Skip to main content

tv   Power Lunch  CNBC  October 17, 2017 1:00pm-3:00pm EDT

1:00 pm
scott. >> francesa bought it because you -- >> people have no idea >> you're not speaking from the heart. that's the problem >> joe >> lamb research they report after the close tonight. if you get a pullback, buy it. sooner or later it's going above 200. >> citigroup this is the tenth pullback in one year the pullback's done. it's going higher. >> good stuff, guys. thank you. thanks to all of you as well "power" starts now i'm melissa lee. here's what's on the menu. market milestones. the dow hitting 23,000 for the first time ever. what comes first 24,000 or maybe the big correction many are expecting? president trump set to hold a news conference this hour with the prime minister of greece it comes on the back of yesterday's surprising and rowdy gathering with the media we'll carry that live. and a major warning for the american housing market. what it could mean for home builders and buyers. "power lunch" starts right now hi, everybody. i'm brian sullivan as melissa said, the rally continues to be one for the
1:01 pm
record books nearly half of the dow 30 are up nearly 25% over the past year. three of those stocks making investors more than 50% in their money in just 12 months. one of those, united health, posting another bigly gain on solid earnings and president trump, you may want to hear this. unh shares now up 511% since the day obamacare was passed wow. streaming, studying and snacks also on the move today netflix saying it will spend between 7 and 8 billion on new content. education company pearson boosting its profit forecast and corn dog maker sonic beating profit estimates michelle >> corn dogs you've got to love a corn dog. i'm michelle caruso cabrera. here's what else is happening at this hour. canada and mexico both expected to firmly reject u.s. nafta proposals but will offer to keep negotiations going that's according to two people who were briefed on their positions. meetings are set to begin in just about two hours reports indicate president trump is likely to announce his pick for fed chair from a pool of
1:02 pm
five candidates before leaving for an asia trip in early november and the new "forbes" 400 rich list for the united states is out. president trump's fortune dropping $600 million to just over 3 billion that ties him with snap's evan spiegel. microsoft founder bill gates tops the list for the 24th straight year. tyler. >> all right, michelle thank you. we begin today in the nation's capital where we so often do in just about 30 minutes we expect president trump to hold a news conference, his second in two days, this one with the prime minister of greece eamon javers is live at the white house. eamon. >> reporter: that's right. we expect today's news conference will be a little more constrained than yesterday's freewheeling news conference was. today we expect just two and two, two questions from the greek press two, from the domestic press but there are any number of topics to cover here including this flare-up of political hostilities today between the president and john mccain, the republican senator who was given an award last night and made some criticisms
1:03 pm
that a lot of folks interpreted as directly aimed at the white house. here's what john mccain said last night that has gotten this white house's attention. he said, "to refuse the obligations of international leadership and our duty to remain the last best hope on earth for the sake of some half-baked spurious nationalism cooked up by people who would rather find scapegoats than solve problems is unpatriotic. the president was asked about that on talk radio today, responding to john mccain by saying, "i'm being very, very nice but at some point i fight back and it won't be pretty. mccain, who's suffering from brain cancer, was then asked about the president's comments on capitol hill today and he told reporters on the hill that he has faced tougher adversaries than president trump sow might expect that could get a question also we're now learning a little bit more, as you just heard michelle reporting, about what the president's thinking is on fed chair. we do expect now that the president will make that decision before he leaves for asia on november 3rd he's down to five candidates you can see the names here on
1:04 pm
our wall graphic the president is meeting with janet yellen, the incumbent, on thursday, and after that happens he will now have met personally with all five of the remaining candidates for this job. after that it's anybody's guess exactly when this decision will come or who the president will select, but thatill eamon javers on the north lawn >> let's get bac first time ever today and we seem to be hitting these milestones sooner and sooner i think that's because of math bob pisani, it's a lot easier to go from 22 to 23 than 12 to 13 it's about half a percentage gain but i'm not taking anything away from it. where's the half >> yes 18 to 19 was 5 1/2%. 22 to 23 is 4 1/2% you're right guys, this is happening a little more often than it used to in the past just look -- i'm talking about the last 18 months we've gone from 18 to 23,000
1:05 pm
we went from 18,000 to 19,000 last year. that took seven months 19 to 20 only took two months. 20 to 21 took less than two months 21 to 22 took five months. and look at this, 22 to 23 took 2 1/2 months the dow's moved 1,000 points on average every 3.6 months in the last 18 months that's a lot even when you count the math it's not as difficult as it used to be. why is this? well, we've got -- first we had the earnings rally then we had the trump rally, the lower taxes and infrastructure now we've got this reflation trade. ex-pangd the global economy, higher rates and yield curve, and of course the possibility of the tax cuts and there has been something to this reflation trade tech, industrials, banks, there's your reflation trade all on the up side lower interest rate stuff generally has been on the down side in the last 1,000 points in the dow. what could stop us going to 24,000 we could have these record earnings reversed. i don't see that happening in the next quarter
1:06 pm
we could see a hawkish fed we've been talking a lot about some potential candidates out there like mr. taylor. we could seethat ce s. there are lots of things that could go wrong out there but i have to say you look at the volume and you look at the volatility and there is not any particular concern that any of them are going to tank the market immediately tyler, back to you >> all right, robert, thank you very much. let's go to dominic chu who has a look at the stocks that have fueled the last 1,000 points of loot >> if you look at the overall picture for percentage gainers we have seen the dow move like bob said about 4, 4 1/2% higher between that 22,000 and 23,000 mark we've backed off since a little bit there. but take a look at some of the best percentage gainers during that time span if you look at the overall picture for the dow there, have been a handful of stocks that have contributed the most in terms of the overall fuel. caterpillar up 15% home depot up 9% chevron up 9%. boeing up 9% and pfizer up 9% these guys the best percentage
1:07 pm
leaders. i will point out that if you look at just caterpillar and boeing those two stocks account for a quarter of that 1,000 points that we got between 22 and 23 as for the biggest laggards there, merck, united technologies, disney, ge, and nike those shares all being big drags. but the biggest drag, melissa, on the dow in that 1,000-point run we've seen, shares of disney off by 9%. that shaved off about 72, 73 points from that 1,000-point rally. i should also point out, guys, just 15 of the 30 stocks in the dow represent all of that 1,000-point gain back over to you guys. >> wow what a great fact. dom, thanks so much. dom chu. earnings a big factory in this record-breaking market a number of big names reporting today. wilford foss is on the financials, goldman sachs morgan stanley. meg terrell is here looking at johnson & johnson. wolf, we begin with you. two beats but the stocks are moving in opposite directions. symbol exactly right, melissa. let's start with the fundamentals goldman sachs beat earnings on the top and bottom line. the recent poor performance in
1:08 pm
fix income currencies and commodities trading turned and rose quarter on quarter, albeit still down 26% year on year. however, the vast majority of the revenue sxechlt ps beat for goldman sachs came in the investing and lending business, described as "low quality area" by nimura's analyst steven chuback. goldman also revealed an increase is coming in the second quarter of 2018 as well as its previously undisclosed approval to buy back over 7 xwl in stock next year. some had hoped for a bigger potential number than that meantime, morgue stanley produced another quarter of strong results across all of its businesses supported by good cost control the standout was wealth management where profit before tax margin came in at 26.5% ahead of the 25% target. partly due to cost control but also because of better deposit pricing than expected following bank of america and wells fargo commentary last week investment banking was a slight beat trading overall was solid. remaining number one in equities
1:09 pm
a bit slightly behind forecast with fixed income currency and commodities ahead of expectation. shares as you can see moving in opposite direction morgan stanley a strong move upwards whereas goldman sachs because of that lower quality beat sliding 2%. >> wiffle, thank you very much shares of harley-davidson higher after that company's earnings report landon downey's all over it. >> harley reporting a beat on the top and bottom line, but it wasn't exactly a smooth cruise for the quarter. profits down 40% from a year ago. sales struggled across the board, down 8% in the u.s. mostly driven by a weak industry environment as well as hurricanes in the southeast and texas. baby boomers a key customer group here are buying fewer bikes and younger people are just not as interested in riding motorcycles. and executives on the call saying they continue to address the issues and make sure that they don't discount or cheapen the brand but it has been, quote, difficult and very painful. a move that has them slowing production and shipments in
1:10 pm
response to an industry that has seen six straight quarters of slowing sales despite what looks like a bumpy road ahead, though, harley maintains guidance of shipping, 241 to 246 thousand motorcycles this year. they also managed to gain market share, more than 53% in the u.s., helping them maintain their spot as an industry leader even as the motorcycle market slows. take a look at the stock shares of harley are up more than 3%, guys. back over to you >> all right, landon, thank you. and thirdly, meg terrell following johnson & johnson which beat on both sales and profit and she is here to tell us about it. >> that's right, guys, for the quarter it was a beat for johnson & johnson. we're just getting some news on all those talc lawsuits j&j has been facing. a court has overturned a ruling from missouri of a $72 million award that had been against j&j in one of those rulings over these claims that j&j's talc product causes ovarian cancer. so that has been overturned. what we're learning, though, is it was overturned because of
1:11 pm
jurisdiction, guys, because of a recent supreme court case saying where cases can be filed because apparently the alleged victim in this case lived in a different state. the court basically saying it shouldn't have been filed in this court so j&j has had a number of different verdicts on this going in both directions and of course it is appealing the ones that it's lost. but that's some news on j&j. back to you quarter where they didn't really talk about these talc lawsuits really at all on the conference call or in the release. it was a beat and raise, mostly driven by their pharma division, supported a lot by their recent acquisition that they closed of actilion also a lot of questions over puerto rico. j&j does a lot of manufacturing there. six open plants. they say while they are running on generators they expect minimum disruption to supply although they said they couldn't rule out potential shortages down the line. the main impact for puerto rico they say was on people delaying surgeries. so in their medical devices unit maybe we'll see that made up in future quarters. we also asked j&j cfo dominik caruso about drug prices of course trump saying yesterday
1:12 pm
the industry is getting away with murder. here's how he responded. >> the overall cost of health care is a topic we should be talking about. but drug prices as you probably know represent only 14% of our overall health care costs and what's lost in the discussion is the immense benefit that they provide to patients and they actually reduce or help reduce the other 86% of the cost that we're not talking about. >> and a hearing just wrapped in the senate today about drug pricing, guys. so this issue really coming back to the forefront if it ever left >> intraday high comes on the decision to reject this talc lawsuit. but you say it's jurisdiction, not necessarily on the merits of the case so should we read into this move in the stock price anything related to that? >> other losses were in st. louis. but the stock had already been rising since the beat and raise this morning it's unclear what people think of $72 million which is really amazing considering there have been two analyst upgrades in the past couple weeks on j&j ahead of the earnings >> that's right. saying that the numbers were too low. >> exactly >> before you go, we've got to talk about this post from president trump.
1:13 pm
president trump saying, "congressman reno has informed me he is withdrawing his name from consideration as drug czar. tom is a fine man and a great congressman. meg, i guess fair to say the "60 minutes" piece on opioids did him no favors. >> certainly not the timing looks pretty obvious. this report comes out from "washington post" and "60 minutes" saying essentially this legislation that was passed last year dismantled the d.e.a.'s ability to freeze conspicuous or suspicious shipments of opioids. and essentially the allegations were that lobbying on marino, who sponsored the bill, and other congressmen helped get that law passed and took away a lot of the d.e.a.'s power. now we're seeing this happen though trump not saying anything really bad about marino, just saying his nomination -- >> so do i understand that law pass the by unanimous consent in both houses and was signed by president obama? >> yes, it's very interesting. >> so marino's role in this was what that he was one of the drivers of this law? >> yeah, to help drive it through. was a main sponsor of the bill
1:14 pm
>> but no one opposed it >> right well, it didn't go through that typical vote in the senate where you're going through a roll call, but yes, it did -- >> unanimous consent >> and the way it was portrayed at the time was that it would help people get painkillers who need them and it would increase communication, but it was supported by the distributors, the drug distributors. >> meg, thank you. >> thanks, guys. as this record run in the stock market continues, are we in a goldilox market, not too hot, not too cold, just right? michael aron is strategist with state street global advisers steve masoca is managing director with wedbush. gentlemen, welcome good to have you with us is it sounding like goldilox, michael, to you? and what if anything is on the horizon that could disrupt this continuous seeming run higher and higher >> so it does sound like goldilox to me we have good but not great growth low interest rates and pretty tame inflation with decent earnings growth. to me that's the very definition of goldilox. so i'm not so concerned about
1:15 pm
the rest of this year. tyler, i think that the market wants to grind higher in both november and december. but i think we have a triple threat of risks that the market is underpricing. >> what are they quickly >> so u.s. earnings are beginning to decelerate, and i'm keeping a close eye on that. a monetary policy mistake certainly could derail the markets. and lastly, zero could be the legislative victories that the republican party has as they go toward campaigning for midterm elections next year. those are the three big risks. >> steve, he's just laid out three real critical pressure points do you see it the same way >> well, i think the overwhelming impetus of this market is global central banking. they used to say don't fight the fed. i say don't fight global central bank you've got the b.o.j., the ecb being extremely aggressive the fed clearly is signaling that they're going to bump rates up again in december but the world has changed.
1:16 pm
we're sna fwloebl environment now, and you have to look at what all of these central banks are doing. case in point, one of the largest holders of apple and google is the swiss central bank so they're literally buying equities in america. that's how aggressive the swiss have become. so as long as this continues, as long as it's pedal to the metal from all these large central banks, i think the markets continue to go high rer. asset pricing continues to go higher and there's a possibility that abe could lose in the upcoming election the polls don't show is that so i think kuroda's back in charge and he's been among the most aggressive >> but steve, it's not all pedal to the metal for monetary policy here in the united states, right? isn't that a risk? yes, they're still loose most parts of the world and yes, the fed is not going to be extremely aggressive but they are going in the opposite direction both when it comes to the long end of the curve and the short end of the curve.
1:17 pm
>> yeah. and i think that's a head fake because we're the fourth largest balance sheet among central banks. the boj, the chinese, and the ecb all have larger balance sheets, and they're building the fed reducing its balance sheet's going to reduce about 300 billion over the next year the rest of these banks are adding about 300 billion a month. so i guess it could change and if it did change and there were dramatic changes in monetary policy, then i think it's look out below. right now that doesn't appear to be the case. >> pick up on steve's point. but also let's address the question of how -- you pinpoint the idea that a monetary mistake is a key risk here would the risk of a monetary mistake increase under a warsh fed or a taylor fed or name the other fed as opposed to the yellen fed >> well, certainly i think that what's happening with global monetary policy is directionally
1:18 pm
after ten years we're moving toward tighter monltry policy. the federal reserve began this tightening cycle back in 2015 and they're still committed to tightening policy, both on the balance sheet and interest rates. you have the bank of canada, the bank of england, the ecb, all threatening to tighten monetary policy so directionally that's a big change in terms of who's going to be kind of leading the ship so to speak at the federal reserve, certainly the market is reacting today to the john taylor news. i think warish and tail r&r definitely a bit more hawkish. i think others have come out on the side in terms of whether it be yellen or kashkari as being more dovish. we're going to find out in early november but it sounds as though we're still a bit uncertain as to which direction this is going to go. >> steve, michael, thank you very much. >> shares of united health helping to push the dow to a new record high today. and look at it over the past three years. it has more than doubled can unh and the other health insurers keep climbing as the
1:19 pm
president moves to disntmale obamacare? we've got that next on "power lunch. when this bell rings... starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.
1:20 pm
that's the power of and.
1:21 pm
if shares of insurance companies were in the president's crosshairs before, they may really be now united health posting a blowout quarter. it beat wall street expectations and raise the its full-year forecast and that is with a reduction in revenue from withdrawal from individual insurance markets
1:22 pm
unh up 51% over the past year. and now up 511% since obamacare was signed into law back in march of 2010. let's bring in anna gupta. senior health care services analyst at learing partners. it is good guidance. but do you worry when the president comes out like he did yesterday and directly attacks insurance companies' gain? is there a regulatory or even a white house risk which is sort of an asterisk on these results and the stock price going forward? >> i think united is pretty well insulated from all the recent actions that president trump has taken. broadly speaking i do think actually the health insurance industry is not at risk to the degree i think that the market fears but united in particular is in a great place. the executive order the president passed last friday is a positive for united, which has
1:23 pm
left the exchanges so there is no risk from the defunding of the cost-sharing subsidies for united but on the positive side they have a very thriving business on association health plans, which is around the theme of selling insurance across state lines also more bare bones plans, higher deductibles and shorter-term policies. in a way it will actually boost the growth rate for united >> ana, i want to push back a little bit you said to the level at which people think i would push back and say does anybody think anything bad is going to happen to a unh or any other insurers with the stock up 51% in 12 months it seems people are pricing in zero risk >> united in particular i think you're right it's very diversified. it has this platform of unregulated businesses under the brand optum. but i'd say for the rest of the insurance industry the names have been more volatile around the news flow, and i guess my premise is it's more headline
1:24 pm
risk than actual risk. there are a couple of names like centene and molina that have played more heavily in exchanges. anthem to a lesser degree as well but otherwise, i think for aetna, humana, united it's pretty well known as you say that they don't play on exchanges. the executive order was somewhat misunderstood. the names were weak for about a few days until sell side analysts and others published on it >> in terms of molina you made the point in your most recent note that it perhaps would feel the impact the most, that it doesn't have the balance sheet flexibility that some of its competitors have and it might actually need to do some sort of capital raise. what's the down side for molina? and how much better are its competitors in terms of the balance sheet flexibility to withstand what is come down the pike here with none of these subsidies coming >> so that's the fourth quert really that's the down side rhys frk a balance sheet perspective. it will be 100 million or so at
1:25 pm
most for most of the companies they're very, very well capitalized. outside of molina, where the excess capital is a little short of the others. they do have a revolver of 300 million. that being said, we don't know what the third quarter will bring and we don't know what type of capex they need to turn around the business. they've just apointed a new ceo, joseph zabretsky so there is the possibility of a capital event for molina, not for the others, however. >> all right, ana, thank you ana gupte. >> thanks so much. >> we are awaiting president trump. he's set to hold a news conference at the white house with the prime minister of greece, alexis stip rhys we're going to bring that to you live stay with us hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon.
1:26 pm
great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.
1:27 pm
watson, you gotta learn how to take a hint. is now a good time to refinance? yes! mortgage rates are historically low. the time to refinance your home is right now. get started at the only place you can compare up to five real offers, side by side, for free. our average customer can significantly lower their monthly bills. quick. beat the fed's next rate hike. do not miss this window. are you sure you have the best rate? it only takes 3 minutes to find out. go to right now. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors.
1:28 pm
before investing consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully. there was a time when the leader of greece was of huge importance to the u.s. market. they're not systematically relevant anymore but geographically and geopolitically they are. >> they are because our relationship with turkey is suffering. we're in a feud with president erdogan. we have an american naval facility we operate in crete called sudabe, very important for our operations air and sea
1:29 pm
in the middle east i'd also say, michelle, greece has long-term debt and the greeks need debt relief. is president trump going to support them for debt relief with the eu and imf as president obama did? that's one of the open questions from today >> do you think he'll ask him about his long relationship with russia and china, tsipras? >> i hope president trump did. this is a left-wing greek leader, traditionally -- >> communist left-wing communist. off the charts communist >> and traditionally very anti-american. and what's happened is the greeks have gotten to be very close to the chinese, who runt the port of pyres and the russians it's complicated -- >> they don't just run it they own it >> they own and t. and run it. both things. you're right >> north create bigger issue right now, correct >> certainly the most important national security crisis we face >> is it really a crisis are we anywhere closer to war than we were, say, a year ago? >> we are. the threat of war is higher than it was a year ago. i still think the probability of a war is low certainly lower than 10% as most people would measure it. i think secretary mattis in particular has put us on a very
1:30 pm
effective path the wild card here of course is kim jong un. is he going to continue to test ballistic missiles is there another hydrogen test coming will the chinese continue to crack down economically? a lot of unanswered questions to watch the next couple weeks. >> it seems like it's good cop bad cop. tillerson, mattis, et cetera, play good cop and president trump plays bad cop. is that an fevlth strategy >> no, i don't think so. if the foe was considerably weaker it might be an effective strategy but right now kim jong un has nuclear weapons. what you want to do is deter him from ever using the weapons or invading south korea or japan. and the way to do that is to be very clear about the price of his actions, not to have a muddled american response. >> how does the situation in north korea impact or educate our response to what's doeg on in iran or vice versa? certainly we can't have this conversation with kim jong un and then have a separate conversation with iran and decertification of the deal.
1:31 pm
>> well, the two are related i think the north korea one is far more problematic for us because iran never got to nuclear weapons. we were able to stop it through the 2015 agreement north korea has nuclear weapons. i don't think the leader of north korea is mad, irrational he's rational. but you want to give a consistent and clear message and be very forceful in giving that message and president trump's rhetoric has been bombastic and shrill i don't think it's helped things >> i read an article, i can't even remember where, a couple of weeks ago where the author suggested that one way potentially to make kim jong un feel more secure would be if china did the opposite of what we've been trying to get china to do, which is to isolate north korea and instead said to north korea, we under our nuclear umbrella we will do exactly for you what the united states says it will
1:32 pm
do for south korea and japan and back up your security, your regime against any nuclear threat with our nukes. does that work >> in a perfect world it might work it might be a way toward a settlement we don't live in a perfect world. the problem is the chinese don't trust kim jong un. they see him as unreliable he's not shown a lot of respect. he's also threatening what the chinese hold most dear and that's a free trading relationship a trading relationship i shouldn't say free trading with south korea, with japan, with the u.s the chinese don't want that to be disturbed by a major war in the korean peninsula so i think we've seen -- it will be interesting to see if the chinese are as tough following the party congress as they've been in the last couple of weeks, but the chinese have begun to use their influence not decisively but they've used more leverage than they have in the past >> the greatest bull market in american history began in 1982 that was directly under the shadow of nuclear annihilation i'm sure many of us remember i did in california. we had fire alarms and we had nuclear attack alarms where you'd get -- like getting under
1:33 pm
the desk was going to help the point i'm trying to make is we have nuclear armageddon threats. pakistan and india have been at each other off and on with nuclear armaments for 20 years are we overstating or overworrying about north korea >> i don't think so. if the risk of war has increased over the last 12 months, and it has, and if the consequences are the two largest economies in the world can quicken up in a conflict, i don't think it's going to happen, the probability is quite low, you've got to look at it and be aware of it >> but do you really believe if north korea attacked us and we retaliate against north korea that china in any way would get involved >> the chinese said about six weeks -- >> what they say and what they do are very different things, mr. ambassador >> no, i think the chinese usually mean what they say and they said six weeks ago if north korea attacks south korea or the u.s. china will not come in to support them but they also said if the u.s. or south korea attacked north korea china will defend north korea militarily almost as if the chinese are trying to deter both the north koreans and the united states.
1:34 pm
>> your critical words for president trump earlier, but at the same time he's had big wins at the u.n. under nikki haley, getting the chinese and the russians to come on board. does he deserve any credit for that >> i think he does in some ways. i think this has been -- the national security issue he's been most effective. taking the rhetoric aside is north korea. he's got the chinese doing a lot more as you say, united nations sanctions are stronger than we've seen before. there is leverage being applied. what this requires is patience we're the stronger party they can't break out of this box if we're patient and that's why the u.s. shouldn't pre-empt and -- >> i know we're going to have viewers who are going to tweet us and say that was the plan for 30 years and now they have nuclear weapons. why should we follow that same path >> we are where we are they have nuclear weapons. and so our options are very limited. there's no one that i know of in the u.s. military who believes that we should launch a pre-emptive strike on north korea because we might likely touch off, ignite a major war --
1:35 pm
>> my question wasn't suggesting we should attack them. but maybe does the bombacity if that's a word with president trump play some role in getting the chinese to come on board, in getting the russians to come on board, in getting the chinese to think wow, he has connected trade and north korea? and like you said, that's important to them. >> i don't think that's his bombastic nature i think the way -- it's been very skillful, to say to the chinese i need you on north korea to use your leverage and the president has gone soft on china on trade. there's been an implicit trade i think that's probably worked in the first ten months of the administration what isn't working is the president threatening through his tweets offensive military action when mattis and tillerson are doing the reverse. that's not smart >> certainly very different messages >> that's right. >> mr. ambassador, thanks very much for joining us. >> pleasure. >> ambassador nicholas burns >> let's go to the bond market, shall we rick santelli is tracking the action at the cme >> hi, tyler if you look at two days that says a lot
1:36 pm
we've traded as high as 1.56 highest level since october of '089 this comes at a time when the fed looks like they're going to tighten more, balance sheet reduction, and most of all equities are on a tear look at intraday 10s the further down the curve you go the less aggressive upsides and yields by the time you get to the 30-year it's actually lower on the day. finally, boons since september 1st of this year why? because 36 basis points will be the lowest close they've had since september. that's one reason they're having such a problem p it's torn between the aggressive nature of the short and end of course what's going on with mario draghi and the central banks on the long end michelle, back to you. >> thank you, rickster president trump and the prime minister of greece about to hold a news conference at the white house. we will go there live when it begins see everybody lining up there. jared kushner walking in there's lb rwiuross about to sit down we'll be right back after this break. don't move
1:37 pm
not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.
1:38 pm
pthey don't invest inn stalternativesds. or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more.
1:39 pm
1:40 pm
hello, everyone. i'm sue herera here's your cnbc news update at this hour. marawi evacuees are hopeful today as the philippine city has all but been liberated from military control philippine soldiers are fighting for the last pocket of that city more than 1,000 people have been killed since an isis-allied group overran the city in may. thousands are grieving in somalia as the search for victims of the deadly truck bombing continues. scores of people are still missing after the massive weekend attack which killed more than 300 and injured almost 400. retailers could see red on black friday this year as shoppers vow to part with less green. slightly more than half of americans say they will skip the mall on thanksgiving weekend because they can grap deals all year round that's according to an accenture survey and holy cow new york city cops finally moo-ved in on a bovine loose in brooklyn it took a couple hours but they eventually trapped him between a couple of fences at a soccer
1:41 pm
field in the process peblth park area, then roped him, led him on to a horse trailer no word on where he came from or where he's headed. but utterly entertaining watch new york cops go wild west to wrangle the not so little critter. you are up to date that's the news update this hour melissa, back to you >> is there a slaughterhouse in brooklyn >> usually -- >> melissa, it is not a cow. it is a bull it was a bull. and there's a stock market joke in here somewhere. >> a bull grows -- >> tyler mathisen, can you dig it out the bull is loose. that's the market peak who knows? >> thank you, sue. >> you got it. markets right now taking a check here, the dow slightly off its highs after breaking 23,000 for the first time ever. today united health, johnson & johnson among those moving higher goldman sachs and 3m are drags on the index ty president trump about to hold a news conference the white house. greek prime minister carried live soon as it begins let's bring in john harwood now. john, you've got a column on
1:42 pm -- or maybe not john harwood. it's -- there he is. >> there he is >> it went black for a minute there, john. you've got a story about president trump and the republicans potentially losing control of the house in the mid-terms. how many seats would they have to lose to lose or fall below the 218? >> tyler, recent history would provide reason for caution even with a popular new presidential. the midterm elections are always dangerous for their parties. you have bill clinton lost the democratic house to the gingrich revolution in 1994 president bush lost a republican house during the iraq war in 2006 president obama lost it back to the tea party in 2010. and now president trump's in danger of becoming the fourth consecutive president to lose the house. now, here's what democrats need. 24 seats to recapture the majority the cook political report in a new analysis out just the other day counts 61 republican seats
1:43 pm
in potential danger. winning enough of them won't be easy by any stretch, but the political winds have been blowing the democrats' way in particular one key indicator is presidential approval and president rupp's approval, which today in gallup is 37%, is lower than the three predecessors had a year before they lost the house. and the stakes in hanged the gavel back to nancy pelosi are high for trump personally, for his pro-business agenda and for the markets, guys. >> the democrats, have they got strong enough candidates to take on some of these republican incumbents >> well, we'll see how strong they are once we get to the fall of 2018. but when you look at the general landscape and seats where they're in shouting distance of winning, there are enough on the playing field if they can execute. of course a lot can change between now and then >> john, thanks very much. john harwood from a beautiful nation's capital today you're looking at a live shot of the beautiful rose garden at the
1:44 pm
white house. president trump and the prime minister of greece, they will u erli nt "y, and we will take yothe veexonpower lunch.
1:45 pm
1:46 pm
just a reminder we are awaiting a press conference with president trump and the prime minister of greece the moment that that happens we're going to bring that to you live right now let us bring in eamon javers eamon -- here we go. the president and alex tsipras, the president of greece, walking out right now at the white house. they'll be at the podium momentarily. let us go live now to washington, d.c. >> thank you very much i just want to make an initial comment that the stock market just hit an all-time record high it broke for the first time ever 23,000 so we're very happy about that i hope that greece is going to be doing the same thing very soon i think they will. but i'm honored to welcome prime
1:47 pm
minister tsipras of greece, and he's a special man who's done a very special job we're grateful to the prime minister and to his entire delegation for visiting us today at the white house greece is a cradle of western civilization so true. of democracy, literature, philosophy, science, and so much else america looks on that glorious heritage with wonder and with awe. you do indeed have a tremendous heritage, mr. prime minister perhaps for this reason america's friendship with the greek people has been long and enduring thomas jefferson wrote, "at the dawn of the modern greek state that no people sympathize more with greek patriots and none offer more sincere and ardent prayers to heaven for their success than the american people." jefferson's words are true to this day mr. prime minister, i'm proud to
1:48 pm
report that this past march we celebrated greek independence day right here at the white house. and that was great america and greece draw on this common history and heritage and on our people's abiding commitment to freedom and sovereignty. in working together on great challenges and opportunities, now before us there are tremendous opportunities before us in so many different ways the prime minister and i have just concluded a very productive discussion on the cooperation between our two countries including on matters of defense, energy, commerce, and trade. i want to thank the prime minister and the people for serving as gracious as hosts to our u.s. naval forces at suda bay. i also commend greece for being one of the few nato countries currently spending at least 2% of gdp on defense.
1:49 pm
my administration has also informed congress of a potential sale to greece to upgrade its f-16 aircraft. this agreement to strengthen the helenic air force is worth up to $2.4 billion and would generate thousands of american jobs we also are making great strides in our economic cooperation. the american people stand with the greek people as they recover from the economic crisis that recently afflicted their nation. i've encouraged the prime minister and his continued implementation of reform and reform programs and i have totally reaffirmed our support for a responsible debt relief plan, a strong and flourishing greece provides immense opportunity for american trade, investment, and job creation i thank the prime minister, his predecessors and the greek people for his efforts to return prosperity to greece
1:50 pm
on energy we appreciate greek contributions to european energy security through its support of the transadriatic pipeline the greece bulgaria interconnector and liquefied natural gas facilities that are transporting and diverse source and potential natural gas exports from the united states of which that particular route and businesses are getting bigger and bigger as you know. these initiatives are making us greater and good jobs. i am proud that the united states will be the honored country at next year international affair in greece this will showcase our american technology enterprise and innovation on the world's stage, we look forward to sending a high level delegation to attend
1:51 pm
the wonderful event, mr. prime minister, thank you again for being here today and partnership of addressing critical issues. i look forward to have many discussions with you and having a close warm cooperation on a wide range of shared objectives. we'll build up upon our foundations of shared history and values to pursue future of security and prosperity and peace for your nation and ours mr. prime minister, thank you very much. >> i would like to thank for his productive discussion. the friendship between our two countries are strong and based on our common democratic
1:52 pm
principles, on the values that we jointly share as people it is correct that the founders of the united states are insp e inspired by it it offers many opportunities for both countries the greek's interests maybe at its best since the second world war when our people worked together and fought together i do believe that there are many
1:53 pm
today, strategies and mutual respect and by the significant support provided by the u.s. to greece and to the greek people during the hard times of economic crisis and support and exit greece. at this point, i am trying to -- greek fulfills three basic objectives which not only relates to -- of our special international level. first, coming out of the crisis, no noted and of the opportunity to attract --
1:54 pm
[ inaudible >> it is leaving behind not only the crisis but it is leaving behind the economic model that led to the crisis. second, greece today is the most significant power of security cooperations in one of the most important but at the same time of stable and sensitive area of the planet a country with a dynamic policy. a country that's a reliable partner and ally of the united states which fulfills its nato operations of the united states. its country which pertains dialogue of turkey despite the difficulties, that we face and the challenges
1:55 pm
it contributes to the security and growth of the area third. greece being already pretty strong in maritime and tourism it is gradually becoming a significant -- the agreement the prospect that will be a an area where he can believes i would like to mention the
1:56 pm
ports from athens and the promotion of strong and fast connection and in this content, it is very clear that our strategic cooperations of the united states is becoming more important than ever. first of all, we look forward base we look forward this is a significant message of my visit here and my meeting with economic representatives. we look for to attracting u.s. investments and the more substantial support of this crisis the fact that the united states will be the honored country of 2018, will play a significant role second, because greece can develop dynamically only if it
1:57 pm
is freed from the fundamentals and national concerns of the area of security and defense the united states have a significant role to play this matter, not only in the diplomatic but in the defense seco sector the intervention must end. it under mines the relationship between two nato allies and broader -- greece is a country
1:58 pm
that's always opened to dialogue but i want to be very clear that it will always protect decisively and its sovereignty rights and it claims disputes. with this thought, i want to warmly thank president trump for the wonderful discussions we held which i believe will give a substantial push to the existing cooperation. we created a work group between the economy so we can monitor the ability to have a substantial cooperation in an investment and economy and all sectors. thank you very much.
1:59 pm
i c >> i can take a few questions. >> thank you, mr. president, good to see you at the rose garden again >> it is a nice place. >> sir, you said a short time ago that obamacare is officially dead and your plan has not been off the ground in the senate, there is no idea of looking at early 2018, you have been picking around the edges of executive orders of some of what critics say are helping to destroy obamacare, at which point, what's your healthcare plan >> if you look at insurance companies and you take a good strong look at the numbers, you will see since the formation of obamacare, they're up 200% or 300% or 400%, they made a fortune. when i knock out the hundreds of
2:00 pm
millions of dollars a month being paid back to insurance companies by politicians, i must tell you that wanted me to continue to pay this and i said i am not going to do this. this is money that goes to the insurance companies to line their pockets and raise up their stock prices and i that had a record run and incredible run and it is not appropriate. obamacare is a disaster and i predicted it is a concept that does not work. we are very close, we have to vote as soon as we finish with taxes, we have the vote to get block grants into the state where the state can manage the money and much better taking care of the people rather than the federal government and we'll do messy block grants so the states can run the program we'll be doing that after the taxes. in the meantime, we are involved with a budget and then after the
2:01 pm
budget, hopefully, that gets approved and after the budget assuming that we have the support of all the republicans because we have no support from the democrats or almost no support because they really become just obstructionists, they have no good policies and frankly, they are not good politicians but they are good obstructionists and that's what they do well obstruct the number of nominees that i have approved by the democrats are half of what president obama had. you can look at judicial growing. 145 is tremendous number they're not getting approved there. they're being slow walked. it is really disgraceful it is people that they know they're going to apro approve ad they use every minute.
2:02 pm
obamacare is everything but dead and the people are not going to take it, they're not going to take to alaska they had over 200% increase in arizona and 116% in going up higher and people are not going to take that longer. we are in great shape. i think we have the votes and we'll be doing that right after the largest tax cuts in the history of our country are approved, hopefully sometimes in the near future. >> mr. prime minister, march of 2016, you said a potential for donald trump's presidency, quote, "i hope we'll not face this evil. after spending time with the president, have that changed your mind? >> i wish i knew that before my speech [ laughter ]
2:03 pm
[ speaking foreign language >> the u.s. -- i want to confirm that the meeting that we had was productive and not a moment did i feel threatened any time i saw that there is a fertile out look here in order to set aside any differences that we may have and find common ground. the common ground is really important for the relationship between the two people that are traditional and historical and common objectives.
2:04 pm
we need common values and don't forget that. the value of democracy and freedom is born interest it is one of the best that traverses of american cultures and traditional. the president today of the u.s. continues the tradition, i think our collaboration will be substantial and i am optimist after the meeting that we had today. >> a number of countries were a little bit nervous at the beginning and i have very good relationships with the leaders of virtually every country that i dealt with, the reason they were concerned because i would not allow our country to be taken advantage by other countries all over the world if you look at our massive trade deficits and our jobs moving
2:05 pm
tout certaou to certain countries, the companies are leaving and they are firing the people and products are made elsewhere and it is sold back in the kwieunitd states i am not going to be allowing that but, we are just not going to allow the united states to be taken advantage of by other countries anymore. thank you. >> mr. prime minister, if you can elaborate of the steps that greece is makingmaking. how can the u.s. support the
2:06 pm
greek effort to fully turn the page and attract investments thank you. >> first of all, this is one thing to intervene legislatively to attract investments and it is different to work on a daily basis on implement these attentions at a state environment. we opted to conflict of the basic greek optics and creating a friendly environment our investments mean jobs and it means return of people that left greece, left greece to go to
2:07 pm
other country come back to greece so, what do we do? we passed law in parliaments that provides a stable environment, a fixed tax rate for twelve years for investment of high value. we simplify the procedures to provide licenses to investments. we introduce the fast track process for strategic investments. we also made significant changes to hit procedures and administrations. our vision is to have a digital public administration but we want to mistake it practice.
2:08 pm
so we can see that laws where being implemented whether there is effectiveness and we are setting out a strong political will to promote these projects the president asked me earlier what's happening with the deal of the airport years ago, he himself is a businessman was interested and he saw himself of the weaknesses in dealing with greek and i informed him it is moving along and very soon we'll see this area being formed to a large state project and greece will be, we are hoping for it to be an attraction for other investment abroad. greece for the feirst time is te last country absorbing european fun funds. we find yourselves at a turning
2:09 pm
point where a point where investment can provide the ability to exit finally a crisis and the message that i want to pass out to u.s. investment. it is also an investment traction and investment destination. >> we have a great confidence in greece, i think it is a land of tremendous potential and i know many people are looking to invest in greece and a lot of the problems are behind it they had good leadership and they really done and made a lot of difficult decisions we are helping with a massive renovations of air force and airplanes going to greece. they're looking to buying additional planes from boeing. we are helping and very much involved with greece and helping greece to get back on its feet
2:10 pm
we have al tremendous greek population in this country we are looking at the most beautiful country in the world >> jennifer, do you want to go >> thank you mr. president >> let me start with you mr. president. let me give you a quick question of the federal reserve, do you have any other candidates that you are looking at other than powell, yellen and the five that's been named? are you looking at anyone? >> i would say within those five that you will get the answer i will make a decision over the next period of time. >> can you say who's your favorite at this time? >> i like them all i have a great respect from all of them but i will make a
2:11 pm
decision >> can i ask you a quick question of obamacare as well. alexander made a deal with senator pat murray, has the white house been involved in those negotiations and will you support those deals? >> yes, we have been involved. block grants going into the state is the answer. that's a good solution we think it is not only saving money but giving people much better healthcare with a very much smaller premium cmyk and you look at what's going on with that and much lower deductibles so they can use it lamar has been working very, very hard with his democrats on his side and patty murray in particular the solution will be about a year or two years and they'll get over this intermediate humps. we'll get the votes for having
2:12 pm
really the potential of having great healthcare in our country. they are indeed working but it is a short term solution so that we don't have this very dangerous little period including dangerous periods for insurance companies by the by the way. for a period of one or two years, we'll have a great solution ultimate fly for healthcare they are working together and they know what they are doing. >> okay. >> thank you >> mr. prime minister, do you regard turkey as a democracy and should turkey remain a member of nato >> i have so say that despite our concerns regarding turkey, despite the concerns that are also based on the daily
2:13 pm
interventio interventions. we believe that it must stay oriented we do believe that the european outlook perspective of turkey can be a level of pressure so there is reforms of domestic of the country. my answer is relatively easy yes, we do believe that turkey must remain within nato and european course. on the other side, we have to ensure and make it clear to this ally of ours and to its
2:14 pm
government that the road to europe and the stay and the collaboration of the west carries with its certain conditions and responsibilities. one of the most necessary conditions is to respect international law and collaborate. this is our basic direction and i believe we have the opportunity to go in details on the matter of president trump to explaining the need for the f l fulfillment so that there are clear messages towards the turkey administration. >> mr. prime minister, how do
2:15 pm
you like to here of the deal of greek in the region? what does your government planning to do to enhance these roles and for the benefit of the bilateral relationship and for a specific, are there any plans you have for it. mr. president, you praised greece's role in nato of the contributions what do you see as a potential of greece as its ability in the region and what will the u.s. like to see happening in order for greece to achieve this potential >> well, i will just start by saying i think it has a great deal role in stability of the area we have a feeling that it will get stronger and stronger and
2:16 pm
stable people and its got the potential be, once it got over this tremendous financial hurdle of the process of working out, we think there will be great stability in greece and militarily and every way we look at it is very important and very important to the united states we have great confidence in greece as a nation and we know they have plans to do specific things they have been a reliable ally and we have always been reliable to them so we'll look forward to that and we'll be friends for many, many years we'll look upon that with respect to greece as being a key, okay? >> thank you
2:17 pm
>> as regards to the initiatives that we are taking but also regarding the initiatives that we are taken for the strategic role of greece as a reliable partner of the un nato, i would like to say from the first moment, we took over the administrations and we proceeded and move, we proceeded to a new dogma through affairs. we enhanced our collaboration with two significant partners in the area of egypt and israel
2:18 pm
and, greece, cypress with israel and other countries of the area. our goal is to multi collaborations to enroll the collaborations and stability and joint growth in the area of course, greece for a number of years have been playing, it plays a role of a reliable ally of the u.s it has a unique different future greek maybe talking to other developed world of the countries in the east. so it is not just a nato member. it is a useful ally for the united states of america now, as regards to crete a, we e
2:19 pm
doing a good part there and it can and must be upgraded and it has. >> i want to thank everybody, the prime minister came out, this is the road garden and even the media likes the rose couggan it is hard to believe. mr. prime minister, it is a great honor of having you and we look forward to many, many years of friend shship working togeth and keep up the good work, thank you very much. that was president trump wrapping up a new conference with the greek's prime minister. we had some news breaking, president trump talked about himself. >> and while president trump was making head liliningheadline, te
2:20 pm
sector is hitting this at a session's high >> john harwood has all the details. >> the deal that's struck of wi lamar alexander and what the democrats would do is restore those coast sharing payments that president trump eliminated last week. it will reverse his elimination of them and providing additional funding of $100 million for enrollment in the affordable care act, obamacare, in return for that, those are things that obama wanted in return democrats have agreed to flexibilities and waiver for obamacare's requirements for their health program and the ability of states to form interstate compact i don't know what that is going to call for because some of that was permitted under obamacare to begin with
2:21 pm
it is a flexibility in return for money deal for obamacare, this is going to calm the nerves soft omnivopeople who believes t president trump was sabotaging obamacare. this was a short term solution of something that holds the tie until he gets his repeal and replacement passed he thinks he's closed but for now, this is something the insurance companies and health sectors are going to welcome >> we are watching healthcare and the market the dow is htiitng 3,000 for the first time ever. that's not good, america, we are back with "power lunch" after this impossible to ignore.
2:22 pm
the strikingly designed lexus nx turbo and hybrid. lease the 2017 nx turbo for $299 a month for 36 months. experience amazing at your lexus dealer. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. wantsure!ack? alright, looks like we've got chips, popcorn, pretzels? pretzels! plain, sourdough, spicy, sesame, honey mustard, chocolate covered, peanut butter filled, this one's in german, it says, "reindfleisch?" plain. great. so what are we gonna watch? oh! show me fall tv.
2:23 pm
check out the best of the best hand-picked fall shows on xfinity x1, online, and the xfinity stream app. thirsty?
2:24 pm
welcome back, president trump wrapping up the brief conference lets bring in our senator judd gre gregg. there is a couple of news there, larry kudlow, when are they going to focus on taxes? we are going to do that as soon as we finish taxes >> i got to give him credit. he made a lot of speeches. melissa was telling me during
2:25 pm
the break, john mccain is going to vote on the budget floor. you cannot have tax cuts and cannot have reconciliations and instructions for tax cuts. if mccain is going to vote for it, that's a big one i know rand paul -- trump played golf with them and he can be r persuasi persuasive you got pretty momentum for tax cuts senator gregg, do you agree? >> yes, i agree with larry i usually agree with larry once they complete the budget situation, i am a little concern to be honest about it. they're doing a tax bill on a purely bipartisan base
2:26 pm
it does not look lilook like th want to come to the table. they got to use the tools they have >> jack, bipartisan is always better, i adpr agree with you a that >> on the other hand, you could not get four democrat senatorses >> you are talking about healthcare or taxes? >> on the full budget resolution >> you may get senator from mccaskell you got to do what you got to do that's all a partisan vote if they do a good bill and
2:27 pm
outlining the bill that's there, it is a very good bill on the corporate side, the individual rates are far too high under reagan ross, the top rate was 5% >> whoa, whoa, senator, you are becoming supply side now in your retirement, i love it. >> music to my ears. >> i voted for raragaen ross. you do a sliding scale and what people can deduct of their income and whatever they choose to do and charitable deductions and you can get where you want to go and you can reduce the rate down to 25% top rate if you want to get there just by ratcheing down on the income
2:28 pm
>> you are on something there, governor, that's the idea of capping deductions across the board. i think of the moment you start to cherry pick, larry, that you are going to go after, that's where lobbyists trying to come in and try to educate. >> i understand this this is a power pact bill. it is coming from the business side and not from the individual side the individual side has some stuff in it but the power is in the business side. and, i want that to go through and at any cost, i don't want the republican party or the whole world to get hung up on state and local deductions or taxing the rich. lets focus on the need of economic growth and productivity and high or real wages >> that's the brunt of this. this is not a 1986 bill.
2:29 pm
>> historically, they're going to turn that money to higher wages. >> i disagree with that. you had academics on both sides of the issue >> what i am saying is we have not had capital formation, that's one of the key information that we have not had productivi productivity >> lets jump in here >> give me a little support on this the problem with our tax laws is people invest now to avoid taxes. they don't invest to use capitol efficient. you got to improve the way people invest their money. the same thing can be said on the individual side. you get the rate down where people are not looking for deductions or investigate on return on capitol, you will get a much more efficient economy and much higher return on your investments and therefore, you will get more revenues
2:30 pm
>> middle class after class deduction are at the lowest they have been in 50 years. >> that's correct. >> how do you go down from zero? >> individual income tax >> okay, so i will make a point. >> that's the net of deduction >> those middle class wage earners, they're the biggest beneficiaries of the biggest tax cuts that's my view and etcetera and etcetera, i have been saying that for forever if they get higher wages, they'll contribute to revenues >> lower tax rates on the business side are going to produce higher tax revenues through growth we would be better off on a 20% top rate the same thing applies and the same principles. if you reward success of entrepreneurship, you will get more of it and that's going to
2:31 pm
grow the economic and the revenues will go up. that includes it half way. >> remember, larry, you don't have to change the productivity to get your rate down 20%. you can maintain the exact same that we have now of 85% of tax paid by the top 25% of income of people it is n it is an issue of using your investment income officially and rather avoiding taxes and using deductions and exemptions. a lot of corporations are going to be hesitant to move forward what happens if the democrats are taking control of congress >> that's the key thing. >> i am not allowed to talk
2:32 pm
about. rose is the biggest paid for >> larry kudlow and senator judd gregg. >> thank you, i got news alert of harry weinstein, lets get over to hsue herrera. >> the movie mogul is stepping down the decision was made began at 1:00 p.m. eastern time and there is no comment at this point from the attorney of harvey weinstein. she says to nbc news, no comment. harvey weinstein has resigned according to a source of nbc news back to you. thank you very much. we got so much more ahead including new information on why the most valuable private technology companies maybe worth a lot less than the market believes what a canadian aircraft company just did maybe bad news for
2:33 pm
boeing and netflix is making sure you are binging more >> we'll always wear the crown, right back after this. cme group.
2:34 pm
2:35 pm
♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
2:36 pm
silicnow new data indicatin those sky high evaluations may not be as impressive as previously reported. john, this is fascinating. where does this stem from? is it the bc buying at evaluations that are way too high >> it is partly that and the types of deals that's getting done where these evaluations getting calculated the study is shown that the companies are often worth half as much of the evaluations seem to imply some of that has to deal with the terms of certain investors get paid out if things go wrong, they're different classes of investors
2:37 pm
and the way top line evaluation numbers get calculated depending on in part and what type of investors. >> when uber is worth $6.25 billion, in theory it is only worth $31 billion >> that could be it is difficult to discover the real value of these prices it is based on months ago somebody willing to say what the company is worth as soft bank comes in, perhaps, we'll get a new figure of what it is worth. >> the professor did the study and it is worth having did they wait for these companies to go public how do they determine the half when you say the last investor in, that's how we judge any
2:38 pm
private company out there. >> i am not familiar of enough companies to know of a blanket rule of the way these are calculated we can look just the way some of the companies have come to market and blue apron comes to mind, what something appears to be working than public the order of magnitude off of evaluation is staggering >> unicorn is great marketing. look how special we are and if it sounds gooed. >> jon fort. now, lets get to sue herrera >> hello again, melissa. thank you. fame market pessimist, have been kicked off
2:39 pm
>> if blacks populated america, the u.s. would looked like zimbabwa faber told cnbc quote, "if stating some historical facts makes me a racist then i am a racist." >> in other news this hour, rohingya refugees continue the track from myanmar and banglade bangladesh, more than half a million of rohingyas have crossed into bangladesh since ethic cleansing was started. the worst hot air balloon crash in the united states
2:40 pm
he struck the line of austin tex, texas, killing himself and 15 years. >> he also had opioid? his system the amazon struck a deal with some of the bilggest landlord t involve 18,000 units "power lunch" is back in two-minutes of this massive spending spree don't want to miss that.
2:41 pm
2:42 pm
2:43 pm
time now for a power run down three stories for phil lebeau. a dealer could potentially allow bomba bombardier to impose the u.s., how so, phil >> they are hoping once the canadian government and along with u.s. leaders, look, you have air bus taking a stake in the series planes and they plan to expand in alabama lets take another look of the
2:44 pm
proposed 300% of tariffs boeing says that's absurd. they alleged that given to the c series planes that make it so cheap to sell it down to delta they believe that those tariffs will stick >> my word is not yours so boeing would say that bombardier is just using air bus is their cover. >> that's one way of putting it. >> are airline travelers happier than this month's report i have to travel on saturday to your town to chicago >> it is supposed to be rainy. this late in report shows about 15% drop in complaints and overall airplanes are on time of 77% of the time. the drop and complaints, that's welcome news for the airline >> general motor is going to
2:45 pm
test the driving cars in new york city. tell me when so i can stay ome >> tyler, these will be in lower manhattan of five square mile area where they'll be testing these chevys and they'll have an emergency engineer driver behind the wheel in case there is some reason for him or her to take control. this the beginning of what gm believes of the next step offering on demand of electric services >> michelle is ready to sign up. >> lower manhattan, i want midtown. >> they won't let alexa in the house but they'll allow cars
2:46 pm
>> you did not mention melissa >> you, too, melissa >> i wish. >> it is a million people in there. [ laughter ] >> all right, phil. >> thank you >> i will see you later phil >> thanks, you bet >> netflix is reporting a big earning today of 5.3 million subscribers. that number would make netflix of the number one spender on contents on networks and espn, the only network that out spent netwo networks this year >> he's about 35 bucks below the street high. matth matthew, it is great to have you with us and appreciate your time >> at what point do you say, they're spending all the money, is it worth of the number of subscriber they are forecasting next year. do you think of the cost to
2:47 pm
acquire the new subscriber of the spending on content? >> what they're trying to do is gaining territory world. i certainly participation of this coming in 2019. the street is really fixated on the subscribers and it is really interesting. we are getting particularly the high end and they are one of the few people that delivers out 4-k videos for high end and tv sets for some of their top shows and in terms of getting tractions. >> in term of a mix, they forecast u.s. subscriber broke less than what analysts are expecting, they are seeing a better growth. >> is that a better margin file for netflix? no the contribution margins are
2:48 pm
ser certainly higher in the u.s. they are not worried about 2018 or 2019. they're worried about 2025 i mean it is very, very different mental itmentality. you get different results and a lot of interactions on the creative side as well. >> basically what you are saying is they'll spend on amazon as long as they hit a subscriber number, they'll get a pass >> it is kind of a winner takes all and we work and play out the same way of entertainment and different and more fractured, they are the clear leader and they're going to take ground as fast as they can they seem to be able to hold i d >> if they are spending this much now, what are they going to spend in 2025? >> probably more i think we are reamping about a billion dollars a year and
2:49 pm
certainly, the number you are quoting -- >> they'll be able to borrow that money >> absolutely. i guess it is about 82 or 83 it does not rattle people's cases. that much. we have a severe financial crisis right now i think they really have a full kechconfidence of mt to say the least >> matt harrigan >> john harwood on president trump's travel ban a judge weighed in >> the trump administration thought they have gotten passed legal difficulties now a federal judge in hawaii has issued a new nationwide halt to that travel ban so the trump administrati administration, of course, they'll have something to say about this and this will proceed through the legal process.
2:50 pm
for now, the new trump's travel ban has been halted by this federal judge in hawaii. >> big blue has been a big bust. shares are down quarters of falling revenue. company getting ready to report after the bell is there anything ibm can say that would turn around sentiment? we're going do debate it right after this it can detect a threat using ai, and respond 60 times faster. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it. is. the cloud. the ibm cloud. the cloud that's designed for your data. ai ready. secure to the core.
2:51 pm
the ibm cloud is the cloud for business. yours. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.
2:52 pm
2:53 pm
it is time for "trading nation" and today let's trade ibm, set to report numbers after the close. dennis with harvest volatility management max wolf with disruptive technology advisers. max wolf, 21 consecutive quarters of declining revenue growth, stock down 12% in a massive bull market. is stl any turn yararound in si for ibm and its investers? >> there probably is, right? ibm has been doing the right things, kind of got to them late if the first phase of doing the right thing was the me, too, phase, larkhey, we're going to pursue things that younger, nimbler companies are doing better than we will and part of the reason we've seen a leg sac of quarter over quarter
2:54 pm
mistakes getting ahead of the curve, lts cloud, flirting around with the block chain. i do think they'll get there i think their story is the struggle of an old tech company becoming a new tech company fraught with misadventure, slow and not always successful. >> dennis, listen, lot of good men and women at ibm, right, longtime company literally the bluest of the blue chip called big blue >> yep >> what's wrong with ibm are they going to turn this thing around any time soon see anything in the options market that might indicate that? >> i see people going in buyingd with max i think it's a waste of money to buy upside calls in ibm. i think they need to take a page out of mcdonald's book as max alluded earlier, they kind of are doing that but need to be less concerned about stock buybacks and less concerned about their dividend for certain shareholders in the stock and more concerned about being more nimble and quicker to action, and bringing product, go where the customers are. i mean, i don't know if they can catch up they're big blue but they're trying to play a catchup game with people.
2:55 pm
xerox was a household name where's that stock now >> yeah, listen, maybe they should offer all day breakfast as well. try anything at this point dennis, max, thank you very much for more "tradie ining nation" our website, tradingnation.cnbc p.m. "check please" speaking of all day breakfast is next. >> now the latest from >> when you own a stock that's going higher, lock in profits by raising your stop order. as your stock moves higher, risk/reward ratio may fall out of balance so consider raising your exit point to under a significant support level. allowing you to ride the trend as long as possible.
2:56 pm
2:57 pm
2:58 pm
"power lunch." cnbc has an exclusive interview with wells fargo ceo tim sloan talking to us one year after taking over from ceo john stumpf that's tomorrow at 2:30 p.m. eastern time check please >> i think, a couple things that are sbrr interesting, number one, start of the nba season tonight. lebron james and the cavaliers will be playing his former teammate, kyrie irving and the boston celtics unclear whether lebron will play i think the big story over the next 24 hours in business and pop culture will be what the nfl owners decide to do, if anything, whether they tell us, about the ongoing protests over inequality and police violence
2:59 pm
>> michelle was talking about the big interview we got with wells fargo tomorrow we're watching the fchinancials very closely after morgan stanley and goldman beating on the top and bottom lines we're seeing stocks tremendous weakness on today's session, reversal from morgan stanley in terms of the gain earlier in the session. the spread between the twos and tens, smallest in almost will a decade that's really roiling the financials today this is something to continue to watch. >> the rose garden -- sorry, i thought i was next go ahead. >> mine is incredibly boring hopefully this is more interesting. mine is -- >> save it until the last. >> we don't know, folks, we really don't know what we're going to do until the commercial break before finish the rose garden -- >> i just thought we've come a long ways since the greek financial crisis, right? >> was greece -- >> everything. remember, days and days. spent 50 days in greece the summer of 2015 i'm still, like, gold on spg because of it. >> we -- any left at home? >> no, i drank it all. >> you needed to those days.
3:00 pm
mine is very boring like i said. just watch oil if oil continues to trickle up, the dow might have another leg in it. chevron is up. 15% in 90 days kind of quiet. oil could give the market a lift. >> wow, a good one. >> good one to watch. >> thanks for watching "power. "closing bell" starts right now. >> pretty boring the stock market just hit an all-time record high it broke for the first time ever 23,000 so we're very happy about that >> that's president touting the market's record highs this afternoon. and welcome to "the closing bell," everybody, i'm kelly evans at the new york stock exchange where the dow is just a hair below 23,000 right now. >> he needed a hat >> the president >> 23,000 hat. like art cashin is sporting today. i'm bill griffeth. we're going to look at this


info Stream Only

Uploaded by TV Archive on