and there will be more quantitative easing measures. >> josh. >> hedge japanese stocks are the play if you think this continues. they've been absolutely savaged down more than 20% year-to-date. probably undeserved. >> keep your eye on twitter as well for the rest of the day certainly moving on those comments from ross levinson earlier. "power lunch" starts now. and welcome to "power lunch." i'm michelle caruso-cabrera with brian sullivan. tyler and melissa are off today. stocks are posting modest gains, the dow is trying for its seventh straight day of gains. apple shares topping $100 per share for the first time since june. we're going to talk more about that in a moment. but happening right now 1:00 p.m. marks the official starting time of the republican national convention kicking off in cleveland. and both cnbc's john harwood and eamon javers are there. john, you first. >> michelle, the sound checks are over, the preparations are over. we now have reince priebus, the chairman of the republican

national committee behind me bringing this convention into session. it's a convention with high stakes for the republican party because donald trump is trailing hillary clinton. if you look at our nbc/"the wall street journal" poll just out over the weekend, she's leading him 46% to 41%. donald trump leads only in the south, trails every other region. he's got to make up some ground. and he's got a task to both identify a broadly appealing message and also persuade voters that he is up to the job of being commander in chief. interestingly though as at a time when donald trump is trying to unite the party and his choice of mike pence as running mate was a step in that direction, his campaign chairman paul manafort has taken a strong stance against the anti-trump hold out. this morning he said governor john kasich ran against donald trump was not speaking at this

convention, was embarrassing his state. also said people like kasich, like mitt romney, like the bush family members who are not coming to this convention are out of the past. and we're looking toward the future. that is a more aggressive tone than you would expect somebody trying to pull their party together would be. but this is as paul manafort says, it's donald trump's convention. >> how does it look, john? we're seeing the crowds everybody at attention as we get underway, i assume it feels different to past conventions, or doesn't it? >> well, at this stage you can't much tell, but you know because donald trump is such a unique personality, this is going to have a unique feel to it. he may speak tonight when he said in interviews that he may come speak every night of the convention. but he may come speak tonight when his wife malania addresses the convention. and so donald trump is broken all the rules to get to this point. we kind of expect he'll break the rules all week. >> it's going to be a lot of

unpredictability. john harwood, thanks. speaking of unpredictability, let's send it over to eamon javers who's keeping an eye on the rnc protests. >> yeah, hi, michelle. first significant protest of the day outside convention hall in downtown cleveland. this group is a grab bag of different groups here speaking behind me from black lives matter to workers party to hispanic protest groups saying they are for immigration. i wanted to show you one of the things they're handing out here, this is the socialist alternative newspaper. underscore the point that the republicans are not the only political party where the political split. the headline here is still not with her. the guys who handed me this newspaper said they are bernie sanders supporters. and they are not going to be supporting hillary clinton in the november no matter what happens. so this protest pretty tame today, but ultimately they are prepared, the police are here in cleveland, for any kind of activity that might occur. they have purchased about 2,000 different sets of riot gear. they've got 123 different permits for marching protests. and they've also got 58

different groups who've been issued protests all together for throughout the week. all told they say they are expecting 11,310 different protesters here in cleveland this week. so it's a combustible mix. and we have seen a very heavy security presence everywhere from coast guard ships with machine guns over here on lake erie to bicycle cops here at the convention center. they've got a very visible security presence here in downtown cleveland. they say they are prepared for anything that might happen this week, guys, back to you. >> have you seen anybody carrying guns with the whole issue of open carry? >> we have not. and actually i'll let you take a look here at the protests. we don't see anybody carrying guns here at all. we see a variety of very peaceful people out here protesting a variety of different causes. but we haven't seen any weapons out here at all. feels very peaceful and very secure right now, michelle. >> eamon javers, thank you live at the rnc for us. outside of that we have a big developing story right now on the zika virus. it is a sad story from utah.

meg tirrell here with more. >> that's right, guys, utah health officials and cdc are calling this a unique case of zika and they're investigating how this person became infected. so essentially in july we learned of a person who had zika who died of what utah health officials are calling unknown causes, but that person did have zika. we've learned today that a family member, a family contact of that patient has now also contracted zika. and it's unclear how. that person hadn't traveled to a zika area and had no sexual relations with anybody with zika. and the mosquitos that transmit the zika virus are not present in utah as far as folks know. so of course we learned last week that there was another way of transmitting zika, that's a sexual transmission from women to their partners. we hadn't learned that earlier. so this is yet another development in potentially how zika can be spread. people just aren't clear on how this patient contracted zika. >> from what i understand it was an elderly patient. so we've ruled no mosquitos in utah. >> that's right. >> ruled out likely travel. ruled out any sexual transmission.

>> that's right. >> so it's currently a mystery? >> it's currently a mystery right now. so the cdc and utah health officials are trying to figure out just how this person could have become infected. >> the reason to be so concerned is, is this something about zika that we didn't know? this could be another -- there could be another way out there that people get sick and we don't know it yet. that's what this could be a signal of. >> that's possible. and what people are surmising right now is this person who died who had zika had high levels in their blood and possible this person maybe taking care of them became infected with contact of blood, urine, other bodily fluids we know can transmit zika. but right now it is a mystery, as you called it, brian. >> meg tirrell, i'm sure we'll get more from you. appreciate it. we're also following another developing story, this one involving the olympics. >> so the world antidoping administration, they're saying that the russian doping procedures from 2014 in sochi were so bad that they think all russian teams should be banned from these rio olympics. we've already seen the track and

field team have been, you know, asked not to show up. they don't want the track team there. now saying their recommendation is that no russian team from any sport should show up to rio, which is starting less than three weeks away. so this is a really big deal. the report says that the ministry of sport in russia was really part of the process in making sure these athletes were getting their drug tests swapped out for proper ones to pass tests. >> i don't see how that's possible, eric. putin is speaking right now. >> that's right. >> he says there's no place for doping in sport. >> that's right. he says there's no place for doping in sport. he says russia is open for these conversations and is open for having fairness in the games. so obviously what the prime minister is saying is a lot different from what these independent agencies are saying about how it actually happened on the ground. >> the olympics start in just, what, two weeks? >> 19 days. >> 19 days. wow, you could have a huge player completely gone. >> they were the number one medal winner at sochi. >> right. they're always a huge dominant team. >> right. >> eric, thanks. >> you got it. turn to turkey now, the

fallout from the failed military coup. the president erdogan today cracking massive crackdown against alleged plotters, 9,000 officers removed from the ministry of the interior. some alleged plotters, some trying to stop the coup, 1,400 injured. turkish stock market plummeting roughly 9%. currency falling too. and the deputy prime minister spoke on cnbc this morning. he said the massive scale of arrest today is justified. >> turkey's a rule of law country. they have to face the full force of the justice. so judicially we'll decide what happens next. yeah, and, michelle, by the way there was a report out a couple hours ago that i guess some prosecutors in turkey had entered our air base there. it is unclear why, again, this is a developing story comes from the turkish official newspaper that they are inside the incirlik air force base.

>> they are our allies, nato member, but always a problematic ally under erdogan. >> and this base is in the south central part of the country which is up against many of the troubled spots. not up near istanbul. we'll get more on that, but right now back to the markets. stocks overall ticking mildly higher. but despite the lack of a big move today it's been a pretty good year for the dow. 22 dow stocks are higher this year. but one stock that has not hit a high is apple. here's an interesting question, could apple's decline actually be a good thing for the overall markets? i know it sounds crazy, but hear us out. as apple soared, some suggested it was overowned by everybody. every hedge fund in the world had it as a top holding and retail investors also snapped it up, meaning it may have been pulling money from everywhere else. so if people are selling apple, or looking elsewhere, do more other stocks get access to investor money ie, sell apple, buy a couple others, and maybe the whole market lifts up. that's the idea. let's find out if this theory is

genius or total garbage. bring in cnbc contributor jon najarian and matt teback. you have said stocks would go higher if apple didn't, do you think it's maybe a good thing? >> to be honest, yes, i think it could be. i've changed my mind. i think basically a reset has taken place. as you mentioned individuals and hedge funds but also mutual funds highly overweighted in this stock. and so whenever any new money came in, you know, a big chunk of it went to apple. now that there's been a situation where, you know, apple for years it came out with the thing, whether it be itunes, ipad and of course the iphone which changed the world, everybody expected this every new product was going to change the world. the iwatch didn't do that, so we have a little bit of a reset. let's face it, at its peak apple was up five times as much as the

s&p. now it's up four times as much. so i think now it's kind of back into where it should be given that their new products aren't what they quite used to be. and then take it from there. and more of this new money will go into some other areas. >> and, jon, you get my theory, right? because we sit right next to each other at cnbc sort of complaining about this, talking about it last week which is forget the dow because it's a price weighted index, apple's going to go up and things are going to go up. i mean, overall, did apple -- no knock on apple at all, jon. did it absorb so much investor money and a lot of other really good companies simply got left behind? >> yeah. and it absorbed a heck of a lot of time on our air waves every single day, brian. so, yeah, i think it's very possible that a lot of these suppliers to apple are the ones that are getting the love this year. i mean, as apple has basically bounced around between 88 and call it, you know, i guess it got up to 112 or so, but now it's basically about the 100

level, 99.5, 100, you take a look at the suppliers, brian, add a jabl or analog devices, or at a crus. these stocks are up four times the dow, six times the dow while apple is underperforming, as you've stated. so i do think that your theory is correct that a lot of folks are looking elsewhere. not that they're trying to get out of apple and shun it, but their focus isn't just apple anymore. and that's a healthy thing. >> well, apple, i guess, matt, would be the rising tide and everybody else would be all of the boats on that tide. so let's take the flip side. apple's done pretty well in the past month. if apple continues to be strong, is that necessarily a negative then? the counterfactual? >> no, i don't think so. because i think, again, we've had this reset. now that some of the people have paired back their positions, let's face it. people haven't said, oh, gosh, i've got to get out of the stock. they still create billions of

dollars of cash, still a great company, as jon said. it's more of a thing where now we've kind of had this reset, more money will go in and kind of go together. i mean, i think we'd all agree suddenly if apple rolled back over and broke below it's 2016 lows below 90 that that would be an indication maybe what's going on in the global economy. but i think now that it's kind of reset and underperform for a while, it will kind of go up in the same way as the rest of the market will. but do look at as jon said going to some of these other stocks. look at the xlk tech etf. that's broken out to a new high. so now you've got some of these momentum players not looking at apple like they used to. they're looking at other names that jon mentioned. so i think they're both more in tandem now that the reset's taken place. >> you can only love one gorilla guy in your life and you break up and realize there's other love out there. jon and matt, with love to you both, thank you. >> to you too, brian. >> love a good metaphor. the republican national convention is underway. in just a few days from now donald trump is expected to

receive the party's nomination for president. not everyone at the convention is happy about that. in fact, we're going to talk to a delegate who went to court so he did not have to vote for trump on that floor of the convention center you see there. he'll join us next. 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.

the republican national convention just getting underway at the quicken loans center in cleveland, ohio. in just a few days from now

billionaire donald trump is expected to receive the party's nomination for president. not everyone at the convention is happy about that. one of them is bo carel, he went to court to fight a virginia state law that would have compelled all state delegates to vote for the winner of the state's primary or face a fine or 12 months in prison. last week a federal judge threw out that statute leaving him free to vote his conscience. bo, thank you for joining us. >> thank you for having me. it's a real honor. >> congratulations on your victory, i guess, but is it kind of hollow? donald trump appears to have gotten the delegate votes. what are you going to do? >> well, right now, we are -- i mean, there's still machinations happening at this moment. there's some really exciting news, and that is that we have the petitions necessary to have a role call vote on adoption. that's huge news right now. >> why is that news?

explain the byzantine nature to the audience? >> sure. it's difficult sometimes to understand how all this plays, but a few days ago the rules committee recommended some rules that will be a hold on the grassroots with the rnc and chairman -- actually, when it comes back to that lawsuit, which was a vindication of constitutional principles, it defers to these unconstitutional state laws. so we as the delegates at large look at this, i think we're going to have a vote down on the rules committee recommendation unless we get authority. >> so if i understand correctly, you're going to have a role call vote, which means every single delegate gets to vote on whether or not they're going to stick with the rules. >> as proposed, correct. >> and if they don't stick to the rules, then in theory there could be another vote which would allow the delegates to vote whatever they wanted rather than in theory what they were compelled to do based on their states. do i have that right? >> well, yes, but then the rules

committee may reconvene, but reverts back to the 2012 rules which are much more decentralized. the reason that's important is that's a condition precedent to any effort to stop donald trump. >> but what's your problem with donald trump? he got the delegates necessary based on the rules. he's brought more republican voters out in the primaries than anybody's ever seen. i mean, he could win. what's the problem here? >> i mean, maybe -- look, he was outraced 40-1, he has a skeleton staff. the reason we're doing this and fighting hard is we don't think he can beat hillary clinton. >> so who do you do instead? what's plan b if he's not available? >> anyone that's competent and able to beat hillary clinton would be my choice. >> yeah, but who? there's nobody to rally around at this point. paul ryan says he won't do it. >> well, right now there's some indication that petitions are circulating right now amongst the state delegations. i don't know all the details about that. but, you know, under the rules if there's a majority of eight states, they submit a name to

the floor. again, i don't know all the details about that, but those petitions are supposedly circulating now. >> but, beau, look me in the eye, and i mean of course rhetorically, and tell me you really think there's a possibility that donald trump isn't the republican nominee by the end of this convention? >> in order to have any shot, even a 1% chance, we got to knock the rules down. and that will be coming up shortly. >> tell me what is your issue with donald trump? you mentioned he had a skeleton staff. for having a skeleton staff, he's done pretty darn well. that might almost be a credit to him at this point. >> he's outraced 40-1, when he's not spending money on hats he's wasting it on jet fuel and his steakhouse. i mean, look, when it comes down to it there is a large contingent here. and i've already heard it, i mean, like huge boos, you know, when certain people get recommended for temporary convention positions. you're going to see a contentious, ruckus convention

because basically what this is gop insiders shoving rules down the throats of the grassroots. that's hugely concerning. and you hear right now that the rules committee is going to reconvene. but when it comes down to it, trump is going to try to wedge his nomination down as early as potentially today. >> beau, we were talking about whether or not there might be rioting outside the convention. you're not suggesting it's going to happen inside the convention? these are republicans, right? >> good republicans like to follow the rules. that doesn't mean we don't want input in the rules. >> well, we'll see, beau. we're going to be watching. we've got john harwood standing by for that very moment when they try to deliver that message to paul ryan and see if they can actually get a roll call vote. beau correll, thanks for joining us, brian. up next, as housing stays hot nationwide, there's a new piece of data out today has some worried housing could cool off.

what it is and why you care ahead. ow that thinkorswim seamlessly syncs across all your devices. the market's hot. sync your platform on any device with thinkorswim. only at td ameritrade.

welcome back to "power lunch." hasbro reporting earnings beat driven partly in part by "star wars" and disney figures. volkswagen promising restitution. that's according to to dealers who met with the company on friday. volkswagen is set to unveil details in the program within a month. merck is being downgraded to market perform at bmo capital

markets. the firm saying that the risk/reward profile for the pharmaceutical company is balanced and fundamentals do not support a higher valuation. on the housing front, home builders losing a little bit of faith in their market. new data shows home builder sentiment dropped one point, but there's as always much more to the story. diana olick is live in washington with much more to the story. diana. >> well, brian, the number did fall a little short of expectations. 59 was the reading from the association of home builders for july. analysts thought it would be at 60, which would be steady. you can see it really hasn't moved much since january despite spring being the busy season for housing and builders especially. we're also one point down from a year ago, but 50 is the line between positive and negative. so the builders are still feeling positive. all right. but what's the issue? land and labor, and a little bit of consumer concern, which appears to be softening sales a bit. we spoke with the ceo of california based tripoint homes, and he blames some of it on politics. >> home buying does have a

certain amount of confidence factor to it. and so, you know, what happened in britain and the political uncertainty of going through this election cycle, there was -- it was a pretty warm late june in a number of the southwestern markets. so, you know, sales kind of tailed off a little bit. >> of the index's three components, current sales conditions and buyer traffic both fell one point to 63 and 45 respectively. sales expectations over the next six months though they took a bigger fall down three points to 66. now builders are benefitting from the lack of supply of existing homes for sale. but newly built homes like this one, well guess what, they're pricier than existing counterparts, even low mortgage rates aren't making up for that premium. and in an economy where home prices are rising far faster than incomes. back to you guys. >> diana, thank you very much. coming up, we're going to focus on what we are calling the

three es, earnings, election and the failed coup on turkish president erdogan. which e should be the most important to you and your money? find out ahead. plus, did those events in turkey drive buyers to the safety of gold? we're going to find out. metals close straight ahead. she even gives me advice...ng. ...about my toothpaste and mouthwash. 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!

cnbc news update sponsored by comcast business. comcast business, built for business. hi everyone. i'm sue herera. here's your cnbc news update for this hour. russian president vladimir putin speaking out for the first time on the doping scandal findings. the world anti doping agency out with a report today finding evidence that russia cheated at the 2014 sochi olympics. putin says russia is open for cooperation adding there's no place for doping because it discredits fair play. france's cabinet ministers gathering today for a special security meeting. it is their third meeting since last thursday's deadly attacks at bastille day celebrations in nice. and we are learning more about the marine who ambushed six police officers in baton rouge. the gunman gavin long posted this video on youtube on july 8th. in it he talks about violence against police. he killed three officers and wounded three others yesterday.

and utah health officials today confirming a new zika case. it was diagnosed in the caregiver of a patient who died from the virus. investigators are now trying to determine how that caregiver became infected. we'll be following that story for you all day today. that's the cnbc news update this hour. brian, back to you. sue, thank you very much. all right. let's get back now to your money. so bank of america, if we can we can talk about bank of america. earnings, their earnings were out by the way. and you see the stock's doing pretty well today. in fact, bank of america up 4%. the company beating street expectations on both earnings and revenue, but profit fell nearly 20% due to continually low rates. now, according to thompson reuters, earnings invest in p 500 companies are expected to fall nearly 5% last quarter. so are earnings the most important e to your money, or is the election or turkish president erdogan? joining us now chief investment officer at brinmar trust and

chief investment officer of akt wealth advisors. multiple repeated attacks in france and in belgium, the attempted coup in turkey. are you advising your clients to reduce their stock exposure because of what is happening in the world right now? >> hi, brian. thanks for having us on. the short answer is, no. that's not the basis for stock exposu exposure. clearly those issues that you mentioned all of them and very tragic event certainly in france as well as turkey have an effect on uncertainty and dry volatility in the markets. at the engd of the day earnings is what matters. even in the short few number of companies that released earnings through friday, 60% of the company's mentioned currency as being a big issue in terms of earnings. so earnings on the long-term matter. the other issues are very important certainly from a human and political perspective, but

earnings drive market prices over the long term. >> daryn, same question to you. i would add in some respects i would add this is an earnings story. if currencies move, if we sell less over there, if the europeans buy less from themselves, ultimately the multinationals will get hurt. are you recommending less stock exposure because of what we've seen in the world? >> first of all, i totally agree with what ernie said. we're not going to make any dramatic changes. i think a lot of these political issues have been priced into the market particularly in europe where stocks have lagged the united states. we did make a minor adjustment though because if the u.s. does, the dollar strengthens, you'll see the euro weaken, that is bad for multinationals. we added a little bit to our small cap exposure recently because small cap stocks tend to have more domestic focus, more focus on the consumer doing quite well, less currency exposu exposure. >> because you're buying the domestic u.s. story, darin. >> correct. we think the consumer -- >> small cap are mildly now more

attractive than they had been because you believe it's going to be one of these look homeward angel time situations, we're going to stay in the u.s. >> i don't think it's not necessarily we're looking homeward like nationalism type thing, but small cap stocks beaten up pretty badly last year, valuations became attractive. and we've seen wide currency movements, we saw the pound, yen, dollar move around a lot. if we were to see for instance a 5% appreciation in the dollar, that's going to become a headwind again for multinationals, which was what caused earnings problems in the first place. and the small cap stocks i think are better positioned to take advantage of that. >> okay. and, ernie, i'll leave it with you, you like j.p. morgan chase, but we talk about multinationals, perhaps no company as multinational or perhaps exposed to currency as ge and yet you like the stock. why? >> yes, brian. yes, they certainly have multinational exposure, so there's currency issues. and they've been pretty successful in hedging. one of the issues we really like about ge is they really transform themselves away from

more of a financial services company, more so than industrial and technology services company. really have more of a momentum, more of a track. they have been growing earnings and revenues at a pretty good clip. the current yield is just about almost two times the ten-year treasury, and they're growing their dividend, very important. we think that's going to be a big source of returns in the market going forward. that is dividends. they're growing their dividend at double digit rate. we think that will withstand those headwinds and they'll prosper over pretty well over the long term. the stock trading just under 33 we'd be better buyers closer to $30 a share. >> darin richards of akt, likes smaller caps than he used to, i wouldn't mind ge falling a couple bucks. appreciate it. go to powerlunch.cnbc.com to see another stock e ernie likes for the long-term. final gold trades are crossing for the day. show you what's going on with the precious metal.

not a whole lot higher by a buck 20. we have seen higher in the last day or so in the wake of what's going on in turkey, but looks as though the coup has failed. 1328 is where it stands right now mixed session for all the other metals, platinum slightly higher, palladium slightly lower, copper slightly higher and silver slightly lower. check on the bond market at this hour. wow, the 10-year yield, i mean, going to get a nosebleed here. 1.5% last we saw. there we go. treasuries 10-year yield at 1.58%, 30-year still above 2 and 2-year note 0.6% is the yield. rather flat trade. more on the fallout from that failed coup in turkey. one of president erdogan's senior advisors is going to stop by next. and as we head out, live shot outside the republican national convention. anti-trump protesters taking to the street. "power lunch" is back in two minutes.

turkey's leadership says it has foiled a deadly military coup in turkey that left over 265 dead, thousands of police, judges, generals arrested over the weekend. global markets keeping a close check on the aftermath given turkey is a member of nato as well as a key american ally in the middle east. turkey's bors down almost 10%. joining us senior advisor council to turkey's president recep tayyip erdogan. welcome, sir. good to have you here. >> thank you for having me. >> you're a lawyer as well. are you a lobbyist? what is your role? >> i'm lawyer and council to the government of turkey. i've been asked to deal directly with the issue of activities in the united states over the last

year. >> okay, let's explain to the audience who he is. he's a cleric who happens to live in the poconos of pennsylvania. and president erdogan has accused him of trying to orchestrate this coup. he's actually put out a statement over the weekend. he rarely talks to the press, but he said that he was actually quite insulted by this idea as someone who suffered under multiple military coups during the past five decades. >> well, actually -- >> it's especially insulting to be accused of having any link to such an attempt. >> it's good you have us on a business show, because he is probably one of the biggest industrialists in turkey. he has 150 charter schools in the united states, takes in half a billion dollars through his gulen network here. he's a major campaign donor in the united states. he's been very active in terms of abusing the h1b program in the united states. he's a major international player, not the reclusive imam that he's trying to pretend to

be. >> does that justify thousands and thousands of arrests? >> listen, i'm not here to discuss thousands of arrests. i'm here to talk about the situation involving mr. gulen. and the country's just had a coup, a violent coup, a coup where tanks literally tr ll lly over civilians. there are hundreds of deaths, hundreds of injuries, the government is doing i'm sure what it can to bring security back to the country. >> i want you to listen to this sound bite. we had on the former supreme allied commander of nato stavridis this morning, listen to what he said. >> that's a day in the united states where 25,000 judges, prosecutors and senior military are rounded up and put under arrest. it's unimaginable. and i don't say this just because i'm an admiral, but 200

generals and admirals have been inka incarcerated. that's 60% of the entire flag officer core of turkey. >> you're saying gone too far. >> i think it is obviously going too far. >> he's getting a lot of criticism here in the united states, sir. >> he is. and i think we have to look at turkey. we have to look at turkey in terms of how the army and the military has penetrated -- has been penetrated by gulen, and also most importantly how many times the army has attempted to overthrow the democratically elected government of the country. this is not the first time. this is not the second. this is the sixth. and i'll tell you from having survived a coup in thailand that what happens to a country after those coups is far worse than rounding up people, interrogating them and trying to figure out what happened and trying to avoid the next anti-democratic coup. >> everybody is sympathetic to that idea, sir. but now we have grown very

accustom to once people have been elected, we have seen leaders completely dismantle democracy either through freedom of the press, mass arrests. this is -- the question raised about erdogan at this point. >> listen, there are many questions that can be raised, but i can tell you this. in turkey no one is running around trying to keep christians from entering the country. in turkey it was erdogan who stopped police from routine ly - >> you're saying he's -- >> no, what i'm saying is the united states needs to look at whether it's in a position to judge. number one. and number two, we all have to work with turkey to ensure that their democracy, which they've brought out on to the streets to save in the last few days -- >> if you are -- robert, it's brian. sorry to jump in. we are running out of time. what i haven't heard anywhere today is why.

if you are correct and gulen is behind this somehow, what does he want? what was the point of the coup? >> the point of the coup was obviously, number one, political power. and number two, protecting a massive asset base that he has not only in turkey but around the world. >> why would he need a coup to protect that? according to you he's wealthy already. >> because in turkey his projects, his work has been taken over by the state because they've been researching and reviewing how much he's controlling, the illegal operations -- >> so you think this is literally a coup over a money grab? that erdogan -- >> no, i'm saying -- >> that gulen's operations were a little bit outside the law, they were going to put a stop to it, gulen rallied the troops literally and tried to take back economic control. this was an economic coup. >> no, you're putting words in our mouth. it is both -- it is clearly political, but you need to understand this man is a major player both in turkey and the united states economically. he runs your largest charter

school operation. and he does it in a fraudulent manner. >> i got to ask you, on twitter, behind closed doors there's a lot of skepticism that this coup was actually real. >> well, you know, i've seen that. when this country doesn't like a leader, they did this with chavez in 2002 -- >> we hear that from people in turkey, sir, turkey. >> let's be clear, the president lost some of the people closest to the president were murdered. you're going to have to go very far to have people believe that's the case. his home in this resort was bombed. the f-16s that were flying next to him had to be attacked by other f-16s. i think that's just crazy. >> robert amsterdam, senior advisor to turkish president erdogan, thank you for joining us, sir. >> thank you. back to the markets. the s&p 500 keeps setting all-time highs despite failed coups and terrorism around the

world. but one firm says the small caps could rally another 7%. we'll find out why. plus, yahoo getting ready to report results after the bell. the stock up 14% this year. but will the company ever get bought? "power lunch" back in two.

the s&p 500 set an all-time high back on july 11th, that was the first since may 21st of 2015. then it added three more in succession, boom, boom, boom. what about the smaller cap rivals? they get no attention or love probably because they're small. how long before they start setting their own new highs? your next guest says the small caps could rise another 7% from here in just the next 60 days. bring in sam stoval to break down the numbers. we had a mutual manager on earlier saying i'm buying more small cap stocks because i think the domestic economy is a little more insulated. is that the primary rationale behind your thesis, or is it something else? >> well, should i start calling you boom-boom from now on? >> do it, baby. >> i liked your introduction there. >> but there were three booms. >> all right. who's counting. basically the feeling is looking

back to history. if the stock market sets a new all-time high, is it like the messenger from marathon who then keels over after saying rejoice we conquer and falls dead, or does it actually catch a second wind and work its way higher? and the answer is the latter. that historically going back to the 1970s, looking at the russell 2000 and then swapping with the s&p small cap 600 that after getting back to a new high from a bear market and the small cap stocks went through a bear market last year, that we'd tend to rise almost 7% in the coming two-month period. >> so you're just looking at plain old history. saying history says when this happens, this is probably going to happen. and this second this is small caps doing well. >> well, history is a starting point. as you know as well as i, brian, history is a great guide. it's never gospel. yes, sometimes it does rhyme, but others like the national anthem singers sometimes forgets

the words. so in this case i overlayed it with fundamentals and said is there a fundamental story behind it? the answer is, yes, that small cap stocks are expected to post a near 30% increase in earnings in 2017 versus the slightly less than 15% earnings for the s&p 500. right now on a forward 12-month basis looking at s&p global market intelligence aggregate estimates, we're at about a 14% premium, which is equal to the long-term average. so small cap stocks even though they're up more than 10% so far this year are not expensive based on history. >> are you worried about valuations? >> valuations right now are trading at about 17.3 times 2017 earnings. that's versus about 16.4. that's about a 7% premium, which is actually lower than the longer term average. so on a relative basis i would

say that if you're going to be invested, the better opportunities lie in the smaller cap arena. >> all right. sam stovall, we do appreciate it. good stuff. we'll see you again soon. >> thanks, brian. the dallas cowboys crowned the most valuable team in sports at $4 billion. cowboys owner and general manager jerry jones is going to stop by. we're going to talk numbers, stadium security, his big bet on boxing. "power lunch" will be back in two minutes. and as we head out, a live shot outside the republican national convention anti-trump protesters taken to the streets. this is actually inside the convention where some people are booing trump as well. "power lunch" is back in two minutes. when it comes to medicare,

everyone talks about what happens when you turn sixty-five. but, really, it's what you do before that counts. see, medicare doesn't cover everything. only about eighty percent of part b medical costs. the rest is on you. consider an aarp medicare supplement insurance plan insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it could really save you in out-of-pocket medical costs. so, call now and request this free decision guide. discover how an aarp medicare supplement plan could go long™ for you. do you want to choose your doctors? avoid networks? what about referrals? all plans like these let you visit any doctor or hospital that accepts medicare patients, with no networks and virtually no referrals needed. so, call now, request your free guide, and explore the range of aarp medicare supplement plans. sixty-five may get all the attention, but now is a good time to start thinking about how you want things to be. go long™.

stock to keep your eye on today is twitter. that stock up nicely more than 3% today. former executive of yahoo telling "halftime report" here on cnbc he thinks twitter will be bought within two years. michelle, that has twitter having one of its best days in a while up 3%. >> we've heard a lot of talk about that. let's see if it finally happens. yahoo will report earnings after the close today. investors are more focused on the sale of the company, however, rather than these actual financial results. josh lipton is in san francisco

with what to watch. josh. >> well, michelle, you know, it's already being talked about as perhaps yahoo's last earnings release. and the street does not think it's going to be all that pretty. yahoo expected to report eps of 10 cents on revenue of 1.08 billion. now, that would represent drops of 39% and 13% respectively. but analysts now think of these results as a sideshow to that bigger story, the sale of this business and how yahoo is going to monetize its stakes in those asian assets. >> see improvement in the yahoo core business, but investors are really focused on how they affect tax free spin mostly on alibaba and yahoo japan. >> roughly a $30 billion stake in alibaba and $9 billion in yahoo japan. total market cap around 36 billion, meaning investors are signing no real value here to

the core business, so what happens next, does alibaba step in and buy back its stake at a discount? is soft bank a natural buyer for japan, either way suntrust bob peck tells me he thinks monetizing those stakes could be a long complex process. that's why he recently downgraded yahoo from buy to hold. >> thanks so much. josh lipton on yahoo. we'll watch that earnings report i guess this afternoon. ultimately. >> ultimately everyone just cares about a buyout. >> exactly. >> so aside from all of that we're also keeping an eye on two other big tech companies set to report their results tonight. that will be netflix and ibm. let's talk about both beginning with big blue. dan morgan and ibm shareholder, dan, how long have you been an ibm shareholder? >> we've held ibm, brian, for really since i've been with the firm which has been 12 years. it's been a staple on our equity income model, which is our dividend paying stock selection list that we use for more

conservative investors. >> well, the reason i ask that then is i don't need to tell you most of the last four years have not been great for ibm. >> right. >> lately the stock has shown some signs of life. do you believe that investors sentiment or something else has fundamentally changed on what has been arguably one of the most disappointing dow stocks for the last four years. >> that's quite a setup, brian. bear in mind we look at the stock from an income perspective. it yields about 3.25%. still generate a lot of strong free cash flow at about $13 a share, they pay about $5 a share in dividend. so there's still a lot of room in there from that perspective. and, you know, ibm is a company in transition, as you've talked about before. this is very similar to in the 1990s when they made the migration and got out of the hardware or mainframe business and got more into services. that's the same type of transition you're seeing now in terms of getting into their

strategic imperatives which as you know is cloud and analytics and all the things they're doing in that space. i think it's something you have to be more patient with. >> i know it seems like quite a setup, and i get your point. i tend to be a little bombastic, but it was a $213 stock in march of 2013. it is now $160 stock, dan. you've bought it before then and you've made money for your clients on it. i get it. but we see a dow component fall $50 a share in three years it does raise even the most jaded business journalist eyelashes a little bit. >> yeah, i would agree with it. ibm not been strong, 16 consecutive quarters of negative revenue growth, but it's just a story we're waiting for that turnaround. as i've mentioned before they've had the time during the '90s three different periods where they've gone through this transition and redone their business and got back on track again. so that's what we're really betting on them doing. you have to remember too, brian, we own amazon, we own google, we own all the other stocks too doing really well in tech.

we look at this more of a dividend play. >> all right. dividend play, ibm in it for the long term. dan morgan, thank you, we'll see you soon. let's get more now on what to expect from netflix after the bell. we bring in julia boorstin. julia. >> well, subscriber additions are the key numbers in focus. both the numbers this quarter and projections for the next quarter, that's what could send this stock swinging. shares plummeting back in april after the company slashed its guidance for subscriber additions for this quarter. the stock now down about 26% since record highs in november -- in december. the company projecting for this quarter the addition of 2.5 million streaming subscribers, 2 million of those from overseas. now, analyst estimates are a bit high ore, but even those higher estimates show the fourth consecutive quarter of u.s. slowing growth here in the u.s. where netflix is already in about half of u.s. broadband households. with overseas subscriber additions facing some tough comparisons, investors will be

particularly focused on the potential to expand into china. now, analysts expect the company to grow its revenue 28% to $2.1 billion, while earnings are projected to drop 60% to 2 cents per share. we'll get all those numbers and ceo reed hastings all important letter to shareholders after the closing bell. brian. >> sorry, can i ask a quick question, julia? >> jump in. >> sorry. >> to underline, you save revenues and earnings for last. it almost doesn't matter when it comes to netflix. it always tends to move based on whether or not they've grown subscribers enough for the expectations of the street. >> exactly. for netflix the subscriber numbers tend to have a much bigger impact on where the stock moves than those re knew or earnings numbers. this is a company which has so much expectation of growth baked into that stock price. and what's really crucial here is if you're looking in the united states if they're in half

of broadband households how much room is there to really grow significantly here in the u.s.? there's expectation of massive amount of growth overseas, but how much netflix grows every quarter overseas depends on a lot on where it's launching, which markets its launching in. and this quarter they haven't launched into as many new markets, so we'll have to see what reed hastings says about that and also the last big market for netflix to tackle, which would be china. >> julia, thank you. we'll see more of julia later on. let's get more now on netflix results. you notice i'm not going to call them earnings because i don't know. i know they'll be results. i don't know they'll be earnings. let's bring in michael morris, managing director from guggenheim securities. he has a buy rating on the stock, and yel managing securities a bit more cautious. michael, let us start with you. a lot of things to look at. if you had to tell the audience one or two most important metrics in tonight's numbers, what would they be? >> well, julia touched on it. clearly the market cares about the subscriber growth of this company and the subscriber

growth forecast. i think the important thing though in the near-term is watching the company transition through the un-grandfathering of the pricing process. we believe that the company is delivering much more value to the consumer than reflected in the current price that the consumer pays. and as they work through this process of essentially raising the price, the ability to maintain healthy subscriber numbers, it is certainly becoming more difficult to aggregate subscribers and grow new subscribers. that's a law of large numbers problem. but their ability to move through this price increase i think will say a lot about the value of this product to the consumer and the ability to grow revenue over time. >> neil, you have this rated a hold, what do you say to michael morris? >> yeah, you know, i think the subscriber number is going to be key. our real concern is the subscriber guidance has come down pretty dramatically both in the u.s. and also internationally. and as we look into the back half of this year, you know, we're starting to hit law of large numbers in the u.s. and we've seen what it's done to

companies like pandora when you can't grow that subscriber base, you know, significantly anymore. and also on the international side we're not going to see as big of a growth that we saw last year on the back half of the year. so on the international side that's where the real big growth opportunity is. we're seeing growth slowing down and that's what keeps us on the cautious stance for now. >> michael, sounds like you're arguing there has to be a real shift in the way the street looks at this stock. barron's pointed out said netflix could go down 40% from here that this was a stock with a narrative. that it was the new media. that, wow, this was so new everybody's going to stream some day. guess what, everybody streams. now maybe the multiple just isn't going to be as big anymore. it sounds like you still need to rely on people being quite excited about that narrative, michael, in order for the stock to keep going. >> well, i think ultimately investors care about cash flow and cash flow potential. narrative is great when we're talking about where the company could get to over time. and i think there still is a healthy narrative. i think if you look in the back half of the year domestically

you're going to have the disney content come online. i think that that's going to help enthusiasm from the consumer. and enthusiasm for the investor. but over time the real difference is how much does it cost a consumer for all of this great content? and it is a fraction right now of what the consumer pays for their pay tv subscription. so i think you're transitioning to a stronger economic model domestically. you will see that in 2017 as company generates meaningful profits. and overseas there's certainly going to be fits and starts in individual markets. we've seen it domestically where the company has had stronger growth in certain quarters when they've had key programming come online. and i think you're looking at 190 markets that all present opportunity for this great delivery mechanism. but there are going to be some better quarters and not as good quarters depending on what's being delivered in those periods. >> neil, all that seems true, right? and how much do you pay for it all? >> we have a $109 price target. we think the stock is pretty fairly valued at this point. it's a very expensive stock. you have to see significant

amount of growth to be able to work into the type of really high price targets that some other analysts have. >> do you disagree with everything that michael just said and it's just a matter of how much you're willing to pay for it? or is he getting some of his projections wrong that make you unwilling to pay up? >> yeah. i mean, i haven't seen michael's projections, but we feel like at this point the stock has kind of fairly valued. we do a sum of parts analysis, you know. we apply 28 multiple on the domestic business, five multiple on the sales for the international piece. really we need to see growth in subscribers before we can see that multiple kind of reaccelerate. >> a strong case, i guess one thing i would say is this becoming an amazon.com like stock, michelle, where all the valuation, all the earnings, all the profit, all the metrics, the graham and dodd, warren buffett type stuff we have sort of learned to appreciate, michael or neil, means nothing.

is that the case? is netflix media even though netflix is in media, neil? >> we do cover amazon. the stock has had a tremendous run because they've been able to show profitability. i think the same is going to be for netflix. if they can start to show profitability and also start to show, you know, good strength in the international subscriber numbers, i think the stock will have legs to work. to walk on. but for now we don't see that happening in the near-term. >> all right. neil doshi and michael morris. good discussion on a very hot and important stock. thank you both. >> thanks. susan lee with a market flash. >> let's take a look at shares of restoration hardware up more than 7% today. on friday ceo gary friedman purchased just around 33,000 shares of the company's stock average price of $27.59 a piece. shares still down more than 60% so far this year on basically a surprise loss in the first quarter and also down beat guidance. back to you. >> got it. sus susan, thanks. here's what's on the menu for the remainder of your "power

lunch," the republican convention kicking off a short time ago. how will authorities keep everybody safe with protests, some pro and some con, all over the place. plus a failed coup in turkey, what does it mean for u.s. interests in that region? general wesley clark will join us. you cannot miss that one. plus, we're talking politics and pigskins with the owner of the world's most valuable sports franchise. that's right, jerry jones owner of the cowboys of dallas will be your guest coming up on "power lunch." will your business be ready when growth presents itself?

american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com.

welcome back to "power lunch." i'm michelle caruso-cabrera. thousands of people coming to cleveland this week for the republican convention. a lot of time and money being spent to keep them all safe. eamon javers is live in cleveland covering it for us. i asked you last hour if you'd seen protesters with guns because the open carry laws which permit it in ohio. back then you hadn't, now you have, i understand. >> yeah, that's right, michelle chlgt we just went up to public square, which is about a block from where we're standing right now and we ran into one of the pro-trump protesters wearing a make america great again hat and also carrying a long rifle over his hat. identified himself as jesse gonzaga 26. when i asked him why he brought a rifle to a public protest, he said because i can. he said his second amendment rights are valuable to him and wanted to exercise those rights unless they're taken away from him. that was the first time i've seen a protester out here with a weapon. but that is the thing they are afraid of here in cleveland.

this is an open carry state here in ohio. and he talked to some of the national guard folks here like these guys behind us with the 387th engineer battalion of the ohio national guard. a lot of the law enforcement authorities here are just not happy about this open carry situation here in cleveland. when you see that guy with a gun walking around, it's very difficult to make a determination of exactly what his intentions are. he may be out here exercising his rights, but to police officer or national guardsman in the heat of the moment it will be very difficult for them to get a fix on exactly why he's here and exactly what he's doing here. nonetheless, i talked to jesse gonzalez, he said he's out here to support his rights and to broadcast his message as far and wide as he can. i'll tell you that's what he's doing. after i talked to him about three, four, five other reporters talked to him as well. that's the scene here. we've also got a picture here now of a live protest happening just a couple blocks away from us here. that's over just outside the cue here in downtown cleveland. those are the anti-trump folks who are reaching the cue site now. we saw them beginning their

march. they marched about five or six blocks. what we're told is everything is peaceful and calm over there. and they're simply expressing their rights too. guys, a lot of democracy here on the streets of cleveland. >> they are supposed to stay in controlled areas, right? there's designated protest areas? >> that's right. to have an officially licensed protest, you have to actually fill out a form, there are certain designated parks and things you can go to set up your protest. but they're also expecting there are going to be some people down here who try to push the limits on that, try to go where they're not supposed to go. a lot of these folks out here today did sign up and are organized and law enforcement and authorities were totally aware and expecting them. >> doesn't feel like much of a protest if you can't break the rules. but, you know, eamon javers, thanks so much. >> might see some of that before it's all over. >> listen, you know better than i do, a lot of people plus a lot of cameras can sometimes equal people doing weird things so that they can possibly get on

camera. >> on purpose. yes. like larry kudlow, i was going to throw to larry. go ahead, finish your thought and then we'll get to larry. >> go ahead. well, i was going to say, michelle, you know just as well as i do whenever you get a situation like this which is combustible, a lot of energy on both sides, a lot of heat on both sides, when you get the cameras and social media on top of that, it can be this sort of inflammatory moment. that's what everyone's going to be watching for here. hopefully everyone stays safe here in cleaver land. >> exactly. thanks. let's get to formal advisor to the trump campaign live from the republican convention. larry, good to see you. >> michelle, good to see you. i can't wait for you to get here, by the way. my saintly wife judy and i walked from the hotel to the convention center. it was lovely. it's a beautiful day. and we walked through the square and all i saw were kids holding signs that free market capitalism is the best path to prosperity. that's all i saw. >> i'm sure that's the dominant

protest sign that you see there. >> i'm just telling you. and i went and talked to a couple of them. we had some people, some cnbc watchers, i don't know, just lovely here. >> i'm sure they wanted your autograph. >> not there, but in the hotel we had a few. i spoke to the new york delegation this morning. talked about economic growth, lower taxes and regulations. i also talked about defending the thin blue line, michelle. i really would like to see this convention, and i'd really like to see mr. trump really talk about the need to defend the cops who are brave, who actually rushing to the shooters in baton rouge and dallas and so forth, they are not racist. i'm sorry. evidence shows that. i'm just trying to get everybody here and everybody i talk to, it is time to defend the cops. they deserve it. they keep our safety. and what we have to work on is not racism, it's about the content of our character to use

martin luther king's old phrase. >> yes, everyone remembers that. we had somebody on earlier, beau carroll, there's a group of delegates there called dissid t dissiden dissidents, they're calling them republican dissidents who are still trying to get a floor vote in the hopes that they can get donald trump off the ticket. have you seen any of them? i mean, is there any chance, what are they thinking? >> well, they're thinking they don't like trump. i haven't hit all the delegat n delegations we got here last night. i can tell you this, talking to friends of mine on the rnc, talking to friends of mine on the rules committee, this so-called dissident group is going nowhere. they're not going to win any votes. the party is increasingly united for donald trump. they like trump's messages regarding, you know, the war in the middle east and isis and all that. on the cops and on the growth, taxes and regulation. i mean, there's always a small

group. they're making a lot of noise. i could be dead wrong, michelle. but i will tell you i don't hear it, i don't see it and i don't think they're going to succeed at all. not even close. >> there's been, you know, mainstream media snickering about the guest list or the speakers list of the rnc versus the democratic convention. what do you make of the fact that let's be frank, high profile establishment republicans are not showing up for this. john kasich wouldn't even show up for this to speak at this convention. >> well, i think it's too bad. you know, i regret it. there's always opposition to candidates in these elections. it's a hard fought election, as you know. i'm sorry, john kasich is an old and dear friend of mine. i wish he were here, honestly. but he chooses not to be here. that is his choice. cleveland, ohio, has been a great venue, he's missing it. >> so, larry, without dating

yourself, let's stick with republican, how many rncs have you been to? >> since reagan in 1980 i think i've been to all of them. maybe i missed one some place, i don't know. >> so based on that you have a great pulse on who the traditional republican and attendee would have been outside the delegates from what you've seen so far, larry, how does the crowd or the vibe this year feel? and if different if at all from any of the others? >> well, you know, that's a good question, sully. what i'm seeing off the floor is what i'm going to call, i hate to date us, the same old folks, the good folks who come to the republican conventions and support the candidate. i'm also seeing a lot of what i'm going to call edge, the supporters of trump, the strong supporters, have a lot of edge. they're really, you know, working, fighting, arguing, turning out, pushing it. it's very interesting. there's a lot of spirit. i mean, this thing's locked up. there's not going to be any battle on the floor.

but i'm seeing a lot of strong edge from the trump crowd. other than that i'm seeing people, for example, that really like the mike pence selection because pence reaches out to what i'm going to call traditional regulars, conservative republicans. they liked it. one person said it adds modesty, moderateness, balance to the ticket. everybody was upbeat. this morning i was about and around, and everybody's upbeat. so it looks pretty good to me. >> but john harwood says it's possible donald trump might speak each night. is that a good idea? do you believe that? >> the convention speech which will be the most important speech of his career, is he going to speak on tuesday and wednesday? i don't honestly know, mcc. i haven't heard that, but there are a lot of rumors around. and they're even talking about shifting some of the topics around.

troublemakers like myself want to cover the thin blue line, for example. they're going to do security tonight. that's a very big topic. they're going to do security and the economy. that is national security, a big topic. and of course melania trump is going to speak and her husband is going to introduce her. that's all i know with certainty. >> well, donald trump may not know if he's going to speak every night. >> could be genius marketing if you lack, quote, big names, and you've got the biggest name of all right now in america for a variety of reasons. why not use that person? it's your party after all. in a way. >> you got mike pence, who i think is up wednesday night, correct me if i'm wrong. and i think it's very important to give mr. pence all the attention possible. i really do. now, if mr. trump introduces pence, so be it. but i'm just saying governor pence it's kind of an introduction into the american people. he's a very talented guy. i'm biased here. he's an old friend of mine. he's a supply side free market guy. but i think pence really needs his moment in the sun and let

the whole world see him. and then mr. trump following up on thursday to let the whole world see him and his issues. that's the way i see it. god knows i could be wrong. >> see you later today, larry. >> thank you. appreciate it very much. >> larry kudlow. huge $32 billion deal is sending chip stocks higher today. which other chip companies could be next to get snapped up? that story coming up on "power lunch."

the semiconductor etf, known as the smh, not shaking my head, but smh, surging nearly 3% after the arm soft bank deal was announced earlier today. back to form in early 2011. let's find out ask rog gill managing director at neidham and rodham. i'm assuming you're not throwing micron on the list. who else looks like a tasty target? >> well, we're looking at the m&a environment from kind of four different perspectives. one from a market cap distribution. so companies that are under $5 billion there's roughly 40 publicly traded semiconductor companies under $5 billion.

which we believe is significantly too high. and the over metric we're looking at is companies that have high gross margins, which indicate sticky product portfolios, long design cycles. the third metric are companies that have high op x as a percentage of sales which basically would lend itself to possible synergies when you combined the companies, and lastly valuation. if we combine those four metrics, and we look at kind of a proprietary score card, we're looking at companies that are under $5 billion, particularly companies like melalanox, intersol, these are companies we have no knowledge of whether they're going to be acquired or not just based on framework propripr proprietary score card. >> couple new names. again, we know you're not saying this is what i've heard or any knowledge. based on what they do, trends in the market, maybe valuation,

xylinx looks good to you? >> yeah, if you look where are the bigger semiconductor companies, where do they want to target. you have intel, qualcomm, texas instruments and broadcom slas/v. so the question is what does qualcomm want to do? does qualcomm want to move into the internet of things space and buy a company like silicon laboratories, or do they want to move more to the processor side, data networking site and buy a company like xilinx. as you know their market share has been reduced in the china hand set market. similarly with texas instruments, do they want to consolidate share in the analog mixed signal space and look at a company like intersol, or do they also want to go into the iot space? with the acquisition with soft

bank acquiring holdings, clearly sofbank wants to move into the internet of things space which is about 50 billion connected devices over the next several years will be connected to the internet. >> raj, we're going to leave it a little short. we have some breaking news. we appreciate your thoughts and insight. thank you. now let's get to susan lee with breaking news. >> check in on fiat chrysler once again selling off in the session after report suggesting that they were basically cooperating with the department of justice into an inquiry. looks like they have confirmed this now in a press release. fiat chrysler confirming they are also cooperating with the s.e.c. now into the investigation of reporting of vehicle unit sales to end customers in the u.s., also similar issues and inquiries into these similar issues recently made by the u.s. department of justice. we did have this report coming out earlier on that looks like the chrysler they are under investigation by the u.s. department of justice going back to the civil lawsuit with the chicago area dealer alleging that the company inflated its u.s. car sales by paying dealers to report selling more vehicles

than they actually did. ck the old fashioned stuffing the channel idea, right? >> yeah. this is actually similar to the herbalife story in one way. >> yeah. >> and that is where do you record the revenue and profit? >> right. >> when i sell it to michelle caruso-cabrera, fiat chrysler dealership, or when she sells the car to susan lee, the customer whether it goes to you or to them, and that's sort of where the government had argued with herbalife you have to record it when you sell it to the end user, not to the dealer. that's kind of in a weird metaphorically way that's what they're talking about here. >> right. and stuffing the channel i'm referring to same idea where for example a food distributor would sell a lot of extra cans of whatever to supermarket chains more than the supermarket ever needed, they were going to keep it in storage because it was a very cheap price, but then the producer of that food had stuffed the channel so that way they could report bigger numbers. that's the accusation. >> i'm looking at their statement, fiat chrysler records

revenues based on shipments to dealers and customers and not on reported unit end sales to customers. that is direct response to what was in the media today which is that a dealer or some dealers had argued they were being pressed to inflate sales to people. fiat chrysler saying, well, no, not only did we not do that, but we couldn't have done that because our revenue recognition comes from the sale to the dealer. in other words, it would have no benefit for us to say pretend you sold more cars to a customer. i think it's fair to say in technical terms it's on. you know what else is on? trading nation. let's take a look now at bank stocks amid their earnings, stacy gilbert options expert, chad morgan lander, fund manager with stifel nicholas. chad, we had some good numbers, decent numbers but overall sector been a disappointment to sectors. when and what is going to change the story for financial stocks? >> financials will start moving higher when the yield curve starts to normalize. you need the long end of the yield curve, take for example

the 10-year, to go above 2%. at the same time the critical thing here is a normalization of central banks. as the federal reserve starts to raise interest rates, albeit they don't need to raise a whole heck of a lot, then that too will be a plus for financials. with that said, credit quality looks good for the financial sector, the big banks. and as well credit demand here in the united states is starting to pick up a bit. so we actually think the financials are undervalued. and as a value investor we would be now accumulating shares. >> okay, accumulating shares as a value investor across the financial spectrum. thank you. stacy gilbert, when you look at the options side, is there any indication that maybe more people feel like chad and they're gaining some interest in the bank and financial stocks? >> hey, brian. unfortunately, no, we see no evidence of investors shifting their sentiment. if we look at it from an etf perspective, financials have actually seen the largest outflows year-to-date. you've got about 6.3 billion that have come out, the aum of

financial etfs is down about 21% when you include performance. we have not seen any change in acceptabilitiment there. when you look to the options there is nothing suggesting investors are positioning for this shorter term rebound. to chad's point, i think chad was talking about a lot of stocks that he's actually suggesting. the options a lot of times would be looking for more of a short-term play here. we don't see any evidence that investors are moving to the etfs or moving to the options looking for anything that's going to rebound quickly. >> all right. little different side there from the options side. stacey, thank you. chad morganlander, thank you. for more trading nation head to our website at tradingnation.cnbc.com. oil is sliding today. let's get to jackie deangelis with the latest. >> good afternoon, michelle. intraday we went under that $45 mark, $44.86. but we did close higher over $45. that's because that's a key technical and psychological level right now but it does seem to be the sweet spot right now for oil prices. remember and look back to the charts for last week. we had these twinges -- swings

5%. that's what traders think will continue for the next couple of weeks the choppy kind of trade in crude. dollar index hanging out around 96. not impacting trade right now, but i will say this even though people complain on twitter about gas prices $2.21 the national average, it's still better than $2.76 a year ago, guys. >> it sure is. i like it better when it's lower. thanks, jackie. beaten down stock one analyst thinks could rally as much as 70%. we'll have that name and four other opportunities coming up in street talk.

welcome back to "power lunch." i'm julia boorstin in los angeles with the latest on the sexual harassment lawsuit against fox news chief roger ailes. now, today the new york magazine circulating a story saying that roger ailes will be fired or pushed out from his position running fox news. now, 20th century fox just issued a statement saying that this is not yet been decided. saying, quote, this matter is not yet resolved and the review is not concluded. now, in response to this story saying the murdochs have decided to remove roger ailes, gretchen

spokesperson said they would not comment though spokesperson said gretchen's lawsuit continues and will continue no matter what happens to roger ailes' status at fox. so there you have it the latest on the lawsuit against roger ailes. and we'll of course be waiting to see how this investigation unfolds that fox news has been doing. back over to you. >> all right, julia boorstin with that developing story. julia, thank you very much. all right. it is time now for street talk, our daily dive into the key analyst calls of the day. here we go. first up, groupon piper jaffry upgrading groupon to overweight from equal weight. target goes to 6 from 4. hey, groupon is narrowing its product focus, being more regional. company been ramping up marketing spin. and the analyst says that while the street is modeling for the marketing ramp, it is not accounting for the gross profit generation from newly acquired customers, adds groupon excels that the local deal by the way, michelle, $6 price target on a

$3.89 stock is about a 60% to 70% upside move. >> moving 11% today on that call. you can see it on the two-day chart. the second stock is coach. aspirational luxury brand baird upgrading the retailer to outperform from neutral. the analyst raising upgrade on recent consumer survey -- i'm laughing because i think this is very funny, pointing to increased demand from women for -- >> handbags. >> handbags. did it ever die? i don't know. baird raising the price target to $350. that represents about 18% upside from friday's close. >> help me out, i was listening to "squawk box" in my car this morning, you were hosting. >> yep. >> i went to get a coffee, i came back to my car and you guys were talking about pink leashes or leashes with -- what was that? i missed the frame of reference -- >> oh, saying they called it a leather goods company. >> and quickly spiralled. >> and something about a collar for andrew or his dog, doesn't have a dog -- >> it went from leather goods to leather goods.

>> to thoughts, thank you. that explains it. buckingham research upgrading toll brothers to a buy. they raised target on tol to 35, that's about 30% upside. they said after the stock underperformed peers it's now attractive from a value perspective, add so softens in metro areas like new york is a big concern, but investors too pessimistic about this and overlooking positive developments elsewhere for toll. they see 60% upside in a bull case, 12% downside in a bear case. by the way in the same call they downgraded kb home to a neutral. monster beverage, wells fargo downgrading from market perform to outperform, firm doesn't see much near-term upside given potential for q-2 earnings miss. talked about lack of innovation, growth overseas they think may suffer because of macro policy concerns around the world. so that's one of the reasons -- there are a couple reasons why.

their price target on the stock $164 to $166, which by the way is still above where it trades right now at $155.70 a share. >> yeah, not much. but still up there. haven't heard about this company in a while. stock number five, as always your smaller cap under the radar name, this company i'd never heard of, fairmount santrel holdings. it's actually an ohio based maker of resin coated sand products for the oil and gas and sports industries. think smoother, softer rocks under artificial turf and the sand they've put in to frac. >> i see. >> yes. so they were upgraded to outperform from market perform. they say wells fargo by the way did that they say the company is facing some balance sheet constraint but with growing expectations for higher oil prices and a recovery in enp, the issues are more manageable. they note valuation is still attractive even with the big run this year. their range $8 to $9.50 for the stock. so about 15% upside seen by

wells fargo. this was a $15 stock when it went public, fell down to a buck. >> when oil was at 25. >> and everybody associated with oil was going to be permanently doomed. so fmsa, i figured ohio company given all the ohio focus these days. >> lessons you learn over and over about commodity cycles, right? i mean, at the peak you got to get out. and when things look the worst and, oh, your stomach is just in knots, that's the time to buy. >> wells fargo says do it. they upgraded. with that we wrap up street talk. let's get back to a serious issue, failed coup in turkey taking a big bite out of that country's stock market today. but what if anything does it mean for american interests in the region? a big interview coming up with general wesley clark. stick around.

welcome back to "power lunch." i'm michelle caruso-cabrera. turk turkey's main stock market down 7% today. investors concerned about more instability possibly coming in that country. and if you were going to invest in turkey from here in the u.s., one way would be this etf ticker tur, the msci turkey index lower

by 6% at this hour. the yield on the turkish 10-year bond soaring today to 9.5%, however, when you look at the one-year chart you can still see it's lower than it was a year ago. yields all around the world have fallen. turkey's allies, fellow nato members, world leaders offering spoth to president erdogan to turkey following the failed military coup last friday. but the backing has come with warnings. the uprising is not a blank check for turkey's leader to do whatever he wants against the nearly 8,000 people arrested in the wake of the failed overthrow. here now to discuss more is former nato supreme allied commander general wesley clark. general clark, good to have you back. >> thank you, michelle. >> what do you make of this massive crackdown by erdogan? thousands and thousands of people arrested. >> well, it's like he said, it's an act of god that gave him the opportunity to move toward a more authoritarian government. that's the way he sees it, at least. and so i think all of our nato partners and the united states is very concerned because we want turkey to proceed in

accordance with the rule of law here. not for personal vengeance but rather to establish a solid, constitutionally regulated democratic government in turkey, or to sustain it rather. >> we had a representative on earlier who was concerned that the response from the united states had been tepid in their support of democracy over in turkey. i mean, how do we deal with the fact that you have somebody who was democratically elected but every day that goes by acts less and less democratically? >> yeah, it's a real challenge. what we know is that we can't control other countries. we tried that the in the region, didn't work very well in places like iraq cht can't overthrow governments. that didn't work very well against bashar assad. can't really get rid of autocratic, that didn't work against mubarak. so we're doing everything we can to persuade erdogan not to continue to centralize power. but ultimately he is the

democratically elected government leader of turkey. and he's going to do what he can do. and that's the direction he wants to head. so it's going to be a continuing effort by the united states to slow down this move toward centralized and greater presidential authority, i think. but ultimately it's turkey. it's turkey's choice. and if that's what their people want, the united states is not going to be able to stand in the way of that. >> i saw you on tv on friday night. you were watching everything that happened. and there were a lot of discussions about how hamhanded this coup was. do you have any doubt anywhere in your mind that maybe part of this was orchestrated to give erdogan an excuse to centralize power even more? >> well, i'm quite sure that the people who -- i shouldn't say i'm quite sure, i don't believe that the army officers would have willingly done this to give erdogan an excuse to crackdown.

i do believe it's possible that the people who had been arrested might have known that a crackdown was coming. and they might have tried to take preemptive action to avoid it, hence the coup was very professionally executed because maybe it hadn't been prepared. and it's also possible that perhaps the coup was instigated by some of the turkish intelligence agents to sort of sniff out who would be opposed to erdogan and surface the name so they could be eliminated. you can't rule out any of that right now. but one thing you can rule out the united states government certainly had no role in this. >> uh-huh. there's no issue with turkey ever not being a member of nato as a result of anything that's happened this week thus far, is there? i mean, is there any question about turkey remaining a member of the nato? >> absolutely no question. >> okay. general clark, thank you. former nato supreme allied

commander general wesley clark. coming up, the dallas cowboys recently valued at $4 billion. we're going to talk to the man who owns the team, jerry jones, about football, politics, much more. stay with us. sic plays througho♪ the first stock index was created over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. rebecca barlow was running a nanny company when her husband of 13 years suddenly passed away, leaving her to manage his failing water damage business,

acme flood. she rebuilt the company from scratch, which is now grossing more than $2 million a year. for more watch "your business."

your business needs better technology to drive better performance. so you need it to be reliable and fast. really fast. introducing the comcast business summer savings event. fast internet speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. get some of our most advanced products at a great price with over $500 in savings. call today and ask how to get these savings plus a $250 prepaid card. comcast business. built for business.

all right. a couple of stocks to be on your radar. twitter. ross, a former executive of yahoo! telling a halftime report guys he thinks that the company could get bought in the next couple of years and still issues and that alone helping to move the stock up 3%. $18.67. >> interesting because it's a discussion we have all the time about the possibility that that stock could be bought but he's got credibility and so hence why it moves the stock but so far it's not happened. bank of america. another stock on the radar screen. reported earnings this morning, beat second quarter earnings. net interest margin compression down more than people expected and the theme this quarter anyways coming to the banks. you can see it's lower by -- excuse me, higher by 3.5%. year to date down 16% an moving higher by 50 cents, $14.15 in

the wake of the earnings this morning. dallas cowboys owner jerry jones. don't move. you've wished upon it all year, and now it's finally here. the mercedes-benz summer event is back, with incredible offers on the mercedes-benz you've always longed for. but hurry, these shooting stars fly by fast. lease the gle350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

dallas cowboys taking the top spot of the world's most valuable sports teams, get this, valued at $4 billion. more than the soccer team real madrid. jerry jones, owner, president and gm of the cowboys and joins us from arlington, texas, here to take an announcement with

something to do with boxing, why are you making a boxing announcement? >> well, first of all, when it's the caliber of fight that alvarez and smith is, that's a big deal. and what i've tried to do since we built this stadium is have the great sport events, great events. if you will. to me that's what makes madison square garden. this, for instance, canelo is a hero in mexico. we have such a great fan base here and we know that he will be enthusiastically supported here with this fight. and of course, this will be a championship fight. and he's one of maybe the best fighter that's out here fighting today. we're excited about it. that's what we're all about, hopefully. >> will you break any records with that fight? i don't know the most attended

boxing match is but this has to be close. >> we had 50,000 for pacquiao and then 45,000 for either first or second fight there. those are the only two major fights we have had here. and yes, with the draw and the support that canelo has, as a mexican, then i think that we'll really take it out the top. we have a real advantage because we drop our center hung board. we drop it right over the ring and so he's 70 feet tall with that right over -- hanging overhead there. and so everybody gets to see the sweat fly and baby blue eyes. >> 70 feet tall standing on the stock of 4 billion ones the team and the company are worth there. michelle has questions of politics and i want to ask you about football for a second, though, because you're active spenders in free agency. $50 million as of last count. vaughn miller, $70 million, the

richest defensive player in history. what do you make of that contract and do you feel like that sports, especially defensively back contracts, are now we're going to launch into a new stratosphere? >> well, the key thing to remember is that everybody just has so much. and truly an allocation. what you spend there you don't have to spend at safety or to spend at runningback. so it's just an allocation of the dollars. on the other side from him is demarcus ware. that left our team three years ago. we didn't want him to leave but we had to make an allocation. so the point is it's -- the management of what gives you with the makeup of your team the best chance in free agency. >> was that a good or bad deal by the broncos? >> i don't think so. i think that vaughn miller is a difference maker. it certainly was a bold move but

it shows just how important pressure is. and winning football games. wade phillips, their defensive coach and arguably should have gotten most valuable player in the national league last year. he did a great job of using the skills of where and where vaughn miller and manifested itself in the super bowl. >> mexicans love boxing, jerry. it's michelle here. i want to ask you, tell me about the finances of this fight. how much money are you doing to make? i assume a piece of each ticket. how does it work? >> well, we have a big job. we sell the tickets. and so, it's important to us for the biggest reason is to fill the stadium up. this stadium will go to possibly 1 million or so people or more and pay-per-view and worldwide it's free and the presentation of the stadium, the event, all

of that is important to us and gives us added incentive to have a great fight. >> are you getting a cut of the pay-per-view? >> no. we don't. no, we don't at all. we basically get ours off selling popcorn. >> got it. okay. >> jerry, how could i not ask you about deflate-gate? tom brady said he's done with the fight. what is your take on it? >> well, i think that one thing that we have invested a lot in that we all live by is the power of the commissioner. now, i have had that heavy hand put on me many times. and throughout my 27 years. recently, they took $20 million, commissioner took $20 million, when there wasn't a deal to take 20. he decided to ooen even it up a maybe had an advantage. we want him to have that kind of

power. if deflate-gate, which moves away from the balls being tampered with, moved away to the commissioner's power, i'm pleased that was ratified as to the commissioner's power. >> jerry jones with the boxing match and everything else, we appreciate your time. good luck. thank you. it's been great having you. thank you for watching "power lunch." >> "closing bell" starts right now. hi, everybody. i'm kelly e vanls at the new york stock exchange. >> happy monday. i'm bill griffeth. a $32 billion deal in the chip space to tell you about. japan's softbank buying the uk's arm holdings. they say arm holdings. we'll say both. could we see more of these deals overseas, especially given what's happened to the british pound since the brexit vote? david farber joins us with that. earnings in the tech