Transcripts For CNBC Power Lunch 20180119

Opportunity. And what a week it has been for the cryptos. No, those are not superheros and they have not been performing this week in any way like a superhero. What happens now after this bitcoin plunge well talk with a head fund emergen manager who is sticking by his opinion. A boxed power lunch starts right now. Tyler, maybe we should call it tales from the cryptos. Youre welcome america is staring at a Government Shutdown but investors taking it in stride, because you smart cnbc viewers know it doesnt hold stocks. They are down, but they are on track for another winning week three dow stocks in focus for the opposite reason, however, ibm down 4 . Despite breaking a 22 quarter declining revenue streak and amx down 2 and ge could not get out of its own way and now the stock is at sevenyear lows on the pace for the worst week since 2009 oh, ford sinking again ford dropping to the lowest level in four months and sound the alarm, adt sinking on their first day and that is even often a lowered ipo price. Yep im melissa lee, as we mentioned, we are barreling toward that Government Shutdown, less than 11 hours away. And a new development, Chuck Schumer has invited to the white house. How about nancys invitation we are going to eamon javers at the white house. Chuck schumer is in the oval office i saw him go in a few moments ago. A reporter and i asked him, does he think he could get a deal he said, i hope and kept his chin down and kept walking into the oval office for that negotiation. And were told the reason for that delay this morning in the press briefing that we were expecting to happen at 10 30 didnt happen until after 11 00, everyone was wondering why that was. Im told the reason is that the president was on the phone with Chuck Schumer and mark short, the legislative director and Mick Mulvaney were invited to the oval office to participate in that phone call they were continuing negotiations even after they had scheduled a time for that press briefing, keeping everybody waiting and trying to figure out what was going on after that they came out and gave us the press briefing in it, it seemed as if they had the sense this is a government heading for a shutdown but mcmull vanney said the Obama Administration weaponized it previously here is what he said. It will look very different than it did under the Previous Administration one of the things that ive learned since ive been in thi office is that there is no other way to describe it but the Obama Administration weaponized the shutdown in 2013 what they didnt tell you was that they did not encourage agencies to use carryforward funds. Funds that they were sitting on, nor did they encourage agencies to use transfer authorities. They could have made the shutdown in 2013 much less impactful, but they chose to make it worse. So will we have that kind of a shutdown this time around . It is unclear. As i say, Chuck Schumer is in the oval office with the president. Perhaps getting a last minute deal well see what happens when he emerges. And senator lawmakers are meeting and kayla, i saw your tweet and well have a vote but not sure when. A senator republican aide tells me mr. Is a vote on the shortterm funding bill. They expected some time this afternoon but the time hasnt been set yet of course as eamon just mentioned, the democrats are regrouping as they are meeting with the president and whatever he comes out with the deal will set the tone for the afternoon and the democratic response. Democrats are expecting schumer at some point to introduce an amendment to the shortterm funding bill that includes things like daca, like border security, like Disaster Relief and some of those democrats have been appearing on television and talking about their expertations for that amendment so well see if after that meeting that is what senator schumer brings to the floor and brings to his colleagues who are trying to figure out what their next steps are earlier today, just a few moments ago, the minority leader in the house, nancy pelosi, held a press conference and here is what she had to say. I dont believe we have that bite but she did say a shutdown is not good for anybody and that is not the outcome that anybody wants but well see what sort of soe sort of momentum that they could get a deal to avert that shutdown. Kayla, a long day for you and others covering the scene. And sara taggan is here and alex bolton is a senior staff writer for the hill sara, let me talk more broadly, well get to the idea of whether there is or wont be, how long and so and so forth. But does the fact that we keep coming back to the moments of standing on the precipice, where one party is punching the other, the other party is punching back, they are each blaming each other. And a president in the middle of this doesnt this speak to the American People about how dog gone dig functional the government has become. It does it is a reason why you see independent registration in this country nearly a 70year high. And people are frustrated. They are frustrated with both parties. And the politics of this is bad for everybody. It is worse for democrats because the house was able to act. And even though the democrats would likely amend that house legislation, the house gets something done, the senate has not. And the republicans are twoing a good job of making sure that americans know that Chuck Schumer is the guy standing in the way. It is a long way to play out but that is how i see it. Well schumer is in the oval office right now but fundamentally which raises the stakes for democrats. If he cant get a deal on. Fundamentally you are right in the past the gop has taken most of the, quote, blame for these Government Shutdowns this time it looks like the democrats are the ones who rr rrnt arent going along alex, the passing of a federal budget is the most basic act of government of all and yet repeatedly we are unable to do it and we do these things two weeks at a time, three weeks at a time, four weeks big deal why cant you get it going what is the what is the problem there, number one, and what do you think is going to happen are we probably looking at another two week or threeweek extension while they figure out daca and chipol and the rest. Some lawmakers are proposing a one day continuing resolution or a threeday continuing resolution so it is getting ridiculous there is frustration on capitol hill orrin hatch, the longest serving senator and he took the floor and said were the greatest country on earth but sometimes were run by some pretty stupid people and that just shows the level of frustration. Why is it we are in this situation again. This year isnt all that special. Weve seen brinksmanship and last minute c. R. s omnibus bills at the last moment before christmas the last several years and what is the problem . I think there is a growing realize is that the appropriation and spending process is antiquated, the procedure calls for 12 regular spending bills to pass and for there to be conferences between the senate and the house there are antiquated procedures and the newly elected republican is pushing budget reform and thinks there needs to be changes to how they do business up there. One proposal is to get the to give the authorizing committee more power to give the Spending Committee less power to enact policy on the spending bills really what it comes down to is if you have a policy issue being attached to a spending bill. That is what is causing the problem here. Sara, more broadly, this shutdown showdown comes on the eve of the president s the anniversary of his first year in office if the republicans dont fall in line so to speak and prevent the shutdown from happening and it is the first Government Shutdown where one Party Controls both houses in congress, then is that going to stall the momentum that the president might have otherwise had going into 2018 for the rest of the agenda items like infrastructure . I think it certainly makes it harder any time you have a log jam like this, where emotions run higher than normal, it has a dampening affect on the ability to get things down. And they need 60 votes in the senate and they have to have a bipartisan solution and Chuck Schumer is thinking about as he is sitting in the white house is he has ten democrats up for election elect the out of states trump won that he won by doubledigits and i know many of those members places like north dakota, missouri, they dont want to take a vote where they are looked at as shutting down the government over immigration. And so the politics work on both sides of this. Alex, do you find hope in the fact that the president did invite i presume Chuck Schumer into the white house i doubt senator schumer simply showed up. And the optics seem good maybe not for the republicans, though, because they are thinking, is the president going to undercut us well, i mean it is a good sign because it means this is being kicked up to the executive level and what the what Mitch Mcconnell has said all week is that, were not going to put anything on the floor until it has the president s signoff and the only way you could get him to sign off is have him sit down with a chief democrat negotiator and that is Chuck Schumer. So if there is a deal, this is how it works and happens you get schumer and trump in a room together. They could have a good rapport when they are facetoface, but it is in their separate offices and dealing through the media, when things get bad. Folks, thanks very much i would say one thing to the table here, the market is reacting very minimally. Special the s p and nasdaq is how is higher and the dow is lower. Investors are paying for attention to Rising Interest Rates than to this weve seen this movie before and what makes it different this time is it is not linked to the possibility of a debt default. There is no fiscal cliff here this time around not to minimize it, but just to distinguish it. It is a good point. We need to remind the viewers, this is this would be the 19th Government Shutdown since since weve been alive. The dow is up 71 since the 2013 shutdown not saying it is not an important story and a big deal but for the market, they brush it off. They Pay Attention to other things more. Lets get to Steve Liesman with breaking news from the fed. Randy grossen, one ever his biggest most specific speeches since becoming taking that position, saying the feds should step back and assess financial regulations. He said the fed can, quote, improve the efficiency of regulations out there. He said core parts of financial reform has brought gains to the Financial System and he wants to preserve the core reforms, capital liquidity and stress testing and resolution doesnt want to change them but has an idea at the margin. He supports the effort in congress to raise the dodd frank threshhold to really free up some of the small and medium sized banks. He said the fed itself can and should do more to tailer regulations to the size of firms and fed should disclose more stress test detail totz bank that is an area of controversy and he said the Financial System is stronger due to the reforms and doesnt want to ease for the biggest banks. So this is one of the things we are not talking about, because were talking about the shutdown but there is an effort to ease the dodd frank reforms that are not going to back to the wild west but maybe the extreme lockdown that some consider the banking smm to have been under is easing up a bit brian. Steve, very cool. Thank you very much. Joining us now, jason wear with albion financial and floud from j. P. Morgan funds this is a big deal and a lot of people will be impacted and affects but from a equity market perspective, jason, stocks, does it matter, do you advise your clients, hey, dont buy any stocks or sell stocks, the government may shut down, does that happen . No. And volatility increases around these types of events. I believe it was you, brian, it is a great question, going back to jimmy carter, i think weve had 18 of these Government Shutdowns and if you look at the median draw down over the course of the shutdowns, it is like a half of a 1 and i believe in 45 of those instances, the market is higher the last three Government Shutdowns we saw the markts high the market higher. So we dont think it is a tradeable event. If you have some dry powder, some cash, it is a Good Opportunity to put that to work around the volatility for names you want to own but as far as a market event we dont think what is the definition of in sanity the same thing over and over again and expecting a different out come weve been sitting up here and talking about d. C. Dysfunction for decades now. Sadly this is beginning to be the norm, not the exception. Is it not . From an Equity Investor perspective and you have to think the government is probably going to shutdown again, lets buy stocks or sell. And if you dont believe the government makes competent decisions with regard to the economy, it is perhaps good they dont make decisions so it is sometimes having government gridlock is not that bad. I dont think this is a shutdown of nonessential services, which means most of the federal government stays open i dont think it is a big deal i think what is a much bigger deal is the earning season where we are finding out company by company exactly how this tax reform will impact them. It is immensely complicated. I think all of the equity analysts are working overtime to figure out who the real winners are and there are a lot of winners and that is helping the market move higher. Jason, in terms of where you see value and stocks right now, are you factoring in higher inflation and much higher Interest Rates that seems to be the market concern over the past week or so at least. And that is a really great question something weve been paying attention to for a long time and consider Interest Rates and inflation to be two of the four critical elements that influence stock prices and inflation is starting to show some signs of ticking up and while we dont think it will run hot, we are more perhaps on inflation watch, quote, unquote, some of the commodities index is breaking to out out of the slumps were looking at tips that are suggesting over 2 inflation a lot of these cyclical sectors are signaling inflation. And then cpi is running around 2 but the feds prefer cpe lower than that. And then on the Interest Rate front which is more important, were at 263 on tenure and if it breaks out from here to the upside, it may have a little bit of room to run although real Interest Rates are low. Invest probably suggests that stock prices still look attractive in this environment. David, why do bull markets die and do you see any reason why this one might be close to that well, they die for different reasons. And usually it is something to do with the economy. But what i think is interesting about this economy is it is really hard to get inflation going. So i dont think well have an in flation over heating and reaction end to this economy but i think these as prices go up, all of this liquidity and the tax cuts are fuelling a bull market and a lot of assets and the real problem is an asset bubble so people have to watch the key is watch evaluations in everything that you own. Dont get sucked into this over exuberance because there will be another bear market and when it occurs, those things which are flying highest today will take the biggest hit. So this is a time for a little bit of caution when everybody is feeling just as exuberant. Jason and david, thank you. Have a good weekend. Well weekly rig counts just out. Jack jackie de angelis is at our commodity desk. The number of oil rigs in the United States fell this week by five the total now 747 which is up 196 compared to the same time last year. Drillers cutting rigs for the second week in three market interpretation, big oil exercising caution even with oil over 60 a barrel. Down about 1 . 63. 28, back to you. Jackie deangelis. What the past tells us about the future and weve seen a crypto crush in the past month is this the popping avenue bubble or a normal healthy pullback weve seen pullbacks like this berebeevfo, lie it or not. Power lunch will be right back 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. It has been a wild week for bitcoin. Higher but down 10 in just one week but moves have happened like this before we are looking at a big drop. Bitcoin is not for the faint of heart after losing half of the value, bitcoin is rebounding. Briefly hitting 12,000. Keep in mind, over the past year we have seen six occurrences where bitcoin has dropped 20 or more the average return two weeks later, 24 and four weeks later, bitcoin gains 81 . According to genesis trading but warnings from the s. E. C. , radsing the alard raising the alarm and mutual funds saying there are issues that need to be examined before sponsors begin offering these funds to investors. Lets talk about investing in bitcoin withari paul a Portfolio Manager at the university of chicago endowment. Welcome to the show. Thank you for having me. Lets talk about regulation and the strongly worded letter from the s. E. C if we do see more regulation, not just from south korea and china but the United States as well, that certainly makes investing in this space more challenging. Certainly i think it is probably the single biggest risk to investing in crypto currency. And why are you doing. There areiddio sank rattic risks and return if south korea does ban all crypto currency and were talking about south korea, one of the largest bitcoin markets in the world, where do you see it goes from here. I expect a crash. Maybe we return to the september lows of say 3000 that is an extreme case but we dont expect a full ban in south korea. How are your investments in bitcoin and maybe the alternative coins doing right now. So we we invest across the universe we dont own any bitcoin almost all of crypto currency is down together. Correlation is very high so most things are down 50 . So were active traitors and we move in and out but we are down less than bitcoin. So the last time we spoke on fast money you made a bet on future markets, a Million Dollars bet that bitcoin would go to 50,000. We bought 50,000 strike calls. And what have you done with that position since your an active trader. Probably holding until expiration. So you think it is a possible that bitcoin will go back to 50 k or up to 50 k. I thought this was likely i expected a public call i made then in 2018 bitcoin would hit 6,060,000. So i own less outright crypto currency so it means ill hit less. Which will it hit first 6,000 or 60,000. 6,000 is more likely but i dont know. About it is not just bitcoin. Weve seen ripple, white coin, where should one put their money, which offers the bigger risk profile. That is a tough question. If an investor is only going to invest in a couple or a one or a few, the coin based coins are attractive with real communities, let pumped artificially there is more of a grassroots broad ownership so bitcoin is still a good longterm bet. If we are to believe that regulation is going to increase, then should we be more concerns or less concerned about the likes of a mon arrow or z cash, the privacy coins. That is a great question. I dont thi i dont think regulators are saying that and that is a way away. You have a nice job as a Portfolio Manager and you said no to that and why do that when this field is unpredictable. Were looking for alpha so the market is increasing but there is a question of i could tell you endowments around the country is how do we earn a decent forward forget about source of beta or return, it is an inefficient market where an active manager could generate returns and when i surveyed the landscape there were very few funds several months ago and very few that were professional, so given your experience, do you think that endowments and other investors will eventually get into the space they will eventually. So theyve been doing but the mandates are preventing them right now, correct. No, they can invest some endowments have invested both indirectly and directly there are some endowment investing in a crypto currency project and many of them are invested in Venture Capital firms that are invested in us and crypto currency directly. So not just the south korean grandma investing. They are finally getting in. Most of the large Family Offices around the country are in crypto currency. Good point. Thank you good to see you again. Thank you on deck, why some amazon prime members but not are going to have to pay more. Are you in the group and imagine the tweet storm is bo jeff bosez goes outside of the United States and to canada. Well talk about that. A lot more to do stick around at fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Like you do sometimes, grandpa . With and puffed. Tage. 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You or joints. Something for your heart. But do you take something for your brain. With an ingredient originally found in jellyfish, prevagen is the number one selling brainhealth supplement in drug stores nationwide. Prevagen. The name to remember. We have to stop talking now. We were having so much fun the market is on a tear since the passage of tax reform last month. And it seems like all green lights for the u. S. Economy. But over 30 years ago Economic Predictions were very similarly rosie. When president reagan signed the last major Tax Reform Act in 1986 and almost a year later to the day, black monday happened, the dow suffering the biggest one day percentage loss ever no one is saying this will happen here or maybe they will, but be mindful of history. Joining us enrique floud and author and analyst and financial historian ron sanaa. Welcome to both of you we could draw comparisons or distinction between how this particular bill became law and the reagan act became law. There are similarities, there are differences. The reagan act much more focused on lowering individual rates this one on companies. But take us back to the economic climate in 1986 and then tell us what happened in in 87 and why and what are the similarities and differences. Certainly well you are right there are many differences between this tax bill and the one adopted in 86 86 was the the culmination of a lot of tax politics that had begun in 1981 with a substantial tax cut. Early in the Reagan Administration that produced rising deficits and it gave rise to the attitude, well deficits dont matter because in 1982, that great bull market began on wall street. And galloped on and on in 86, this fairly carefully tailored and constructed tax bill was adopted with the idea that it would spur economic growth, and the jury is out about whether or not it did that but what is interesting is to do is as you say, fast forward one year and look at how radically tax politics changed after black monday almost immediately, i mean within hours, deficits, federal budge deficits soared to the top of wall streets worry list. And the the comparisons with today that worry me frankly is that gap between wall street and washington wall street back in 86 was firmly convinced that nothing washington did mattered. Stocks were going to go up regardless it didnt matter we feel that way now. Exactly. Were sitting here staring at staring at a Government Shutdown and the market is going but we also have experience with shutdowns that they dont shutdowns dont matter. They could last for a couple of weeks and we get through and but to her broader point, the market is moving up no matter what is going on in washington. And this is an interesting or in pyongyang. And if this tax bill increases the budget deficit at a time unlike the 1980s, the Federal Reserve is raising and Government Spending is exploding. In 87, was the economy as hot as it is today and was the market as bubble itious as it is today, were Interest Rates rising as they seem to be today. From a different extent from january of 1987 to august of 1987, the dow topped on august 25th 1987 at 2722. That is 2700. But it went up 38 from january to august. But the long bond went from 6 to 10 the 30 year bond was the benchmark. So rates were accelerating and the dollar was deapprecia dee ating and the budget was a concern and we had a trade argument with germany that also helped because at the time secretary of treasury james baker said well let the dollar go to hell unless germany agrees to certain trade terms and we had the crash so there were a host of similar ant seedents for the crash we might be off on timing with respect to how long it takes for us to have another market event. But there are similarities. But the point that ron makes, is that none of those issues that he has itemized there matter to wall street one bit until they all until they did. And it turned on a dime. The first of october, 1987 was, ah, deficits and on the 20th of october, 1987, after black monday it was oh, my god, weve got all of these deficits, where did they come from. And that psychology is what worries me the psychology is so similar there is other differences policy wise but the psychology is similar. What i remember of that time and we were all there. We were all there that is why this is fun. We should have dinner over this. But i remember the economy was out and the market was rising at the same time Interest Rates were rising. Long bond going up that feels a little bit like today in a different it is not a pure analog. No. And we had middle east trade fictions the morning of the stock market crash we bombed the karg island terminal off the coast of iran and the iraniraq war was still to an extent and having major trade disputes with germany and japan and the dollar was in play and our president was saying, and our congress was saying very tough things about trade as President Trump is today. That crash was of course the first real test of Alan Greenspan to become the fed chief in april. Not even. In ten weeks he barely found the restroom at the fed. But he acted quickly. He did. And he had great instincts and he was guided well by Jerry Corrigan in that crisis but he did exactly the right thing and he did it immediately. Without waiting. So the fed doesnt have that kind of room not now. Then he could cut rates and he did he could keep rates down and provide money. Where can they cut below zero here. They backstopped the system at that juncture, the banks an the brokers were flooded the system go get the book, right. Get her book. She has the one secret which is how the market turned on october 20th, the next day. Ron is a great reader and i was delighted he was pleased with the book. But it was a it was a closer run thing than we ever thought at the time. Even than we on the scene in the media realized at the time. What is the books name. A first class catastrophe. Go find it and kindle it. Whatever you need to do. Thank you. In the past hour, senator Chuck Schumer arriving at the white house to meet with the president about the looming Government Shutdown. Republican senator Lindsey Graham tweeting moments ago, glad to see the president and senator schumer sitting down and talking. This is welcome news to American People, military, Daca Recipients lets see if two new yorkers could agree on a good deal for the usa, i believe in america anything is still possible graham continues unlike some of my republican colleagues im glad the president and the Senate Minority leader are talking. I have confidence President Trump can and will lead us to a successful conclusion on multiple issues that are important to the American People, end quote. We know President Trump is no fan of amazon chief jeff bezos so what is the ceo decides to pick a nonamerican city for the Second Headquarters. It could happen. And the man behind making it happen, torontos mayor will join us next thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye we help all types of businesses with money, tools and knowhow to get business done. American express open. Its abor it isnt. Ence in 30,000 precision parts. To get business done. Its inspected by mercedesbenz factorytrained technicians. Or it isnt. Its backed by an unlimited mileage warranty, or it isnt. For those who never settle, its either mercedesbenz certified preowned, or it isnt. The mercedesbenz certified preowned sales event. Now through february 28th. Only at your authorized mercedesbenz dealer. Hello, im sue herera. Your cnbc update at this hour. More testimony at former usa gymnastics doctor larry nassar hearing. Jordan wieber describing the sexual abuse and criticized the u. S. Gymnastics and the Olympic Committee for their lack of protection nobody was protecting us from being taken advantage of nobody was even concerned whether or not we were being sexual abused. I was not protected, and neither were my teammates. Olympic organizers welcoming an agreement between north and south korea to unite athletes at the upcoming winter games. They promise that more exciting initiatives promoting unity will emerge this weekend. Despite a long decline in cigarette smoking, millions continue to light up the cdc reporting smoking among adults went from 21 to 2005 to 15. 5 in 2016. Nonetheless, 38 million adults continue to smoke. Youre up to date. Back to you. Sue, thank you. Toronto canada is home to many amazing things. You have nice people and the sea tower and the greatest progressive rock band in history, rush. But now they hope to become the new home to amazons Second Headquarters one of 20 finalists and the only city outside of america making the cut. And joining us the mayor of toronto, john tory and i got looks when i mentioned rush, but we know what we are talking about, right here is to the yyz. I gave them the key to the city about a year and a half ago. That is how highly we think about rush. And how highly do you think of amazon. We think highly of amazon and we think highly of anybody who wants to come to canada. Were for Free Enterprise and jobs and amazon would be a great addition to the toronto economy and so were just delighted we made the playoffs as it were and now one of the cities getting further consideration in this competition. Well a bunch of canadian cities did not make the cut, halifax, vancouver but do you feel like you have a bit of a handicap in a sense that President Trump has obviously made his distaste for jeff bezos and amazon wellknown do you feel like the potential for a backlash if amazon came to toronto is an anchor around your ankle. I have enough trouble of the politics of canada and let alone the United States. Well put our best foot forward. We offer an unparalleled kwau s kwaults quality of life and that is important to amazon and we offer the deepest most Diverse Talent pool anywhere in north america in terms of tech talent and a. I. And a welcoming environment for people around the world so we are trying to get the best and the brightest to come here and welcome them. 50 of the people who live in the region were not born in this country and they have built up our city and our country and have done wonders for us and weve now put in place immigration measures to speed up the time when within which we could get people to come here. So all of those things plus our main card that we play as a region in our bid, which was a substantial commitment to invest in further education for stem graduates and a. I. Graduates and so on, which is what we said to make sure that Talent Pipeline stays full in the future for Companies Like amazon or anybody else who wants to come. But mayor tory, brian is asking, do you think you have a hot. Under americas trump make America Great again to win the headquarters. Absolutely. The board of directors and the others will be focused on what is good for their company and if we could offer them a huge pool of talent. And huge tax breaks. The aability to attract more talent and the ability to keep pumping out the graduates and a low tax, low cost Great Health Care environment which by the way will save them money as well and a quality of life second it none for all employees, whether they come from somewhere else or here i think they have to look at that, whatever is going on in the politics of the United States. Our toronto born and raise and now based wanted me to tell you, go leaves go, but it means something with a stick mayor, a pleasure. If you win well see you back here on cnbc ill be there take care. Coming up on power lunch. One company that wants to connect celebrities with fans and brands with their customers. That is in power pitch. And counting down to the shutdown the latest developments straight ahead. Is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Time now for the power pitch, 60 seconds to convince a panel of experts that their business has what it takes to be the next big thing. Im Amanda Patterson im Amanda Patterson, ceo of the call list. We help brands monetize live video and deep relationships with millennial consumers and one person could video call many people at once imagine a video call from your favorite author or athlete or an interactive tutorial with a celebrity make up artist they have have a one to one video like face time 82 of video traffic and the 40 blts market trend and with our ceo managing team of engineers, we created the perfect scaleable solution brands get it and theyre prepaying for integration. Some ask for exclusivity the next billion smartphone users will rely on video invest in the call list scaling brand attractions with people around the world you just saw the call list pitch, so lets meet our panel joining us here on set, Angel Investor alicia soret and kelly keenan and from San Francisco Venture Capitalist david woo so amanda, you are now in the hot seat. I think you did a good job of explaining the product without actually demoing it. But you didnt talk about competitive advantage at all so im going to have to give you a bplus. What is to stop the big players like a google or a cisco from replicating what you are doing. Think our competitive advantage is our technology arrangement. We could integrate directly in a couple of weeks. We can set up hosts in a matter of minutes and charge admission or contract platforms can open another revenue stream to have sponsored content. As the influencer space grows online people are turning to the tools and i like you are coming in as a new entrant trying to do things the other platforms arent, i would give you an aminus. I am engaged with a network of brands and contact platforms and direct sales in the next two quarters we will launch a Digital Marketing campaign for individual hosts you did a Marketing Campaign for individual hosts. You did a mice job perking my interest i was left with a lot of questions on are you selling directly into the brands or building a platform . Im going to give it a bplus. How do you price the service for your brands . We have a baseline price, and that can be increased with custom features. We operate from a single code base, so we actually white label our own product for individual hosts. I saw that the calls are limited currently to 1,000 participants why is it 1,000, and will that number expand . We evaluated our architecture and we can scale to many thousands. Give me a snapshot of who your kip typical user it is . Were starting with a fortune 500 cosmetics brand and they plan to leverage it with tutorials with celebrity makeup artists. Thats one example of how powerful this is for consumer education. This is an opportunity to do that at scale. We heard whaumt amanda had t say. Theyre going against really big tech players out there with that said, i like the personalized experience for the participants, and i like the idea that the influencers get to monetize their communities you have a pretty dynamic founder here, so im going to go in whats on offer for influencers and the people who are big brands and want to get more out of their experience that what other platforms are offering, thats positive so im in too i think the b to c white label piece creates fiction and might be hard, so im going to be out amanda, whats your reaction . Thank you so much for your fe feedback and your questions ande check out the call list. Thank you to our panelists. Thats todays power pitch all right you heard what the panel had to say. Now its time to find out if you are in or out on the call list follow the conversation on twitter using the powerpitch. And for more, head over to powerlunch. Cnbc. Com. A lot of power there ntuiia incredible run for nvid coinng the stock up 1,000per isnt in three years. Can it go higher thats coming up in street talk. The sun to develop popcorn. We thought we had the right equipment, we quickly realized we needed more. We were able to send a Wire Transfer to a local vendor and get more Solar Cookers delivered, right here in death valley. Manage business expenses from virtually anywhere. The chase mobile app available with business checking. Chase for business. Make more of whats yours. First stock here, a two for one. A bargain. Winn and mgm they make the cut with a top pick with a price target up 13 . They have the highest exposure to continued vip growth and theyre optimistic that the Boston Harbor location mgm, 19 upside. The analysts were bullish and expect to generate solid firstyear returns your second is kraft heinz. A buy in at a 96 target they call kraft a core Holding Analysts think the stock will outperform peers and kraft heinz deserves to trade as a premium, a 95 target is about 18 upside. Third stock, nvidia bank of america maryland raising the price target for the chip stock to 275. Thats up. Analysts think december online gamer data shows upside for nvidia cards and cryptocurrency, especially ethereum, the new price target is nearly 20 . Side note, player unknown, fastest selling game ever. You have to have an nvidia card to play it check it out final stock, icon plc, dublin based Clinical Research org. Starts the buy at a 126 target. Bookings are accelerating them, and they put it higher management continues to deliver, especially on the cost side. By the way, that 126 target is a 12 return tyler folks, a little more than ten hours left until the shutdown. The Senate Meeting right now senator Chuck Schumer apparently still meeting with president trp umat the white house can they make a deal the second hour of power is straight ahead welcome home mom. With the right financial advisor, life can be brilliant. You or joints. Something for your heart. But do you take something for your brain. With an ingredient originally found in jellyfish, prevagen is the number one selling brainhealth supplement in drug stores nationwide. Prevagen. The name to remember. Top of your menu to start the second hour. Potential Government Shutdown, falling dollar, and big earning season ahead wow, lots to focus on. Whats key were going to find out. What the recent jump in Interest Rates means for any of you trying to buy a home or maybe sell one and the president has tweeted more than 2300 times since taking office. Those tweets seem to be helping the stock, up 30 since then but can the Trump Twitter bump continue well dig in im Brian Sullivan second hour of power lunch begins right now and welcome to power lunch. Im melissa lee. Mixed day for the markets, the dow the only index in the red. S p as well as nasdaq, higher. Ibm American Express largely to blame for the drop in the dow today. Theyre shaving 60 points off the index. Ge of note, falling to a sixyear note, down 11 this week nike leading the dow after getting an upgrade, hitting the highest level since 2015 dollar general, home depot, and best buy at lifetime highs and check this out treasurys tenyear yield rising, hitting the highest level since 2014 and earlier trading, jeff gunlock said 2. 63 was the level to watch were right there right now. All right, melissa. Welcome everybody. Im tyler. Heres what else is happening at this hour. The iea says the u. S. Could overtake russia and saudi arabia as the Worlds Largest oil producer this year this comes as production in the u. S. Has bounced back recently delta saying passengers with support and Service Animals will now need advance documentation to travel. The firm cites safety concerns and notes an increase in incidents such as biting i thought that was just the passengers and coke says it wants to help collect and recycle every bottle and can it sells by the year 2030. It hopes bottles on average will use 50 Recycled Content by that year, 2030 we begin this hour where else in washington. If congress cannot reach a deal to fund the government, were headed for a shutdown at midnight tonight we have you covered all across washington ameamon javers at the white hou. What is the latest Chuck Schumer still in there meeting with President Trump well, heres what we know as of right now we know Chuck Schumer is in the oval office. I saw him walking into the oval office we asked him if he thinks he can get a deal he said i hope and continued walking right into the oval. We believe hes in there right now with the president what we dont know is who else is in that meeting we believe that Republican Leaders are not in the meeting along with Chuck Schumer and the president. We expect that there are some members of his staff who are in there, but we dont know exactly who is participating in the meeting or what deal if any is on the table right now earlier today, Mick Mulvaney, the omb director, came to the White House Press Briefing Room to talk about what the governments plans are if there is a shutdown and also to talk about the blame game, who takes responsibility if theres a Government Shutdown at midnight tonight. Heres what he said. The president has actively worked all day yesterday to try to get a bill through the house and continues conversations today. Theres no way you could lay this at the feet of the president of the United States i can tell you there are reporters camped out in every crevice of the white house complex, looking to see when Chuck Schumer leaves, if he has anything to say, if he gives a hint if theyre coming to an agreement today or were heading for a shutdown at midnight tonight. All right, thank you. Lets head to Kayla Tausche on the hill with the latest there. With Chuck Schumer at the white house, the conversation here has now turned to what sort of deal he will strike with no republican buffers in the room from capitol hill. The Senate Majority Leaders Office insists theyre in Constant Contact with the white house ahead of that visit. Talking about republican priorities, but the Number Two Senate republican, john cornyn, told nbc news the thought did cross his mind that there wont be anyone else there from their team to act as an idealogical buffer for a president who has been idealogically untethered during some of these dealmaking sessions earlier today, nancy pelosi, who is the House Minority leader for the democrats, was giving a press conference, and she said she was confident that schumer would approach that meeting with all of the priorities for democrats, not just immigration priorities listen we have worked very closely, house and senate, democrats, in trying to work in a bipartisan way on what our priorities are in this debate i have said before, if there was no d. R. E. A. M. Er ever on the face of the earth, we still have our issues about parity and pay force. And we can just sit down and settle that. Now, before this meeting, the expectation by democrats was that schumer would introduce an amendment to the shortterm funding bill the house passed and it would have border security, protection for d. R. E. A. M. Ers and Disaster Relief as well unclear what this meeting does to that potential outcome, and its also unclear how the president would appease Chuck Schumer as well as mark meadows who is the chair of the House Freedom caucus two house mens on completely opposite ends of the spectrum, both of whom the president has sought to make deals with in the last two days. Well see what comes out of it so is there, kayla, a way to thread the needle . You have the house already having voted on a bill that obviously the Senate Democrats would not vote for so then lets say theres some bargain that gets put together in the white house there presumably there are staffers around there like stephen miller, who has been one of the president s harder line advisers on immigration they then strike some deal whos to say that the house would then accept it thats the exact question, tyler. But it appears house leadership seems that might be something thats coming because just a couple hours ago, they started telling members, hey, wait, dont go home for the weekend just yet stick around because we might need you we need you to be flexible previously, they had said look, we have done our work, cast our votes. Now were going to get out of here, but there seems to be a pushback on that front with most members now sticking around. So well see it remains unclear theres still some in tra Party Republican bickers over whos in the room, who gets to negotiate this deal. Theres still a lot of contentiousness on this front. You have two new yorkers in the room right now, apparently, schumer and trump. Well see. Kayla, thanks. It has been a wild week on wall street. Triple digit gains, losses, gains. Nearly every trading day volatility, maybe its coming back just a little bit is the market reacting to the uncertainty coming from capitol hill and down pennsylvania avenue or is it Something Else . Bob pisani watching it all unfold at the New York Stock Exchange bob. Tyler, i tend to think its Something Else, but there has been a change in tone. Yes, were essentially just off historic highs, but the markets stopped going up i want to show you what were doing this week because we have been talking about how big the cyclical stocks have been recently but industrials have stopped going up you can say oh, its ge, but its not csx is down, theyre leaders. Theyre all down this week same thing with the material names. Not big moves down, but most of the big names are to the down side energy has a problem it stopped going up days ago and Oil Essentially hit 63, 64, right around there and thats been going nowhere all week so things are stalling out a little bit here. As to why,i hear some talk of shutdown, but i hear a lot about the tenyear yield remember, the most important thing is number one, no recession this year, and number two, no sudden spike in Interest Rates. Either from the Federal Reserve or from the market but look, 2. 5 at the start of the week 2. 63 today thats got a lot of people talking. Maybe theres a little bit of this related to the Government Shutdown, but that tenyear note is the big question being debated here and its been affecting Interest Rates on stocks until this week, and its been kind of strange whats going on. Normally, higher rates are terribly detrimental, theyre not doing much this week banks should benefit from high rates, but they stopped going up as well. This is some kind of Inflection Point we have reached and were not seeing these kinds of effects in prior weeks back to you. All right, thank you very much, bob pisani lets dig deeper into the markets with fast money traders guy and jim. Good to see you earlier in the day. Nice to be here why not lets talk about the markets and where we are bob was making the case we havent gone up really this week he put up some sectors there are some sectors who had nice gains for the week despite all volatility we have seen. You mind if i jump in ultimately, we have a case here. Look at the small caps theyre up over 1 copper is up 80 basis points when i look at the cyclical parts of the economy, the market represents that even today the slowdown in industrials, think of the move we had in airlines over a twoweek period going into this week its not a surprise when theyre reporting next week that we have slowed down. Im not telling you the markets should be blind to risk out there. Im telling you theres been an enormous run in the markets. I love bob pisani i love everybody here. My pushback would be, alcoa is a big part of the move in materials he talked about. And alcoa has been its own animal forever you look at freeport, it had a decent week. Steel stocks, we mentioned that six months ago some of the moves are justified, quite frankly. If rates are going higher because the economy is getting better, we can have that debate, but the material stocks will continue to do well. Do you have any concern, though, it feels almost like wall street is rushing to catch up with what the markets are doing. Hunter k. , your friend at Wolf Research earlier this week, upgraded boeing after sitting on the sidelines for the past week. He raised it today, we get Credit Suisse raising the market on caterpillar to match up with what the stock has done here some part of this is a necessary byproduct of analysts having to wait until we got a tax deal this tax deal obviously affects every company a little differently. So im not really surprised. If you think that the s p upgrades to this point have only been about 3 , i dont think we have gotten the bulk of this i dont want to sound like a runaway bull we talked about the caterpillar upgrade by jpmorgan which was brave. At the same time, its like, where have you been. At this stage of the market, the tick higher in yields, the move in oil services, listen, they talked about demand in 2018, they talked about markets tightening up. Thats interesting someone i was speaking to here on the other show i do late last year said one of the things to look for as a tell about the market is if the market starts to hear good news and its not quite good enough. And it sells off last year, the market went right through any bad news we had. But they said if you start to get good news and the market doesnt react, is ibm an example of that . Why is ibm down so much today, the day after, for the first time in 23 quarters, it made increasing revenue we had this discussion last night at 5 00 on fast money, which i know youre glued to every night. First time in 23 quarters they had revenue growth, but the things that concern people in my world is theyre in high growth businesses now, which is a great thing. But their margins decreased. You had Gross Margins of 49. 5 this quarter last year, same quarter, 51 so people say, hmm, whats going on maybe the quarter isnt as strong as is suggests. Last quarter was good, this quarter was good as well this is a pause on the way to 180. We had jim cramer on the show. Im moving fast, i know. I think ibm gets to 180. Its particular to ibm. This is an ibm that rallied dramatically into that number where i think a lot of good news has been priced into a stock that still a year ago we were saying was moving glacially, slow money before you get to ge, i do listen every night there you go. Thank goodness thank you well, heres the thing. Valuations and analysts, i dont want to give it away next segment, analysts tripping over themselves to upgrade beaten up stocks well highlight some of the retailers in the next block. Do you have any worry at all, guys, the these analysts are just, your point about hunter k. , no offense to him or anybody else, getting on the boat when its just about ready to leave the dock boeing at 29 times forward earnings double that of apple hunter said valuation doesnt matter on boeing you get my point. I agree with you we have pointed that ow. Downgrade every day. Mel knows, shes there every day. We have been bullish on boeing for ever a move on a stock of that magnitude has been extraordinary, i think we would all agree. They report i think on january 31st, a week and a half or so from now they better crush, and when i say crush, in order for this to continue to move higher. They talked about their order. If you think about what happened in the last couple months which might be in defense of analysts, its frustrating to see a lot of people jump to the party i think you had Economic Data that changed, industrial data that changed and that along with a tax deal gives people an ability to at least redo their numbers. General electric, lowest level in six years is it broken if we showed you the chart and didnt tell you what stock it was, what would you say . Broken, broken, but we talked about it on our show every night. Break it more the analyst did a great job they said the breakup value on the stock is somewhere between 11. 5 and 15. They said that six months ago. They got scoffed at. Its still an expensive stock. When you compare it to a company like honeywell we said for years in this environment, ge should be crushing and theyre not theres something wrong. As a shareholder . This is a case where people were downgrading at the bottom a case where we have one buck on earnings for 2018. Which is in jeopardy according to a lot of analysts i dont think they can break up the company, either when you think about the Cross Holdings and the need to back up the capital, i dont think this news that people are moving on in the last couple days, look, theres a 140 billion company that everybody thinks is going out of business. I dont think it is. I think its been priced to the floor, but this is not a stock you should go out and put your retirement into. This a stock, you should take some piece of your investment portfolio you want risk on, and thats a small piece, a company you can take a shot on before we go, can i Say Something . Tyler, those cufflinks are killer my virginia cufflinks they won last night, beat georgia. Did Ralph Sampson give those to you theyre number two in the country. Its nice to have nocturnal creatures with us during the day. The show is on late. You need to stay up. Im an early bird at the golden corral. I find those cufflinks offensive, by the way. I understand. Good to have you. Two hours from now. Heres whats coming up on power lunch. One analyst betting that the new tax law will perk up starbacks earning. Hell tell us why and why he thinks the stock climbed a good rising Mortgage Rate fuel a housing supply crisis in the big spring buying season and twitter up 41 since that man took office. Should you buy in or will deing renuclinvees eventually outweight the trump bump all that and more coming up on power lunch. We referenced this last segment. It appears the consumer is en vogue on wall street why do we say that well, melissa and i prepped for street talk, we go through the analyst calls. Look what we dug out just from today. Okay, in retail, nike, foot locker and abercrombie and finch upgraded from neutrals to buys the street beating on casinos, Goldman Sachs saying its time to buy wynn and mgm. Food stocks also getting mcloving today jackinthebox and chipotle getting upgrades all this happening just today. Investors seem to be buying into the trend, the Consumer Discretionary etf up 12 in the last two months. A big component of that etf, by the way, starbucks it should be on our list as well it got a price target hike today, and tyler, we just happen to have the guy who made that call its amazing how that worked out. This, you know, its the residue accident is the residue of genius, folks youre welcome. Bob daringten is the manager director and Senior Research analyst with the advisory group. He upped his price hes a genius and a stable one at that. He upped his price target on starbucks, the seven day, from 60 or so, about 66 a 14 upside the stock about 61 so bob, lets talk about starbucks. How much of this is a tax reform effect how much of this is international . I think those are the two things that are coalescing here you know, i think, yes, by the way, yes, i do have my daily fix. But what i would say is that those are two key pieces, but the other thing you dont want to underestimate is this year, in 2018, given a little bit more money flowing into consumer pockets beginning around the middle of february, that, in my view, is going to be one of the core contributors to a little bit better spending, a little better sales trends, and ultimately, you know, likely upside versus our expectations in the name. So thats the third part of the stool here, and haeb the most important part. The happy consumer who has more to spend onmy favorite drink there, which is the iced vanilla latte. Well, you know, the other thing i would say is that this companys Product Innovation has clearly been, you know, something that has really driven sales, traffic trends, consumer interest and thats not just here in the u. S. But thats worldwide including china. And i think the fact that they continue to look for ways to keep their customers interested in the brand, five years ago, i may have been drinking a regular coffee today, its a cold brew. Cold brew is one of the Fastest Growing platforms for the company. Oh, by the way, it has 25 to 30 more caffeine per ounce. They clearly understand their consumer, what consumers want. And they continue to hit on that pretty well. When will we know that there are too many starbucks thats a great question and you know, actually, about half an hour ago, i was having a conversation with someone who was saying i wish we had a starbucks within our marketplace. Here in the u. S. , we have, you know, something a little over 13,000 locations but that really doesnt get into the prefry outside the major markets at this point. And i think ultimately, were going to see store openings in a broader and broader area than what were seeing right now. Bob, thank you very much. Enjoy the coffee you dont need more caffeine, bob. Thanks a lot. The tenyear yield jumping to its highest level since 2014 ulcod the rising rates and low supply ing the Housing Market lead to crisis in the allimportant spring buying season stay tuned take a look at the nasdaq hitting an alltime intra day high earlier about two points away from it. 7332 was that record high level in todays session facebook of note is up by 1 for the week, the nasdaq is up by almost 1 we also wanted to note that eamon javers has confirmed Chuck Schumer has left the white house from that meeting with President Trump. Did they come up with a deal that is what were waiting to hear about as soon as we have details on what happened at the meeting, well bring them to you. Bonds on the move at multiyear highs Rick Santelli tracking the action hi, melissa youre looking at 24hour chart of tens, you can clearly see something is going on around 2. 63, because that really has been the pivot and what has been a tight range. But tight at the top of the range. As evident by this mid2014 chart of ten year. Imagine a line across all of those tops and you can see why this 2. 63 area is formidable resistance all you technicians looking at the chart going, listen, if i had to have a physician right now, it certainly looks as though its formation for higher rates. Nobody would disagree with that. Its how formidable and how long it will take is the question one week of the dollar index, nothing but sideways thats the good news the bad news year to date chart shows sideways is pretty much at the bottom dont change that dial power lunch wi rurinwo nus. Lletn t siren wailing 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 . All right. To eamon javers we go at the white house for breaking news. Chuck schumer has left the building at the white house after an Oval Office Meeting with President Trump its not clear exactly who else was in that meeting, and its not clear at this hour if they made any progress toward averting a Government Shutdown at midnight tonight. I talked to kellyanne conway, the white house adviser, just a few moments ago briefly. I asked whether any republicans in that Oval Office Meeting. By that, i meant were there any republican leader from capitol hill, and she turned and looked at me and said yes, donald trump was in the meeting and so was john kelly theyre republican she also said its a very small group that participated in the meeting. We can assume that this was a very highlevel negotiating session. Its possible that Chuck Schumer now has an offer to take back to his members on capitol hill. Well wait and see what he says when he gets back to the senate, if there is a deal here on the table or not not clear at this hour whether theyre making progress. All right, thank you very much eman lets go to sue herera with a news update. Heres whats happening at this hour. Secretary of Defense James Mattis says countering chinas expanding military and an increasively aggressive russia are now Top National Security priorities, outpacing the threat of terrorism we will continue to prosecute the campaign against terrorists that were engaged in today, but great power competition, not terrorism, is now the primary focus of u. S. National security. Amazon said its raising the Monthly Price of amazon prime membership the company did not give a specific are you going to shut down tonight . Is the government going to shut down . That was Chuck Schumer, the only thing i was able to hear was the negotiations will continue, and he then walked away amid questions from reporters about whether the government would shut down tonight or not well see what else he said at that rather impromptu scrum, lets call it there, on the steps of the capitol hill as he went back in to the Capitol Building presumably to meet with his side of the aisle his leadership there in the senate mr. Durbin and others, about whether there can be a deal to keep the government open in the face of the wrinkles involved here, which among other things, include daca, the pathway to not citizenship but to staying in thecountry for the Young Children of Illegal Immigrants so schumer has left the white house. And he has gone back to the capitol. And well, of course, be monitoring what goes on there. In the meantime, the oil market is closing for the day. Lets het to jackie at the cnbc commodity desk crude prices losing steam a close of 53. 31. A loss of about 1 on the day, and a loss for the week as well of about 1. 5 . For the month, though, oil is still up 10 this week, there wasnt a big fundamental catalyst there was some technical andy is investment strategist with Matthews Asia hes lived and worked in china for more than 20 years yesterday, and i appreciate you reading my piece, which is basically all this trump stuff and Government Shutdown stuff may have taking attention away from china hasnt been a big headline, that maybe has some concerned the number was better than expected today does that make china free and clear and everything is fine china is never free and clear. Theres always going to be issues can think its important to focus on the great part of the chinese economy thats driving the macro story, and also great for investor thatsts the consumer parts of the story. Real inflation adjusted income last year up 7 . Real retail sales up 9 . Thats why we invest there a lot of people are concerned about the valuations you talked about that earlier, will get out of hand, but if you look at what we have been able to do our main china fund was up 59 last year. The median went from 10 to 12. Our China Small Companies fund which invests in a lot of consumer oriented entrepreneurs up 54 , yet the p. E. Went from only 11 to 13. Which is amazing because youre talking about companies that most people cant just buy. You have to have a presence there, which you guys do youre able to buy domestic chinese companies. Its hard for a lot of people who dont have a presence there. But when i hear that xi jinping has consolidated power, wants to crack down oun credit growth, on loan growth, on the shadow Banking System which has powered real estate. I wonder how much is going to impact consumer, andy, because so much of the gains have been real estate based. Let me give an example of sometimes how things are lost in translation from the chinese or the communist party lingo. Its not really a crackdown in credit growth. Last year, credit growth was 12 . Faster than nominal gdp growth down only a little bit from 12. 8 the year before. What theyre really cracking down on is risks and people breaking the rules in the Financial System thats a good thing, much more proactive. When you take a look at the socalled equivalent of the faang stocks, the Chinese Internet Companies when you take a look at their valuations, what do you make of them a lots of people are investing in those companies because they have access to them, and they see the same trends youre seeing right, and those are great companies. And we own shares in some of them which ones . I cant talk about specific stocks, but what were really focused on is finding the next alibaba and badu and tencent, and thats how were able to invest in consumer Oriented Companies and keep our valuations really low. Andy, we have to keep it there, cut it short because we have breaking news well get you back on soon anda, thank you very much. Kayla tausche, breaking news on capitol hill. Hey, brian. Senator schumer returning here to the capitol after a 90minute meeting at the white house, making some brief remarks to reporters upon his return. We had a long and detailed meeting. We discussed all of the major outstanding issues we made some progress. But we still have a good number of disagreements the discussions will continue. Thank you. So no update there on exactly what they discussed or how this changes the game plan going into the afternoon. A Senate Republican aide still says the expectation is to hold a vote this afternoon, still no set time for that. But i imagine the senator schumer will want to convene with the Democratic Caucus and figure out where to go from here well bring you the latest when we have it thank you very much, Kayla Tausche. The combination of rising Mortgage Rates and record low supply could spell big trouble for the real estate sector heres diana olick with that story. Mortgage rates were stuck near record lows for the bulk of last year, but theyre breaking out in a big way the average rate on the 30year fixed is up nearly a quarter point from the beginning of this year thanks to that selloff in the bond market. Rates loosely follow the yield on the tenyear treasury now, that move could weigh heavily on the upcoming spring Housing Market namely because of the supply crisis there is so much demand and so little supply already that home prices are rising far too fast faster than incomes and inflation. If rates continue to rise, sellers will have less incentive to list their homes for sale because theyll lose those rock bottom rates they have locked in now. That means even fewer homes for sale for buyers, a new rising rate environment could have more firsttime buyers and those on the margins looking to get in fast now, before rates rise even further and price them out so more demand now, the best hope for new supply is in the new home market, but those Properties Come at a Price Premium and of course higher rates will mean fewer buyers who can afford that more on cnbc. Com thank you very much President Trump believes twitter helped h wimin the election, as President Trump helped twitter well take a look at that straight ahead on power lunch. If you look at that chart, you could say maybe he has in case you hadnt noticed, President Trump can be counted upon to tweet nearly every day on a variety of issues the president believes thereto twitter helped him win the election, and talked to the American People unfiltered but is President Trump helping twitter . The stock is up 41 since he took office. So that might be a yes Julia Boorstin live in l. A. With an explanation well, President Trumps twiller followers have nearly tripled. Up from 13 million before he was elected. Hes been driving conversation about his tweets and also drawing exposure to twitter on tv news. Twitter shares, as you mentioned, are up over 40 since the inauguration a year ago. But its unclear just how much the president has boosted twitters users or engagement. Twitters user base has only grown 4 or by 13 million user in the year ending september 30th anthony, twitters coo, said of the quarter when trump was elected that trumps tweets had no quantitative impact, but he said on that quarters earning qual, quote, the president s use of twitter has broadened the awareness of how the platform can be used and it shows the power of twitter now twitter has been called upon to ban the president for tweets that are said to incite violence twitter responded to the call saying blocking a world leader from twitter or removing their controversial tweets would hide Important Information people should be able to see and debate it would also not visilence the leader we can expect President Trump to continue tweeting. I doubt we could tear him away thank you. What impact has the president had on twitter stock joining us to discuss it all is the analyst over at morning star great to have you with us. You know, some could say and take a look at that chart, 41 or so, and say its helped some could say, take a look at facebook and some of the other internet stocks and they were up 55 or so in 2017. Maybe it hurt even whats your take well, i think it has helped to a certain extent. I mean, certainly, we see President Trump tweeting and actually posting his own content, and that in itself generates more content in terms of responses, debates, interactions and so forth. So all of those things certainly help attract ad dollars and so forth. So there is a perception out there that it has helped that it may actually help generate additional advertising revenue, maybe spur some ad growth in my opinion, it has helped it. Another thing actually i think should be taken into account is facebooks latest strategy, which they announced last week which is deprioritizing content or news. That might push users from facebook out to twitter if theyre only seeking to get some news and public content. All of those things have, in my opinion, pushed up the stock thats what a lot of people use twitter for, as a news feed. When do you think well start seeing evidence in the numbers is it going to take a quarter, two quarters in terms of impact of President Trump, i think in terms sorry, in terms of what facebook is doing and whether or not twitter is going to benefit i see yes, i think it will take at least a couple quarters before we see any impact in the twitter numbers. How fundamentally solid do you think the business is . Well, i mean, its slowly becoming pretty much the only realtime news provider on Online Platform out there in terms of whether its generating enough roi, return on investment by advertisers, that remains to be seen i think we need to see more consistent maybe a little bit accelerated growth in users. We have modeled basically pretty much Single Digits the next few years. I think we need to see some stabilization in terms of the ad prices that have been declining drastically for a few years. So once we see that, then we could actually get a better idea of whether this business is sustainable and or has reached stability. Will it remain standalone . Yeah, thats a good question. Ill tell you this if you were to ask me this about six months ago, i would say theres a pretty good probability that they may get acquired, you know, trading below around 17 or Something Like that. But right now, i mean, in my opinion, in our opinion, the premium is pretty much priced in thanks a lot for joining us appreciate it. We have breaking news here. More details on senator schumers meeting with the president. Back to eamon javers were now getting the answer to one of the minor mysteries of the afternoon, which is who was in that meeting in the oval office between President Trump and Chuck Schumer, the democratic leader in the senate. Ill told by a white house official there were only four people in the room the president , the democratic leader, and each mans chief of staff, and thats it that is a very small group for a negotiation that spans all of capitol hill, including the house and senate, implicated by whatever is decided in that meeting. So well see whether the white house invites Republican Leaders up on capitol hill to meet with the president as well. Of course, they are all in communication constantly by phone, but that was a pretty dramatic moment to have the democratic leader come here to meet with the president by himself, essentially, with just his chief of staff and just the president and his chief of staff. Im told by the white house official that it was a good meeting. But theyre not putting out any more details here at the white house, of what if anything was agreed to here at the oval office the last time, as i recall, the president met with democratic leaders, i believe ms. Pelosi was there and mr. Schumer, and the references were to chuck and nancy. Right i dont know if i want to say it didnt sit well with the Republican Leadership, but it destabilized them a little bit what do you think the reaction there is today or do they they may have all known and been cued in here, or do they my sense is this is a very fluid situation. People are finding out about things as they happen. We are picking up on some concern from capitol hill Republican Leaders that the president was meeting oneonone with Chuck Schumer theres that famous picture of schumer and trump in the chuck and nancy meeting last year, late last year in the oval office, in which the two men sort of have each other in a bear hug and are negotiating and its said they have a rapport, that there is two new york guys meeting and talking facetoface in a way that they can cut a deal that seemed to be encouraging, at least to schumer and pelosi emerging from that meeting you know both of them were slightly encouraged last week when the president indicated that he was willing to deal. And you remember that moment last week when Lindsey Graham said something has changed with the president between where he seemed to be willing to deal and then over the space of a couple hours seemed to suddenly not be willing to deal. It seemed as if the president has been speaking to various constituencies and giving off a slightly different sense of where hes at to each of those different constituencies over the course of this whole process. That might be a negotiating tactic to keep everybody on their toes, but it makes it very difficult for anybody to figure out where exactly this is going to end up before the shutdown tonight. One thing we can certainly say is that people sitting in the same meetings with the president sometimes hear very, very different with president sometimes hear very, very Different Things eamon javers, thanks very much. By the way, while you were talking, momentarily the dow went positive. We were down 75 on the dow see, look, as soon as you come on camera, tyler, the dow goes positive the Tyler Mathisen effect put me on, it will fall. Nike on pace for their longest monthly win streak in three years. Should you do it and buy the stock . Stock . Well debate it. 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 . Di 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. Time for trading nation. Today lets trade nike two bullish calls. Highest since late 2015. Kim forrest, matt maley. Kim, you say nike is all about speed. Not about the speed of the athletes wearing the shoe, but the speed of production and getting stuff to market. Is that reason enough for you to want to buy this stock its reason enough for me to put it on a watch list because i do think that speed is important in Consumer Products you know, consumers change their taste all the time and nike finally realizes that they really have to ramp up the speed and get the products people want to them in a hurry that being said, im a little worried about, well, any stock that goes up 5 in a day to buy in now, but more than that, these products are probably not going to hit the shelves until late in this quarter and early next quarter so, this quarter has a big question mark over it. If they disappoint, down goes the stock, or so i think. Watch list, not the most ringing endorsement. Matt, from a technical basis, does it look attractive . I know it did does it still . It does its funny because last summer it didnt look attractive at all. I hated the stock when it got to 60 and failed to break above it. But it rolled back over and got down to the 50 level, i turned much more constructive on the stock because it formed a Double Bottom at that key 50 level, key support level at 50 since then it rallied back up, broke above that 50 level. A key breakout, whenever you get a nice bubble bottom followed by a nice ohio, it has positive development. As kim said, its had a huge run, overbought in the nearterm level. If it can stay where its at right now, that will be very bullish on a technical basis lets face it again, it may have to take a breather before it does that and back off a little bit, but if it does it now or later n 2017 the best stocks to buy were a lot of the stocks in 2016, 2017 wasnt a great one for nike it could be a good one for it this year, especially if it breaks that 67. 12, 67. 15 level. Thank you very much, matt and kim, looking at nike for more, go to tradingnation. Cnbc. Com. Announcer now the latest from tradingnation. Cnbc. Com. Its usually best to avoid buying or selling during the first and last hours of the trading session as thats when volatility tends to be the highest. When volatility picks up, often the spread between the bid and ask price will increase. Thats never a Good Environment for buying or selling. Dynamic performance, so you can own the road. Aggressive styling, so you can break away from everyone else. The bold lexus is. Experience amazing. Oh good, youre awake finally. Youre still here . Come on, denise. Were voya we stay with you to and through retirement. With solutions to help provide income throughout. I get that voya is with me through retirement, im just surprised it means in my kitchen. Oh. [whispering] so that means no breakfast . I said there might be breakfast. I was really looking forward to breakfast. I know. Voya. Helping you to and through retirement. Check, please. Of course, the top story has been the ongoing negotiations about a possible Government Shutdown we should point out, right there you see it, the market it yawning at this. The s p 500 in the green nasdaq in the green. Russell 2000 in the green. And the dow has flipped after being negative for much of the session, it is now up by the slimmest of margins, but it is up. In fact, the s p 500 hitting a fresh intraday high. Nasdaq, fresh intraday high just during this show certainly yawning. Im watching the Retail Stocks theyre showing a bit of revival in todays session take a look at macys, nordstroms, kohls. Norwegian airlines, congratulations. Heres why they just flew new york city to london, five hours, 13 minutes, breaking the nonconcorde record heck of a tailwind, 575 miles an hour, almost hitting speed of sound. Five hours, 13 minutes, norwegian air. A regular flight it wasnt a special thing. God bless the tailwind. God bless the norwegians. Thanks for watching. Closing bell starts right now. Hi, everybody, welcome to the closing bell. Im kelly evans at the New York Stock Exchange. Im bill griffeth. Yes, we are on washington watch as the big question looms, can republicans and democrats avert a federal shutdown were less than nine hours away. The dow is virtually unchanged right now. Eamon javers is live at the white house with the very latest on whats happening there. But firs