Transcripts For CNBC Power Lunch 20240714

Magic. Power lunch gets started right now. And lets check where we stand at this hour were off the highs of the day the dow up 200 points right now, but the session highs were about 100 points above that when we were up more than 300. S p and nasdaq both up about a percent as well. Even though asian markets were down 2 overnight, so a real turnaround for our markets today. And take a look at apple, the stock is jumping after one top analyst says that the tech giant might be tariff proof. Well explore that a little later this hour, kelly thank you, bill the big news affecting the markets today coming from the g7 meeting in france. Its been changing quickly hourly lets go to eamon javers for the latest yeah, kelly, thats right the president has left the country, air force one was wheels up from biarritz france a short time ago, and that brings to a conclusion the g7 where everybody involved was at pains to strike a message of unity it ended with a Fascinating Press Conference between Emmanuel Macron and President Trump talking about the president s leadership style he was asked this question of whether or not ultimately hes causing too much of a roller coaster in financial markets, too much instability by calling xi jinping on fraid and a great leader today the president gave us sort of an insightful look into his approach heres what he said. The way i negotiate its done very well for me over the years. And its doing even better for the country. They dont have the wisdom to know that you cant continue to go on where a country is taking 500 billion not million. 500 billion with a b. Out, every single year so the president explaining there thats simply the way i negotiate ate. He said hes worked for him throughout the course of his career he thinks its going to continue to work for him as president the message to all of us observing this presidency, this is how its going to continue. The president is going to pour on the rhetoric when he feels he needs to, and hes going to dial back when he needs to do that. Today was a dial back day. More about peace and unity among the g7 the president sending favorable rhetoric to china hoping to get a trade deal with the chinese side he announced a couple items here today, but ultimately, this g7 was about trying not to have a repeat of the disaster of last year in when the president took off, there were angry tweets, insults. Angela merkel called it depressing last year all sides would agree this one has not been the disaster that last year was. That was what all the leaders were trying to accomplish as they came to france this year. They cleared that bar eamon, thanks very much. Lets go to bob pisani at the New York Stock Exchange where markets are believing the best on trade with china. Yes, it is a rally, kelly, but its a very tentative one, if you look under the hood a little bit stocked associated with trade like apple and nike are up more than 1 . Theyre outperforming the market, but look at the industrials. Much more modest moves caterpillar is flat. 3m is down a 52week low for 3m, and even Energy Stocks like chevron, very modest rallies oil has turned negative on the prospects of the u. S. And iran returning to the negotiating table. That came out of the g7 meeting. Second, by the way, the volume is much lighter on these up days than on the down ones like we saw on friday. Thats a sign the rallies are being greeted with skepticism by a Trading Community somewhat exhausted by interpreting tweets and unsure if the timing is right for a trade deal traders are realizing that not even President Trump or president xi may know if the timing is in fact right. As for the yield curve, so obsessed with that last week, we all were the 2 10 was briefly inverted. Is this losing some of its shock value . A better way to look at this is its not getting dramatically worse, at least not yet, and right now, it is in fact flat. Back to you. Thank you investors have to deal with whiplash on every headline these days every trump tweet. Our next guests say you need to brace yourself theres no end in sight to the trade turmoil. So how should you be handling the trade triggers and what does it mean for your money joining us, david beonco, dws americas chief Investment Officer and samir is senior Global Market strategist with wells fargo investment institute. Good to see you both david, it just i mean, is the average investor to make changes to their portfolio based on the volatility or do you just need to ignore it and maintain a longterm prospective . The average investor should employ professional investors, and for us professional investors, this has been an exhausting summer. A lot of volatility, a lot of uncertainty. Its the trade conflict is the root of things but now at this point, substantial dislocations and Interest Rates and what should the ordinary investor do our suggestion is its time to take a defensive stance. We are uncertain, we dont see enough upside to make the uncertainty worth the risk and for this reason were looking at other Asset Classes that may not have the highest returns but theyre going to protect the capital until theres a more confident outlook. Were looking at shortterm Interest Rates, short duration, municipal bonds. We have been champions of equities for giet some time, but we think the only place where the upside is worth it is bond substitutes. Reits, utilities, Communications Tech software. We are batting down the hatches for what we think is a well justified, lets call it correction, far from a bear market, but markets need a 5 to 10 pullback often, that correction lasts a day until the next tweet samir, i would add to the list of standouts where people have gone to the safety trade, gold is at a multiyear high as well. Where do you think individual investors should be going, if at all . Again, is the question that they should just stay the course if they have a longterm perspective . Theres something to be said about staying the course at the same time, if you take the trade issue and set it aside, were ten years into this bull market. People have made a lot of money. This is a good time to be thinking about your overall risk exposure and not owning too much in equities, and kelly just had a great discussion about now you have riskfree assets where basically treasuries, german bunds are low or negative yielding you need to worry about how much exposure do you have to those Asset Classes. David mentioned cash thats a good spot to park out, but thats a melting iceberg because the fed is going to keep chipping away at it, so you probably need to look towards alternatives, noncorrelated strategies things like gold, reits, utilities. Would go back to those sectors but we wouldnt lean too heavily there. You could have a buyer strike where the yields snap back quickly. Its. Its not a great sign when we have analysts telling us cash is looking good david, you mentioned a couple areas of the market that are the richest parts of the market now. Whether its munis, corporate bonds, bond substitutes like reits and utilities, as bob highlighted earlier, this is where the performance has been, where theyre already looking pretty rich. Its where the performance has been one of our views is that trends that have worked will continue to work. The Growth Stocks will continue to outperform the value stocks large cap will outperform small cap. U. S. Will outperform most of the rest of the world, but look, the big trend and the trend that may even have more to go is this consistent decline in Interest Rates. And that makes many of the things that may appear expensive actually very reasonable im not going to suggest that people chase dividends for dividends sake. We want to make sure the dividends are safe, the dividends are reliable, so our focus is more on defensiveness than it is on dividends at this stage. And yes, again, those would be the bond substitute sectors, muna bonds, corporate bonds. There are some spreads there, still some spreads left versus the riskfree yields quick question to both of you. If you advocate getting into shortterm bonds, you must believe rates are going much lower from here. There are those who have posited that even our shortterm notes could go to zero percent samir, do you agree or not we think that the fed probably will cut two more times this year. These rates probably are headed lower. Again, in a relative standpoint, thats a pretty good place to park cash. David we think the fed will cut a couple more times. Perhaps more, but unlikely to go below 1. 5 on fed funds rate but the point is short term, bond investing is about protecting capital and thats our focus at this moment david, samir, thank you both for joining us thank you and coming up, disney is dropping new details about its theme parks and retail stores. But especially its streaming platform well explain why thats becoming an even bigger threat to netflix, and over the past month, only two s p sectors are higher and theyre the ones you just heard about real estate and utilities. If the safety trade is getting crowded, where do you hide from the market volatility . Power lunch is coming up what do you look for when you trade . I want free access to research. Yep, td ameritrades got that. 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. 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. Welcome back to power lunch. A very busy weekend for disney the Company Released a ton of new details about its soontobe launched streaming platform, disney plus. They unveiled new parks, and announced a partnership with a major retailer Julia Boorstin back from vacation and hit the ground running. Shes got details for us now well, bill, thats absolutely right. Disney is applying the same blockbuster approach to streaming as it has to successfully dominate the box office with big budgets and big brands for its Disney Plus Streaming Service that could really help it break out from the streaming clutter. Now, disney debuting a trailer for star wars series the mand alorian, drawing over 13 million views on youtube in two days its 1 of eight new shows that will be launching with disney plus on november 12th. They also debuted a new trailer for star wars the rise of sky walker which is hitting theaters in december, reminding fans disney plus will be the exclusive streaming home of all of the studios upcoming movies as well as Library Titles including on the day of disney pluss launch, captain marvel. They did announce more details about what will be ncluded in disney plus. The standard 7 plan or the bundle, along with hulu and espn plus that will cost 13 a month. The standard will include up to seven user profiles as well as four streams at the same time. And will include streaming in 4k and hd to compare with netflix, it charges 16 a month for 4k and four streams unlike netflix, though, disney does plan to release new episodes of its originals weekly rather than dropping a whole series all at once like netflix does now, disney is also making more moves to leverage the power of its brands at its parks. Announcing a naval themeland and a moana attraction in orlando. And to give disney brands a bigger presence at retail, disney is partnering with netflix. There will be Disney Stores in 25 target locations in october with 40 more planned over the next year. Four streams. Thats more like a fire hose, isnt it thats a gusher. A whole family. Its for a whole family. Gotta share that something for everybody there. Yes. Julia, stay with us were going to talk more about disneys streaming strategy. Brett harris is with us. What jumped out to you most about the announcements this weekend . I think we have seen disney is prepared to be very price competitive with netflix they started by pricing their basesign service at 6. 99. On their Earnings Call three weeks ago or four weeks ago, they announced the bundle where theyre bundling hulu, espn, and disney plus for 13, which again, is very price competitive with the main netflix service. Then as you mentioned earlier, theyre going to give consumers four streams, which is the premium Netflix Subscription as well as 4k so the fascinating thing to me is that part of the attraction of this Business Model for investors in disney is that it provides that sticky subscriberbased model that youre looking for, for earnings predictability and smoothing things out and so forth, but do they have to does it have to be profitable for disney at some point, it needs to be profitable they have set expectations theyre not going to be profitable until 2024. They expect to have between 60 million and 90 million subscribers then the service itself wont be profitable, even based on their estimates, until 2024. That being said, Subscription Streaming Services have subscription based revenue, which wall streets looks on very well, and of course, any business with streaming because of the growth associated with it right now, gets a huge premium in the market. You saw the fact that when they announced disney plus, they essentially cut their earnings by a third and they said they werent going to make money on the product for four or five years and the stock was up 40 , which tells you how wall street feels about streaming Services Today julia, just after this weekend, were reminded in my view, i mean, disney is the one new streaming service that has already established franchises that theyre going to be able to take advantage of with the new programming that theyre going to do. Something that netflix has had to develop on its own, and apple is starting from square one. Exactly, thats exactly right, bill. Disney is all about the power of its brands were seeing them introduce these huge new titles Like Star Wars that are going to be exclusively, their mandalorian show exclusely on the service. If youre a fan of the movie, that drives you back to the streaming service. Same thing with marvel if you want to watch a marvel movie, you cant watch it on netflix anymore. The fact theyre pulling their content from netflix, putting it on their own platform, its about the strength of the disney brand. Pay attention to how theyre doing this across their different platforms. They use the parks and the studio to feed into the demand for the streaming service. So sort of Cross Platform here leveraging that really unique intellectual property, and it will be interesting to see what happens to Netflix Netflix is a lot of content, but it doesnt have the distinctive brands in the same way sdizny does brett, were singing their praises here it sounds like it cant miss when i hear it cant miss, then i start getting sweaty palms is there anything that worries you about the disney plus platform from what we know now, disney plus is going to be a very attractive consumer proposition. What should give investors pause is how competitive the landscape is netflix is going to spend 14 billion, 15 billion this year on content amazon is close behind it, 10 billion. You have hbo out there, showtime anytime. Cbs all access so its going to be a very competitive marketplace for the streaming subscriber and unlike traditional cable bundles where oftentimes you sign up for a twoyear contract, its easy to move in and out of Different Streaming Services it almost sounds like ride sharing, a Business Model based on price and a lot of flexibility to choose from whoever has the lowest price and we know investors arent in love with that Business Model it remains to be seen how profitable this is over a long period of time given the level of Competition Among so many giant companies. Good for the content creator in the meantime. Thank you both and coming up as amazon expands into virtually every business, is it losing control of its main draw its website . Well explain those issues coming up. And sticking with big tech, apple bouncing back today as the trade headlines turn positive, but with the trade war not likely to end any time soon, should you bet on this stock to en higher from here power lunch is back after this retirement. Oh, dont worry. Voya helps them to and through retirement. Dealing with todays expenses. Like college. While helping plan, invest and protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall imagine the closet space . Yes oh hey, son. Yeah, i think theyll be fine. Voya. Helping you to and through retirement. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Stand up if you are first stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to power lunch. Im mike santoli at the New York Stock Exchange the bulls rushing back into apple today. Jpmorgan giving the stock a pop after analysts say the Silver Lining such as lower material cost and Pricing Power can absorb tariff pain far better than many expect lets bring in your trading nation team, jc ohara and michael babbis to talk this out. Jc, set us up with a look at apples technicals right now they have kind of traversed this familiar terrain for a while now. Above 200 a share thats absolutely right, but if you look back, lets start in january. This stock has been in an up trend for a majority of 2019 we have seen a series of higher lows take place. Now, yes, 200, 215 has been formidable resistance, but we believe if the trends continue to push positive, well see a break above that level and all of a sudden were looking at 2018 highs around 230 we think theres another 8 to 10 baked into the stock with the positive trends behind us. Yeah, i guess were pushing 11 month or so since those highs in apple a lot of the other big tech stocks as well michael, where do you stand on apple and its ability to withstand some of the demand issues and the china friction . Look, i agree with that they have revolutionized the technology space, and thats not stopping every household across the globe has multiple products, multiple apple products i know every corner i turn in my house, theres an apple product there. The margins are improving. The demand is still there. And you have a Company Trading at 16 times next years earnings with a dividend yield of 1. 5 . And in todays Interest Rate environment, thats not bad. So were recommending to our clients own apple, keep it once this dark cloud of tariff and trade wars moves on, theyre going to outperform in the next 12 to 18 months. All right arguably expectations have been set relatively low for whatever next generation of iphone comes occupa out, too for more trading nation, head to our website or follow us on twitter. Kelly, back to you thank you, mike ahead on power lunch, its amazons prime problem the company struggled to police unsafe items sold by thirdparty sellers. Plus, tariffs on tap how the trade war is hurting the craft beer industry, and a landmark opioid decision Johnson Johnson facing a ruling in a 17 billion lawsuit. What you need to know when power lunch returns. And now, the latest from tradingnation. Cnbc. Com and a word from our sponsor. Some people say buy and hold investing is dead. But theres nothing wrong with that strategy as long as you dont buy and forget about it. Its important to make sure that your portfolio doesnt become overly concentrated in one stock or sector due to market appreciation so dont forget to rebalance your portfolio every six to 12 months to maintain your target allocation im randy frederick, and swab ch is the better place for traders. Welcome back, everyone im sue herera heres your cnbc news update at this hour. Supreme Court Justice Ruth Bader Ginsburg visits the university of buffalo today following a treatment this month for a tumor on her pancreas. She spent part of the day speaking and teacher students at the universitys law school and received an honorary degree. At the g7 summit in france, World Leaders agreed to provide 20 million to help amazon countries fight wildfires. More than 41,000 fires have raged so far this year thats up 80 from last year the brazilian government has faced strong criticism for failing to provide significant help in fighting the fires colorado has become the 11th state to adopt californias zero Emission Vehicle mandate, forcing carmakers to sell more electric vehicles. The new rule says at least 5 of automakers new car lineups need to be electric you might want to look away if youre afraid of heights because youre looking at the longest pedestrian suspension bridge in north america. Its called the gatlinburg sky bridge its in tennessee, and it stretches 680 feet long with views of the Smoky Mountains youre about 150 feet off the ground when you reach the midway point. But beautiful views. Thats the news update this hour bill, ill see you tonight as long as the people in front of me just keep moving exactly, just keep going forward. No stopping there thank you very much, sue lets get a check on the markets with the bulls still very much in charge. We have about cut the highs in half today the dow was up more than 300 points earlier as you can see, its up about 150 points right now all 11 s p sectors are in the green today. Communication services, technology, and Consumer Staples are your leaders right now, and take a look at dish. Thats powering that Communications Services sector higher today shares of dish up more than 3 on the back of an upgrade to strong buy at raymond james, they see more than 35 upside for that stock hey, the oil market is closing for the day, kids. Lets go to my friend rahel solomon. Good morning, good afternoon. The oil market reacting to a couple headlines we saw prices rally after President Trump said chinese officials reached out overnight and wanted a trade to deal, but then prices fell and turned negative after Emmanuel Macron said that preparations are under way for a meeting between the u. S. And iran. So if that relationship improves and sanctions against iran are lifted, we could see as much as 1. 5 Million Barrels of iranian oil bark on the market at a time when it already has too much supply both of those headlines impacting prices now wti settling about 6 down, 53. 76 a barrel brent almost 1 at 58. 80 a barrel back to you. Thanks very much. Wall street is taking cover in this volatile market, while Growth Stocks like fang have taken something of a beating traditional safety sectors like Consumer Staples are soaring to new highs. As investors pile in, is there danger in this socalled safety trade. Lets bring in kevin, and will is the ceo of granite shares its great to have you both here kevin, we just heard this advice at the top of the hour it was go to the bond proxies in the stock market, which include the best performers. Is that not becoming a danger in its own way because everybody piled in for the safety . A little bit, but the lack of yield around the world is still a significant issue here and then the data that has been coming in over the last month or six weeks has been weak also so the trend is your friend here, and at Washington Crossing advisers were still optimistic, still overweight equities but at the beginning of the month, we cut back our equity allocation because we saw data slowing, suggesting a greater chance of a slowdown particularly overseas there trend is your friend until its not in retrospect, it seems obvious when these things change, so take a sector like utilities which continues to be at 52week highs day after day. You really feel comfortable telling people to stick with that trade if you look at where were headed, bond yields in the United States have come down, but theyre much lower elsewhere around the world its been well covered we have negative yields all over the place. Someone is buying these bonds. Consequently, as we move forward and deeper into the expansion, we are expecting lower returns so Washington Crossing, given the change we have seen in the data, we have actually cut back our equity allocation and actually lifted our exposure to gold and cut back our overweight to high yield. And will, while this has been going on, two weeks ago, a week and a half ago is when money market funds, assets, hit their highest level in ten years that was the week that we saw the 800point decline there. So a lot of people are piling into cash right now as well. Thats becoming a crowded trade, if you will. Yeah, next thing were going to have people putting money under the mattress again, with 18 trillion worth of government bonds around the world where would you put money to work myself, im a favor of gold i believe gold should be a part of everybodys portfolio, and the reason why gold has been increasing obviously over the last few months or so is thats the kind of canary in the coal mine, in my opinion, that really is sounding a broader alarm about the Global Economy so gold and then as a safety trade, not an inflation hedge, i assume . No, no. I think at the moment, its much more an a Risk Management tool, so putting a piece of gold in your portfolio, i think is much more Risk Management tool rather than an inflation hedge. I think nontraditional forms of income are also interesting. So moving away from these utilities and other more traditional forms which have been bit up by the market, things like reits, mlps, nontraditional forms which still give a very nice yield but maybe havent been bit up as much as some of the other sectors. Development companies, real estate investment. A lot of acronyms flying around. Crazy stat, kevin, i saw lately is that 95 of the Investment Grade debt globally that delivers any yield is u. S. In other words, you have to come here, and that wall of money is coming here in order to pick up any spread at all right now. For u. S. Investors, should they participate in that game or look elsewhere . As u. S. Investors, youre basically a price taker. If youre looking out ten years and thats your horizon, whatever your yield is on lets say the tenyear treasury is your yield taken from a different perspective, what if youre coming from a place thats maybe in the emerging markets where you have concerns about things like property rights, where you dont have a lot of safe places to put money where else are you going to go if you went to europe, a lot of those bonds have been bought up by the ecb right so when you think about the places to go, there really has not been a lot of places to go for safe money if youre a global investor. It just so happens that those noes are impacting our Interest Rates here in the United States and being a benefit to the borrower absolutely, but does it change on a dime as soon as or if, who knows if it will happen, but theres a better trade sort of tenor with china, all of a sudden a different situation the Federal Reserve cuts rates a couple more times. I mean, are those the kind of events that can take these stats we have been talking about and all of a sudden spring people to the other side of the trade . They can, but probably not immediately. The trade flows, the current account balances that have existed for decades are very much the taproot of where a lot of these flows what has created a lot of the current global Interest Rate environment dynamics thats taken years and years to emerge and probably not going to go away overnight. But you have to be mindful of that will, we had a guest here not too long ago who said that, you know, she thought maybe gold would be even higher than it was if not for bitcoin that bitcoin has been getting a lot of attention as a safety trade as well this summer. What do you think . Um has it cannibalized some from gold i think its just too small, the market in relative size compared to gold no doubt some capital blowing into cryptocurrency, particularly in the bitcoin market, but compared to gold, its very, very small still. And i think theres a lot of speculative money in there, but the volatility is just so extreme. Im not sure people, especially in the sort of Institutional Investment class, are thinking of it as a safe haven just yet just yet anyway well see what happens if bond yields keep sinking. Its only monday. Thank you guys very much. Will and kevin and to the bond market now, as a matter of fact. Rick santelli tracking the action at the cme. Hey, rick. Hi, bill. You know, its a fascinating day. You look at a oneweek of tens you could see were bumping along, and of course, we really drained the pool on fridays selloff, pushing yields much lower. And look whats happening today. Were steady 1. 53 actually happen to be the cycle low close going back to 2016 august. So we have to pay close attention here one week of dollar index, same thing with a different ending. Its really zooming back its up close to a half a cent looks like its reclaiming 98. Tens minus twos, a lot of eyes focused on it, maybe today is the day the mid july chart shows. Finally, lqd, a year to date chart, but i could go back to day one. Its alltime highs in the lqd, the Investment Grade etf, so a lot of buying in treasuries and a lot of forms thanks very much. Write that down, lqd etf another acronym. Coming up, the actual impact of tariffs on businesses Frank Holland is at a Craft Brewery in hackensack, new jersey frank. Hey, good afternoon craft brewers say china tariffs and the increases are also increasing their prices for cans and for kegs and also impacting their plans for capx. Coming up on power lunch, osbrerabt e to talk to one of the ews outhtariffs on tap welcome back to power lunch. A news alert out of washington right now. Ylan mui has details democrats are floating the possibility of another shortterm funding bill to keep the government running after september 30th, and avoid another government shutdown. House democrats held a Conference Call on friday, and a source tells me majority leader steny hoyer floated the possibility of a continuing resolution that would last through november 22nd. Another source told me the date could also be december 6th, essentially punting this until after thanksgiving now, the house has already passed 10 out of 12 appropriations bills, but the senate has not passed any. They said they were waiting until the white house inked a broader deal to raise spending limits that happened earlier this month. Now the senate has to fill it in, but they dont have much time lawmakers return on september 9th and then theres only three weeks to reach a deal to fund the government before the fiscal year ends. Thats why democrats are now discussing the potential for yet another stop gap measure through at least late november back over to you is it possible that the injury to Mitch Mcconnell a few weeks ago, his shoulder, which has laid him up since then, is that causing some of the delay or did cause some of the delay i dont think so. I think this is all about the senate needing time to work through those spending bills they got a late start on it. They have 12 to write in a very short period of time i think theres a recognition that they simply cannot complete that work by september 30th. Got it. Shutdown season, nfl season, Pumpkin Spice latte season here we go again thank you. I love fall switching gears, the uncertainty surrounding tariffs having an impact on many industries, including the beer industry, where china is the most Common Source of brewing equipment for american beer makers frank is at a crafter in new jersey craft brewing is all about creating a beer with a nice thick head, just like this one and also dealing with some pretty thin margins. Were here at elementary brewing in hackensack. They say the tariffs are hurting their current profits and hurting their plans for expansion. They need the expansion to scale up and stay profitable ive got this room on the left for all these tanks, more room to my right for even more tanks. I would like to fill that space with more fermenters right now, theyre going to cost me 30 more than they did last year so im not quite sure what my timeline looks like for that expansion. The owners say the cost of cans and kegs for its beer has increased by 58 this year due to tariffs and thats why elementary sells more than 70 of its beer. Its not just elementary feeling the impact, the brewers association, the trade group that represents craft brewers are worried that the tariffs can threaten the growth of the industry last year, 42 of imported brewer equipment came from china. They say increased expenses are making it very difficult for the roughly 3,000 brewers in the process of opening up to actually make those plans a reality. The one bright spot here is that the production of craft beer is up 4 year over year, still a very difficult environment for these Small Business owners who are making their goods here in america, really feeling the pinch of those tariffs back over to you frank, thanks very much another side effect we hadnt thought about. Frank holland. Heres a taste of other stories were looking at with just 121 days until christmas, wells fargo doesnt see a great shopping season ahead for retailers. A gloomy view based on retails lower guidance, the holidays condensed calancer, and reduced Tourist Spending it all ad ads up to a bad sign. And lets not forget, last year was a pretty good year. The comparisons would be very difficult as well. And we know that retailers have been loading up ahead of time on inventory. Its entirely possible they overdid it you may see a lot of discounting to closer you get to the holidays as a result that could do it absolutely. Heres another one. Kfc is get into the meatless mania craze. Colonel sanders will soon be serving vegan Fried Chicken thanks to a partnership with beyond meat. That makes them the First National u. S. Fast food chain to introduce a beyond chicken item, beating competitors like popeyes and chickfila rr shares have been rallying today, and i would point out, lets remember the lone failure in beyond meats history so far has been a chicken, fake chicken that they sent to the supermarkets and it just didnt take they discontinued it so now theyre trying it again good luck to them 153 the shares are at after being over 200. Theres been a correction. My little pony and mr. Potat head will be under the same title as snoop dogg. You remember the story from end of last week, for peppa pig, to grow Family Friendly content. Ironically, theyre not just adding that animated kid show. Theyre also going to add gangster rap label Death Row Records, which Entertainment One had acquired some years ago. How did that happen, by the way . You have to know what Entertainment Ones thought process was. What was their thinking now, like you said, you have now mr. Potato head and Death Row Records in the same portfolio . As far as i know, they have not combined these assets in any way, but now hasbro can. I could see an animated series with snoop dogg that would sell in a heartbeat i dont know why it hasnt happened already now that you said it. Its so obvious. You wait and see. An action figure, a bobblehead with snoop dogg. Coming up, amazon has a prime problem. A new report claiming the online retailer is losing control of its site to thirdparty sellers. And struggling to prevent the sales of banned and dangerous items. Well have all those details when power lunch returns amazon is facing a prime problem. The ecommerce giant is hahning over the website to sellers that sell and some hazardous or lacking proper certifications or testing, according to a new investigation from wall street journal. The analysis identified more than 4,000 items for sale on amazon declared unsafe by federal agencies, misleading labels or were outright banned by regulators. We have one of the reporters who did the investigation. Hes with us in the studio today. Shane shiflet. Thank you for joining us amazon suddenly 57 of the products youre writing about is gone or wording changing exactly after telling amazon, they updated or took down many of the listings. Something they should have been doing anyway . Exactly. Ceding control or they lost control. Which is it . Well, its hard to say. The platform is so large anybody would be hard pressed to police it effectively we talked to many former employees and Safety Experts who said that there are some obvious holes in the way that the Machine Learning tools to police their site allows dangerous and banned products to slip through the cracks. I was flipping through the piece over the weekend and id seen some of the headlines about it and already thinking about it and realized something you featured was something i ordered for my son, that side sleeper. I had no idea. This is a banned product i justheard a recommendation, hey, try this thing. Bought it from a Third Party Seller i guess i dont know i bought it from amazon. Im more aware as you said with the data 60 of the Merchandise Sales are now Third Party Sellers up from 30 and im sure im not the only one that realized its a difference than might have been even five yores ago. Its not as if youre buying from a big box store. They rely more on Third Party Vendors and opening the site up to them it still looks like amazon is selling you the product like thank you usey used now the fulfilled by Amazon Program and put in an amazon package and delivered to the doorstep arriving in an amazon branded packages they might even advertise latest tv show and a trance parent process and unless you look to see in the small text to see maybe its fulfilled by amazon and sold by the name of the third party there. We are not talking about the back waters of the website this is a major come pponent of sales. Many items as amazons choice for those product categories. Contactuallexactly. We did do additional testing for amazon choice products, we purchased ten products, many amazons choice and sent them to labs and four of them came back with safety issues. The other thing thats interesting about this is its an end run for amazon i dont want to say around the legal system but a demapd for a product like i did, i can its readily available for me. I could not have gotten that in stores how much merchandise, how much commerce is happening on the platform that would not be allowed elsewhere . We only identified thousands of products. You know we were looking at very specific categories and everything to do with labeling issues in the current form would not be sold on a store shelf that way to things dangerous, the governments called dapg rous like the sleeping mats and motorcycle helmets recalled that after the recall they were for sale on the site or listed. Will you keep it . Well, i guess not if its severe enough that it would be not allowed to be sold in the store then, of course, id think twice about a product to think i have to be careful with that caught my attention right away. Im sure. Shane, thank you for joining us today. Thank you for having me. How much should Drug Companies be held responsible for the Opioid Crisis . A verdict is expected with major ak f t eirstesorhente industry stay with power lunch. Dont miss your golden opportunity to experience thrilling performance. Now at the lexus golden opportunity sales event. Get 0. 9 apr for 60 months on all 2019 models. Experience amazing at your lexus dealer. In just a little over a from now we are expecting a landmark decision on a case that could seat press department for how Drug Companies are held accountable. Meg turrell is on site in oklahoma meg, tell us ant it. Reporter bill, it is oklahomaer ha Oklahoma Oklahoma versus Johnson Johnson. J j is sole defendant left they theres a public nuisance of marketing the drugs to doctors in the state and the kingpin because it cultivated poppy plants until 2016. The defense is that its market share very small here in the state and sold fda approved drugs for a Pain Medicine and acted responsibly in its role as a supplier of raw aterials, as well it is a public trial here in oklahoma with cameras allowed in the courthouse the evidence will be very clear, Johnson Johnson knew this truth before they ever started marketing their drugs here in the state of oklahoma. If you oversupply people will die. Why are we here because when youre right you fight. Reporter and, guys, the state is asking for 17 billion here wall street will be watching closely and many stocks not just Johnson Johnsons could swing on the outcome back over to you. Thank you very much thanks for watching, everybody. Closing bell starts right now. Welcome to closing bell. Im scott watpner in for wilfre frost. Were watching that stock of Johnson Johnson for reaction stocks are relying on renewed hopes of a trade deal with china. Sara hello, everyone im sara eisen President Trump says a deal with china is coming as he departs the meetings as those tensions ease, oi