bucks. that's where your stock goes. you'll know you're wrong immediately for short term trade. >> iconic brand, high quality, i think it is -- >> you look inside, the internals were impressive maybe not for some, but nonetheless, that's how the story stands now. that's all for us. thanks for watching. "power lunch" starts now. "power lunch" starts now. welcome, everybody. along with melissa lee and brian sullivan i'm tyler mathisen, michelle caruso-cabrera is live in brussels and we will check in with her in just seconds. let's get you caught up on the latest in the investigation into yesterday's terror attacks. sue her err era is at the break desk for us. >> president obama holding a joint news conference with argentine president macri in buenos aires in the wake of the brussels attacks and he defended his strategy against the islamic state. >> there is no more important

item on my agenda than going after them and defeating them. the issue is how do we do it in an intelligent way. what has been working is the air strikes that we're taking on their leadership, on their infrastructure, on their financial systems. >> and here's what we know. identifying two of the suicide bombers in yesterday's attack, ibrahim el bakraoui and his brother khalid who blew himself up at the train station. one of the attackers still on the loose, french prime minister says european union members must heavily increase their investment in anti-terror measures. and there was another police operation near brussels earlier today. masked police carried out bags and boxes from an apartment in the anderlick area of that city. britain's interior minister says donald trump was just plain

wrong to say muslims in britain are failing to report suspicious activity by extremists. earlier trump said it was a disgrace that one of the suspects behind the paris attacks had been found in an area of brussels where he had lived. we'll continue our coverage on the latest in the brussels attacks at the top and the bottom of the hour. in the meantime, ty, back to you. >> thank you very much, sue. and let's get more now on the unfolding situation in belgium. michelle caruso-cabrera is live there in brussels. hi, michelle. >> hey, tyler. we learned john kerry will travel to bruce lz ssels on fri. the airport is still closed. it will be closed tomorrow here in brussels. as a result, we flew into paris and had to drive here. along the way, we crossed the french/belgian border where there are checkpoints set up for the manhunt that sue mentioned. we're showing you video of the german border, the same as well, as they continue to look for that individual. at the same time, while those

borders are temporarily closed, because of this manhunt, there is increasing talk and more calls for those borders to be permanently closed. many members of the far right, the euro skeptics, have long been against the idea that you could just move from country to country, that a country like france or belgium couldn't control its own borders. so the leader of the far right put out this statement saying, this emergency and for the safety of all, it is imperative to proceed t close immediately the french/belgium border, a real closure. and then in germany as well, we heard from one other individual -- a german politician from the right, who said the dream of a colorful europe is dead. bombed away yet again. finally accept it, it is time for change. that is a facebook post. so you can be sure that the discussion will be under way as to what to be done in europe that has prided itself on this european dream, open borders, free movement of labor, capital and goods and fighting nonstate

actors using those very things to be able to conduct this borderless war against them as we have seen here in brussels and also in paris, back in november. >> what would a closed border mean in practice. would everyone who is driving between those two countries have to go through passport control, have their cars, trucks, loris searched? what? >> that's the idea, right? if you go back decades, there were customs at every border, you would have stops, big trucks. wasn't necessarily traveling that much back then, but certainly you would have to have just an increased amount of individuals on the ground to be able to do stops, to do passport control. marine le pen said if she ever becomes the leader of france, the first thing she's going to do is make france leave the euro and control the borders and close them off. that would presumably mean increasing the amount of

security, military police, just police you have at the borders. it is also going to have a big impact on trade. that route we took today, tyler, hundreds, hundreds, i would say maybe thousands of trucks carrying products and goods across europe. the countries here are small. and so it would be much more efficient if there was open borders and if they continued. but on the other side, they're viewing it as not safe and not secure. >> thank you very much, michelle caruso-cabrera in brussels today. let's move on now to a big development in apple's fight with the fbi. the u.s. is now reportedly working with an israeli firm to help the fbi crack into an iphone used by one of the san bernardino killers. let's get to josh lipton in our san francisco newsroom with more on this developing story. josh? >> well, brian, israeli newspaper says a firm called celebrite, some 15,000 law enforcement and military users,

the company reportedly provides the fbi with decryption technology as part of a contract signed with the bureau in 2013. the fbi did not immediately respond to requests for comment. founded in 1999, it employs more than 400 people and is a subsidiary of the sun corporation, a publicly traded japanese company. in the wake of the san bernardino attacks, apple fighting the doj over a judge's order that it write new software to bypass the security of the san bernardino terrorist iphone because apple says that software could be stolen, and this would set a dangerous precedent. now if cellebrite finds a way here that it can exploit the government would no longer need apple's help. ben beheron says this proves apple's point and encryption is a moving target and outsmarting the bad guys is no easy job. apple's lawyers do say that if the doj pursues this case, the

company will insist the government reveal this alleged security vulnerability so it can be addressed. brian, back to you. >> josh, stay with us here. let's also bring into the conversation don shimalski. is the fbi snubbing the nose at apple saying we can do this without you? >> the fbi said even though it was pursuing apple in court saying this is an act of last resort, we need the information stored on this phone used by one of the attackers in san bernardino, the fbi recently revealed it has been working behind the scenes trying to find some other solution. if the reports are accurate, neither the fbi nor cellebrite will say, they had a long-standing relationship with this firm, and they're well known in encryption and forensics world for its ability to extract information from a variety of mobile devices

including iphones. >> without getting too technically in the weeds, dawn, talk to us about the idea -- i'll call it memory mirroring rather than nand. memory mirroring. what the fbi might be able to do. >> yeah, this is -- we won't speak to the narrow geek world here. so forensic specialists yesterday put together an interesting thesis about how someone, the fbi or forensics folks, might be able to get around the password protections that apple built into its phones. and here is what might happen. forensics experts are saying remove the memory chip from the phone, copy the contents of the memory, much like using a device that is not all that dissimilar from the old cd burners, we used to make duplicate cds. and this way you have a complete copy of the information that is on the disc. on the memory chip. so if you go -- and then reattach the chip to the phone, and then go about trying to guess the password.

and if you trigger an erase feature after ten failed attempts, you can restore the information to the chip and restore it to its original contents and rtry to make ten more tries. >> let's say this works in the case against apple is on the back burner, is this actually a win for apple, on the privacy side, but a loss for apple on the pr side because, hey, you know what, this other firm can hack the iphone. >> well, i think apple's point has been their first priority here in this case, broadly to protect the privacy, security and safety of its users. i don't think tim cook ever said, listen, we can't stop outside parties, hackers, cybercriminals or agents from trying to break into our systems, they do try constantly and these are smart skilled men and women. all tech companies can say is, listen, no tech company would ever say their system can't be hacked. what they to say is when they are hacked, they try to prevent the damage as quickly as possible, put out a patch as quickly as possible.

that's why you're hearing apple lawyers say if this case goes forward, we want that patch. one question that i love to get from the fbi is if they do have this real security vulnerability, if they have a method to open this phone, are they going to share that? share that with other law enforcement, are they going to share it with sigh vance in new york or international law enforcement. so a lot of questions unanswered. >> my question is sort of -- dove tails out of what josh was just talking about. that is if the fbi and this firm, if it is this firm, succeed in decrypting this phone, at some point in the not too distant future, don't we end up right back where we are today because some other law enforcement agency is going to ask for a way in. and apple, meantime, is going to change its encryption somehow to defeat the way in that this firm and the fbi found. >> yeah, it is a cat and mouse game, where apple is trying to safeguard the device from any kinds of intrusions, either from

hackers or others and the government is arguing that it needs to be able to gather evidence, to gather information regarding crime. so i think we're going to see this continual process. cellebrite has a number of clients including the fbi. and it will continue to evolve its technology to try to continue to extract information from devices. meanwhile, apple and the rest of the technology world will try to stay one step ahead, we're going to have this continuing tension going forward. >> it is a company that is in existence to make money, josh. you have to wonder if they're successful in breaking into this iphone, what will that -- what will that solution then cost on the open market? >> really interesting. i was actually talking to chris sagoyan at the aclu. we heard about the mysterious third party, i was asking chris who he thought it could be. he did mention, sometimes u.s. government will pay private

security firms and pay them handsomely to detect these kind of security vulnerabilities. chris told me that number could be in the hundreds of thousands of dollars, melissa. >> all right, josh lipton and dawn, thank you, both, appreciate it. good discussion. up next, another big name company threatening to pull out of georgia over a controversial plan. the full details when "power lunch" returns. you're an at&t small business expert? sure am. my staff could use your help staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your

staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs. you should probably get your eyes checked. good one babe. optometry humor. right now get up to $650 in credits to help you switch to at&t. man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor.

man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems. welcome back to "power lunch." i'm melissa lee. oracle is suing hewlett-packard

enterprise saying they used third party support. google unit winning a new key client as home depot signs a deal to move some of its data to google's cloud servers. alphabet shares up a quarter of a percent. credit suisse will implement additional cost cuts including the elimination of 2,000 jobs at its investment banking unit. credit suisse shares are higher by .6% now after a spike earlier today. news alert now on disney. and let's get to julia boorstin. >> that's right. disney threatening to boycott making movies in georgia if the state enacts legislation to permit discrimination based on sexuality. the media giant issuing a statement saying, quote, disney and marvel are inclusive companies and although we have had great experiences filming in georgia, we will plan to take our business elsewhere should any legislation allowing discriminatory practices be signed into state law.

thanks to tax credit, disney made a number of films including captain america civil war in the state. the mpaa representing all the major hollywood studios already attacked legislation as discriminatory, urging the governor to not sign it. we have reached out to georgia's governor's office for a comment, but we have not yet heard back. back to you. >> julia, thank you very much. long time republican political consultant mike murphy summing up what many on the traditional side of the gop believe. >> i think she's beatable, incredibly beatable. a huge opportunity. i don't think trump can do it. we got problems, but trump is not the answer. he's poison. >> and the she there would presumably be hillary clinton. the lead over ted cruz expanded after last night's arizona and utah primaries. trump taking arizona. winner take all. cruz taking utah. to john harwood in washington. as i understood it, going into

these primaries last night, mr. trump, to secure the nomination, needed to win something like 57% of all those remaining delegates. is he on track after last night? >> well, pretty well. he got 58 delegates out of arizona and ted cruz got 40 out of utah. so that's about 57% right there. but, look, republican leaders, as mike murphy indicated, are not happy with the nomination. donald trump, they have a front-runner they think is too divisive to win. jeb bush has come out and endorsed ted cruz. but republican leaders don't much like ted cruz either. ted cruz, of course, called his senate republican leader mitch mcconnell a liar on the senate floor. super pac for ted cruz just in the last couple of days used racy pictures of melania trump from gq magazine to attract trump. trump responded by saying he's going to go after cruz's wife. cruz then called donald trump a

coward. paul ryan, the house speaker today did the only thing he could do, which is give a speech and ask everybody involved to raise their game. >> our political discourse, both the kind that we see on tv and the kind that we experience among each other it did not used to be this bad. and it does not have to be this way. >> now that is likely to have the same effect as president obama who just made a similar statement at a news conference in argentina, because neither president obama nor speaker ryan can control the candidates, they can't control what republican voters do, they also can't control the media, guys. >> john harwood, thank you very much. john reporting from washington. on deck, you're going to hear the word shangen a lot in coming days. that's the agreement that allows europeans to travel among 26 nations without a passport. and now some are questioning or calling for an end to this deal. we're back in two minutes with more on that growing debate.

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welcome back to "power lunch." let's check gold prices closing now, and a big driver of the trade and the commodities trade in general is the strength we're seeing in the u.s. dollar. gold prices now 1223. 90 an ounce, down 2%. we're seeing losses across the board in terms of the metals complex with the biggest losses now in palladium as well as silver. let's head over to dom chu with

more. >> whenever you see gold, silver prices, those precious metals move the way that you just showed, you got to check what is happening with the stocks that kind of benefit from them. in this case, we're talking about the gold miners themselves. you see the gold miners etf down by 4.5%. off its worst levels today. still a very, very large gap lower. these stocks have been on real up trends as of late, since the beginning of the year. newmont down 5 to 7%. big drivers here in terms of the met als trade. winners in 2016 so far. but giving back a good chunk of the gains, huge gains for the year, but big move down lower here, down by 4.5% for the major miners etf out there, gdx, melissa. back to you. >> big moves there. thank you, dom. now a check on the bond market. we had strength in the u.s.

dollar. we're having a bid in the bond market. the biggest move -- this is notable, in the 30 year and that yield is now down to 2.61%. 96.5 is the price on the 30-year bond. look at the ten year, where people are watching, that's the closest thing to mortgage rates there. 1.896%. we are back below 1.9, brian. >> anyone who is anyone in the auto world is in the big apple this week because the huge new york international auto show is under way. and phil lebeau with the task of checking out some of the world's hottest new cars. phil? >> brian, we're going to be talking about jeep when we come back from the break. it is the hottest brand going right now. and the man who has overseen the growth at jeep, mike manly, he joins us on "power lunch." new jeeps are coming and the future of growth for jeep.

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all the world's hottest new cars are in manhattan now. showing off their latest models with models. does the industry have a bit of a leaner year in store this year? phil lebeau standing by with the ceo of jeep, and a first on cnbc. >> thank you, brian. i'm joined by mike manley, ceo of jeep. you don't need models to sell jeeps. you're the hottest brand going now. >> thank you. >> we're outside at camp jeep, where people get a chance to see what the jeep capability is all about. you're showing some redesigned models, a little later on here. give me some sense of what the growth forecast is this year for jeep because you've been red hot over the last five years. >> well, you know, we came into the year off a world sales record and so far this year we're up 24%. so i expect significant growth after last year. we won't be able to keep 24% going, but we'll be above our world record. >> how much of that is driven by the jeep name, the fact that you got rather cheap gas now, so suvs are in demand, which one

play a greater factor now? >> we have seen a migration into the suv segment. that's not all about cheap gas. there are other factors driving that. that's helped us. with a great brand like jeep, you feel it with phenomenal product, put the two things together, communicate well with the customers and you get growth. >> there is no doubt that you have got it spot on when it comes to styling, when it comes to marketing. but the knock on jeep is whether it is jd power, consume reports, your quality is poor relative to the competition. what do you say to that? >> we respect those reports tremendously and to a large extent they are historically looking reports. we're working phenomenally hard to make sure that we're not just competitive, that we lead the way in terms of quality. i think we made some big strides, we're always going to keep the gas on that -- the gas on that particular issue to keep moving forward. and you're going to see improvements from jeep going forward. >> are you worried that it hurts the reputation, that you see the

reports continually. you're working on it, but you continually see the reports or the press is out there with these reports? >> of course. it is a big issue that -- as i said, though they are looking metrics that are being measured, for us it is important, our brand is represented in the right way and that is really why we're working on it incredibly hard. >> let's talk about the big growth opportunity for jeep. china. you're now manufacturing in country and you're rapidly developing or introducing newer models there. how quickly will china become the number two market overall. u.s. will be number one. >> yeah, china outside of the u.s. is number two for us. we're making a big transition from a pure importer to being a major local player. we already localized cherokee, that started late into last year. we'll follow that up in april with renegade, which will debut as a locally produced vehicle and then a third model before the end of the year. that's a massive transition for any brand, but that brings us, i think, really back in play on the local level. >> brian sullivan has a question

for you in the studio. >> not exactly hard hitting one either, phil. i'm a jeep owner and my buddies and i were talking about this last night, pictures going around on the internet of a 2018 grand wagonier concept car which we're all salivating over. is that going to happen, that wood sided new refresh of the grand wagonier. >> let me ask him. brian is talking about the grand wagonier concept getting a lot of attention, buzz on the internet now. his question is, is it just a concept that people can drool over or will we see it being made? >> you can tell him, we will absolutely see it being made. it is scheduled for around 2019. and people will absolutely drool over it. >> he's applauding as he hears your answer, he's applausing. one last question, cheap gas is not the only thing driving suv sales and jeep sales, but as gas prices start to move higher, when do you get worried the rotation starts to shift away from suvs and crossovers? >> let me tell you why that's not going to happen. today there is no compromise.

you can get into an suv, a crossover, you can get really good fuel economy, great ride and handling. even if gas prices move up, it is still an attractive choice. >> mike manley, ceo of jeep. he gave you the answer you wanted to hear. it is the hottest brand going now in the auto business. >> as a jeep owner, i'll do what we're supposed to do which is wave. he can't see it, but i'm doing the jeep wave. thank you very much. >> i'll let him know. the bottom of the hour, and let's get to sue herera with more news from brussels. >> here is the latest on those terror attacks. president obama speaking with the argentinean president in buenos aires said the world must be united against terrorism. >> the united states will continue to offer any assistance we can to help investigate these attacks and bring attackers to justice. we will also continue to go after isil aggressively until it is removed from syria and removed from iraq and finally

destroyed. >> president macri voiced argentina support for brussels as well. meanwhi meanwhile, the hunt is on for the suspect seen on the right of this video. he's believed to have escaped after the attacks at the airport yesterday. police identify the two other men as suicide bombers. one shown in the middle was deported from turkey last year. to belgium, and turkey reported that, but belgian authorities later set him free. police aren't saying how a suspect is linked to the attacks. we'll keep you posted as developments warrant. back to "power lunch." melissa, back to you. >> thank you, sue herera. big stock story, virgin america, shares are taking off. couldn't resist. on reports that the company is considering a sale, va stock up about 13% in morning trade and it continues throughout the afternoon, dom. >> absolutely.

and phil lebeau and i, he's on car duty now, saw that, but we have been trading e-mails back and forth trying to monitor the story. this is a bloomberg headline, story coming out early why this morning about the idea that virgin america is possibly shopping itself around. the story goes on to say citing sources again, source reporting, that they have received interest from interested parties and that they have now hired a financial adviser to take a look at what could happen there, a sale could happen perhaps in part, perhaps in whole, but still the shares are surging 13% now and just around 10:43 a.m. eastern time when the had headlines hit. the reason i before up the time is if you look at the competitors in the airline space, we did see ripple effects in the moves. if you look at a jetblue out there, pull up that one now, hawaiian airlines, you see the spikes there around 10:43 a.m. eastern time as well. this is interesting too, these are much smaller carriers on this side of the equation. virgin america is only $1.5 billion. talking 2.5 for hawaiian

airlines and 6.5 for jetblue. they're not the majors involved, but wanted to highlight the fact that other airlines are out there. >> it is interesting you mentioned the smaller ones, they could be the ones that can either be take-out targets or other airlines could buy stakes and jetblue, the rumor is that their partner would increase their involvement with jetblue or buy them outright. >> it is interesting too only because this virgin america concept is very much a u.s.-based concept. virgin atlantic does a lot of europe to u.s. flights and what not. you talk about the routes involved and maybe there is some complementary ones, there is a lot of speculation right now as to who may be involved, who could the interested party be. i would point out this is not sayingparties, just the market is handicapping it now. >> what makes it so believable is last quarterly report they posted, they had a 33% savings in fuel, but the capacity was up 10%, and the unit revenues were down 5%.

they got all that save frgz lower fuel costs, but it is not translating into revenue per passenger per mile. >> what is interesting too about this, we don't often talk about this idea that maybe private equity could be involved, but we don't know who those people are, these are unnamed, unidentified people that may be interested in the company. still what is interesting about the overall scheme is that these airlines have been on a roller coaster ride for the most part over the course of the past two years. high flyers, i couldn't resist again, early, a couple of years ago, they have seen their share of struggles over the past year or so. as we look at what happened with the airline sector overall, we always focus on the majors, the delta airlines, $38 billion. the americans, those types of things. see there, the nyc airline index. up by about 16%. the trade is still volatile. this is the latest coming out of there this time involving virgin america. >> dom, thank you. ty, back to you. up next, we're going to head back to brussels for a look at

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hello. my name is watson. together we can outthink the limits of what's possible. welcome to the cognitive era. live in brussels, belgium. we're getting word that the airport will still remain closed to passenger traffic at least through friday. however, cargo flights and private flights will resume and that's according to dow jones. reporting it is unclear when the terminal will be reconstructed or reopened. but once again, airplane flights at the bomb terminal have been shut down yesterday, today. we knew about tomorrow. and that will be extended at least through friday, though private flights and cargo flights can resume. guys, back to you. >> thank you very much, michelle caruso-cabrera. i'm joined by neil dwayne, chief investment officer of equities for alliance global and he's with us to talk about terrorism's toll on europe.

michelle, stick around. also fred kemp is with us who rejoins us from yesterday. we thank you, both, for being with us. neil, let me start with you. as a philosophical matter, is europe better off with open borders and the eu which is basically facilitates the movement of goods, the movement of people, the movement of money? is it better off -- >> it is definitely better off. it has been one of the founding principles of europe. so i think when you think about your constitution here in the u.s., the free movement of people, free ability to reside, it has been fundamental to the journey so far. >> but fred kemp, is it a practical matter in the long run? is fred with us? >> yeah, i'm with you. the politics are gravitating against right now, but the economics are clear. you have the schengen area with 26 countries, you have the eu economy which is $18.5 billion,

25% of global gdp, bigger than the u.s. economy, about 22% of gdp. with those borders closing or some sort of crisis in the schengen area, the estimates are of a loss to the economy of between $28 billion and $110 billion. you've got 1.7 million europeans that work across borders, so they go to work across borders every day. if this breaks down, the whole narrative of europe changes. >> we agree here, our two guests agree that from an economic standpoint, it is a slam dunk, it is clear. >> yes. >> that open borders, free flow of trade, free flow of capital and so forth is an economic good. >> yes. >> against that are those who are afraid. they are afraid that the practicalities in this dangerous world argue against it. how do you thread the needle between the economic good and the practicalities that we face on the ground?

>> i think at the moment, there is two types of migration. there is the -- within the eu migration, so let's say the polls or the bulgarians going to the united kingdom or france that is something that has upset a lot of the british and why we're going to have a referendum about it because often the people coming in undercut people for jobs dare i say the mexicans and jobs many americans are not willing to do and the war in syria and the migration out of the war zone. and i think that's where the migration issue becomes very, very complicated. and europe is not addressing or helping the citizens of their country navigate the two different issues. so they're being blurred into one because the man in the street sees all immigrants as people who are a threat to their own political and economic -- >> michelle, jump in with a question or a comment. >> i was going to say, intuitive way for americans to understand it is imagine if you had to stop

at every border in the united states. because the countries in europe are very small. imagine how onerous that would be, if capital didn't flow across the border. what is different about the united states and europe is there is far greater integration and cooperation among the police forces, the intelligence units of the united states. and so they can -- we can act collectively very quickly and more efficiently, where as what has become clear after paris, after belgium, there are separate institutions in every single one of these countries and already we hear the sniping back and forth, they don't share, you don't share, we need to get together and have some kind of institutional sharing that makes us all safer so we know where individuals are going. after paris, the leadership of paris said we got word after the attack from a noneu country that he had -- one of the attackers had been in greece, but hadn't heard it from any of the intelligence unit its within the eu. >> go ahead, fred.

jump in. >> i would like to pick up on that. the history of the eu has been never let a crisis go to waste. european leaders have to remind citizens of what europe was before 1945. it was centuries of conflict. the european colin steel community ended that and created this sphere of prosperity which then got expanded to the east of europe after the fall of the berlin wall. th that's what's risk, the largest economy in the world, and the largest community of democracies. i want to pick up on that intelligence question. that's crucial. at the end of the euro crisis, you had inspection of federal budgets, of country budgets by the federal sphere, you had closer banking supervision. but we were afraid europe would break apart. now they have to do the same with european spy agencies, with border controls, none of which is in place. if they don't do that, they're going to lose more and more of the faith of european subjects, and you're going to have more

nativism, more far right parties as people want to rely on their own countries and communities to protect them. european leaders have to step up right now, with american support. >> i guess, neil, to me, the idea is that when you make policy out of fear, when you react out of fear, it often, not always, but it often turns out not to be the smarter policy. >> i would totally agree, yes. >> and so the risk here is to do something and, oh, by the way, it doesn't in this case necessarily do away with the immediate threat of terror. >> no. absolutely. and i think the dynamic here is europe, even listening to fred's comment, europe has always been as the u.s. has a paul of immigration. even after world war ii, the program had more spaniards and italians go to germany than the

turks. i think people have forgotten how much migration happened in europe and they now fear it rather than realize that probably a lot of them are in fact immigrants into their own countries. >> i'm a little slow, michelle, as you know, but it seems it is interesting and ironic that some of the same fears that americans are expressing about the threats of terror, about the threats of labor flow into this country, the people from central or america or mexico coming in here and, quote, taking american jobs, are quite analogous as you point out neil, and fred, you also, to the concerns in europe that the polish workers are coming and taking irish jobs or wherever. michelle? >> yeah, it is absolutely the same. people, when they grow concerned about their economic interests, when they grow insecure about their economic interests, when you are no longer competitive because cheaper labor has come in, and undercut you, you want

to blame somebody. you want to do something. and then if you add a layer of insecurity and violence on top of it, then it is a double whammy. it is a very powerful argument for those who are fearful. >> so, fred, a final quick thought here, the eu is separate and distinct from the european monetary unit, from the euro. if you had to choose between losing the euro or losing the eu, which would you choose? >> i think you want both and you have to get more europe. the problem is the politics gravitates against it right now. what you can't do, crisis -- crisis can't be wasted as i said before, and you have to move now and it can't become a bigger crisis. if it becomes a bigger crisis, then it is harder to fix. you had sleeper cells in belgium for more than a decade. >> i apologize for giving you a

false choice, but you get what i was driving at. sort of -- you know what i mean? >> you have to have more europe or you may lose all of europe. that's what's at stake. >> on that rather eloquent note, more than i could have put it, neil, thank you. michelle, i know we'll check back with you later. brian? >> thank you very much. let's get back to the markets because dominic chu joining us on the market flash but a little deeper than that. nuance communication stock is tanking. tell us why. >> nuance communication does voice recognition software, right, think about siri, that type of stuff, the shares are falling now on news that google alphabet will compete with nuance by opening its speech recognition system to third party developers. this was announced at google's cloud platform conference happening now in san francisco. so at the moment here, this system could be for free for developers at its launch with pricing to be introduced later

on at a certain date. what is more important here is google is taking its speech api, application programming interface, that's going to allow basically anybody who wants to develop any kind of app to use its infrastructure, if you will, and its technology to make speech recognition as part of their particular app. that's the reason why nuance is dropping, you got a large competitor possibly coming in to a space that pretty much has been a dominant player in for quite some time. >> and giving it away for free. >> for now. we'll see what happens. >> if there is enough interest in the developer community around this, and there are enough apps that are favored by consumers, that could really be a boost for google's technology. >> for google's technology and we know they're making this huge push, right, into the cloud. they want to make their products more accessible so that people use them as a matter of their first choice. they're trying to get in the cloud game some would say relatively late because we know amazon and microsoft have dominant positions.

but with voice recognition here, they're just trying to open up the products that they have, trying to make that diversification that google and alphabet has been known for over the course of the past few years. >> thank you. >> nike shares, look at this, down over 2%, the day after the company reported disappointing sales in its latest quarter. does nike have room to run or time to kick it to the curb? we'll debate that when "power lunch" returns. the first stock index ♪ (musiwas createdoughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks.

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welcome back to "power lunch." shares of nike down nearly 3% now after the company reported weaker than expected sales in its latest quarter. let's bring in sam poser with stern. sam has a buy rating on nike. and joining us on the phone is susan anderson. great to have you with us. sam, i'll start with you. the stock is down today. why are you overlook the guidance falling short of consensus estimates when the valuation is where it is? >> first of all, i think that the q 4 guidance is, you know they maintain their full year number. and basically they manage to beat it every time. as far as the preliminary

guidance for next year, i think that's just at the low -- that's at the low end of their five year plan. and, you know, given the ammunition they have, the feedback we're getting from retailers and everything else, i think that this is just setting up this momentum of athletic both in the united states and around the world is continuing to be exceptionally strong. >> do they have a track record of being strong? is there reason to believe this forecast is in fact conservative based on past history? >> from a topline perspective, certainly. they continue to invest, they don't hide their fact that they're investing but they have been consistently beating the gross margin, they try to downplay the gross margin in q 4 so they wouldn't are to raise the full year. this is such a huge company, they have so many levers they can pull and i have no doubt they'll continue to pull them to deliver both topline growth and profitability. i would say the next two years at least. i think that there are 2020

target of 50 billion will be achieved in 2019. >> suesan what is the number within reason why you have a market perform, valuation, a concern of investors after a monster 2015 in terms of the stock run? >> yeah, most of it is valuation. it is trading almost at 26 times fiscal year to earnings, which is above its historical, which has always been in the low 20s. i think, you know what seems to be somewhat slowing growth now for them, it is definitely fully valued here. and we did see a slowdown in the futures and the u.s., they slowed to 10% versus the low teens and last quarter. and so, you know, we're seeing still some elevated inventories in the u.s. and their dtc business is what is driving the growth. i think if you get the u.s. slowing, that could lead to slowing topline and bottomline over the next year or two. at these levels it is very sternly valued and we add under

armour, much more expensive at almost 50 times, you're getting more than double the growth that you're getting with nike and it is not more than double the valuation. >> dtc direct to consumer. i wanted to ask you about the change in the way they apparently are reporting futures orders, which is very important metric for nike. it now includes according to a footnote in the company's earnings report not only external wholesale customers, but also internal orders from their direct consumer. how -- how does that impact how you look at the company, does it -- does it concern you at all? >> yeah, no, i think it is good because there was such a spread there historically and dtc is a bigger part of the business and growth profile. i do think it is helpful to include the more internal orders going forward. >> it is important to understand that they're not comparable on a basis unless you back the number back in. sam, i'm guessing you're telling your customers right now to buy the stock. >> yeah, i'm certainly telling

them to buy it. in regard to the decelerating backlog or future orders, i mean, they went from 14 to 10, but on a two-year stack, went from 29 to 27. we're talking about a $33 billion business that soon will be 50, growing double digits all over the place. as far as the excess inventory goes, the retailers we have spoken with, large and small, are seeing no impact from any of the excess inventory, and, in fact, are telling me the product they're seeing through the end of the year is some of the best stuff they have seen for a long, long time. so i think this concern, like, in somebody's mind is good, in reality, this isn't happening at their biggest customers. >> we got to leave it there. thanks for your time. appreciate it. sam poser and susan. to brian back at the desk. >> and back to dom. the flash on kb home. >> falling nearly 2% of ahead of

the first quarter earnings report after the closing bell. on average, preview, analysts expecting earnings of 11 cents a share, sales of $643 million. investors watching that deliveries number, expected to be just around 1800 in orders estimated to be up around 2,000 order mark. going to be an interesting earnings report to see in light of all of the recent weaker data in housing reports. keep an eye on it. "power lunch" back in two. there's no one road out there. no one surface... no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering, shift points, and suspension to fit the mood you're in... and the road you're on. the 2016 c-class. lease the c300 for $399 a month at your local mercedes-benz dealer.

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welcome back to "power lunch." here is the latest out of belgium at this hour. here's what we know. turkey's president says one of the brussels attackers, ibrahim el bakraoui was caught in turkey in june and deported to belgium. but he was then later corrected by a turkish official who said he was actually deported to the netherlands before being released. the brussels airports says cargo and private flights can resume but passenger flights suspended through at least friday. president obama held a joint news conference with argentine

president macri in buenos aires and spoke about the terror attacks. >> the world has to be united against terrorism and we can and we will defeat those who threaten the safety and security not only of our own people, but of people all around the world. >> and the state department announcing that secretary of state john kerry will travel to brussels on friday to express his condolences and meet with belgian and european union officials. pope francis urging the world to unite in denouncing the brussels attack, saying those responsible for the bloodshed had been blinded by cruel fundamentalism. security was tight at the vatican as thousands gathered in st. peters square for the pope's weekly general audience and also to observe holy week. we'll have continuing coverage of the latest out of the brussels area at the top and the bottom of each hour. melissa, back to you. >> thank you, sue. now to michelle live on the ground in brussels. michelle? >> i want to add to the

headlines that sue was saying, the metro in brussels will close at 7:00 p.m., tweeted out by the transit authority here. not because of any threat, at least they suggested that it was not because of in he threat, but perhaps due to an abundance of caution. it is part of what has come to be here in brussels trying to deal with just as they saw in the wake of the paris attacks, back in november, and now in the wake of their own attacks here, living with the police state that they have come to expect as a result of what has happened. and it caused some degree of people who say, look, we have to go on with our lives and then at the same time people who are fearful and worried when they get on the metro, when they get on a bus, and i would say it is very tense here. and also quite nervous but trying to live their lives and go forward. >> michelle, stay with us as we bring in daniel carson, chairman of croel, his company's expertise is in investigation,

cybersecurity and cyberrisk management. good to have you with us as always. we were talking yesterday, i forget if it was brian or melissa who posed the question this way, are the good guys winning or the bad guys winning? >> i think the good guys are have the upper hand. the gathering of intelligence has led last week to two successful raids in belgium, which resulted in the capture of salah abdeslam. there are going to be incidents but by and large the acquisition of intelligence is improving in the ability to respond is improving. >> this isn't exactly your area. but as you -- as we target isis, how do you beat isis? >> by gathering intelligence, by developing intelligencenetwork s, identifying leaders, knocking out the capability to get money, weapons and bombs. it is a wholistic approach to

doing this, but we're going to be experiencing these incidents until there is some political military solution. >> how do you knock out their ability to acquire money, weapons and bombs? >> it is, again, developing intelligence, tightening borders, identifying people who are their agents, and mobilizing that fashion. but probably greatest source is human intelligence and that means intelligence networks, informants, technology, using satellite communication and technology to intercept telephone calls, e-mails, and other forms of communication. >> technology is key. and nobody is saying that it is not. but we have talked about it a lot. how much do we need or does the eu need to get back to good old-fashioned sort of spy making, putting people of similar ethnic backgrounds, language, religion, inside these cells. it is hard. it is dangerous. but are we there at all? real human intelligence.

>> it is taking place. there are agents in the united states. we have developed cases that have prevented terrorist incidents because we have such agents. i believe they do are those agents in the ec. they have deterred and prevented some incidents, but they only have to be right once, as they said themselves. and occasionally there is going to be this kind of incident. >> let me bring in michelle for a question. hi, michelle. >> hey there, tyler. >> did you have a question? did you have a question in. >> i thought you were going to ask me a question. >> they said michelle next. i'll toss it over to you, for your reaction here to what you just heard from daniel. >> i think parallel to the discussion that we had earlier about whether or not you have seen greater financial integration, the greece crisis and the question about whether

greece would stay in the eurozone forced the recognition of the problems within not having the coordinated banking system. now i think what you're discovering is that you don't have a coordinated intelligence system you have many different countries. the way we talk about the cia and the fbi are rivals in the united states, well, here in europe you have rivalries among all the countries. and their intelligence units and there isn't enough intelligence sharing when you speak to people here involved in that. that is a key step, this they're going to deal with nonstate actors who are fighting this borderless war. >> daniel, i would be remiss if i didn't ask your sort of general sense of the battle over encryption that is taking place between the fbi and apple. and how you feel about -- you just said one of the critical things would be intercepting communications, telephone communications, texts, e-mails, and the like.

how do we walk that fine line between privacy and security? >> it is a balancing act but always a balancing act before the onset of the internet, the question was should we allow government to intercept telephone calls, and so we had a law enacted in 1968. if you had a judicial determination that finds there is probable cause to believe that a crime has been committed and that danger can be averted, then you have a neutral intermediary. i think this is the -- this is the same issue with respect to cracking encryptions and iphones. and as one of my former fbi colleagues said, the only people who gain by a lack of compromise in this are terrorists and pedophiles. so there has to be some progress in this area, and there has to be some recognition on the part of telecom companies there will be a neutral magistrate who will

determine that there is evidence that is important to save lives. and i'll make one other point, and that is until yesterday, in the so-called free travel zone, or the schengen zone, there was free travel among 26 member nations. you show your passport, you crossed the border. yesterday seven countries ended that, largely, and started to impose restrictions on travel between countries. that is an important step. >> we're running out of time. way i want to ask this, the attack was near an american airlines counter at the airport, the bombing in the metro was close to the u.s. embassy. do you believe part of this was directly targeted at the united states, despite physically taking place in belgium? >> yes, i do. i think it was probably aimed at people returning to the united states and that's why it was set up there. >> all right, daniel, thank you very much. daniel carson, chairman of croel. michelle, thank you as well. >> thank you. to dominic chu. >> remember that story about the

d.c. regulatory commission trying to put the brakes on the proposed exelon pepco utilities merger. now word that the d.c. regulators have approved exelon's purchase of pepco creating one of the nation's largest electric utilities, serving a lot of companies in the mid-atlantic part of the united states. shares pepco up by 27, 28% now. they were up by as much as 32%. the company conceding and giving certain rate concessions and certain benefits to its customers throughout the area as part of the deal. so exelon gets the deal for pepco. that's the reason why the shares are up 27%. >> you didn't even make a pep in pepco pun. highly disappointed. >> too many puns to melissa for the airline segment. >> taking off, soaring, there you go. we are just getting started. here what's on deck. does janet yellen have a mini revolt on her hands at the fed? steve liesman and why he thinks the answer is yes. how valeant pharma's huge drop may be slamming your retirement

money even if you do not own that stock. starbucks, stuck for a year, can their big international plans give their stock a boost? a good old-fashioned bull and bear debate on the coffee mermaid coming up. (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. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, you...us. (vo) go national. go like a pro.

man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers.

man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems. steve liesman is here with a story on our website that getting a lot of attention. it is oernl minly mini revolt i the fed. i've been critical of the fed

for over a year and all the fed speak and i would like to get a little deep near ther into that by playing a game. are you up for the game? >> always. >> here is the game. i'm pulling out a giant wad of hundreds now. they're 1 dollar bills. on every dollar, there is the fed -- i went through, i didn't want to -- i did game the game a little bit. here we go. i'm going to announce the fed, i want you to tell me who runs that fed and where they stand on fed policy. >> okay. >> are you ready? here we go. for fed questions for 100, alex, san francisco. >> that's fed president john williams. he's largely thought to be a centerist but angling for fed policy. >> leaning hawkish. >> leaning hawkish. >> you get to keep the money.

atlanta, georgia. >> so you didn't rig this? this is in the story i'm talking about. dennis lockhart, again, a centrist, the way he's leaning is a good way to judge the way the fed is going. he said april ought to be on the table, counterveiling the sense from the meeting last week that maybe it was more june or september. >> shocking. >> comments were big, yeah. >> so lockhart leaning hawkish. >> leaning hawkish. another buck. >> st. louis, missouri. >> that's jim bullard, good friend of cnbc, comes on quite a bit. today, another network that you're familiar with, he also said april. this is -- let's rewind, brian, back to last week. what did you think coming out of the meeting? and if you're like everybody -- >> i thought the meeting and i hate to use this term, pivoted dovish. >> dovish, absolutely. >> now -- >> so did every other intelligent fed observer, so did

the market which took the chance of a june rate hike, pushed to september, now i got all these folks, all these dollar bills saying april. >> okay. cleveland, ohio. >> that's an interesting one. that's loretta j. mester, out of philadelphia, she was his research directdirector, goes t cleveland. if there is a move to april, i think she would go with it. i think she leans hawkish. >> we have to speed -- i have three choices, richmond, dallas or chicago left. pick one. >> richmond is hawkish. dallas is a new president, kaplan, also talked april. just came out with that. and what is the last one? >> chicago. >> chicago dovish. amid the terror attack, actually when evans was speaking, they made a few hawkish comments, few dovish ones, but yield rose,

reacted more to evans yesterday than brussels. >> statement more dovish. everyone we spoke to more hawkish. you're rich. >> cnbc.com. >> check it out. full credit to kevin flynn, my producer, who came up with this game. that's his money too, so give it back to him. >> i earned this money. >> let's bring in matt maily. we talk about the fed in a second. you wrote something, you always write interesting notes. this morning, it caught my eye, you said 15 or 20 years you've been doing this kind of work, you've never seen a year that started off so crazily, so volatile with stocks and then became so blah. do you think a lot of that is because of the fed? >> i do think so. people are trying to figure out what is going to happen next. we did have a little bit of hoopla on thursday and friday with the expiration, but the last two weeks, just dead quiet. and, you know, we're kind of between the situation here where i think investors are, well, the fed seemed to be more dovish

than they had been thinking. we have the ecb with adding on to their stimulus package. and the boj as well. and then, of course, the other side, we're back up to the valuation levels that are stretched. and so -- and we also have earnings that aren't so good and growth not so great. people are, like, frozen, deer in the headlight. >> six or nine months ago on the year, the fed should stop talking. i want to hear from yellen. that's pretty much it. and our game was supposed to highlight how much talk there has been and maybe different views. as a guy that reads probably the text of everything that they say, are you confused? do you know where the fed stands as a group? >> this is my take on it. just remember back in 2013, when they came out with the taper situation, the fed learned the hard way that they really need to telegraph what they're going to do. everybody got it wrong, the bond mark

market, but absolutely killed and everybody moved from one side of the ball to the other and lost money doing so. september, when everybody thought they would start tapering, the fed didn't and they all got killed again. so the fed i think is much more every time they are very market sensitive because let's face it, they said, through the wealth effect of things and market is one of the tools they use, in helping the economy. >> i want to chime in on that a little bit. what surprised me about this is i'm always in favor of more talk. the more we know, the better able we're able to figure out what it is the fed is going to do. just very unusual to be less than a week from the meeting where what felt like a definitive statement was taken from the market, from people like yourself, and said, you know what, i don't have to worry about next month and all of a sudden, five of the folks, i'm including esther george, five folks come forward and say, you know what, april is on the table. to her credit, yellen said april is on the table. but the gist of almost everything else she said seemed like it was not.

>> and i agree, steve. i think the reason they're doing it, to be perfectly honest, easily could be wrong, i think they realize, my goodness, the fed -- the markets and the pundits overread our dovish comments. they're trying to get back people back into a little more -- >> they got it wrong in their message on wednesday. >> there you go. what did greenspan, something like -- >> if you understand what i'm saying, i must have misspoken. thank you very much. give the money back to kevin flynn. >> i'm not quite that hard up that i need to take kevin's money. you may have thought the big slide in shares of valeant pharma only hurts if you're a billionaire hedge fund manager. no, your retirement plan could be impacted as well. we're going to explain how coming up. the first stock index ♪ (musiwas createdoughout)

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it is dusk or evening time in brussels and there you're looking live at a memorial service to the 30 some victims of yesterday's terror attacks in the capital of belgium. joining us now on the set is new jersey senator robert menendez, democrat, ranking member of the senate foreign relations committee. senator, welcome. glad you could stop by. >> good to be with you. >> is the united states doing everything it can to help europe fight terror because that's where so many of these attacks have happened. we have not been immune obviously, san bernardino, most notably but others as well. are we doing everything we can? >> i think we're doing everything we can in terms of sharing intelligence and information, which is the key to trying to stop an attack before it happens. i think the europeans have to work at their process of security in a much more heightened sense than they had. and they have challenges by virtue of the european union and its rules and its borders, and

so part of that means a much more greater commitment to security and intelligence. >> there has been a lot of talk on both sides of the political aisle, the president talking about destroying isis, the gop candidate saying basically the same thing, that that's their goal, they'll do it harder, faster, morer. how do you defeat, decapitate isis? >> well in first instance i think we have to make a concentrated effort to go after raqqah, the command and control. for so long as they have a center in which they can lead their effort with impunity, they can direct attacks -- >> who needs to do that? whose forces need to do that? >> i think we have to have a collective effort. we have to have a coalition of governments truly willing and committed in resources to achieve it. led hopefully by the gulf countries, but assisted by us. we also have to look at what is happening in libya, which is increasingly a challenge.

you can't let them develop another center of control, but our biggest challenge is when someone is willing to strap on a bomb, and die as a way of glorification, that is an enormous challenge and so we also concurrently trying to decapitate their command and control centers, have to be in the battle of ideas. >> it is sort of the definition, what you just described, the definition of asymmetrical warfare when the other side does not and in fact sees a higher calling in dying. i was talking to one of our earlier guests off camera, about the origins of where we find ourselves today. there are a lot of failed states in the middle east, going back from 20 some years ago, with the first gulf war, libya destroyed state, syria nonfufrnctioning state, iraq nonfunctioning state, afghanistan, barely functioning. now concerns in egypt and turkey. how much does the west need to look and the united states need

to look at its self and what we have done there and what we have not done there by way of sort of assessing responsibility for what we're dealing with right now. >> in first analysis, those people who lead their countries are most responsible. and when years ago i made a speech, i said if we don't listen to the arab street, we're destined to listen to the consequences. a population overwhelmingly young and overwhelmingly poor with no aspirations for the future. that is a tinder box of social explosion. at the same time, we should be demanding of governments who we engage with a greater standard of democracy, transparency, respect for its citizens. greater economic changes that bring greater social standing, and at the -- but probably one of the worst decisions we have made over this time is the invasion in iraq, which i voted against because i saw no clear

and present danger to the united states, no imminent threat and no evidence of weapons of mass destruction. that changed the calculus in that part of the world with iran and other countries in a way that we are paying the consequences still today. >> senator menendez, thank you very much for being with us. we appreciate your time today. >> thank you. >> senator robert menendez of new jersey. "power lunch" will be right back. its intelligent drive is msystems...ng. paradigm-shifting. its technology-filled cabin...jaw-dropping. its performance...breathtaking. its self-parking...and self-braking...show-stopping. the all-new glc. mercedes-benz resets the bar for the luxury suv. starting at $38,950.

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hello, everyone. i'm sue herera. here is the latest on the terror attacks in belgium. authorities search for suspects in the deadly bombings. police are focusing in on the man seen on .right of the video. they believe he escaped after the explosions at the airport. authorities have now identified the man in the middle as a suicide bomber named ibrahim el bakraoui. the turkish president says he was deported from turkey to the netherlands last year. turkey says it warned both the netherlands and belgium that he was a foreign terrorist fighter. brussels airport will be opened to cargo and private flights, but the passenger terminal is now closed until at least friday. earlier the king and queen laid a wreath there in tribute while the city grieves.

>> i'm afraid it is not the last one. so might be some more terrorists in this town, but, you know, never know. >> i just hope we will manage to put our strength together and effort and resolve the problem. we have no other way now. >> the islamic state has claimed responsibility for the bombings that killed 31 and injured 270. brian, back to you. i'll see you in half an hour. >> sue, thank you very much. the oil market is closing for the day. let's get pricing now with jackie d. at the nymex. >> an important close for crude oil today, under $40 a barrel. $39.79 where wti finished because of the massive build reported by the department of energy, larger than expectations, larger than the api. it was over 9 million barrels. we are at record levels in terms of what's in storage now. we are not working through that supply glut, that's what analysts have been cautioning about as we see this run-up in prices.

you had this little bit of a stealth move higher in the dollar, that's been negative for commodities. in terms of production levels in the report, we saw that for the fourth week in a row we went closer to 9 million barrels, but not falling under that daily production level, which is what people really want to see. interesting because technically speaking when we see the downward momentum like this, downside pressure, we usually get more selling, but tomorrow, we're heading into the long weekend. so temper that with people not necessarily wanting to be short. back to you. >> jackie, thank you very much. it is time now for our daily segment trading nation. let us trade the xle energy etf as oil recovered a bit, so has that etf, up 10% on the month. is that run done or more to come? we have aaron gibbs and todd gordon. a pretty impressive run, erin. do you think there is more, excuse me, gas left in the tank? >> short-term, it is possible. particularly as we have the

qatar april oil producers meeting coming up. really long-term i have major concerns about the energy sector. first of all, we're looking at 60% earnings contraction. really a big dip and another thing, they have a lot of debt coming due they have to roll over, potentially a higher rates and finally it is the pes. these guys are trading at 70 times forward earnings. look at the charts, you think you're looking at biotech stocks. so i have some real concerns about these companies being able to trade at valuations, even if gas and oil recover. >> all right, there you go. todd gordon, get the technical side of the xle. what are you seeing when you look at the charts? >> this whole recovery that we have seen in 2016 and the broader markets has been led by materials in energy. bad news is this xle that we're talking about has reached technically an overblock condition. if i dive into the charts here, we have a combination of two key

factors, one is the downtrending moving average, that's that purple downtrending line and then the blue one, the horizontal line, that's a two-thirds retracement, a correction will go two-thirds, stop. we have a combination of those two factors. that's between the $64 region and $65. on top of that, with energy, just broken back below $40, it looks like the leader in this market has failed and along with materials and we could see downside to come. >> downside to come, todd gordon, thank you very much. erin gibbs, thank you very much. we do two additional segments every day, but you got to go to our website, to see them. melissa? solid rebound for valeant pharmaceuticals, up 25% since monday when the company announced the ceo is leaving. bill ackman is joining the board. it plummeted more than 80% in just one year, leaving many investors including retirees exposed to the loss. valeant's number one shareholder is ruane, cunniff.

with the stock down so much, sequoia is underperforming 98% of its peers so far this year according to morning star. joining us on the phone is david ansalem. great to have you with us. >> nice to be here. >> you think that this is a company that needs to be broken up. with bill ackman now on the board, with michael pearson out, does it make it more likely, speed up the time frame on that? >> i think it could. and i think frankly that's the easiest way to salvage the assets and salvage some value here. what i've been saying in the past is that the company is really a series of disparate parts, no core here. and there is a lot of tattered customer relationships here. so bottom line is i think a breakup is the best path to

unlocking some value. >> we led off the introduction to you, david, talking about the pension funds that might be exposed. i'm wondering if these funds now are strong hands, in other words, at this point in time, are they more likely to sell in your experience or to hold on? is there pressure on them from advisers and the people they serve to actually dump out of the shares? >> well, it is hard for me to speak to that. but i would say is right now i think the creditors are calling the shots here with the company, certainly with the potential for a default risk. my view is that i still think there are a number of holders that are still in denial about the mess here that has been created over the last few years. so that's my view here. and so going forward, i think ultimately there is going to be holders, going to be some of the funds who are going to conclude

that the best option is to try to get out. >> sure, we mentioned the stock is up 26% since monday or so. that sounds and feels look a short squeeze. but i ask you about whether or not those are strong hands holding the stock because the stock gets a little bit of a reprieve because of the share price. if the people start selling, could we see the resumption of the sort of downward spiral which could actually pressure the company further into taking action? >> that's certainly possible. look, april 29th is an important date because of the deadline on filing of the 10k and do we know that the accounting issues are deeper than what they have been letting on, we don't know. so could we see a resumption of selling pressure as we get closer to date and don't see a filing, that could happen. >> david, thanks a lot, appreciate it. david ansalem. thank you very much, melissa. we got word that the yankees alex rodriguez told espn will hang them up after the 2017 season.

a-rod turns 41 in july. he is a 20-year veteran of baseball, brian. one of the most certainly controversial and i would say probably disliked players of his generation. >> how do you really feel in. >> despite his amazing talent. >> coming back the way he did, he had a good year last year. >> he did. >> i'm no yankee fan. but i thought what he did at his age, he's, like, a couple of years younger than you. >> couple of years. >> he's taking some pretty heavy cuts up there. had a pretty good year. i wonder when people say they're going to retire at the end of the next year, i think 2025, i'll step away from television. nobody cares. >> i would -- >> i would wager there will not be the kind of kobe bryant, derek jeter, mariano rivera going away tour for alex. >> you mean, you're not going to go to every ballpark in america and tip your cap to a-rod? >> no, nothing against him. i actually believe that the players who were part of the steroid era ought to be eligible

and elected into the baseball hall of fame. >> that's an interesting point of view because is your argument based on the fact that probably most of the pitchers were also juicing and therefore the playing field was about the same -- >> the pitchers were probably juicing. i think the players association and the ownership were tacitly complicit. >> he's a big dude. big guy. >> big man. >> he's graceful. graceful. >> fluid. and apparently dating somebody. >> dating -- shares of abercrombie and fitch up, but someone thinks the stock will go up more. we'll have that call and four other stocks to watch. and now the latest from trading nation.cnbc.com and a word from our sponsor. >> we have been in a near zero interest rate environment for a very long time now and as a result dividend paying stocks have become very popular with investors searching for yield.

but this can be a dangerous strategy because stocks not only have more capital risk than bonds, if interest rates should start to rise, these stocks can become some of the most vulnerable to a market pullback.

time for our daily segment street talk. we dig out analyst recommendations we think you need to know about. i got lazy on this one. i pulled up a couple from yesterday. with the coverage, we did not do street talk. some calls still valid. abercrombie and fitch, tuesday call, but jeffries named it a new franchise pick. they note a few things. improving industry trends, improving sales, margins may have bottomed and like the fact there are fewer shares outstanding to boost the target to 50 from 40, about 60% -- 65% upside. >> that's a lot. this is a turn around story here. latest earnings report they posted their first positive same store sales first gain in more than three years. >> don't forget aeropostale having issues. nasdaq, downgraded outperform from strong buy to 70. the stock had a good run up 12% year to date, 30%.

recent acquisitions should provide upside. the increase in the price target is specifically because of the depreciation from ise. >> a downgrade, they still like the stock. they went from we love it to we like it. >> james, you know, i don't know, strong bonds. >> downgrade to an outperform. next up, o'reilly automotive, tuesday call. oppenheimer -- good call. oppenheimer upgraded outperform from market perform. $300 target on the stock. not an abercrombie up side. the analyst cites a few things, older cars on the road, driving more miles, conditions of the roads. and also the fact that because gas prices lower income consumers have more money to spend to try to fix back up their cars. they like o'reilly automotive. >> you know how old the average car is out there now in. >> 11 years. >> 11 1/2 years. that's a record high. that's unbelievable.

>> i -- my car, my daily drive is six years old. i have a car 14 years old. have you seen the roads? they're so bad. why would anybody buy a new car around here. get it beaten. >> next up -- >> i don't have any passion about that issue. >> mixed fiscal fourth quarter, earning report last night. had a billings miss and faced tough comparisons, solid guidance reflects confidence in the business. it is trading near the middle and good cash flow, expansion remains -- cash low expansion remains a sector weight. they're saying wait for a pullback in the shares, though it is seeing a pullback 4%. >> power city index, 40 metro area indexes. raleigh was the best performing stock market city in america. this year, no. it is like the worst. completely collapsed. raleigh, get your act together. infeed, you talked about it on

fast money, deutsche bank upgrading buy to hold. after attending a big industry confidence, he's more optimistic in the core communication semiconductor business and says while they hope for a lower republican tri poin entry point, thinks there is a chance the company could get bought. mentions that in the note. boost the target from 40 to 30. >> quite a run since february. >> semiconductor company based in -- where they all are, california. big moves in metals today. street talk is over. we'll explain what is driving gold down in a big way. plus, starbucks shares down 2% so far this year. flat money for six months. what can the company do to perk up its stock? a good old-fashioned bull/bear debate.

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a bit of a market check at 11 minutes before the hour. big move in gold today. it is down 2%. the dollar strengthening. and some fed officials making some hawkish comments today. big moves in the etf that track

gold and the gold miners as you see right there. the spider gold trust down almost 2%. market vectors gold miners down 5%. and the direction gold bullion three times, three times leverage down 15%. other metals, including silver, copper also lower today. checkous the russell 2000. it is down today as well, almost 5% lower so far for the year. melissa? tyler, happening right now, starbucks is holding its annual shareholders meeting. howard shultz speaking right now and we'll continue to monitor it. as shares of the coffee king are still down. so what's the next stage of growth for the company? and the stock? joining us to make the bullish case is shareholders peter anderson, chief investment officer with congress wealth management. making the bearish case is will slaybaugh, an equal weight

rating. great to have you both with us. will, you say the valuation is too high. 32 times. why? >> thanks for having me. i think they have put up pretty impressive results. and really no doubting the momentum they have, but i think that's that's about 35% above its five here 'tis turkeyal valuation average, so i think a lot of the good news is simply baked into the price here. >> you made the case that 32 times is about when the company was growing at twice the current pace. peter, how do you feel about paying that multiple for half of the growth you could have gotten years ago? >> well, you know, i'm not a coffee drinker myself, but i am very well bullish on starbucks for a number of reasons. thanks for having me on. normally i'm on talking about

very risky stocks. this is a refreshing change for me, because i consider it a very low risk, but moderate return stock, okay? we're in a product that interlastic demand. certainly the value at 32 times could be considered a little tippy, but the prospects for the company are very, very exciting. i mean, we have international growth. we talked a bit about china. for instance, they're expecting to double the store count in over i think it's about three years, so you could almost think of it as yum brands tried to do this, but they were in a disaster, and it's because of the headline risk. starbucks has nothing like that in terms of headline risk. >> sure. >> it's innovative, and it's innovative in a very simple business, right? coffee beans. it's all about -- it's a marketing 101 dream case in terms of attracting customers and keeping them, and they have done a fantastic job in a business that has zero switching costs. >> peter makes a great case, you

probably agree with a lot of them. they have also made some changes to the rewards program, which is really netted them a lot more people enrolled in the program. i think they're up 170,000 members to the program since they launched it. i mean, if your view, what is the biggest risk to your bearish case? >> yeah, i think the my starbucks rewards program is far and away the best program out there in restaurants. they typically spent around 3x as much as a typical user. the additional piece, the food piece adding about 300 basis points of same-store sales growth is helping, but i don't think that's a additional source of up side. so the way i look at it now is we're facing more difficult comparisons year over year. typically restaurant consumer stocks, as you roll into facing they -- tend to trade poorly. we would look for a better entry point. while they're completely valid i think they're baked into the stock here.

>> thank so much for your time f. guys. back over to you guys. actually i'll take it. up next the next step for brussels. we'll be right back. sales event is on. with extraordinary offers on the exhilarating is... the thrilling gs... and the powerful rc coupe. ♪ this is the pursuit of perfection. (patrick 2) pretty great.ke to be the boss of you? (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. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, you...us. (vo) go national. go like a pro. we built our factories here because of a huge natural resource.

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lunch." as night falls here in brussels, we're seeing people gathering here. it's the center of the city, there's a very wide plaza there. we're showing you some video, where you with see the crowds have gathered. they've left floral tributes, candles, drawings, cards all placed on the ground. at one point they began chanting "all together." the city trying to recover, and we wait to see if the manhunt will finally locate the one individual that the police say they're looking for from the closed-circuit television video we saw from the airport yesterday. back to you. >> michelle, there were reports earlier today that i heard on cbs radio that that individual had been apprehended, but obviously those were incorrect. do we know his identity? do we know his role in this cell? >> reporter: there is so much that is unknown. at first we knew supposedly that

the two brothers were in the photo, now it's not clear exactly. we know one individual in the center of the photo, his name, his identity. the rest of the picture isn't clear. there's another body. but the facts have been changing so quickly. it's been very, very tough to cover. >> michelle, what was it like for you, getting into brussels? you can came from cuba. what was your journey like? >> reporter: so we couldn't fly into brussels, because the airport is closed and going to be closed at least through friday. so we flew into paris, we to drive. we saw extra security for sure into paris, as we drove toward the belgian border or path was open into the country, but there was a police checkpoint for leaving the country because of that manhunt, and there was a tremendous amount of traffic. it was this key moment highlighting the issues that you guys have discussed so much during the show, which is what are the future of borders in europe? they're asking that question, and people are incredibly

divided about what's going to happen in terms of economics versus security. >> it's interesting, michelle, to hear renewed calls or crisis for putting up these borders once again. not only are we hearing it through the debate, but marie la pen also say, you know what? let's put up walls again. maybe it would give ownership to border patrol. >> reporter: yes. she's been very consistent about that. she wants control of the border. she does not want this concept of there should be more europe. it speaks of the general idea we also see coming up with the whole debate whether they should leave the eu, how much sovereignty do you have over what's happening in your country at any given time, whether it's your money, whether it's your security, whether it's the banks, whether it's the local regulations. it comes up over and over again during this eu project.

>> michelle, thanks so much. great work. michelle caruso-cabrera in brussels, belgium, for us. >> no doubt much more to come. thank you all for watching "power lunch" today. "closing bell" starts right now. here we go. hi, everybody. welcome to "closing bell." i'm kelly ehave been. >> and i'm bill griffeth. big moves in commodity-driven stocks. not a lot of otherwise. freeport mac moran, conoco getting hit hard as oil drops and the dollar rallies. we have someone who says oil is headed to $50 a barrel by the end of this year. he'll make his case. >> and many revolts over at the fed. steve liesman has details and the impact it could have on rate hikes and this market. >> great story today. i hope