they know they're getting screwed. and that is what i think will happen. and it's just what i said. it's sort of open and shut. how do you have business exist? how do you have people put money in -- i own 20 companies, i got 93,000 workers and i take chances and i'm scared to put more money into equipment and manufacturing because i'm frightened about what the epa is going to do to me, what the ftc is going to do and on and on and on. i don't think they're bad people of the epa, but they look at -- or ftc, but they look at that as their mandate. and they're not really interested in the economy. and you have to reign them in. you have to tame them. so i just say to me if you just look at the question at hand, you should really see trump win. but i agree, scott, the last week he just sort of blew up.

basically, i think, that they were taunting him yesterday. i think they were trying to see if he would blow up again. i mean, you know, that whole thing was staged yesterday at that speech. at least in my mind. >> he did -- >> didn't take sherlock holmes to see that, you know? >> he did manage to hold his tongue and maybe speaking with a teleprompter helped him do that. i have the feeling the archie bunker line is going to live on in infamy, that's another conversation in itself. >> what do you mean innin father and mother -- infamy. >> i don't immediamean that in derogatory way. let's clean it up. archie bunker is a middle class guy, somewhat educated even that doesn't know where his next check is coming to send his son or daughter to school, doesn't know if he's going to keep his job, he's a bright guy and he

reads the stuff today. it's not like in russia where -- and why the hell should he vote for a system that is not giving him a good paying job? you know that's true. i don't think anybody's going to argue about that. yeah, you have jobs. by the way, it's going to even hurt the economy some of these jobs because even there -- hey, these service economies, i still question the pundits that said, oh, it's great, we're a service economy. what does it do? what does that mean? we sit around and text each other, what do we produce? and eventually who's going to take our paper? we're living off imports that everybody loves the dollar, but sooner or later that's just going to blow up in one week. i mean, it's going to happen. it's happened in history. i don't think it's debatable. i don't even think the economic gurus of the democratic party are going to debate the fact that we must be able to compete. and even in technology we really don't because if you think about

it we make the iphones in china. so the only thing we do is send messages to each other and say isn't that wonderful sit around all day and text each other. and go and send tweets to each other. and how do we compete as a nation. it's like a family. everybody just sit around the mansion and just play pinnacle with each other -- >> let me ask you this. i think it raised a couple eyebrows, at least, when mr. trump's economic team was laid out and there was the steven moores, the mnucins, some people very well known to our audience. one name not on the list was yours. >> okay. let me address that. because i did. but it obviously wasn't picked up. the only reason i didn't go on that list, and didn't accept it was the laws are such that if i

do my own pac or my own super pac, i can't really be an integral part of the election team. so that's the law. so i wanted to keep my options open to do a pac about just what i'm talking about. about what's going on with the epa's and the ftc's and all of them. they're not bad people at those agencies. they do what they're trained to do and asked to do by the government. but i want to be able to -- if i can help, if i think my millions of dollars are going to help in a pac to say what i think, but i don't want to just give money to a pac, i want to be part of saying what i believe. that's always been my nature. >> but are you -- >> and as we speak i am working with some people that are putting a pac together and deciding if i can make a difference. but i want to keep that option open. and they didn't need me. i mean, those guys are real smart with trump. the speech writers great speech

writer. steve is a great speech writer and doesn't need me to explain what i'm saying. it's sort of to me as many truths are where you really do make fortunes, they are simple truths if you deduce from what the facts are today. the facts are today that we as a nation don't produce. as i've said before -- and by the way, if you look at what i consider to be very, very smart guys, smart investors, they all feel sort of what i feel. that we are not producing as a nation. we're fooling ourselves. and the stock market is a mirage. that's all i can say. i'm not the only one saying that. >> sure. >> just a lot of very smart guys saying that. >> if you're not officially on the economic team, are you informally advising mr. trump on -- >> i want to be careful what i say about that. do i talk to him?

do i express my views to him? yes. but i am not officially on it and i am not part of the decision making at this time. you know, i could obviously be invited to join it. but i think i could do more good this way if i choose to go that way. if i think it's going to make a difference, i'm willing to put in millions of dollars myself because i think it's extremely important for this country to see trump win. only because i have nothing against hillary clinton. you know, i'm not going to get into personal thing about her. i said that several times about my pac. i'm not getting into personalities. and i really think that and maybe that is a little bit of a disagreement i have about it. you don't do personalities here. there's enough. people do know what hillary clinton's done. you don't have to bring it out. but people don't understand the problems with our economy. that is something that's not hard to educate people to. people do know many, many, many

millions of people do not have good jobs. they do know that. but they don't know why. and i'm making it simple why. the regulatory agencies and other pacs are just scaring the hell out of them. >> what would your reaction to be to those who say, look, we've looked at the numbers of what the trump plan to this point appears to be, it will increase the deficit dramatically, it will throw the u.s. economy into a recession, it will create far fewer jobs than hillary clinton's economic plan. what do you say to those who make those sort of accusations after they've crunched the numbers themselves and? and we're not talking about -- >> i know this is going to shock you, maybe, and i'm going to tell you that in our economy today when you have no inflation, the deficit is complete total red heron. it didn't bother reagan, did it?

and it worked pretty damn good. and reagan spent any more than any other president i believe. when we got out of the depression, the war brought us out of depression we had one hell of a deficit, but we spent money and created jobs. you have to spend money to get jobs. a country is not a business. a country can borrow money because if you borrow in dollars, you don't have somebody -- you don't have to worry you pay them back. all you have to do is become a productive economy. and it pays itself back. as trump said yesterday, you pay yourself back because you become productive. you get people working and the taxes will take care of themselves. even if you reduce taxes. and you look at history. i don't have to say it. it's so obvious. it's amazing to me that if you keep something long enough, long enough, we can't have a deficit, can't have a deficit, i'm talking against i know the right wing of the republican party in

saying that but i disagree with them. i don't think the deficit is a major problem. ironically there i agree with a guy like krugman but i don't agree with krugman on saying that the democrat -- that the party government should have a say. you should not have a say in how manufacturing productivity operate. a government should sort of leave that part alone. but the government you must have fiscal stimulus. and we need that today. you must bring back jobs. we can't keep going sending texts to each other. i mean, that's sort of simplistic. everybody you walk in on the street are out there sending, you know, text messages. so that's like saying the family, you know, you got a family that's a wealthy family for a while and all it does is keep buying m ining mazaratis, t sit around the pool and play. you can't have that. i've said enough. >> no, it's okay.

the next program, "power lunch," has been very generous with their time in giving us an extra ten today. i'm going to let you run. but you think trump's going to win in november, still? >> i'm very hopeful, yes. i think if he sticks to what he did yesterday, i believe he will definitely win. if he doesn't, hey, i agree with you, scott. what happened last week, i can't say it's unforgivable. people make mistakes. come on, people are human. and trump is human. but he's a very smart guy. and i think he understands the mistakes he made. and hopefully that's not going to happen. and that's what i'm saying. but i do agree. last week there were mistakes. >> carl, thanks so much for your time. i appreciate you calling in. i know people will be talking about this one for a while. >> okay. thanks. >> carl icahn. i'll send it now over to tyler mathisen. as i said, ty, you guys have been generous here with letting us go overboard a bit. >> we are always happy to share our time with you and carl icahn

who never fails to both provoke, amuse and explain. interesting sort of lots of movement there from archie bunker to a nation of texters and so on and so forth. >> there was something for everybody in there. >> something for everybody in there. all right, scott, thank you very much. tyler mathisen here. melissa's here. brian is here. and becky quick is here too. we'll explain that in just a bit. >> hi, guys. >> first, news alert in the bond market. we're glad to have you. rick santelli is at the cme. >> well, tyler, the first of 62 billion in supply, 24 billion three-year notes, yield at auction 0.85. well below the bid and bid side offered. b as in boy is the grade i gave this auction. 2.98 the bid to cover, almost three times oversubscribed to. that's since 2010, only metric

light, tomorrow of course ten-year notes 23 billion and that will begin the important auctions at the long end of the yield curve. back to you. >> all right, thank you very much. got a lot to get to this hour, but let's start with one of the big stories of the day and week, and that is walmart's $3 billion bet on jet. jet.com. i've never heard of it. lots of people have though. our own becky quick sat down with the ceos of both companies and joins with the highlights. hi, becky. >> came from your hometown. >> is that where it's -- >> it's based out of hoboken now. >> what? >> i'm going to hook you up. >> son is the vice president. >> as tyler mentioned this is walmart and jet.com. and each side gets something out of this deal. for walmart it's an instant dose of e-commerce expertise from an online retail pioneer. jet.com's founder also founded parent company of diapers.com which he sold to amazon for over half a billion in 2010. for jet.com aside from the $3.3

billion purchase price, also gets haft. >> gives us scale overnight. hundreds of billions of revenue and incredible purchasing power. i think the 3,400 store network is a really powerful asset for any company to leverage too. >> what walmart's ceo didn't talk about today is how this might impact walmart's guidance for the year and beyond. that's because the company is in a quiet period before earnings release next week. now, walmart has run into some trouble with the street in the past. when it's spending for future initiatives made a bigger impact on earnings than the street expected. look at the stock chart. you're going to see back in october, 14th, pretty easy to pick out because it's the cliff the company falls off with shares. mcmillen joined us on "squawk box" that morning. later that morning he told analysts how that would cost the street and their earnings. and the stock sold off very sharply. in fact, the dow component lost 10% just in one trading day. since then if you continue to

watch the stock though it's climb pretty steadily as he's rebuilt the relationship with investors and continued to put up strong results. in fact, six quarters of traffic growth in the stores in seven consecutive quarters of positive same-store sales. walmart can't talk specifics ahead of earnings report next week, but mcmillen did talk broadly about the economy today. and there's some good news there and some bad news. >> we've got currency pressure. we've got help from fuel. food is deflating. i think first quarter we were down about 16 basis points in food deflation. so we'll never get all those things lined up in our favor at the same time. but low fuel prices do help. and hopefully we'll see those stay down for a while because that's what our customers need. >> so stay tuned for more, guys, the company reports on thursday and we'll have a better idea then. >> a lot of analysts bullish on walmart in terms of possibility for e-commerce are saying that the stores are basically amazon's warehouses. they just haven't leveraged that yet. is there sort of a vision out there now as to how they'll leverage the company's stores and how that could be an

advantage over just amazon's warehouses? >> yeah, they won't talk specifically today. but they did say a lot of the back operations like that are things they're really hoping to leverage and use more. jet.com also had some new algorithms and things it's using. for instance, as you're shopping if you put a jar of tooth paste in your cart, they'll tell you it costs six bucks. if you add something like bleach or something else to it and they can find the same distributor to send it to you in the same package, they'll give you a discount on each. >> that's got to be what they're buying. there's no way walmart needs a website which is very unsophisticated. it's a money losing business. walmart has plenty of products, plenty of market share, plenty of power with their suppliers. it's got to be a back office algorithm that they're paying for. >> and look mark and doug when they met last year apparently hit it off really quickly. they met at walmart's headquarters and mcmillen said the two of them started writing with a whiteboard. he wouldn't tell me what they were writing but started

shooting off ideas what they could do and do together. >> quick question i could ask you or the next guest. but walmart's online revenue is 7% of its total? >> yeah. >> how does that compare with jet's revenue? >> well, jet's revenue is big but there's no profit there. they've been losing money every month when they started this. first started out to charge a plan of a membership fee of $50 a month. they soon found out they couldn't charge that. that was they're only way to profitability, now they're saying it's only through scale. if they get up and running they'll have thin margins but -- >> walmart make like a grocery store. >> by selling the company. that's how you make it up. >> becky, thanks very much. good to have you with us in the middle of the day. let's bring in cnbc's contributor jan niffen, worldwide enterprises and ken perkins equity analyst with morningstar. jan, how do these companies fit? do they fit well? is it one plus one equals five? or something less than that? >> well, at the moment they don't fit at all. but they're going to fit really

well as they get this rolling. because walmart desperately needs to be more competitive with amazon. and jet is directly competitive with amazon. and so far they've been about on average 18% cheaper when you buy something from them. yes, i know, you're going to say they don't make any money. amazon doesn't make any money online either. so, yes, is that a problem? yes, but walmart can help them be more profitable. they've got huge buying scale. and they're going to be able to use 3,000 stores one of these days as distribution centers. they don't have that ability today. so this is going to put walmart much more into amazon's camp directly competitive. that's something walmart's been trying to be for a long time. and failing. >> ken, does this in any way change your view of walmart's stock? you've got a hold on it. it's trading right now at 73. you have a fair value estimate on it as 75. does this lever that up, down or just right where it is?

>> i don't think it really changes our fair value a whole lot. we've maintained our $75 fair value since the selloff last october. and our view's always been walmart of all the traditional retailers probably has the best shot at competing with amazon. the reason is if you combine walmart's store base with their distribution assets, they're very competitive. the real challenge is getting the demand onto their website. and i think jet is something that will help them get people to their website, buying groceries and then hopefully moving those consumers to bigger baskets in general merchandise. >> the g word is key here, walmart has online delivery at about 40 of its stores from some of the analyst notes that i read this morning. ken, two questions, how much of this is indeed about grocery sns and, two, do you view this as an admission from walmart that their current dot com strategy has failed or at least isn't succeeding the way they want it to? >> i see -- >> jan, you can respond right after ken.

>> i see business is complementary. jet has groceries, if you think it's better in the hands of walmart than a competitor like amazon which is moving to the space. and i do think groceries are very key for walmart. that's the one area where it's costly for amazon to move into particularly with fresh food. and so if walmart can drive consumers to its website via its online grocery business, that's the opportunity that they can then move people to general merchandise and really turn on the flood gates to compete with amazon. >> jan, jump in. >> i agree with all of that. and i think it's a long-term play. i mean, walmart has told us they're disappointed with their online. it's not like we're going to have to make this up. doug said that. we know that's why they're buying jet. they think that's going to make them more competitive with more millennials, with higher end customers, there's a whole lot of things that brings to the table. it's certainly a long term play. i don't think anybody thinks in the short term this is going to move walmart's stock dramatically. maybe amazon, es won't move

walmart. any event they think this is a long term play, if i'm right 50% of sales will be online in 13 years, walmart has to be an enormous player online. it's not growing fast enough for them. jet will help that happen. >> right. okay. jan, ken, thank you very much. we appreciate you both being here. >> thanks for having us. >> thank you. well, oil's given back some of yesterday's gains hovering right now. take a look at the chart. 32.6 -- excuse me, 42.66. next guest sees a bottom for oil at $35. the head of morgan stanley's energy and commodity research stops by next. real is touching a ray. amazing is moving like one. real is making new friends. amazing is getting this close.

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we may be going back to another opec meeting next month because once again some opec members are calling for a meeting to come together on supply and prices. this as oil seems stuck at a range between $40 and $50 a barrel for the last few months. we know past meetings have not worked well. will they now? adam longset head of commodity research at morgan stanley. he joins us now. adam, clamberings again for a pseudo opec meeting. do you think they'll be able to get anything done and move prices higher? >> i think you'll hear your usual headlines on this, but i wouldn't expect anything material to come out of this. the way to think about opec

nowadays is they do believe they are a central banker of oil. so just talking can move the mark market. i think it's supportive of creating a bit of a floor but wouldn't expect any action that changes fundamentals. >> what will then change the price of oil materially in either direction? >> well, we've seen a little balance on just some short covering in positioning. the problem i have is i don't think we're fully out of the woods yet. there's a number of headwinds. we're still oversupplied. and one of the biggest challenges that we've seen and it's been talked about is this major oversupply in the gasoline market and a market share war on products that really ultimately needs to be resolved to get some visibility into the recovery. so i think it's a question of do we send the right signals to fix that and then ultimately just time healing markets. >> so, adam, you see oil averaging $40 in the fourth quarter, but you also say it could trade as low as $35. >> correct. >> from here to the fourth quarter what is the driver to the downside? what do you see is causing that?

is it production coming back online because producers are lulled into this sense that there is a floor under oil right now? >> it -- to simply say it's all of the above, the challenge is we've had supply come back particularly out of canada. and that will show up in some of the weekly numbers we see going forward. so the bullish trend we've seen in the past or earlier this summer is likely to shift more bearish. that's separate from a global dynamic where i think the real challenge is crude oil demand although end market demand for gasoline and other refined products is relatively okay. i wouldn't say it's spectacular. it's slowed a bit, but it's okay. crude oil demand from refiners is really where the challenge is going to be. just dealing with this product oversupply. and that's more important. we've seen a big divergence. crude oil demand is underperforming. and the importance of that is that a refiner is the real consumer of crude oil, not you and i. and i think that will be our

catalyst. >> how long, adam, do you think oil will stay at the level you just described, the 30s, mid 30s or whatever? and what effect will that have on some of the smaller producers, some of the smaller companies in the business that felt a lot of distress last year as things fell down? how many of them are going to hang on, how many are going to fall apart? >> well, the ironic part is the cycle's progressing. so we still see the market rebalancing by the middle of '17. that's the good news. the challenge is you're in this quagmire of a range bound and volatile market. i don't think it's quite as bad for some of the producers as the headline might suggest. you've seen it coming out of earnings, these companies have done remarkable things. and necessity's the mother of invention. so we see companies who are saying, hey, we'll grow at $50. we'll add rigs today. so it really is a differentiation between haves and have notes and a race to improve your cost structure. so steadying in this range has

more to do with the global dynamic and oversupply in the market than the health of companies. and i think many, many of the u.s. companies will ultimately be fine and come out winners on the back end of this. >> all right. adam, thank you very much for being with us. adam longson, we appreciate it. >> thanks. there have been kronuts, remember them? and tur duckens. get ready for at whopper-rrito, a whopper and burrito. will that bring customers back to burger king? that story straight ahead. ing t. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪

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hi kids. here's a modern day fairytale. a hamburger and burrito went online to a imaginary food site, they both swiped right and then they fell in love and before you know it out popped a little joy that was just enough of both of them. except this is not a fairytale, it's real, minus the online food dating. burger king rolling out their whopper-rrito which is the son of a burrito and a whopper. >> you son of a burrito. >> a son of a burrito, you're delicious, but you don't listen. it will be offered for a short time in all stores for $2.99, guys. they're maybe going after chipotle, maybe after qdoba, jack in the box owns qdoba. chipotle's got a burger company now called tasty burger that's coming out. everyone's going after each

other. your thoughts on the whopper-rrito. >> would you eat it? >> s-o-b, son of a burger, i like it. >> i would try anything but burger king and its parent company has tried everything. if you take a look at the stock price performance year-to-date, it's actually the best performing burger chain. i mean, it owns tim "halftime report" -- horton's as well. >> jack in the box has done well as well. >> that's who that -- jack in the box has done well. >> you know why? >> they're trying new things. >> jack in the box their management probably would like me saying this -- >> qdoba is why. >> remember mcdonald's said we're going to be healthier and sales fell off the cliff? jack in the box is three burgers on a pretzel bun with extra mayo and throw in a taco. they're not pretending to be

anything other than they are. >> that's true. but their pillar of growth has been qdoba, which is a burritbu hence whopper-rrito. >> it makes sense. we got to bring them in now. >> i'm all for a taste test. >> you like my fairytale? >> i liked it a lot. >> griller might economist. >> ye-- might exist. >> notice i didn't put e. shares of lionsgate down this year, the company betting on tv to turn things around. our exclusive interview with the vice chairman of lionsgate. that's next on power. it's time for the your business entrepreneur of the week. on june 27th dstlb became the first company to raise capital through the newly equity crowd funding. customers were now given the chance to own part of it. find out if the owners raised the money they need. for more watch sunday mornings

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hello everyone. i'm sue herera. here is your cnbc news update for this hour. turkish president erdogan meeting with russian president putin in st. petersburg. afterwards erdogan said that the two nations can rebuild their damaged ties and make them even closer. promising to back major energy projects with russia. he repeatedly called putin his dear friend. the voyage data recorder from el faro, a u.s.-flagged

cargo ship that sank has been recovered from the ocean floor. it caps a ten-month long effort to retrieve the recorder. nbc news reporting the trump campaign has yet to spend a penny on tv advertising during the general election. hillary clinton's campaign has now spent $52 million in ads. and outside groups backing clinton have chipped in with another $39 million. pro-trump groups lag with only $8 million worth of ad time purchased. basketball icahn michael jordan pledging $5 million to the smithsonian's new african-american history museum. it's the largest donation from a sports figure to that museum. he also gave a chicago bulls jersey that he wore during the 1996 finals. the museum will name a section of its sports gallery the michael jordan hall. that's the news update this hour. i'll send it back to you guys, melissa. >> sue herera, thank you. now to a big player in the entertainment business. lionsgate shares rising today and up 10 cents since reported

earnings. investors now focus on the synergies of lionsgate big deal. here for "power lunch" exclusive is vice chairman of lionsgate. michael, always a pleasure to see you. >> nice to see you. >> your last quarter driven by strength in tv. how does that continue to evolve with the starz acquisition? how does that help your business? >> we think starz, for one thing we love the subscription business, we love what they're doing over there. we think this is a terrific asset for us and a way for us to make a bigger play in television. because starz really at its core is in the high end scripted television premium business and we want to get bigger in that space. >> i mean, the knock, if there is a knock from investors and analysts that earnings are lumpy before you're viewed primarily as a movie house and so therefore dependent on what hits you had and when they're released et cetera. does that give you more visibility into earnings? >> it does. the real interesting thing about

the starz asset for us is the reliability of cash flows. we love the idea that, you know, every month in, month out, you're going to have subscription revenue coming in. the idea that you can take this combined company and increase your output of product of content, i mean, we're becoming a giant content machine. if you take a look at what lions gate has on the production of movies and television production that we have, in addition to what starz has, it's about $1.8 billion of new content creation a year. >> what percentage of your revenue today is television-related? and what -- versus movies. and then how do you see that five, ten years from now? >> depends on what bucket you put starz in. i would put starz in the television bucket. >> i would too. >> so it will be a giant portion of our business. again, it's about a third of our business right now. we said it was going to go to about half. if you put starz into it, it will be a bigger position than that. >> because you can eliminate the lumpiness melissa referred to,

hit movie, average movie. >> that's exactly right. front business is great business because it gives you optionalty. if you catch lightning in a bottle and have a franchise like a "the hunger games" or "twilight," you can make a ton of money. you can make money day in and day out in the television business. we make money from the day we start shooting a new show. and, again, when you take that show and you have call it 40, 50, 60 episodes and sell it into second and third cycles, it's a lot of money. >> the minute that the deal was struck there was already speculation on what you would do next. there was actually talk that you would seek a strategic partnership of some sort with maybe a telecom company or some sort of distributor. how much of that is true? are you looking right now? is that what you see as the future? >> we have a strategic alliance right now. obviously we have john mallone, a significant shareholder, mike frees from liberty global on our board, we see that as a very

strategic relationship. and i would expect to see us doing more and more with both of those companies. and anything in the john malone universe. >> very quickly, it's a big question about the future of television really. if you could be -- >> he's asking for a friend. >> no, if you could be -- where do you think the sweet spot in television is going to be over the next 20 years? in other words, do you want to be the head of an nbc or an nbc universal, not to personalize it, do you want to be where you are, do you want to be a netflix? >> so where in the food chain. >> where do you want to be? >> my partner and i have been at this company now for 16 years. and so we like the idea that we have an entrepreneurial company. we have terrific entrepreneurs in all of our businesses. and so wherever we are, whatever we're doing at the lions gate level, we'd like to be in a position where we can move very quickly because what's happening in the industry, the entire media space, it turns on a dime. look at what starz is doing right now with their app.

look what they're doing with their over the top offering. this is a giant c change that's going on. the idea you can move competitively, that's an advantage. >> i want to know straight from the top what we should be watching this coming summer in the months? >> aside from "power lunch." >> "power lunch." >> or "fast money" at 5:00. >> if it's on nbc. >> it's hard to pick a favorite child. i think our film slate is terrific. i believe this deep water horizon that's coming out in the fall is going -- is a great topical based upon a true story. it's a really good movie. i think this la la land, which we have -- again, we have four movies premiering in sun dance -- i mean at toronto. we think all of them are good. we love our strategic relationship with cbs. we're doing three films with them. all good. i think television is going to continue to grow and grow and grow. again, if i would leave you with one thing, i think once we do the combination between starz and lions gate, you're going to see us delever very quickly.

if i were going to say focus on one thing, focus on free cash flow. >> okay. michael, thank you. michael burns, vice chairman of lionsgate. to the bond market, rick santelli tracking the action at the cma as he did an hour ago. >> absolutely. you know, tyler f you look at intraday of threes you can see we moved a little lower in yield. if you move down the curve we moved a little bit more. today' dynamic is flattening. the long end is doing better finding buyers, pushing yields down, which may make 10s and 30s the much more interesting. look at a two-day of tens you can see what i'm pointing to. hyg is the junk etf. this is close to taking out its july 22nd high, which would take it back all the way to september of 2015. people are e namerred with more. they want more. they want more yield because if you look at the lqd supposed to reflect a more conservative

investment grade, bit out of vogue, that speaks volumes about parameters. >> rick santelli, thank you very much. donald trump saying yesterday in detroit that detroit is a disaster. but that it will come roaring back. however, is the motor city really in need of the kind of comeback that donald was talking about? former michigan governor joins us next. romantic moments can happen spontaneously, so why pause to take a pill? or stop to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently,

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saving you money on your car and home coverage. call for a free quote today. liberty stands with you™. liberty mutual insurance. detroit, the motor city, will come roaring back. roaring back. >> that was donald trump speaking in detroit yesterday. but is detroit really in need of a comeback? steve liesman has the numbers. >> i want to talk about the auto industry in general and get to the notion of not just detroit but also michigan here, brian. let's take a look at what

happened and give some data for both sides in this argument over nafta. nafta about '94, you can see auto employment in the u.s. continued to increase for many years after nafta. and then it came down after the 2000-2001 recession, that was the precipitating event there. what that was was partially increasing automation, increasing -- something hit detroit very hard but also rising preference for foreign made autos. that came down and you can see here that despite this terrible situation here in the united states, auto workers have gained jobs over the last several years since the recession comeback. now the other side of the story, look at auto sales. it kind of checks, but watch this break right here where vehicle sales and auto workers where it gets above it so we're not employing as many as we should. again, look here. you've had this big bounceback in sales, but not as big a bounceback in auto workers. certainly nafta may be one of the elements in that, but not

the only one. you have tremendous automation here in the united states pushed by the competition with mexico. but also other issues are at play here including globalization as well as a tax dimpb shashl that pe peter nava talked about yesterday. this is michigan's share of total auto workers in the u.s. you can see it's come down and now it's flattened. so the problem they have in detro detroit, brian, one problem in michigan not with nafta or foreign trade agreements has to do with foreign automakers coming into the united states and building plan ining plants michigan but elsewhere around the country. >> steve, that was excellent. now let's bring in john angler, president of the business round table, former republican governor of michigan. john, listen, you know the numbers better than anyone else. donald trump was saying detroit's a, quote, disaster, jobs have lost. is detroit in that bad of shape it needs a complete rework?

>> well, america needs a growth plan. 1% gdp doesn't help detroit, michigan or the other 49 states. so the larger point is what we need for the nation. there's no question that michigan has lost a share of auto manufacturing, but, you know, 20 years ago nobody thought they could make cars in alabama, for example. there's 100,000 plus auto workers. you've seen michigan respond. michigan is a right to work state now. it's said we're going to compete. we're going to go head-to-head. so a lot of changes been made. when i was governor we got the first two green field auto plants built by general motors up in the lansing area that had been done in decades. we got a big shock years ago when saturn went to tennessee. and so much of the story -- >> but nothing changed after that, governor. here's what americans probably don't realize. >> right. >> there are more auto manufacturing men and women in the united states now than ever

before. >> that's correct. >> they're just not in michigan. can michigan compete with alabama where hyundai and mercedes are? in south carolina with bmw? >> yeah. >> if so, how? >> well, i think they are competing now. you've seen some significant reinvestment in the michigan auto motive infrastructure that's been announced. one place where michigan's dominant doesn't get as much attention they don't count as auto workers but still a megacenter for automotive and transportation research. that continues. but that's a different kind of job. one thing that michigan, and frankly all of the old industrial areas need to do, is up their game on workforce training and preparation. we can't have a 5% reading success rate in detroit and imagine you're going to have a robust vibrant detroit economy. we've got to have a workforce that's capable of doing 21st century work. and a lot of efforts are being made around the country, but that will be the competition among states. can we get the workers ready for

the kind of jobs we've got. >> is mr. trump's position on trade going to help or hurt the members of the business roundtable? >> well, again, it's not about the member companies, but it's what they represent. 16 million employees, $7 trillion in revenue, we're less than -- we're about 4% of the world's population. we can't possibly eat all the food we can grow or consume all the products and services we can make or deliver. so we need to trade. we think trade's an important part of the economic growth strategy for america. i thought there was a subtle shift yesterday. mr. trump started to talk not only about much lower tax rates, which we desperately need for competitiveness, but he also talked on trade more about enforcement. in other words, enforce the agreements we've got. that's different than ripping them up. he also mentioned ripping them up, but i think if you rip up the agreement there's nothing to enforce. so the glass half full argument

is, hey, focus on enforcement. i think there's a lot of strength -- no question nafta was a winner for michigan. >> former governor john eng ler with the business roundtable, we appreciate your time today. >> thank you for having me. let's get to dom chu for a market flash. >> shares of sage therapeutics down at this point drug developer on track for worst day in five months also falling below that 200-day average price. shares lower as company announced a delay in top line data from its ongoing study on one of its lead drugs that really treats a life threatening neurological disorder. the company reported bigger than expected second quarter loss on higher expenses. those shares taking a hit today. >> thank you, dom chu. after 92 years, rugby is back in the olympics. brian's very happy about that. carl quintanilla met up with the u.s. team in rio, got a lesson on how to play the game. you won't want to miss that. power back in two. the heirloom tomato.

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after 92 years rugby is back in the olympics. carl quintanilla met up with the u.s. team in rio and asked how they're preparing to defend the gold medal nearly a century later. >> as a story it's a great

story. but i think a very different place now. obviously there are some established rugby super powers. it's a different landscape, but nonetheless it's the olympics. we are the defending champions, so we're going to be ready to try and defend our title. >> what's it going to take, coach, for sponsor to come in, i mean a major sponsor, and help make it mainstream? >> we need the nfl and the nba to grasp this. >> in what sense? >> well, if they can position the game in high schools so when they get to college they've experienced it, these guys can learn the game of rugby. the game of rugby will compliment them to become nfl stars but alternatively the nfl create an alternative avenue for players unavailable. >> does that make sense to you? is there enough crossover in terms of athletic ability, mental ability? >> i definitely think there is. i mean, i think, having that rugby background you'll able to

use that natural athletic talent on the field. but seahawks talk about how rugby tackling is a great technique to use, so having that rugby background can compliment yourself and make you a better athlete all around. and if you've got that rugby background, if you don't make the nfl or nba, you can say, well, now i can fall back and pursue rugby. >> i'm going to show you how to do it. this is a right-handed pass. you want to be standing, if we're going this way down the field. >> yep. >> you'll be standing like this. to pass that way you want to open your feet and hold the ball like that. >> all right. >> so with your right hand the back of the ball and your left hand near the front. >> yes. >> i'm going to stand to your left. pass behind you. >> right. >> kind of like that. so if you end with the long arms, that will make it easy -- >> all right. you want a better spiral? guys, mens rugby airs tonight on cnbc along with beach

volleyball, not necessarily favored to win but they did win the world series in london in 2015. we'll see how they do. >> you look like a natural, carl, i can't wait until you take beach volleyball lessons. >> a natural embarrassment. >> takes time, carl. do not worry about it. we lost today. we had a tough loss to argentina in extra time. we were leading and argentina had forward momentum because you continue until the play is down or until the momentum is lost. and argentina scored on us. i don't want to give it away, carl, but it's all running live on nbcolympics.com, so what the heck. >> yep. it's happening here in rio as we speak. but again, a bigger game tonight with brazil will be interesting to watch. >> we were watching the women here on cnbc yesterday about 5:00. it was fast and fun and wild. i am telling you it was great. >> new generation of kids out there playing rugby. >> results in oddly shaped noses. >> carl, thank you. carl quintanilla on the ground for us in rio. disney on deck with earnings out after the bell today. shares down nearly 9% over the

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disney on deck. will the media giant sprinkle some magic across its earnings? we're going to find out. much of donald trump's tax plan is focused on the three key rates, but the biggest impact of it could actually be the least talked about. and a controversial plan that provides a huge leap for online poker in america. should it be legal across the country? it's a good debate. and we've got it. the second hour of "power lunch" begins right now. oh, hi, how are you, everyone? i'm tyler mathisen. let's get a check on the markets. two hours from the closing bell and stocks are modestly -- i do mean modestly. this is the definition of modest here, and i know i'm out of the light, but that is the definition, folks, of modest. but it is no ordinary trading day. the s&p 500 once again setting a record intraday high. the nasdaq record intraday high. that means it's a record high,

folks. it's all-time high. for the first time on nasdaq in more than a year. and the industrials they're within a handful of points of an all-time high, melissa. tyler, i'm melissa. headlines this hour activist investor carl icahn on cnbc in the past hour saying trump is right on in the economy. more on that in a moment. big interview. federal judge meantime upholding the 14-year prison sentence for imprisoned ex-illinois governor rod blagojevich. it's been a while since having to say that. and the u.s. postal service out with earnings revenues edging higher but posting a huge $1.5 billion loss. as we mentioned big interview just about an hour ago on cnbc. carl icahn defending donald trump's economic plan and saying he should win hands down. he also had a lot of other colorful things to say the least to say. scott wapner joins us now with more on his big interview. >> melissa, thanks so much.

icahn a long-time trump supporter as most of you know with the billionaire investor calling in to "halftime report" a day after trump took the stage in detroit to lay out his economic vision. a speech icahn told us he liked. >> i think he's right on about the economy. in fact, i'm going to tweet about that later today. he is exactly right on. and our country can't exist when the government is at war with business. and that's exactly what we have. >> icahn saying the economy is not doing as well as people think and that while donald trump has made mistakes in recent weeks including his much maligned battle with the gold star khan family, he's still the best candidate for change, especially for the middle class voter who icahn likened to a certain fictional sitcom star of the '70s. >> if he sticks to what he's doing, i certainly do not understand why any worker, any middle class worker, you know,

the archie bunker of the world -- that was a great show. i used to watch it. those guys are going to vote for him because they're smart guys. they know they're getting screwed. and that is what i think will happen. >> icahn saying he is not on trump's economic team because he might start his own political action committee and put up millions of dollars of his own money to do it. that said icahn says he's spoken to trump and expressed his views on issues related to the economy. i asked icahn if he thought trump though trailing in many polls could still win in november and he said he certainly hoped so. didn't sound in any way as though his support was wavering in the least. >> you asked him several times about trump's rocky week as defined by the media last week with the khan family and his attack there is. and icahn's response was, he made a mistake. >> yep. >> he made a mistake. everybody makes mistakes. the issue though for a lot of voters is when mr. trump makes a

mistake, he never admits it. not that most politicians do, but he certainly doesn't. >> i think yesterday people on the trump campaign and then his supporters would view as getting back towards the real job at hand, getting back on message. there were, what, a dozen or so interruptions from heck lers during his speech. he didn't lose his cool at all. he totally stayed on message. i think they would probably internally admit some mistakes may have been made and they're making a concerted effort to stay on message. at this point given where the polls are. >> his super pac comment is also interesting basically saying he wouldn't join the thing because he might start a super pac. he really doesn't like the epa or ftc. >> he doesn't. and he's also willing to put his own money up where his mouth is. you know, he's routinely done that. he had started this big campaign about the repatriation of taxes some months ago. so when he's impassioned he writes a check, he's not certainly in any way afraid to

put his own money up. but this was yet another example today where he makes you laugh, he makes you think. >> archie bunker. >> that sort of genius of who he is. >> the nation of text messages and tweeters. >> as if there's something wrong with that though, that's what i found interesting. tweeting and text messaging has also created lots of jobs in and of themselves. i'm sure the verizon worker would say thank goodness for those who do text message and tweet and use online services. and yet that's sort of dismissed by icahn. >> there's a good and sizable debate that's going to be had between now and november especially around issues of employment and trade as to whether the, you know, jobs have been lost because overseas competitors have been playing an unfair game or whether automation and the move towards technology in various industries has played a dramatic role. i think maybe, you know, in some ways he's speaking to those kind of issues as well. >> i wonder in all of his activist sort of battles how many times has he called for

cost efficiencies? i wonder if we actually went back and took a look at, i mean, i'd be curious myself. i have no idea how many times he said we should automate, find efficiencies through technology. >> yeah. >> that cost the very jobs. >> right. >> i thought today was important that when the economic team of mr. trump was laid out, it was conspicuously absent, i thought, you know, icahn was. some people are wondering is he still on the same page, is he still pledging as much of his support as he had been saying over the last few months and i think you got a clear indication today that he's as supportive as ever of donald trump and willing to do what it takes even if it takes millions of his own dollars to help donald trump get to 1600 pennsylvania avenue in november. >> scott, thanks. >> great interview. shares of valeant pharmaceuticals are surging today. this after the troubled company said it would reorganize and it did affirm a fairly wide range of forward earnings guidance. valeant's ceo speaking with our own meg tirrell earlier today.

she joins us now with the details of what joe papa had to say and also maybe why valeant -- i mean, they're not out of the woods despite the stock price move today. >> not at all. it's amazing to see the stock reacting just so positively. a lot of people expected they might have to lower their guidance for the year and the fact they didn't is giving some investors some confidence. they did miss their analyst expectations for the second quarter. and a lot of folks say they still have a lot of work to do in the year ahead. but i did talk with joe papa, he's just about three months into in new role. he said one of the things they're working on is renegotiating some of their debt covenants. he said they don't have as big of a debt cushion though they're okay for 2016. they're going to work to increase the cushion, get that out of the way to start talking with investors about other things. we also talked about asset sales. on their call today which lasted an hour and 45 minutes they're really pledging to answer every question out there, pledging transparency, they said they have potentially up to $8 billion in assets they could look at selling.

these are noncore assets, they're not looking at selling b bauch & lomb, but more than a third they say are unsolicited takeover interests, anyway, from outside parties. so i asked him why they haven't pulled the trigger on any of those asset sels and he said, well, i'm new to the job and i want to figure out what to sell but any asset sales would take six months. >> to me the comment that the cushion was okay we'll be okay through 2016, which is only another few months basically. but 2017 sort of a wild card. and in the renegotiation of their debt covenants you have a picture where analysts across the board pretty much are pretty skeptical so whether or not they can actually meet the reaffirmed guidance for the full year, you've got businesses that had been drivers of growth that are seeing some real weakness. you have their top selling drug,

that declined quarter on quarter because of lower average selling prices. what is their ability to really renegotiate these debt covenants in a way that won't cost them too much money? >> it's a great question. i asked him what it's going to cost to renegotiate these and he said it will cost us. we're going to have to pay a fee. it's going to be harsher interest rates. it's going to be more difficult. but in the near-term they want to get that off the table and he says this is better for the company. at the same time they have reorganized the company into these three business units and they say they hope that's going to help them focus on different areas. but the environment for valeant as you point out has changed. they can't rely on raising prices of their drugs anymore. they have to increase the volume of prescriptions. and it's going to be interesting to see how they do that. >> i think it's important to note too, and i'm not taking anything away from today's gains. let's be clear on the magnitude of the drop. even with today's gains in order to get back to the price that valeant began this year at, it will need to jump 300%.

this is what happens when you have a 90% drop. if you are a investor for one year, ala bill ackman, the odds of getting back i'm not going to say are impossible -- >> right. that's the questions is he ever going to get out of the hole he's in. >> he's got to have a lot of movement. let's turn now to kate kelly. thanks, meg. today's pop in valeant does help mr. ackman, but he is still as underwater as a slip wrehip wre right, kate? >> that's one way to put it, tyler. every day depending on the position. today, ackman's had a nice run. he's made about $100 million on paper today on his valeant stake, which is a little shy of 22 million shares. that's just the common stock i looked at. however, bigger picture and you were just talking about this, year-to-date if you look at his position, he has lost about $1.6

billion. now i should say i made these calculations with the assumption valeant was trading about $27. it's actually even gone up a hair since i made that calculus about an hour ago. it's really ticked up steadily today, which is interesting, meg, isn't it? the market seems to like this news. almost like it's sinking in and buying more and more throughout the day. >> actually, meg has departed, but it is an interesting thing as the stock is moving sglup unless you think there's more and more short covering throughout the day. >> well, that certainly could be part of the explanation, melissa. you have seen that as have i many times before. but it's an interesting thing. ackman too, i had forgotten about this, but he actually added to his position earlier this year. he started the year i want to say with about 1.7 billion shares then bought another 5 some time in early february. a series of purchases that they reported let's call it about $95 a share on average. so when you look at that, he bought then those positions -- that position is a little less

underwater than the year he started the stake with but still down more than 70% a piece. >> again, mr. ackman may have bought puts, he may have shorted the stock himself, he may have -- we don't know. but let's just assume that purchase in february, kate, let's call it $90 a share. >> it was $95. but yes. >> okay. $95 a share. he still needs a 250% gain from today to get back to there. >> to get back to break even on the second purchase. that's 250% gain on valeant is going to be -- would be one of the greatest comebacks in the history of the stock market. >> no doubt, but let me throw a bone to bill. last week we reported on, scott wapner and i, on the canadian pacific investment he made did tremendously well over time. in fact, his gains based on calculations we made and checked with them about $2.6 billion as i recall. >> he made a fortune in general growth properties as well. i'm not knocking any of those. i'm only talking about valeant

and how long you hang in when you look at the math and go -- >> i agree with you. >> -- i don't know if i can ever get back to break even. >> the point is those funds from the canadian pacific sale could be redeployed to higher growth areas which could offset the declines that we've seen. right? i mean, that's bottom line here. >> right. he said he's going to take those gains, melissa, and put them into one or more new investments in their flagship fund. i'll be curious to see what else he's done, you know, within the last quarter. >> yeah, maybe a billion dollars -- >> he's got a real in the hole on valeant and herbalife. >> and herbalife. >> two very big positions. >> one thing about ackman and what makes him compelling to talk about as we often do is he swings for the fences. he's had some huge wins and embarrassing losses, but looks like it's still playing out. >> kate, thank you very much. we're about two hours from disney's earnings report.

could have a major impact on how stocks trade tomorrow. we'll tell you what to look for, when disney's numbers come out, that's next on "power lunch." hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

welcome back to "power lunch." i'm dominic chu. sales of gogo higher after ceo reports purchase of around 50,000 shares of the company's common stock. he made that purchase yesterday around $10.37 per share. this all according to regulatory filings. shares are still down about 36%

year-to-date. still, melissa, a half million dollar bet on this company's stock. back to you guys. dot cm, thank you. disney shares down making one of the worst dow performers. joining us onset is sam myers who has overweighting from jaffry and michael morris from guggenheim neutral on disney as below the street and below consensus earnings. san, start with you. $120 price target. as you take a look at what to expect after the bell today and going forward, what is it that's going to drive the stock higher by more than 20% from now in the next 12 months? >> right. so heading into earnings we like the setup here. you have the theme parks doing a little better although we do have some offsets in the quarter. the film business, the studio had three major hits in the quarter. and we obviously have the home video of "star wars" coming in.

on the consumer side npr -- npd reported 7.5% growth in the quarter, so we like the setup there. we think the consumer business will be up 5%. and obviously on the media side, espn -- >> michael, had what would seem a good catalyst but the stock hasn't discounted for the past month still down about 3% over one month's time. if you take a look back at the past year, it really hasn't recovered since about a year ago when they were talking about the skinny bundle. is that really what's dogging disney at this point? are those fears are they still valid at this point? or should we still be concerned about that? >> no, you absolutely need to be concerned about that right now. disney's a great company. but it's working through a couple of challenges, the biggest challenge is the fact that espn in our opinion

overearned for a long period of time being the largest part of every single person's bundle. and what you're seeing is their distribution partners are finding new ways to reach the consumer and consumers are finding new ways to be entertained, both of which increasingly don't include espn. and that puts a lot of pressure on a business with a lot of costs. >> address that point, stan, if you would. it's not merely people are finding other ways to get the content. it's there are other robust competitors that there didn't used to be, fox sports, cbs, nbc sports, the local sports channels. >> i think sports in genre mains most valuable asset on tv today. 90% of all live viewership is sports. so i think overall espn remains a critical component of tv consumption today. in terms of other platforms -- >> my favorite sport by the way was bachelorette on abc. sorry to interrupt. >> but i think disney's slowly

taking on digital platforms, it's layering in that new subscriber growth from those platforms and starting to take on those virtual platforms as well. >> is it doing it fast enough though? i mean, if it's so critical. >> right. >> and it's a melting -- i don't want to say a melting ice cube. that's a little harsh, but sort of an asset dwindling at this point, are they doing enough fast enough to arrest that meltdown? >> at this point in fact the bundle is not shrinking. the subscriber levels are not shrinking fast enough to make it a priority. i think we lost about 1% of subscribers in q-1. >> michael, quickly, the most important number tonight is what? >> subscriber growth of the cable networks is the most important number tonight. there's a couple other concerns. keep an eye on the domestic parks trends number as well. >> is there any, any, any effect of the alligator death that was at a disney park? and concern about security at their parks?

>> i do think it is a concern. it's obviously a very tragic situation. and i think it's modest in general with respect to the impact in the near-term. but over the long term some security issues both in florida, broader globally security issues -- >> how about zika? >> the incident at the park. zika, brexit, all of these things by our data are weighing on travel trends or could be. travel trends are being weighed on and each of those issues is incremental to where we were three or six months ago. and i think the parks is an outstanding business, but i think it has some challenges to work through as well. >> all right. should be interesting. thank you, stan and michael. do not forget first on cnbc 4:15 disney ceo bob iger giving his outlook. coming up, heated debate on online gambling. we'll talk to a pro poker player who says legalize it, regulate it, tax it and a reverend who says gambling is a social ill

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good, bad and ugly in today's trade. first, to the good, monster worldwide up nearly 27%. monster move there after announcing it will be bought by randstad for $429 million. as for the bad, shares of the gap falling 6.5% reporting same-store sales fell 4% in the month of july. and it is what an ugly day for shares of wayfair, the retailer down over 19% after reporti ini $48.3 million in losses in the second quarter. you can see there it's down by 19%. does donald trump's tax plan really favor the rich? we'll ask cnbc's expert on the rich, the one and only robert frank. plus a very expensive fender bender. we'll have all the details. "power lunch" will be right back. 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?

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delta canceled some 530 flights today as it tries to normalize operations after monday's outage that disrupted its flight schedule worldwide. long lines for passengers once again at atlanta's international airport. delta is offering $200 vouchers to customers whose flights were canceled or delayed more than three hours. brazilian senators began debating whether to continue the process to permanently unseat suspended president rousseff over allegations she committed fiscal crimes. nagasaki, japan, marked the 71st anniversary of the atomic bombing by the u.s. with a ceremony at that city's peace park. japanese prime minister shinzo abe placing a wreath in front of the peace statue. that is the cnbc news update tat th -- at this hour. brian, back to you. check on the markets they're not doing a whole lot of anything, but interesting stories inside the markets.

s&p 500 and dow moving very fractionally, but royal caribbean and gap are your two worst performer -- i don't know, ooi i've been up since 4:00, so microchip tech are your best performers. the oil market closing for the day. we're not seeing again a huge move in the price of crude oil. down 33 cents, about 0.7% to 42.72 per barrel. donald trump unveiling his tax plan and critics of which there are many say it favors the rich. well, robert frank knows all about rich people. so let's ask him what it really means, robert. >> well, all of the attention on this trump tax plan has been on those three rates that 33% rate for those at the top, but his plan contained a much bigger windfall for the wealthy. it's called pass through income. and trump mentioned it as a break for small companies and businesses, but pass-throughs allow people to pass income from a partnership or special vehicle through their individual tax returns. sounds complicated, but right

now top tax rate on pass-through income is top ordinary rate of 39.6%. trump would kout that to 15%. why is that a big windfall? in 2013 taxpayers reported more than $800 billion in pass-through income and more than two-thirds of that went to the top 1% of taxpayers. that's according to a report today from the center on budget and policy priorities. now, the really rich, well, they benefit the most. the top 400 taxpayers reported $94 million each in average income from pass-throughs under trump's tax cut they would each save an average of $37 million a year. experts say this could cause massive tax avoidance where people ship their income through to pass-throughs by declaring themselves as independent contractors or actually changing their business designation. now, trump touted his plan to close the carried interest loophole which would raise tax rates for hedge funders and private equity, but they could actually turn that income into pass-through income and get

their taxes actually lowered now from 20% to 15%. >> i'm becoming an s corporation. >> me too. as of right now i'm an independent contractor. >> i am a big pass-through. all my income just passes right through and goes out. >> as are we all. >> exactly. we've also got a new reading on billionaires and status of billionaires because we're all worried about how billionaires are doing these days. >> they're concerned, our health is all our concern and there are a lot of them actually, not us yet, but there are 2,473 billionaires in the world. that's a record. and they have $7.7 trillion in combined wealth. but more billionaires are actually inheriting some of their fortune. more of them are coming from asia and less coming from finance. a new report from wealthx found 628 billionaires are in north america, about a quarter of the world total. europe had 806, asia has 645 and middle east with 166. asia had the fastest growth up 15% last year. 88% of billionaires are males,

70% of billionaires have a bachelor degree or higher, 85% are married and their favorite hobbies are philanthropy, travel and art. now, 55% of billionaires are self-made, but the fastest growing segment of billionaires, this is a little troubling, are those who inherited a portion of their wealth. that jumped 33% last year. now, the financial industry, banking, hedge funds, investment, finance still leading industry for billionaires but their share of wealth fell to the lowest level since the financial crisis. and billionaires, this is interesting, are holding a record amount of cash 22% of billionaire wealth of that $7.7 trillion is now sitting in cash. >> you know you're rich when your hobby is art. >> and number one is philanthropy. >> giving it away. >> what else do you like to do? well, i like to shine my monicle. >> as you think about that, when the tax code causes by its very

structure people to do certain things, act a certain way, they take advantage of that. >> yes. >> it is yet another reason why i strongly believe that income ought to be income. >> yeah. >> there ought to be fewer distinctions between different types of income. how you earn it shouldn't matter. >> it's such an important part. and we saw this in the 2012-2013 tax increases when the wealthy took all those capital gains, moved them into 2012. we saw this burst of income. so we saw how much income was discretionary. taxes do change behavior. >> yes, absolutely. >> and the difference here from 39.6 to 15%, i mean, that is an astronomical tax cut. and there's no doubt we've never had a shift like that that could cause all these people to become independent contractors or to change their -- >> i think i speak for the entire country when i say all i want is for a tax code that makes everybody else pay more. everybody else.

>> don't tax you, don't tax me, tax that guy. >> over there. yeah, he's got more than i do -- let's get off this and have a little, i guess, fun. a -- this is painful to look at. a $300,000 fender bender at a car show in virginia. a mercedes benz sl accidentally backed into a ferrari 458 speciale. the driver of the mercedes, which itself i guess is a nice car was said to be trying to parallel park. the owner could be seen running to the accident called it, quote, the dumbest thing i've ever seen. and i guess because there was allegedly a lot of room to parallel park. >> well, there's no other cars in front of it. >> i mean. >> so that is about the worst parallel park -- but the good news is they're both red. so a little bit of paint rubs off there. it's not the ferrari red. >> go back to the old mercedes. >> terrible driver. >> a good rich person fight right there. the mercedes guy versus ferrari

guy. >> that's probably not a good driver in the sl. just speculating. >> probably not. thank you. california on the verge of approving broad legislation of legalizing regulate online gambling. bad idea it will lead to social problems and end up costing the state more than it could ever bring in. we'll have both sides of that debate next. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.

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new jersey's hard fought struggle to legalize sports gambling in the state was shot down today by u.s. appeals court ruling sports betting would be a violation of federal law allows sports betting only in places like las vegas. major blow for those hoping it would bring much needed revenue to the state. >> new jersey isn't the only state looking to bring in revenue through gambling. california could soon become the fourth u.s. state to legalize, regulate and tax online poker. nevada, delaware and new jersey already have it. and some predict that if california gets online many other states could follow. reverend james butler opposes online poker. he's the executive director of the california coalition against gambling expansion. and here in studio with us is jason summerville, a professional poker player who is

sponsored by poker star, which is lobbying for legalizing and regulating the game in california online. somerville streams his online poker play for viewers on his site runitup.tv. gentlemen, welcome to both of you. >> thank you. >> good to be here. >> reverend butler. welcome. good to have you with us. what do you see as the strongest argument against what california is thinking about doing? is it the social cost? is it the public policy? what? >> it's all of that. it's also the economic cost. you talk about how this is going to raise revenue. and the studies indicate that there is a three-to-one loss for states and governments that use gambling as an economic resource. >> how does that occur? >> it occurs through the social and economic cost of increases in crime, unemployment, welfare, homelessness, bankruptcies to name just a few. >> is there an association of increased crime with online gaming as opposed to illegal

gaming that might take place in the basement of some social club? >> right. well, those are more internationally based and they have found a correlation between increases in any type of gambling and internet gambling included in some of these negative consequences. there's that increase in gambling, there is an increase in negative social consequences. as well, again, as the economic cost of trying to sustain a bad economic model. even to the point of discretionary spending. what happens when you take that much money out of the service economy, the retail economy, the manufacturing economy and put it in a sector that does not have the same economic multipliers. >> you know, jason, i'd like to hear you respond to the reverend's points. >> sure. >> but most countries around the world, if i'm not incorrect, do allow online gambling of one sort or another. >> absolutely. >> we are in a distinct

minority. >> right. >> the reverend points to the social, moral costs here. >> online poker exists in a regulated environment in the majority of other countries around the world. and it's great to see states like new jersey take a forward thinking approach on this taxing and regulating. hundreds of thousands of americans are already playing online poker, but they're playing on unsafe, unregulated sites where they don't know the games are square and don't know their money is safe. i personally have lost tens of thousands of dollars on unregulated online poker sites that have vanished in the middle of the night. i say i think it's the government's responsibility to tax and regulate -- >> were you being responsible in going and using those sites? >> i had no choice when i was playing, you know what i mean? >> you had a choice not to do it. >> sure, but the sites come off as being reputable but actually they're not. sites like poker stars, which is the most licensed regulated online poker site in the world, they are pushing for these regulations so we can make sure there's no underage play, that there's no problem gamblers playing. we want to track those.

the unregulated sites they don't care if someone's losing their house or playing under age. they're there to take money. the government's perspective should be to tax and regulate. >> reverend. >> it's really interesting that we say we need to respond to protect people who are engaged by their own acknowledge in an illegal site. there are other ways to protect gamblers from these illegal sites. the federal government closed sites down in 2011. the state of washington closed down sites. and it may not be what the gamblers want, but if they truly are arguing that we need to protect these people from themselves, then the state of california needs to say we're going to enforce the regulations we have and close these sites. if they're not willing to do it now or don't have the technology to do it now, why should we possibly believe that they will be willing to do it in the future? >> you know, reverend, even if we agree with some of your positions on the morality side and sort of the money transfer

side, and there are statistics that point to everything you're saying as being true that it disproportionate number of poor people do things like play the lottery and end up just giving away their income. completely agreed. we just show add video before this segment about a $400,000 car being backed into, people make bad money decisions all the time. buy a car, worthless the moment you drive it off the lot. where are we in telling people what they should do with their own money? >> maybe we should at least begin by not charging people for me for that choice. in the state of california if we lose $3 for every $1 of revenue, where will that money come from? it's going to come from non-gamblers and non-gambling interests. we need to say that there are some people who are not able to control themselves and it is the role of the government to provide some sort of safety to those, not provide a virtual poker parlor or gambling casino in some cases on every computer

and smartphone that's connected to the internet. there would be simply no escape for people who have problem or pathological issues with gambling. and in california that is more than 1 million people already without the internet. costing the state more than $1 billion. and that money is not being made available from gambling interests. it's being made available by california taxes. people like me are paying for it. >> i want to bring jason back in for the final word. reverend, thank you. how do you respond to what he just says? you live in canada now? >> well, i live in new jersey as well. i'm a resident of los angeles vegas. i'm from new york originally, i have to leave the country to be able to play on pokerstars.com. >> so you go to canada to make your living? >> yes, i stream playing online, i have tens of thousands of americans watch me playing every single week playing on poker stars. i hear from these americans who say why can't i play a $1 buy in from the comfort of my home while i'm able to bet on horse

races, lottery tickets, daily fantasy, why is poker not being treated the same way as other industries that we're taxing and regulating? >> in your experience what is your sense, the reverend talked about a million people, i believe he just said, in california already have problems with gambling before this. what is your experience? what does your instinct tell you about the number of people playing your game. >> sure. >> who may be addicted to it. >> sure. well, look, plenty of people in life make bad decisions. as an american i think that we shouldn't be able to tell other law-abiding adults what they can and can't do with their time and money. i think it's up to the government to enact responsible regulations and protections to make sure people don't hurt themselves too much and generally, you know, poker is a great game and has raised millions and millions of dollars for great causes. i've raised money for causes like st. jude's and fallen police officers' families. poker is a great vehicle of charity and it's a beautiful american social game of wits and wagers and psychology.

for me particularly online poker is a passion of mine. it's great to see finally states try to take this approach of taxing and regulating. let's bring poker back to america. let's make poker great again. >> okay. reverend, we have to leave it there. jason, thank you both very much. it was a very articulate argument on both sides. very well mannered and behaved. we appreciate it. we're going to break. we'll be right back.

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welcome back to "power lunch." here's the latest of delta canceling another 500 flights today. we heard from the chief operating officer explaining yesterday's power outage in atlanta knocking out the entire global system for delta. and looks like the monday morning was a critical power control module failure at the technology command center that malfunctioned causing a surge to the transformer and then loss of power and according to the statement they said that the network equipment then didn't switch over to the backup. the systems, we're seeing slowness according to the chief operating officer of delta gil west and we are looking at another 500 flights canceled. back to you. all right. back to the markets, nasdaq

composite hitting a record intraday high today in more than a year. what's next for the tech-heavy index? let's ask your team which is today steve grasso and craig johnson. craig, i'm going to begin with you on the technical side. are there signs of more and more and more -- we want more in america -- more highs on the nasdaq or is this it, we're falling? >> you know, brian, we have now got the dow, the s&p and the nasdaq making all-time near highs. what i look at the chart i brought in today, a weekly chart to cut out the noise. it looks like we are making a classic bottoming type pattern. we broke it above the neckline. but i have seen set-ups like this in the past suggesting upside to go and with the fact of the nyse new highs index is making, again, new highs, i see more upside to the nasdaq, about 12% upside over 12 months or so

from here. >> wow. very positive view there technically, craig johnson. you have been bullish and right. steve grasso, fundamentally, do you agree with the bullish view? >> you have to couple -- put them both together and i don't necessarily disagree with his target if you go further out. brian, you know this better than anybody. trying to thread the needle of catching that bottom it doesn't work out. perfectly. right? you look at february bottom. who bought that bottom? really when you start to look at the institutions, they're more of them selling. volume is light. bank of america data with flows, people are lightening up here. trying to marry them, i don't disagree but i think you see a selloff before we get another 12% higher in the indexes. >> well, maybe a good entry point if you believe you and craig. buy low and sell high. that's the idea. steve more negative in the short

term. craig positive longer term. thank you. we'll leave it there. we do two additional segments every day. go to the website. i won't say trading nation again. we're back after this. ♪

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>> so in. endo pharmaceuticals, caution on the street after second quarter results beating low expectations sending shares soaring and best performing stock on the s&p. questions remain over whether it generates meaningful cash yield and pay down debt in the face of lawsuits of the mesh products. barclays adding the second quarter results halted the downward. >> i want to say me and lorenzo rolling in the benzo. tower international. mike ward starting coverage on the auto sector. ford and gm at a buy. focus on tower as a smaller cap under the radar name of the day. $35 target. 50% upside right now and said tower is among the best positioned of the metal stamping companies and becoming more north american focused and huge problems in south america. bringing more back to the united states and selling off brazilian and chinese assets.

and very bullish on towr. tower international. >> lightning fast "street talk" right there. time for "check please." a viewer, sharp-eyed viewer said it was shot in front of an eye care center. wonder whether the driver of the rolling in my benzo, there it is. great falls! >> doug best on twitter. nice job if you're watching. we were knocking the driver for knocking -- >> maybe there was a visual issue here. >> impairment. >> could be. althou although, if there were, that person would not be behind the wheel. >> you could see that if it was a parallel car, no car in front of the ferrari. it's parking. >> pulling into a space. really. >> pulling into the 458 space. >> i'm not a great driver but that's lousy. >> i think say got all up in his grill.

>> oh gosh. that was awful. >> all right, folks. >> just -- >> i've done much worse. >> oh, i know. i know. >> folks, thank you very much for watching. on that note -- >> we'd like to thank you for tuning into the special edition of "power lunch." i'm going to eat every second. "closing bell" begins right now. welcome to the "closing bell." i'm sara eisen in for kelly evans. >> welcome aboard. i'm bill griffeth. a record setting day on wall street earlier. s&p and nasdaq both hit intraday records just not right now. we've got one money manager saying that the u.s. is still the best place to invest and she'll explain why coming up. >> dow component disney set to report after the bell. bringing you the numbers as soon as they cross. plus, a first on cnbc interview of disney chairman and ce