wasn't that disappointing. also european manufacturing data came better. >> the hit to our markets is not as much as you would have thought even a month ago. i'm not sure if it's the start of a trend but it's encouraging.

>> bob, thank you very much. kate rogers is tracking the action at the nasdaq today. kate? >> that's right. we're seeing nice gains here. we're up by over 1% on the composite. helped by apple up 1% and the nasdaq biotech etf. the ibb also up by around 2%. in terms of individual movers here, we have alphabet. you can see that's up by nearly 1%. that's higher on news that google expects to begin delivering packages to customers by drones in 2017. according to the lead on project wing who told an audience in washington, d.c., that news today. also tesla up by more than 3.5% ahead of earnings. to the downside, biomarin pharmaceutical. and nxp down around 1.5%. that also after a disappointing earnings last week. back over to you guys. >> it is a big week.

thank you, kate. for economic data and earnings. can good numbers drive stocks higher from these levels? with me here is anastasia, chief global market strategist at jpmorgan funds. also berns mckinney to talk about it, portfolio manager at nfj investment group. i'll start with you, anastasia. earnings have been better on the bottom line but revenues have disappointed and now you have uncertainly over whether the fed is going to raise interest rates. which one wins? >> i think the earning season is lackluster but better than feared. when you judge from the perspective of the surprise, we are doing a little better but i think more importantly to me is what's happening with revenue growth and earnings growth and we're not seeing it. it's down actually year-over-year is down this quarter and probably the whole year is going to end up being disappointing. the message is maybe we need to look at another index. it's not just about the s&p. if you look at the nasdaq, earnings there are doing quite a bit better and you are seeing both topline growth and bottom line growth.

then you have the fed and it depends on the fed communication. >> sure. >> if the fed tells us this is policy normalization and not policy tightening per se, i think stocks can move higher. >> but you do think we borrowed a little from october. berns, want to get to you on your sector picks. you like i think like anastasia, technology, but you also like financials. you're looking at earnings and revenues or looking at the fed? >> i think the fed has a lot to do with it. it is one of the few sectors that would stand to benefit if you see a rise in interest rates. that's one of the things that's really caused the frnls to pull back a bit over the last couple months just because you had the liftoff push back to december and then perhaps to even march. it's looking more likely based on the discussions last week that the fed, in fact, might raise rates in december. financials benefit from that and really for us it's about valuations. the s&p is at 16 times next year's earnings. financials are trading on

average at 12 times earnings next year and they're getting past a lot of litigation and regulatory concerns. you're seeing the fed allowing them to return capital to shareholders so there's growing dividends, growing share repurchases and you do have a corporate sector that has fairly clean balance sheets and so as a result they're wanting to borrow to fund future growth and as a result industrial and commercial loans are starting to rise a bit. it's one of the places that could stand to benefit if you see a rise in rates. >> also seeing some m&a. i want to ask you about consumer discretionary group which has been leading the market higher. it's the star performer so far year-to-date. has the easy money been made? >> i think after an 8%, 9% october you can say probably we've seen the bulk of the upside front loaded in the month of october but i don't think we're out of the runway. i think there is more to it. if you look at the type of stocks we like into this holiday

season, they sit right at the ne nexus of technology and consumer discretionary. we're going to benefit from a robust delivery season. if you look at the percentage people estimate they will end up spending online versus retail is 46%. >> we've got to leave it there. burns, i know you like walmart which has been beaten up pretty hard this year. that's another interesting consumer disdiscretionary. you can always go to "power lunc lunch".cnbc.com to see how they're playing different sectors. that's powerlunch.cnbc.com. tyler? >> thank you very much. october turned out to be one of the best months on record for bulls. the s&p up 8%. but major hedge funds apparently getting slammed. some of them by double digits. so why is the smart money so

dumb in this market? kate kelly has been taking a look. maybe i overstated it a little bit but i couldn't resist. >> it's a fair analogy give the compensation and the reputations some of these play versers have. >> green light capital up 0.7% for october but down 16% year-to-date. pershing square down 3.8% through october 27th, down also about 16% year-to-date. glenview capital down 7% through october 26th, about 20% for the year and third point offshore up 4.7% for october. i'll get back to that in a second. flat year-to-date. it seems odd given the broader market did so well and the names most popular in hedge funds includingler again, apple, and facebook were all in the green. but it was a month in which flat was the new up. wellington while a big

outperformer in general with more than 12% upside was up only a fraction of a point in october. for third point, it was the opposite. a solid 5% upside in october brought it to flat for the year overall versus the s&p that is up a little less than 2% from the first of the year until now. now, in a newly released letter, third point says due to a weakening china, the removal of the so-called fed put that's helped boost markets or at least market psychology, and other factors it has reduced its market exposure and is more short than long. it is adding to its core health care positions which is kind of a counterintuitive move. some of the managers i have talked to say it's been a while since there was such a disparity between what the market did in a month and what hedge funds are doing. we'll see if that has an impact going forward. >> we don't know whether on average hedge funds were down or up for the month because those numbers -- >> we'll wait for hfr and other

consolidators and it takes about a week or so. >> you just mentioned the one, third point, who said we had a china position and that was a strug -- >> china weakening is adding to the short-term bearishness. they don't see a recession coming but they see volatility. >> thank you very much. >> thank you. >> we're going to go to washington because one prominent hedge fund billionaire has endorsed marco rubio for president. eamon javers has been covering that for us live from washington. >> the prominent billionaire is paul singer from elliott management. we're talking about somebody who as a billionaire himself can write a big check for the rubio campaign and for the super pacs that support marco rubio. but he's such a sought after backer of the rubio campaign. also because of his broad network of donors. a lot of republican donors follow mr. singer's advice on

where to put their political money as well. if you look at this chart showing jeb bush and marco rubio's total fund-raising you will see why the jeb bush campaign wanted to keep singer out of the rubio camp. pu bush has raised $128 million compared to marco rubio $312 million. the singer support will start to move the needle. another big coup for rubio today. he just locked up the endorsement of a sitting u.s. senator, corey gardner of colorado. a 40-something-year-old colorado senator who is supporting marco rubio citing a need for a new generation of leadership. a good week so far, it's early, for marco rubio. >> bas busy day for mergers. plus obamacare 3.0.

we'll tell you what's better this time around and what's not. where the problems still are. that and more when "power lunch" returns after this. awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. we heard you got a job as a developer!!!!! its official, i work for ge!!

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welcome back. merger monday. a bunch of deals to tell you about starting with dyax, a company that focuses on treatment for rare diseases. shire pharmaceuticals buying it for $5.9 billion. next up, constant contact, it's a marketing company that helps small businesses. endurance international buying that one for $1.1 billion. and lastly, medassets being bought for $2.7 billion.

medassets helps hospitals and other health care providers run their businesses more efficiently. sara? >> stick with health care because today is the first day of year three for obamacare. bertha coombs is looking at what's working now and what isn't. bertha? >> you know, sara, it's been hard even for the large insurers to find profitability on the obamacare exchanges, that individual market there. it's just a tough one. it's no different for statups like oscar health here in new york. the jventure-backed insurer sawa net loss in 2014 when it started up, but it hopes to near break even in 2016 and with new funding from google it's expanding to offer coverage in california and texas next year. now, by contrast its much larger rival health republic of new york was launched in 2014 with a quarterback million in federal

loans. part of a program to try to boost competition. but despite their low prices that garnered 20% market share in new york exchanges, their medical costs far exceeded their premiums and they've been forced to shut down. that has left some 200,000 individual members and small businesses like tools forever in long island scrambling to find new coverage after regulators forced health republic to close. >> we had received notice they were going to increase our rates between 19% and 29% this year. and then shortly after receiving that notification we learned they were closing their doors. >> it was a shock to them because they learned about it in the newspaper. you can read more about it on cnbc.com, but i will tell you guys that a lot of health republic clients are calling here into oscar today so they're seeing huge volume on the send day of open enrollment and oscar you might note is number 17 on

this year's cnbc tech disrupters list. back to you. >> thanks very much for that report card on obamacare 3.0. shares of chipotle taking a hit today on an e. coli scare. should be staying away from the food around the stock? we'll ask an analyst. plus no surprise to see innovative offices at neck companies but one law firm is redesigning its office space. "office envy" is next. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. well, right now you can get 15 gigs for the price of 10.

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it's gotten squarer. over the years. brighter. bigger. it's gotten thinner. even curvier. but what's next?

for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. welcome back to "power lunch," everybody. let's go through this hour's power point. stocks sitting near session highs with the nasdaq up more than 1%. this, of course, after a really stellar october. volkswagen has been notified of more clean air act violations. the epa adding seven vehicles to the violations list. and shares of priceline hitting a new record high. the online travel giant now worth about $74 billion. sara? >> tyler, you know the corner office is usually what law school grads aspire for the moment they start at a new firm. but one global law firm is

turning that idea on its head. nixon peabody proves it's not just tech companies that have the coolest offices around anymore. have a look. >> i'm jeff lesk, the managing partner of the washington, d.c. office. let's go. we are a global law firm. let's take a look. the first thing people see when they come into the office is the 16 screen video wall. this is a video that describes our firm, our locations, and a lot of things we have going with our clients. one of the most unusual things we did is put this cafe off the reception area. when guests come, receptionists can show them in, have a cup of coffee. the best views in the project are views that are given and shared space. in most law firms that would be the premium corner office. it's filled with light, got great views. >> hey, jeff. >> how are you? >> good to see you. welcome. >> thanks. >> we also really teched up the

conference room as much as possible. we have large screens. you can use it in any of the configuratio configurations. one of the things we wanted to accomplish was a feeling of community and collaboration. we did that by carefully desi designing the space so people would interact with each other more. there's a condition september of transparency and you can see it in the long stretches of glass walls. this is our three story living wall. it's completely planted. there are 1550 individual plants. not just a visually beautiful wall but it also serves as an air filtration system. we have a lot of events on the roof. it's a great place to have lunch, grab a chat. >> for more on our series inside the coolest office its that we find, head to powerlunch.cnbc.com. take a look at apple shares today, they are higher by 1% or so.

1.2%. after the first weekend of sales for apple tv. are consumers tuning in? plus much of the valeant bashing been going on on twitter. does the s.e.c. need to regulate social media more carefully?

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are you ready for a big monday show? because we are packed with info and advice on just how strong this stock market has been lately and more important, where it is likely to go from here. plus, with oil still so low, why aren't gas prices even lower than they already are? we're going to let you know. and if you love chipotle, you need to listen up. we have the latest on the growing e. coli scare. plus news on what ford is doing to drum up sales. tyler, i'll send it back to you right now. apple's revamped version of apple tv has on sale for just a few days but josh lipton has some interesting data on the device's apps. >> well, tyler, apple tv fans are apparently all about the games but that entertainment can be pricey. business insider citing data from a developer broke out the top paid apps in the tv's app store. the big hits are games like beat

sports, galaxy on fire and lu mino city. the top free apps including more apps including hbo now and nat geo apps. the paid apps are $5 to $10. very few at 99 cents. it's developers who decide the price of apps, not apple. apple tv starts at $149. it has its own app store as well as the siri enabled remote. wall street does not expect apple tv have a serious financial impact anytime soon but the tv is strategically important. apple wants to be, of course, everywhere you are whether that's at work, in your car, or

on your couch watching television. more broadly that new set top box could be laying the foundation for that much talked about streaming tv service. guys, back to you. >> thank you very much. and that will do it for the first hour. sara, great to be with you. we'll see you i hope tomorrow. in the meantime, here is brian. >> i want you to think crossy road on a 60-inch flat panel, everybody. welcome. it's 2:00 on wall street, 1:00 in des moines, iowa. the dow is starting the month strong as oil falls again. hi, everybody. happy monday. i'm brian sullivan. melissa lee is joining us from the nasdaq. we'll have more on oil in a bit but we begin this monday with the red hot consumer sector, especially the beauty companies whose shares have looked do downright gorgeous lately. estee lauder and coty surging over the past month. the entire group has been rallying. that sector up nearly 7% in the past month. let's get some ideas and best

ofs with charlie, vice chairman with ariel investments. are you selling any of these names or will you continue to ride the consumer trend? >> well, in general we think the american consumer is in better shape than most people think. a lot of the biggest consumer stocks tend to skew towards higher net worth individuals. so an amazon, we think of a democratic company but the average user is above average median income and the above average people in america are doing better. so we are sticking with these names. >> what's interesting though, you like a name like stanley black & decker which is not really a consumer name, is it? >> well, if you go into a home depot, you see a lot of their products for sale. the truth of the matter is when you have new family formations, new housing, people buy new tool sets and the guy that builds that house for you uses dewalt. the new homeowner uses black and decker.

>> but charlie, you're not only is it stanley black & decker but also newell and these arguably are the kinds of stocks not exposed to the highest growth subsectors within consumer diz kreti discretionary, names like mcdonald's, starbucks. those gains have paled in comparison to the gains of the top five or six holdings. >> that's a good point. the big names, amazon, disney, mcdonald's have done really, really well but newell has done really well. if you say what's the growth rate in sharpee's it's 7% to 8%. they have a decent tool business. so kind of newell is a sneaky one but it's growing faster than you'd think. >> sharpees, who knew? tiffany, are you buying more? >> i'm glad and story you

broug -- sorry you brought that up. tiffany is exposed to the high end but it's unfortunately exposed to china and asia which are not wonderful. it has not had a good year as we would have hoped it would have had. we still own some. we want to be a little bit cheaper because we don't think they've seen the end of the problems in asia. >> maybe waiting for that to get a little cheaper. who knew there was a run on sharpie's. on a more serious note. chipotle facing fallout from a growing e. coli scare. there's concern in 43 stores and those locations are now closed. the scare is centered in washington state and oregon. is there a bigger concern for diners and investors? bob darrington joining us now. we know you like the stock. you're obviously watching this very closely. any change to your investment thesis as of yet? >> you know, at these levels the

stock is trading almost to a level where it's historically averaged over the last five years at 30 times forward 12-month earnings. in our view it's getting much more attractive, there's no duty about that. >> how big of a concern do you believe this is going to be not only for earnings and sales obviously but people that are far removed from washington state and oregon saying maybe i should wait to go into chipotle? >> you know, that's fair, and there is certainly a lot of news over the weekend in the major news media talking about the issue, the problem. but in the big scheme of things it's a relatively small part of the country. if you look at the typical user of a chipotle, it's more of a millennial. there's somewhat of an immortalized view that i can withstand anything. i'm not afraid of this. i love my chipotle and the company has taken care of me for a long time. >> so this, too, shall pass.

you believe the customer women say it -- will say it's a scare, it will pass. >> also a competitor, qdoba, you believe they will be a beneficiary. >> if there's someone that wants their mexican fix and they can't -- their hesitant to get it at chipotle right now for whatever reason, then i think q dough batt qdoba offers an interesting opportunity. >> we are watching this e. coli story. no change yet. bob darrington a pleasure. thank you very much. >> after a year-long process, hewlett-packard enterprises and incorporated are trading as spread entities. meg whitman sat down with cnbc this morning. >> we looked at the market and looked at hewlett-packard's

strengths and said being smaller and more nimble is a huge advantage. we will have $5.5 billion of cash on the operating company. two different strategies. we have a lot of confidence our strategy will be right. >> let's bring in dan with fbr capital markets. dan, great to have you with us. $5.5 billion in cash is what she said. do you expect they deploy that? they make an acquisition? >> i think they need to do m&a. right now the growth is really the big issue for companies like hp, ibm, oracle. they need to acquire big data, cyber security, or cloud. organically they have an everest-like uphill battle. >> is it at a severe disadvantage right now because its competitors, ibm, oracle, microsoft, they're making big pushes into cloud. hp just scrapped its cloud effort. it seems to be behind the

eight-ball when it comes to appealing to enterprises that want the all in one. >> they're late to the game on cloud. but you have to separate them from the competitors. you look at public cloud, they threw that away next week. it now it's private cloud, that's where the growth is. that could be a trillion dollar market opportunity over the next three, four years. it's not just about talking. it's about walking the walk. it needs to be about m&a. a split is a good first step. >> $5.5 billion seems like a lot but it's not that much. they'd have to be careful with what they actually acquire. you have some m&a candidates, splunk, fort net, arac h space. which direction would you like them to go to? >> they need to focus in big data and cyber security. that's really tangentially the growth areas that fit in. that's where the data centers are right now.

it's a land grab opportunity and that's where i think right now investors across the tech space are 2r50iing to understand the ramifications of where they acquire do, they get aggressive and what are the ramifications across the sector with a lot of tech dinosaurs struggling for first. >> which has the better prospects? wr . >> right now investors are focused on the enterprise. it comes down to jury is still out in terms of which way they go and do they actually get growth on the cloud. >> dan, great to have you with us. brian? >> thank you. we have got much more ahead right here on "power lunch" including the latest valeant pharmaceutical fallout. herb greenberg and mike santoli will weigh in. plus, one big-time developer is making a big bet on times square. wait until you hear what they're building on the heart of the crossroads of america. and we like trivia on "power lunch" so we have one for you. can you answer this question --

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welcome back to "power lunch." shares of valeant are down 50% over the past month wiping out $60 billion in market cap. the stock has seen wild swings

since a short seller questioned the company's business and linked it to enron. let's get to meg terrell with more on valeant's free fall which started before that short seller report. >> that's right. that short seller, andrew left, did an interview with scott wapner trying to say he's not the main part of the story here. let's take a look back at valeant shares going back even to mid-october -- sorry, mid-august. that's when valeant received a letter from two congressmen, bernie 157nders and representative cummings on drug price increases. it focused on drug price increases up until october when citron drew attention to its relationship with pharmacies. let's go through the time line of what actually went on with valeant. going back to august 14th, with mentioned that letter from sanders and cummings. september 21st we had the tur g faing pharmaceutical ceo on cnbc.

fast forward to september 28th, house democrats requested subpoenas regarding valeant's price increases on some of its drugs. october 2nd, citron puts out a second report. october 14th, valeant responds to a senator's letter about its drug pricing increases and patient access programs. valeant discloses two government subpoenas from the attorney generals in massachusetts and new york. then just five days later on october 19th, the company reports third-quarter earnings. on that same day the report from the southern investigative research foundation comes out mentioning philidor. two days later that third citron report questioning whether it is the pharmaceutical enron. so it's very interesting to look at that timeline and see the stock really did come down before that. scott wapner asked andrew about a tweet he sent out friday which seems to further depress valeant shares saying there was an even

dirtier report coming on the stock. that really hit valeant on friday but on sunday he really seemed to back away from that in an interview with "the wall street journal." so today scott asked him if he had been contacted over the weekend by the s.e.c. here is what he said. >> i was not. it had nothing to do with any trading, nothing changed in any of my trading from that time to the time that tweet was put out. it was something that my legal traem, w team, we decided what best was to take new information and give it to mainstream sources and walk away from the story so people can stop focusing on this story being a short versus long story but focus on the information. >> trying to make himself not the story. saying our work is done here. >> thank you very much. let's bring in senior markets commentator mike santoli and cnbc contributor herb greenberg, a partner at pacific square research. thank you very much. mike, first to you.

obviously, a really great interview conducted by scott as always. a little bit feisty at times certainly. what was your takeaway on lift's position? >> a little bit difficult to understand exactly why the reversal from friday's promise of some new bombshell and then obviously basically saying he would like to step back entirely from being the center of this controversy. but in general i don't really see a lot here that is anything suspicious. this is somebody putting out what seems to be an informed view on a company, publishing it as research. the twitter element is really just another new distribution platform for information. so i don't think there's anything specific about how he got that opinion out there let's say on friday that was, you know, necessarily noteworthy. >> is that the case, herb? we have talked about this before, right? twitter is great. we all use it, but only about one in five whatever people in america even has a twitter account. is that the right way, not just left, whether it's the federal government, carl icahn, whoever,

the right way to put out information on a stock, specific name, during market hours? >> it is a way to put things out, brian. i think to sit there with your head in the sand and say i don't look at twitter so it shouldn't be used is kind of foolhardy. it should be any part of company, any investor who wants to happen to communicate with the street. it should be part of the conversation now because it exists and it's something many of us use. >> brian, i have to get in here. even if one in five americans have access to twitter, what obligation does a private research company, what obligation does it have to make sure its information, its research is widely disseminated to the american public? there is no burden on these companies. does morgan stanley have a duty to make sure every american knows its research calls? no. they have a distribution list. what makes a difference? >> i agree with you, melissa. there is no obligation on the

part -- >> never said there was an obligation. >> this is a broad fair disclosure platform. >> i just got the impression, brian, you thought because only one in five americans have access to twitter, that there are other ways to more broadly disseminate information when there's really no obligation amongst these companies to do so. >> first, everybody has access to twitter i guess. whether or not they sign up for it is a different story. if you're going to put out market moving information, should you wait pre-market or post-market. >> you shut put ould put it out you have it. waiting pre and post has always been silly to me. when you have the material, you put it out. you put it out with a megaphone, a sandwich --apple should relear earnings at a random time. if i'm driving in my car and i have no access to anything except for cnbc on sirius

channel xm 112, that's fair? >> what right do you have -- you're driving your car at that time, maybe somebody else is not driving in their car at that time. i don't understand this whole argument that people need to have the information when everybody else gets it. >> let's not forget and i think -- >> just making an argument. >> i think mike santoli could back me up on this, until very recently and perhaps still now, you know, disclosure was disseminating to the major news wires like dow jones. you were driving along in your car, whenever that might have been, you were not seeing the dow jones disclosure. so as we have more avenues of disclosure, you know, that has to be part of the process. so i don't think you can just go after twitter here. >> let's be clear, mike santoli, nobody is going after twitter. i'm just using twitter because it was brought up. i'm saying there's a reason companies -- wall street and

public companies put out research and earnings pre or post market. just wondering if you think the s.e.c. might evolve in its thinking, that maybe they will nudge you you should wait until 4:01 or pre9:30. >> unless thats with some kind of allegation of manipulation, there's really no role for the s.e.c. to decide when it exercises its ability to give its opinion about something. a lot of questions are was this somehow market manipulation? if he thought this tweet could knock down the value of shares. that also is a very, very high standard to meet. it didn't manipulation if you just express a view on a company. >> and to be clear, guys, melissa you know this, it's not about left or icahn. if you remember a couple months ago, i think it was the ftc put out a tweet about somebody

losing a court case, 1:30 or something. and i got on them. i said what are they doing putting out this material information at 1:30 when the ftc commissioner who sent it out had 2300 followers. >> but it was also posted on the website. there's a distinction between a publicly held company disseminates information versus a wall street firm that is publishing an opinion. they can do that whenever they want. they're not regulated. >> seems like a fair fight. i'm just trying to make debate. >> nobody is against you, brian. we're all with you. >> that's no fun. herb and mike, thank you very much. by the way, i talked to herb over the weekend about this. we were arguing on the fiend i was in the middle of a home depot. it was great. up next, five big analyst calls that need to be on your radar. plus, once again can you answer

today's trivia question? since 1950 because that's when our data goes back to, what was the single best performing month for the s&p 500. the answer coming up later in the show. stick around. empowers us to achieve more. it pushes us to go further. special olympics has almost five million athletes in 170 countries. the microsoft cloud allows us to immediately be able to access information, wherever we are. information for an athlete's medical care, or information to track their personal best. with microsoft cloud, we save millions of man hours, and that's time that we can invest in our athletes and changing the world.

time now for "street talk" where every day we dig out the key analyst calls that we think you need to know about. here we go. first stock is hewlett-packard enterprises. you talked about it earlier. this is the hpe taker. the far bigger of the two companies. the analyst ratings are rolling out. jeffries, as far as i can see, is the high on the street with a $21 target. you have creed suisse with a neutral and a $19. most of the ratings are between $17 and $19 and neutrals or holds. the jeffries target is the highest i6 sehigh est i have seen. >> we are talking about the $5.5 billion. that number could be much bigger when it comes to making that acquisition. number two stock here, digital reality strutrust. gets a downgrade to a market

perform. they had upgraded in september, shares up 18% since then. just couple months. versus 9% for reits in general. the stock reflects recent management changes, a recent acquisition and a strong balance sheet. >> stock trading above the consensus target of the ten analysts who cover it. danger, will robinson. third stock, abbvie. morgan stanley upgraded to overweight. 20% upside. higher cash flows. this is pretty interesting, they note an expectation of $55 billion in free cash flow in five years, more than half the company's market company. >> it got a hit on that hillary drug tweet but the stock has had a nice one-month performance up 13%. the next stock rackspace. a bold call ahead of earnings.

shares are down 40% year-to-date. the bulk of the decline after a second quarter miss and guidance cut. the concerns about cloud competition. cap ex cuts could help. there could be an upside if that should happen. >> $27.80 stock. this was an $80 stock back in jaub january of 2013. the last stock is retrophi nishnishretrophin. they treat rare and dangerous diseases in children. starting coverage with a market outperform and a $30 target on a $21 stock. a lot of upside seen by analyst lisa bakko. not one drug contributes more than 30% to her price target model. the stock has been under pressure over concerns about what else, drug pricing. >> exactly. in august it was a $36 and

change stock. it's down 44% since then but still a winner over the past year for sure. >> a lot of defense of these beaten up biotechs lately. up next, is there a problem at the pump? with oil so low, why aren't gas prices even lower than they already are? we'll dig in. first the final oil trade. we are headed live to the nymex when "power lunch" returns.

hello, everyone. i'm sue herera and here is your cnbc news update. a u.n. refugee agency says more than 218,000 migrants crossed the mediterranean in october. it was more than in all of 2014. more than 600,000 people crossed the mediterranean this year. the ntsb confirming the wreckage of a large ship found on the ocean bottom off the bahamas is the lost ship el faro. jeb bush launching a

campaign reset of sorts saying he's going to do everything in his power to win the republican nomination without compromising his principles. he said those words in florida under a new campaign slogan, jeb can fix it. and the kansas city royals and the new york mets posted the highest ratings since 2005. the royals won their first world series in 40 years. brian back to you. >> one of my best friends is in kansas city and i'm sure he's having a wonderful but haik fea filled monday morning. >> i'm sure he is. a lot of sad innocence new york. >> they'll be back. let's get to jackie for the oil close on a monday. >> good afternoon to you. oil closing lower by 1%. $46.14 is where we finished the day holding over that key level of $46.

of course, concerns about china one of the reasons we were lower but also on the supply side of things. opec and russia record production. so the supply side certainly doesn't fix a picture of us going higher from here. the fact we're holding over $45 traders say gives them optimism we could take that technical bounce up. $45.56 was the intraday low. so watch those levels very closely. as i said today a little bit lower but traders think we could bounce from here. back to you. >> all right, jackie. thank you very much. gasoline prices aren't keeping up with the fall in crude oil prices. now, yeah, the national average for a gallon of gas is $2.19 a gallon down 28% in the past year. that's pretty good. but keep in mind that oil prices are half of what they were last year. why isn't gas even lower especially in parts of the country like santa barbara where you're paying like $16 a gallon. what is going on here, patrick, senior portfolio analyst at gas buddy.com. is this the part of the program where you say it's a refinery

issue? >> always something at the refining level and that's exactly it. you look at some of the earnings from the refining companies, not the companies with exposure down stream to the price of a barrel, but that's exactly it. the refining sector suddenly which looked like the weak dog years ago is suddenly strengthened and that's exactly it. we don't have enough refining capacity so all of that access crude oil, in fact, over 100 million barrels crude oil build versus last year. it's not translating into gasoline supply and that's why you can have all the cheap oil in the world but it does not necessarily translate to a cheap pump price and that's exactly what we're dealing with. >> because if you're in mississippi or alabama or georgia or tennessee you're probably paying $1.70 a gallon. up in michigan you're paying $2.70 a gallon. is it a contribution issue? is it pipelines? trucking? because they're watching these segments going $2.19? where the heck is that? >> sure, absolutely. right up the alley there with

that. it's all refining and that's the problem in the midwest, the west coast where you cite california has seen high prices all year. of course, thanks to the february fire at exxonmobil h's refinery. the midwest maintenance season the most extensive ever. when you take that capacity to produce gasoline juflioffline, e going to have a pinch at the pump. >> is it just me or is the refinery maintenance season starting to turn into the british soccer season, it never seems to be over? it's like they play the championship game and the next day the season starts. i can never tell when the beginning or end is. when is the refinery maintenance season? >> it seems like stage one is over. stage two will wrap up by thanksgiving and inevitably it seems like, here is the pessimist in me, maybe there will be a problem by january that keeps prices a little bit

higher but the bulk of maintenance should be done when we're sitting down to watch the lions lose miserably on thanksgiving. >> that's cynicism -- it's true, but it's scynicism we don't nee. michigan getting crushed in this interview for some reason. pure michigan. it's time for "trading nation." let's talk gold suffering another tough session. andrew burkly, casey gilbert. andrew, what's gone wrong for gold? >> i'm not a big fan of gold. really there's two reasons, one is on the short term. as a u.s. investor i don't see either of those problems occurring. it comes down to fed expectations and direction for the dollar. as fed expectations have come up, the dollar has seen a little strength here. really no increase in any kind of inflation expectation. we've seen that weigh on

commodities and especially on gold. i'm not really looking to hedge here. i'm bullish on equities to the year end. so i would recommend not having a gold position here. >> gold is still up 4% over the past 90 days. stacy, your focus is the options market. when you look at that, do you see traders thinking gold may go below $1,000 an ounce. >> if anything investors continue to suggest that gold will be somewhat range bound with maybe a slightly bearish bias but nothing we would say is pounding the table saying they're incredibly bearish. in terms of going below $1,000 looking to under, it's less than a 5% probability we break $1,000. if we go out a little further to january of 2017, now you have around a 20% probability. nothing we would label as bearish. the flip side is they're not setting up for a major bounce in gold and to andrew's point a lot

of that has probably come off the fed where we saw gold sell off when we saw the volatility come lower and the sentiment get a little more bearish in gold options. >> i called gold a couple years ago a, quote, tired old mule. nice to have, doesn't do a whole lot. you kind of look at it, maybe stubborn sometimes and that's the way it feels right now. thank you very much. no disrespect to tired old mules. they will be great beasts of burden. for more "trading nation," head to tradingnation.cnbc.com. if you're in the market for a new car, you have to stick around. one auto maker is starting to go heavy into discounts. it's not vw. we'll tell you who it is. plus, do you have an answer for our trivia question? we had a big october this year, but it wasn't even in the top 20 months of all time. what is the single best month and year for the stock market since 1950? that answer coming up. you pay your car insurance

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welcome bark to "power lunch." i'm melissa lee. google announcing it hopes to begin drone delivery sometimes in 2017. it was last year they announced they were testing a drone delivery service. amazon is getting rid of two services, it's daily deals app and local register. and a couple stocks are hitting all-time highs in today's session including advanced auto parts, priceline, and henry schein. >> ford wants to sell you a car or a truck. that's not news. did you know they were really willing to sweeten the pot for potential buyers. what is ford going to do to try to get buyers on their car lots? >> it's called the friends and neighbors program and it will officially launch tomorrow. when it does, it will be the largest incentive program that we've seen from a major automaker since at least before the recession back in 2007 and 2008. it comes down to this. you go in a dealership, you can

get up to an additional 10% off the suggested retail prays, up to $2,000. it will run through january 4th. and that, by the way, is in addition to other incentives. you can combine the two and get deep discounts. you might be saying why is ford doing this? it's all about using the cash that they have because of the profits in the north america region over the past three quarters. look at their market share. 15.1%, 234rflat with last year down compared to the last two years. if you look at whether an incentive war is brewing, a note came out saying what happens if competitors see what ford is doing works? it is a slippery slope down to the old view that as volume stalls, incentives rise and there is a concern that eventually we will hit a top of the market in the u.s. and we will see volume stall. by the way, incentives this year up 14.1% according to true car.

they are just 9.5% of the transaction price and that's important because when we were back 10, 15 years ago when everybody was putting out big incentives they were 14% to 15% of the transaction price. october auto sales will be very good. you're expecting a number around 17.7, 17.8. don't be surprises if we see it that high. we had strong number, almost everybody i'm talking with said it's going to be a big number. >> before we let you go, it looks like we have more trouble for vw crossing. what can you tell us? >> epa coming out and saying there are another 10,000 vehicles in the united states, an additional seven models including for the first time a diesel porsche model. that's the first time we've had a porsche model listed among those the epa says has a defeat device in order to rig emissions. another 10,000 vehicles. if the max numb fiimum fine is

it's an additional fine of $375 million for vw. we have not heard anything yet from the corporate parent at volkswagen. >> okay. phil lebeau, thank you. >> want to take a quick check on the markets because we are at session highs. the s&p 500 right now being led by energy. interesting considering we're seeing the pull back in the price of crude but the etf that tracks energy stocks up by 2.25% right now. >> all right. up next, we are breaking out ye old history book. it's a scroll. what typically happens two your money following a strong october, and we had one. we'll find out. plus, the answer to today's trivia question going all the way back to 1950. what month and year did the s&p post its biggest monthly percentage gain? here is a hint. this song was number one on the charts. we're back right after this. ♪ then came you

♪ i never knew love before ♪ then came you ♪ then came you

we've got a strong start to november, by the way. the dow is up 130 points right now, 0.7%. but even now that we are in november, let's take a look at another minute to reflect on how good october really was or wasn't. yes, the s&p 500 rose about 7% last month. that is a great return. but did you know that it is only the 22nd best month for the stock market since 1950? so let's answer today's trivia question courtesy of our data partner at kensho. since 1950 the single best month of the stock market was october of 1974. you heard it, "then came you" by dionne warwick was number one

and "the texas chain saw massacre" was the top movie. let's look at what happens to maushths aft markets after a solid october. it tends to be a good year. 2346 the s&p 500 has traded positive 78% of the time the one month following -- so a good october portends a solid end to the year but that's just history. do market pros agree? let's find out. we're joining by john and kevin. john, it is a nice piece of history. >> i love it. >> does it mean anything to you? >> yes, it does. it means that it happened in the past. what's going to happen now we'll just have to see, but we'll trust the fundamentals here and the fact that things are getting better whether it's the manufacturing numbers coming out of europe today or stateside. we'll look at that, and that makes us feel good about equities. >> and you wrote this morning, john, you think even a modest rate hike would be good news for equities. are you daring to say the fed will not destroy the stock market? >> i most certainly believe they

won't destroy the stock market. they didn't the last time that they raised rates from the end of june '04 to the end of june '06. they raised rates 17 times, 25 bips '04 to the end of june '06 they raised rates 25 times, it was a 45 or 48 year low, took the rate up to 4.25 but during that period the market went up substantially, the s&p was up 11% and my recollection is that the mids and smalls were up around 20 some percent apiece. >> kevin, you say that the markets right now aren't really cheap, but does that necessarily mean that they can't go higher? >> well, they can obviously go higher, particularly if you get a little momentum behind t we saw that clearly in the late '90s, what we're thinking about beyond the next month is where do you go with a portfolio after you have had so many good years of equity returns. for us the overall thought is that we're going to have

positive but lower returns, maybe a bit more volatility because when we think about where we are we have a few cross currents, we have different monetary policies coming out of different central banks, you have interest rates -- i'm sorry, you have profit margins that are starting to come down a bit and when you think about what's happening with valuations they're certainly not cheap. so when you put that all together in a bag and shake it our best bet is you want to be a bit more cautious and not be making a big bet on a short term move between here and the end of the year. >> what does that mean for sectors? which sectors do you like in that environment? >> we think the consumer has been a stall wart of this entire process, we continue to like the consumer we think final demand will hold up reasonably well. for a good chunk of the consumer segments in the united states that has been buffeted by a strong dollar and weak foreign demand. some of those valuations have become more attractive to us.

we would be looking around the consumer sector and looking for good balance sheets, consistency and cash flow, reasonable valuations at this point in the cycle. >> sounds good to me except i would be generally long and overweight, all the cyclicals with the exception of energy because i think the environment we are you have low interest rates, you have corporations learning how to weather the effects of the strong dollar and the likelihood that the dollar is beginning to lose momentum. in addition to that you have the fed essentially in accommodative mode and europe and japan in a qe mode as well as that labor is reasonable, energy is cheap. hey, looks to me like the only thing i think we might have to worry about, what happens if we go into a boom. >> wow. the down side to the upside. my mind is blown. john, thank you very much. kevin, appreciate it. thank you. >> thanks. >> the down side to the upside. it's so good it's bad. up next, the big high end bet at the crossroads of the world, one of new york's biggest

developers here with his big new plan around times square. wait until you hear this. stick around. we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.

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check out shares of fit bit rallying into the close here up by 3% into its earnings report tonight. we will be covering that earnings report tonight on "fast money" at 5:00. the conference call goes on and remember, brian, last quarter it was a big mover on earnings. this is one to watch. >> apparently my heart rate is 69 right now according to my charge. >> that's good. >> it's elevated thinking about those earnings.

all right. this is going to be one of the biggest new retail projects in new york city in years. it will change the face of times square. it is 20 times square, 39 story building, retail and marriott edition hotel. steve witkoff joining us now. >> this is a big deal in times square, i think it's the first hotel in like 20 years. >> first new building in 20 years. >> how did you get is it done, what is it going to mean for the area? >> i think it's big for the area, it's validation, the retail rents are strong there. the marriott edition brand is a category in our opinion, of course in miami now voted the best new hotel in awful florida, in london and at the clock tower in madison square park. that's really going to be amazing and the hotel occupancy rates in times square are the highest in the -- in new york city and the country. >> it's just incredible. you look at the hotel rates in the city and you think why in

the heck isn't anybody building any new hotels. there is obviously a shortage of rooms. do you see this impacting pricing at all or is it still going to remained strong/high? >> there's plenty of supply coming on stream and airbnb is of course a threat to hotels in new york city and we've got to deal with that threat but the fact of the matter is that well located product in new york city, particularly in the lifestyle and luxury category seems to be immune. >> you own residential towers, retail, but residential alley new york city seems to have no end. i mean, it has been strong for years despite all these calls are b. pops in the b word, bubble. do you see any slow down in new york city at all? >> you know, i think there's a little bit of a winners and losers market today so it's not quite like it was two years ago where you put a project up and everything sold automatically, you've got to be thauftful about your plan. here is a stat for you. london real estate prices are where new york is but the pound trades at 1.6 times the dollar.

so it's really 60% more expensive than new york city prices and we are seeing a huge rotation of foreign capital into new york city today snuf' also been big into miami. there any other -- you've been an early investor in some these markets. any other markets that you've got your eye on? >> i don't think there's anything cheap out there. >> really? >> you've got to know what you're doing out there and execute correctly and be thoughtful in your plan. we study all the markets, we are in the gateway markets in the united states, but it's difficult. construction cost right side rising today, assets are fully priced because of all that -- all the qe money. >> but obviously if they're fully priced why go forward with some of these projects. >> there are still execution deals. i have an execution shop, we build, we turn around, we've got construction management teams and so that's really where we try to make a difference out there. but it's harder to find those opportunities. >> i'm going to try to put you

on the spot and get you to break some news. you own a piece of property -- if you are not familiar with new york city real estate it's the weirdest market because you can actually own land under stuff and above stuff. 48th street you own kind of an older building, i think you own the land underneath that. what are you going to do with that? >> you mean at the best western? >> are you going to keep it the way it is? >> it's a long-term ground lay so we own the dirt underneath it, you have an operator who is operating that. >> i'm thinking a 10 story building or 2 hub story building. >> new york is this giant mall and this giant development site. people see the value here. it's a wonderful place to be. people are always looking to develop, but it's expensive and plenty of risk in the development business so you've got to be careful. >> melissa, are you an owner or a renter? >> owner. >> i don't want to be too personal here. >> we are only on national tv with our closest friends. yeah. >> yeah. just hundreds of millions of our closest friends. so as an owner are you a seller

now? are you worried about this market peaking? >> but i would have nowhere to live. you have to live somewhere. >> i actually think it's cheap relative to -- relative to other cities. >> there you go. steve, a real pleasure. thank you so much. >> my pleasure. >> thanks for watching "power lunch." "closing bell" starts right now. and welcome to the "closing bell," everybody, i'm kelly evans back here at the new york stock exchange. >> welcome back. you were all over the place last week. i'm bill griffeth. a lot of number crunching going on here today. stocks are pretty good rally mode right now fueled in part by a mini mergers and acquisitions monday. visa, conagra, pharmaceutical company shire. just a few of the names that announced deals. we will look at whether this momentum could continue on into the