defensive play. >> i noticed the nasdaq is up 1% here. if you can -- dow, s&p 500 on pace. a nice rebound today. dow at the highs of the day. you got brainerd 15 minutes away. "power" starts now. scott, thank you very much. gentlemen, appreciate it. tyler matheson here. "power lunch" coming your way. moments away from potentially market moving news as scott just mentioned coming from fed governor lyle brainerd. donald trump on the attack saying janet yellen should be ashamed of what she's doing to the country. more on his comments ahead. and hillary clinton's health, front and center, following her abrupt departure from a 9/11 memorial service and the disclosure she is suffering from pneumonia. is this a turning point in the race for the white house? "power lunch" starts right now.

>> welcome to "power lunch." i'm melissa lee. less than three hours left in the trading day. stocks are near session highs. what happened to the fry sell-off? we have the nasdaq up a full percentage point. strength in technology, and in particular in technology, take a look at shares of apple seeing the best day since july 27th, higher by 1.6% now. >> here's what else is happening at this hour. hillary clinton's doctor says she's being treated for pneumonia. this after she had to be held up and helped into a van while leaving that 9/11 memorial service early over the weekend. donald trump responding right here on cnbc. listen. >> i hope she gets well and i hope she gets well soon. but, you know, it was quite sad to be honest with you and i hope she gets well soon. no satisfaction, believe me, whatsoever. >> also today, in business, a big agricultural deal, potash

teaming up with agrium to create the world's largest fertilizer company. hp, hewlett-packard getting big near printers, buying samsung's printer business for just over $1 billion. tyler? >> thank you very much, brian. the fed front and center as we wait on fresh comments from lyle brainerd. we heard from neel kashkari this morning on "squawk box". >> my view is there doesn't appear to be huge urgency to do anything, frankly, let's get as much data as we can and try to get our inflation back up. >> moments ago, jpmorgan, jamie dimon weighing in on a rate hike. listen to this. >> my own personal view and she does not call me for advice, by the way, but 25 basis points is a drop in the bucket, we don't -- we say to you always 25 basis points goes slow, don't worry about it. let's just raise rates. >> donald trump also sounding off on interest rates and janet

yellen today on cnbc. >> she's keeping them artificially low to get obama retired. watch what's going to happen after we're just a very serious problem. i think it is very political, i think she's very political and to a certain extent i think she should be ashamed of herself. >> let's get the reaction now from the traders. bob pisani live on the floor of the new york stock exchange. lots of commentary today, bob. >> a lot of it fed speak. not a lot of substantive stuff. we had highs for the day, essentially s&p spiking a few points in the last few minutes at the highs. let's look at where we stand right now. not only no follow through from friday's selling, but quite a rally from the lows this morning and it was prior to the open that we had the low. it is even now, even though the markets are up, more volume going to stocks on the upside than the down side. the volume is average, and the volatility is a little bit lower. not a lot of big moves here despite what we saw on friday. people are surprised we moved

ahead of lyle brainerd's comments, but look at the market move. we moved 75 points on the s&p 500 from the open on friday to about 6:00 a.m. on monday. 75 basis points and now we have come 40 points up, you might say, that's a lot, because we have regained half of all of the losses we had from friday to monday morning here. dow leaders and sector leaders, the rally was initially led by interest rate sensitive sectors, so telecom, and utilities, for example, but technology has been coming up, highs of the day, so is health care. all of the bank stocks were negative when we started, but they too have moved into positive territory and you could see this, we look at the dow leadership, so you have a very broad swath of the dow showing leadership. techs like apple and intel, the oil stocks went positive very early on, and even some of the consumer staples names like coca-cola, that were under pressure early, are positive. goldman has been positive for a while now. so rather notable market turn around in the middle of the day after bottoming out, 2100 on the

s&p 500, 45 point move from the 6:00 a.m. lows this morning. guys, back to you. >> bob, thank you. >> i'll pick it up, melissa. rick santelli has found his way to the microphones. let's check in with him for a bond report. hi, rick. >> hi. well, tyler, we had had two options, we had a three year auction and nine year, 11 month auction, fancy for ten year auction, adding to because the first issuance was last month or adding to reopening this month. we'll start off with the three. 24 billion of those, one issue market was trading around 95.95, that is. at the auction, .947. darn close. lower yield, higher price, that's one of the bright spots. 277 on bid to cover close, but below 10 auction average, 58.8 indirects is the only metric above average. 4.7 on directs is really weak, weakist since december of '09. c minus on that one. now to the ten-year, nine year,

11 month, 20 billion in terms of the size of the auction. yield at auction, a whisker under 170, 1.699. looked like 168 1/2 for trading. a little bit of a bad mark there on pricing. 2.35 bid to cover, less than ten auction average. like last auction, the three year, i mean, 62.1 close on the indirects. the weakness here, just slight, three year note auction was the directs 3.4%. that was the weakest since february of 2011. i also gave that a c minus. both those grades are very generous, obviously, with everything going on in the fed, the question is about the meeting, the global dynamics of the synonymous nature of the economy, and the stock market really makes these auctions, particularly important, especially tomorrow's long dated 30-year bond. back to you. >> rick santelli, thank you. let's talk more about the markets here, joining us is gabriela santos, global market strategist.

good to have you with us. paul, what do you make of today's action. it seems like we're resuming the same old same old sort of trade in a low growth environment, people are reaching for growth, bidding up technology and reaching for dividend yields. >> i think it is the buy the dip mentality. we saw a sell-off on friday. a lot of angst in the weekend and this morning when the futures were lower. just shows there is not a lot of complacency out there among investors. the market investors coming in and buying things up. but people were looking for an excuse to sell, haven't done anything for so long, got that on friday with hawkish fed speak, but these bumps in the road, we'll have the fed, the economy and the election weighing on short-term moves in the market. overall we think the u.s. will command evaluation premium over the rest of the world. >> gabriela, you're not a doctor, i'll ask you to play one on tv now. do we suffer from fed fear. your ceo saying raise rates, it is not a big deal. the market seems paralyzed by

any hint of a rate hike. is that an overreaction? >> would you like to disagree with your boss publicly right here on -- go ahead? >> no, no, we would agree with jamie and we have had that story for quite a while now. to use your doctor analogy, we had zero interest rates when the economy was at its death bed, right? very, very sick. and that is no longer the case anymore. we don't need this emergency medicine. so it is time to start weaning the patient off of this very, very -- what is still very aggressive. >> we have crisis rates but the crisis is long gone. >> long gone. that's why we have been saying it is more than time to get going in terms of normalizing rates. >> the fed focuses on two things as i understand it. the health of the labor market, right. and the presence or lack of inflation. it does not focus on the gdp to my knowledge, right? so you got a labor market that looks pretty dog gone healthy. anybody seeing signs of inflation coming that might cause them to raise next week, in december, or start moving

more aggressively? >> there are some pressures building down the road. we're seeing the lack of declining commodity prices as, you know, worked its way through. seeing the commodity prices going up. labor is slowly commanding higher prices. so that's going to have some impact on inflation, but there is not really necessarily an urgent need by any stretch right now. are we overly focused on the fed, headline we're talking about, markets awaiting brainerd speaking at 1:15. 99% of americans don't know who lyle brainerd is. >> nor should they. >> exactly. she would be very happy to know that, probably for 99.9% of people don't know who she is. but there is such a focus on the fed and we have to get away from that. one rate hike here isn't going to be a huge deal on the markets by any stretch, i don't think. >> that's true. are we facing volatility shock in the future? the elections, for instance, amazing people say, no matter what, the election is going to

be whatever they are, and own stocks again. with valuations where they are, is the risk to the downside? why not take money off the table and step back now? >> to your question about volatility, volatility was abnormally low in august. so incredibly calm, the market was barely moving on a day to day basis. it is very normal to see that level of volatility come back up. does that mean we should be concerned enough to take up too much money off the table? no. we wouldn't say that. we need to make sure we're still appropriately positioned, and u.s. equities does still makes a lot of sense in that scenario. there will be bumps along the road. >> if the fed is not the risk, what is the risk? >> to your question, actually, around inflation dynamics, one of the reasons that we would agree with jamie dimon in saying let's start normalizing rates is that otherwise you do risk inflation starting to get a little bit on the upper end of the range and you're forced to tighten more quickly than you would like to. that's a risk because we don't get moving soon enough and then

faced with higher inflation down the line. >> you actually, though, see volatility shock in the form of the odds for one particular presidential candidate. >> not necessarily volatility shock, but we had a major shift in the polls over the weekend, this could just be a temporary blip because of what happened over the weekend with hillary clinton. but if trump surged, his poll numbers have increased going into the last -- this past weekend and they continue to increase. if we see him -- his poll numbers go out to new highs, market has been pricing in a clinton presidency. and so if that starts to change, that's going to impact the markets. no president is going to have an ultimate impact -- drive the stock market and still have congress and the house and the senate. there is going to be short-term movements and people are going to be, you know, the unknown. what is trump going to bring to the markets and what impact on the economy? but we're not -- we're nearly at that point. >> why is big blue, ibm, a good stock to own right now? i don't know if i heard anybody recommend ibm since it was ib.

>> i think it was probably the best reason to be recommending it, nobody likes it. the stock has been under pressure for three years, the stock rebounded this year, consistently raised its dividend and doesn't pay a whole lot of earnings out. >> thank you. >> we're moments away from potentially market moving fed comments. they're coming up live. comfort food, you've had a good long run.

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welcome back to "power lunch." let's look at the markets which didn't look like they would be very good today. but they have bounced back quite nicely with the industrials up 131 points. 18,217. s&p 500 up about 18. and the nasdaq up about 1%. to steve liesman, breaking news from the fed. steve? >> fed governor lael brainard saying the case to tighten policy preemptively is, quote, less compelling given how inflation has behaved in the fed's inability to hit its inflation target. she said the fed should not foreclose the chance for further job gains, essentially by tightening rates preemptively. she goes on essentially makes a full throated defense of not raising rates, says weak foreign demand will weigh on the u.s. for some time and that foreign head winds shouldn't matter to u.s. policymakers. she warns on the potential impact of chinese -- of the chinese growth slowdown, both in the u.s. and abroad. on to specifically say that there is a risk from dollar

strength if the fed hikes, for example, through lower inflation as well as lower capital investment. another reason for not hiking that, brainard suggests, the low neutral interest rate, which she says could be around zero, is likely to persist for some time, contrary to what people thought before the crisis or shortly after the crisis. policy, she says, should tilt against downside risk. why? because of the asymmetry we talked about, the fed can fight inflation has fewer tools to fight deflation or weakness in aggregate demand. the labor market goes on to say has improved and makes some positive comments, also saying the near term foreign risks have less and even though she's worried about the longer term foreign risk. recent data suggests the pickup in the third quarter, but right back to talking about reasons for not hiking, pointing out the economy has been disappointing over the past three quarters. ultimately, at the end of had her speech, guys, she urges, quote, prudence in any decision to hike interest rates.

tyler? >> dear prudence. gabriela santos is still with us. paul hickey as well. let me ask you this question, how divided is this fed? >> i think going into the september meeting there is pretty good divisions here. i think there are a couple of fed governors who do not want a hike. i think dan tarulla is one of them. lael brainard counting herself as not among them. and a bunch who do want to hike. mester, george, sounds like they want to hike, those two for sure. the question becomes the chair. i do not think the fed governors in this case would strongly dissent against the fed chair if she wants to hike. i think she has more definitive votes for hiking than she does for in the hiking, but i think she would probably have a majority either way, perhaps a bigger majority if she decides to hike rates. >> gabriela, you chose not to disagree with your boss, mr. dimon, a moment ago. but you do disagree with miss brainard.

she said do not raise rates preemptively which is what you said you think they ought to do. >> i don't know we would say preemptively, but again going back to normalizing rates. and this is part of a rhetoric of other fomc members that have been saying we're getting closer and closer to fulfilling our mandate. we're at 4.9% unemployment and inflation is starting to tick up slowly. i don't think it is preemptive at all to again normalize policy. >> you also -- i thought i heard you say in the last segment what you were concerned about is the idea they would be too slow and that inflation if it comes back, then you're playing catch-up. maybe i misinterpreted preemptive in that context. >> preemptive in the sense that there is no urgent concern for inflation, but not preemptive in the sense this is still a good time to normalize. >> tyler. >> yes, sir. >> i want to be clear that that board you were looking at on the famous wall over there is simply my opinion of where people stand right now. i don't want them to think that's definitive. we have words look likely,

possible, unlikely, and unknown up there. but that's my sense of where it would be if the fed chair wanted to hike and what -- how different people might vote. i think it is a close call here. whatever you decide to do, and the question i think one of the big ones becomes what you do with those ism reports last week which suggest a sharp deceleration in the economy. and it seems like some fed folks are looking through it and some, like lael brainard, are embracing the negative aspects of it. >> we have ten people up on the wall. is that -- is that the -- >> those are the ten voters, yeah. >> these are the ten voters. so if we follow your analysis there, if yellen says i want to raise, she is likely to have two who might not go along with her. if she says i am not going to raise, she might have four dissents. >> tyler, you've changed the equation a little bit. if yellen decides she wants to raise, it is possible that one or both of those governors to

her right there come with her. it has been since 2005 that we had a governor dissent. so i'm not sure that tarullo or brainard would dissent in this case. she may have nine or ten votes to hike. i don't know if mester and george would dissent if she decides not to. >> one thing that caught me off guard, i'm not surprised by this, brainard has been on the dovish side, throw in the politics, she has donated to the clinton campaign in the past. you got people come out and say, well, she's going to be dovish because you don't want to sort of shake the boat ahead of any collection if you donated to a presidential candidate. whatever. what confuses me, steve, is the china comment. citing a china slowdown as one reason, china's gdp growth has been 6.7% for a couple of quarters. i know that's slower than it was, but what is she referring to. >> she refers to the idea that we don't know how the china slowdown is going to go. she says there are risks in it, and we have seen some of those risks earlier this year.

brian, you'll remember, the market went through a major gyration as a result of fears over china, she points out that there are debt issues in china that we simply don't know how they will work out and they present to her opinion, they present risks to her. >> and paul hickey, i don't know if it is going to rain next month. i don't know if i'll make it home every night for the next six -- >> you get my point, you can't just -- you got to go -- if you can't on one hand say you're data dependent, because data is by nature backward looking, and then cite some great unknown in the forward look, you know, china may slowdown, may speed up, as your rational. in your view, has brainard lost credibility? >> i don't want to question credibility of any fed members. but i think, you any, know, to point, you will never have a perfect scenario. and what gabrielle is saying before, you don't want to be caught behind. when you have a rate hiking cycle where the fed is behind

the ball, the market runs into trouble. you have the slow gradual periods hiking rates, the market tends to weather it better. >> some might make the case over the china slowdown looming, we don't know the impact on the united states. they should be more incented to raise rates, they have policy tools in the future to deal with any sort of slowdown. >> in case there is some sort of chinese debt situation, three, five years from now. >> what if china speeds up. >> we don't know. >> hard to say we have to tighten so we can loosen down the road. it is just -- they always have tools. there is plenty of tools they could, you know, do more qe. >> how about this? i'll keep you out of the political front. is the data good enough to justify a rate hike? >> yes, it is. because they have two sides of the mandate, they have the labor market and they have inflation. and to us, and both of those are signaling that it is more than appropriate to normalize. >> she answered too clearly. >> yeah, you speak way to -- >> enjoy minneapolis. >> gabriela, and paul. we should note as for the

markets, we had a sharp reaction immediately after those brainard comments. lift in terpz of the embargo. but back to prebrainard levels on the s&p 500. if it is a term. it is now. we still have strength in dividend yielding stocks and technology. we had a little bit of the air come out of the treasury trade as well as financials. meantime, we do have a big day on tap tomorrow. we're counting down to delivering alpha. you'll hear from some of the biggest name on wall street throughout the day tomorrow. right here on cnbc. on deck, the good, the bad and the ugly of today's trade. plus, one of the best investors will join us, scott minerd, we'll get his comments on the fed and where you can make some money right now. that's why we're all here anyway.

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hello, everyone. i'm sue herera. here is your news update for this hour. greek prime minister alexis sip riis arrived by military helicopter to the island whereforest fires burned for a third day. officials say at least eight homes were destroyed with dozens of foreign buildings. firefighters were injured fighting that blaze. actor george clooney and don cheadle unveiling evidence of stealing and prove tearing in south sudan. the two and other members of the group the century presented the findings at the national press club in washington. >> including mass atrocities on its citizens, starvation, and rape. all while plundering the state's resources and enriching themselves and their families. >> democratic vice presidential candidate tim kaine has his own campaign plane beginning today. he gave the thumbs up on the tarmac at his hometown of richmond.

he greeted the flight crew and supporters before taking off for a campaign stop in dayton. reporters will be traveling on the plane with him. france has banned plastic dishes, glasses and knives in the ongoing effort to reduce pollution and be more environmentally friendly. it follows a ban on plastic bags put in place since july. going to complicate those french country side picnics. that's the cnbc news update at this hour. back to you. >> thank you very much, sue. let's check on the markets here. cooling off after a short lived brainard bounce. the dow was up 178 points 15 minutes ago. lost about half of those gains. we're still seeing strength in dividend plays. staples and telecom holding in the green. watching this very carefully because the steam seems to be coming out of these gains here. >> let's move to politics now. hillary clinton's health once again called into question as it has been on a couple of occasions over the past month or so. john harwood joins us now with more. to a campaign, john, that did

not have a particularly good week last week, the health concerns take it even down a darker path. >> they didn't have a very good week last week, tyler, and they had a horrendous last 24 hours. and that's because as you said, there had been some pre-existing questions raised about hillary clinton's health, the coughing that she had experienced in some public settings that some called attention to and then this, this moment when she left a 9/11 commemoration yesterday, was waiting for her secret service vehicle, you see her knees buckle and she collapsed and had to be carried into that van. that is the last thing that a 68-year-old candidate wants to have the public see and about 90 minutes later, she came out publicly and tried to calm the furor by saying this -- >> are you feeling better? >> yes, thank you very much. thank you, everybody. >> now, the problem is there was

no other explanation until hours later when the hillary clinton's personal physician, lisa bardack, put out this statement saying, well, actually, she -- the coughing that she had experienced was diagnosed as pneumonia on friday, we treated her with antibiotics, advised her to rest. they did not announce that on friday. they did not announce that immediately after she had that episode and they also didn't have her follow through and rest as the doctor had said. now, this morning, donald trump was on phone for "squawk box" and made remarks which reflected a smart strategic calculation to not get in the way of the story and appear only gracious with respect to his opponent. >> i hope she gets well. i hope she gets well soon, but, you know, it was quite sad, to be honest with you, and i hope she gets well soon. no satisfaction, believe me, whatsoever. >> now, of course, donald trump is two years older than hillary clinton. he has not released medical

records beyond a widely ridiculed letter that talked about he would be the healthiest person who ever served as president. hillary clinton has only released a year old letter from her doctor until the release that she put out yesterday afternoon. brian fallon, her spokesman, just appeared on msnbc and said she would be releasing additional medical information this week that she doesn't have other undisclosed conditions and donald trump told us on "squawk box" this morning he was examined last week and will be releasing numbers from tests that were done on him later this week. we will see when both of those sets of information come out, and how complete they are and whether they calm questions about hillary clinton and donald trump. >> one thing i think is part of this story, john, correct me if i'm going down a path you don't agree with, but it would be this. that one of the things in the clinton narrative is that when bad things happen to clintons or

the clintons are involved in bad things, that their first impulse is not to be transparent, necessarily, it is rather sometimes to maintain secrecy, to maintain the bubble. and here is a case where the candidate received a diagnosis on friday of pneumonia, not word one was said about it. and then it comes out in the context of this episode where she got wobbly, seemingly to my observation, collapsed, and we find out she had pneumonia or has pneumonia. am i wrong about this? or what? >> you're 100% correct, tyler. this is exactly true. and it has been true of the clintons for a long time. as a matter of fact, i was having a long conversation a few moments ago with a former clinton aide, very close aide and senior aide to bill clinton during his presidency, who said that the problem with the clintons is that they believe that they are good people, trying to do the right thing,

and that people who don't accept their version of their own story must be badly motivated and therefore don't give them more information, don't give them more ammunition. she tries to guard and protect her information, that is why, tyler, i believe this e-mail story became a huge story, that the decision that she made to use the server that her husband had set up as a former president was in part because she wanted to safeguard and reduce the risk that others would be prying into her information and try to use it against her. that caution is something that has inhibited her as a candidate and repeatedly caused her problems including this weekend. >> yeah. it goes back to that idea that they got -- they must have something to hide and sometimes comes back to burn you. john harwood, thank you very much. meantime, the business round table is out with a new report that suggests that america's ceos are concerned about lackluster economic growth.

on "wasquawk box" this morning, donald trump pointed his finger at the heavy but u.s. government is putting on corporate america. >> businesses are being put out of business by the regulations. every day, new regulations come down and i had people -- and i'm not only talking about small business, i'm talking about massive businesses telling me, donald, you've got to do something, they're putting us out of business. look at what is happening with the energy business, they're making it impossible for people to really to compete. they can't -- i mean, it is so onero onerous. >> let's bring in john engler, now head of the business round table, group of ceos representing $7.5 trillion in revenue and 16 million employees. welcome back to "power lunch." >> good to be back. >> your reaction to trump's comments on regulation? >> well, it is spot on. the regulations just don't stop coming. and we're seeing an avalanche of regulation as the current administration nears the end of its tenure, really cleaned out the cupboards and closets and

they're finding regulations in places we didn't know there were any lurking. it is tough now. and we don't know when it is going to stop and a lot of these create uncertainty and some of them, fundamentally alter, such as a treasury rule, 385, the way debt and equity were thought about for 50 years. >> what is that 385? >> 385 -- >> no idea what you're talking about. >> i hate to be jargonist, but a proposed rule that would basically change the way companies have treated debt or equity in terms of a transaction. if i'm buying or selling assets, i've done the accounting one way for a long time. and this was a rule that came out initially, they said, we're going to stop inversions. well, it goes far, far beyond that, and it affects domestic only companies who really never thought they had a problem. so this is not a rule that has happened yet, but it is one that lurks out there, targeted right

after the pfizer deal was announced. and it is just one more in a series of rules that are adding complexity and cost to doing business at a time when gdp is rising, what, three consecutive quarters into 1% range. that's just not good enough for the kind of recovery that can bring this world economy back. >> do you -- can you -- i don't know the answer to this, mr. trump said that their business is small and large, that are literally being put out of business by the avalanche of regulation. can you think of one? >> i can't think of a large business that has been put out of business, but when i see top line growth being very difficult to achieve in this environment, when i see small business data, we had had three years in a row where we saw more small businesses go out of business and we saw form. so clearly there, i think we could probably find a lot of different examples, but what happens to the larger company is maybe suddenly m&a happens and

that one entity becomes part of another entity or they're splitting up and reorganizing in different i waways, trying to t the slower growing parts of the company, put that over here and a little more robust growth over there. so a lot of financial engineering in order to survive and still hit those quarterly results. one of the things we have been urging is we ought to step back a little bit, especially on the -- on the activist front and say, look, let's talk about long-term value creation and part of that audit be a government participation where the tax system gets cleaned up, we ease off on the regulation, we get energy policy right. and we do those things and trade and immigration are part of that, where we are doing everything we can to maximize our opportunity to help people go to work, and get in jobs where they can support families. >> in terms of the short-term,

john, we talk about a possible fed interest rate hike, we talk about the elections as being sort of these factors in the market that might cause a pause. talking to your businesses that you cover and have in your group, is that a reason for them to pause on investment? are they doing anything differently? >> our chairman got asked that very question, we put the survey, this is 14 years we have been doing this survey. we're about 15% below what the average has been over that 14 years. so it is softer. and the specific results are we look six months ahead what do you think about sales or hiring. sales was thought to be down, hiring down, capex ticked up by a fraction of a hair. so, yeah, i think there is -- what doug said, because of the election, because of the uncertainty, you have people checking bets. and that is somewhat the case, i think every time especially when you got an open seat in the white house, somebody knew was going to be there come january

20th. so i think there is some concern and in this campaign, there are positions taken, frankly by both candidates that would be of concern to what we would say would be maybe a comprehensive growth strategy for america. so there is some reluctance and i do think the optimism then that comes after the elections say that first 100 days in 2017 ought to be a period of great activity and we hope after 30 years, for instance, on tax reform, we can finally get something done and that alone would add to gdp. >> governor, thanks so much for your time. appreciate it. john engler, president of the business round table. the major averages giving up much of their gains in the last 30 minutes or so. coming up next, we hear from a man who worried about the hedge und and etf influence and this market, $80 billion of investment advice coming your way. that's straight ahead. ohn, 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. with this level of engineering... it's a performance machine. with this degree of intelligence... it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis. introducing the completely redesigned e-class. it's everything you need it to be...and more. mercedes-benz. the best or nothing. now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive.

hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.

welcome back. jamie dimon speaking a short time ago at economic club of washington. it is clear mr. dimon, wilfred, does not agree with miss brainard of the fed. >> that's right, brian. as you rightly say, he just fin irbd speaking on the topic of the economy. he said the u.s. is doing okay. adding while there were some problems, there were no real potholes. when asked what advice he would give janet yell been when en ab rates this is what he had had to say. >> my own personal view, 25 basis points is drop in the bucket. we say 25 basis points go slow, don't worry about it. let's just raise rates. >> when questioned whether it should be september or december, quote, should go sooner rather than later. as for the topic of brexit, he said it was not a disaster for the united kingdom but did fear the eurozone could unravel depending on further elections next year in europe.

though that's not his base case and hopes the eu will use brexit to fix problems for everyone. as for the state of european banks, he had this to say. >> europe is behind us. they haven't fixed their capital, profitability, it is much more important to the financial system in europe than it is here. it is 70, 80%, here, 20 or 30%. but i think if i was running the european government, if you were to dictate, i would lay off at this point. let them do their jobs. >> this in contrast to u.s. banks which he said were in a position of enormous strength. in part, he did say down to dodd frank, though it is not a bill, he agrees with in full, asked whether the next president should repeal it and start again, the answer to that, though, was no. >> did he have q&a. i'm curious what the reaction was to him saying the fed should move sooner rather than later. >> there wasn't immediate q&a, but i think it is not a point that is unique to him, of

course, the bank ceos will be helpful to them if they get a hike. this was pretty explicit on the week before we get a fed meeting. so that view very pointed. but clearly we know that the banks won't see rate hikes anytime soon. >> all right. well, thanks. good to have you with us. stocks giving a big part of their gains up, but the dow still up triple digits. long, cold winter. it has been summer. why are we using winter metaphors here? no matter. value players have been, don't know, in the wilderness for nearly eight years and counting to be exact. >> it is a rolling stones song. been a cold, cold summer -- cold summer and then winter. and john snow. i don't know. >> let's talk to our next guest who says the tide may be shifting. kevin holt is cio of value equities for invesco, $80 billion in assets under management. value can stay value for a long time. how long are you ready to hold a classic value stock that you

would buy? >> our typical holding period is five to seven years. there has been, as you said, values under perform for a period of time now. we think fundamentals are coming together and some areas of the market are more value oriented so we could be on the cusp of outperformance. >> where do you see that? i suspect you're going to say based on where you're sitting now houston, texas, it might be in energy. >> yeah. i think there are two areas and they make up combined 41% of the value indices. the energy space is one that people look at it and energy is underperformed since 2008. even though energy was $100 a barrel, the markets were smart enough to see the excess capital that was invested in that industry and that returns would come down. so in 2014, when the prices rolled over, the stocks underperformed dramatically once again, that wasn't something that just started that year. so we think energy stocks with

investment having been pulled back, we think saudi's near peek production, we think those are good productions right now. >> you think financials may be an area of value. what is the difference between a stock or a sector that is just underperforming and one that is a value? >> yeah, really if you're a value investor, it goes through the numerical analysis. we look at the financial stocks, we think it is the largest banks which frankly have been the topic of much of the discussion earlier in terms of legislation, regulation. so they have, you know, some of the changes they made were needed. but so much capital residing with in our largest sector seven banks now that if you look at the most recent results, the companies could buy back by the fed's own definition 25 to 45% of their equity today if the fed would allow them to, and the fed is gradually letting them increase the buyback and dividend programs.

>> how long do you think you have to wait in energy and in financials for the value to out? >> i really do think we're on the cusp, and the only risk, this is what the market i think has been discounting since the fourth quarter of 14, when momentum really within the stable dividend paying stocks started to dramatically outperform is a deflationary spiral. so as long as we get just stable, not even great, but stable economic growth and you mentioned china earlier, you know, they devalued 10%, imports appear to be stabilizing, i think if the global economy can just chug along, i think we're on the cusp of higher interest rates, unemployment is the low here in the u.s., and i think with energy, you know, we're going to deplete the inventories, u.s. production is down a million barrels a day. we have to deplete the inventory sometime in the first or second quarter of 17, when that happens, given that our imbalance is so tight right now, you'll see higher oil prices. >> right. kevin holt making the case for value, with invesco.

we appreciate you being with us. thank you, kevin. >> appreciate it. >> tesla announcing changes to its auto pilot system to try to keep more drivers engaged. don't watch movies while you're driving, even on auto pilot. the changes and the story straight ahead. experience the thrill of the lexus is f sport. because the ultimate expression of power, is control. this is the pursuit of perfection. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

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welcome back. tesla announcing changes to its auto pilot system. phil lebeau is live in chicago with more. phil? >> and brian, this is about tesla adding radar detection, essentially to the auto pilot system. means that the vehicles when they're on auto pilot should be able to recognize vehicles, objects in the road and should also give the drivers more warning in advance that they are potentially running into an object or could run into an object. here is essentially what tesla is doing. there is a radar function and radar technology that has been in all of these tesla vehicles since 2014. but it was never a primary support role in terms of the auto pilot system working now. it will be working with the cameras to see objects. cars that and other things that the previous system could not see. it will go around cars to let you know if something is in front of the car in front of you. over the air software update

will install this in all vehicles with auto pilot technology over the next one to two weeks. from elon musk's perspective, this will help drivers, some of them veteran tesla drivers who become too complacent when it comes to auto pilot. >> there won't ever be zero fatalities or injuries. there is -- there is just -- the world is a very big place and there is huge number of people and huge number of circumstances. so it is really just about minimizing the probability of injury, minimizing the probability of death, not sort of the illusion of perfect safety. >> elon musk went on to say in a conference call yesterday that it is the veteran auto pilot users, people who have been using it for a long time, that have become the most complacent about it. they have not paid attention when there were warnings they should engage with the vehicle, that they should put their hands on the steering wheel. now more warnings. in fact, if you ignore the

warnings up to three in an hour, then the system will shut down the auto pilot system, not the vehicle, until you are re-engaged and stop the car. auto pilot data and the new changes from tesla have been shared with the national traffic highway safety administration, which is conducting an investigation of this system following the death of a driver in florida, remember, he was driving his car, in auto pilot mode, a truck cut in front of the vehicle, turning on a two lane highway, it then hit the truck. elon musk believes if this technology had been in this driver's vehicle, that accident could have been avoided. back to you. >> phil, i want to ask you about just that point. the radar system that elon musk was talking about in his blog essentially says, this is a much better radar system than what had existed in the past. every one tenth of a second a picture is taken and now the knock on radar before was that convex or concave objects that can catch the light like the bottom of a soda can can really

be read as radar as a much larger object could slam on the brakes. there are lots of spurious objects on the road out there. is that the radar system has improved or is it that the warnings to the driver are now more frequent that would have prevented that death in florida? >> the radar system is primarily what he was talking about at conference call, the radar system has improved. that they have been able to work with their engineers in order to better read objects on the road. and the combination of the radar and the camera sensors, that's not changing, those two coming together should give better identification of potential objects as well as vehicles, anything that might be coming in front of the road. elon musk is quick to point out, no system is flawless. you're never going to have one that will 100% of the time stop a vehicle when there is an object in the road. they believe that this will dramatically improve the failure rate that is out there when it comes to object on the road and the vehicle and auto pilot and

not seeing that. >> phil, thanks. shares of apple up more than 1.7% now. the iphonemaker having the most positive impact on the nasdaq. why is that? because of pictures like this one. samsung 7 note exploding, setting a jeep on fire. bad news for samsung. good news for the competition. that story coming right up. ♪ we're drowning in information. where, in all of this, is the stuff that matters?

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i'm melissa lee. here's what's on the "power lunch" menu at this hour. to raise or not to raise. september in play for a fed rate hike. one of the world's biggest bond fund managers make his call. hillary's health issues, how serious are they? and how will it shape the election leading up to november 8th? an exploding problem. just how safe are samsung phones? and is the fear helping apple? that stock on track for its best day since late july. second hour of "power lunch" begins right now. i'm brian sullivan. let's get a check on the markets and your money with two hours now until the closing bell. you can see here, stocks are rallying again. the dow is up triple digits now. we were briefly below 18,000 for the first time in more than two months, but dovish comments from one of the fed members may be helping stocks. speaking of reversals, crude oil

has done the same, falling about 2% earlier today, but new crude oil is fractionally higher. telecom, consumer staples and utilities once again are your best performing sectors for your money this hour. tyler? >> brian, thank you. i'm tyler mathisen. jpmorgan's ceo jamie dimon speaking in the past hour saying the fed should raise rates sooner rather than later. weak demand at auction today. the national hurricane center says the ninth tropical storm of the season is forming over the atlantic. and the redskins are going to beat the steelers tonight. that's what i say. we're one week away from the next fed meeting and it feels like every fed member is weighing in today. stocks seesawing on the headlines. what is the market hearing about rate hikes ahead? steve liesman here to break it down for us. >> this is like essentially closing hour at the bar. something you may know something about. you get -- got to get your

orders in. the blackout period, i don't mean that, in any kind of pun way, begins tomorrow where the fed won't speak. today is the day that governor lael brainard making a full throated case for the fed not to hike rates. brainard, who is a govern, permanent vote on the open market committee, she said the fed should leave open the chance for labor markets to improve further and was very prudent in hiking rates. >> to the extent that the effect on inflation of further gradual tightening and lake market conditions is likely to be moderate and gradual, the case to tighten policy preemptively is less compelling. >> her comments follow those by minneapolis fed president neel kashkari, he made dovish remarks this morning saying there is no urgency to hike, wants to see more inflation data, and that inflation is a global phenomenon being low as it is. he wants more study of that. only dennis lockhart sounded

hawkish, saying conditions warrant discussion of a rate hike. he asks if the current low rate is appropriate. what does it all mean? it all comes down to janet yellen, had said in august in jackson hole, the case for strengthing for a rate hike and lukewarm data since then. we'll find out next wednesday if she changed her mind or not. >> the brainard bounce is back. we're back at session highs. >> i cautioned a bunch of times, right after a major fed event or data, the market bounces as there is this -- >> adjusting. >> i think it is a black box phenomenon. that's the way the market trades. and then i think people come in with maybe more prudent analysis or whatever you want to call it, human analysis. >> steve, thank you. what is the big bond trading firms making their way to the fed had headlines. dom chu has more. >> melissa, let's lead off with

who howard lutnick, kind enough to join us here. we're going to get to that in one second. we heard steve liesman breaking down the comments from fed governor lael brainard, some other comments from lockhart and rosengrend. it seems like the tug of war over the interest rate pick still continues. what is your take on how things play out for the rest of the year? >> we have got a slow growing economy, right? just about 2%. so it is just a slow growing 2%. so there is no compelling reason for a rate hike, but, come on, it is a quarter of a percent, wouldn't half a percent be better? not like anybody in the world actually is going to worry about, a quarter, a half a percent, i think they want to get to a half a percent, like a bigger lead off for space. if you think of second base being 1%, i think they want to get there, i think they're probably afraid to in september. i suggest probably more likely in december. >> as the ceo of a wall street firm, do you fear any kind of a rate hike? do you think this economy is not

stable enough to where we will actually take a downturn if rates go higher? >> no way. i think the u.s. economy is perfectly reasonably okay and it is 2% growth, perfectly reasonably take a move from a quarter percent to a half a percent. not that big a move, not, oh, my goodness. come on, a quarter of a percent. you know what we do with that? we buy coffee for the office. it is just a quarter to a half. i think the u.s. economy is ready for it. and would accept it positively. but probably in december. >> speaking of the was, this place is filled with energy because of the cantor charity day. you do proceeds, all the missions go to charities. tell us about the function and why it is so important to cantor fitzgerald and bpc partners. >> we lost 658 people, think of it as if all the people behind us were gone. we had floors just like this on top of the trade center. we want to take care of their families. we started out doing this

charity day. all our employees wave their day's pay. which is incredible. we bring in celebrity ambassadors to make it a fun day for them so that they work the hardest they work all year, but when they go home and kid says what happened today, instead of saying, i worked my tail off, i didn't make anything, they say, look, here is a picture with me with eli and peyton manning, how cool is that? it is a fun day. uplifting day. but we raise last year raised $12 million, gave it to 150 different charities. this year i'm hoping we do better. >> give us one quick second here, how much money have you raised total for the cantor relief fund so seminar. >> $180 million focus on the families. 658 families, paid for ten years of health care. and after the five years we turned to helping others and now we raised $125 million additional dollars to take care of others. 150 different charities. today, around the world, we're doing this, guys from manchester united and arsenal are doing the same thing in the uk. we got joe willie behind the

camera right now. >> see him over there. >> we're trying to turn the worst of days into something beautiful. >> so, brian, again, we're here at the cantor charity day. howard lutnick telling you why this is such an important part of this company's dna now and why people are calling in, all the money goes to charity today. a great cause. something they do every year and something to look forward to next year as well. >> every year for the rest of my life this is what we're going to do. this is who we are. they sit here, they agree to wave their day's pay and feel the energy of the company and this is who we are. good people on a tough day. >> a lot of positive energy here today. we'll send it back over to you. >> howard and dom, thank you, both. let's bring in scott minerd, with gung heggenheim partners. i know you know the lael brainard comments saying that they can't raise rates or they shouldn't raise rates because

everything is not exactly perfect. in your mind, is brainard or at least parts of the fed lost credibility? >> oh, absolutely, brian. i mean, there is a credibility gap with the fed. so many times the fed has set up expectations to tighten and they haven't tightened. and they have become a hostage to the market. we're seeing it right now. last week we got the comments and then the comments out of the ecb and the sell-off on friday, i was thinking to myself, i wonder how much the sell-off, if it continues, is going to weigh on the fed decision next week. and i think if it does, if we did see further market weakness between here and there, it will weigh on their decision. >> here is the follow-up then to that. with all due respect to miss brainard or daniel talullo, we don't know jerome powell's view, are we listening to them? does anybody's opinion really matter except for the fed chair? >> i think so.

i took brainard's comments to heart today because she is a governor. and that -- the strength of that speech and the argument against tightening was so robust, it was sort of a preemptive dissent. there is a pattern here and i know that steve will back me up on this. that fed governors typically don't dissent. and i think that brainard really wants the fed to wait and i think that this speech today was designed to preemptively say, hey, don't do this. however, you know, having said that, i think if the fed moves on wednesday, which i don't think is likely, but if they do, then i think brainard will end up voting for it and try to explain it in light of her comments. >> where do rates go, scott? given the prestige of fed speak we have gotten and the economic data, do you see rates being lower in terms of the ten-year yield than where they are now by the end of the year? goldman sachs came out with a pretty contrarian call saying 2%

by the beginning of 2017. >> it is interesting because technically the market broke down on friday. and one of the things i tell people is i like to take my cues from the market and what the data that comes in. so right now, you know, though i am in this view that rates will head lower, you know, markets don't move in a straight line and my view is that for the next month or two that we're likely to see rates move higher as the market tries to digest the uncertainty around what the fed is going to do. whether the fed moves in september or not, which i don't think the market is set up for and i think we'll get some sort of a tantrum if it happens, we clearly -- they're clearly trying to make a move and i would say december is the most likely time. i think the market has to price for that. >> why is the market, tell me, taddy, why is the market up today when it was down so much on friday. is this a bounceback or a fundamental reason?

>> we hit a very important technical level on friday. and i think that i'm not surprised that we're bouncing off of it. that technical level was established over a period of about a year and a half, so i think that's going to provide pretty strong support. but the real question i think is, you know, will we break down through the technical support. for the moment, the discipline tells me not to sell. but if we do break this sort of bottom, the lows we saw on friday, i think that you would have to say we're probably having our standard september, october sell-off. >> what are the technical supports, sorry to interrupt, what are the technical supports that you're talking about, breaking the 50 day moving average on the s&p and the 200? >> for about a year and a half, melissa, we had chopped around and arranged where every time we got up to around 21, 20, the s&p would pull back. and so once we broke through that level, and we traded above it, that technically was a breakout and that level now

supplies support to the downside. so i would say that until we break that level, meaningfully, the discipline would tell you to stay long, but at this moment, i think you got to be cautious. >> you said we might have a tantrum if we get a rate hike next wednesday, i'll remind our viewers, the federal reserve meeting decision is already next wednesday. define tantrum. what do you think might happen? >> i think we -- i think the markets are not priced to handle the fed rate hike right now. the probability is 35% last time i looked. i think you would probably get an abrupt increase in long-term rates, ten year notes, probably up around 1 3/4, maybe higher. and that is support i'm talking about on the stock market might very well not hold. and, you know, we have seen these fed -- we have seen the

tantrums before when the fed does something that the market isn't expecting or priced for. and the mark set telling us that we are not expecting it based on fed funds futures. and i think we should be paying attention to that because if we get it, i don't think the market is going to like it. >> there you go. if we get it, the market won't like it. the caddyshack trade, you'll get none and like it. scott minerd, thank you very much. appreciate it. hawkish talk from the fed doesn't just impact stocks and bonds, has a direct effect on your mortgage. how rising mortgage rates could impact home buying. plus, questions about hillary clinton's health moving to the forefront of the presidential campaign. how will this affect the race for the presidency? we'll bring you the latest.

the markets seeming to take to heart the dovish comments from lael brainard, just within the past hour or so. we're pretty much sitting at session highs. the dow jones up by almost 200. we're seeing real strength in shares of apple now. seeing its best day sits late july. that is at session highs. and on the tech front, big gains in biotech and semiconductors. home builders, many of the stocks anyway, got hammered last week. this after mortgage rates began to tick higher. so if we see even higher rates in weeks and months to come,

what might happen to the housing market? diana olick live in washington with that story. diana? >> well, brian, here is the bottom line, you're now paying about $500 more in up-front costs on a mortgage today per $100,000 financed than you were just last thursday. now, that might not sound like a lot, but in a tight housing market, where buyers are already stretching to afford higher prices, that's a hit. the average contract interest rate on the 30-year fixed rate mortgage is low, under 4%. but moved a full eighth of a percentage point in rate and then you got fees on top of that. that's the biggest move since the brexit vote two months ago and comes after rates have really been stuck in a holding pattern. so now we break higher. the rate move hits builders higher. and that's why they were punished on friday. they appear to be bouncing back with a broader market today, rates have to move significantly higher to see a big impact on existing home sales. we did see a slump in sales in

2013 when rates rose over half a percentage point quickly. as for home prices, the lack of homes for sale is a much bigger driver than mortgage rates on that. we have all the numbers and more on the realty check.cnbc.com. back to you. >> thank you, diana olick. insight now from the man in charge of the fourth largest home builder in the country, larry nicholson, president and ceo of the cal atlantic group. great to have you on the program. >> great to be here, thanks for having me. >> are you seeing any impact whatsoever on rising rates and the willingness of people to buy new homes? >> well, right now, you know, rates are at historic lows, today, 3.25 on a 30-year loan. the economy is moving forward. unemployment at low levels, household formations back of north of a million. this bodes well for housing going forward. >> is that a yes or a no? >> it is a yes, absolutely a yes. >> yes meaning there is no impact or there isn't an impact? >> no impact at all. >> have you been having to cut your own fees down closing costs et cetera to get that buyer

maybe off the fence who sees the rates rise and are concerned about how much they're going to be spending? >> it is a very competitive market out there today. there has been no change in fees at all. >> okay. you do a big business in texas. what are you seeing there now? >> texas is healthy. dallas has a great economy. supplies at an all time low in the market. austin continues to have great job growth and high paying jobs. we talked about houston in the past. houston has really not changed much in the last 12 months and we hope to see oil make a move later maybe this year. see that improve. and san antonio continues to move right along. >> it is interesting. i was looking at your product offerings and i clicked on new jersey, our home state, and i saw you have a housing development, down south, a town called morestown, where your homes begin at $1.8 million. that's the entry level price for a house. a, is there that much demand for homes of that price? and, b, is this the preview of what you are trying to have your

company become? and go right after toll brothers? >> great question, brian. moresville is a small community, we found a great opportunity with a limited amount of lots. not like it is a five-year community. we do have -- we do a lot of luxury housing around the country. we think there is an opportunity there and the right market and we'll continue to pursue that. >> larry, thanks for your time. appreciate it. >> thank you. >> larry nicholson, cal atlantic. samsung issuing a warning to galaxy note 7 users. stop using your phone immediately. get rid of it. exchange it. as soon as possible. reports of devices exploding during charging causing fires. how will this impact samsung ahead and what it means for rival apple. that stock on pace for its best day since july 7th. "power" is back in two.

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welcome back to "power lunch." stocks hitting new session highs. the dow up 2200 points. apple up a smidge under 2%. biotech helping the naz dock today. alumina, angen, regeneron

leading. look at the moves there. perego up more than 7%. hillary clinton's health is now front and center in the presidential campaign. how will it play out in the race for the white house? plus, the oil market getting ready to close for the day. big reversal. we'll tell you what happened in oil when we come back.

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hi, everybody. i'm sue herera. here is your cnbc news update at this hour. the prime minister of luxembourg is meeting with benjamin netanyahu. netanyahu said he's always prepared to have direct negotiations with the palestinians. two strong earthquakes jolted a historic city in south korea today. but there were no reports of serious injuries or damage. the quakes measured 5.1 and 5.8 in magnitude and that second 5.8 quake was the largest ever recorded in the country. samsung is now warning consumers to stop using the galaxy note 7 phones immediately. this comes as more reports of the phones catching fire have emerged. earlier the company halted sales and urged customers to return

them for another device. and the lucky winners of a $487 million powerball jackpot have chosen to remain anonymous. at a news conference in new hampshire, lottery officials handed over a lump sum check of $256 million to attorneys representing the winners. one of those attorneys handed out checks to various charities and said more help was coming. lucky indeed. that's the news update at this hour. melissa, back to you. >> good news story. thank you. let's look at the markets. perched just off session highs right now, dow jones industrial average high bierer by 210 poin. best performing sectors at this hour, telecom consumer, staples, utilities. oil market closing for the day. look at the wti as well as brent, reducing the dollar index, soften in today's trait. wti up by .9%. brent is higher by .6%.

48.33 the last trade there. a lot of noise out there around your money right now. the election, the fed, oil's continued weakness. let's clear all that away and go to the quiet space. get some sound financial advice through it and bring in quincy crosby at prudential. nobody said quiet space with me. i understand that. let's have fun with this. sue gave the story about the powerball winners, how would you advise them to invest now? where should they put that money? >> right now i would tell them enjoy it, stay in cash for a while, let this play out, let's see what the fed does. >> cash? >> yeah, cash -- the notion that cash is trash, that's trash. because cash is ammunition, it is power. and when the market sells off, you want to are it, want to put it to work when the market sells off. we have a sell off, if this continues, you don't want to jump into any market. you just wait. >> think we will, you said when

the market sells off. you think it will? >> it should. >> it should. come on, you're an investment strategist. bullish all the time? >> no, we're not. the fact of the matter is it is healthy. it is healthy. and the fed, you know, we're all -- everyone says the fed, the fed, the fed. central bank policy has been trumping fundamentals. it has been trumping technical analysis. it has been basically underpinning the markets and at this stage you want to see are they going to finally pull the trigger and it is going to cause the market to pull back. >> is that the -- am i reading that correctly, is that the same advice you with would tell somebody invested in the market, would you tell them to sell? >> no, all you need is one comment from the fed official who the market pays atensi s s to. i started working on a trading floor. if you look at the market from friday, you would wait for

follow through on the downside. what we have seen over the last number of years is all it takes is the fed to say don't worry, we're not moving, we're not going to be aggressive for the mash to the say, thank you very much. >> down 400 points on friday, up 200 points today. are we now -- friday, talking about is this the beginning of the big sell-off? clearly it is not. are we at the cusp of a return of volatility the likes of which we have not seen this summer? >> probably, yeah. most likely. it stands to reason you've got hurdles for the market and you still have issues with the fed. the fact is marketse do not lik rate hikes. the market loves you. they never like a rate hike. i think that it is very clear that janet yellen, who is considered the uber dove, wants rate hikes. she wants to be able to begin normalizing rates. it may be for financial

stability. she obviously reads the reports on pension funds globally. >> that's the problem. >> that is the problem. it is the problem. and they know it. and the interesting part is why don't they come out and say it? they don't want to -- >> they don't want to scare anybody. >> scare the daylights out of global markets. but they know it is an issue. they know that every pension fund has to go out on that yield curve. i'm looking at debt from countries most people don't even know where the country is. you'll grab that and hope you can sell it to someone as long as there is liquidity in the market. what happens when liquidity drys up? we forget what markets are like when liquidity drys up. liquidity is the oxygen for markets. what is the fed going to do then? 1998, alan greenspan, that wasn't -- russian ruble denominated debt defaulted, long-term capital management, greenspan had to come in twice. >> we got to go. but anecdotally, financial advisers conference a couple of years ago or last year, couple hundred people said raise your

hands if you were a financial adviser in a rate hike cycle and i would say -- >> if you were. >> a third of the people did not raise their hand. the point is, at this group of people, about 30% of them had never advised clients in a rising interest rate -- had not seen what happens. >> hadn't been there. >> we looked through 72 cycles at this point. >> many. many. >> there are investments to be made. that's the point. you just wait it out, new hampshire winners, congratulations. >> yeah. >> call quincy crosby. 1-800-crosby -- thank you. biotech on track for its best take since july 6th. is it time to buy? this stock is up 13% this year. why it could serve as double digits from here.

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time for street talks. we kick it off with marathon oil, getting hit with a downgrade from credit suisse to a neutral. marathon has done a great job cutting costs, setting gains in the stack where you were just

last week. >> i was in the scoop. >> in the scoop as well. specifically talking about the stack. the emp space, they see more momentum in the pure play names. where could the call go wrong? greater improvements to shale given marathon's footprint in eagleford and oklahoma. >> we joked, once the media shows up, maybe it is too late. maybe this call is exemplifying that. next up, we got two calls, all in one, goldman sachs upgrades philip morris, but they downgrade competitor reynolds america. they move philip morris to a buy. seek growth, and a slate of new products coming out. valuation, yes, in the tobacco space, is elevated. but they say the underlying health of the industry remains strong. their target on pm, 114 a share, 20% total return including dividends and same call they downgrade rai to a neutral. >> and good day for both because people are reaching for dividend yields and these are huge

dividend yields. >> smoke them if you got them. >> target, this is a double also. target getting downgraded to market perform. the analyst is not convinced that target can get comp growth. investments and convenience features like online grocery pick up will be tougher to compete against instead given food deflation, electronics. little grocery momentum, own walmart. that one is getting an upgrade. >> you wonder if target, which had a cooler cache, despite most products in the stores being the same, but you wonder if lost a little bit of that. finally, smaller cap final call of the day is sun communities. ticker sui. a michigan-based owner of things like adult housing community and rv parks, park your motor home at one of the facilities, a pool, whatever, citigroup, buy from a hold, recently bought care free, citigroup likes that deal, positive on the increase

scale, the company, so their target on sui is 86 stocks at 79. only about 10% upside, but, still, a name that we're not that familiar with, a lot of mobile home stuff as well. >> what a run to date. >> unless you're big in the rv community, you're not going to know it, but the rv community knows it, now the market knows it. with that we wrap up street talk on a monday. now to trading nation. biotech stocks having their best day in months. let's get their next move. richard ross, max wolf. max, is this just a short-term pop? a lot of people in proclaiming this space dead, especially with what is going on in the campaign trail and a lot of knocking of the pharma and biotech sectors or is this a real turn to the positive for that group? >> i think both friday and today are huge grain of salt on anything. just because trying to decide whether the sun will always shine or rain sometime.

what we think about the biotech space, it is a way to hunt for a yield that is not macro directionally correlated. where you go if you want a big risk and give up your liquidity, but need high returns long-term, like venture, but a little less cyclical. we think it is going to have its moment in the sun. if you think it will be a big area for capital in the future, it is not a deal, and it is going to continue to be very much a victim of anything to do with rate jitters. >> okay. today, no rate jitters, biotech is up. rich ross, strip out the emotion, how do the charts look on biotech? >> look, biotech, it has been a big disappointment this year. in a year in which just about everything has gone higher. this is the worst performing sector here in the u.s., down 15% year to date. bring up the chart. i'll show you why i think it could get better for biotech. you look first at the daily chart, you can see that protracted youb yoprotrac protracted downtrend. since january, we have been

moving sideways, building a nice base of support. and just last month we break out from that base of support. that breakout proves false. we fall back into the pattern here with the broader market. look, the 50s cross back above the 200 for the first time since last october. i think that break jut will prove premature and we'll reassert ourselves to the upside, might be seeing the start of that today. if we zoom out fast, i'll show you where you stop yourself out on this trade and where you get more excited. look at that long-term, 200 week moving average providing support for over the last five years. comes in around 260. below there, all bets are off in biotech. i think until then it does hold and we can move higher here, you take out the 50 week, that's your resistance, you can actually get another leg higher here. i kind of like biotech closer to the bottom. just about everything else is closer to the top. >> fair to say, rich, quickly that the next few days are going to be very crucial technically for the biotechs with that 250, correct? >> i think the next few days are going to be crucial for everything. >> well said. rich ross, thank you very much.

max wolf, appreciate it. for more trading nation, the always crucial site, website trading nation.cnbc.com. tyler? >> samsung's exploding problem, the recall of its galaxy note 7 phone, billions in market value for samsung wiped out. a bigger problem is it for samsung. how much will this help apple? we'll discuss that next. and the rally picking up some steam, hotter than a samsung note. it is up about 250 points. now your trading nation stats of the day and a word from our sponsor. >> trading physical precious metals can be a risky proposition. the most important step to investing in any group is to know how those markets work and to understand the mechanics sufficiently so as to not be surprised. if you decide to dabble in precious metals, keep it small, as you work toward understanding the group better.

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from the creative galaxy in my idea box. would you help me make art? ♪ each one of our journeys ♪ keeps us young hey, i have an idea! ♪ we'll never get older... arty: go be amazing! amazing! announcer: give your cardboard box another life. welcome back to "power lunch." i'm seema mody. stocks near the highs of the day, take a look at the russell 1,000 moving higher today as a

wide range of stocks rebound. the leaders today include weatherford, solar city, and perego. rising after activist investor starboard disclosed a stake in the drugmaker, up more than 8%. but still off 34% so far in 2016. tyler? >> seema, thank you. the video of hillary clinton struggling and nearly fainting as she gets into her car at the september 11 memorial event yesterday raising questions now about her health. could this latest health scare department her polling numbers and chances in the race for the white house? joining us on the cnbc news line is larry sabado, center for politics. mr. trump has not had his knees buckle that i have ever seen. but about whose health do we know more, mr. trump's or hillary's? >> hillary clinton's, no question about it. that's not to salute her. she's told us relatively little. trump told us even less.

so the advantage for hillary clinton is as lacking in transparency as she is, she's running against the only other modern presidential candidate who has been even less transparent. >> how important is it for us to know the medical history, the overall health of a presidential candidate? >> it is extremely important. i would put it on a par with the tax returns. you don't just want to know about the economic record of a candidate. you want to know the basic health and what has been the pattern over the years. and too often in american history, presidential candidates have hidden very serious health problems. >> including president kennedy with addison's disease about which we knew very little and roosevelt was rarely if ever fra photographed in his wheelchair. to the question of transparency in mrs. clinton's case. and the fact that they did not release the information about her pneumonia on friday, on saturday, and then only after this event on sunday.

does this confirm in the electorate's mind that the clintons have given the chance will hide and keep secrets? >> undoubtedly. it certainly confirms it in my mind. i watched them for many, many years. when given a choice, they always tell you as little as possible. >> let's move to a comment that mr. trump made on our air earlier today about the debates. i would like to get your reaction to it. let's play it. >> i think maybe we should have no moderator, let hillary and i sit there and just debate. because i think the system is being rigged so it is a very -- it is going to be a very unfair debate. >> two questions there, would the debates be better with no moderators because, boy, after matt lauer did his job on friday, all you heard about was matt lauer, not really about the debate. would we be better off with no moderators, number one? and is the system rigged against mr. trump, the debates, that is? >> well, i actually have written

a number of years back about debates having no moderators. and i actually support that. i think it would be a good thing as long as time limits are observed. and, of course, that would be the problem with donald problem with donald trump. as far as being rigged against him, this is a standard complaint by donald trump. everything is rigged against him. the press is raged against him and the election if he loses is rigged. how do you like that? i don't take it seriously. >> let's go back to ms. clinton's comment on friday. we know she had just been diagnosed with pneumonia. she referred to, quote, half of mr. trump's supporters as being part of a basket of deplorables. she said she overgeneralized and regretted using the word half. a third would be all right? >> you don't put a number on it at all. you can say an element of trump's campaign supporters

believe whatever. this is almost justice in a way. they did not announce her diagnosis when they should have. we deserve to hear what the diagnosis was. if she followed her doctor's advice at the time she wouldn't have been at that fundraiser and wouldn't have said that phrase that is going to haunt her through the end of the campaigning if she becomes president in the white house. >> good ad always to hear from you. >> thank you. this is a tale of two pictures. samsung recalling galaxy note 7 because of battery explosions. one setting a jeep on fire in florida while charging. then there is apple, the first-ever published photos from the iphone 7 plus. this is a shot from the vikings season opener. tim cook tweeting touchdown iphone 7. is apple going to get a boost from samsung' problems?

gene, great to have you with us. samsung is recalling 2.5 million phones. the timing couldn't be better if there were going to be switch overs. are you anticipating any? >> yeah, i mean, apple could not have scripted a better timing for this gift from samsung. this is the launch window for the galaxy 7, too. there is going to be a tail wind. if you wanted to put numbers they will sell around 50 million galaxy 7s this year and assume they lose maybe 10% of those. maybe it is a 5 million. might not sound like much but in this hyperscrutinized investor concern every percent counts. >> we are taking a look at the "sports illustrated" photos and they are crystal clear. they are really stunning photos. is this going to convince people to upgrade.

are you more optimistic given the quality of the camera which many people said was at the cornerstone 069 iphone 7? >> how people communicate and self expression has shifted more towards photos and videos. there is a greater emphasis on quality of the camera. so i think that is an important part of it. i think the bigger story here is that this wave which is about 30% bigger than last year of people with old iphones is going to really power this upgrade cycle and ultimately we think the iphone business will go from down 9% last year to up about 11% next year. the camera is the big driver. >> are you worried about the extra cost? >> the nice thing about the bigger screens, the capacity tends to be higher. that's a higher margin. that offsets any extra cost related to the camera. >> you mentioned the tail wind

from the galaxy 7. you mentioned the camera being a real selling point here. all of this not enough to get you to increase your anticipated numbers for sales? >> we're high on the street with iphone expectations. this is just nice gravy, i guess, in terms of how we feel about our numbers. >> they have this plan which is sort of the sign up to upgrade every year. we will give you a discount. that seems a little huksterous from apple, does it not? >> if you wind back the clock what happal is trying to do is find ways to get more predictability in their business. they have come up with the upgrade program. the idea is the phone is a subscription. i think that from a consumer standpoint they get a benefit from it and a discount if willing to upgrade y. put it

more in the category of apple being creative in terms of how they can get people to upgrade phones faster. what is most important is not just that apple has the program but puts pressure on carriers now to have similar programs. >> hasn't samsung did a similar thing where if you rent the phone and pay $30 a month you can get the latest phone when it comes out and they throw in a fire extinguisher? >> samsung does have a similar program. at&t has next and verizon have similar programs and samsung phones are included. >> thank you. >> thank you. well the stock rally is picking up steam. final thoughts on the day and check please as the dow is up 200. remember friday everything was doom. everything is great now. we are back after this.

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shares of tesla. fill lebeaux is watching. the new system will rely more on radar which tesla says will be more accurate. this is departure from the use of cameras. radar, take a look at shares of mobileeye. shares are down sharply. the notion being there could be less content in a tesla car as it moves to radar. elon musk was asked. >> even with auto pilot keep your hands on the wheel for now. just watch the road and don't watch movies. massively broad rally. i'm sure you will talk more about it on fast money. only 12 s&p 500 stocks are down as of a moment ago.

i hope it is not just a fed-driven rally. it's just not worth it. >> the breadth of it alone would suggest more than that. >> "closing bell" begins not right now but in like four, three or two seconds. see you tomorrow. right now welcome to "closing bell." i'm sar ooraizen. >> they are all talking about interest rates today but they don't all agree. what do you think? we will bring you their comments and the market impact coming up in a moment. >> that is an unlikely group. stocks right now look much different than they did this time on friday. a big comeback on the broad