opportunity. >> to pete's point, if you bought, you sell into it. if you didn't buy into it, you don't buy into it up 200 and some odd points. >> you buy into it and you use a stop. nothing wrong with using a stop. >> oil is up nearly 6% today. stock market is having a good one as well. "power lunch," that and more, next. and welcome to "power lunch," everybody. i am brian with michelle and tyler. two days before a huge storm is supposed to hit the area, there is finally some calm in the stock market. a slight rebound in oil. a massive cash injection from china, and the possibility of more money from europe helping to push the dow up more than 200 points. >> today we are focusing on stock picking. what stocks and sectors are ripe and ready after this terrible start to 2016? and if you are still gun shy on stocks, and who could blame you? we have one of the biggest names in bonds this hour. see why loomis sales says now is the time to buy bonds.

it will be an interesting conversation. >> despite today's rally, the debate still rages on, is this a bear market? is this a correction? what exactly is going on? bob pisani on the nyse floor with some -- i don't know who is saying it's a bear market, bob, but whatever. >> we're not there yet. the question is, is this the bottom that we've reached at least short term? it has some of the hallmarks of a bottom yesterday. right about this time we were talking about it. here is the hallmarks of the bottom. you get big volume, and we had twice normal volume yesterday. secondly, you get new lows, new 52-week lows. we certainly had that, new lows all over the place, and then suddenly the market turns around and closes near the high. now, we got close to that. the s&p did not quite close at the high but the russell 2000 does. it's usually associateded with a short-term market bottom. here is the problem, this only suggests the selling is halted for a moment. in bear markets you always get rallies, some last for a day, a few days, then the market droops

again. you have to believe one are of two things. if you believe it's a garden variety sell-off and so far the s&p 500 is only down 13%, that's a garden variety sell-off and there's a good chance we are near the bottom, but if you think we're headed for a steeper drop then today's action and yesterday's action and the modest bounce we'll get today is just a brief respite. you do get these rallies in bear markets. in fact, they're very notable. this is the oldest technical analysis service in the u.s., of the 50 largest daily rallies that have occurred since 1940, 31 have occurred in bear markets. 60% of the biggest one-day rallies in history have all happened in bear markets. the point is we could have a day like today, and this is very typical of a day after a day like yesterday, and not necessarily be at any long-term bottom. guys back to you. >> bob, i don't think anyone would say we're in a bear market definitively at this point. the numbers don't suggest it.

>> not even close. >> down 8% from its high. a bear market is 20% from the high. we're in a bear/cub market. >> but the question is how many stocks, bob, are in a bear market? how many of the s&p 500 because there is a significant number that are down 20% from their highs. >> yesterday 60% of the new york stock exchange was at a 52-week low, 60%. we have not seen that number since 2008. there was 30 to 1 declining to advancing stocks. i haven't seen that number i think since 2008 as well. we had some very, very strange numbers yesterday, all suggestive at least of a short-term bottom has been in place. >> you just teed up the next segment so perfectly, bob, i can't even say it. so how do we know if this is a bottom? mike santoli joins us, and there you just heard from bob one of the sort of signs. what have you been looking at? what are the signs telling you? >> the way you know is in

retrospect. you have to read a little bit of the signals of what's going on here. the things that bob mentioned, you have so stretched and so oversold and then you did at least see some of that buying come in, whether it was mostly short covering or not. also the vix index, the volatility index, this is the demand for downside protection and hedging and downside speculation. it surged above 32 and then it retreated, and that's what you want to see. you want to see a spike in the vix, sort of a welling up of fear and then a little bit of a retreat. a lot of these ingredients are there for at least saying that was some kind of climactic selling event. maybe it's a short-term low. it's funny, i cautioned against people saying i want to try to decipher this and know for sure if it was the bottom. not only is it impossible because the market is really tricky. it's impossible because it's just not determined yet. depending on events to come, depending what oil does, it's going to decide if that low holds. >> that's my question, oil. do we actually have to be asking did oil hit a bottom and then

hence that means the stock market has hit a bottom in this particular market right now? >> exactly. it seems that linkage is not about to loosen up or break very soon. if you have oil as it is today lifting off the bottom just a little bit, you free up -- sort of chain reaction that is have been going from oil to the credit markets to capital flows to equities. >> all the three factors you mentioned, could you ask them about the oil market? i mean the oil vix skyrocketed even more yesterday, cataclysmic selling, then this reversal we're looking at. but i don't know if stocks and commodities you can judge them the same way. >> not precisely the same way but the sameapply. using up a lot of selling energy and the market not buckling beyond a certain point. >> it's a garbage rally today. >> which is always the way they start. you have to keep that in mind. it's always going to be kind of like first in, first out when it comes to these things. >> oil names, i tweeted out a picture, up 30%. they are the ones down 85% over

12 months. the worst pmp ers are up the mot today. >> that is the way it starts. >> what starts? >> a recovery. >> a durable rally. you decide if there's really organic buying interest to come after it. >> let's bring in brian belski, bmo capital markets chief investment officer. he joins us from london. brian, good to have you here. you have heard this conversation. what do you think? the volatility we've seen in the last two days, have we marked or bottom or is there more to go? >> the market and investors hate uncertainty and as we warned our clients heading into 2016 on your very program, we said that 2016 was going to be a period where we saw issues in terms of the fed, commodities, global growth, and geopolitical/u.s. political constraints, so we said that the market had risk down to 1800. now that it happened, it seems all clients want even more than

that. so to use a phrase you said before, more people are looking for more downside. we find interesting at the lows yesterday, maybe about this time, an hour or so earlier, you had the fear mongers coming out and talking about contagion and that was 2008. we just think that's reprehensible. the analysis does not show this is 2008, and just because markets go down does not mean that we're in a bear market. this is a normal correction from our standard, and believe me, we've been doing this for a long time, and corrections come when you least expect it. the best corrections come when no one is looking for them, and clearly the ferocity and velocity of this pullback in january surprised everyone. >> do you handicap the possibility that stocks have a lot farther to fall or do you think that that sell-off yesterday to the 1820 level or wherever it settled is it? >> well, you know, santoli put it best, you never know where a bottom is until you pass one, and in terms of your classic

bear market scenarios in terms of a 20% correction from the peak, you know, you're looking at 1700. is there a chance to go to 1700? sure there is. is there a chance to go to 1500? i don't think so, especially considering that the fundamental construct of the united states stock market and gdp remain stable no matter what the fear mongers and naysayers say principally because these are the same people that are having a hard time digesting that the super cycle in commodities, emerging markets, china, currencies, and interest rates is over, and because of that and because of that intense focus, they're just having a hard time dealing with the realities of fundamental investing again, and we think we're still in a 15 to 20-year bull market in u.s. stocks. this is a normal correction and a very healthy correction. >> so you talked about the end of that huge super cycle. even if it doesn't mean it's the end of the bull market, it's got to change what you invest in, right? those were just huge themes that drove so many things. if we're in the middle of that

change, what do we do now versus what you did before? >> it's a great question, and i think you have to kind of go back, pishl, to classic early cycle plays that benefit from the recovery and strength of the u.s. economy, and we clearly think that's financials, consumer discretionary, and technology. so much of the past was dealt with commodities and industrials and we still can't get off how negative everybody believes we're heading into a industrial recession. again, not true. and we have to focus on the reality that $20 oil and $1.50 a gallon at the gas pump is pretty good for the consumer even though the stock market is trying to tell you that $80 oil and $3 at the gas pump is better because we have conditioned ourselves over the last 15 years to believe that higher oil is good for the stock market, and to use a british term, that's ballocks. >> you are in london. >> brian belski of bmo capital

markets. mike santoli, thanks to you as well. >> in many ways it's still a central bank world because dovish comments from mario draghi no doubt helping your money today. draghi warning downside risks are increasing again and more stimulus might be necessary. steve liesman is here with some analysis on draghi the dove. >> what he said was that inflation was going to be significantly lower this year and a single mandate central bank says i have to react to that and he basically said we're going to react in march, which is sooner than everybody expected. but to me what it does, maybe the more important impact, is it raises the question about how the fed reacts to recent events because draghi came out and said, you know what? we did a program in december and things have changed, so things have changed for the fed. guys, here is a look at how critical factors have changed since the fed last met. s&p is down 9.4% since the december 17th meeting. oil down 16%. and our tracking estimate for

gdp, maybe most importantly, for the fourth quarter it was 2% when they met. it's now 1%. so we've shaved 1% off of the prior quarter. we don't know what's happened to the forecast at the fed for the current year but certainly it's come down for the fourth quarter. what does that mean? here are three ways the federal reserve could react. i stress could react. we don't know for sure. one is acknowledge softness in the data. two is no note the market volatility and the tightening financial conditions engendered by the lower stock prices. and, three, a underscore the data dependence of future rate hikes in that it sounds like the fed has been on autopilot, not really being aware of what's been going on. i think they need to tell markets they're aware of this. >> how soon do we get that answer? janet yellen testifies in front of the congress -- >> we'll get it in the statement. there is no press conference next time. they're trying to preserve the flexibility to hike but just saying, you know what? under these conditions it ain't

happening right now. >> all right, steve. thank you. steve liesman. high yield bond market feeling the pain from plunging oil prices, and many fund managers are trying to unload or limit their junk exposure. we're going to speak with a four-star bond fund manager who takes a contrarian view. he'll explain and tell us exactly where he's seeing opportunities right now. you're watching cnbc, first in business worldwide. in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. like in utica, where a new kind of workforce is being trained. and in albany, the nanotechnology capital of the world. let us help grow your company's tomorrow, today at business.ny.gov

certainly one of the big reasons stocks have struggled this year is the concern over the amount of debt around the world that is both the trillions held by nations and the hundreds of billions in energy related bonds sitting on bank and investors books. let's dig into whether the market has overreacted or maybe underreacted to the debt concerns. on the cnbc newsline is a man who has forgotten more about credit than most of us will ever know, dan fuss. dan, i'm going to get right to it. is the junk bond or sovereign debt led credit crisis on the horizon? >> no. a crisis? no. is there a really lousy market? yes. and it's hard with bonds to say you're ever in a crisis, but you've had a liquidity imbalance is the best way to put it. now, parts of that liquidity imbalance more on the sovereign side are starting to balance out

a bit. in so far as the high yield market or the credit side of it, there it's really hard to tell. you have opposite funds flows there. on the mutual funds side, the large open end mutual fund and etf side you have got net selling of quite some size, in corporate securities particularly high yield, in fact, mostly high yield. and on the separate account side -- >> well, dan, quickly, so irrry interrupt, what is going to happen to the energy debt sitting on the books? most of the debt doesn't mature for two or three or four years. if oil stays lower for longer, the credit quality is not going to get any better. what's the end game for that debt which by some accounts could be a half a trillion dollars. >> well, what's happening right now is you have a transfer of

ownership. retail being net sellers. the institutional side, some defid benefit, defined contribution, and a lot of other institutional money, not pension, is a net buyer, and the net buyer in that area, and this is just supposition from our own flows, is increasing. the portion in the mutual fund side that comes through the defined contribution is certainly increased year-over-year, but the portion that's retail distribution, you know, that's getting socked. now, the credit parameters for the raw material, oil in particular, metals also, are yet to be defined. there's some good credits in there, but there's the overwhelming case that until you

might say today you have had just net selling there. >> what do you think -- when you talk about some of the institutional buying that you see happening there while retail is getting out, do those institutions not mind going through a bankruptcy and willing to sit it out and thinking, okay, we'll be on the creditor committee because we're big enough and, therefore, we're willing to take that risk? or is it that they think they're going to get paid? >> when you get to the distressed area, there are specialty managers, not us, out there that have gone from doing nothing for four or five years to all of a sudden being busier than they could have possibly have imagined. and that's normally how that end of it goes. the level above that in high yield is where the institutional monies that we see come in. that will have some disappointing credits over time because things happen when you're more financially levered,

and we're in the third quarter of this four-quarter credit cycle. now, that looks to be -- that's possibly going to be extended if the fed doesn't tighten any more and if anything if they go back the other way. the other thing that's changing very, very fast right in front of our eyes is the selling of currencies in developed and developing area by a few of the major central banks and sovereign wealth funds seems to be abating. at least they have nothing else to sell. that becomes a factor with australia, new zealand, canada, things like that. and in norway's case, which was subject to that -- their own sovereign wealth fund and their

own central bank has been buying this stuff back and if you notice the norwegian kroner despite the drop in oil has gone flat and they have started to become public about that. >> all right. >> and so you've got cross currents. is there real value in a high yield? you betcha. >> dan, great having you on. it was really terrific for calling in. dan fuss of loomis sales. airlines are flying high in today's rally but that sector is down 13% from the beginning of the year. what is the health of the u.s. carriers amid these plunging oil prices? should help, right? we have three big clues next.

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lifelock. join starting at $9.99 a month. welcome back to "power lunch." triple dose of airline earnings. southwest meeting estimates, profit hitting record levels for both the quarter and the full year. alaska air also topping those estimates. revenue coming in inline with expectations. alaska says the passenger base is growing while cost and fares are coming down. united continental missing on the top and bottom lines. results impacted by a strong dollar, lower surcharges, and a decline in travel from customers whose businesses, says united, are being impacted by plunging oil prices. >> so we have a rally in the stock market. usually leads to selling in the bond market. just the opposite of what we had yesterday. rick santelli is tracking the action at the cme. rickster? >> michelle, you're exactly right. an intraday of 10s shows you what you need to know.

that sub 2% close didn't last long. if you open the chart up to the last time we did close under 2%, a couple interesting facts. it was october 14th. of course, we had the 26, 27 fed meeting, so we're really right back in the same place. however, if you look at the s&p 500, which didn't make quite a big adjustment looking forward to that rate hike, you can see it hasn't been an equitable trade-off in terms of lower stocks versus lower yields, and mario draghi today really wasn't a pessimist. he really wasn't an optimist. he remained an al chemist and that certainly with the qe undertone is one of the reasons you see the intraday euro dropping against the greenback. if you look at the december 1st start to the euro in front of the december rate hike. that was the big move. for the most part since then, it's been mostly sideways. back to you. >> all right, rick santelli. thank you very much. on deck, you can call this an

ice cube market because today is a good day. you got no smog, but that doesn't mean tomorrow or next week will be as good. we're going to take a look ahead at what might be ahead. plus, midcap maf v cacap marvel. we'll speak with a four-star fund manager who is making money for his clients. he has three midcap stock picks just for you. stick around. it's hard to find time to keep up on my shows.

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all right. hello and welcome back to "power lunch." we're talking off camera here a little bit. tyler mathson here along with my friends brian and michelle. the markets right now continuing the rally we saw late in the day yesterday. the dow adding 184 points higher right now, about 1.2%. let's look at the sa&p 500 at 1876. nasdaq, really nice move there, especially yesterday. my goodness, 30 points higher at 4501 and there's the russell 2000 which has been limping for a good long time, up half a percent. stocks continue to move hand in hand with oil and a powerful move higher by oil up right now

6% or $1.70 on west texas, back above $30 a barrel. to sue herera now for a news update. >> and here is what's happening at this hour. in a cnbc interview from davos, secretary of state john kerry says it is likely that some of the billions of dollars in sanction relief given to iran will go to groups deemed terrorists. >> i think some of it will end up in the hands of the irdc or other entities, some of which are labeled terrorists. to some degree i'm not going to sit here and tell you every component of that can be prevented. airport tsa officers intercepted a record number of firearms last year. according to data released today, 2,653 firearms in carry-on bags were seized. that's a nearly 20% rise from the previous year. the worst airports were in dallas, atlanta, and houston. gop presidential candidate

jeb bush campaigning in new hampshire kicking off his day by meeting employees at the ruger gun manufacturing plant where he was presented with a rifle before his speech. thousands of strollers and replacement top seats made by britax are being recalled due to a he can choing hazard. the foam padding on the arm bar can come off in fragments if a child bites onto it. that is the cnbc news update this hour. back to you guys. >> all right, sue. thank you very much. well, stocks up, so gold is down. that is your story today. co-mex gold down to $1,094 per ounce. the market is rallying as oil surges 5% moving back above $29. the dow is up more than 150 points. is the worst over or is there more to this correction we've been watching? joining us are jeremy zirin from ubs wealth management research americas and steve oft equities research. so many people remember 2008,

2009, some people even remember 2000, and i think when you see what's happened since the first of the year, some people worry, gosh, is that coming again? is there another 50% decline in our future or are we going to get a run of the mill correction here? is that what this was? is it over? what do you think, jeremy? >> i'm not sure if the correction is over but i don't think the comparisons to the 2000 period or the 2007 period are valid. if you look at the 2007 period we had valuation levels nearly double where they were today. so the valuation argument is not even close. if you look at the 2007 to 2009 period, we had a massive credit bubble that was burst where you had bank balance sheets that were holding housing related or real estate related debt made up over two-thirds of their balance sheets. some people are making the analogy that the energy bust and the credit loans from the energy sector is going to lead to a similar type of credit crunch. but if you look at bank balance sheets, it's only about 5% of their exposure is to energy.

there's very little comparison to the current correction and those two horrific bear markets. >> steve, i want to invest. i don't want to trade. i want to hold what i buy for the next two to five years. what would you buy? >> well, first of all, i would be a little slow on buying, tyler. we do think the market is heading significantly higher, and you're saying two to three years out. on the other hand, near-term risk here if you look at the news flow and what's driving markets, concerns about a global recession, we think those are overdone, but still news flow out of china is going to be poor. no one really cares what the chinese are going to do anymore. they've lost credibility. the fed is slow moving right now. that's probably not a source of relief. and we think oil goes lower before it stabilizes, so -- and then earnings numbers on the s&p are probably too high. so net net some of these near-term drivers that have caused this instability, we think there could be as much as 10%, 15% downside to these

markets. now, in the near term, we think that will be a major buying opportunity because, as you know, we are kind of part of the secular bull story here at fed rated. we think the markets are going significantly higher, so we think we are entering a period where a major buying opportunity is starting, but i'd like to emphasize, i don't know that it's right here. i think this rally today is nice. i think it's a little bit of a bear market rally. >> jeremy? when -- >> one point that jeremy made that i think is very important, he didn't quite say it this way but a big difference between here and '08-'09 is we don't have the systemic risk in the financial system. and so -- >> i think he was making that point. >> we have a little bit of a slowdown here, you know, a little bit of weakness in the market and maybe even a technical recession, you know, sub 1% or something for a couple quarters but we don't have the systemic risk that's going to turn that into a full-blown

crisis. i think that's why this is presenting itself as a buying opportunity, not the beginning of a 50% decline per michelle's earlier question. >> jeremy, you were making that point when you pointed out the relationship to the quantity of energy bonds versus the quantity of mortgages et cetera, when you compare the two situations. jeremy -- both of you guys think we're back above 2,000 for the s&p 500 within the next six months or the year. how does it get there, jeremy? what's within the s&p 500 that's the best thing to do right now to ride that rally or that move? >> i think the best areas of the market today and where investors should be focused on are the areas with good secular growth tailwinds. you have very inexpensive areas like technology and health care, both are trading at under 15 times forward earnings. i think both will deliver faster than market earnings growth rates this year, and i would say long term they're both primed to deliver stronger earnings growth as well. i think if you want to start to

dip your toe in the water from a value perspective, two areas that have gotten hit hard, energy looks incredibly cheap. i don't know where -- if the next $10 a barrel is up or down, but i can pretty confidently that oil prices below $30 for the long term are unsustainable, and the energy sector on a price to book basis relative to the market is the cheapest it's ever been. so there's clear value in energy. it's just a matter of investors having the patience to ride out some of the near-term volatility. >> and having the stomach for it as well. thanks, jeremy. jeremy zirin and steve auth. you can go to powerlunch.cnbc.com right now, see why steve sees a soft landing in china. powerlunch.cnbc.com. >> let's take a look at shares of home depot. they are moving up today by $4 or about 3.5%. one of the top stocks in the dow leading it, we'll tell you why that company is up today and what it has to do with this song. ♪ don't stop believing

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a lot of talk about energy so let's look at some energy names. brian was pointing out earlier, a lot of them bounsicing becaus they have basically been depants over the last couple months. >> a wedgie. >> uplifting by the briefs there. all of them up double digits today alone. there you see them. >> did you make the obvious covering your shorts? >> good. >> she says in brief. that was a brief comment. well, apparently -- i loved it though. apparently traffic woes hit even

at the highest levels. the president joining the masses stuck in traffic for more than an hour last night because of ice and snow in d.c. the chopper could not take off from andrews air force base after the president returned from the midwest. so the motorcade got stuck in traffic which, of course, is a daily occurrence for most people in the d.c. area. >> and by the way, this is karma for every time he comes to new york during the u.n. >> oh, yes. >> k-a-r-m-a, karma. the storm hitting the south and the east coast. by tomorrow cities will be getting hit hard. totals up to two feet in d.c. 18 inches if philly. 12 inches in new york city. 5 inches in boston. >> that arrow was pointing at your home. did you see that brian? >> i'm ready. >> a little north of philly. welcome back to "power lunch," everybody. let's take a look at shares of home depot getting a boost from positive comments from jpmorgan in a note fightlnote.

it sits at $120. the analyst saying home depot is seeing nothing in the business to suggest the home improvement business market is slowing. xilinx soaring because of strong earnings but it may not be the main thing driving the stock. the company also disclosing change of control agreements with five senior executives. markets are taking that to mean the company might get bought. it is up almost 9%. >> i'm going to let you guys in on a little game i play in my head, which is should you buy this bond? that's so much yield right now and different stories i cover and i -- >> would you rather. >> petro grass has what they call the century bond. 100 years issued just last june. matured in 2115. $2.5 billion when they issued it. the coupon was 6.85% but take a look at what's happened to the price. >> where is it now?

>> 59 cents on the dollar when we bring up the chart. the yard is now around 11%. so if you bought this and they did pay, you'd get 11% a year for the rest of your life. >> if you paid it and bought it at today's price. >> exactly. >> and if they're still around. >> if they're still around. on the one hand, it's the most indebted company in the world. the country's economy is in the tank. total uncertainty about whether or not the president will survive. she's a sadist anyway. it's state owned. they have publicly traded stock but it's controlled by the government which can do whatever it wants and its analysts argue it's too embarrassing too fail. >> too embarrassing, not too big. >> both. but it so defines brazil as a nation. these are little games i play. >> buy and hold to maturity. a long-term play. you get the 11%. >> traders will say you can get a better entry point but i don't

think people at home think that way. they think can i get this yield and will it stick around? >> nobody cares what i have to say as far as investments go, but people ask me and if you ask me my personal opinion, i would say i would invest in brazil right now. >> you would buy brazil. >> i would buy brazil right now for the long term. i'm not recommending. it's not my job. >> are you talking stocks, bonds? >> ewz. you're supposed to buy when everything looks the worst. they're literally throwing billionaires in jail. there's literally rioting in the streets. the economy is a disaster. the currency ask a disaster. the political scenario is a disast disaster. their biggest company is a disaster, but it is still the seventh biggest economy in the world. >> it has some demographics. >> when at some point when commodities turn, brazil is a commodity economy. it's important to latin america. who knows. i just -- you know -- >> a little mad money? >> no, no, no. god, i'm not recommending.

i'm just saying, you know -- >> that's a contrarian view. >> because everything looks so bad. there's no good news in brazil except the olympics on nbc. >> that's coming on nbc and cnbc. >> and nbc sports and bravo. >> you know the old saying, brazil is the country of future and always will be. >> and on that net we go to the "power pitch" where entrepreneurs get 60 seconds to make their pitch and then a panel of experts will ask questions, weigh in, and decide if they have what it takes to become the next big thing. >> hi, i'm sean carrigan, ceo and co-founder of mobile cubes. the mobile device has become the most important tool that we use every single day to stay connected. but as we put more and more demands on those devices, our battery power is draining faster than ever. we developed mobile cubes, a national network of fully automated self-service kiosks that allow customers to rent and

return portable battery packs and stay charged on the go. we enter the market in high traffic venues like airports, train stations, large hotels, casinos, convention centers and sporting awry thats and provide on demand power for hundreds of thousands of smartphone users. we have already opened up markets like new orleans, new york, chicago, philadelphia, and miami and we're rolling out across the country as we speak. so the next time you need your power solution, forget about going to the wall or charging pole. look for a mobile cubes kiosk and get your power solution on demand when you need it most. >> i'm mandy drury. you just saw sean's pitch. let's meet the panel. on set we have angel investor and adviser kelly hoey. she's a limited partner with lat cone ya group. >> we have david wu from maveron. he mentors owe every 30 startups. and in seattle nat burgess is

the president of corum group. so welcome, everybody, to the show. sean, you're in the hot seat today. kelly, first question. >> so as a consumer who clorly needs a charge, how are you making sure that i can find mobile cubes anywhere? >> we have a number of different touch points for the consumer. we're rolling out a app, we have a live map on the website. we also have a deep social media platform that we put out there to consumers to educate them on where they're going to be and where they can find these kio s kiosks. >> david? >> it seems there's several different options on the kiosk side to charge in a public place. what are some of the key differences? >> ours is really one of the only portable solutions. what you see out there in the market right now is the lock box station, the charging pole. we have built a system that allows people to get their charging solution, stay

portable, stay on the go, and we added convenience to the whole process by allowing them to return that battery back to any kiosk in the network where the battery packs automatically recharge. jo and i incentivize your venue partners to carry your kiosks by sharing some of the revenue. >> right. it's no cost for the venues. we thus give us prime placement and power and we share some of the revenue every month back to the venue so it's a win/win for the consumer and our venue partners. >> nat? >> how much volume does one venue have to do to be profitable? >> we really like to generate four transactions per day. when you're talking about going into an amtrak station or an airport, a large casino where you have tens of thousands of people going through there every day and they're all smartphone users, we can generate those transactions on a frequent basis and be profitable very quickly. >> kelly? >> why are you the team to do this? >> we built a great team, with he have a great strategic relationship with our manufacturer that have allowed

us to raise nondilutive capital and put a lot of machines in the market with enterprise deal. we can move fast and gain market share quicker than everybody else out there. >> it seems the cost of wi-fi in the last five years has dropped to basically free. i'm already seeing free charging stations in starbucks and whole foods. do you think there's going to be continued downward pricing pressure heading towards free on the charging side as well? >> when it comes to battery power, you look at some of the other solutions being offered, they're tethered solutions. they require people to stay in one spot. that's not how we operate our daily lives. we are mobile by design. that's why we leverage our smartphones so heavily. so paying a little bit of prepare yum premium to keep you on your way and not interrupt your business or daily life will give us runway well into the future. >> we've learned a lot of information about mobile cube. we want to know if the panel is in or out. kelly? >> this is a big problem, you know, clearly i have got it. i have concerns over whether or

not they're going to be able to create enough of a barrier to entry because you think best buy, other kiosks could come in and do this, but you have a really great team, so i'm in. >> we have one in under our belt. what about you, david? >> i like the approach that you're taking in terms of the form factor of the device. it seems very convenient. at the same time it seems like a very crowded category. i see different versions of this kind of kiosk all over the place and i think you're running into headwinds where the pricing is going to come down and affect a lot of the unit economics so i'm going to be out. >> one in, one out. you, nat, are the do he siding vote. >> i have this dream of not having to go through the hassle of charging my devices anymore. i want to be a member. i just want it taken care of by you and i'm addicted to mobile like most mobile users are, so i'm in. >> we have two ins, one out. interesting feedback as well. what's your reaction? >> i appreciate the opportunity. i think the feedback is great and i think there's a lot of applications for this and we're excited to grow and expand in the market very quickly in the

next couple years. >> thank you very much, sean. sean of mobile cubes and also our panelists, a big thank you to kelly, david, and nat, and that is today's "power pitch." >> i recognize that voice, right? you heard what the panel had to say. now it's time to find out whether you are in or out. follow the conversation on twitter using #powerpitch. oil is rebounding a bit but we're still right around 30 bucks a barrel as oil moves a little bit higher. we are likely seeing a big short covering rally in the energy stocks because the stocks that are up the most today are most of the same stocks that are down the most over the past year. ie, this is a low quality rally. i think they're playing this song for me. it's all about the ben. >> thcannot be controlled. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding

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welcome back to "power lunch." i'm michelle caruso-cabrera. here are this hour's power points. stocks are rallying. the dow is up 180 points but off its highs. energy, telecom, consumer discretionary are leading it this hour. home depot leads the dow. consol energy leads the s&p 500. and xilinx leads the nasdaq 100. brian?

nearly $2 trillion in investor value has been wiped out in this stock market rout since january 1st, but who is losing the most? robert frank and steve liesman have some differing takes. >> brian, i say it's the billionaires and the 1%ers who lose the most because they own the most stocks. in fact, 85% of them. >> can't disagree with that, robert. i think you're right, but the broader economy i think is also in danger and i'm going to explain why on the other side of the break. >> all right. it's a face-off. umm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

everybody used to love google, but with the stock up over 40% in the past year, is google now officially known as alphabet for some reason, still worth your money? let's bring in brian weezer of pivotal research. he has a hold on the stock. victor anthony of axiom capital who has a buy. brian, why the hold? >> well, you know, dcf gets me to a prior target of $745. there are concerns that are a bit more overstated that some of the street has that are just going to continue to rise. i'm not convinced that the transparency that google has been saying they're going to provide will be -- make a meaningful difference and i don't think the company is

really focused on capital efficiency when you compare them to say facebook or several other companies that i think are -- >> i guess, brooiian, i would p back and argue and say i don't think they've ever been concerned about capital efficiency. they always have crazy products and projects that bring in no money. how is now different than any time in the past? >> it's not. the issue is what is the right price for the stock, and i have had buys on google at different times and had holds at different times. i think there's a lot of let's call it willful optimism among investors at this point in time that with the relatively new cfo, the creation of alphabet, that they will be all of a sudden remarkably more transparent and remarkably more shareholder friendly. there's a lot of optimism about that coming up, and i'll wait to see it before i believe it. >> victor, why the hold? why the buy, excuse me. >> i have a buy. it's one of my top large cap long ideas for 2016, so i'll put

myself in an optimistic camp. when i look at google, i see a stock that's benefiting from solid management team, good corporate governance. organic top line growth rates have grown in the high teens for 12 consecutive quarters. i soo he that continuing over the next several quarters. margins have stabilized over the past three quarters. i see margins expanding. i do think that, you know, that increased transparency will be good for the stock. i think what you'll see is that the core advertising business is a lot more profitable than what investors are expecting. the company is returning capital to shareholders via share repurchases. small but it's a good incremental step. i have conducted checks over the fourth quarter. they have been extremely solid. i expect fourth quarter results to come in above consensus. that's another solid. there's optionality in the moon charts. the risk the company faces over the next years are manageable and all of that is available to investors at a cheap multiple

and chief relative to other -- >> you have a price target of $1,000 on it. brian, what is the business risk to google and where does it come from? usually when a company that's been as hot and as successful as google begins to stumble, it's because somebody closes the gap on them somehow or invents something that makes obsolete or at least carves into one of their principal business lines. where is that threat going to come from? >> there will always be threats out there. i could point to something as arcane as a header bitting which made render their ad stack less competitive than it is. we could argue apple may decide to disfavor google in different ways in mobile devices. that's not the issue really. the reality is like with victor, i agree. google is doing wonderfully from a top line perspective. they and facebook are heads above the industry. there's nothing getting in the way of their utter dominance

where the bulk of the growth goes to both google and facebook and not -- i mean net, everyone else is flat. the bigger issue for google remains how much are they going to spend on cap ex every year? is it $10 billion or $20 billion every year? but in terms of the core business, now, there's not really much that i think will practically get this the way in the foreseeable issue always there will always be issues like ad blocking, apple doing something, lots of reasons for google to, you know, stay very vigilant in terms of retaining their competitiveness. >> all right, brian and victor. guys, it was a good discussion. earns are out february 1. quel see you again. thank you. >> thank you. >> we have two hours left in the trading session. for those of you listening on the radio, a quick snapshot. the dow is in rally mode up about 174 points. the 10-year yield is back above 2%. we're seeing selling in the bond market at this hour because of the rally in stocks and oil is having a monster day trading higher by more than 5% right now. the march contract is up $1.43

to $29.78. knocking on the door of 30 bucks again. dow transports are also higher by 1% on the session. they are down 11% this year. we have been wondering about the transports all -- for the last six months, morgan brennan, wondering with oil prices low and the economy supposedly good, why were the transports down? >> i think that's the big question right now is what are they signaling for the broader economy, particularly here in the u.s. i think all you have to do is look at union pacific's results which came out this morning. that stock is hitting lows not seen since february of 2013. that's after disappointing earnings and also down beat commentary, so ceo lance fritz telling cnbc today, quote, our perspective is with the strong dollar and with the energy recession in full bloom, that there are some pretty significant headwinds to our volumes right now. so this is canadian pacific reported an earnings miss this morning as well and on the heels of csx's chief michael ward saying recently the current

shipping environment could be thought of as a, quote, freight recession with so many challenges in so many markets, but we've known that railroads are struggling. that's been happening for the better part of a year. it's other transports that move goods destined for consumers that experts are watching perhaps the most closely. earlier this week the american trucking association said truck volumes should be negatively impacts bought businesses are overrun with inventory so they're buying less. the hope is overall freight demand begins to recover later this year. we're seeing plunging stock prices and in the case of railroads, we're seeing more and more staff cuts now. >> morgan, thank you very much. appreciate it. let's dig in a little bit more on the transports, a sector lots of people watch. donald bruton covers transports and bob bob costello is chief economist at the american trucking association. bob, let me begin with you. do you see it the way morgan sees it, that the challenges

facing the trucking about i was this year outweigh the positives. give us your handicapping of it. >> certainly early in the year i do see that. you know, with he swe saw a majr deceleration of freight growth late last year. it was around a few things. it was factory output is throwing down. all the fracking wells we were building, we're not making them anymore. that hurts. but the biggest thing is this glut of inventories. we see it throughout the entire supply chain. you talk to shippers, talk to retailers, manufacturers, everybody is struggling with it, and until you clear that out or at least lower it, i should say, freight is not going to be very strong. >> what is the countervailing positive? are there any areas of the economy or of the business that your members evare telling you about that's actually thriving right now? >> yes. we've got flat bed freight is okay because you have housing starts that are decent but then there was a lot of pipe being moved around in those frac wells

when you build them. we'll put that in the okay category. you know, consumer spending is not bad but because shippers have so much inventories on hand, they're not bringing in a lot of truck freight movements. really the best area has been refrigerated freight and you're starting to haul more -- different types of goods in refrigerated, you know, trailers now. things like cosmetics. things we weren't always putting in refrigerated trailers. >> how about the driver shortage? >> driver shortage has eased a bit but it's still a problem, okay? some of those drivers that were out doing all the frac well stuff, they have actually come out of the oil industry and gone into the over the road environment. they're driving over the road from state to state. however, if oil prices were to ever start to go back up, those folks, and we start to build nor frac wells, those folks are going to go back to those jobs.

they don't drive as much, they pay a lot of money. it's a problem, remains a problem, but not quite as bad. >> bobby, are you ready for the storm? we'll see you in about three weeks in d.c. >> funny enough, these storms can wreak havoc in the transportation industry. >> you bet they can. why it can suck up capacity. our members will start parking some of their trucks, getting them out of the storm's area, and for a couple of days we could see some shortness of capacity because of it. >> of course, d.c., really thrives during these snow events. thank you very much. >> now let's shift gear and bring in don. you heard the good discussion. what is your take on these stocks and are any of them investable right now? >> well, right now we're investing in freight forwarders. we're investing in logistics companies, like c.h. robinson, echo, xpo, land star, asset light companies. >> so what makes those -- let's call it a c.h. robinson, former

food contributor about 100 years ago, good value? is it a lower chinese currency? >> no, no. what happens is this, if i were to look at my group, if i look at the truckers, look at the railroads, and i would say what's the single largest thing they can do to create economic value for shareholders? i would say it's improve asset utilization. in the current environment, asset utilization is declining and declining dramatically. on the other hand, if i were to look at the nonasset, the logistics players, what's the greatest thing they can do? the greatest thing they can do to generate shareholder value is to improve their gross margins. their gross margins are exploding because they're still selling at contract prices to move goods, but they're buying at spot and with the drop-off in demand, spot market pricing, especially for trucking, has been plummeting. >> so if you like a c.h. robinson, does that mean you like expediters also? >> expediters isn't a direct

competitor. it's a comparison but c.h. robinson is very heavily weighted into u.s. domestic truck brokerage. expediters' bread and pbutter i international air freight forwarding. >> thank you very much. we appreciate your time. thank you very much, done. >> davos is going on right now as we all know. the fed, oil, china, they're all huge topics at this year's world economic forum in switzerland. some of the biggest power brokers on wall street have been weighing in, also some of the biggest brokers. all of these topics are in cnbc today. take a listen. >> the ceo community that i'm talking to, which is our clientele, which is across all industry groups and all geographies and most of our clients are global in nature so they have businesses all over

the world, they are clearly feeling some type of slowdown in their business. now, this slowdown didn't start january 1st of this year. this slowdown started, you know, in the end of last year. >> what we're not seeing yet is that the financial contagion, so to speak, if you like, has not passed over the wall to the consumer, and hopefully it will stay that way. >> oil prices have gone up and down many times in my lifetime. this is the first time that i've heard lower oil prices described only as a bad thing, and i think you have to be careful to get both sides of the oil price equation. you look at economic growth in europe, even economic growth in the united states where in spite of headwinds internationally, we're maintaining steady, good growth, good consumer demand, lower oil prices are part of the reason for that. so there's definitely an impact. if you're in the oil patch, it feels terrible. if you're an oil exporting country, it's very disruptive, but globally there are also positives.

>> words from davos. the s&p 500 rebounding today, but it is still down about 8% this year and that has wiped out nearly $2 trillion worth of market value. so will that have a big impact on the economy or is it just the wealthy who have lost some of their billions or millions? joining us are steve liesman and robert frank. robert, you have been looking at this. what do you say? >> mukhtar i think put it well, which is there's little evidence that the slowdown or the contagion in financial markets has gone over the wall into the real economy. the big losses are -- >> people are still drinking coke. >> people are still drinking coke. the big financial losses at least on paper, amazing, all of these are since january 1st. we have jeff bezos losing $9 billion this year. bill gates down nearly $8 billion. warren buffett down 3 wlds. wang jianlin, he's down $7 billion.

>> down had-tto his last 29 bil. >> it's tough. stock ownership in america is down to its lowest levels broadly since the mid 1990s. so, yes, it's painful. yes, there are a lot of people that will elizabeth monlose mon pensions. but just as the asset rich got rich and gained the most, when we're talking about the other direction, i think it's the asset rich that will lose the most. >> i'm surprised robert would betray his people this way. >> the billionaires that he covers. >> he practically knows their assets and liabilities by heart. >> i have the violin right here. >> he's betraying his people and saying the spending of the wealthy doesn't matter for macroeconomic point of view. it does matter. there is a wealth effect. it is concentrated, i agree with him completely, in the hands of the wealthy, but that shows up in the data. the more concerning part i have

is as this goes on, it echoes in the c suite. not through the personal finances of the wealthy ceos but through their stewardship of their corporations. >> their confidence. >> when you get in situations where you have guys that much more than in years past, their job is to raise the quausrterly price of their stock. they decide not to make housing -- not going to make hiring decisions. they decide not to make capital investment decisions if this goes on. if you have a quick springback, i think everything goes on. but it's a time where guys go, that marginal project i was going to do, with the stock price down the way it is, i think it's time to stop. >> the market decoupled from the economy in 2009. to your logic we had soaring stock prices and profits, but that confidence didn't file down through the c suite to the workers in terms of hiring -- >> that's not true. hold on. we just hired in the past two years 6 million people, okay? and, in fact, equipment spending has been pretty robust.

this notion of even the consumer not being there is just wrong. we did some of the better consumer numbers we've had. where we've lacked has been government spending and some other -- >> i thought he was talking more like 2010-2011, the early part where it took a long time for the individual and the consumer to feel safe again. >> that's definitely true. >> but the market started taking off in 2009. >> exactly. >> and it forecast the end of the recession. >> right. the impact of what you're talking about, robert, also really feeds down to the state, steve. you think -- >> taxes. >> taxes. california is a state that relies on capital gains. they like to tax the rich and how do you do that mostly? capital gains. when a stock market starts to fall, there's a lot fewer capital gains. >> the 1% pays 40% of the taxes in california and new york city and most of that is capital gains and that is where it will show up more than the consumer -- >> and the wealth and equality stats we have seen. we know the wealth -- income and equality --

>> bingo, brian. the best way to find inequality is to have a 10% correction in the stogck market. that's a joke, folks. do not write in on that. that was a joke. >> income inequality is actually wealth inequality because of the high number of assets owned by the richest. as that comes down, nobody is weeping for them but it should narrow the gap on those stats. >> it will. and yet we learned life hasn't gotten better for everyone because inequality has now momentarily dropped. >> robert makes a good point. we talk all day long, a big part of the inequality surge we had came from the rise in the stock market -- >> almost all of it. incomes haven't changed. >> the interesting thing about that is that kind of answer does not create a need for a policy response necessarily, right? if you have issues -- and there are issues like this out there, where the wealthy are getting more than their fair share because the market is rigged, that's where you want a government response. but if it's because they get more of the increase of the stock market and, by the way,

more of the decline -- >> well, actual incomes, like what your boss would pay you, that vaehaven't moved. >> for most people. >> so many -- here is the ridiculousness of it -- >> both have -- >> if you live in washington state, you make -- and you make $411,000 a year, you are in the 1%. >> correct. >> but you're in the same 1% as bill gates who makes $20 millio percent more. >> inequality is being driven by a very tiny slice, these guys at the very top with huge gains. at the end of last year bezos gained $5 billion literally overnight. that's what's driving inequality. i think it's a false measure, but i don't think this stock market decline is going to directly immediately flow over into the economy. >> i think the fed will take note of this. it will try not to blink, but it's going to say, look, we're

paying attention to this because there's potential -- look, from a strictly economic standpoint, when stock prices get lower, financial conditions tighten. capital gets more expensive by definition. >> because they worry about the rich a lot there at the fed, don't they, steve? >> thanks, guys. that was funny. >> here is what is on the menu for the rest of this hour. you're going to hear from one of the best performing midcap fund managers over the past year. he is betting on ski jackets and termites. plus the five big stock calls you need to know about. those names are ahead. and we're minutes away from the oil market closing. will the crude minnie ralut min will we close above $30 a barrel? ♪ okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank

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all right. welcome back to "power lunch." i'm michelle caruso-cabrera. f5 networks reporting a quarterly profit. $1.73 a share, 13 cents above estimates. revenues coming in above expectations. disney's ceo bob iger buying more than 124,000 additional shares of disney stock this week. those shares are higher right now by more than 1%. and a few stocks are hitting new 52-week lows in today's session including comerica, charles schwab, and ecolab. breaking news on former drug ceo martin ska rely.

>> there's a fascinating tussle playing out about whether martin skrely will testify next week. republicans and democrats on that committee want to hear from mr. shkreli on the issue. they've invited him to testify before the committee. his lawyer sent a letter saying he will not appear and may invoke his fifth amendment rights and now a battle back and forth over twitter about whether he will, in fact, appear next week. the house oversight democrats tweeting out, i hope martin skrhkreli reconsiders his curre course and avoids additional legal reaction against him. mr. shkreli responding your attempt to subvert my constitutional right to the fifth amendment are disgusting and insulting to all americans. he cc'd the democrat in charge of the committee for the democrats. he's clearly gotten under the skin of the democrats and some of the republicans on this

committee. last week they point out that he tweeted out a copy of the committee's subpoena saying found this letter, look important. the committee clorly thinks he's overly dismissive of their efforts to get him to testify here and also shkreli tweeting, house busy whining to health care reporters about me appearing for their chitchat next week. haven't decided yet. should i? the committee quoting both of those tweets in the press release this morning. clearly a back and forth and we'll see whether shkreli shows up on capitol hill next week. >> he makes things interesting, doesn't he, eamon? he's a poster boy for a lot of issues but -- >> this is not how you play washington typically. you don't see the savvy high-end ceos doing this but maybe it will be effective. he's clearly gotten under their skin. >> doesn't he have a right to plead the fifth if he wants? >> absolutely. he have american does. no question. the committee clearly wants to hear from him and they're wrangling over what terms they will hear from him. a lot of this could be a back

and forth that's part of a larger negotiation but he may have to go there and testify and he may have to just raise his hand -- >> and refresh may memory though, eamon, his legal problems don't really have to do with raising drug prices, right? >> that's right. and so part of what's going on -- >> has to do with trading issues from a prior company, right? >> exactly. part of what's going on here is that shkreli has been released on bail in a criminal case, and he is citing existing bond arrangements that state he must remain in new york and not leave without court permission. so what the democrats on the committee be upset about is that his attorney informed the committee today that mr. shkreli has not taken what they call the basic step of seeking leave from the court to travel to washington. so that is he hasn't even checked whether or not in that case they will give him permission to come down to washington to testify. they don't like that when you don't take the basic steps. they want him to follow up on the subpoena. >> all right. thanks, eamon. >> you bet. the rally losing a little bit of steam as we head toward the final 90 minutes of trade,

and while some people love the biggest of the big cap stocks generally, others find the value in the mighty mite small caps. your next guest is making money for his clients in the jan brady stocks. bill bell co-port manager of the eaton vance fund. we teased you like ski jackets and termites. welcome, by the way. what makes columbia sports wear, that's the ski jacket reference, a good investment? >> columbia, as you said, they make outer wear and outdoor clothing. i think columbia for many years lost their way, but in the last ten years or so has done a great job in terms of product innovation. so they've probably got the most fresh portfolio of clothing out there in the outdoor market right now. last week i was actually talking to a friend of mine who is in outdoor retail.

he said all that innovation makes it much easier for him to sell. so that's one reason why i think columbia is really taking share from the rest of the industry. >> you also like termites vis-a-vis service master which owns termi ismtermix. >> i grew up in florida. we have roaches that fly there. the last thing you do even if the economy is bad is cancel your pest control. it's a stable business that produces lots of cash flow. >> also markell. specialty insurer. what about them? >> markel, they're in specialty insurance. they focus on policy that is the bigger players really wouldn't bother with. so stuff like horse camps or fishing lodges. they've been able to earn a tremendous profit on the underwriting side and also have done a really good job on the investing side. so they're set up like a miniature berkshire hathaway but i think they're small enough to continue to have really good returns over time.

>> are you nibbling on any oil stocks? most of the big caps are now midcaps. midcaps are small, and small caps are gone. >> we're not really deep value players. we focus on companies with consistent earnings. it's very difficult to predict where oil prices are going to go. >> you're not even trying. >> we're not trying. we focus on companies where we can predict earnings much more easily but we are starting to nibble at some of the most cyclical names in our universe. frankly, the u.s. economy doesn't look too bad to us. the real problems here seeing are in china. i think you've got a massive amount of under investment that was fueled by debt that's in the process of unwinding. we think that's probably going to get uglier before it gets better. >> all right. >> good to see you, bill. >> thank you very much. >> thanks for making the trip up from hotlanta. good luck on the morningstar fund manager of the year. >> speaking of that, look at my head in there. that is a large pumpkin right

there. >> you look bronzed. >> my goodness. you don't want to miss "power lunch" on tuesday because i will be at the morningstar 2015 fund manager of the year awards. ahead we are talking planes, trains, and the credit card you don't want to leave home without. the earnings squad will join us. and we're headed live to the nymex when "power lunch" returns. ♪ i used to rule the world

we're in the heart of earnings season and today is one of the big days. covering it all right now with phil lebeau on united out earlier today, morgan brennan on unipacific. mary thompson looking ahead to american express. phil, you go first. >> you know, tyler, what stands out about united airlines is the fact this really was not a very good earnings report. yes, they boosted profits, but this terms of what happened to the bottom line, they're feeling a lot of pressure. one example of that, they're trimming flights into the hub in houston. no surprise those are energy related customers who are no longer flying down there because of what's happening in the oil patch, and as a result, they have trimmed flights there. meanwhile, china demand, with he hear a lot of people talking

about are people still going to cline? demand is still as robust as ever up 19%. the reason this stock got a bounce, ceo oscar munoz, who has been out with a heart attack since october had a heart transplant two weeks ago. he was on the conference call and as a result that sort of overshadowed the negative news in terms of when you look at where united is right now relative to other airlines, and that's why people say look at the stock over the last three months. yes, it got a bounce but look at it over the last three months. it's feeling the most pressure of any of the airline stocks. >> down 17% in three months, up about a quarter percent today. to morgan brennan now on union pacific. trouble there on the rails. >> yeah. some more trouble with union pacific. those results were, dare i say it, off the rails today. we saw a miss on the top and bottom lines plus disappointing operating operation and volumes. the freight railroad is not issuing an earnings forecast for 2016 because of uncertainty in its markets. only that total volumes for the years will be slightly negative

and that depends on the economy. coal volumes expected to drop 30% this quart-- 20% this quart. executives also saying the windfall from lower energy costs for consumers has not actually materialized in the goods that are being shipped with inventories high, retame demand sluggish. lance fritz telling cnbc he's laser focused on getting costs in line given the weak fright environment and by the end of 2015 their worse forkforce was 18% and 2016 capital spending will be 13% less than last year, so you see shares of union pacific are under pressure. they were down about 3%. down about 6% at the lows of the day. >> morgan, thanks very much. now let's finish with a preview of american express out after the bell. mary thompson. has loss of costco hurt them? >> it will and it will continue to hurt the company. it's one reason investors are expecting a lackluster fourth

quarter. $8.33 billion. the strong dollar is expected to negatively impact the firm's billings. as has been the case for the last couple quarters to offset the sluggish revenue growth the company will hold the line on costs. now, while analysts say the 26% decline over the last year makes it look attractive on a valuation basis, investors continue to wait for the firm's plan to make up for revenue lost from the end of its exclusive agreement with costco and for signs new ventures are starting to deliver the revenue growth the company needs. >> thank you. brian? >> oil losing a bit of steam going into the close here. jackiedeangelis, take us into the great oil rally of 2016. >> great oil rally, i'm not sure but definitely a little rally. we crossed the $30 but we finished at $29.59.

the inventory really bearish, especially in gasoline. we have more gasoline in storage than we've had since 1990 according to the eia but the market shrugged it off. it was looking at draghi, at what happened with equities, and we went higher. reasons for this rally aside from that, short covering certainly, a little bit of this buy the dip mentality and selling fatigue generally. we have gone down very fast and very far, and it's been violent and furious, brian. so everybody just said that overall oil wanted to go up today. back to you. >> all right, jackie. a lot of sound and fury. thank you very much. also you know what else is fading? the stock rally as we head toward the final hour of trading. all the major indexes are off their highs. the nasdaq and russell 2,000 are all negative. the dow was up more than 250 points. and about that level we started the show. we apologize. it's now only up 119. >> is it something we said? >> collectively. let's get to sue herera with an overall news update. >> here is your news update this

hour. we start out with britain summoning the russian ambassador for a dressing down. that meeting was requested after a british judge reported that russian president putin probably approved a plan to kill a former spy with poison on british soil back in 2006. more than 70 stranded tourists were rescued by helicopter in romania. they were flown to safety and given medical checkups. marco rubio campaigning in new hampshire says that the barrage of negative ads targeting him proves he's not an establishment candidate. this comes in response to charges by rival ted cruz that he is. pope francis celebrating the feast of st. agnes by blessing lambs in vat kican city. he blessed the two lambs whose wool will be used to make garments for archbishops.

agnes means lamb in tat lylatin. coming up next, five stocks analysts say you should be owning right now. those names in "street talk" are ahead. and as we head out to break, a look at some of the big winners in today's session, kinder morgan, xilinx, sw energy, and range resources all solidly in the green. keep it right here. you're watching cnbc. we are first in business worldwide. was engineered... ...to help sense danger before you do. because when you live to innovate, you innovate to live. the all-new audi q7. a higher form of intelligence has arrived.

♪ light piano today i saw a giant. it had no arms, but it welcomed me. (crow cawing) it had no heart, but it was alive. (train wheels on tracks) it had no mouth, but it spoke to me. it said, "rocky mountaineer: all aboard amazing".

time now for "trading nation" because, after all, traders do trade better together. today let's look at starbucks. david seaburg, rich ross. david, would you and your team of analysts buy starbucks ahead of the numbers? >> absolutely. we came out yesterday when the stock was trading close to that $55 level and we basically said buy the stock aggressively here. the numbers ever going to be fine. 45 cents is what the street is expecting. same-store sales, you know, a comp number of roughly 8%. there's probably going to be some upside so an inline 8%

comp, the stock probably performs okay but if they beat that comp, which they probably will, the stock can go through $60 in a heartbeat. this is a perfect example of -- a company that's taken advantage of technology through the mobile -- their mobile apps to leverage sales, to make strategic acquisitions on some nichy type companies to leverage their food brand and they have done a lot of cost cutting so help gross margins. the management team is doing all the right things. you know, you look at the stock year-to-date down roughly 1.5% versus the overall market being down, you know, where it is today. i look at this and say long term we really like this story. management is doing the right thing. you should absolutely be buying it here ahead of the earnings. >> all right. rich, you are charting starbucks because that's what you do. how does the stock look technically? >> i'm with david on this one. in a really tough tape, you can do a lot worse than starbucks. i don't love the market, but i do like this stock.

bring up the chart and i will show you exactly why, brian. the first thing we notice when we look at the chart is it's in an uptrend, which is not exactly easy to find these days. we have a 12-month total return of 45%. that's better than facebook, better than google. what's nice about the name heading into earnings is that so%, 11% counter trend pullback into support at the 200-day moving average. nice intraday reversal along the broader market. i think that sets you up for a nice bounce coming out of earnings and remember, brian, last year around this time in january we get a 6% pop on those first quarter earnings. history could repeat itself. when we zoom out and look at that weekly chart, what i want you to focus is on is the 50-week moving average. it comes in right around $55. on a close below $55, it raises the prospect of a deeper pullback. that's what i would use for traders as a protective stop. absent a close below that level, i'm a buyer going into earnings and likely a buyer coming out.

>> hey, david, before i let you go, switch gears off starbucks, we've seen this rally sort of fizzle a bit. what's your take on the overall market action today? >> look, i mean, i think this is the midday lull we have here. probably a little bit of profit taking, some concerns, shedding their long positions. look, i really believe we've gotten to a point where stocks have gotten tremendously cheap. i think people are really selectively looking to buy both on high quality names into their portfolio. we've talked about it before, brian. this market, you can't just go out and buy an index. you can't just buy the overall market right now. you got to do your homework and starbucks is a perfect example of a stock that got dislocated on a relative basis outperformed the overall market and actually it's sector but there's a name you can look at and say layup, buy on weakness. the people that took advantage are going to make some money. >> rich, if we can go back to the broader market for one second and follow up on what brian was asking about, every rally we've had lately, people have used it to sale. when we see a little bit of a

fade here, the nasdaq is back in positive territory, but it really had disappeared. the euro has reversed. all the draghi effect is gone. any thoughts on whether or not we're going to see the same selling pattern we've seen before? >> yeah, michelle. you know what? i think the market goes lower over time but this the very short term i think we can get a bigger bounce here. a few percentage points to the upside before ultimately we get a bigger move to the downside. look, a reversal is typically a three-day pattern. yesterday was the first day of that pattern with that exhaustive reversal. today as long as we can hold in there, that confirms yesterday's rever reversal. if the pattern is for real, tomorrow we should get nice follow through to the upside. if we don't get that, it invalidates the prior two days and we go lower. i don't think that's the case. we've had a lot of damage in a short period of time but i think we test 1780 to test a bear market cyclical decline. >> david, did i hear you grunt? are you disagreeing that

tomorrow is an important day in determining -- >> i think it's a very important day, brian. there's no doubt about it, but here is what i'll say. the china concerns, and we talked about this on had show on "fast" totally overblown. people overreact when markets go down as aggressively as they have. we had a lot of just indiscriminate selling across the board. so absolutely, you know, when i look at it and say the move that we saw, it's scary. it scared a lot of people. you have a lot of global macro funds, sovereign wealth funds, selling stock here. do i think it lasts? i don't think it's going to last. i think we'll see a backoff here a little bit. iran, huge overhang on the oil tape, right? it has been a massive overhang. we need to see what those numbers are going to be for people to start to get really comfortable there and for that overhang to go away. the china scenario, look, i don't think that it's going to be an issue. i don't think it's going to send us into a recession -- >> i love his perspective. because i argued the other day

that china was not that relevant to us given they don't buy much of our stuff. >> it's not relevant. >> i would disagree. >> the fact is -- >> i would disagree with both of you guys. >> you will never know. >> and i think the action in the hong kong dollar, chinese 8 shares, i think that stands in the face of exactly what you're saying here and i think it's not an overreaction to sell stocks when you're 12% off the top of a seven-year bull market when the tape around -- >> i disagree. emotions take over in markets like this and people make bad decisions when the market is down 10% in a very short period of time like this. i'll tell what you, china is not going to be a big issue. it's not going to come through. they tyme have the -- everything from the intent from the balance sheet to rectify any issues they have and push this out for as long as they need to, but the most important thing here i think people are missing is they just don't have the experience with this policy transition. >> they don't. that's exactly right. >> i will say there's

inexperience that's going on, and that inexperience is leading to confusion and chaos. it's affecting the overall markets and people now are making bad decisions based on them making bad decisions. so ultimately, brian, i think it is absolutely an overreaction. i think it gets cleaned up. it's an opportunity to buy really high quality names at a discount, if you will. >> other than that whole inexperienced part with actually running a stock market and a transition in the world's biggest economy, they're all good, so don't worry about it. >> it's not a stock market over there. it's a casino. it's not a stock market. their stock market is not like the u.s. -- be clear, their stock market is not like the u.s. stock market. >> no. >> thank god. >> it's a casino over there. if you're look at their markets -- >> the 8 shares is a sophisticated market. a bunch of day traders sitting in a basement chain smoking. >> that's not the point. the ripple effect from their transition, from their transition, which is causing a slowdown means commodities have plummeted -- jo what transition though? >> the transition to becoming

hopefully a more market oriented -- >> mcdonald's -- >> we're going to have that for the next 50 years. china is in any ways the united states of 1930. >> but it's bumpy along the way. >> but the transition will be going on long when we're dead, i mean i think. unless we die today on the way home. >> one more quick question. like nicke puts up a forward number of up 35% in china. blows out expectations. the consumer there is actually doing fine. we are in a consumer-based economy. >> that was my example the other day. >> anytime anybody says anything positive about china, they bring up nike, one company. >> bring up starbucks. bring up starbucks. they talk about putting 100 stores in china. >> and what if it doesn't go well? where is the growth going to come from? >> look, that will be a tale that we talk about down the road, about you right now -- >> my question is are we talking about it right now? >> i'm going to say -- >> are we talking about it right now? >> let's get to the bottom line of this. screw the scripts.

everybody in china wants to move here. all the money wants to come here. everybody in latin america is buying apartments in miami. all of europe, they have a migrant crisis. france, italy, negative birth rates. they all want to come here. >> except that -- >> and we're all worried about everybody else. we are the place for capital. >> we are the safe haven. >> brazilians can't buy nearly as many apartments as they used to and it will become fewer and fewer as the year goes on. >> i'm not saying everything is fine. i'm just saying i agree with david that china shouldn't be blamed for everything that's going on. >> but what i do push back against which i disagree with is china does matter. you can't say china doesn't matter. it matters. >> how does china matter in the small cap 600 index. >> right now it's more perception. i don't want to belittle china. >> i referred to u.s. equities. >> 11% decline that we just all suffered through? >> we had a 17% decline in august of 2011 and china was

humming along. >> what's china's gdp -- michelle, what's china's gdp growth going to be next year? 6.8%? >> i'm not convinced of that. people think right now it's only 4.5%. what if it's 4%. >> let's say 6%. will we be pricing in 5%? >> that's the question. we don't know and that's why there's uncertainty, but to your point and exactly your point that you're making right now, china's growth does matter, so when we sit here and say somebody says china doesn't matter, it does matter. >> you can't say that. >> that slower growth is taking place on a larger base, so in aggregate output the gains are pretty big no matter what. they're not as big -- you know, obviously 7% growth on a $10 trillion economy adds more aggregate output than 5% growth on a $10 trillion economy, but 5% growth on a $10 trillion economy adds more aggregate output than 10% growth -- >> don't confuse us with math.

>> if you thought it was going to be of.5% or 7% and it's only 4% -- >> well, then you reset. jo that feels like a recession. skro then you reset. if you're assuming a level of growth and a lot of economies and a lot of investors do, you have to reset for lower assumptions. i think in that sense it does matter. >> and that is maybe what's been happening for the last several weeks. >> yeah. i buy that. i think there are a lot of people who are resetting their expectations. >> thanks, guys. >> we worked that one out. >> for more "trading nation" head to tradingnation.cnbc.com. "power lunch" will be right back.

. all right. here is a look at the dow. intraday lots of ups and downs today, illustrated by that chart. we are well off the highs. so close positive. currencies an issue today. there's the euro, we will show it to you right now.

reversing its -- close to reversing all its gains against the dollar -- when mario draghi spoke this morning, saw a drop in the euro though we see it recovering. he's ake to talk it down. more "power lunch" in two minutes. this just got interesting. why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, 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,

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♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ financial spider etf the xlf struggling this year, down 12%. is now the right time to get in?

dave ellison runs a portfolio for hennessy funds. >> good to be here. >> why should anybody invest in one of the big cap banks right now? i see especially when you talk about the really big ones that are reporting, can't get return on equity, it's been forever they're trading below book value and appears to be a reason, every politician seems to ate them and at the same time i say, wow, the sentiment is so negative, maybe it's when they turn. what do you think about the large cap financials? >> i think they are down because peek are worried about the lack of interest rates going up which was the big catalyst last year. the question now is what are these banks going to be in three to five years, will they break up, be smaller, will they do things to really change the business model? that's the real opportunity is what they're going to do in the next two to three years. >> are you worried at all about the level of debt they carry on their books from energy companies? >> not really. what i'm concerned about is what it's saying about the growth of

loans and the fact that rates probably won't go up this year and therefore you won't have the spread expansion. oil is telling us something about the economy, it's telling us something about what the fed is going to do and i think the stocks are down this year because people are disappointed that rates aren't going to keep going up. >> the flat yield curve really kills them on net interest margin, right? if you can't charge more for loans than what you're paying in deposits, what do they do? >> i think the business model needs to change, right. you have had 30 years of declining rates, that's not going to happen now, so the question is changing thatted noel. that's what you're starting to see out of morgan stanley and some of the other bank of america and wells fargo and that's the real opportunity is what are these big companies going to do to deal with the new environment, which is flat to up rates which is low commodity prices, low growth. >> do you think they will break themselves up? >> too big to fail. >> well, the good news is that the core business is worth something, the problem is a lot of these other businesses aren't

worth that much and that's the question they are going to have to deal with. there's a lot of costs to take out, a lot of things they can do and it's going to be down to management to make those decisions. >> dave, thanks for coming on. >> they're playing our song. we have to get out of here. >> see you tomorrow. hi, everybody, and welcome to the "closing bell," i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. we have a little bit of a rally, up 157 points rye now but nowhere near the highs of the session earlier in the day, the dow was up 271 points as we were up maybe 40 points, maybe 30 minutes ago. art cashin was calling it the chesh shire cat rally, it was slowly disappearing. >> that's what we're keeping an eye on. >> oil having a rare up day today, it's the new front