is spiking nearly 3% on what john was seeing. or pete. >> we look similar. i know. >> one of the najarians. >> if you listen to pete last week. i'm sorry, i'm trying to do a show here. >> that does it for us. "power" begins now. we've had a trifecta of stock movers topping your menu. we're talking twitter, apple, macy's, and wait until you hear what macy's is doing to help gin up sales. plus, hillary meets the press. we're breaking down hillary clinton's six-question fly-buy with reporters. and s.o.s. save our stuff. more on the american goods being held hostage at sea. "power lunch" starts right now. welcome, everybody, to "power lunch." i'm tyler matheson. glad you could be with us. stocks headed lower at this

hour. the three major averages in the red right now. okay, so it's not by much, but it is red across the board. biggest losers for the day in the dow stocks, apple, nike, and ibm. oil heading the other way in a big way. crude rallying on an inventory draw-down, while brent creeps up very close to $50 a barrel at $49.82. michelle? >> i'm michelle caruso-cabrera. vice president biden calling on congress for an up or down vote on zika funding to address what he calls a national emergency. soccer giant real madrid losing its appeal against a one-year transfer ban by fifa for breaking rules protecting underage players. olympic swimmer ryan lochte handed a ten-month suspension following last month's shenanigans at the rio games. we have a lot to get to today, but we kick it off with a trio of stock movers that need

to be on your radar. first up, to twitter. it is down about 6% right now, deep in the red. the company about to kick off a board meeting in san francisco. on the docket, how much more time does jack dorsey have to turn things around, and will a for sale sign be put on the door? next guest has a buy rating on the stock. let's bring in brian weezer. great to have you with us. >> thanks for having me. >> do you think that nobody thought that twitter was possibly up for sale at this point? i mean, wouldn't they have approached twitter by now? >> it's fascinating that the stock did move based on comments made a week or so ago. there's nothing new here as far as i can tell. it would be hard to imagine an inquirer seriously looking at twitter at this point in time because the big risk for any potential buyer is that they look bad for doing so. i think there needs to be more of a demonstration of turnaround

or a resumption of growth on the user side. that said, i do think that there is value to a lot of potential inquiries, just not now. >> sure. what is new is what our own david faber had reported. that is not enough is done at this particular board meeting, then activists could be lured in. it could be a good target for an activist? >> it's a situation that any activist would have to tread very carefully on. i think if there was an activist that was very constructive and had a long time horizon, i think that could help a lot. that said, it's not an easy situation, because twitter kind of has to figure out what it wants to be. are they going to be a really powerful and important niche

medium, or what they aspire to be? >> it sounds like the two major catalysts that have been talked about regarding twitter, you're basically saying it's either unlikely, or the for sale, that's also unlikely. what i do you have a buy rating on the stock right now? >> when i look at the underlying value, i believe strongly that this is the fourth most important seller digital advertising on the planet outside of china. that position isn't going to be seated any time soon. so when you look at it, just purely for what it can do in terms of how much cash it can produce, by itself i get to a $22 price target withoutggreive at this point. yes, i think there is a floor on the value from the potential of an acquisition in the long-term. >> brian, thank you. brian weiser, pivotal. the second stock on our radar, apple shares. take a look, they're struggling. the latest bells and whistles on the new iphone 7 and apple watch series, too. let's bring in rod hall. good to have you here.

it's 24 hours later. the reaction from investors has been meh. but we heard cramer this morning saying there's a lot to this phone that's not appreciated by people who are older, that young people will love it because the battery life is better, because the central processing unit is going to be way better, virtual reality is going to be a possibility. what do you think? >> you can spill coffee on it as well, so that's a good thing. i think the product is pretty much as we expected it to be. very similar to last year's product, but there are some nice new features on it. i don't think it's enough to move the needle. i think that when you look at the product set that they presented so far this fall, we would anticipate that things are beginning to be pretty much as we modelled, which is relatively cautious heading into the back end of the year. you've got a product category that's only growing a couple percent this year, and generally speaking around the world, macro demand isn't great. so that doesn't bode well for the tail end of the year as far as we're concerned.

>> i see you have a target price of 107, which it's very close to. are you going to lower your rate? you sound not super negative on the stock, but you certainly don't sound positive on it. >> it's a tale of two stories for us. the short-term, we're cautious, as you hear me saying. but longer term, we think apple's got a lot going for it. it's one of the highest quality arguably in the world. it's got great talent. they have options on growth like services that they really haven't exploited yet. and the company sells a lot of cash they can pay back to shareholders. so long-term, we're fine with it. it's just short-term looking out into the end of the year, not as optimistic about it. >> we didn't hear about an apple tv, we didn't hear about mac books. you expecting that? is that a disappointment? >> it's not a disappointment. we didn't expect it to come now. but i do think there's a pretty good chance we'll see a 4k apple tv by the end of the year and a mac book refresh. i wouldn't be surprised to see apple do another rebid between

now and the end of october. >> will that move the stock? >> i don't really think so. the apple tv is not enough to move the earnings number that much without a services play, which we're not sure they'll be able to put together given all the content negotiation problems they've had. if you look at the mac books, that helps a little bit, but the stock still remains very heavily centered on that iphone. that generates an awful lot of the earnings for the company. >> all right, thanks, rod. >> thanks, guys. third stock on our radar, macy's. the company's incoming ceo says the retailer might turn to booze to help gin up sluggish sales. that certainly grabbed our attention because we were thinking, you know what, are they watching "power lunch"? are they listening to tyler, who has been pounding the table for so long about how booze could be the savior? >> i don't know what you come up with. but what i have argued, based on my observation of direct selling parties that my wife throws in

our house to sell lines of clothing to her girlfriends. and the amount of sales is in direct proportion to the amount of sangria consumed. so it was a small and not maybe particularly leap to opine that maybe department stores ought to take a page from that book and start serving champagne at the makeup counters. champagne in the fashion areas where ladies hang out. maybe girls would go out with their girlfriends and have a fun time, and spend a little more. >> that was more or less the throwaway comment this morning. i was in that meeting, so i know exactly what they said. they have a lot to talk about as far as what's going on in retail. part of what they were saying is we have to be more expeer yennial. you have to be there longer. and booze is one way to make that happen.

what they were really talking about is they've added starbucks in a bunch of their stores, so people congregate there and they're going to put restaurants in next to those so you can have a little finer dining. one thing that will probably happen is you'll see liquor. this is not new in department stores. we had restaurants and bars in our department stores 50 years ago. >> that's not what he's talking about. >> that's different from the salesperson coming over while you're looking, can i offer you a glass of champagne? would you like a mimosa, a cosmo? >> they didn't say they were going to do that. i'm not saying you won't see that start happening, but you probably noticed if you go to right restoration hardware store now, you'll see on one floor a scotch bar, on another floor a wine bar. there are six nordstroms now that have bars in them. >> you don't go to a separate room? >> do you pay for these drinks? >> you do pay for the drinks. and you can also go in urban outfitters. >> are you really creating experience, because you're

basically having a person pull out their wallet anyway in a department store. nobody's going to say hey, let's go there. what you want to do is you want to get that person who's already there, and just keep them longer. >> in other words, should they be listening to tyler and serve drinks? >> clearly, the casinos figured this out. drink more, you gamble more. do i think it's a pretty short step to saying today we're doing pink champagne in the cosmetics department? no, it's not a short step at all. you will certainly see people doing more and more things to make people more comfortable, having more fun in the stores. i think tyler is in the exact right spot. you'll see more events where people have special things going on. >> come after hours, hang out with us. >> you said you were there this morning when this comment was made and it was a throwaway comment. it doesn't sound very serious. should they take the idea more seriously? >> oh no, they're very, very serious. what they're very serious about is beefing up the experiences in the store.

this comment was just part of a question that someone asked about things you could do to beef up the experience. but they are focused on figuring out a way to get you to come in the store, hang in the store longer, have a good time, and want to come back. >> what is your reaction to as a retail person apple and what they announced yesterday? >> i don't really have a big reaction to what apple announced. there was not a big announcem t announcement. >> incremental, not monumental. >> other than that, it was a very incremental announcement. >> you look good with those little earbuds drooping out of your lobes there. >> i am, it's true. i get that comment all the time. >> i bet you do. >> why has macy's stopped down at 3%? was there something else set at that retail conference that's bringing the shares down? >> not that i heard. i believe that what they said was the same thing they've been

telling us for months now. the stores that they're going to close. what they're going to do to beef up the experience in the store. told us that business was pretty good for back to school. they talked about denim being improved. they didn't talk about athleisure, by the way. >> i was going to ask about athleisure. >> they talked about denim being improved. >> denim is coming back, right? >> denim is coming back. >> flares. >> yeah, flares. they did. that clearly is happening. there wasn't a thing said that i thought would have been taken negatively. i walked out and said these guys did about as good a job as you can do telling your story as you transition your company for a digital and online really matters. >> you're one of the first people to say athleisure was rolling over in terms of a trend. any new data points to support that at this point? still sticking by that? >> i think the data point from macy's saying we're seeing strength in denim is all you

need to know. nobody was saying strength in denim two years ago. they were dropping store for store sales in denim. last year, they were just saying it was declining at a declining rate. now people are talking about denim actually being good. denim can't be good at the same time that other fashion components are. what will happen is denim will perform. shoes that go with denim will perform. handbags that go with new-look outfits will perform and department stores will be a lot happier this fall than last fall. >> and i'm going to be wearing a boho top. >> i'm bringing you on next time. >> will you please? and one for brian. he's a little taller. he's a long-waisted one. >> going to skip me. >> jan, thank you. the outrage over mylan's epipen price hike continues. it's putting the spotlight on the next industry. plus, american goods straand at sea. which retailers could be impacted the most. you're watching "power lunch."

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welcome back. the outrage over mylan's epipen price hikes putting the rest of the drug industry in the spotlight. meg, take it away. >> thank you so much.

da thanks for join us. what has been the fallout of the epipen situation on the rest of the drug industry? is everybody kind of on guard about this? >> we spoke about that. talked about whether this is just an outlier issue or a symptom of a bigger disease. he said there are probably other issues, too. the problem of rebates and how the rebating over the years has changed from way for drug companies to help incentive isaac says has now turned into paying for access. >> that's a really interesting question that you've been asking a lot of the ceos at the conference. tell me what you think the pressures are going to be on the system of rebating, which everybody does. >> so rebating is a really weird thing. it almost sounds like -- from most consumers, they'd say, wait a second, drug companies pay pbms just to get access? that sounds like bribery, and it's not. they have to pay that just to get access to the patients.

so it's almost like the gate keeper says if you want to get into this game, you have to pay us. so it's more of a racket than it is bribery. that's morphed over time. so we asked them, what would you do in a scenario where there were no rebates? they said, we'd be fine with that. >> do you think the government is going to start looking more at rebates? is this a part of the system that will be pressured? >> one of the clinton proposals was managing rnd spending. maybe the easier way is to manage what the rebates will be. something minimal that helps incentivize the processing of all of the pbm, wo, but has nothing to do with all of the drug pricing itself. >> speaking of hillary clinton, what did you make of her plan that she put out on friday, with the ability to levy fines and do other things? >> first, let me tell you what ian said. we asked him, and he said look, in its totality, it would be horrible for innovation. it's really not workable. things like drug reimportation

just isn't workable. i think some of the ideas come from the right space, which is listen, there's a problem in the system. people are paying too much. and maybe zero co-pays or limited co-pays is a really good idea. the problem is a lot of the other stuff i think hurts innovation and puts patients at risk. >> brent saunders coming out this week, the ceo of allergan, with a pledge to only do single digit once a year price increases on their drugs. what do you make of that pledge? do you think the rest of the drug industry should take it? >> it's a brilliant move. i think it actually comes from where the corporate culture is. i think pharma is going to go in that same cpi plus a few points. everyone understands that drug companies should make a little bit more each year. their costs go up. their people have to get paid more. science costs more to do. but if we could limit maybe the outliars. the problem is that we don't want government -- i don't think having government run that process is really the right way. it's a trojan horse for price

controls. once they start controlling a little bit of price, the temptation is to control all of price. if you do that, you really get fewer drugs invented. >> david, it's melissa lee. i had a question about mylan's move to offer a generic version. we were talking about this before a couple weeks ago. is this really in the end a good thing for mylan? are they going to make more money off this? the future they were facing was having to roll back the price on the epipen and also facing generic conversation from teva when they finally presumably gets fda approval sometime in 2017. here they are saying we're going to offer this thing $300 right now. seems like they're sort of cutting off teva and getting a little bit of income that they otherwise would not have had. >> it sounds like a win/win for them. we get caught doing something that maybe we shouldn't have been doing or at least that people don't want them to do, and our solution is to make it easier for you to buy it directly from me, but at a higher price than i'm selling it to the channel. now, i don't know if that's the

case, because it's a little confusing. they haven't given us all the data that we need. i'm sure the senate is going to really look into that and ask them tough questions on why didn't you do this before? why are you only doing it now? will you make a lot less money, or the same? the elephant in the room is why not just lower price? if you got yourself into trouble by raising price too much, get yourself out of trouble by lowering the price. >> you have a follow-up? >> no, go ahead. meg, i do want to ask you a question now. and that is about a big mover today in biotech, clovis. take a look. it's up about 15%. got some news out of the fda about a new drug application regarding its treatment for ovarian cancer. at first blush, meg, i thought this was a negative announcement. >> yeah, so the headline really is that the fda is not going to have an advisory committee meeting. an ovarian cancer drug. it's in this class of drugs.

it's become a very hot class. the reason the stock is up is because people are seeing this potentially a positive move from the fda that they don't need to have this outside panel of experts convened to discuss whether to approve it. folks hope maybe it will get approved before its due date in february. >> meg, thank you. we should note meg's got a very hot interview later on. brent saunders will join meg at that conference, 4:15 p.m. eastern time today on "the closing bell." still ahead, meet the newest met. more on tim tebow's big career change. remember him? but first, we are talking tractor trouble. online bidding and bleach. the good, the bad, and the ugly in today's trade, when "power lunch" continues. ♪ usg 60,0oints om my chase ink card bought all the fruit.. veggies. om my chase ink card and herbs need to create a pop-upppick-yrr

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welcome back to "power lunch." time now for the good, the bad, and the ugly. first to the good. e-bay hitting an all-time high for the second day in a row, shaking off the weakness we see in the rest of the market. on to the bad, clorox. that stock tumbling down another 1.6%. about to wipe out all of this year's gains. we've seen interest rates perk up a little bit today and that may be hitting some of those big dividend players. and it's a downright ugly day for tractor supply. the stock having its worst day in 16 years after the company cut guidance, blaming the weakness in the agriculture and energy sectors. that stock off nearly 17%. >> all right, thank you very much, michelle.

the last time he played for a new york team, it was in a different uniform, in a different sport. the former new york jets quarterback, heisman trophy winner tim tebow now a new york met following a triumyout from major league teams. he was offered a minor league contract. tebow has not played organized baseball since his junior year in high school. but he's a good athlete, impressive enough to garner interest. meet the newest met. >> future met. >> looks good. >> it will be a draw. most and least affordable places to buy a home in america. think you know where they are? you may be surprised. that story straight ahead.

hello, everyone. i'm sue herera. here's your cnbc news update for this hour. gunfire at a texas high school. police say in alpine, texas, a female shooter is dead, killed by a self-inflicted gunshot.

this after shooting an injuring another student. a law enforcement officer also suffered an injury. both injuries, though, not life-threatening. the consumer financial protection bureau fining wells fargo bank $100 million for the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts. the bank says employees opened more than two million of those accounts. airbnb is introducing several changes to combat discrimination. starting november 1st, it will ask all users to agree to a community commitment. that commitment asks people to work with others who use the service regardless of race, religion, disability, sex, gender identity, or age. actress and u.n. envoy angelina jolie among those attending a u.n. peacekeeping conference in london. it was hosted by uk defense secretary michael fallon. in her speech, she praised service men and women for their commitment and their sacrifices. that is the cnbc news update at this hour.

ty, i'll send it back to you. >> thank you very much. let's take a look at where markets are right now, holding just ever so slightly in the red. the indexes are down by about a half percent or less, in the case of nasdaq, a third of the percent for dow and the s&p off about a third of a percent. a check on some of the names you might own. let's start with the a stocks. alphabet. basically flat off .8 of a percent. apple down a little more, 2.6% after yesterday's big or maybe not so big announcement about the iphone and the iwatch. microsoft off about 39 cents. and the big bank, jp morgan chase moving the other way, in the green, up a third of a percent. hillary clinton holding her first press conference in 278 days on a new york tarmac. but was it a press conference, or more like a fly-buy. let's get our daily dose of politics. john harwood is live in washington. six questions, john?

>> six or seven, something like that. but michelle, look, hillary clinton went to that commander in chief forum that nbc hosted with donald trump last night, and she drew the short straw. she had to go first. and she was pressed very hard on e-mails and she didn't get a chance to countersome remarkable statements from donald trump, like his praise for russia's president vladimir putin, who leads a country that isn't even free. >> well, he does have an 82% approval rating. the man has very strong control over a country. now, it's a very different system and i don't happen to like the system, but certainly in that system, he's been a leader far more than our president has been a leader. >> hillary clinton took the opportunity this morning to have a bit of a reset from that forum last night. she held a press conference on the airport tarmac and responded to those and other comments by mr. trump. >> i was just think aboing aboul

of the presidents that would just be looking at one another in total astonishment. what would ronald reagan say about a republican nominee who attacks america's generals and heaps praise on russia's president? i think we know the answer. >> one thing ronald reagan did appreciate was fundraising. he was a very good fundraiser in his day. donald trump has just now announced his fundraising for august, that he raised about $90 million in that month, that's less than hillary clinton's $143 million, and also he has about $32 million of cash on hand. hillary clinton reported $68 million. so she's got that advantage in the war chest as we head to the last two months. >> we saw a pretty incredible gaffe. libertarian presidential candidate gary johnson appearing on "morning joe." he made a bit of a blunder. >> what would you do if you were elected about aleppo.

>> and what is aleppo? >> you're kidding? >> no. >> aleppo is in syria. it's the epicenter of the ref jae c -- refugee crisis -- >> okay, got it. with regard to syria, i do think that it's a mess. i think the only way we deal with syria is to join hans with russia to diplomatically bring that to an end. but when we've aligned ourselves with -- when we've supported the opposition of a free syrian army, the free syrian army is also coupled with the islamists, and then the fact that we're also supporting the kurds, and it's just a mess. >> how damaging is it, john, that the libertarian candidate didn't know where or what aleppo is? >> that is what you call,

michelle, a gigantic belly flop for a presidential candidate. i think it certainly doesn't help him at a time when he's been around 10% in the polls. he needs to get to 15% to get into the debates, which begin in just a few weeks. on the other hand, a lot of voters are hearing his name today, so there's some ways in which any publicity can be good publicity if you're a third party candidate trying to breakthrough. he did put out a statement today saying, i've removed all doubt, i am, in fact, human. he said when he heard that question without context, that it was an acronym that mike barnacle was referring to, and he blanked on the subject, and once it kicked in that it was about syria, then he was off on his answer. but no candidate wants to have a moment like that. it's pretty rough. >> john, the polls have narrowed between clinton and trump, but has that narrowing translated to a narrowing in the key states that trump has to have for the path to the white house to

deliver? >> in some states, yes. she still has an advantage in more than enough states to win the 270 electoral votes she needs. the trend has moved the last two weeks or so in donald trump's direction, but one of the challenges is some polls are better than others. our nbc survey monkey poll that came out on tuesday showed a stable race. six-point lead for clinton, which was the same as it was a week prior. cnn had a different survey that showed donald trump doing much better. so the question is once we get a larger number of high quality polls and we get at the debates, which are the key remaining moments in the campaign, we'll get a better fix on where the race is. >> does it feel to you that hillary clinton in the past couple of weeks is something i know you are familiar with, that she's been playing the four corners? >> yes. look, when we came out of the

conventions, she had a more successful convention than he did, and he made some spectacular mistakes. she opened up a very substantial lead. it was 8 to 10 points in various good quality surveys. the edge has come off that lead. and what she was doing was letting donald trump occupy public attention at a time when that wasn't helping him. now she sees a somewhat different story, sees the race narrowing a bit, and she's adopting a higher profile, hence the news conference today. >> john harwood in washington. melissa. caldwell banker is out with the 2016 list of the most expensive and the most affordable real estate markets in america. the most expensive markets can be found in one particular state, and the majority in one particular famous valley. break this down for us. >> i'm just going to bust up this mystery right off the top. california.

oh, my god. who knew? and saratoga in silicon valley. a four-bedroom, two-bathhouse will run you $2.45 million. cupertino came in at number three. and san francisco, i'm surprised, way down the list, all the way to number seven. more interesting, though, are the most affordable housing markets. detroit tops the list. and that's not a shocker. but detroit is seeing a big revitalization downtown. and you can still get a four-bedroom house for $64,000. same with cleveland, which is a super hot city right now. it came in second. scranton, pennsylvania, is on the list as well as augusta, georgia. in fact, all of the most affordable markets are in communing distance of a major city. is it getting wider as millennials crowd into cities? let's ask the brand-new ceo of caldwell banker charlie young. one week into the job. as we start to see these millennials crowd into the

cities, is that price gap going to shrink? >> i think that with anything, supply and demand helps drive pricing. i think the thing that we have to understand with housing, and when you look at this list, the united states is a very affordable housing market in general. clearly there's a shift towards urban living by millennials. part of that is related to the pricing in the marketplace today. when you go back to saratoga and silicon valley in terms of cost, you see that the employers in those markets are starting to look to other parts of the country. >> exactly. is that where we're going to see so many tech jobs move in, are those going to be on your list of ten least affordable next year? >> you're going to see places like salt lake city, phoenix, arizona a well. i think employers will be really conscious of cost of living and

the cost of house. i think at the end of the day, you look at jobs, you look at local economy, you look at the quality of life in the marketplace. that's the other reason why california is so expensive. you've got 12 months a year you can be outside. it's a very active lifestyle. >> but also you're seeing a lot more competition because of the lack of supply. there's a lot of competition among real estate agencies now. you have all kinds of business models. much lower costs for the home buyer and the home seller. do you intend any changes in the caldwell banker model when you see a market that's so tight with so few listings and brokers really competing? >> first of all, i think you've got it absolutely right. the market is really driven by the inventory issue. i think there's optimism on the forefront. you've got low employment.

92% of homes with mortgages are in a positive equity position. is there more competition? certainly for buyers there is today because there's not enough choice in the marketplace. the industry itself, we are seeing competition for agents. i think that's where a brand like caldwell banker comes into play. how to get in there with an offer that's most likely to be accepted. >> if i'm an investor and looking to buy a house or a home in a city, would i go to the most affordable city? all the tech jobs that are going there. >> i think one real useful piece of information is to understand

what the average pricing is. so in the report, we compare a four-bedroom, two-bathhouse and 2100 markets around the country. the average price for that home is $320,000. there's 1,300 markets out of the 2,100 markets in the survey that are at that price or lower. so that gives you a good baseline of where pricing is nationally. you want to look at markets with strong cultural output. nashville, austin, salt lake city, and even in detroit and cleveland. >> okay, thanks so much for joining us. >> absolutely. glad to be here. >> and our thanks to you, diana. still ahead, cargo chaos. american goods held hostage at sea. how are we going to buy all our stuff? big impact ahead.

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welcome back. the s&p 500 is on track for its 43rd day without a 1% move in either direction. that's almost inconceivable. how do you make money, especially in a 1% economy with 1% interest rates and not much volatility? let's bring in the head of funds and managed accounts at northern trust, which has more than $150 billion in money under management. welcome back. good to have you here. >> god to od to be here, ty. >> how do you make money today in a diversified portfolio, when the economy is rolling 1%, inflation is about 1%. so you don't have any price rises. and interest rates are about 1%

or less? >> right. well, maybe we'll come back to it, because i think it's important to unpack what we mean by slow growth or the interest rates. but three things that you definitely have to do as a long-term investor, and you spoke to this wordy ver, diversification. we're finding out they're not well-diversified. i think about natural resources. i think about real estate. i think about infrastructure. these improve the returns of the portfolio. >> and people are underexposed to them? >> very much underexposed to them. the second thing is if we accept that it's slower, and i would actually say we should expect it to be slower based on demographic trends, then you have to go where growth is. so what you've seen by and large oftentimes as a home country bias, particularly in the u.s., i'm not saying you overweight global equities, but in particular, if you look at emerging markets, you have to be

willing to put some money at risk and go where growth is. the final thing i would say is think about how you manage your household budget. you don't just look at the top line. when you come under pressure, you say, i've got to look at my expenses. you have to think about how do i efficiently invest my portfolio, and that's not just the cost of your investments, whether you're thinking about efficient vehicles like etfs, but it's getting the most for your investment dollar. >> so it seems to me that what you're saying is you have to think about diversification differently today because the way we used to think about it was i got my stocks. >> right. >> and i diversify by owning some bonds. you didn't even mention bonds. >> right. >> now, bonds are important. the reason i didn't mention bonds is because it's the classic 60/40 equity fixed income. fixed income plays an important role. but the thing is fixed income increasingly -- especially high grade fixed income or treasuries are more of a risk diversifier. they're not necessarily always going to provide a lot of return. >> what is the single most important lesson of 2016 for

investors so far? >> you know, the most important lesson is really having those disciplines or those fundamentals. so, for example, if you were spooked by some of the noise that was out there on the tape, you might have pulled out of investments. think about when i was here last and we were talking about brexit. but after that quick downturn in the markets, we saw markets back up. because people looked at the fundamentals. the other thing is, when we talk about these disciplines, simple things like rebalancing and diversification, it's easy for people to get away from them. so when they get concern, and you see all this money crowding into spaces, but you would have missed, for example, the return we had in natural resources. up as much as nearly 30% in some portfolios, even in the mid 20s. the last one, up 16%. >> the total return in investment grade, it's been very good. i hear the lesson from you being don't get spooked by the immediate. whether it is the decline that we had in the first six weeks of the year, the brexit, or the

fear over interests. got to leave it there. thanks so much. >> thank you. >> one of the world's biggest shippers files for bankruptcy. have you heard? american goods, lots of them. destined for here, not making it. they're stranded at sea. who's feeling this the most. that is straight ahead. it'sot just a car... go ahthe es and es hybrid. ths the uitfectctn.

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welcome back to "power lunch." american goods being held hostage at sea after one of the world's largest files for bankruptcy. what's the deal here? >> this is unprecedented. it surprised everybody across the board. nearly 80 vessels carrying $14 billion worth of cargo, from clothes to appliances to mail that are stuck across the globe right now. they're stuck because they are concerned they would be seized by creditors if they docked. sources tell me none of the ship's cargo will get unloaded in u.s. ports unless the handling payments are made up front. one ship is being unloaded in british columbia. one of the few where that's happening right now.

at least four are sitting off the u.s. coast. one outside the new york-new jersey court complex. hp has computers stuck on 142 containers destined for the states. samsung has goods valued at $38 million on two ships. so this is really stunting the global supply chain. hanjin is the seventh largest world shipping line. it comes in the crucial peak seasons. this is as retailers stock up on inventories ahead of the holidays. it's also sending transpacific ocean container spot rights soaring. according to fretos, the price per con tauner has spiked 56% over the past week since we got that initial bankruptcy filing. that sends them scrambling to get these goods on to other carriers' ships right now. >> don't move, because we want to bring in a shipping analyst to talk about the applications of this.

>> normally, you're looking for debtor in possession financing so that precisely this kind of thing does not happen. how come they couldn't get that done? >> it's been pretty chaotic. there are big dynamics happening here. it's the largest bankruptcy we've seen in at least the last ten years. heading into the fall, they were known as the more stable korean line. their competitor restructured throughout the summer in a relatively orderly way. the thought process was that they would follow a similar path. heading into labor day, i think

their filing caught everyone by surprise. with regards to the financing and the chapter 15 and the lack of good financing, it's certainly making it challenging in terms of vendors and lessors because they don't know what the liquidity picture looks like. it's actually tough to tell as to how it's beginning to turn out. >> i was going to say, how long could this stuff sit offshore? >> it's a really good question. as you mentioned, it's pretty unprecedented. when you look at the issues there, you've got a jurisdictional tug of war going on with u.s. ports keeping assets near u.s. shores. but you've also got the issue whether they have the liquidity to unload the assets. both of those issues are workable. there's a solution, but the question is how quickly can they get that unravelled. >> bigger picture question here. shipping makes oil look like it's had, you know, a tremendous

couple of years. i mean, oil was horrific. energy was horrific. shipping was even worse. depression level drops around the world. is this the kind of event that we need to see that finally you can say the bottom has come in in shipping? >> certainly anything energy related, we've seen a pretty big supply rationalization in and of itself. these lines try to compete and get bigger and bigger and we're reaping that right now. >> we sure are. thanks so much. still ahead, he paddled his way to millions by working fave hours a day. not kidding. we'll talk to the ceo who has turned the five-hour workday

into a recipe for success. big success. but first, groceries under pressure. whole foods, kroger, super value, sprouts all taking a hit out of trade aisle 6. next. hey rywhat'd u t here? th bad b is a mobile tdies so that i can take m yoknow that thkorswim? trading atform wherever i go. seamoh, so my customstudies? all your devices, rit? anywhe you wanto go! e market's hot! sync your atform on y device with thinkorswim. eonly at td ameriade

welcome back to "power lunch." here's what's on the menu this hour. cleanup on aisle 5. grocery stocks have been slammed lately. is now the time to fill your cart? lucky 7 for apple, or maybe not so much. vc weighs in. and this ceo owns one of the hottest start-ups around, making a ton of money cashing in on the paddle board craze. by the way, his employees only work five hours a day. how does he do it? second hour of "power lunch" begins right now. the headlines at this hour, macy's says it needs to start selling food in order to get more people into its stores on a

regular basis. wells fargo reaching a settlement over claims of aggressive sales tactics. the bank accused of secretly opening accounts for customers without their knowledge. >> let's get a check on the part,s. we just have fractional losses for the major averages across the board. dow and s&p 500 losing ground for the second day. nasdaq lower for the first time in five days. apache discovering a huge oil and gas reserve at a relatively unknown corner of texas.

>> all right, thank you. if this energy rebound holds, can it help drive a record-breaking run for the overall markets as we head into the fall? let's bring in jim paulsen with wells capital management. and our friend ron ensana joins us as well. jim, what do you say? can the market make headway without energy, or can it make headway no matter what energy does? >> well, i think it could make headway without energy, but it's certainly helped a lot already. and could continue to help the market overall. i think on a couple fronts. one is, today is a great example. this market today for example could be off a lot more if it wasn't for energy stocks holding it up. so the recovery in that sector is certainly helping overall market. if it continues, it will continue to help. the revival of oil and commodity prices in general is going to start to revive the one area of the earnings sectors that really

took earnings down. if they revive minerals and mining and energy earnings portions, that's going to lead to an upward revision in earnings estimates, which i think brings back bullishness for stocks overall. >> this is a time of year that the market can get frisky. september and october, to put it mildly. we've got a fed meeting that may play into this. we've certainly got an election with three big debates coming up. what are your thoughts between now and election day, now and year end? >> we've really moved sideways since the beginning of 2015. i think that pattern will persist for a little while. when it comes down to one of your presidential candidates asking what is aleppo, i think it's going to be between hillary

clinton and donald trump and i think we have to wait out a couple months before that really takes off. >> how do you see the election playing in? >> you know, tyler, i guess unless one party gets tri-power, i don't think it's going to be that big of resolve for the financial markets or the economy. i think that markets will respond well to continued gridlock. i'm not so sure the markets will necessarily wait for election results. i kind of like a few things here going on. particularly i think we're past the worst of that earnings problem, and now estimates coming back up. i just think there's no break on this rally. if you take a market from 1,800 to 2,200 and don't ever raise the dollar, accelerate the money

supply, broaden out market participation and increasingly make it more cyclical and to the market that's driving it. i just think this is a market that looks poised to break out to the upside. >> and that would mean something rather more enthusiastic that i think you expect, though you were nodding when jim was talking about maybe a turn in the earnings cycle. >> yeah, i think it's just a matter of timing. they also say never sell a dull market short. i tend to agree with jim's premi premises. >> it's sideways, but we've had record highs. with the nasdaq on tuesday, i believe. we have record highs. i think there are those areas that you want to play. i'm not saying that you want to stay out of the market.

the pace of acceleration, the timing probably the only place where jim and i differ. >> a little whisper of what could come if that started to turn. >> my typical contrary view is yields are rising because the fed is not going to raise rates. i think every time the fed pulls away, you see the long end go up. every time the fed moves towards interest rates, the long end comes down. >> jim, the last word is yours. >> one last thing to our point. we are with an eyelash of all-time record highs. i'm kind of surprised, giving where we've come since february and given that this is a global rally, i just don't see the optimism that you'd expect. and i think we're going to break hire.

>> the market is up, but why don't i feel rich? i don't. >> i'm not. [ laughter ] >> you are right. >> all right, mr. paulsen, thank you. >> let's talk about that bond market. rick santelli tracking the action at the cme. rick. >> hi. well, in order to, in my opinion, understand what's going on in the markets, you need to understand the expression that all stimulus, all central bank policy is fungible. so if europe's going more easy, that makes a difference in the spread between us and europe. well, we didn't get any more claws. many think mario draghi has not only run out of runway, he's on grass. so everything's moving up that would have moved down, like yield. so if you look at a two-year here, it's up. if you look at the curve in the ya eurozone, twos were up -- fives were up five basis points. and the ten-year was up six. if you look at our ten-year, you

can see yields have moved higher. there's your bund, up about six basis points. it makes sense. if we're closer to potentially normalizing, at least talking about it, it would make sense. that the opposite of more central bank policy should show up in the market. and indeed, it is. when it comes to foreign exchange, that's the one that's a little weird. if you look at the euro versus dollar, you can see the yaeuro s come up and down. we'll have to see what happens after our fed meeting to really put a handle on it. melissa, back to you. now let's zero in on the grocers. kroger hitting 52-week lows ahead of its earnings report due out last year. it's been a rough ride all year for the grocers as food prices slide. joe feldman is senior managing director, we've been hearing this theme for quite some time. prices are coming down. we heard it from target we heard it from sprouts, we heard it

today from super value, tesco. are things going to look up any time soon in your view? >> not on the food deflation side. we think that's going to be around at least through the back half of this year, probably into next year. it's running on nine months now if you look at the government data. that's really the longest run in the past six, seven years. it looks like this is going to extend for some time. if you look at the commodity prices. >> sounds like you don't like any of these grocers then. >> well, that's not true. i actually really like kroger. i think kroger is set up to have decent results. i think that they're performing in lock step a lot more closely with wal-mart. as you know, wal-mart had a very good quarter in terms of grocery. they were up low single digits. and that included 100 basis points of food deflation. you would think kroger could do something similar. >> what is going to turn kroger around from its 25% loss year-to-date? if food prices are working

against them, operationally, can they offset that with other measures? >> well, that's just it. they've actually been performing quite well from an operational standpoint. >> so what else is left? >> well, you know, on the food side, the volumes are up. getting greater profitability. gas prices are still low, which also still helps drive the earnings a little bit. they're executing quite well. there's definitely differentiation within the store, more private labels that they're doing. they've got click and collect, which is their answer to -- it's basically buy a line, pick up in store and that's their answer to the online threat. so there's a lot of good things. if you're looking longer term on this one, now is a pretty good time to be entering it. >> how big of a problem is food deflation in target's turnaround effort, since grocery has been a weak spot? >> well, the food deflation definitely is a pressure point for them. i think target's biggest issue is they're not telling anybody that they've really revamped their grocery department. they've done it in other categories and it's been working fairly well, luke apparel, home, kids areas. but they haven't really been

messaging the grocery side as well as they could. i think that will help a little bit. >> who's the weak player in the suite of companies that you follow? >> well, clearly, you saw super value today. i think they're struggling still. even on the supply chain side, they're dealing with mostly smaller regional grocers trying to sell to them. their save a lot business. that's probably where you see some wal-mart price pressure coming into them. and interestingly, you know, we saw sprouts yesterday hat given some guidance cuts. whole foods has been under a lot of pressure this year. i think those guys are femaling more competitive pressure. they're selling more organic and natural goods and you see it. >> we're goingt leave it there. thank you.

let's get to dom chu now for a market flash. >> gold prices working on their second straight day. that's taking gold mining stocks down with them. if you look at the gold minors there, gdx, it's down much more than the overall stock market. the biggest stocks by the market cap like new mont, all lower on the day by more than the market overall. so certainly, michelle, gold minors and gold prices, certain things to watch in this afternoon's trade. back to you guys. >> thanks, dom. shares of twitter falling today as the company's board meets. it's expected they're going to discuss selling the company. we'll talk to someone who's been permanently banned from twitter about the company's future. also we'll talk plenty of politics as well.

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twitter's board meeting today in san francisco. whether or not twitter will remain as a standalone company or consider a sale. i'm going to talk about twitter in a second. first, we want to also ask you about the alt-right. in a recent speech, hillary clinton basically referred to you and other people, "the wall

street journal" describes it as a loose movement mostly online that rejects mainstream conservativism, promotes nationalism, and views on immigration and multiculturalism as threats to white identity. it represents a landmark achievement for the alt-right. are you the alt-right? >> the press seems determined to crown me the queen of it. i think that white identity and white nationalism is a little misleading. i think it's more accurate to say the alt-right cares about western supremacy. democratic values, freedom, equality, that kind of thing. it sees various threats to those on various fronts. >> when donald trump talks about preventing immigrants, preventing muslims from coming into the country, a lot of people see that as racist. you don't think that's racist? >> they're entitled to. all i can tell you, as a gay

man, i'm quite reassured by donald trump's entreaties toward american values and his skepticism about islamic immigration. hillary clinton quotes my headlines and suggests this is some kind of sinister dark underbelly -- >> what do you mean by american values? >> first and second amendment. freedom of speech. freedom of expression. the right to be, do, and say whatever you want. these are thele have as that made america the greatest country in the history of civilization. these are not compatible with some of the islamic immigration that we see in europe. i guess i'm over here as a warning from europe saying please don't go the same way as germany and the uk. >> do you as a gay man feel comfortable in it that the people who embrace other elements of what we just described -- >> i understand the question. >> do you feel comfortable in it? >> the press seems determined to label the alt-right this racist, homophobic, anti-semitic movement. and yet at the same time tries to crown, you know, a gay jew

who never shuts up about his black boyfriends as the leader of it. >> can you concede that the alt-right attracts some of those people? >> i think there's some overlap on the very fringes. i wrote a very good guide to the alt-right. i say it's very good because i think it's the only example in journalism really so far of somebody trying to give an accurate and fair guide to the contours of the movement rather than saying racism is bad. yeah, we know that. i want to know what this movement actually consists of. what is it you're getting wrong, the new republican base, the trump guys, the twitter, the troll brigade, what it is that they're seeking, what they're searching for. >> and what are they searching for? >> i think aside from the policy positions, and i do think that trump is tapping into something with immigration stuff, that people like trump for the policies. mine is a little different. i think people are getting a

little sick of the nannying safe space culture of the left. of the language policing. saying everything is sexist, everything is racist, everything is homophobic. that kind of chilling effect on freedom of expression, even on journalism has become very obvious. >> what would make look like with an ascendant alt-right, with a trump in the white house, mr. bannan as the chief of staff? >> it would be so much more fun. >> it would be more spontaneous, let's say. >> would it be meaner? >> might be a little meaner. but we could do with a little meanness in american society. this cult of being nice all the time, not saying what we really think. the reason people like me get upset about political correctness is that it kills. it results in horrible things happening. san bernardino, sandy hook. people say we knew, but we didn't say anything because we didn't want to see racist. in the uk. 1,400 young girls were raped over ten years, and the

government report said the reason nobody reported on this is that the police and the authorities were scared of seeming islam phobic because those 1,400 girls were all raped by pakistani rape gangs. that is an example of political correctness with victims, with real world consequences. that's the serious end of political correctness. that's the real end. aside from the memes, that's the kind of stuff i really object to. that's the kind of stuff that i think a lot of trump voters don't like either. >> speaking of twitter, board meeting today. there's talk they may sell the company. >> they could try. i mean, who would want it? who would want twitter? to say nothing of what -- look, twitter is systematically having a got at conservatives. they are people saying that twitter has a race problem. it's got this black supremacist hash tag in its offices. there are plenty of people making that argument. that raises the specter of antitrust, and cruz would probably be up for that. jack dorsey very clearly checked

out of this business. he's not care. they're losing their users. as i spoke to you about one of the conventions, my analysis of twitter is that the conventional wisdom is 180 degrees wrong on this. everybody, the media, and journalists, everybody is telling us the problem with twitter is too much trolling, too much meanness, too much abuse and harassment. i see the problem as exactly the reverse. when twitter started cracking down on free speech, the platform started failing. that rule has never been broken. >> was there a series of tweets that got you banned from twitter, and in your version of what could be a more fun world, would those tweets have been okay? >> i mean, i told "the wall street journal" that leslie jones, the subject of the new ghostbusters movie, looked remarkably like one of my ex-boyfriends, which she does. i said it was nice that they cast a hot black dude in the movie. it was like, okay, fine, a gay guy is catty, stop the presses. this is not a reason to get somebody off twitter. what i actually did was wrote a

very long, very good, very brutal and bitchy, but i thought ultimately quite fair review of a very bad feminist movie. >> what do you think of colin kaepernick? >> oh, god, i'm so bored about hearing about this silly grandsta grandstanding. those moments when you have the national anthem, when everybody comes together, despite their political differences, race, gender, whatever, those are the moments when you're supposed to be respectful of your fellow players, the audience, of everybody around you, come together for that moment and say these are the things we believe in. >> but that seems to run against -- >> yeah, that's contradictory. >> it runs against your thought that we should be less respectful. >> oh, no, i think we should be hugely respectful of free speech. >> i don't want to get too uptight about it. because i don't care about some sportsman. >> you're bored of him. >> having a little tantrum, hissy fit spectacle. what i would like, though, is when they do things like this, and all eyes are on them, i would like them to actually say something of substance.

like have a real argument. rather than these lefty talking points. the reason sales of his shirt are going up is because people are burning them. >> you do support his right to do what he did. >> of course. i just think he's an idiot. he's perfectly allowed to do it. >> milo, good to have you here in the studio. thanks so much for joining us. tech editor with brightbart.com. apple shares are falling today. coming up, the we'll ask the top vc investor what he thinks. we'll talk to one of the most successful shark tank investments ever and he does it in only five hours a day.

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understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. welcome back. shares of tractor supply getting hammered in trading, after the farm and agricultural retailer cut in guidance. weighing on consumer spending and many of the markets after that company serves on top of that analyst teams both downgraded the shares to neutral ratings from the equivalent of buys. tractor supply shares down about 18% in 2016, down by 20% over

the course, tyler, of the last 12 months. >> thank you. big move in the price of oil, up more than 4% on a big drop in inventories. we'll go live to the nymex for the closing trades, next.

hi, everybody. i'm sue herera. here's your cnbc news update at this hour. hillary clinton held a news conference this morning in white plains, new york, saying she would make hunting down the leader of isis her administration's number one priority. >> we will discuss how to intensify our efforts to defeat isis and keep our country safe. we should make it a top priority to hunt down the leader of isis. and bring him to justice, just as we did with osama bin laden. wal-mart says a display of coke cans stacked to look like the world trade center at a florida store has been removed and was not meant to be disrespectful. the 15-year anniversary of 9/11 is on sunday. israel says work has begun on an underground barrier along the border with gaza, meant to

block hamas militants from tunnelling into the country. the concrete barrier is set to run hundreds of feet deep and will ultimately stretch along the entire gaza border. and one person was hospitalized after an suv slammed right into a convenience store in connecticut. the vehicle back ups and slams right back into the store. police believe the driver accidentally slammed the gas pedal instead of the brake, more than once. back to you. a big move in oil today, up nearly 5%. jackie deangelis at the nymex with the reasons why. >> good afternoon. i think we're going to settle somewhere around 4762. seeing strength into the end of the session, we hit a high of $47.75. it was that inventory. a draw down in crude oil inventories of 14.5 million barrels, the largest weekly

drawdown that we've seen since 1999. there are those saying this was a one-off. a problem because of the weather. at the same time, traders are looking ahead to next week saying if we do continue to see drawdowns like this, there is potentially a trend starting and we will see some of this inventory start to work itself out. that is a positive sign for crude oil. buckle up, get ready for some volatility. back to you. >> thanks so much. that's what's happening with oil. dom chu tracking the big energy names in response. >> while the broader market moving, the energy sector overall the best-performing sector in the s&p. you can see they're up by 1 3/4%. almost every stock in the sector is in the green, helped along by, like jackie said, the higher oil and natural gas prices

showed that reduction in supplies. also, one of the better performers in the energy sector overall. back over to you guys. >> got it, dom, thanks. tomorrow, brian will join us live from oklahoma with a great lineup of guests. tomorrow on "power lunch," 1:00 eastern time. from the energy field to the heart of silicon valley, we're joined now for a look at which tech firms are leading. this iphone 7, this really confirms your view that apple's got a problem on its hands. >> i think you can call it the less hassles release. dropping your phone into your

toilet by coincidence, or into the bathroom tub and that helps you with that. tho those things are personally important for people. but i'm going to buy an iphone, because i need one. it's been two years. would i have asked for some crazy awesome feature? of course. i think a lot of people would have wished for that. but this release takes care of a lot of problems people have been talking about for a long time, which are also important, but it doesn't have that pixie dust on top of it that people would also expect or hope for from apple. and my hope is that actually what's happening is apple is secretly working the same. so that next year, when the iphone 7-plus or 8 or whatever it's called comes out, we will be stunned with features that are sort of like wow. >> and pixie dust may be in the works for next year, but in terms of the innovation race at this moment in time on the

hardware side of things, the device side of things, you actually think amazon is making some great strides with its new echo device. >> amazon's echo, or alexa, is a sleeper hit. it has, currently, depending on which estimates you believe, between 1.6 and 3 million already purchases of the device in the home. my mother-in-law is 65 years old. she knows thousand use the web and knows how to do that. it's not something that she feels comfortable with. i bought it as a gift for my wife. i thought maybe it's a little gadget in our house. then we used it, and my mother-in-law marie comes in and she says, what is that?

well, you ask it for the weather, you can ask it for the news. alexa, what's the news today? or alexa, what's this song? two days later, she says, i can't believe how awesome this is. i can't stop using it! so now she has an amazon echo sitting in her kitchen. she asks for the weather for the news. and, you know, the latest thing, you know what you can do with it? you can play jeopardy with it. >> i think as a fellow male, we all want a woman who understands us. alexa understands me. >> okay.

>> also quite diplomatic. >> she said, i just want to let oh people decide. >> nonjudgmental. >> about the echo -- i love the echo. i agree with you, i think for the elderly, it's going to be fantastic. is it an echo or an alexa? why don't you just refer to it? >> branding issue. you're right. they want alexa to become the voice interface for everything. they're working on a package that developers can use in their own apps, so you can access the power of alexa in anything outside of the hard world of amazon. >> the important thing about this is that this is innovation that will lead to revenue.

i'm guessing the idea is that this removes that friction between the consumer and that transaction with amazon and whether it be on their side buying their goods, or through a partner. >> that's right. the next time you press the button, you order it. or you even tell alexa to order it. you just say buy it, and then it comes in with amazon prime in front of your doorstep. it has a very large music library, too. you can enjoy entertainment, which amazon is also focused on, with music. and you can also enjoy the purchase part of it. >> do you think this could be a bigger, stronger ecosystem than what apple supposedly has right now? >> well, in the home, amazon is leading right now. there's no doubt about it. amazon is now going to compete against apple home, which is

coming out. but apple home kit has been out for two years. we will see how that compete co. but amazon is a serious competitor in the a.i. and interface space. voice is the next big frontier. >> all right, thank you. >> absolutely. speaking about at company known for its innovation, tesla shares falling today, near three-month lows. why the stock could fall even further. we will have that call coming up. and disney, the worst performing dow stock this year. does that make now the time to buy disney? we'll discuss that one next.

time now for street talk. stocks you need to know about. we kick it off with pier one catching a downgrade from raymond james. the ceo stepping down. also, pier one issued results for the current quarter. >> when you're only four bucks and you're down 67 cents, that's a 14% decline. second stock is eli lilly. jp morgan upgrading from overweight to neutral.

from 95 to 92. it's currently at 80. he thinks it's a lot of opportunity in the alzheimer's space. >> this is one of these pharma stocks with great dividend yield, too. >> third stock here, tesla, getting initiated as an underperform price target of 160. the company is well-positioned in the long term, but the material amount of execution risk over the next 12 months. the vehicle target very ambitious, but there could be delays in the batteries or the model 3, and that could hit margins. of course, a solar city deal that further complicates this whole entire story. >> very complicated. final stop, nike. the firm notes that competitive headwinds could leave shares of the stock range bound. specifically, the firm cited accelerating competition in europe from puma, new balance, and adidas. classic reeboks.

>> classic reeboks. >> right. >> that's interesting. steph curry's under armour shoe is a white shoe, kind of a jerry seinfeld-esque white dad sneaker. maybe that whole look is coming back. >> ew. >> despite the downgrade, the price target of 58 remains unchanged. >> all right. street talk down. that was fun, michelle. disney this year's worst performing data stock. ari wald is a technical analyst at oppenheimer. barton, let's go to you first. how is disney firing in terms of various cylinders, theme parks, movies, etc. ? >> look, disney is a great company. it was our favorite stock for a couple of years. this year, we did downgrade it to a market perform. this is going to be a tough year

for earnings growth. they're investing more in content. they've got very tough comps on the studio side. they kind of have a nice lift on their shanghai park launch. but altogether, we think their eps is only up 2% or 3% this year against a backdrop of a wet blanket secular headwind for the group. we think it's difficult for the stock to show you much love this year. >> is it really the cord cutting concerns that's really holding the stock back at this point in your view? >> yeah, i mean, cord cutting concerns are ever present. they're probably bigger than the concerns are bigger than the reality, because i think the declines are 2% or so. not that meaningful. they're only growing -- it's hard to get a lot of excitement if that core line is growing that slowly. particularly in an investment year for a big sports write-up for the nba. >> is there hope? >> i think it's too early to make that call.

the charts are still signaling caution for disney. it looks like it trades down to $90 from a near term basis. that's really going to be an important level, melissa. buyers have come in and defended that point over the last year. that's your important support level. but what you'll also notice, if you look at the chart, is that sellers are coming in sooner and sooner as well. that is noted by the lower highs over the last year. and they're selling with conviction as well. and we can see that with the very big downturn in on balance volume. actually at multi-year lows here. so this is jargon alert here, it is indicative of distribution, and it it carries bearish implication here, so we would stay away. >> all right. thanks so much. finds more market insights at tradingnation.cnbc.com. our next guest cashed in on

the paddle board craze, made big money for his investor mark cuban, and he did it all while working on five hours a day. he shares his recipe for success after this quick break. and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> while it is true that volatility can benefit the trader, it can also lead to chaos and a greater amount of risk. in volatile markets, consider narrowing to help limit losses while capitalizing on the swings that do go in your favor.

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likely no surprise that the average american works not 40, but 47 hours a week. our next guest has seen his business grow more than a 1,000% over the last three years. and he says a big part of the recent success is having a five-hour workday. stephen arstaal is the founder and ceo of tower paddleboards. it's a beach and lifestyler retailer, praised by mark cuban, the shark, as one of his best shark tank investments. he's also the author of "the five-hour workday." there was a book called "the five-hour workweek," wasn't there? >> there was a book called the four-hour workweek. >> what are you doing wrong?

>> it's like five-minute abs. >> that book was for entrepreneurs, for individuals, how to separate themselves the from the corporate world and go out on their own. my book is how do you do this for the entire american force. >> how do you do it? how have you done it? >> we work 8:00 a.m. to 1:00 p.m., got rid of lunch. there's a lot of waste just involved around lunch, even planning where to go to lunch. we basically put sort of constraining the time and that forces people to be productivity and to find productivity tools that are out there today. >> you pay them the same if they were working an eight-hour day? >> we do, actually. >> you have hourly employees? >> everybody's on salary. >> everybody's on salary. when we rolled this out, we also rolled out 5% profit sharing. the net effect of reducing the hours as well as profit sharing, everybody's per-hour earnings nearly doubled in the company overnight. and the beauty of this, there was no cost to the company to do this. no increased financial risk. >> you said you're measuring

productivity. how? and what do you do in a business that it's not as easy to measure productivity on individual employees? >> yeah, you know, we measure productivity in really broad strokes. like, how much money did we make this year. you know, what size checks am i sending cuban. we're not sort of micromanaging the, you know, the productivity. but the idea is, my theory is that the american worker right now, most office workers get about two to three good hours of work done, but we're taking 8 to 10 hours to do those. because productivity has gone off the charts in the last 20 to 30 years. and you know, there's no time constraints on people. we've become a lazy workforce. >> you're the owner. do you work five hours a day? >> i've worked this way for about the last 15 years. it's not 8:00 a.m. to 1:00 p.m., i have a lot more flexibility in my schedule. i tell them, i'm the owner of the company, when you found it, you can come and go as you please. i come in, get my work done, and get out of there. everyone that works like me, my entrepreneurial friends and people who are working independently, are working the

same way and they're thriving in today's economy. >> did you start your company with this in mind or was there a transition? i would imagine some people out there listening might be thinking, this is an interesting idea, but if i told my workforce, you only have to work about five hours a day, you're going to get about 50% of the productivity you would normally get. >> when i started it, we were a start-up and focused on growth -- >> so it was not a five-hour day company. >> it was not. >> can you start a company and make it a five-hour day company? >> you totally could. >> but how you do you transition? >> how many employees do you have? >> there's ten employees. there were seven when we started the transition, about a year and a half ago. i told everybody, we're going to do summer hours, you're going to start at 8:00 a.m., leave at 1:00 p.m., no lunch, and if you can't figure out how to be as productive as you were before, you'll be fired. i'm giving them this sort of lifestyle where their workweek is better than most people's vacation week, but the ask is,

you need to figure out how to be productivity. >> so you said, productivity has been off the charts for years, we've gotten lazy. i didn't understand where you were going with that. >> the fact that you have so much time to do your job, you're not forced to use the productivity tools we have. there's a website that accompanies the book, fivehourworkday.com, where we list productivity tools we've identified that allows us to work at this faster clip. without the pressure. people are not identifying those tools. these tools have been around for five or ten years. >> have you persuaded mark cuban that he should work five hours a day? >> mark cuban is not a big fan of the five-hour workday. but mark cuban is not a fan of the eight-hour workday. mark cuban is a special guy. he's like braret favre playing football. we've probably paid his

investment back in cash dividends in the past four years about 500%. and if you add in the value we have baked into -- 2,500% is his return in four years. he's happy. >> how much did he put in originally? >> he put in $100,000. and when he invested, so, no -- he put in $150,000 for 30% of the company. but at the time, we had $100,000 in lifetime sales. since his investment, we've done over $20 million in sales. >> i remember the pitch i saw on cnbc not long ago and you brought a young lady in a bikini along to help you make the pitch. >> yeah, she didn't have much to do with the company -- >> she didn't say much. >> made for good tv. the and she saved me, actually. i'm known, infamously, with as a the worst pitch in the history of "shark tank" that still got a deal. throws up, i couldn't talk -- >> i think that's -- >> it was pretty bad. >> it was pretty bad. >> thank god for the bikini. thanks very much. we'll have you back. >> that was fun, stefan, thank

you. up next, sidelining the new iphone 7 and trust me, it's not what you think. we'll explain. there are two billion people who don't have access to basic banking, but that is changing. at temenos, with the microsoft cloud, we can enable a banker to travel to the most remote locations with nothing but a phone and a tablet. everywhere where there's a phone, you have a bank. now a person is able to start a business, and employ somebody for the first time. the microsoft cloud helped us to bring banking to ten million people in just two years. it's transforming our world.

♪ guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. check, please. we'll talk a little bit more about apple, why not. i think apple is a victim of its own past success. they set the bar so high, they set the anticipation so high, they're bound not to measure up, when they announced the iphone 7

yesterday. here's an interesting. tonight at the opening nfl game between carolina and denver, which is on nbc, a photographer from sports i'll straited will be we quipped with the new iphone 7. he'll take shots and post them tomorrow morning on si.com and you'll be able to check out these shots from the iphone 7 and see how they measure up to what he might have gotten using a big long lens telephoto that he would have used for si. >> great product placement. >> a great product placement. it's smart and it will make people not only, educate them about the iphone, but click into si.com. nfl tonight on nbc. >> that camera's the reason why a lot of analysts stuck by their outperform ratings, why they're so positive on apple, and that's why gopro is seeing its second day of declines, down by about 2.25%. fit bit rival to the apple watch is down as well.

for gopro, specifically, the smaller that camera gets and the better packaging, the more trouble. >> i'm interested to see what happens with this twitter board meeting and whether they decide to sell them. i love twitter and i want the best for them. >> who wants them? >> i know. >> thanks for watching "power lunch," everybody. glad you could join us. "closing bell" starts right now. hi, everybody. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. i want to point something out here. notice something? huh? huh? no high heels. we are about the same height after all. >> it's a long -- in reality, we are. >> i told you! i told you! anyway, where was i? >> you're going to get me in trouble. >> there we go! aren't those nice? this is going to be weeks of fallout. i have a blister. >> tmi. tmi. oil hitng