Transcripts For CNBC Power Lunch 20171129

Power lunch starts right now good day, everybody. Welcome to power lunch. Im Tyler Mathisen as michelle just highlighted, the dow and s p 500 hitting records again. But we are well off those levels at this hour nasdaq basically getting slammed. Down more than 1 . Big selloff in tech. Check out what is leading that nasdaq 100 lower Lamb Research down so auto disk down 15 now applied materials, invidia also in the tank today. In fact, the whole Semi Conductor industry on pace for its worst day in almost a year more on this group coming up forget ten, folks. Lets move on to 11,000. Bitcoin breaking past 11,000 just hours after topping 10,000 for the first time ever. Everybody is talking about bitcoin. Crypto currency up more than 30 in the past week and now up well over 1,000 this year, brian. Its like an auction. Do i hear 12,000 im Brian Sullivan heres what else is happening at this hour. Tyler drilled down on bitcoins record run the nasdaq planning to launch Bitcoin Futures next year. Apple scrambling to fix a serious problem with its mac operating system the flaw lets anybody gain entry into a computer without using a password. And fed chair janet yellen wrapping up testimony on capitol hill, saying the fed will continue with its path of gradual rate hikes but no clues as to what the fed will do in december. Melissa . And im melissa lee we begin with markets, which were once again reaching new records. The dow getting to within 40 points of 24,000 today, but were off those levels right now. Wall street socalled fear index, the vix hitting its highest level in over a week bob pisani, whats important today is a very sharp rotation here yes a bunch of underperformers starting to do a little bit better and banks are coming to the floor here i just want to show you banks. Remember yesterdays testimony, saying banks were sufficiently regulated. The banks moved up yesterday, all again today. These are new highs for the banks. Underperformers we talked about. Melissa referring to retail normally starts underperforming after thanksgiving not happening. Were seeing moves up in auto zone, oreilly, ubs, under armour, tjx. Doing better gap at a new high. Michael kors at a new high generally airlines have been underperformers throughout the year theyre also doing a little bit better today the big thing this morning and whats been going on today is weakness in the tech sector. A lot of volume in the xlk, the largest you see the weakness coming off the bottom. Everybody talking about bitcoin. Ill make it simple for everybody. The reason that bitcoin has been expanding recently, we are seeing an expanding derivatives market, adding legitimacy. So now the cme, cboe and this morning we confirm nasdaq are going to be launching Bitcoin Futures in the very near future. Heres the next question what about Exchange Traded funds or etfs . The s. E. C. Has denied them so far on the grounds its unregulated. Well see if that changes after these futures launch but the bottom line is, big hot topic right now. More on that, trader talk. Cnbc. Com, bitcoins and etfs dow is up. The dow may be up, but the nasdaq down more than 1 that really doesnt tell the story of technology today, because when you dig in, some high flyers in the chips base are being grounded today dom chu looking at those losses. So brian, at the low so far today, we did see that smh, the semiconductor etf that a lot of people do trade the semiconductor etf down 5 . That would be its worse oneday loss going back to brexit, just to give some perspective thats how bad it was for the chip stocks. Theyre finding some support today at that 50day average price. Well see if that holds in trading. If you look at that semiconductor etf, its been a hot trade, up by 40 yeartodate, even with the big losses weve had so far today. Now if you take a look again at some of the big moves intraday, some of the biggest stocks that have had the biggest gains in this particular etf overall have been the ones hardest hit today. Lamm research down micron down by 8 . And invidia down by 6. All have double digits percentage returns, some close to doubling this year. As you take a look at the biggest stocks with the influence over this particular etf, its these names. Intel, a real laggard. Taiwan semi up 37 and invidia up 79 mother . Could they be a sign of things to come. Back over to you. Thank you very much,dom the movie in the semis, the worst in the performer, down 1. 5 at session lows now about 1. 3 lower selloff comes on the back of a new note from Goldman Sachs today that warns we are at the highest valuations since 1990. And that can lead to pain. Lets bring in gene munster, founder and managing partner of loop ventures and kevin core roan, senior Portfolio Manager with Washington Crossing advisers gene, let me start with you. As we look at Technology Stocks broadly and semis in particular, why dont you describe them in light of the goldman note about basically a warning about valuations so those stocks are up at least if you look at the nasdaq and the fang plus tesla, kind of the bellwethers, up 37 yeartodate and that compares to up 14 in the same period a year ago and so this has had a big run. The earnings have expanded, too. But in general, the multiples have obviously increased over the past year. So i think its understandable that this pullback is happening. Just given i think investors are looking around and saying weve had a big run. I dont think it changes some of the fundamental opportunities around some of these big tech names. Were looking here, kevin, at a oneday selloff that is concentrated in one rather narrow area of the market. It would appear to me. I should have i should correct myself this is, says gold maman, the highest value saying since 1900, not 1990 is this a point of alarm for you . Or is it just another day of trading . No, this rotation is really its really just one day of trading but a lot of the other things are substantive. So if you look at the economy, the thing i think that drove tech the most was that youve had a nice pickup in sentiment and Business Activity and investment so companies that are tied to business investment, sensitive to the global economy, like technology, it would make sense to see a disproportionate move thats why weve seen a move over the past year as far as the market overall, there are two narratives one narrative is the valuation question, which is becoming very painfully obvious to anybody who looks. A market cap, gdp, whatever the metric is, valuations are full but the overriding interest has been in the narrative has been this improvement in growth which continues through today. So unless that growth looks threatened, then the market will move in the path of least resistance, which is higher. But if that growth becomes questioned, then we could be the market could be kevin, heres the simple question for investors, and this is a question that people are grappling with today, obviously. If you have the dollar, do you put that into technology we just had that stellar run, because we were seeing the big cap sector or do you put it into financials or industrials the sectors that are gaining you put it into you put it into technology if you have a longerterm time horizon, if you have a shorterterm time horizon, you wait for a pullback and focus on companies that have a lot of cash on the Balance Sheet right now. So that would preferably be technology, consumer staples, health care. Those kinds of Companies Given where we are in the cycle. We like to see cash in the portfolio, and as the feds raising Interest Rates, we think that cash becomes more valuable. Gene, clarify for me. Are you concerned about the valuations in tech, or not im not and part of the reason were just huge openended opportunities here if you think about a company like tesla thats going to kind of redefine transportation and Energy Consumption google, the framework and foundation of ai and that impact those types a lot of these large cap tech names have openended opportunities back to the growth piece and so im not concerned. Gene, thank you very much kevin, appreciate it, as well. Thanks. Turning now to d. C. And tax reform, the big issue, automatic triggers that would lead to tax hikes. Could that kill the bill why a tax cut bill might have tax hike provisions. Elan michelle, weve counted at least five republican senators who are not fans of this idea of a fiscal trigger this is something that senator bob corker wanted to address his concern about growing deficits but opponents, including North Carolina senator, thom tillis, they argue that including this in the bill would undermine certainty for businesses and potentially undercut growth. Any time you limit the length of time you can make a business decision and you create uncertainty, you will dramatically impact the perverse consequence of having a trigger in here. Could potentially be that we wont achieve the economic gains that we would otherwise have if the trigger were not reporter now, i want to make clear, none of the senators i talked to said they were willing to vet against the bill if it included a trigger they said this is not the direction they want to go in also unclear exactly how this trigger would work bloomberg reporting that the trigger would kick in 2022, and raise 350 billion over the course of a decade but when i talked to senator david perdue, he said he was looking for something more like five years before the trigger would kick in, and that important details like how big the tax hike would be, and, of course, who would pay for it, are still under negotiation. So the senate is expected to vote on beginning official debate on the floor later on this afternoon, and well keep you posted, guys. Just for people who havent been paying attention for the last few days, the trigger would be if you do these tax cuts and revenue still isnt Strong Enough and you get worried about the deficit, somehow theres some automatic provision that kicks in that starts to raise taxes and hence revenue. Reporter thats exactly right. Okay. Reporter the parameters of how that would work still up for debate. And let me ask one further question we identified some of the senators who are not on board with this. Who are the senators who are pushing it i know about mr. Corker, who is retiring after next year reporter yes theres also senator james langford, as well as senator jeff flake those are sort of the three deficit hawks in the Republican Caucus really pushing for this. All right thanks again at t firing back defending its proposed takeover of time warner becky quick sat down with Randall Stephenson last hour he sounded confident. We are convinced once we own time warner the ability to integrate that content differently for our customers. Produce new experiences for our customers will happen much quicker. Thats the premise for doing all of this. It has absolutely nothing to do with a backwardlooking view of the world where we say how the way turner can price their content to cable distributors nothing to do with this deal thats the reason we made concession right off the bat that is irrelevant. Stevenson also addressing the pressure to sell assets, specifically cnn i worry about selling assets is the message that it sends theres a lot of noise around this deal as it relates to cnn and as you begin to talk about selling assets, it starts to give a hint, a perception or a belief that youre selling these to address a concern that some may have with cnn. Were going to do nothing that would lend credence to an idea were actually making concessions to address somebodys concern with cnn. Were not going to do that becky joins us now. Becky, what was your take from the conversation you know, melissa, really just listening to what he had to say, many of these things are him doubling down on what he said to this point but he did share a little later in the conversation that, yes, he is very frustrated by this process, frustrated by what he thought was going to be a pretty clearcut case in coming up with the doj. He says reasonable people can ask questions about why. He said he didnt want to get into the head of the antitrust chief on why he would be doing some things like this. But he did say he was very frustrated by it and he said in particular, its hard as a ceo to look at this the reason theyre actually litigating is because you want to have rule of law. He thought that he understood how things would be working in mergers and acquisitions and how department of justice would be measuring this when thats unclear, he said it kind of offended his sense of how things should work in the United States and thats why theyre pressing forward versus what they did ten years ago when they tried to buy tmobile, department of justice stepped in, and so they backed away from that deal. This one theyre fighting. And he gave i couldnt say insight as to why. I wonder, becky, how much of his time is now being spent on this he does have a Gigantic Corporation with hundreds of thousands of employees to run. And it seems like this is 100 of his focus did he give any indication of how much time this is occupying for him . Well, he joked around at the top and said, yeah, it was a quiet thanksgiving i asked him whats new he said, quiet thanksgiving, not much going on. But youre right, brian, this has to be eating up a ton of his time he said thats part of the reason theyre looking for a relatively quick trial to come up with this at t and the filings they put out last night, went ahead and asked for february 20th for the date for this trial to happen. The government had asked for a much later date. Department of justice is seeking a may 7th trial date his point is, we are 14 months into this, it will be 16 months by the time the trial date comes up, if at t gets that trial date its looking for and he said, look, there is a lot of uncertainty that takes place among the workplaces in both companies so they said to see this go through quickly. And he did express quite a bit of frustration with how this has gotten dragged out he said they had gone in for dozens of depositions and i think the government has Something Like 25 million pages of documents related to this again, the sense of frustration is something that came through pretty clearly the series of Sexual Harassment stories this year nbc, the parent of this network, firing matt lauer of the today show over Sexual Misconduct allegations. Today in washington, congress is addressing the issue, as well. Kayla tausche has that story today on the hill, the topic of Sexual Harassment more broadly took up about 90 of the weekly meeting among house republicans, according to attendees. The house was preparing to vote this afternoon on a bipartisan bill that makes Sexual Harassment training mandatory for both members of congress and their aides. Majority leader Kevin Mccarthy said he finished his training by the end of today and his whole office would be done with it by the end of the month washington has been grappling with questions about its protocol after allegations surfaced against minnesota senator, al franken, and michigan congressman, john conyers acknowledged he paid to settle claims by a female employee in 2015 that was reportedly over Sexual Harassment both lawmakers are currently being investigated speaker ryan this morning was asked whether Congress Needed to address the 16 women who have accused President Trump of Sexual Misconduct in order for congress to claim the moral high ground heres how ryan responded. Right now, were focused on making sure this place works the right way. Right now were focused on making sure the Congressional Accountability Act passed in 1995 gets updated the way it needs to. Since that act went into effect, congress has paid 17 million to settle more than 260 claims on a variety of issues. Among them, things like asbestos exposure and thats according to greg harper who oversees daily operations the totals have not been broken down into categories but that is something you can imagine reporters have been pushing for. Brian . Im sure they have. Kayla tausche, thank you on deck, much more on the growing Sexual Harassment scandals around america and what Corporate America needs to do to stop them. And we are also going live to phil lebeau at the los angeles auto show. Phil, whats up . Reporter the l. A. Auto show means the finest luxury autos being revealed that includes the new mercedes cls. Well talk about this new mercedes and talk with theea hd of mercedes usa when power lunch returns to live a better retirement. Its called a reverse mortgage. Call rfree information kityour with no obligation. It answers questions like. How a reverse mortgage works, how much you qualify for, the ways to receive your money and more. Plus, when you call now, youll get this magnifier with led light absolutely free when you call the experts at one reverse mortgage today youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree money from the equity in your home. And heres the best part. You still own yohome. Call now take control of your retirement today the l. A. Auto show underway today. Phil lebeau is there, checking out the new cool cars. Hi, tyler im going to bring in the head of mercedes usa, standing in front of the new cls, which you just unveiled. Give us a taste of what people can expect when this goes on sale in the middle of next year. Certainly thanks for having me, phil glad to be here. The new cls is coming summer next year. And were really excited to bring this new vehicle has an allnew engine called the m276, basically a six cylinder with an integrated 48 wall starter generator. Only Brian Sullivan on our anchor desk understands what thats about the bottom line, youve updated the technology and packaging, correct . Yeah. Its a fantastic new design, but it is, as you said, also the interior technology that came down the same thing we have in the s class are there. And then a few more things on top of that. Looking at your numbers in this year, youve sold almost as many suvs and crossovers as you have carsful do you think that continues . Do you think its not long until the not the majority, but at least more than half of your sales are coming from suvs and crossovers so overall, we see that trend continuing it might you know, not grow the suvs might not grow as fast as the last couple years but we are seeing it continue certainly from a mercedes, as well well probably be over 50 in the coming years but we also are pretty happy we have the strongest line of passenger cars and do pretty well with them, as well. As you know, so much of the talk at this show is about selfdriving vehicles. Driverassist technology the latest technology in these vehicles are we almost to a point in the auto business, similar to what we saw with smartphones, and we see with smartphones, where after a couple years, people say, i need to upgrade, because the technology has moved that fast. Well, let me say it this way. Our industry, the automotive industry, has always had new stuff. In the past, new designs, new models, new engines. And now i think youre right were entering an area where its new models, new engines and new technology. Is the cycle turning faster it certainly is turning as fast as possible and its getting faster. So there i am with you reporter selfdriving cars getting so much attention. Yeah. Reporter how many of your customers, when they come into a mercedes showroom, bring up, i want that Driverassist Technology so i can take the hands off the wheel . Or is that something that were fixated more on as we cover the Auto Industry than the customers are . I think, you know, we are fixed more on that than the actual customers are we have a lot of customers who tell us time and again they love driving. And they want to continue to drive. And, you know, if you at mercedes we market our selfdriving features as safety features so far. Were not going out, the car drives itself. Were going out, this car provides additional safety so we are 100 sure everything is absolutely pictureperfect. Reporter the man who runs mercedes usa guys, on a very busy day out here in los angeles. Back to you. Certainly looks it. That was enjoyable thank you, phil. Its been a good few months for the bank stocks. The big banks and regionals up nicely from the september lows can you still make money in those stocks in 2018 and as we head to break, take a look at some of the biggest losers in the s p 500 today. Auto desk off by nearly 17 . This is not a cloud. This is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for business. Yours. When it might be time to buy or sell . 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Im sue herera here is your cnbc news update for this hour. A spokesman for british Prime Minister theresa may says President Trump was wrong to retweet anti Muslim Videos tweeted about i a leader of a far right group called britain first. The videos purporting to show violence against muslims outraged british opposition leaders who have demanded the government revoke a state visitation to trump. A final hearing a war crimes tribunal was halted when a military chief appeared to have taken poison he yelled, quote, i am not a war criminal, and appeared to drink from a small bottle after judges upheld his 20year prison sentence for his involvement in driving muslims out of bosnia in the early 1990s. Here at home, garrison keillor, former host of prairie home companion, has been fired by Minnesota Public Radio for improper behavior. He retired last year from his longtime radio show but still produced the writers almanac for syndication. And the fda warning dog owners about storebought bone treats the agency received nearly 70 reports of pet illnesses and 15 deaths related to those treats youre up to date. Thats the news update michelle, back to you. Thank you very much, sue. Lets get an update on the markets now. The dow and s p set new records at the open but they are well off their highs. And theres been a big divergence with the nasdaq on pace for its worst day since august Technology Names also weighing on the dow apple, microsoft and intel, also visa is a laggard, as well on the flip side, you wanted health, verizon, disney and jpmorgan United Health higher by 3 retail seeing nice gains xrt up 11 this month alone. Target, macys, nordstroms, kohls, among your winners today. Financials breaking the bank with the xlf hitting fresh tenyear highs lets bring in jason goldberg, managing director at barclays. Good to see you. We saw this pick up in steam in the Financial Sector yesterday during jay powells confirmation hearing and pick up further when it looked like tax was going to pass lets break down the impact specifically from tax first. Immediately you said this could actually lead to a decrease in ep eps, correct no. We think tax reform is positive for banks for several reasons. First off, Corporate Tax rates go down. A greater percentage of earnings going to the bottom line and given the majority of banks earnings come from the u. S. , they would be above average beneficiaries of that. But also has the benefit to asset quality. Households have more money youre going to use that to pay down debt. And then to the extent that what tax cuts are seemingly to the economy, banks have the benefit the way it oh could benefit from loan growth, Capital Markets and revenues. With banks gains so far this year, bank of america up 27 . Citi up 26 . Have we priced that in thats the question that investors are grappling with right now. You know, certainly the stocks have outperformed significantly since the election, somewhat less so yeartodate but there are several reasons. Certainly some comes from the potential for tax reform we dont think thats all priced in clearly the fed has hiked rates. This year expected to continue to hike next and banks are beneficiaries of that and then also you have this just the beginnings we think of a regulatory roll back cycle which obviously increased regulation was weighed on the banks the last several years and could help the banks looking out as recent initiatives are pulled back if you look at relative multiples, today versus where we are prior to the election, they actually havent gone up that much despite the fact this group is levered to higher rates, lower Corporate Tax rates, as well as this regulatory roll back theme. So a whole group rallying on the prospect of tax reform and the prospect of lighter regulatory touch and you still like wells fargo in terms of the letter sent to wells fargo from the occ, why bother with wells fargo here with a regulatory overhang when youve got a field of other banks that you couldinvest in that will benefit from the same sort of overarching themes here . Yeah, were certainly constructive on the group in general. The big banks in particular, given they have the most to gain from this regulatory roll back theme. The respect to wells fargo, clearly a laggard since their sales practice issues came to light last year. We think theyre at the tail end of that process in terms of reviewing all their practices. Rooting out the evil, so to speak. And really as you kind of begin to think about 2018, could actually focus refocus on growth we think a lot of opportunities on the expense side, given what they have been through the last year or so. All right jason, well leave it there. Thanks for joining us. Jason goldberg from barclays. Its not just a boom for the big banks. Were seeing a huge move in the small and midsized banks. Check this out about 100 bank stocks we followed, cnbc, the average move is 14 higher in 90 days 18 of those have gained more than 20 in three months one Major Regional Bank etf is now at an alltime high. Joining us is jack vesanco i understand the case. But, man, these kind of gains, are they sustainable brian, no im not sure they really are jason talks about, you know, rectory reform, tax reform thats a big part of what we have seen in the move already. Theres a couple things going on in the banks that are concerning, though one, loan growth is very anemic. Decelerated since the election and second, you know, the feds continue to raise rates, the impact from rising deposit costs has risen exponentially, as well so the move on deposit costs for the industry overall is about5 x x on the last rate move than on the first hike so youre getting a diminishing benefit as the fed continues to tighten on that spread income. And i know there are no stocks that you are currently recommending to your clients, correct . None correct no, were neutral on all our banks. We think they have gone we think they fully reflect all these things tax reform, regulatory reform. The core drivers of Earnings Growth are not there we took our estimates down on 90 of our coverage coming out of the Third Quarter so, you know, we need to see some loan growth we need to see cni loan growth in particular. To get more constructive. Wow not sure ive ever interviewed an analyst who hasnt recommended one name jack, its a bold call we appreciate you coming on cnbc to tell us about it. Thank you very much. Recommending nothing. Those of you not sure where the Oil Market May be headed, dont worry. Youre not alone we sat down with the ceo of Royal Dutch Shell earlier today, and heres what he had to say about volatility in oil. Are i think there will be a considerable degree of volatility in our price. You have to believe that i think, you know, the fundamentals may be telling you that indeed with the market tightening again, demand growing quite profoundly at the moment, and, of course, investment levels have come down quite a bit over the last few years. In the long run, yeah, there is going to be a tightening of the market and we have the full interview with shell ceo coming up later on in the show. Well talk about oil, Something Big they did with their dividend and believe it or not, their plans to try to go green melissa. Good stuff. To the bond market now Rick Santelli tracking the action at the cme. Hi, melissa lee wow. What a difference a day or two makes. Look at a two day of tens. Hunkering down in a ten session range. We popped as you see on that chart. But it wasnt only us. We never do anything in isolation in the sovereign credit markets look at the twoday boons. Very similar as it moves higher. Maybe the biggest story of late is the twoday of the pound versus the dollar. Or a twoday of the pound versus the euro you can put the yen, you can put many combinations. The pound is doing pretty well but if you look at the dollar index, a oneweek chart, yeah, its drifted up higher, above 93 but it doesnt seem to sense or show how much strength is in the pound. Theres a good reason for that only 11. 9 of the dollar index reflects the value of the pound versus 57 for the Euro Currency michelle, back to you. Got it, rick. Thank you. How Corporate America needs to respond to the growing sexual ow lchme iue perun will be right back you cant predict the market. But through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Nbc news announcing this morning it has fired today show host, matt lauer, for inappropriate Workplace Behavior this firing, the latest in a year of upheaval in the workplace. Lauer joining a growing list of men who have been fired or resigned over allegations ranging from Sexual Misconduct, harassment, even rape. Started last year with fox news roger ailes, then bill oreilly. It exploded with harvey weinstein. As you can see, seemingly daily, there is a new allegation being leveled against powerful men in the business the list goes on and on. What do Companies Need to do to confront the issue of Sexual Harassment we have gillian tett of the Financial Times and cnbc contributor. Kathryn tinsly of the Georgetown University Womens Leadership Institute and management professor at the Business School and Joanne Lipman is editorinchief of usa today author of the forthcoming book thats what she said what men need to know and women need to tell them about working together. Welcome, ladies, to power lunch. Good to be here. Its clear a lot of issues have gone on for years, decades. A lot of us know why if you complained, you were never going to work in this town again, couldnt get hired again, you were going to be a problematic employee it would be a negative for the reporter that, the person reporting it, that has clearly changed has it not, jillian . Is it now safe to say you have been harassed sexually well, i think we certainly are at an extraordinary water shed moment for americans, society and businesses and i think Everybody Needs to recognize that the culture is changing, and communicate that very clearly to their staff and communicate the new rules of the road it is never easy to come forward and talk about Sexual Harassment any woman who has tried to do that knows the tremendous cost emotionally, personally and often until now in career terms. But certainly the ability for women to step forward and say this has happened is certainly changing very fast and frankly, leaders in all fields, not just the media which has been hit so far, but media leaders in all fields need to take note. My prediction is that tech, finance, areas like that could well be factors hit next. Yeah, no. Everybody is waiting for lots more shoes to drop joanne, what is youve got a whole book what do we need to know about working together as men and women . What do we need to know, and what do you think has changed that suddenly were at a moment where women came forward and everyone believed them, when for years we know that wasnt the case so clearly, the line has moved. Behavior that was acceptable or winked at for many, many years no longer is so people are starting to look back at their own history. I think every company and every industry is now reassessing. And needs to reassess previous behavior the real difference, and where i think the watershed moment is here is all about the men. In the past, women were afraid to come forward, because they werent believed now the big difference is that we have men who are listening. And that is the only way that were going to make headway. And, in fact, the reason i wrote the book, thats what she said, which is coming out in february, is for that reason is because women have talked about these issues amongst ourselves for years. And yet there has been no motion there has been no movement and improvement. Were not going to get any improvement in the situation in closing the gender gap until we have men as part of this conversation women talking to each other is only half of a conversation. Let me join the conversation, then and why cant you get your book out sooner, joanne we need it youre a publisher you would love it out sooner, right . I would love it out right this second. It needs to be out today call them, will you . Kathryn, let me turn to you. I mean, i dont pretend to speak for all men. This feels to me like a generational moment. A changing in the culture. There are women who have been victimized, and i would say that a lot of men today are scared. Scared because they dont know how to act. They dont know they know pretty well whats going to get them into real trouble but in some ways, we dont know how to act does and so Companies Often rely on standard Sexual Harassment training that may be on some computer module. Does it work so, no. Actually, what a lot of the Research Shows is that its a real mixed bag and you can manuimagine, if youe ever done Sexual Harassment training yourself, its oftentimes rather cartoonish it can be antiquated and it can really seem much more like a hassle than anything else. You bet i think thats these computer modules right. It is a question of starting a real organic conversation in the workplace, as opposed to having me go on and complete my whatever it is. Check the box. Check the box the bigger issue is really not Sexual Harassment training the bigger issue and the reason we have seen this outcry from women is less about women who have been physically assaulted at work. And much more about women every woman knows what it feels like to be overlooked, not heard, interrupted, not respected. And that, i think, is the reason why we have seen such an outcry. You dont have to have been physically assaulted by some guy at work to understand how that feels. And so kevin, what are the fixes . Well, so i think thats one of the things thats really important to get in here, which is that there is a real gradation of these experiences, right . Its not black or white. And so i think that you need to think about any Sexual Harassment is not about sex. Its about harassment. Its a power move. Its about belittling others and so i think we should treat it the way we treat any other dispute or interpersonal workplace issue. So we have a lot of Corporate Executives who are watching. Is there a rule book allegation one, you do what . Allegation two, you do what . Right so this is what i suggest. I think there are three fixes you could have first of all, i think, of course, we have to focus on prevention, right . Which means having a respectful culture. But if you cant focus on prevention, so what can you do when these things happen i think that one structural fix that every corporation should institute is something thats called a rule of two so one of the reasons why women are sometimes hesitant to come forward is because its not black and white. Its because something was said and made them uncomfortable. Theyre not quite sure was it harassment, was it not. There might be other people that are also in the room and so what happens is, theres this normalization of this kind of thing so a rule of two is if a woman comes forward, she remains anonymous until another woman also comes forward with an allegation against the same person then that triggers some sort of investigation of the incidents and thats when there could be a larger conversation. And so this would help women to report more often instead of waiting until it gets to a real egregious place. Because oftentimes, this isnt you know, as the man on the show was im sorry, i forgot your name tyler. Yes, sorry, tyler. You were just saying, you know, oftentimes men dont know that they are transgressing. And so this can be an opportunity for learning and coaching for everybody so i think a rule of two is a really good thing. And that can be some early prevention the second thing that i think we ought to do is institute some bistander training and so this isnt just about if you personally experience something. But if you are part of experiencing something that made you uncomfortable. Then that would go a long before you get to three, catherine. Yes. I want to bring gillian back in the conversation here from a workplace perspective, corporate perspective, you want to create that environment where women are free to speak up you want to act very quickly but theres also the risk of jumping the gun. Of maybe acting too swiftly. Of maybe creating a witch hunt sort of environment, right absolutely. Gillian i was going to say, i could not agree more i think its very important right now, while were celebrating the fact that women have the courage to come forward and this type of punishment is being needed out against people who should have been punished years ago. We have to make sure that companies have a due process we have to make sure that any institution has a due process. What worries me right now is that there is a danger of this snowballing and spiralling into a witch hunt and we also have to think about social media you said earlier, why is this happening now . I think its partly the political climate, one reason why its happening now the other is its extraordinary power of social media to basically let women connect with other women who feel angry and create a Snowball Effect in some ways, thats good. But there is a danger if we dont have due process and the kind of training and the kind of corporate systems that catherine talking about in place you and i have been friends a long time, jillian, you as well and i have a new friend katherine here who now knows my name, which is gait. So let me turn to you, brian, its okay, man jump in any time, please any time, and i dont want the loud voice, mine, to overwhelm anybody here it seems to me that there is a behavioral issue, problem, that exists in the workplace, but that a lot of this, and i think it was you, katherine who mentioned it and jillian, i think you did as well. There is a power imbalance and a lot of this seems to have to do with a power imbalance and powerful men abusing that power or taking advantage of that power. Thats absolutely right tyler, thank you for being part of the conversation because so often when there is this gender conversation men clam up because they dont know what to say. Theyre afraid theyre going to say the wrong thing, and first rule is dont be afraid. You need to be part of this conversation thats how were going to solve this entire issue. In terms of the power imbalance. Thats absolutely correct. Thats why were seeing what were seeing today, but in terms of just in the general workplace, we really need to be aware at every single level of there is an imbalance between men and women. For example, all of the Research Shows that women are interrupted far more frequently than men and it doesnt matter at what level of power you have. In fact, there is Research Done by northwestern that found that female Supreme Court justices are interrupted three times more frequently than male Supreme Court justices those are issues that well have to solve at another time. I just like to you know. Interrupt, rape and all of those other things and i interrupt all of the time and i make up for all of those other cases. Ladies, so good to have you. Much appreciated, jillian, katherine and joanne great to be here. Coming up, the latest housing sales show signs of a rebound, but can it last plus automatic tax hikes will that kill the tax reform weluhilll por nc wl be right back. Home sales today, but will it last . Diana olick is live in d. C. With the details hi, diana. Youre right. Buyers came back especially in the south. Pending home sales which count signed contracts on existing homes finally moved meaningfully higher in october, up 3. 5 , but the devil is in the details. Sales jumped a whopping 7. 4 month to month in the south and that is the pentup demand from buyers who were side lined during those two major hurricanes realtors in houston say they were pleasantly surprised by the quick recovery the northeast and midwest did see small gains, but the west did not and thats because supply is the tightest in the west california has seen pending sales down nine of the last ten months and it got worse in october. Sales in the San Francisco bay area are down over 10 from a year ago and Southern California isnt much better. Pending sales down over 7 its low supply and high prices. Inventory at the lowest and thats when the realtors started tracking it and prices are heating up again especially on the low end. In fact, the bottom third of the Housing Market is seeing price gains at twice the pace as the top third. Thats according to zillo. More on that online, realty check. Cnbc. Com back to you. Coming up, the latest read on the economy and the beige book that is next it is beige, baby. Welcome back lets get a check on the markets and your money ahead of the Federal Reserves release of the monthly report on regional conditions, better known as the beige book the dow and the s p hitting record highs the s p has pulled back. What do you mean record highs, sullivan it was down. Earlier it was up and that was enough to make a record high the dow is up 0. 3 probable owe fast money 5 00 p. M. Eastern, the nasdaq seeing its biggest drop since august and Technology Semiconductor stocks in particular are down big. Your sector leaders overall, well, youve got telecom, financials, industrials, healthcare and consumer staples, they are up, not enough, but a lot. On the weak side we talked about technology and were seeing the s p 500 get hit and the microns of the world and we have the beige book lets go to Hampton Pearson in d. C. The Federal Reserve survey of Economic Conditions across the country over the last six weeks shows Economic Activity continuing to increase at a modest to moderate pace with a slight improvement in the outlook. All districts reported that Manufacturing Activity expanded during october and into midnovember with expectations, the trend would continue in most districts. Only philadelphia and st. Louis saw signs of a slowdown. Preholiday reports on consumer, retail and autos and the outlook was optimistic many districts highlighted growth in transportation, but the San Francisco district noted the California Wildfires temporarily reduced shipping volumes. Residential real estate activity is described as constrained with little growth or sales in construction, but nonresidential activity continues to show a slight growth turning now to the jobs picture. Employment Growth Continues and is described as modest to moderate with widespread reports of tightness in labor markets, the biggest restraint remains finding enough skilled workers, no real surprise, but the biggest wage increases are going to professional, technical and production positions that are hard to fill we do see a possible sign of inflation when it comes to what the fed survey is showing as far as prices. Most districts reporting price pressures with increases in both selling prices and input cost like Construction Materials on the rise in most regions of course, in particular for lumber and other materials needed for hurricane reconstruction, but other districts are also reporting higher costs tied to that increased Manufacturing Activity we spoke of earlier. Higher fuel costs also getting into the mix and many districts there are reports that yes, those slightly higher costs are being passed through to consumers especially in transportation and manufacturing. Finally, a few specific highlights, Dallas Business is mostly back to normal after Hurricane Harvey with the posthurricane surge in auto sales now receding, richmond, one of the regions where wages are rising due to tight labor markets, cleveland, the first hometown labor market there negatively being impacted by low inventory and riding building costs and rising home prices the next fomc meeting is in two weeks. Back to you. Thank you, Hampton Pearson. Lets bring in senior economics reporter Steve Liesman your take . I think its interesting that the beige book this month and last month has not picked up the stronger growth we have. We have a full percentage point extra out there, if you figure and still believe that the great colleague over here larry kudlow may not believe, but its general consensus that the underlying growth ratess 1. 9 and 1. 8. We did a 3. 3 upgraded and the cnbc rapid update is at 2. 7 and we did a 3 in the Second Quarter and thats better than modest to moderate i dont know why they are not picking that up. Usually theyre pretty good at that and sometimes on the forefront and its also a good place for the beige book to get an understanding of the mysteries out there because you get it from a real business level so the price pressures are something worth noting that hampton highlighted in the beige book, the idea that theyre growing price pressures out there and wages are still moderate and its not too much of a concern and janet yellen would certainly get access to the beige book and she did not make a big deal and inflation is set to be a mystery and john williams, earlier today and earlier this afternoon says he sees those things coming ultimately, this beige book is a little bit off of whats happening and i am very interested in the Economic Growth numbers that are up in that 2. 5 to 3 range. I think we may have had a step shift by maybe half a point out there thats worth thinking about that maybe were not in this, too. Maybe were in a 2. 5 world im monitoring it and im surprised its not being picked up in the beige book. Lets bring him in. Is the fed speaking too beigely . Great question. I love the hue to your question. Like reagan, he didnt like to talk in pastels i agree with that. Primary colors. I never pay inordinate attention to the beige book. Im very impressionistic i will agree i think there is an upshift in the economy. The report added 3. 3 for q3, right . And you had 3. 1 q2. Youre looking at atlanta gdp now is 3. 4 . The cnbc number. Youre not that far away. 2. 7, 2. 8 ill call it 3 you have big tax cuts coming and i just want to report there is going to be a tax cut. Ever since i went to that republican breakfast, and i felt it and theyre going to get it all done its not perfect i just want to review a couple of things that this is where the growth is going to come from its on the investment side and on the business side the personal side, not that much im okay with it just to get the business stuff in, but youve got basically, i think the Small Business controversy with ron johnson is basically settled the large sea corps are not going have a state and local Tax Deduction anymore so theyll be on the same footing as the passthroughs and youre going to get a 20 deduction off your income for the passthroughs and that gets the effective rate down to 30, maybe 28 to 30 and that satisfies ron johnson this trigger stuff is getting a lot of attention, senator corker i wouldnt pay much attention to it youve been through these triggers before and none have been actually exercised and theyre five or six years out. You can take them out later thats exactly right, by the way. In terms of the perception from businesses up front is it going to be perceived that these tax cuts are not permanent because of that trigger and so will that then change their behavior concerning the money that they say. The trouble is you dont know which taxes you might go after, thats the vagueness of it and youre right, it could cause uncertainty. If you know revenues are coming in short you assume the economy is below expectations. Why would you raise taxes thank you the provision that triggers lower tax rates and not higher tax rates. The one that hasnt been solved for investors particularly is this fifo stuff. You said to not worry about it. I know. So we should worry about it look i cant give any definitive information yes, we should worry about it. I know senator johnson is on it and hes very much opposed to it, but it hasnt been done yet. There is a managers amendment that comes in the next 24 to 48 hours before the floor vote, and i myself am making calls to senators to make sure its on their screen so that has not been done, youre right and that troubles me i was speaking to last night some people from the Investment Company institute and the etf trade group. There is a carveout, they say for etfs and mutual funds from that individual investors. But not its not for individual investors, but not for individual securities. Its not for individual securities and also not for individual investors that was my last understanding. The Investment Company institute is a powerful, wellheeled lobby. So they got their magic and they got their way and now we have to take care of the rest of everybody else theyre not going to get their way. Maybe i misunderstood what they were saying, but i thought they were saying that Mutual Fund Shares you could still do specific identification and shares and mutual funds. But what about the rest of us . Are you talking about investors selling their mutual funds yes yes. Oh, no, thats a different ball game. Yes thats a different ball game. In other words, this would apply to specific, individual stocks as opposed to shares. If im buying the same stocks sequentially over the space of three, four, five years and i want to liquidate some of my position for whatever reason. The first one. All of the way back. Which means you will have a bigger tax hike. Right and traditionally, Capital Gains taxes are, you know, perverse, although i love it you raise the Capital Gains tax rate you get lower revenues. You lower the tax rates you get lower revenues and these guys are falling into a stupid trap and many of us are on the phone just drawing your attention to it and let me add one thing here final point we have Steve Liesman, very important fed watch. Jpal, now im very interested because i may have jumped to too many conclusions about him his q and a showed several promising signs. Number one, he does not see full employment number two, he does not see evidence of overall inflation. Right. Or overheating in the economy. I love that. And finally, badgered which is a polite word by senator elizabeth warren, he said no we dont need any more financial regulations and in fact, we might have to push back on some of the financial regulations, so hes implying that we have room for the tax cuts were not going to worry about inflation right now. The fed is going to move cautiously, and i know theyre going to hike in december, but basically, this is a very good signal in my humble opinion that maybe i underestimated mr. Powell, okay and the tax cuts on the supply side generate Growth Without inflation. If powell gets that its a home run. I will quickly conclude the conversation, the next time i have a sick day, larry, you come in and be the economics reporter because its exactly my opinion. Youre right. Weve been very close. We have to leave it there thanks i appreciate it. Senior, senior economics reporter truly senior. Not that senior colorful, not beige the markets, the dow and the s p 500 earlier set record highs again, but the nasdaq seeing its biggest drop in three months today lower by more than 1 . Is that a red flag is it a sign of more weakness to come in among the broader markets jason ware is with aci financial and james norman is with part of legg mason. Good to have you here. What do you make of this diversion of what we call the industrial average even though its got a lot of tech in it, but also the tech stocks which have been the market leaders james, is this a signal that well see broader weakness in the markets in days to come or is this just a sector rotation i think its both things. First of all, i think it is a sector rotation, but it also responds to the warning sign weve seen in the market which is a lot of gains in the s p 500 have been very concentrated. Over 50 of the returns have been driven by Technology Stocks which have been up over 40 . So when you see that type of really strong performance, people will rotate out into other areas that perhaps have better opportunities, but it is a warning sign whenever you have the concentrated markets and valuations are stretched like they have in this low volatility, people signals that they might be nervous. I heard Something Interesting from jeremy segal who was up earlier in the Halftime Report he thought technology was weak because a lot of those investors are coincident with bitcoin buyers and maybe theyre selling tech to buy bitcoin. What do you think of that . I heard the interview and i have a lot of professor for professor segal, but there may be that at the margin and i think the Bigger Picture here is we have semiconductors getting hammered and this is a sub group within technology that has outperformed the outperformed the Broader Technology Sector and that sparked a broader rotation day in technology and were seeing the money showing up in other beatendown stocks look at macys, nordstrom, look at kohls and target were seeing 6 , 7 move in those stocks and more valueoriented sectors like financials and while there is some truth and theres been a heck of a run in bitcoin this fall, it is a classical rotation. I agree with you. These stocks, lets not forget that some of the stocks that are down big and they are have doubled this year. Thats right. At some point you cant be that greedy right lets talk about where to put the money. Are you a believer that retail we did a segment in july about retail bottoming out retail is up 13 since then. Are you a believer in retail as a comeback story as a broad narrative, no. I think there are too many things happening with ecommerce and amazon eating so much of that space i think that is a real secular trend and thats a big threat to the average department store, lets say. I think theyre getting hit from other sides like ulta beauty and sephora with regard to cosmetic counters t. J. Maxx is taking share. There are spots in retail that investors can look to and home depot is an example of a stock thats been doing fantastic and its benefitting from other elements that are tailwinds as opposed to headwinds and you can look at certain spots and find opportunities. We talk a lot about north korea and Interest Rates and the risk to the market is the biggest risk to the market that so much of the gains have been in so few stocks and so few stocks dominate the big etfs i definitely think thats one of the big risks and in addition to that there are a lot of things out there that people are not paying as much attention to. One is december 8th, we have a very important date. We could have a Government Shutdown and there is contention between democrats and republicans and that could cause sentiment to be negative another one that we see is if tax reform doesnt get passed and it looks positive at the moment and that would surprise people and thats possible thirdly is trade policy. Nafta discussions are not going well and if people in 2018 feel these concerns about trade policy, thats something that could be a negative sentiment effect on the market overall okay. All possible things we have to watch for. Gentlemen, thanks so much. Jason and james thank you. Heres whats coming up on power lunch. Straight ahead the coo of volkswagen north america talks about the latest models of the auto show. The president of Discovery Communications on delivering content in a changing media landscape, plus an exclusive interview on Royal Dutch Shell all ofhat tand much more coming up on power lunch. Automakers in los angeles for the auto show. That would be where the l. A. Auto show would be, in los angeles. Theyre showing us the late of the models and give us a look at the future of the Transportation Industry phil lebeau is there with a first on cnbc interview with the ceo of volkswagen of north america. Phil thank you very much, tyler. Its a big day for volkswagen. Hinrich woebcken, the ceo of volkswagen, and tell us about the i. D. Cross which you just unveiled today this is coming to the country a couple of years from now welcome, phil we decided and announced yesterday to the world media the i. D. Cross, a beautiful suv full electric car with interior dimensions of a midsize suv, actually it will come to the market in 2020. So youve got that. Over to the side we cant really see it is the i. D. Bus, basically the microbus reimagined youre making a real push into the allelectric market, arent you . Absolutely. We believe electric mobility is the future globally. Also here in this country, we announced back in august in pebble beach that the microbus will come back to the country and, of course, we know many show cars before we excited the audience that everybody was begging us, when do you bring back the microbus. Its coming and its arriving in a complete family approach and fullelectric cars. Have you waited too long . Because the argument here in the United States is you and other automakers have waited too long to say were going to have fully electric models coming and it wont be until 2020, 2021 and in the meantime, tesla is gaining first mover advantage in this market no, i think its exactly the opposite we are in a Perfect Timing it was electric infrastructure, range and cost, and all of these things have to come together and in terms of the electric infrastructure by 2020 and 2021 the infrastructure will be much more developed in terms of range this beautiful i. D. Cross will have a range of 300 miles u. S. Cycle and in terms of cost they will come down and we announced yesterday that this interior midsize suv will have a similar price position as a conventional midsize suv so the timing for a volume approach is perfect in this that regard and we believe we bring or we need to bring electric mobility for millions, not just for millionaires and there is your shot at tesla. Is the volkswagen brand back . In other words, its been damaged so badly over the last couple of years. You took over north america in the eye of the storm do you feel the worst has happened and the brand now has a relatively clean slate with consumers. We are absolutely we are back, yes. We are coming back, but on the same time we are making sure that we there is zero arrogance. There is a lot to do still to regain fully trust with customers with our dealers, with the audience and we are working hard on this, and the best proof point for this is, of course, to deliver exciting new products. What you see here on the electric push is after 2020, but before that, we are exciting the audience with exciting new products and the atlas, the midsize suv which arrived just in the middle of the year and later in the year the tiguan with the extended base, our statements is to listen to american customers and american needs to make sure we bring products to the market that fit exactly to the market. Hinrich woebcken, the ceo of volkswagen north america two electric models coming in the next few years that will change those with the ev. A pretty coollooking car, by the way. I forgot to mention sales are up. And sales are up. Headlines, thousands of American Airlines flights for december do not have pilots on the schedule and switch from cars to planes in your brain what is American Airlines saying right American Airlines is saying its moving quick to make sure that all of those flights that are scheduled will have pilots so that means they will have reserve pilots who will be taking some of those flights and the airline is offering its pilots up to 150 of their hourly pay which is the maximum allowed under the pilot contract to sign up, to take some of these flights. So it will cost the airline. Are we likely to see thousands of Flights Canceled because they dont have pilots . I dont think so theyll find the pilots, but it will cost american phil, thank you phil lebeau from the l. A. Auto show. You bet we do want to bring our attention to bitcoin remember it had rallied above 11,000 earlier this morning and now we are below 10,000 once again. 9870 is your level and basically flat here. Straight ahead, Discovery Communications, david zaslov joining us to discuss the state of media top analysts on trucks, topping and tax rermfo its street talk and its two minutes away on power lunch. Most etfs only track a benchmark. 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. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Our dive into the calls of the day or at least the ones that we think are key. Which is very important. Exactly first stock, qualcomm, downgrading the analyst down side especially if broadcom withdraws the acquisition offer. Its possible that broadcom will make a second bid, but they expect negotiations will be protracted priss target here 75. Second stock is navistar. Susquehanna has a positive rating and a 50 target and the truck maker is exiting the darkness by the failed engine, end quote, and the Partnership Gives the immediate relief and longterm potential and the analyst does acknowledge Customer Trust issues like vw will take longer to resolve and the 50 target is just under 30 upside i promise i will never have a certs ahead of a segment. A half of a certs is bouncing along my lung. I didnt know if i would have to do the heimlich. Im glad you would do that. Into a buy, was there a question, upgrade inside from a buy to question, and the stocks recent pullback which would make shares more attractive and the International Expansion through franchisees by buying out rival pizza chains and converting it to the target and thats an upside from current prices the Byline Bancorp. By is the ticker the chicagobased bank, upgraded to an outperform and they like a recent merger and they think it will boost the commercial lending team and the profitability should be improved and more deals for byline could be on the way. The analyst also thinks tax reform could be a catalyst and they boost their estimates and boost their target price to 28, and Byline Bancorp getting an upgrade to kbw and promising if the occasion ever came up. Youre welcome in advance hope it doesnt, but thank you. Lets get to the sue herera with the cnbc headlines. Heres whats happening at this hour, everyone. White House Press Secretary Sarah Sanders defending president for retweeting videos from a farright British Group that purportedly shows violence committed by muslims im not talking about the nature of the video. I think youre focusing on the wrong thing. The threat is real and thats what the president is talking about is the need for national security, the need for military spending and those are very real things theres nothing fake about that. Gymnastics doctor larry nassar pleading guilty to criminal firstdegree criminal conduct with children under age season six other charges will reduced and four more dropped. Nassar faces a minimum of 25 years in prison. Ivanka trump visiting an historic 16th century fort in southern india, capping her twoday visit to the country she received a warm welcome indias hightech hub receiving all of the trappings of a state guest. That is the news update this hour ty, ill send it back to you thank you very much. The oil market closing for the day. Lets go to jackie deat the cnbc desk. Ahead of tomorrows crucial opec meeting will they or wont they extend the production cut. Its been priced in you can see prices down more than 1 1 4 percent today analysts are telling me theres not much more upside here and you might see the sell the fact kind of reaction the inventory numbers are more than 3 million barrel drop in crude by a similar build in gasoline and u. S. Production is climbing yet another week to another high and those numbers will be important again. Session high, 58. 38 session low, 56. 75. Back to you. Jackie, thank you. Media, money and mergers our exclusive interview with Discovery Communications Ceo David Zaslav another exclusive this time with the ceo of shell what they just did which are making should investors very hpyap power lunch back in two. Well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. Bitcoin continuing to tumble at this hour remember, it had rallied to over 11,000 earlier this morning its now at about 9640. On some exchanges its at 9100 which would imply about an 18 decline from peak to trough and todays session depends on which exchange youre using, as well, but this is something worth watching here. Volatility, indeed. Time to talk media. Julia boorstin is at ignition conference and shes with Discovery Communications president and Ceo David Zaslav julia . Thanks so much. Dave zaslav of Discovery Communications, thank you for talking to me. Theres m and a and so much happening and the changing landscape. First i want to talk about what happened with matt lauer and the series of Sexual Harassment claims and allegations and firings and it seems like every week there is another big name thats fired how do you address these concerns at your own company at least for us, first, i spent 18 years at nbc, a great company. A great friend to matt, and its just a very sad situation. Its just a sad situation. For us, weve always had at discovery for over a decade zero tolerance, and i think its not just about Sexual Harassment i think its about a culture of letting people know that people need to be respected and we are a Creative Company and so people come to work and they need to feel safe and comfortable. I think that starts with whether its bullying or whether its just treating people respectfully, and in terms of Sexual Harassment we have a zero tolerance policy if there is an issue, youre gone and thats been the policy, and i think its worked very well for us. I think its one of the reasons why people want to come work for us and not because of the Sexual Harassment issue, but we really try and cultivate an environment where people feel comfortable and respected so they can do their best work. So Many Companies have been affected by this issue do you think there will be a change across the Media Industry or across business in general as a result of all of these bigname firings i hope it will be a change. I think it is a moment and its a moment thats very important and it goes to the basic issue of every person they deserve to have a chance to have their best life, and its not a question of a business issue that people are more effective and more productive when theyre treated respectfully and they feel comfortable its a societal issue that every person should have a chance to be to live their best life and not to have anybody infringe on them in a personal way and so its a basic its a very basic, societal issue and the fact that its been so prevalent represents a real challenge for us, and i think its a moment where we all have to shift its very clear whats okay and whats not okay. I think there will be more companies that have zero tolerance and there will be a lot of people that will think twice before they say or do something which is a very good thing. Its very important. Shifting gears over to the other big story in the media space which is m and a we just heard murdoch deflect questions about whether or not he was interested in selling parts of his company, disney or comcast. These merger rumors have been flying around. Youre in the midst of buying scripts. Do you need to have more to compete . The media aspect is two baskets. Basket number one is scripted content and scripted could be series or movies, and that area has become extremely competitive, and there will probably be more consolidation in that area because there used to be 60 scripted series a year and now theres 300. You have netflix spending 8 billion. You have amazon spending 6 billion. Hbo is spending more money so the whole ecosystem of who gets access to the best talent, the best scripts, the best directors has been jumbled up and if youre on that side of the Media Business its its its getting shaken up and youre going to see, there will probably be more consolidation and what happens and how it rationalizes is remains to be seen for us, were on the other side. We do nonfiction content that we aggregate for super fans whether its our own, africanamerican women, science, crime with i. D. , cars with velocity, animal planet. So right up our alley is scripts and so well be very strong in nonfiction. Our cost of content is about 10 of what the cost of content is with scripted, and we think we can compete pretty effectively with that, but i think one of the things thats misunderstood about our scripts deal is that in many ways were buying i. P. And cable channels, but the other thing were buying is Free Cash Flow. So we will we will be a Free Cash Flow machine and it will generate a lot of security for us over the next couple of years and flexibility to buy more things or to buy back a lot more of our stock over time. In terms of vertical integration what is the at t acquisition of time warner do you think the doj win or will at t win and get this deal through . Im on the side lines on that what i can say, the real winner of the fact is that there is this significant consolidation is companies that earn great content. We look at at t wanting to buy time warner and we say kaching. Thats a real opportunity because around the world these the players that are in the pipe space, mobile players, Cable Operators and satellite providers. More and more they need great content to differentiate. Does that mean youd be interested in selling to one of them its possible its possible, but whats more likely is the reason that we bought euro sport, the reason why we bought the olympics and the reason were buying scripts is all of that content we own on every platform and so the same way that randall wants to own time warner, you know, deutsche telekom, vodafone, b. T. , verizon, we think all of the distributors will want more i. P. And more content and well be able to open up our coat and say heres the stuff that we got just a final question cord cutting has put a lot of pressure on your stock despite being up today its still down 30 over the past 12 months how much are you counting on skinny bundles in the new direct and consumer bundle that doesnt include sports to change that equation and save your cord cutting situation . First, 65 or 60 of our company in revenue is outside the u. S. , and this whole issue of skinny bundles doesnt affect us because were on every skinny bundle and virtually everywhere else, but the u. S. We Just Launched filo which is a skinny bundle without sports i think you will see more distributors launching bundles over the top and directly to consumers without sports this is the only market in the world where you have to buy a fully packed bundle that includes Regional Sports and sports and retrans, and so i think that will happen, but even if it doesnt, the amount of Free Cash Flow that were generating and well be able to generate through scripts will keep us a Healthy Company and bring us optionality for the next few years david zaslav, ceo of discovery, thanks for joining us today. Guys, back over to you thanks for bringing that to us, julia. Straight ahead, another exclusive interview, this time in the energy space. The shell Ceo Ben Van Beurden, hear what he has to say about the future oil prices and demand anwhd y he can go a little green. Stay with us for that. Please investors the company saying late yesterday that it will go back to an allCash Dividend, also it raised its Free Cash Flow guidance we sat down with the Ceo Ben Van Beurden to discuss why shell made this move and more. We have been on a longterm financial transformation with the company, and we have a few messages for investors yesterday. First of all, the outlook we had for the end of the decade is just a little bit better than we said last year so our Free Cash Flow will go from 20 to 25, to 25 to 30 a year by the end of the decade. Yes, we have also confidence in the nearterm and enough to turn up the dividend and to start a longrange buyback in due course so these were two of the key messages of confidence for the near end and shorter term, but for the longer term, i am very confident that our company is there for the longterm and were a Resilient Company for the footprint of the Company Going forward. Well get to that in a second and going back to the cash, should we read that as shell believes that oil is going to be above 50 or 55 or 60 for many years to come . Because otherwise how do you generate the Free Cash Flow . If you run a company as large as ours with such a high correlation with the oil price, you cannot have a strategy that only works for one oil price so we have to take into account a range of oil prices, and i am confident enough that even with the volatile they we will still see in oil prices, we can afford a full Cash Dividend from now on and thats why we turned it off. Lets talk about debt some analysts will say that your net debt is too high and you have been a seller of assets and now youre committing cash to a dividend, do you have to sell assets to pay down debt . That liberated quite a bit of cash we said we would do 30 billion in 16, 17 and 18 and were almost done and we will continue to upgrade our portfolio and continue to sell assets and think about 5 billion to 10 billion a year for the years 19 and 20 and that will help, of course, with paying down debt, but our debt has come down quite a bit. We now have a very clear line of sight which is approximately roughly for a aa credit rate coming is what we are after. If oil were to go down again, how secure would the Cash Dividend be . Is there a scenario that you would go back to the socalled script dividend . We dont plan for that. We will have to take into account, will there be bumps in the road yes, there will be, but how bad is it to have to flip back to the script dividend and we have had quite a few bumps in the road so the intention of we turn it off and it stays off of course, if oil prices come down, we will have to do other things we will have to work harder on constraining our capital expense and work harder on taking our operating costs down and things we do anyway, but i think we have enough tools to lift within the range of volatility that we expect. Opec extending production cuts, i rashraq, 4. 5 to 5 milli barrels a day depending on who you believe, do you think theyll remain relatively stable think there will be a considerable degree of volatility you have to believe that. I think the fundamentals may be telling you that indeed the market tightening again, demand growing quite profoundly at the moment and of course, investment levels have come down quite a bit over the last few years and in the long run, yeah, there will be a tightening of the market, probably supporting higher prices, but in the shorter term, things are driven by sentiment very much and what is happening tomorrow with opec and whats happening with stocks and whats happening in the middle east, et cetera and that actually dominates the oil price much more. So do you see demand Strong Enough to withstand higher production that we may have. In the long run, absolutely 1. 7 and 1. 8 Million Barrels a day and that is quite strong its much faster, than for instance, shale in the u. S. Will have to respond and we will have to rely on growth, and not opec in order to fill the gap how does an oil company cut its Carbon Footprint you know there will be skeptics to which you announced. Of course, let me first of all say we are not just an oil company. We have a guest and oil company and on top of it, we are a much Broader Energy company and we are in renewables and we are in petrochemicals, et cetera. So our view is if Society Needs to tackle the duel challenge of Climate Change and also accommodating higher demand for energy as, of course, the energy core needs to get access to energy, as well, we have to reduce the Carbon Footprint of the Energy System and society to a netzero level. That means that by 2050 we have to half the Carbon Footprint. How its going to be a change of measures, some of it will be improved efficiency. Some of it will be more biofuels in the mix and more Renewable Power in the mix and major base solutions, et cetera and we believe we need to match that societal expiration if you want to be a part of that solution and thats the commitment we made our exclusive interview with shell Ceo Ben Van Beurden. Guy, the way they were paying that dividend, we dont have it here its a script dividend, you get a piece of stock as opposed to cash i dont know about you all, but i prefer cash. For a dividend, anyway big move. Thanks, invidia is off the lows of the day. 191 per share officially entering correction territory however earlier today. Ca this a buying opportunity or their in the coal mine. Well bring you that ahead straight ahead on power lunch. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. We need to be ready for my names Scott Strenfel and r im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Semiconductor stocks selling off invidia getting crushed today. Now flirting with correction territory down 10 from the top. Lets bring in trading nation team today and that is gina and todd. Todd, ill start with you and the charts this is a momentumtype stock. The charts really matter, we know its been a weak lately sight of a bottom or turn back higher. Sure, brian, if we start by getting at the big perspective getting back to when this was first a story stock, 15 years ago, 2002, weve established a nice uptrend channel what youve done is sourced a support line at the lower side of that chart. Made a parallel line, and then basically looking for upside resistance the good news is, resistance doesnt come until about 250. Technically, not overbought yet. As we shift in here over the last year and a half, weve seen a period of corrections, a series of corrections and just to get context as to how big this is. Weve seen three significant since september 2050 21 , and then 18 , so you can see the corrections have gotten incrementally smaller. Now, what we would have to sea sooe is a greater than 18 or 2 correction. Yep that would bring you down to about 179 bucks, that would bring the series of lower corrections. So until we start breaking 180 bucks, this is very much to be expected and possibly buying opportunity. Watching that gina sanchez, if you own it, one of the most widely traded stocks out there. So if you look at them, theyve had nine consecutive quarters of positive beats on their earnings theyve had spectacular earnings, if you look at the underlying segments, theres reason to believe the demand should continue. Im going to put two notes of caution on that, the sfirs invidia has seen a rise in the use for crib to currencies its been a bit play there is concern that that is coming to an end and the second note of caution i would put is seeing significant Insider Selling on them at particularly the ceo who rarely sells massive amounts of shares. I do think that is an important element to watch when you see management selling at these kinds of levels they are at a high they are at a high valuation, you might want to pay attention. All right and we certainly are thank you both very much go to tradingnation. Cnbc. Com for more, check meez, next let out your inner child at the lexus december to remember sales event. Lease the 2018 es 350 for 319 a month for 36 months. Experience amazing at your lexus dealer. 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 theyre used by no one else but you. It. Is. The cloud. The ibm cloud. The cloud thats designed for your data. Ai ready. Secure to the core. The ibm cloud is the cloud for business. Yours. Check please just as we are getting used to saying big coin 11,000. Were seeing a real reversal in bitcoin. 93. 50, this is about a 15 decline from the top here. We should note that coinbased has been experiencing alltime high traffic and according to brian kelly who runs the hedge fund essentially hes saying that could have impact here. Buyers are taking out of the market sellers are still selling, but this is the dynamic here and the bitcoin world. Another day, another person goes down for Sexual Harassment, allegations of improper sexual behavior wondering are we going to see any women who are accused of Sexual Harassment as we see this process unfold . I think the bet, my bet would be yes absolutely. And sooner rather than later. I always think of the advice i give to my son, dont write anything in a text or email that you wouldnt to want see on the front page of the wall street journal. I think in these cases, behavior has to change and men need to think dont do or say anything that you wouldnt do or say in front of your mother good rule lets look forward to tomorrow big lineup, huge lineup, five ceos from amd, Huntington Bank shares and pharmaceuticals which has been red hot, melissa. Thank you for watching power lunch. Closing bell starts right now. Hello, everybody, and welcome to the closing bell today im kelly evans. And im bill griffith, is the growth trade over . The nasdaqs getting hit hard today with the fang stocks and other Technology Names significantly underperformancing the market even as the dow moves higher the dow was up 90 points, the nasdaq down 90 points, thats the kind of diversions were seeing well see whats behind the move