Transcripts For CNBC Power Lunch 20180110

You picture that in power lunch starts right now. S. Hey, everybody welcome to power lunch for a wednesday. Thanks for joining us. Im tyler mathisen, stocks on track for the first down day maybe for 2018, and you want to be volatility you wont see it there look at those moves. The dow just peeking into positive territory by 0. 01 of a , led by the airlines, american, united, delta all flying a new tenmonth high and breaking news on the tenyear auction results Just Moments Away were above 2. 5 Home Construction stocks tracking for their worst day, folks, in more than a month. Morgan i am Morgan Brennan are Rising Interest Rates a threat to this rally we have all the angles covered Rick Santelli in chicago watching an auction of tenyear notes. Steve liesman here on set on the rapidly Rising Interest Rates, but we begin this hour with bob pisani where stocks are rebounding bob, whats going on slowly but surely, about you it started out rather rocky. Preopen, the futures contract, where about 35k trrp some reports that china officials may consider slowing or halting their purchase we dropped seven or eight points and slowly clawing our way back, and none of that is confirmed, throw in gundlachs comments yesterday, grosss comments, take a look at bond proxies. Utilities are at tenmonth lows, reits at sixmonth lows, so that whole complex is under pressure. Higher rates, of course, yields up thats helping the banks tenyear yields close to tenmonth highs, so most of these banks are at the highest levels since 2008. Transports, you heard earlier from tyler, united and american raised guidance helping the airlines remember, railroads have been the real performers this month talk about sectoro tags, tech has been under pressure, and remains under pressure so over in taiwan and over in korea, we saw some of the big names, these have been weak for several days samsung had disappointing commentary yesterday, its down again. All the big semiconnector names are again weak this group really sort of topped out back in november, and having been doing much since then. Thank you, bob. See you next hour. What does it mean . Steve liesman nose, thats why hes here. A lot of what has happened is putting the yield curve, different yields on the spectrum, back to where it was, its not breaking new ground the twoyear has rising steadily along with fed rate hikes, but the tenyear has yawned under the last couple weeks. The tenyear yield is caught up with where the twoyear was, you can see one key elements is the spread between the two and the tenyear has widened again after months and months of worrying flatteni flattening a series of events, china reported this morning to be rethinking allocation in treasuries better Growth Numbers have suggested to a while that long yield numbers should be higher, and inflation along with more definite set spending is expected, so this is a modest problem for companies out there that borrow. Corporate bond yields have risen, so some of the tax cut benefits could be reduced a bit by higher rates. This solves, however, a problem for the Federal Reserve. Some officials were starting to get worried that rates were failing to respond, and reducing the Balance Sheet. A higher long yield, a bit of comfort, that its not out of the game here, that shortterm rates are having a broader effect. The people you are talking to, are you surprised at this rise in rates . I isle tell you what happened this time last year, we had a Company Dinner and i was forced to give my yield i wasnt invited. Tyler was there. A bunch of ceos i gave a 3 yield on the tenyear as follows. I thought the fed would hike three times, which it did. 2 , which it did, and i thought that the tenyear would be 100 basis points over that. Are you bragging right now or saying you werent caught offguard impltsds first, im at least ten days late, but i think it makes sense if youre going to have better growth, better deficit spending, and a tenyear approaching 3 is not out of line. And tenyear notes are up for auction. Rick santelli is tracking that rick, what are you seeing . Ill tell you what. Before i give you my grade, everybodys expecting a crumby auction. Whos going to want to buy it . The whole world seems to have gotten bearish overnight well, somebodys buying it, because this was a stellar auction. Second reopening, original issuance was november 8th of last year, but i gave it an a for demand 2. 579, risk under 2. 58, and 2. 58 was the offered side on the oneissue market no pricing problem there 2. 69 bid to cover, 2. 69 times many people interested in securities available, best since june of 2016 indirect, 71. 4, best since august of 16. The only thing that was average was 6. 5 direct is a little light, 7 tenauction average, primarying only take 22 , and granted its the second reopening, but this was a solid auction following a solid threeyear yesterday whats left . A dozen 30year bonds. Tomorrow as well totalling 56 billion in supply. Back to you. All right mr. Santelli, thanks very much stocks may be taking a bit of a pause here, but the oracle of omaha told becky quick this morning do not give up on this recordbreaking rally just yet. What has hat in the 345rk9 is very sensible. Now, in addition i have the tax act which is a huge factor in valuation. Meanwhile, bill miller considered one of the best investors ever after beating the market for 15 years in a row at legg mason weighed in on whether we would so another massive move higher. I think its still to come if we get it, and it will be driven by tenyear yields those go through 260, head towards 3, i think we could have the meltup we had in 2013 where the market was up 30 . If we get it. But not everyone is on board billionaire investor jeff gundlach, and its about 120 billion, says the s p may go up is a the first part of the year, but i believe when it falls, it will wipe out the entire gain of the first part of the year with a negative sign in front of it. So who is right . And where is the recordbreaking rally going from here . Joining us now is david s peismt eaka, and steve masaka mr. Speakesa, what is the state of our union in the stock market. Well, thank you, tyler, i appreciate the introduction. I would say regardless the three experts that you cited a moment ago, that we be most closely aligned where mr. Buffett, in that we think the rally will continue however we think it would be with more volatility what we have seen has been unprecedented. Think about it people were worried the market might open up down 50 basis points thats crazy we have hit the longest period of time ever for a number of market without a 5 correction 14 straight months of positive equity market returns. We like the a market, but we absolutely think there will be more volatility, and we think thats healthy were going from hyperhyper to just hyper. Right around 2 1 2, 309year is below three. Thats just in america, and the fed is tightening, but its the fourth largest Balance Sheet on the planet china is tightening swan, but the b. O. G. And ecb continue to be aggressive, and i dont think they have shinzo abe was quick to the mike saying no, he wants aggressive policy, and everyone is worried that draghi will be placed by a german, but it will continue to push for lower rates. After brexit, i think the ecb will be leery about creating distance between themselves and than say illy, spain or portugal. We have qt, and for the first time in a decade, the twoyear treasury yield is now above the s p 500 dividend yield. Dont you fear that rising rates and, you know, just a bit more yield on some of these bonds is going to prove competition and headwind for equities . Theres no question the key factor in driving this market last year was low inflation and low rates. That goldilocks scenario we saw. So Central Bank Policy Going Forward, which will drive Interest Rates higher, tack larry if inflation is faster than expected, will prove to be headwind taking away one of the legs of those stools that has driven the market if we get faster growth than expected that could offset some of that, but again the biggest factor in driving the market last year was low rates and low inflation. To the extent they pick up, that is going to cause some angst. So, steve, lets talk about some of the crosscurrents that may play this year weve been saying on our desk here the past couple days we think 2018 is likely to be a more interesting year than 2017. Thats saying a lot, because not only do you have not just the prospect of a new tax law, you have the reality of one, you have lots of profit questions to ask and get answered youve got an economy doing well, but now were beginning to see some of the maybe the green shoots of inflation coming on the scene. Will this by a trickier year for investors than 2017 was . Well, you have to say yes, because 2017, low volatility, straitup market, will that continue again in 18 . Its hard to say that will be the case, but once again, i would say that Monetary Policy is so aggressive, even if it backs off a bit, it will continue to be good for the stock market and the stock market, you know, maybe will have a 20 rally, but i certainly dont see a significant decline in the market unless something changes dramatically now you have a very aggressive fiscal policy as well. Not only do i have the tax bill, but regulations being torn up right and left so you just have to think that thats going to be a Good Environment for stock. Jell, thank you President Trump in a Cabinet Meeting a short time ago eamon javers is live at the white house. Reporter the topic of the meeting was supposed to be infrastructure, but the president spent the top of it talking about the accomplishments from the Previous Year and the astonishing meeting from yesterday, a 55minute livefire negotiations with republicans and democrats in the room over immigration and where that issue will go this year. The president very pleased with the Media Coverage of that, but not pleased with some of the other Media Coverage hes getting, specifically apparently a reference to Michael Wolffs new book, which got so much attention appeared caused the ouster of steve bannon from the trump camp heres what he said in the wake of that book. Our current libel laws are a sham, a disgrace and do not represent American Values or fairness well take a strong look at that you cant say things that are knowingly false, we want fairness, and be able to smile as money pours into your bank account. Were going to take a very, very strong look at that. Reporter so the president here making the case that he doesnt like people saying things that are knowingly false and she shouldnt be able to profit from that well see the president later on today. He has a briefing with the Prime Minister of norway coming up well see a press conference between the two of them, called a two and two. Both leaders will take two questions from their own domestics press corps. Well see if the president talks about the Upcoming Trip to davos, where the populist president will speaking with the globalist elite. Well see if he gives us any hint of what hes going to tell them when he goss to davos next month. Eamon javers, thank you very much. Its usually nice to get a letter in the mail maybe its not nice when its from a senator demanding answers about your company the latest pressure on tim cook, ahead. The theme has been to grow manufacturing in america well tell you where toyota and mazda have found a new sweet home theyre coming to america nobodys putting their money into equities. Theyre not investing in commodities or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. Phil lebeau is live in chicago with more on the story. Well have the formal announcement a little later on this afternoon sources tell us that toyota and mazda have agreed to open up a final Assembly Plant in huntsville, alabama. It will create about 4,000 jobs. Once its build, probably about 2021, it will have the capacity to manufacture about 300,000 vehicles a year, half of those being the toyota corolla, and then a new suv for mazda for toyota, the corolla at this plant is a crucial vehicle its the bestselling vehicle worldwide. Among its best here in the United States, and in terms of auto production in the u. S. , this will move alabama ahead of tennessee, which its currently tied for fifth place in terms of states that manufacture the most vehicles, and depending on what happens with this market over the next five years, you could see it eventually pass up kentucky toyota has said the plant will open in 2021, the companys fifth final Assembly Plant well be talking with the head toyota america, jim lentz. A question well be asking, remember it was just a year ago that the president was targeting toyota saying, hey, why are you building vehicles in mexico, when you were be building here in the United States its been a rather quick move by toyota to say, yeah, a fifth Assembly Plant in the u. S. Guys, back to you. Huntsville known as aerospace, thats why they call it the rocket city any reason why they choose huntsville its not just aerospace as youre familiar with that area, huntsville has a lot of the highertechnology, if you will, that Knowledge Base for electric vehicles, for future generation Transportation Systems. Thats what toyota will be tapping into, because while theyre building the corolla there, theyre also going to be focusing on electric vehicles and future Transportation Systems at this plant as well. Huntsville is a logical location for that. Almost almost also has nick saban, right you have a big man crush. Apple under fire now one u. S. Senator wants to know whether apple is designing phones to become obsolete. You just have to keep buying new ones. Plus one of the biggest stars pranking a rookie. You have to see this video we will be right back. barry murrey when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. We call that the golden hour. Evaluating patients remotely is where i think we have a potential to make a difference. barry murrey we would save a lot of lives if we could bring the doctor to the patient. Verizon is racing to build the first and most powerful 5g network that will enable things like precision robotic surgery from thousands of miles away. As we get faster wireless connections, itll be possible to be able to operate on a patient in a way that was just not possible before. When i move my hand, the robot on the other side will mimic the movement, with almost no delay. Who knew a scalpel could work thousands of miles away . 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You know your family. We know Senior Living. A place for mom. You know your family. We know Senior Living. Together well make the right choice. But prevagen helps your brain with an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Apple facing more heat today over prone problems with older i phones, senator thune writing tim cook a letter. The heart of the issue is planned objects lessens. Is apple designing phones so you are inclined to buy a new one as they get older josh lipton joins us with more. Senator thune wondering whether apple has been as forth coming as it could have been that introduced software that would slow i phones with older declining batteries. Part of the thing we want to get at is the transparency issue. If they deny theyre engaging in planned objects l ene ene planened senator thune telling c increases he would call a hearing and in his words elevate this further senator thune want to know if they have tracked complaints about processing performance and if the iphone maker has, should now get some kind of rebate. For its part, remember apple flatout denies this charge, saying first and foremost, we have never and would never do anything to intentionally shorten the life of any apple product, or degrade the User Experience to drive customer upgrades our goal has always been to create products that our customers love and making iphones last as long as possible is an important part of that still apple creating criticism in france, the Prosecutors Office has apparently opened up an investigation guys, back to you. This is certainly something my family has experienced. My wifes iphone 6 started slowing and slowing. She was certain it had to do with updates she loaded onto that phone that were probably more inclined to service the iphone 8 or iphone x or whatever it is, and that was degrading the performance. Very frustrating she talked with apple. They did what they could to help her, but that was the suspicion. I got rid of mine after six weeks, the 6, and went to the 8. It was before this story came out. The phone was so slow, when i typed you could see the letters come up one by one it was a good paperweight. I just dont do the updates i push them off as long as you can. I think thats right. Tips from brennan. Well, anyway. Thank you, josh lipton, out in san francisco. Check out all the attention, industrial stocks also did nice. Up 22 over the past year. Can the rally continue this year l lk to an industrials pull, when power lunch returns. Not just being in the military, but at home. She thinks shes the boss. She only had me by one grade. We bought our first home together in 2010. His family had used another insurance product but i was like well ive had usaa for a while, why dont we call and check the rates . It was an instant savings and i shouldve changed a long time ago. Theres no point in looking elsewhere really. Were the tenneys and were usaa members for life. Usaa. Get your insurance quote today. Hi, everybody. Im sue herera heres your cnbc news update darrell issa of california is announcing he will not seek reelection after serving his ninth term in congress it continues a string of lawmakers who have decided to retire rather than take on what would be a difficult reelection battle ohios efforts to purge voters who havent voted in a while is being heard in supreme court. Its one of the few states targeting inactive voters. Antiausterity voters in greece reaching the entrance of the Prime Ministers residence the vote is due tore voted on tomorrow. The duchess of cambridge spending time with a group of children as she visited an Elementary School in west london she did some artwork with the kids and met with officials after touring the school that is the news update this hour brian, i will send it back to you. Lets get a chirac on the markets. Stocks trying to avoid ending on the first down day of the year. Get this, the dow down nearly 130 points earlier today, but jpmorgan and, yeah, ge trying to pull us up its about the bond markets today, yields everywhere are soaring. Rick santelli giving tof a great of tyler. A decision on whether to impose tariffs on foreign steel could be coming in the next week Kayla Tausche has the latest on what the administration might be do january represents the culmination of this ninemonth study of whether overproduction of both steel and limb news primarilily Stateowned Enterprises bill National Security commerce secretary wilbur ross must submit his findings by this coming monday and to the aluminum industry by following week industry observers expect the president to take strong action pointing to the renewed criticism of china after his visit there, and last months that strategy which described china as a dangerous competitor. Sources say any tariffs could be limited to exclude allies or may be made temporary to stem fallout beyond china and russia. Century aluminum and its peers have expressed a price they say will protect u. S. Companies from foreign competitors in the next downturn. Very volume tiff and will go down again, especially if theres no action here the last downtown, 100 of the u. S. Industry was slated for closure. Its not a question of if, but when. After the white house receives the report, President Trump has 90 days to decide what to do. The former speaker newt gingrich, who advises the president , told a group in washington today, he expects the white house to act quickly back to you. Thanks, Kayla Tausche in washington the s p 500 industrial indecision was up 19 in 2017 respect started the new year with a 4 gain so whats on deck for industrials . Lets bring in jeff sprague at vertical Research Partners great to speak with you today. Thanks, morgan. We just heard kayla report on the possibility of steel hives, the possibility of aluminum tariffs, currently were seeing crude trade above 60 a barrel how much could that effect industrials . Its clearly an issue industrials were fighting the battle a bit in 2017, but within reason, actually, a bit of inflation is a good thing for industrials, a deflationary environment is very, very different. Were seeing actually a demand pulse thats driving some possibility. I think the a outlook is pretty instructive here. Certainly over the past month they have outperformed the broader market, how much do you think tax reform is priced in for the sector i dont think its fully priced in. I think, you know, a lot of us being analysts, you can go to the xl spreadsheet and say my tax rate was x, now y, and do that simple math i think to some degrees, most investors have done that whats harder to analyze, and i than will be an upside surprise will be the ripple effects of capital deployment whats interesting, though, on the xl spreadsheet, on tax rates, the estimates really havent changed fully to reflect it obviously some of it is embedded if the to be prices, but when we get to the formal positive earnings revisions, the stocks will work their way higher. So in light of that, and this idea of potential ripple effects, what stocks do you like right snow i like emerson rockwell, parker hanafin, semiplay into the automation split space, tap into the higher capital spending, all of them are seeing improving orders at this point we think tax reform gives us the competition in 2018. A lot of focus today on the bond market, this idea that rates are finally going to begin to start rising off the stubbornly low levels. If we were to see that happen, maybe faster than anticipated, is that a risk for industrials this year . I think it is a risk. Its something were going to want to watch. I dont think its a nearterm problem. In many respects i think rates are rising for the right reason, in other words, the fed doesnt need to be quite as accommodative, so obviously its notching up the short end. The long end is responding to qe and government actions and other things, but were still talking a relatively low rate of interest here. Companies are flush with cash, and in the early stages of rates moving up in this part of the cycle, i think its a positive snag for industrials. If you look at shares of General Electric since the start of 2018, they have really rallied. Second best performer much whats your take on that i think its really classic, you know, dogs of the dow bounce quite frankly, i dont think it can have a tremendous amount of followthrough obviously the stock had a very, very tough year. When we think about the normalized cash flows for ge, the fact that they could be going actually lower as they go through this divestiture program, we think 18 is roughly fair value you might be able to grind your way to 20ish, but theres not a lot of room for the stock to go much higher here. Lastly, any other risks or potential headwinds we should be keeping in mind . I think the price costs, we still want to watch that its a doubleedged sword. Right now i think were on the positive end, but we want to keep an eye on that. Also, we do want to make sure companies dont lose their discipline on capital deployment i think capital deployment is a very bullish part of what well see out of tax reform, but we obviously dont want to see companies egregiously overpays, an overexpanse of capital would be one of those things that plants the seeds were a ways away from that happening, but its something well be watching here in 2018. Great jeff, thanks for joining us. And coming up inside at ts battle to buy time warner, im like ventriloquistizing you. The hef up turner will join us, and nbas tv ratings are way up. Wait until you see one of the leagues best players, what he did to an unsuspecting rookie. Hard to be a rookie. Thats next to power lunch. Well, a 103 yeah, 103. Well, let me ask you guys. How long did it take you two to save that . A long time. Then its a fortune. Well, im sure you talk to people all the time who think 100k is just pocket change. Right now were just talking to you. I told you we had a fortune. Yes, you did. Getting closer to your investment goals starts with a conversation. Schedule a complimentary goal Planning Session today. Weve been preparing for this day. Over the years, paul and i have met regularly with our ameriprise advisor. We plan for everything from retirement to college savings. Giving us the ability to add on for an important member of our family. Welcome home mom. With the right financial advisor, life can be brilliant. Theyre not investing in commodities or fixed income. What people areally putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. Dad dad can you drive me to jessicas house . Uuughhh this is what our version of Financial Planning looks like. Tomorrow is important, but so is making the most of the house before theyre out of the house. Spend you life living. Find an advisor at northwesternmutual. Com. Welcome back we want to call your attention to whats happening of shares of dst systems. Its just reopened from a trading halt, in the on the heels of reuters headlines that it has learned that theyre in talks to buy many people at least in the mutual fund, will know s. S. And dst, many of the services they provided are used by mutual fund executives, also etf providers, a couple big Services Companies perhaps getting together well bring more details. Back over to you guys. Thanks, dom dominic chu. The bid to, is turning into a battle with the government Julia Boorstin is live at ces in las vegas. Reporter hangs so much im joined by john martin. Thanks for talking to us. Thanks for having me. So much interesting what does the deal mean for you . Why is it important for you that the deal go through . I think for us, the ability to connect up with at t, theres a few key advantages number one, you know, theres a race right now going on with premium content companies trying to gain Better Technology and better access to data. Data is an overused term, but what it means is if i want to know where a fan is or how to connect with a person on an individualized basis, i need that person and what they like and how i did superserve them at t has a massive amount of data, a hewlett scale platform, and then tens and tens of mills ons of mobile relationships. So resulting in higher advertising . I think thats a very nearterm opportunity for sure, the ability to have addressable advertising, where we dont just sell nielsenrated parts, we can actually sell people, which would be hugely valuable to advertisers. Our new products are showing an uplift of anywhere between 4 and 16 times. Of course theres this spending lawsuit to block the deal do you think that turner will have to sell cnn to make the deal to go through fortunately i am not a regulatory expert, and i cant answer that. Ill leave that in the hands of our capable teams working through that, but you know, in the history of this company, no vertical merger that looks like this has ever been blocked before i think were all thinking this will go through. Do you think cnn has benefited or damaged by the critiques of the president i think business is great for cnn right now. And business has never been higher cnn has been a top ten Capable Network for five quarters in a row. All of the capable nuts networks are up, but cnn is benefiting disproportionately and im just proud of the work were doing. The administration is obviously making very personalized attacks on the network itself, plus some of our key executives, anchors and talents. I dont think in the long run that will accrue to the administrations benefit, and in the meantime im proud of the journalistic integrity we have theres a thread of cord bundling, skinny bundles, how do you exist in a world with all those pressures, plus the fact with new apps thats a new rival. Where do you fit in there . We have to stay relevant. We have to work with our partners and work to stabilize subscriber trends, and then we need to be an overthetop packages, whether its the skinny bundles, or over time, i think longer term, this is somewhere where at t could be helpful, we need to go directtoconsumer with our premium content and experiences, and over time were going to need to control the experience ourselves and make sure the experience is nothing short of top notch. Thankfully we just completed 2017 we have three of the top ten networks, the only company that has that, four of the top 20 cnns ratings, the highest in years, and we have three of the top five networks with millenni millennial, and now our Digital Products are engaging fans so we have to keep our brands strong and relevant, we have to create great Consumer Experiences and engage fans. What about sports you have invested in baseball, basketball, nba ratings looking pretty strong . Great season, the ratings are up the matchups have been great. When you look at whats happening with nfl ratings, do you think thats unique to the nfl . Yes, i do. Or are you worried that seeping over no, im not worried about 80 of our sports are either playoffs or tournaments or championship games, and if anything is proven to be true, the rho razzity on for those programs is going up, not down, plus were allowing our sports to be consumed on more devices, making it more convenient. In the nfl youre seeing bad matchups and frankly more availability of games, and there may be fatigue just on behalf of viewers. One thing thats changeses is theres more bidders for sports rights you have your next deal, sports rights 2021. For baseball, but if you loo at the new buyers, are you concerned about sports rights costs going up more . Sports rights have continued to escalate. Im thankful we have our relationship with march madness until 2032, a relationship with the nba thus through 2024, and Major League Baseball through 2021 i think, you know, were going to have to be competitive in bidding. There may be more bidders, but at the end of the day, you know, i think the leagues will continue to want to partner with brands that will build up and help their brand while these Digital Companies are certainly making a big push in spending money to create professionally produced video, i think its a leap to say theyll be able to come in and acquire very, very significant sports rights the leagues will have to worry about whether that will diminish the fan experience. March madness through 2032. Who knows how well be watching tv. Ill be around. John martin, thanks very much thank you. Tyler, back to you. What happens when an nba rookie doesnt carry out his rook joyce sterling brown had his car filled, yes, filled with popcorn. Ian is and also known as the greek freak. This is the popcorn. Look at that what did the rookie do wrong . He failed to provide towels. The bucks posted the video, they say it took ten later garb an bag us full of popcorn to clean up the mess. Two things, number one thats a mercedes g55, one of the most expensive cars that mercedes make that was a big prank numb abouter two, when i was in college all my quote, friends filled my Toyota Pickup cab with styrofoam pellet whenever you turned on the heat, some would come out the vents. Youll see a mercedes g5 on the market in milwaukee. Soon expect it for kernels. And it will smell like buttered popcorn that is wonderful. You say that like its a bad thing . That sounds delightful. To quote the late great Stewart Scott it must be butter because its on a roll. Two oldschool names, one of in the meantime all aboard the blockchain train the other ys nsaot so fast the latest cryptocraze is next, on power lunch. Warren buffett is no bitcoin bull this morning on squawk box, he had this dire prediction. I can sayalmost with cente certainty that it will come to a bad ending, whether it happens, or how i dont know, but if i can buy longterm put, i canbu a fiveyear put on every one of the cryptocurrencies i would be glad to do it and im never short a dimes worth i get in trouble with things i know about, and why would i take a long or a short on something i dont know about. However other big names feel differently. A fund run by bill miller, 50 in bitcoin and heres what miller told closing bell yesterday. Whats happening is this is following a very traditional path its gone faster and bigger than any other path for probably the represents because its the only type of innovation of its type across finance that weve seen technologically in several thousand years, and you really cant tell how far it may go, and it still may disappear and it may wanot work at all at the end of the day. Then theres this check out shares of kodak. Yes, number one, it still exists and its red hot and up nearly 260 in a week why . Because they said theyre using block chain to create a digital photography platform called, you guessed it, kodak coin, and that is meant to digitally protect kodak was a paul simon song to digitally protect intellectual property rights. Mama dont take my block chain away all right. Two very smart guys, two very different opinions lets dive a little more in with andy bromberg, ceo of coinlist it helps list initial coin offerings and ill take a wild guest. Im a tv anchor, so i know everything that you may be a supporter of the block chain and Bitcoin Technology just a wild staff. Where does Warren Buffett have it wrong ultimately at the end of the day when we look at the technologies we see the technology at large, block chain being tremendously valuable. Its not that every cryptocurrency will win or lose and we see jamie dimon making bets on that all of the time, but when we see the technology as the distributed systems and the distributed ledgers working, we see tremendous potentia across all industries whether its photograph we kodak coin, Health Records and anything else as being where a lot of value can be derived and thats totally fine, and there is a lot of technology thats new and bit koib has only been around a few years. Block chain has been around, andy and we havent done anything with it so far. How about this a lot of people have questions what is the biggest single misconception you hear about bitcoin and or block chain think the biggest misconception about bitcoin is that it will be used as an effective currency for transactions every day we see it as gold value and Something Like a digital gold and thats where it is being derived from and it is being used much more like currencies, and where we host the best initial coin offerings for these new tokens and were seeing the value from the currencies and also from the technologies that will allow transactions on new, distributed networks you brought up an interesting point and i heard this idea of comparing bitcoin and other types of cryptocurrencies to digital gold and trading it as such where is the value it seems like value is in the eye of the beholder. What would you link the value to is it the Block Chain Technology itself for bitcoin, yeah we look at it similarly to how you value gold the value of gold doesnt come from its inherent value and usage for specific applications, but rather in the trust as the storer of value. Bitcoin has properties that are better than gold its immutable once transactions happen they cant be taken back and there is a public transaction of whats happening on the network it can be transacted instantly across borders and anywhere in the world and this is better than gold as a storer of value and we see it taking over gold as the storer value. Better than gold, but it doesnt look as good on a necklace or earrings. It certainly does not i wonder your impression when you see a company like Eastman Kodak and i wonder what it would be if they changed from eastman to kodak, number one, what is your impression of these companies when they affiliate themselves with bitcoin or Block Chain Technology and their stock goes up 70 in a day, does that make you want to buy that stock . Does it make you want to run away from it what do you think . It absolutely has to be evaluated on a case by case basis and thats something is evaluate the crypt on currencies and see where the value is being created. There is a lot of noise in the space and cryptos are being created without innovation and technology, and those you should run as far away from as you can and you will rename and saying their work. Without any real use case and reminds me of the 1999 where there was no real profit, either and thats why those companies, many of them went away andy, earlier today, Goldman Sachs out with a really interesting note that said something we dont hear a lot because normally we hear block chain and bitcoin together like Peanut Butter and chocolate. However, Goldman Sachs implied that if block chain wins which i think it will, it will hurt bitcoin because it will make other monetary processes more valuable and more expensive. What do you think about that i think that goes back to the question of bitcoin as a store value versus the currency. If bitcoin was being used as a currency and there are others that are better at bitcoin at that specific case and we expect to see that hurt bitcoin, but we havent seen cryptocurrencies as impressive usage as store value and i see bitcoin continuing to succeed even in spite of and aided by block chain continuing to succeed, as well and certainly as block chain succeeds we see more competition and see different ones start to rise and start to fall as we see with any other technology. Got to run. Thanks very much. Thank you. Coming up, how to manage a crisis and a top fixer, michael citric joins us with advice for companies and individuals caught in scandal he should know his firm represents harvey weinstein, plus a sharp move in bond yields. Bond legend bill gross who needs no such representation, says the ndeahaju begun he joins us next on the hour of power. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. It is hour number two of power. Im Tyler Matheson and here is what is on the delicious menu. The end of the bond bull market. Thats tough beef right there. Thats what legendary bond investor bill gross says he will join us to explain why he says that and what it may mean for the markets the fixer, hes known for cleaning up Public Relations messes from some of the most highprofile companies and celebrities. Whats his advice for the president following the fallout from that controversial fire and fury book and playing for profits. The gaming stocks have had a massive run over the past year a fivestar tech fund manager tells us why he is betting big that the rally is just Getting Started. Power lunch is just Getting Started hour number two. Brian . Thanks, tyler. Your Stock Investments are working really hard to avoid their first losing day of the year get this, the dow at one point today was down 130 points. It is now up, fractionally, but it was down triple digits. Wow what a comeback. Ge and j. P. Morgan chase, your top winners and real estate and telecoms are some of the losing groups stocks may be sexier, but bond yields are the story today and may be Going Forward the tenyear yield at a tenmonth high and twoyear notes at a nine and a half year high and well get bill gross on that the kbe one of them betting a tenyear high and regional banks leading the way and Retail Stocks are jumping, as well. Kohls, target, nordstrom and macys are all over 2 and we welcome in Contessa Brewer great to see you brian, nice to be here. Im Contessa Brewer and heres whats happening also this hour. Darryl issa throws in the towel and he says hell retire after 2018 he has served in the house of representatives for nearly two decades. The World Bank Says Global Growth appears to have peaked with a number of factors including tightening Monetary Policy and placing limits on economic expansion it will edge up to 3. 1 in 2018, and congress will grill alphabet, facebook and twitter again, this time for terrorist content on their sites the tech giants are scheduled to testify at a hearing january 17th, brian. Contessa, thank you well see you in a bit the tenyear bond hitting the highest level since march and the twoyear at its highest level since 2008 and with that move, the yield on the two year now surpassing that of the dividend yield and of the s p 500 and the first time that has happened in nearly a decade and your team tracking what that means for your money and we have bob pisani at the nyse and we have Rick Santelli in chicago, looking at bonds and listen, rick, heres the thing bonds, and i mean this with love, are a little bit boring and they can be esoteric i compare them to a super tanker you watch it, theyre slow to turn, but when they do turn its a big deal how big of a deal is it in what we are seeing in the bond market right now . You know, i think its a big deal, but its a big deal in slow motion so your tanker analogy still works and just imagine its in a bit of a time warp and in terms of a deal dividend versus tenyear note yields i urge everyone to look at that on a 40year chart because what used to be normal is rates were much higher than the dividend yield and were getting back to something more normal and i understand its a fulcrum, but on the Interest Rate front, as you can see from the intraday tenyear, brian is right. We havent closed above it since march of last year if you look at bunds, this is the value trade in reverse were pulling yields up. How do i know . Because the next chart, were at 208, the difference and you can see its spiking around with volatility and its still within the range that weve been in for several plus weeks and if you look to the left side of the chart it hasnt moved all that much hyg and the barometer of nervousness reflects the issues that you brought up, brian it doesnt like the way equities initially reacted to it, but they reverse finally, you would think with all of this volatility the dollar should Pay Attention and the dollar didnt pay much attention with the Strong Equity market and it is paying attention to the rise in rates and just not enough. We fall back a little bit and we fall back down to the 92 level in the end, i agree with all of our experts and bill gross that we have turned the corner, but i think just because we are now in a bear market doesnt mean we have to have all helpings of it in a very short term timeframe i think we stretch it out a bit. Who is better than santelli im telling you, man he knows it. Lets send it over to bob pisani who is also dog gone good. Hes on the floor of the new york stock exchange. Thank you, tyler. It is a bond story affecting the stock markets. Remember, bonds were under pressure and the market was trying to move into positive territory and then about we got those better than expected numbers from the bond auction and the tenyear bond auction and stocks briefly dipped down and have been trying to come back throughout the day. The real story is long term and the bond proxies have had a problem for a long time and weve noted utilities and the reit sixmonth lows and that generally is continuing although off of their lows today and the higher rates have been helping banks and weve had the yields at tenmonth highs and were getting 52week highs and in fact, these are the best numbers since 2008 for all of the super regional banks right now transports, this is a separate story and theyre leading the charge here. The transports have been on fire, but particularly today, the airlines are now taking center stage as united and american just had very positive comments overall in terms of their guidance here. Meantime, this rotation and the semiconductors havent been doing anything they topped out a while ago. Some of the big names like kong hai and Taiwan Semiconductor they had perceived negative comments and those major indices and those sectors are headed to the down side and that was spilling over here into the United States and some of the big names like micron and nvidia, applied materials, broadcom and lam research. Semiconductors basically, guys, topped out in november brian, back to you bob, thank you very much. When an investing legend says a 25year anything is over, we listen. We listen. Thats exactly what bill gross has just done. Yesterday he tweeted out that the 25year bull market in bonds is kaput over muerto lets bring in the man himself, bill gross of Janice Henderson what are you seeing that makes you so convinced that this 25year incredible run is over well, several thing, brian, and let me point out its like your tanker analogy and very slow moving and i use the analogy in terms of coffee its not a strong, colombian bear market. Its a decaffeinated bear market where the yields on the tenyear would probably rise 10 to 20 basis points for the year, but nonetheless it means that yields are probably moving higher as opposed to lower as they have been for the bulk of the 25year period that you cite now, what do i see that presents that possibility first of all, i see nominal growth in the United States increasing from where its been to 5 due to tax cuts and increasing deficit i see the u. S. Treasury and this is interesting i havent heard this yet on news wires increasing from a 500 billion net issuance to a trillion dollar net issuance in 2018 primarily because of the deficit and i see Central Banks cutting back on the quantitative easing and the ecb is cutting theirs in half and by the end of the year they entirely eliminate it and the flush of money is being met with a flush of supply and that produces higher Interest Rates. You have two reasons and im oversimplifying it bill, i understand here they are. You have the economic story and to your point things are humming along and maybe the fed gets involved or youve got selling pressure, and i know that you have said that you believed today that you were seeing some evidence that china was selling or even dumping u. S. Treasurys so what is the cause of this backup in yields well, china i believe, are not liquidating treasurys and they have a huge portfolio in the trillionplus area, but they are trying to diversify their portfolio and that means more gilts, that means more bunds and more spanish bonos, and so, you know, Central Banks and the Chinese Central Bank and the chinese Fiscal Authority are probably in the area of reducing their commitment that they have for the past three or four years, and that commitments been huge. Brian, over the past five years quantitative easing in total from all these Central Banks has been about 14 trillion and so if we pause it in september or october that much of this doesnt go away, but it stops increasing and then, you know, the pressure for slightly higher yields is probably what it is. So, bill, tyler here. You say this, bill, this bear market may be not a robusto, but something more calm than that, but how much is it going to hurt, daddy . What am i going to do with my Bond Fund Shares that ive been shoveling money into well, that has a good question, and last year and the year before, the tenyear treasury bottomed as Rick Santelli accurately points out in june 2016 at 145. So theoretically, 255 would have produced a significant bear market and with highyield bonds added to the pot, Bond Investors have been satisfied with a 45 annual return and they havent seen or felt a bear bond market. Now with high yield spreads so compressed, i dont think theres much room for their Capital Gains and with yields where they are, you know, i think bonds produce a return of zero to 1 , and is that a bear market no, but its a market where investors dont get much of a return we have a bunch of untested and new members coming into the Federal Reserve this year, bill. So really what the projections they had last year are not irrelevant, but when youve got a 50 turnover on who decides what rates are, its significant and maybe a little bit scary do you believe this Federal Reserve is going to manage this properly or overshoot, raise rates too quickly and slow the economy down too quickly no. I think theyre going to do fine in terms of the pace, and i would look for only two increases this year in terms of policy rates and that would put us close to 2 on fed funds and 0 in terms of real fed funds which i think is their target. As to powell and as to other of the new members in terms of bearish and bullish and so on and hawkish and dovish its hard to believe that a new chairman would be more dovish than janet yellen because she was very dovish and there might be a tendency for the fed to join Central Banks in terms of mildly being hawkish, but not very much so two increases is my forecast. Bill gross, Janice Henderson. We know your Investment Outlook is out tomorrow and we appreciate you coming out today given everything that has gone on thank you. Gold jumping to fourmonth high as the dollar weakens following a report that china would slow u. S. Treasury purchases. Gold now, one of the best performing assets since the fed last raised Interest Rates and for more on whats ahead for gold currency, and much more is dennis guardman, founder and editor of the guardman letter who sent me a funny text when we were musing about kodak going into bitcoinrelated things. Kodacoin gives you the nice flight dollars thats a nice line very nice paul simon on line two. Lets talk about gold. Lets talk about bitcoin and other cryptocurrencies our guest of 20 minutes ago thinks that bitcoin and the like are going to outshine gold big time do you agree i have my difficulties with that perhaps it shall, but we all know that the block chain is a major change in the Technology Behind trading im a great believer in what the block chain does, but im not a believer at all in bitcoin, ripple and the rest of them. I think this is a love affair that probably shall end badly. Am i short of bitcoin . I would not be short of bitcoin with your money, tyler i certainly would not be short of it with my money, but i think it will end badly at some time in the future. As mr. Buffett said if he had the ability to buy a fiveyear put he would and i think that makes imminent sense. Youve hit bitcoin. The bitcoin hit the fan there. How about gold well, i think that generally, what we have to understand is that weve now begun a bear market and the bond market and weve begun a bull market in commodities, i think commodities are extremely inexpensive and if you look at the ratio of the stock indices versus the commodity indices, they have gone through extremely overextended positions and weve begun to move away from the equity margin into real assets and i think that will be the trade for the next several years and any five, six, 10 you want to be a buyer and on balance you want to be a buyer of commodities and thats the trade is long commodity marks and that doesnt mean im bearish of equities outright. It doesnt mean im bullish of commodities outright and the two should move dramatically over the next several years. Dennis, can you be more specific about what other assets other than gold that youre interested in . If you have to buy one, given the weather conditions that prevail and given the winter wheat crop, i can find myself erring better on the weather wheat crop dramatically. As an old friend of mine, mr. Melvin ford and my mentor in the wheat market told me years ago that you dont kill the winter meat market in january you kill it in april, but you find that the damage has been done in the january position we have no snow on that crop and the smallest acreage in a hundred years and if you have continued cold weather without snow cover we could have a problem and wheat prices could be 2 or 3 higher i suspect. I have to jump in with breaking news for you. Here is a question for you a new reuters report out about a minute ago that they have learned that highlevel canadian officials believe that donald trump will pull out of nafta so canada, i guess, reuters reporting that canada is increasingly convinced that will happen were seeing the Canadian Dollar move a bit we are seeing the u. S. Dollar obviously against the Canadian Dollar move a bit. Number one, do you believe the u. S. Would pull out of nafta i ask that because if we did, what then would move what would be affected canadian wheat let us hope that we do not pull out of nafta. That would be an egregiously stupid decision on the administrations part. Nafta has been a creator of jobs in canada, in mexico and in the United States. Mexico and canada are our two largest trading partners, to turn our backs upon them would be a very, very bad decision that would be deleterious to the Canadian Dollar and the mexican peso it would be supportive to the u. S. Dollar and the benefits it would accrue would be illadvised. I hope that is a bad report. I hope that we do not do that. That would be a very bad decision. Everyone, dennis, should, like you, have a wheat mentor. A wheat mentor Everybody Needs a he was a wonderful gentleman. I have relied upon what mr. Ford taught me 40 years ago in the wheat market and i rely upon it even still. I am going to find myself a wheat mentor congratulations to the wolf pack to the win over duke last weekend. Over duke go wolf pack heres whats coming up on power lunch, at a time when anyone can say anything anonymously, it could be difficult to protect your good name well talk to michael citric about how to safeguard your reputation online. Goldman sachs and j. P. Morgan have had the same guys in the top job since 2006 are they overstaying their welcome . Just a question. Who could be next to lead the big banks and plus the ceo of coal Company Murray energy on why perhaps hes not getting all that he hoped for out of a Trump Presidency all that and much more coming up on power lunch. At ally, we offer lowcost trades and highyield savings. But if thats not enough, we offer innovative investing tools to prepare you for the future. Looks like you hooked it. And if thats not enough, well help your kid prepare for the future. Dont hook it kid. And if thats still not enough, well help your kids kid prepare for the future. Looks like he hooked it. Well do anything. Takes after his grandad. Seriously anything, to help you invest for the future. Ally. Do it right. Your next guest has helped some of the biggest names in business and entertainment deal with crises and careerending or nearly careerending pr disasters. He helps them fix things so his new book is called appropriately enough the fixer, Michael Sitrick is from sitrick and company. Hes represented many big names including one out there right now, harvey weinstein. Nice to see you. Before we get to weinstein, i want to ask you about the president. Say youve not, i assume, hired by President Trump or Anyone Around him, correct . We have not so given the book fire and fury by michael wolff. I wouldnt call it a crisis, but certainly it has caused some interest how would you advise president donald j. Trump right now . Im on the outside looking in on this, obviously, but if you were on the inside i wouldnt ask you you wouldnt be able to say anything. What we do in a situation like this is we would first find out whats accurate and whats not. If there are inaccuracies you want to point you want to find out what the inaccuracies are. If you could get five or six or eight or ten inaccuracies, i saw tom barrett say he didnt say what he said thats a big deal, and so if you can point out multiple inaccuracies and undermines the credibility of the book. I dont know if its accurate or not, but when youre calling into question his fitness for office and his intellect and what we saw george w. Bush do is tackle them headon i know some people think im not that smart, but x, y, z and what President Trump do is stand up and say im, like, really smart. Is that the advice that you would have given him to go forward and protest those kinds of accusations or what he did yesterday may have been masterful in sitting down, inviting the president and letting them see the negotiator at work. People have called trump, President Trump a number of names since the beginning of the campaign, maybe even before and he has his own style which is an understatement it got him the election, right it got him elected president , and i think taking individual elements of a response, you have to look at the whole picture i thought one of his aides saying there were a number of people who cant who are not willing to accept the fact that hes president of the United States is an accurate statement, but the real issue is the book first of all, the people making the accusations against them or statements against him or alleged to have made the statements against him, theyre not experts and theyre their opinions and there are thousands who have opinions, and if you want to address the book you have to say is it accurate let me turn the discussion a bit and ask you two questions. One is tactical. The president s approach is usually when punched, punch back and harder when is it smarter in a theoretical context not to punch back, but do a little ropeadope, just punch themselves out thats question one. And question two, mr. Fixer, are there some individual rep takes or company rep takes that you cant fix . That cant be restored like harvey weinstein, like matt lauer . Weve had a number of these from companies that were under attacks by schwartz and the stock dropped to one of them dropped to under 100 million and within years, showing that the information that was being put out there was false. It was sold for 10 billion and there are Michael Jacksons estate, Michael Jackson died and its the most successful estate ever john bank a the executor happens to be a genius a stable genius a stable genius wed like to think we played a part john would tell you we did Michael Jacksons estate is the most successful estate ever generating half a billion dollars in revenue. Thats amazing because there were stories at the time of his death that he was in financial extreme. He was. Its absolutely true he was he had substantial debt and he had popularity issues and so its the way you approach it, right . So youre a big proponent in your book. Again and again, you have to get down to the facts and you fight fire with facts. In Harvey Weinsteins case, he says that these relationships were consensual. You have more than 80 women, highprofile women, coming out and saying that he assaulted them in one way or another how do you rehabilitate that well, look. Its difficult to talk about a current case and i will tell you we were brought in by their attorneys and some of whom ive worked with for over 30 years and patty gross when i worked on in the bill gross case who i talked about in the book and kirk kerkorian, one of the top litigators in the country. The goal here is to work with the lawyers to ensure that any statements we give are vetted by the attorneys and what he said is that what weve said is that there is no nonconsensual sex thats the statements weve said the staples are very carefully put together and i dont want to get ahead of myself because the case is still oning about. Michael sitrick, thank you. The book is called the fixer. We appreciate you coming on. Thank you very much Big Bank Earnings just around the corner after 12 years at the head of their companies, Lloyd Blankfein and jamie dimon are thinking about the future. Suesrstrghal look at potenti ccso sait ahead. nadia white the moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. dane chauvel sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. tom villa we took our world class network, and we developed devices to track environmental conditions. This device allows people to understand whats happening with the location, but also if its too hot, if its too cold, if its been dropped. Its completely unique. dennis woloshuck if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Who knew a tiny sensor could help keep the food chain safe . We have a news alert from ces. Lets head to Julia Boorstin i am here at the Consumer Electronics show in the Las Vegas Convention center. 12 minutes ago, all of the power went out we are in the central hall the power in the central hall and the south hall went out entirely the only reason you can see me is we have a batterypowered light and well turn it off and you can see just how dark it is right here right now theres light coming out outside and there are big doors and batterypowered lights and this is horrendous, really, for what is the largest Consumer Electronics show in the world. Every year, 170,000 people expected to come to the Consumer Electronics show 4,000 Different Companies and organizations presenting their gadgets and software here. The north hall, we heard, the lights flickered, but stayed on, but the other two halls, it is very dark right now. People are wandering around. We spoke to the Consumer Technology association and they said theyre working to investigate what the source of the power outage is and to fix it as soon as possible, but for now were in the dark. Guys, back over to you. It wasnt your hair dryer, was it, julia . Well, you know, there are a lot of electronics running in this building and who knows what the source was. The bitcoin miners crashed the system you need to be prepared at all times. And well see how long it takes them to get up julia, turn around and tell them to turn on the iphone flashlights at the exact same time andgo on as if nothing ha happened. Like a rock concert think about how much money think about how much money is invested in show casing technology here, a lot of home voice devices and everything you cant see anything right now. A lot of money is being wasted. Sorry to cut you off. We have to go to don chu on the heels of those headlines coming out about whether or not the u. S. Being potentially get out of nafta, the trade agreement, we are watching a couple of big etfs moving on this first, theyre both i share products and countryspecific and the i shares and canada capped which you can see there down a percent and a sharp move in the last five or ten minutes or so on much heavier than expected volume or average volume the other one to watch is the eww, the ishares mexico capped which tracks stocks in mexico. These are nonhedge Currency Exposure etfs which means the currency moves that you guys highlighted might be having a big effect on some of the etfs and i wanted to point out a few stocks that we do see moving on some of these headlines. General motor, for one, it has significant crossborder operations from the manufacturing side and those shares did move lower and a couple of other loans to watch, Kansas City Southern, a Railroad Company that has exposure to mexico and also, guys, whats happening with stars, Constellation Brands modelo and corona beer. To sue herera for a news update. Indeed, thanks, ty. President Trump Holding his first Cabinet Meeting of the new year at the white house, touting his administrations accomplish ams and he criticized the nations libel laws. Our current libel laws are a sham and a disgrace and do not represent American Values or american fairness. We will take a strong look at that we want fairness at least 15 people have died in devastating floods and mudslides in southern california, and that number could climb as search teams continue to look for the missing. Aerials of the devastation showing just how wide spread that damage is a fiery crash involving three semitrucks shut down all lanes on interstate 65 in indiana. A Police Spokesman says a semidriver wasnt paying attention, and hit the rear of a second semi which caused it to hit a third truck. One of the trucks was hauling Hazardous Materials causing the evacuation of all homes within a halfmile radius youre uptodate. Thats the news update this hour back to you. Scary stuff thank you very much. Coming up, the ceo of coal Company Murray energy blasting the Trump Administration for picking what he calls inadequate bureaucrats to run the energy guto cmirelaryomssion. Hell explain why he says that next President Trump rolling back many regulations in his first year in Office Especially regulations on the coal industry check out the headline of the front page of the business section of the New York Times, how a coal barons wish list robert baron himself when i met with you right before the election, you had high hopes for a Trump Presidency is the New York Times headline true did you get what you wanted with the time presidency . The New York Times headline was a bad headline and the article itself was not bad i have never blasted the Trump Administration or even criticized him indeed, i think hes done a wonderful job to assure lowcost electricity in america and to shore up the reliability of the electric power grid. Today Angela Merkel announced that germany is no longer going to close any more coalfired plants you need them. You have a power blackout right now in las vegas it is true that the Regulatory Commission failed to enact the immediate reforms necessary to ensure the reliability and resilience and they were directed to do so by secretary perry and that is the Trump Administration he has been very supportive of coal a lot of it was lowhanging fruit in overturning these regulations, contessa, because many of them are obama regulations were illegal so they were very easy to overturn by executive order. The New York Times got its hands on a letter you had sent to the administration with a sort of a wish list, a todo list that would be important for the coal industry and when you are looking through that, rolling back regulations and that got done. Overhauling who sits on the ferc commission on the federal energy Regulatory Commission, that got done four of those commissioners were trump appointees unanimously, this Commission Voted against what would effectively subsidize coal and nuclear power. How does that sit with you that does not sit with me well you see, wind mills and solar panels are subsidized by the taxpayer 30 production tax credit and electricity from a wind mill and a solar panel costs 26 cents a kilowatt hour my coal fired electricity costs 4 cents per kilowatt hour. Theres bias among the two democrats, and glick and lafleur on the ferc. They are obviously, never going to support coal or nuclear power. The other two employees against thechairman himself, mcintyre and particularly rob paulson are wrong in their decision and it needs to be overturned one of these commissioners, in fact, noted, mr. Murray that theres a contradiction here in subsidizing coal plants that contribute to Climate Change which cause the Severe Weather that the Energy Secretary was talking about when he questioned the resiliency of the grid i think he is wrong in his statement. I know hes wrong. Theres no ask here for a subsidy for coal its to pay the coalfired generators and the Nuclear Electricity generators for having the capacity in the grid to keep the lights on. You see, contessa, we cant store wind at a power plant. We cant store sunshine. We cant even store natural gas, but the loads on the power plants go up and down daily and over the seasons we need something there to keep the power grid reliable and to keep the lights on during this bomb cyclone last week, gas prices went up 60 times. 60 times most of the utility providers have contracts, longterm contracts with natural gas so that didnt affect what consumers are paying thats not true what happened is the Gas Companies couldnt deliver 17 37,000megawatts of gas to the power plants to generate the electricity because the gas lines were froze up and because priority for home heating so the gas wasnt there so there is a huge problem in the grid im an american first, and i know that that couple on fixed income and that single mom and that manufacturer of a product in america must have reliable, low cost electricity and i have studied the issue for 60 years, and i know there is a reliability problem. Secretary forry was right. Donald trump has been right on every occasion relative to the electric power grid and to my coal miners. Where do you see, mr. Murray, the percentage of Power Generation from coal in the United States in 20 years and where would you like to see it what do you think will happen and what do you think ought to be the relative an excellent question i sat down the first year of the obama administration, sir, and we calculated what we thought the coal industry would go to. At that time we produced 52 of the electricity in america and we calculated that it would go down 30 and that was eight years ago we made that calculation. Sir, that is where it is right now. Already with his overturning of the clean power plant,presiden trump has saved 25,000 coal mining jobs because we calculated it would have gone down to 18 of the Power Generation mr. Obama closed 411 coalfired plant, the clean power plant would have closed 56 more, taking it on down to 18. So those are 25 jobs we calculated that hes already saved in the coal industry, plus there are about 5,000 more jobs than when he took office these are good things and that was an excellent question. Mr. Murray, thank you so much you are so passionate about your industry and your company, and i know from sitting with you in the past about your employees. Thank you for your time today. Thank you, maam for having me all right thank you again straight ahead, video game activision making a push into esports. The rise of video game championships, it may be the next big thing, folks, and what it means for the stock thats straight ahead on power lunch. 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. Well, itsonce again. Eason 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. Were still talking coal here video game publisher Activision Blizza blizzard launching its Overwatch Esports League today with 12 teams from across major cities across the world, i should say esports expected to grow into a billion dollar biz by 2019 the question is can it live up to its expectations and it continues to boost activisions stock. Danny fish is tech Portfolio Manager at Janice Henderson and he has activision as one of his top holdings welcome. Good to have you with us. Thank you for having me how big does this competitive Sports League business get, do you think, and how soon . Well, its an interesting question its one of the reasons that were here today is, you know, one of the old addages in technology is you can underestimate what you can do in a year and a decade and i feel thats where were at with esports right now and importantly, activision has established this league and you know, its the inaugural league for overwatch. Importantly, the groundworks been laid over the last couple of years from the time that the game was conceived around, you know, multiple teams competing against each other with multiple players and the short duration victories and a number offel ems to the game that made it conducive to e sports and activision and bobby kotick and the team have done a remarkable job of laying the groundwork around this league and importantly, if you look at the buyin that youve actually had in terms of the Team Structures that are based on cities at this point that are in north america as well as you mentioned internationally in shanghai and more importantly, if you look at the people that have invested in these teams including the crafts and the kronkys and youve had sponsorship and ownership associated with nba teams, as well its a really, really impressive list of investors into the inaugural league. To my observation, it certainly is what does it mean for the stocks in this sector, the stocks that you follow, you invest in. What does it mean for activision yes so to each company it means something different. It you look at activision specifically, the way we look at it, whats nice in terms of how we thought about activision and one of the reasons that we own it, theyre just a number of positive secular dynamics associated with the name that give us confidence in the ownership position and we look at esports at the moment as a call option on the business that in this first iteration it might not be worth much or it could be worth a lot over a multiyear basis, but we think activision is one of the better positioned video game publishers to actually capitalize in the trend and if i can throw out one stat they think is really important is many speculate that this year will actually be the first year that more people actually watch gaming than play gaming worldwide and if you think about that concept and the fact that this is global in nature kind of gives you an idea of the magity in umagnitude of what it could be esports is a big part of that and theyre building a big, new arena that theyll open this year that used to be a nightclub in the luxor heres my question, when you look at the enthusiasm and excitement about it, apple is now dealing with activists that think its devices are addict testify young people if apples devices are addictive, what abou addictive, what about gaming what happens to you . Are act vision and stocks like that, Companies Like that next ting depends. There are a number of potential issues that the Companies Need to work through over time. There are a number of potential Regulatory Elements that could impact the business. You know, there are a number of things that are addictive and social, a lot of elements and technology, that potentially need to be worked through. You know, theres also the idea of, you know, in some respects are these games more akin to gambling when you think about loop boxes and some of the other technologies that have been embedded into the games from microtransactions. Were pretty comfortable in terms of just how these, you know, these management teams are managing their business. The level of engagement. Thats why were investors im a d, but my 13yearold son is an a. Thanks. And be sure to tune into fast money tonight at 5 00 p. M. Eastern to see the interview with Activision Blizzard pretty sure if they had a competition, i could be a real contender. The Airline Stocks taking flight, united, american, delta all ep 2 or more should you board now or let those stocks come back to ethar well debate straight ahead on power lunch. Time for trading nation. Establishinged with Harvest Management and lets talk about some of the airlines here. Are you the buyer of any airline . Delta is one to look at here. Trying to break above 51 for three years now. And every time it does it, it pulls back its finally going to break above that in a significant way, its going to be very positive for the best ingredient in the group. Dennis, what do you think yeah, saw the price action this morning on all the Airline Stocks thought they were being priced in bitcoin for a second, then i realized the q4 traffic numbers came out and they were impressive what weve seen in the Options Market is a lot of people monetizing or selling out calls they had bought going into these numbers. My good friend brian over at stiffle has a great trade, united airlines, we think should be bought. The 60, 70 expiring in march will give you protection if southwest starts piercing into unites area on price competition. Thats the thing to look out for in the q1 numbers that will be coming out dennis and matt, thank you for more trading nation, go to trading nation check please is next you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. General motors and brands manufacturer moe dell low and corona beer. These stocks moving lower on a report that a canadian source, this is a reuters report, it indicates that the u. S. Will in fact pull out of nafta and that that would be bad news for those stocks Kansas City Southern which carries a lot of freight from down there and there you see the dollar moving up against the mexican peso quick check please, mine is the Consumer Electronics show right now is in the dark last thing we heard was they should focus more on making stuff that makes Energy Rather than making stuff that uses energy no way to illustrate how effectively your devices work than having no power people trading food for cell phone chargers right now, tyler. Very unconfirmed like i just made that up sorry, i dont speak you are the son of mathis thank you for watching power lunch. Welcome to power lunch ironically the lights have gone out. Were trying to get a sense of how big this problem is is it just affect the Convention Center or is it larger were going to try to find out meantime, canada is saying its mor