Transcripts For CNBC Power Lunch 20180223

Inc. Portfolio power lunch starts right now and happy friday your money carving out decent gains in the major indexes the dow trying to end the week higher just like the nasdaq is doing. The nasdaq is now more than 5 for the year melissa highlighted general bills and blue buffalo and if you are investor, go home and give your dog a pet tonight because that stock is soaring. It is up almost 17 . Other interesting stocks today, go daddy hitting a new alltime high on pace for its best day since august of 2016 Red Robin Gourmet Burgers rallying and Planet Fitness strong on the earnings and out look now to michelle. You have to work out after you eat a red robin. Thank you. The dow is up more than 200 points and lets get to the Market Action here on the floor. Bob pisani joins me. We are watching to see what happens for the rest of the day. Because were just off the highs. Look at the s p 500. Every day this week there has been i g a gap up and then we move down and close near the end of the day we are just off the highs. This is happening every day this week right now the market starts moving down. So a little bit of suspense. In terms of sectors, it looks like the beginning offebruary. The cyclical names are holding up, so you have the semiconductor and Consumer Staples are lagging. You heard brian talking about General Mills buying blue buffalo but the Consumer Companies have been terrible because of the cache that has worn off and hersheys was at a low. Heinz at a low and the stocks are having a tough time. As far as the markets, were just off the highs the key thing is it is good, three to one and the volume has dropped off. Nothing like the last two weeks. Much lighter and the volatility has been declining. Take a look at the vix were at thelowest levels sinc the big drop and it was monday, february 5th, vix hit 50 weve been going down every day this week and now at 17. You did not mention in this hit and maybe it is the first time in a long time, tenyear yield and whether Interest Rates are pushing the market around. And it is not that much generally it is quiet or down, we tend to have the markets move up yesterday, however, everyone was scratching their heads we were kaw we were kwee essent and the market moved down and everybody kept messaging what is going on and there wasnt news out there. So a point move and not a lot of news and that may signal the volatility wont go away that was a lot of movement for not much information. Thank you bob pisani thank you. The market issin ert, quiet he essent and you are still optimistic that stocks are going to go higher but like mom said, following the crowd is the best strategy and with oppenheimir and mark lab ella from qs investors both of you make your living off of equities. However you are also paid to worry. So john, are rates the biggest worry and if not, what is for you . I think near term Interest Rates are most certainly a worry. Only in that you have a process of normalization continuing, a new fed chair, and the market always wants to judge get used to the personality of the fed chair before it feels comfortable. And right now there is that level of of what exactly how is Jerome Powell going to work out. Theyre going to test his metal from time to time. That said, fundamentals are good, both from a perspective of the economy and corporate fundamentals so that is support for equities here. Do you believe that the Federal Reserve is going to be able to manage this economy well enough that corporation can just go about their business, john, keep making more money and keep equity premiums at a premium. I think they will likely do a remarkably good job at it people have been waiting for the fed to make a mistake since the market began to recover in 2009 and even before that in 08 when tarp and talf and the beginning of qe began and so far this cycle the fed is remarkable in getting being sensitive to the Economic Growth, lack of Economic Growth, deflationary trends and inflationary trends and it may have something to do with the usage of technology and the quick dissemination of information. Which the fed is benefiting from. Mike, most people out there say they expect an increase in volatility and you fall in that camp as well there is the issue that john highlighted of the fed having to thread the needle perfectly when it comes to rate hikes and the rising inflation pressure weve seen why should investors at this point remain fully invested in this market which you say is in the later stages of the bull market cycle. People have to realize that most fed tightening end in a recession. The perfect landing rarely occurs and over the last couple of years weve had extreme Forward Guidance from the fed. Telling us, no matter what the economy does, were going to keep rates low well a couple of years ago the fed moved to data dependent and what that means in plain english is we went from Forward Guidance to no guidance if Inflation Expectations beat what the fed is predicting, we could see four rate hikes. If things cool off it could be three or two so more options means more for investors and they have to learn to live with this. And live with anybody, you have to require some lifestyle changes. That is a unique analysis, why should we learn to live of it but i dont know what that extrapolation is with your analogy. But if you have been fortunate enough to be participating in this bull market and seen the returns weve seen last year and citing all of those Different Things in 2018, why do we learn to live with it and risk that at this point so just pulling yourself out of the market even for a small number of days could be very detrimental to longterm returns. Just missing the ten best days of the last 20 years would cut your equity returns in half. So selling when things get volatile is a bad idea why we think people need to learn to live with it is you cant buy a broad based index which is faang heavy too much exposure. Amazon alone is 40 of the market returns this year you need to diversify. Start looking to defensive sectors. Sectors that do well when volatility rises not losing money becomes ever more important and that is why you have to look for bargains. Start with the value. A side note and amazon is the number one holding of every hedge fund out there is amazon a risk to the market it is definitely been a donkey that helped pull the cart, but what if the donkey dies. The risk is that like in any stock, if there is any type of surprise to amazon, even a slight miss. It could have an outsized impact to the overall market. This is the lebron james of the market if he is on the bench, the cavaliers will have a hard time. Amazon is the top stock in almost every major etf and hedge fund and indexes, what it may never roll over if it does. The idea here would be more like you could get some interim volatility caused by something coming out of amazon or the hedging pulling out. But the idea here is you look for the cyclical and the secular trends on a stock like this and what they are doing as strategist, we cant help but think it is less of a concern than some might think. But always volatility, plenty of possibility for it when markets and the economies are in transition and when you have overconcentration of leadership from time to time, the market is always going to look for a catalyst to justify profit taking and rotation and rebalancing. We have to leave it there have a great weekend, john and mike. You too. Thank you. And President Trump speaking about a number of hot topics, including sanctions against north korea and guns in america and the stock Market Correction and ahead of the News Conference with the australian Prime Minister in less than an hour. And eamon javers is live. At the Political Action conference outside of the beltway here in maryland today, the president also touching on the stock market, expressing his opinion of what has been going on in this little correction that weve seen over the past month. Here is what he said the fundamentals are so strong the stock market with the ups and downs since election day is up 37 from 37 now it did a little bit of a correction in fact, i started to say, i was in it for 13 or 14 months from election and i said is this sucker ever going down a little bit. This is a little embarrassing. But this is mostly a red meat political speech by the president of the United States hes hoping here to really energize conservatives ahead of the 2018 Midterm Election urging them to get out and vote and here is what he said about democrats in the speech. They want to give your money away they want to give your money away they want to end your tax cuts they want to do things that you wouldnt even believe. Including taking your Second Amendment rights away. They will do that. They will do that. So we have to get out there and we have to fight in 18 like never before just the way you fought with us. Reporter now as you mentioned, well hear from the president at the top of the hour with australian Prime Minister Malcolm Turnbull who is in town visiting were also watching some developments in the russia scandal. That is sort of the back drop to today politically. Rick gates, the former Trump Campaign aide is expected to plead guilty at a d. C. Courtroom at 2 00 p. M. As well in charges brought by the special counsel so well see what new developments are on that front as well. Thank you very much. Meantime, lets see if the Oil Companies continue to drill for more crude the weekly counts are out and jackie has them at the commodity desk. Crude prices are not phased that rig counts increased. It is trading near session highs because u. S. Oil drillers only added one rig but still it is five straight weeks in a row there have been additions. It makes sense since crude price is holding the hirer rage. The total counts is 799 according to baker hughes. That is back to you. They just keep on drilling. Rio tinto part of the australian delegation at todays News Conference at the white house and trade expected to be a big topic. Commodities front and center in the debate about inflation and also tariffs also tariffs well get mr. Stevens . This is your new name. This is your new house. And a perfectly inconspicuous suv. Live you know whats not awesome . Gigspeed internet. When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Well continue our coverage of the guns in america and check out how the two major stocks are. The stocks rise is because people will go out and buy more guns but is not the case were seeing american out door brands and they are smith and wesson and sturm ruger both down. And another company with less attention, Vista Outdoor they own a lot of things brands like bell bicycle helmets and bushnell but they own federal and peer and Powder Company cci. Another angle of the gun control story, companies ending the business relationship with the National Rifle association met life and chub cut ties and met life saying we value our customers but decided to end our discount with nra. And the First National bank of omaha and well have more headlines if and when they do. Thank you Malcolm Turnbull is at the white house with a large contingent of australian ceos one of sebastian, the ceo of rio tinto and he met with gary cohn, director of the National Economic Council Welcome to power lunch. So let me set the scene here. Let me say a few words around rio tinto to make sure they understand weve been here for 120 years and one of the largest mining companies. The us is very important i would say the usa and canada together, because we see it as an integrated system today we supply onethird of all of the aluminum consumed in the usa. We provide 13 of copper and last but not least, we have around 20 billion u. S. Dollars of shareholder in the u. S. So the conversation i cant disclose what was discussed in the private meeting but i could tell you, the way we look at it. So clearly groewth is looking good in the u. S. Clearly the copper tax cuts is very helpful but for what is important is and we love rio tinto will if you have more requirements you need more copper and more aluminum, were here and we are here and we have more and can i ask you, sir, did the discussion of the tax cuts come up. We havent had you on since the u. S. Instituted a new Corporate Tax rate we have spent a lot of time discussing what the impact is on u. S. Companies but you are a company you are in london and australia. Does the u. S. Corporate tax cut change the way youre going to allocate capital around the world . It could. Absolutely and remember as you said we are British Company but as i said today, weve been in this country for 120 years. And you need to understand let me give you an example one of the recent mines that we are building as we speak, and in a nonu. S. Country so 5 million of investment and five years to run and seven to build and it will be up and running for 40 years. So in this context if you have a country with an attractive tax rate that could make a difference and we have real options in terms of further investment in copper and aluminum in canada as well so that can make a massive difference because we are a capital intensive business and when we make an investment, it is 25 to 40 years. So we are looking at it very carefully. So the department of commerce here in the United States, one week ago decided that announced they believe that imports after aluminum are a threat to National Security and some of the remedies include duties that could be very, very high, or quotas. How would that impact your company . Are you worried about the u. S. Doing that and did you say anything about that to gary cohn. So as i said, we are processing out of canada and the bulk is sent to the u. S. , we are providing onethird of the aluminum consumption in the usa. I wont make any comment about but im confident people will take that the chain between canada and the u. S. Is highly integrated and that at the end of the day we want the u. S. Customer to be competitive and their best interest is to secure low cost aluminum and i think this oil integration between canada and the u. S. Is the way forward. Terrific. Thanks for joining us. We appreciate it. Thank you. China has been a massive spending spree here in the United States. Snapping up marquee rauft but now the Insurance Company that owns the waldorf astoria seized by the Chinese Government could have a impact here well go inside of the portfolio straight ahead ein the 2018 lexus es,y system plus, standard. And the es hybrid. Take advantage of special president s day offers now through the 28th, on the 2018 es 350. Experience amazing at your lexus dealer. 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. To get business done. Tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to Financial Planning can help make sure youre prepared for whats expected and even whats not. And that kind of Financial Confidence can help you sleep better at night. With the right financial advisor, life can be brilliant. Welcome back, the Chinese Government announced they are seizing control of on bong insurance and the company ceo had been prosecuted. They are the private company that owns the waldorf aft waldorf astoria. They said that they had violated laws and regulations which may seriously endanger the solvency of the company the ceo was arrested in june as troubles mounted and np indication of how the chinese Justice System works, his movement through the court system was and we didnt know he had been tried until this announcement melissa. Chinese corporations have spent a record amount of money in the United States over of the past few years and snapping up business and real estate we have more on what is being bought and how much they are spending. This was an epic shopping spree by these three companies they have spent more than 50 billion in the u. S. And now as for t the fortunes turn, ao the big property is waldorf astoria. The most Expensive Hotel ever sold in the u. S. It is closed for renovations they wont comment on the future but Industry Experts tell me they wouldnt be surprised if it comes back on the market probably for a lower price now they also bought the hotels and resort group in 2016 for 6. 5 billion and included hotels including the essex hotel and the Hotel Coronado in san diego and the Four Seasons Hotel in d. C. Now chinas hna group, another company they are trying to unload, Office Buildings in new york and San Francisco that have bought less than two years as part of its 40 billion shopping binge. Now it owns the radisson and part of Hilton Worldwide the Third Company is dallian wonda and it had ambitions to be the next disney, bought real estate and the amc theater and the Hollywood Studio Legendary Entertainment and now like the rest it is in selling mode trying to unload a 1 billion condo in Beverly Hills and the vista tower in chicago, a 9 million complex under construction and it has also sold off its chinese theme parks. Presumably when they come back in the market, if they are coming back on the market, they would come back at a steep discount you would think so. The waldorf was 1. 4 million per Hotel Room Key that was so far and above anything that had ever been sold but these are all of them are high status properties, the coronado and essex, all wellknown brands. But they won the bidding wars for a reason no one was will willing to pay those prices so yes, it is lower. And robert h a was in the process of trying to buy Anthony Scaramuccis high bridge which hasnt gone through the process. They werent just going after physical assets but Financial Assets of these companies. It is a great point as you pointed out, these were the companies with explicit support of the Chinese Government for so many years to be spending so much on highprofile assets. It is amazing how quickly it is all turned around and theyre billionaire founders are either disappearing or have gone quiet. And they are all scrambling to sell in a period of two years so it just shows you, when you live by the government, you die by the government. And this is a guy who was married to the granddaughter of the former premier ping. So the thought, a, this guy is for real and, b. , he should have protection and both of those are fallacies. And there is a reason why the wealthy chinese have been sending family and wealth overseas, to australia or seattle or vancouver to protect themselves and i wonder why, they already have protection since theyre making all of this money well it can change overnight and were seeing that now with these giant empires. Robert, thank you. Thank you well dog food and cereal dont go together unless you are talking about a scene from a frat movie not any more cheerios maker General Mills buying blue buffalo. And dom is here. A Huge Industry Americans Last year spent on their pets roughly the size of the kenyan economy they spent more than the lat viehan enocomy just on food. Viehan enocomy just on food. Well talk about the scope dane chauvel sometimes the product arrives, and the cold chain has been interrupted, coming up next right here on power lunch. Twork, coming up next right here on and we developed devices to track environmental conditions. This device allows people to understand whats happening with the l 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 . 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. Im courtney reagan. Your cnbc update at the cpac the president announcing new shipping sank shung sanctions against north korea despite a recent thaw between the two koreas. We imposed the heaviest sanctions ever imposed on a country before and frankly hopefully something positive can happen. Well see. Florida governor rick scott announcing his plan to keep florida students safe. Among them a complete ban on the sale of bump stocks, a mandatory Law Enforcement officer in every florida public school, and raising the minimum age for buying guns to 21. The goal of this plan of action is to make massive changes and protecting our schools. Provide significantly more resources for mental health, and to do everything we can to keep guns out of the hands of those dealing with mental problems or threatening harm to themselves or others. That is your cnbc news update at this hour back to you, michelle. Thanks very much. And a look at the market the major averages are all strongly in the green but off the session highs, the dow was up 203 points earlier and now higher by about 150. The s p higher by 22 and the nasdaq higher by 66. That is a gain of nearly 1 in the strongest of the three utilities and energy are your sector leaders and now lets get a bond check so important these days. Rick santelli standing by in the bond pits. What an interesting week. It looks like we might not get eight fridays in a row where tenyear yields climb higher so they are down five basis points but the wings as we say on the floor arent down so two and 30. So lets look at a february 1st start. A start of twos, not only up on the week, theyre down to the equivalent amount on the day so they are down three but up three on the week. Lets good to the other extreme 30year bonds. They are not having a great day. They are down five or six basis points but they are still up three on the week and if we look at foreign exchange, what an odd month it has been now we always realize that the euro is the biggest part of the dollar index and those charts are semetric but reverse but they are fascinating first the dollar index looks like a great week but we are whisker under 90 and settle at 92. 92. 92. 12 but the euro had a week. And on the week weve seen some trend changes to some extent but if you take a more yeartodate approach most Interest Rates are in tact but the tenyear world looks to be broken back to you. Ill take it. A big deal in the food space. General mills buying blue buffalo for 8 billion in cash it is a companys first move into the pet food business which has been a very high growth sector. Dom chu is running the numbers. So 12 annualized sales growth for blue buffalo over the last 18 years and 18 pretax Profit Growth why General Mills paid for what is now blue buffalo. Why are they a late entry to the game, they are trying to play catch up because mars, and m m, they own and are one of the biggest players in pet foods they own pedigree among others and iams and they bought the whistle pet tracker. So they are trying to build an ecosystem around it nestle a huge player anything purina is owned by nestle and smuckers, meow mix and milk bones wellknown blends so are there any independent food labels still left out there . There are smaller ones but some of the more wellknown names like royal canaan, and dick van patent and hills, and prescription diet are owned by the Major Companies out there. Mars owns royal tainan smuckers owns Natural Balance and the other pet foods are for decades. Why do they want this . Because of the size of the pet market n. 2013 americans spent 55 billion on their pets. Fast forward and you could see the trend line higher to last year according to the american pet product association, americans spent nearly 70 billion estimated on pets last year and of that, guys, about 29 to 30 billion just on food back over to you that is a lot, dom. And i know that you live up near the blue buffalo headquarters in connecticut and you know people that work there. Have you talked to anybody 8 billion for a pet food company, it is some kind of record and shows the value we put on our pets. There has to be some surprise. I havent spoken to anybody personally that works for the company but imagine this is a Large Company based in fairfield county, connecticut and in the town of wilton and i dont think people thought it would be an 8 billion company when they went public. So this is a huge deal but it goes to show how a lot of Consumer Products companies are trying to face that slowing growth for the Core Products by going out into pets. We are still spending a lot, especially on the premium end side of things. For the shareholders it is not a rough day. I see what you did. One company profiting from our growing level of spending money on our dogs is bark which makes the monthly dog Food Subscription Service you sign up and pay 20 and a box goodies show up on your doorstep and joining us, the cofounder of bark box. Has anybody ever bit the bark box. Were making the relationship better they are excited to see them. Are you surprised you have to love this deal of course. What does that do to the valuation of bark. I dont know what it does to our valuation. Im not surprised. It is a Huge Industry. Dom just went through the numbers but it is a Huge Industry with passionate peel treating their dogs as family members. Making sure they have the healthiest and they are happy and so this is just a reflection. Take us through it. When you are sitting there this morn at home or whatever it is, you watch and hear about this deal, do you immediately think, yeah, our value just went what is the reaction of a grie growing a business when you see a deal like that. Im excited because we walked into so many meetings that said, the pet industry and what a joke and it is 60 million households households and 70 billion. It is huge so this is a recognition thats it beautiful. So we have a box up here on the set. 20 a month. I dont know if i would pay 20 a month for myself for snacks. You dont have a dog. Even for me for human but you spend more on your dog than your human. What is the typical profile of the person that subscribes to the bark box in terms of income and age and the demographics it started with women custom millennial and urban areas the general profile is somebody that has a dog and treat them like their child and love them and that is growing more and more so our biggest growth is coming from different areas from the midwest, from the south, from more rural areas very different profile now as weve created more products for them michelle . Retail, it is michelle down here at the nyc and you are selling treats through target. What is more lucrative for you, those boxes or the retail line where you have a lot more exposure i would think. Yeah, it is just exposure to a different audience and so 1800 stores all across the country introducing different people to different people to our products in those locations. None they are all equally lucrative. We like all of our customers. So you have 350 employees in chinatown and new york city according to the notes are they stuffing the boxes. We have 350 total we have about 200 in columbus, ohio, that is our cust support out there. Do you live what are they doing what are they doing im sorry. What are they doing from technology and development, the operations of it are very complicated. Marketing and you name it. How much will people first off, could we see the box. Give us an idea of what is in there. Well try some of these. This may be better than the food you eat as a dog lover, my dogs have eaten better than my kids sometimes and im not embarrassed to admit that. So snacks on the beach and bacon and fruit dog treats is there a limit there are crazy dog people out there. Well it is all very youre going to dive right in im not eating it. You looked like you were going to eat it. I thought so too. Well it is all tailored to each individual dog so this is for a dog that loves bacon and fruit but funny story, we have pigs who are subscribers and you cant send them bacon, no pork products for the pigs. They dont eat their own no. Im sure there is some pigs out there in the dark corners that we dont talk about. But this is a standard box. This is two toys, two treats, one chew and it is 45 of retail value for 20 a month. Yeah, we try to pack in a lot of value for people. Fascinating stuff thank you for joining us and bringing a box along stuffed konk. They love the konk. Merry christmas lets get to phil le beau with a news alert in the auto sector. Daimler a. J. Has confirmed that lee shoe fu, the owner and chairman of the jilly automaker out of china has taken a 9. 9 stake in daimler a. G the cost for him 9 billion. You might be saying to yourself, well what are they doing buying a big stake in daimler and what is in his interest and like so many of the other automakers in china wants to more more toward electric vehicles or deer emission vehicles. Daimler is considered one of the leaders in that space. As it develops these battery electric vehicles. So as the result of this, daimler a. G. Selling a 9 billion stake 9. 9 of the company is now owned by lee shoe fu, the chairman of jilly. And coming on this day, when we are learning about on bong and as you make clear, Chinese Government mandate electric cars and so this kind of deal is now okay with the government absolutely. And with geelly they are expanding their portfolio globally and that is what the Chinese Government wants as well got it. Thank you, phil. So we were talking about dogs investors taking a bite out of wing stock as it takes a hit following a disappointing out look and the ceo will talk about the state of the consumer. And the Boston Celtics ceo and now the fifth most valuable franchise in the nba his take on the future of the sport and a lot more dont move feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. Power lunch is coming right backand when y ou do that, you dont chase ou do that, the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. With its hightech the cameras and radar, contemporary cockpit, 360 Degree Network of driverassist technologies, and sporty performance, whats most impressive about the glc . All depends on your point of view. Lease the glc300 for just 449 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Wow record time. S. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. Heavy hitters in sports business coming together in boston for the 12th annual m. I. T. Sloan sports analytics conference we are live with the Boston Celtics ceo and lead owner that is right were here in boston at the conference and president barack obama is going to speak at the conference a few minutes from now but right no we have the lead owner of the celtics, thanks for joining us were the opening act for obama. Amazing. Everything is about data, analytics, technology, that is fuelling the growth for nba valuation so i assume you are bullish because you still own the celtics and not looking to sell what do you think is the future of media rights as they are the drivers, the main driver of the valuations. My partners and i are excited about where the celtics are going on the court and also we dont think about it that much in valuation, but as everything has gone digital and global and the nba leads that and we reached a billion people last year, one out of every seven people in the world and we have a young and global fan base. It feels like the next round of media rights could even be more exciting than the last round and i didnt believe that even a couple of years ago. So im really bullish about our game, our great players, and the way people are taking to it and watching it. Do you have a preferred media rights do you want to see the apple and google and nfl and pay a huge dollar for the action. I have a contract with comcast and Nbc Universal and very grateful for them so they are friends and family and partners so im not going to pick a horse in the race other than if i did, i would pick them. But i just like where the game is going and appreciate everybody bringing it into the world. And one of the talks sports gambling, it might get legalized, how are the celtics getted ready, or people getting on the phones in the stadium. We have adam silver leading the way and saying it ought to be regulated and done right and done correctly and done safely for everybody who participates and that we would take our pee our piece of that. Glambling happens any way and lets gut it out in the open over in england you could bet on the different plays in soccer from your seat and we think that is fub fun in an nba game to have the fans interact even more. And a private equity and private markets, not liquid markets, what are your thoughts on valuation in the private space, companies that have not made ipos yet. We are finding a lot to invest in at causeway media partners, my venture fund, we have a group of investors and we are investing in Companies Like seat geek which is revolutionizing ticket and formula e. Racing and so were bringing new media rights and new technologies around the intersection of sports media, technology the valuations are there because people want to work with people who are connected in sports and team up and then go see if we could make it Work Together. Trying to get another banner up in the rafters. That would be fun. Wick grousebeck from the Boston Celtics back to you in the studio. Well see you litt later n the show. The wing stock stop in the red. The ceo joins us on a first on stash ta cnbc stay tuned nobodys putting their money into equities. Theyre not investing in co 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. Shares of wingstop getting clipped today. Guidance fell short of expectations joining us now for our first on cnbc interview is Charlie Morrison welcome back to power lunch. Appreciate your time thanks for having me today. Were looking at the stock here its down sharply in todays session, and a lot of people pointing to the full year guidance you got it to 75 cents a share thats about 8 cents below what analysts had been expecting. Can you walk us through the disparity here in terms of your guidance and what the street is expecting . Yeah, its actually quite easy the expectation was put in place prior to a very large special dividend that the company paid just two weeks ago of 3. 17 a share to our shareholders. Thats about a 7 yield for our shareholders, and consistent with our longterm approach to returning capital to the shareholders if you incorporate that plus the impact of some new accounting standards that we had to apply, we actually had to restate what the expectation was, 75 cents is great. The comparable number would be in the low 60s, year over year, so still very Strong Performance that were expecting for wingstop into 2018 can you walk us through also, what are you seeing in terms of trends and what your plans are for opening new locations and if you are at all impacted by retails woes. I ask you, are any of these locations or many of these locations colocated in malls or retail destinations . Yeah, no impact at all associated with the location of our restaurants as it relates to any of our outlook on development. As you may know, we have been developing restaurants at a very rapid pace, both in the u. S. And overseas last year, we opened 135 net new locations. Which represented more than 13 growth year on year. And our longterm guidance is for 10 plus continued unit growth for the chain and when we think about longterm, not just 2018, but well beyond that, as we work hard on our vision of becoming a top ten global brand youre working on delivery, charlie. You have a test market in las vegas and chicago. What have the las vegas results for delivery taught you . Well, first, that its highly incremental to our business. We saw in las vegas a 10 increase in samestore sales during the time of the test. We expanded that test to chicago, as well as austin, texas, recently. Both markets have shown very strong lift in sales, anywhere from mid to high Single Digits in growth, and highly incremental transactions were positioning the brand for delivery to be a longterm growth driver. One of four key Growth Drivers in the future. Tell us about the special dividend did that have anything to do with the tax cuts, and what is the impact of the Corporate Tax cut on you sure. Well, certainly, it has an effect on our overall tax rate, which means more cash available for us for investments in technology, which is a key focus of our business. Thats where we innovate, and those are technologies that are aimed at providing a better Guest Experience for our consumer but that dividend was another example of the return of capital strategy that we had for our shareholders in 2017, we initiated a regular dividend, a regular quarterly dividend, but also on a cadence of about every five to six quarters, we have provided a special dividend since our ipo alone, we returned about 180 million back to our shareholders in the form of special and cash dividends. Yielding about 35 on that investment since ipo in 2015 all right, charlie, were going to leave it there. Thanks so much for your time thank you very much Charlie Morrison of wingstop. A programming note. Were awaiting President Trump who will be holding a joint News Conference with australian Prime Minister Malcolm Turnbull. Theyre expected to discuss infrastructure as well as trade. Big business heavy event when it happens well bring it to you live. In the meantime, stocks are higher dow is up 147 points and power lunch is back right after this 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. Welcome back im melissa lee. Scott walker is joining us for the second hour of power lunch. Good to have you here. Thank you we begin with breaking news President Trump set to hold a joint News Conference with australian Prime Minister Malcolm Turnbull in just a few minutes. As soon as he starts, well get to it. Meantime, we have team coverage. Eamon javers, Kayla Tausche on the white house lawn, and john harwood. Thats right. As you say, were expecting the president and the Prime Minister in the east room momentarily we have been given guidance they might be coming just a little early here a lot of eyes around the world will be on this gathering because as you remember, the relationship between these two men got off to a very rough start last year. That sort of infamous diplomatic phone call between turnbull and President Trump at the beginning of last year in which trump appeared to get frustrated over the u. S. australia immigration deal, called it one of the most unpleasa unpleasant phone called he had that day both countries hoping today to move past that moment of tension, and there are a lot of reasons for these two countries to Work Together politically, diplomatically, militaryarily, and hanging over all of this between these two countries today will be a third country, china. And the role that country plays in the region, australia facing a little bit of diplomatic concern at home over the role of china and australias domestic politics, and of course, the president campaigned very much against china as a trade rival to the United States so well see howall of that shakes out, and of course, the backdrop here is that rick gates, a former trump president ial aide is expected to plead guilty at this hour in a court here in washington, d. C. Theres some political drum beat in washington as well. Well see what questions the president and the Prime Minister get about all of that in just a few moments. Thank you, eamon. Eamon javers Kayla Tausche, now to you what is on the australian Prime Ministers agenda today . Well, australia feels that to be an effective counterweight to china, brian, they need to expand tpp they need to make it as strong as possible. Remember that deal that now excludes the United States was agreed late last month its going to be signed early next month, and there is a provision that allows for any new joiners, be it the United States or the United Kingdom or any other country to rejoin it, and thats going to be top of mind here for the australian Prime Minister in a briefing with reporters, the australian ambassador to the u. S. Talked about the desire of australia for u. S. To join, despite the fact that turnbull had previously said were not counting on the u. S. To join any time soon. Even though acknowledging that he would like that to happen so thats definitely something that is going to be on their agenda, to be asking the president for. So what can they offer in return well, the australians are going to try to pitch some sort of funding mechanism for the u. S. Infrastructure program australian private funds have put about 14 billion into u. S. Infrastructure since about 2010. And the proposal we have heard about that will be made today is now potentially devoting part of a 2 trillion Australian Pension Fund into United States infrastructure of course, they would want a return on that money, which would mean tolls on roads or some sort of revenue stream coming out of those projects, but for a president who is looking for payfors for his infrastructure proposal, that could be music to his ears, but white house Officials Say they want to see exactly what concrete proposals are in that potential package and whether its even something thats possible to move forward on or whether its a nonstarter. Kayla, john harwood, were watching members of the delegation on both sides make their way. Theres gary cohn, who just sat down you saw the secretary of state as well coming into the room along with wilbur ross, the commerce secretary all of this, john, and bear in mind, this could begin much quicker than we had expected, president addressed cpac earlier today. And now this comes on the heels of that. He did. He was addressing his base he spoke for an extended period of time. He was certainly savoring the applause he was getting in a moment thats very difficult, as eamon said, with rick gates, the Deputy Campaign manager, about to plead guilty to two counts, conspiracy against the United States and making false statements to investigators. The latter occurring just three weeks ago. This isa challenging moment because pressure on cooperation from gates means pressure on manafort we dont know what Paul Manafort knows that is relevant to the president , to his close family members, but we do know that he was participating in meetings with jared kushner, donald trump jr. , and russians, so its a difficult moment for the president. And it was a bit of an orasz for him politically to be at cpac, to tout his proposals for arming selected School Teachers agains School Shootings and praise other elements of his administrations agenda, including the way he has stocked the federal judiciary so far the president is probably going to want to talk about trade. Given that hes going to be with australias Prime Minister, but you have to believe in the q a that follows the remarks, two questions per side, that the president is going to be asked about mr. Gates and about the gun debate in this country i would expect, scott, that the questions are heavily focused on the Mueller Investigation, maybe to some extent on the School Shootings, but remember, we have only got two questions per side, so its going to be a relatively brief as far as trade goes, we know that the president told our colleague joe kernen in january that he would consider having the United States on different terms join the Transpacific Partnership, but hes got a balancing act with his base. He was trashing nafta at the cpac meeting i dont know, a, whether or not its possible, and i suspect it isnt, to renegotiate terms of tpp, and whether absent that, the president would change his mind on that issue and kayla, we talk about infrastructure, too. The one thing we dont talk about is australia, not that big of an economy, but they have a huge public pension plan, as you have noted in the past as well australia in many ways wants to be americas bank, does it not, for infrastructure they do and its an area where they have experience, brian. That pension fund is about 2 trillion, which is a very large Sticker Price that has to be attractive to the president. Obviously, you know, a sizable portion of that would not be sent over here it could be a smaller amount, but for a president who is looking for, you know, 1. 5 trillion program, certainly these are numbers in the range that he would be interested in talking about. And they certainly we want to interrupt you because the president has entered the room along with the australian Prime Minister. Lets listen in. Today, im honored to welcome my friend, Prime Minister turnbull, of australia and mrs. Turnbull, thank you very much. Great honor. Were looking forward to sending our newly nominated ambassador, admiral harry harris, to your very shortly an outstanding man youre going to find that hes a great man. I want to thank the Prime Minister for offering his condolences on the horrible tragedy in parkland, florida americans are grateful for the prayers and support of our australian friends and friends they are as our entire nation grieves the senseless loss of 17 precious lives and all of the horribly injured, the United States and australia a term that you use very beautifully, mr. Prime minister a century has passed since brave americans and australians first fought together in world war i, over the last 100 years, our partnership has thrived as a bulwark of freedom, security, and democracy. Last spring, the Prime Minister and i celebrated the remarkable 100year milestone during an extraordinary evening on the uss intrepid. And my friend greg norman and Anthony Pratt andsome of the others who were in the room today, they were hello, folks. Stand up, greg stand up, anthony. Wheres anthony . Good a great evening. Thank you. This afternoon, im pleased to announce that the United States will name the combat ship 30 the uss camber in honor of an australian cruiser lost fighting alongside the u. S. Navy during world war ii our secretary of the navy has chosen australian minister of defense Maurice Payne to be her sponsor. I know that the uss will be a worthy successor to both her australian namesake and her american predecessor, the former Navy Baltimore class heavy cruiser uss camberra. As she sails the open sea, the new uss camberra will symbolize to all who cross her path the enduring friendship between the United States and australia. There is no closer friendship. Today strengthened by our common values and history, were working together to promote our mutual interests i want to thank the Prime Minister for serving as a strong voice for peace and stability across the entire endopacific region australia is one of our closest partners in our campaign of maximum pressure to denuclearize the curKorean Peninsula today, we put the strongest sanctions on korea that we have ever put on a country. We must continue to stand together to prevent the brutal dictatorship from threatening the world with nuclear devastation. Our nations likewise share a commitment to keeping our people safe from terrorism. Australian troops are currently serving alongside americans and are partners in afghanistan and the coalition to defeat isis together, were denying terrorists safe haven, cutting off their funding and discrediting their wicked ideology isis land has been largely recaptured, almost 100 . Im very honored to say. And they are on the run. Our Strong Partnership can also be seen in our flourishing economic relationship. Australia remains a key market for u. S. Defense products. We make the greatest products in the world. So you have very good taste in choosing our product automobiles and aircraft and our fair and reciprocal trading relationship is a model for other countries as we seek Bilateral Agreements news that america is open for business has also reached australian shores. In may, australian entrepreneur Anthony Pratt announced a new 2 billion investment in box making factories across the United States but he only did that if trump won the election, i think. Is that a correct statement, anthony . Thank you. Boy, that was a close one. I was worried. These people would have had a field day if you gave the wrong answer thank you. No, but anthony did call, and he said if he wins the election, were going to spend billions of dollars in the United States i appreciate your giving me a very, very correct comment thank you, anthony ill never do that again this investment will continue to build on an almost 100,000 american jobs taking place and already supported by Australian Companies. Im glad to share that the United States is also by far the largest investor in australia. In the room today are dozens of american and Australian Business leaders and great athletes great athlete and business leader, by the way, greg who are working together to identify further opportunities for bilateral investment and cooperation. Mr. Prime minister, i also want to take this opportunity to congratulate you on your immigration reforms. And on australias commitment to meritbased immigration, or my friends from congress listening to that . Merit based. We want to do meritbased immigration also and we will. That really protects the interests of australia and its people its the way to go and you have been very successful with it here were working very hard to do the same, in that sense, were going to hopefully follow in your footprints Prime Minister turnbull, its been a pleasure to host you today. We had a great lunch with your representatives, a lot was discussed. A lot of deals were made for the purchase of additional military equipment and other things for a century now, the people of the United States and australia have inspired the world with their determination, their bravery, and their generosity. I know that our close friendship and Enduring Alliance and our personal friendship will grow Even Stronger in the century to come our relationship with australia will always be a very powerful and very successful relationship its been incredible, and its only getting better. Thank you very much. Thank you. Mr. President , thank you so much lucy and i want to thank you and the First Lady Melania Trump for your very warm welcome, your generous hospitality, and friendship our meeting today was a great opportunity to strengthen and deepen our engagement with the United States. You are our most important strategic and economic partner and to lay the groundwork for a new phase of intensified cooperation, the next 100 years of mateship. Im here, as you noted, mr. President , with the most substantial australian delegation ever to travel to washington, d. C. We have, in addition to th ceos, several of whom you have identified here today, who are busy creating jobs we spent much of our time today talking about jobs they are creating jobs in australia and in the United States demonstrating that our two great nations, committed to competition, to freedom, to economic innovation, science and technology, working together, complement each other, and thats why were seeing strong jobs growth in both countries. We have had 403,000 jobs created last year in australia the largest number, mr. President , in our countrys history. In 16 months, we have continued jobs growth. We have been inspired, i have to say, by your success in securing the passage of the tax reforms through the congress we have secured some tax reforms in terms of reducing company tax, but not as much as we need to do. We have more work to do, and the stimulus, the economic stimulus that your reforms have delivered here in the United States is one of the most powerful arguments that we are deploying to persuade our legislature to support reducing business tax because, as you are demonstrating and as we all know, when you cut company tax, most of the benefit goes to workers. It produces more investment, and when you get more investment, you get more jobs. And of course, im also joined on this visit with six of the leaders of our states and territories. The only two that are not here are those that are fighting elections. So as you can imagine, thats always a top priority. And were meeting at the National Governors association, again, broadening and deepening the relationship we have a huge amount to work with our relationship, as you said, has been forged over a century, through times of war and peace securing both our nations freedom and security in the world. But our relationship is based not only on history. We have the same values. We share a deep well of trust and spirit based on those enduring values of freedom, democracy, the rule of law, enterprise, ingenuity, the spirit of having a go and if it doesnt work out, dust yourself off, and have another go that is a core american and Australian Value that spirit of enterprise is what leads us on and of course, our relationship is underpinned by millions of people to people and family links, and of course, the extensive Economic Cooperation we have spoken about our Security Alliance is as close as it possibly could be, yet keeps getting closer the cooperation is more intense than it has ever been. Whether we are standing up for freedoms cause in the middle east, in our region, around the world, combatting terrorism. The cooperation in a connected world that we need to have is greater than ever. And that trust between australia and the United States, between the thousands of Brave Service Men and women who are working together right now, that trust underpins our security you mentioned, mr. President , our economic relationship and trade. Do you know, since the australia u. S. Free trade agreement came into force in 2005, twoway trade has grown by over 50 , the United States does have a trade surplus with australia. Of 25 billion its your Third Largest trade surplus with us. But you know, we know it works for both of us the twoway investment is more than doubled in the past decade. It was worth around 1. 1 trillion in 2016 again, boosting jobs and growth in both our nations. Both our economies and today, we have agreed on some new initiatives that will deepen this relationship further. Were seeking to expand transparent and competitive Global Energy markets, cooperating on highquality Infrastructure Investment in the United States and in the region. We have spent a lot of time talking about infrastructure including urban infrastructure, a subject, mr. President , of course, you have a lifetime of experience in. And the leadership youre showing on infrastructure in the United States is being admired around the world, and Australian Companies and australian experience is there to help, as you know, and is already operating here, a number of our infrastructure players are very active in the u. S. Were obviously working to intensify our cooperation on digital trade. Bob lighthizer and wilbur ross from your side, and our trade minister have made terrific progress in that regard. We turn to security. Yesterday, lucy and i were with general dunford at the Arlington National cemetery. And we honored americas war dead we honored an australian airman who had died in combat in new guinea in the Second World War who was buried at arlington also and we are reminded that all of the freedoms we enjoy, whether it is in our parliament or here in washington in the white house, or in the congress, all of those freedoms have had to be secured generation after generation by courageous men and women defending freedoms cause. Our freedoms have depended on them and americans know, as australians know, that each of us have no better ally we are mates 100 years of mateship. Were working together, as you said, to address the greatest threat to our region right now north koreas Illegal Nuclear weapons program. And i want to welcome and of course support mr. President new sanctions that have been announced today. We continue to do precisely the same with our own autonomous sanctions and of course, enforcing the u. N. Security council mandated sanctions were working to combat terrorism around the world helping the iraqis and the afghans build up the resilience to hold their countries secure in the face of terrorists. And of course, we both recognize that the prosperity of our region and indeed the world has been underpinned and in fact built on a foundation of a rulesbased order, which has been secured by the leadership of the United States ever since the Second World War that leadership has been critical and the commitment you show, mr. President , when you came out to the region, to the east asia summit, to apec last year, that commitment was so important. It spoke volumes for americas continued commitment to our region, to our part of the world, to the indopacific so vital the engine room, if you like, of the fastest Economic Growth, most rapid Economic Growth that we have seen in our times. Now, mr. President , i want to thank you, as i have earlier in our meetings i want to thank you for the very rare honor you have shown to australia by naming one of your future literal combat ships the uss camberra. What a great symbol of our alliance and our shared security endeavors. What an extraordinary statement of commitment. And its worth observing that that ship will be built in mobile, alabama, so you have an Australian Company with american workers, working, operating in the United States, building ships for the u. S. Navy. What a great example of 100 years of mateship. And when you grieve, as you said you noted at the outset, so do we so we send our love, our prayers, and our condolences to all of the victims and their families of the shocking shooting in the school in florida. We are mates we stand by each other and when we are hurt, we are hurt as well so mr. President , thank you for your warm welcome. 100 years of mateship, we celebrate 100 years ago on july 4. General john monash led american and australian troops into battle in the First World War for the first time, and we have been side by side every since. 100 years of mateship celebrated, and 100 more years to look forward to, closer than ever thank you very much. [ applause ] well, thank you very much, malcolm. Thats very beautiful words. And we appreciate it on behalf of the first lady, who is right here, and our great Vice President , mike. Thank you very much. Its an honor to have you. And well answer a couple questions. That okay . How about trey from one america news trey hi good, trey go ahead thank you, mr. President. I have a couple questions for you. If you how about one go ahead compromise with two following Mass Shootings, theres often a lot of talk and little action. So i ask you today, what specific pieces of legislation or legislative framework will you propose to lawmakers following the parkland shooting . Were going to do a lot, but were going to be very strong on background checks. I have spoken with many of our people in congress, our senators, our congressmen and women, and theres a movement on to get something done. We want to be very powerful on background checks. When were dealing with the mentally ill, as we were in the last case, he was a very sick person and somebody that should have been nabbed. I guess they had 39 different occasions where they were able to see him or potentially see him. We want to be very powerful, very strong on background checks, and especially as it pertains to the mentally ill were going to get rid of the bump stocks and were going to do certain other things. But one of the feelings that i have, and you have probably heard me in a speech this morning, very, very important that we have offensive capability as well as defensive capability thats within the schools. Because when you have a gunfree zone, youre really inviting people to come in and do whatever you have to do, and oftentimes get out i was the one that brought up the fact that these shootings on average last three minutes, and it takes anywhere from six to ten minutes for the police to get to the site. And i want to have people in the building, and in many cases, you have exmarines and exarmy and navy and air force and coast guard. You have them in the building and they can have concealed weapons and still be teachers or they could be in the building in a different capacity but we have to have offensive capability to take these people out rapidly before they can do this kind of damage. But well be putting in Strong Language having to do with the background checks, and that will take place very quickly. I spoke with paul ryan this morning, with mitch mcconnell, and people are looking to really energize i know that you have had this has been going on for a long time many, many years and you have had people in my position, and they would mention things, but not a lot of things got done, obviously. We take it very seriously. We want to put an end to it. And if, by the way, the bad guy thinks that somebodys in this room with a weapon thats going to be pointed at him, with live bullets, hes not even going into the school. Its the one way youre going to solve it youre not going to solve it with gunfree spaces because theyll get in there theyre doing to be the only one with the gun so we need offensive capability, and were going to be doing something about it were dealing with congress right now. Thank you. Mr. President , amid talks of Arming Teachers and mental health, what specific commitments to American Students can you make that these policies will make them safer well, i think its going to make it safer. And you know, the problem thats been happening over the last 20 years is people have talked, you said it, its all talk its no action and were going to take action i think its going to make it safer. I think the fact that you have some capability within a school, theyre not going to go into that school. Theyre not going to do it you can look at whats happened with airplanes where we put marshals on planes with guns where pilots in many cases have guns nothing has happened for a long period of time when it used to almost, it was getting to a point of being routine when you have somebody with a gun staring you down, its going to be a lot different for them to walk into the schools right now, they look at the sign outside, this is a gunfree environment. That means theyre the only one with a gun and the damage this lunatic did in that school for such a long period of time, and frankly, you had a gun, and he was outside as a guard, and he decided not to go in. That was not his finest moment, that i can tell you. He waited and he didnt want to go into the school i just heard this, and its a terrible situation but we need people that can take care of our children were not going to let this happen again and the way its not going to happen again, because theyre basically cowards. Innately, theyre cowards. If they know bad things happen to them once they get into that school, by people that love the children, see, a Security Guard doesnt know the children, doesnt love the children. This man standing outside of the school the other day doesnt love the children. Probably doesnt know the children the teachers love their children they love their pupils they love their students theyre doing it also from love. Now, they have to be very adept. Im not talking about every teacher. Im talking about a small percentage, but people who have great ability with weaponry, with guns. Those are the only people im talking about. But theyll protect the students for the Prime Minister certainly thank you, mr. Prime minister for joining us today here in washington australia is known for helping the Syrian People and Syrian Refugees i ask you today, as the world watches, what steps can australia take with the help of President Trump and the United States to insure that civilians are protected in eastern guta . Well, the australian forces, Australian Armed forces have been working as part of the coalition to defeat daesh in iraq and syria for some time now. Our principle concentration or focus of our efforts now is in iraq as opposed to syria. Where we are training both the elite special forces unit, their counterterrorism service, and their regular army and armed police we have a very trained over 30,000 personnel at our task force, which is based at the air field near baghdad in terms of refugees, australia has a very substantial humanitarian program were currently taking about 18,000 refugees a year we have taken we have taken 12,000 from in addition to that, from the syrian conflict zone but we determine which were very careful about security, of course, in terms of our humanitarian program, but i think it will be fair to say, the president has of course the most insight into this area here, but it would be fair to say that ultimately, the resolution in syria has to be a political settlement and that, im sure, is what secretary tillerson is working towards. If i could briefly follow up, specifically, though, in syria, as two of the most powerful men in the entire world, is there anything you can do to stop the bloodshed . Well, ultimately, there has to be a political settlement you know, the campaign to destroy daesh or isil has been largely completed. The socalled caliphate has been reduced down to, you know, a few pockets. Its been smashed. And that has been americans and australians have worked bravely, effectively, with our allies and partners in the region to do that. Its very important, by the way, to keep australians and americans safe at home because the image of isils invincible caliphate, you know, sweeping across syria and iraq, and they said they were going to sweep across europe, all of that was a big recruiting tool. So this is a very important part of our global effort but ultimately, the settlement in that region has to come from a political settlement among the people who live there. I will say, what russia and what iran and what syria have done recently is a humanitarian disgrace i will tell you that were there for one reason were there to get isis and get rid of isis and go home. Were not there for any other reason and we have largely accomplished our goal but what those three countries have done to people over the last short period of time is a disgrace okay would you like to ask a question yes, i think yes, phil curry from the Australian Financial review thanks, gentlemen mr. Trump, mr. Turnbull. Phil curry from the financial review just on the region and china and associated issues, the United States navy has conducted frequently freedom of navigation sailthroughs, through the disputed areas would you like to see the Australian Navy participate directly in those operations alongside the u. S. Allies . And whilst on the region, can i ask what your latest thinking is on the Transpacific Partnership . Are you softening your opposition to that or do you remain as opposed as ever . I think the Transpacific Partnership was not a good deal for us and if they made it a good deal for us, i would go in, but honest lae, it wasnt. I like bilateral deals much more than multilateral. I like to be able to negotiate with one country and if it doesnt work out, you terminate. During the termination notice, they call you and say please, lets make a deal, and you fix the deal when you get into multi, you cant do that. But Transpacific Partnership, tpp was a very bad deal for the United States. It would have cost us tremendous amounts of jobs, would have been bad. But theres a possibility we would go in, but they will be offering us a much better deal i would certainly do that. As far as your lanes are concerned, we would love to have australia involved and i think australia wants us to stay involved i have to say, we have developed a great relationship with china, other than the fact they have been killing us on trade for the last long period of time killing us, absolutely killing the United States on trade but we have developed a great relationship with china, probably closer than we ever had. And my personal relationship, as malcolm can tell you, with president xi, is quite extraordinary. Hes somebody that i like, and i think he likes me. With that being said, he likes china, and i like the United States but a lot of things are happening. Its going to be a very interesting period of time but we do have to straighten out, and as much as i like and respect, really respect president xi, we have to straighten out the trade imbalance. Its too much, no good okay. Karen gilbert. Ska news australia. General mattis has called china a revisionist power and there are growing threats from china yet youre very positive about your relationship with xi. Can you tell us, is it a friend or a foe and on north korea, the sanctions, if they dont work, are all options still on the table . Can i get your answer and also the Prime Ministers thoughts. To the second, well have to see. I dont think im going to exactly play that card, but we have to see, if the sanctions dont work, we have to go phase two. Phase two might be a very rough thing. May be very, very unfortunate for the world. But hopefully the sanctions will work we have tremendous support all around the world for what were doing. It really is a rogue nation. If we can make a deal, it would be a great thing if we cant, something will have to happen. So well see as far as general mattis is concerned, i mean, he has that view and a lot of people have that view china is tough theyre getting stronger theyre getting stronger to a large extent with a lot of the money they have made from having poor leadership in the United States, because the United States leadership has allowed them to get away with murder with that being said, i think we can have a truly great even trading relationship with china. Hopefully, thats going to work out. And hopefully, the relationship i have with president xi will make that happen only time will tell. Thank you. I can confirm that President Trump and president xi see eye to eye in every respect. And they have a its very clear at the meetings i have been at, which we have attended in the region, the east asia summit and so forth, apec, the respect that they have with each other, and i think its the most single most important relationship between china and the United States. Its clearly very respectful, very frank, very cleareyed. For our own part, we see chinas rise as being overwhelmingly a positive for the region and for the world. The critical thing, of course, is the rule of law is maintained there are people that want to try to paint the United States and its allies like australia as being against china in some sort of rerun of the cold war you know, that is not appropriate. Its not accurate. What we need to insure is that the rules of the road, the rule of law, the rulesbased system where big countries cant push around little countries, where to quote all those years ago, where you dont have a world where the big fish eat the little fish and the little fish eat the shrimps. Where you have that rule of law that protects everybody. That is what has enabled the great growth in our region thats whats enabled hundreds of millions of people in our region and including in china to be lifted out of poverty so maintaining that rulesbased order is what were committed to, and we all have a vested interest in doing so and i just want to say, again, to the president that his presence, his own personal presence in our region at the end of last year was sent such a powerful message the regular visits by secretary tillerson, secretary mattis, and of course the presence of the United States navy and so many other manifestations of american commitment to the region, is so important to maintaining that rulesbased order. Believe me, that has been the foundation of the success, the prosperity, and the security these last 40 or more years. I dont think we have ever had a better relationship with china than we do right now the only thing that can get in its way is trade because its so onesided. Its so lopsided, and the people that stood here for many years in this position right where i am right now should never have allowed that to happen its very unfair to the United States and its very unfair to the workers of the United States very, very unfair. And even today, its extremely hard on companies that want to do business in china because the barriers are incredible, whereas the barriers coming into our country are foolishly not. Foolishly. I believe in reciprocal trade. If they do something to us, we do something to them well, that never happened. And its gotten worse and worse over the years but well correct it that can be the only thing that can get in the way of a truly longterm great relationship because we have all the ingredients for friendship from the washington examiner, gabby. Thank you, mr. President. Your chief of staff, general kelly, has recommended ending the practice of granting interim security clearances to members of the trump administration. If that proceeds, would you be willing to grant a waiver to jared kushner, one of your senior advisers . Jared has done an outstanding job. I think hes been treated very unfairly hes a high quality person he works for nothing, just so nobody ever reports that, but he gets zero. He doesnt get a salary. Nor does ivanka, who is now in south korea, long trip representing her country, and we cannot get a better representative in fact, the first lady, melania, was telling me what a great impression she made this morning when she landed in south korea. Jared is truly outstanding he was very successful when he was in the private sector. Hes working on peace in the middle east. And some other small and very easy deals they have always said, peace in the middle east, peace between the palestinians and israel is the toughest deal of any deal there is malcolm, i have heard this all my life. As a former deal maker, although now you could say maybe im more of a deal maker than ever before, you have no choice as president to do it right but the hardest deal to make of any kind is between the israelis and the palestinians were actually making great headway. Jerusalem was the right thing to do we took that off the table but Jared Kushners right in the middle of that and hes an extraordinary dealmaker. And if he does that, that will be an incredible accomplishment and a very important thing for our country. So general kelly, who is doing a terrific job, by the way, is right in the middle of that. We inherited a system thats broken its a system where many people have just its taken months and months and months to get many people that do not have a complex financial complicated financials, they dont have that, and it has still taken months its a broken system, and it shouldnt take this long you know how many people are on that list. People with not a problem in the world. That will be up to general kelly. General kelly respects jared a lot, and general kelly will make that call. I wont make that call i will let the general who is right here make that call. But jareds doing some very important things for our country. He gets paid zero. Ivanka, by the way, gets paid zero she gave up a very good and very strong, solid, big business in order to come to washington, because she wanted to help families and she wanted to help women. She said, dad, i want to go to washington i want to help women and i said, you know, washington is a mean place. She said, i dont care i want to help women i want to help families. She was very much involved in the Child Tax Credit now shes working on family leave, thinks i dont think would have been in the agreement if it werent for ivanka, and some of our great senators, but she was very much in the forefront of that. So i will let general kelly make that decision. And hes going to do whats right for the country. And i have no doubt hell make the right decision okay, thank you very much. Mr. Prime minister, your country conducted a buy back program of semiautomatic weapons back in the mid 90s and hasnt had a mass shooting ever since is this something you have discussed with President Trump, and did you at all urge him to reconsider his current recommendations to combat Mass Shootings in the United States well, our history with gun control and regulation is obviously very different to the United States. And youre right there was a mass shooting in tasmania in 1996 and my predecessor, john howard, who is very well known here in the United States, Prime Minister for nearly 12 years, john undertook some very big reforms. And basically semiautomatic and let alone automatic weapons are essentially not available. Indeed, there are many classes that range of firearms that are available to people that dont have a specific professional need, like people who are involved in pest control and so forth, are very, very limited. Its a completely different context, historically, legally, and so forth we are very satisfied with our laws we maintain them theyre there. Theyre well known you have referred to them, but we certainly dont presume to provide, you know, policy or political advice on that matter here you have an amendment to your constitution, which deals with gun ownership. You have a very, very different history. And well focus on our own political arguments and debates, and wish you wise deliberation in your own. I have to add to that theyre very Different Countries with very different sets of problems but i think were well on the way to solving that horrible problem that happens far too often in the United States thank you very much, everybody we appreciate it thank you. Mr. Prime minister, thank you very much. The president wrapping up a News Conference with australian Prime Minister Malcolm Turnbull. The majority of the planned comments were focused on business specifically trade and infrastructure however, there were also questions on gun control and of course the parkland shooting the president saying theyre going to get rid of socalled bump stocks, which enable guns to fire automatically, as well as needing more offensive capability to take the bad guys out. You heard Malcolm Turnbull, the australian Prime Minister effectively say that maybe what works in australia may not work here as well so primarily, an infrastructure and a trade discussion, although the questions in sort of a somewhat differently structured News Conference than what we have seen, asking about guns as well what struck me as well were the comments, specifically regarding north korea and the u. S. s relationship with china in denuclearizing the Korean Peninsula and how australia, of course, fits into it, but he was asked pointedly, what if the latest round of sanctions do not work the president said something to the effect if they do not work, it would be unfortunate for the world, which raised a lot of eyebrows here, at least. Its clear the relationship between the two men has been repaired since the early friction of that phone call early in the presidency of donald trump, the president saying its a great relationship, one that is only going to continue to get better. Noting that the new literal class combat ship built by an Australian Company down in mobile, alabama, talking jobs. Lets get more of a wrapup. We have eamon javers and Kayla Tausche standing by. Eamon, first to you. Thats right. You saw some diplomacy in action in the east room from Malcolm Turnbull there, when he was asked about australias gun laws, very strict after that mass shooting in the 1990s he said yes, those gun laws are on the books, and australia is pleased with them by and large and how they have worked over the years. But he also said he wouldnt presume to tell the United States exactly what to do with its gun laws he said we dont presume to provide policy or political advice on that here. This is such a completely different context historically, legally, and so forth. So the australian Prime Minister really ducking the gun question here in the east room. Standing side by side with President Trump. Also, interesting news there made on jared kushner. Theres been some question about Jared Kushners security clearance, whether hell get it, whether hell continue to have access to highlevel security information here at the white house. What the president said was the decision on whether or not to issue a waiver on that security clearance will be up to john kelly, the chief of staff, who was sitting here in the room as the president said that. The president said he himself wont weigh in on that decision. The president also made a comment about china. We talked beforehand about china being sort of the third country in the room, so to speak here. The president said he doesnt think we have ever had a better relationship with china than we do now, and the only thing that could get in the way, he said, is trade back over to you thank you very much we want to go to Kayla Tausche, and what was striking, how the two gentlemen spoke about trade and the reciprocal relationship that both see on either side well, and of course, melissa, these two leaders have met several times since that phone call last year they met on the sidelines of various summits and conferences throughout the course of 2017. But australia has been keen to note that the u. S. Is the most important Financial Partner for that country the president was asked specifically about whether he would rejoin tpp, and he said theres a possibility we will go in, but they will be offering us a much better deal unclear who they is or what that better deal would entail but the president is getting some political pressure on that front. 25 gop senators have written a letter lobbying him to rejoin tpp, so well see whether he takes the bait on that one and whether he decides to reengage on those discussions i also found it interesting to hear the Prime Minister of australia, who has a front row seat to economic relations with kinda, given how intertwined those two countries and their Natural Resources are, when he was commenting about President Trumps relationship with president xi, which at times has seemed somewhat fractious, and he said they see eye to eye in every respect. That he has witnessed a relationship that is clearlyres relationship thats very respectful, very frank and very cleareyed thank you very much the president was not asked about the Mueller Investigation during that News Conference but there is breaking news on that front, john harwood. Scott, that was the striking thing about this News Conference none of the reporters, either the americans nor the australians, asked the president about the guilty plea at this hour by his former Deputy Campaign chief rick gates. Gates under pressure from Robert Mueller, the special counsel, has pled guilty to two counts. One for conspiracy against the United States. That refers to tax evasion and Money Laundering related crimes. Secondly, to making false statements to the special counsel. That occurred just three weeks ago, according to Robert Muellers charging document today. This guilty plea by rick gates is very significant because it adds to pressure on Paul Manafort, rick gates boss who was head of the donald Trump Campaign for a period of 2016. Paul manafort faces immense legal charges and will find pressure from Robert Mueller to provide information. We dont know whether he will do that, if hell cooperate like rick gates does and what Paul Manafort could offer if he does decide to cooperate. Thats a mow men to us moment for the president , for his team. And we did not get any questions or answers from the president just now. John harwood, thanks so much. Busy news day. Busy news hour, not the least of which is the market rally. lws up better than 200 points. lws up better than 200 points. Wel have much more on that letsfist word that comes to mind when you think of lowcost futures trading. Was it happy . What about a dedicated service team when we come back in two minutes. Happy . When we come back in two good. Then its time for power etrade. The platform, price and service that gives you the edge you need. The original place to invest online. Today, the new new york is sparking innovation. You see it in the Southern Tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. Which helps improve every aspect of advanced rail technology. All with support from a highlyeducated workforce and vocational job training. Across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. To grow your business with us in new york state, mvo with everything that is going on around us and in the nation, we need to Work Together. We need to do it more often to help people that need help. Ill stand by you. Fvo hes encouraged other people to look around and notice one another and take the time for each other. Thats his gift. Ill stand by you. Im courtney reagan. We have an update on nordstrom, the Department Store Nordstrom Family is continuing to work on a deal to take the company private. According to sources to cnbc. Com now, reuters, which first reported that the family is back in talks on this and reported this update said a deal could come as soon as next week. Nordstrom does report their earnings on thursday so, we understand that could potentially be one of the dates in target. Youll remember that the Nordstrom Family announced they were looking at possibilities of taking the company private, but decided to suspend that action during the holidays, so well see what happens, if we get an update pretty soon for the family that owns more than 31 of the shares. Back over to you. Thanks for that courtney reagan. We want to point out as far as the market rally were seeing, were close to or at session highs right now. Technology as far as the three major indices, nasdaq leading the way up 1. 4 . S p utilities and energy sectorwise leading the charge. President trump wrapping up his News Conference with australian Prime Minister Malcolm Turnbull joining us congressman tim ryan from ohio. We want to talk about your trip around the midwest and Venture Capital in a minute, but i want to ask about the News Conference specifically gun safety, what is the state of ohio working on, what options are there to keep our children safe i think the president has come up short. We need a firmer position from him. We have to get these weapons of war off the street with a ban on these kind of weapons. Theyre meant for war. Theyre not meant for kids to get or citizens in the country to have. We need to have a universal background check so we know everyone who is trying to get a gun, including people at gun shows and personal sales we have to close those loopholes up and right now i think those are the steps that we have to take and we have to take them immediately. These young kids, its just its really hard to watch with them and their families have gone through we are have to say we cant ever let this happen again. Congressman ryan, that tech tour you took, a delegation of 12 Venture Capitalists around the midwest to see how to get the flow of investment going to your district and ones neighboring it, i wonder what the reaction is and if you think their view of investing in the midwest has changed after tax reform well, you know what, a lot of this is about connection 80 of Venture Capital money goes to three states it goes to california, new york and massachusetts. And the money, only 4 goes into the midwest. Only 2 goes to american. We went to youngstown, ohio, akron, flint, and detroit and south bend, indiana, its about getting investors connected. Seeing the emerging technology seeing the level of sophistication thats really happening in some of these cities not just on the tech side or the business side, but also the quality of life side the renovated theater we saw in flint, the new amphitheater going up in youngstown, ohio the quality of life stuff that will help keep our young people there and also the ones that left, give them an opportunity to come back and that emotional connection i was so impressed with the Venture Capitalists, their promise to rebuild these xhuj communities. Were showing on the righthand side of our screen one of the Nice Investments you were able to drum up, 32 advisers in robert wolf, who many of our viewers know committing 100,000 to flints 1,000 startup initiative. Thats right. Flint has an amazing operation there where theyre turning spinouts and businesses. Robert wolf stepped up in a very, very big way for 100,000. Patrick mckenna, who was also on the trip, he committed 75,000 that hes already put into youngstown, ohio, in a venture fund there, in northeast ohio. Others are ready to do something similar and were talking about those next steps, but were making that connection this is the big economic problem in the country you have so will con valliliconu have wall street you have pockets in austin doing really well, but the rest of the country is left behind but we have the ability. We have the opportunity. We have the technologies we have an Additive Manufacturing institute, america makes in youngstown, ohio. We need investment we need private Sector Investment let me say quickly, sometimes democrats too much we focus too much on what the government needs to do. And i believe we need broadband and infrastructure, we need private investment for private sector jobs, increased wages, tensions and all the rest. Thats starting to happen now. Congressman ryan, thank you market rally on our hands. Were managing to end the week, it looks almost flat on the s p 500. A gain of 1 for the nasdaq. Thanks for watching power. Closing bell starts right now. Welcome to the closing bell. We are live from the New York Stock Exchange Michelle Carusocabrera in for kelly evans. Im Bill Griffeth the nasdaq was pushed higher by more than 1 with these gains, the s p and the nasdaq are finally positive for the week were still working on the dow right now. If they arent positive, it will be the third down week in the last four. Thats because its been two weeks since what people are calling the