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tv   Power Lunch  CNBC  November 4, 2016 1:00pm-3:01pm EDT

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it. >> we'll give you a pass. >> give me a pass. i'm buying stocks. i have a laundry list. u.s. steel, i think the steel stocks are poised to move higher. pricing is getting higher. >> on wednesday, the election is done, we focus back on the economy -- >> you're not going to say either? >> give me a second. >> the show is over, see you. "power lunch" starts now. i'm michelle caruso-cabrera. and the jobs factor in the election is topping the "power lunch" menu as the candidates head into the final stretch of the campaign. live reports on the economy, and the polls straight ahead. and there is a new war on drugs, yes started in d.c. again, but not cocaine or heroin in the cross hairs. it is big pharma. is the sector now uninvestable. and the disaster du jour that got us thinking have we reached peak gadget? "power lunch" starts now. ♪
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go, gadget, go. welcome to "power lunch." i'm brian sullivan. three hours left in your trading week. stocks mildly higher. but the dow set to end the week lower. not everything is down. if you own shares of archer daniels-midland, take the family to sizzler, that stock has been a big standout all week long. first solar down double digits on the week. more on these markets throughout the show. >> thanks, brian. i'm melissa lee. samsung recalling nearly 3 million top loading washing machines on concerns they can cause injury. a magnitude 6.3 earthquake rocking central chile. no injuries reported. two former aides to chris christie were found guilty on all charges in the bridge gate scandal. welcome, everybody, to "power lunch." i'm tyler mathisen. all four of us here today. four days to go until the election and we have the last piece of big economic data before the ballots are cast. steve liesman with the jobs numbers. john harwood on how it is
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factoring into the last feverish days on the campaign trail. steve, you first. >> tyler, thanks. a lot of october surprises recently with the october jobs report was not one of them. coming in around the expectation, 161,000 jobs created last month, neither too much or too little to get sucked into the maelstrom of depravity. here we go, here is the data, nonfarm payrolls up, august, september, revised higher, 44,000. unemployment rate ticking down. it has been between 4.9 and 5% for most of this year. average hourly wages a big story, up 0.4%. year over year, up 2.8%. labor force participation ticking down. jpmorgan says the recent acceleration in wage growth may revive the debate how much shadow slack exists in the labor market. i put that up there because i like the phrase shadow slack, what it means if wages are going up quite so much. maybe there isn't so much shadow labor slack out there or millions waiting on the sidelines to come back to work
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that could affect the fed. here is where the jobs were up, manufacturing declining, that's a challenge sector. finance doing well, leisure, hospitality up 10,000. and government with a strong showing there, up 19,000. most economists say this jobs report was solid and enough for the fed to hike in december. the futures market has a 60% probability of a hike, more than what many on the fed see as sufficient to keep the unemployment rate in check. dennis lockhart, he called the report satisfactory. robert kaplan choosing the day before an election that has a lot to do with mexico to travel to mexico city to allow the benefits of trade and immigration between mexico and the u.s. called the relationship critically important to the u.s. economy, benefits from mexican trade and immigration quite substantially. here's mud in your eye. >> steve, thank you very much. to john harwood for the latest on the race for the white house. john? >> we have some measurements of what steve liesman just called
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accurately the maelstrom of depravity. from the abc washington post tracking poll, which shows hillary clinton up 3 percentage points, 47, 44, over donald trump, earlier in the week, donald trump had been slightly ahead. now, that poll now matches two of the three major polling averages we have been looking at, if you look at real clear politics, their average, 2.6. right around 3%. you look at the new york times average, 2.7. the huffington post average is slightly bigger at 5.5%. they have a different methodology. now what does this add up to in electoral votes. here is the nbc news battleground map for electoral vote count. hillary clinton is leading or solid in more than enough states to get over 270 electoral votes. but just barely over. and donald trump has got a weekend to try to make up ground. now, how are the betting markets and prediction models factoring this in? look here at some of the major models, 538 conservative.
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if you look at the betting odds on real clear politics, it is around 74, 75% for hillary clinton. and if you look at the new york times upshot model, which is also done with a different methodology, they show an 84% chance of a hillary clinton victory. that comes as both candidates and their surrogates, president obama, vice president biden, bernie sanders for hillary clinton, and donald trump as -- with his surrogates rurksd surr giuliani, chris christie, chris cro crisscrossing the nation. >> john, thanks so much. let's talk more about the jobs report and what it means in the race for the white house. let's bring in bill rogers, a professor at rutgers university. and diana, senior fellow at the manhattan institute.
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mr. rogers, the jobs number today impactful enough that it could drive the election or does it inform your view about why the election is going the way it is going? >> i don't think the numbers will impact voters. i think most voter s pretty muc made their decision. the one you -- this number, this report, it is on the solid side and so it does support 73 consecutive months of job creation, we got a nice strong pop in wages, growth, and exceeded the increase in prices. so real wages are going to main street. and -- but on the other side, there is the 10% that call the u 6 real unemployment rate that is elevated. i talked about that on a variety of months. but so i think both camps will use it and will spin the way they want to. >> diana, what do you think of this number? does this inform any views about
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why we are seeing what we are seeing when it comes to the election? >> it shows a low labor force participation rate. and another 195,000 people left the labor force, which is why the labor force participation went down to 62.8%. these are 1970s levels. so it is not surprising that the unemployment rate is so low when so many people have just dropped out of the labor force. and as we just heard, the u 6 number of the unemployment rate, which is the broadest measure, it includes discouraged workers, people who dropped out, people who are working part time when they want full time jobs, that's at 9.5%. and that's a lot more similar to what a lot of americans think. they're hurting. they want better jobs. >> so, diana, i want to get back to michelle's point or it was bill's in part. isn't there plenty in this report for either side to use to bolster their points of view? >> i think there is.
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so one side, the democrats, can say there has been 161,000 jobs created. they don't have to say that that's lower than the expected number of about 180,000. they can say there say 4.9% unemployment rate. they don't have to say that it is low, because so many people dropped out of the labor force. there is a lot underlying here that isn't so good, but there is enough for the other side to talk about too. >> i'm trying to move past relitigating the past, but we have to always remind ourselves what was going on between 2007 and 2009. so, you know, that's when she put that into perspective, it is quite amazing where this economy has recovered and seen resiliency. >> i don't think the average voter thinks that way anymore. >> it seems late to be blaming bush after eight years of president obama. >> did i mention president bush's name? >> let's move on in general from politics before we all need a
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hot shower. every politician, doesn't matter what party you're in, promises a return to gdp growth, job growth and a shiny pony for everybody. but what would you do, how do we really get the labor market going again? i mean, not just with more jobs, but with -- to diana's point, higher paying jobs. is there a magic sav. i think the demographics don't make it possible. am i wrong? >> i think part of the demographics story, the lower participation rate is because of the retirement of the baby boomers. that should shift out demand for workers to fill those new spots. from a bigger standpoint, the united nations talks about -- to answer your question, the united nations talks about investing in human priorities. and whenever we as a nation have slowed down our investments in human priorities, that's investment in human capital, education and training, investment in social capital, in communities, making sure we have
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strong social insurance, social safety nets that whenever we slow down in that, that's what happened in the 1980s, it happened the period from 2001 to 2007, we saw increases in income equality emerge, we have sewn the seeds over the last decade or so of creating this surge in income inequality. we're below trend in where we should be in investment and human priority investments relative to the size of our economy. >> diana, i'm wondering, if basd on the data -- >> the facts are the labor force participation rate is higher than ever among 55 and over. and it is low between the 25 to 55 age group. here is a graph showing how it has gone steadily down. and what we need is lower taxes and less regulation. and that is what mr. trump promises to deliver when he's elected president. >> i'd love to get to just the fed and the markets. so, bill, i'll direct this question to you. at this point, given the data we have seen and given today's jobs
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report, the only thing standing between us today and a fed rate hike in december volatility in the markets and i guess that's sort of another way of getting at -- have we seen enough from the economy to say, you know what, the fed has no choice but to raise, except for the fact that reaction to the elections next week may be so volatile that they could hold back? >> yeah. if you look at some of the consumer sentiment index, consumer confidence index, the president or the current sort of readings in terms of how people feel today, they're pretty strong. it is the expectations about the future and unfortunately we have one candidate who, i think, he's really fanning the flames and creating a lot of hysteria and so it is not even just -- you said markets are reacting to that. i think -- hopefully people on main street will exercise their civic responsibility. >> we have to go. you want to respond to that? >> yeah, i think the fed has been ready to -- should have
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raised interest rates two or three years ago. they have been postponing it for political reasons and hopefully after the election they will start gradually raising interest rates. it is good for the economy, will stimulate the economy and that's what we need. >> bill and diana, thanks so much. good to have you on on this jobs day. >> it is rig count friday. rig counts are out. another big jump in oil rigs, baker hughes the ge baker hughes rig count showing that nine oil rigs, 12 total, three gas, nine oil rigs jumped this is the 20th time in 23 weeks that rig counts have added. we're still down 200 some from the same week of last year, with oil rigs. but another big jump in oil rigs, nine. let's get a check on the price of oil if we can, speaking of. it has been a lousy week for crude oil if you're long it. we have seen a 9% drop in the price of crude oil this week. the problem is simple, just too much oil.
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that's pretty much it. is it a short-term related issue to the colonial pipeline explosion, or do you believe it is something longer lasting? >> i think this is a bigger picture. if i were an oil bull right now, i would be scared to death. not only do we see this big build. how do the experts miss it? they were looking for a million barrels, they got 14 million, on a month where we have record exports. what that rig count told us is verifying what i'm about to say, technology and the cost of actually fracking and producing oil here in the states has become much cheaper. you talked to as many people that i do, all of a sudden, salaries have started to come down, the cost of producing a barrel of oil now has become cheaper than ever before. you couple all of that with the fact that technology, which is really the key factor here, is driving that price and then you've got this whole situation with, you know, the velocity of the move. that was the big problem if you remember back in february.
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really the velocity of the move down that really started to trigger panic. when i say panic, i'm talking about a global margin call. sovereign debt. and everybody else had to go out there. the question is whether we'll see the velocity of this move continue. >> bottom line, are you still bearish on oil. 44, 51 a couple of days ago. >> i think we see $35 a barrel oil. i think it is the beginning of the self-destruction of opec. and i have been waiting my entire life to see it. hopefully, you know what, at $35 -- >> i have to clean out my ifb here. i thought you said 35. >> 35 is my target. we got up over 50, i thought it was a great short. the real concern here is the damage it does to the oil services and the oil workers here in the states. that's why i say it is the velocity of the move that is important. we see a gradual move down there, we'll be okay. >> final and probably the most relevant question i asked anybody this week, why aren't you at the parade for the cubs?
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why are you working? get out of there. >> i'm on the floor with thousands of people. last thing i want to do is go out there with millions of people. i was at 20 cubs games this year. i'm a diehard fan. i waited my whole life for it. go, cubs. >> if you were a fan, you wouldn't be standing in a suit. is anybody else there with you? >> you must be by yourself. >> i don't think anybody over 50 is smart enough to watch it on tv, i think anybody under 25 in the city is there. >> they do look younger than you. >> they do, yeah. >> no offense. >> wow. >> jack, thank you very much. we are showing, by the way, if you're listening on the radio, we're showing people chanting, look, one guy in a mask, chicago cubs parades, party, a couple million. i think jon najarian was supposed to leave now and trying to make the end of the parade. >> how fun. >> 5 million?
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5 million people? >> watching on tv is not bad. >> the first one with cars. >> yeah. so long. >> speaking of cars, tesla's road ahead, elon musk making the case for merging with solar city. not everyone thinks it is a good move, including our next guest, who calls it an unneeded distraction. that is straight ahead as we talk tesla and more.
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i think the timing is just right. frankly, we may be a little late. i wouldn't say we're early. it is really an accent of history that the companies are even separate. in my original plan, for tesla, i planned for tesla to do solar panels. but at the time they wouldn't overlap because we didn't have the stationary storage for houses, the battery pack for houses. >> that was elon musk earlier today saying the timing of the solar city merger is just right. tesla shares up 2% now. shareholders from solar city and tesla should vote in favor of the deal. the vote is scheduled to take place on november 17th. our next guest calls the merger an unneeded distraction.
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joining us now, cole langone. great to have you with us. elon was speaking from the baron investors conference, wasn't physically there. ron baron, a major holder of tesla, 1.5 million shares. this is his thesis, he believes that all cars will eventually be electric. demand for electricity is tremendous. utilities aren't spending the money. grids are insufficient. and tesla is making a big move now because down the line when everybody and their brother wants a tesla, solar will be necessary. do you see the logic in that? >> i see the long-term vision he has. i think it makes a lot of sense. i think the question on timing, i tend to disagree. i think tesla has a lot on its plate now. launching the model three, the first mass market car, they have to do that out of profit, delivery targets of 500,000 by 2018. that's a significant burden to be facing.
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i think a lot can be done through a joint venture. >> in terms of the model 3, you say it is a lot on their plate, do you mean executionwise or cash flowwise? today, musk reiterated the fact he doesn't plan on raising capital. they have a cash cushion to get them through the model 3 targets at this point. it may be prudent to raise the money now when they don't need it. there are no plans so far to do that. do you buy that? you don't believe him? >> i think -- very likely they'll need to raise capital. >> you think he'll be wrong in the end on that. >> i suppose i do. i think he's going to need that cushion. i think if he doesn't, there will be pretty thin cash flow once you get to the model three. if there is any delay, that puts them in a risky position. there will be a big spike in cash burn. all the cash flow this quarter was from working capital that is clearly not sustainable, it probably turns negative. so i think it will be wrong on
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that. he'll hit the capital markets within the next six months. >> you are celebrating on the stock. the merger goes through, can't lower your rating. would you lower your price target. i would imagine that would probably be dilutive. >> i can't comment on what i do with my price target. i'm cautious on the deal. if you look at solar city, from an operating perspective, burning through cash, tesla burning through cash, that's adding more risk on the company. >> is there any way that these two companies are stronger together? that you can see? >> i see the long-term vision of storage, which is a very small part of tesla today in solar. that maybes sense. you're leveraging the battery technology, that makes sense. i think the play out of these opportunities is going to take a lot longer. that's one of the reasons why we downgraded tesla last year was i thought they were overhyping the opportunity in storage and it has been taking a lot longer.
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i think the same thing will be happening with the solar opportunity. >> colin, thank you. >> thank you. a huge turn around today for one very beaten up tech stock this year. the who and the why when "power lunch" shakes it and returns. hs simplify our e-commerce, we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.
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this is going to be our
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disaster du jour but our turn around of the day. we're talking about go pro. look at how it started the day. down as much as 19% premarket this morning. this after last night posting a weaker than expected quarter and taking down its guidance for the all important holiday quarter in which it earns 50% of the revenues. so from that, and 990 a share, it bounced back and is up to 12 bucks a share, down by 1%. we're talking yesterday about fit bit. that was the disaster du jour yesterday. and how similar the two are. >> is this a short squeeze coming in? >> it was -- if you look at the shares short compared to the shares outstanding it is about a third. but also a third for fit bit, and we didn't see the bounce intraday. and even with today's bounce of 5%, it is not recouping near the loses it suffered. >> my chair just broke. >> that's the best moment on tv ever. >> my chair just broke. that's a sign i need to -- it is bad enough i'm a foot taller
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than all of you, i'm going to sit here -- hi, everybody. >> a new chair. >> i find this odd we were talking about short interest and my chair fell. >> right, right. >> i'll be the small cap desk the rest of the show. that was fantastic tv. john oliver, you're welcome. here we go. i'll stand up -- >> now -- >> now the natural order. one of my predictions last year, who cares, i'm going to say, twitter, go pro, fit bit, one of those companies would end the year as a stand alone private company, not because they go out of business, but because they might get bought. we saw this on twitter with four days to cover, i don't know if the short covering would produce this kind of a turn around today. i'm not suggesting anything, except that with four days to cover, not sure that coverage would be enough to power a 19% turn. your traders at 5:00 p.m. would know. >> they probably would. >> you'll ask them. >> can i get a new chair?
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>> no. >> short herman miller or whoever made this chair. >> the new war on drugs. washington taking aim at big pharma, all started with a tweet. is the sector becoming uninvestable. we debate it next.
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i'm courtney reagan. here is your cnbc news update at this hour. two former aides to chris christie were convicted on all counts of creating an epic traffic jam on the george washington bridge for what prosecutors say was political revenge. sentencing for brigitte kelly and bill baroni is set for february 21st. christie again said he didn't know. here is u.s. attorney for new jersey paul fishman. >> we believe that the evidence in this case more than adequately proved beyond a reasonable doubt these two defendants were guilty of the crimes with which they were charged and that is a just result. >> a car bomb is believed to have caused an explosion that killed eight people and wounded at least 30 others in southeastern turkey. the attack followed the overnight arrest of 11 lawmakers from the democratic party. samsung is recalling nearly
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3 million top load washing machines because the top of the machines can detact unexpectedly during use causing injury. that's your cnbc news update for this hour. back over to you. >> thank you, courtney. senator bernie sanders and representative elijah cummings calling on federal regulators to investigate whether the three drug companies colluded to set prices for their diabetes drugs. the justice department could file charges in a sweeping investigation into generic drugmakers bit end of this year. both headlines the latest in a series of government actions aimed at big pharma. meg tirrell is here with the timeline of the events that got us to this point. >> quite a tough year for the drug industry. let's look back at what has transpired. back to september 2015, that's when martin shkreli was introduced to the world by raising the price of a dug. hillary clinton responding with a tweet that sent it down 5%.
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a month later, valeant comes on the scene getting subpoenas on the pricing of some of its drugs. congress gets involved and invites shkreli to testify. remember, he pleaded the fifth, but that just brings more political scrutiny to the whole drug pricing world. that not the end of the congressional hearings, though, in april, valeant testifies in front of congress, former leadership there. in august, we start to hear about the headlines on the epipen, back to school season, those prices going up. mylan ceo testifying in front of congress in september. in october, just last month, bernie sanders who always has been on this issue, starts campaigning on behalf of proposition 61 in california and we can't forget his tweets about different companies, ariad and eli lilly. as you mentioned, they're calling for an investigation into the prices of insulin as well, guys. >> meg, stick around. is this washington's war on business and has pharma become
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uninvestable? let's bring in bill george, and david mara. david, i'll start with you. it seemed like we could originally get our heads around the problem because they were going after companies who bought other drugs, didn't put the r&d into it and are jacking up the prices. it widened to companies that put the r&d in and jacked up the prices and then companies making -- is there anybody immune at this point? seems like everybody has a target on their back. >> seems like if you make a lot of money, people will go after you. we have to not lose sight of the fact this is probably the best industry that america has, employs 4.5 million people, the pharmaceutical industry spends more in r&d than the aerospace and the tech industry combined. people feel fewer innovations. this has been a horrible year for going after the drug industry. >> you're known for your work on tracking drug price increases,
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for drugs that are not on the radar yet, i'm sure, of politicians. seeing the list you have compiled, what is your sense as to where we are in this, you know, i don't know, nine innings -- whatever metaphor you want. >> we're early in the pricing debate. to be fair, there have been more than 500 drugs that raised the price more than 15% so far this year. there are a lot of them. and clearly anyone who is raising price too much, that should be something that people look into and have some sort of say in that. secondly, if you have collusion, everyone agrees. if there is known collusion, go after it. >> i don't want to blow the entire segment to smith reasere but earnings have stunk for many companies that have fallen as well. do you think this is a political problem or the fact that the earnings aren't good and valuations were high? >> i think it is a public problem. i think the pharmaceutical companies lost -- they're serving consumers.
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and you can't just continually jack up prices. what is really driving this right now is the high cost people are seeing on their health plans. the exchanges are up an average of 25% here in minnesota. 55% just talking to john, he's saying, you know, people are conflating this with drug costs. it is true that drugs only count for 15%. i think you're seeing real public anger. this was stoked by the three issues that meg pointed out, that, you know, heather bretz and the epipen, she claimed i'm in the business to make money, she's in business to serve consumers. and patients. it is true the drug companies have life saving drugs -- >> maybe they shouldn't be public because a public company is around to serve the shareholder. right? what he's setting up to me sounds like an impossible conundrum for a drug company. >> you go to buy a car and check out the volvo price and they
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say, they raised the price a lot, we should have government control the price increase. no, you have choice. the difference is they can't easily change that. there is a public trust involved as well. it is a combination. it is difficult. but we have to have -- we have to have control of the high price increases, not all of price increases. >> you have been on every single conference call for a pharma company and biotech companies so far this season. i would imagine on every single call pricing has been brought up. and ceos are bracing investors already. it is a new world here, we're not going to be able to jack up prices anymore. >> it is a new world. and a lot of the focus on the conference calls i've been hearing from ceos has been on a lot of these political initiatives. proposition 61, eli lilly coming out strongly against that. pfizer's ian reed talking about the pharmacy benefits managers and how he expects them to play a bigger role on the political focus. they have an issue at that point themselves thinking they're not the ones who are causing the problem.
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and a question on the new letter from bernieer and elijah cummings about insulin. is this a reach to say insulinmakers may be colluding? >> i have no insight into that. i can't -- i don't have the documents and so that's impossible for me to say. but to say, look, every drug company, if there is collusion, they want to get to the bottom of this, that's not the way they make money. they make money by coming out with new innovative medicines. really i think that these types of letters in a political season, two days, three days before an election, i think there is something to that. >> david, we disagree. first of all, on several points. drug companies are not in business just to serve shareholders. they're in business to serve consumers. medicines for the people, and it is not for the profits. if we do that well, the profits always follow. that's what we believe.
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i believe companies lost sight of that. they can't jack up prices. >> what is the most you raised the price on the device? i'm curious? >> when i was there, zero. >> never raised a -- >> you went out with a product. >> we brought out new models. new models, innovation is where -- we got good prices on the new models. let me be clear -- >> go ahead, bill. >> on the generic companies, i would worry a lot if i were they. the department of justice does not make a lot of public statements. for them to come out and say they're looking at them. mylan back in the headlines. i would be very worried. this is not about civil penalties or companies. they're talking about criminal penalties and i don't know how data -- i know nothing about it. i think in general -- >> i got to bring it back, meg, to earnings, i hate to be -- i know it is boring. >> it is a good point. it is -- >> s&p is revised down, biotech companies, average earnings, we
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have seen 50 biotechs down over 25% this year with the majority of the declines coming at the beginning of the year, before any politician or mylan ever came out. you've been on every conference call. bristol-myers, some drugs, disappointing. the drug trials aren't working. i'm not saying politicians aren't to blame. but this is an industry struggling for earnings growth. >> had hu maumalog was in the c hairs. >> it is the political thing and what i'm hearing is that is the biggest concern, but also these clinical trial disappointments we have been seeing, maybe less m&a, all of that is combining to make it a weak time. >> bill george, let me offer you a different view, which is when drugs get really expensive, it draws more product to market. the more expensive they become, the more profits people see, the more investors you bring to it, no different than what we see with commodities, for example.
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you talk about drugs for the people. but years go there had been a very big emphasis on trying to make money in the pharma sector, maybe you would have had more innovation and more life saving changes. >> you got it. but we shouldn't just deal with high prices. the key to making money is very straightforward. it is through innovation, through breakthroughs. >> how do you pay for that? how do you pay for it? >> listen, they have plenty of margin to pay for it. >> tremendous margins. tremendous margins, always have. >> yes, they do. >> right. very, very high margins. i don't play the violins for them. >> let me make a difference here between the quality research. take a merck. they have done it right. earnings are up. stock prices are up because they keep finding more applications for it. the ones that are really serious about research, they're going to pay off big time. very big.
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the biotechs -- >> isn't there a concern, though, that congress will step in as it has, you know, and regulate those prices of the drugs that companies have spent r&d on and how can they raise prices. >> that's a great point. i think the biggest concern for investors right now is a remote one, that the house and the senate turn democrat, the presidency is democrat, and that that would enable legislation to be pushed through that would give the government more power to regulate prices. >> do you have to shorten the period of time that drugs are patent protected? is this a good move? >> don't have to shorten it but have to hold to it and not give them so much more -- epipen has been off for a long time. there are no competing drugs. the fda will get their act together in getting generic drugs to market. probably a two or three year delay now. >> you need a long patent life because unlike the medical device world, where it takes a
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very short period of time to come up with a medical device, maybe, bill, you should talk about the thresholds needed for medical devices. drugs, the average drug costs more than $2 billion to market. so it looks -- they're investing in r&d and they're buyers, purchasers, they're consumers, and the public. a lot of times with medical devices what you have are hospitals, and you don't see it. it is never seen. you don't feel it in your pocket. that's why people aren't complaining about -- >> i -- >> sorry, bill, wanted to follow up on something with david. at the conference last month, one thing you brought up with the interaction between the drugmakers and them. do you anticipate there will be even more of a spotlight on that relationship and we may see real changes that will impact how much people are paying for drugs. >> everyone is asking for more transparency. if there is more transparency,
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one place it has to come up is with the pbms. they have come paback and said that's not true. there is something about the rebates and the pfizer ceo said we would be happy in a world with mandated maximum rebates like in certain other countries. >> we'll leave it there great discussion. thank you, bill george, david maris, and our own meg tirrell. party in chicago today. the cubs celebrating their first world series victory. and 108 years, look at your screen, an estimated 5 million people lining the streets as the parade rolls from wrigley field to giant park. rick santelli, a big cubs fan, he's in chicago. not out there on the street. he's a good worker at the cme with the bond report. >> wrigley field holds about 43,000 people. if you multiply that, that gets
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you close to 5 million, to put it in perspective of how many happy fans are out there. if we look at the market today, and the fixed income, it is a bit on the slow side. intraday chart, whether this is bunds, tens, gilts, pretty much we made our high yield lowest price right at the 830 number. ten years have resisted support around the 175 top from june. intraday, dollar index, you see same pattern. july 1st, next big support, we're a little bit through it around 97 1/2. and all this is great. we'll have a lot more information about the market, stocks and foreign exchange. "power lunch" returns in two minutes.
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a slight shift in the polls, and voter sentiment today. the latest election forecast from the senior writer at 538, welcome back. good to have you with us. the race seems to be tightening. in what i was reading, what is interesting was that the race is within what you would call the margin of error or what history tells us the variability may be between the poll results and the actual electoral results. explain. >> yes, well, one of our writers, harry enden, is a real strategist about this and points out that polls are often in presidential races about two points off. now, if that two points is leaning towards clinton, then she could win with a comfortable margin. if the two points is leaning towards donald trump, he too could win with a comfortable margin because the race is that close. of course, in our system, whoever wins the popular vote
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doesn't necessarily take the presidency because the electoral vote decides. something we talked about a little bit here and i love to play with the interactive electoral trackers that are out there. i was doing it yesterday. doing it again this morning. couple of interesting wrinkles. there are lots of ways that this race and the electoral college could end up in a tie. i'd like to go into that. and if that's the case, then mr. trump would win because republicans control the house of representatives. but in that case, mr. trump needs, he would need florida, would need ohio, but he doesn't need michigan, doesn't need pennsylvania, he would need new hampshire, which is a race you say is tightening, he would need nevada, and he would need iowa. >> yes, you're correct. we could get an electoral tie and you're correct that the republicans would be the deciders in that case. but there is many different scenarios where not only would there not be a tie, but that people could win in
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nontraditional ways. in a state like arizona, which has been republican, and where donald trump still leads, the lead has been passing back and forth between trump and clinton. so clinton, unlike trump, could win without florida. but with a coalition of states, some of them unusual for democrats to win like arizona. donald trump does need many of the bigger states like florida, but he doesn't need all of them. and so every -- there is a wider range of battleground states in the 2016 election than there were in 2012. because this race has really broken so many formats and populism, we have to remember, that american populism really underlies this entire race and there are many places where people may not consider themselves traditional republicans but they're -- >> sorry to cut you off, we have to go, tight on time, like you said, a lot of battleground states, what is the single most important state for you, one
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state we should be watching the most? is it ohio, florida, one we haven't talked about? >> florida is the most important state simply because it is the biggest battleground prize. again, clinton could win without it, trump could not. florida remains the most important, not necessarily even the most in play, i might say that's north carolina. >> thank you very much. we appreciate it. it will all be over on tuesday. or maybe not. >> i was going to say, how do you know? >> are you sure the house of representatives would vote for trump? >> did you say tie? >> the speaker -- >> what do they do? >> you had tyler mathisen -- if you say tie or contested between, i hope your chair breaks. let's move on. don't try it, on deck, four stocks in focus and one big analyst call, calling for a turn around on one very beaten up stock. money-making opportunities served up just for you as "power lunch" rolls on.
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time for street talk. analyst recommendations of the stocks you need to know about. we kick it off with invensin.
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offering some thoughts on who could buy the firm. it makes those -- you know how apple has a touch control, it makes the chips that enables that. it announced it hired advisers and significant indications of interest. here is something of interest to apple investors, a major apple supplier and the cell phone market is soft and saturated. >> 12 bucks down to 5, come back another -- back to 7.50. got to have a thick stomach for this stock. second stock, lions gate films. stock is now down 35% this year. rbc capital market said enough is enough. upgraded it to buy from neutral. the market simply hasn't fully appreciated the deal, four stars, especially some of the
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cost interviews according to him. target to 31 from 24, nice upside, but says there is a discounted cash flow case for 43 a share, which would be a double on lgf, up 11% today. >> a time when content was in fashion. >> mockingbird or -- mocking jay. >> mocking jay, yeah. mama is going to buy you a mocking jay. >> the movie. this is a darling at the time. but this has been a tough year for media stocks overall. >> jennifer lawrence, the mockingbird. >> whole foods, bank of america downgrading, lowering to 25. the analyst citing increase risk to whole food comps and margin outlook due to a more challenging operating environment. interesting trade, got halted because of volatility and reports an activist might be interested in the stock. that happened during the session. it is higher by more than 1%. >> one of the companies with co-ceos, not anymore, one
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really -- i don't want to say he's out, but his role diminished. 30% lifetime discount at whole foods. which is a lot. >> jpmorgan has a piece out saying the average price gap between kroger and whole foods is 30%. >> shop at kroger. >> not a deal. don't have a time for the small cap name of the day. >> i'm sorry. mockingbird and all that -- >> every timing problem the rest of the show is due to my chair. >> worth it. worth every second we had to give up, right? >> absolutely was. >> i'm a meme. >> i hope so. still ahead, it's true, you cannot only eat them, you can invest in them. isn't it a great company? all thanks to dean metropolis, he'll join us live on set hopefully with some ding dongs. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here.
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china coming to hollywood with the buying spree. what it will mean for the movie business. >> election protection, sound advice on how to navigate the uncertainty that is out there. and call it a comeback, twinkies and ho hoes returning to wall street. the second hour of "power lunch"
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begins right now. ♪ >> do we have a lot of cake on set? i'm melissa lee. let's get a check on the markets, just about two hours until the closing bell rings for this friday. stocks higher on the back of the latest jobs report for the month of october. the s&p 500 trying to prevent nine straight days of losses, we're higher now by about 8.5 points. health care materials, industrials leading the way, consumers staples the biggest laggard, the only sector in the red. >> check out the big stock movers now. endo international rebounding today by 4%. reports that they sell its specialty pharmaceutical unit o to -- whole foods up 2%, reports that activist investors are targeting the company and humana up more than 2% on earnings beat. >> let's begin with what your next guest hopes is a sweet return to wall street.
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just announced plans to begin trading as a new public company under the nasdaq ticker, twnk. in a power lunch exclusive, here is the man responsible for turning around the company, dean metropolis. thank you for joining us. how is the hostess today different than the hostess that failed. >> it certainly failed because the balance sheet had been way over burdened with many liabilities, the model of execution to the individual stores up and down the street. extremely burdensome. the lack of systems that enabled it to track performance. all of those changed, consolidated, a lot of the manufacturing invested significantly behind the product quality as well as the efficiencies and it is a very different -- >> when you looked at buying it, was there one thing you saw that you said oh, okay, if i fix
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that, i can fix the company. >> our company, including my sons, have purchased many wonderful historical brands over the past 30 years. in fact, some 83 businesses and this brand seems so unusual, it had a tremendous nostalgic connection with consumers. and we knew that if it was cleaned up and managed properly in a different model it would be very successful. >> there was an article in the journal today, and for those who haven't read it, made a very big point about the fact that twinkies, the urban legend is twinkies put in a land fill will live forever, but contrary to that, you had to double the shelf life in order to improve the profitability of the company. explain what it was before, what it is now, and why that was so meaningful when it comes to distribution et cetera. >> well, number one, the earlier life was 28 days. and that was being delivered up and down the street to every single individual store across the country. today's shelf life is about 65 days and that's all been done
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with moisture and natural enzymes and so on. and that's 65 day shelf life enabled us, instead of up and down the stret deliveries, to go to the warehouse, the krogers and great partners like that across the country. that made it much more efficient, streamlined and a very, very important reason for the positive turn around in the company. >> you have done lots of turn arounds, you turned around pabst blue ribbon beer. when you look at -- we're looking at some of your investment portfolios now that are in there, when you look at a brand that has fallen on hard times, is there a common theme or thread that you have to fix? >> i think there are several things. number one, you have to focus and make sure they're efficient, the operations, you have a cash flow to invest in innovation. secondly, it is, in fact, innovation. you have to innovate products that are more relevant to today's consumer, trade's
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millennials and then mark them very differently. my sons have been great marketers because they know how to guerrilla market to the millennials. that's what they did with pabts blue ribbon. you have to innovate significantly and got to really reposition the brands with new consumers. >> you can only innovate so much and these are nostalgia brands. so you can't change the twinkie an say it is going to be a smaller, round ball, to attract a new audience. so what did you do to the twinkie and how did you market it differently but still keep it relevant to the people who fell in love with twinkies when they were kids? >> the thing about twinkie and the hostess products, they have never fallen out of favor. >> despite health trends, anti-carb, they're still being eaten. >> the previous guests said have you ever seen anyone bite into
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twinkie crying? it is an indulgent category. >> go cry over your twinkie. do you worry about a war on sugar? we're seeing this rolling around, sugar, sodas, what if big government -- >> absolutely. >> comes at you. >> i think we have every two months we have a meeting with outside our labs that we consistently review the trends and we consistently review how do we continue to move forward with the trends of wellness. we need to be at the cutting edge of whatever technology and science brings to eliminate sugar, stivia. as of today, we're taking on, for example, a lot of trans fats out of the label, the products, and sugar still an important ingredient and i think as science evolves and alternatives to sugar, and as of today, almost every sweet good relies on the sugar product to make it
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what it is. >> can i eat one of those snowballs, please. >> these were really -- i grew up on this. my mom used to pack these and these, these cupcakes in my lunch practically every day. >> i want to see melissa for her birthday have one. >> oh, thanks, dean. >> so when this goes public, when twinkie is now viable by investors on monday, part of this reverse thing, we all know what it was, we know what it is -- too many details for the average viewer, why did you choose that format, though, rather than doing a traditional ipo? >> for two reasons, i think it was the -- special purpose entity, it is an acquisition vehicle with a gores group. i've known alec gores for quite a few years and it is a much more efficient way to get to the market. that's what we found appealing about it. the economics were very, very appealing to us, the way we structured it over the future years. my sons and i will be the largest shareholders going
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forward and we like that very much. they turned around and invested another $50 million into the new company, we continue to believe in the future. >> are these smaller than they used to be? >> no. >> i'm just bigger. okay. i can finish that thought. >> what is your next thing? >> well, as you know, we invested in utz -- >> the chips? from madmen. >> and golden flake, a sister company in alabama, mississippi, georgia. utz is out of pennsylvania. they have a great heritage, great family. >> is there any food product you think is in a bubble now? >> look, food products have to be constantly challenging themselves and becoming continually relevant. and i don't -- i'm not aware, nothing comes to my mind as being a bubble. >> is gluten free a bubble? >> i think there is a place for it. i remember my first company in the food business, 30 years ago.
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light cheese was going to be -- >> that was awful. >> you have to manufacture in the united states, don't you? >> we like manufacturing in the united states. we had wonderful business outside of the u.s. >> shelf life is 65 days, has to get the -- >> that's my point. you have to manufacture in the u.s., right? >> we do ship internationally. we ship it frozen and then they thaw it and give the shelf life. >> next interview, i'll bring up pbr. >> great. >> bring 24 of them. >> great having you here. >> real pleasure. good luck with the ipo, good luck with hostess brands. >> thank you very much. >> thank you. >> dom chu, news alert. >> this is about a banking fine and settlement involving a large chinese bank. agriculture bank of china engaged in a settlement with the
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department of financial services. it will pay $215 million for violating new york state's anti-money laundering laws. that's what the regulator says, including intentional wrongdoing and masking suspicious transactions at its new york branch. they agreed to pay this amount and install an independent auditor or overseer for their operations. but just a big number there. the reason why it is important is because it is much larger than the $185 million at wells fargo just paid to settle its fake account scandal. interesting number here involving a chinese bank. >> certainly is, dom, thank you very much. just three days and change until voting kicks off around the country. what you can do between now and then to protect your money. $875 billion worth of advice on how to election proof your portfolio. next on "power lunch."
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small cap call of the day, called inslet, soaring today. the insulinmaker, delivery systems, primarily with a thing called the omni pod, which you wear and gives you three days of insulin, upgrade to a buy from a neutral. the analyst says business is booming, his words, and though they do not love chasing the stock, you see more upside ahead, target on pod, $42, another 15% of upside, growth
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margins shined in the quarter. the omni pod booming, you wear it, delivers insulin for teledays. >> if you can reduce injections, that's a great thing for diabetes. volatility or the vix spiking more than 40% this week. if it ends lower it would be the first nine day losing streak for the s&p in 36 years. how can you election proof your portfolio? david lafferty manages $875 billion. great to have you with us. >> thanks for having me. >> can you election proof your portfolio? >> i think it is pretty difficult to think the market has been pricing in mrs. clinton all along. i think the gap closed, i think mr. trump and the more downside risk scenario has grown, but still unlikely. so if you move out of risk assets, you might be let down a little bit. i think instead of election proofing a portfolio, investor
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really need to be thinking about the aftermath of the election, if we do get a dramatic outcome, how can you take advantage of that, if it is a downside scenario, significant downside scenario, other assets you can pick up, and then i think if mrs. clinton wins and there is a modest rally, i don't think a whole lot has changed. so there might be some selling opportunities into maybe an unjustified rally. >> you think if mrs. clinton wins, what the markets have been pricing in so far, that it is still going to cause a market rally or a sell the news event? >> is there downside in both scenarios? >> yeah, certainly downside, i think it changed in the last couple of weeks, so my outlook has been that because mrs. clinton has been the favorite since day one, and to your point it has been priced in, there wouldn't be much of a so-called relief rally. but given how soggy the market has been and the fact that vix
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has gone up significantly, just in the last eight or ten days my view on that einvolvvolved a li bit. i think the market could see relief rally upside if only because it has been so soggy as mr. trump has closed in the polls a little bit. >> in terms of the portfolio overall, do you recommend people get into gold as any sort of a hedge or how should you look at bonds, for instance? >> i think the bond market is enormously bifurcated. so i think it is very dangerous to have too much allocated to a high quality, low yielding, really interest sensitive bonds. it might be a great trade to buy a bond at a negative yield, and hope that the bank of japan or the european central bank takes it off your hands at an even lower yield for a dwaygain. it is a terrible long-term investment. the bond market bifurcated, we see much better value in credit, the lower end of investment
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grade, high yield and bank loans to an extent. just clip some coupons, make the difference, take what you can take and ride out the storm. >> you know, david, i had a meeting yesterday with an investment firm and talking about a hedge fund client. and they said the hedge fund client has meetings, i couldn't believe this at first, every hour, to go over the latest polls to position -- every hour. at natixis, how much are you talking about strategizing around this election? >> so it is a great question. i don't know we're doing a ton of strategy around it, but as i meet with clients, both in the u.s. and around the world, i've been to a bunch of different countries, it is the only question we are being asked about. internationally, clients are laser focused on the outcome. i think, you know, brexit really has them kind of prepared for worse case scenario and so it is
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the number one question we're getting asked again because i think hillary is still the leader in the clubhouse. i'm not sure i would want to be getting enormously defensive at this point because you might miss a little bit of upside. so i think it is hard to prepare for, but if you get a dramatic move in either direction, it might be a rebalancing opportunity. >> all right, david, we're going to leave it there. thanks so much. david lafferty. a vote in italy scheduled for one month from today. being seen as the next potential brexit moment for the european union. seema mody joins us to explain why it is so important. >> seen as the biggest political risk facing europe and will likely be the main focus for global investors after the u.s. election. italian prime minister matteo renzi is asking citizens to vote on streamlining the constitutional system by giving less power to the senate and reducing the number of steps taken to get laws passed. this would essentially expedite renzi's reforms through
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parliament. so far the no vote is winning by 3 percentage points. experts in rome say because renzi has personalized the referendum, at one point saying he would resign if the yes vote doesn't win, many are using this as a way to vote against the italian leader. his biggest challenger in fact is the five-star movement led by a former comedian whose anti-establishment, anti-eu views resonate with italy's young. but the fallout could be huge. it could raise the chance of renzi resigning and this populous party coming to power. italy potentially following the uk's footsteps out of the european union. >> another euro skeptic group in there that would be in power. thanks, seema. >> thank you. coming up, an iconic american entertainment brand bought by a chinese company. kate rogers is where the jobs are, and apparently on a bike somewhere. kate? >> that's right. but not just any bike. i'm on a bike at the famed
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circus cirque du soleil which is hiring. we'll tell you how and why after the break on "power lunch." 't s. what are we gonna do? how about we pump more into promotions? ♪ nah. what else? what if we hire more sales reps? ♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it. that worked better than expected. i'll dial it back. yeah, dial it back. just a little. live business, powered by sap. when you run live, u run simple. for medicare. the annual enrollment period is now open. now is the time to find the coverage that's right for you ... at the right price. the way to do that is to explore your options. you can spend hours doing that yourself ... or you can call healthmarkets ... and let us do the legwork for you - with no cost or obligation. we'll search a variety of plans from nationally
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they explained all our medicare choices and followed up at every level. and here's what judy of indiana writes ... medicare shopping was very confusing - if only we talked to you first! at healthmarkets, we make finding the coverage you need fast and easy ... because we know you have better things to do. call this number and let healthmarkets find the right medicare plan for you - without cost or obligation. call a licensed agent now before open enrollment ends. call now. if you need a job, and have
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acrobatic skills, you may want to apply to cirque du soleil. that's where the jobs are. kate rogers has that story. kate. >> hey there, michelle. those artists have grueling schedules with up to 470 live shows a year, which means eating right, getting a lot of exercise and adjusting to the long hours. we spent the day shadowing one of the artists in las vegas to find out what it takes to join their ranks of more than 1300 performers around the globe. ashley's life has come full circle. >> i remember seeing miss dare when i was 14. i remember walking out, just in awe, wondering how something like that was ever made. and thinking i want to do that some day. and here i am. >> the 35-year-old gymnast has been with cirque du soleil for 12 years, performing bungee and chinese poles in las vegas. her schedule includes ten shows a week where she warms up,
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trains on bungees like this and does her own makeup before she gets on stage. the job is very physically demanding. >> once you're in, the hard -- taking care of yourself, making sure that you stay in shape to avoid stuff that could possibly happen. and then finding something else too because as a performer, you can't do it forever. >> bungee work requires a ton of strength. i found out myself. let's just say i'm not sure i have what they're looking for. that is seriously so, so hard. so i think my bungees needed a little more practice. my aerial biking was a little stronger, but i'm not sure i'm cut out for cirque du soleil. an artist's career depends on how much they can keep up with the physical demands of the job and salaries can range anywhere from as low as $50 a night with no benefits to up to six figures and contract with full benefits and including medical. back over to you.
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>> kate, what is that bike supposed to do? if you're on the radio, kate rogers on a bike that is suspended by two wires, like an air bike, right? you won't have a little basket with a dog in it, but what are you supposed to flip over, do something crazy? don't get hurt. >> i think me bgetting on the bike was crazy enough. this is the new show in new york city. and it is basically this steam punk air show and from the mind of a mad scientist. people get on the bikes, ride them in the air and do all these crazy tricks. i'm very low but they're high up in the air and it looks awesome. >> did you say 470 shows in a year? >> yeah. the performer that we showed you, she does ten shows a week and was saying up to 470 shows a year, which is just incredible. i was on those bungees for like 15 minutes and felt like i worked out for a week. i don't know how they do it. but they're in incredible shape, they're athletes. amazing to see. >> holy smokes that's a lot of performances. wow. >> a lot of bungees.
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>> thanks. >> kate rogers. if you want the bike to work, you got to be on the ground. we'll see you soon. be careful flying home. >> all right. see you later. >> perfect for it. kate rogers, awesome stuff. thank you. trapeze rogers. time for the good, the bad and the ugly. first to the good, shares of regeneron pharmaceuticals, revenue lower than expected. sales jump more than 7% due to increasing revenue from the eye drug. on to the bad, monster beverage down, the energy drink manufacturer missing profit and revenue estimates. that stock down 1.8%. they say it is due to a stronger dollar and distribution issues. and a downright ugly day for netapp, down 4.5%. company saying it is going to lay off about 6% of the workforce for the restructuring for the end of april. tough day for the stock. worse day for 6% of the workforce. >> thank you very much. the last jobs report before the election came out this morning,
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unemployment rate fell below 5% once again. will that matter to voters? we'll ask our jobs panel in a moment. will donald trump's comments about women hurt him and other republicans with female voters? we'll go live to a key swing state and then live to the nymex for the closing trades on oil. lots of places live. will your business be ready when growth presents itself? american express open cards can help you take on a new job,
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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 find out how american express cards and services what's critical thinking like? a basketball costs $14. what's team spirit worth? heers) whwhat's the value of taa walk in the woods? e value of capital is to create, not just wealth, but things that matter. morgan stanley
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comcast business. built for business. i'm courtney reagan. here is your cnbc news update at this hour. federal jury found rolling stone magazine, its publisher and a reporter defamed a university of virginia administrator and discredited story about gang rape at a fraternity house. nicole ram o claimed the articl portrayed her as a villain who discouraged the woman identified as jackie from report the incident to police. a police investigation found no evidence to back jackie's claims. ikea is recalling 29 million long chest and dressers due to a serious tip-over hazard. consumers are being urged to anchor the furniture or return them for a refund. china says its plan for a permanent space station remains on track with the successful launch of its new heavy lift march 5th rocket.
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it blasted off last night and will be used to launch the space station's additional components and payloads. supporters of russian president vladimir putin and his government marching in moscow to mark national unity day. it was great creted created by. that's the cnbc news update for this hour. back over to you, melissa. very interesting verdict there in the rolling stone case, just to hand it down, several homomes ago. >> thank you very much. 90 minutes away from the closing bell. stocks higher right now. on track to end a long losing streak, would have been nine straight sessions of losses. let's get to jackie deangelis for the final oil trade in what has been a very rough week for oil. >> bad week. down about 10% for wti. session low today, $43.57. we were able to recoup some of that and close over $44 a barrel. what happened today, more opec rhetoric. a report indicating that the
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saudis last week said if the members that are holding out don't come to the table to agree on november 30, they will increase their output. the opec secretary-general saying no, that's not true. the saudis have come to the table, been cooperative and constructive. so, still, we stand in the same place until we know more. especially after this week's u.s. inventory report, record levels we have never seen here in this country. too much oil. that's what traders are feeling right now. so closing over 44, but the support is at $42.50. a lot of people saying 40 isn't out of the question. donald trump's comments about women causing him problems with women. and it may not just hurt him in the presidential election. also can hurt republicans in key houses and senate races. contessa brewer, woman, has that story from virginia. hi, contessa. >> thank you for clarifying there, michelle. in the neck and neck battles across the country, democrats are using trump's record on women to attack their gop opponents.
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a recent nbc poll shows that the majority of women don't think trump respects them, after that leaked "access hollywood" tape that damaged sentiment even further. the question is will it damage candidates down ticket. here in the tenth congressional district in virginia, where the early voting lines are already out the door, it looks like luanne bennett is tying -- to trump even though the congresswoman denounced trump after that leaked tape. >> barbara comestock hopes you won't notice but she and donald trump are closer than you think. on equal pay. >> you're going to make the same if you do as good a job, you're going to make the same if you do as good a job. >> they have a left wing agenda they're trying to make an issue. >> bennett says independent women in her district and republican women who are independent minded could make all the difference to whether she wins or loses here.
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in fact, many are facing now the choice between two women, one of whom opposes donald trump and one who was slow to denounce him. >> my opponent has just sat on the fence, trying not to either distance herself or to embrace him. and to just, you know, play the middle of the road. i don't know that i think that works so well for her. >> i reached out multiple times to congresswoman comstock but didn't get an answer back. republicans are trying to use hillary clinton against their opponents. just doesn't seem like she's the same kind of drag on the down ticket races as her opponent donald trump. >> got it. thank you, contessa. talking more about this all the way through tuesday. >> sure we will. news alert here on disney. nielsen. to julia boorstin with that. >> we see disney shares moving a little bit lower now on the heels of nielsen coming out with
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the statement saying that they are standing by their numbers. now, you may recall that there was a controversy earlier this week, on sunday, nielsen temporarily pulled back its estimates, after there was some hubbub because its estimates of the number of cable subscribers had shown an unusually large decline from month to month. nielsen said they were pulling back those numbers because disney and others have complained saying that those numbers were not accurate. now they're saying -- issuing a statement saying after temporarily pulling back the estimates to investigate a larger than usual chain, compared to the prior month, they take their data very seriously and determine the mag my t nitude of the change. everything got done correctly. they say the decline that was reported was due to a half a percentage point decline in the cable plus universe, the number of people who subscribe to
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cable. nielsen said it had declined in as much as expected. surely be hearing more about this from disney, which reports its earnings this coming thursday about which or not they're seeing a decline in the cable subscribers, particularly for espn issuing a statement earlier this week saying that their numbers did not match up with nielsen. >> what do you anticipate if there is any sort of reaction from a disney which had really debated this number. >> well, look, the percentages we're talking about are very, very small. what nielsen says is there is approximately half a percentage point in the cable plus universe, meaning the number of people who subscribe to this type of tv bundle. i think that we know that there are small declines in terms of the subscribers, but disney is the one that would be able to tell us directly exactly how many subscribers they're seeing decline month to month. hopefully we'll hear more from
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them on thursday, but bigger questions about the state of the tv bundle. >> doesn't that -- i was going to say, you can't really -- i don't think you can drop. i don't think i can drop espn. they're part of the basic package. do we have any idea how many of those people might be going to something like a roku or apple tv or whatever? kill your cable bundle, right? but then buy the apple tv and they have the watch espn app. you wonder, do we have any idea about that. >> there have been introduction of many skinny bundles. we'll se more bundles in the works. we know hulu is working on a streaming service. i think that the question really is not whether or not people are going to be using their apple tv box, but what service are they going to be subscribing to. we heard from everyone from les moonves to bob iger about how they want their channels to be included in these new skinny
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bundles. but we'll have to see what the official numbers are. >> julia, thank you. you can see there, disney shares trading lower now, almost at session lows, happened down almost by as much as 1%, but checking on nielsen, the real decline came on the 24th, couple of weeks ago, we saw the stock go from 55 all the way down to pretty much current levels, not too much reaction on the back of this news. >> with the election coming down to the battleground states, will today's jobs report sway voters one way or the other. joining us is mark morial and joe watkins. welcome. mayor morial, you're tight on time, i'll begin with you. do you think this jobs report is in any way an influencer of anybody? >> i think the jobs report particularly the increasing wages, the continuation of the addition of hundreds of thousands of jobs each month, we had 161,000 this past month.
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i think it is an indication that the job of the next president is to build on what president obama has done, to expand the economy, to tick up economic growth and also to deal with unemployment in those areas where it remains high. we evaluated both candidates plans. it was tough to evaluate the trump plan because he failed to respond to repeated requests for information. and all i can say from looking at the clinton plan is that it is a solid plan, it is a plan that would manage the deficit. it would promote economic growth and it would deal with high unemployment, whether in rural america, suburban america, or urban america. those pockets that still remain behind that haven't caught up after the great recession. >> joe watkins, how do you see things? plenty in here for either side to cheer or criticize, i suppose. the job growth slowed a little bit. labor force participation down a little bit. incomes not moving too much.
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what say you? >> i don't think it is going to impact in any great way what is already about to happen next tuesday. i think that hillary clinton still has a very clear path to winning 270 electoral college votes. more so than donald trump does. but it is not over until next tuesday. that being said, i think the people that are most motivated to show up at the polls are the people that the numbers don't really talk about, it is the folks that are working part time for economic reasons. the over 6 million of them. and some people that are not participating in the labor force, people who are upset because they feel they have been hurt by the economy. those people will be motivated to show up on election day and to vote. but that being said, i don't see that the -- the current jobs report having a huge impact on next tuesday's election. >> mayor morial, back to you. whoever wins, we know many of the democrats have come out, they promote climate change and things that would, you know, prevent that. do you believe -- oil and gas,
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which are frequently mentioned, in that discussion, are extremely important to your home state of louisiana. do you believe that a clinton administration would be openly hostile to oil and gas? >> not at all. i think a clinton administration would embrace, i think, the idea that we need not only oil, not only gas, we need alternatives, we need innovation, we need energy independence. the issue on energy and the economy is about jobs, but it is also about balance. balancing the need for growth, with the need for environmental protection. and so i think that's what you see from her. i don't think it is a one way or another way. i think it is a balanced approach. and a balanced approach is what we need. we need to innovate. >> the industry shouldn't fear her? >> i don't think the industry should fear her. look, every industry, every interest group in this country wants someone who will rubber stamp their agenda. the role of a good president is to find balance on behalf of the
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best interests of the american people. energy is important to the american economy. it is a job creator. but i do think that in a clinton administration, i think you find balance, i think you find maturity, and i think you find an approach that really transitions us to where we need to be in the 21st century. >> joe, do you see the same lack of clarity in mr. trump's economic proposals that mayor morial does. and as you look at the two candidates, under which one do you think u.s. economic growth would be better and why? >> well, i haven't seen the kind of clarity i might like it see, the detailed clarity i might like to see. that being said, republicans always i think favor less regulation, lower taxes, which benefits certainly a growing business and growing the economy. if you want to see more people put to work, lessen the burden on small businesses, take away the regulation, improve the corporate tax structure, lower
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corporate taxes. and then don't hurt folks that have succeeded by increasing the death tax. at the end of the day, if you create an environment that makes it possible for people to thrive, for people who have taken risks to thrive and to give back, they'll do that. but if you punish them, if you raise their taxes, if you give them more regulation, if you beat them down again, after they die, by raising the death tax, all those things are hurt the business people and hurt the economy. and hurt the growth of the economy. >> and much of that money has already been taxed at least once at some level. >> that's exactly right. >> joe, thank you very much. mayor morial had to leave. we thank hem as we do every month for being with us. >> many biotech investors had a bad year. get this awful stat. more than 40 biotech stocks lost more than half their value this year. the big etf down 25%. one investor's pain is another's
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gain. perhaps some biotech cash going to gold. gold minor etf up a staggering 80% this year. more on your money and just random stats when "power lunch" returns.
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earlier we talked about biotech woes this year. let's trade it, welcome to trading nation. larry mcdonald, and erin gibbs are your trading nation team. a debate, the previous hour, where we talked about biotech woes and how much that may be political, right, politicians saying we need to lower the prices of drugs versus simply that earnings estimates are coming down anyway. i wonder what do you think is the cause of the biotech demise. >> for me, when you're looking at earnings estimates and see how much they have been revised down, sales and earnings, and we're talking, like, one-third reductions for 2017 earnings going from 10% growth down to 7%, big, big declines, and so for me that really says that the prices need to come down as well. there are a lot of concerns about lowered prices. and, yes, certainly the election has an impact as well. but we are seeing other industries like in health care equipment and services that are
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actually holding up pretty decently. so i think it is particularly with the biotechs a lot of it is driven by they're just not slowing as much or not expecting them to sell as much next year. >> might be earpi iearnings. maybe he's not bringing down the whole industry. >> in our bear traps report, we got a capitulation model using since 2010. and the amount of shares sold in the biotech space the last three months is just outstanding and incredible amount. and just trading at a multiple that is relatively cheap compared to the last couple of years. this was the street's favorite sector last year. so i think from a risk reward perspecti perspective, if the u.s. keeps the senate, i think you can see 10% to 20% upside in the space over the next couple of months. erin and larry, thank you, both, very much. watching earnings estimates, politics, a tough year. for more trading nation, you can
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head to our website, "power lunch" back in two minutes. now, the latest from and a word from our sponsor. >> trading physical precious metals can be a risky proposition. the most important step to investing in any group is to know how those markets work, and to understand the mechanics sufficiently so as to not be surprised. if you decide to dabble in precious metals, keep it small, as you work toward understanding the group better.
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he is taking the place by storm. >> absolutely. this is the number one talking point in hollywood. the amc movie chain is owned by wanda. earlier paid about $3.5 billion for legendary pictures which is behind "godzilla" and pacific rim. there is a partnership between sony pictures and wanda and now is moving into television with dick clark productions which produces live entertainment programs. >> in hollywood there is a phrase called dumb money. when you look back the richest people or industries in the world are outside investors who go into hollywood and get fleeced by hollywood accounting. japanese in the '80s. hedgefunds and private equity funds in the past ten years. what are the chances this is the
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latest round of dumb money or is this a smart play? >> i think that remains to be seen but the difference between those situations and this situation is china has the market to back up the investment meaning it will soon become the largest movie going market in the world. it has amazing growth potential and sees its investment in hollywood not just as a place to put money but as an investment in the chinese entertainment industry for decades and decades to come. they want not just the company. they want the know how. they want to learn how the american entertainment industry works and want to import that back to china to serve their own people and the rest of the world. >> now maybe i get it because dick clark productions is a niche company. they basically have awards shows. i think it is only maamerican.
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i don't know that for sure. what are they get nothing. >> they are getting access into the television market. they are getting expertise of a company that knows how to produce awards shows. these are big award shows. they are getting a company that can potentially expand around the world. there could be a golden globes of china. there could be billboard music awards in china. and they are getting the know-how. they are learning as they are growing and acquiring companies so that ultimately the end goal -- we did a story on the shareman of wanda. the goal is to develop a chinese entertainment industry to rival the american one. >> thank you, matthew. >> sometimes forget about who the buyer is. think about who the seller is.
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th it was bought for 370 million in 2012. they just sold for a billion in four years. >> not dumb money. >> that is smart money. >> i'm just saying they have their own firm. made triple in four years. congratulations. buy melissa dinner tonight. it's her birthday. >> buy brian a new chair. coming up at 5:00. michael moore will talk about all sorts of stuff including the u.s. election. that should be interesting. reting retired tires. plan your never ring retiring tired res retirement are you entirely d ared to retire?ed of it. with *trade. i'm inests ands a vestnvtor in vests
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check please. in the best moment of the day, maybe the week, maybe the year. >> four days. my chair is -- >> that is the best ever. >> that's a sign. it's bad enough that i am a foot taller than all of you. >> you handled it with grace. >> i think i sat in that chair over there when we do nightly business report. it has a hitch in it. >> i'm totally cool with it. >> i was joking about herman miller. it was made in taiwan.
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it's a clear sign i have been gorging on halloween candy all week. >> we had twinkies earlier today. >> thanks, guys. thank you. >> my wish came true. thanks for watching. >> "closing bell" starts right now. hello and welcome to "closing bell" i'm kelly evans at the new york stock exchange. >> it's "closing bell." i'm bill griffith. s&p looking to break its longest losing streak since 2008. today we will see whether the market can hold toon these gains. s&p up 3.5 points. dow up 4 points. it goes without saying we are four days until


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