tv Power Lunch CNBC December 2, 2016 1:00pm-3:01pm EST
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you have to wait, though. easier trade is bris totol myer >> i'm watching bonds. we talked about the yield but i'm not so sure. >> good to see you. paul richards with us today. "power" starts now. i'm melissa lee. here's what's on the menu. trump's deal to save the jobs at carrier. should business cheer an activist president or fear government gone wild? michelle is going to join us live from a plant in mexico. jobs, jobs, more jobs, the unemployment rate falls to its lowest level in nine years. is the jobs picture, though, really that rosy? we'll debate that. and why one wall street firm wants you to bet the farm on chicken, beef and bacon. a sizzling edition of "power lunch" starts right now. ♪ get it hot come on baby ♪
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>> and welcome to "power lunch." after a big few weeks, your money taking a bit of a breather today. narrow gains, a little out there. the dow bouncing between positive and negative territory. however, if we can hold off, the dow is on pace for its fourth straight weekly gain. one reason, maybe oil, it is edging higher again today. crude oil now up 11% for the week. that follows the opec production deal. tyler? >> brian, thank you very much. i'm tyler mathisen. welcome, everybody. david faber reports that pandora is open to selling itself. shares of the online radio service soaring about 10% right now. ford recalling about 650,000 vehicles in north america to fix issues that could prevent seat belts from working properly in a crash. background checks for new gun sales surging 14% from a year ago. that's the 19th consecutive monthly rise according to the wall street journal. michelle? i'm near monterey, mexico.
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donald trump was at a carrier plant in indiana yesterday so we came to a carrier plant in mexico today. why are jobs moving to mexico? we explain later here on "power lunch." back to you guys. >> michelle, thank you very much. we begin with a developing story. donald trump taking another big step in his economic plan, naming a team of high profile business leaders to advise him. eamon javers is live with names and what this all means. >> we are getting new details now on this outside business advisory group. they're calling it the strategic and policy forum, the first meeting is going to be in february at the white house after donald trump is inaugurated as the president of the united states. look at the membership here of this new business group, and what you'll see is a lot of big names that will be familiar to cnbc viewers, including steven swartzman, the forum chairman. he's a black stone group, of course, and marry barra, jamie dimon, larry fink of blackrock,
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bob iger of the walt disney company. also on this outside advisory committee, doug mcmillan, the ceo of wall street. jim mcnerney, ginny rowmetty and jack welch. that's a lot of folks advising the president. what we have seen in the past is presidents have used outside business councils, barack obama had one. in fact we went back and checked. jim mcnerney of boeing sat on obama's advisory council and will sit on trump's. you get some overlap there. generally the work product, the meetings, the official dealings of these business councils is not necessarily as important as the behind the scenes advice they give to a president of the united states. think of these people as the ceos that the president will be close to going forward, the people he'll call on for advice, indications, strategies on how to create jobs. that's why this trump administration is going to be very focused on early on.
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>> kept at arm's length from the nominee and now president-elect. what changes their mind to join him and rally around the commander in chief now? >> one thing you should focus on is jamie dimon here. he was mentioned as at least a possible candidate under a trump administration for treasury secretary. that was surprising to a lot of folks given jamie dimon is said to be a democrat, though he said he's barely a democrat in the interviews in the past. now, he's not going to be involved in that official capacity at the cabinet level, but will be involved in terms of giving advice and for ceos, a couple of reasons to do this. one is you want to have input on the policy that is advising the president, shaping the nation's economy, and, two, of course, it can be good for your company to get in and learn who is close to donald trump, learn who is involved in this new white house, and have that access and those relationships, all of that very important for corporate leaders going forward. >> thank you very much.
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all of this happening less than 24 hours after president-elect's trump big event where he announced more than 1,000 jobs at the carrier factory in indiana will not move to where michelle is in mexico. despite the jobs being saved, not everybody is happy about how it went down. in fact, the wall street journal editorial board dubbing the move a, quote, shakedown. let's bring in cnbc contributor steven odlan. welcome. do you think this is a shakedown? >> well, no, look, i think that this is a good thing. trump was vocal about carrier and ford, a couple of companies. and now in the last few weeks he's not only done a deal with carrier and ford, this is why people put him in office, he espouses himself or presents himself as a dealmaker and made deals. these kind of deals typically are state and local kinds of deals, not sustainable for the president or the federal government to go around and to
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make deals with every company that is thinking about changing their lease on their -- on this building or moving this pulledipulled i building or facility to somewhere else. it comes back to the need and underscores the need for policy changes. both from a taxation standpoint and regulatory standpoint and that's what they're talking about on a macro level. this is a little bit of a band-aid, using the bully pull w pit. it is a wake-up call. and that works. as a ceo, you have the opportunity to move facilities and to move manufacturing, to move jobs around, and if the president is saying this is important, and please, you know, understand i'm going to take some action, i think all ceos listen to that and i think that will help keep jobs here. ultimately you need the policy changes, brian. >> so, steve, on the subject, we wanted to get your action to comments this morning. home depot co-founder king langone on "squawk box," he had
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this to say. >> trump has to understand and he will no doubt about it, trump needs to understand we don't have a managed economy, don't say to companies, you can't go and won't go. >> so, steve, get your take on that. is it -- this is one company. is it possible and/or in the best interest of the president and the president-elect to go company by company by company. >> no, ken is right. he went on to say you can't just run this with a bunch of academics. you need practiced and seasoned business people involved, which is why i'm happy about the forum being created. but you can't go company by company. you need a policy that addresses these things and comprehensive policy is only possible with a deal in congress that gets to corporate tax restructuring and gets to the repatriation issue and gets to -- true regulatory reform. but you can't do it on a one off basis. that's the fundamental of crony
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capitalism, which has kind of got us where we are today, where every company has cut its own deal and it warped the tax code and you have some companies paying nothing and some companies paying maximum taxes, none of it is fair. that's why you have to start from scratch. i think what we see with this carrier deal is, you know, hopefully not the sign of somebody thinking that they're going to dictate from the white house, i don't think that's what it is. i think it was using the bully pulpit. i hear the discussion of policy here in washington, between the president-elect and the transition team and congress. so that's what makes me feel good that they're focused on the right way. >> let me ask you this, steve. if you were running a big business today as we check another rival there at trump tower, as he continues to fill out his executive team and we'll bring you up to date on who is coming and going right now in just a few minutes, but
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bolton -- >> john bolton, the back of his head. >> john bolton, former united nations ambassador. if you were running a business -- yesterday there was a deal made in the way deals often get made. bl but then mr. trump through fastballs up on the chin of business leaders. if you were a business leader today, would you feel more intimidated, the possibility that you're going to be bullied or pushed today than you would have the day before yesterday? >> i think anyone watching donald trump come into office knows that he uses the bully pulpit, that he -- look, he's a real estate developer. and having run retail companies and dealt with real estate developer, not donald trump, but very similar and they come in, bombastic way, come in, opening bid is -- seems outrageous. he's acting in a way that americans wanted them to act. come in and make change. i would much rather have him do
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it in a way that sends signals and hopefully uses more carrots than sticks. what ceo ez dons don't want is d more regulations, more and more penalties, we want incentives, we want a flat playing field, we want fairness, we want to know what the rules of the game are, and let us compete. that's what most ceos will say today. i'm hoping that this is a shot across the bow saying this is an important thing, let's keep jobs here, give me a chance to get some reform in place, ultimately i think ceos have to listen to this, and, you know, look, if i was a ceo who was thinking about moving something, i would back off that decision today. >> that's an interesting answer. steve, thank you. >> thank you. >> well, the friday rig counts are out and we added three more oil rigs, 19 in the last 20 weeks, a gain in rigs.
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we're well down from last year, folks, but we continue to add rigs, which is good, because we're adding jobs as well. just watch for increased production. now, to steve liesman with some breaking news outside of oil. steve? >> brian, thanks very much. fed governor dan tarullo, the top banking regulatory official on the federal reserve is def d defending dodd/frank and this comes after comments of steve mnuchin where he talked about pairing back dodd/frank. he cautioned against backsliding on the regulatory process, or progress. he said reforms, quote, provide strong foundation for financial stability and he said we should not forget the losses from the great recession. he pointed out the u.s. has the strongest and most diverse financial system in the world. here is a comment from his speech, he said, quote, i do not think there is a sound economic case for general requirements
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applicable to the largest banks and i do not think the taxpayers should bear the risk that would be entailed by any such weakening. one place he agreed with mnuchin was that he said refinements can be made to dodd/frank, exempting small banks from some of the dodd/frank regulations and said you could exempt banks with assets under $10 billion from the volcker rule. but this official, melissa, coming back after steve mnuchin on our air talked about reducing or amending dodd/frank saying it helped out quite a bit. >> steve, thank you. steve liesman. coming up next, the battle over jobs just beginning, being felt on two fronts. here at home and across the border. michelle is in monterey, new mexico, with that story. >> union workers in the united states, in indiana, really did a great social media campaign to raise awareness about their situation to try to preserve their jobs. we speak to a union member here to see how they feel here about the fight over union jobs in
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eli lilly a player on this. shares up 2.5% on this fda approval. back to you. >> companies are not going to leave the united states anymore without consequences. not going to happen. it is not going to happen. >> that was president-elect donald trump in indianapolis yesterday drawing a line in the sand on american companies taking jobs overseas. that no doubt sending shivers down the spines of american ceos. shivers also being felt in mexico with carrier deciding not to ship out as many jobs to its plant in monterey, mexico. michelle caruso-cabrera is outside a carrier plant in monterey and joins us live. >> local politicians thought what donald trump was doing was very anti-capitalistic, hypocritica hypocritical, a politician trying to direct where capital and investment should go, they think that's akin to banana republic. we're outside of one of four
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carrier plants where they manufacture heating and air conditioning equipment. this is one of the older ones. we're here for tv reasons. you can see it from the street. the new plant that donald trump is so critical of is in the huge industrial park all over this area, that this area of mexico tried to attract. you see many, many american companies here. so union workers in the united states are very critical of the moves of the -- of jobs to mexico. we spoke with the head of one of the local unions here, the secretary-general of the local union. his union has nearly 100,000 members who make 1800 pesos a week, about $120. he started out as the equivalent of a teamster here in mexico. he didn't criticize donald trump at all. he said i get it. his point is valid. he wants to keep jobs in america. and he almost seemed to appreciate the attitude. however, it was a big however, he said i don't think it is going to work.
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investors aren't going to accept lower margins. what he's talking about? when you look at wage, there is a huge differential here in mexico compared to the united states. last year hourly manufacturing union jobs, more than $37 per hour when you include benefits. here in mexico, less than $6 per hour. one of the reasons why a lot of manufacturing jobs have moved south. this was what was interesting, the secretary of general of the union said this, when i asked him, aren't you -- doesn't it bother you you're taking other union members' jobs? he said, listen, in our negotiations, we try to wear the shirt of the investor. because without investors there are no businesses. without businesses there are no workers. so that's how we think about it. and then he wanted to say, he said, look, i know from their point of view this is very, very tough. but please tell them that the companies here, they respect workers' rights, these are very good jobs with very good salaries and very good working conditions. so a huge disparity in the wages
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and the productivity levels as well, a lot of economists point out, but certainly these are jobs that the union workers here don't want to see leave. just like those there. >> interesting that he says he wears the shirt of the investor, taking a really pro capitalist stance when union leaders, of course, are often head to head with management over wages. >> super interesting. i think, melissa, it may be because for years this country was -- decades was dominated by union workers. the mexican oil company was essentially created to employ union workers. and they have been working so hard to change the attitude that you got to have investors, can't just be all for the laborer, because then eventually laborers don't have any jobs. i think it is because they lived under a lot of socialism for a long time here and didn't work. >> what is the mood down there as they got news that the jobs weren't going to come there?
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>> so the governor of the state during a news conference yesterday about something unrelated said he thought mexicans should no longer cross the border and go shopping in the united states, which is a very common thing to do. there were a couple of local politicians who said this is akin to a banana republic. this is what the americans used to criticize about latin america and mexico, politicians telling businesses what to do. it feels like the shoe is now on the other foot. bemusement, anger, increditlity, combination of all those things. >> michelle caruso-cabrera in mexico for us. big interview on monday. jim cramer speaks with greg hayes of united technologies which owns carrier. monday here on cnbc. the good, the bad and the ugly in today's trade. that's straight ahead. the car heading straight for a pedestrian in poland. my goodness. wait until you see what happens next. we freeze the frame.
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it is an absolutely ugly day for workday, shares down more than 10% despite beating earnings estimates. management leaving guidance unchanged according to web bush analyst. look at shares of lululemon. downgraded to sell from hold saying while lulu improved supply chain profits, they're facing stiffening head winds. the analyst is saying the trend is shifting away from athleisure and to denim. >> which is not the easiest to move around in. >> denim? >> take out the ath, there was no athletics in athleisure, if you're moving from athleisure to denim -- >> the ath is gone. >> let's look at this crazy car crash in poland. it involves a lamp pole, and one
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very lucky pedestrian. >> that is a lamp pole. >> car heading for a pedestrian on the sidewalk, thankfully it hits the pole instead, just as a quick thinking pedestrian dives behind the pole. you see from different angles. no one was seriously injured. so one very lucky pedestrian, one very unlucky pole and another very lucky pole. >> right. >> tale of two poles. >> think about this happening, what you would do under those circumstances, i think about it all the time. >> i would have gone around the corner and not behind the pole. >> need some new denim. >> need some new denim. the unemployment rate falling to its lowest level in almost a decade. the latest data signal about the economy, future rate hikes, your portfolio. plus, it is the small cap call of the day. this stock is up 20% this year and we'll tell you why it could go up another 25% from here.
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[ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know you didn't cut off the light. the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school about energy efficiency.
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administration issuing a safety advisory calling for all train operators to be tested for sleep apnea. this after the engineer in september's deadly new jersey commuter crash was found to have that disorder. secretary of state john kerry meeting in rome with his russian counterpart sergey lavrov. he expressed the u.s. continuing concerns over the situation in syria. kerry is in rome to participate in a mediterranean summit. north korean leader kim jong-un observing a military drill carried out on that country's coast. according to the country's state news agency, that drill simulated the plans for striking five south korean islands in the southwest sea. a slump in fine jewelry could mean bargains for holiday shoppers. retailers are dealing with sluggish tourism, and spending and deflation and shifting consumer preferences towards less expensive pieces. though i've never found diamonds to become less expensive.
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they always go up, not down. that's the news update at this hour. back to you. have you ever walked into tiffany's? >> i never saw the discount section. >> i never saw a discount section there. >> thank you. stocks are trading in the narrow range right now. the nasdaq is trying to carve out some gains, still on track for its worst week in ten months. as for the dow, merck is leading there, real estate utilities, consumer staples leading the sectors. this exemplifies the trump off trade, we're seeing a pullback in financials, which were so super charged since the election. so the xlf is down by 1.4% and bonds are finding a bid, in november, $1.7 trillion was lost from the global bond market, the worst route since 1990. and here we have the tlt higher by 1.2%. 178,000 jobs added last month with the unemployment rate tumbling to its lowest level in nine years. steve liesman joining us now with the ins and outs of the job report. the question of whether or not at 4.6%, is it really that
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strong of a job market? >> it would be -- it would seem to be even stronger, right? the 178,000, just in line with expectations, but the big number everybody is talking about, this .3 drop in the unemployment rate to 46 from 49 making it the lowest level since 2007. this was due to people dropping out of the workforce. that's a bad reason. but also you had a decline in the unemployment, which is a good reason. john riding saying people aren't focusing on the unemployment rate. the fed hiked in 2004 to 1.25% with a higher unemployment rate. they say the possibility that slack in the labor market is less than the fed imagined could accelerate hikes. here is the u6, we won't do that, right to where the jobs are. there we go. thanks. 9.3 is the u6. that is the lowest level since 2008. >> explain what that is.
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>> it includes discouraged workers, unemployed workers, people working part time, it is the broadest measure of slack in the economy. elevated, but fell quite a bit. and here is for your edification, where the jobs were and are. leisure, hospitality, 29, construction, good sign for residential building. temporary help, another place where you might see holiday hiring in there. 14,000. look at retail, down. it is up on a not seasonally adjusted basis, didn't do as well as last year. manufacturing also down. here is a little closer look at the holiday hiring sectors. clothing down, department stores down, look what's up. nonstore retailers. couriers and messengers part of my look at what holiday hiring is all about. as well as ware housing and storage. when you don't go to the store to buy something, it means a box gets delivered to your house and so more and more holiday season is seeing seasonal hiring in the transportation sector. you look confused. >> that's u.p.s. and fedex.
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>> it will end up in there. barclays says we suspect the decline in employment marks a further shift towards online venues for retail goods. one more note, on monday, in the 10:00 hour, i will have the pleasure of sitting down with bill dudley for an exclusive interview. >> there he is. >> there he is. look at that. they have a picture of him so good in the back there. >> we'll see you at 10:00 a.m., if not sooner. >> it says stay right there. >> no, no, stay right there. i'll read this to you. steve, stay right here. >> i was going to say, sorry to interrupt, we're doing this perpetual trump cam. heidi heitkamp coming in and taking photographs, perhaps for constituents from north dakota, north dakota, a critically important -- not only oil and gas producing state, but at the forefront of pipelines. there is the naked cowboy, fully robed, thank goodness.
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>> chilly. >> it is chilly. heitkamp going in to trump tower right now as the trump tower cam is alive and well. >> which post is the naked cowboy being considered for? >> arts and entertainment. >> department of the interior. >> department of the exterior. >> department of the positive tear tearier. how will this play into the fed's next rate decision in two weeks from now. andrew slim is here. and ron insana. and steve is still here. do the data do anything in terms of rate hike? >> equities. for the rate hikes? no. i think it is the perfect number. reinforces the 100% people think that the fed is raising rates. >> a quarter point at a time. >> exactly. i think the good news is it is not too hot. the most important thing is the fed can raise rates but not just
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too quickly. >> ron? >> i think that depends on how quickly a new trump administration decides to enact with budget reconciliation as a means for pushing through a variety of different stimulative measures rather quickly and twice next year. and i think that could accelerate the pace of fed tightening beyond what is currently expected four or more times if the trump administration gets everything that it wants and paul ryan gets everything he wants and they finance the tax cuts with medicare privatization or something like that. this stuff could happen pretty quickly. i think it would be welcomed by the fed but surprising to others. >> what is the consensus on the number of rate hikes next year and ron says it could go as high as 4? >> this is news. insana predicts -- hinting is different from saying it outright. the consensus too, what we're looking at right now, and the measures i'm watching is you got a 90 plus percent probability on december. looking at -- first get over the
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hump on that next rate hike, june/july. that could get pushed ahead or later, possibly march is probably the earliest time -- would ever happen. somebody is shaking his head over there. >> unlukely. >> if you're watching something, might get pulled back to march or so. and then a third one being added. >> so third being too next year. >> next year. one in june, one in december priced in. we'll see -- we have to pull one ahead to squeeze in that -- >> that would be four over the next 12 months. >> can i throw a grenade into the discussion, though? you saw heidi heitkamp go into the -- we haven't heard anything about the fed chair. is it true, maybe chair yellen will stick it out for another two years. but some people think that's unlikely. i'm asking, how much of what we're talking about is framed in the current fed which many believe that the current fed is unlikely to be the same fed that
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we see if a couple of months. >> let me tell you the likely scenario. janet yellen finishes out her term, which is january or february, 2018. >> you think that's the likely scenario. >> the likely scenario. let me tell you the other piece of likely scenario. there are two open spots, donald trump gets to appoint them. there is likely to be a third if the following takes place. if one of those two is appointed vice chair, banking supervision, dan tarullo, he may resign, giving donald trump three of seven, okay? you get to january, february next year, that's four. and you can push ahead to june of 18, he should have by that time five of the seven boards of governors, could be trump appointees. what we don't know is towards what end? i will give you a dollar for every president you can name who asked the federal reserve to raise interest rates. he complained about it during the campaign. my guess is president trump will be different about the fed than
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candidate. >> having said that, though, congress is very interested in getting a rules based regime at the federal reserve. that's john taylor, that's kevin -- a whole host of individuals who would be much more inclined to live and die by the so-called taylor rule which determines how interest rates get set at times by the federal reserve. you could get a much more hawkish group of individuals. whether or not they pull the trigger remains to be seen. if you're doing it north of 4% and inflation jumps above 2 -- >> they cannot say no, they're not going to -- i would think that with this whole stimulus, if something is passed in first half of the year, the back half could be a sudden shock to the markets because those interest rate hikes could be much steeper than anybody expected. >> that's possible. >> we showed the number of central banks who had rules, and the number of times those rules are followed. so don't get too worried about that. >> i'm -- i'm a cnbc viewer,
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sitting at home now, i made money in the stock market. bonds not so much lately. stock market i've done pretty well. listening to everything we're saying, but maybe an uncertain fed makeup, what do i do? >> i don't think it is relevant for the stock market now. >> i do nothing? >> the stock market is up all of half a percent from the august high. the stock market is up 2.5% since the election of the s&p. there is parts of the market that is up more. >> 20% since the february lows. >> well, that's true. but -- >> 11 months. >> but we're down a lot, okay. details. >> trying to make my own point here. >> so i think the point is is that i don't think there is a lot -- we haven't embedded earnings estimates have not gone up based on any fiscal policy reform next year. we're looking athe ing ing at earnings growth. >> without dropping the tax
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rate. >> what happens if the tax rate goes down? numbers will go up. >> 1%. >> i'm telling you -- >> 12 to 14% earnings growth, before all this happens. >> i put my money into a good old -- >> i don't think the market is -- there is parts of the market that has gone up a lot but a lot of laggard. >> those parts that have gone up like financials, you look at financials, they traded higher pes. some of them trade at a higher pe than tech stocks. what do you think has better growth? one would say intel. >> this is not 2001. growth stocks fell so much higher than val you stoue stock. that's not the case this time. i think the opportunity is going to rotate into the areas that have lagged. that's primarily technology and some of the growth areas.
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>> i think this is the second leg of a secular bull market that will be fueled by fiscal stimulus. this may be a blowoff top. we may get accelerated growth in the stock market, accelerated growth in the economy, higher rates, faster increases, but we could be getting in a period where growth and the stock market surprises on the upside rather than on the -- >> so set it and let it roll. >> i think the bond market starts to tell you when to worry about too many fed rate increases. that's when the yield curve starts to flatten. >> i think the market is trading more on the -- you give it credit for. i think some change in dodd/frank is built in. some of it. >> most of it. most of it is. >> no, the steepening yield curve is the biggest piece of it. i think some of it is relief from dodd/frank. i think some of it is out there with some sense of a tax cut. i worry the market will be
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disappointed when -- ideas of -- >> meet the reality. >> on that note, we have to take a pause here. to seema mody for a market alert. >> i want to draw your attention to the price of oil, which is now extending gains on a report from reuters that the white house is expecting president obama to sign a bill to extend sanctions against iran, the white house is expected to sign a bill on those sanctions soon, the white house saying that it does not expect this bill to interfere with the current iran nuclear deal, but we are looking at the price of oil moving higher on this report. up 1%. >> seema mody, thanks so much. you're the oil guy at the table. >> the oil guy. i've been to some fields. i would say iran is an important piece of this melissa. we're talking about 4 million barrels a day. they were the only ones that did not cut production in the deal. they're going to add 90,000 barrels a day.
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if there are increased iran sanctions, we could see more pressure there. looking at a framework of 32.5 million barrels of oil per day and maybe a little screw in the back of iran, i don't think that's going to be enough or should be enough to move oil. but oil market, like fed funds guys, is bet on by hedge funds and computers. so how they react, i don't know. iran is important, but a small part of total global oil production. >> can i go back to steve's comment about the market moving. the congress next year gets to use two budget reconciliation acts to pass whatever plans it wants. if they defund the cfpb, if they roll back the excise tax, this could go fast and deep. i don't think they fully
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discounted it. i think people may be lowering their expectations at a time they should be raising them as to what is going to get done in the first months of a trump administration. >> and reconciliation is important because it means you don't have to have a super majority. >> 51 votes in the senate and the stuff passes. >> financials have done well versus the market recently. >> gentlemen, we have to leave it there. thanks. >> on deck, some opportunity just for you and you and you, the big wall street calls that you need to hear about today, called street talk and it is next. first, to rick santelli for today's bond report. >> if we look at one week chart of two-year, we are down a basis point on the week now after settling at 112, currently at 111. that's, of course, after a lot of volatility upside which seems to be more so with the lead-in to the unemployment data this morning. if we look at one week of 10s, still up only two basis points, well off the high levels. those high levels, if you look
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towards june of 2015, a lot of congestion in the upper 240. and finally, this is the chart to watch in front of the referendum vote, a four-year chart of the euro versus the dollar. if there is upside, there won't be a big issue. if it starts to trade under 105, probably a big issue and when you add in the fiscal gasoline in this country, that is coming that the fed may not be prepared for, we're going to be looking at some wild volatility. guess what, "squawk" will return in a short 120 seconds.
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quality chemicals business, balance sheet and delivery capabilities but lacks growth and that makes the share price premium hard to justify, given the improving outlooks of its piers. >> target is 10% the low, should maybe consider an underweight. >> down 10%. >> sell. >> something you don't want to hold, but, you know, i'm not -- >> second stock is really two stocks in one. tyson foods and pilgrims pride, starting coverage with overweight ratings on both -- the broader food call, got a $21 target on pilgrims pride, 20% upside. more bullish $70 target on tyson, 25% upside. that stock was hit hard. analyst notes the caution around the abrupt ceo change recently but strength in beef offsets, quote, pork head winds. >> what are the pork head winds? >> have you seen lean hog futures. they're down about 40% in the past couple of -- >> too many.
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>> third stock, square's business model is underapprecia underappreciated. the growth of small businesses, electronic payments and industry move to integrated solutions. square retained a client's better than peers. high retention, low return rate, 2017, 2018 estimates could be too conservative. >> i talked to a gi using square the other day. he said i love it but the fees are high. that's what he said. you start to see it more and more. one guy's opinion in a restaurant. finally, your small cap call of the day, health stream, hstm, outperform, the company has favorable positioning pause of the obama care repeal risk. analyst likes the stock's valuation, so boost the target of health stream. 31 to 26, 25% upside. that's street talk for
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friday. >> with first nonstop flight from china touching down on the las vegas strip today, actually mccarron, not on the strip, are casino stocks poised to take off? we'll investigate that straight ahead. r business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. find out how american express cards and services they are the natural borns enemy of the way things are. yes, ideas are scary, and messy
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vegas and gambling are back. the first direct flight from china is set to arrive in sin city. thanks to a boost in business both here and in macao, stocks like mgm are surging. is it time to put your chips down on the casino stocks? harry, i'll start with you, because in addition to the signs of -- positive cybsigns from la vegas, the numbers were pretty good and yet you got a sell on wynn. why is that in. >> partly because of the valuation, partly because it is $4.4 billion new casino, the wynn palace, is off to a low start. and our belief is that the returns on capital will be -- while they will be lifting over the next 12 months, it will take a while for that to gain
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traction. >> adam, you got a buy on wynn. are you concerned about the slow start for the wynn palace? >> i'm not. i think if you look out a couple of years they're going to figure it out one way or another. and mgm, located next door, and causing a lot of the disruption, construction will wrap up by the second quarter and i think results will start to improve. >> are those growth stocks or rawl you sto value stocks? >> good question. i think that with mgm you can view it in both lights. it has the lowest multiple in the industry, and yet it has strong unit growth, opening the first casino, the only casino down in washington, d.c. in a couple of weeks. so you got unit growth, same store pricing, trading at a good multiple. >> something else going on here too. we focused on china and america
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and we should. this week, the japanese parliament reopened a bill that may legalize gambling -- it is illegal in japan except with pachenko where you win prizes. do you up your price targets? >> i think you have to wait and see where the licenses are awarded and the legislation is filled out in terms of how it is executed. i think it is a real opportunity. i think all -- >> something you're watching. >> yeah. mgm, wynn and las vegas sands have a shot at those licenses. i think it will be properties that do very well. but probably won't open until 2022. it is well off. >> harry, i'm curious, under a trump administration are you more optimistic about domestic gambling? >> i am about las vegas because i think if corporate proflt pr rise, they'll send more of their employees to group meetings and conventions. las vegas is the largest market.
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and mgm has the largest position within that market. i think it would be a direct beneficia beneficiary, which to some degree explains the 12% move that we have seen in the stock recently. >> reflected in the shares now. >> partly, not all. >> what is your favorite? >> i would agree with harry, mgm is compelling. >> talk to me about the dc property, down in alexandria or -- >> across the potomac in the national harbor complex. they have a large facility there. i think 2,000 hotel rooms. they're going to have conventioneers all week that want to do things. they can shuttle over to the new national harbor. on the weekends, the visitors can say in the gaylord hotel. the national harbor only has 300 hotel rooms. i think there will be a nice win there for the two companies. it is going to do very well. i think it can do well over $200 million once it is fully ramped
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up. >> thank you. >> you're welcome. >> folks, the great rotation money pouring out of tech, going into financials, banks now the growth play? and tech the value play? and keeping jobs in america, you'll hear from one ceo who is doing it, despite intense competition from china. second hour of "power" is ahead. what's critical thinking like? a basketball costs $14. what's team spirit worth?
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second hour of "power lunch." good to have you with us. can american companies compete with foreign competition? we speak with the factory man, because he saved the furniture factory in the south. unemployment falling to just 4.6%. the job market really that strong and what can be done to make it even stronger? >> the markets now trading to the downside. starbucks falling after the ceo says he's stepping down. smith & wesson falling 10% on weak guidance. pandora popping as david faber reported that it is open to selling itself. we see pandora is up by 12%. to bob pisani on the floor of the new york stock exchange.
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>> consolidation day, the market leader -- industrials, banks, all taking a back seat right now. the important thing overall we're seeing nice movement in the market right now. back to you shortly. the important thing is we're seeing some real movement -- >> i think bob's mike needs to come on. >> needs to be put on or turned on. audio issues with bob. one key thing with market action is to watch the nasdaq here. you're back? >> important thing is, want to see where the markets are right now. since the s&p 500, since the markets on november 8th, s&p 500 and russell 2000 have nice moves up, most important thing you could have done is own the overall market. big gainers since the election. now the important thing is we're seeing a lot of churning in and out. look at the etf flows in the last month or so. big movements into the etfs for the s&p 500. and the russell 2000. and big movements in the
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financials and the industrials. very clear losers as well out there. people have been taking money out of emerging markets, taking money out of gold, and then taking money out of staples. the problem is, nobody ever gets these kinds of movements right. last couple of days, nobody would have predicted a lot of selling in the technology area. there is the semiconductor etf, the smh. the important thing is nobody got these kinds of rotations right. the best thing, melissa, would have been to simply own the s&p 500 as well as the russell 2000 and leave trying to get in and out of various sectors to the professionals. you and i know that they had a very hard time doing that as well. back to you. >> bob, stick around. as we welcome our next guest, who sees stocks moving higher through the new year. here is michael arone at state street global advisers. got 2.4 trillion under management, right there with you, bob. i'll let you lead the way here. michael, do you think that next year is going to be a great year
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for the index investor? you can just get it, set it, let it ride? >> i don't think letting it ride is always the right investment approach. but certainly i think we're going to see a transition to things that benefit from lower taxes, better fiscal stimulus, better tax reform, and we're seeing that transition in those flows that bob just showed. i think that's likely to continue. kind of picking the right sectors and industry of the market will be beneficial for investors next year. we have been talking about tax cuts in 2017. do you have any sense that is going to be a real rocket fuel that we're talking about earnings that are way above expectations a month or two ago? >> i think what is happening is that folks are getting a little ahead of themselves. they're pricing in perfection as it relates to a big fiscal stimulus, big infrastructure spending and huge tax reform. i do believe we'll get some of those things.
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i think the timing is longer you will get some bet benn fit fnef the year. >> caterpillar told us you're too optimistic, your expectations for 2017 are too optimistic. they would benefit most from an infrastructure. should the market pause and pull back a little bit until we get a clearer indication of where the numbers come out. >> i think that's what will happen. we're seeing a lot of the names are slowly but surely getting tired here. some other names that sold off , staples, utilities, technology, are trading higher today. you're starting to see a little bit of a pause here. >> what about bonds? what should i do with them? >> it is a tough spot. yields per unit of duration still very unattractive. bonds are expensive. what we see a lot of folks doing is high yields done really well. but folks are a bit concerned
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with the duration of credit from a high yield perspective. what we see a lot of clients doing is beginning to get into things like bank loans, moving up the capital structure, maintaining a high yield, they're thinking about that short interest rate volatility and they're getting access to the floating weight mechanism. >> everyone believes the fed will raise very shortly. can mat, the market handle that? >> it is priced in. once the fed raises rates in december, you may see the ten year back up a little bit, meaning yields go down a little bit from here. >> what about stocks? no reaction. fed raises, next meeting, no reaction in the market? >> all priced in. the thing i'm going to be looking for very, very closely is in the post fed meeting minutes and the press conference is what type of signals are they giving about the pace of interest rates? do they give any and the market will trade off if there is a
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signal regarding more aggressive rate hikes than is currently priced in. right now, market is pricing in a couple of rate hikes next year. if they feel as though we get more than that, look out. you could see the markets fall from that perspective. >> watch what they do. watch even more what they say. thank you very much. >> thank you. look at this chart, since the election, the bank index or the kbe soaring up 19%. the tech sector has slumped. down 2%. are banks new growth stocks and tech the new val withdrue stock. i don't think anybody will pause at that amazon could trade inline or more cheaply than a bank stock. in terms of what we have seen, the question here now, with this great rotation that we have witnessed, is that bank shares if you look at the forward, they're almost the same. xlf 15, xlk 15. 8.
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in this moment of time, if you had to put a fresh wad of cash to work, which sector would you choose? >> i wouldn't choose the bank sector here right now. i think it is overbought from a technical standpoint. and clearly the environment is going to change for a bank that will get better. the trump administration will probably be much more facilitating the banks than the obama administration has been. and also with the fed beginning to raise interest rates, net interest margins will expand. we had a tremendous move here over the -- since the election. i think you got to wait before you buy banks. i think parts of tech do look interesting. i would still stay away from the f.a.n.g. stocks, incredibly high multiples. there are parts of tech that are somewhat inexpensive. >> if we can go into them, i don't know how far deep into the stock you want to go, but generalities, it is interesting, if you look at pes today,
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goldman sachs is more expensive than cisco systems. seems like there could be opportunity here if you're willing to look deep. >> yeah. i think some of the larger cap, older tech anymores look interesting here. with intel and cisco you pick up some dividend yield. you can go to -- look at a company like seagate, in a much older part of tech and hdds. but you pick up a 6% yield and very low multiple and, you know, i think seagate looks interesting from the standpoint with the cloud expanding and more storage coming on, they're going to get a bite at that apple. look at western digital in the same business, see a low multiple there as well. so parts of tech look to be value oriented. i think the story with banks is the change in the regulatory environment. >> you just dropped a little pearl in there about amazon's
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multiple. 300 times trailing earnings. >> many are going to argue this is the wrong way it value the stock. if you look at gap earnings, trailing 12 months, roughly a big 314 times trailing gap earnings over the last 12 months. >> so -- >> and facebook is like 45 times that number. it is gap earnings, it is trailing 12 months, doesn't take into account growth, but it is telling how expensive the stocks are. >> an amazing thought. you think back to, what, the year 2000, when -- there were no earnings. and companies were selling it at huge prices like that. worry about -- >> selling at multiples of revenues. 1990, and 2000, multiple of eyeballs if you remember that. people looking at the screens. we're not quite as expensive as it was in those days. >> we'll leave it there. thank you. with that in mind, we'll do this a little tongue in cheek,
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you and the fast money team, 5:00 p.m. eastern, like it talk about the f.a.n.g. trade, since that apparently is over, i thought we needed a new pithy acronym to reflect the interest of the financials and after much thought, minutes of thought, may i present america with the gump trade. goldman sachs, u.s. bancorp, morgan stanley, pnc financial. i make a good investment, jenny. >> box of chocolate. >> these stocks in 30 days, 21% average gain between those four things, you can say they're on a run. >> and they keep running until today. >> run, forest, run. >> by the way, we chose those stocks, i don't want to say we chose. i had no part in this. brian chose the stocks. >> i do wonder -- it is hard to come up. gumbo was possible. >> couldn't think of the o, though. >> no o. gump. i wonder if there is a second run to these stocks.
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you could say they have new legs. >> my mom always said life was look a box of chocolates. >> that's why i love us. the gump trade, use it freely, america. >> sue herera with a news alert. >> it concerns some federal data that was just released on health care. u.s. spending in 2015 rose at the fastest rate since 2007. it was driven by the obamacare which gave people access. as a percentage of gdp, u.s. health spending rose to 17.8% from 17.2%. as a percentage of gdp. so obamacare increased access and increased access to higher priced drugs, driving up those health care costs. back to you. >> sue, thank you very much. key vote in italy this weekend could have a big impact on markets and perhaps the
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future of europe. julia chatterley is live in rome for us. >> -- last minute campaigning going on here in italy ahead of this weekend's crucial vote. a referendum on constitutional reform, aimed at streamlining the government is now way bigger. why? because prime minister renzi offered to resign if the no vote wins. what this will mean is a period of political instability and a crucial time particularly for the weak banking sector here. we have seen this play out this year, that index down almost 50% year to date. if the no vote win as i expect, we could see pressure on the stock. there is a but, and a pretty big but. there is always a risk of surprise here. think donald trump, think
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brexit. in this case, the surprise would be a yes vote win. it is a possibility. around a third of it tallians remain undecided. if we get surprised with a yes win, i think we see the opposite for the bank stocks and some kind of positive bounce come monday. those are the two main scenarios. we wait for the vote. >> thank you very much, julia. there is a presidential election in austria this weekend. it is a revote from a may election that was annulled. a far right populist candidate facing off against a left wing green party candidate. keep you posted. up next, back to michelle, live in mexico, where the carrier jobs were slated to go. the deal to keep them in indiana. plus, starbucks shares are down as founder howard schultz steps down as ceo. schultz speaking to cnbc about it and about a trump presidency as we head out. look at the s&p 500 session lows
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here for this state where we are right now. you're also an auto parts executive. >> yes. i own a company namakes auto parts. >> okay. let me ask you, what is your reaction to donald trump and what he pushed carrier to do? >> we are respectful of what the president elect is doing, what carrier is deciding. we're glad they decided in the middle of the road, carrier can continue their business here. they have been here for 30 years. been expanding here, big market in mexico. and the united states. we are glad they could bring some of their operations here. >> are you worried about a trade war with the united states because of donald trump? >> i hope it doesn't come. i think the president is a smart person, a business man, and right now, i mean, i think for
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political reasons he is doing this. but he's going to understand sooner or later that we are like siamese twins here. we are too much together. >> the u.s. and mexico. >> yes. if he wants to separate that, that's going to cost the united states a lot as well as mexico. if he really wants to grow the united states economy as he -- we hope he does, that will benefit the world, mexico, i think shouldn't be wasting time backing the wrong -- we are a partner. we are going to help because the united states need us as well as we need the united states. >> he says nafta was horrible. it ruined manufacturing in the united states, wants to start all over again. >> that's a perception that is not realistic, i think. and let me tell you, there are people in mexico that could say the same thing, no. there is a lot of industries that disappear in mexico.
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thousands of companies disappear and thousands of millions of jobs disappear to nafta. >> because of nafta? >> because of nafta. you need to adapt and change and move. but there is a sector that is disappearing. >> like what? >> agriculture suffers a lot. we don't have software industry, we have an aviation industry, we don't have computer industry. we don't have hollywood type of movies. there is a lot of industries that are more modern that have occupied the place of other companies. so we have suffered. mexico hasn't had a free ride in this no. and so there is a lot of people that could be as big -- let me use the -- in mexico as they are in the united states. there have been benefits and costs. you have to weigh them. you have to analyze them and act wisely. mexico is not in worrying with
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the united states. we don't want to be in war with the united states. we are not fighting back. we didn't provide carrier with incentives. we will not do it. that's a decision of the united states. that should not be started. that's some wars that should be taken out of the -- that we're not going to have the united states or mexico. >> thanks so much for joining us on "power lunch" and making the case for mexico. appreciate it. >> thank you very much. >> guy guys, back to you. >> starbucks is falling after howard schultz announces he'll step down. will he really be able to give up control of his baby? you'll hear from schultz himself when "power lunch" returns. miles per hour. s tr0 to win, every millisecond matters.
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i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) he's back. tiger woods finishing his second round at his own tournament, called the hero world challenge. now in the bahamas. first action in more than a year. tiger carted his lowest round today in three years. a bogey free round, 7 under par,
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65, worth noting that tiger is playing this week with taylor made woods, his old nike irons, even though nike is getting out of the golf equipment business. he's playing now a bridgestone ball. you can watch the action this weekend on nbc. there is a nike chart, still wearing nike shoes, and apparel. shares of starbucks are lower today. earlier on "squawk box," andrew ross sorkin and i spoke with schultz and kevin johnson. >> we had a remarkable conversation this morning with howard schultz, the ceo of starbucks, handing over the reins and that title to kevin johnson, the present ceo and long time board member of starbucks. howard schultz going to stay at the company, executive chairman, will welcome on social impact issues and its premium brand of coffee, the reserve line. one thing fascinating was howard schultz said he thought that kevin johnson was, quote, better
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equipped to run the company and help scale the company than he was. one of the questions that always comes up in a transition like this is how much power is kevin johnson really going to have given that howard schultz is such an iconic leader of this company. >> kevin johnson, starting in april, is going to be comprehensively all in the chief executive officer. howard schultz is the executive chairman to support whenever kevin needs it. he's managing the business, managing the team, setting the strategy, and i'm here to help and support. there should be no misunderstanding whatsoever and kevin johnson is well equipped to take the company to the next level and that's going to be a wonderful opportunity for our shareholders. >> the other thing we spoke about, of course, was politics, howard shuttle waschultz was a
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of hillary clinton. we talked about the trump administration's impact on the stock market and on starbucks. >> i need to separate the prospects of starbucks from the trump administration. and the momentum in the stock market. if you look at the success we had in terms of building market value, building shareholder value, it has been primarily based on our ability to execute, build shareholder value and balance profit with social impact. i'm not spending a lot of time on the cause and the effect of the trump administration. we all want the president-elect to do well. but starbucks is going to have to do what we do based on the things we can control. >> a fascinating morning here in seattle. back to you. >> thank you, andrew ross sorkin. as andrew mentioned, howard schultz was such a vocal supporter of hillary clinton. his stock prior to the election was down 10%. after the election, up 7%. obviously there is some
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enthusiasm about a trump administration, about the prospects of a growing -- >> lower taxes. >> a lower corporate tax rate. helping starbucks. but he would not go there. that was his answer to the question when he said i have to separate what's going on with the trump administration and the stock market with what we are -- >> asked him if he's going to run for president? >> yes. >> what did he say? >> he's all in starbuck for now. >> schultz stepped down before. april 2000, he left starbucks, $5 stock, and it went up to about $20 a share in 2007 and then began to collapse. in january of 2008 -- >> huge operational problems. >> january 2008 schultz was lured back or came back and the stock was at 10 bucks. but it had come down from 20. he resuscitated the company. with all due respect to kevin johnson, schultz has turned around this company before, though i would argue, this is probably a much different company than it was then.
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>> it had four conquartersconse quarters of sales misses. for investors there are questions about starbucks. right now at this time it is priced like a growth stock, still the growth stock it once was? is it still the same kind of growth stock as it once was? does it command a premium and throw on top of it, oh, by the way, the founder, iconic ceo is leaving. >> from a consumer angle, i would love to hear what our viewers think, there is a drive through starbucks near me, which has basically egg mcmuffins, so they're turning a little bit -- i don't want to say into mcdonald's, but that's a different model than providing -- >> they have been selling food for a long time. >> seems to be more resembling traditional -- >> maybe that's why they think -- isn't he focusing on a higher end coffee and --
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>> $12 cup of coffee. >> comes with flakes of gold. >> i joked about that. golden cup. >> irish coffee. >> to jackie d. >> to govern. you're coming to me for the oil close on this friday. we're watching prices getting close to $52, but there is resistance there. we're not necessarily able to cross over that mark. you may have a few extra shorts being squeezed out. two big moves that we have seen over the past couple of days as a result of that opec meeting. most people think that that was a very constructive deal that we got. the question, of course, is will the internal members stick to it will the russians stick to it. nobody really knows at this point. goldman sachs saying if everybody does what they're supposed to do, we can see crude oil prices break the $60 mark. that would not just be a positive for people trading the futures but impact the stocks
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and energy sector as well. if you look at some of the things that we have seen happening right now in this space, you can see these moves have been very volatile. they probably won't be this big until we start to get some reports of what is actually happening. but we won't hear until january, until the deal is implemented, we won't hear until february or march if people are cheating or not. it is one of these stories that stay tuned. >> thank you very much. 4.6%, the unemployment rate falling, lowest level in nearly ten years. but is it a true reflection of the jobs market right now? we'll talk to the so-called factory man, the ceo fought off china and kept jobs in america. "power lunch" returns after this. ways wins.
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with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. welcome back to "power lunch." i'm seema mody with the news alert. we're learning that double line total return bond fund run by jeffrey gundlach posted a net outflow in november, the third largest cash withdrawals since 2013. this according to reuters. the total return bond fund posting a $1.4 billion in net outflows in the month of
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november. just highlighting the challenges that investors have had in the past four weeks. >> to sue herera for cnbc news headlines. >> the update this hour, everybody. president obama meeting with u.n. secretary-general designate antonio gutierrez at the white house. he praised him as someone with an extraordinary reputation. he said the u.s. has always been at the forefront of reform. >> we need a u.n. that is more effective, more cost effective, more able to serve the people with very strong reform. the u.s. has always been a driver for reform in the u.n. and i'm deeply committed to pursue that objective to make sure the u.n. can be a positive partner. the syrian army releasing video of its troops firing at targets in southeast aleppo. rebel groups still control a
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third of the district, government forces have made serious gains in the city in recent days. formula one champion nico rosberg announcing his retirement at age 31, five days after earning his first world championship at the abu dhabi grand prix. rosberg saying he's achieved his dream of becoming a formula 1 champion and it takes a lot of time and he wants to have more kids and -- but everybody was really surprised by that. back to you guys. >> i admit i -- sue, you know i -- i did not know -- i'm so busy digging into the financial markets, i didn't -- it is also my daughter's 13th birthday today, we have been busy as a family. i did not know this at all. 31, huge. the demands, they're rich -- >> they're traveling all the time. >> all over the world. >> lewis hamilton, a number of world championships, he says he
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will miss the rivalry, but he said he has a clarity of mind and it is not a surprise that he decided to stop because he's achieved what he wanted to achieve since he was a kid. there you go. >> may have butted heads a bit. not all bad. >> i'm not sure it is good for formula 1, you don't basically have a world champion going through the winter season, right? >> i smell a guest on monday's show. leigh diffey, if you're watching, come on the show on monday. thank you. president-elect trump scoring a big victory with the announcement of his deal with carrier, which will save around 1,000 jobs. carrier was just one factory. what else must trump do to pull fill h fulfill his promise of keeping jobs in america. well known for his fight against
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illegal dumping from foreign competition, and he joins us now, thank you, john, for joining us. what is the secret to keeping manufacturing jobs in america? is there a secret? >> well, i think there is many secrets. you hear about education, you hear about entrepreneurship, you hear about innovation. what you don't hear about is that the other side cheating. when i listen to the president-elect talked about the wall, the 45% tariff, the laws are already out there. we're just not exercising the laws as we should. dumping is the practice of another country, selling that product in your country, under that cost of manufacturing. >> can you be compost competitive? i want to make a table or couch at your facility, how cost competitive would that be to a
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table or couch, all in, you know, ship to china, back from china, whatever. >> there are products we're not going to be competitive in. there are other products we're going to be competitive in but we're not going to be competitive if we're not willing to invest in this country and invest in our people, and invest in equipment, and call them when they are cheating and say, look, it is against the rules. they actually initiate and impose more dumping petitions than we do. and i'm talking about china, i'm talking about india. they -- they defend their own industries while they're raping ours. >> are you hopeful the new president will do what you're urging them to do, sounds like the sort of rhetoric that he has used, that the other side doesn't play fair and we're about to end that. are you hopeful?
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>> i'm hopeful, but let me describe it this way. we all look at the nfl, we love professional football. and they have a thing in the nfl called the instant replay. we want to get it right. and even if you are voting for a certain team and your team fumbles and they true ly fumble, that's it. we need the instant replay in trade. that's what we need. we need to look at this and say, wait a minute, our people are losing their jobs, illegally, because you guys are cheating. >> let me ask a different question about something the president-elect said yesterday, that was that companies that try to move from the u.s. offshore, move jobs offshore, they're not going to do it, not going to do it without consequences. that felt like a fastball under the chin to businesses that might be considering doing that. if you're in that circumstance, how would you react to a comment
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like that from the president-elect? would you feel pressured, bullied, pushed, what? >> the first thing i would do is try to get my facts straight. let's be honest, a lot of companies probably wanted to close their factories. they wanted to get rid of the people, get rid of health insurance, get rid of retirement, and just give it to somebody in another country. now, i think that the management in this country needs to stop and revalue. and not just talk to the guy in the cfo's office, go out there on the factory floor and talk to your people. this is why trump got the tremendous surge of support and votes because there is a lot of people upset, guys. it is time to get out of the ivory tower, time to get out there with your real americans and say what can we do together? >> we'll leave it there, john. thank you. very insightful interview.
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we appreciate you coming on cnbc and hope see you again. >> i like the uva behind his head there. that was a good thing. are you an -- >> i'm just here because -- you could get me on television. >> w nell is a great school, wonderful school. >> leaving one out, i'm a hokey. >> virginia love fest. >> thank you, we appreciate it. >> you're quite welcome. >> big interview on monday on mad money. greg hayes, you saw him in the plant with jim cramer 6:00 monday, insightful. all the shots we saw of them talking, what did they talk about? jim will hopefully dig that out of him. >> kelly evans is a w nell person. >> you knew that. is it good for labor to see more of the type of deal mr. trump made? bill rogers, professor at
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rutgers, ron christie gop strategist and former special assistant to president george w. bush. welcome. let's start with your reaction to something that was -- that mr. trump did yesterday, that is he applied the bully pulpit, used a business man's kind of leverage, i would say, to get something that he wanted from a carrier corporation and united technologies. some, like the wall street journal, are critical of that. even calling it a shakedown. how do you see it? >> i don't think it is a shakedown. this is a smart move. he had the opportunity several months ago to speak to mr. hayes, the chair of united technologies, which, of course, owns carrier. had a conversation. said we shouldn't be moving these jobs abroad to mexico. we should find a way to keep the jobs in indiana. they did so. they found some tax incentives working with the government of mike pence in indiana and fouad a way to do so.
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i think through negotiation and i think through deliberate tiff thought process this was the right thing to do. >> what do you think critics would have said if mr. obama had done the same thing? >> i think people would have criticized president obama, but -- >> on what basis? >> that playing in some corporate welfare, that, you know, this is small, that this is not, you know -- it is a one-off. but the thing is, you know, this -- he's responding to, you know, what was howard deal, the anchor in the old movie network. >> i'm mad and i'm not going to take it anymore. >> i get this that the political necessity to do this. this is done all throughout the
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u.s. my home state in new jersey, my governor since 2010 provided subsidies and tax cuts to companies for per job cost of $60,000. right now it is acceptable, it is responding it a real need, a main street need. don't get me wrong there. but from a step back and as my whole sort of -- the economist hat on my head, i get concerned. with needs to be done with a variety of other tools. >> ron, let's take a look at today's jobs numbers. one of the last reports, the next to last one, i guess the next to last one of the obama administration, is going out on top? >> i don't think so. if you dig a little bit deeper in the numbers, there is some things in there that are deeply troubling to me. you look at what the real unemployment rate is, the u6, mr. rogers knows this well, you're looking at those who are either underemployed or those who have gone out of the
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workforce, you're looking at something in the realm of 9.3%, down from 9.5 last month. now had 446,000 people leave the workforce last month alone. if you look at the specific number of 4.3%, you say that looks great. once you start digging deeper, it still shows the economy is not at strong as it should be. >> ron's point is the right one that headline number 4.6 is probably understating the real level of disaffection in the workforce. i am curious about labor force participation. what percentage of those people who drop out of the labor force are dropping out because they are discouraged as opposed to dropping out because they are aging out or choosing to leave. >> so there is -- i think the answer to your question is two statistics you want to look at. the unemployment rate you talked about, which includes those who are unemployed by definition, but then those who are working part time, but want to work full
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time and another set of workers who are discouraged. if they're offered a job, they would take it. that's around several million and you have your standard db labor force participation rate. about half of that decline we have seen over the recovery is attributed to aging out. what is interesting, i've looked at the participation rate for prime age sort of adult men and women and that is still driven -- still below where it should be. >> final thought. >> yeah, so the final thought here is, you know, i think you have to step back and say what are the obama administration inherit in terms of the economy. and the great recession. and going forward tremendous gains, and this report really does show that we will be handing off -- administration will be handing off a solid economy. probably has peaked. but a solid economy.
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we got a real big -- virginia. >> melissa wasn't lucky enough to go to school in virginia. >> ron, thanks. >> always a pleasure. >> our pleasure. three stocks responsible for a big chunk of the dow's recent gains. just three. we're going to tell you which three to find out if they can keep rallying. stick around. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business. if you're on medicare, remember, the open enrollment period is here.
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welcome to trading nation. your guest today and the topic is this. three stocks have accounted for the majority of the dow gains over the past. is this sustainable? and would you be a buyer of these names? >> not at all. i asked two questions. neither are sustainable. they have done really well recently. it is really one shot deals
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thanks to the trump presidency. these are very small stocks relative to the entire dow based on their price weighting that gives them outside influence. i'm not a buy here. i don't think these are going to be out any higher. >> from a chart perspective do the charts match up? neither are sustainable? >> i think as far as the leadership i do expect to rotate around. i don't think it is necessarily these three names. i think the more important point for us is that the overall market should continue to work higher as far as participation it hasn't just been these are three stocks. 77% of the dow is currently in an uptrend which we define above 200-day moving average. forgetting about my view i will let the numbers do the talking. we looked at forward performance when you have at least 75% of constituents in and up trends to
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be up average and tends to be just as good when you below 25%. the actual negative warning, the sell signals in the middle readings when you are making new highs about only 50% of the stocks are in an uptrend the numbers argue for gains. >> that's how you do it both ways. we appreciate both of yours. thank you. for more trading nation head to our website. power lunch back in two. >> and now the latest from trading nation and a word from our sponsor.
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couple of minutes. let me ask you your impression of the transition. we saw the announcement of the trump ceo council and business advisers. what do you make of that and what you have seen so far? >> in terms of council he has the best and the brightest ceos and i'm sure he will use them as a consulitative sounding board. terrific idea, keep in touch. he has made his statements and wants topromote american business and jobs. the big tax cut bill will come. that will take a little while. i think mr. trump got off to a very good start yesterday saying keep in america. america first. we want to protect america and give you incentives with the tax bill. >> we saw ken langone saying the danger is the impression of a managed economy and wants mr. trump to be remembering that we don't have that. how do you come with that challenge of pushing ceos to do
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what you want? >> i don't this can he has intention of managing the economy. he is a free market capitalist and a great businessman. he knows the ropes very well. that doesn't mean he can't speak out and push and prod sometimes. he is trying to protect american workers. that is how he won the election. i don't have trouble with that. the key thing is in some sense this is a holding pattern. when the business tax cuts go into place there will be no reason for american business to leave. there will be no business to put their cash offshore. what i think mr. trump is isaing is there is a new sheriff in town. i want you to work with me, take it seriously because i mean it and we will give you incentives to do it. >> you are about to meet with donald trump. what are you going to tell him? >> i don't know. i'm not exactly sure. we met many times over the course of the year. i have a hunch he wants an update on the economy. that is what i usually do when i
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go therein. we will see. >> are you going to give him your take on the jobs number? >> if he asks for it i will. >> i will tell him it is a decent jobs number but the under pinnings, jobs are not growing as fast as the population. that is why that employment population ratio has been low for the entire recovery. business is not growing, investment is not growing. productivity is not growing and real wages. it's a mixed bag. glad more people are working but we just got to get business investment going again. >> thank you for joining us. it's a cold and blustery day. we'll toss it over to you guys. >> we should note the chairman steven schwarzman will join "closing bell." that is an interview we are looking forward to. titans of industry stacking this
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council. let's get to michelle for final thoughts and a check please. >> globalization and free trade agreements there are winners and losers. we see it playing out day to day. back to you. >> great reporting out there. it is interesting one of the members of the strategic and policy forum and you got to think as an auto industry executive you are thinking about what mr. trump did in indiana and wondering if it will extend to your business where you have sent a lot of manufacturing. >> that was going to be my check please. it is interesting, maybe telling that the only tech ceo on this list is not a silicon valley ceo. >> i wonder if that is trump's little jab a bit. silicon valley who is vocal
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against trump so congratulations. >> absolutely. thanks for watching power lunch. >> we head into the closing hour with the dow basically flat off about one fifth of one percent. >> and welcome to "closing bell" m yin for kelly evans at the new york stock exchange sdplmpt with welcome aboard. >> stocks in a bit of a holding pattern. the monthly employment report showed 178,000 jobs added to the pay rolls last month and unemployment rate fell sharply to 4.6%, the lowest level we have seen since august of 2007. financials have been on fire since the election. they are under performing today. the most
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