at present, many estimates show the neutral rate to be quite low by historical standards. indeed, close to zero when measured in real or inflation-adjusted terms. the current actual value of the federal funds rate also measured in real terms is even lower, somewhere around minus 1%. with the actual real federal funds rate modestly below the relatively low neutral rate, the stance of monetary policy at present should be viewed as modestly accommodative. although the economy is now fairly close to the fomc's goal of maximum employment, i view our modestly accommodative stance of policy is appropriate for several reasons. first, with inflation continuing

to run below our objective, a mild undershooting of the unemployment rate considered to be normal in the longer run could help inflation, could help move inflation back to 2% more quickly. second, a stronger job market could also support labor market improvement along other dimensions, including greater labor force participation. a third reason relates to the risks associated with the constraint on conventional monetary policy when the federal funds rate is near zero. if inflation were to move persistently above 2%, or the economy were to become noticeably overheated, the committee could readily increase the target range for the federal funds rate. however, if inflation were to remain persistently low or the

expansion were to falter, the fomc would be able to provide only limited amount of additional stimulus through conventional means. these motivations notwithstanding, i continue to believe that it will be appropriate to gradually reduce the degree of monetary policy accommodation, provided that labor market conditions strengthen further and inflation continues to make progress toward our 2% objective. because monetary policy affects the economy with a lag, steps to withdraw this monetary accommodation ought to be initiated before the fomc's goals are fully reached. and if the head winds that have lingered since the crisis slowly abate, as i anticipate, this would mean the neutral rate of

interest rates would move up to provide gradual increases in the federal funds rate, but i stress that the economic outlook, including the pace at which the neutral rate may shift over time is uncertain, so monetary policy cannot proceed on any preset path. this point is well illustrated by events so far this year. for a time in january and early february, financial markets here and abroad became turbulent, and financial conditions tightened, reflecting and reenforcing concerns about downside risks to the global economy. in addition, data received during the winter suggested that u.s. growth had weakened, even as progress in the labor market remained solid. because the implications of these developments for the economic outlook were unclear, the fomc decided at its january,

march and april meetings that it would be prudent to maintain the existing target range for the federal funds rate. over the past few months, financial conditions have recovered significantly, and many of the risks from abroad have diminished, although some risks remain. in addition, consumer spending appears to have rebounded, providing some reassurance that overall growth has indeed picked up as expected. unfortunately, as i noted earlier, new questions about the economic outlook have been raised by the recent labor market data. is the markedly reduced pace of hiring in april and may a harbinger of a persistent slowdown in the broader economy? or will monthly payroll gains move up toward the solid pace they maintained earlier this

year and in 2015? does the latest reading on the unemployment rate indicate that we are essentially back to full employment? or does relatively subdued wage growth signal that more slack remains? my colleagues and i will be wrestling with these and other related questions going forward. to summarize, i've explained why i expect the u.s. economy will continue to improve, and why i expect that further gradual increases in the federal funds rate will probably be appropriate to best promote the fomc's goals of maximum employment and price stability. i've also laid out the considerable and unavoidable uncertainties to this economy and appropriate path of the federal funds rate. my colleagues and i will make our policy decisions based on

what incoming information implies for the outlook and the risk to that outlook. what is certain is that monetary policy is not on a preset course, and that the committee will respond to new data and reassess risks so as to best achieve our goals. thank you very much. >> thank you so much. the chair has graciously agreed to answer a couple of questions within our time constraints. from members and guests of the council. so if we have any questions, let's hear them. there are two microphones. >> thank you very much for coming here, dr. yellen. >> my pleasure. >> when deciding whether to keep short-term interest rates low,

is your primary concern gdp growth and the unemployment rate over the next few quarters or do you also consider the negative follow-on effects that occur much later due to low interest rates such as, i'm sure you heard this, a few hundred thousand times, if you could imagine consumers getting into too much debt, take advantage of the low interest rates and we get five years from now with defaults or defined benefit pension plans having to invest more money into the plan, less spending now or underfund and default later that, sort of thing. do you take that into consideration, too? to what extent do you balance one versus the other? thank you very much. >> thank you for that question. the federal reserve takes its mandate and appropriate objectives from congress, and

congress has assigned to us two main goals, namely maximum employment or full employment and price stability. so that is our focus and that's what we keep our eyes on. you asked if our focus is just the next couple of quarters and the answer to that is absolutely no. we are trying to take a medium and longer term perspective in setting monetary policy. we respond and our views on policy respond to incoming data such as a surprise like the labor market report last friday, only to the extent that we determine or come to the view that the data is meaningful in terms of changing our view of the medium and longer term economic outlook.

so we are focused on the medium and longer term. and you mentioned various negative impacts of low interest rates which we well recognize. you, in particular, mentioned the impact on insurance companies and pension funds, the fact low interest rates can reach entities like those but also ordinary investors to reach for yield to take on risk that could ultimately have serious negative consequences. and of course, as we saw most importantly and dramatically in the case of the financial crisis, such risk-taking behavior, when it becomes really excessive, has in the medium and longer term very serious negative effects for the economy and the attainment of the

employment and price stability goals that congress assigned to us. so we look very carefully at financial stability risks. we try to assess those. and on occasions, i think we would prefer, most of my colleagues and i believe there are other tools that can be used to address emerging financial stability risks so-called macro or supervisory tools, i would never rule out the possibility that if we thought a stance of low interest rates was giving rise to serious financial stability risks, that that could become a factor affecting policy. >> thank you very much. >> thank you for your time today. i would like to ask about the dynamics on the committee and your role as chair.

i think there is impression in the financial media or among market participants that essentially your vote is the one that matters. and clearly, you're the chair but there are also the other people in the room. i'm wondering how you view your role in terms of coming into the meeting with an outcome that you're expecting versus sort of judging where the committee is. i'm wondering if you faced the situation during your term as chair where you came in expecting one outcome but were swayed by the weight of the committee? thank you. >> thank you for that. so the federal reserve system was intentionally designed to be one where many independent voices and thinkers would come together around a table to work constructively together, but to bring independent points of

view, formed in part by the contacts we have contacts with our local communities, businesses, households, consumers in our communities assessing and bringing to bear information about the economy and the outlook. so i have assembled around the table at the moment, we are two short, we're at 17. 17 intelligent, thoughtful individuals who come with their own independent thoughts. and i feel my job is to, first of all, add my own thoughts. i'm also thinking about all of this data and i -- and what is the right policy, and we share our thoughts with one another.

not only at the meeting, but also in the run-up to the meeting and on other occasions, we talk to one another. and i look to achieve a consensus in the committee. sometimes people dissent. i believe i've had as many as three dissents on one occasion, and i think some dissent is certainly to be expected. in an economy as complex as ours. sometimes changes and ways that are different interpretations as to what's happening, but i am looking to find a consensus to try to help form that consensus, and i think my colleagues look to me to explain what that consensus is. i will say that i have never founded a difficulty to be in that consensus myself.

so i can't really think of any occasion where the outcome or decision at a meeting is one that i haven't personally been comfortable with, and i think we have come together as a committee, and while there are a range of views and the world hears them expressed, i think we have considerable consensus and respect for one another. >> thank you. my question regard communication and the ability to provide any insight or forward guidance to the financial markets which are no doubt watching all of this very interestedly. you defer to the desire to gradually normalize rates to a real normal level which is above the rate we see today. yet with the degree of data choppiness and uncertainty around whether or not some of the recent data is a trend or just an anomaly, i wonder if you could comment on the ability to

provide guidance that is any more forward looking than two or three weeks based on the data coming to the committee? thank you. >> so let me start by saying that the committee frequently refers to this process of normalizing rates, and i think maybe it's useful to make clear that that's not some independent goal of monetary policy that we have full employment, price stability and normalization of rates. most of my colleagues and i believe in a pretty normal economy, it's likely to be appropriate to have a higher level of interest rates, perhaps not the historical average, but something higher than we've had in recent years. even that, what is a normal level of interest rates in a normal economy, i tried to emphasize, let me say again,

it's something over which we have to be uncertain. there have been shifts in the economy. i think the current level of neutral or normal rates is pretty low. i do believe that will tend to rise over time, which if it does, means interest rates would appropriately afford the economy move further up. but i have to say that is something we're uncertain about and have to find out over time. now with respect to forward guidance, i know market participants really want to know exactly what's going to happen. it is only on rare occasions when we are able to provide that kind of guidance. there is, as i said, about 18 times no preset plan, and we look at data and we have to rethink the outlook constantly,

and in light of that changed outlook, reevaluate. i really think the best we can legit plaimately do is explain factors are guiding our thinking. we provide detailed information every three months. each participant -- this isn't a committee view, but all 17 participants write down their assess miamis for the likely path of gdp growth, inflation, unemployment and the path of policy over the next three years they think goes along with that and is appropriate. those views change. they're not fixed.

would never say look at the path we go down in march because we have to constantly be reacting to new data and rethinking and questioning things we thought previously. during the depth of the crisis we provided more concrete forward guidance. we thought it was appropriate to do that. for example we gave various dates and said we thought it would be unlikely -- probably did this in 2011, 2012, we would be raising the funds rate before mid 2013 or mid 2015 or before the unemployment rate declined below 6.5%. we had the view this was a very unusual down turn, that it would be long lasting, and that we would need to hold interest

rates at very low levels for an unusually long period of time. without making a promise, we were trying to communicate that view to markets and it helped because it brought down longer term interest rates, which helped the economy. but that was a very unusual period. >> with apologies of those who won't get a chance with the constraints of time, we'll take one more question here. >> thank you for coming. being retired, being an extreme lehman into my economics, and listening to all the morning shows on sundays and all the cable shows, and not having any particular interest of the candidates except in economics and my retirement, they have mentioned sidebaring that if the republican candidate becomes president of the united states, that there is a possibility of an economic crash all over the

world because of the world viewing donald trump, how they view donald trump. is this a possibility? thank you. >> i'm sorry. i've got nothing for you on that. you know, we're very focused on doing our jobs and we'll just see what happens. [ applause ] >> thank you. i mentioned earlier the council's programs -- >> fed chair janet yellen wrapping up what we thought would be about an hour-long speech and q&a about the economy speaking in philadelphia. that last question led to a very, very short answer. she didn't want to answer about donald trump. welcome to "power lunch." the gang is all here.

we thought we might get a new top on here. the dollar fell, interest rates fell, it would suggest it confirms based on the employment report on friday that the investors think a rate hike is less likely than it was just a week ago. >> if that's what investors think, i think they're right. if you listen to what yellen said, she did not do a complete about-face from a couple of weeks ago where she said rate hikes could be appropriate in coming months. she left off the "in coming months months" part. she kept the rates going in the same direction. remember the buildup to that last speech was all her colleagues on the fomc saying it's going to happen. we need to do it in june or july. she said coming months sound okay to me. given the friday weak jobs report, she took off that time period. i was surprised how positive she

otherwise is on the economy. for every negative she brought up, she says it seems to suggest the positive outweigh it. global head winds abating. china, financial markets stabilizing. jobs are disappointing, but coming back. wage growth is back. it's a very balanced, tilted slightly towards the optimistic side which is saying tilted slightly towards being a little more up. >> is she going to have a hard time maintaining consensus on the panel? >> depends which direction. i think everybody on the panel is chasing who are looking for a rate hike in june. not everybody. esther george thinks they should have raised rates months ago. loretta meser says it's important to raise rates. center of the committee will be, you know what? it's dumb to hike interest rates into weakening job and growth. >> she mentioned that current

monetary policy is modestly accommodative. >> right. >> modestly accommodative when you're looking at really 0.5% rates. there was an op-ed in "wall street journal" that low rates don't seem to be doing much. do you think janet yellen realized maybe there needs to be another way? >> i think she would love to hear or find or discover another way. i think you're i right to point that out. most people don't understand, you can dismiss it and say it's wrong, but the way the federal reserve looks at the world here, it looks at what the neutral rate is. what rate is it that would not stimulate or otherwise hold back the economy? they see that rate as already very low. it's an inflation-adjusted rate. they see themselves barely below it. they do not want to do negative rates. the theoretical context would be to go to negative interest rates. that's why they did qe and

maintain a large balance sheet. the fed doesn't see itself having a foot on the accelerator pedal. >> the other part of that op-ed you are pointing out, companies are using low interest rates to do buybacks and dividends as opposed to investing capital investments. that's where the fed is getting it wrong or the policy hasn't been as effective as otherwise you might think. >> that is a theory that's been around a while. i've done a bit of research on this. i can find no connection between the fed doing quantitative easing and companies doing buybacks. if you look at the history of things, when stocks go up in value, company investment and equipment goes along with it almost always. there is no other way to incentivize -- you can from the fiscal side. from the monetary side, there is

no other way to incentivize capital investment but to push up overall asset prices. >> steve, thanks so much. let's get market reaction to yellen's comments. >> bond yields did move down. the dwroorl did weaken. s&p moved a little to the down side, but largely gained it back. we were up about ten points before ms. yellen began speaking. look at the s&p futures. i don't think she tipped her hand whether june or july was still on the books. she did say don't panic over one month. you see that dip there. that happened just after she started talking. she did have a comment here. she did say the latest labor market data raised the less favorable possibility firms may have decided to expand their operations more slowly and i intend to continue to pay close attention to developments in this area.

she went on and emphasized while the jobs report was concerning, it was a single monthly report. the general take away later on in her speech was don't overreact to the number we have here. she is particularly emphasized she was looking at the medium and long term outlook. the market moved back to where it was before she spoke. look at bank stocks, kbe which often reacts on movement in interest rates. you see a slight move to the down side. it recovered a little bit. the big story has been the oilt markets. oil has been concerned about nigerian supply disruptmeiodisr. we are just about back to where we started right now. i think nobody believes june is on the table. most people i've been able to talk to still believe she left the possibility july is on the table. back to you. >> thanks very much. if you are an investor and

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let's recap. we heard from the fed chairman janet yellen. not adding any clarity where money policy is going. we are watching stuff is how i took it. >> no one would confuse her with a donald trump performance. >> are you saying low energy? >> a little less energy than there is with mr. trump. i guess you'd have to say june becomes a remote possibility for a rate hike. >> you cannot say you're data dependent and then ignore that last piece of data. >> it's just one piece. >> it's still data you have to consider. you don't know if it's the anomaly or beginning of a trend. >> i wasn't surprised by the question from the person who asked about this trade-off between very low interest rates

to try to stimulate economy, yet the negative consequences it has for pension funds, for insurance companies, for anybody in this search for yield. she acknowledged it. you haven't heard the fed acknowledge for a long time there are trade-offs for their poll system they are saying yes, there are trade-offs, but she is willing to live with them. she doesn't think there are risks to the overall economy. >> it punishes savers. >> i'm not pulling my trailer out of the june rv camp. >> i'm not either. >> this is a note sent out by chris rupp. the last two lines is, we are telling clients to take the summer off. see all you fed watchers in september. >> so july is off the table for them. i'm not sure it shood but it does. they are worried about it in the wake of the polls we've just seen. >> there you go. no market reaction. dow did drop a little but came

right back. it's literally seven points'sway from where it was pre-yellen. >> the fed's giving us lemons and we are trying to make some lemonade. i don't know what ingredients we have. more of your boig money headlines. massive japanese tech firm continuing to dump its alibaba holdings bringing the total to 10 billion. alibaba shares up 1.8%. also shares of whole foods are higher after "barron's" said the supermarket chain may be poised for a rebound. the article citing cost cuts that will allow them to offer more competitive pricing. less competitive pricing would be impossible. nest ceo is leaving the company. fidel founded nest six years ago. he will continue to serve as advisor to the company.

nest acquired by google's alphabet. alphabet shares down. much more ahead. stick around. i laugh, i sneeze...

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so i know i'm wearing it, but no one else will. always discreet for bladder leaks i'm sue herera. a prosecutor says the mother of the 3-year-old child who got into the cincinnati zoo igor i'lla exhibit will not be charged. the gorilla was killed after dragging the child through the water, when authorities decided he was becoming a threat to the child's welfare. florida governor rick scott declaring a state of emergency in advance of twoshl colutropic storm colin. colin moving through the gulf of mexico is expected to bring drenching rain and flooding to

the florida panhandle. >> roger clinton, the younger half brother of former president bill clinton has been arrested on suspicion of drunk driving in southern california. he was taken into custody sunday night and scheduled to appear in court later today. take a look at that house. billionaire steve cohen paid $62.5 million for this hamptons mansion in 2013. he never lived in it and now he's torn most of it down to build a new one. the house was a traditional, shingle styled 10,000 foot home. he owns another beach mansion down the road he bought for $18 million. that's the news update at this hour. back to you. you can never have too many mannings. thank you. a news alert from martin shkreli. >> good afternoon. outside the brooklyn federal courthouse where shkreli was arraigned. he pled not guilty as did a

former lawyer who is a co-defendant in parts of this case. in shkreli's, eight counts to commit security frauds with his handling of a hedge fund and the pharmaceutical company he allegedly looted. in addition, a couple of new dates were set july 14th is when this group will convene again to firm up dates for motions and for trial. the judge today said a trial could be set as early as the beginning of 2017. coming out of the court, the lawyer representing shkreli says he's pleased he's been given more time to digest one additional friday filed late friday. they still think the case is flawed. >> got it. would you expect them to say that. thanks so much. >> you heard janet yellen make direct reference to this vote coming up in june whether the

united kingdom will stay part of the european union. >> on 7th of february you said leaving would cause some business uncertainty. can we gauge how much that would be or how long that might last? just a year or two? >> no. whatever uncertainty there might be, i think actually the prognosticators of gloom you are wildly overrated. wilt be a massive opportunity for uk business and those who have been, who are currently very negative about about brexit. other people have a strong political motive to be so have been wrong in the past. >> british pound falling sharply against the u.s. dollar today as the latest polls show support for an exit rising. the pound is down nearly 6%

against the greenback. how do investors navigate the brexit vote? joining us martin schulz managing director at pnc advisors. gentlemen, welcome to you both. martin, let me begin with you. how worried are you about the brexit vote and what potential does it have to destabilize global markets and the u.s. market? >> good afternoon. what was interesting in my mind was both yellen as well as the atlanta fed chief today spoke about brexit the first time. it's something they are considering, not just the other factors they normally consider. we've been seeing brexit on our radar screen the past year. there are risks and they are basically contagion-oriented. you'll see currency issues.

obviously sterling will be weak. i think longer term it means that europe will have to deal with the fragmentization that is currently happening. as part of the european experiment right now, you saw the scottish vote last fall. also in the ramp-up of the election, obviously markets were a little uncertain. our global investors now and i think that continues today. p p populism is a factor. >> brexit being one of the uncertainty, fed policy. if you had to pinpoint one or two things that have you worried about the market at today's prices and its ability to punch through to higher levels what would it be? >> today's prices. >> simply too high. >> all kidding aside, it's hard

to make a compelling case prices are broadly cheap. i'm not sure i'm as convinced as carl icahn our next move is down 20. 22 times earnings, there's not a lot of cheap equity securities. those spreads are widened on high yield, absolute yields are certainly not high. 10-year at 180. i look at these potential opportunities to put cash to work. whether it's br exit vote going differently than people hope or the fed surprising people after last week's unemployment number. >> surprising them by going ahead and raising rates? >> yeah. i just think as we get closer to the november election, it becomes more and more politicized. i giggled listening to you talk about they are worried about brexit. now we have to worry about

what's going to happen in the uk. i think it's time we got back to more normalized environment as far as rates. i'm probably the minority at this point, but that's my opinion. >> what does more normalized feel like to you? >> well, i think that as i like to say, when money's free, everything looks like a deal. whether it's commercial real estate or certainly a lot of corporate equity, there are prices that just on a private market valuation standpoint wouldn't hold up in a more normalized 10-year, 3%, 5% rate. with that said, i don't think the u.s. government can afford a more normalized rate at this point. we borrowed so much money the last nine years. it's a real conundrum where we find ourselves today. >> what is the big concern you see in front of stock prices moving higher?

maybe it is just prices are high already? >> valuations are definitely a concern. at the end of the day, i mentioned earlier, populism which is a global phenomenon is a risk factor not easily navigated. it's one that obviously exists and deals with trade policy, affects all kinds of economic interests around the world. >> is that the main transmission mechanism? we talk about populism. you see it in many countries. italy spain and other places the same. is the transmission mechanism there through trade? >> it can be. obviously in the united states, we obviously now basically negotiated a policy with the, trade policy with the pacific nations. we are still waiting to do one with europe which has been on the sidelines for quite some time. there is something that is, international trade labels

plateaued the last few years. what the global economy needs is for trade integration to continue and those trade policies on the case of european, u.s. and asian integration to continue. >> thank you very much, martin schulz and mark travis. go to powerlunch.cnbc.com which mark says despite high prices has a lot of value. we've got to get a market flash. seema mody. >> let's look at hertz global at session highs up about 6%. the car rental company's board has approved the previously-announced separation of its car and equipment rental businesses. shares up as much as 7% on the day. keep in mind, down about 22% year-to-date. back to you. >> thank you very much. the two biotech companies that are costing investors more than half of their money today,

they are coming up. we'll give you the names and why they are tanking so much. as we head to break, let's remember today is the 72nd anniversary of d-day. veterans gathered at the world war ii memorial in washington, d.c. on this day 72 years ago, 160,000 allied troops landed in france. honor those loss and give thanks to the brave veterans who are still with us.

cnbc launch us a new video series called binge with carl quintanilla. looks at the landscape changing in new and exciting ways through the eyes of those making the content. >> it's the wild west right now. we are not only competing with the 500 other cable channels, but netflix and amazon who seem to have unend iing bails of mon. amazon and netflix live at a bank and they just have all the money and they can spend

anything. it's kind of terrifying, i would think, it is the wild west right now for programmers and developers. >> isn't it a gold rush? >> it is a gold rush. >> gold rush it is. season one of "binge" streaming on cnbc.com/binge and on apple tv, hulu and youtube. check out cnbc's facebook page 2:00 p.m. eastern today. conversations with carl about the phenomenon of bingeing. a bunch of names hitting all-time highs in today's session. a smatter of names here. amazon is of note. altria moving to the down side. take a look at hewlett-packard enterprises. that is the biggest gainer of the group holding on to a gain of about 2.5%. let's get a check on the bond market following fed chair janet yellen's speech in philadelphia here. we did see immediate reaction

after her speech. pretty much back to the original status of the market prior to her speech. take a look at the 10-year, 1.728%. shorter end, sectors most sensitive to rising rates, how to trade them. that's next. uh, maybe we should call i.t.

we can argue all we want about the impact of the federal reserve on your money. we can and we have. but nothing is a substitute for directive actionable advice and ideas. let's do that with two groups of stocks often brought up in fed discussions, yield financials and utilities. paul miller covers the financials. but let's start with greg gordon who covers utility at evercore-isi. higher rates will be bad for utility stocks because they make the dividends less attractive. the big utilities are up 15% this year hitting a new 52-week high today. why is the common wisdom so wrong? >> well, i actually don't think it's been wrong. i mean, it's been waiting for

the fed to raise rates. it was one small hike and a long pause. and with the economic data with the jobs report that came out on friday, utilities were up 3% last week on the view that odds of a significant fed series of fed rate hikes later this year are minimal. if you look at the fed funds futures, i think they're presuming less than one hike this year. >> what matters more to your sector then, greg? it is, a, the fed and interest rates or, b, the price of inputs like nat gas and coal? >> it's the former, not the latter. if you look at regulated utilities, they operate in a regulated environment that is called cost plus. they pass the costs through to the customer. they just -- they recover a fixed return on the capital investment. the return is set by government regulators and is more or less a spread off interest rates. the return on equity they're earning is quite robust.

they're paying out, you know, 3 , 3.5% dividend yields. they're expected to grow fou4, 6% a year. with the proxies so low and with corporate bonds having rallied so much since mid february when the fed first started to sound dovish, that's the governor that allowed utilities to trade up to close to the highs we saw in april and then again in last january where at 19 1/2 times current earnings which is a punchy evaluation but understandable given the certainty they provide and the environment where the rest of the market earnings outlook is switchy. >> american electric power and. ep. dive into another pick you like, pg & e. a lot of people avoid in this name because of a huge fire in california. they're paying a lot of money in penalties. why do you believe their dividend and their dividend growth strategy are still safe?

>> great question. so i just upgraded this stock at the beginning of the year. for the last five years, they have not really grown earningors paid the dividend or raised the dividend because they were waiting for the final word on the amount of fines and penalties they were going to pay for san bruno. the last major rate review that resulted in the implementation of the fines was implemented earlier this year and they raised the dividend for first time in five years after that decision. and they've committed to a dividend policy which i think translates into 7% dividend growth annually between now and 2019. so basically, if you look on a three and five year performance basis this is one of the worst performing stocks. i think it's that legacy is behind them. and now they can get back to being a normal, low risk steady growing company and get a better multiple and deliver on that dividend growth. >> all right. up 8% if the past three months. greg gordon, thank you. we'll see you soon. >> you're welcome. >> let's get to the financials

aspect of the trade. the kbe banking index gained back last week's losses and trading hire he in today's session by 2%. let's bring in paul miller from fbr capital. always great to get your analysis. i want folk us in the regional banking etf. that is the biggest gain over the past month in response to this anticipation of a fed rate hike. it's up by almost 8%. is this a rally that you would fade? is this a well grounded rally? >> i think a lot of the companies now are trading at really high level valuations with expectations of the fed going to go at least once and now today there is some discussion about going twice. the problem is not -- you know, the small end of the year curve is not where you really want to go. it's the flatness of the curve that we're concerned about. it flat ened over the last week. it is not going up or a parallel shift. to we're a little bit concerned. yes, i think these things will continue to run through a rate hike. but what concern that these banks hold the valuations after

the rate hike? >> all right. so let's say, paul, the fed raises rates tomorrow. you're really just looking at the 210 spread. you want o see that improve before you can get bullish on regionals? >> that's exactly right. i want to say a parallel shift or steepening to justify the valuations out. there the sprob they're being overregulated. the roes are single digits. and so until they need a steep year curve with rising rates to get the roes above 10%, 11%, and when y'all get excited. it's that hope trade, i think it will continue to run with the fed expectations of a rate hike. after that, it fades again. >> what is the top pick? >> you know, on the large guys, bank of america. we also love zions here. >> great to speak with you. paul miller. dohm chu.

>> actually, i'm going to picture up. the health care sector turning positive for the year. the move now leaves financial as you were talking about the only negative sector year to date. some of the name listing health care today include mylan, endo international and vertex up between 2% and 3%. the sector is up .5%. that's a lookout on pharma and biotech. >> thank you. stocks still holding on to gains following fed chair yellen's speech. the dow, s&p 500 and nasdaq are roughly where they were when we went in of .6% on the dow. .5% for the s&p 500. let's take a look at west texas crude. up at had $49.38 pushing towards $50 once again there. that up is 1.5% on the day. so when it comes to the economic outlook, miss yellen says the positives do still outweigh the negatives. steve liesman here with the key take aways from yellen's very interesting speech.

>> tyler, thank you very much. janet yellen saying the fed remains on track to raise rates but reacting to friday's dismal jobs report decline in the speech to say when that rate hike may come. >> if incoming data are consistent with labor market conditions strengthening and inflation make pragogress towar our 2% objective as a expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives. >> two weeks ago yell ensaid a rate hike could be appropriate in coming months, a phrase she pointedly omitted. she called the friday jobs report disappointing and said the recent slowdown bears close watching but she noticed strong payroll gains over the past several years and she said she expects the economy to pick up from a weak first quarter. she also said she expects inflation to move towards the fed 25% target.

now economic outlook is highly uncertain and pointed to four key areas of concern. resilience demand and the foreign economic situation, a particular concern about the reprecushions of the uk leaving the european union, productivity growth and the inflation outlook. now for each of the areas, she offered a fairly upbeat outlet. overall, yell be affirmed the markets that a june rate hike is unlikely as well as one in july barring a strong bounce back in jobs. it was clear before the fed hikes again the fed chair wants more certainty that her forecast rebound is the right one. >> don't move, steve. we have two other columnist wez wa -- economists we want to bring on. bob, let me start with you. you agree with everything steve said? he is guessing that yell en is saying no rate hike in june or july. >> i think steve got it right. >> write that down.

>> go home now. >> thanks for coming on, bab. >> i think that yellen basic sli trying to keep the ball in the middle of the fairway and keep options open. she has a froth i'll coalition on this policy statement. it held together with, you know, staples and chewing gum and she's got to be careful. she doesn't have anybody bounce off. they're going to have a lot of thin tez next meeting. she has to keep the ball in the middle of the fairway. >> you like to think of the fed doing things impeesempirically. you have the dovish wing, hawkish wing and centrists. one thing that led the market to think that there was a rate hike is the centristed moved towards june. she really had to keep the coalition together. they don't really want to operate like the supreme court. i don't know if that's the right or wrong 1, 2, 3 inning to do. they don't want to do monetary policies with decisions. >> we talked about what we think janet yellen suggested she's going to do. what should they do? i mean is it right to hold off and wait for brexit?

it is right to hold off in the wake of the report we saw last week? >> if we're looking just at the data, the u.s. economy is still very fragile at this point and that was exemplified by that disappointing may employment report. but it we're listening to what the fed said this really is back pedaling at its best. after weeks of very hawkish comments and really bidding up the market's expectations based on this assessment that u.s. economy was on stronger footing, a position that should not be undermind by one disappointing employment report. this back and forth and really this bait and switch of a summer rate hike i think undermind what little credibility the fed has left at this point. >> i see you nodding your head. >> i always found it puzzling and a little dangerous and confusing that the next rate hike seems always contingent upon a single report. i'm not quite sure how to break out of this. essentially this madness. but i asked stan fish better this. >> i was going to bring that up.

>> back in august a year ago, i said stan, does it -- a single -- >> we've been at this for years and now we're going to wait for one report? >> you think the case for raising rates should be one that's built on a series of reports but part of it is the way the fed does defrns to the markets and says, you know, however the market reacts, the other thing it is seems like it's such a close call. and i want to back up what lindsey said. the notion of the economy being quite that fragile, that's what happens when you have a 1% or 2% economy. zero is not that far away. >> that's true. you're going to wind up with the very weak numbers. this is where the tension is. the fed has this belief that we can raise interest rates tomorrow but never today. and so you're always in this position where you're trying to figure it out. >> i don't know. >> they said -- they went to new orleans. what happened in december, i understand what happened? december. december, they went on a path of normalization. they put the special period behind us. it's behind us. they're headed for normalization wlachlt is normalization? it's a fed funds rate they tell

us. somewhere around 3.5%. they're on that path. they want to be on that path. they're trying to go there. at the same time, they're data dependent. they're on the path but data gent. it's like -- >> but data dependent, i agree 101%. >> they only raised rates in december because they backed themselves into a corner with that language. >> you're going to move on every piece of data, right steve or lindsey or whoever? if we god help us if the fed is going to situate vote every time we get a weak or strong number. it's ridiculous. >> the important conversation we have not had as much as we should have and that is if the fed wants to hike, it better make a case that excludes or otherwise is able to withstand the volatility in the data. it has to be a water case. >> hold on. here's the thing. to your point, the national association of business economists comes out with the survey they do every couple months and now they raise the questions about whether or not there is a concern about a potential recession in part because of the election.

i mean, we may be getting back to the point where the fed missed the window completely and now we're talking about a much weaker economy where we are now. >> talk about -- >> do you agree with the name? >> talk about politics like steve did, you're an economist, right? you want to blame somebody for bade forecast? let's blame the elections. the elections are coming. i haven't talked about a recession. all of a sudden i have an excuse to talk about the weak recession. i have to blame somebody for it. will he's blame donald trump. he has broad shoulders, right? this economy has been underforemaning. the fed raised rates in december. >> i could make the case that the fed can raise 50 or 75 basis points and make a case that it's removing emergency stimulus. and get off of this thick you were talking about, bob clshgs is this notion of normalization. we're not normalizing. the fed could have done it by the way after 9/11. greenspan cut 50 and then 75 basis points as emergency insurance cuts against the

economic effects of the 9/11 tragedy. the fed can take that back and say, you no know what? we're just taking it back and going back to a place that is more commensurate with where the economy s. >> you seem animated on this discussion with the election. larry summers has a piece out where he says the greater threat to the american economy is donald trump. the world economy, even greater than dbrexit. >> he keeps us on this path. we never worry about how the dollar is performing. i think donald trump is very concerned about the dollar and u.s. competitiveness. i would tell you the reason wages are paying and investment and low and underperforming and haven't had a surplus since the early 1980s is because of all the conventional economists talk about free trade which we don't v we have a exchange market and we're losing jobs and nobody's doing anything about it. and now we have finally, you know, like george washington, we've been bled so much that we're on our deathbed. all of this is really creating --

trump is the one person talking about trade and really concerned about it. the administration finally did something. they had a policy that they put down and wornd the countries about a formula they would apply and call it exchange rate manipulation. and this is long, long overdue. you know? >> lindsey? >> they can't raise wages because we're not competitive. >> lindsey, right now i'm sitting in the june rate hike camp by myself, lonely, grilling a marshmallow. >> that is a lonely spot. >> i'm probably wrong and it will be eaten by a bear. are you going to join me in the june rate camp? we need some company around the fire. am i by myself? >> you know, unfortunately, i can't at this point. i think it's very clear that janet yellen back pedalled. looking at that language, i think she's not only taking june off the table but i think july is off the table now, too. remember, she pointed out four different areas of uncertainty and concern including as she said global bumpiness. and these are issues. these are trends that are not going to be reversed in one or

two months time. this has been long standing weakness, particularly when we talk about business investment. 14 consecutive months of negative business investment. this is something she pointed out she is concerned about. that's not going to reverse any time soon. so what is enough positive months if, we dover see positive months of business growth, to offset that previous 14 months of weakness? we may be talking about december or maybe we wait until 2017 for the next rate increase. >> before i refuse to come to the camp, what's in the cooler? >> beer? liquor? cool aid? >> i've been in the june camp. i'll come to campfire. >> i went to virginia tech. >> i noeld. >> wild turkey is in the cooler. >> i can come by for a drink. >> i don't know if you notice. this you said it was being held together, the coalition by band aids and whatever -- >> staples and chewing gum. >> you just coined it on this show. globally seeing the mcgifer fed. >> i can use. that. >> all right. you'll be glad for that later, i'm sure. thanks, bob.

thanks, lindsey. thanks, steve. as lebron james and steph curry battle it out for the nba championship, we'll bring ut the battle of the sponsors. nike versus under armour chchlt one should you own snt war on cancer. we're going to speak with the ceo of a pharma company leading the charge. that stock is up 40% this year. that is all still ahead on "power lunch." i could get used to this. now you can. when you lease the 2016 es 350 for $329 a month for 36 months. see your lexus dealer. igoing to clean betteran electthan a manual. was he said sure...but don't get just any one. get one inspired by dentists, with a round brush head. go pro with oral-b.

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we are at session highs. thank the fed or whatever it may

be, the dow jones industrial average is up 126 points. every dow stock, except for home depot and travelers are up. so meantime, two plummeting stocks are the biotech space that we're keeping a close eye on this hour, adamis is down 50% after the fda rejected the emergency treatment for acute and pronai therapeutics down 65% after they said they would discontinue treatment for the lymphoma treatment. it is the biggest cancer research meade meeting underwear right now. we're there with a "power lunch" exclusive interview with the ceo of ariat pharmaceuticals. >> thank you so much. i'm joined about it ceo of ariad. >> thank you. thank you for having me. >> thank you for joining us. the big data you have here at the conference are on your lung cancer drug and tell us what the data show. >> actually, at the very top

call. it was sprenlted a few minutes ago in one of the halls down the halls. we're very encouraged by the data we see. we -- to sort of set the scene a little bit in, our positive lung cancer, the space that we're talking about, the survival is only two months for patients. this is relatively recent dat yachlt so in the other study which is the post treatment -- >> we see over half of patients responding to the drug. we see about two-thirds of patients with brain tumors responding and then we see a median progression free survival by 12 months. so we're very encouraged by. that it's very important dat yachlt actually, on the weekend, there was some data being presented from the earlier phase study, the phase one-two study where we saw that the longest

time on treatment was actually 3 1/2 years. so very encouraged and feeling good about the data. >> so a the love anlives come out with pretty positive notes. they do point out it's a crowded space for what appears to be a small market. how do you plan on competing in this space? >> we already scaled up the majority of our organization both in terms of the commercial and the medical pieces. and we feel good about the profile. we think competition is good for patients, good for physicians and we feel very confident that assuming, of course, all goes well with the regulators, we'll be filing in q-3. that's what we said. we'll be very happy to compete that market and we think we have a very good profile to do so. >> do you win here by providing a safer, more tolerable drug or hopefully both? what will be the differentiating factor? >> great question. when you think about, again, the fact that median survival in

these patient types is -- was very recently around two years, thenefficacy is extremely important. dr. kim a few minutes ago presented that he believes that the safety is -- and the tollerability is well characterized as well. so we believe that, again, assuming that all goes well with the regulators and as planned, we'll have very competitive profile. >> thank you so much for joining us. we're out of time. more questions for you. we'll have to come back. >> thank you for having me. >> thank you. melissa and everybody back there, back to you. >> all right. thank you, meg. this week, cnbc is going to announce our fourth annual dr t druptor 50 list. we look at ininvestors that placed big bets on disruptive companies that ruled the list. here is julia. she has more on that story. jew julia? >> with the slow down in venture funding, startups is tougher

than ever. private equity firm tpg has the advantage of scale and has about $70 billion in assets under management. the partner led tpg's investments and air b & b, uber and spotify and survey monkey. they're allowing the investments to yield bigger payoffs. >> the ipo market is shot for all intents and purposes. the benefits they have right now sbest of both worlds where they've been able to scale in a private context but still have access to liquidity that was reserved for public companies. >> he says tpg minimizes the risk by coming into investments later. >> we've tried to be incredibly selective. we're not a venture capital fund. we don't assume that winners will offset losers and expect zeros in the portfolio. we're coming in lart stage to the companies. what we like to say is we like

continue to vest in company that's nailed it and now just need to scale it. >> tomorrow we'll see which of tpg's investments land on the disruptor list again this year. back to you. >> yes, for sure. tomorrow, julia, as you know, we're going to reveal 2016 disruptor 50. the exclusive list of the 50 most innovative and ambitious companies around the world. that is tomorrow 6:00 a.m. eastern time on "squawk box." all right. we want to take a check on the markets and where we stand. take a look at the s&p 500. we were saying before there is muted reaction to fed chair janet yellen's comments. we're seeing the s & p levitate to a seven month intraday high at this point, really being led by financials. that up is by .9%. we're seeing pretty big gains in small caps. the russell 2000 up by 1%. so we're seeing this risk on taking the market because it's not the old utilities and telecom leading higher to day. it is a chart of the s&p 500. it is a tease. we're back up there again.

we keep wondering where we're going to break out of that range that we got stuck in. there. >> true. some could argue that if a rate hike sont table until later this year, we could be in for another couple months of this sort of goldilocks environment where we know that rates are going to -- or to the best of our knowledge, rates will remain relatively low. we have this environment where we can actually bank on that and make some decisions. >> we'll see. >> all right. just ahead, why j.p. morgan is cutting the tie and going casual. wall street's changing style when "power lunch" returns. tokyo-style ramen noodles. freshly made in the japanese tradition, each batch is small. special. unique... every bowl blurring the line between food...and art. when you cook with incredible ingredients... you make incredible meals. fresh ingredients. step-by-step-recipes. delivered to your door. get your first two meals free blueapron.com/cook.

all the anti-wall street rhetoric is not hurting millennial's desires to work on wall street. according to the ft, goldman sachs received a quarter of a million applications for students looking to be jobs. that is a 40% jum frp the 2012 levels. they may find a more casual environment when and if they get. there a new dress code going knee infect at j.p. morgan, suit and ties are now optional. except when meeting clients. there is though a limit to just how casual one can be. jeans, leggings, anything distracting tight revealing or exceptionally loose or low cut, tyler, is off-limits. >> loss, low cut stuff i'm known

for around here. >> i actually think you have to dress for success. >> yes. >> i don't know. >> i'm not a big fan of the casual. >> i'm not either. >> i'm not a big fan of the khakis. >> i'm not either. >> clothing gives you a mindset. >> i agree with. that i agree that. >> but maybe that's why we're here on the east coast doing this. >> i also -- >> i also wear massive amounts of facial makeup. >> yeah. >> so that's -- i mean i don't look anything like this. >> no. trowels worth. >> this is how wake up in the morning. >> we all do. >> all right. year to date, take a look at the charts. under armour and nike neck and neck. tension on the basketball court is heating up. crushing lebron james and the cavaliers in games one and two of the nba finals. so who is a better pick for your portfolio, lebron or steph and under armour.

we have a senior equity research inl am i was with us and routing for under armour. i'll be the first to admit, i'm not a huge basketball fan. i'm not really paying that close attention to this. but if i were an investor in the stocks, should i be, is this a concern you to and your nike visas? >> with the basketball lineup be a lineup? it hasn't been proven to drive basketball sales. so we think the lineup this year in the finals is a nonevent. but we do think that the global growth story for nike continues. we love the valuation here compared to under armor. we see the olympics as a catalyst. and we also think that secular trends for -- we have a bit more nuance thesis for the secular trends so they think that it is peaking. we think divergence between athletic apparel and it is taking the brubt of the inventory glut. we see that segment of the market peaking.

we would prefer to be in the number one market share owner and that is nike. >> susan, competitor last week will a downgrade of nike and part of that downgrade is a comment on under armour saying that steph curry footwear taking share from nike year to date. this is a report from morgan stanley. what is your channel checks indicate and whether or not steph curry and line of footwear is steeling thunder from nike. >> yeah. i think definitely. i think the basketball lineup this year does bode well for them taking more market shares. if you look at curry, we estimate last year only did about $30 million in sales. lebron about $340 million. jordan 2shgs$.6 billion. obviously, the runway for curry is huge. i think we're going to continue to see them take market share. >> thank you for joining us swrechlt to leave it. there we have news here. >> thank you. >> yeah, we -- news coming out of mexico. the finance minister is speaking generally about donald trump and not explicitly saying he's

confident that whoever wins the u.s. elections will not take measures that hurt their own economy, meaning the u.s. economy. and saying that he is also confident that whoever is the next president of this country is going to do things that are beneficial to the u.s. economy, suggesting that he means he's not going to do things that hurt the mexican economy. they think the two are very much linked because of trade and proximity due to geography. so first time we heard from the mexican finance minister since the rise of donald trump within the poll. brian? >> let's take it further south with more breaking news. this time from brazil and olympics. steph curry, we just talked about basketball, you may have heard about this gichlt one of the greatest basketball players that ever lived. withdrawing from the olympics. >> he was a hokie. >> del curry was a virginia tech hokie. thank you very much. a good guy, by the way. i got a chance to meet him. here's the deal. steph curry citing injury, not

zika or anything. his knee is bad. not showing the finals. i mean the cavaliers haven't even shown up. i'm sorry, cleveland fans. they have not shown up. steph curry is not playing at the rio olympics citing injury. >> that's a big deal. he's a huge, hunl star. >> more and more players are step ago way it from. the forget the other ones that have said i need to recover. and boy, they have a long season these guys. and they play like in pro soccer, they play virtually all year long. >> this gives latvia and greece a fighting chance. >> there is not zika? >> no. this i believe is -- >> he's banged his knee up. he is fighting through a lot of pain. he knows, i don't know. >> what can $250 million buy you? how about one, just one apartment in new york city? most expensive apartment listed in the world. plus, oil market is getting ready to close in two minutes and 37 seconds. we'll have the final trades next.

hi, everybody. here is your cnbc news update at this hour. treasury secretary jack lu and secretary of state john kerry meeting with chinese leaders in beijing to discuss economic policies. lu said managed production is

the key to stabilizing global markets. >> excess capacity that's a distorting and damaging effect on global markets. and implementing policies to substantially reduce production in a range of sectors suffering from overcapacity including steel and aluminum is critical to the function and stability of the international markets. >> one of six baltimore officers charged in the death of freddy grey was back in court today. officers goodson saying he wants a bench trial instead of a jury trial. he was the transport driver in the van where grey suffered his fatal injuries. his trial begins thursday. india's prime minister departmenting for geneva from geneva for the u.s. the fourth stop on the five nation tour. he is scheduled to address a joint session of congress and hold talks with president obama. it will be modi's seventh meeting with the president since becoming prime minister in 2014. and scientists in mexico say they discovered four new

dinosaur tracks in the northern state of sanora. they belong to a species that walked through the region p 72 million years ago. you're up to date. that's the news update. back to you. >> sue, thank you very much. the oil market, oil used to be dinosaurs, is closing for the day. jackie has more at the nymex. >> good afternoon, brian. oil made another run for $50. i'm talking about wti. it didn't cross or settle over au $50 today. so two major issues today sporgt oil prices. the first would be the dollar and the second is nigeria. the dollar index certainly backing off after investors have become more certain or more aware that we probably won't see a june fed rate hike. the nigerian problem is becoming a little bit more serious right now. it's been ott radar. but the xern about the oil infrastructure there. and that potential lit problems are worse than a lot of people can realize at this point.

a couple that with what is happening in venezuela and canadian oil slowly coming back online and seeing support for crude prices. traders are telling me with oil near $50 a barrel, you have to watch the u.s. these are trafkt levels to start pumping again and that could temper where the concerns are about output globally. republican, traders are also saying the upside is limited. maybe $1 to $3 at the most. a close over auto would help us get there. and gas prices are on the rise. they're up six cents in the last two weeks. $2.37 is the national average. >> we did an interview and they said they're at 1.6 million barrel az day with the capacity to go to 2 plt 2 million. a lot of people said there is no way nigeria is still at 1.6 million because the avengers as they call themselves, they're not stealing the oil. they're just blowing stuff up because they can. and nigeria is probably below 1.6. >> exactly. that's the situation. a lot of people are saying, as i said that, dwoenlt necessarily

know how bad sichlt we don't necessarily have a grasp right now on how much oil capacity is coming off line. remember, oil is two-thirds of the economy. >> and now angola is producing more oil than nigeria. thank you. >> all right. time now for street talk. that's our daily dive into the key stock calls of the day. stock number one. the local dry goods and grocery store chain known as walmart. jeffries upgrading it to a buy from a hold. they boost the target to 82. the battleship is starting to turn. execution improves. they give ten reasons to own the stock. we don't have time for all ten. basically, store checks suggest the money walmart sfoent update the stores is starting to help sales and inventories are starting to be better. the target implies 15% increase. >> one of the ten reasons i thought was interesting was that analyst points out that institutional ownership of wa walmart has gone down. so as more institutions come and

buy walmart, that can provide a foogt. tyson foods is one i'm watching. they're downgrading them to a market perform. case for aggressively investing in tyson left impressive. the analyst says the downgrade doesn't reflect long term view of the company. tyson says will benefit from opportunities of prepared foods, transformation of the chicken business, rebound in beef packer margins and ample supply of hogs and pilgrim's pride getting cut here. >> really this company even five years ago was really chicken company. >> right. >> she own hill shire brands, ballpark franks. they're totally changing it. it's not the same company. >> right. >> stock number three, also has to do with click en. kind of. it's brinker. the parent company of chili's and magiano's italian grill. they resume coverage with an outperform and $52 total return. that is about 13% upside. he says while the restaurant is

fighting for relevant vancy in a crowded market, he thinks the stock is worth your money. management is working to improve the core offerings and thinks that they'll continue to grow the free cash flow and maintain a disciplined approach to capital allocation. >> fighting for relevancy. that is not pound the table. >> no. >> you know, that middle sort of quick service space, you know fast casual is crowded, man. >> very. >> harley-davidson, hog, goldman sachs is upgrading thoem a neutral from buy. cutting the six month price target to $50 from $5$55. there say lot of room for growth. add so that recovery zpeezable income for buyersen that set set the stage. but channel checks are indicating that hoz registration growth may have stalled in the second quarter this year despite fewer of the competitive headwinds. >> you can thank polaris for. that they own the big motorcycles. polaris is calling for high,

high teen percentage gains in indian and victory sales. so if the core group of motorcycle buyers isn't all coming up, they're taking market share from somewhere, probably from harley-davidson. >> if they are delivering on the numbers, yes. >> big if. i know. stock number five. >> narrator: radar smaller cap name of the day. colony capital. they're probably known to viewers at cnbc because the ceo comes on "squawk box" fairly often. they're a real estate investment company. upgraded to an outperform from a market perform. boost the target it $22 from $18. they say the deal may rejuvenate investors sentiment. in other words, one plus one plus one equals 3 1/2, not just 3. her target price implies about 25% upside. >> okay. that does it for "streak talket

for a monday. money is pouring into china. and it's not just silicon valley where that cash is going. straight ahead.

it's not individual investors who want to get into the market, chinese investors are counting on u.s. buyers to fill up the properties. chinese firms invested a record total of $20.5 billion here in the united states real estate. according to the american enterprise institute. for example, ocean wide real estate development invested $1.25 billion in u.s. cities. see where he sees the biggest opportunities here in the u.s. >> translator: we'll continue to invest in promising projects in areas in the united states where we see good economic growth. in los angeles, new york, san francisco, hawaii, and sonoma. the chinese domestic market has gone from the golden age to the silver age meaning the fast growth period may have passed.

but the u.s. market is stable and mature and the government is encouraging chinese companies to invest overseas. >> high net worth chinese clients are a big focus for oceanwide but so are americans. as far as the slowdown from chinese buyers in the u.s., he doesn't see it. let's chat more about this with jackie tulwitski. she sold a billions of dollars to the chinese investors. you are seeing any evidence in terms of a slowdown in terms of chinese buyers here? >> no, not at the moment. i'm seeing a little bit of a shift. we're not seeing so much the chinese buyers that we're looking at the properties and great wealth was initially and created. that's why i do agree with what was said right now. now we're in the silver age.

so what we see now is people coming in and they're between 1 and $5 billion in properties in manhattan. also in the north shore of long island. >> both systems are very good. >> exactly. >> you're the exclusive broker for 135 west 52nd street where 70% to 80% of clients are chinese. how do you advertise? do you go directly to china to advertise? or it is through ads here in the united states and targets chinese buyers? >> at 135 west 52nd team, i'm part of a large team much we also have a chinese dissent sales person. so the whole idea is that you do all of that. you market locally because you have a lot of chinese buyers already here. and also you go directly to the source in china and you also try to select different

publications. but this also goes word to mouth. i feel very happy with building. this building, you have 75 foot pool. you have a golf simulator. >> they like new, not lived n they like amenities and the luxury. >> exactly. and they like also not to have a cookie cutter apartment. each of our apartments is very unique. >> jackie, thank you so much for joining us. i appreciate it. michelle, over you to. >> i'm sure if you're sick of your multimillion dollar mansion, so tear it down and build a new one. that's what hedge funneled titan steve cohen is doing. according to "the new york post," the founder of .72 asset management tore down the mansion in the hamptons so he could build a new one. he paid $62 million for the 10,000 square foot home and the new house will be over 13,000 square feet. spokesperson for cohen declines cnbc's request for comment.

our next listing is worth four times that amount. it's twice the size. it's here in new york city. the asking price for the mansion which is sky high is a sky high $250 million. if it sells for that much, it will take the title of world's most expensive apartment. way have details now. you have some floor plans. >> we do. it's 23,000 square foot extravaganza. it's a quaud plex, four floors, 17 bedrooms, a foyer, great room. >> overlooks central park. >> there is right on the tip. >> you said hatz a foyer. twint highlight to people how a foyer in new york city is the height of deck adense. it is the space in which do you almost nothing. and where space is such at premium to have it is a big statement. >> absolutely. and the developer said he is spending $5,000 a foot which sun precedented to build. now typically a luxury

apartment, you know, really top of the line, 4,000 foot you could sell it for. this guy is saying 5,000 a foot to build this product. >> and it's going to sell for more than $11,000 per square foot fit sells at this price. >> that is the asking price. it is a big gamble. but if it does, it will be about $11,000 a square foot. >> chinese, russian? >> so what we're hearing, we heard that a buyer from a can ka tar and they travel in an enlt wrath. they have the families. they have the servants and friends aendz hangers on. so an apartment like this which offers four floors of privacy in a exclusive as it gets makes ate love sense. >> you need 17 bedrooms for an enlt wrath. >> yes. and the great room as well. >> thank you so much for bringing us this and showing us the floor plans. >> thank you. the number of the top bobbed etfs hitting new highs, stocks already rallying in the past months. how to position your portfolio in the back of fed chair ye

yellen's speech earlier today. that is coming up next. we call it dark data. 80% is invisible to most businesses. the ibm cloud has tools that can help see dark data and put it to work. hello, my name is watson. working with watson in the ibm cloud, we can help an energy company predict pipeline corrosion. and help a start-up to use social data to predict market trends. now businesses can get more out of their data. that's what the ibm cloud is built for.

today's "trading nation" is about choosing a side, stocks versus bonds. the age-oldside, not east coast versus west coast but stocks versus bonds. craig piper o piper jaffray on the charts. stacy, you do have a preference? do you have a preference generally stocks or bonds? >> yeah. i would say from a preference -- dpeenlding how we're going to define preference. looking at where the movement is being priced into the market, it's pick your sectors, pick your stocks. i think that's what has the best potential performance this year. the market is really set up for a range-bound situation here in the equities. it's the fixed income etfs that get a bit more interesting. if we look at high yield volatility relative to the

broader market s&p 500, it's positioning for more movement there. higher risk. so if i had to pick which area between equity and bonds, i see the market anticipating more risks. it would be in the fixed income. >> okay. so craig johnson, when you factor all that in and put together your charts and you look at them, what is it telling you? >> you need to continue to hold equities. for several reasons. first, there's a fewer number of stocks in the market today than there has been since 2000. second, we continue to see investors climb the wall of worry at this time. there continues to be this negative sentiment toward the overall market. we continue to believe that key support levels are going continue to get chipped away. 2115 looks like it will be breached. then 2135. then we're owl to near highs. and then the fear trade starts

to come on. we're missing out on the near high. we continue to thick e questions continues to be the best place to be. we're looking at 2015. the internals of the market look good. >> all right. craig johnson calling it out. 2350. craig, stacy, thank you very much. for more "trading nation," you can go to the website tradingnation.com. security catches a monkey catching a fistful of cash and then drove the car. this is a real story. stay tuned, melissa.

okay, so what's our latest data say? our customer is a 21-year-old female. heavily into basketball. wait. data just changed... now she's into disc sports. ah, no she's not. since when? since now. she's into tai chi. she found disc sports too stressful. hold on. let me ask you this... what's she gonna like six months from now? who do we have on aerial karate? steve. steve. steve. and alexis. uh, no. just steve. just steve. just steve. live business, powered by sap. when you run live, you run simple.

all right. a monkey walks into a jewelry store. this is the beginning of a joke. it happened in india. i presume it's a he. went right to the counter.

spent a few moments casing the joint, there goes monkey, grabbed the cash register and took off. $150 was the loss there. apaurjtsly the monkey or monkey had been seen casing the joint. this is like a sit come right here. >> i think they're trying to give him a cookie. >> or boyne. >> what were they doing? hanging out in the back? >> have you faced off against a monkey? it's scary. >> no. i think they can get -- >> that monkey was trained to go after that cash. i'll dedicate the rest of my life who trained that monkey. >> unbelievable. >> inside job, do you think? >> i think so. >> the monkey knew right where to go and what the cash meant. >> maybe there was a banana in that drawer, we don't know. moving on, mark zuckerberg has been hacked. his twitter, instagram and

facebook. password dadada. zuckerberg himself hasn't actually tweeted since january of 2012. you're supposed to have a password. >> upper case, lower case, symbol and all that. >> two-person awe thenlt indication. >> i'll have to change mine. it was cashstealingmonkey123. >> with the dollar sign for the "s." for the third straight year walmart coming in on the fortune 500. apple. sales versus profit. it also moved up to number 3. so walmart, number one. >> it's amazing that mckesson is that high. fifth most sales in the u.s. u.s., right?

>> citron would tell you that a lot of those mckesson sales might not be sales. that's his position. >> berkshire hathaway. >> it's a real lesson. exxon and walmart both have more revenue but as you pointed out apple is more profitable and more valuable. >> right. >> if you need 10 cents and walmart and exxon needs 60 krenltss to make a buck, buy apple stock instead. that's my nba obvious, you know, class 101. so. >> you're still thinking about the monkey. i know it. brian, you're thinking about the monkey. >> i'm thinking with the monkey poising the dates. it's clear monkeys are trained to do evil. let's get down to seema mody.

>> the emerging market's etf, the eem is higher flirting with a one-month high. one of the bright spots is the russian stockmarket gaining momentum after brent did. back to you. >> this is an area they thought this wouldn't happen, especially if you thought the fed was going to raise rates. what do you see with the merging markets? bam. the minute you think this is less likely, this is the natural place go. >> and the suckers who are higher beta sectors trading in today's session, biotech is up by 1.6%. we pointed out the russell 2,000. that's outpacing the broader indices. we're hovering at seven-month intraday highs on the back of fed chair kwlenl's intraday speech. >> look at the data. up 130 points. do we have a chart that we can

take a look at? that was basically flat for much of the day. it has gone up rather substantially. >> monkey security stocks are all. >> all righty. >> thanks so much for watching "power lunch.." >> "closing bell" starts right now. hi, and welcome to the "closing bell," everybody. i'm kelly evans. >> and i'm in for bill griffeth. stocks still not high enough to support many middle eastern countries. >> they'll get stock. he'll be joining us to discuss. plus, as the brexit vote approaches i sat down with boris jops who