that people are most worried about. >> pfizer and health care space is one that interests me. between 30 and 35. i hope they have been buying back shares like crazy. we'll see. >> yes, we will. big day for the stock market on the final trading day of january. "power lunch" picks up the story now. thanks, scott. welcome to "power lunch." i'm melissa lee with tyler mathisen, michelle caruso-cabrera and brian sullivan. we have a rally on our hands with the three major indices at session highs. look at the boards here. dow jones industrial average up by 1.75. s&p up by 1.7% and nasdaq up by 1.6%. and a lot of this being fueled by easy money. the bank of japan moving to a negative interest rate policy overnight. >> and one wonders whether in light of this very powerful rally if the bottom is starting to be put in, in these markets. both in terms of equities and

maybe even the petroleum market. why today? why today on a day when the gdp came in below expectations indicating a u.s. economy that is stuck in neutral, maybe there is an association between that and the idea that the federal reserve will not be raising interest rates, certainly not in march and maybe not anytime soon. >> that's certainly the key driver today. oil not the key driver in part because iran, after all the discussion yesterday about whether or not there would be some kind of deal and we highlighted it on the show how unlikely it was in part because iran wasn't likely to go with any kind of deal they would have to cut production. we have leaks coming out saying that's the case. we just learned now they're going to up the number of super tankers that go out and deliver more heavy oil to the market, just what this market needs. >> i'll take your point and literally just piggyback. i'll jump right on -- i'll gloom on to your point, which is this. we have seen oil lead the market, oil down, market down, oil up, market up.

today could be a very important day. we'll ask josh brown in a few minutes because we're seeing oil not move, but the dow up. look at that chart. we have been waiting for some kind of a decoupling. is it today? does it matter? we'll see. but today's rather unusual day, considering what we have seen, guys, the past couple of months. >> dig in on this late friday rally after a really brutal start to the month of january. seems that josh brown, who has been sticking around for us along with steve liesman, it seems like january is ending pretty well. why don't you pick up on either of a couple of points, one, josh, is the idea that oil and equities may be decoupling just a bit. the other, the question of whether you're seeing enough signs that maybe a bottom is being put in, in equities at least for the short-term. >> so it is very possible that you have a short-term bottom, that's, i mean, obviously we're up 300 points. but a lot of these have happened and ended up failing, leading to lower lows. this is the nature of a bear

market rally. so i think it is really, really a tough thing for investors to shake off that recency bias when they see a rally like this and say it must be over, all must be well. the proximate cause of today's activity, less about oil, more about the surprise move from the bank of japan, with something that nobody had expected. it wasn't on anyone's radar. when they did it, i think it gave people a reason to maybe stop selling. most important reason why we're balancing here is because we hit an rsi of 30 on the s&p. which is a really, really oversold level we have bounced from before. and i think you start to see some individual stocks start to look better than the overall averages, which is a nice change of pace. so it is a great day. put a smile on your face, maybe help as the month ends, but i don't think we're done. >> i'm wondering, josh, another reason we look like we're at session highs here is because of the comments coming out of the member of the fed, kaplan, steve liesman. is this having any effect? >> it is significant because he's the first fed guy to speak at the meeting since wednesday

and the first guy to speak since the bank of japan. and bob kaplan from the dallas fed is saying the bank of japan move will clearly affect the dollar the fed is -- this is an interview with reuters. there is good reason for the fed to be patient on policy, given the recent tightening of financial conditions. and it is significant that the fed remove the balance of risk. how significant? and he says the overseas challenges will affect the u.s. economy. i think the context here, michelle, is this. bank of japan, move this morning, that will cause the dollar to strengthen. it is going to further exacerbate the weakness in the manufacturing sector. and i also think it is going to gift fed additional reasons to pause come march and if you look at what is happening, for example, with the fed funds futures market, for december, there is one tightening 25 base points i think priced in, but even that's becoming tentative at this point. >> to your point on the dollar, we have seen the dix and the dollar index hit 13 year highs on the back of this surprise

move from the boj. strong dollar has not been good for multinational companies, has not been good for the stock market. why are we rallying strongly when we know this will remain and perhaps be an even bigger head wind to corporate profits going forward? >> i think there is something to be said for the fact we're on the last day of the month, and a lot of people have really tough performance. and if they have got some cash to put to work, maybe they do that and helps push things up. and i also think you look at the dollar being up, stocks up, look at the tlt, long bond is up, that's bizarre. gold up too. why is everything up? i think that has something to do with money management, the way assets get put to work, toward the end of a month or quarter or a year. >> a major pension fund rebalancing as well today. >> without a doubt. >> impacting there. >> you know, i meant to bring my american flag on set, and, josh, go to this point, i wrote a facebook post the other day, look around the world, right? china slowing down, can barely breathe. australia may get caught up in china. japan negative interest rates, europe, problems, migrant crisis, slowing economies,

demographic cliff. you look all over the world, latin america, zika virus, commodity collapse, when you factor all that in, and you're more of a long-term guy, josh, you factor all that in, is this the time to wave the flag and put the old eagle? does america look like the best dirty shirt in a bag of laundry? >> who is your next president? is it the guy who is ready to push the red button on day one? or is it the guy who wants to raise taxes by $14 trillion, something that is so unheard of in the history of income tax, people can't even believe that they're reading an actual headline when they see it published or think there must be a misprint. is that the eagle we want to be petting here? i'm not sure. i think it he was weighs on sen probably not a good thing for multiples. >> can we say to people at home, don't pet eagles. >> by eagles we mean eagles. >> did kaplan do this as part of the whole -- if he were asking what on earth did the fed say the other day? so is kaplan coming out today

trying to say, yes, we were trying to be dovish. >> yeah, i mean, apparently there was some confusion about that. not at cnbc here necessarily, but perhaps out on the street. >> confusing larry -- >> i do want to say something to brian's question here, which is that -- >> don't pet doves or hawks either? >> when you look at the gdp numbers, i don't think there is an expectation that 0.7% continues into this quarter where i'm seeing estimates between 2%, 2.5% growth. the other thing people saw, they looked at the consumer spending number. 2.2%. the domestic demand number was 1.6%. idea is that weakness doesn't necessarily carry over and you look at the rest of the world -- >> the first month of this year, where is it coming from? >> first of all, you have -- >> 2.2%. >> the overall case for the u.s. economy being okay, begins with the jobs we created last year, tyler, the idea that wages were pretty good, and inflation is relatively low, gasoline prices are off. >> businesses are pulling back. >> there is pullback in

business. looks like a lot of it is linked to the oil patch. it was at least in that -- >> i want to be clear. let's put that eagle back in the cage. i'm not saying the u.s. economy is going to soar or like steve miller said, fly like an eagle, i'm talking about the stock market and the stock market and economy can be very different things. all we're seeing are headlines that capital from china, brazil, if you're rich, anywhere in the world, a survey that something like 40% of rich europeans were thinking about immigrating to the united states. capital wants to come here now. the u.s. economy may have problems, but it doesn't mean the stock market can't do well because capital wants a home. >> especially when the fed is backed up against the wall, because the bank of japan is doing this and it is effectively strengthening the dollar. at this point, they -- don't they have to remain on the sidelines? >> so everybody has moved at the party to a different room and the fed is very much alone in that room. and what is going to happen to

the ecb in march, european central bank will ease further. the bank of japan surprised everybody. i asked a former fed insider if the fed knew what kuroda was going to do and this former fed insider said kuroda didn't know what kuroda was going to do until he did it. which is troubling on its own. but i will say that this was a surprise, it changes the game for the federal reserve, and it may bake out additional rate hikes. >> we'll drop it right there. steve liesman, thank you very much. josh brown. for a news alert to sue herera. >> and still developing story, the two busiest ports on the east coast, that is the port of newark and the port in bayone have been shut down by an apparent walkout by the workers there. this happened -- started to happen a little earlier. nbc is estimating about a thousand workers have walked off the job and those ports are run, of course, by the port authority, who has issued a statement. they say, as the agency that oversees the largest port complex on the east coast, we strongly urge the ila members,

union members, to return to work immediately and resolve their differences after they return. right now, we do not have any containers being unloaded. we have all of the trucks locked in, according to wnbc's brian thompson. so once again, it is a wild catwalkout by the union members at the port of newark and the global port at bayone. back to you. >> sue, thank you very much. in some ways that could be bad for local gdp if it continues. >> much bigger impact. we saw the port shut down in california and that had a major impact. >> that was a long shutdown, asian goods, you know. new york port is big, not as big as l.a. and some others. could also maybe view it as a sign of strength because they feel like they have bargaining power because wages -- they feel like they have got the ability to push wages up. let's talk about something else, friday, means it is rig count day. we're seeing a decline of 12 oil

rigs. their weekly drilling rig count, down 18 overall. six of those gas. 12 oil. we lost 12, down to 498, down a thousand rigs from last year and yet production is still about the same level because, remember, rigs are not production. they are future production. >> i think we should underline the point you made at the top here, do we see this decoupling of oil and the markets throughout the day? does that hold? does it hold over the long-term. >> we're watching wti slip further, only up by half a percent at this hour. >> all righty. up next, we put the u.s. -- over here. over there. over here. now we're coming here. we're going to put the u.s. economy on the spin cycle. what whirlpool says about the american consumer, the ceo will join us ahead. and there are less than three hours left in the trading month. and despite today's rally, it has been one of the worst months for the market in recent history. will february be a groundhog's day for your money? we'll dig in when "power lunch" returns.

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welcome back to "power lunch." i'm tyler mathisen. american airlines reporting a profit of $2 a share. that beat estimates by 3 cents. revenues in line with the forecast. bank of america getting a big upgrade at clsa. the firm upping its rating on the stock to outperform from sell, while boosting its target price to $16 a share. that's $2.20 from it is today.

a couple of names hitting new all time highs in today's session including mcdonald's, facebook and the nasdaq marketplace. >> shares of whirlpool, the largest maker of home appliances, rising after the fourth quarter profit more than doubled. for a "power lunch" exclusive, jeff fettid, chairman and ceo of whirlpo whirlpool. great to speak with you once again. >> thanks, melissa. pleasure to be on. >> the stock really seemed to be up because of the optimism surrounding north american market, but there is a lot of competition coming in now. samsung settling, gaining market share against you and hayier paid for the appliance unit. how do you plan on competing? will we see more price promotion in the coming quarters? >> i think what the american consumer in fact -- consumers everywhere are looking for is great value in brands and

companies that they trust, and ongoing innovation in the benefits that we deliver to them. and, you know, that formula worked for a long time, works today, we had an all time record year in north america, demand is very positive. of course, we have global competitors here and with the recent announcement of haier buying ge, if that goes through, we'll have obviously another asian competitor, but, again, we compete with these folks all over the world and there is no secrets on -- for us on what we have to do to succeed and that's what we have been doing. >> so does that mean that you're standing firm on price at least for now? is that what i'm hearing from you? getting back to the original question. >> there is always competitive pricing, there is always that value comparisons and, you know, our brands with our product innovation command value in the

eye of consumers. i don't think that just short-term major price reductions really is a sustainable model. we certainly compete in promotions every day, every week, every holiday. but, again, we believe that, you know, that the type of business model that works is one that the customers and that's one with great brands and product inoue ration. >> take us outside the u.s. market to europe and asia. tell us what you're seeing there in terms of revenue growth and how specifically is the strong dollar affecting your business? >> well, the europe was somewhat of a pleasant surprise last year. western europe actually grew very nicely, midsingle digits. eastern europe, russia, ukraine, was very, very difficult. probably 20 to 30% decline in demand. overall europe looks like it did not grow much, probably about 2%, but it is really the

difference between the west and the east. asia, similarly, very strong. china for the first time in a long time actually had a small decline in demand. but the overall story for 2015 and 2016 is really major reset and global currencies against the u.s. dollar, and the decline in demand in certain emerging markets like russia, brazil, and china. and that had a profound impact. it impacted our revenues by $3.5 billion last year. >> wow. >> it impacted our earnings by almost $4 a share. and that will carry over in part into 2016. >> so, jeff, i'm curious, following up on that point, as we sit here watching the dollar hit new highs in the dollar index, 13 year highs, doesn't seem like the dollar will abate in its rise. how concerned are you? how much of a head wind do you think that will be in 2016? are you thinking it is going to get worse in this new year?

>> it is hard to be a currency forecaster, but we do believe, you know, the fundamentals are we are in a strong dollar era. and we don't see -- we do see that continuing. if you just look at the current spot rates, what we told investors today, was that current spot rates, on currency, that it would probably reduce our revenues by another billion dollars this year. we also said that emerging markets, we still expect a decline this year, but that will be offset by the growth that we continue to see in the united states and western europe. so in total, you know, we understand that we have dealt with it all last year. we're going to be dealing with it this year. i feel pretty good about the actions we have placed to overcome it. >> thank you for phoning. >> thank you. >> we are all over this friday rally on wall street with stocks sitting firmly in the green. one of the biggest winners now,

consol energy, up more than 24%. seagate, western digital and alliance data systems. coming up, the middle is closed. plus -- >> coming up, a startup crowd sourcing the weather. >> our technology allows adults and kids alike to access stunning hyperlocal images in real time. >> will the panel forecast rain or shine? >> you're charging $189, which feels like a really high point for the average consumer. what are you doing that is so unique that other people can't easily replicate? >> stay tuned to find out. compay understands the life behind it. for those who've served and the families who've supported them, we offer our best service in return. ♪ usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life.

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welcome back. tyler mathisen, stocks in rally mode. look at that. the dow at up 283 points. my eyes are getting so bad. i can't see. 283, s&p up 31. the nasdaq up 67. that's a 1.5% rise there. the russell 2000 up almost 2%. >> i do the same thing. a squint a little bit. time for the power pinch, where entrepreneurs get just 60 seconds to make their pitch and a panel of experts weigh in. ask questions and decide if they have what it takes to become the next big thing. >> hi. i'm sammo chow at bloom sky. the next generation crowd source weather station and app company. have your plans been ruined by the weather? have you noticed that current weather conditions don't match

with what was forecasted? with bloom sky's hyperlocal real time information, those unwelcome surprises are over. our technology allows adults and kids alike to access stunning hyperlocal images in real time from over 1,000 weather stations. at home, at school, on the go. bloom sky has two components. the beautifully designed bloom sky weather station including the solar panel is available for $186. and provides temperature, humidity, uv, barometric pressure and rain alerts. the camera captures footage of the weather that can be shared. our free bloom sky app is available on ios and android. download the app and experience real time images and time lapse videos from the global bloom sky network. no more weather surprises with bloom sky. >> welcome to today's power pitch. you just saw sam's pitch, now let's meet the panel joining us here on set, alicia syrett, advises and invests in over 2 dozen startups. steffi palmieri with softtech

vc, focusing on software, mobile services and next generation commerce. and nat burgess, president of corum group, deals with google, microsoft and intel. hello, everybody. sam, thank you very much for joining us today. you're in the hot seat. >> i want to tell you i give the pitch a b minus. >> okay. >> i thought the delivery was good but lacking in information. when we look at bloom sky, should we think about the value coming from the hardware you're selling to consumers or is it really the data you're getting out of the network you're building. >> the data is what we're trying to build. we're trying to build a really good infrastructure using the hardware itself. that helps us be able to do -- for people to deal with crowd sourcing. the weather and our hardware bills to get us that network we're trying to build. >> stephanie. >> solid pitch, you gave me a good understanding of the consumer and you left me wanting to learn more, which is always important because if i don't

want to learn more after a pitch, there is probably not a follow-up meeting. so i give you a solid b. you're charging $189, which feels like a really high point for the average consumer in order to get mass distribution, not just in the u.s. but globally. can you talk about whether or not you're planning to bring that price down? >> we're going to keep that particular price point and that's because weather stations that have the capability of what we're trying to do and add a camera is about $2,000 to $3,000. our price point is very, very easy for people, for consumers to buy. >> okay, nat. >> your pitch folks on product features and you have to learn how to pitch your company. i have to give you a c. what is your gross margin at the $186 price point? >> it is very, very healthy. we are at a comfortable 30% gross margin. so i think given the industry average, i believe we're, very, very comfortable now. >> if i look on amazon.com, i can find other similar offerings

from competitors. what are you doing that is so unique that other people can't easily replicate. >> the camera is really why we created this company. want to give people a visual communication in real time from the weather. >> patented technology or something special in that camera? >> that particular area is patent pending now. but we do have product design that is -- that has been patented. >> that lucky last question to you. >> looking at the reviews, what people love about your product is the time lapse photography. bob dillon famously said, you don't need a weather man to tell which way the wind blows. you can check in with your bloom sky. you're pretty quickly going to are billions of hours -- not quickly, but at scale, billions of hours of beautiful time lapse clips. are there plans to do something with that data? >> we do have a plan for something like that. using this, we can be able to give good understanding of what the cloud patterns are like, the hyperlocal level. that's interesting. hyperlocal scene. i don't think there is anyone doing that right now. >> great. we all heard what sam had to

say. we need to know if the panel is in or out. >> i do love the idea of the crowd source real time hyperlocal data. i do also think, though, there is some competitors out there and it is a bit of a niche product. but i love the fact they are going after weather data, monetizing that, and i love the idea of predictive analytics. i go in on this one. >> okay. we have one in. stephanie? >> i'm concerned that the price point is going to be a limiting factor to getting a mass distribution of these devices outside of these niche communities and so unfortunately until you can demonstrate, you have a better understanding of those core customers, globally, i'm going to have to pass. >> nat? >> your technology may be propriety, but the cameras, the sensors, that's all commodity stuff. it is getting cheaper every day. and i think that's frankly where your magic lies because you're able to bring that together in a delightful package that is not limited to the weather market. it is everyone who wants these

great time lapse clips. and for that reason, i'm in. >> okay. we have two ins. one out. sam, your reaction? >> i love it. that's great. i'll take that. go and download our app. it is great. >> we'll check out the weather. thank you very much. thank you to sam of bloom sky and our panel. alicia, stephanie and nat. that is a wrap for today's power pitch. okay, you heard what the panel had to say. now it is time to find out if you are out or in. now market flash. >> not all stocks joining in on today's rally. look at darden restaurants. shares of the olive garden operator off by 1% on a downgrade from raymond james citing risk in the stock market volatility and slowing retail sales. the stock is down 2% this year as we keep a close eye on the health of the consumer. >> thanks so much. another area of the market missing out on today's rally, biotech sector, the btk, that is

basically flat on the session, but when you consider the nasdaq's 1.5% gain at this hour, it is really underperforming its index. look at some of the movers within the biotech index, really moving on today's news, gilead sciences is down by about 5%, losing the ceo who orchestrated the pharma set purchase which gave it the blockbuster pipeline of the hepc products. and they beat, but the humira sales in the united states, blockbuster arthritis drug, that was disappointing, those sales slowed. that stock is down by 2.5% right now. the metals market is closing for the week. we got to take a check on gold. wild week in the market. gold closing out at 1116.70. stronger dollar dampening some trades here. silver, copper, palladium, platinum in the green. palladium, biggest gains, up by about 1%. to the bond market we go.

rick santelli is tracking the action at cme. >> let's look at the five year, shall we? down 6 on the day, down 14 on the week. let's look at a one year chart of fives. we're at 134 basis points. we all know the japanese moved in the negative territory. and in terms of, hey, if you're park the money with bank of japan, you'll have a penalty rate, similar to the situation in europe. let's look at a european five-year, 20-year chart. minus 31 basis points, third curve negative out to seven year. technically that's german securities. let's get more specific into the notion of europe and the european union. let's look at a french five year. at minus 14 basis points, there is your 20 year chart, it is negative on its curve out to the six year. what about japan? the epicenter of the news today. their curve minus out to the eight year. 20-year chart of the five-year, minus six basis points.

how is all that playing in foreign exchange? because that's the transmission you want to pay attention to, look at one-year chart of the dollar index. see how it is knock, knock, knocking on the door of 100. how much room do you think there could be above 100. 20-year chart, i don't know, looks like some clear sailing if it breaks out. melissa, back to you. >> rick santelli, thank you. up next, the mother of all misses, chevron reporting a huge expected loss in its fourth quarter. we're going inside this messy oil slick straight ahead as we head to break, a look at the nasdaq 100 with micron, sea gate, western dig leading the way. stick with us. more on the friday rally when "power lunch" returns.

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welcome back to "power lunch." let's look at the markets. industrials up 282 points. who would have thunk a couple of weeks ago we would be ending the month of january with these powerful rallies. not a lot of people. 1924 is the quote on the s&p 500, up 1.23%. the nasdaq higher by 1.4% at

4571. the russell 2000 up nearly 2% at 1021.60. sue her rare why fera for a new >> new york city's ports have ground to a halt after workers walked off the job. the port authority of new york and new jersey urn urging members to return to work. it runs those ports, the busiest on the eastern seaboard with more than 3 million containers unloaded each year. the chicago police officer charged with the murder of a teenager returned to court this morning. during the brief hearing, prosecutors handed over evidence they received from the independent police review authority. and they gave it to the defense. rescuers pulled out four miners who spent 36 days trapped under ground when a mine collapsed in china on christmas day. one person was killed leaving 17 missing including the four survivors. harvard's hasty puddings named kerry washington as its

woman of the year as the star of scandal, washington is the first black woman to headline a drama series on network television since 1974. during her acceptance speech, she urged the crowd to always remember how lucky they are to be at harvard. take that. there you go. that's the cnbc news update this hour. back to you. >> thank you, sue. stocks are higher. does this mean february will be a better month for stocks? with us, our cnbc contributor ron insana and ralph bassett, head of north american equities at aberdeen and jim donagan of pnc asset management. >> i get the first question, like the debates last night. >> should there be an empty chair here? >> i'll start with you, ron. talk to me about whether this cut in the rate by the boj means sort of a green light for stocks over the next month, but also a red light for the fed in terms of interest rate hikes. >> i'm a little less certain

that stocks are going to extend the rally given the message that negative interest rates from the likes of a bank of japan would suggest. if you look at the german yield curve, it is in negative territory, all the way out to seven year notes. so the world is still facing deflation, they're fighting hard if you're looking at a place like japan. i think it halts the fed in its tracks. i think we go negative at some point this year, too much economic weakness around the globe. either to warrant further interest rate hikes from the fed or not to reverse policy in some meaningful way. if they don't, we'll see some real strains and foreign exchange markets in the world and strain on global growth. >> we're seeing stocks rally, we're seeing the dollar rally sharply off this move. i'm curious, how concerned are you about the continuation of dollar strength, as we're facing a number of central bank meetings, which will launch them further, you know, easing on their monetary policy effectively strengthening the u.s. dollar here. how much of a concern is that for you when it comes to corporate profits and stocks? >> on the first issue, we think

if it is the fed in a difficult spot as we just heard, i think, you know, the continued dollar strength puts more pressure across, you know, other global economies and really, you know, more of a signal for the japanese given that negative interest rates don't do a ton in terms of monetary policy. what it means for stocks, we're seeing a bit of a relief rally, but we think there is volatility ahead as we work through this. >> same question to you, green light for stocks at this point, or is this just sort of a knee jerk reaction and resume the pattern we have seen in january. >> after a very rocky start to the start of the year, melissa, i think it is nice to end on a high note and bid january farewell. i don't think it change the narrative a lot of concerns in the marketplace, i'm not sure we exhausted all of the selling here yet. so i think there is still some volatility. oil continues to play a big part in the equity market. we have seen some stability there. but we still have to work out the supply dynamics of that market place.

so lots of opportunities to continue the rocky start we have had with some downside, but i think that works its way out and we're still positive on the economy in 2016. >> do you see the economy improving from that -- the pace of late last year and if so, why? >> this recovery as we know, tyler, has been erratic from the start. but it is sustainable. we do see the recovery continuing at that modest pace, 2.3% in 2016, but we had, you know, up and down quarters around that since the recovery started. so likely see some of that -- >> do you see it that way? >> but you have -- >> i'm inclined more toward a growth recession. under 1.5%. maybe not an outright recession in the united states. but there are risks. it is as the head winds grow around the world, the u.s. may be somewhat more insulated because we're 70% domestic consumption, but if the rest of the world is in recession, and one could argue the rest of the world is in recession, it is hard for the u.s. to grow,

meaningfully, faster, without either the fed lending a hand, you know, either reversing its rate hike or, you know, reducing interest on excess reserves, something like that. >> we don't have time to go through all your pick, but it sounds like you're effectively defensively tilted. you have a pharmaceutical outsourcing company, and the egg producer. >> correct. so those companies all have very strong balance sheets, robust business models. we are finding a lot of opportunities in existing names across the board at this point. and, you know, calamine is one of those that the stock has done of those that the stock has done very well, but it trades on ditatal innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts,

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welcome back to "power lunch." i'm melissa lee. sony beating estimates with its latest earnings and maintain its full year profit outlook, but the company did say it is bracing for a slowdown of the smartphone market where it is a major supplier of image sensors for apple's iphone. toyota announcing plans to buy out of the portion of minivan maker dahatsu that it does not already own. the dow up 303 points now at 16373. nasdaq up 73 points, 1.23%. and the s&p higher by 34.

let's check in with dom chu. >> we talk about the layers of the union, top line numbers, let's go one layer beneath that to the sector performers and it tells you about what going on today. we are seeing some moves intraday at session highs right now for the s&p and the dow. dow is up 305 points now. if you look at the sectors leading the way higher, two sectors in general, and specifically here, technology industrials, more economically sensitive, they're the big gainers today so far. it is also interesting, though, because utilities, staples and telecom services here also among the ten sectors that are all higher so far. but they're lagging a little behind. if you look at the interest rate picture, the ten-year note yield, below 2%, 1.94 the last trade there, again, ainterest ra as interest rates come down, it becomes more apparent, you see the downtrend in interest rates there. let's put up the year to date returns. we have one month almost in the books here. in terms of the s&p 500, you'll notice the best performing sectors year it date are the

ones that are perhaps more, again, dividend paying focused, right. we're talking utilities, also about telecommunications companies, and also consumer staples. meanwhile, financials and materials, the laggard so far year to date. now, that picture is making some people say if this is the kind of mini rally at the end of the year you want to hate because it is all the defensive sectors leading the way higher. also want to point out a few stock movers here before we go back to you guys, so far year to date, some of these retail stocks have been beaten up are doing relatively well, may season coach, real downtrends over the past 12 months, are showing some rell signs al sign. hasbro notable exception, toymaker helped along by "star wars" and action figures and helped push up by 9% year to date and spend higher over the last 12 months as well. retail, certainly guys, a bit of a focus. >> what is the conversation like down there on the floor? is this a rally that deceives or a rally to believe? >> it is interesting. it is a relatively quiet day

here on the floor despite the fact that you have a 300 point rally in the dow, what is interesting is, again, traders you talk down here will talk about this idea that oil and stocks are trading a little bit together. there is a relationship, a correlation there, even though i know you showed a little chart there intraday that shows the dow breaking away from oil, until it breaks solidly, that's the talk of the town down here, whether or not that stays that way in 2016 in february, that's a real issue, but for right now, the talk is still about oil and some stabilization there. >> i was surprised to see the ten year yield is down at this point. on a day we get a big rally in stocks, we see people coming out of treasuries and moving into stocks. why do you think that's broken down a little bit today? >> it is broken down because you got this idea that as government yields have come down across the board, thanks to what is happening with the bank of japan, there is a real issue or real catalyst for interest rates kind of moving down across the board. when it comes to developed market, hour higher rated

government debt. as interest rates come down, it becomes very competitive and risk free rates across the world are promoting this risk taking environment. so government intervention a part of the interest rate story and that's in essence lead to some bigger risks. so certainly the macro and micropicture is converging and the bank of japan being part of the narrative today. >> is it appropriate to say that central banks are making it rain? there is money everywhere. throwing money up in the air and landing on everything. >> free money. japan is the ninth country with negative interest rates. >> actually less than free money because now you have to pay -- you have to pay them. i think that you talk about negative interests, a lot of viewers' eyes glaze over. the bottom line is this, you pay for the privilege of putting your money -- they're supposed to pay you. you now pay them. >> money on deposit at those central banks. >> exactly. the point is the same, right.

the banks will get charged. >> switzerland, switzerland had negative interest rates of around 40% in 1978. and the swiss frank rose 75%. remember, there is negative interest rates already around the world, primarily in sweden, denmark, countries where they charge you $12 a beer, but the people are very attracted. can only afford two. >> we'll get more. >> boys will be boys. all roads lead to beer. >> i said people. i wasn't gender specific. >> up next, we get the take on today's rally. we are at the high of the session. the s&p 500 up by 1.9% a gain of 35 points. "power lunch" will be right back.

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welcome back to "power

lunch." let's look at shares of axiall. the company rejected wesley chemicals $1.4 billion cash and stock offer. earlier today, west lake said its bid was rejected by ax iall. the stock is up over 80%. more "power lunch" coming up after the short break. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

welcome back to "power lunch." i'm melissa lee. stocks off a session high now, let's bring in art cashin. art, great to have you with us. what do you believe the bond market or the stock market? >> well, i'm slightly partial to the bond market. i think mr. kuroda ruined the weekend of a lot of short sellers here in the united states. and in europe also. i think that's why you're seeing this rather heavy reaction. they're scrambling to get them back in, don't know what surprises you'll get over the weekend, besides this. this is a shot. so the bank of japan certainly has awakened -- i don't know if they made it a bad weekend for chairman yellen too. we'll see how that works out. >> steve liesman talking about that too. do you believe this rally, just a short covering rally or ask

does it hold after this? >> tough to say, but by gut tells me 70% short covering. benefit of crude, a little strength to it too. so that's not detracting in any way. we have to go into next week, see how the global markets play out, and particularly the currencies. we have to see what will the people's bank of china do, are we on the verge of getting into a minor currency war here. >> you're not a believer yet in the stock market. what would make you so other than the points you just made right there? >> well, i think a little further staying power, i would like to see them hang on. if we are in a semibear phase, that old-timers have been taught years ago that rallies and bear markets are short, sharp and die in low volume. this is not low volume. so it is going to have a little extra life in it. >> is it frustrating that we have got these central banks around the world, that at a

moment's notice can come in with a headline on cnbc and stocks turn around and you really, even fundamental analysis is difficult because you could get a headline which could literally change the face of global markets. >> in this business 50 years, you know there are surprises. but i never have seen the kind of succession of them coming week after week after week and all geopolitical. >> how does it end, art? how does it end? it seems every central bank is tripping over themselves to be lower than the next guy. >> it probably will end not too prettily because at some point, somebody will push just a little too far and the currencies will start to go. keep an eye on the emerging market currencies, a lot of the baby asian tigers, see where they get hurt. japan is really thrown down the gauntlet. >> that's already starting, right? emerging market currencies

getting hammered for ages. >> that's going to accelerate and will be the problem. >> you mentioned this is what kuroda did is not a positive for stocks. is it a negative for stocks? does it make you less optimistic about what happens with the markets for the balance of the year in. >> it takes off the idea that the -- i was never a believer the fed would hike and i said we'll see zero before we see 1%. and i think what kuroda did tells me that the pressure around the world are there. everybody is looking at what he did, look at the actual data numbers that came out. they have got serious deflation. and they had quantitative easing for well over 20 years. did it work? apparently not. >> art, thank you very much. art cashin, great to hear from you and your long-term perspective. we look at oil, is that our plan next? it has been a bit of a bounceback week for oil. you see after a slight dip around noon time, west texas crude up 54 cents at 33.76.

where was it two weeks ago? 27. >> low was 26. >> 26 something. >> look at that move in ten days. >> $6 move in one week. >> look at that chart further out. we can see that move. you do see that oil sold down 9% in 2016. >> yeah. and, you know, said it before and i'll say it again, based on my reporting and balance sheets, and i hate to say this, $33 oil doesn't mean anything over 27. that six buck difference isn't going to save anybody f you're in trouble at $27, you're probably in trouble at $33. >> does it preserve some dividends, though, right? every dollar that goes, you start to -- >> at that point, yeah. you're hoping the dividends are already taken care of, so to speak. >> at this point, give me a barrel of oil. >> thank you very much. we'll see you in a bit. this is where we begin the 2:00 p.m. eastern time hour. results out of chevron.

we say results, not earnings, because the company posted a loss for the first time since 2002. analysts were expecting a profit. sales were 28 billion. down 33% from 2014. chevron shares, you might imagine, not doing well today, and good day for the dow, chevron one of the laggards, one of the only laggards. chevron ceo john watson says the company is taking, quote, significant action to improve earnings while prices remain low. but, remember, we sat down with watson in december, he did tell you that keeping the dividend is very, very important to chevron. let's look at how some of the other big oil companies are trading today. keep in mind that exxon will report its results on tuesday, conocophillips on thursday. so we're going to have an oil heavy next couple of trading days. so, what should you do with your big cap oil investments if you have them? should you buy them if you don't? should you sell them? let's bring in jerry castellini,

first to you, do you own chevron, exxon or any other big cap oil company for your clients? >> in fact, we do. it has been an area we're very interested in right now given that year or more ago the stocks were starting to discount precipitous decline in crude, which is now for all intents and purposes probably behind us. the now question is whether these companies having absorbed that type of price hit are in any kind of position to make a good investment over the next year, two or three. and i would argue they are. the cash flow as you can see by chevron, performance today, is tight. they have to borrow money this year if prices don't improve and if they want to maintain that dividend. but given the growth projects that they have in store for the next two or three years, it is a nice balance between growth opportunities and the ability to pay that dividend. >> you're convinced that -- you're not worried about that yield at this point.

at what point do you get worried about the yield? do you have in your head, if oil stays at x for this long, then i have to start to get concerned and the reason we bought it for that dividend may go away? >> i think you hit the nail on the head. if we don't have a price action on the upside, clearly they have to dramatically reduce capital spending if they don't want to borrow to pay that dividend. they have the flexibility right now, about $3 billion short this quarter. the next two or three quarters at these prices, they're probably going to have to go to the -- they have $10 billion in cash. they'll have to go through that. but my suspicion is we're going to get the relief on oil prices well within the next six months. the entire global economy now depends on that. and the basis that the saudis had for the entire exercise is now completed. they established where they stand on a cost basis globally. and you're going to see prices move up from here. so chevron at this point becomes a very inkritriguing name.

>> pavel, i don't know if you heard all that. do you agree with that? do you think that jerry is basing his investments in oil at this point on the assumption that at some point sooner rather than later we'll get a turn off the bottom when it comes to the price of oil. do you agree? >> no question about it. oil prices at 30 bucks are completely unsustainable. they're unsustainable for the industry, for any of the nonopec suppliers, but they're also unsustainable for opec. saudi arabia is running $100 billion budget deficit. it is not something that can last forever. and if the current pace of spending across the spectrum of the industry continues to, you know, run at the current rate, nonopec supply will be falling off a cliff within the next 12 to 18 months and that's why prices have absolutely nowhere to go but up from current levels. we think $60 minimum by the end

of the year. >> you know, pavel, i love you, buddy, with all due respect, i mean, and i know a lot of people hope you are right, but this is not a rational world the last century. we have gone to world wars twice. people say, well, we'll never go to war again because it is mutual destruction. and we have done it again. are you really that convinced that all the major oil production nations of the world can get together somehow despite having huge differences and come to some coordinated action that will eliminate two to four million barrels a day of production, which is currently in oversupply. >> well, first, i would question the 2 million to 4 million, we think it is less than that. >> you do, how come? >> well, our model shows that inventories are increasing currently by, you know, more like a million, million and a half a day and that number by the middle of 2016 should be getting pretty close to zero. if saudi arabia -- if the opec countries and russia can come to a deal, and voluntarily curtail

production, that would send prices higher a lot sooner. even if that does not happen, though, the fact of the matter is from outside of opec, from places like the u.s., brazil, china, russia to a degree as well, production is going to fall on its own simply because the industry is under investing. without any politics behind it, production is going to deplete. >> even if they raise, one reason the saudis haven't wanted to step in and cut production is because when they -- if they can manage to raise the price of oil, a lot of that oil in the united states just comes back online, right? you're going to play this supply and demand game all the way. >> well, sure, and your argument is true in that oil is not going back to 100. but 30 bucks isn't absolutely viable in the medium term either. the happy medium where supply is

growing but not growing unsustainably is probably in the 60 to $70 range. but that's double from where we are today. that's not even close. >> jerry, what oil company is the most leveraged if pavel is right, if oil goes to 60, should you be -- some of those names at the bottom of the barrel, they would breathe a huge sigh of relief, that's where the tremendous rally would happen. but at the same time, there is so much risk there. >> yeah, i mean, pavel is right. it is irrelevant whether it is $50 or $60. it is unsustainable today and your question about whether there is access to more quick relief crude of the united states, that can't happen at this point for over a year. we have already set those rigs down. it takes too long to bring them back. so we're going to have this period of imbalance open the short side that will drive this rally. playing that, really it is a

question of what kind of risk profile you take. if we stay with the large companies, conoco is an example, which doesn't have a downstream operation, has the most upside leverage here because all the assets are on the upstream and they would be one of the fastest moving and has come down the hardest too. but among the other integrated majors, chevron would be the next up, simply because they're running a cash flow deficit today and it shows how tight they have become between the capital -- putting into the market and what their available catch flow is. those are the two you hold an exxon be with at other extreme, whose balance sheet is in much better shape, but probably doesn't have that bounce back potential. >> some of the debt trades above par at this point because people are so confident in theirabil y ability withstand. >> pavel has a sell on exxon. going to underperform. >> pavel, why is that? >> it is irrelevant in terms of which name is used.

they're all going to rise significantly here. if you want the most leverage, you go to the end of chevron and conoco. if you want to take the least, you go to the end toward exxon. >> exxon is extremely defensive. it has been the best performer on the downside, and it is probably going to be the weakest performer to play the recovery, to play the recovery, exxon is probably the last oil stock you want. too much refining exposure, too much chemicals, too much natural gas. one of the names not mentioned that i would highly recommend to play the oil recovery, occidental petroleum, oxi, want something smaller than that, hess and cosmos energy, two midcap, small cap companies that screen extremely well to play the oil recovery. >> you're not worried about hess' leverage problems. second only to marathon. >> i think he's suggesting it depends on your risk profile, like jerry was saying.

if you can white knuckle it, there is some possibilities out there. >> to go to the other extreme, just pick pure on shore u.s., the midcaps we're describing and there is a whole host of them who probably have two or three times that upside opportunity. again, if you're willing to take that step further down the risk curve. >> if you can sleep at night. >> one of my takeaways, last word, please, sorry, when i was in miami, one of the takeaways i had was bigger doesn't mean safer. if you're wrong, and if jerry's wrong, and if oil stays at this level or goes to 40, whatever, who cares, right, big years. >> why? >> because in general they can cut spending to a level that is consistent even with current levels of cash flow. of course, they would not grow. and estimates would have to come down across the board. in fact, production probably declines for a period of years. but they can still service their

debt, and roll over their bond maturities and there wouldn't be any kind of restructuring or chapter 11. >> thanks, guys. >> good discussion. >> very good discussion. that's what it has come to when we ask if a company can service its debt. that's how bad it is. >> a lot of oil companies, not my opinion, the balance sheet, other hedge funds and analysts, a lot of oil companies are in existence only now to pay their bond holders. pumping oil to pay everybody else. no other reason for existence at this point. i hate saying that. >> that's why we highlight what the bond prices are doing. the stock price doesn't tell the whole story. >> a lot going on. a big rally in the stock market now, happy friday. we're in rally mode. the dow industrial average, up 276 points. the nasdaq is up 1.5%. yesterday we said it was the worst start to a year ever for the nasdaq. that is no longer correct. with today's gains, we're only the second worst january in nasdaq history. by the way, nasdaq doing well,

despite a big drop in shares of amazon. the other big tech names, facebook, microsoft, apple, they are all moving higher. trying to figure out what this music is. miles davis maybe. we're back after this. stick around. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

welcome back. we are in rally mode on this friday. if you joined us in last 120 seconds or so, the dow is up now, almost 300 points to 284,

three dow names down, dupont, chevron and pfizer. if you own those, you picked the three losers. single best performer so far on this solid friday in the s&p is consol energy. electronic arts beating estimates for earns and revenue big part of that because of strong sales of the "star wars" battle front game. but stock is down today because investors say good was not good enough. sony's results helped by an increase in sales with the playstation 4. the movie unit had a strong quarter, combined with thoughts of a weaker yen and sony's shares are soaring. hostile takeover attempt in the plastics industry, mrs. robinson. west lake chemical making a $1.4 billion offer for ax iall but they rejected the proposal. we're watching whirlpool after our interview with the ceo an hour ago. the stock is up after we interviewed the ceo. earnings beat estimates. revenue, though, however,

missed. now to seema mody. >> look at the nasdaq 100 of thing a 1.5% gain. this as chip and storage companies lead the tech heavy index higher. micron tech up 10%. sea gate, sandisk, avago and western digital had mixed results yesterday, up better than 5%. keep an eye on tech. as the markets attempt a bullish close to the extremely volatile and negative month, investors continue to seek out opportunities for their portfolio. robert luna is ceo and cio of sure vest welfare management. good to have you here. what do you make of the rally. we had art cashin on earlier. >> every rally starts with short covering. there is so much pessimism

around this market this month, it wouldn't surprise me, i know if i was short, i would be covering today. but i think what today's message signaled to investors by the boj and also kaplan come out with his comments is the search for yield is back on. look at the leading stocks like verizon, pepsi, there is a reap for yield, investors need income in today's market. with the ten year back now at 1.9%, equities look good again. i think you're seeing some of that fundamental buying also. >> scott, are you just as positive at this point? >> michelle, you had a couple of things happen here. one is that 1810.20 level where the s&p stopped, that was a huge technical level. we had technical support. oil started to gain a little traction, a little bit of footing, then that helped. bank of japan piled on. you want to not fight the fed. you don't want to fight the other global central banks either who will be easing a lot in 2016.

that's a tip of the iceberg from the bank of japan, from the ecb, from the people's bank of china. we'll see a lot more central bank action. for us, this was -- this is oversold this market. we're looking for positive year. we want to be in the cyclical sectors, industrials, consumer discretionary, technology. for us, we have been trying to get our clients to step in, retail clients, that's a tough thing for them to do. but we feel good about the market. >> robert, i want to ask you about that search for yield here. we saw that play out in 2015. we saw a number of consumer staples companies for instance reach new highs because of the dividend growth. are you concerned about valuations in these areas of the market where people have gone for this yield? >> yeah, melissa, that's a great point. the consumer staples and now if you look at the telecoms and utilities, we're a little underweight there for our investors, searching for yields. to your point, the valuations just aren't that compelling for us right now. so we're really trying to find

other areas like the close end funds trading at a discount. and also now when you start seeing some of these financials like citi trading back below book value, jpmorgan yielding 3%, trading at book again, we think you compare the fixed income positions that are more sensitive to a rise in interest rates with financials who can benefit if you get that direction wrong. >> what are the odds that the united states central bank reverses course and takes interest rates back to zero or maybe even negative? >> tyler, i don't think that's going to happen. i don't think the market would like that. we have been pricing in two hikes this year, you know, the dot plot is for -- in my mind, that's not going to happen. we'll see the do the plot move toward the market. and if we're wrong on two rate hikes, it is because we thought there would be too many, i think. i think there is very little chance the fed will reverse course. they're going to hold pat here. >> hold pat. >> hold pat, doesn't that

continue the trend toward a stronger dollar? >> a little bit stronger. our officials for a buck, a buck five against the euro at the end of this year, that's a little stronger. but the s&p 500 companies, these guys are good at managing foreign exchange exposure. it is a head wind but not an earnings killer. >> why do you think it is that the markets wouldn't like it if the fed started to go easier when it comes to money. the message from the markets for the last several years, if they love cheap money, all over the world as much as they can get it. >> they love cheap money. but the federal reserve doesn't want to appear or i think the market would take it as, hey, the fed, they made a mistake, they're worried now, things like that, i think this one rate hike was a proactive sort of thing. we'll see the fed very reactive from here, not proactive, they

won't anticipate a lot. they're going to see what happens and what they find out is that we're in a modest growth, modest inflation environment, hike we have been for four years, and they are going to be an absolutely no hurry to bump these rates up. >> i'm wondering if they're going the other way. >> i don't think they will. >> thank you so much. >> have a good weekend. >> you too. let's going to seema mody, see what's moving at this hour. >> dow transports, seen is a leading indicate, outperforming as oil prices stabilize, leading the index are shares of matson, jetblue, upgraded this morning, fedex, kirby and united all trading between 2% and 5% higher. despite today's gain, the index in bear market territory, 25% off recent highs. more on this big friday rally coming up when "power lunch" returns.

welcome back. happy friday, everybody. it has been a tough start to the year. the dow is still down year to date, yes. but for one day, things don't look too bad. the dow is up nearly 300 points. check out 3m, of the 30 dow stocks this week, it is the posted note in scott tape maker, that is the best performer. it is up 8% so far this week. >> sandpaper too.

>> there you go. goes with the scotch tape somehow. go minneapolis. dom chu on the floor. >> all kinds of things that 3m makes overall. all kinds of things. a story about something that seema talked about before the break, this idea that transportation stocks are part of the story. let's put a lot of the other pieces in place here. let's look at what is happening with small capitalization stocks, versus large capitalization stocks. just so far over this kind of one week period. now, small cap stocks are still under performing large cap stocks. just to put it in perspective over the week. if we expand this out over to the year to date period, a little more on the mediumish term, you see that same outperformance by, again, large cap stocks playing out here as well. so, again, a reason for a little skepticism lies in the fact that small capitalization stocks, which could be a leading part of the overall market, still underperforming the large cap stocks.

seema mentioned the transportations. let's put those up there again on a one week and year to date basis as well. you can see here the relatively inline dow industrials may be slightly outperforming on a one week basis here. however, if you look again at the more maybe shortish term but more medium term basis on the year to date side of things, industrials again outperforming the transportation stocks by about a couple percent. 2.5% here. so large capitalization stocks, versus transports. large capitalization stocks versus small cap stocks, both showing certain signs of stress still in the marketplace. and that's one of those things that traders are watching here as well. whether or not we see any kind of reversal there, transport, small caps, big focus. so if you're looking for the more cautious side of the argument about why this rally may not be as loved, again, two of those reasons, guys. back over to you. >> got to start with an unlauov rally, though. starts with short coverings.

starts with garbage. >> true of everything. when everybody starts hating something, take a look at it. >> we'll talk about this exxon and facebook. their market caps are approaching. exxon now $320 billion. facebook, $308 billion. >> so i think let's just, folks, if you're on the radio, driving down the new jersey turnpike, probably going 7 miles an hour, wherever you are, sit -- just think for one second. facebook, amazing, over a billion customers a day. facebook is now bigger than wells fargo, at&t, or walmart. walmart. to michelle's point, facebook is almost bigger in terms of market cap than exxon. facebook does 17 billion a year in revenue. exxon does 261 billion a year in revenue. so facebook, the growth rate, of course, like this. exxon has no growth rate. >> the margins on facebook are better -- heck of a lot better.

>> exxon is asset heavy and has got all kinds of factories and refineries. facebook has 16 people who stood around, they're each worth a zillion dollars. facebook, i'll say this, what year is it? 2016? >> yes. >> by 2020, mark zuckerberg will be the richest man in the world. >> you're extrapolating this growth will continue at this rate? >> i don't know if the growth will continue, because people -- i was a facebook detractor. on twitter, as our viewers who follow me on social media know, i moved more to facebook. i'm still active on twit, but i've created a little facebook fan page, blah, blah, blah, because facebook is becoming the internet. >> right. >> google and facebook and here is the other thing, i think, by the way, amazon called itself a transportation company. it is friday. right. so maybe people have been drinking already. amazon -- i'll say it right now, amazon should buy uber. >> okay. the oil market is closing for the day. jackie deangelis is standing by

at the nymex. >> good afternoon to you. those headlines taking the wind out of oil's sail today but we'll end over $33 a barrel. session high was $34.40. iran saying it has no plan to join opec or saudi arabian if intere there is a production cut. meantime, some are questioning russia's motivation for saying yesterday that it was thinking that saudi arabia would cut production. perhaps little posturing there or wishful thinking. clearly russia suffering from these low prices. but a four day win streak for crude oil, up more than 4% on the week. 12 more oil rigs came on line. the question will be if it is going to result in a meaningful production cut here in the united states. but that, of course, remain to be seen. have a great weekend. >> something pretty important happened today. bring up the intraday chart of oil. oil went negative at one point because of the iran headlines and yet the stog mack market dit

fall. it held on. >> you bring up -- >> wondering if it was ever going to break. i thought it was pretty significant. >> you bring up such a great point. this is when oil traders tell me all the time when equities guys say they moved together and oil is moving the stock market. they don't look at it that way. and today is the perfect example of that. we did probably close a little bit higher. probably because oil was following equities and not the other way around. that negative point that you highlight there is really very interesting. >> all that cheap money helps. thank you, jackie. so as you heard, it is the last trading day of january. relatively strong finish to an overall dismal january for any of you out there that own stocks. don't look at your investment returns. put them in the fireplace. what is next for next month? we'll talk about it. stick around. "power lunch" will be right back.

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welcome back to "power lunch." i'm michelle caruso-cabrera. a half hour to go until we close the books on a volatile january. hour and a half to go. the dow, s&p and nasdaq along with the russell all in rally mode. russell up by more than 2%. look at the dow jones industrial average, higher by more than 300 points, gain of 2% or nearly 2%.

s&p as well, some of the best performing members, the beaten up energy names, consol energy, higher by 17%. to sue herera, cnbc news update. >> here is your update at this hour. here is what is going on. syria's main opposition group says it will send a small delegation to the syrian peace talks in switzerland on sunday. the talks aimed at resolving the five-year civil war began today at u.n. headquarters in geneva. they're the first since two rounds of negotiations collapsed in 2014. the gop debate held without front-runner donald trump drew 12.million vi million viewers. that's about half what the first republican debate drew on fox back in august. donald trump held a rally in new hampshire this morning where he told supporters that skipping that debate turned out great. he told a packed hotel ballroom in nash withua he got more publ

for his decision not to participate. an app will help you pair wine with your favorite girl scout cookies. thin mints pair nice with brunelos. and do-si-dos with the california zinfandel. must be the coconut undertones or something like that. >> no one was asking. i don't know. >> my daughter is -- i'm ashamed to admit, not a girl scout, shame on me. have they changed the name of the cookies? >> no. do-si-dos have been there for a while. the one with the coconut. >> that's the samoas. >> yeah. >> those are the good ones. >> i thought you were asking about zinfandel. >> that would be me asking about the zinfandel. you know me well enough, michelle. time for trading nation. traders trade better together. today we trade across the

pacific to trade japan. huge headlines, japan officially moving to negative interest rates. you got to pay them to put your money in their system. what does that mean for the entire japanese market, which you, america, can buy through the ewj etf. stacy, to you, i don't know if you have options on the nikkei 225, the japanese dow jonenjone what is your take on japan now. >> what we saw heading into this event was volatility expectations. and what we're looking at are the etfs on japanese equities. some are currency hedged and some not. the majority of the flow is profit taking. not a ton to read from today's flow. if you look an the actual etf side, we see the more interesting activity with buyer of the hedged currency hedged etf. this is different than what we have seen for most of this year. the focus into ewj, ishares

japan, now into currency hedge versions not surprising given the weakness in the yen. investors are moving now. expectation for further upside in japan with it being hedged in the currency version. >> craig johnson, look at the ewj, all over the map the last couple years. what is your technical take on the nikkei? >> i brought up a ten-year chart of the ewj and what i see in that particular chart is we pull back right to the identifiable support line off the 2009 lows. coming right back, reset offing that support level, if you come in and look at a one-year chart you see the ewj has gotten pretty oversold, starting to bounce, money flow is starting to improve back in ewj. it looks like to us, if we see a nice relief rally that can take the stock or the etf back about

5% to 8% higher from here. >> 5% to 8%. not wildly bullish but a little pop. you see when it hits the green line, boom. >> yes, correct. >> there you go. look for the green line. craig, thank you very much. stacy, appreciate that, guys. have a great weekend. for more trading nation, head to our trading nation website, tradingnation.cnbc.com. if i say trading nation one more time -- michelle, trading nation. >> a daily segment. the world health organization says the zika virus is spreading explosively. no vaccine. so how is it going to be controlled and how vulnerable is the united states? and we're all over the big market rally now. the dow, the s&p 500, shooting higher. "power lunch" will be back in a minute. and now the latest from trading nation.cnbc.com and a word from our sponsor. >> if you're an active trade erk sometimes sitting on the

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welcome back to "power lunch." i'm michelle caruso-cabrera. big rally on wall street now. dow is at session highs. gain of 307 points, a gain of 2%. that means year to date the dow is down only, only 6%. remember, the lows just a couple of weeks ago, down 9%, 10%, 11% for the major averages. the s&p 500 at session highs at this point. higher by almost 2%. 36.50 is the gain. 1929. we have steadily climbed higher throughout the session. what is the best performing sectors within the s&p 500, technology is higher by nearly 3%. we're seeing big moves in names like sea gate and micron technology. but all of the sub sectors of the s&p 500 are higher. even discretionary is higher by a full 1%. so very broad based rally driven by that easy money. once again, coming out of the bank of japan. >> stay tuned. you'll like this next story here. colgate palmolive out with

earnings, but venezuela is the story at colgate. the consumer products company beating on the bottom line, but revenue shy of estimate, colgate massively exposed to foreign currency, especially venezuela. venezuela's problems hurting a distinctly american company. this is why you care about currencies. also today, rubbermaid meeting expectations thanks to the sharpie and paper mate pen business. big story, the market rally, most stocks are higher. here are some names on the move. sea gate, western digital, micron, avago and 6,000 others. the dow up 300 points. the world health organization saying that the zika virus is spreading explosively and the level of alarm is, quote, extremely high. with no vaccine on the horizon, how exactly do we hope to control this? meg terrell taking a closer look at a very scary and growing story.

>> that's right. zika is now spreading in more than 20 countries. the who said we could see up to 4 million cases in the americas in the next year. with no treatments or vaccines yet available, there is work going on. officials say the best bet against zika is prevention. zika is carried by a mosquito, the same one that carries dengue fever. because populations in the americas haven't been exposed to zika, people in these regions are more vulnerable. no established immunity. so bug spray, mosquito nets, pesticides, eliminating standing water, these are what are recommended. zika may pose special risk to pregnant women. cdc says insect repellents are safe and effective if used according to the level. the brazilian tourism board estimates 380,000 foreign visitors will attend the

olympics. rio plhas a plan in place to eliminate the spread. quelling fears of zika, not to mention dengue is sure to be a key priority. also there is work going on to introduce new ways of mosquito control. natrexon is working on a genetically modified mosquito used to wipe out its own casinos. more than 90% reduction in moat ske mosquitos. the technology is under review. we'll talk more about the work in an exclusive interview with the ceo r.j. kirk. you were talking about brazil. find out the prosecutors office of the brazilian state subpoenaed louie vasilva, over a money laundering scheme. there had been questions as to whether or not he might get

implemented in this. but now being subpoenaed as part of the pig investigation. the brazilian market higher today with the rest of the world at this point. we don't see much impact there. a significant event when it comes to the state of brazil or the country of brazil. number of big analyst calls today pushing stocks higher now. street talk is on deck. we'll show you when ones are moving. and an ugly january, but not for one under the radar stock. it has been soaring this month and analysts expect a bigger move from here. we'll tell you what that under the radar name is next. stick with us. thanks. ♪ [ male announcer ] fedex® has solutions to enable global commerce that can help your company grow steadily and quickly. great job. (mandarin) ♪ cut it out.

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all right, we do it every day. unless we don't. it is called streetday, unless we don't. the everyday look at the key analyst calls that you need to know about or we're telling you you need to pay attention to the calls. sandisk, need them, upgrades to a buy from a hold. they think a deal from western digital will happen. putting the odds at 90%. it's a pretty teng cal note. more cash, less cash, whatever, but both the buy and price target on sandisk on either

scenario and possibility of the deal doesn't happen, some kind of equation they are using. the spread between all options too big to ignore, target 78, 15% upside. >> the call comes out today after western digital reported earnings eps was a beat and revenue slight miss. we're watching jp penny and credit suisse is upgrading this one. on a shift in messaging, saying that j.c. penney is saying their top priority is to pay debt. it is going to be a challenge, and $1.2 billion without significant sales growth but 1 billion should be obtainable. jc penny is no longer sponsoring the oscars. >> they did? >> apparently and it cost them a boatload. the focus on debt reduction could be to maintain current

share price despite multiple decay by shifting debt to equity. >> first time in 30 years are sears and j.c. penney going to beat each other to both of them are lying on the ground? third stock. not a household name, jacksonville, florida focusing on timber land. outperformed from the market and say we're not timber land bulls but we're talking spread, between the current stock price and net asset value of the land is too large to last and if it does last, analysts notes that it could be a buyout target, did cut the target on price to 26 and 27 but that's still 30% upside and 5% yield. >> basically the analyst is saying that the tim betterland is being valued far below the market value of the land. therefore it's a value. >> there's unrest in the forest and trouble with the trees.

>> that's a good lyric. >> next stock, juniper networks, remember it got crushed on earnings. upgrading to outperform saying shares are attractive after that 15.4% host earnings dropped. like q on guidance because management is being too conservative in the face of macro uncertainty and service provider service sales will benefit. >> you talk alet more than i do. is this a ciscoe proxy? >> they've deverged at this point. >> usually it would go up or down more. if you're negative in bernstein, are you the bernstein bears. >> actually funny. >> terrible. notice the southern accent coming up. upgrades to a hold and earnings

missed past expectations and outlook for the name was solg itd because of a recent deal to buy a competitor. target boosted on cpsi to 61 from 53. the average target 53.40. not at bullish but under the radar small cap call of the day. >> it has been an underperforming versus the nasdaq. >> we wrap up "street talk". >> and it was a good one. january turned into an ugly month for stocks but gold did well. it shined, prices surging 5%. three stocks you need to watch going forward and rally on the final trading day of the month. the dow jones industrial average is higher by 300 points. that tv is far away. nasdaq higher by 75 points. "power lunch" is back in two minutes.

♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

welcome back, i'm michelle caruso-cabrera. today we have 'a recovery. take a look where the major averages are. the dow jones industrial average higher by 300 points right now. still down 6.8% and s&p 500 rallying as well, we won't be down 9 or 10 or 11% but down 6.5% for the month of february.

russell 2000 still down 2% officially correction territory. >> and particularly the growth stocks a lot of investors have been looking hard at valuations, look at netflix, one example, terrible earnings. netflix did decline and it is down 20% for january. this is a darling of 25015 but when it came down to it in the month of january, investors had to look, what are we paying for netflix? it has been getting punished. >> when in doubt, fall back on cliches, it is a market of stocks not a stock market. two cases in point, a couple of good months and that would be mcdonald's and trading now at all time highs and $24 a share. when nobody wanted to own mcdonald's a couple of years ago they were in the doldrums new ceo takes charge and kids may be

rejecting these days but adults love the breakfast. >> i love it. >> facebook, the other -- >> i knew you did. >> facebook the other winner based on its results, you guys were talking an hour or so, how big it has become. look at that all time highs on facebook. >> let's end the trading month looking at the three best and worst cities this year. 40 different city -- why did i do four? 40. metro areas, here you go -- let's do the worst first. >> the worst three cities of the stock market -- >> no, they are in the other list, san francisco the average is 1 stocks in each index, san fran is the third worst performer, let's go to the next two if i can remember off the top of my head. forget about the names, move on boston and detroit, the worst performer so far this year. the least worst are in rapid fashion, let's go, guys, we are seeing houston as recovered a little bit as oil has and

pittsburgh and nashville best health care and cracker barrel. half of the stocks in the pci nashville are up. >> i'm guessing houston is down that much because a lot of the fall came last year already. >> they were the worst by far. >> raleigh was the best last year by golly. >> a rally from raleigh. >> are we seeing a shift away from growth and value with net flex? >> and convergence. >> thanks for watching "power lunch". >> have a great weekend. >> "closing bell" starts -- >> right now. >> hi, everybody, welcome to "closing bell" i'm kelly evans. >> and i'm wilfred frost. happy friday, a big rally on wall street but don't let today's green fool you, it's been unugly january for stocks

and dow and s&p on track for the worst months in august and nasdaq since 2008. >> i don't like any comparison to that year. the reason for the rally today, surprise move by bank of ajapan, a negative interest rate policy overnight. what this could mean for the broader markets and for the fed. >>