Buy in the space how can that be . Well tell you as power lunch begins right now and welcome to power lunch. Im melissa lee. Stocks taking a breather today after yesterdays more than 1 gains, all three of the major indices are lower with the s p and dow on track to snap the threeday rally since last weeks big drop. Fractional losses across the board. Check out the transports theyre sinking further into correction territory American Airlines, the biggest drag there that stock is now down 16 for the month of august. Well have much more on that move later on. Ty we begin at the white house President Trump to meet with the president of romania while the economy is front and center for the president and the administration and eamon javers has the story for us now thats right. Were going to see the president of the United States in the oval office here in just a short time the president will have the opportunity to talk about the end of the 30th anniversary of the end of communism in romania and an important nato ally you can expect hes going to get questions about the economy and this idea of whether or not the white house is planning behind the scenes for any kind of recession protection measures. Theres been this leak over the past 24 hours here, the idea that the white house is working on a pay roll tax cut behind the scenes officially, the white house denies that. They say theyre not working on a pay roll tax cut at this time. The New York Times and others reporting that some folks have been circulating a white paper internally with that measure and perhaps some others on it. So it seems clear that Administration Officials are at least considering how to respond to any potential recession, even at a time when the president of the United States himself is insisting theres no recession anywhere on the horizon, the economy is very strong, and thats one of hes key signature achievements over the course of his presidency and one of the keys to his reelection next year this is a very important moment for this White House Well see whether the president takes any questions about it in just a couple minutes time in the oval office. Thank you very much eamon javers on the north lawn yesterday on power lunch, we heard Tilman Fertitta say Corporate America is doing things in a very conservative way because of fears things here and around the world are starting to slow down. This while the white house is saying the economy is go gangbusters. Can the administration do anything if theyre picking up steam . Libby, great to have you with us what do you make of reports about a possible pay roll tax cut, and do you think congress would democrats, its interesting because eamon was saying the administration is making clear to say theres no recession on the horizon, yet they might be behind the scenes advocating for some sort of pay roll tax cuts. The democrats on the other hand have an interest in saying the economy is weak, yet their likelihood of bailing trump out seems low. Exactly its not unusual for an administration to be brainstorming about possible ways to combat a possible recession. You know, for what its worth, pimco doesnt see a recession necessarily over the next 12 months as likely, but i think this should be expected. Now, White House Brain storming is very different from actually seeing this pass congress. And i think there is very little chance that we see a preemptive tax cut pass its way through the house or the senate, for that matter im not shower that Majority Leader Mitch Mcconnell would be supportive of more deficit financing at this point when the economy is still, maybe slowing, but its still relatively robust so i think that kind of bottom line here, very little chance we see any sort of fiscal stimulus in the next year how about the greenland stimulus package that might help a lot. The president has been taking on fed chair powell and the Federal Reserve a lot. What is your view or pimcos view of where Interest Rates settle well, look, we probably will get some sort of indication at jackson hole later this month. We think that you sort of have to take fed chairman powell at his word that hes looking at the data, at policy uncertainty. He interestingly mentioned trade policy uncertainty several times in his press conference back in july sure did. If this does escalate with china, then i think we can see the fed respond in kind. I think we need to take chairman powell at his word for that. Is there any Political Risk behind chairman powell losing support on the part of congress. The more the administration talks against powell, the more the public might question powell the more Congress People might get questions from their constituents its really a good question i think the reality, though, is quite different. At least for now in terms of especially the senators support. You see that in the testimony. Both on the senate and house side, when jay powell was in front of both committees, there was a lot of support for him and i think democrats especially, but also some republicans, said that the fed unless is sacrosanct, that we will defend you and sort of continue to do what youre dpoog. Looking at data and being independent as possible. Huge demonstration in hong kong over the weekend, thankfully, it was peaceful. If that situation devolves, does its beenil or completely take interesting because President Trump more or less hasnt really made human rights central to these trade negotiations thats very important to Vice President pence and some other folks in the administration, but in terms of what President Trump has been focused on, its been mostly trade issues where however, if hong kong does escalate, i think he has no choice but to make it more central to a deal and that mean the chances for a deal are much lower. At the very least, they said they would put off some sort of deal until president xi deals with whats going on in hong kong we could see a pushed out timeframe in terms of the talks and the deal yes, and absent that, im not sure we should expect anything different from that. Honestly, at this point, it may behoove both leaders to keep saying that theyll continue to talk, that theyre continuing to negotia negotiate, but we dont necessarily see a breakthrough as imminent. Okay, libby, thank you. Good to see you. Libby cantrell bond yields falling again today, but they are off last weeks lows ahead of the fed summit out in beautiful jackson hole later this week are the markets pinning too much of their hopes on getting soothing comments from the fed bob pisani is following from the new york stock exchange. Robert i think so, tyler lower yields, lower stocks its been that way the whole month. Its happening again today after three days of higher yields, were finally getting some skepticism about this recent rally remember, this is all based on hopes. Hopes for a stimulus package in germany and china. More progress in trade talks, and the fed sending a dovish signal at jackson hole given the risk, the fact were only 3 from historic highs, this is a remarkable amount of bullishness and high hopes out there. The bull case short term is pretty simple. Its this. European pmi is going to be out on thursday. The bulls think it may be weaker than expected and that will again prompt speculation of even more aggressive rate cuts from the ecb and maybe a resumption of quantitative easing on friday, fed chair jay powell speaking at jackson hole, and even though the markets are expecting two additional 25basis point cuts, a vocal minority for cutting for a 50point basis cut in september. Its unlikely powell or his surrogates are going to deliver anything close to that or a centum close to that, and a small group of disgruntled investors could knock another couple Percentage Points off the risk now, givethen rally we have seen, is to the down side going into friday. Thank you very much earlier on squawk on the street, kyle bass told david faber why he would not be surprised if Interest Rates go to zero. Our rates are going to go to zero whether trump gets it all in one move or not you think so . Yeah, because were the only country who has an integer in front of our bond yields wlee have a rule of law and a decent economy all the money is going to come here all the money in the world is coming here. Lets get more on where bond yields could go from here from michael collins, he also is morning stars fixed income manager of the year in 2017. Mr. Bass, who is certainly a respected voice, says he expects Interest Rates to go to zero in my notes, it says you think the fed will cut two more times this year, but the feds got eight more quarterpoint cuts in it, and it could take that funds rate to zero in the next one to one and a half years. You expect it . In the next recession, absolutely i mean, the fed is the only game in town, right theyll have to basically bear the weight of the world on their shoulders and other than maybe some german stimulus, maybe china can tweak their rates and add some stimulus, the fed is the game they will have to provide the stimulus the u. S. Doesnt have a lot of fiscal bullets despite all the talk about tax cuts. Et cetera. They will go to zero in the next recession. The question is, when is that . When is that . And what do they do before that . In the meantime, theyre going to cut a few more times. We believe for a while the neutral funds rate is not 3 or 2 1 2 or 2 its probably 1 or 1 1 2 i think they have to cut a couple three more times basically to get the economy on even footing to keep it running at neutral. So theyll cut in september, maybe in december, maybe another cut or two next year get the funds rate into that 1, 1 1 2 range, and then we could have a growth for years. The president said cut a full point now and start doing quantitative easing now. Do you want to save some of that ammunition for later you know, theres two schools of thought the prevailing wisdom right now at the fed based on their june, the big confab they had in chicago, is if you really see the whites of the recessionary eyes, if you really think youre moving in that direction, you have to cut quickly, aggressively, get ahead of the markets, and get to zero really fast now, personally, that seems a little odd if you only have a few dollars left to spend, dont you want to save save those for when you really need them but i dont think were in that recession eyes right now. What were seeing are signs of a manufacturing slowdown, maybe even manufacturer recession in parts of the world, but i dont know if were there yet. I mean, the u. S. Economy still feels like its sound. It feels like a Recession Risk in the u. S. Is really low in the next year or so. So i think theyre just going to tweak the rate down lower a little bit how does europe factor in we have the brexit deadline looming, contraction in germany when it comes to gdp, we have uncertainty in italy once upon a time, the fed used to be the rate setter of the world. Im not sure it is anymore, at least in this particular cycle, the ecb is probably going to cut the next meeting to kyle bass point, its a global bond market thats been one of our previling views. One reason we have been more bullish on u. S. Rates is when you look at yields everywhere else in the world, theyre zero, theyre negative were the highest yielding Government Bond market in the world. Hes right about that, because this is the only place you get yield and the credit quality. We have these big creditt markets on top of the treasury yields that are liquid, that are developed, that are high quality, and the world will continue to keep a lid on our rates here has the fed lost control of rates then what can it do if the money is going to come in, right, then how it there are already four additional cuts priced in between now and the end of next year its going to be tough for the fed to hit those expectations. For them to cut that many times, you have to really see the economic data, i think, get weaker so you almost have to watch what you wish for if they cut all the way down to whats priced in, which is about a 1 funds rate in a year and a half, you have to be in really weak economic situation. You probably need stocks to perform poorly where do i make money in bonds right now . We still, believe it or not, like the long end of the Treasury Curve the very back end, still, even though its just about 2 , you know, probably has the most to fall the curve can continue to flatten, right its still a pretty big yield when you look at rates around the world. Of course, trump and mnuchin are talking about doing a 50year or 1year bond which could put prerth on the back end, thats okay, but the credit markets look like a good value highyield bonds are probably going to be one of the best performing fixed income classes in the world for the next year or two michael, good to see you. Home depot higher after its earnings report. Lowes also moving higher. Which is a better buy right now . And cnbc has full coverage of the fed summit in jackson hole, wyoming. Power lunch will be right back corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Welcome back to power lunch. Home depot on pace for its best day of the year after a big earnings beat despite slashing its outlook on 2019. The company pointing to trade concerns and lumber issues lowes is joining the party. The stock is soaring before earnings tomorrow. Here with us now is liz suzuki great to see you thank you for having me in terms home depot, you pointed out it doesnt lower its guidance for the year and hasnt done so since 2008 so what is it . Why is the stock higher . This is the first time that they have cut their Sales Guidance in almost a decade actually i think we found one instance in 2010 where they did as well. Theyre known for never cutting guidance so the fact that the stock is up today means that the market was clearly expecting this and actually, we had been talking about how their guidance of 5 samestore sales growth for the year had looked a little optimistic as well versus our expectations i think the cut to 4 seems reasonable it seems relatively achievable but you know, we do see risk to their threeyear targets, which are going to be updated in december when they have their analyst day. The last time they had an analyst day was in december of 2017 they were coming off a peak earnings year. They put up 6. 8 samestore sales growth that year, and they were talking about averaging 4. 5 to 6 per year through 2020 so now 2019 is coming in below that range we think 2020 is also going to be decelerating. So the theme here is that we think that growth is still positive, but its slowing and we think that theres going to be another guidance cut as it were to their threeyear targets which i think is a risk that isnt really being considered for december right in terms of consumer strength, what are the trends we have seen throughout the quarter and is there any concern that the consumer could be soft in the back half of the year . Yeah, i think there are some positives in the second half of the year to consider for one, they are going to be lapping some hurricane headwind they had in the first half of the year that comparison gets easier in the second half. Theyre also looking at now some lower Mortgage Rates, which may help it doesnt historically have a high correlation to the samgstore sales growth, but its an incremental positive in isolation. Its something that could help overall renovation spending as Mortgage Rates come down people will either buy a new house they have been thinking about getting or refinance, and that may put cash toward renovation spending. Otherwise, when we look into the full year 2019, were past home depots peak samestore sales growth which was 2017, past their peak samestore sales year, which is 2018. Now were at a point of deceleration the stock is up 25 this year. Have the fundamentals improved 25 year to date i dont think that were at that point. Lets go from peaks to lows all right . I like that what about lowes lowes, one of the themes were focused on for this year besides highquality defensive categories of hard lines which i think Home Improvement falls into, is turnand stories that are really compelling. We look at lowes versus home depot, the operating margins have been underperforming. The samestore sales growth has been underperforming they have a brandnew Management Team they have turned over basically the entire Management Team through last year. Now theyre starting with a clean slate of a lot of folks that came from home depot, to be honest now theyre using some of that same playbook in 20192020 now, there have been some hiccups in the turnaround, and i think thats to be expected. The last quarter was a hiccup, wasnt it . Exactly is this the quarter that the new management shows its stuff probably not quite yet. There will still be issues in the Second Quarter the street is expecting. Samestore sales could come in pretty decently, but well likely still see margin compression, which is what happened in the first quarter. In the second half of this year, thats when the results start to get cleaner and when some of the initiatives the new Management Team has put in place actually start to come through. Longer term, we think this is a really compelling turnaround story and we think that when you look at when youre looking for stocks that have earning growth acceleration, this is one that we like, whereas home depot, were seeing the growth deceleration, where it doesnt really justify multiples expanding at this point. Liz, thank you. Thank you liz suzuki coming up, its been a turbulent summer for American Airlines that stock more than 20 down in the past month should you hop on a flight now and big tech under fire again. The latest move towards regulation and what the final perunke bl lilye. Ow lch will be right back keeping the night interesting, is all about setting the right tone. Lower carbs. Lower calories. Higher expectations. The light beer youve been waiting for has arrived. Corona premier. The president is making some commen commentsunts possible tax cuts this out of a meeting with the president of romania he says the administration is looking at possible tax cuts theyre always looking at the pay roll tax she says that the u. S. Is very far from a recession but again, looking at these tax cuts. He also made some comments about china, saying china still wants to make a deal we heard him say that many times, they want to make a deal. Well find out just how much interesting about the pay roll tax considering the white house was, you know, very clear to put out a statement yesterday saying that was not being considered, and yet we have the two articles today in the Washington Post and New York Times saying it was being considered and hes confirming its in fact being considered. Libby cantrell talked about that, and why its very difficult in an Election Year for any party to oppose a tax cut, i would find it very difficult to believe that ms. Pelosi would go along with giving the president that, what he wants although thats exactly what the Obama Administration did for two years with the pay roll tax cut. Yes so squaring that away is going to be a difficult dance for them a very difficult pickle for them to be in. Well by the way get the tape playback of the full events and all of his comments in moments in the meantime, lets send it over to mike santoli for trading nation thank you, melissa. The transports are stalling out again. You could say. Stocks including avis budget, American Airlines, Norfolk Southern and fedex among the hardest hit. Is this leading indicator a blinking light at this point larry and boris are your trading nation team. Ari, just weigh in on the transports in general. Its been a nagging concern, i think, for the bull case for a while, that transports have lagged how are you looking at the group right now . I think when it comes to dow theory, the important point here is you cant trade off it. Transports broke down last october 23rd, if you use the dow theory exclusively, you have been cautious on the market since then nothing has changed as long as transports are below 11,099. I think it highlights whats been a market of haves and have nots we looked back and saw transports also underperformed in strong runups, technology runups in the 1950s, 1960s, and 1990s. I think thats the environment were in transports relatively weak group, stick with leadership within that. The name that stands out for us is trucker Old Dominion Freight Line odfl, coming out of a bullish triangle pattern that projects to new highs thats the way to play that weak fwrup. All right, and boris, obviously, theres a lot of issues here that are caught up in just this one sector, whether it be the trade stuff or just general economic terms, but also cheap looking stocks it is cheap, but you know, i think cautious is the right word that ari is using. Maybe not a red light, but definitely a yellow light at this point because transports to me are a macro story, and not necessarily as far as tariffs and trade, but much more with manufacturing. If you kind of lay the transports against the pmi or the ism in the u. S. , you see that isn keeps going down towards that very dangerous 50 boom bust line, the transports keep sliding lower until you see the manufacturing ism stabilize or start to have a month over month increase, you could have a hard time seeing any rally in transports going forward. All right, so see if that caution pays off, so to speak. Ari and boris, thanks a lot. For more, head to our website or follow us on twitter at trading nation back over to you ahead on power lunch, tech under fire a group of states could be readying to launch a joint antitrust probe into big tech well bring you the details. Plus, not so happy campers rv sales saying 12 months of declines why this could actually be an important recession indicator. And Endo International shares soaring after announcing a major legal setment. Well hear from one analyst who thinks it could be good news for other opioid makers facing lawsuits all this when power lunch returns. Now, the latest from tradingnation. Cnbc. Com and a word from our sponsor. During bull markets, many traders find themselves attracted to smallcap stocks because they have a tendency to have a higher beta, meaning their generally move up faster than the broader market. But dont overdo it on the small caps because theyre also more vulnerable to pullbacks. Im jonaan payne, and schwab is the better place for traders welcome back, everyone im sue herera heres your cnbc news update at this hour. A coroner says a missouri man blamed for running the largest organic food fraud scheme in u. S. History has died by suicide. Just days after he was sentenced to ten years in federal prison the coroner says randy constand died from a, quote, selfinflicted situation, end quote. New york, connecticut, and vermont are joining the fight to challenge President Trumps new public charge rule the three states argue the president s rule intentionally discriminates against latino immigrants and immigrants of color. For generations, the United States has been a haven for immigrants seeking opportunity and upward mobility, and the trump administrations unlawful reinterpretation of the public charge rule turns this history on its head. Excluding hundreds of thousands of immigrants. And heavy smokers can reduce the risk of Heart Disease within years of dropping the habit. Vanderbilt researchers studied 60 years of data from 9,000 people, and they found that within five years of quitting smoking, the risk for Heart Disease dropped by 39 another reason to quit thats the news update at this hour ty, ill send it back to you thank you very much lets look at the markets right now, and as you see, the dow looking to break a little bit of a win streak there, now down 79 points or a third of a percent the nasdaq is off about four tenths of one percent at 7970, s p off about a half percent at 2909 and the streaming wars heating up apple jumping on reports its spending a whopping 6 billion on original streaming content, and that is having the opposite effect on netflix. That stock is down about 3 today, as you see right there. Melissa. Well, the dilemma for big tech is going from bad to worse. States are now moving ahead with an antitrust investigation, and thats only one of several issuissu s facing those companies ylan maui is here to break it all down there are at least a dozen states involved in this coordinating antitrust investigation. State a. G. S have been in touch with the Justice Department about the possibility of action, and the dojs top official told our own Brian Sullivan that theyre all working together i think its safe to say that were all in the same place, having had conversations with the state attorneys generals at the federal level and the state ags, i dont think, you know, theyre at different stages of an investigation the state investigation is expected to be bipartisan and cover all of the big tech platforms, but facebook in particular has been under fire its being investigated by the ftc and chairman joe simons has indicated hes welling to break up the Big Tech Companies if necessary. But he told the ft this week that process could get a lot more complicated if facebook moves ahead with its plans to integrate instagram and whatsapp he said, quote, its harder if all the eggs are scrambled the fact that facebook as well as twitter had to shut down account this week that were part of a coordinated chinese disinformation campaign, that just underscores the power and influence of these platforms, facebook even acknowledges that rooting out this type of abuse is an ongoing challenge. Thank you very much do you have a question no. I beg your pardon thank you very much. We want to keep the conversation here. And bring in mike isaac, Technology Reporter for the New York Times, and nbc Technology Contributor sarah fisher, media reporter with axios. Welcome to both of you sarah, let me start with you how imperiled is big tech if thats a good word to use or not. Well, the spotlight is definitely on them in a way they have never experienced before. And so that does put them in a sense at a level of peril. Look, when you have, i think the wall street journal reported possibly 20 state attorneys general that now we know according to that report with Brian Sullivan, are working with the doj, who says its working with the ftc, to probe all these companies for market dominance, that is a huge threat to your business now, whether or not we see action taken in the short term is still in question, but in the long term, i think its definitely a huge threat is the original sin, mike, bigness, pure and simple its funny. I think probably for years when facebook was coming up in, you know, the early 2010s, even some folks at the ftc now kind of admit they missed some big signs that growing this big and this dominant in terms of market power for facebook, at least, could have been a problem. You know, at the time, instagram, that acquisition and whatsapp, that acquisition, didnt seem at least to regulators that it was going to be a big deal in terms of anticompetitive behavior, but now clearly, facebook at least in the United States, controls how people contact each other on social networking and soon with this integration of their messaging services, may end up cornering the market on messaging. I think now, at least at the federal and even state levels, folks are starting to realize the problem of this bigness. Does it matter, sarah, that the public doesnt seem to care . Its great that the states are getting together with the federal regulators, ala what happened with microsoft and that antitrust case so long ago, but ultimately, we havent seen the data out of acebooks most recent quarter that advertisers are leaving that platform. Alphabet just reported a stellar Second Quarter in terms of profits, and im not sure that the public really cares because they have want voted with their feet doesnt that play into this at all, if this is in fact a political issue . Well, it definitely to your point, plays into the Tech Companies argument, which is how do you say that we are anticompetitive when our prices for advertising are so low and when our pricing for consumers is zero. These services are free. What you can imagine is that even if the public drags its feet, if regulators find that these companies are being, one, dismissive or being misleading about ways theyre using their market dominance, which to mikes point, there have been regulators in europe that have said facebook was not forthcoming enough about what it knew when it was acquiring whatsapp, then i would expect them to take action regardless of what you see coming out of consumers. And to your point about them showing up with great earnings quarter after quarter, one dynamic here that im curious and have my eye on is what do we do about advertisers advertisers keep saying, threatening advertiser boycotts, that they want to take action. As you noted, time and time again, they are choosing to put their money not where their mouth is so mike, lets turn to a question that i know is on your mind, and that is the use of governments to spread disinformation and the steps that some of the social Media Companies like twitter are taking to try and combat it. Are they going far enough fast enough or is it too little too late what yeah, its really interesting right now. You know, i think 2016, the president ial election kind of started giving a playbook to other nation states on how to use these social networks for disinformation warfare like once the investigation sort of uncovered how the russians used facebook and how they used twitter to sow discord and racial strife in some cases and rumors around the candidates in the u. S. President ial election, i think countries are paying attention. You know, china now in these recent protests in hong kong used twitter and facebook to sort of undermine what the protesters were fighting for the sort of democratic protests. And you know, i worry what thats going to look like for any other governments or other nation states that are trying to accomplish similar things. And you know, facebook and twitter dont have enormous staffs that can monitor all of this all the time, nor do they have the cultural context to really even understand it. So its kind of like whackamole in my view. Im not really sure its a solvable problem i agree, but they have the money potentially, sara, and i think that would be the concern for invests, especially when it comes to facebook. Which has already spent billions of dollars when it comes to trying to manage its content there could always be more pain exacted on some of these Tech Companies to spend even more is that going to satisfy, in your view, regulators who want these tech giants to take control of their content better . I think regulators think that all the money in the world isnt necessarily going to solve this problem. I mean, look, facebook has now at this point has about 40,000 people that they have added to help work on security issues, and at the end of the day, facebook and google, im sorry, and at the end of the day, we still have these problems. Theres still something we cant get humans to fix, and really take accountable for and i think thats why youre starting to hear some really serious talks about do we break these companies up are they just too big to be managed and regulated either by the companies or by government it seems to me that governments are just bearish on the ability to get control over this problem, regardless of how many people you paid to work on it. All right, folks. Thank you very much. Mike isaac and sara phisher. We appreciate your time today. Thank you. Thank you thanks for having me. You bet to the bond market. Rick santelli tracking all the action at the cme. Hey, rick. Hi, melissa lee boy, what a difference a day makes. Lets look at tenyear notes from thursday. Why thursday thursdays intraday low is 147, but the close was 1. 53 the lowest close going back three years as you see on this chart. Lets overlay s ps on it, and bob pisani always brings this up boy, are they correlating, and certainly it looks as though today, treasury rates and global rates led the way. If we look at whats going on overseas, the twoyear shots, the two year note in europe, for the second Time Thursday and today had an intrady low of minus 91 basis points. Finally, twoday of the dollar index, its been going up almost every day. Today, it came very close. 98. 40 to the 98. 52 closing high. It backed away a bit tyler, back to you thank you very much Rick Santelli in chicago coming up on the tasting menu, a tesla tout a towns ransom, and hitting the road well be right back. Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. It is not just the, quote, crazy inverted yield curve, a warning sign on the economy is coming from out on the open road, and Frank Holland has the details. Frank. Tyler and melissa, some people, they believe a downturn in rv sales can be seen as a signal that a recession is on the way, and right now, were 14 months into a slump that started in june of 2018. So year to date, sales of towables have fallen by 20 . Motor homes by 23 so just to keep this in historical perspective, there have been five rv sales downturns since 1981, according to Thompson Research group only two of those, both tied for the longest at 36 months, have actually proceeded recessions. One before the early 90s recession, one before the great recession. Since 2009, rv sales have increased pretty dumatically, when the rates on the tenyear treasury note decrease, but this year, thats abruptly changed. The tenyear falling by 25 , rv sales falling by 20 concerning, but not the whole story. Tariffs have raised input costs and prices for rvs, and they have also put pressure on parts makers that put the parse into the rvs. Also have to consider the rv market, the rental market, has expanded, growing an estimated 45 since 2009 on the other side, today were getting a positive sign from the commercial vehicle sector. Truck tonnage, which can also be seen as an economic indicator, surged in july an increase of 6. 6 from june. This chart were about to show you, this shows some of the ups and downs in the industry, but you can see from the start of 2017, relatively upward trend. And important to note, this number is dominated by contract rates, which are higher priced than spot rates. So two sides of the story here, one for recreational, one for commercial the bottom line is it sounds like rv sales, it may seem like a good economic indicator, but there are all sorts of caveats especially recently with tariffs, throwing a munchy wrench in the idea this is an economic indicator, bull also not that reliable. Only 2 out of 5 thib last 30 years. And the fallen tenyear bond has been a reliatively recent denominator. I dont know if you would expect the lag to be caught up by the sales. Well find out time for todays tasting menus here some of the other stories were watching major tesla investor ron barron pounding the table on the electric vehicle maker listen to where he sees teslas revenue heading in the next few years. Tesla, when we invested in 2014, the revenues were less than 3 billion a year 2. 7 billion this year, the revenues are about 27 billion. So the company has grown ten times in revenues since the beginning. Then, they were sort of struggling and producing cars. Next year, i think theyre going to do 35 billion or 40 billion and two more years theyre going to do about 100 billion let me guess, hamptons. Can you tell by the backdrop . You could tell. It was the hamptons barron obviously has been a longtime tesla supporter stood by elon musk, even with the selfinflicted wounds musk had. Its interesting, the squawk box conversation, becky pointed out to ron, your cost basis is somewhere in the high 200s i think she said 270s or so. He sort of said, is that 218, excuse me. 218 so you know, he is still sticking by, even though its sort of getting closer to that point. Boy, you see a lot of teslas on the road. I have to say that you see a lot of them, and more and more every day yeah. Well, 23 towns in texas are being hit by a coordinated ransom ware attack, according to the department of information resources. The attacks began friday are impacting smaller local governments, and cybersecurity experts are in the process of trying to regain control of systems. Attacks like this usually involve malicious software, locking systems until a ransom is paid, hence the name ransomware maybe not a surprise theyre hitting smaller governments. Probably less able to resist the attack and less good defenses, i would assume right, and fewer resources to actually fend off an attack and maybe more inclined to pay some sort of a ransom well, after a recordbreaking 19 weeks as number one on billboards top 100, lil nas x, okay, lil nas xs old town road tells you how cool i am has been dethroned. The new top track, bad guy with bill billiee eilish heres Billie Eilish who were told is the first person born in the 21st century to have a number one thats what frank said, and hes in the know unlike me, for sure. I like this song. 17yearoldo 17yearold gaining popularity for her unique style. As you can see to, there its referred to as horror pop that seems fitting. Yeah. Watch this. Lets run this a little bit and think about it. Play it out to break. Yeah. Coming up a sad settlement in an opioid lawsuit but there are thousands of others. Well tell you wt hait means next on power lunch. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. Shares of endo settling today as the stock down 80 in a year so what does the settlement mean meg joins us now. Yeah. Huge move today. Given some of the numbers weve seen around potential opioid litigation settlement, it appears small. Its two cases out of the thousands the company and others are facing there are important cases. Endo is settling and its important because those cases were select as the first to go to trial in a massive federal lawsuit that consolidates cases brought by more than 2,000 cities, counties, and others if no broader settlement is reached, that trial is set to begin october 21st it is clearly being viewed positively by wall street. Because the 10 million extrapolated to a lot less for endo overall about 1. 8 billion total versus their estimate of 4 billion. Endo isnt the only Company Facing these lawsuits. And aller gain is said to have reached a potential settlement for about 5 million we havent yet confirmed that with the company, guys there are caveats around that number just the beginning of a long road in opioid litigation. Only 10 million for endo, does it have any implications for the municipalities who are suing in terms of is it difficult to prove the cost to the municipality thats a great question what a lot of folks are saying its basically a Legal Expense companies would have spent fighting the cases why didnt the municipalities feel the more its a great question. Quick update on the Johnson Johnson case. The nearest term one is in the state much oklahoma where we expect a decision from the judge sometime next week probably toward the end of the week that will have huge implications on the entire universe. Thank you very much well get to the white house. Reporter thats right. The president is speaking in the oval office a couple of minutes ago. Well get the tape here shortly. But the president did say to reporters in the oval office that he is thinking about a payroll tax cut as one of the tax cuts that white house officials are kicking around here he said it doesnt look like thats anything theyre going to be working on any time soon, but this comes after yesterdays denial by the white house that they were working on it or considering it at this time. So turns out that phrase at this time was doing a lot of work in yesterdays denial now i asked white house officials what explains about their denial yesterday and the official is saying that considering it is different from implementing it in terms of payroll tax cut. I said it seems clear that the president likes the idea of a payroll tax cut. The official said the president likes a lot of ideas its something being kicked around here. But not evident its going to happen any time soon. I think theyre being very tardy and not doing it they raise to do quickly and ive been vocal on that. They also didnt want the tightening, which was ridiculous and so despite that, you know, if you look, i guess you can call it normalized, but if you look, our economy is doing fantastically. If you take a look at the previous administration, they werent paying interest. They had no Interest Rates they had loosening and not tightening frankly, its a big difference in our economy is incredible our jobs you look at the jobs we have to be proactive. So we need a fed cut rate because if you look at what is going on with the european union, as an example, theyre cutting. You take a look at germany and what theyre doing and paying, theyre actually doing something inverse. Nobody has seen it before. We have to keep up, to an extent right now were paying a higher rate of interest we didnt follow the world, generally speaking thats okay you cant have that much of a disparity. Were looking for a rate cut we can be greatly helped if the fed would do its job and do a substantial rate cut also doing quantitative typing do easing or minimum should be doing nothing about that but they have to do a rate cut the other thing is were looking at various tax reductions but im looking at that all the time thats one of the reasons where its a strong economic position. Right now the number one country anywhere in the world by far has an economy europe has a lot of problems and asia has a lot of problems you look at china, china had the worst year theyve had in 27 years, and they want to make a deal with us but i can tell you im not ready to make a deal unless theyre going to make the right kind of a deal i dont know but i will say this, something will happen. Maybe soon maybe a little bit later but china very much wants to make a deal. What kind of tax cuts would you look at . Weve heard indexing, Capital Gains. What would you weve been talking about indexing for a long time many people like indexing. It can be done simply. It can be done by me as you probably heard, i can do it directly. Were talking about indexing and looking at the Capital Gains tax payroll tax. Were looking at i would love to do something on Capital Gains. Were talking about that and its a big deal that goes through congress payroll tax is something that we think about and a lot of people would like to see that very much affects the workers of our country. We have more people working today than weve ever had before in the history of our country. Almost 160 Million People working today. I think the word recession is a word that is inappropriate its just a word that the certain people in the media are trying to build up because they would love to see a recession. Were far from a recession in fact, if the fed would do its job, i think it would have a tremendous spurt of growth tremendous spurt the fed is psychologically very important. Less so, actually, but very psychologically important. If the fed would do its job, which its done poorly over the last year and a half, you would see a burst of growth like youve never seen before that would be lowing Interest Rates and maybe putting some if you look at what china is doing. If you look at what germany is doing. If you look at what so many countries are doing. Putting some money in because we want to compete with these other countries. So i think that we actually are set for a tremendous surge o