Transcripts For CNBC Power Lunch 20240713

Good thursday, everybody welcome to power lunch lets take a look at this record rally. All three major indices at new high the dow is up 21 in 2019. The s p up nearly 28 and the n nasdaq up 33 just this year were in the green today check out some of the new highs across the board micon, citigroup and kellogg joining that party ty thank you very much with a few trading days left in whats been the best year for the market since 2013, bob is at the New York Stock Exchange with a look at what worked in 2019. Hi, bob. A lot worked. Thats the good news the rally has opinion fabeen fa but dont kid yourself top 23 stocks in the s p 500 all were up. All 23 were up some of them were up really big. How big . S p 500, up 28 . The top ten stocks by market capitalization were up more than 40 . That means as they get bigger, those stocks have more and more influence on the s p number one, nothing knows bigger than apple this year look at this, 77 . Thats not a typo. How much is that thats 800 points in the Dow Jones Industrial avenuage. Thats what im talking about. The dow is price weighted. Microsoft up 53 for the year. These are the top two. Beyond that its not just tech stocks you get financial stocks visa has been a monster this year jpmorgan, all the banks hit new highs. Today they are hitting new highs. A small spattering of industrial stocks done well united tech much more typical up about 39 . As i mention, 23, all 23 of the s p 500 were up so far this year got to get to number 24 before you get a loser so far this year and thats chevron which is just down a few Percentage Points off considering how poor energy has been doing all year. Thats not bad at all. Oil is at 60 now. Some people thinking Energy Stocks could out perform in 2020 back to you. Thank you very much its been a party this year with stocks at the record highs we just documented. With double digit gains in all the major indexes should you stick with the winners or kick the winners. It could be the roaring 20s. Bob is chief investment strategist with Slatestone Wealth and david is manager portfolio with acora advisers. Does the idea were calling this the roaring 20s give you any pause, bob no. In fact, all those names bob just mentioned is what we own in our portfolios i think you have to stick with what will be winning this coming year if you look at the phase one trade deal, that will help give some confidence on the part of the leaders. Hopefully increase business spending i think you partner that up with strong employment environment and partner with strong Consumer Spending in low Interest Rate environment and you have to go with the gross space and particular the cyclical sectors of the market. Things like consumer, financials, industries, technology i think that will power your portfolio. Go with whats been working david, i think you subscribe in part with what bob is saying with specific reference to financials you part with him over technology youve been cutting back on tech, why . Thats it in 2019, its been heads i win, tails i dont lose 2 2020 will be tails i do lose it will be a sbragreater separan where technology is run we have cut back on names like exencetr a we cut it back as the valuation begin to get rich and we have added to financials. Names like citizens financial, r Regional Bank play that is growing their dividend energy is lagged ive been up in the energy a name like marathon, Petroleum Corp i think theresattractive valuation there. I think you want to move to some of the sectors that have been und underappreciated this year to where the potential is next year on a valuation basis do you think the optimism then, david, is too euphoric yes as offensive this morningss readings, the ratio of bulls to bears is two to one. If i had this conversation a year ago, the ratio of bears to bulls was two to one in favor of the bears. The fact that sentiment is so optimistic and euphoric today tells me that a number of these Growth Stocks that have run this year are getting priced for sainthood. Bob, we talk a lot about the strength of the consumer and how the fact this is an economy that is really fueled by the American Consumer im curious whether you think the consumer is too optimistic or do you think the consumers are feeling really good about where they are and they will continue to drive this economy i think you have to focus on the initial unemployment claims. I think thats the consumer will start to pair back so far he has employment remain strong if employment remains strong, the consumer will continue to spend. I dont disagree that the market could set up for give back i dont think that will be long lasting. I think it will be short lived i think people will yuuse that an opportunity to move into the spaces that i just mentioned name that hasnt really worked that well recently but had been is home depot. I think it represents a good buying opportunity now if you look at the industrials, a name like Union Pacific, they are talking about the phase one trade deal starts to move agriculture and over to china. I think thats where Union Pacific picks it up. Technology, you dont buy it here and now a name like adobe, the stock has done well. It has periods where it pulls back f fentech i also like. These are two Financial Companies that help Financial Technology these are areas that i wouldnt be buying now. These are areas that you want to be making your Shopping List you want to be making your Shopping List for after christmas, not before christmas. David, let me turn to you, youve been reducing positions in several Technology Areas among others are you reducing your overall allocation to equities and where is that money going . Thats the great question because the rule of thumb always was if youre more cautious, sell stocks and buy bonds. That was the play book its not the play book in 2020 because while more sobering on the stock market, the bond yarkt with less than 2 on treasuries are even greater risk lies were going to have more separation and stocks between winners and losers no surprise. I think that will be more beneficial to the active investor in large cap and small cap stocks maybe a bit more defense in portfolport portfolio. It sells stocks and buy different stocks sell stocks, buy different stocks with better yields and difd did he understand growth. Have a Great Holiday season leave it there thank you. Happy holidays. The tenyear yield flirting with four month highs. Rick is tracking the action at the cme. Flirting is the exact word. Looking at the chart of tens they climb right up to 195 open the chart up for a week, its not like we havent climbed up there before. We always seem to roll back. Were in the low yields at 190 if you open the chart up to november, were at 195 yes, were at fourmonth highs november we had 194 high yield close. Thats the area you want to view and should we take that out on a closing basis, zoom, zoom, zoom, theres your comp to july. The entire yield curve is parallel shift all maturities are down two basis points boon yield pattern looks the same instead of 195 substitute 23 mie mus 23 basis points and across the globe continue to act firm but they cant quite punch through the top of the range tyler, back to you thank you very much. Coming up, a potential Sleeping Giant in Online Shopping the one company that could soon become even bigger than it already is. Nike reports after the bell. The stock up 35 this year can todays results continue the run into 2020 . Well talk about that swoosh, when power lunch comes back. Gold nice rock. Its time to drop gold. Go digital. Go grayscale. Were about to begin. Yeah im a magic cat. I love it. And now for the icing on the cake. [ hiss ] and a drumroll, please. [ hisses ] [ hisses and snarls ] [ bell chimes ] lets dance and now the icing on the cake well judging by the number of boxes being delivered in my neighborhood, yet alone to my home, Online Shopping isnt going anywhere but could its rapid growth finally be starting to slow . Steve has the details in the cnbc all America Economic survey thanks very much. I want to show viewers something we have been trablging now not for one, not for two but three straight years lets show you where this year our 800 americans who answered our survey this time said they are shopping 43 say online is their number one or two choice. 24 big box. 14 Department Store 12 locally owned. This order here has pretty much remained the same. I want to go back into history and show you the seminal moment and whats been happening now. Zero in here this is the last year, 2013, when Big Box Stores was a bigger choice than online then 2014, it changed and changed for ever go along here on the blue line it remains the number one choice then look at the last three years. One, two, three, thgrowth has nt changed suggesting theres peak many the answers of our poll here conducted last week 24 big box. Somehow the Department Stores and the big box have managed to hold the line. Show you who is doing what and where they are doing it on the next slide here. You can see here if we go to next slide here we are. Mobile shopping also has peaked. It went from very little and almost, 2017 is when mobile went and became a dom naninant thing. Its remained flat now we show you who is doing what age 18 to 34 say they are doing less Online Shopping as age 35 to 49. In the Online Shopping world, this youngest cohert is doing more mobile and seniors are getting involved 65 plus. A little more adept than they had been on the mobile phone obviously that does not include you contessa thank you for that. Clearly the botox is paying off for me i do not suggest that in any way shape or form. I dont know if youre registering this peaking out there, that showing up three years in a row. Im watching my 88yearold grandmother with her mobile phone shopping she shops a lot because she hits buttons and buys things without meaning to they show up you tell your 88yearold grandmother that we also hit the wrong button too shes doing just fine. Thank you, steve. According to e marketer, consumer will spend more than 500 billion on ecommerce this year a 14 increase from 2018 it benefits dominant players like amazon and ebay but baird is saying theres another ecommerce power house guess who it is. Google collin, good to see you today. Thank you thea agnalysis shows that google gets one third of the ecommerce volume in the United States if thats the case, where is the room to grow well, predom nantsly that is advertising. Thats how merchants and brands reach consumers. Google wants to keep consumers on google and not go to external websites just like they are doing with online travel, we are seeing google integrate more commerce functional lity on its search results page you click on products and buy them on google by doing that google can drive more revenue and take a bigger piece of the ecommerce pie. Weve seen that with facebook and amazon ramping up their pruk adverti product advertising. Has google has been able to out innovate its competitors i think the pressure is there from amazon an facebook. I think we see merchants and brands want to diversify their exposure off of amazon ecommerce is Mission Critical for most companies if youre not going to sell through amazon, you need to grow your own commerce sites. You can do that through google and facebook we have seen that fuel massive growth for Companies Like shopify and google faces the same positive pressures. Let me make sure im understanding how google touches or controls a third of u. S. Ecommerce volume. Is it because i would go and search for something on google and then i would follow up and go to a store or vendor and buy and google gets some credit for the sale made not by google per se but a vendor, a nordstrom or local company or a small vendor . Just explain it to me. Thats exactly right. Google search tends to be that last click before people make a purchase when you search for a camera on google, it takes you to best buy and thats where you make the purchase its easy to see google is driving transaction volume how do they collect money from that other from advertising . They get paid through advertising on a per click basis. As they agree by buttons and payment and check out, they will get paid a Commission Like amazon does. Thats a big change to their Business Model how much do payments and voice and other kinds of internet offerings play into how google grows its great question google is a fantastic Technology Company and with google maps and google home and nest and voice, people will be shopping away from their desk top computers. Even away from their phones. Google is well positioned to capture that shopping traffic as well if youre talking to your google voice or google device. Youre in your car with android auto the touch poibnts are blunted. The payments you can go beyond your credit card to pay for things as well in. Yeah, google check out, Google Payments has integrated well with android devices. Well see that more broadly. Theyll close the loop through payments out perform with a price target of 1400. Thank you. Thank you, appreciate it. 2019 was supposed to be the year of the ipo but it doesnt turn out that way. Uber, lyf, slack among the big names that went public and sank. What do the ultra rich think of these stocks is there opportunity this year has been great for billionbi tech on pace for its longest weekly win streak ever. Does that mean the run is nedo well talk about that one when power lunch comes back you have to print, walk, sign, scan, recycle, walk, email yourself. Really . More walking, try again, waiting, recycle, walk, email yourself, then get back to your day. Or not. This isnt working. Introducing samsung paperless workflow solutions. With the galaxy tab s6, you can sign Digital Documents onscreen, with a finger or your s pen. Samsung business solutions. With a finger or your s pen. So wim searching for info on options trading, and look, it feels like im just wasting time. Wasted time is wasted opportunity. Exactly. Thats why Td Ameritrade designed a firstofitskind, personalized education center. See, you just oh, this is easy. Yeah, and thats oh, just what i need. Courses on options trading, webcasts, tutorials. Yeah. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well exactly. Well except now, youre binge learning. Oh, i like that. Thank you, i just came up with that. Youre funny. Learn fast with the Td Ameritrade education center. Call 8662967451 or visit tdameritrade. Com learn. Get started today, and for a limited time, get up to 800 when you open and fund an account. Thats 8662967451, or tdameritrade. Com learn. Theres room for more than just the business you came for. Whether thats taking in every moment. Or capturing a moment worth bringing back. Thats room for possibility. How far we can go, oh oh welcome back to power lunch. Bio tech is on fire this quarter. The xpibio tech scoring 25 since october and set to score its 12th straight week of gains. Lets bring in the trading nation team today. Q quin of financial. For a group that really should trade based on company by company, details and fundamentals and drug approvals, the sector really does run in these streaks and move as a group. How to you see the sector positioned now i think its going higher you have a high rate of fda approvals. Valuations are not too inflats inflated the technicals here i think are great. Theres momentum pointing hire if you look to a channel here, back to 2015, defining this on trend. Not only that, we go to the trend line, theres intermediate down trend line. Its coming from last years high were trending higher now. Momentum is there. Were going higher if they asset class is trending. The rsi which tells the us its bought and cooled off a bit and the stock has held well. I think were going higher this up channel suggests we could be up to about 106 or 109 price target through next year thats what were looking for. If nothing else, it suggests that investor risk have been rebuilt or in the process of rebuilding would you ride along with that i hate to be the grinch on this one but i cant jump aboard many of these stocks got crushed in q4 of 18 and spent 19 consolidating and now they are going back to those levels we will favor the big boys and they havent participated. I think investors have to really be careful some of these stocks do look cheap but could be a trap going into the new year. The mature ones look cheap and the ones people want have no earnings yet its kind of an interesting dichoto dichotomy. Thank you very much. For more trading nation head to our website or follow us on twitter. Back over to you ahead, two wall street heavy weights throwing their support behind joe bidens president ial campaign why Mike Bloomberg might get the cold shoulder. Making private more public more investors access to private markets. Well explain the details, next. Nike long run the stock up 35 this year will it have a strong finish all this when power lunch comes right back apple card. Is a new kind of credit card, created by apple, so its simple and transparent with a new level of privacy and security. It lives here and here on your iphone, and it will save you 6 on Holiday Gifts at apple; like iphone, apple watch, airpods pro and so much more. Apply in as little as a minute, right in the wallet app. Apply in as little as a minute, and a drumroll, please. Yeah tonight is a magical night. Where anything is possible. Its party time. Woo here we go. Ha, ha. Now for the icing on the cake come, were about to begin. Welcome back im sue here is your cnbc update three people were shot one fatally at an apartment complex in rhode island this morning. The shooter remains at large local schools and a nearby hospital were locked down as a precaution in her morning briefing, nancy pelosi had some harsh words for Mitch Mcconnell as he prepares the senate for its impeachment trial. I heard some of what he said today. It reminded that our founders when they wrote the constitution they suspected that there could be a rogue president i dont think they suspected that we could have a rogue president and a rogue leader in the senate at the same time. Clean up is under way after a truck crashed through a wall at Sarasota International airport early this morning Authorities Say man driving a pickup truck droeve right throuh a fence and crashed through a wall of a building near the baggage claim area the driver is in critical condition. Youre up to date. Ty, back to you. Thank you very much. Lets take a look at the way the market stands now. They are green the dow is up 124 points can row reyou read that . No, i need my glasses fwl the nasdaq is audiotape about a half percent green arrows today we could really invest in those magnifyi ining glasses thg right over your screen time for todays power movers starting with micron on track for its eighth straight up day the numbers arent what is moving the stock the company says this quarter was the cyclical bottom and predicts stronger results next year conagra on pace for its biggest one day gain since 1975. It hit the trio of earnings success. Raising guidance lastly, rite aid soaring the company earning 54 cent a share. The estimate wads ten. The sec is proposing a rule change that would allow more americans the chance to invest in private Companies Looking at the positives and the negatives of the proposal. There are both. On one hand startups are staying private for longer much of theccruing in the private markets. The aggravate value of ipo tech was 177 billion thats more than three times that of last year and 20 times the value in 2016. In the recent cases of uber and lyft the best growth days were behind them by the time public markers got to invest. Theres also wework. A clear example of lawing more americans to invest in startups. Wework did make many of their financials available because they had bond holder as ipo perspective contained more information particularly around Corporate Governance that some of the most Institutional Investor had overlooked they have seen the problems until it was too late. Theres another thing to keep in mind here, the average american is already invested in many of the hottest unicorns like fidelity, vanguard that are getting more and more active back to you. Thank you very much. This proposal comes after what was supposed to be banner year for unicorn ipos and it failed to deliver some of biggest names that went public like uber, slack, pinterest all tumbling double digits turn that smile into a frown the broader markets climbed to record highs and the 1 , the 1 say theyve had enough they are running away from the new kids on the block in this new year lets bring in michael nice to have you back. Your club members, investors are pulling back from ipos why do you think that and how does it compare with how they felt about ipos a few years ago in. They were just over priced. Theres no way around it whether the sellers got greedy or the markets were misperceived you have the top ten ipos on the enterprise side down 11 and the consumer side 14 . Thats not the way its supposed to work. They build companies and when they go public theyre supposed to leave something on the table so people rush in and have the ipo go whats the advantage to getting in before theres a move to ipo in. When youre in the private side thats when most value is created. The ipo is the end of that process for private equity investors. The rates of return are much higher in the private equity market but you need a lot of skills to do that. These proposed rules would allow people who maybe not meet the financial qualifications to invest but have a slempcertain of investors sophistication. Do you think thats a good idea . When ever you can bring mu capital to a company that helps get off the ground at a lower basis, thats good when you reduce regular lations open it up, people are unf unsophisticated. I think the value created will be better than the risk to a few investors. Where are these highly affluent individuals putting money that they might have put into ipos . They are moving who are entrepreneurs. They created 750 members across the globe. What they have been doing more and more is vc a lot of these vc investments are at the very beginning of company. These arent Big Investments they are putting will the of chips on a lot of possibilities. We had a member who invested 50,000. Got a 50 million check from an ipo. Obviously, thats like a Lottery Ticket when you see those kind of returns youre not going to put big money but a lot of chip os n a lot of spaces and see if any of them stick. If youre talking about the kind of cash that your members have on hand, what would a recession do to their inment choices . Our members keep about 12 in cash on a the one hand they are on the gas pedal, real estate, public and private equity. Even though their foot is on the gas pedal, our members dont want to be many the position many were in 2008 where they didnt have enough cash. They had to liquidate their best investments at exactly the wrong time having enough cash to weather a storm, 12 is about six years of a storm. Weve never had a sixyear storm. Our members can power through a storm even though they are still making long term bets. Number one is real estate, public and private equity after that would recession bring them opportunities to invest . They have high cash is to pounce on an opportunity when they see it. Let me ask you about vc investing. Are members finding individual companies to invest or putting money with vc funds and letting though pros decide whether they will put it . Glour tanow youre talking l youre in one of our meetings. I wish i could get in we can make that happen if you really want to develop an expertise then you should be making a direct investment if you dont, let the professionals do it. Give your money to a vc fund who has the expertise. If you dont have an edge, you cant make money in any of these markets. I have 18s in in my pocket. Sg sg great well see what we can do half of the top 20 real estate in new york city have been in the same building. Robert frank joins us with a look at this must be super pricey condo it is the it building in new york city. Im the address is 220 Central Park South it was home to ten of the top 20 sales in new york just this year latest is hedge funder dan och purchase for 93 million its 9800 square foot. It will be his home. That follows the 238 million purchase of four floors for his home now the neighbors include he and his wife they paid 56 million for their unit eric is a california hardware magnet he paid 61 for a five bedroom. The total building when the units sell out expect it to top 3 billion what makes it so valuable . Its right off central park. Its got an 82foot salt water pool, salon, screening room, Basketball Court and a private restaurant for the residents run by a great chef. If youre not a billionaire, you can rent in the building theres a three bedroom being offered for a mere 59,000 there are a month. What we have seen in new York Real Estate is that high end apartment vs been sitting on the market longer. Were seeing more frequent price drops to be unloaded what is it about this particular building and this price that that is bucking the trend . Part of it is these sales went into contract three years ago. They are now closing theres a bit of a time lag. Even the more recent sales are not discounting. Its great architect robert a. M. Stern is the architect in new york among the wealthy. The amount of money they put into each unit is top of the line also the wealthy like to follow other wealthy. When ken griffin bought this for 238 four floors 23,000 square feet. Once he did that, all the other billionaires or semibillionaires felt like they could follow. It becomes the it building and they all rush in its the one building defying gravity in new york city fascinating two wall street democrats pick their horse for the 2020 election on the tasting menu, a raging bull on microsoft. A warning abt urho ouyo pne [narrator] at Southern New Hampshire university, were committed to making college more affordable. Thats why were keeping our tuition the same through the year 2021. [woman] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. Welcome back 2020 democratic frontrunner, yes hes still the frontrunner according to many poll, joe biden, locking in some serious wall Street Funding with less than two months to go until the first votes are cast cnbc. Com says the Billionaire Hedge Fund martin lazarr and james efron or opening to biden after backing kamala harris. Harris goes out. Biden is there why did they pick biden . They just think hes the best candidate not only to win this primary but take on donald trump come the general election. The other piece is wall street is really worried about Something Like Elizabeth Warren. They see biden and many of his proposals as a Counter Measure to her they think hes the best shot to win this primary including over pete butti ggieg joe biden has nine lives every time you think hes made a mistake, he continues to stay ahead and keep up in the pack and be in first place. Thats why they are putting all their resources behind him are you surprised that youre not seeing more wall street support for bloomberg . Im not too surprised with that he and his team have been in touch with many of these people. They have told them we really dont need your help for this campaign Mike Bloomberg is worth over 54 billion. Hes fine. Hes also telling them, they have a meeting in new york with all these finances, to back the dnc. Put their money toward the dnc in state party races in bloombergs opinion the dnc does need a lot of help come the general election lasry runs Avenue Capital they have been big hundred dollars l bundlers in the pas. Both helped raise over 500,000 for obama in 2012 and 2016 for hillary clinton. Each of them raised over 100,000 for her these really are too big players for joe biden. Really its a key moment in this bigger Fund Raising Battle for joe biden who needs the cash going into the year 2020 whos got the most cash on hand now in. Its coming down to Elizabeth Warren and bernie sanders. Those two have done well kind of spending and raising money kind of balancing it out through small dollar donordonors they have the lead there joe biden didnt do well thank you very much for more on the money behind the 2020 election, go do cnbc. Com. Here are some of the other stories. Bank of america the biggest microsoft bull on the street its one of the top picks for 2020 and its target is 200. Why so bullish the growth businesses and the analyst points out microsoft is one of the few companies that have strong potential in ai. The shares up 50 this year. If i were to nominate potentially the ceo of the decade, it might well be microsofts guy. Its interesting that bank of america says it likes the companys potential for artificial intelligence. I thinks it has its investing in groe businewth buss that have a much larger market relative to what it used to do its putting i dont know it seems like an obvious pick. Maybe we should do a vote next week. Cook of apple, eiger of disney thoe those would be my three and best buy. Taco about a makeover. Chickfila announced its testing a new restaurant design to support its billion dollar Digital Business the remodelling will feature walk up windows and premier placement in order to reduce friction and increase convenience. 2019 has been a year to republicremember for chipotle they will test out a number of different designs and look at the transactions and get Guest Feedback and see how these different designs are able to incorporate future menu innovations but it looks like chipotle is making a name. Thats how they are growing you dont want friction with your burritos. Digital privacy is an issue during the past decade a new report uncovered how Different Companies can use cell phone data to track the movement of groups of people in cities. Here is an example tracking more than 10,000 smartphones in new yorks central park. Thats what it looks like. Im not sure how that helps you. Tilts you theres a lot of people with cell phones. In terms of your consumer movement, they can tell when you passed a billboards. They say its the holy grail this is one of the sources its the holy grail of advertising that completes the picture connecting all of our interests and Online Activity with your real world activity but its spooky the level of detail they have when you leave your house, when you get to work. What if you go to your Therapist Office or treatment clinic i forget whether you were here the day we had discussion of a company that knows where you are and can project on a billboard or bus shelter an ad knowing you have searched for something and knowing you were about to pass that ad. That is spooky i think a lot of us assume the companies have a lot more information than we want them to have when you see how it could be used adversely by enemies of the state or people, its terrifying the New York Times behind this will be on closing bell today. There he is. Charlie warzel opinion writer at large. Anike results out aer tfthe bell everything you need to know. Thats coming up lunch ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. Investment opportunities beyfirsthand, like biotech. Ne because your investments deserve the full story. T. Rowe price invest with confidence. Nike set to report earnings after the bell has the stock has vastly outperformed the s p 500 this year. Despite the trade war nikes digital push helped china be a real growth driver for the company surpassing north america. All this comes as john donoho is set to be the new ceo. Theres a bullish rating on nike with a price are the gate of 105. Good to see you today, paul. Talk to me about this growth in china and how important that is to any keys continued growth in 2020 absolutely. Thanks for having me we really think theres three metrics that are most important for nike both in terms of their earnings today and long term algorithm. North America Revenue growth is one of those we expect midsingle digit growth and china revenue. Its been an explosive market for them over the past few years. We absolutely expect that to continue were seeing strength in full price sales especially on the footwear side and were actually models 20 growth in this Second Quarter on top of a 30 gain last year. We saw nike end this year, its practice of selling its products on amazon is this direct to consumer business going payoff in 2020. Did amazon hurt them at all . We think that their dtc strategy is paying off right now. Really leading to Strong Revenue and margin gains and ultimately our expectation is that an acceleration of that direct to the consumer will probably be john donohues game plan as we think about his tenure as he takes over in 2020 nike today sale steals nearly 70 of their product in north america through the wholesale channel and just a tad below that from an international standpoint we believe ultimately nike will be more of a 5050 split between wholesale and their own stores and website and that is the reason why we still remain very bullish on nike into next year, despite the outperformance weve seen here today. You do have a couple of things stacking up in nikes favor. One is a new contract with major league baseball. Second is olympic. Third is euro 2020 competition i want to ask you about the new ceo mr. Donohue who is not he did not grow up in nike. What do you think his challenge is, and how do you think hell face it. Its a great question i think first and foremost we have to acknowledge hat mark parker who has done a phenomenal job isnt leaving the company and he is the shoe dog if you will and still very much be there assisting from a product standpoint i think what john really brings to the table is his tech and online sales background. Right . So as we think about nike app, their ability to be a better retailer and engage a Loyal Customer through their own websites around the world, i think that we will see a meaningful push and focus in those areas. And ultimately that is what we think will be a big margin and bottom line driver in them gaining market share through their own app and websites paul, real quickly, picks for 2020 yeah. Absolutely nike is remaining one of our top picks into 2020. In addition we actually like ulta beauty as a come back story. Then lastly five below the best growth story in retail paul, thank you check please is next. Hamps, we believe in education built for all people. [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Check please the stocks were watching right now is live nation its moving higher today on word that live nation has agreed in principle to a settlement with the department of justice over an investigation into whether live nation was forcing venues to use its Ticketmaster Company to sell tickets to live Nation Events thank you for watching power lunch closing bell right now. Welcome to the closing bell everyone im wilfred frost. Another record setting day here on wall street im in the nike post that stock up a nice 0. 3 today, up 30 yeartodate. Another fresh record return on intraday well be all over that story well report earnings after the close. Markets are up with 59 minutes left to trade. Thanks im Courtney Regan lets look at whats driving the action on wall street. The major averages setting intraday records as treasury secretary the stephe