>> i think my final thought would be the volatility itself in the marketplace, the way it is completely just disintegrated over the last two and a half weeks or so including yesterday and staying underneath the averages today, that's saying a lot about what everybody's sentiment is now. >> the dow is down by 12 points. that does it for us here. "power lunch" starts now. welcome, everybody, to "power lunch." thank you, scott. along with michelle caruso-cabrera and melissa lee and brian sullivan, welcome back, brian, i'm tyler mathisen. one step forward, one step back, the major averages with very modest losses right now as you see there. about .05, 9 points on the dow, .9 points on the s&p 500 and 11 points on nasdaq. stocks down, but oil up today. rebounding. you'll see west texas up 27 cents a barrel at 34.67 and brent at $37 even, 19 cents higher.

yields are higher as well today. there you see the two-year note at its highest level since january 14th. >> but we begin with a bombshell of a story in the energy world. former chesapeake energy ceo aubrey mcclendon charged by the justice department with conspireing to rig bids. chesapeake putting out a statement saying it has been actively cooperating in the investigation, end quote, and does not expect to face criminal prosecution or fines related to the matter. mcclendon responding on his own behalf saying, quote, the charge that has been filed against me today is wrong and unprecedented. but mcclendon left chesapeake three years ago and is one of the owners of the oklahoma city thunder basketball team.

joining us, the reuters reporter who is part of a team that first broke the story, he's been working on it for a number of years and joins us now. josh, thank you very much for joining us. get to heart of the matter and what i find most interesting/peculiar about this, that generally in a conspiracy it is a lot of people. he was the only one named. how come? >> right. i wish i had an answer for that, brian. the indictment only names aubrey mcclendon but says that he colluded with a co-conspirator who remains unnamed and another company was a co-conspirator in what the doj is alleging was a bid rigging scheme that went on for years in oklahoma. the doj said its investigation is continuing. and the question of whether there may be more indictments down the road, i don't think it is one that has been answered yet. >> i don't think people realize at home, maybe they know mcclendon's name or the oklahoma

city thunder or chesapeake. this was one of the most aggr s aggressive land buying and land leasing campaigns in the history of the united states, correct? the doj is saying this was not just aggressive, that it was unlawful. what is he accused of doing specifically, josh? >> well, as you said, the allegations are in oklahoma, which is obviously at the heart of the oil drilling boom in recent years, but, of course, when aubrey mcclendon was ceo of chesapeake, that company undertook a huge land leasing boom, some would say the biggest land leasing boom since the gold rush of the 1850s. what is he accused of? he's accused of essentially contacting, being in communication with a co-conspirer is, a co-conspirator company, and divvying up land leases in oklahoma, agreeing with a

co-conspirator not to bid on certain leases, and then dividing up the leases that each company would capture at a later date in restraint of trade. so that's why the doj is pursuing here charges of a sherman act violation, antitrust violations, that could carry stiff penalties. >> are the losers people who own the land, they're sitting on a lot of natural gas, and people like aubrey mcclendon, another company, comes along or don't come along and say we want to bid on what's down there and if you have fewer bidders, you're going to get less money for it, right? >> there was a huge competition across the shale patches and across the country during the shale boom, but exactly. when you have alleged arrangements between companies, where they decide to avoid bidding against each other in certain areas, especially if those companies are the main players in those areas at the

time, then who loses? well, potentially, the landowners who hope that companies will compete against each other to buy their leases. they have gas or oil under their properties. and who end up, you know, allegedly conspireing to just not do that. >> mr. mcclendon is the only person named so far. could there be fileup charges? in theory, at the time the alleged conspiracy was going on, all the land, all the leases would have been worth a lot more money. and in an open bidding process, one that was not rigged, these landowners could have reaped a bigger profit off the lease. >> that's the theory now. i don't know whether there will be any more indictments. i don't think we know what the doj has said is that it is continuing what has so far been a four-year investigation into potentially anti-competitive behavior in the shale patch.

so time will tell. >> i'm naive about this sort of thing. is it possible -- two questions. is it possible the reason there is not a co-conspirator named or another party named, that that party is cooperating with the justice department, number one. number two, there is a history here of chesapeake being involved in, i believe criminal proceedings in michigan, having to do with similar things. is there a nexus between that case, which the company settled by paying a fine, and this one? >> right, so to your first question, you know, chesapeake itself said it has been cooperating with the doj for years on this investigation. it has said that it does not expect to face charges or penalties. so what was your second question? >> my question really was could -- not chesapeake per se, but could -- is the fact that other companies were not named or other individuals were not named, does it suggest in any

way that maybe they are cooperating with the justice department in return for not being named right now? >> i wish i knew the answer to that question. it is something to ask the justice department because unfortunately i don't know the anser. >> what is the nexus between the cases of those in michigan and these in oklahoma if any? >> looking back, when we first wrote the story in 2012 in michigan, what we found were e-mails between a chesapeake and its competitor in that shale region, one of them, for instance, had aubrey mcclendon telling actually a deputy of chesapeake energy, it is time to smoke a peace pipe with competitor in cannia to avoid bidding each other up on land prices. well, the doj, as we understand it, commenced its investigation into this stuff in michigan, and it actually closed the investigation in michigan, but was continued by the state's

attorney general. so both chesapeake and cannia, the competitor in michigan, ended up settling charges with michigan's attorney general, chesapeake paying up to $25 million in that settlement which was announced last year. as we understand it, the investigation then that doj continued expanded then into other states and that is how oklahoma came into the picture. >> aubrey mcclendon is such a colorful figure, a controversial figure, a pioneer, a visionary, a lot of people may not know he got involved in funding the swift boat ads that were so critical of john kerry when he was running for president, took out full page ads to support the duke lacrosse team after they were falsely accused of rape, duke graduate. i'm wondering if there is something in this, he's very willing to be obviously the tallest male out there. and if in some ways that didn't also help attract the doj to him in ways that wouldn't have

occurred with other ceos. >> was he a target, josh, is the question? >> there has been a very public falling out between chesapeake as his former company and aubrey mcclendon since he left in 2013. he is a household name in the energy industry. he's known for having been one of the most aggressive in this leasing boom that went on for years. and so i wouldn't -- i wouldn't know whether the doj considers him the best or, you know, target. however, he's a household name, he revolutionized in many ways the shale drilling industry. so, you know, whether the doj, whether the doj takes that into account, you have to ask the doj, i suppose. >> real pleasure to get you on the program. very interesting story involving a high profile guy to michelle's point. thank you. great reporting. see you soon. >> thanks a lot. the battle over encryption is known as a cybersecurity guru

in silicon valley. amazon, google, uber, we'll talk apple versus fbi, how tech and government can join forces on cybersecurity and about the investing climate in the valley now. you're watching cnbc, first in business worldwide. woman: is that a newspaper?

man: yes. woman: it's quaint. man: did you read about this latest cyber attack? woman: yeah, i read it on my watch. man: funny. woman: they took out the whole network.

man: they had to hand out pens and paper. woman: yeah. man: could it happen to us? woman: no. we're okay. man: we are? woman: yeah, we brought in some new guys. man: what do they know that we don't? woman: that you can't run a country with pens and paper. it's not just security. it's defense. bae systems. welcome back to "power lunch."

chipotle shares up 3% in trading today. raising the price target on the stock to $613 a share. it was $536 prior. saying the restaurant chainsaw a better than expected uptick in customer traffic last month. the company does maintain a buy rating on the stock. shares about 9% this year. they are already now trading above the average analyst estimate about $492 a share. back over to you. "power lunch" exclusive with a leading cybersecurity expert. ted sline. he's about to host a keynote speech and i believe sit down and talk with defense secretary ash carter at a security conference under way in san francisco. welcome. good to have you with us. >> thank you for having me. >> you bet. i want to begin by playing a sound bite, which i hope you can hear that we had last week with john mcafee, i think of him in a way as the donald trump of

cybersecurity in that he's prone to say provocative things. let's listen in here and then i'll follow up with a question. >> if apple falls, so will android and google and so will every one and we are then in a world of hurt. we will be defenseless as a nation in the up and coming cyberwar. and as a people, we will lose everything to the hackers who go, oh, heavens, we don't have to do any work anymore, we have the back door to go into. >> you heard what he said there, he's depositing a domino theory of cybersecurity hinging on the apple case that is so much in the news. we're in a cyberwar and we will lose everything. do you see it quite that way? >> well, i'll try and interpret what i think mcafee is saying. i think if we think we're going to come up with a general

purpose way to solve this problem and create a general purpose back door, it will weaken owl of our security infrastructure for our communications systems. and that doesn't serve actually the good people, it certainly helps the pad peop s the bad pe. the bad guys stay safe, the good guys get hurt. and that doesn't work. so i think a general purpose solution as mcafee is saying at the end of the day would not work. >> do you see the stakes in a cyberwar as apocalyptic as he seems to? >> apocalyptic, i see the stakes as being pretty high. you can't get it -- the fundamental confidence of the internet, and if we shake users' confidence using internet, i think that gets to some fundamental rules that we all engage by as an interconnected

economy. so it is a big deal. and there is a good reason why we're all fixated on this apple decision. >> what are you going to ask the defense secretary about it today? >> well, i want to know why we got to the point that we're at. it is pretty obvious to me that we need to create some very specific legislation that alous a tim cook to say yes. and i think we put him in an untenable position where he has to fight to get it to a point where he has the ability to say yes. it is not like anybody does not want to help the country around national security. i certainly know tim cook would like to help the country around national security as well. so can we get the public discourse and therefore out to the politicians to focus on something very specific on how to solve this particular problem rather than some general purpose new law that could be used in ways that set precedents that everyone is going to be scared of. >> how do you view this case

ultimately? i was thinking about it more and i thought is this really a cybersecurity case or a privacy case? >> it is both. the privacy people sort of say, hey, if you give people the ability to gain access to any of the data, who knows, maybe my data is next and you end up in a privacy conversation. i'm a cybersecurity guy at heart and i believe on this -- this is at the end of the day more of a security issue. you want to have safe and secure communication channels. we all do. i know if i talked to the secretary later, he's not going to argue with me he likes that safe and secure communication channels with his troops out in the field. so how do we ensure they get that level of safety? yeah, make sure that the government can do due process with what it needs to do to keep us safe and secure against terrorism and as well as other organized crime factions.

>> ted, i'm wondering as you look out in the vc world, are there companies already working on so-called work arounds? other sort of secure parallel communications networks that we don't even know about yet, but they see where this is going and there are already hard at work raising money to back it. >> well, there actually are numerous secure communication channels that have nothing to do with apple or the iphone that can be used today. so even if you solve this -- as i said before, you can go do this, break the encryption algar rhythm s on behalf of a large number of users and another channel pops up. >> is kleiner backing them with funds? >> no. the one company they have in a position is dionic security, which is building a way to have a security service where the data could be encrypted if it wanted to be encrypted and stay

encrypted between companies. but not a communication channel, no. >> you said the stakes are high. my word was apocalyptic. you didn't choose to embrace that. but the stakes are high. who is winning the cyberwar? the good guys or bad guys now? >> it is not a war you ever win. it is a war where we need to ultimately raise the stakes and make it more expensive to be a bad guy. and that means today it is really not -- it is a great -- >> how do you do that? how do you do that? >> so i think we actually have to start taking the fight a little bit to the bad guys. and this is a little bit more of a conversation around how to be more preemptive with attacks that are coming rather than what we have been is very reactive as an industry. and i think you see a lot of new technologies that is going to allow us to be more preemptive which will test our rules and laws because at the end of the day, as private citizens and as

private industry, you're not allowed to take offensive capabilities against an attacker. i think we're going to be analyzing that in the coming years. >> i think some people watching would see -- we introduced you as being part of the firm behind google, amazon, twitter. these are all companies that actually rely on us giving up our privacy, that exploit our personal data. some people might be listening to you and saying, well, it sounds a little hypocritical backing all these firms and these companies that rely us to expose so much of ourselves. at the same time, backing apple when it comes to privacy. what would you say to them? >> i think every individual makes the decision what data they're going to share. and i think when they engage in the rules of facebook, they clearly know how that data is going to be used and what data they're giving them. same thing with google. and so i think when people think they're making a phone call, they're sending a text or an e-mail, they think it is private.

so i think each one of those are very individual dependent but at the end of the day, it is an individual decision on how they want to interact with that service and do business with that company and it is known ahead of time. i think the rules are known ahead of time. >> interesting conversation. ted sline, thank you for being here. have fun on stage later today. our own eamon javers will speak with ash carter at 4:00 p.m. on "closing bell". the rich and the real estate, we'll let you know where the wealthy are now buying big homes and how much they are spending. plus -- >> coming up, a startup scaring the way night terrors. >> we're bringing scientifically proven technologies to improve your child's sleep. >> will the panel keep this founder up at night? >> does that really prevent other people from playing in your space? >> how do you defend market share against that thought of low cost offshore competition? >> or will they call it a dream?

stay tuned to find out. "ow..."

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nearly 25% of american kids. if you have seen one, you'll never forget it. it is like a terrible temper tantrum, but your child is asleep through the entire episode. and up until now there has been no solution. the sleep guardian slips under the mattress, learns your child's sleep cycle and uses vibrations to bring them out of the sleep cycle that causes night terrors. in clinical studies it improved night terrors by 80%. since launching the sleep guardian for $129 just a few months ago, we helped over a thousand families sleep through the night. poor sleep doesn't just affect kids, it really affects the entire family and at lully we're here to change that. >> you saw the pitch. so let's meet the panel. joining us on set is alicia syrett of the new york anke els. she advises and invests in over two dozen startups. in seattle, angel investor nat burgess of corum group involving

mergers and acquisitions including deals with google, microsoft and intel. and dr. tana altman, a spokesperson for the american academy of pediatrics. >> i thought you had a lot of great information packed in your pitch. but you didn't talk about competitive advantage. so i'm going to have to give you a b plus. and speaking of competitive advantage, i know that you have the proprietary algorithm. but does that really prevent other people from playing in your space? >> we have patents in the u.s. and internationally. we have a proprietary ail go rid algorithm. >> you're very focused on solving one problem. and you describe your product well. what is missing for me is the bigger opportunity around sleep. i want some tease there. i'll give you a b on the pitch.

are you guys confident you're not going to be a regulated medical device requiring fda approval? >> we had regular consultants look into this, in a couple of different ways. and the fda regulates products that treat or cure a medical condition. what we're really doing is helping to improve the sleep that they get, we're improving the sleep that families get and when the fda looks at that. they don't consider it a medical device or regulated product. >> you're up. >> i love you're bringing awareness to night terrors as they can be so alarming, scary and disruptive to the entire family's night sleep. i'm giving your pitch an a minus because as a pediatrician, i want to know more how does the device work? >> what we do is capture historic night terror information from the parents, when they first set up the device. based on that, we're able to make an initial prediction of when we need to turn on the

vibrations, and what the vibrations really do is get them out of the sleep pattern that triggers night terrors which involve a lot of microarousals and pushing them on to the next cycle. >> so night terrors sound like a real issue. but it also feels a bit niche to take in outside money from venture capitalists. >> it is a very acute pinpoint, it affects about a million kids a year, which is annually occurring. we have a pretty large opportunity. but lully is the children's sleep company. >> can i get more information on the safety profile of this device when it is in the crib with a young child in. >> night terrors are -- we're not talking about newborns where a lot of -- a lot more risk exists. the device goes under the mattress, so it is really inaccessible to most children.

>> we have seen other pioneers in consumer product sectors get slaughtered, like go pro, having to get out of the low end of the market. trackers, premium products, now racing to the lowest cost. how do you defend market share against that threat of low cost off shore competition in. >> down the road, we plan on introducing service layers on top of the product that allow us to retain the lifetime of our customers a lot longer. >> we heard what vorun had to say. is the panel in or out? >> i was initially concerned that the focus on night terrors might be a little too niche, but given their focus is broadly children's sleep over time, i'm intrigued. i think you have smart founders, smart money behind them and initial traction that is promising. i'll go in. >> nat? >> if this was a gimmick, you convinced me otherwise. you got a real vision here. and i'm in.

>> dr. altman. >> as a mom of three young children, i know how important sleep is for the entire family. so i'm in. i want to try it. >> clean sweep. what is your reaction? >> that's great. we're solving a problem for a lot of families out there and that's what really motivates us as a team. >> best of luck. that is today's power pitch. so are you in or out on lully. tweet us using #powerpitch. gold rallying again today. somewhat at least. prices closing right now higher by $10.30. $12.41. silver, copper, palladium, platinum, silver and copper in positive territory by more than 1.5%. but palladium and platinum, lower. speaking of gold, another market flash from dominic chu. . >> honor of gold prices, gold

miners etf, that's the name, up about 3% almost there right now, rebounding after yesterday's 4% loss. gdx gainers, pan american silver, ashanti, they're all up around 3% to 6%. so as always, as gold prices go higher, these miner s a focus. >> we talked to them down in florida. thank you very much. just over 30 minutes now until you get to see the latest look at the fed's read on the economy, but ahead of that, let us see what the big stories are in chicago. rick santelli following the bond market action as always at the cme. >> you mean outside of the cubs already winning the world series by vegas betting. we'll get to the chicago story. rates are unchanged except for the 5s today. they're up 2. they continued to lead the way. all at a time when it looks like the big bounce is running out of gas. i continue to say, when things look a little better, equities

look bet, rater, rates go up, a things seem to stop. let's look at it one week closing charts. five-year, see the move. look at all the rhyming charts there after. let's look at ten-year boom, a little more aggressive on the right side, which is something to think about. dollar index, s&ps, look at how it is flattening out. s&p cash still lightly in positive territory. and risk on, risk off, the easiest way to measure it, with the etf for high yield, otherwise known as junk in the hyg. the fact that these patterns are so similar makes me really think that friday's number and the implications for how important jobs are to the fed, this is going to be key. and the patterns are most likely going to be similar after friday. tyler, back to you. >> rick, thank you very much. strong employment data out today. if there is another big report on friday, will that make the fed raise interest rates when it meets later this month.

plus, the fed out with its latest report on the u.s. economy, released at the top of the hour. they call it the beige book. could be a real market mover. we're all over it as the industrials have minor losses. s&p 500 basically flat. sort of the same for nasdaq. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

hello, i'm sue herera. hundreds of abortion right supporters rallying outside the supreme court today as justice s consider their first major abortion case in nearly a decade. the justices appear evenly divided on a challenge to a texas law imposing strict regulations on abortion clinics and doctors. another thousand refugees and migrants arriving on the greek island. more than 400 were rescued from the aegean sea. pope francis says the church does not want ben fa benefactory if it comes from exploited

work workers. he railed against employers who mistreat and underpay their workers. and how about this shot? pro golfer matt kuchar making a 47 foot chip shot at the miami heat basketball game last night. he hit a perfect pitch shot that bounced off the backboard, through the basket, and he didn't just do it once, he did it twice. he won $10,000 for charity. what are the odds? he should play the pauowerball something. >> he should. but the hole is bigger, right? >> this is very true, michelle. >> better shooter than shaquille from that distance. really is. shaquille couldn't hit a free throw. >> hack a shaq. >> stocks are off the lows of the session after sliding earlier on bigger than expected build in inventories. can investors find value in the market? linked to the price of cirude.

what does that mean? joining us john buckingham, chief investment officer at afam capital. financials have gotten beat up a lot, come back a little bit, though. if you're worried about recessions or lower interest rates, they could get beaten up even more. make your case. >> i think you look at the financial market, they're oversold now. the market has come off because of its lows of down almost 11%. now we rebounded up about 8.5%. financials have recovered based upon the recessionary fears and the fear of crude and the oil companies, may not be -- may not be going out of business as -- to the level that we may have seen in the early part of the year. so financials are giving great opportunities. take a look, you may find some other valued companies and some really nice prices now.

>> john, why are you undervaluing or underweight financials at this point? what is wrong with jeff's thinking here in. >> i do like financials, don't get me wrong. we talked about jpmorgan and wells fargo. so we do like the space. we have exposure to insurance, to reits, to the banks. but we don't feel that we need to be overweight financials at this point. there are still concerns about, you know, loan loss reserves for banks, interest rate environment is not as favorable for banks or insurance companies. and so we have exposure there, we still see better value in many other sectors. we're a little underweight financials. for us, underweight is a percent or two, not 5% and the market is 17%. >> john, i'm going to go there because i know you can handle it. i'm not asking to say who you like. it is -- what is today called? lousy wednesday? we had super tuesday. i don't know if there is a name

like cybermonday for today. is there a candidate, jeff, or john, john, to you, that is better for the stock market, because it looks like we're going to have trump as a nominee. good or bad? >> well, i'll give my two cents worth on that. we have to remember in this country we have a system of checks and balances. so there is congress. and unless the president actually controls congress, which neither one of the two leading candidates right now would seem to have that, even though we may have a republican majority in congress, i don't necessarily lose a lot of sleep over who is going to be in the white house. we might argue that somebody like kasich, even though he doesn't have a whole lot of support now, he might be best for the stock market in the long haul, but here again, i don't see a big reason for investors to make any major moves in their portfolios based on super tuesday. >> jeff, same question to you. >> i would agree. i think yesterday we were looking maybe for the gop as

well as for the democratic front-runner, certainly hillary clinton has taken the democratic -- >> let's just assume it is clinton and trump, the two front-runners now, which provides you with more certainty as you look out to 2016? >> i think, you know, for me, what provides even additional concern would be really on the senate. i think if we lead with hillary and the white house, i think the senate may be at risk for the republicans given that the republicans currently hold 54 seats, 44 for the democrats, and you have one independent. i think the lead on the republican side concerns me more than who the next president will be. >> all right. >> we're all going to find out some day, aren't we? jeff, john, great to have you on. go to powerlunch.cnbc.com now and you can see the sectors that jeff is avoiding. that's powerpunch.cnbc.com.

a new adp report shows the number of private sector jobs rose in february by 214,000. that's better than many people thought. if friday's nonfarm payrolls number is similarly strong, should the fed proceed with a series of rate hikes? not so fast says ron insana. he'll join us to make his case straight ahead. ♪ ♪ ♪ for your retirement, you want to celebrate the little things, because they're big to you. and that is why you invest. the best returns aren't just measured in dollars.

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the latest read on the jobs market is this friday. if that data is strong, some are speculating it could prompt another hike from the fed when it meets in two weeks, something our next guest thinks could start or restart a vicious cycle. with us now, ron insana. always good to see you. we had great data yesterday. manufacturing data, construction spending. the markets seem to be taking

everything in stride. financials are doing very well. hyg, high yield, doing well. accepting good news is good news. >> we could consider this a bear market balance or cyclical bear market balance. we have come back some of the way. high yield eased a little bit. things have straightened out. we talk about the great data have become relative. the fact that we look at the manufacturing numbers still under 50, and say that, well, the deterioration slowed, and thus the fed should tighten, it is not something we would have said in prior cycles where typically you're blowing off on the upside, ragingly strong. this is getting back to even. not quite the environment where interest rates typically go up. >> james bullard on "squawk box" and he was very focused, not on inflati inflation, not on unemployment. >> nominal growth. >> but on the -- what the forward futures markets were saying about inflation, very particular thing. >> and bill dudley echoed that

sentiment. >> steve liesman made a good point. if they were going to raise in march, that would have been telegraphed already and bill dudley would not have said what he said already so close to an upcoming fed meeting that you have the market offsides. you think more globally, we have the rest of the world in recession. people argue whether or not this is within the fed's mandate to worry about it. the head winds, you look at the economists, the picture of chinese steel supplies, the surplus is greater than the combined production of the united states, germany and japan. deflation, both in commodities and in finance is still there. it is not gone. >> everything you just said is 100% factually correct. >> okay. >> but here's my concern. >> my wife never tells me that. >> you too? we also say this stuff as if we automatically assume higher rates are bad.

we don't know that. raising rates and i get all your points, but if we just assume higher rates are bad, we had higher rates in the past and the economy has done just fine. how do we know that raising rates won't help china, won't help the rest of the world? >> we have seen the impact of that in last december when the fed raised a quarter point and had capital flight to the tune of a trillion dollars, other currencies came under pressure, adds deflationary pulses to the global economy. exports weaken. >> well, you're equating all of that to the quarter point hike. if china didn't know the fed would raise rates, my dead grandmother knew the fed was going to raise rates. then they said, oh, my god -- that gives me zero confidence. let's disregard them altogether. >> you lost me a little bit here. >> my point is, you're saying all that happened because the fed raised but everybody and their mother knew the fed would

ray ra raise rates. >> in anticipation of and after all those things did happen, and you had widening interest rate spreads between the united states and the rest of the world, 23 countries of which have negative rates. >> what he thought happened was in the past the fed has been lockstep, once they start, they're doing a quarter point, boom, boom, boom, boom, boom. they raise that quarter point, the market said, let's price in 125 right now. and so it wasn't a quarter point -- >> they were talking about four -- >> exactly. they weren't all the way there. >> i want to come back to something we talked about yesterday and that was one of our guests said he sees the high potential for ten-year yields to dip below 1% in the u.s. >> we'll see. it is hard to tell. i fear as we discussed in the past that the fed will have to unwind the hike they already have undertaken if we return to the environment we saw from october through january. but i don't think we're out of the woods. i don't always say, by the way,

higher rates are bad. it depends on conditions. in 1999, the economy was on fire, 2006, the economy was on fire -- >> they're not putting out a fire, they're creating it. >> i don't want to be perceived like i'm jumping on your thesis. there does feel to me and probably to all -- come to me if i'm wrong, the last few years we viewed low rates as the automatic fix for everything, when higher rates can be positive also. >> under certain circumstances. we don't have anything to offset higher rates, which would be fiscal policy doing some -- >> we could lower rates again if higher rates don't work. that would be the off set. >> you're creating the situation that you fear. it is, like, we're going to raise rates so we can lower them. i never bought into that argument. >> i don't either. i was throwing it out there as the salve on the wound.

>> is it salve? >> salve. >> we'll read your article online. >> ron's article, powerlunch.cnbc.com. here is a look at all ten major s&p 500 sectors as we head toward break. energy is in the top spot now. raw materials, very bottom, telecom is coming up, number two spot as well. one of the sectors is doing something it hasn't done in a long time. want to know more? stick around. "power lunch" will be right back. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental.

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one of these days, i'm going to perform power points as if it were a rapid advanced ad. welcome to "power lunch." i'm tyler mathisen. let's look at the power points for a 1:00 p.m. hour. markets flat ahead of the fed's beige book out at 2:00 p.m. that is the survey of all of the economic conditions in the various fed districts around the country. telecom 18 month high, leading the way, frontier, level three communications and century link. a few stocks hitting new 52 week highs in today's session. including johnson & johnson, both of them, and avery dennisen and at&t. melissa?

>> a million dollars doesn't buy what it used to, so says a new report on the luxury real estate market. robert frank has been following that story. robert, what's coming up? >> a million dollars buys you a one bedroom, a bedroom in the most expensive city in the world. we'll tell you where it is and find out where the best value is for your millions coming up after the break.

trolling for a gig with braindrone? can't blame you. it's a drone you control with your brain, which controls your thumbs, which control this joystick. no, i'm actually over at the ge booth. we're creating the operating system for industry. it's called predix. it's gonna change the way the world works. ok, i'm telling my brain to tell the drone to get you a copy of my resume. umm, maybe keep your hands on the controller. look out!! ohhhhhhhhhh... you know what, i'm just gonna email it to you.

yeah that's probably safer. ok, cool.

i don't know about the rest of you, america, but when i was a kid, if somebody said a house cost a million bucks, i pictured a giant castle with 15 bedrooms and solid gold hot tub on the back of a helicopter. times have changed. robert frank with new reports on not only what a million dollars gets you, hint, not much, but also where the rich are buying not much. >> yes. and where they're buying a lot. prices inching up 1.8% last year. vancouver had the biggest price gains at 25%. that was followed by sydney and shanghai. mo among the worst, sao paulo and lagos. the strongest markets are expected to be sydney, new york and monaco. monaco is the world's most expensive market, a million bucks gets you 182 square feet,

and buys 215 square feet in hong kong, about 290 in new york. but it buys you over 2700 square feet in cape town. i love cape town, by the way. if you're looking at monaco, this place, check it out, 35,000 square feet, penthouse with a water slide that brings you from the dance floor to the infinity pool, no jacuzzi on the back of the helicopter, but 500 feet above monaco. $450 million. but the luxury real estate boom is likely to stall a bit because of slowing wealth creation. the population of multimillionaires fell. there are half a million people worth $10 million or more and 187,000 people worth $30 million or more, that's down from 2014. the populations expected to grow 41% in the next ten years, and that's slower than the previous ten. new york had the largest number of super rich residents with 5600 followed by london at 4900. >> new yorkers and londoners. >> yes. >> they're not, right?

that's a lot of flight capital, is that still chinese money -- >> vancouver too. >> vancouver would be -- >> all three of the top markets last year were all essentially chinese buyer markets. you got vancouver, sydney and shanghai. this year, it is going to change a little bit. new york is going to be strong. monaco is going to be strong. security and safety are still the top two priorities when you look at where the wealthy want to put their money. >> i would think -- >> both physically and financially. >> i think this could help the markets because chinese want to park their money overseas. >> if anything actually we had howard on this morning, if anything it is accelerating. he said the first quarter of this -- >> this term, though. >> at some point the money runs out. >> china does that -- >> that's hidden, by the way. >> exactly. >> great stuff, robert. >> thank you, guys. >> all right, it is nearly 2:00 p.m. on wall street. checking the markets now ahead of the so-called beige book. the dow is in negative territory and the nasdaq and the s&p 500.

but marginally flat. let's show you the price of oil as well as. all over the map today. right now lower by 5 cents, 34.35 for april delivery of crude, which is essentially flat. the big fed event of the day, find out what they think about the economy. diana olick has breaking news on the fed's beige book. >> and most of the 12 federal reserve districts report economic activity has expanded since the previous beige book report in january. st. louis and boston called results mixed. new york and dallas described economic activity as flat. kansas city, though, noted a modest decline, there was general optimism over future growth. to consumer spending, increased overall with weakness in kansas city and dallas. snowstorms temporarily took away some spending in philadelphia and richmond district. but sales then bounced back. auto sales were mixed. but elevated in most districts. kansas city, st. louis and dallas districts said auto sales declined since the last report and are now below year ago

levels. tourism activity strengthened, lower gas prices cited for that. the majority of districts reported modest growth in the labor market, but conditions were mixed in atlanta and dallas. atlanta, dallas and san francisco districts noted fewer jobs in the energy sector. wages, generally increased, but did vary from flat to strong and consumer prices held steady. to manufacturing, it was flat, with most districts noting weak demand, the energy sector as a significant head wind, but san francisco reported that it did lower cost per steel production. most noted the strengthening dollar had a negative effect on international exports to housing, of course, my fave, sales rose in most districts and inventory of homes for sale was very low. residential construction strengthened, especially in multifamily, that's your rentals. most district reported slight to modest increases in loan demand, stable credit quality, but no loosening on credit standards. finally, to agriculture,

economic conditions there flat to down moderately with commodity prices and weak global demand putting downward pressure on foreign income. one more note, the stock market volatility was noted across the board in several districts as affecting both consumer spending and home building. >> thanks for bringing us the headlines. let's bring in steve liesman to discuss what he has seen there with steve rusutto. what are the big headlines? anything that changes your view what the fed may or may not do in. >> hats off to veteran reporter with beige book rookie diana olick. i think both hampton and i need to be worried about job security after the wonderful job she did. i try to translate this as much as i can into numbers. it still sounds like, feels like a 2% economy and the one section here, this is overall prices

were generally flat since the previous survey period. we had a spike up in recent inflation because it does not appear to have shown up in the beige book. just a note on how the fed uses, it informs their decision-making process. it is a series of anecdotes from all over the country, not decisive. but something that helps them figure out the kind of tenor or feel of what is going on in the economy. it feels like a two, maybe sub 2% economy, some weakness from the fourth quarter did not spill over into january. we're seeing that in the data. we had several decent reports that put us back on track for a pretty good rebound in the first quarter. you hear the challenges. you hear the challenges from the oil sector. but overall, the economy is withstanding those and still growing. >> that's steve. i'll call you steven. distinguish the two of you. you heard what steve said and what diana said, what do you make of it? >> i don't disagree with steve's analysis. the fourth quarter soft patch is what it was. a one quarter development.

we're back to the trend of 1.75, we have been there for the last several years, nothing really has changed. it is a little surprising we didn't get a weaker fourth quarter number on a relative basis and those haven't changed trend. we had several of those in the recovery period. the key is the inflation story which i think is the dominant issue for the fed as they go into the march meeting. they set a mottlnot model out te were in full employment. and the january data was stronger. and the january payroll employment number on the weak side, not horribleably and financial market turbulence. that subsided. and now i think the fed really has a difficult position. the macro economic environment is no different, inflation is higher from the data they have been looking at and therefore they have a difficult decision when they meet in march. >> is there any reason why they wouldn't wait to go. what is the downside to waiting for a little more data as opposed to the potential

downside for moving in march? >> there is none. i never thought they should have moved in december. my original thought process is they should have waited until march. by now we would have had the appropriate -- seen the dip in the fourth quarter, would have seen whether it was sustainable, it wasn't. we would have had the worst inflation numbers come out. it would have been a more justifiable move to move now. the problem for them is it built the mouse trap. and the mouse track sprung on them, the inflation went better, unemployment rate -- >> what is the problem? i look at what is going on, the market priced out a march rate hike, and now when the data has come in a little bit better than expected, it is starting to rethink june. seems to me to be about right. the danger, tyler, that the fed is worried about, is that things get -- it gets behind the the curve, inflation crops back up, the economy takes off more, and they end up having to hike rates faster than they want to. they want to be very gradual in this modest -- >> how fast is inflation going to crop up between now and june? >> between now and june, probably not very much.

you did have -- here's what's happening. you -- you look at the bulk of the economy, which is the service sector, you have inflation at about 3%, 2.5%, 3%, running right there. what made the inflation numbers lower is the tremendous drop in commodity prices along with the surge in the dollar. the thinking at the fed is that those things begin on a basis effect to come out of the numbers, and what are you left with? you're left with the services part, pushing it up. >> as the government defines inflation, will we ever have high inflation again? as the government defines it. >> in the world of excess supply that we live in, both in tradable goods and commodities, we're not going to have that. the reality is, accelerating a process toward tightening makes no sense. the fed's basic problem is the box they built for themselves. not the fact that they moved in december, not that they should have moved in march, not whether they move this march. the reality is this set out a precedent they said at 5% we have hit the natural rate of unemployment, we are going to

see wage pressures increase, and we have to move against that and then they laid out through their docs a series of rate increases. now the problem is they have to step back from that. that's a bit of their credibility issue. this was the problem everyone was concerned about as we got tightening in june and in september and rushed to tighten in december. the reality is they shouldn't have tightened in december. they still had plenty of time this goes back to your point earlier. they had plenty of time. there is no sustainable inflation. >> we had three strategists come on the air and say the ten year yield has gone to 1% or lower. one saying it is going to 20, 25 basis points. do you believe that? >> it depends what happens to the currency and what happens with global environment. if the currency stays in the nice defined range as we have seen recently, we're probably not going to go through 1.5%. if the dollar ratchets up dramatically higher because the fed goes and starts to move along the path of the dots and people believe they are, we're going to get a strong currency, a strong collapse in crude oil

prices and go from there. this is all contingent on the currency. >> nobody in the market thinks they're moving along the path of dots. there is no single market indicator that shows that the market is following the dots. the market has thrown out, ignored and otherwise completely eschewed whatever is in the dots now. the point that the fed has a problem because of the dots, i think the market has gotten rid of that problem by pricing it out. something of a forecasting credibility issue than a policy credibility issue as far as i can see. the story as i see it, the fed said, look, we're at an economy that is at or near a best guess of full employment. the economy that is growing at or near our best guess of potential growth. in that environment, it is very difficult to make a case for rock bottom absolute zero interest rates. i don't think anybody at the fed is saying we need to tighten or slow the economy. i think they say zero does not

seem like the right number. >> janet yellen laid out a specific model in december. she laid out a very, very specific path for interest rates in december. everything is somewhat data dependent. but the data has gotten strong earn a relative basis, since she made out that argument. therefore, there is a bit of a credibility issue. if you look at the two-year note, you talk about the fed funds future market, but the two-year note moved up nicely. if we get strong payroll employment, half the decline we had in the two year note from when we started changing the concept, back to half of that. >> the only trouble i have here is that i think the market is underestimating how much the fed will do this year. i think they could do as much as 50. >> that's a problem. i don't think they do. i think they do one more and they're done. >> how is mom and pop doing in. >> not particularly well. >> i think you're having this

great conversation about mozart, talking about musical structure and tone and how does it sound? >> you're 100% correct. you look at political environment. we have a very, very large amount of discouraged people. the federal reserve should not be on this path at all. and that's the biggest problem for them right new. they're completely out of sync with what is happening in the fundamental macro economic environment. >> thank you so much. here's what's on the menu for the rest of "power lunch." exclusive comments to cnbc from exxonmobil's ceo, rex tillerson and we'll ask an exxon stack holder if he likes what he's holding. presidential candidates aren't just bashing each other, they're also going after businesses. and calling them out by name. what gives? and a top secret global super league. not a collection of comic book villains or heroes, the possible union of the world's top soccer teams. all that and much more ahead on "power lunch." we're the hottest young company around

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welcome back to "power lunch." i'm sue herera with this news alert from the ben carson campaign. mr. carson, dr. carson putting out this statement. he says i have decided not to attend the fox news gop presidential debate tomorrow night in detroit. he says further that he does not see a political path forward in light of last evening's super tuesday primary results. he also says that he will

discuss more about the future of his movement during his speech on friday at cpac in washington, d.c. so he will not attend the debate tomorrow night, he does not see a political path forward in light of yesterday evening's results, and he will discuss more about it in a speech at cpac in washington, d.c. back to you. >> all right, sue, seems odd he wouldn't just go ahead and pull the rip cord there. >> it is clear what he's saying is he's dropping out, right? but this is typical of ben carson, right? he talks all the way around it, but doesn't explicitly say it. >> no path to debate but the path is to the white house? >> didn't make any sense. >> sounds like a third party candidate. not dropping out but saying my movement -- >> my grassroots movement. >> might be a possibility of a third party candidacy. >> okay. >> let's talk about one of the big major oil companies, exxonmobil holding its analyst day at the knock stock exchange today. the oil giant saying it would continue to cut spending as long as crude oil prices stay low.

shares not doing very much today. up about 1% or there abouts. beck wy quick got an interview with rex tillerson. >> when we make decisions about the financial structure of the company, our investment programs, we're really thinking about 20, 30 years out. and we're thinking about those long-term shareholders and we know the dividend is extremely important to them. the dividend is safe. we have -- again, part of what we feel is the obligation to our shareholders. >> james of advantage funds is with us now. five rainbows, instead of five stars, but at any rate, this is a long-term holding of yours. it hasn't -- it is off a little bit in stock price terms over

the past 12 months. i think seven or eight percent. that 3.5% dividend does a lot to blunt that. you're comfortable owning it, right? >> we are. we are. it is not a huge holding, per se, but when you're looking at a holding like this, you're looking to preserve money for your clients and also looking to grow their assets. and a company like this is so well run and has such good financials that aaa rating, may be a little bit in play due to the downturn in oil prices, but that is a big solace as we look at it. they have the lowest leverage of all of the multinational integrated oil companies. they have the lowest impaired assets. they have the lowest cost, highest profits on what they pull out of the ground, they're about $10.50 a barrel f we're $30 a barrel, they're still making a profit. we see this as a pretty solid holding, maybe not -- it is going to go to the moon real soon, but it is a good thing to have in your portfolio.

>> two quick questions. you owned this one since 2004 or thereabouts. is there any conceivable scenario underwhich you get out of it. and do you hold other energy names in large amounts? >> the ones that we do own in larger amounts are the refiners. what we have found is that when you're over $100 a barrel, the refiners don't do as well as the integrated and the drillers do. and you get below the $100 a barrel, that's where the refiners mack a lot of money. but what we reached is a lower level in terms of the price of oil, so we start to see comparisens catch up and also the negative comparisons for the drillers. so really that should provide some stability as we go forward in terms of earnings. but, again it all going to circle around the price of oil. so good long-term holding, it is a crown jewel in this area, the comparisons against the others, they don't hold a candle to it

in many, many ways. it is a stock ma we would continue to hold at this time. >> tillerson made it clear during the meeting about he wanted to maintain financial flexibility to take advantage of opportunities. they also went recently to the bond market and raised $12 billion. what do you think they should buy and is there any concern on your part? the last big ticket acquisition was in 20 10. a spot in that gas went to 2. >> they are really smart when it comes to purchases both of the reserves, the largest reserves, but also, you know, in terms of any type of environment they're looking to do. i don't have any advice for them. i think they can do perfectly well without my advice. but they decided not to do as much in terms of buying back their own shares. they reduce it 40% in just a few years the number of shares outstanding. they were investing in shareholders. they're paying over 3.5% dividend yield while the payout

ratio is higher than it has been. >> i was going to ask you about that. the payout ratio. the amount that they're making in net income, their profits are actually expected for the year to be lower than what they're expected to pay in dividends. a payout ratio of more than 100%. they have raised the dividend every single year for 33 years. what if they don't raise? is that going to bother you? would you give them a pass and say in a time like this, it would be okay? >> i don't think it is sustainable over a long period of time. i think we'll start to see some stability. their downstream, what you call things after you pull it out of the ground, the refining process and the chemical side is extremely profitable for them at this stage. we think that it will probably see some stability in their earnings, so they can go for a brief period of time, i think,

with paying out more than what their earnings are. but it is not going to be something that, you know, you can do for four or five years. they look at demand as growing in the next few years and so, you know, that should provide some opportunities and they're really cutting back their costs. they have cut back from 12.5 to $10.5 a barrel for pulling it out of the ground. so, again, it is a company that i think can make it for the long haul and i don't think we have to worry too much about the dividend yield at this point. >> on that note, we leave it. barry james of james advantage funds, thanks again. you can see becky quick's entire interview with rex tillerson tomorrow morning on "squawk box" 6:00 a.m. let's look at the xrt, down fractionally. it is down more than 10% over the past year. coming up on street talk.

time for street talk, our daily dive into the five big stock calls you need to know about or what we think you need to know. we'll tell you what to think, america. first call, ross stores. this was a stock melissa teased

into it. mkm upgrading buy to neutral, like the earnings visibility, strong same store sales. ross store now delivered on two quarters of strong comps and notes key competitive advantages like scale and score growth. target is 65. all time high for the name. thises with a 5. 75 stock. >> dollar tree, strong buy over at raymond james. the stock sa approaching a lifetime high of 84 bucks a share. the analyst points out comp store sales growth for the core dollar tree segment is slowing. earnings before interest and taxes look like it is slowing as well. this after running on lifetime highs about 12.4%. this is the first rating change for dollar tree by this analyst since upgrading shares to a strong buy at a split adjusted price of $9.55. >> that was a great long-term

call. made clients a lot of money. i wonder where the gasoline pop in these stores is. >> walmart is seeing it. >> lkq corp. stern ag starting coverage with the buy, get this, they cite favorable collision fundamentals. yes. more wrecks because more people are driving and assuming driving badly as they weave from side to side while texting. insurance companies are looking to minimize their claim costs, also growth overseas that the analyst likes, the valuation of the name. europe doesn't use as many after market parts, use the original -- sorry about that. lkq, like, kind and quality. if you get into a fender bender and have a bmw, instead of a bmw fender, you get a generic or maybe something from a junkyard, from the same car.

replacement auto parts. my apologies. 30% upside. >> next call, bank of america, big rally over the past couple of days. drexel out today laying out the bank's most leveraged to higher rates naming bank of america number one. the most positive earnings leverage to higher interest rates followed by jpmorgan and citi. they acknowledge some publishing of similar rates in mid-november, expectations of rates rising go down significantly. look at the financials. best performing sector this week. we have seen a 5% increase in bank of america shares this week alone. >> i can stand up for a second? >> i guess i can. right here, the august september thing, a lot of analyst upgrades on bank of america, six or seven different upgrades. stocks are a couple of bucks below where it was. a lot of the analysts middle -- what do you call six months?

near term? chemical financial holdings, under the radar name, midline michigan bank, creating the biggest michigan-based lender. the analyst likes the taller merger and says when it closes, the price to earnings gap appears to close up. valuation will come up. they like their conservative underwriting. $42 target on chfc. what is that? 18% upside. >> you brought it up before, in street talk. >> i have. >> means i'm getting old. >> not so under the radar, maybe. >> it was. >> doubly under the radar. tyler. >> guys, thank you. big intraday reversal in the price of oil. let's look at oil right now. up 32 cents. it has been up, it has been down.

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welcome back. target about to kick off a meeting with analysts. courtney reagan has an exclusive with target's ceo ahead of that meeting. >> any minute now target will begin its annual financial community meeting here in new york city. i had a brief moment to speak with brian cornell before he takes the stage to address the analysts. and target talked a lot about putting more emphasis on their merchandise going forward. however, they're still without a chief merchant. here is what cornell had to say about that. >> we had a terrifically talented group of merchant leaders and we're making some really good progress and it is showing up in our results. we'll keep looking. eventually we will rerhplace ou chief merchant. the team is making great strides and i'm partnering with them and working with them each and every

day. >> so cornell himself is acting as chief merchant in a way. we expect him as well as the cfo kathy smith and coo john mulligan to address the community here, talk more in detail about their transformation plans going forward. the transformation they released just about one year ago today at this exact meeting. back to you. >> let's go superher rto sue he. >> gop presidential candidate marco rubio voting early in florida's primary this morning, casting his ballot in west miami where he began his political career 20 years ago. he called it an incredible honor to be able to vote for himself. students were turning to a class at an ohio high school less than two days after a student opened fire in that school's cafeteria. teachers were lined up outfront greet the students and welcoming them back.

whole foods issued a recall for blue cheese because it could contain listeria. the cheese was sold nationwide by the company. sports authority filing for bankruptcy saying it will close 140 stores nearly a third of its total back in january the company missed a $20 million debt payment. the sporting goods retailer hurt by increasing online competition among other things. brian, back to you. >> sue, thank you very much. the oil markets are set to close for the day. jackie deangelis joining us. a real tug of war today, you had inventory data which was very bearish, but venezuela coming out and chirping about a possible meeting which is bullish, where did we end? >> that turn around was massive in terms of momentum you see in the trade. the number was a big build. i had more reasons for you why we turned around and saw support, not just the chatter about a potential freeze.

there was the reuters report that the saudis are out talking to banks about a $10 billion loan from reuters. in the department of energy report, you had a production decline here in the u.s., the sixth straight week in a row, we get closer and closer to that 9 million barrel a day mark in terms of production. it is march. people are anticipating the builds are going to start shrinking, summer driving season will kick in and you'll start to see a turn around in oil prices. interesting because the intraday high was $35.17. if we get a close over 35, that will be enough to drive us a little higher from there. that's where the momentum stands. we did hit it intraday. close 34.66. back to you. >> jackie, thank you. she mentioned the reuters report this report showing that saudi arabia may be in talks with banks to discuss a major international u.s. dollar loan in the amount of up to $10 billion. rita sen joins us now. good to have you with us. what does the talk of this loan

tell you about saudi arabia and the pressure they may be under now. >> i think they can borrow pretty cheaply at the moment. they have good ratings still. and rather than liquidating assets that have probably tide up, it does make sense for them to borrow. i don't think this necessarily tells you they're running out of reserves or anything of that sort. but, yes, of course, $30 oil, the reserves have been running down quite quickly, budget deficit was over $90 billion, compared to an expected 30 billion. they are under pressure. this is not them running out of money. i think that should be made very clear. >> is the flip side that perhaps it is actually bearish for oil? they have this potentially $10 billion u.s. dollar loan and it alleviates some pressure so they can keep producing the same levels they're producing at and can see that $20 a barrel mark that niemi mentioned. >> i think that's very much the case with or without the loan. the policy stays for now that they are going to keep production at around 10.2 to

10.3 million barrel a day. the policy on oil is that the production numbers stay very high and the result of that means it will take longer for the market to rebalance because opec isn't cutting and that's why they're going out into the market to raise money because they're not willing to change that oil policy. >> where are we on the great search for cuts in production? have we made any progress anywhere in the world when it comes to a deceleration in growth or actual decline in production anywhere? >> we made pretty decent progress in the u.s., and as we just heard as well, u.s. production has been falling. the december numbers that came out, the first year on year decline since 2011. that's -- >> that's a big deal. >> that is a big deal, absolutely. and then you also got declines now in some parts of asia. all of these countries are

starting to post their year on year declines. first time in a couple of years. underlying declines are stepping up in a $30 crude environment and producers don't have money to keep pumping or keep investing in -- keeping the declines in check. this is the start. but also, i mention, there are a couple of unplanned outages in nigeria and in iraq. that led us to recent rally. we lost about 800,000 barrels a day of oil. suddenly the market look a little better than it looked a few weeks ago. >> a few weeks ago we were at the $26 a barrel level. today, breaking through $35. you heard what jackie deangelis said about sort of a growing sense that maybe seasonal trends are starting to kick in here and that would suggest that maybe we have seen the lows in oil and maybe moving towards a kind of stability point in the mid to

upper 30s. do you see it that way? >> i do think, again, very dangerous to say the lows -- we could fall $5 tomorrow. i think generally speaking sent has tu sentiment has turned. gasoline is weak. gasoline driving season will be strong, but we have so much gasoline in tanks. i think this is more to do with the crude supply side. that's what the saudis wanted as well. >> you know, we look at -- we got the api data and look at production. we know that's high. i want to show our viewers something else. imports, they continue to go up as well. i understand high production, right? nobody wants to cap it. everybody needs the cash flow. why does the united states keep importing more barrels every month? >> this is, again, goes back to the problem with being -- it is a free market and whenever production is falling in the u.s., small numbers, but falling, so then what happens is u.s. prices keep going higher.

as soon as the u.s. price goes up, it attracts all the barrels from the rest of the world. that's why, in fact, the u.s. inventories keeps swelling up. the rest of the world is drawing this is trading, fun and games to some extent. but the ability of the u.s. to attract inflows because prices react quickly to any headline, production drop or generally the fact that the economy is doing well, that's the problem for the u.s. to a large extent. >> great to vu yhave you on. thank you. in the presidential candidates need a break from beating each other up, they started to take on companies instead. calling them out by name. we'll discuss that happy trend. gold is up 17% this year. silver not following along as it usually does. what is go ing on with the metals.

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greater extent. this year silver has been sagging, lagging gold. here to discuss, ari wolde and larry mcdonald. i'll start ari, what is going on here? they're still both doing well but silver less well. has the relationship decoupled? >> the chart tells me this, brian, i think the trade is to long gold against a short position in silver that we think this outperform in the yellow metal continues not only for the coming months, but potentially for the coming years. to make this case, look at relative relationship between these two. we're taking the very big picture view here, this chart goes back years. and over the last 20 years, we had -- we have seen these commodities take turns taking on leadership. one leads for a number of years and another one takes over. we had gold lead over the past few years, but now something

interesting has happened. at the resist and level where you see that turn, gold has broken out to the upside. this is a major breakout. it suggests gold continues to outperform both on the upside and downside. buy gold, short silver. >> this year, both have done fairly well. we're picking on the a minus. what is your take on silver? >> on the program last fall, i made a very bullish call on gold, and the bears attacked me on twitter and now the bears are nowhere to be found. in is a lot of bulls coming out on gold. and the outperformance is significant but we are in an area of gold outperformance over silver that is not very sustainable. we're at levels extremely lofty levels in terms of outperformance. and i think the risk reward is much better here to be long

silver and short gold over the near term just because of the significant outperformance over the last couple of weeks. >> don't worry about what you read on the web. it is kind of what it is there for. thank you, both, very much. for more trading nation, head to our website, tradingnation.cnbc.com. >> last night, super tuesday results seems to have brought us closer to a hillary clinton, donald trump race. what does that mean for the business community? that's next on "power". now the latest from tradingnation.cnbc.com and a word from our sponsor. >> technical traders look at volume as confirmation of a market trend and while volume can be important, opportunities exist in every market. so if you got a sound investing plan, don't let low volume keep you out of the market.

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although the macro economy has not been front and center in the election, certain companies, have caught the attention of certain candidates. take a look. all right, we're going to scratch that. we have breaking news, sue herera. >> this comes to us from a tweet from the oklahoma city police

department. they're in oklahoma city, there was a fatal crash yesterday. they are now saying that the victim in this morning's fatal crash has been identified as 56-year-old aubrey mcclendon. you would know him as the former ceo of chesapeake energy corporation. he is the victim in this particular crash. we're going to be monitoring the news conference, which will begin in a few minutes. just for background, we should let you know that mr. mcclendon was indicted yesterday by the justice department, he denied the charges, but was indicted basically with rigging bids on oil and gas leases in oklahoma, a charge once again that he denied. but that would have been a violation of the sherman act, punishable if convicted by ten years in prison. but once again, a tweet from the oklahoma city police department confirming that the victim in this morning's crash was 56-year-old former chesapeake ceo aubrey mcclendon. we'll be showing you some video

taken earlier this morning by our affiliate in oklahoma city. we will also be monitoring the news conference which should begin in just a few moments. the speaker at that particular news conference will be information officer, captain baldorama. they're setting up the podium as we speak. mr. mcclendon was indicted by the justice department yesterday of basically rigging bids and leases in oklahoma city. he denied that charge vehemently, saying all he was trying to do is bring jobs to oklahoma and oklahoma city. if he had been convicted of that crime, it was punishable by ten years in prison and would have been the first person, his team says, charged under the sherman act in 110 years. once again, the police department in oklahoma city confirming that the victim was

aubrey mcclendon. we're monitoring the news confirm. we'll bring it to you when it does. >> the crash, sue, was when? this morning? >> this morning, and a single-car accident, brian. the video showed a burned-out car under an overpass. there is speculation out there that nbc and cnbc has not confirmed that it was a possible suicide, driving under the influence, something along those lines, but once again, that is simply speculation. we have no confirmation of that. we are waiting to see whether we do get some comment on that from the oklahoma city police department when they begin their news confirms. we talked a lot about him at the top of the show, visionary, incredibly controversial, very conservative figure as well, known as a wildcatter, right? >> you've that interviewed him a lot. >> he lost a billion twice in just a couple days, because he liked to live on the edge with

leverage and margin calls. in many ways an extraordinary figure, but again also controversial. he had been forced out his previous company, the company that he made second in the country in a very short time when it came to natural gas production, baas he was so aggressive, and also so clear. >> the news conference has started. >> yes, it has. >> i want to report that earlier today at 9:12 a.m., the police department responded to, involving mr. aubrey mcclendon. the information i have right now is his vehicle, which was identified as a 2013 chevy tahoe was traveling northbound on midwest boulevard just south of memorial towards i-44, better known as turner turnpike. he went left of center traveling at a high rate of speed and collided into the west embankment wall of the overpass.

his vehicle was engulfed in flames immediately, and he did not survive the accident. once again, it appears that speed was most definitely a factor in the pa at that time. it would take our investigators one to two weeks to complete the investigation, and it appears to be cut-and-dried to what happened. the medical examiner will make the final determination as the cause of death. we do work fatalities accidents where people have medical episodes just prior to the collision, but that's all the information i have right now. any questions? >> reporter: is there any indication that had el tried to stop the kar? >> he pretty much drove straight into the wall. the information and evidence out there is he went left of center, through a grassy area right before colliding into the embankment. there was plenty of opportunity

for him to correct or get back on the roadway, and that didn't occur. he went straight into the embankment and collided into it, ultimately died from his injuries, we believe, but again the medical examiner will make that determination? >> reporter: you said high rate of speed? is there any numbers? >> the posted speed limit there is 40 miles per hour. he was going well above that. after we completed investigation, we will be able to find out exactly how fast he was going. that is an unknown right now. that determination as far as the damage on the vehicle and other evidence on the roadway? >> reporter: were there witnesses? >> not that i know of. there were not any witnesses. any other questions? okay. that's the information i have, but i wanted to report that mr. aubrey mcclendon did die from the facility accident earlier

today at 9:12? [ inaudible ] >> no, i don't know how fast he was going. >> he was alone, correct? >> he was alone in his 2013 chevy tahoe. >> reporter: is there any indication as to whether there was anything in the vehicle that caused the fire? or is it just that crash? >> at this point we believe it was the crash. he collided into a concrete embankment at a high rate of speed, and the speed was engulfed in flames immediately afterwards. it took quite some time to strict him from the vehicle after the fire was put out. >> with him being in the news recently, is there any indication as to whether anyone had reached out to him for any type of mental health? >> i don't have any information regarding that. >> reporter: did he have his seat belt on? anything like that? >> you know, what happens in

investigations such as this is we are going to download the information off of the computer in the vehicle. that will let us know exactly how fast he was going, whether he hit his brakes, whether he was wearing a seat belt. the vehicle was so badly burned that we were unable to tell whether he was wearing a seat belt or not. >> reporter: would the computer information by salvageable? >> i don't know. >> reporter: you say it will take a couple weeks. what is exactly going to take place? >> there's a lot of evidence at the scene. there's track marks as far as which direction he was traveling. when he went off roadway. the information on the vehicle is important, gives us a lot of data as to how fast he was going, how hard he pressed his brakes, how fast he was going at the time of the impact as well. so that's information that's obviously very helpful in the investigation, but there's also

evidence at the scene that we can gather. it makes it more difficult in this case, because the vehicle was completely burned after the wreck. >> reporter: any evidence now you can talk about, extra fuel or extra ignition sources? >> at this point, no. >> reporter: did a witness call this in? >> i haven't looked at the call information. that should indicate what occurred. soon after that, the call came out at about 9/12, a few machines later emergency crews arrived to the scene and were able to starred working on the vehicle, but in this case it involved flames and required the fire department to put the fire out. any other questions? okay. that's all that i have. thank you very much. all right. in oklahoma city, a police spokesman reporting that one day and you have aubrey mcclendon, the former ceo of chesapeake was

inentitled on an antitrust charge, he's been found dead in a single-car accident on a two-lane highway, there is the accident scene which at a high rate of speed he apparently veered left and hit one of the concrete stanchens that support an overpass or bridge in the environs of oklahoma city. this will obviously occasion speculation in light of what happened yesterday whether this was some sort of intentional accident. the police officers was nod asked and did not venture an opinion on that. we're joined by several to discuss this turn of events. jim cramer, you knew him, you've had him on the show. >> probably been on more than almost anybody. went out to the ute i ka shale

with him. shocked like everybody. i shot him an e-mail last night. told my executive producer, i couldn't believe he didn't return it, i said, come on the show, sherman antitrust, good opportunity, you know, we always welcome you on the show, just state your case. you're going to get a fair hearing. i was shocked he didn't come back, you know, because he comes back -- well, i'm not shocked -- well, i liked aubrey. i liked aubrey. he was larger than life. >> you are shocked, i can tell. >> natural gas industry in america is what it is today because of him, right? >> yeah. he had a vision. look, i'm sure there's since cal people that say, you know, cramer is such a crook for liking aubrey. whatever, go ahead. aubrey, he made a lot of mistakes, okay? he came on the show and said he made a lot of mistakes. when he margined his position, i i said, wall of shame, partner,

put him on the wall of shame, all over, he comes on, said i made a mistake, i will not do margin again, let me show you the vision. he helped me under the oil and gas business. he's a character. did i agree with every aspect of his character? absolutely not. did he makes mistakes? yes, a ton of mistakes. he did a lot of things he shouldn't have done, but you would e-mail him and say, what the hell are you doing, partner? oh, i screwed up, or -- >> this is a guy, jim, and michelle you know him, too, and kate kelly is on the phone. all the other stuff we talked about, he's very charismatic. a lot of people forget he does have a new company, american energy partners, 20% owner of the thunder nba team. i sat on a flight with a bunch of folks going from his new company and they loved him. so he's