this time around. nonetheless, there will be some activity and she cited about it brexit and what it could mean. although, i would say if we do get that lowlower, it's a buy, judge. >> very minimal jie ragss in the market during the fed chair on the hill. thanks for watching. "power lunch" picks it up now. >> thank you very much. keep it right where it s halftime fans, we have a jam packed two hours ahead on "power lunch" brought to you by the letter b. that is because we're talking buy backs, brexit and a third one there, that would be the banks ahead of that stress test tomorrow. welcome, everybody, to "power lunch." along with melissa and brian. michelle is making her way to london ahead of tomorrow's big brexit vote. u.s. investors paying attention

to that vote. they have turn into small losses for the industrials. down ten points. nasdaq holding ton a very slim gain of about 4 at 4847 and the nasdaq is higher by 1.6%. >> let's kick it off with the first of those bs and that is the brexit vote countdown. we are just 12 hours, 59 minutes, 11 seconds away from the vote opening up in the uk. the polls do seem to show rather even split for stay or go. perhaps the market and the wisdom of crowds is selling more of a stay story. the uk stock market having a great run lately. we pointed it out yesterday. we're up again today. four days in a row of gains for the uk. the banks doing especially well. barclay's, for example, up 10% over the past week. some of the other ones, lloyd banking group, prudential have also done very well. let's look at the british pound. it's been on fire lately. in fact, a few days ago the pound had one of the best days

in a decade. as you might imagine, we're going to have lots more coverage of this brexit vote you might have heard about coming up. but first, some breaking news in the auto sector. a new study on vehicle quality just crossing. and there is a new champion in quality phil lebeau. who is it? >> it is kia. you may be saying yourself, kia has the least problems of all the new vehicles launched by automakers. yes, according to jd power, they surveyed 80,000 new vehicle buyers, kia is the number one in terms of fewest problems of new vehicles in the first 90 days people own them followed by porsche, hyundai, toyota and bmw. kia sales up 4.3% this year. there is a brand that sales have been outpacing the overall industry average here in the united states. in part because the reliability has steadily improved over the years. fewer glitches have been reported, especially with the entertainment system. that is a tribute to the

planning done in advance when designing the vehicles. >> so the new vehicles that are coming out are really coming out. they're launched very well. very well thought out in the design phases of the vehicle. >> now aside from kia, there are good news for the big three. they all improved their reliability according to the jd power survey. that is just the second time that has happened for all of them in the same year in the last 30 years standing out among that list, jeep and chrysler. they posted the biggest gains of any auto brand when it comes to reliability. take a look at gm, ford, fiat chrysler and i get this question all the time, what about tesla? tesla did not have enough new vehicles surveyed by jd power to be included in this release for this year. so we'll see if that changes next year and in the future as we start to see the model 3 and more teslas on the road. >> is there anything lebron james is not winning at? he is kia's spokesman. people say lebron -- maybe another win for lebron.

maybe another win. you know what think back ten years ago. they were at the bottom of the list when it came to reliability. we're kind of dismiss bid people, you know, a maker of lower priced vehicles. that's not the case anymore. they really vim proved their quality and their standings. >> somebody on this set drives a kia. >> i own a year old kia. very, very happy with it. it's been a very nicely appointed car. as you say, phil, the reputation of kia ten years ago was that they were bargain basement cars. now not premium priced but you still get a lot for your money on the kia. and, man, you're so right. there are a lot more kias on the road now than there were. >> they have out -- they outsell volkswagen which isn't saying a lot given the problems that voek k voekz wagon has had. they have grown along with hyundai. focus on the quality. yeah, we may not have the sexiest vehicles on the road. they may not be head turners

across the board. but they are reliable. and that is showing up in all of the surveys' certainly in this latest one from jd power. >> where did latta come in? just kidding. >> we have a new blush in the bond market. s seven year notes up for auction. let's get reaction from rick santelli. >> the last seemed to have been pretty good. seven year note auction straight up 1:00 eastern. dutch auction that, is. i rated it b as if boy for demand. as can you see as i give you the internals, it wasn't a bad auction, especially compared to some of late. we look at the yield for the $28 billion, 1.497. 1.au 1.50 is the offer side. the high yield of the day of 1.505. just a little bit above the ten year auction. 65.6 on indirect. foreign central banks and large

institutions, of course. that is the best level since, well, going back to when they first started issuing seven years, best way to describe it is a third best indirect number in the whole run. and if we look at direct at 9.1 that, is weakest since september of 2015. so 28 billion, graded a b. the auctions are done. now all we have to worry about is brexit. >> no minor detail. rick, thank you. >> all right. so the countdown is on to tomorrow. let's now agree to call this the big uk vote. shall we? our next guest has suggestions on how to big uk vote proof your investments. joining us from london is international ceio of global fixed income for jp morgan asset management. thank you for joining us. bond, it's an inflation story. it's an interest rate story. where does the big uk vote fall into the global bond market

scenario right now? >> well, when you look at it right now, the risks are very a systemrick. sterling had a tremendous rally this week. it's up 7%. when you look at that and the results from friday, it's now real really real really asymetric. if you look at the ropes that, goes to 152, something like that. on a leave vote, you're down into the low 130s. when you look at bonds more generally, what you're likely to see is a relief rally on remain. and what is already baked into the market. it's around 18% price. but, of course, if it leaves, credit spreads go a fair bit wider from where we are now. >> so basically, you're saying the most likely outcome which will be a remain vote is fully

priced into the market. is that correct, nick? >> it is. i mean, when you look at polls, it's 50/50. translate athat to the betting market, you're around 80/20. financial markets are really priced that in already. and that means tomorrow actual sli going to be a very quiet day. >> so there is really no positioning per se to be done. the only perhaps way to position yourself will be to position yourself for a bet to the down side on equities to the upside on bonds and to the down side in pound. the only way to do that given your theory that this is an asymetric risk is to do it through options? >> it is. that is exactly right. a lot of the positioning is already done. when we get this big uk vote out of the way, we'll get back to the fundamentals for bonds which are hugely bond supportive. there is no growth, there is no inflation in the world. >> so my notes say you like higher duration, higher yield

and higher quality. the first one i get. the last two seem to be a little bit at war with one another. can you explain? >> yeah. so when you have higher duration, it stuns an american. but one of the highest yields in the world is u.s. treasuries. ranked every government bond in the world from high yield to low yield, 85% yield less than a ten year u.s. treasury. so international investors will be getting those. that is what we mean by high quality and in that environment, you buy the longest treasuries, the longest u.s. corporate bonds, you can find. >> all right. and then where does the higher yield come in? >> well, there's a twist there. when you look at the higher yield, the standout place will sound off in europe. and again, think of what is going none europe right now. there is a race this year in terms of economic growth and it's likely europe for the first time in years beat the u.s. it will come do you remember to a couple of tenths of a percent.

when you look at european high yields, great credit metrics behind it and improving company health. >> do you think they'll stay or go? do you think the betters are right or the polls are right? >> bookies are always right. >> there you go. >> look at every election. the bookies are right. >> all right. >> all right. european commissioner john cone yofrpger saying today if the uk votes to stay, there will be no more reforms for the united kingdom. weakening prime minister cameron's argument for changes in the relationship arguing that they are possible. cnbc's wilford frost sont ground for us. >> indeed. live on the ground. and i'm will go joined outside parliament by kate oleo. good afternoon you to. >> good afternoon. >> let's talk about the comments. we've been talking about them

from the studio. many have thought that regardless now of the results of this vote that europe would wake up. the eu would wake up for the need for reform. they're slamming that door shut today. what do you make of that? >> it looks like we have an interruption in our signal there. so he famously in favor of a leave vote. we have the signal restored? yes, we do. let's go back to wilford. >> we have the signal back. sorry about that. start again. >> well, i do think that this unelected president, let's not forget, he said something like. that none of us ever wanted to have another negotiation about us staying in. we have a vote to leave. and we've been negotiating about various things to do with trades with the eu. all of those things. it's not really, you know, so

what if he said that? we knew that would be the view because he thinks that david cameron got a good deal. of course, he didn't get a good deal. he didn't ask for very much. >> you said the word unelected there. is that your main argument for why you want to leave? >> i think democratic arguments are crucial. it's underlying all of this is that the european union is basically a project. it's about moving more and more away if national parliament to brussels and to the european union on elected commissioners. we don't want to see. that but also, there are growing numbers of people in the rest of the eu who don't want to do that. so we are a little ahead of the other countries. and i think the democratic arm is important. i'm elected as a member of parliament here. we want to know what effect they're going to have. they can carry them out without being affected by six or seven other countries. >> that's an argument of the

heart, of the gut. for the people that might be voting with the head a little bit more, perhaps more on the economic argument, do you feel that your side rightly or wrongly lost that argument, the argument on the economy? >> no. because the argument on the economy is based on experts, leaders of big institutions, all basically saying if you leave, it's going to be disastrous economically. the very same people, most of the american people said exactly the same thing to us when we decided not to join the single currency. it will be the end of the country. we would lose our engagement for financial services, all of that. you know, we're the fifth largest economy. there are a lot of other countries not in the european union doing very well not being part of this shrinking market. so, no, i don't believe we lost the argument. i think we have a very hopeful argument about looking and trade wrefgt of the world, not giving up priority to the european undown.

>> in terms of momentum, the last week hasn't been great for you. the last day or two come back in term of the policies. are you feeling confident? >> we did have a setback because obviously the death of my colleague was devastating. and there were some people in the area that tried to -- [ inaudible ] and, of course, very sensible senior people said that is nonsense. i think in the last couple day what's we've seen now is a realism that, you know, tomorrow is crunch day. >> sure. >> and there is a mood out there, i think it revived politics a little bit in the country. this is our chance to get this opportunity which would never happen before. >> thank you so much for joining us with just one day left of the vote. back to you. >> all right.

thank you. meantime, we want to point out that stocks right now are just about at session lows. all three indexes are in the red. the dow jones industrial average down by 44 points. the nasdaq down by seven. the s&p 500 is down by two. we're watching this very closely. financials, seems like we're losing that group on the s&p 500. and we're also seeing the tlc, it attracts the bond market. the flight to safety if, you will, at session highs right now. th should be an interesting session to watch. janet yellen wrapping up testimony before the house of representatives. steve liesman has the latest. >> she was done before the market hit session lows. i don't think so. just to follow up on the brexit stuff, the fed chair said the fed has not scheduled a special post brexit meeting but they're watching it. watching the impact on the u.s. economy. they said the fed would do what needs to be done if there is an economic impact. also said the fed is not targeting equity prices but does see it as an important aspect of

the economy and economic growth. the rate hike will not be bad for stocks if it goes along with rates going up. now, also, we just want to reflect on the economy. there are higher wages and the new york fed slooking at enhanced monitoring of certain transactions after that particular -- that fraud of $81 million from the bank of bangladesh. there was one bit of heat there. representative from new jersey scott garret republican representative grilled yellen on whether or not fed policy was in fact good for just the rich. >> your actions are benefiting the rich over the poor because of your monetary policy. is that correct? >> it is not correct. >> which part is not? is it not the fact -- is it gallop wrong when he says the rich are more likely to invest in the stock market than the poor. >> that is true. >> it is not true that your quantitative easing according to bernanke also benefits asset purchases and -- >> 14 million jobs. >> wait s that fact or fiction? >> 14 million jobs --

>> excuse me. excuse me. i have the floor. >> it wasn't all like that. it was a little bit of that back and forth. they tried to also get her to comment on whether or not regulations and government were holding back the economy. >> always a little more inclined to buy stocks. >> and the big holders of it. there say legitimate debate about this, whether or not the fed by doing quaun take theive easing, helping stock prices and the quality. on the other hand, the fed would come back and say they kept interest rates down. they got people access to mortgages and loans and other things. and also help the job market quite a bit. that would be the fed's response. i do think a lot of the economists think that on net it's probably benefited the wealthy more than the poor. that seems to be out there as conventional wisdom. >> all right. thank you, steve. >> all right. the other big story today in the corporate world, shares of tesla getting whacked on its propose will buyout of musk's other company solar city. we'll talk about what the deal means from both companies and their shareholders as well as

musk's expanding empire next on "power lunch." ♪ it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the cla250 for $299 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

my m...about my toothpasteice. she eveand mouthwash.ice... but she's a dentist so...i kind of have to listen. she said "jen, go pro with crest pro-health advanced." advance to healthier gums... ...and stronger teeth from day one. using crest toothpaste and mouthwash makes my... ...whole mouth feel awesome. and my teeth are stronger too. crest-pro health advanced... ...is superior to colgate total... ...in these 5 areas dentists check. this check up? so good. go pro with crest pro-health advanced. mom's right...again! tesla offering to buy solar city in a deal worth $2.8 billion. elan musk was also the chairman of solar city calling the proposal a no-brainer. but is this a really good move for musk's empire? it is a good move for shareholders? let's bring in michael merosi. joe dennis is a portfolio

manager and they own 600,000 shares of tesla which they bought at the ipo. great to you have with us. >> thank you. >> i'll start off with you, joe. do you get this deal? do you approve of this deal? >> i think if you look long term. >> what is long term? i'm curious, what is long term in order for us to see what the synergies of this deal is besides putting tesla cars into a solar city showroom? >> sure. if you think that energy and transportation are moving towards a sustainable basis, why wouldn't you want to own all the different parts of the ecosystem? make it as easy as possible and simple as possible for customers to adopt that under one brand that people already trust. >> you don't think that it's taking on too much risk? i mean solar city has $6 billion in liabilities and debt here and already the questions about tesla being able to bring model 3 fully up to production and build the factory without another sort of capital raise. >> this doesn't change our stance on the model three

launch. i think that's still hits in terms of timing. in terms of list from solar city coming in, i think that many analysts and elan and the company themselves expect them to be cash flow positive by the end of the year. i think that elan has a lot on his plate. but nobody asks if the ceo of ge has too much on his plate. a lot of stuff going on. a lot of excitement. >> all right. michael, i turn it over you to. is solar city better off being owned by tesla? i guess that's another way of saying is this essentially a bailout for solar city which had a tough time accessing the capital market at a time when i mentioned they have $6 billion in liability on the balance sheet. >> yeah. i disagree with the argument this say bailout of solar city f they are well positioned to be break even by the end of the year, i think taking a step back, there is a deal that e lan wanted to do for years, i think. and in many respects, he is channeling his inner warren

buffett by buying solar city at a time when sentiment is pretty negative. and i think he's buying an attractive asset. >> when the deal first crossed, i was looking at the reaction of the other solar players as well as sunrun, the knee jerk reaction is move higher. then investors realize there weren't rich cousins of the ceos of those companies who are going to step in and buy them. today they're all down. so michael, my question to you is does this really firm up solar city's position in the market to the detriment of the competito competitors? >> i think it certainly positions solar city to succeed. you know, elan is clearly interested in building a platform here which attacks both mobility and sustainable home energy. in reality, i think there are many other companies whether there are other auto ems or industrial suppliers who are interested in competing for that same share. homes spend $20,000 a year between transportation and

energy and that's just a large amount of spend for one company to go after. i think the future will hold mod nlz which manufacture the companies are competing for durable, you know, high lifetime value customers. >> got it. thank you. michael and joe. >> thanks a lot. >> coming up, more on the three bs affecting your money. they would be brexit, buy backs and banks. and if a picture is worth 1,000 words, we have way more than that in this photo of mark zuckerberg. take a look at that. look at that grin. this is shaving.

blades here, blades there. some more over there... whoa! that's not a blade. this is shielding. with lubrication before and after the blades. shields from irritation for a close, comfortable shave. the new proshield from gillette. intensely-flavored.. colorfully-diverse. beautifully-misshapen. cultivated for generations, it's the unexpected hero of any dish. 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.

we're looking at the major indices at session lows. the vix is back above 20. the last time we were trading at this level was last week when those brexit fears were rising. polls indicating there was more momentum behind the leave camp and we're looking at volatility on the rise today. more on this market coming up.

my parents live in india. when they come, they come for three weeks. in our apartment they slept on our couch, and it was okay. but they're getting older, and... ...i wanted them to have a space for themselves. every time i come home, i'm just like, "wow." this is... there couldn't have been a better home for us. whatever home means to you, we'll help you find it. zillow.

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. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business.

i'm courtney reagan. here is your news update for this hour. president obama signing the first major overhaul of toxic chemical rules in 40 years calling it proof that washington can function despite intense polarization. he praised both the chemicals industry group and environmentalists for finding a consensus. >> donald trump launching a broad rebuke of the presidential rival hillary clinton accusing her of being a world class liar who personally profited from her

tenure at the state department. >> hillary clinton wants to be president. but she doesn't have the temperament or the judgment to be president. she does not have the judgment. she believes she's entitled to the office. florida senator marco rubio announcing he'll run for re-election after all. this after meeting with his family over the father's day weekend. he had come under intense pressure from his oeb party who feared if he didn't run the gop could lose its majority in the senate. hundreds of people have been forced to evacuate their homes as more than 1500 firefighters in san diego county struggle to contain the border fire. around 800 structures are threatened as triple digit temperatures and dry conditions have made the wildfire tough to fight. this is your cnbc news update for this hour. >> let's take a look on the final gold trades crossing for the day. here we have gold really not doing too much. what is important here is that

we have hit a two week low. we will a guest on earlier during "power lunch" saying a lot of the remains sentiment is priced into the market. that's what we may be seeing in the price of gold which had a huge rally going into this week. taking a check of the rest of the metals complex here, the biggest move today, palladium, more of an industrial metal. that is higher by 1.6%. now to the bond market. rick santelli is tracking that action now. rick? >> yeah. that's seven is a pretty good auction. i gave it a b. look at the intraday of seven. you see that yield drop right after the auction? all of the supplies are done. that's kind of a normal sponsor at least it used to be. just like about any auction you bid in, you don't want to pay up before you buy whatever it is that is being auctioned off. and to that end, the two year went off at 74 1/2. it's basically a scratch at 75. the five year yesterday went off at 121.8. that's a winner. and, of course, to day at 1.497

is where they went off. you see that dynamic in the end of the curve as well. get this. 'for me to figure out cause and effect. but i'll tell you what, the s&p 500 also had a move right at 1:00 eastern. my guess is they were paying attention to interest rates in the auction as well. tyler, back to you. >> all right. thank you very much, rick. three bs impacting your money today. we talk brexit, now on buy backs, then soon the banks. let's start with the stock buy backs at a record high. something about 10% to $589.4 billion in the 12 months through march. so is this good for the market? joining us is chief market strategist with boston private wealth and craig columbus, ceo of tower square investment manage. ment, craig, probably good for the market overall because it puts a floor under stock prices broadly speaking. but it's not a good sign for the

economic because that money is being used to buy back stock rather than get invested in new capital outlets. >> i think you're spot on. a legitimate technique but when you have debt filled buy backs to boost eps, that really reflects financial engineering and a lofk growack of growth inl economy. where do you see a high level of financial engineering? more companies reporting nongap pro form eps tells that you earnings quality isn't great and growth isn't great. >> what does it tell when you we see lots of buy backs? is it financial engineering? is it an admission tacit or not that companies just don't have anything better to do with their cash? >> i think it's borders on the line of financial engineering. reality is corporations find that their stock is cheap. and this they find is the best way to put that money to work. i would like to seat companies invest for the future. increase capital expenditures. buy other companies. you're seeing a little bit of that with the microsoft. but you're not seeing more of

it. i think corporations and ceos have got a little lazy. this is an easy way to put money to work and get it off the balance sheet. i really would like to see going forward a return back to the 60s, the 70s where companies invest for their future. >> let me guess that part of the motivation for this, apart from the idea that maybe they don't see other alternatives for the use of the cash, let me guess that part of the motivation is that the executives compensation is tied so heavily to stock performance, craig? >> spot on. couldn't have said it better. >> bob? >> i can't speak to that. we're a fund company. we invest our shares because it makes the most amount of sense. our stock is cheap. perceived by the leaders of the company. and i think that's where the money goes to work. >> let's get to some of the places you're put yurg money now, bob. a couple of your picks are one, one i do know, baker hughes. the other, service now. i'm less familiar with.

tell me why you like them. >> baker hughes, they've been increasing. i think oil is going to increase in demand. you're seeing rigs being put back to work already. i think it's by the independents. i think as we go forward, you're going to see more of that activity. baker hughes note only did thet get 3.abillion, they bought a billion and a half in stock and debt. they're more financially sound and they have the extra cash to buy somebody elimination going forward. service now is the company that cloud based that offers services to increase the ability of i.t. departments to work more efficiently. so they've been increasing sales. they've been upselling customers. they have a real steady revenue flow. i think you're going to see that i kind of growth continue. 60% growth next year. >> quick thought from you, craig. you like health care, tech, and energy in the u.s. on value grounds n europe, you like the banks which sounds to me like a

closet vote for remain. >> i think that's very important tomorrow. the leave camp lost the message. it focused and lost the economic populism message and focused on the anti-immigration message. i think leave will be defeated tomorrow. fit were to win, it would send a very bad message across the other movement that's are similar across europe. and so it could be a good positive catalyst for the places in europe that are cheap which are those that are intrasensitive, banks, reits, et cetera. >> we can thank you both. "power lunch" right now, do not wait a second to see if another big cap stock that bob is adding to his portfolio. that is on our website. do it before the british polls open. a lot of people watching the betting markets to see where the brexit vote will go. but a lot more money being risked in the currency markets. we'll see what the markets are telling us. plus, potland, oregon.

everybody knows about colorado. but the legal marijuana business is booming in oregon, too. that and much more on "power lunch." ♪ ♪ it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e350 for $499 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. "are you okay?" "yeah, i just got charged for my credit monitoring. that's how i know it"s working." "ah. you know you can go on creditkarma.com and check it out there. it's completely free." "really?" "yeah"

"oh, that didn't hurt at all." "yeah, completely painless." "credit karma. give yourself some credit." images, videos, social updates. 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.

we talk a lot about the stock and the bond market on this fine program. there soot market that may have a graert move on the back of tomorrow's big uk vote and that is the currency market. so if it's currencies, we're live in london on that side of the story. sarah? >> good to see you, brian. certainly currencies are the market to watch. not just because they're open 24 hours but they will show the gut reaction to the brexit vote which ever way it goes. also, they're important this time around because two issues that matter, trade and capital

flight. two key concerns into this vote. both relevant to the currency market. so in the final hour before the voting begins here in london, markets and polls continue to tell a very different story. just two polls that we got this afternoon continuing to favor the leave camp by just a few percent n contrast, what you're seeing in the markets, specifically with the british pound is that a five-month high. it is still stronger against the dollar on the day. the leave vote could make that british pound reaction even stronger to the down side. i talked to an investor and he says more of 7% depreciation for the new york pound if britain votes to leave. that is a huge currency move. it is nothing compared to what the guardian wrote, 20% move lower for the british pound. one reference point, guys, 1992. black wednesday when britain opted out and forced by speculators out of the erm. that was a precursor.

the pound moved 10% that week. that could be a good reference that traders are passing over on the desk to day. back to you. >> all right. sayer yashgs we'll see you more. thank you very much. let's chat about this more now with jeff knight, global head of investment solutions and asset allocation. jeff, uk stocks on a big run in the past few days. the pound at a five-month high. the dow is flat over the past month. oil down today but up over past week. do you think investors are under estimating the risks of a leave vote? this really is a tossup. the probabilities as we can estimate them are very close to 50/50. it feels to me that markets are pricing in something that is far more lop sided in the remain direction. there is a asymetric response we can get it f. we get the remain

vote, not such a big response in markets f we get an exit vote, koibt volatile. >> aside from selling all the stocks and hiding from under a desk, how do viewers protect their assets? in the next couple of hours, while our markets are open, ahead of the vote tomorrow and friday? >> yeah. i mean, i don't think this is a sell everything and hide under the desk episode. it is a decision moment. the decision is do you do anything to hedge or don't you? we have short term event risky think to think about and then we have longer term implications. the short term event risk is what's on the table this week. and i think because the markets are not giving a high reckon fog an exit vote it is worth hedging that exit vote. and i would favor doing that frankly with the assets that are most logically exposed. >> of all the asset classes out there, stocks, bonds, currencies, commodities, coringies, the vote has the potential to be the most negative to which?

>> i think -- it could be disproportionately negative in either direction. there's an opportunity to build an intelligent hedge. so equities, for example if, we look at the ft-se 100, the uk stock index, i view that as having priced in very little probability of assets. so that loses a lot of ground it seems to me in the exit scenario. uk gilts on the other hand have moved quite a bit lower during the course of this debate. and i think probably don't move that much in a remain vote. excuse me, don't move that much in an exit vote because they already priced it n but do move a lot in a remain vote. i think being underweight in both of those things, we can construct the hedge that actually has a positive expected value in either scenario. >> the ft-se 100, i looked at it just before the show, it sakting like severing great. i mean, 916 the 1 h of the 100 e soared. many stocks up double digit.

you that i is a massive overshoot? these are companies, by the way that, our viewers know. it's not a weird -- un i liefer, royal dutch shell, barclay's. >> i think -- there's a couple ways to dissect. that i think one of them straight forward is uk equity investors are not asigning a high probability to exit quechlt learn from. that second, i think equity markets in general have been pretty resill yenlt due to this debate even as the probabilities have ebbed and flowed. they're hanging in there better than other asset classes. and finally, i think there is a silver lining even in an exit scenario, ultimately for uk stocks in particular if we do see pound weakness and see a improvement in terms of trade for a uk company. many of whom have quite a significant percentage of the revenues sourced overseas. it could be an earnings positive in the intermediate term. >> great insight and advice there, jeff. thank you very much.

all right, our big uk vote coverage is big and bold and does it start tomorrow morning and it rolls right on into friday. we should have the full results, remember, we don't exactly know when things are going to be decided so we're going to be covering this thing from front to end. cnbc, the place to be for the historic vote and, of course, all of your market reaction. up next, the most important meal of the day is working big time today. we're going to check in on some of the all time highs ahead. and later on, why "orange is the new black" when it come to housing. we'll explain when -- i think this is a band jakko? is that true? wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement.

there's no way to predict that. td ameritrade. when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction,

stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card. great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that.

that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. adobe gave a weaker than expected forecast for the quarter. adobe is getting whacked. facebook is signing deals with media companies and celebrities to create video for the live streaming service. the company reportedly already

signed 140 contracts. how about 141 totaling more than $50 million. shares of facebook, let me look over here. down 30 cents. meantime, united continental airlines is reviewing how they utilize hubs at large airports all part of an effort to become as profitable as the rival. united has a small market share at some hubs compared to airlines like american and delta. shares of united continental are up 10 cents. i found out it was not the band jakko pierce. it was deep blue something. >> deep blue something actually the name of the band or something because you don't know the other word? >> not brexit attive niz. >> breakfast atti tiffanies wou be great. >> we mention thatd brexit trade is working to day. i want to check on the name hitting the all time list today. by breakfast, we mean general mills, maker of cheerios and other cereals. it is down right now. it hit an all time high. the highest level since the

company went bpublic in 1927. >> all right. thank you very much. orange is the new black when it comes to housing. the median home price in orange county, california, back above its 2007 bubbler are a level. we'll have more on that in a moment. first, new data out today on the most affordable housing markets in america. >> this is since they began tracking this in 1968.

the harvard source center for housing released the 2016 stast the housing market. the headline here is that while the housing market is recovering steadily, the biggest impedestrian amount is housing affordability. in other markets in the midwest where there is more supply, housing markets are more affordable. but in general across the country, we're seeing prices higher and affordability weaker. and as we said, orange county is leading the charge in that one, tyler. >> i was thinking as i got ready for this segment, diana, there would be other areas in the country where the home price may have exceeded or eclipsed the previous peak. the town live in new jersey where it peaked within six months of when i bought actually. that's the math sen rule. but so are there others like san francisco, d.c., boston, new york? >> in fact, san francisco just exceeded the peak yesterday.

we got a new report from core logic an hour ago saying the second straight month the san francisco bay area home price exceeded the price before well above the peak. it's now median price of $700,000. interestingly, we're also seeing market as cross texas exceed peak from 2006. the national housing market price was in 2006. we're seeing areas like dallas and austin exceed the peaks because they didn't see home prices fall as far during the crash of the markets. but, yes, prices are hot again. >> all right. when math sen buys, it's a great time for sellers. thank you very much. >> up next, biotech getting a big boost today. thanks to obama care. we'll explain when "power lunch" returns.

the count down to the in our out referendum in the uk continues, our next guest imagine what's the world would look like if britain votes to leave the eu. harvard law school professor howl scott thinks withdrawal would trigger a mass panic and run on the banks. they do see some silver lining for the u.s. but says it's a bad idea. welcome to "power lunch." so let's start with you.

we talked a lot about the problems. and i know you i don't support the brexit. you think it would set the uk back a long way. what would the one or two potential silver linings be if they do vote to leave the eu? >> the silver lining that the leave people think they see is the ability to get rid of the bureaucratic intervention from brussels to be free, to reduce the tariffs so that the imports are less expensive and prices in britain less expensive. think think they'll be freer to trade with the rest of the world. and i think there's a more fundamental element of sense of having reachieved true british nationhood. >> it could be good for the united states in a way? at least as far as capital flight? we see with china's problems, billions have come here. do you think that british money

has or will maybe already has come here? >> well, certainly some already have. and i think that the dollar was strengthen and there will be an influx of capital from britain and other parts of europe into the u.s. and that would give a short term boost to the economy. >> i know you're not trying to insight any panic or anything. but why do you believe that a yes vote, a leave vote might trigger -- let's call it banking problem? >> well, i think the possibility that that is extremely low. the consequence of it happening is very high impact. so i'm worried that if the unlikely vent occurred that there was a panic, remember, there was a panic around lehman in 2008 that we would be much less able to deal with it than we were then. >> yeah. you know, the interesting thing is we've seen the ecb professors say we have liquidity if

something happens. we'll take care of it. janet yellen referenced this brexit vote. but the federal reserve and maybe even the u.s. treasury could be very limited in their ability to respond to anything like. that how come? >> we limited the federal reserves power to lend to nonbanks which hold a very substantial fortune of short term liabilities in the system. of course, they were the center of the 2008 panic when there was a run on the money market funds. they said that what the fed did was basically bail out wall street and we want to restrict them. and we have. and also during 2008, the fdic raised guarantees on departments and the treasury guaranteed the money market funds. neither of those actions can now be taken. what i want to stress is that possibility of panic is very, very low. but the consequence of its happening could be very high impact. >> well said. and that's the reason we've been covering it as much as we have, professor. nobody actually knows what's

going to happen. very quickly, i'm going to ask each of you gentleman the same question. how do you think the vote will turn out? first you professor scott. >> i think they'll stay. very hopeful that will happen. >> collide? >> i agree. >> all right. two hopeful votes for remain. both, thank you gentleman. we appreciate your insight. >> all right. brian, thank you very much. it's 2:00 p.m. on wall street. 7:00 p.m. over in londonening glanld. just hours away now from the beginning of that big vote on whether to stay in the european union or not. voters in the uk will decide tomorrow whether to leave or not the european union. polls are really neck and neck. the pound sterling remains slightly higher today as you see there. let's go right now to sechima m. it is causing stress for the

investors. >> that's right, they've been struggling to price in the political uncertainty attached to a brexit. many ininvestors are expecting a reallocation of capital away from emerging markets if the remain -- excuse me if, the brexit win as the fears intensify. we've been seeing a bit of volatility in these msdi indices. it's still up 2% on the week. in terms chf economies are most vulnerable, columbia, south africa and turkey. here's why. these are countries that run a current account deficit in excess of 4% of gdp. they're very relinlt on external financing and any acceleration and foreign outflows could hurt these nations. another region that will likely be impacted by a brexit according to experts, eastern europe. big trading partner with the uk. you can see here with the united kingdom, you can see demand could potentially fall if the uk decides to left european union and these are countries, slovak yashgs czech republic, hungary

and poland that do a lot of business with the uk. this is exports to the uk as a percentage of gdp. lastly, we're speaking global, take a look at japanese yen. it's been gaining strength due to a rise in risk aversions. a ma lags bank put out a note saying the rally in the japanese yen may not be done. they're anticipating a 12% rise in the safe haven currency if the leave camp wins. so as we take a look at the global context of the brexit vote, we could potentially see some capital outflow from emerging markets. >> all right. thank you. as the brexit countdown continues, our next guest has been hedging the dollar against the pound over the past few months to protect against any fall in the equity markets. he's got a couple other trades in his pocket ready to go if britain stays or goes. he is simon clemons with alliance trust. $4 billion under management.

welcome. good to have you with us. explain what you've been doing and how you're hedging the currencies to protect against a fall in equities. and how if at all has your strategy changed in recent days? >> we'll be hedging through to pass the vote. in term of equity markets with our portfolio, they're defensively positioned. and we will look to kind of add some more market hedges should we get to a brexit vote on friday morning. that is not our core scenario much we think the vote will be to remain. we're just trying to make sure that we're kind of ready and ready to go. >> so your net long sterling. that is putting your money where the view is, right? >> yes. we have hedged out that

exposure. we do have a long -- generally a long uk view within our portfolio. it does benefit if we remain. we just try to hedge out that exposure should it go towards a brexit vote. >> now let's say it goes the other way and there is a vote to leave the european union. what kind of reaction would you expect to see in the pound and what kind of reaction you would expect to see in uk equities? >> yeah. i mean, i think we think the pound will probably weaken significantly in a kind of exit scenario. probably down to as low as 120 to the dollar. that is pretty significant depreciation. >> it sure is. in terms of equity markets, again, we think they'll be very, vae weak. they will be weak on the day and very, very, very volatile and for a month or two following the vote. so, yeah, we think probably there saz much as 15% down side to uk and european equities in

an exit scenario. >> i was going to ask you, do you believe beyond uk equities that risk off trade would flow around the global? you just said europe. what you would see? you would see the same sort of reaction in the u.s. in markets in asia? >> you'd expect the dollar to strengthen in that scenario. i guess the risk is that we get a recession in the uk and in europe and that cause sometimes sort of, you know, global down turn. i think that we probably getting close to that sort of scenario. a lot of that will depend on the political kind of fallout after an exit vote. so, you know, do european politicians and uk politicians manage to find some sort of ammicable solution or is there kind of more, you know, a more difficult situation trying to find a resolution once we leave the eu? a lot of that we don't know. obviously thashgsz going to

cause a lot of uncertainty. until that uncertainty is resolved, we think that it's going to be, you know, a difficult time for global equity markets. >> the markets seem to be suggestsing a remain outcome here. and that's your view? >> yeah. i mean, we think so. the polls are reasonably close. they're looking at 25% chances. that is probably higher than that. we think it's probably a chance of remain, maybe one-third chance of leave or there abouts. but it is alway difficult to say with things like this. but, yeah, you know, the core scenario is stay. >> i was with a money manager who used the phrase the wobbly pencil phenomenon. when people actually go into the ballot booth on this kind of vote, the pencil goes a little wobbley. they don't know exactly what to do. and in that scenario, more tend to stay with the status quo. simon, thank you very much. simon is with alliance trust. we appreciate it.

melissa? >> biotech rallying this hour. check out the etf. bulls more than 1% after starting out negative. the sector getting a boost from a new report on the health of medicare. >> that's right. folks were nervous because of a medicare report on spending was due out this morning. it could trigger what is known as ipab. and the provision included in the affordable care act which set the target growth rate for medicare and compares it with another target growth rate. if medicare spending exceeds that target growth race that, trigger this is ipab and forces this tomorrow start enforcing cost cuts in medicare. folks worried that would translate into cost cuts on drug spending. that report came out this morning. and that growth rate for 2016 was not exceeded. that doesn't strtrigger the cos customers this year.

you see gilead, celgene. even though they're good news today, the report does say that 2017 is likely to see an exceeding of that rate. so we're going to revisit this next year. >> we saw a huge move lower in the ibb. we're not seeing a move higher here. a lot of the stocks, biogen was down to a new 52-week low in yesterday's session. >> a lot of these stocks are feeling a lot of pain for other reasons including the elections. you have all of the political pressure coming. folks are happy for good news today. they're waiting for more good news to really drive the sector up. >> meg, thank you. straight ahead, between tesla, batteries and solar, what is really powering elan musk's empire? shareholders seeing record records in 2016 s that good or bad for a long term growth? plus, they boost the fraccers. we'll look at the effect on the energy market. that is ahead on "power lunch." hey, honey?

yes, dear? you're washing that baked-on alfredo by hand, right? (loudly) yes, dear. dish issues? cascade platinum powers through... your toughest stuck-on food... so let your dishwasher be the dishwasher. this turned out great. cascade. when you cook with incredible thingredients...ato. you make incredible meals. fresh ingredients, step-by-step recipies, delivered to your door for less than nine dollars a meal. get your first two meals free at blueapron.com/cook .

our partnership with habitat for humanity at pg&e, we believe solar should be accessible to everyone.

allows us to provide the benefits of solar power to the types of customers who need it most. pg&e provided all of the homes here with solar panels. the solar savings can mean a lot, especially for low-income families. with the savings that i am getting from the solar panels, it's going to help me to have a better future for my children. to learn how you can save energy and money with solar, go to pge.com/solar. together, we're building a better california. welcome back to "power lunch," everybody. take a look at shares of tesla and solar city. if you missed it yesterday, here it is again. tesla offering to buy solar city for $2.8 billion. tesla ceo elan musk is also the founder and chairman of solar city describing the deal as a no-brainer. let's get more insight from herb greenberg, partner pacific square research.

he is a cnbc contributor as well. he covers both stocks. he will join us in just a moment. herb, you caught our attention. i reached out you to immediately. you tweeted -- the first thing you tweeted out is there is so many red flags here, they're hard to count. what are the one or two biggest red flags? >> well, should we start with no-brainer? depends on how you interpret the term no-brainer. look, this is -- this is the left hand trying to bail out the right hand. we all know that. everyone can see it. people have been following circuit city for years. i started writing about it back two years ago or so. we see what is going on. we know it. but when you look at this, look, brian, the whole story is about the hope and the hype of the future. it's the cult of elan musk. when you look at the -- just the financial leverage involved in this, it is justing this. i'm going to tell you something, "the wall street journal" has a piece up a little bit ago. we have a cash flow chart going back years on this on tesla.

this is a subsidized company. look at the free cash flow. >> we know that. fair enough. i'll play the -- you know, we sparred back when you were on set on street signs. we'll do it again. elan musk says the cash burn is going to slow down because -- he mumbled in the conference call. basically synergies. >> he said cash flow positive by year end. >> there you go. >> cash flow positive by year end. i did the conference call today. >> what he said in the transcript which blew me away is really referring to the fact that when they get rid of all the back office stuff at solar city, almost seemed like we're going to get rid of the headquarters and that's where the cash burn is. what? did he really say that? it's almost -- you sort of wonder how well thought out this is. part of me, almost thought it was a way for him to float the idea, see how the street reacts. if that doesn't happen, maybe he tries to get a bid from somebody for solar city which would seem to be extraordinarily unlikely. whatever -- >> hold on. they're also now, what do you

make of the fact, you pointed this out. they now call themselves an energy company. >> a sustainable energy company. the cars are a sustainable energy company. what is it? i see analysts talking about clean energy company. sustainable energy. no one knows what this is or will be. and all people are really hoping for is that elan musk will do it what jeff base bezos did. one thing all the companies had, they had a ton of cash flow. they had a ton of it. it was not subsidized to even get a negative cash flow. en that is a big hole to dig out of. it's very kblikted. >> all right. >> it's what i like to refer to as bull market stocks in a not so much of a bull market. >> okay. i want to bring in ben now. you came out with a note today. you reiterated the outperform rating and the price target. to herb's point about it being a no-brainer zshgs this mean by standing by your rating price target that you think that risk surrounding the tesla deal such

as being able to fund the expansion and factory without raising more capital as well as execution, those risks don't increase with the distraction of a solar city acquisition? >> thanks for having me on. there are a couple red flags on what herb said, too. i think they get repeated quite a bit in the marketplaces. they're losing cash. it is hemorrhaging cash floechlt a lot of this cash is going to help them grow and we're seeing them grow from 20,000 units in 2012 to let's say they're going to deliver will 85, 90,000 units this year and then going forward. so first of all, this is about subsidized. there are subsidies for the consumer that buys the cars. second of all, same thing goes for solar city. we have the biggest roof top provider on the residential side and the top leaders in commercial side as well. do they make sense together? i think a lot of investors are straching their head with that. is it a corporate governance issue with solar city gone bankrupt without this deal happening?

i don't think so. because they'll go on to the capital markets. for the convertible side, i don't think they'll need it to happen to bail out as cousins or anything like that. but investors are still trying to see where the synergies are. because it's in such a preliminary stage, tesla has a chance to go do that and come back to the marketplace and give fair numbers around that as well. >> do they remain the same after this deal? are they sticking with the price rating? >> i think there is a lot of skepticism in the model x. we should see the model x product improve. be a bigger part of the mix as we head into the q-2 deliveries. i think that part of the risk goes down. i think with the capital raise behind them, although some of the people that bought that stock are upsaid with this deal going forward, they have the capital to help build out the battery factory.

now will the capital needs get bigger and that brings on the balance sheets for the capital need risk to a greater degree going forward? but that doesn't -- that doesn't hit tesla in anything they have done in the past or change anything they have done in the past. >> you have heard from any tesla shareholders today, ben? if i bought tesla stock because i like musk or the car and i'm buying a car and battery company, suddenly now i own -- we were trying to have an analogy. >> what is it? what is -- >> like if exxonmobil bought a tire company because you put gas in cars. so now the point is, tesla stock is now something different than it was before the deal. yes or no? it's not the same company. >> definitely. and you know, tesla already split out the company to tesla energy and tesla automotive. you add in the solar part of that, i think one of the biggest

things for investors are there are a, you know, 75% to 80% investors that i talk to that were buying tesla for those two divisions and didn't want anything to do with solar. and now they're being forced upon, you know, having to deal with the solar industry and all the intricacies of. that i've been covering the solar space for ten years. it has a lot of volatility and ins and outs that make it a difficult place to analyze. now that is forced upon them in this deal. >> herb, i'm not as deep into this as anybody on this panel s but i would say that just on the face of it, this smells musky, you know? and i wonder how the phone call went. how did the phone call go? musk picks up the phone from tesla and he calls and he calls himself. i mean he says hi, it's elan. how about we go -- >> he's going to recuse himself for voting in both and voting

his shares on both. but he is part of the discussion. so he's not recused from the discussion. one of the things we talk about when we talk about solar, wanlt to make it clear, i'm in san diego. i just want to -- i keep saying this over and over -- >> he has to brag about that. >> there is so much competition. on my block alone, four people put in solar in the past, say, three or four months. trying to get ahead of the cap that's going to occur here that is going to cause people to not want solar for a while. three of the people -- two of the people use sun run. one person uses solar city. another person uses the local company. and that's important because people are shopping around. they're trying to get best deal fwoefrt of my knowledge. at least three of the four were purchases, not leases. so you know, solar city is a public company. it's not the only company. they have public competitors. lots of private guys. >> to that point then zshgs this deal make the competitors have a harder time competing against solar city now that solar city can have better access to

capital thanks to being under tesla? >> i think a couple things it does ultimately. i also think that, you know, solarcity does lead the market share. they have just introduced a loan product. it's no the just lease anymore which i think it was one of the biggest staircases going forward is the mix and consumers preference was shifting to loan. >> so it's a finance company. it's a finance company. >> it's an installation company as well. >> yes. >> it's sort of like signet which is a finance company that sells jewelry. same sort of thing. herb and ben, good discussion. we can take this forever. we cannot due to the vagueries of time and the brexit vote in 12 hours. ben and herb, we'll see new bate. thank you. all right. let's switch gears. can you -- if you're on the radio, you have no chance f

you're watching the toll vision. can you spot the detail in this photo that proves mark zuckerberg is thinking about his -- leave it back up. >> i'm looking. i couldn't find it. >> is he serious about thinking about his privacy? we gave await answer. the answer for real in two minutes. how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest, borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return.

digital works for banking and financial services. lets talk about how digital works for your business. ♪ on their auto insurance. wouldn't a deal involve two parties discussing something? a little give? a little take? because last time you checked, your rate was just, whatever they say it is. why not give you some say in the matter? or -even better- let your driving do the talking. liberty mutual righttrack finally puts you in control of your rates. all you have to do is connect, drive and save. in fact, safe driving could save you up to 30%. with 5% off just for signing up.

for righttrack. and the discount is good for the life of your policy. to get started, visit a local office or call liberty mutual today at take control of your rates. visit a local office or call see car insurance in a whole new light. liberty mutual insurance it takesbut stealing itd work to eaonly took a few days. female announcer: protect your money. find out if you're dealing with a registered investment professional at investor.gov. before you invest, investor.gov.

hillary clinton right now in raleigh, north carolina. let's listen. >> -- friends, the gospel group that got us all just going today! and i can not think of a better twosome than the people you just saw up here because i honestly believe jim hunt was not only one of best governors north carolina ever had, but one of the best governors anywhere in america in the last year. and what he did to really put north carolina on a path to the future has stood test of time. we've had a few glitches with others who don't seem to

understand what the ingredients are for building an economy that works for everybody, not just those at the top. but jim hunt knows that. and i look forward to continuing to work with him and i was so delighted that you had a chance, as i did, to hear alicia wilkerson talk about her journey, how hard she has worked raising her children, getting an education, making it possible for her to have a better future and i so greatly appreciate her mentioning the s chip program which helped eight million kids every year get health insurance. because we're in north carolina and we have a lot of friends here, i want to acknowledge them. your secretary of state, elaine marshal.

senator dan bloom, the minority leader of the north carolina senate. representative larry hall, the democratic leader of the north carolina house of representatives. linda coleman, running for lieutenant governor. judge mike morgan, running against a republican supreme court incumbent. and don't forget the dan bloom the third is running for state treasurer. josh stein running for attorney general. and let's give a big round of applause to your next governor, attorney general roy cooper. your next ag commissioner walter

smith! and your next united states senator dep are a ross. we're going to work hard in they lection to elect as many democrats up and down the ticket so that north carolina can get back on the path to the future, get off the detour that you've been on. i have to start by saying if you notice anything different about me today, it could be that now i've got double the grandmother glow. this past weekend chelsea and mark had a little boy and we are all totally over the moon about it. and obviously, our family will do everything we can to make

sure that little charlotte and now little aidian grow up with every possible opportunity. i know that is what every parent and grabbed parent, aunt or uncle, godmother, godfather, people who care about the children in our lives, that's exactly how we all feel. and i believe with all my heart that you should not have to be the grandchild of a former president or secretary of state to have every opportunity available to you in this country. every single child deserves the chance to live up to his or her god given potential. and that has been the cause of my life. it's rooted in the values that i learned from my family and my

faith. we are all in this together. and we have a responsibility to lift each other up. as we methodists like to say, do all the good you can to all the people you can and all the ways you can and that is absolutely true for our children. that's why i got into public service in the first place. that's why i'm determined that he will win this election in november. i think it's an understatement to say that americans face a choice in november.

he just continues to spout reckless ideas that will run up our debt and cause another economic crash. i'm here today to offer an alternative. i have a clear vision and we have to make sure that our economy works for everyone. not just those at the top. not just for the rich or well connected. not just for people living in some parts of the country or people from certain backgrounds and not others. and i have a plan to get us

there. five steps we can take together to drive growth that is strong, fair, and lasting. growth that reduces inequality, increases upward mobility that, reaches into every corner of our country. the measure of our success will be how much incomes rise for hard-working families. how many children are lifted out of poverty. how many americans can find good jobs that support a middle class. right? and not only that, jobs that provide a sense of dignity and pride. that's what it means to have an economy that works for everyone, not just those at the top. that's the mission. and i'm asking all of you to join me in it. >> now we have to overcome some

big challenges. i will admit that. first, to many of our representatives in washington are in the grips of a failed economic theory called trickle down economics. i don't doubt their sincerity but it's been proven wrong again and again. but there still are -- there still are people in congress who insist on cutting taxes for the wealthy instead of investing in our future. they kareem from oneself inflicted crisis to another, shutting down the government threatening to default on the national debt. refusing to make the common sense investments that used to have broad, bipartisan support like rebuilding our roads and our bridges, our tunnels, our

highways, our airports. or investing in better education from zero through high school and college. now, look, i like to look at evidence. i plead to that. i think evidence is important when you make decisions that affect other people's lives. if the evidence was there to support this ideology, i would acknowledge. that but we have seen the results. twice now in the past 30 years a republican president has caused an economic mess and a democratic president has had to come in and clean it up.

too many lobbyists have stood in the way of progress. it's not just washington. too many corporations have embraced policies that favor hedge funds and other big shareholders and top management at the expense of their workers, communities, and even their long term values. wall street's obsession with short term share prices and quarterly earnings. corporate executives found that more than half, when asked, would hold off making a successful long term investment. maybe in their workers or plant equipment or research. if it meant missing a target in the next earnings report.

so corporations, stash cash overseaors send it to top shareholders in the form of stock buy backors dividends instead of raising wageors investing in research and development. and then this pressure this short term pressure leads to perverse incentives and outrageous behavior. it is wrong to take taxpayer dollars with one hand and give out pink slips with the other hand. no company should be moving their headquarters overseas just to avoid paying their taxes here at home. and in addition, there have been big changes in how american families live, learn, and work.

but our policies haven't kept up. and there are so many examples of this. we are the only developed country that doesn't provide paid family leave of any kind. no wonder so many are struggling. the bottom line is that too many leaders in business and government have lost sight of our shared responsibility to each other and to our nation. and they let wall street take big risks with unregulated financial activities. they skew our tax code toward

the wealthy. they failed to enforce our trade rules. they undermine workers' rights. they have forgotten that we are all in this together and we are at our best when we recognize that. excessive inequality reduces economic growth. markets work best when all the stake holders share in the benefits. so the challenges we face are significant. it's not easy to change washington or how corporations behave. it takes more than stern words or a flashy slogan. it takes a plan. and it takes experience. and the ability to work with both parties to get results.

>> hillary! hillary! hillary! and that means we need a president who knows what we're up against, has no illusions about what we need to do to move ahead, but can actually get it done. and that is why i am offering because there is good news. everywhere i go, smart, determined men and women are working hard to reverse these trends. mayors are pioneering innovative ways to work with the private sector to ib vest in their cities. entrepreneurs and small businesses are building and hiring and n. places that bigger companies have abandoned. unions are providing training programs that add value to the companies that employ their members.

uvenon pension funds are investing in infrastructure projects that have supported more than 100,000 jobs here in our country! >> we're going to bring in john harwood. she is speaking in what is potentially an important swing state. i guess you'd call it a purple state. neither red nor blue. from what we heard so far, john, this is not a personal attack on mr. trump like her speech earlier this week. it's more schematic and program attic and again unlike mr. trump's response to her from this morning which was highly personal. >> yes. now she's not in the personal attack on trump. she did it yesterday on the economy. what was interesting about the beginning partst speech which is on going is that both clinton and trump were in theory

targeting the same bogeyman. that is to say special interests, stagnant incomes. but there's a contrast in how they go about it. donald trump was blaming the trading system. and talking about the disastrous trade deals that let companies move overseas without consequence. hillary clin cln wasn't faulting the trade deal so much. she was talking about changing tax laws to reverse or eliminate the incentives for companies to go overseas especially if they've gotten tax breaks before. you also had this morning donald trump, you know, portraying her as a criminal saying that she perfected the art of personal profit and her argument was not made in this speech today is that donald trump is kind of a phoney and a fraud whose biss haven't been all that successful. will policy steps she's talking about are raising tax onz people at the top, providing expanded education and training, other steps paid leave for families to

try to small but concrete ways improve a lot of american families and donald trump was more at a 30,000 foot level making the case that hillary clinton has been enriching herself and the trade deal that enriched corporations at the expense of average people. >> you know, john, to the point about special interests which are politicians of favorite target bar none, she seemed to be failing the political class at large over its involvement or ties with special interests. this was a line of attack that mr. trump used on mrs. clinton today. >> oh, yeah. >> mr. trump has made a very key point he hasn't been taking special interest money. he's not -- he's trying to sell funds. does he have a point that she is more vulnerable on her closeness to special interests that people who have funded the clinton foundation, who have paid her for speaking engagements than

she would have in attacking him on special interests? >> well, if hillary clinton goes out and raises a lot of money from industry as well as individuals which is what she's been doing and donald trump self funds, yes, that is an argument that he can make fairly successfully which is that i'm paying for my own campaign. nobody owns me. people have a piece of her. on the other hand, he hasn't put in that much money to his campaign. hasn't raised that much money. now republicans are unsettled about how little money he has, how he's not advertising in battleground states like north carolina. hillary clinton is. and so donald trump now starts raising that money, he undercuts his own argument. if on the other hand he writes himself a big check, he can keep making that point with some effectiveness. >> all right, john. we appreciate it. we'll continue to follow hillary clinton's remarks down in raleigh, north carolina. oil market closing for the day. crude down more than 1% after a

smaller than expected weekly u.s. inventory draw. that erased early gains in crude futures. west texas crude down 1.6%. >> mean time, a federal judge in wyoming blocking a ruling from the obama administration which sought to set stricter standards for fracking on public land. what does that ruling mean for the industry in let's bring in the director of key bank capital markets. david, put aside the environmental arguments. this is going to send a lot of people into an uproar. focus on what we do at cnbc which is the equity side. what does it mean for the companies you covered? >> i think largely this was expected. this is a year ago this was a temporary block put in place by the judge against the obama administration's proposal for the bureau of lands. this affects 10% of production in the u.s. now.

rest is controlled by states. i think that sets a very, i think, comfortable precedent for oil and gas companies that are going to have a fairly benign regulatory environment going forward. there are a lot of contributors of this economy. i think, you know, federal lands, especially you see more exposure from some of the larger companies like exxon, devin, the larger operators. >> what i like about your coverage is the names we don't talk about a whole lot. you know, concho, et cetera r there one or two companies you like because or maybe in spite of this ruling more than the others? >> you know, i think for my coverage, it's very limited. the process is really onerous. it's something for a larger company to handle. this proposal, i think the industry estimated was going to increase average cost by $100,000. so it could have shaved a couple

percent off returns and slowed this recovery as we've seen oil prices come back up to the high 40s from the low 20s in the beginning of the year. david, a pleasure to get your views. thank you. have a great day. >> thank you. >> time now for "street talk," our daily dive into the key analyst calls of the day. let's go. all right. stock number one, priceline.com. barclay's upgrading it to an overweight from an equal weight. they boost the target to 1500 a share from 1300. stock is above that level. price line shares are pricing in a fairly bearish scenario amplified by the disappointing second quarter guidance. however, they think the reason cited for the lower guidance mostly timing related and do not impact their long term thesis. they believe margins will improve in the long term as priceline begins to shift ad spending to things like facebook. >> interesting. but just quickly on priceline, big exposure to europe.

second stock whore, here, mcdon. dropping the target to $129. same-store sales trends and the hamburger segment no longer a beacon of brightness for the industry. apparently it was. mcdonald's will face tougher comparisons in q-4 and now that mcdone saldz no longer near the top pick, the analyst is naming yum brands as his top large cap restaurant. this analyst took a meat cleaver to him and he downgraded dominos, papa johns and wendies. i guess he likes the taco bell story. the third stock, ilumina. they say the near term headwinds provide a window to the open opportunistic. he is moderating growth and more reluctant investor sent. but stays more bullish than most. the clinical research market, he likes the company helix

technology which he calls the untapped consumer market upside. that target on a $141 stock is 15% upside. >> and this is helped about it higher move we're seeing overall in the biotech sector and health care space. facebook, bullish note from mkm on facebook. they rate a buy. there is based on yesterday's announcement that instagram had 100 million users. they think it's worth comparing the trends versus twitter. twitter is more than three time instagram. but mkm says that gap can close quickly as instagram engagement is better and benefits from facebook's sales and ad technology. and all this bolstered them. >> i recently -- you know, i'm moving towards instagram. >> are you on the gram? >> yes. >> are you snapping also? >>, no but i got snapped this morning. the point is instagram has almost as many daily users as twitter has monthly users.

it appears that instagram in some ways is the new twitter. fair to say? >> oh, yeah. >> there you go. finally. she's the authority. today's. >> narrator: -- today's under the radar name, atn international. until yesterday this company was called atlantic telenetwork. get this. befr r beverly, massachusetts based company with a fiber optic network in vermont, cellular businesses in guinea and bermuda and solar energy business initiated buy by drechl he wixe hamilton. the solar business is small but stable and generates high return on investment. the target, $90. we have to get the ceo on. fiber optics, cell phones in cat ribbian and solar panel business. >> quite a portfolio. all right. >> it is called atn. >> that is it for "street talk." "power lunch" is back in two.

test test test test test test test .

time for trading nation. aka more sullivan.

because traders trade berget together. tesla'sed by ed bbid so buy ou city. you might have seen this segment earlier with an analyst and our friend herb greenberg. jim chanos hate this is deal. what is your take on tesla. >> i don't think i've ever seen wall street so onesided in hating a deal. and i have to agree this is a terrible deal. solar city, a company goldman sachs says the single weakest dmor its sector. the company is burning tons of cash and elon musk pays a premium. the thing about tesla and e elon musk is the their most value is not the batteries and the cash and anything like that. it is that people trust elon musk. they see him as the visionary

and different from a standard businessman and someone who's going to change the world. when he does this he seems like regular businessman from a by gone change and that is what's very troubling. it goes right to the occcore. >> and tesla down 10% now. >> session wlous for today. although we did see tesla hit 195 in the afterhours session on the announcement of the deal. i'm wondering what are the key support levels here? >> interesting. the chart on tesla. you have been making a series of lower lows and lower highs for years now. despite the selloff today you have taken out key support at the may lows of 2016 around 2004. your next support is going to come in about 180. after that it is really towards the lower end of this downward trending price channel on the week chart which is around 165.

so the risk-rewards are clearly not favorable. that is in sync what you are hearing on the fundamental side. more downside yet to come. >> forget about even this deal. this is a $190 stock? 2013. great cars, i love them. but you have made no money if you are owned tesla shares for two and a half years. >> but it reached 286. >> if you haven't sold. >> but it's been a tremendous -- within this past year it hit 141 on the low and -- >> if you are a trader. >> absolutely. >> it is more the fast money -- >> [ inaudible ]. >> i like tesla as the stock. cash is king especially for e america's booming marijuana industry. live in portland oregon with more.

more what? >> more weed tyler. in the human collective here in portland oregon and trucki in talking about getting access to the banking system trouble. take a look at this video we shot with don yesterday. has to every month to the oregon state department of revenue and pay his taxes in cash. because these marijuana companies have difficulty getting access to bank accounts because the banks are worried about federal regulations. we asked about the business and he said this is just like any other retail business and he wanteds access to that bank account. >> everything has to be done in cash. we take the money in. sizable amount. pretty much the equivalent of your 7-eleven every day or something like that. but we can't take it to the bank and make a deposit. we have to keep it on hand or take it off property, store it in other places and then pay our

bills with it on a daily basis. >> to problem is if treasury sets extensive requirements to get into the business. often that is simply too expensive for local businesses and adds too much friction to the transaction. they say bank accounts would be safer for these businesses which run the risk of being held up or robbed. and here at the human collective in portland, they sell marijuana and they also sell other accessories. i don't know exactly how this one operates but lot of customers going in and out all day i'm sure have no problem. >> what an actor. >> that is what they say. >> how vulnerable or unsafe do the people transporting the cash feel? and what kind of security do thif? >> i assume they take it someplace why they have saves,

right? do what do they do? >> there is big business in storing cash off site. a lot of companies won't keep it here for obvious reasons. we asked how security feels running all the cash down to the department of revenue. and he says his goes at different times of day. takes a different vehicle. different kay days of the week and keeps all the cash in an innocuous casual bag and doesn't like to attract a lot of attention. he wouldn't answer whether or not he carries a gun when he does that but he did say it is legal. >> have that bit coin technology could help in this situation? >> that is an interesting question. we haven't asked them about that. don come out of the retail industry. a lot of these folks are focused on getting into the mainstream community. they see themselves as legitimate retailers who want

access to the same banking everybody else. that would lower their costs and make things safer for everybody. but we'll ask about bit coin as well. >> home of voodoo doughnuts as well. do the research. >> always. >> the magic is in the hole. that is their motto. >> a motto. >> lucky charms covered -- like crazy delicious doughnuts. all right america. take a look at this picture. facebook ceo mark zuckerberg. and he covers both the camera and the audio jack on his mack book with tape. this is a low tech trip to foil hackers who might try to take over a camera. solving his security problems with a penny's worth of duck or gapers tape.

and we talked about the story. you said who wouldn't do that? who wouldn't do that? you apparently. >> cover your? >> of course you would. that is the easiest thing to hack in a computer. so easy. >> mine is sitting here wide open. my camera. yours has main anchor because you are. >> on the air you are probably not doing anything to, you know, private. but maybe this your home, let's say you have a computer in your bedroom or in your formula, you don't want everybody to know your business. use some tape. >> cover it up. tomorrow, how to make waffles. >> that i don't how to do. >> let's do that. >> a learning show. take a look at the markets. negative territory on the dow. s&p holding on to gains. the sector watching most close are the financials, have been teetering there.

it is worth noting the vix hitting 20 or higher today. rising into the brexit vote tomorrow. >> hey everybody. thanks for watching power lunch. "closing bell" starts right now. hi everybody. welcome to the "closing bell." i'm kelly evans of the new york stock exchange. are these for me? >> those are yours. i forgot i bought those. >> peanut butter m&m. >> elon musk doing a deal with elon musk. tesla. whe we have someone who says both companies are doomed. >> and on whether the uk should leave the european union