psychology is no bueno, and it's not like you've got growing earnings so you're real counting on sentiment psychology here, more than fundamentals in the short term and i would say it's not a slam dunk. we get through the highs and stay. >> not that far away as you can see. there's the s&p 500. "power lunch" will pick up the market story right now. we sure are. hello, welcome to "power lunch." a lot of numbers and markets to get to, but we'll start with dominic chu. news breaking of another high-profile attack of a twitter account, this time against the nfl. dominic? >> again, a big interesting story developing here. the nfl's twitter account was hacked earlier and just about maybe in the mast 20 minutes or so here, and it in essence tweeted out something that roger goodell had passed away. that tweet was an obvious hack and it was, again, something this was perpetrated in a very high profile way on the nfl's own verified twitter account.

we want to show you then how some of the fun and games developed with the twitter hacker after this had come up. after this had been taken down, the tweet about roger goodell, we also saw some, again, some interesting tweets coming up from the supposed hacker that also said that, oy, don't take this tweet down. we also saw him come back and tweeting again from the nfl's verified account saying okay, okay, you amateur detectives, something along that line you got me. interestingly enough here, this is, again, one. latest string of high-profile attacks that have gone on with twitter. we want to point out, of course, that roger goodell is alive and well and the nfl's public relations department did put out a tweet saying as much as soon as these tweets were discovered. right there you can see brian mccarthy, @nflpr. the nfl twitter account was hacked and the nfl commish is

alive and well. what we want to point out, again, is that roger goodell, the nfl commissioner is alive and well and that this is just the latest in a string of high-profile hakz for twitter dating back over a couple of years now. remember, there was also that one from the associated press back in the day that had supposedly the white house under attack at one point. all of these things, again, speak to just how fragile social media is with regard to how it disseminates news and whether or not that news can be downed at face value right off the bat. we'll be watching and see how this develops throughout the afternoon. >> appears all the erroneous and extra hack tweets are gone. >> twitter has a problem. >> yes. >> they have a problem and a problem that goes well beyond the 60% decline in its stock over the past year. >> if you're a corporation and twitter needs companies, they don't just need individuals, if you're a corporation and you look at the benefits of certain types of social media like a

twitter and look at the potential downfall, right, look what happened to usair a couple years ago? >> yeah. >> basically bad dirty stuff that was going out there, you might think maybe it's not worth our time or effort to be on that platform. >> in theory it's up to the user to have a very strong password and to do everything necessary so that this doesn't happen, right? >> yeah. >> in theory, but ultimately if it happens over and over and over again, with katy perry, et cetera, et cetera, they have to come up with something else. >> it may not even be hacks. could be some disgruntled employee who has the log-in who says i'm going out with a blaze of glory. >> the thing about twitter accounts, these are not individuals, the twitter profiles of corporations so there are many people with access to these accounts. it could be somebody who has actually logged in and did not hack. in the account and tweeting whatever they want to tweet out there because we don't know. >> i'm going to quit today.

>> that's not twitter's company but it's the company's problem. >> all right. more on that later. we can talk about twitter a lot. the markets a big story, dow cross i crossi crossing above 1,800 and crude has crossed the $50 mark again >> david seaburg is here and jon najarian. great to have you guys with us. david, you say the risk and reward, they are kind of balanced here, but as an average guy out there i'm taking a look at the markets here and taking a look at markets around the world which are doing horribly. yields are terrible. are you telling me that i shouldn't be in the stock market with, you know, potential whatever it is return in said put my money in a bank account that will give me 3%. >> no, no, no. >> so what do i do? >> be patient.

if you're long equity just ride this out. i think that the momentum trade here is occurring. you're seeing a tremendous amount of hedge funds that are completely underinvested in the long side. watching this tape grind higher, and they are extremely nervous. they are getting ready for that chase point, so at the end of the day i think we can tick a little bit higher. look at the oil stocks, trading names. not trading on fundamentals, trading on positioning so you're seeing a lot. fundamental guys that look at it selling the stocks. >> right. >> but you're seeing the hedge funds come in and trade them so the bid up here is a lot of short covering and sort of momentum trades. not necessarily purely fundamentals, so i look at it and say wait for little lower levels. i think we'll have a pullback and then you can get in at cheaper prices. >> you've been noticing a lot of activity in these oil names in today's session. >> meshlgs a lot of them have had activity, and a lot of the activity, quite frankly is on the put side where people are more or less saying, well, after this furious run, it 20%, 30% in

the past 30 days people want to protect, but then there's a couple where there's pretty good speculation to the upside. anadarko petroleum fits that to a "t" because we've seen normal activity explode from 4,500 contracts a day to 22,000 calls, just in the first two hours in apc. that's based on rumors, mel. i don't really want to invest anybody's money based on rumors. >> right. >> but these are a lot of big institutional trades that somebody is putting a lot of credence in those rumors and one of the few stocks that people have the big breath on for this to continue. >> sure. >> even after a 20% run in the last month. >> david, last word to you. you know, you talk about the momentum trade winning out at this point, but for the overall markets be patient. if you want it to be a momentum name at this point, what would that be? >> that's a hard thing, mel. hedge funds have lost control and the passive investors have

control. you don't know where the new momentum is. it's very difficult to seek that out, so i think if you look to any sector right now it would be the energy sector where you're just seeing a tremendous amount of short covering, some underinvestment and people may be piling on to this trade so maybe there's a little more upside there. outside of that, you know, again, just for a trade. i don't really seeing anything compelling. >> all right. thanks, guys. david seaburg and skworn najarian. a news alert in the bond market, three-year notes up for auction and rick santelli all over the action at the cme. rick, what's demand like? >> i gave it a c-minus. charlie minus is the demand grade for the 1:00 straight up dutch auction. let's go through it. shall we. 24 billion three-year notes to start a $56 billion total supply week with 10s and 30s yet to come. 2.93 was the yield at auction. that was the bid side of the one issued market pretty much for the last 25 minutes before the auction buttoned up. every statistic, 2.79 bid-to-cover and 48.1% indirect

and 11.1 indirect was all a little bit light to ten auction average and all seen recently within the last several auctions, so c-minus. dealers take 40.8 and primary dealers which isn't a really on the high side, but what we really want to pay attention to is how low yields have gotten. that really took away any concession and when you are dealing with the short end. it's all about location considering the question marks on normalization from the fed. melissa lee and the gang, back for you. >> speaking of low yields, wait until you say what some are buying up. shares of ralph lauren back up after falling nearly 10% earlier in the day after the company unveiled a restructuring plan including job cuts and store closures. let's bring in the ceo of j. rogers nippon worldwide and the ceo of talmage advisers. jen, i'm going to start with

you. we've been talking so much about the struggling retailers. ralph lauren isn't a retailer. it's a brand. do they have any of the same problems when it comes to the retailers, or is this a different issue. >> >> most of their business has been inside of retailers. it's so great to go to a meeting where everybody on the stage is dressed better than i am and where they serve the best coffee in new york and their own brand out of their own restaurant, a first class operation and that's really what ralph lauren is all about. first class brand, whether you look at teenagers or boomers like me it's one of the top ten brands. >> so what's the problem? >> what's going on. >> even if they can't afford to buy it. >> why do they need a turnaround, and do they have the right guy doing it and how long is it going to take? >> i do think they have the right person doing it and i think, you know, it looks like it will take a year when it comes to stabilization. there was a little bit of vagueness about when exactly they would see the infliction

point. they hope next year they will see stabilization and they are not sure. do need a turnaround for the rest of the details that retail is suffering. distribution that's not brand enhancing hand not margin enhancing. >> the new guys from old navy about as polar opposite from ralph as i can imagine. >> i came on here the day they announced him and said this is the right guy at the right place and at the right time. >> what is he doing? closing stores and thinning out brands? >> haven't had anybody that can run the train since roger farrell left. he's there, running the train on time and closing stores and focusing on polo, ralph lauren and lawyer as the three groups to drive the business and the tertiary groups, cutting off the tails and look at them attin roi basis and he's doing a turnaround 101 as well as can you describe it on the stage. >> one of the issues that high-end brands suffer.

if you go public, you have to grow and grow and grow and your product has to become more ubiquitous. the second you're ubiquitous nobody wants you anymore. >> you lose your exdaluisivity. how do you manage that? that's exactly what they are trying to do right here right now. >> once you go public you're serving two masters a little bit. you want the brand integrity stay intact and you also want to promise wall street growth and oftentimes we see like we're seeing here, you know, a retrenchment. i think beyond stefan larsson they also have a very strong team beneath him. the brand people are really from the high end. the operation people from fashion and the others from ebay. it's a very strong plan and team and in addition to the 101 things that jan is talking about, doing the 201 is and doing the test and it rate and react and things we see coming out of a technology background so i really think they have the right team and right plan and it's just a matter of time

before this thing turns. >> talking to someone who said they had five different men's suits line. had a black line, gray lane. this is what you're talking about. constitution, contruce, concentration. do their outlet stores help or hurt him? >> they want to do less in outlet channels and do less discounting in the department stores and want to do more direct. you know, my philosophy i think 50% of all retail will be online in 13 and a half years and, therefore, them going direct is good. every time they take a piece of items and go online their roi goes up. they will do more of that as well. they are doing all the right things. the question is will they get it executed and that will be -- >> at least a year until you see

the sales stabilize. >> this is more hospital mystic than what i expected to hear and then they said they were being conservative. >> all righty. >> they have told this to the street and they are only down 1% 2,%. >> got to leave it there. appreciate it. fantastic. talking about the little polo shirts. next, a power player in the energy world with. the company's stock is up 46% in the last three months, and we are going to talk to the ceo about where he sees crude prices going from here. all that and much, much more on "power lunch." back in two minutes. man 1: you're new.

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estimates. brian, back to you. oil back to above $50 a barrel hitting its highest level since october and the big question is where is oil headed from here? rbc capital markets surveyed 600 energy investors and ceos on where they see prices at the end of the year. here are the results. 9% said we're going to go back below 40. 23% said we'll be between 40 and 49 a barrel. 51% said we'll be between 50 and 60, basically where we are right now and 17%, said, wait, we're bullish. we're going to be above $60 per barrel. one of the ceos surveyed, david done lap of superior energy, shares of that company up over 43% the past month and david here for a "power lunch" exclusive from rbc's energy conference in lower manhattan. david, thanks for joining us again. where did you come in on that survey? >> well, brian, i'm bytesed towards oil price towards the end of the year around $60 a barrel. i think in the second half we're going to continue to see prices migrate up. as the market begins to realize

that non-opec production is coming down, including shale production here in the u.s., and we're going to be getting closer and closer to that supply/demand balance. >> before we get to your business, you know, specifically here's the only issue i would take with that. you're right about the data. however, do higher prices beget more drilling which then begets lower prices because people upproduction because people want to make money? in other words, do the the industry oftentimes doom itself? >> well, there's no question this industry has a history of dooming itself. i think part of the challenge now though is that a lot of our -- a lot of our customers, emp customers are cash strapped. difficult balance sheets to deal with, and it's going to be difficult for many companies to be responsive as commodity prices get better. there are companies in the u.s. as well as a few internationally that we believe will start to spend incremental dollars as oil prices set into this range of

$50 a barrel or bert, but it's not the entire market that will respond so, listen, this is a cyclical business and ultimately one that we've got kind of a full level of investment and that's probably a few years out. >> last year we saw the gain of a couple of oil rigs. do you see oil rigs, drilling rigs, having got tommed out? >> yeah. i think probably so. i mean, we did see the baker hughes rig count come up by four last week. not really a market mover, but i think we've had conversations with some of our customers that would indicate that we're likely to see a bit more activity in the second half. year. that's probably high utilization for the completion supply chain, including hydraulic fracturing. that's going to be a positive for our business. >> more than 14,000 employees, dave. some may be watching this now or watching it later on the web. have things stabilized to the point where layoffs and/or pay cuts are not a risk from here

out? >> yeah. i mean, i think that if we have reached a bottom in drilling activity in the u.s. that by and large we have probably reached a bottom from a head count reduction standpoint. you know, it's been a stressful couple of years for our labor force, and i know many of our field laborers would like to get more hours than they are getting right now and i think the first step in recovery will be the laborers that we have in place today. getting more hours before week. our labor force really likes to get 60 hours a week and upward and we haven't been able to offer them that for a couple of years and had the first thing they will see is a bigger pay czech. maybe good news for what's been tough years for many across the industry. david, a pleasure. >> thank you. on deck, shares of this company are up more than 30% since the new ceo took over. what company we're talking about and why the stock is soaring.

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♪ 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. welcome back to "power lunch." i'm eamon javers in washington where a council of banking regulators has just issued new guidance to financial institutions about cyber security risk. this council is called the federal financial institution's examination council. it's made up. fed and a number of other regulatory bodies here in washington that oversee the banking industry, and they are sending this note in the wake of

that bank of bangladesh act out to financial institutions advising them to take a number of steps to protect their cyber security. here's what they are saying that the banks should do in terms of risk mitigation. they are saying you need to conduct ongoing security risk assessments and protect against unauthorized access to equipment, implement test controls around critical systems regularly and manage business continuity risks, a whole series of advise here now for financial institutions from the u.s. government regulators on how they should prevent another bangladesh from happening. michelle, also reuters reporting that the fbi has issued a letter of warnings to banks on cyber security risk as well, letting them know that they need to tighten up security. a lot of aspects from the federal government to the federal banking system that it should be very diligent.

>> shares of the rv maker winnebago booming and that ceo is michael happy and joins us for another "power lunch" exclusive and must be living up to his last name because of the some performance. michael, your industry was absolutely devastated during the financial crisis. how is business, and are you back to pre-crisis levels? >> well, good afternoon, brian. the industry was impacted significantly during the last financial cries and to answer your question, yes, the industry has rebounded to levels now that have exceeded the previous highs. the industry has grown search straight years here in 2016 and we're about to set an all-time record high again as we move towards 2017, so the current state of the industry is very strong. >> why is that? is it easy credit? is it the economy is better? we keep hearing about all the subprime car loans? is there a concern in your

industry about the same thing, michael? >> it's a combination of a number of factors. certainly the economy has been steady enough so access to financing and low fuel prices have certainly enabled people to be interested and making things like this. the products are getting better. the amenities of your home are starting to make their way into the rv industry in a big way. electronics and technology is present and candidly the lifestyle, the outdoor lifestyle is attracting more and more people interested in, again, investing in the space, and we are seeing the average age of rv consumer decrease as more people explore the great places around the united states. >> feel-good story. unfortunately we have to leave it there and cut it short because we have more breaking news. michael happen enof winnebago, sorry about that. let's go to scott wapner with breaking news. >> thanks so much. i want to call attention to

shares of the pultegroup. elliott management has taken a large position in that company and the firm has told pultegroup about its position. did i reach out to pultegroup which told me the following, and i quote, elliott recently informed us that they have taken a position in the company. we welcome dialogue with all of our shareholders, end quote and also reached out to elliott. that firm right now is declining to comment. you guys may have been following this story. i mean, it's sort of been sizzling up over the last month or so. the founder, william pulte and his grandson, have been trying to oust the sitting ceo. he has said he'll retire in may of 2017. they want to speed that process up, and now it becomes a little more interesting, i think, it's fair to say. paul syringe's elliott management now has a stake in this company, and what role that might play in trying to speed up the process, if at all, of

getting mr. dugas out as the ceo of pulltegroup and shares are reacting on this news of what's been a board room drama the last couple of minutes. you've had bill pulte the grandson on this battle. any indication whether or not he's talked to paul syringe or elliott where elliott might stand in relation to the battle lines that are drawn? >> interesting question and certainly a good one but, unfortunately, i don't have anything for you on that yet. it is interesting. bill pulte, the grandson, yes, he's been on the program and has stated the company's position quite forcefully that the stock has underperformed. their peers certainly since the financial cries, and he, along with the founder of the company, his grandfather, have been arguing quite apparently they want mr. dugas out and i have no

idea whether the grandson has even spoken to el yeast and certainly good questions to follow up on. >> how vulnerable could the board be, scott in the is it a staggered poured or -- >> unclear. >> guys, i can add a little bit to the story, scott and melissa, you know the story well as well which is, you noh know, they have been mad about a lot of things. the point that elliott may be looking to change here is that pulte got criticized and the stock got pulverized legaltive to its peers because they feel like they mixed the waves of the kinds of homes that they built. they went in one direction and pulled in another one and don't like. fact that -- this is a battle where maybe elliott is on the pulte family said it's a little more ammunition in the market against sort.

dugas contingent, if you want to at all it that. >> it's an active position and not a passive one by elliott so that would lead you to believe that they would be on the side of the grandson and the founder. frankly having not spoken we'lliot management other than getting a no comment, i can't really get you any more that what i'm telling. it will be real interesting to see. brian, you're firm exactly right and with the two points of contention that pultegroup missed out and then the move to plantability, has almost um that the founder of the company has raised as to one. reasons why they want dugas out as soon as possible and not

waiting until may 2017. >> scott wapner with that exclusive. thank you. we're watching home builders and not just pult at the on the move here and get to dom chu with more on that. >> melissa, on the move even before the pulte news came out. one of the mainateievs, the s spidr s&p home builders, leaders include shockingly, i know, pulte, temper sealy and dr hortoned and le far as well. of course, brian, guys, home builders were such a hot trade at points over the last few years, they have cooled off the last month months and this year to day -- to date.

back over to you. >> thanks very much. if you've had a biopsy, you know how painful and scary it can be but there's a comlooking to find a newer, better way. you'll hear about the liquid biopsy and the company behind it coming up next. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business.

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e hello, everybody. i'm sue her rare ark. here's your sneens news update. new jersey governor chris christie arriving to vote in the new jersey primary this morning. afterwards he told reporters that donald trump is not a racist and he has the right to express his opinion. >> i know donald trump. i've known him for 14 years and donald trump is not a race unfortunate, and so, you know, the -- the allegations that he is are absolutely contrary to every experience that i've had with him over the last 14 years. >> the head of the tsa telling a senate panel that significant progress has been made on shortening airport screening lines since earlier this spring. peter neffinger said 90% of passengers rated less than 30 minutes and 90% waited list than

15 minutes. the cincinnati zoo has installed a higher reinforced barrier to prevent similar instances. and added a small memorial to the gorilla who was killed to protect the child. and the last known living 9/11 search dog has died in a houston suburb at the age of 16. a golden retriever was euthanized on monday and had become ill at a veterinarian clinic. spent ten days at the world trade center searching rubble for human remains and she was given a hero's farewell. that's the news update this hour. michelle, back to you. >> sweet and sad. thanks, sue. just after 1:30. let's show you what's going on with the markets. talking about whether or not we're potentially finally break out of this trading range that we've seen for so long. dow industrials higher by 17 points, 17,994, below 18,000, but we were above it earlier in the session for the first time since april.

the nasdaq higher by 10 points and the s&p higher by 9 and the russ sell higher by 6 points. a gain of half a percent. to the bond market now where rick santelli is tracking the action in the cme in the wake of the auction we had earlier this morning. richter. >> the three-year note auction was just blah. many thought it would go better especially after toyota motors found so much sponsorship for a .001% yield. look at intraday. not a lot of action. the whole curve has been quiet, pre-and post three-year auction. 81 basis points, low yield that everyone was looking at. maybe not enough cushion. dollar index, one market. just gone flat line after the big deterioration after the jobs report due to federalismcations. listen, one week of copper, look at that down 3%, 3.25% today and if you look at that chart, one-day took a lot of action away to the upside and what i

found significant is as real as that move is look how the crb index is still at its loftiest levels since thanks of last year. back to you >> listen to this. toyota finance just sold 10 and 20-year bonds with the lowest interest rate ever for corporation. what will your yield be? .001%. holy smokes. >> if you borrow 10 million, if my math is correct, you get $10,000 a year in interest, that's nothing. there's been zero coupon bonds, unilever, our neighbors here issued no coupon bonds. that's how bad things were in the eurozone, and this is the lowest offered yield. you get to a point where you think why offer anything? do the unilever and go zero? what's the .001% going to get you? >> zero coupon bonds, you get a discount on the purchase and

there's a different way to do it. to do it this way is interesting. the bigger issue is you can borrow for almost nothing, and if you're toyota you're wondering why i can't get a negative rate. you people should be paying me money. >> they have no money. if anything, there's deflation. if there was inflation you'd be getting a negative yield and if you're toyota financial, hey, throw it out there. why not. can anybody top it? i want to see .0001% of coupon. >> keep going further and further past the decimal point. >> they have to be competitive because the average yield on a japanese corporate point, 0.17%. that's why. >> this is like what. >> that's 100 times last than that. >> don't go to zero without a reason. got to the have something. >> tyler? >> let's talk about the dow, moving up above 18,.

first time that's happened since april 1th. let's bring in the head global market strategist at wells fargo and burns mckinney, a portfolio manager. gentlemen, welcome to both of you. i'm not going to bore us or the audience what you think the fed will do and when. i want you to tell me what i should do with my money right now? >> make sure you're fully invested in u.s. large-cap equities. we're going to be collected. we're going to underweight small caps a little bit. >> why? >> because that's where the most volatility is. we've also previously underweighted emerging markets. another big source of volatility. we see the market going up from here but with volatility. we'd rather be selective. >> large cap and big u.s. companies. that's what paul says. burns, what do you say? >> i would echo some of his points but even to get a little more specific within large u.s. cap equities we continue to be very constructive on dividend paying stocks. i grew up studying economics,

supply and demand and right now because of financial repression you have -- i have one of my deletion and talks about how -- they are not looking for capital gains but dividend yields and some of the bond proxy areas such as the utilities and telecoms have done well lately. last three years dividend payers in the united states have lagged so reversion to the means should also work very well for dividend-paying equities. >> you didn't ask paul to put wells fargo in the burn list. just a little serendipitous. my personal is between now and election day the market is going to trade in a trading range. do you think it breaks out to new highs between now and the

end of the year in. >> i'm not sure when exactly that's going to be but we're expecting the market to make gains and eventually they will surpass current highs. it will will be more self-evident to investors and as that is transpires more expansion. >> a little bit of breaking news. paul says he'll put nfj on his buy list. go to powerlunch.cnbc.com. another stock that burns likes right now. powerlunch.cnbc.come. >> two major biotech stories with an impact on your health and wallet. that's next on "power lunch."

let's turn to one of the big themes emerging at a cancer

conference, liquid biopsies, a key in early cancer detection. how does this work and which companies are working on it and meg tirrell joins us from chicago? >> a liquid biopsy is a blood test for cans ker. a big conference at the cancer conference here in chicago and not exciting medically but could potentially be a big market as well. it's estimated the market could reach $10 billion at its peak if all of these tests reach their potential. who is working in the space, guardian health was a company with the focus and publicly traded companies like foundation medicine and illumina. we sat down with the ceo of guardant health sat down? >> cancer cells as they grow rapidly they die rapidly and shed their unique dna into the bloodstream and take a tube of blood, there will be small traces of dna in that tube of blood that are coming from the

cancer cells. >> now doctors tell us it's still really early days here. these are not used yet to be initially diagnosing cancer instead of a traditional biopsy. we spoke with the foundation medicine ceo about how their tests should be used. >> we use them to identify the genetic changes that are in essence causing that tumor to grow and the reason that we do that is because the whole new area of personalized medicine is really predicated on finding the appropriate drugs, selecting the appropriate therapeutic for that particular patient. >> so a lot of work still going on in this space. illumina found a company called grail to try to do that initial earlier stage detection of cancer blew a simple blood test but still a few years away. >> thank you. fascinating story. sticking with health care, shares of vale yaent pharmaceuticals missing and slashing its guidance again.

this news comes one month after joseph poppa took over at ceo. we asked the senior analyst at hc brian wright were the stock. you think the stock is now a buy because the worst is behind it? >> let's put it this way. we're cautiously optimistic and think joe poppa was a sensible choice and the kind of person we expect valeant's board to have tapped for the job. shares are down 26% since ron's appearance on "power lunch." still got a buy rate on the stock and did trim its price target. even after today's conference call and today's guidance cut you're saying the market is pricing at an essentially high default risk. why is that being perceived as excessively high after the company severely slashes guidance and talked about one of its core buses looked upon as perhaps one of the saving

grigss, dermatology and said this business has so much problems, as if we're taping dollars to the prescription bottles and handing them to out. >> all of these are valid points. i think from our perspective the immediate term default risk was that of not being able to file the financial statements on time. obviously they filed their 10k and 10q in a timely manner and the immediate term fault risk has gone away but they have now slashed forward guidance to the bone and there's nowhere to go from here. if they were to reduce guidance any further they would be increasing the lack of confidence among debt holders so that they can make their interest payments. we think the company is clearly in rebuilding mode and needs to get its reputational problems behind it before it can put its buses back on a firmer footing. >> because of that lower guidance basically they are at the precipice of violating a key debt covenant and that would be ebitda to cash interest expense right at the lower end of its

guidance, $4.8 billion ebitda, 4.2 times its cash interest expense. according to the covenants they have to beat 2.75 or better. why do you stick to a buy rating when they are teetering on the brink? basically no room for error when it comes to hitting the bottom end of the guidance. >> absolutely correct. one of the fundamental issues here is whether valeant should be a stand-alone company or whether it should be broken up and is the value. underlying assets greater than the value being attributed to the business today? our view is that, yes, that is indeed the case. there are core assets that valeant possesses. >> so even under distress with the core assets, they sell some of the core assets. you think the stock will quadruple from here because that's essentially your call? >> i mean, at this juncture that has not yet factored in the revised guidance that they have put out earlier today. we haven't put out additional commentary since that call.

obviously we'll have to take a look at what the revised guidance does to our numbers that existed prior to this call, but we were at the low end of the street prior to them slashing the guidance and now they have a range of 6.6 to $7 a share. >> stick with your buy ratings as the bottom line? >> kwae. >> thanks for your time. again, a buy rating on shares of valeant. coming up next, we're going dumpster diving proving one man's trash is another man's treasure. that's when "power lunch" returns. with usaa is awesome. homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military

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the nfl's twitter account was high judiciary committee earlier. a tweet september out said roger goodell had died. not true. he's alive and well. details now from dominic chu. dom? >> that's how it all started and here's how it went down after that initial tweet went out. that hacked tweet was taken down just moments after being posted, published on twitter, and in

what looks like an act of taunting from the hacker in question another tweet went out from the nfl's verified twitter account saying, quote, oy, i said roger goodell has died. don't delete that tweet and then another tweet went up saying, quote, okay, okay. you amateur detectives win. good job. now, all of this, of course, was happening in the midst of the nfl trying to figure out and trying to get out the message that in fact roger goodell had not passed away and nfl spokesperson brian mccarthy quickly responded and tweeted out from his own verified account that the nfl twitter account was hacked. nfl commish is alive and well. now, we did reach out to twitter. they referred us back to the nfl for any further comment on this particular issue. we have in turn reached back out to the nfl with a line of questioning regard to how this happened and what steps may be taken in the future and what not, but for right now, michelle, that's where the story is and just the latest in a high

profile string of hacking. may be a good idea for you and your viewers to check the social media accounts and secure them a bit more. back over to you guys. >> such a drama. more now from a tech investor. welcome back to "power lunch." good to have you here. you're a big tech investor. >> hi. >> what do you make of this situation with twitter? we've seen so many high-profile twitter hacks. at what point do you no longer say listen, people, take control of your password and say, twitter, you've got some kind of big problem here? >> well, i mean, it's basically the problem that people use the same passwords across multiple sites. as we know mark zuckerberg does that, things dadada is a good password to use across multiple sites so that's not helpful. people should use different passwords for different websites and services and we need to get away from passwords all together and other forms of authentication such as fingerprints and so on because this doesn't work.

this is an old-fashioned outdated system. >> we have to say, we should hack it up, back it up because we don't know hack that thing on up. we don't know if this is a being had a. it could be a current or former employee who knows the password which not really is not hacking but more like theft. >> it always could be. most likely it'sport of other data breaches where people use the same password across multiple sites. it's possible that this was a them. the other one is also a theft the way it moves across multiple sites so it's even worse. turns out that reports of roger goodell's death were greatly exaggerated this time, and we will see a lot more of these news that's false if people don't, you know, change their passwords >> you mentioned the news about zuckerberg use dadada and his account got hacked and he was criticized for using such a simple password.

>> to be honest, if anything, it shows he doesn't take himself very seriously so i kind of like that. it's certainly not very smart. maybe he should change that, but it does show that he's got a sense of humor. >> what does it say about twitter, cyriac? if you go to a bar and talk to people after a couple of cocktails that work for twitter or know people that work for twitter or whatever, are they scared? what are they saying? twitter has had a rough go, and it doesn't appear to be turning around. >> well, as they say, when it runs, it pours, and currently the world does not look very good for twitter. they have had the fourth product person in the last two years at twitter and not just that. a lot of other executives this went out. jack dorsey came back in to take over as ceo and people are waiting for the updates to the core product to make it more usable and more user friendly and we have yet to see a massive change there so there's a lot more that has to happen hat

twitter in order to put it back on track. some people are now talking about it being bought in the next year or so. that that is the only exit. i hope that -- >> how much do you think -- >> and i ask that question. brian was bringing it up earlier. if yahoo in theory is going for 3 billion, those are the reports, what does that make twitter worth? >> exactly a very good question and the same is true for all the unicorns that are not even public. all these companies that seem to be higher value until they actually have to be bought by someone and then the world looks very, very different. at yahoo we're seeing that most of the value actually is in the alibaba stake and in the yahoo japan stake and not actually in the core business because we're talking about 3 billion valuations here and the company is worth a lot more in total and twitler have the same issue then so if we're seeing that the public markets are much more difficult than the private markets have been in the last few years. >> listen, i don't know, cyriac, if yahoo goes for 3 billion and

sells for 3 billion is that going to send a shock wave through silicon valley, or is it expected? >> i think it's expected. >> this was a company that was offered for $33 billion a few years ago to microsoft. >> yup. >> 3 billion? >> yeah. the world has been changing. everybody has been watching what's going on with yahoo. i don't think it's a surprise, a big surprise for silicon valley to be honest. i think the much big and more scary story for silicon valley is what happens with the unicorns because those are private companies with a lot less revenue than yahoo and they are looking at valuations that are so high that it's actually turns out it could be a curse for some of these companies to evaluate so highly. with investors they will lose money or with employees that won't see a lot of money when they exit. >> all watching to see that as it unfolds. great to have you on again joining us from san francisco. >> cloudy san francisco. let's talk about stocks right now and they are higher.

the dow breaking bad above 18,000 for a few moments. hasn't been at that level in almost six weeks. seems like an eternity, doesn't? s&p 5001% away from its all-time closing high. why? well, one reason is energy stocks as oil tops $50 a barrel. by far the strongest sector in the s&p 500. that would be energy. health care, however, is in the red. >> joining us now for more on the markets is jeremy siegel, professor of finance at the university of pennsylvania wharton school. professor, great to have back with us. last time you were on "power lunch" you said the dow could hit 19,000, 20,000 by year's end and that would imply a 5 boston to 10% return. what takes us higher at this point? >> i think it has to be earnings. we've had a little stability the last few weeks. earnings projections are finally not going down the way they have for the last nine months, but we really do have to i think realize better earnings to

really push this market forward. you know, i'm happy that janet yellen, basically said we're not going to increase in june but that didn't make that employment report we had better. that really shook me. i'm not turning bearish but certainly not only the job creation but the unemployment rate going down to 4 opinion 7, that real meant the participation rate, which is so important to get those people that want to work, because we don't want to tighten this labor force to cause the fed to -- to tighten too quickly, so i -- you know, that was a bad report and, you know, i'm certainly going to be watching the next one, but i think to push that 19, 20, which i think is still really possible, we really need the earnings to start moving up the second half. year. >> you don't sound like a guy who is pounding a table on up to

a 10% return on the dow by year end. taking a look at the earnings saying the, part of the equation has to improve, pe earnings, the denominator has to get bigger here, are we going to see that because that impligs that the market right now is overvalued or fully valued. >> well, first of all, we have about 18, 18.5 times this year's projected earnings. in a low interest rate environment which janet yellen is telling us, hey, this may even last longer, that's certainly not an unreasonable estimate at all. we still have the dividend yield on the s&p 500 being well above the ten-year bond and well above anything that anyone is going to get on cds or fixed income, and, remember, i've been on this show before, and i think that we're still in the very early innings of investors thinking about stocks as income pro-duesing and dividends-producing and i think that story is as live as every.

i just want to make sure that we don't stall out at any point in these earnings increases because then we'll be stuck in the same trading range that we've been in for the last six or nine months. >> what i'm hearing you say -- >> that's not a slam dunk that we're going to get that earnings increase. >> what i hear you say is part of your thesis is there's a dearth of alternatives to equities, rao igt? >> yeah. >> there's just nothing else there. when you've got toyota floating a bond at .001 of a percent. >> if that's going to be the case for the next three to five years. i don't think the ten-year treasury is going to top 3%, maybe even 2.5%. i don't think cds are going above 1.5% to 2%, even towards the end of this cycle, and -- and, hey in, that environment, it 2%, 2.5% on s&p with growth and inflation protection looks mighty good to me but i think that that's going to be a big motivation for people to shift into equities, thinking of them as income producing and not just

as vehicles for capital gains the way it's been most of the past three or four decades. >> professor siegel, mir shell here. when you show the two-year charts it looks like maybe they will finally break out of this range. >> tyler has brought up a point that's interesting. do we trade flat in the election? does the election slow down anything here? >> wow. i mean, it's -- i don't think so. i mean, you can always talking about that uncertainty out there that's supposed to keep it in a trading range. there's still a lot of bearishness out there. a lot of people are saying, my god. how is it so high? that's actually good because i think there's a lot of people still underweight. even a lot of of the hedge funds and others, we know they haven't even been able to match the rather tepid increases that we've seen in the averages. some people think we'll have a short-term meltup in the market

as people try to catch up, but i think to sustain that increase we really have to see those earnings which have been really challenged, to say the least, the last 12 months, particularly in the energy sector move up. the fact that we put in a bottom of oil at $26 in february, the fact that if it stays at 50, commodities are there. i mean, i think that's positive for the markets. >> professor, our thanks to you. >> thanks for having me. >> news alert on lending club. let's get to that? >> shares are under a trading halt that's lasted for ten or so minutes because the company has filed a new regulatory filing saying that they had adjourned their annual shareholder's meeting which was taking place today. the reason they have done so is because the company says that given the developments over the last few weeks, referring to the controversy around some of their lending portfolios and the sale to investors and what not, the company is not yet in a position to provide its stockholders a complete report on the state of

the company. they have accordingly said that they will reconvene their annual meeting at 11:00 a.m. pacific time on june 28th with the same virtual meeting access as well, so that's the latest news and probably the reason why the stock was halted. it's still halted right now and we'll see if anything else comes up. you may recall earlier, just about 20 minutes or so ago, headlines came out from a separate regulatory filing saying that lending club was looking to raise interest rates to borrowers other and they were saying raising interest rates will boost attractiveness of loans to investors hand they say they will also tighten credit criteria to remove higher debt parts of their portfolio and want to reduce loan volumes by tight nick criteria. some. headlines come out and we'll lit know when lending club starts portraying again after the trading halt. >> think about what they are saying and struggling with the

raising interest rates. we know the bond market has moved so what they are saying is we're struggling and our solution is going to be raise prices effectively. >> well, they are doing that as well, and they are saying as a result of that, they expect to put out fewer loans, 5% fewer loans because of this particular heightened or tightened lending criteria. yes, the company has fallen on perhaps some tough times with regard to the overall picture of the company, but this is an interesting move by the company saying that they want to at least tighten some of the lending portfolios, a move set to shore up what some investors feel need node shoring up a little bit. we'll keep an eye on lending club. >> reconvening on the 28th. let's hope they learn something about their own business in three weeks. dom, thank you. to oil now. nigeria starting a much delayed program to clean up areas heavily polluted by oil spills and vandalism in the niger river delta. that is where almost all of nigeria's oil is produced.

terrorism, the blowing up, the cutting up, whatever, of pipelines has heavily impacted nigeria's oil production. the southern swamps. delta have been hit by a series of militant attacks on the oil and gas pipelines. those attacks have pushed up the country's crude oil output to a 20-year low. ouch. all right. so, what's happening in nigeria has actually helped push the price of oil back up to $50 a barrel and above that and some. stocks the last weeks and months have been rallying. here now for another "power lunch" exclusive david dempshire, the ceo of four labs. 2k5i6d, first off on prices, how much do you think what's going on in, you know, the canadian fires and. nigerian terrorism and vandalism that we're seeing is the reason oil prices have gone up because if they are those are short-term things most likely?

>> yes, brian, first of all, thanks for having us back on "power lunch." enjoy seeing you again. when you look at the worldwide net decline curve rate of about 3.3% that's going to add up to about 2.75 million barrels of net decline in production this-year. that, coupled with an increased demand of about 1.2 million should balance the crude oil market by year end. now, these supply disruptions in nigeria, up in canada, are having a significant effect, as you said, in the short term, but even longer term the laws of physics and thermodynamics and the decline curve always wins and never sleeps. >> well said. let's get to your business specifically, david, because you rely on the big guys, the biggest of the big, spending more money, especially with core labs. just about once a week for the past six months we've seen xyz giant capital corporation cuts its spending budget. do you believe the spending cuts

by bp shell, all of them, are over? >> i think pretty much they are. as a matter of fact, if you look at bp later this year they are going to -- or early next year they are going to sanction the mad dog 2 project in the deepwater bid in the gulf of mexico. they were originally approved for oil above $100 and if brent gets to $60 a barrel. they feel returns at $60 a barrel will be better than what the original returns were going tonight. moreover, we're seeing maybe totale later this year, again sanctioning a deepwater project so i think their cap "x" budget cuts are over, and we're going to see them start to spend money and develop the reserves around the world. >> i've argued that for many companies, maybe not yours, maybe not bp, but for many companies $50 a barrel is not much better than $40 a barrel. "a.i." wrong? >> well, you've about natural resources set at wti.

at $50 they might put on as many as step rigs in the basis. that would be a dramatic is they wish to have them move in some ways. >> brian demshur. >> thank you. >> lending club trading has resumed. >> it's down about 4% right now. it opened up down around 5.5% at its lows after the trading halt. shares were down some 2 some percent before the trading halted. shares are out and they have said they will post pope or at least adjourn their annual stockholders meeting and will convene and when they know more about the state of their business. guys, back over to you.

>> i'm going to jump in here, dom, or low it to tyler or melissa or michelle. has anybody heard of a company stopping a shareholder meeting in the middle of the day? i'm going through my brain and my brain is a little foggy. >> no, i don't think so. sounds like they convened it in some way simply to announce that they would convene at some other point. >> maybe procedurally they have to do that. >> that's pretty gig. it sound like they are forced to change their business mold and charge higher rates in terms of what they are going to give out to loans but if you are going to get investors to buy the loans you've got to offer a better premium. >> if you're offering or charging higher rates uruguay wondering whether that will have them look at alternatives.

>> i think the whole business mold el. company is in question. >> the lending club has adjourned and will reconvene in three weeks, i guess. okay. raising the bar. if you're thinking about going to law school, don't. listen up, something just happened in the legal world that's not happened in step years. what it's signaling and the ramifications ahead. plus, housing, red flags, a lot less documentation and more ability to lie on mortgages. hmm. have we heard this one before? really is it different? your money and your vote. hillary clinton making history. the road ahead in this election. a lot more to do. stick around. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that

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>> look, everybody has a right to an impartial and fair trial, okay? a lot of republicans are kind of jumping the gun here. ethnicity is not a reason, okay, and this should not be a conclusive reason regarding a fair trial, and i think mr. trump missmoke -- misspoke on that. judge curiel has a background that it would not be a fair trial. as a member of la razza lawyer, helps la aza council members and he's against trump and all trump's border security programs and the law firm gave $675,000 to bill and hillary clinton. asking the judge to be recused would be a good approach and ask

for a change of venue. >> he hasn't asked for a change of venue or done the things that you describe. he went after the judge very pointedly and very personally and you know very well, larry, that the minute you start to introduce someone being qualified or not qualified for a job based on their race, ethnicity or religious background you're beginning to go down a very serious slope, a slope on which this country was not built. >> i agree with that. i don't think he's going down that slope. the last -- >> but he -- >> liberals, republican establishment people. >> he's kept saying it. >> very quick to use this racist charge. i don't think he's racist. i know him. i'm not an intimate, but i don't think he's racist. what he's asking for here is a fair trial and do i think he misspoke on the mexican thing. on other areas i think he's on very firm ground, tyler. i must say on that point. as i said this, judge does not

have an impartial history regarding these subjects, and i think trump's got a point, but i also would not have used -- that's me. i'm not running for president. >> right. >> just me. >> you're in charge of all the data. you're with 538 and look at all the polling and everything else. what insight can you give us and donald trump and what it might do to the gop? >> the question is does the gop want to survive in a multi-racial america because we've got 30 years until america becomes a country with no racial majority. white people -- non-hispanic whites will still be the largest plurality, but in about 30 years there will be no racial majority, and so when you look at the overall figures for how the electorate is changing, latino americans and asian americans have a growth rate as a percentage of the electorate from 16% to 17% over 2012 whereas african-americans and

white americans are roughly flat. so if you talk about the momentum that you have demographically when it comes to courting voters, and also -- >> that's 0 years from now. what about right now? >> well, right now you -- you have certain states, you know, a lot of the states that are swing states don't have a particularly large latino population but arizona is a state that has not been a swing state. it's still leaning red but where you have because of sheriff joe arpaio and the controversial elections he's had as well as the comments of donald trump, the latino electorate in arizona is more mobilized than it's ever been there. he's a push by the obama administration to naturalize 800,000 legal residents who are not citizens before the election and then there's also a move by many latino groups to mobilize 3 million potential voters who are citizens who haven't voted before in a presidential election so the math around these comments about latinos basically is boxing in the

future. >> look. can i just break in, larry. just gotten a news word from mitch mcconnell, the majority leader of the senate, saying that it is, quote, time for trump to stop attacking minority groups. is there any evidence that his extemporaneous comments, misspoken or not is hurting republican candidates down ticket? any evidence in the polls that that is why those races are as close as they may be. >> well, you know, one of the things is that some of the closest races are not in places where you have the largest latino population, so you've got -- >> bingo. >> in the senate you've got new hampshire. you've got ohio where there's a significant but not overwhelming latino population and wisconsin, so, you know, right now the -- >> you'd be hard pressed to say. >> that's exactly right. thank you for being objective. i appreciate that.

look, i'm an old jack kemp republican, so i want the gop to always broaden its base and reach out to the minority groups, okay. i always have and i always will, but i think they have to do so not in a andering sense, but they have to talk about economic policy and growth and opportunity and why traditional gop policies, such as deregulating, helping small business, reducing tax burdens and the like will work if they go out there to the communities, so in that sense i think republicans have a problem, but i also think that the trouble with trump on this is not racial, it's all about being off message. the message that trump should be the economy. grow the economy, raising the threat of recession right now. >> you came in with some facts. >> let's grow the economy. that's where donald trump should >> you came in with some facts. >> yes. >> you said that hillary clinton had been paid $600,000.

>> $675,000. >> by a -- a latino lawyer's group. >> no, it's -- no, a group who is representing -- i'm sorry. let's be very fair on this. the la raza lawyers of whom the judge is a member is very different from la raza lawyers but the council represents them in a number of cases. judge curiel appointed a law firm which has in recent years given 672,000. >> if these are the facts, why does mr. trump choose not to cite those kinds of facts and to go to the -- to the matter of the judge's ethnicity. >> well, i -- >> and you've been in the room with him. >> i think -- >> does he listen? he's got -- you've got mitch mcconnell, the two highest elected republican officials in this country calling him out on this. does he listen, and if he listens does he hear?

>> i think he will listen. i think he does listen. >> does he care? >> i'm not -- >> let me jump in. >> i'm not a trump expert. i know him. i have been in the room for him and i can't speak for him on any of these matters. however, you make a good point. i would rather he judge the judge regarding these other matters which are far more important than ethnicity but i stick to my response to my friend michelle. the gop must stay on an economic growth message and mr. trump has a good one but he should be using it and that's the best way to the minority groups. >> the thing you is asked about down ballot races but when it comes to swing states, that's where you see the power of the latino vote. florida, you have all of these cuban-american republicans like the mayor of mime who are saying hands off, i can't touch this guy. you know, all of the, i know, southern florida republicans are running against donald trump, so florida's a classic swing state.

you've also got nevada, colorado, those are all states with very high -- >> trump is running even in florida. trump is running even. the real clear average. >> cuban-men traditionally republican voters won't touch donald trump. >> i don't think that's true. >> can we -- >> can i ask a totally different question. >> trump is running even with hillary in florida. that's what the polls show. >> can i ask a different question for you, layer and then can you respond off the trump topic. >> yes. >> if bernie sanders wins california, despite hillary clinton being called the presumptive nominee, what happens? >> all hell breaks loose. >> do you agree with florida. >> >> maybe not that exact description. all hell breaks lose. the bernie sanders people will be emboldened. we'll see fights on the floor of the convention, fights for rule changes, fights for delegate changes and platform changes. >> don't tease me, hillary.

>> you can quote me hon in a. >> according to the pollsters for 538 the polls plus analysis is clinton has a 90% chance of winning california, even thought the polls themselves seem close, once you dive down and look at the underlying mix and you can look at them by region of california, 90 -- >> calling somebody a winner does tend to skew votes beforehand. we know she's the winner. i'm not going to vote for a loser. >> i have a lot of respect for miss silva though she's made a lot of mistakes in this campaign so far. >> she's not going there. >> i don't know who is going to win. right now the race looks like a tossup. that's what the latest polls show. i would just say in answer to brian's insightful, brilliant question. you've never heard that. >> first time ever. >> for politics. >> look at him. getting red already f.sanders

wins tonight, if he does, i'm just telling you all hell is going to break lose. >> they'll be like a team going into the playoffs on a 20-game losing streak. >> that's a good metaphor. picture in the "the new york post" with her trying to claw over the finish line. >> yeah. >> like the olympics, you're supposed to run straight ahead and put your arms ahead to the tape. she's barely getting there. >> and with super delegates there has enough. >> there may be a fight on the floor. >> they can change their mind. >> that's very contentious and what i'm saying is i don't think she's crawling across the finish line the question is whether she crosses tonight with an overall delegate count or just with the super delegates. >> my point is a little different point. you're right on the rules, but there may be a big rules fight on the floor regarding super delegates. this is possible. it's in the democratic rules. >> and a california win emboldens them to try if that's the case. >> i'm telling you. it's a hell of a thing and we'll all be very anxious tonight.

>> on both the moral level and a practical level the gop has to figure out its messaging to latino americans who actually are more likely to vote for republicans than either asian americans or african-americans. >> i have it. breaking news, growth, opportunity, breaking news. gop, growth, opportunity. jack kemp. kudlow, ryan, steve moore, art laugherer, and sully. >> brilliant. >> kind words. >> we'll be right back. back in two minutes. (man) oh, looks like we missed

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since the economic crisis we've seen what many believe was the decline of big law, big firms, some of them, going bust, merging. salaries slashed, but now from a new york firm, well, what are they doing? they have hiked starting salaries for first-year associates from $160 grand to 1180,000 and older associates will get commensurate raises. did big law hit a bottom, and will all of those big new york firms and chicago firms and the covington, are they all going to raise their rates?

>> that's what it looks like is hang right now. since it was announced yesterday, already had half a dozen firms around the country announce they are raising pay rates as well, so it looks like -- >> what's going so well for these lawyers? >> welling right now the large law firms have been doing well. they have had about six consecutive years of increased revenue and profit. representing their clients and collecting on their bills and -- and they have had had a decent amount of growth in this recovery. >> this is the first time in how many years that these sort of benchmark law firms have been raising their first-year salaries? >> almost a decade. last big pay raise like this was back in january of 2007 so it's been a while. >> does this make the law an even more appealing career choice? >> well, peace the difficult question. i think whether the law is the right career for a driven person depends on where they are going to law school and firms like cravath are very selective in

their high school. >> they are going to harvard and yales and michigan and. >> exact successfully other law firms aren't jumping along. is this the beginning of a trend? is this a multi-year thing, or will we see another long breathing period between now and the next time they go up by so or 20 grand? >> well, i think what's going to happen is this pay raise will spread across the country and that could take several months as it goes to d.c., los angeles, san francisco, et cetera, and then, yes, we'll have a couple more years of a breathing period. >> david, thank you very much. >> thanks for having me. >> interesting news in the law feel. appreciate that. "power lunch" returns in two minutes.

it is time now for trading nation because traders do trade better together and today's quest, what sector, if any, will drive stocks to record highs? erin gibbs and max wolfe with manhattan venture partners. erin, we know you like health care. why is that the sector to drive us to new highs? >> all right. one, it's one. largest -- one of the three

larger sectors of the broader index, so obviously it has a lot more heft and weight to push the index up, but another big part of it is has some higher growth rates and we're looking at 8% growth for this year and 6.5% over the next 12 months, but the really big thing is that it's actually trading well below its three-year average valuations as well as below market valuations so even if we get another 5% of evaluation expansion, let alone some of the most attractive eps growth, we could really see some growth and pushing the market higher. much better than we've seen with the financials that are trading at more richer valuations and obviously having the fed hanging over them so they are my favorite and that's where i think we might get the push. >> max, you have another favorite which is financials, something we talk about all the time with the federal reserve. is the financials just a fed story? >> no, but significantly a fed story and the other big story here is whether or not we're

going to get the full package of financial regulations has gone back on the chopping block, having been off that block for many years, so we're starting to see a weird situation that kind of formed up here which is that the rule-making took so long that it won't actually be complete until the next president comes in, and we're seeing lots of voices in the house and senate, including some of the presidential candidates talk about repealing or big pieces of approximately huge segments of regs. likely to see a situation where rates are more accommodative, and been unloved a long time and valuations may come back and they may get regulatory relief and given that we think the markets are overbought we think there's a sweet spot in the number of levels, though health care is appealing and it's probably a safer bet between the two. >> all right. max and erin, health care and financials, two good arguments. thank you both very much. remember, for more trading nation, go to the trading nation website which is tradingnation, did i mention tradingnation,.scenes.com. all right.

up next, are the banks going back to their old sad ways? a possible red flag in housing when we come back. and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> trading with the trend is key for many traders so trend following indicators are important. the markets are trending down, many traders watch moving averages which will generally have a downward slope. as long is a the stock or index stays below the moving average, most trend traders believe the weakness in the market is being confirmed.

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welcome back to "power lunch." remember last woke we told you when the return of the 3% down mortgage. wait until you hear this offer from diana olick in washington. diana? >> reporter: melissa, remember stated income loans. could tell the bank where you worked and what you made. they called them low doc or no doc loans after the housing boom and after the housing crash they called them liar loans. one community bank in queens, new york, quantity c, and what you need to get it? you need a really big down payment, 40% p.you need a

minimum 700 fico credit score and have to occupy the home but all you need on the document side is verification of employment, two months of bank statements and enough cash in a check considering account at quantic to cover all the costs of the loan for six months. for those of you who know today's tight mortgage rules you know this does not xlooet comply with new federal regulations called the, quote, ability to repay so how does it work? quantic is part of a treasury program from 1949 to help revitalize low-income areas that. said, quantic can make these loans to anyone anywhere. so far they are only doing it in new york and miami. now i spoke with the bank ceo this morning. he said, quote, i see them as extraordinarily low-risk loans. they are mission-oriented. the worst case scenario, he said, is that the borrower goes delinquent and have you to foreclose. okay. well, there is, of course,

nothing to keep these borrowers from lying on these loans as has happened in the past, we know. shock. >> diana, is this a profit-drive institution or a nonprofit institution? >> not a nonprofit. it's a community bank which by virtue of it being that type of bank it's supposed to be giving back to the community doing what it does within the neighborhoods to help revitalize those economies, and that's why it's part of that treasury program, but it is not a nonprofit. >> got it. all right. thanks, diana. let's bring in bruins marks, and this is a nonprofit that provides loans to low-income individuals who are considered to be sub prime borrowers. good to have you here, bruce. >> great to be on again. thanks for having me. what do you think of the low doc loans? you have to put down 40% for the down payment. a big whopper of a down payment. >> well, it is. this is going back to the predatory lending, but it's even worse because it's taking what's supposed to be for low and moderate income people and it's

preying on -- using that to just make these mortgages that are very problematic, but most importantly it's not going to help low to moderate income people. it's just these -- it's the bottom dwellers who are there going after -- going to the depths of predatory lending again. >> why does it not help? why does it not help these people, bruce? i mean, if they can make the payments, and if they have got that 40% down, very high fico score, why can't these people decide on their own that this mortgage is for them? why is it that they are being preyed upon? >> because if you look back, look what -- look at what created the mortgage crisis. it was people with high credit scores, but they were able to put down anything on their mortgage statements and on mortgage payments and actually what happened is you had the lenders saying if you want to get this markets put down this income, put down how much you have in assets, but really what built this country is full doc underwriting.

>> is it different this time because this is as 40% down that we're talking about. back in the crisis we were talking about almost nothing down or no money down in some cases? >> we but we've been doing the no money down mortgages for over 30 years, but it's always full doc underwriting so when you do full doc underwright you're verifying your income and your ability to pay. that's the key piece. if they were so sure this is the right thing to do why are they using to -- did you read the story that diana wrote? >> yes, i did. >> a lot of non-traditional buyers who don't have necessarily traditional incomes, a lot of immigrants who -- >> but -- but -- >> but the point is -- >> to pool resources so to document would be incredibly difficult. they may have the money but don't have the ability to file the paperwork so why shouldn't they be able to get the loan? >> because the paperwork that you have to require to do the ability to repay is not

difficult. it's not difficult. so they shouldn't have to use the mechanism -- >> but they won't qualify for a traditional loan. >> but they do. common sense says if you're going to be in the lending business, anybody in the which is meant for low moderate income people but every form of lending, common sense says you have to document the ability to repay. it is not difficult. it's very simple to do that. you've just got to verify the income, the deposits. that's what built the country. remember, after world war ii, what built the white suburbs? it was a v.a. mortgage. it was a no down payment mortgage, but full doc underwriting. what caused the mortgage crisis was not the lack of payment. it was the lack of documentation. >> got it. >> anybody listening to this say

use want to verify it. it's common sense the and to repay. >> bruce, thank you so much. >> they're going to find a way to scam me again. >> thank you very much. good to have yu on. >> thank you. >> "power lunch" is on in two minutes. using 60,000 points from my chase ink card i bought all the fruit... veggies... and herbs needed to create a pop-up pick-your-own juice bar in the middle of the city, so now everyone knows... we have some of the freshest juice in town. see what the power of points can do for your business. learn more at chase.com/ink see what the power of points can do for your business. ♪ 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.

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2016 disrupt ter list is ready to go. it's the rank list of the most innovative and disruptive private companies. our chief disrupt ter julia boorstin is at the headquarters. number 6 on the list, julia. >> tyler, that's right. here at bloom, the company is building fuel cells. they're designed to revolutionalize how energy is produced and distributes. it's fuel cells that convert natural gas into electricity far more traditionally than traditional power technology. bloom has performed these for big customers including apping, at&t, walmart, and home depot. earlier we spoke with the c

ceo krs is sridhar about his company's mission. >> it's critical to a sustainable planet. just like computing telecom went to centralized to distributed. that's access, affordability, choice, sustainability all coming together. this is one of the most important things we aztec knoll gists can do for this look. >> the company signed deals with others. sridhar says the next leg of growth will come from a big push into emerging markets. >> developing companies and leapfrog just like they never had landline and went straight to a mobile. they can go straight from l electricity to the most advanced form. >> bloom energy raised over $150

billion. sridhar says he's not in any rush. >> look. ipo and going public in a company whose mission is to change the world is one step in the process. we will take that step when it's appropriate for us and not whenover people think it's right for us to do it. at the end of the day, we want to be a large sustainable company that will have an impact on the world. >> you can find more interviews with disrupt ter 50 ceos as well as the full list at the website. >> julia, thank you very much. we have a big line of disrupters tomorrow beginning with the co-founder and ceo of the yore gachbl design company ginko bioworks.

the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t. we're holding onto gains. dow jones industrial average gave up that 18,000 mark, but hanging in there up by 61 points, s&p 500, this is a year-to-date high. we're less than a percent away from all-time highs and for wti crude, this is 2016 highs setting above $20 a barrel. no surprise energy stocks a big

gainer on the s&p 500 along with transports, semiconductors, homebuilders. >> cfi. >> it matters if you're out west. >> are you going? >> it's 2:00 p.m. west. >> "closing bell" starts right now. welcome to the "closing bell," everybody. i'm kelly evans with the new york stock exchange. >> and i'm bill griffeth. >> welcome back. >> thank you very much. stocks moving to all-time highs. we're going to tell you where you can find growth. yes, we're flitting with 18,000. we'll see if it can happen by the end of the day. >> getting hit hard on the back of bad news from biojen and valiant. we'll bring you the details on what's behind these moves in just a moment. >> meanwhile nearly 70 million cars in the u.s. alone have