Transcripts For CNBC Power Lunch 20240713

Welcome to power lunch, everybody. Stocks are just off the lows of the day. The dow down b about 200 points. Still on pace for its Third Straight session in the red with apple the biggest drag and gold reaching 1600, its highest level in seven years and utilities leading today on pace for a record close the second best performing sector this year next to tech up 9 for more on where the money is move ng todays market, lets get to bob pisani at the new york stock exchange. Hello, again. Much of damage is cue to apple and theyre worried about krohn kro coronavirus. Exxon mobil, another new 52week low there and also were seeing some of the big global industrials like caterpillar, 3m pretty modest response leon cooperman was saying the the biggest risk to the markets is the u. S. Elections and this is the way a lot of the Fund Managers seem to think bank of america, 150, the biggest Fund Managers in the world. He said that, too. The 2020 election is the number one thing. Were all worried about coronavirus. These Fund Managers are worried about the election look at number three, coronavirus. Just keep that in perspective of what some of these Investment Managers feel about things finally here, whats going on with the coronavirus issue its amazing the market seems to think theyre going to get it either way a good outcome, so if this is a shortterm blip like many of these have been in the past and it recovers in the second half of the year, no problem. But wait a minute, if theres longer term problems, dont worry about that either because Central Banks are going to step in they had a big fight about this over the weekend they decided to do nothing, but made it clear they wouldnt, they seem to think theyre going to win either way. Back to you. Thank you very much it is not just the coronavirus but there are several one off events happening this quarter that could make judging the economy and corporate earnings quite difficult. Hi, steve. Thanks. In a historical way, the First Quarter for u. S. Growth call it a write off quarter. The number of extraordinary items keep mounting. T to the point where u. S. Growth for First Quarter may end up looking like a start up tech company with a bunch of one off items. Take the coronavirus off that may hit gdp from 0. 1 to 0. 4 take boeing off. We still have tariffs on a lot of goods despite the agreement and you had extraordinary warm weather. That caused utility output to decline by 4 in january first to hit would be a drag from the decline in chinese. A Second Quarter drag could come from the fall off . Supply because u. S. Producers cant get all the parts they need to sell things. They write the longer the outbreak l. A. S, the longer the Recovery Time will be. Jpmorgan, more optimistic. They say the size the primarily important for the determining the magnitude of the mid year baounce. Thats what pisani was talking about. The conventional wisdom underlying strength meanses a First Quarter dip and Second Quarter bounce all these one off items combine to make it more than just a single write off quarter possibly threatening the expansion. Weve got breaking news lets get to eamon javers at the white house. Thats right. The president Just Announced that partoned the legendary wall street figure, Michael Milken in remarks to reporters just a short time ago he said that he was on a list of figures who he has issued pa pardons to including the former new York City Police commissioner and other figures as well. Were expecting there might be a list of figures who have been pard b bed here by President Trump coming out shortly, so well take a hook at that when it arrives Michael Milken, you remember was the junk bond king in the 80s in wall street he was ultimately, he pled guilty to securities violations. Paid hundreds of millions in fines and ultimately was banished from the Securities Industries all together. A lifetime ban there now he has been pardoned by the president of the United States and well wait to see on this longer than mentioning his name under the airplane wing at Andrews Air Force base and any statement we can get from him and his family of course milken in recent years known for his philanthropy and the global forum in holds every year in the financial industry, but a continroversial figure he and an interesting decision here by the president of the United States to pardon him i had forgotten and im ashamed that i have forgotten, did he do jail time . I believe he did. You know what, he paid 200 million in fines and had that lifetime ban i have to check. Before my time covering the wall street world time. It was not before my time and i cant remember but thats because it was in my and my memory isnt what it was. But what this points to i would say, eamon, is the issue that sentencing of roger stone and long time friend of the president s, whom in that gaggle around the air force one there at andrews, he said he has noting thought much if at all about whether to pardon him or not. Yeah, the president is certainly flexing his pardoning powers, right, and sending a message about what his authority is here by doing this today. And a big question about whether hell pardon stone at the end of the day or commute his sentence once that sentencing does happen the president s been venting on twitter over the past several days about aggressive prosecutors, the mueller investigation, that he doesnt like and things are too harsh, so in some ways, a lot of this pardon activity here plays into that the other one pardoned here is Rod Blagojevich, someone who was a democratic elected official. The president pardoning him today as well. So the president here is clearly been finding and wanting thank you very much people with much better memories or faster fingers on goggle tell me he did in fact spend two years or roughly that, in jail despite the uncertainties surrounding the markets, leon cooperman told scott wapner that a e setback is b possible, but he is not concerned ed about a big market sell off. I would say were in the early stages of knocking on the door of euphoria, but not quite. Certain parts of the market are in euphoria, like tesla. Other parts like energy are in pessimism. Makes sense but the conditions for a big decline are not present. For more, lets bring in Barry Banister and he was a long time bear and has recently raised his s p 500 year end target also with us, ken, he is bullish on the market as well. Barry, let me begin with you where are you on the markets these days in terms of whether you think theyre going to finish the year strongly or have a rough year and react to what leon said. Knocking on the door, but not really being present yet in january 2018 when we were at the top of that fiscal policy driven pop in the market, we turned negative. We were negative for the almost the 422 days that the market traded sideways, but in mid october of 2019, we upgraded our target and did it again not too long ago and went with more of a cyclical profile, having i think the virus will pique within a month not terribly concerned about it. The gdp will be gained back in the hat ter lat r part of the year we are watching the ris b k, particularly cases outside of china, but when you can about the psychological y of a virus pandemic, in this case, an epidemic, people who have been pent up for over a month, theres going to be some pent up demand to buy things and people are usually relieveded we got the renaissance in europe because the legacy of the black death. Obviously a different scale here, but i think were going to bounce back and we have all this liquidity and easing around the world and more to come i think chinas going to ease quite a bit. Ken, what is your take on this and what kinds of stocks that i should lean toward and away from given your view of the market i think one of the big events of the day is really apple has kind of given the green light to companies to kind o claim the virus put if you will. We used to call it throwing the kimpb sink at it so i think it could be a rough quarter for growth company, especially the big Momentum Companies that have been fuelling the market because a lot of them are priced not only to perfection, theyre priced to start seeing potentially that get pushed out a little bit. I think investors might want to look at what i would call the sectors that your grandparents love ewe tutilities, consumer cyclic, even the large cap dividend aristocrats, those companies that have rock solid balances. The economy certainly looks well unless get something really, really unexpected from the virus, i think that as weve heard before that well probably see a dip in the First Quarter then demand comes back and could make the second half of the year look very, very good so i wouldnt be abandoning equities where are you going to abandon them to . So i think its really important to kind of spread out and if youve been making your profits on momentum and Tech Companies understand what you own. Barry, would you i agree with that prt of the market at least . No. I think that if we get a reacceleration in the latter part of the year this drop in the tenyear yield would backtrack and i wouldnt want to be in ewe tutilities. We also think that as the world grows, particularly outside the u. S. , where theyre having the hardest time, the dollar tends to pull back so in a kind of a final run for a bull market, you would expect growth in value to probably Work Together weve got our depressed value because of concerns about global gdp and with growth, weve just got wads of money running around and its liquidity and ly quiquy drives growth stocks, o i would be more positive on tech and energy as a barbell approach to the rest of f the year where are you on utility, ken . My thought b about utilities in any sector that seems to be b more solid from a Balance Sheet point of view the biggest thing facing investors now isacity tog through some bad headlines for the market and maybe for all of our own safety so during times of angst, i think the thing that keeps people in the game if you want to call it that, is this idea that i have solid investments that dont necessarily come and go with markets. So i dont think were going into a period where someone wants to maximize the last penny out of their asset allocation. You want to get into a spot where you can sleep at night and stick with it. If you try to time the market, its been a fools errand. Thank you coming up on power lunch, Michael Bloomberg getting a bufferin in the polls. Enough to earn him a spot in tomorrows debate. Plus, apple not sure how bad the Coronavirus Impact will be, but atou bfein scknly techto th clde elg the heat a top analyst weighs in when power lunch continues. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Dont get mad get e trade and start trading yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its the most open and secure public cloud for business. It can manage all your apps and data from anywhere. So it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. Without getting in your way. Apple l down about 2 this week that is hurting apples suppliers. Josh lipton has more tyler, its a very fluid situation. Thats what tim cook told me when he we last spoke about the outbreak in china and why he offered investors and why theres unusual in the current quarter. Two broad reasons. One, because iphone supply will be temporarily con trastrained many pha a silties in china are roeping, but more slowly and two, demand within china is weaker than expected just seven of their 42 stores have reopened and even those with limited hours i caught up with jean monunster and hes betting that it shifts from the march quarter to future quarters but whats the timeline . Thats uncertain as we see what the length of this outbreak will be investors also watching the chip makers its chips help the iphone c conserve power thank you our next guest lowering his price target on apple to 375 as uncertainty around the coronavirus continues to spawn the outlook. He says its not the only tech company at risk. You still have a buy rating on apple. Why no longer term concerns here sure, so basically, when you think about the coronavirus, the challenges were looking for are supply chain disruption, which youre seeing with the iphone then loss of sales to chinese consumers, which youre also seeing with apple which has them seeking 15 of their sales to chinese consumers. Now as far as longterm risk goes, i think its going to depend on the duration of the virus. If you look at the data that cnbc provided, you saw on a week over week basis, a doubling in the number of cases, confirmed cases, and a doubling in the number of confirmed mortalities, so i think its still too early to determine the longterm impact on apple and others, when you adjust the numbers, you took about a 10 hit to the march quarter. 5 to the june quarter and 2. 5 to the September Quarter on the notion that the duration may be longer than investors ant anticipate often for these companies, its not apple that hurts as much as those suppliers for whom apple might be their biggest customer and kind of define their whole cycle. Who are some of those suppliers that you think are most vulnerable sure, so i think you talked about the chip manufacturers i think thats a challenge and an argument can be made that you will have maybe a greater sense or greater amount of lost sales than just the shifting of sales into later quarters this year. So i think but broadly speaking when i look at the disruption of a supply chain, i think about Companies Like amazon and w wayfair that sell a large portion of products out of china and a prolonged disruption could have a negative imact on them as well for which i dont think a lot of people for amazon are factoring in right now they force a will the of products from there. You said there are companies that are well positioned to weather and maybe even profit in this environment and you include in that group, fitbit, grubhub, pinterest and roku explain. So the basic pieces there, is you have two groups. Companies like fitbit and sonos that because of the prolonged u. S. China trade issues, pulled their supply chain out of china and moved it to other countries so theyre actually insulated in the duration of the coronavirus then you have a second set of Companies Like roku or pinterest where to the extent that the coronavirus inspires consumers to stay home and order in or watch more television for roku, it could be a net benefit. And these would be u. S. Customers here with grub hub and roku absolutely, u. S. Customers. Good point, good to point that out and the basic thesis would be that as consumers that are sick globally are more concerned about spreading it of that nature, that would inspire them to stay home more than they would in the past and thats why it could be beneficial to a grub hub or to a roku all right thanks appreciate it today. My pleasure thank you. Its a down day for the markets and walmart missed on earnings, so why is is that stock trading higher by 1. 5 . Well put that question to a walmart anysalt. Plus, Virgin Galactic stock has been soaring to the moon it has tripled so far this year. Will it eventually come back the to earth that is next on power lunch. N. To one that can take on a bigger challenge. We are solving problems that improve lives. When i see obstacles, i create opportunities. To one that can take on a soft music lenge. When i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Welcome back to power lunch. One high momentum stock is outdoing even tesla. Virgin galactic blasting to new heights today continuing a massive rally for a seventh consecutive session but with shares up around 180 this year, Morgan Stanley analysts are warning it could come back down to earth lets bring in mark teper. Are you a buy er no. The stock price is just moving at a hyper sonic pace. Gone from ten bucks over the last two months, almost hit 38 today down to 29 back to 32. Its just moving way too fast for us why has it gone from 10 to 32 bucks . Theyve generated no revenue so right now, ooempb goals are concerned about the price and what i see is a stock that thats trading similar to tesla. But without the revenue to back it up. So then the stock goes up and shorts are getting crushed and that takes the price up even higher so fundamentally, the its typical to value something thats generated zero revenue. Youre supposed to hook at projections ten years from today, i dont know how anyone can predick that i couldnt tell you what im doing a week from today so until we start to see something more concrete, were staying away theres a lot of excitement around space what matters most here today is the spinning top formation. The bulls push it higher, ran out of fuel. Finishing or look to be finishing in the middle of the range of the session now after such a rally, the spinning top here would usually open the door for a consolidation or sharp move lower, so id expect a pullback somewhere in the ballpark of 20. If we get down to 20, i think theres support there if you like it and find a case to buy it stock up about 12 today. Thank you u. For more, head to our website or follow us on twitter kelly, back to you thanks. Ahead on power lunch, bloomberg hits wall street the former new york city mayor laying out his plans to regulate the financial industry well debate them next plus, elon musk calling out microsoft founder bill gates for not buying a Tesla Details on this billionaire beef and walmart rorlting a a big miss as the Company Holds its annual u investor day. All this when power lunch returns. Flexshares may look simple on the outside. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. For a prospectus containing this information. Wheneveryone is different. A, which is why Xfinity Mobile created a different kind of wireless network. One that saves you money by letting you design your own data giving you more choice and control compared to other top wireless carriers. Now you can choose unlimited, shared data, or mix lines of each and switch any line, anytime. No one else lets you do that. Design your own data with Xfinity Mobile. Its wireless reimagined. Simple. Easy. Awesome. Welcome back President Trump commute iing th 14year prison sentence of former illinois governor, Rod Blagojevich, convicted of political corruption he serve d more than seven year bee hind bars. We have commuted the sentence of Rod Blagojevich he served eight years in jail. A long time and i watched his wife on television i dont know him very well i met him a couple of times. He was on for a short while on the apprentice years ago and pakistan u. N. Secretary general making a new push to end the fighting in syria. Countries involved in the conflict we are witnessing situations india and i believe this is the moment in which we need a cease fire and i hope that the context in russia and iran come to the conclusion that these must go. And you are now up to date. Kelly, back to you thank you stocks are coming back a bit right now. Check out where we stand the dows down about 150 points, just about half of where we were at the lows o f the session when we were down 281 and nasdaq has gone green take a quick look at apple down less than 2 now. After that revenue warning due to the coronavirus time now for the power movers hsbc shares are tumbling about 5 Company Announced about 35 job cuts and shedding assets macys shares in the red after s p cut its ratings to junk. The retail giants stock has been nose diving since last august, losing about 30 of its value and we end with the biggest dragger on the s p 500 see if you can guess con agoura brands. Down 7 after cutting its 2020 forecast citing softer than expected performance across its categories and consumption declines in the food industry. All right, Mike Bloomberg qualifying for the debate tomorrow night as hes surging in a new National Poll puts him second behind bernie sanders. And today, the former new york city mayor unveiled new plans for regulating wall street, including a financial transaction tax, tougher regulations, strengthening the bureau, merging fannie and fr freddie and reforming student loan payments. Joining us now, Economic Policy analyst at the American Enterprise institute and jared bernstein, senior fellow at the budget at the center on budget and policy priorities. Welcome to you both. I got through that now i have to take a breath so im going to let you guys talk. This is a what, a. 1 tax or tenth . Is that going to mean, i know it will raise revenues, jimmy will it change behavior at all right, well its a trillion dollars. Thats hardly a small amount and that comes on top of somewhere between 3 and 5 trillion of other tax increases. Mike bloomberg called for. I think studies suggest it would have an effect it would raise the cost of capital. Make it harder to raise money. Anytime, listen, you like your Financial Markets to be frictionless you like them to operate smoothly and this puts fans in the gears of the Financial Market maybe not a lot, but it does put some fans in there item going to guess, jared, that you disagree. I do. I disagree up to a point its no question that this tax like any other tax, has some behavioral responses and one thing you almost certainly will see is a lot less High Frequency trading and in fact, some of the groups that fear this kind of attack the most even the little bitty old tax are the High Frequency shops. However, what you really, i really havent seen evidence of a higher cost of capital or any significant spinning of market liquidity and the thing you have u to recognize is that transaction costs have fallen so much on their own over the last 20 or 30 years that this little tax only replaces funds of those diminished costs so im not worried at all. Not all offshore trading is bad. Its not all High Frequency crash kinds of things. Shortterm trending helps create a liquid market and gets some prices efficient thats why we want efficient pricing and this would make pricing ali l bit little bit less efficient i think the thing to recognize there is upg ten basis points is going to fundamentally restructure trading. I think your goire talking abo1 on a 10 million trade if i have the math right again, jimmy, one thing. You cannot find any tax anywhere that doesnt have some kind of a an impact. I think this one is tiny i think we need to understand the trade offs and we dont fully understand the trade offs. To me, h isnt even the biggest thing in the plan which could triple Capital Requirement thats mass i. The Financial Companies would have to hold so i want to get out of world of elasticity and efficiency is the right thing and all of that very interesting stuff that you guys understand and cut to the chase here and my question for both of you is can we believe that mr. Bloomberg believes this in his bones. Because he was against a lot of the regulations that were promulgated after the financial crash in 2007, 08 can you believe him or is this another moment of bloomberg being expedient . Jimmy first. Listen, a lot of things he said about the financial crisis and who was to blame, that it was government regulations and about the bank a lot of those quotes were from 2008, 2009 2010 theres been a lot of research there. I think he needs to explain from how he made that journey from where he was to where he is now, but if he can explain it, i think voters can a lot more about what you say now than a decade ago i think thats well said. Hes being accused of throwing wall street under the campaign bus and i was there in the Obama Administration trying to push dodd frank when he was on the other side much to our great annoyance. I think what youre really seeing here is just the fact that the Democratic Party including the centrists have moveded to the left. Not just bloomberg, but buttigieg and sanders and warren who have a financial transaction tax and mentioned a capital buffer cracking down more on individuals who break laws, the Consumer Financial Production Bureau these are now pretty mainstream articles and whether bloomberg will try to follow through on them, well have to see how convincing he is on this turn around when he gets on that stage tomorrow night, i imagine people will tear him to slhreds. Look at all the posts he has out there that are so ripe for plucking will he be able to prevail over this field number one and if so, by moving to the left, will he be able to then kind of move back to the center im skeptical about how well hes going to do tomorrow night. Who knows. Im not an expert on those the guy has such a long paper trail. Hes a billionaire on stage with bernie and senator warren who are just out for blood on the issues, so its goin to be an awfully tough night for him. All right gentlemen, were going to leave it there thank you. Jimmy, jared, always good to have you very lively. Appreciate it. And to the bond market now, Rick Santelli tracking the action yes, it has been lively as a matter of fact, as you look at intraday of ten, we traded up to 15. We have some good new york man fakihturing, Home Builders Sentiment Index was pretty good but most of the issues of course are coronavirus and maybe deterioration of the economy of europe and japan opening year to date chart antd you can see looks like were going to be closing at the lowest levels since february 3rd and thats a little over two weeks. The dollar index up a little less than a third of a cent. Look at this chart going back to may of 2017. Should be closer anywhere above 37 and we would have that new high close and certainly looks like were going to. Finally, its at the expense of this currency. The euro versus dollar 58 of the dollar index is at a 34month close going back to april of 2017. Tyler, back to you Rick Santelli, thank you very much coming up on the tasting menu, billionaires bicker over a sports car a flip phone flop and an animated blue hedgehog hits box office gold, but first, jane wells is k looing at how the krocoronavirus is impablgting te economy. Hey, tyler, first we had a drop in exports because of the trade war. Here comes the drop in imports maybe the drop in shipping generally. New numbers on Trans Pacific trade when power lunch returns. Legendary terrain in telluride, the unparalleled landscape of park city, or the famed peaks of whistler, youve faced the hassle of lugging your gear through the airport. With ship skis, youre just a few clicks away from having your skis, snowboard and luggage shipped from your doorstep to your destination. With unrivaled pricing, real time tracking ship skis delivers, hassle free. Ship ahead and go catch those first tracks on fresh snow. Ship skis. Your skis. Delivered. Apps except work. Rywhere. Why is that . 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Volume is down because of the trade war but in a month, it could get a lot worse because a lot of ships that could arrive from china wont ships are being canceled look at this map even if manufacturing capacity is ramping up, the transportation from factory to ship you can see manufacturing numbers are higher it means even if the goods are finished, the government may not let a truck come pick it up and ships are not sailing. That means ship sales as in revenues are plumeting this week, shares are looking to a potential of a loss from 300 to 350 million a week because of the coronavirus thats what were going to see over the next month. Thanks very much. And heres a taste of some of the other stories were following today. Tension on twitter elon musk shaded bill gates after it was reveal ed that the microsoft cofounder purchased a porsche over a tesla. After the interview, the tesla ceo responded to a twitter user saying quote, my conerversation with gates has been underwhelming. My conversations with you have been b underwhelming. Well, he can afford any number of cars he wants but thats the new insult all right, flip phones are flopping consumers are complaining about two new expensive phones that feature folding displays, but according to reports, the motorola razr screen is already separating from the body bubbling up there. Completely damage iing the phon after just a few days of use the same could be said about the Samsung Galaxy z as the new folding display. Seems to feature plastic, not glass as advertiseded. One person posting this say iin the crack occurred when he opened the phone im not sure why, i guess the flip phone is, has a sleeker profile . Absolutely. I have a smaller version of the iphone which is you know, just about fits in the pocket, but i think theres an appetite, i want the big functionalty and now, sonic the hedgehog racings the nourm one in the bo office raked in 70 million in the u. S. And canada, making it the highest grossing opening for a weekend video game a dapation by a lefthanded tuba playing, i dont know paramount had initially planned to scrap the movie had scrapped it last year after the trailer was released fans were turned off by sonics appearance there on the left that was the before picture. They pushed for a completely, can you blame them look at those teeth. The new sonic is a toothless video game creature with much wider bulging eyes and a broader face seems to have paid off the amazing thing about this is it must have been so much money going into the movie to produce the trailer that nobody liked to say we hear you, were going to go back to the drawing table. Take out the toout walmart misses on earnings holiday sales are avoiding in key areas, but the stock has now reversed higher. Well talk to an analyst who will explain that to us when power lunch comes back we see harnessing natural gas unleashing the promise of clean energy. We see engineers simulating the future to improve today. At emerson, when issues become inspiration, focusing core strengths to create a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. And save even more when you say bring my own phone into your voice remote. Thats simple, easy, awesome. Click, call or visit a store today. Shares of walmart have turned positive today. The retailer seeing weak demands for toys, apparel and video games during the holiday season. Earlier, Doug Mcmillan weighed on what could have been better the Fourth Quarter wasnt our best we had a 1. 9 comp we had a strong november through cyber monday thanksgiving was good. There were a few weeks before christmas where sales in stores were softer than we planned. Its good to see commerce growth continue customers continue to go to walmart. Com, but there are some things we did in stores that we think we andy has an overweight rating on walmart and 138 price target at the nyse so its interesting to me for what looks like a pretty core miss, you know, if youre walmart and you miss in toys and video games, that could suggest bigger problems and investors are shaking it off what do you think theyll do to right the ship i think as doug articulated theres a number of things theyre changing with merchandising. It was not inconsistent with what other competitors have said so we think its less of a walmartspecific problem, more just softness in those category, is it soft necessary or people are buying amazon . Are you saying people arent buying toys for christmas . It seems like the toy lineup may have been softer, but it just wasnt as strong as we saw last year. So i think those things are at play, but clearly there are things they can do better. What are the things they can do better . You talked about there were things we did in stores specifically that didnt work or work as effective as they thought. Yeah, they clearly think they can do a bit better in some of the higher price points. I think they did a great jog in the lower end. Continue to refine the apparel assortment walmart has been known for a lot of basics. They were clear they cant do a better job of selling apparent did you the holidays as well we talked about the price target of 138. Digital obviously is a huge plank of walmarts execution why do you think that fell a little shy and how do you think they can find new acceleration . I think they can tick from the playbook and so some of that, i think is larger numbers, but i think youll see then leaning into grocery pickup, lean into next day, and i think theyre well positioned to take advantage of this move. You have an outperform on this thought, am i right, on this we do what other competitors in this area are you favorably inclined toward we still like amazon. Obviously amazon has taken tremendous share we think theyve had a lot of momentum particularly with nextday shipping, and we also likes target target has done a strong job with apparel, and taking a lot of shares from Department Stores that are struggling. In fact, we just learned that macys debt was downgraded to junk status. Analysts have suggested one of the biggest winners from macy decline has been target target has vastly does walmart need to do something to catch up with target or can they both continue to win there . I think wall marked has, or maybe softer on the general merchandise on the apparel side. Conversely target isnt as focused on grocery, but has done a strong job with apparel. And grocery is so important for walmart, still over i think half the sales do they need to focus on delivery there or can they continue to say thats what will get people into the stores you know, thats a benefit . Clearly one of the biggest Success Stories for walmart has grocery pickup consumers love the convenience its gotten not only the existing incremental is this idea you can in and out get generality merchandise items when you pick up your groceries, so its going to have that consumer start to shop other parts of the store as well what do you think the effect of the coronavirus could be on either of those stores able to source product i think its a kernel for everyone in the retail food chain. We are closely watching heretofore we havent seen anything out of stoic, but its something well watch closely. Theyre operating on very tight cycles i was talk to a friend last night out shopping this weekend, and this person said there were items they were totally out of stock on at, i believe it was gap and other places in a mall near where i live. She traced this back to the idea that the chinese were not sending product or manufacturers in other countries like vietnam were not able to get the fabric from china to make the products. Its certainly something that will accelerate over the coming months if the situation doesnt improve. You know, if there was a good time for this to happen, it was during chinese new year, since retailers plans for the shutdowns, so i think probably the betts time for this to have happened, but if it continues to drag out, there will be a significant impact. Ed, thank for your time today. Check please is next dont forget you can always watch for us and listen on the go using the counter nbc app. Well be right back. I love the new myww program, because its tailored to you . Take the personal assessment and get matched with a proven weight loss plan. Find out which customized plan can make losing weight easier for you myww join today with the ww triple play [shouting] [clapping and shouting] [cymbals clanging] [knocking] room for seven. And much, much more. The firstever glb. Lease the glb 250 suv for just 419 a month at your local mercedesbenz dealer. Saving for avas college. Being able to retire on our terms. Taking care of dad. Why Ameriprise Financial . My advisor cares about my personal goals. He gives us comprehensive advice. I feel prepared for whats expected in life and even whats not. She helps us feel confident. We know our financial future is secure. With the right financial advice, life can be brilliant. Ameriprise financial. Gold is jumping. Hi, tyler one of the etfs that tracks those names thats up almost 3 , about 2. 9 3 gold is up itself. As you said, gold is jumping. Rahel, thank you. Lets look at apple. I would have guessed that apple and the market would be off more than they are right now. Apple is now off its lows of the day, trading near its highs of the days it is still down by 1. 6 , but much improved from where it was earlier today. It is going to be interesting to see whether other Companies Get under the apple umbrella and start citing the coronavirus as a reason for shortfalls. I want to hear more about what you said, people are going around shopping malls saying theres literally empty shelves. The product was not there clearly traceable back, one would think, to coronavirus in china. Well see if theres more to come how about this tweet tro from Elizabeth Warren just in the past half hour or so bloomberg has made it all the way to the debate stage and shes not happy about it saying its a shame he can buy his way into the debate, but at least now primary voters curies can get a live demonstration of how we can take on an ego mannian billionaire. Wow. On that note, the gloves are going to come off tomorrow night. Mr. Bloomberg and one of the other guests said bloomberg has a long paper trail of comments that could come back and bite him. When we talk to brandt schwartz last hour, the biggest threat is super bernie sanders, so clearly theres a big rift between the wing that thinking had has a better shot of beating trump. And so bloomberg, you know, hes going to have his words thrown up in his face a lot. Its going to be interesting to watch. And its on nbc it is indeed. Well see for you that thanks for watching power lunch. Closing bell starts right now. That it does im wilfred frost. Walmart holds their investor days upstairs. Broader market improving during the session. Nasdaq just positive with 59 minutes left of trade. Welcome back to well friday. Welcome, everyone. Im sara eisen apple warning it would miss its revenue outlook due to the coronavirus. Despite that, apple is cutting its losses, with that the nasdaq just turning