>> everybody remember baseball, hot dogs, apple pie and chevrolet? >> no. >> general motors. >> when was that from 1968? >> probably. >> that does it for "halftime report." i'll see you in an hour. meantime "power lunch" is going to get underway right now, guys. all right. welcome to "power lunch." melissa, take the next hour off. you've earned it. we'll see you in one hour. welcome to "power lunch." michele is back. nice to have you here. >> great to be here. >> brian is here and i'm tyler mathisen. what a week it has been on thursday before the british vote to leave the eu the dow was at 18,011. then came big drops friday and monday and a drop of 871 points to 17,140. this is the path the markets have taken. right now the dow sits at 17,960. that's up 30 points or about a fifth of a percent. that means in one week the dow has traveled about 1705 points

in total swing. >> brexit? what brexit? check on the other indices, the s&p 500 at this hour also in positive territory, the nasdaq as well. we'll see those in a second. see the dow is higher by 29 points, 17,959. once again we're talking about 18,000. the s&p above 2100, again, a gain of four points. let's move onto what's going on with yeelgds which have just been breathtaking in their declines. and the 10-year yield still below 1.5% at this hour. 1.45%. the two-year yield at 0.597 and gold higher by another $18 today, $1338. show you the dollar versus the pound, which we have been so fixated on. remember if brexit was going to happen supposedly we were told the pound would fall to $1.30. actually, never got there. there you see the pound right now is at $1.32, almost $1.33. the euro will cost you $1.11. brian. >> let's now get to somebody who's been right in the thick of the wild ride that tyler laid out. bob pisani, all right, bob, give

us an update on today's trade but also talk about how wild the last few sessions beginning last friday have been down there. >> well, she's right. we have essentially come completely round trip on it. take a look at the s&p from the close. thursday's close a week ago was 2112, i think, and we've essentially come all the way back here from 2112 down just in the 2030s and we were as high as 2110 today, off the highs. bottom line it's a complete round trip. as far as the markets in the middle of the day, i like today and i'll tell you why. we are essentially consolidating the market gains. it's 3-to-2 advancing to declining, the volume is moderate, not as heavy as it was in the prior few days but it shouldn't be. we've got to consolidate gains. no big drops, no moving up, called consolidation here. watch the new highs, 15%, 16% of the nyse is at 52-week highs right now. and it keeps creeping up a little bit every single day. that's positive overall. the volatility we're back down

to pre-brexit levels here. sectors today about an even split here, but keep an eye on the bank stocks because once again they're the ones under pressure. the whole lower rate for longer scenario, which is controversial i'll admit, is still very much on people's minds. there's the consumer discretionary technology and industrials on the upside utilities a rare day on the downside. we've been arguing about whether or not there are alternatives to there is no alternative to owning stocks. sure there is. look at the high yield stocks. that's a new high even though it's off right now. muni stocks like the mub, those are at new highs and gold, tyler, also at 52-week highs. there are alternatives. >> bob, thank you very much. over the next seven minutes we are going to hit three big stories all with a big impact on you. one, what you pay at the pump, what you pay for your home and what kind of car you might drive in the future. and who you'll share the road with. and that is where we begin. the fatal car crash involving a tesla model s that was being driven in autopilot mode raising

questions about the future of automation on the road. phil lebeau live in chicago with some fresh details. hi, phil. >> and, tyler, we'll talk about the future of autonomous driver or autopilot in vehicles in just a little bit. i want to bring you up to speed on the latest in the investigation involving this fatal crash in florida involving a driver of a model s who was in a vehicle that was in autopilot mode. remember, after this happened late yesterday people started saying, well, the truck driver said that he was watching the driver of the model s was watching a harry potter video. the police are confirming that there was a video player in the car, one of those portable digital ones found in the car. didn't say if "harry potter" was playing on it, but it was found in the car. nhtsa now has data from the data recorders in that vehicle. and there is no dashboard or in-car cameras. can we throw up that previous picture one more time? that's a google earth picture of the accident scene to give you a better sense. so you have the model s

traveling in the one direction down highway 27 in williston, florida. and the tractor-trailer turns in front of the model. tesla says the autopilot system did not recognize the truck in front of it because of the brightly lit sky and the fact that the tractor-trailer was white. nor the driver clearly didn't recognize that the car was there. so that's a little bit of where we're at with this investigation. and, remember, it's not mutually exclusive that it's the driver's fault or autopilot's fault. this is an investigation and may be that some of both were at play here. keep in mind 25,000 teslas now have autopilot active in them. you have to pay $3,000. it's an option for tesla owner. and if you do activate it, tesla is explicit in saying you have to pay attention while you are in autopilot. this is not turn it on and forget about what you're doing. take a look at shares of tesla. they were under pressure yesterday after this news came out. fractionally higher today. and basically been trading

around up a half a percent, down a half percent. meanwhile, in germany today bmw, mobileye and intel all announcing they're going to be working together to develop a fully autonomous vehicle that it plans to sell, that bmw plans to sell by 2021. it would be driven in limited areas. basically they put up a geofence in certain areas, urban areas, and that's where you would have the fully autonomous drive vehicle functioning. mobileye as you look at shares an executive today saying, look, the technology for the autopilot it's not designed to prevent crashes like the scenario that we're seeing in florida. this is more of a lane assist, traffic assist feature in autopilot. which is why they are careful to say it's not autonomous driving. it is autopilot assisting the driver. but, guys, still a lot of details yet to come in terms of this. >> i'm not sure i understand you there, phil. in other words this system would

merely keep me from pulling into a lane where there's another car? is that really what it does? >> correct. >> but it's not driving the car. >> well, it's driving the car, tyler, when you're on the highway. if you're driving straight or on a highway as the highway starts to turn. it's not like you can come off the highway and say pull me into the cnbc parking lot. that's not what it's designed to do. it is designed as a lane assist. and when you are lane changing to keep you from changing into a lane -- >> into traffic. >> -- into traffic, et cetera. or slow down as you are approaching other vehicles. again, mobileye's executives are saying this is not designed to immediately alert you. >> but it's confusing. and i'm not picking on tesla because there are other cars that have this technology rolling out, phil. i mean, how much do they instruct a buyer about what its capabilities are and are not? obviously if this truck driver's correct and the guy driving the tesla was watching a movie, he either was very negligent or was

misinformed grossly about what the capabilities of the autopilot were. and the word autopilot also has -- >> suggests it's going to stop when there's an obstacle, right? >> i think ultimately, guys, that's part of what nhtsa is looking at right now, which is, a, how much education is there for the driver involved in this. because tesla is very explicit in saying you have to pay attention. you have to be alert when you're behind the wheel. at the same time does this technology also give you a false sense of security? i've been on the road for a couple of hours and i've been able to lane change and i'm doing great. i don't really have to pay attention. that's part of what they're trying to figure out here. and keep in mind nhtsa investigators not only have data from this vehicle but other tesla models with the autopilot feature. so they'll be able to say, okay, we think it's working as it's designed, or maybe certain things need to be modified. >> all right. phil, thank you very much. we're going to bring in colin rush, a tesla analyst at op h m

oppenheimer with us. colin, i assume you've been hearing the latest conversation. thank you for joining us. i guess the poignant question for you is does this call into question any thesis about tesla's stock? in other words this crash and questions arising about the autopilot? >> i think these questions are inevitable that there was going to be a problem at some point. and nhtsa would get involved. and there was going to be some iteration on the technology and how it was going to be applied. for us this isn't anything unexpected. it's just the timing, you know, this happened fairly quickly i think in terms of when they rolled out this technology before an accident like this happened. >> they've clearly got a very popular car. the question is are they going to be able to make money selling these cars. and i guess the other big question for tesla is the merger

with solarcity. how do you view that? and how can those two companies not co-exist but live together and not compete for the capital that they're going to need? >> yeah, so i think you may be aware that we downgraded the stock after the announcement of the intention to acquire solarcity. i think we're still waiting on an awful lot of detail. tesla needs to do the next level of diligence and make a formal offer and then the companies need to come out with synergies. we did publish this week our first attempt at those synergies. we're looking around $400 million of synergies by the end of 2018. by we agree that there is a large capital need. the finance team the combined entity would have an awful lot of work to do. and there's some executioners particularly in a somewhat riskier macro environment with questions around the brexit. >> and you've got a hold on tesla, right? >> yeah, we've been historically very bullish on the platform and

the operating leverage from the auto platform. and i think mixing solarcity into the platform changes the dynamics of capital allocation and return on capital. and we want to get more detail before we get constructive. >> colin, thank you very much. colin rusch with oppenheimer. let's get a news alert from sue herera. >> this concerns pershing square. they are back office employees that deal with technology being laid off. mr. ackman told the staff this week that the moves have nothing to do according to dow jones with the poor performance of the hedge fund which as of june 21st was down in a filing down 21%. assets under management came in at 12.3 billion down from 20.2 billion at the end of july 2015. so some eight lower level employees will be laid off at pershing.

they say they've gotten better at technology and don't need those people in the back office. brian. >> there we go. we've talked a lot about technology and jobs. sue, thank you very much. >> taking jobs. >> mike bloomberg said it a couple months ago on our air that technology was a threat. >> do you take it face value that the poor performance had nothing to do with it? >> well, i think they've been down big in two huge things with herbalife. big jump in the weekly rig count. baker hughes reporting that oil rigs gained 11 last week to a total of 3.41. we're still down huge from our peak. still down from even a year ago. but this is the fourth increase for oil rigs in five weeks. last week oil rigs fell by seven but that reversed the previous three weeks of gains. oil not moving on the news by the way just a couple cents over $48 a barrel. it takes rigs to drill oil, takes oil to make gasoline. and this weekend it will take a

lot of gas to get all of you to where you're going for the fourth of july. let's find out what you can expect to pay at least in new jersey where probably half the country will be driving through at some point. so, kate rogers, enjoying the bucolic sights and sounds of the turnpike. lucky you. >> that's right. i'm here at the beautiful vince lombardi turnpike stop. you're going to sit in traffic this weekend for sure. overall 43 million americans are hitting the road for the fourth of july holiday. 36 million of them are driving. and overall those numbers are up 5 million from memorial day weekend alone, but a big incentive of course low gas prices. they're actually at their lowest levels since 2005 according to aaa with the national average at $2.28 a gallon, which obviously has drivers eager to fill up and go. >> gas prices definitely help out. it's definitely a big incentive into taking long rides. >> $9 to fill up a motorcycle, 250 miles. can't go wrong.

>> and here in new jersey where i'm standing one of the lowest prices per gallon in the country at just $2.12, brian, back over to you. >> kate rogers, thank you. kate, thank you. have a great day and have all the snacks you want on the corporate expense account. well, your next guest says we could see the highest gasoline consumption for any month on record this july. the oil price information service, tom, you really think july could be the ultimate all-time record for the united states? >> i think so. we actually saw a number a couple weeks ago that was the highest weekliest mat ever. and that was about 9.7 million barrels a day. so the record year was 2007. back then nobody thought the record would ever be broken. but this year we're about 2% or so above that. and i think we probably will consume more fuel than we ever have. and unfortunately i live in new jersey by the way a lot of people are going to be consuming it in this state and probably about 10 million barrels a day

and some of the days in the next week or so. >> do we have enough gas? not new jersey, the united states. refining has been a hot topic. obviously some refiners have shut down, had some issues, some summer closures. if you're right, tom, are we going to have enough gas? because if we don't i could see -- >> prices go up. >> yeah. >> no, we have enough gas. we'll never have a gasoline glut because we don't have storage like we do for crude. so if you have events, earthquakes, hurricanes, impacts at the gulf coast, you can get these little pricing paroxysms. but generally we have plenty. it's a little bit like the bay of fundy. high tides, very quick to fill up, very quick to empty. i don't see it emptying this summer unless we get hurricanes. and i see much lower prices in the last hundred days of the year. >> that's what i was going to ask you where do you see gas at the end of the year? is that supply related or connected with the idea people will be driving less as winter comes? >> they'll be driving less.

i mean, july is going to be a record, but it's going to be difficult to match let's say those 2007 numbers in the last four months of the year particularly with the election. i mean, half of the people don't like one of the candidates quite a bit. and i think they'll show that by traveling a little bit less, spending a little bit less money. the other problem is it's so easy to make gasoline once september comes and there are a lot of cheap hydrocarbons out there. so prices for gasoline will drop, there are already very, very narrow margins for refiners. that should tend to drag down crude oil in kind of an undertow effect. >> co-founder of the oil pricing information service. tom, have a great fourth of july yourself. good luck. remember, full service only in new jersey. >> that's right. we can't pump our own gas. >> it's terrible. >> i love that. >> you do? why? >> in the winter i don't like getting out of the car. it's cheaper than new york. >> it is the only thing we have the cheapest of in the united

states is gas. that's it. >> only government regulation i like. i don't have to get out of the car. >> my wife likes it too. >> i can't stand it. from gas prices to home prices, up next we'll talk about what might, might be one positive of the brexit, lower mortgage rates. we're filling up and back in two. president of the north face, we are working on the prototype to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think. i believe we can do even better. here at the td ameritrade they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store.

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welcome back to "power lunch." i'm michelle caruso-cabrera. take a look at some of the

housing stocks. d.r. horton, lennar, they're all up today. kb home in particular up 10% in the last three months as mortgage rates hit record lows. coincidence? let's bring in ralph mclaughlin, housing economist, good to have you here. >> good afternoon, michelle. >> what brought us to the subject today is because we've been astonished to see the 10-year yield, yields all over the world for government bonds falling and falling sharply. now we're talking 10-year yield which mortgages are measured off of, low 1.5%. what does that mean for mortgage rates and refi rates? how cheap can you get a mortgage these days? what interest rate? >> well, right now a 30-year mortgage is about 3.4% or 3.5%. >> holy smokes. >> that's the lowest it's been in -- yeah, it's been, you know, it's the lowest it's been since about 2013. what we think the impacts of low mortgage rates are really more on the financing, on the refinancing side rather than the home buying side.

and the reason is we study this issue a lot at trulia and we've asked consumers, home buyers, they don't care much about mortgage rates now. they really care about finding a home because inventory is down, and, two, saving up for a down payment. prices have risen so much in several markets it's tough to save up for, you know, a down payment on a home. and so we think, you know, low mortgage rates are really going to spur more of an increase in refinancing, especially those that bought a home one or two years ago when rates were 4%. now that they're down to 3.5% or maybe under 3.5, we think more people will refinance rather than suddenly flood the market to buy a home. >> can you remind me of the math? if you bought a couple years ago and had a mortgage rate above 4% now, you can get 3.5% in a refi, it's worth it if you're going to be in the house for how long? there's a whole equation that you can follow. >> yeah. well, you know, typically if you stay in the home for five or seven years, it's going to be

cheaper to buy than to rent. and only a few markets do mortgage rates really make that difference. most markets across the country interest rates would have to be 7, 8, even 10%. >> really? >> yeah. right now it means, you know, your average homeowner can probably save anywhere between $200 and $300 a month if they say bought their home at over 4% and now down to around 3.5%, that may be enough of a difference to really spur a noticeable increase in people wanting to refinance their home. >> so let's underline this. very, very low mortgage rates, lowest we've seen in several years. and yet doesn't necessarily lead to home buying because prices have risen so much. how much have they gone up by? and where do you see it the most? >> well, obviously here in the west coast they've gone up quite a bit over the last three or four years. you know, 20% or 30%, but we're starting to see increases outsi

outside, places like denver seen pretty noticeable increases. along the pacific northwest actually, seattle and portland are leading the country. case shiller numbers last month show they're the top three. in thoez markets it is difficult for home buyers to save up for that especially if they're renting because rents have gone up. in other parts of the country, you know, still inventory is down. and that's what home buyers are telling us is plaguing their ability to buy a home. not marginal changes in mortgage rates. >> got it. okay. ralph mclaughlin of trulia. you like to wear earbuds while riding a mo ped, you are out of luck in one u.s. state and what other state laws are going into effect today. some of them are head scratchers. who else but jane wells will tell us that story next.

today is the first day of a fiscal year for many laws in the united states. means new laws, laws that could impact you. let's get to sheriff jane wells for the newest laws that you need to know about. jane, there are some crazy ones out there. >> there are a few odd ones, but there's some normal ones like here in california, here in los angeles today the first of many minimum wage hikes kicks in going up to $10.50 an hour, but some unusual ones include one here in california like profrgsal cheerleaders, like the raid raiderettes will have sick leave and same worker protections. in virginia don't feed bambi, it

will now cost you $50 in a fine. maryland, powdered alcohol, what? remains illegal for two more years. vermont has enacted the first gmo labeling law and coca-cola will pull lower volume products off shelves rather than spend money on labeling them and in the home of bernie sanders, sawed off shotguns made legal, indiana also charging sports fantasy sites today starting today $50,000 to operate the state. here in california you can no longer have earbuds in both ears when you're driving or bicycling. seems like a no-brainer. none of these though as weird, guys, as some existing laws like in connecticut. they've had a law for a long time it's not a pickle unless it bounces. and in arizona, asses are banned from sleeping in tubs. i mean donkeys. a real law going back to the '20s. back to you. >> fantastic. thank you.

>> i'm just -- i was just looking down trying to find some other laws. i mean, i guess, yeah, you're not making a political comment, jane. it's an actual burro you're not supposed to put in the tub, correct? >> correct. it goes back from what i've been able to determine, i thought it was a joke, apparently some guy in the '20s in arizona had his donkey sleep in a tub where there was water for public consumption. >> oh. and the donkey -- >> see, now it makes sense. >> you know, i think, the donkey might have been cleaner than the guy back then in arizona. >> oh, you're going to hear from them now, man. >> i just don't know how you make a pickle bounce. >> you throw it hard. >> like how high? >> throw it really hard against something bouncy. >> let sleeping asses lie. jane, thank you. on that really classy note. let's get you reset 1:30 on the east coast. the dow up 19 points. we're getting a little spoiled here. that's not much of a rally, but it's 19 points.

14 points higher for the nasdaq at 4857, and the s&p 500 basically as bb bb said earlier today a round trip from a week ago. stocks fourth consecutive day of gains right now at least with the dow and the s&p recovering more than 90% of those brexit losses. art hogan, chief market strategist at wonderlic securities and our chief investment strategist from janney. art, what do you see for the second half of the year? >> tyler, a couple things. i think we're going to see an inflection point in earnings and i think that's manifesting itself in some of the guidance we saw coming out of the first quarter. i think that's encouraging. as we look at some of the headwinds now turned tailwinds, we have stabilization in energy and security. we're seeing the dollar bounce out here. we don't have the insipid strength continues to be dragging down earnings of some

of our multinationals. so i think that's a positive. i think if you take a look at the guidance out of the first quarter for the first time in a cycle we saw better guidance. and we really didn't see estimates for the next three quarters or the bounce of the year come down. i think it's a real good sign. when you look at some of the headwinds that have become tailwinds, i think we probably have a better time. and economic data seems to be proving that out. >> so better second half than first half? >> agreed. >> mark, let me pick on one thing in the note that was supplied to me. financial sector stocks, namely banks, should see higher net interest margins as a result of fed-induced lift in rates and uptick in borrowing. do you want to reconsider that in light of what's going on in bonds and the idea that the fed is not going to be lifting rates maybe at all for the remainder of this year? >> well, i agree the odds of the fed lifting interest rates now given recent economic activity as well as the referendum in the united kingdom probably undermines that forecast. and that's the risk of putting out those forecasts well in advance of those events

occurring. >> yeah. >> and as a consequence you're right though, tyler. the fact of the matter is financials will remain under pressure not only because of the fed's deferring of interest rate hike but as well obviously melting bond yields around the world which is having gravitational effects on our bond market and the 10-year now dipping and threatening all-time lows of 1.40%. so the fact is i think financials will have their day. i think the valuations are attractive, but to unlock those valuations it's going to take higher interest rates. that's just not something we foresee in the near future. >> do you as a broad market strategist, mark, do you agree with art that the second half is stacking up to be maybe a little better than the first? >> on balance in a word, no. i really see more of the same. which isn't necessarily an investment or economic disaster. i think what we're seeing is this 2% pace of growth plus or minus is trend and that's about as good as it's going to get. that doesn't necessarily mean we expect earnings to increase. we've pencilled in mid single

digits. so maybe back end improvement more of a 2017 story than what i expect to see later in 2016. but at the end of the day that also means we're looking for returns that we're up 2.7%, 2.8% on the s&p 500 on the year-to-date basis. maybe we take that again in the second half and 5% to 6% total return isn't bad given the alternatives. >> you know, art, your choices here are kate spade, palo alto networks down 30%, spade is up. westinghouse air brake technologies, is there a theme there or am i just missing it? >> no, there is a theme. it's get out of defensives, get out of utilities, rotate out of the staples and telecoms and get into the underperforming sectors. so what's represented there is consumer discretionary, industrial and tech. i think the underperforming groups will catch a bid in the second half of this year and threw out three of our favorite names. there's not a thread you can tie -- >> i was searching for it. i just wasn't finding it. art, thanks very much.

have a great weekend. we appreciate it, art hogan with wunderlich. go to powerlunch.cnbc.com to see three more stocks art is betting on. before the break let's take a check on gold closing just two minutes ago, as you see it's been a good run for gold up another 1.3% at 1338 an ounce. all of the metals moving up. look at silver up 5% on the session at $19.58. more "power lunch" right after this. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits.

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the best or nothing.

hello everyone. i'm sue herera. here is your cnbc news update this hour. a developing story we're following a group of up to nine attackers have opened fire and taken hostages at a restaurant in the diplomatic zone of daca, the capital of bangladesh. all u.s. citizens working under chief of mission have been accounted for according to the state department. we will have more as this situation unfolds. attorney general loretta lynch seeking to contain the political fallout from her private meeting with former president bill clinton. says she plans to accept the

recommendations of prosecutors on whether to file charges in the probe of hillary clinton's use of private e-mails to do government business. >> in my role as attorney general there are cases that come up to me, i am informed of them from time to time. this case, as you know, has generated a lot of attention. i'll be nmpled of those findings as opposed to never reading them or never seeing them. but i will be accepting their recommendations and their plan for going forward. scientists have discovered what they are calling the first fingerprints of healing of the ozone layer. that's according to an article published in the journal of science. scientists say the hole has slunk by more than 4 million kilometers, act half the size of the u.s., since the year 2000. and police in wisconsin say 20,000 pounds of cheese has vanished. the driver transporting the load from green bay to new york city unhitched the trailer to run an errand. when he returned the trailer and

$46,000 worth of cheese were gone. i smell a rat, guys. i smell a rat. and how long was that errand? i mean, that's a lot of cheese. how long was that errand? had to be gone like half a day for them to get all that cheese. >> how do you unload it? where do you put it? you want it? thanks, sue. >> see you later. >> where does one get a shredder that size. >> i don't know. all right. let's get to josh lipton for a news alert. josh. >> well, michelle, this fight between apple and spotify continues to heat up. you recall yesterday recode reporting that spotify had sent apple a very tough letter basically accusing apple of using its app store approval process as a kind of weapon in their words. i now obtained a letter from

apple's general counsel. he's responding to spotify. he's saying we are finding it troubling that you are asking for exemptions to the rules we apply to all developers and are publicly resorting it to rumors and half-truths about our service. you recall the crux of this allegation from spotify is that apple was blocking a new version of spotify's app for the iphone. spotify saying apple was insisting spotify use its billing system. and that was a charge spotify called anticompetitive. not surprisingly here apple disagree saying there is nothing in apple's conduct that amounts to a violation of applicable antitrust laws. he goes onto say here in the letter, i would be happy to facilitate an expeditious review and approval of your app as soon as you provide us with something that is compliant with the app store's rules. of course in these music streaming wars, back in march spotify told us they had 30

million ping users, but just recently apple saying that a year after launch its music service already has 15 million paying users. ask then we got this news last night a report that apple is at least in talks to buy tidal, the music streaming service run by jay-z. if you think through the possible strategy of what want, yes, want the 4 million users, possibly cut out a rival, but surely also another strategy be bringing on tidal that's more ammo in this fight with spotify. back to you. >> a lot of money at stake as they try to get those subscribers. josh, thanks so much. to the bond market. rick santelli tracking the action ats the cme. rickster. >> well, michelle, in about 20 minutes the cash market will close, futures have been closed for about 40 minutes. look at intraday of tens, looks like traders bought little insurance early. then those that put the 11 basis points on the week in their pocket maybe a little liquidation, but you can see the u-turn there.

maybe a one-week chart is better. we keep coming back to this mid 140 area. so you want to pay attention. a 20-year and intraday. let's start with intraday of 30-year bonds. today's low yield around 2.18. yes, moved back up. if you open to a 20-year chart, i know some people say in the 50s or 60s we're lower, in modern times from basically the '70s to today there is no lower yield. we settle it around 222 on january 30th of 2015. as you see the intraday we took that out. it's going to be a close call whether we make it on a closing basis. and finally, gilts, big topic. that's the ten-year over in the uk. if you take gilt yields and subtract our ten-year yields, it was basically a positive number not that long ago. yu, read them and weep. minus 27. maybe that's something to pay attention to as we handicap credits. tyler, back to you. and happy independence day. >> same to you, rick. next up, what michelle did on her summer vacation.

she went to a glass factory that exists under european union regulations. she'll tell us what she found out next. we also had former commerce secretary carlos gutierrez. more "power lunch" after the break.

the british vote to leave the european union has raised questions about whether or not the eu will survive. i was in london for cnbc's coverage and have spent a long time covering the eu. here's a page of sorts from my reported notebook on the eu. situation i think is emblematic of their problems. check out morano italy, these very hot ovens run at 2300 degrees to make the glass. few years ago the eu imposed new regulations which forced the glass factories to install more air fur purification units. an employee at the factory told me dozens of these companies went out of business because they couldn't afford the new equipment. okay.

these ovens run 24 hours a day, 7 days a week cost 2,000 euros per day to run. i assumed they were running employees, i was told, there are no seven-day workweeks in italy. so, guys, my point is simply this, the eu enforces all these rules that make companies anticompetitive and yet they do not enforce rules that would make them more competitive. their labor laws -- >> they would have to -- the italian labor law say your law doesn't count here. >> they're willing to do that with environmental laws, other kinds of laws, but vested interest with labor they don't fight them and then you don't have employment improve as a result. >> so what do they do with the ovens running, they bank them

down? >> no, they keep them running. >> using fuel. >> exactly. you could have somebody working them. carlos gutierrez is the former u.s. commerce secretary, former ceo of kellogg, also chairs the u.s. business council. mr. secretary, good to have you here. >> thank you. >> i want to talk to you about cuba, but first, you heard the example about the eu. i heard you talk with rick santelli last week and about how tough brexit will be for the united kingdom. but what about the european union? i feel like they've really mucked things up here. i don't know if they are looking at that uk vote as a moment where they should really think hard about the way they've proceeded? >> well, they should be because the trend has been toward more centralization. and the number of regulations that come out of brussels is significant. and what that does it takes power away from the countries. and at some point, you know, nationalists, populous demagogues will be able to take advantage of that. so i think this is a key moment

for the european union. ironically i think if it keeps going and keeps centralizing and keeps taking autonomy away from the countries, that one project mechanism that was designed to keep peace could be exactly what unravels the european union. so i think there are a lot of policy questions and what the european union is that has to be answered. >> are there any lessons for the united states, do you think? >> well, sure. if we think about for example people -- mistake is the european union if we said let's have a common currency, let's have a budget guidelines, you know -- >> for mexico and canada. >> mexico, canada and the u.s. >> yeah. >> that would be a similar example. but regulations, i think you

have to think of regulations that will help business. but it seems like the regulations that are coming out are always an obstacle to do more business. >> yeah. in the european union for sure. >> secretary gutierrez, one of my favorite books is "ruled by nobody," i don't know if you've read it. basically it's not partisan. it talks about all the laws. here's one of the problems to michelle's point in the eu and in the united states, laws are always added, but they're never taken away. so nobody has any idea how to navigate these laws. at what point do we get so unwieldy here in america that nobody's going to be able to do anything? >> well, i think you're absolutely right. once something is created, and it has a house in congress and someone feelings ownership for it, it's very difficult to get rid of it. so i'll give you an example, and i don't intend to make a political statement with this, but the department of education was created to increase, to

improve education. education is actually declined, all the indices that we see since the creation of the department in the late '70s. no one has talked about, hey, did we make a mistake here, is it time to revisit, should we redesign this, should we get rid of this, should we do something? so i agree, once you put in a law, boy, it is tough to change. >> you can almost never get rid of a government agency. today marks the one-year anniversary for key cuba day. what is it and why does it matter? >> look, it's a big deal. and so much progress has been made. michelle, we hear about, you know, that progress hasn't been made, that the administration gave up too much. reality is things are moving on the ground. carnival cruise ships are arriving in havana. we will very soon have commercial flights to cuba. starwood has started managing one hotel in havana.

those are significant things. one of the big problems we have today, first of all cuba is the only country in the world where a u.s. citizen cannot go as a tourist. >> right. >> the only country in the world. and then the bigger issue right now is when they do go, because you can now self-certify, you've got to take a ton of cash. because u.s. travelers cannot use their credit cards. and part of the problem is that the banks have not bought off on the president's regulations. either they're concerned that they may be taken away, they're concerned that there may be retaliation. >> money laundering, et cetera, it was a lot of issues. >> those types of things. so it's a big opportunity, i think u.s. companies, u.s. banks should be paying more attention to the cuban opportunity. because the europeans and asian companies they surely are paying

attention. >> secretary gutierrez, we have to go because we have a news alert to get to out of washington. let's go to john harwood with that news alert. >> michelle, it's been a lousy 24 hours for hillary clinton with all the attention to bill clinton's poorly timed meeting with loretta lynch, the attorney general, while that e-mail probe is going on. so today the clinton campaign moved to change the subject with a very prompt release of her fund raising numbers from june which show she raised $40 million for hillary for america. that's $68.5 million overall for democratic entities pushing her candidacy begins july with $44 million in the bank. remember, donald trump who has not reported his numbers yet, only began june with $1.3 million in the bank. that is a despairty he's trying very hard to make up to compete with her in the general election. we'll have more on "power lunch" right after this break. mary buys a little lamb.

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legendary nike founder phil knight retiring from the board today. nike named apple ceo tim cook as lead independent director. as if he has so much free time on his hands. what do board members actually

do? jayne wells joins us now. jane. >> i think it's a matter of how much time do they have. and his hilarious takedown of the start-up economy dan lions wrote in disrupted he spoke to a tech ceo who told him this, quote, i tell my board as little as possible. i treat them like mushrooms. i keep them in the dark. he goes onto reveal that some people sit on boards as a hobby, albeit a well paying one. you can argue that the insight of an acting ceo from an outside firm is good for corporate governance, brings an outsider's view, it's good for investors. but how much time do these people have when the firms they're currently running face challenges? as you pointed out for example, apple reported its first decline in revenues last quarter, yet tim cook is on the boards of both nike and disney. that's a lot of dow 30 components. disney's bob iger meantime on the board of apple. some might call that cozy. jack dorsey running struggling twitter and square, he too is on the disney board, so is facebook

c.o.o. cheryl sandberg. and reed hastings where he's always trying to overcome challenges and succeeding, he's on the board of facebook. meg whitman has hands full with hewlett packard but on the board of -- in nonpublicly trading companies nobody made top. the twitter co-founder, he's on the board of beyond me, medium, good fit, work pop and his own new start-up. back to you. >> these are busy, busy men and women, aren't they? a lot of them out of the same companies. they overlap there with disney and the tech space. >> where this became a big issue is back during the dot com bubble where we started looking at boards, there were people on 10, 12 boards, how do they manage it. >> we're going to take a quick break. we'll be right back. over 100 years ago as a benchmark for average. yet many people still build portfolios

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we got two hours left in a wild trading week. and right now take a look the dow jones industrial average higher by 19 points. nasdaq up by 14. s&p 500 on pace for its best week in nearly two years. important years we've wiped out practically all of the post-brexit losses at this point. 10-year note falling to its

lowest level in nearly four years. where we stand right now 1.446%. coming up, we'll talk to a man who's been predicting 1% on the 10-year for quite some time. but first, let's get down to bob pisani at the new york stock exchange. hi, bob. >> two points and you hit on one of them, melissa. i want to emphasize one is the round trip nature of the s&p we've seen and secondly showily but surely new highs keep expanding here. 2112 is what we were last thursday. back down about 80 points and essentially backed up 2109 at the height today, maybe 2110. the important thing call it round trip for the s&p 500. all those new highs at the nyse, that's not quite 20%, but getting in that direction. so every day we're seeing new highs, we've been talking about consumer names, this has been the common theme for the past couple of months, those are intraday highs they've hit, 52-week highs. we're also seeing industrials starting to hit new highs as

well. in the last week we've seen 3m and lockheed martin and northrop grumman hit new 52-week highs. including telecom stocks like verizon and at&t and reits like kimco and simon property group. there's half a dozen utilities in the s&p 500 also at 52-week highs. so the bottom line here, melissa, is slow expansion of new highs. and this is the kind of day you call it a consolidation day. just moving sideways, even on the advanced/decline line. back to you. >> bob, thank you. i'll pick it up from here. all right, folks, if you are counting only 27 days until the next fed meeting. and arguably the second most powerful fed member, stanley fisher, speaking with cnbc this morning. here's what he said about what's in the fed's tool kit like negative rates if the economy does not pick up. >> i don't think it's worth

speculating on whether we're going to be driven to any of that. i hope it goes the other way. i hope that we strengthen. and that the economy strengthens. and that we continue along this slow very gradual path we've been on and that the rest of the world is recovering such a way that that wouldn't create negative reflex effects on us that would have to be taken very, very seriously into account. but we'll watch all that. >> joining us now president of sri-kumar global strategies yesterday tweeted expecting fed stimulus to come soon after all yellen left open the possibility of negative rates. he heard us read that on the air so he agreed to be with us today. >> good to be with you, brian. >> if you had to handicap, do you think there's a chance the federal reserve could go to some kind of a negative rate policy? >> brian, you and i have been

talking and you were nice enough to take the interest rate discussion down. we had 10-year at 2.40 when we started discussing, brian, we talked 2%, 1.50, we are below. and as we have gone the expectation of a fed easing has continued. the answer to your question is i don't expect the fed immediately to go to negative interest rates. i expect the bank of england to go to 25 basis points from the cut in 50 basis points in july. further down to zero in august. probably negative later on. and that is what is going to provoke the u.s. federal reserve also to move along in the direction first towards zero and then further down. yesterday the effective federal funds rate was 41 basis points. i don't expect it to go into one fell swoop into negative level, but we are headed there. >> but from a bond perspective,

and you have been right on yields, are you still standing by your call that the 10-year treasury will trade below a 1% yield? >> again, following up on our discussions in the past and very correct in leading this discussion making this an important point, brian, now that we went to an all-time low today, i'm looking along 35 basis points above my target. earlier today, this morning. and i still stick to 1% for the 10-year based on how developments go, the next time we discuss we may well be talking about 90 or 85 basis points on the 10-year. but as of now i'm just sticking with 1% sf. >> well, if you're a homeowner or home buyer, that could be good news. i mean, low rates are supposed to stimulate things because they make borrowing cheaper and thus credit expands and thus people stimulate the economy by borrowing. if you're right, even right now

where rates are, do you see a low rate led housing bump which could then put a floor under the economy and maybe mitigate any kind of damage we could have from the brexit or other things? >> those are very good points. for instance, 30-year mortgage rate is 3.4% today. i look for it to go well below 3% even as the 10-year treasury goes down further. the 30-year treasury in my expectation goes below 2% both of which propel the 30-year mortgage down. and if that happens, that is going to provide a positive stimulus for housing. but keep in mind, brian, those kinds of interest rates are suggestive of a very weak global and u.s. economy. so, yes, your ability to buy a house improves because you're able to get a loan at a low interest rates but you still have to keep your job, you still have to keep your wage increase coming. >> okay. >> that's the negative side.

the positive side is you're going to be -- the interest rate change is going to be a big positive i think supporting the economy and as well as the housing sector. >> sri-kumar, also maybe the nicest guy in the world. keep complimenting me you're going to have you on every day. >> thank you, brian. taking to the streets denouncing new federal control over the island's finances, some even calling for prexit. a pouerto rico exit from united states. yesterday the president sidedd promise, a bipartisan bill intended to give puerto rico the ability to restructure its debt. here's what the bill does. first, it creates a seven-member fiscal control board. the presidentially selected board takes fiscal power away from puerto rico's governor and would have broad powers over

puerto rico's budget, laws, financial plans and also its regulations. second, the board has the authority to force the government to balance its budget and also has the power to force a restructuring on bondholders and other creditors if they do not reach an agreement on a restructuring. third, it creates an immediate stay on litigation stopping bondholders, many of which are hedge funds, for example, from suing puerto rico. this last piece was one of the most controversial aspects among the financial community. and that financial group is one of the largest insurers of puerto rico's debt and has some exposure to today's defaults. joining us now for "power lunch" exclusive interview is president and ceo of ambac financial group. good to have you here. >> thank you for having me, michelle. >> so you ensure some bonds that aren't going to get paid. what's that mean for your financial exposure? what's it going to cost you? >> we expect numbers are still coming in but we expect to pay between $45 million and $50 million in claims today. >> okay. now that this has happened, is this done? or are you potentially on the hook for more?

do we have to wait for paydays to go by to see if there's going to be more exposure for ambac? >> we're very cautiously optimistic about promesa. the control board will be seated between now and the next payments -- when the next payments are due. we think the executive orders issued yesterday by the governor pursuant to his moratorium are illegal and unconstitutional. and we believe strongly that the oversight board will reverse those orders. >> in other words, you'll start to -- those bondholders will start to get paid again? >> absolutely. we think puerto rico has a short-term liquidity problem, not a solvency problem. we're very optimistic about puerto rico's future and we think they have full capacity to pay. >> one of the most controversial aspects i mentioned was the inability to sue if they didn't pay. that was very controversial with hedge funds, et cetera. was it controversial with you? do you think it's a good or bad idea? >> you know, no creditor wants to be subject to a stay in terms of exercising their legal rights. but we understand that there has

to be some compromise here. and so a short-term respite so that people -- so that the oversight board can do its investigative responsibilities and assess the situation i don't think is a terrible idea. it will be unwelcomed if the oversight board focuses on the wrong things like debt restructuring as opposed to the fiscal and structural reforms that are desperately needed on the island. >> in other words, if they just focus on punishing bondholders rather than saying, okay, puerto rico, get your act together when it comes to balancing your budget, getting rid of the bloated government you have. >> that's right. we think there's so much low hanging fruit here that the history of oversight boards are very successful. if you look at new york city and washington which were federal control boards, but if you look at state controlled boards, miami, philadelphia, pittsburgh, cleveland, so on, so forth, every one of them has met with tremendous success and we're extremely hopeful the right kinds of business people, growth oriented business people will be selected for this control board

and with the advice of growth oriented advisors will take a different path than the one this governor has selected. >> yeah, the puerto rico protesters are concerned about sovereignty, but there's long precedent for your finances being taken away from you and your control of your finances as you mentioned all these cities. we call it a presidentially selected control board, but president obama really doesn't have much say over it, right? the republicans get to choose. there are different groups of the government which give you comfort that it's actually going to be pretty even handed when it comes to the decisions that are made. >> absolutely. you know, congressman hatch -- i'm sorry, congressman bishop, ryan, have been working very hard on this. we commend them for their efforts. senator mcconnell has been working with treasury. we commend them for their efforts. they're going through a very thorough selection process and we're really hopeful the right kinds of people will be selected. the process is a little complicated, but senator mcconnell will submit a list. congressman ryan will submit a list. and then the minority leaders

will submit a list. the president does select, and he has until the middle of september to make that selection or else it goes back to the congress. >> right. got it. good to have you. thanks for coming in on this. >> thank you. thank you for having me. >> the ambac ceo. tyler. >> all right. the s&p 500 having its best one-week really in nearly two years. mr. doom, boom and gloom will spoil the good mood. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

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stocks are on a tear, but there are always risks. from thailand, editor and publisher of the gloom, doom and boom report is here to explain what he sees today. gentlemen, great to have you both with us. mark, i'm going to start off with you. at the end of may you said technically you didn't think the markets looked very good. and we had a major market shock in the form of the brexit and we've basically round tripped. the markets seem like they're pretty resilient. do you still see the downside risk given the price action we've seen in the s&p? >> yes, the action has been actually quite favorable. yesterday and today the list of 12 months new highs has expanded. but we have to see the context of all this. brexit means more money printing. and this is going to happen in the uk, in japan, in the u.s.

and my view probably starting last fall the gold price is significantly outperforming equity prices. and so i think that investors should have some exposure to precious metals, to silver and gold and gold and silver shares and platinum and that these investments will vastly outperform the u.s. i'd also like to point out that brazil this year in dollar terms is up 46%. russia 23%. thailand 15%. vietnam 12%. indonesia, the philippines -- >> what does all that mean? and what does all that mean? so all those countries being higher signifies what? >> it means that the u.s. is

basically a fully priced market. there are more attractive opportunities elsewhere. and i believe that actually if the fund managers they were so bullish about u.s. stocks on 12 month basis u.s. stocks are actually lower than they were in may 2015. but long-term u.s. treasuries have rallied 20%. >> on that note, marc, let me ask you this. do you think negative yields in the u.s. are a foregone conclusion? >> i doubt that because i think that the dollar considering everything that is happening in europe, the dollar is not that strong. so the market may be pricing in some dollar weakness. isn't it unusual that you have ten years u.s. treasury notes at the higher yield than spanish and italian bonds?

for me it's incredible. but this is the mispricing that's occurring because of manipulation by central banks. >> so, frank, let me ask you one question, you advise several sovereign wealth funds, a lot of them are in asia and outside on the other side of the world, essentially. how are they positioned? are they buying gold as marc has been? >> well, i think some of them are buying gold, but many of them are procollude e precludeda progressive position so many resign from buying gold stocks. marc is talking about a number of imbalances. we have a debt imbalance both on the united states national debt, the budget deficit and trade balance. i think it's important for professionals to be awake to these imbalances. never want to take a sleeping pill and laxative on the same night. >> that's a vivid thought.

>> very vivid. marc, how weak do you see the dollar going? >> i think the dollar will go down. but it depends against what all paper currencies are doomed. they're going to become worth less because of money printing, in other words purchasing power is going to continue to diminish as it has diminished for the last hundred years. but the dollar in my view will go down against gold and silver and platinum. >> hay, frank, you travel all over the world. i mean, you meet with these folks like melissa mentioned. are people nervous about what's happening here in the united states? are they as worried about as our fed and our environment as maybe marc is? >> well, i think people are concerned because one of the fundamental factors for the market has been profit margins, not necessarily nominal profits. and so no one seems to ask the

question why do we have significantly higher profit margins. part of that is the fact that for example i had a conversation with eli calloway who makes golf clubs before he passed away and he said, frank, i manufacture in the u.s. upon inquiring about that he said i put the grips that i get from india and put them on the shafts that i get from china and put them on the heads i get from south korea. his response was he's making a lot of product in the united states. my response to that was that he's seeing an excessive profit margin because he's having these products built where there are very low labor costs. and that's expanding u.s. profit margins. so i think it's all contingent on the dollar. >> sure. >> if the dollar were to take a break, we've had 40 years of current account balance and $10.6 trillion. >> marc, i got to ask you one last question.

you said the s&p 500, markets here in the u.s. are fully priced. does that mean they are a short here or they will continue to go sideways? >> i hate to short assets in a money printing environment. >> uh-huh. >> and i'd just like to remind you the nasdaq was grossly overpriced in december '99. and it still went up 30% until march 21, 2000. and then it collapsed. so in this environment i'm very reluctant to be heavily short. >> okay. >> but i just don't see a lot of value except as i mentioned to you in mining companies. and i see some value in agricultural stocks and in oil servicing companies. >> okay. got to leave it there. thank you so much for joining us from thailand, marc faber and frank -- >> thanks very much. the yield on the 10-year note falling below 1.4% earlier today. nearly four-year lows here.

how can you make money off it? the trading nation team joins us next.

the 10-year yield falling to the lowest level since 2012.

how much further might rates fall in indeed they fall any further? let's ask the trading nation team, bk asset management, mark newton. kathy, first to you. do you think they're going to fall or is this the bottom? >> i think we haven't quite seen the bottom in yields first. it's important to realize why they're falling. we're in an environment where we're going deeper into either negative interest rates or zero interest rate policies depending what part of the world we're talking about. in this environment investors are hungry for safe yield. that's why treasuries are kind of blowing up. the only way i see this move stopping is either the central banks completely reverse course and stop talking about easing monetary policy, or we start to see rapid growth. neither of which i think is a realistic scenario over the next six or even 12 months. so i don't think we've seen the bottom at all, brian. i think in fact we're probably going to see continued move higher in bond prices and drop in bond yields. >> okay. the sri-kumar camp.

mark newton, technically what are you seeing? >> technically i can make a case yields are very close to a short-term bottom. three key reasons initially you see yields pull back really to the lowest level since 2012. this level's important right near 1.39 to 1.4%. it's the first time it's been hit since july 2012. it is a pretty key level of support the expected yields can bottom. the second point is you're starting to see negative -- or positive divergence. that meaning yields have pulled back but momentum starting to improve a bit. it's not moving down as rapidly. and the third is that sentiment is actually starting to get quite bullish on treasuries. so everybody knows that yields are moving down to negative across the globe and there's a need for safe havens, but a lot of that seems to be built in. when you look at things like the daily sentiment index in the mid 80s right now, yields have been falling for quite some time. we've fallen over 50% just in the last couple years. down from 3% to under 1.5 it's likely in my view that we at least stabilize and try to rally here.

but the long-term trend, look, it's been going down for 35 years since the early '8 0z. it's tough to say we're in an absolute bottom. but at least near-term i think we stabilize and try to bounce. >> there you go. kathy disagrees. that's why we do it both ways fundamentally and technically. thank you. for more trading nation head to our website tradingnation.cnbc.com. the stock disaster do jor, a sell rating slapped on it in march. what are these people doing to this kindly poor old shark? we're going to explain coming up on "power lunch." and now the latest from tradingnation.cnbc.com and a word from our sponsor. different sectors of the market tend to do well during different periods of the economic cycle. when the economy is expanding, industrial and technology stocks have historically outperformed the broader market. when the economy is contracting, more defensive sectors such as utilities and consumer staples

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hi everybody. i'm sue herera. here's your cnbc news update this hour. a group of up to nine attackers

taking hostages inside a restaurant frequented by both locals and foreigners in the diplomatic zone in dhaka, bangladesh. the state department says they have accounted for all americans working at the u.s. mission there. the obama administration says it believes air strikes it has conducted outside conventional war zones in the last six years have killed up to 116 civilians and about 2,500 members of terrorist groups. the civilian death count is hundreds lower than most estimates compiled by independent organizations. syrian president assad says western nations that are publicly critical of his regime, including the u.s., have been quietly sending security officials to collaborate with his government. he made the comment during an interview with australia tv. and five weeks before the rio olympics environmental experts say water pollution is still a major concern. the venue for the olympic sailing is full of trash and

debris, but brazil insists that it will be safe for sailors when the time comes. fingers crossed chl that's the cnbc update this hour. back to you guys, michelle. thanks, sue. oil trading closing for the week. show you what happened there. more at this hour is closing. higher by 63 cents $48. 95 a barrel, gain of more than 1%. we've been talking about this level for several weeks now, brian. >> yeah, michelle, thank you very much. time now for street talk, our daily dive into the stock calls that you need to know about. let's go. all right, first up, netflix, starting coverage with a buy rating, the stock's recent drop but say a detailed map of subscribers shows continued international growth. they do add, melissa, that the next couple quarters could be less certain. but over the long-term they think the company can achieve about 85% of estimates by foc focusing on just the wealthiest households in 13 different countries. $120 target on netflix, about 25% upside. they are concerned about the

leverage and leveraging some of the programming costs. i think you hit this on "halftime report." >> i asked specifically how brexit would impact the international expansion since that is such an important part of the story and he said if there's slower growth in the eu, people probably aren't going to pull their netflix subscriptions because of that. >> by the way some great british shows, one called yes minister where i think they basically predicted the brexit 30 years ago on one of those comedies. great shows. >> second stock we're watching, lionsgate, the deal after announced to buy starz, pacific crest lowering the price target the analyst doesn't see the strategic value of the sale value nl. he believes starz is likely to see long-term margin compression due to dee tier rating pressure. >> lionsgate needs something. last two years according to box office mojo they were seventh. they've come down on the revenue market -- >> at the box office.

>> but they do produce a lot of shows -- >> for other people. yeah, it's just movies. stock number three, this is a hell of a call. cvr refining. they sliced the target down to $3 a share. the stock's at $7.70. >> it's not moving on this downgrade which is surprising. >> not moving. 60% downside. over a billion dollar market cap. piper jaffray notes didn't pay first quarter last year but in companies didn't. now thinks may not pay anything until next year. stock's already down 60%. >> drop 1% in the time we started talking about this. >> listen, it's a smaller company but it's more than a billion dollars. got some volume. >> carl icahn holding. >> that's right. >> solarcity, credit suisse downgrading to a neutral cutting price target to $27 from $28. this of course op the back of tesla's proposed acquisition of the company. the analyst says the price is too low and it would be a steal

for tesla. the chances of the deal being consummated people are questioning that 60% to 70% despite corporate governance concerns and quote limited strategic and rationale for the transaction near term. >> i have no idea what the combined company is going to look like. i hope somebody does. >> synergies are very unclear. >> does anybody know? >> sustainable energy company. >> there you go. today's under the radar stock is wine garden realty investors. ticker wri houston based commercial real estate company operating in 18 states. ubs upgrading from a buy to neutral raising target to 45 from 36. about 10% upside. company also pays 3.5% yield. analyst likes defensive nature of the portfolio. he says, listen, in this post brexit environment defensive type companies should be rewarded. he says it's a nice way to gain exposure to shopping centers with heavy presence in grocery. in other words, you got to go there to get all the beets tyler is going to eat over the fourth of july. >> he loves beets. >> beets on olives. >> you love beets too.

>> i can't stand them. yeah. the stock getting a move on the call today, but a $45 call just note that right now the current price is above the consensus of all the analysts that cover this stock. there you go. and now for sort of a bonus call, micron, shares are falling off weak results. back on street talk we highli t highlighted negative call from our next guest. it is managing director and semiconductor analyst joining us now. so, rog, listen, you're looking right now because the stock is down ten, but when you put the sell rating on the stock is lower than it is now. do you expect your thesis to play out over the next couple months? >> yes, i think the thesis has continued to play out. they are experiencing significant kind of pricing pressure in the mobile dram market as well as kind of a lack of execution on their new product, which is the mobile d-ram product. so they were unable to qualify on that particular product.

and as a result they have lost a lot of market share against samsung. and i think those issues were crystallized on this last earnings call. particularly around the guidance, the august guidance was particularly poor across all metrics on the gross margin side as well as on the operating loss side. so this is now the seventh consecutive quarter in which the company has guided below the street. >> now, a lot of bad things as you mentioned have happened. in the past 24 hours or so as you say crystallize, in terms of how the story gets much worse because specifically since you put that sell rating on the stock the stock is up 20% including today's steep decline. so even with those bad things crystallizing, still not getting back where you said sell it. what is going to be that catalyst to the downside to make your call right. >> well, the stock rebounded artificially i think based on positive momentum among a lot of investors thinking that the d-ram environment has improved.

the problem is they're viewing micron through the eyes of samsung. and samsung has been very successful in the d-ram market but not necessarily translating to micron. micron has not been able to really execute on the d-ram side. there's a very risky bet that the bulls have when they transition to 3d nand they're going to be able to do it cost effectively. >> right. >> my concern is basically we're going to see a potential series of quarters of negative operating losses as well as negative cash flow. >> that was a rise from 8 to about 10 in about a month and a half. that was quite a rise, but we're still above the levels from even that run, raj. i'm wondering is there a read through to the rest of the space because micron is a sell, does that make western dig -- i mean, does it -- >> well, i think it puts pressure on the 3d nand players particularly western digital. samsung is really exerting their lead over the rest of the

competition in 3d nand. and i think you're seeing that with respect to micron's results. i would say that i think in terms of the stock as investors realize that there could be a possibility of ongoing losses, particularly on the earnings as well as negative free cash flow, i think hard pressed for the stock to stay at 12.50, i think it could revert back. >> we appreciate you joining us, raj. thank you. >> thank you, appreciate it. this weekend, kick back, don't wear socks by the way. kick back, celebrate freedom, maybe have an adult beverage and listen to some good old rock and roll. in fact, why not do that, you know, all summer long? and when it comes to music, the battle in how you listen may just be getting started. it is apple versus spotify next. ♪ it was 1989

the battle over streaming music is really heating up. spotify versus apple is, as they say, it's time to get real. josh lipton joining us now from san francisco with more. josh. >> getting real is right, sully. so remember recode reported that spotify had sent a very tough letter to apple. it's claim was that apple blocked spotify's new app for the iphone because so spotify

alleged apple was insisting that spotify use its billing system if it was going to sell subscriptions. now, apple does charge a monthly fee of up to 30% for those that use that billing system. i've obtained a letter that apple has sent right back to spotify. and he does come out swinging saying to imply that spotify should not have to pay to avail itself of the benefits of apple's hard work, just as every other developer does, would give you a tremendous advantage over other developers. it's simply unfair and unreasonable. this fight comes as that music streaming war is heating up. back in march remember spotify said it had 30 million paid users. apple just a year after launch already has some 15 million. guys, back to you. >> all right. josh, thank you very much. why don't we dig more now into this fight, and maybe a bigger fight to come. chief correspondent editor at

large joins us along with managing director rbc capital markets. obviously there's a music aspect here, lance. but when we saw this story and apple firing back, we're thinking of a bigger story. apple controls most of the ap apps in the world, it's their platform. and now you have another widely used app basically saying to summa summarize, do you think this could be the beginning fight of something bigger with regards to other app makers and the apple platform? >> right. every time apple builds something that somebody else has created, that's going to be a concern because apple will not only control the app you're using but the platform that you get it on and the sort of commerce system or subscription system that you're dealing with. but right now it's sort of a one-off thing. and spotify is trying to say it doesn't want to play by these rules. my guess is that apple is unhappy that within the app what they saw spotify say don't subscribe here, subscribe on the website because we'll make it

cheaper. it is cheaper to subscribe on the website because they put a $3 surcharge on the apple subscription process because they're trying to cover that 30% cost. >> yeah. i'm one of the idiots that subscribes through itunes, so spotify i have to go back and do that. but you understand my point, lance. think back to microsoft, right, and internet explorer. i'm not saying there's any sort of monopoly thing here, but when you look at a platform that controls distribution and maybe difficulty getting onto that platform, you could see how that would raise an eyebrow. >> yeah. the difficulty they're saying they're having is because they didn't follow those rules. but, yes, always a question when you've got both the content and the platform, you're controlling everything. then it can be perhaps more difficult or can seem more difficult for competitors to operate within there. of course that hasn't really been the case because one thing to remember here is that apple also makes money when spotify is

on the surface. why keep it off? one thing to keep in mind about the future, apple just said if you have a service that somebody stays subscribed to for a year, you're going to be paying less, 15% of your revenues as opposed to 30%. >> do you think there's any chance of any intervention here by the doj? will they look at this any e in any way saying apple is trying to flex its muscles too much? >> you know, so the way we saw again apple is trying to dfs the services business and broadly the app ecosystem, right? to some degree the way spotify is dealt with is pandora, tidal, everyone else has dealt with. it's more about being fair even ground for all the players. >> i mean, that's certainly what apple would argue. that's what apple absolutely argues, but that being said using that thinking could the doj come in and say you're using your platform too powerfully and therefore there's a problem.

>> we'll have to wait and see. >> i'm just going to jump in and say that, you know, you have to remember that without apple's platform a number of these services probably wouldn't reach the millions of people that they're already reaching now. so it's actually been a great platform. >> that may be true, but i'm not sure it's relevant. amit, what do you think? >> you know, again, we think it's relevant to a large degree, right? i mean, give and take relationship with spotify benefit being on the app store, the way i see asking at this point at least is something no one else -- >> i mean, without microsoft nobody could get on the internet. but they sue microsoft anyway, right? >> doing just fine without microsoft. i got netscape. >> in the early days you didn't get on without microsoft. >> they had the -- i was on prodigy, but that's a different issue. >> that was on comurserve.

we got to go. >> thanks, guys. all right, online travel stocks like priceline hit hard after, you might have heard about this, voted to leave the uk -- wait, no, england -- britain voted to leave the eu. one of those two things happened. will people really stop traveling and all commerce cease around the world? more of that coming up. >> he's already out the door. >> i'm already out the door. england voted to leave the uk, they might, who knows. but if you're at the beach this weekend and you see a shark, don't do what these next people are -- ride the shark, buddy. who doesn't want to ride a shark? >> look wagging its tail. 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,

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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. here the "jaws" music? take a look at this. a shark degree reeled in on the beach of a north carolina town. this is cellphone footage showing the 12-foot tiger shark caught by a fishing team wednesday night. team says, get this, this is what they do. they catch sharks, tag them and release them back into the ocean all for research purposes.

that is not fonzi riding a shark, melissa. >> jumping the shark. >> right. >> we got you. >> all right. heading into a busy travel weekend, priceline, trip adviser all up today and after the uk vote they were hit hard. mike olson is with piperjaffrey. no surprise, priceline suffered the most, most european exposure of the online travel sites and why in your note you seem to say this whole brexit thing isn't so much of an issue because uk is a small percentage of the bookings. but shouldn't we be looking at it from the european standpoint? >> yeah, we should. unless there's a broader unravel rg of the eu, i think in general this is a buying opportunity. it has to some extent of expedia

and priceline isn't back to pre-brexit levels but travel demand is really predicated on consumer sentiment and with the brexit happening on kind of a multi-year, multi-stage time frame here we'll see we think noem innocent shock to consumer sentiment of wage growth, deployment or an impact of gdp or anything like that. >> right. the decline in the british pound is -- and very unusual and just curious, how much has that impacted travelers willingness to take advantage of a weak currency to go to that destination? in other words, are we going to see do you think an uptick of demand for travel to the uk and or europe from elsewhere in the world because of brexit? >> that's an important factor to consider. on the other hand, if you look at the travel spend in europe, about 90% of hotel room nights

from intraeurope travelers and may cause americans and, you know, other people from international destinations looking to go to europe because of the currency situation, we don't necessarily expect that that will have a significant impact or offsetting impact on europe travel trends and it's a positive. it is a slight positive and in general, the key for europe travel demand is going to be from the intra-europe travel. >> sure. you make the case they could use a second quarter as a kitchen sink quarter and what people anticipate in earnings season overall and all companies take advantage of the excuse and use it to give them some pad going into the second half. priceline proven to be conservative in the past. correct? >> they have. if you look over the last few years, they have typically guided significantly below what they actually report. in fact, on average their eps guidance typically about 12% below what they end up reporting

over the last few years so this is a situation where they're conservatism probably be amped up to an even higher level and expect that's kind of a one risk to watch for is that q3 guidance of priceline likely very conservative. we expect upside of q2. travel trends pre-brexit q2 is tracking at least flat if not up in a lot of markets as far as occupancy, average daily rates. >> okay. mike, thanks a lot for your time. appreciate it. >> thank you. tyler? >> melissa, it is the fourth of july weekend. did you know that? means one thing, fireworks across the country. here in new york, macy's launching its fireworks show from the east river on five barges. 56,000 pyrotechnic effects and 56 pyro technicians are wiring the shells into mortars and synchronizing them to a digital firing system. some of them up to ten inches in

diameter and weighing up to 35 pounds. if you wonder who gets paid to put it together, head over to powerlunch.cnbc.com to watch a story about it. what does a twinkie look like after 40 years? we'll show you an old twinkie. >> can't wait. plus, a warning. i'm going to keep reading. more after the break. don't! don't try that at home! this is lulu, our newest dog.

mom didn't want another dog. she said it's too much work. lulu's hair just floats. uhh help me! (doorbell) mom, check this out. wow. swiffer sweeper, and dusters. this is what i'm talking about. look at that. sticks to this better than it sticks to lulu. that's your hair lulu! mom, can we have another dog? (laughing) trap and lock up to 4x more dirt, dust and hair than the store brand stop cleaning. start swiffer ing

this is video of the mall in washington, d.c. every year authorities want americans to know how dangerous fireworks can be. so they do this. just watch for a second. it can be really -- >> oh my gosh. this is good stuff. >> let's play it again. play it again. >> not the conclusion supposed to draw. >> be careful. >> supposed to be horrified. >> scared. >> scared. >> yeah. >> all right. all right. let's move on to twinkies. a school in maine celebrating the 40th anniversary of a twinkie. a single twinkie. there it is. since 1976, the year i graduated from college, science teacher named roger bennetti in blue hill, maine -- pretty town --

decided to teach the class. he put the twinkie on a shelf for observation and there it stayed until 2004 when the teacher retired. a student in that 1976 class is now the dean of students at the school and she put it in a case in her office where it remains -- >> so many questions about this. >> it looks a little moldy but -- >> is this video or photo, first of all? >> looks like a photo. wasn't moving. the twinkie was not moving. >> was it left in the wrapper? >> in the pack? >> taken out and exposed to oxygen and don't know the effects of 40 years? >> inquiring minds want to know. >> one enclosed and one exposed to see how the different -- control group and then the variable. >> i want the know still photo or video because we didn't pay 75 bucks for that, did we? >> worth every penny. look at that! >> there it is. that must have been exposed to

the elements. the air in maine is really nice. folks, have a great fourth of weekend. everybody, be safe. turned out to be a pretty good week in the market. >> despite brexit. "closing bell" starts now. hi, everybody. welcome to "the closing bell." i'm kelly evans back here at new york stock exchange. >> welcome back. >> team is back together. >> what a week this has been. i'm bill griffeth. s&p on the track to have the best week since 2014. so much for the brexit crisis that shook friday and monday. we'll talk about whether the worst is over or if volatility is here to stay for the markets for the foreseeable future. >> we know bio tech was hit hard in the first half of the year but the second half, july 1st, there's a big catalyst many