financials. got hit hard on deutsche bank's news yesterday. but the capital rules was better than expected by the weakness. >> doc? >> i bought the nike calls. we'll see tomorrow. >> pete? >> keep an eye on ko coke. it continues to go higher. >> we will. good to see you. see you tomorrow. markets getting a bump today. "power lunch" begins now. ♪ hey baby won't you look my way ♪ here's what's on the menu. scot scoring the showdown, who really won last night's debate and how many millions tuned in to see the battle royale. why the twitter disney partnership could back fire big time. and the 140 character rants are becoming the latest dogfight in the airline industry. "power lunch" starts now. >> i'm brian sullivan. welcome, everybody. your top story, cruditing another nose-dive.

wti down 2.5%. the mid to high $44 a barrel range. we're going to get more on oil and the opec meeting going on in algeria in a little bit. good news, oil slide not really hitting your stock investments. the dow regaining some of what it lost yesterday. the dow is up 131 points now. american express, cisco and ibm, some of your top performers on the dow. >> welcome back. tyler mathisen here and here is what else is happening in this hour. wells fargo reportedly considering executive clawbacks in the wake of that fake customer account scandal. will trade organizations slashing the global trade growth forecast for the year citing the slowdown in china. >> welcome, i'm michelle caruso-cabrera. one down, two to go following an historic night at hofstra. we are already counting you down to the next big debate. here at cnbc, we like to look at the betting markets to see where the money is going. folks at predict it putting the

odds of a clinton win at 67% versus 35% for trump. clinton gaining six points from just 24 hours ago. tell you also, the mexican peso trades today as if hillary clinton won the debate. cnbc's john harwood is with us and has more. john? >> i think the consensus among political operatives i talked to, democrat and republican, match that of the betting markets. but the question is, is that going to make a difference in the numbers that we see. hillary clinton has been ahead. donald trump needs to make progress. but this may not move the needle. we're going to have to see. donald trump needs more college educated white women, men as well. i talked to one republican strategist who worked in the primaries for marco rubio and said by any traditional measure, hillary clinton cleaned his clock. however, based on the way events have gone in last year, he'll probably go up in the polls. >> i was very curious about

that. i would agree when i watched it all happen, i thought, okay, she's very well prepared, has all the quote/unquote right answers, but ultimately, i've been very wrong about predicting the election the whole way, i wondered if he would get a bump when all of this is said and done? when will we know? >> i think when you look at good well done telephone polls by this weekend, you'll have a sense of what is real and what isn't. instant polls usually don't tell you that much. it is too close to the event. i would be surprised if donald trump gains what i suspect will happen is that some undecided voters who don't like either trump or clinton may come off the fence, may go to clinton, so maybe she gets a little bit of movement, i wouldn't expect his number to go down a lot. but -- >> didn't blow himself up necessarily. >> i don't think so. i think he got rattled. i think he didn't -- of the two of them, she looked more presidential. he looked more skas pexasperate. she put him on the defensive on taxes, business, racial

attitudes, all that sort of thing. he didn't have strong comebacks on a lot of those. on the other hand, he did make the point that you are establishment, you've been there for 30 years, we have foreign policy problems, we have economic problems, you haven't solved them. that is a fundamental message that favors him. >> that he delivered effectively over and over again in the early part of the -- >> she seemed to flip on trade. she stumbled mightily through the tpp answer. >> and very flustered at that point. >> that is the most -- that is i think the weakest policy point for hillary clinton. because i think it is not credible that she actually opposes the transpacific partnership. >> she said she supported it, she never added the addendum, when it is finished. >> it is a fair point for people to say when it is finished i'm going to look at the details. every politician does that. democrat or republican. paul ryan, for that matmatter, big free trader, has not said

he's for it. do i believe hillary clinton thinks that the transpacific partnership is in the best interest of the country and wants it to become enacted? yes, i do. >> stick around. we're going to talk more about the impact the debate may have on the election map, the map, the electoral map, the one that counts, folks. larry sabato, welcome back. does anything that happens on september 26th really matter on november 8th? in other words, will the voters remember this debate what was said, the style points, et cetera? >> they will remember it if they see it in some form or another repeated in the two remaining presidential debates. so donald trump has a chance to correct what was frankly a disastrous debate for him. it is impossible to put it in terms other than that. clinton won hands down in debating style and in substance. >> why do you see it that way?

as strongly as you do? >> because i've watched repeatedly every single presidential debate since they started in 1960, and this was the most one sided debate ever. it doesn't even come close and i invite you to go back and view all the other ones, you're too young. but i've seen it. now. >> you are too young. >> there you go. much too young. >> any credence to what the republican strategist, john harwood, was quoting, by all conventional measures, hillary clinton won and yet he wouldn't be surprised if donald trump ends up with a bump in the polls? >> i don't believe he's going to get a bump at all. what i think will happen, and this will surprise people, it is not going to be any kind of giant gain for hillary clinton, because there aren't that many people left to gain. you have hard undecided of single digits. literally. already down to single digits

and you have some third party people who can be peeled off. there are plenty who can't be pee peeled off. they'll vote for johnson, for stein. you can get some of them. i would guess, this is a guess, that she will pick up a point or two and we'll see that by the end of the week or the weekend, that point or two will help her to break the tie in many of the swing states where she has fallen dangerously. >> if it is true that -- if people agree that trump lost as disastrously as you seem to -- >> not the cnbc viewers. >> well, let me finish my question. do you think mr. trump lost a single voter last night? >> not any of the trump people i know. you remember what he said, you go out on fifth avenue and shoot somebody, and they would all still support him. well, losing a debate is a lot less serious than shooting somebody. they're not going anywhere. >> you think hillary picked up some voters, a point or two, you

say, why did she do that apart from her demeanor? was there a moment in there where it went to the birther argument, where it went to mr. trump's remarks alleged remarks about women, was that where she gained traction? >> no. it wasn't a single moment. that's what was interesting about this debate. it was, in fact, donald trump's reaction to the key question of this debate. what have we seen in virtually every single survey since the beginning of the year. a large majority of americans do not believe that donald trump has the temperament to be president. all you had to do was watch 10 or 15 minutes, any 10 or 15 minutes of this debate, and donald trump answered that question. but not in the way he had hoped to. >> larry, got one question for you about the impact of gary johnson and joe stein not being on the stage.

does the fact that they were absent and voters saw this big event without them, will that accelerate their decline and how low do you expect them to go in a year with public attitudes right now? >> john, you got it exactly right. this is what normally happens with even strong third party candidates. the exception was ross perot, but he got into the debates as of october. i think basically take gary johnson, he was flirting with 10%. there was some polls where he was 12, 13, even up to 15% in some states. i think he's eventually going to go down to 4, 5, 6. jill stein was as high as 4 or so in the polling averages at one point. she's going to go down to a percent. >> hey, larry, brian sullivan. i was jumping -- i'm sorry about that. i'm pushing back on the idea i'm hearing, not just here, but everywhere, where hillary clinton clearly won the debate, so let's move on. 68% of cnbc viewers disagree with that.

a drudge report, very conservative, has it at 82%. i wonder how much of us all sitting up here with very fine college degrees can speak for america where two-thirds of the country did not go to college and maybe they think trump cleaned her clock. we don't know. well, cnbc voters are not a random sample as you know. they're highly intelligent and very able people. >> and they say trump won. and they say trump won. >> of course they think trump won. >> why? >> think about it. >> why would you say that? >> the people who watch you are conservative, they're investors, business men, they are a part of the trump coalition, or -- >> john mccain and mitt romney won all the debates the last two elections. >> well, and actually you bring up an important point, remember mitt romney won that first debate with barack obama by a mile. and for a week or two, he gained points in the polls and then they all disappeared. now, i wouldn't be shocked if

whatever hillary clinton gains she loses in time if she can't sustain this in the next two presidential debates. >> well, and i'm saying that -- i'm not saying our audience is one way or the other. i get called a liberal loon all the time. i have no idea. i hope you're right. >> that's just tyler. >> that's just tyler, exactly. >> liberal loan? >> all acc up here. but i guess my point is simply that we can say that, but maybe the rest of america doesn't feel that way. i don't know. >> you're making a point that we -- i said a lot on the air yesterday, which is we all have a establishment ears, and we hear through an establishment lens and i'm not sure -- and larry, you are establishment. i don't think those old debates, i don't think those matter anymore. this is a whole new world. >> this, by the way, this is why you should always root for duke against uva, because uva is the establishment and duke is the scrappy underdog. >> uva is so far superior to

duke, or any other school. and that really revealed your bias. terrible bias. >> larry, thanks a lot. always good to see you. >> thank you very much. >> larry sabato of the university of virginia. >> jefferson's biggest mistake. >> thank you, john harwood. five year notes up for auction. rick santelli tracking the action at the cme. direct bidders were absent here, rick. >> yes, they were. but they have been more largely absent just three auctions agone. but we had 33 billion five year notes hitting the market not many minutes ago. 1.129. so 1129. the pricing was a business messy. i saw 112 1/2, 239, close to ten auction average. as melissa lee just referred to, the direct bidders 4.4, about half the ten auction average. but as you look back in time, we

had 3.7 in june, so i gave it a c minus, charlie minus, like yesterday, all that is left is seven-year notes and everybody should continue to monitor the big move in boons toward the negative yield side. >> one debate down, two to go. the next one less than two weeks away. what do they need to do to deliver? inside both campaigns next. the one thing you can do on social media that will make airlines listen to your complaint. we want to hear that. that's still ahead. back in two.

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at bollandbranch.com, promo code: tv. donald trump and hillary clinton skwarg oquaring off on of issues. we want to tackle the money issue from both sides. >> catherine hart and neil wool, a clinton supporter. neil, thank you very much for joining us here. let's start off, a lot of positives. john harwood, and larry sabato, they believe she sort of, quote, won the debate. let's talk about the trade issue. do you think her switch a bit on trade hurts her? >> i don't think so, brian. first of all, good to be with you. she said when she was secretary of state that she was very much working toward and on a trade deal that would be a gold standard trade deal. she left the secretary of state job and the deal, negotiations

continued. she took a look at those details when the deal was finally reached as anyone would and made the judgment which she described quite clearly that it wasn't up to her standards. it was insufficient from the perspective of creating jobs, protecting american workers, and advancing our national security. >> do you think she has to clarify her position on it? she called it the gold standard, wrote about it. i thought it was trump's strongest moment in the debate. is she going to have to further clarify exactly where she stands on the tpp? >> i think, brian, she's been very clear about this. the deal as it was being worked on was something that everyone aspired to be the gold standard of trade deals when it was finally completed. it didn't live up to her expectation or standards. she talked about whyclearly i td trump laid out last night was a canard, before the deal was done, she hoped it would be the kind of high standard deal they

were working toward and when it was finished, she looked at the specifics and said, no. >> who won on trade last night? >> i think the -- i think on trade, what you have is a candidate in donald trump who says i want to shut down our access to our market, wants to create barriers, things like -- >> who won? >> i think hillary clinton clearly won. she's for trade. she's for trade. she's for high quality trade deals. she laid that out. and her opponent is against trade and wants to batten down the hatches and retrench. i think that's not a recipe for economic growth. not a recipe for u.s. leadership and i think hillary laid out a clearly winning strategy on trade, which is we want high quality trade deals. >> i want to put -- you to put your hat on as former coo. yesterday, mr. trump continued on the notion that janet yellen isn't doing her job, she's allowing obama to go off and

retire to the golf course peacefully. if you were the ceo or coo, would you say, that's a good thing, we do want rates to rise or would you think that's going to be a much more destabilizing force if you have a president in office taking direct shots, pot shots at the chairwoman? >> well, you know, i think that the idea that the fed is being motivated by politics here is absolutely without merit. i think if you read the statements of the fomc, they lay out where they are and why in a thoughtful, detailed way. i think it is for the fed to make judgments looking at all the data available to it as to when and how to raise rates. and if i were the coo of the hartford, which i'm not, i would be comfortable with that approach. >> neal, thank you very much for your time. >> thank you. >> to the other side, cakathlee hartnet white.

how do you think donald trump did last night? >> i thought he did well. i thought both candidates did well. if there is anything still to offer about this debate, might be how voters are viewing the performance of the two candidates. and you had a clear contrast in temperament or personality and clear contrast in policy, particularly when they each shared their economic policyies. for donald trump, you have a bold business man, actor, decisionmaker. and in hillary clinton, you have a very well seasoned, highly articulate lifetime member of the most elite of our government. and that was very clear and just if you look -- turn the page on what was the core of their environmental policies, excuse me, of their economic policies, donald trump wants to unleash

private investment and, excuse me, free enterprise. mrs. clinton, far more favors government solutions and the use of taxpayers money in the form of subsidies. >> kathleen. >> to stimulate economic growth. >> how about the issue of his temperament. later half of the debate, he did a lot of what we often see him do, tends to riff on issues and go off on tangents. was that damaging last night? did that feed into the narrative that hillary clinton tries to paint of him? >> i don't think it is damaging to the majority of his supporters who think those traits of donald trump really are a humanizing him and i think that they can actually identify with his style much more than they can the very, very scripted approach that mrs. clinton has. >> i was a little surprised, i must say, at the point where mr. trump was deriding our infrastructure, most especially

our airports, third world. that he didn't take that opportunity to talk about his plans and expenditures to improve infrastructure. why didn't he do that and why didn't she? >> i think that's a great question. i had the very same response. again, those two starkly different economic models, but they both think we have a great need to bring up to speed our infrastructure. hillary clinton would largely be through public investment, a version of that we had in the first four years of president obama's administration. donald trump on the other hand would be more likely to see it as something that was accomplished by private investment, a good example would be the keystone pipeline. that is -- largely envisioned as something that would be the result of private investments and not billions and billions of dollars of taxpayer subsidy. >> kathleen, do you think it serves mr. trump well for referring to so many things as a, quote, disaster. that's the word we heard the most. that's a disaster. energy policy is a disaster.

is that a positive sell message? does that resonate? >> well, you're very right. >> i've been around. you traveled a lot. i know my colleagues have. i have. we have a lot of problems in america. not sure i describe anything here as a, quote, disaster. >> well, it might depend what you're talking about. but i think a lot of donald trump's strongest supporters share that opinion. things look pretty bleak. they're not getting better. been said so many times, doesn't need to be said again, there is extremely slow recovery from the recession. there seems to be no light at the end of the tunnel, but i think he contrasts those disaster declarations with also a great deal of optimism that we can indeed jump start economic growth. we can't accept, you know, under 2% economic growth as a new normal. and it will take bold, bold policy solutions and that

just -- as a leader, as a national goal, i think really mobilizes people. >> kathleen, great to have you on. >> my pleasure. thank you for having me. >> kathleen hartnet white, from the trump economic advisory council. we're tapping the rockies, and looking for one stock in a jam. the good, the bad and the ugly when "power lunch" returns. you tell your insurance company they made a mistake. the check they sent isn't enough to replace your totaled new car.

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welcome back to "power lunch." time for the good, the bad and the ugly in today's trading session. first to the good. molson coors, one of the best performers in the s&p 500 now. the stock has gained 30% over the past year. it is higher by 3.25% in today's session. on to the bad, smuckers, in a bit of a jam. calling a downgrade over at credit suisse, more on that ahead in "street talk." ugly day in the energy patch. the s&p oil and gas exploration, the xop, down as crudies take another nose-dive. still ahead, one of the biggest names in hedge funds is calling it quits. is this just the canary in the, well, diamond mine? investment advice post debate. did anything either candidate say last night change where your next guests say you should invest your money right now? we'll find out. keep it here.

hello, everyone. i'm sue herera. here is your cnbc news update for this hour. a person close to former israeli

prime minister shimon peres telling the associated press his condition has worsened. it has been two weeks since he suffered a major stroke. the 93-year-old peres is the elder statesman of israeli politics holding virtually every senior political office in his seven decade career. drone footage obtained by reuters shows extensive bombing damage in eastern aleppo since the breakdown of a cease-fire in syria last week. the footage shows collapsed buildings nearly deserted streets and enormous water filled craters. a missing boater has been rescued after a week adrift at sea and returned to his family. but his mother is still unaccounted for. nathan carmen was brought in by the coast guard from a freighter that picked him up from a life raft 115 miles off of martha's vineyard. the coast guard is suspending the search for his mom. forbes magazine says kevin hart is the highest paid comedian with earnings of $87.5 million from june of 2015 to june of 2016.

he dethrones jerry seinfeld, who made $43.5 million. but who's counting? that's the news update at this hour. back to you. >> kevin hart's counting. >> yes, kevin hart is counting, all the way to the bank. >> good to be funny. >> royalty. they rerun all over the place, right? >> that's exactly right. let's look at the markets. we have a midday surge and we have stocks pushing at fresh session highs. s&p up by 14 points. up by .7%. what we're seeing lead the session is technology and that sector is higher by 1.1%, seeing strong gains in a lot of the dividend paying tech stocks, microsoft, cisco, intel. check out the price of oil here, we're also seeing that off of session lows, happened down as much as 3%. we're seeing it now down by 2.5%. seeing boosts in the airline stocks across the board, thanks to oil. delta, southwest, american, all trading higher.

let's get to seema mody for a market flash. >> go pro shares falling as much as 5%. the move comes after a competitor from china began circulating a new drone video. there is concern the dgi drone which costs as low as $749 and came out today could take market share away from go pro's karma drone. go pro's karma drone, $50 more and released just earlier this month. we're looking at shares of go pro down about 4.3% on the day. >> seema, thank you. head winds for the hedge funds keep getting stronger. one of the biggest names in the industry is quitting. kate kelly has the story. >> word of richard perry shut down came as a surprise yesterday to many people in the hedge fund business. where speculation made the rounds that perry may be moving to a family office model but the plan is simply to close from what i'm told. he wrote in a letter to investors, though i continue to believe strongly in our

investments, process and the team, the industry and market head winds against us have been strong and the timing for success in our positions just too unpredictable. he set out timetables for selling out of perry's fund investments. noting that some like fannie and freddie and certain residential backed would take a year to get out of. he'll keep a core team of his employee base in position to do that. though the timing of other layoffs is not entirely clear. the last couple of years have not been kind to perry who co-founded his fund in 1988. last year, down 12% from what i'm told and this year so far down 2.5%. assets winnowed from $15 billion at one point in time to $4 billion right now. still, perry hasn't been without good ideas. during the panel last year, he touted greek tenure government bonds, which have risen 48% since then. it is a somber moment for the

hedge fund industry, seeing a lot of pain this year. this is probably the first major closure that i've seen in some ti time. >> i was wondering why he can't show up at delivering alpha. >> at the downdraft this year, doesn't sound all that terrible in context. the average fund is only up a few percentage points. down 12% last year, it is pretty tough to weather. >> got it. thanks, kate. >> thank you. stocks at this hour trading higher for the first time in three days. last night, though, donald trump saying there is trouble brewing. >> believe me, we're in a bubble right now. and the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that's going to come crashing down. we are in a big fat ugly bubble. and we better be awfully careful. >> bring this chad morganlander, portfolio manager with stifle nicholas and christine hooper.

good to have you here. you agree with donald trump? >> we're overvalued somewhat. our expectation is 18 times. flat earnings growth, deceleration. >> is that a yes? >> no, it is not a bubble. a bubble is 25 times p multiple. a bubble is 1999. >> if interest rates go up -- >> it is going to take the risk free asset up, take equity markets down a bit. we believe that fair market value for the s&p is probably about 5 to 10% lower. >> some think the market is rallying because hillary clinton, quote, won last night. >> i think it is going to move the dial either way, 90% of the people made the decision. we believe that regardless of who gets in, there is not going to be a very large fiscal stimulus plan, you have the deficit between 2%, 3%. earnings growth sluggish. >> christina, same for you. is donald trump right? a bubble or interest rates bring us crashing down? >> well, first of all, interest

rates going up really depends on the pace. whether or not they can actually impact significantly other assets. so if we see a very slow pace, the kind of data dependent monetary policy we have seen thus far with a few rate hikes per year, cautiousness on the part of the fed, it is unlikely to really take stocks down dramatically. what we could see, though, is a rapid increase in interest rates, particularly if we see some changes in leadership with the fed, which could be caused by changes in leadership at the administration level. >> so sounds like you're saying, because michelle is asking about the markets because the markets perception is could be that, hillary clinton won and that's why we're up today. you're basically saying there could be instability at the fed if donald trump does win. if he was perceived to be the winner in the debate, then we would see a destabilizing factor in the markets today, right? >> that is true. what i would say is that stocks in the short-term are a voting machine and the long-termer term

a weighing machine. we're likely to see a lot of volatility. polls change day by day. we need to recognize some of this has to do with the competition of congress, with the kind of initiatives we see come to fruition. >> the final phrase is things will come crashing down. are they? >> i don't just mean the stock market. i thought he was referring to -- have to ask him, but i thought he was referring to more than the stock market. >> look, the financial system is somewhat overvalued. and in particular, parts of the financial system, the credit markets, high yield bonds, low yield bonds. look at commercial real estate, cap rates are seriously low. the global growth scenario going forward over the next 24 months will be a deceleration based on emerging market credit growth, developed market credit growth has been lackluster. fiscal stimulus, not in the cards. everyone is hoping for hope with that perspective. so his point of view that everyone is crashing down is

dramatic. we just believe there is going to be a reallocation of assets. you can see the ten year bond, for example, go down to 1% to 1.25%. >> is the sullivan family portfolio different under a trump win or clinton win or still the same on valuation and fundamental metrics? >> valuation and fundamental metrics, stay balanced, don't be overweight risk, don't be surprised to see the ten year continue to rally and interest rates go lower. the federal reserve is stuck. slow as we're discussing. >> right. so what i would say is that we have to think of a trump presidency in terms of what congress looks like. and whether the initiatives will be passed. but certainly in terms of the fed, we could see a leadership change if rates go up dramatically, we see that crashing down impact. i think it is very unlikely. what we're likely to see is a fed that is going to move gradually, and as a result we won't see any big shocks to the system. >> oil and gas stock under a clinton presidency?

>> i think due to the global deceleration oil and gas companies, the price is going to go lower. our expectation for oil is in the 30s if not the 20s. >> that has nothing to do with the administration. >> global growth. focus on that. if trump gets in, then coal companies should revive. i would buy the credit, go perhaps with the most senior debt there. >> one sector not mentioned conspicuously, many, but health care was not mentioned. >> not once. >> not once. is that an all clear, maybe, for investors to go in and pick up health care names? >> let's put it this way. in a clinton administration i would be nervous about pharma and biotech. in a trump administration i would be worried about hospitals and managed care. one thing we can count on, i would argue for both candidates, is infrastructure spending and a lot of it. we should expect that's an area that could benefit no matter who wins. >> we'll see. three more debates to go.

two. chad, thanks so much. and christina. the twitter takeover talk continues. sao who are the main suitors now. do the debates hurt more twitter more than they helped?

twitter reportedly in talks to sell itself. twitter getting a big boost, up 30% since friday when the reports first came out. joining us now is ed lee and anthony declemente. guys, thanks for joining us. anthony, i'll start with you. you cover twitter as well as disney. can you see the fit? and is it a good deal for

disney? >> so we actually don't think it fits very well. we think it is a very high price tag and high multiple for disney. we see better uses for that capital elsewhere for disney. couple of things. twitter will be a turn around project. the ad revenue has been decelerating, now down to 5%. some people might look at it as a possible integration of sports distribution. you see what twitter has been able to do the last couple of thursday nights. one specific concern on that front is that the deals with some of the pro sports leagues require third party distribution, so it is not, like, disney twitter could self-distribute the nfl, for example. we're worried that even if disney acquired twitter, they have to go out and spend and license more in terms of pro sports licensing fees and finally, really media acquisitions of technology historically have not panned out very well. >> are you thinking time warner aol? >> that was the other way

around. i was more thinking of news corp. for my space and the acquisitions that disney has made that have done really, really well and have been wise and successful have been content oriented acquisitions. marvel, pixar, lucas film, we wonder is there something, whether in the video game space, or the content oriented space, where disney could better allocate that capital. >> twitter is a spectacular distribution platform. we can all agree with that. we all love it, we're addicted. we're addicted. >> i don't love it. >> i'm past it. >> here we go. why would disney want to -- let's be honest. if you look at the debate feed last night, a lot of it is nsfw, not safe for work. a lot of obscenity. why would a family oriented company like disney want to buy into a platform which is uncontrolled, and sort of that type of speech is one of twitter's, if not the biggest problem. >> they wouldn't.

that's exactly the problem. if there were -- if they shied away from vice, they have a stake in, has all kinds of issue oz or concerns about the type of content it produces, they don't want something like twitter where it is a broadcast medium where anyone can sign up and tweet whatever they want. >> and say stuff about disney. >> and say stuff about disney. >> or its movies, or whatever. >> the only argument for is, you know, twitter is one of the platforms where the young people are hanging out, right? if you're concerned about cord cutting or cord shaping -- >> young people on twitter? i mean, young according to -- we're not the young people that they want. they want the young people who are on instagram and snapchat. >> snapchat is the place where they are. but i think that's where -- i think the point is that, you know, culturally there is a shift towards these types of platforms. >> anthony? >> i was just going to basically

agree with that and agree with that point and i want to look at the size of the audience, and in comparison to what the price tag might be. for example, why buy twitter for rumored $30 billion, gets you somewhere between 30 and 40 million daily active users. i compare that to snapchat, which has 60 million daily users at a $20 billion valuation. or even compare that to the size of instagram which is 200 million daily active users. the size of the audience doesn't fit with the financial dilution and we have done some math. >> who can buy twitter? lucky girl, so many suitors, google sales force, microsoft, and disney. >> alleged suitors. >> alleged suitors. >> happens all the time. >> any of those fit better? >> yes. so i just -- we're struggling with this. we have covered twitter for some

time. and we can see some of the issues that twitter has, the issues with growth, with decelerating ad revenue peruser, the issue with leadership. i cover alphabet, google and i cover disney. and i don't see those as being a particularly great strategic fit. don't mean to be a debbie downer on the potential for a big blockbuster hyped acquisition. but it could be another suitor like microsoft, like sales force, who sees the virtue in extending that portfolio. >> does twitter make good money today? and is there a chance that it ever makes great money? >> the stock is off the charts for twitter. you fix that, fix management, fix the product, a chance for it to grow, maybe a little faster. i will disagree with anthony a little bit. i think google is the best choice just in terms of business rational, in terms of product fit. i think twitter is a great broadcast medium, google needs

that data. >> if i were a twitter shareholder, you sell right now because, boy, you got a real bang for your buck here, because of all of the rumors and maybe nothing happens and you're out of luck. >> i think the company has got a fiduciary responsibility to consider bids. is the sales for bid legitimate. i'm of the view that jack dorsey doesn't want to sell. that's what we're hearing. it could be true that other folks, whether it be evan williams, shareholders, other board members, anthony nono, are interested in exploring that. and i think twitter has been strategic and smart around the live streaming aspect because it has added a qualitative element of strategy and distribution that is difficult to quantify right now. >> you would sell? is that -- i hear all sorts of reasons of sell but neutral on the stock. wasn't to clarify. >> i think if i'm twitter, and i get a legitimate bid at a premium to where the stock is trading, i would consider that, i would sell the company

because, you know, i think you need to do best by your shareholders, they have a duty to shareholders. you can't make the case that twitter will be a double from here given, for example, given deteriorating fundamentals. >> remember it was all that speculation swirling around yahoo!. microsoft going to buy it. those shareholders got yahoo!ed for a long time. >> most of twitter's users -- most outside of the united states. >> twitter stand alone or bought in. >> i think it is sold. gone or somewhere else. >> thanks, guys. >> still ahead, airlines turning to social media to improve customer service. how do you make sure your complaint is seen online? the one thing you can do that will get you a response. next. what's the value of capital? what's critical thinking like?

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what would help is simply being able to recognize a fair price. truecar has pricing data on every make and model, so all you have to do is search for the car you want, there it is. now you're an expert in less than a minute. this is truecar. we'd like to fly away. but many of us are often stuck at an airport with a delayed or canceled flight. many of you may turn to social media. tag an airline on twitter,

facebook, instagram and ask, hey, airline, what's going on with my flight? have you ever wondered if they're listening to you? phil lebeau has the results of a surprising survey and joins us live in dallas. >> the answer is the airlines are watching and listening whenever you put something on social media. according to -- which worked with several airlines and tracks the industry overall, the response rate from the airlines varies depending whether in north america or europe. the good news in the u.s., north american airlines do a better job of responding, 24% of those posts or tweets put up get some type of response from the north american airlines. the average response time, one hour and five minutes. so why are we down here in dallas? in part, southwest is the most responsive airline according to conversocial. they are monitoring social media 24/7. the most responsive airline in terms of responding to about 43%

of those posts out there. average response time, 10 minutes and 2 seconds. >> the approach is really how can we help? wait a minute. we hate to hear that. let's see what we can do to straighten this out. >> look at shares of southwest and alaska, the reason we're putting up alaska is that according to conversocial, alaska is the quickest responding to social media postings. by the way, conversocial works with alaska, not with southwest as far as being a client. we said earlier, what is the one thing you should or should not do? do not put the profanity laced rant out on social media. it will not get a response any faster. if you're smart, be very careful and say, look, i'm frustrated, i need help, x, y and z is the problem.

they'll respond to you much quicker. i know, brian, you have gone on social media when you had delayed flights and ranted a few times. >> let's ease off the term rant. i will say, i will say that a few months ago, we got -- s six-hour delay going to o'hare and i did say to people talking, i said, okay, i'll go on -- hey, united what is the story with flight 79. i know i'm in a different -- in the media. they responded like 30 seconds. i will say that. but i felt like i was benefiting the other 200 lost souls on said 737. >> it was a selfless -- >> if you send a message, almost every airline will be pretty quick in responding. it does not help if you start screaming at them. >> i'm not sure responding helps either. sorry to hear --

>> it was polite. >> did the plane take off any sooner? >> no, but we got more information and i actually received more information from united before -- i would tell people in line, we just got delayed another hour. before it would come up on the board because i would get -- >> the app. >> i did it once. i'm proud. >> thank you, phil. he said, she doesn't know how to make america great again. she said he lives in his own reality. is any of what either said about the economy true, though? we're going to try to separate fact from fiction next. hier. it begins from the second we're born. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen.

welcome back to "power lunch." i'm tyler mathisen. here is what is on the "power lunch" menu at this hour. a big, fat, ugly bubble. that's what donald trump says about the u.s. economy. its slow growth. but just how bad is the u.s. economy really? goldman's new call, where it sees oil and yahoo! in the cross hairs of congress, like so many other american companies right now. will marissa mayer be called up to the hill? the second hour of "power" begins right now.

>> i'm melissa lee. a check of the markets. two hours to go until the closing bell. nice rally going on. the dow is up triple digits. powering the markets higher today. the trade in technology, industrials, consumer discretionary, they're the best performing sectors now. tyler mentioned oil. crude continues to be volatile. down more than 3% earlier. actually we're going back towards those lows. now down by 3.2%. the closing trades straight ahead. >> i'm michelle caruso-cabrera. consumer confidence rising, the highest level since the recession. swift, says it has been hit with more cyberbreaches. federal reserve governor stan fisher says american men in their prime working years may be hunting for jobs at a lower rate because of public assistance income and also drop in demand

for low skilled labor. >> thank you. let's get back to last night's debate. let's forget all the nonsense about sniffles and hash tags and snarky comments and drill down to what really matters. the claims and promises of each candidate about the economy, steve liesman. often forget there is more to the debate than a snarky twitter comment about the sniffles. >> talking about the fact checking and the things they got wrong. but let's now go to the 30,000 feet level. it is really very simple. two different visions of the right path to economic dproegro presented last night. here is hillary clinton's. >> i want us to invest in your future. that means innovation and technology, clean renewable energy, and small business because most of the new jobs will come from small business. we also have to make the economy fairer. that starts with raising the national minimum wage.

>> the committee for responsible federal budget says clinton's combination will increase the deficit by $200 billion over ten years. some of her plans are federal mandates on business, like the higher minimum wage or equal pay for women. that will be born by the private sector. here is donald trump's vision. >> under my plan, i'll be reducing taxes tremendously from 35% to 15% for companies, small and big businesses. that's going to be a job creator like we haven't seen since ronald reagan, a beautiful thing to watch. companies will come, they will build, they will expand, new companies will start. >> trump's plans estimated to cost 5.3 trillion over a decade. his camp says they'll pay for themselves. the economic choices have come down to typical democratic republican choices. it must be added, though, that the size, scope and claims of

growth from the trump campaign are gravity defying for many in the economics community. >> also hammered a lot on regulation and getting rid of regulation. he went on and on about that. i think that speaks to the business community in a strong way. >> it does. it might speak to some of the public until you get around to reducing those regulations. there are costs to the regulations, also benefits. and the typical regulation argument starts with things like usda regulations on foods and things like that. those things create cleaner food. is there a cost to the meat producers? yes. does the public enjoy the -- >> as a business person, even if he can't reduce regulations, she guarantees more. right in. >> that's fair enough. i get plenty of comments from business people who say that is the thing that is holding back this economy. what is interesting is when you

ask people about individual regulations, they tend to shy away from that. the other problem with the regulation argument is that a lot of the regulations seem to be holding back, very much at a local and state level, things like licensing, and educational requirements, not much the federal government can do about that. but there is ways we can change and ease up regulation. whether or not there is something -- i may have this wrong, i think it is $1.7 trillion of benefit claimed by the trump camp from deregulation. i don't know if there is that much there. >> is there any science behind those kind of claims? >> we can't even agree, i'm afraid to say, on the benefits of tax cuts or even the benefits of government spending. there is massive debates over what they call the multipliers, how much a dollar of federal spending means for the economy. the economists i've talked to said the claims of growth and missed tax cuts are toward the

higher end. >> my suspicion is that cutting regulation is like the eternal quest to cut fraud, waste and abuse and that it sounds really good, but when you really do it, you end up finding fewer savings than you thought. >> i have sympathy with what michelle was saying, the general concept of the direction of government matters and you have claims from executives who come on our air all the time who say that a generally more pro business sentiment from the administration is something that could ignite animal spirits. that's sort of something worth trying. and it wouldn't kill anybody from the clinton camp to come forward with, for example, telling us what her corporate tax cut would be. we talked about that. she's not really addressed this issue of private entrepreneurship. >> we have seen 16 years of increased regulation. george w. bush, sarbanes oxley, just as bad.

16 years of similar -- more and more. pages of this stuff. a lot. >> there is no mechanism in congress to get rid of loss. there is almost no mechanism. >> there is a full program that is implemented by the federal government, obama administration, about reviewing and eliminating regulations. some of that has worked. some has not. >> all right, folks. thank you, steve. let's move on now to another economic highlight from the debate, the housing crisis. listen to this. >> donald was one of the people who rooted for the housing crisis. he said back in 2006, gee, i hope it does collapse, because then i can go in and buy some and make some money. well, it did collapse. >> that's called business, by the way. >> 9 million people, 9 million people lost their jobs, 5 million people lost their homes, and $13 trillion in family wealth was wiped out. >> let's bring in don peebles of the peebles corporation.

welcome. what is your initial reaction to that particular point of the night, that mr. trump favored the -- was rooting for, let me put it that way, that's her words, for the housing collapse? >> i'm sure when he made the comment he wasn't thinking about running for president. and, look, i think what he was trying to articulate is he would be opportunistic. wall street and how many hedge funds and pension systems invest in opportunistic real estate. that's just a part of being in the real estate business, doing business in every cycle. sometimes you're a buyer, sometimes you're "seller, sometimes you're a builder. i think they were making too much out of the little nuances about comments as opposed to digging into the stance. that's what many people watching it saw last night. >> do you worry a rise in interest rates and i believe his quote was even a small one, let me make sure i'm saying it right, but if you raise interest

rates even a little bit, he was referring to the stock market, is going to come crashing down? do you fear the stock market would come crashing down with a small rise in interest rates? do you fear that the real estate market would be badly affected by even a little bit of a raise in interest rates? >> no, don't fear the stock market. the stock market is efficient. i think they already priced in some form of interest rate increase and we have been expecting that for quite some time. but it is not -- we're still at zero interest rates. i think the housing market and real estate market in general could be devastated by -- at this point. >> from what you know which of the two candidates would be better for the u.s. economy? >> i think a more responsible, more thoughtful leader is where we need to be and clearly hillary clinton articulated that. i was looking for something from trump. and i think that, you know, he's

right on the idea that interest rates, a movement would hurt our market. but there has got to be more detail put into it, like reforming tax reform. >> mrs. clinton really hasn't gone to the question of corporate tax rates that i know of in any specificity and less clear if she's been clear at all on the matter of repatriating foreign held profits. where do you stand on those two things? >> i think we have got to do something to bring back u.s. corporations, money back into this country. and if we tax them, they're not bringing it back. and we -- that has been the case and been proven. so clearly taxing them is not going to work. there should be some form of an incentive for them to bring it back, reinvest it and alleviate any kind of tax exposure because we need the money into our economy. i thought that was one point that trump made very well, and hillary clinton did not arctic late how she would address that and that is a serious issue. and also, the other thing about

we have got to make the cost of doing business in this country affordab affordable. it is not just about small businesses. these out of work factory workers in the rust belt understand that large corporations are producing jobs and if you raise taxes, look, i just had had this conversation with my communication person in my company. and she was saying, well, don't you think he should -- everybody should pay more taxes? i said, well, no, if i pay more taxes, then some of you have to go unless we expand our economy as a result of it. >> we talked about regulations. you're a builder. you're probably subject to more rule and regulations than any industry out there. talk to us what it takes for you to get a building built today versus, say, 10 or 15 years ago. i got to imagine the number of lawyers and accountants on your staff has grown, but the number of builders maybe has not. >> the legal exposure to my business has grown over the past two decades to an unacceptable

level when building for sale product like condominiums in terms of the long-term liability. we have contractors and architects that have coverage. also, the application of just the basic building code guidelines and how they are applied, and they are ever changing, so we have circumstances where in florida while we're building the building the rules change and while we're having them inspected, another comes out and changes the rules. regulation is a killer. the financial reform act, those acts that change the way banks do business, they're slowing down the housing market. it is difficult for credit worthy people to qualify because the government took an approach that they're going to save americans for themselves as

opposed to smau focusing on people who are committing crimes. more regulations and more laws, catch the ones committing crimes and committing fraud, prosecute them, but don't burden all of us with these absurd burden of these regulations that don't have a practical application. >> if i just listen to the last 90 seconds of what you said, i would have been absolutely convinced you were a trump supporter. >> yep. >> well, look, i'm listening to him, but, again, i think the challenge is is that we -- this is a very big job. it is a very important job and more than managing the economy. the president of the united states is the president for everybody and that means every citizen as well. i think that the challenge is that hillary clinton is more in tune with a broader spectrum and more -- and willing to do the hard work to learn how to run the country. and i think trump is showing, you know, something different more to come. >> you're in charlotte, what is it like there?

>> it is calmer, but i have to say, i'm staying at the ritz-carlton hotel and we're developing a 17 acre parcel, rebuilding a neighborhood, an area called brooklyn. that happens for surrounded by marshall park where the protest was. our land surrounds that. we're staying at the ritz-carlton. i thought i was in beirut because of all of the national guard presence and the like. but this community is frustrated. it is not about police brutality. that's just a symptom. it is frustrated by the lack of equal access to economic opportunities and economic issues. >> all right, don, thank you very much. appreciate your time today as always. don peebles. thank you. >> thank you. a check on oil. it has been a volatile ride in the oil markets. plus or minus 1.5% in the last hour and a half now. back toward session lows. comments being attributed by dow

jones to a saudi oil minister, closing the door on any potential agreement at this informal meeting going on in algiers. saying they're working toward an agreement at the november 30th opec meeting. the opinions are narrowing in terms of the gaps between the iranian energy minister, russian oil minister and saudi arabia's oil minister. looks look a deal won't be reached at this meeting in algiers here. we have crude oil down by 3%. to seema mody with the market flash. >> nasdaq on track, up more than 9%. biggest winners over the past three months include seagate, netapp and invidia. what is helping the story today is amazon hitting another all time high on a bullish note from jpmorgan. and the fourth quarter does begin on saturday. time flies fast. >> seema mody, thank you. up next, more on the big move lower for oil, the head of commodities at goldman sachs lowering his year end price target on crude.

we'll ask jeff curry why they did that and where he sees oil going when "power lunch" returns. announcer: they'll test you. try to break your will. but however loud the loudness gets. however many cheese puffs may fly. you're the driver. the one in control. stand firm. just wait. [click] and move only when you hear the click that says they're buckled in for the drive. never give up till they buckle up.

crude oil cannot seem to get out of its own way. when it looks ready to push higher, it seems ready to break back down. that's where we are today. crude oil down 3% to 44.52. your next guest may be one reason why. they just lowered their year end

targ to the $43 a barrel, to $50. here, jeff curry. probably most listened to in commodity and oil team in america if not the world now. we appreciate you coming on "power lunch." why the price cut price cut downgrade? >> not about algiers, all about the fundamentals. really telekhree key drivers. you look at u.s. production declines, they have slowed tremendously in the past few months. driving that is the underlying decline rate. has to do with the life cycle. these wells are much older so the decline rate is beginning to slow down. so that's point one. point two, the wall of supply. the wall of supply applies to oil, copper, all the commodities. this is the large scale capital investment that was made earlier this decade. it is starting to come online. places like brazil, north sea, surprise to the upside, next year stands to be the real sweet spot of that. the third factor is the core of the new oil order.

this is the idea that opec and low cost producers have an incentive to produce market share, not a cartel strategy. and has to do with the fast cycle nature of shale. so we look at surprises to the upside, russia, sitting at post soviet -- higher than what they were in the soviet era now. look at saudi arabia, 10.65. low cost producers also surprising upside. demand picture, pretty much benign. >> there is an opec or pseudo opec meeting going on. i went to the austria meeting. you look at the conversations there, everybody says the right thing. like political rally. we'll say the right things. your argument is that once they see it leave that room, they go out and pump as much oil as they can, and your data backs that up. >> there is two reasons. one, they fundamentally cannot pursue that same strategy of a cartel in the current environment. the reason for that is the fast

cycle nature of shale. we already have seen rig rates in the u.s. are up 32%, which is this recent rebound in price. you can imagine how fast they would shoot up if prices went higher. that's point one. point two, you have never seen cohesion in opec if you did not have a demand shock. think about this. demand comes down, refineries shut down. there is no place to put the barrels, therefore they cut. in an environment where we are today, due to excess supply, don't have the same incentive. >> i get what you're saying about oil, demand is the same. this is not a call on a slowdown in economic growth. i look at your commodity forecast across the board, forecasting levels that are below current levels when it comes to copper, when it comes to gold and nickel. what is driving those prices lower? is it a stronger dollar? what is going on there? >> it goes back to the whole idea of the wall of supply. you think about a lot of these projects have five to ten year lead times between when you

invest capital and when you get production. we think about the big run up in copper prices, they peaked in 2011. lots of capex took place then. supplies coming on. >> for copper, nickel, i get that. how about for gold? >> for gold, that's really being driven by our outlook on rates in the dollar. essentially we have a forecast of a 65% chance of a rate hike in december. and that's really driving our view of higher rates hence lower gold prices. but i want to emphasize about gold, i don't want to own gold tactically for the reasons you're thinking about. i like to say, gold is a great hedge against politicians and we have a lot of political risk in the market now, so gold has a strategic purpose. >> why? what is the time between gold and politicians? >> we think about -- if you think about just the correlation between rates. and you think about when you debase a currency or weak

dollar, what people gravitate to are hard assets. that's why you get -- >> i get that point. last night, did we hear anything about the dollar? i don't think so. >> we heard about the fed. >> still saying $50 an ounce lower on gold. >> not substantial. i'm not jumping up and down about it. but i'm really thinking about it more in the context of -- >> you don't like gold, don't like oil. what do you like? last time here you recommended -- >> zinc. >> no. burritos. >> yeah, maybe. >> zinc in a burrito. good idea to buy now? >> the reason why we like zinc is because it does not have this wall of supply. you actually saw significant mine closures in the most recent time period so it doesn't have that fruition of investment made five or ten years ago come into market now. also, it is very infrastructure intensive. the type of total social financing increase that we're seeing in china now, it will be

more zinc intensive. >> thanks, jeff. >> coming up, a whole hour show on zinc. >> thank you very much. >> coming up, big moves in biotech, stocks moving after drug trial results released and two stocks taking a hit because of something hillary clinton said during the debate. "power lunch" will be right back.

shares of private prison companies are falling today. hillary clinton expressed support for the justice department's plan to stop using private prisons during last night's debate. and there you see the decline. substantial ones for those two. one trade that will rise and fall with donald trump's chances at the white house. and the big decline in the price of oil today. the final trades live from the nynex next on "power lunch."

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hello, everybody. i'm sue herera. here is your cnbc news update at this hour. vice president joe biden campaigning in philadelphia for hillary clinton this morning. he called donald trump painfully uninformed saying he lacks the values needed to become the next commander in chief. >> he does not have the basic fundamental sensibilities and

values that almost every american politician left, right and center i know have. >> european union defense ministers gathering for talks on implementing a common european defense action plan. britain's defense minister says the country remains committed to the security of europe, despite britain's vote to leave the eu. and a nighttime visitor, take a look at that, made itself at home in southern california. a bear walked into a backyard in southern california before getting into the hot tub. climbing in for a bit of relaxation. and then wandering off to the neighboring pool. you got to warm up and then cool down. there you go. if it was a polar bear, could have been a polar plunge. >> turkish bathing going on there. thank you. sue herera. shares of kite pharmaceutical are higher today after the treatment for non-hodgkin's lymphoma.

juno therapeutics also on the move. take a check on ligand, that company gets royalties, taking a bigger hit, down 12.5% now. a wbig drop in the price of oil. to jackie deangelis. >> it appeared that no deal was pricing into the market a little earlier this morning. session low was $44.19 for crude. we closed off that low, around $44.65. still negative on the day. you talked about it a little bit before, the headlines from the saudi energy minister saying that the views among opec members are coming closer together, but he does not expect to have a decision tomorrow. and a lot of the buzz i'm hearing out of that energy conference is that this is setting the stage for a more formal setting, opec meeting on

november 30th where the members get together, potentially, maybe we'll see a decision then, if crude prices continue to decline. you had jeff curry on earlier, goldman sachs saying the fundamentals for oil are weakened. market thinks supply will continue to outstrip demand, that that will push the prices lower. back to you. >> got it, jackie, thank you. mexican peso hitting record lows in recent days and analysts think this move comes from trump's numbers rising in the polls. after the first presidential debate last night, however, mexican peso rebounding sharply today, suggesting that the market thinks hillary clinton won the debate. talk more about election trades, trump trades, joining us is alberto gallow, you and i have talked over the last couple of weeks, for a long time, you've been arguing be short the peso, you thought donald trump's numbers would rise in the polls.

you've been right about that. what do you think after last night's debate? >> i think it is a setback but mexico is dependent on things not doing well. i think what we're seeing with trump is the double phenomenon towards -- i don't think it is over. yes, the polls say that clinton has won, she had the upper hand yesterday, but i think it could come back and generally we have a very weak backdrop in mexico. we think there is more weakness ahead. >> you would keep that trade on? >> yes. >> this didn't turn out to be, i was surprised, as pivotal a moment as i thought it was going to be. i thought there would be something decisive. i'm not sure we can say that today. would you argue when you see the market reaction today? >> i agree. we would have expected a bigger drop in the peso. but i think some people are still thinking that it is an open game.

why? because the rational fact checking politics are not working anymore. we have a lot of the population, which is angry, didn't get the benefits of qe, didn't get the liquid from the fed that went to the financial markets. they are more sensitive to the messages. >> did you expect to hear more about immigration? did the wall come up at all? i didn't hear the wall mentioned once. >> exactly. if we see events -- >> that will change next time, i bet. >> if we see events that relate to national security in the next weeks, he could recover. this is a global phenomenon. we have brexit in the uk. we have other referendums, one in italy, other countries, we see the vote winning because people are angry, didn't get the benefit of monetary policy and qe. we're still worried that the protest vote could come back before november. >> would a trump presidency or

clinton presidency -- would one be better for the u.s. market versus the other. would a trump presidency be bad for the u.s. markets? >> the near term reaction is risk off. people buy treasuries. and the s&p would sell off. it is what we have seen in the day before the debate. medium term, he wants to spend more. he wants to do fiscal stimulus. that's inflationary. protection is inflationary. you don't import from china at cheap rates. you create inflation, you build things here. for the domestic economy, it is inflationary, means higher yields in treasuries so treasury is selling off. >> strengthens the dollar and supercharges your mexican peso short position. under the scenario, is a safety trade in the currency market really the yen as opposed it the dollar? how do we see that play out? >> it is treasuries, it is yen,

and i think also if you had -- if you won the presidency, the fed probably would delay the hike that a lot of people are forecasting for december. we would -- >> because of the uncertainty he engendered. >> another issue which has a big election outcome, nothing to do with our election. i was in germany this weekend, talked to people about deutsche bank, nobody seemed worried about it. what kept coming up is because merck ameri merkel is in a hot election fight herself, do you think doi deutsche bank is going to go under? >> they need a big capital raise. >> could they come to the equity market right now? >> very expensive to come to the equity market. >> they could. they would pay up. >> they could. i think they could. the fine is 14 billion. the market cap is 14 billion. they have some reserves that they have accumulated against the findings.

the finding is negotiable, could be lower. the main issue is the business model, based on trading, largest institution, used to have a very low capital, a lot of model based balance sheet, you know, risk weights and all these things, all these quantitative things that don't work anymore, you need high capital. they need to reinvent. >> a fund focused on a lot of european bank debt. you have a position? >> no. >> would you buy if you come to market today? >> not yet. >> not yet. >> no. the key thing is they have to invent their business model. they need a new business model. they are solvent. so you can look at the debt. >> even with the tremendously high interest rate, which is what they would go to market for, you would not touch it. >> the bonds are above the february lows. at some point, there is an entry point, it is attractive, it is a bank that is solvent, but still above the february lows.

>> alberto from donald trump to deutsche bank, thanks very much. a hack on yahoo! that could have exposed data on 500 million accounts, only became public about last week. but that was two years after it happened. now, six u.s. senators are demanding answers in an open letter to yahoo! ceo marissa mayer. we'll speak with one of the senators on what they want to hear from yahoo! coming up next.

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> six democratic senators want answers. a senator said, we're even more disturbed that user information was compromised in 2014 and the company only announced the breach last week. this is unacceptable. yahoo!'s trading high today, but down 2% since the hack was announced last thursday. joining us from capitol hill is senator richard lumme eblumenthe of the senators who signed that letter. a senate vote -- why don't you continue --

>> i'm happy to read it. to keep government funded, he joins us now, let's talk more about this while melissa gets her microphone fixed. a lot of microphone issues, the debate last night and now "power lunch." senator, thank you very much for joining us. what do you want to hear from yahoo!? any response that they would have that would make you satisfied further investigation was not warranted? >> further investigation is absolutely warranted. >> no matter what they say? >> if they told us that it was all a figment of our imagination that 500 million people were not at risk of identity theft because this report of a massive data breach was somehow illusory, yeah. no need for an investigation. but, in the meantime, we want to know from yahoo! what is being done to protect these 500 million people who are at risk of identity theft, when did yahoo! first learn about this breach, what did it do about it, why did it take so long, two

years, to know that there was this major security breach. and other questions that we have asked. but there shouldlet be an investigation by authorities into what caused it, how it happened, and what could have been done to prevent it. >> we want to get more on what you think should be done with the yahoo! situation if there should be laws requiring companies to disclose to their consumers hacks within a certain time period. we want to get to the news just crossing, senate vote to keep the government funded has failed a procedural vote and shutdown looms on october 1st. senate leaders were exploring alternatives. what do you think happens? will we see a shutdown or can you come to some solution? >> i'm pretty confident and certainly hopeful we'll avoid a shut down. we'll have other votes. i think they're imminent now, may be ongoing. and i am very hopeful in fact, i fully expect the government will continue in operation. >> how did you vote, senator? >> i voted against cloture,

against the motion to shut down the debate. i think we can reach a solution to better represent consensus, particularly to make sure that we meet some of the needs of our nation. >> what is the sticking point? >> sticking point is man fold, but centering on the funding for flint and the aid to that city and residents there and the general problems, lead poisoning around the country. >> switching back to yahoo! senator, a lot of ground to cover. i think it is shocking to a consumer to think that your data could be breached and two years later you find out about it. is the root of the issue that there should be consumer protections in place, a required disclosure of cyberattacks within a certain period of time? >> astonishing and appalling, not just shocking that this kind of breach could have occurred two years ago and consumers be at risk for the entire period of

time. so, yes, there is a need for congress to act. and i have submitted legislation along with my colleague from florida, senator nelson, that would, number one, set standards for what kind of security protocol should be in place, number two, establish mandatory policy for notification, people should be alerted that they're at risk of identity theft within a timely period. and it will vary according to economy sector, but there should be standards. and a right of action by the federal trade commission and by state. state attorneys general. i serve as state attorney general of connecticut, so that there can be enforcement of this measure. congress should act. >> so, senator, excuse me for being skeptical. i mean, yeah, yahoo! probably should have told everybody, but i find it very hard to believe that you and congress are going to be the ones that protect us all from this kind of thing with yet another round of regulations

and things that or rules that apply to one set of technologies that is going to change dramatically by the time you guys get around to actually writing or passing the bill. >> actually, there are rules in place, regulation already exists in 47 states. >> but it didn't work here, did it? >> a company like yahoo! which is a national company, is looking for national standards and national -- actually, most responsible businesses already are taking steps in this direction, but they're seeking some certainty and also security that they won't be subject to 47 different standards. it is really pro jobs, probusiness, pro certainty, businesses can plan when they know what the national laws are. >> sure, sure. big federal program rather than having the states compete or having different variations where businesses can go to different places in the country and actually be served better. >> well, a patch work of different requirements serves no

one's interest and it didn't work. >> called state competition. >> that's the reason that we need a national standard that will protect consumers. for the past 15 years, the most common complaint by consumers has been identity theft. 15 years, year after year, if you have been a victim of identity theft -- >> i'm glad you're getting around to it. >> how appalling and absolutely painful it can be to try to correct all those records. so i think that in the real world, there are people suffering from identity theft as a result of these security breaches who want some effective remedy. >> our thanks to you. senator richard blumenthal of connecticut. >> cybersecurity will be in focus at our upcoming cambridge cybersummit in partnership with mit and aspen institute. for more information, "power" returns in two minutes.

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narr: and explore world psibilities. kubo it's autiful. narrator: sit discertheforest. to finclest forest o opark to u. no street talk today. time for trading nation. let's talk about the financials. the only s&p 500 sector down on

the year. larry mcdonald, when, if ever, will the financials turn around or are they all going to zero? >> it is similar to 2008. if you look at deutsche bank and think of a pie. they have 16 billion of equity and then 162 billion of debt. 16 versus 162. that is an unsustainable business model. they need equity. they need a recapitalization. there is not the political will in germany right now to get that done. that means mr. market, the beast in the market will force the politicians hands sometimes over the next month or two. that means trouble for the u.s. banks. >> craig johnson, you look at the charts, when you look at financial etf, does it show more contagion, more pain or maybe finally a real buying opportunity with real upside?

>> it looks like to me a buying opportunity. when i look at this you reverse the down trend off the july 15 highs and you are making a classic bottoming setup. from my perspective it looks like there is probably about 15% to 20% upside based upon the charts. it is 40% banks and 60% other things. a lot of other things that make up the index do look pretty good. how good? great or a little better than others? >> there are names like goldman sachs that look like they are putting in a nice looking bottom. a lot of regional banks look attractive. i see a lot of good looking setups in the financials. so if we are going to see rates come up a little bit the financial sector can certainly work from my vantage point. >> it is a play on rates. we are watching the financials

look a little bit better. for more trading nation go to trading nation.cnbc.com. the latest from trading nation.cnbc.com. the best method for keeping trades is to keep a trading journal. take a screen shot of the chart. when the trade is completed take another screen shot and look to see if you followed your initial plan.

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time for street talk. stocks you need to know about. we kick it off with gilead. the price target gets cut thmpt primary concern the hepatitis c franchise revenue forecasts and analysts note steady secular decline. global trends are similar, as well. also look at amazon. morgan stanley up -- auto zone. one sells parts and the other one sells everything. morgan stanley saying the stock has several ways to win. i think the inflection point is coming because of the number of old cars on the road. morgan stanley says this strongly coincided with do it yourself auto repair.

they raise the price target to 8.40. >> let's do check please. last words on the debate. a couple of things interesting to me. i don't know if you were there. it felt a little anticlimatic. >> it was exciting. >> trump was trumping. hillary was hillary -- i don't know. i don't want to get into who won and lost. i think about whose minds were changed. i think precious few on either side. not a peep on immigration or building a wall. nothing on health care. >> a lot of issues yet to come. >> a lot of issues yet to come and they will. >> speaking of the wall, here is cocktail party fodder for you. what is the trade that most people think reflect? mexican peso. the more donald trump rises in the polls the more the pace

falls. 2% move because markets perceive that hillary clinton did better. the wall did not come up last night. what if we talk about the wall a lot? >> if you were watching the debate and chart of the mexican peso at the same time which i know to do -- >> so smart in my next cocktail party. >> when trump came out arguably strong the chart wasn't doing much. then it changed after 30 minutes. >> you have been in germany what were people talking about the u.s. election? >> in the beer tents of oktoberfest? not the election. i met british guys who hated trump. that was a bad british accent. yet they backed brexit. they were talking about

immigration issues in the uk. not a lot of talk about deutsche bank. i thought there would be more in the papers. i think we are talking about it more now. >> how was the beer? >> cold. >> volumeinous. >> thanks for watching power lunch. "closing bell" starts right now. hi everybody, welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> stocks getting a bump today. you have the strong consumer confidence number this morning. some are calling this the clinton rally after last night's presidential debate. we will look at whether hillary clinton really came out on top. and if the next president no matter whether clint eon or tru will have any impact on the markets next year. >> a new report