Transcripts For CNBC Power Lunch 20170327

Happy monday. Im melissa lee. The dow was down about 184 points at session lows. The nasdaq has turned positive thanks to strength from biotech names like regeneron. The worst performing sector, down by half a percent. Well have much more on the bank selloff straight ahead. Here is what else is happening this hour. Some news you heard exclusively here on cnbc, sources telling us bill gross has settle his lawsuit against his former employer pimco between 75 million and 100 million. The number around 81 million. Gross filed the original 200 million lawsuit back in 2015. His dismissal from pimco was a breach of contract. Amtrak derailment with no injuries reported. The investigation is widening into the terror attack in london. Uk police say there is no evidence the attacker discussed his plans with anyone else or any other group. Melissa . We have a very busy two hours ahead. We kick things off in washington where the Trump Administration is trying to turn the page following last weeks fail europe of the Health Care Bill. Lets get straight to eamonn javers. Reporter this is day one. They are looking for ways to move forward here in the wake of obamacare. Put some points on the board, score some big wins here. We saw the president earlier today meeting with Small Business women. This was a scripted moment here. No major news. He didnt answer reporters questions today. Were expecting within about a half hour now sean spicers press briefing and a whole host of questions facing this white house now including just how tax reform and the rollout will be different than what we saw on health care. Thats a question i asked sean spicer friday. He didnt want to go there yet. Well see if he can offer insights today. That is the next big agenda item. Does the white house have a handle on these competing factions up on capitol hill . Some of the same problems that bedeviled them in terms of health care will be up there on capitol hill for tax reform. Does the white house have a good sense now of the lay of the land of all those factions . And then what will Jared Kushner focus on in his new role on government innovation . Its a new title given to the president s soninlaw here at the white house. Hes going to be working, we know, with executives from apple, sales force, and other companies. But what are they going to focus on . What sort of regulatory relief ideas, scream line government innovation could we expect to see from that effort, if any. There have been a lot of efforts to reform government. Not a lot of success in the past. Are there other planks within a potential tax plan that look weakened now that health care has not managed to pass . For instance the ryan brady pat . Reporter paul ryan was damaged. The white house put a the lot on his shoulders. They expected him to lead them to victory. He wasnt able to do it. They will be more skeptical now thats paul ryans favorite solution to tax reform. Somehow, though, they have to generate some revenue in and among all these tack cuts because there are conservatives on capitol hill who will not want to blow a massive hole in the deficit with a tax cut bill. Theyre signaling now theyre willing to have some deficit additions here but, still, they get the willies when you talk about big deficit numbers. Theres going to be a need for revenue somewhere. Thats paul ryans solution. Will it work out is another question altogether. Eamon, thank you. Eamon javers at the white house. Should investors start worrying the trump agenda and the trump trade is in jeopardy . Lets bring in the managing director. Trevor, what caught my eye in the notes the second producer handed us is the odds are increased. That some sort of tax reform will, in fact, pass. And i imagine those odds increase in your view since the failure of the Health Care Bill. Why is that . I think theres a little desperation within the Trump White House and the gop in general to get a win. I think theres a question to be answered about timing and about how they roll this out. But i do think in the end youll likely see more compromise within warring factions within the gop in order to get something done. They didnt treat them with quite the must pass urgency we expected them to. I would expect to see more of that with tax reform. Do you think then the tax reform becomes much weaker than maybe the markets had anticipated because of that desperation . I think it could. There are some issues with not Getting Health Care reform done earlier. It makes the tax reform agenda a tougher one to meet from a big tax break standpoint. Obviously the ryan brady tax plan shoots the moon and it has a lot of senators in red states with respect. The markets have had an irrational optimism around timing in Getting Health Care reform done and tax reform done. I think that needs to be reset and what youre seeing over the last week. It seems tax reform is a big, shiny object on the other side of the river. Until we cross that river we have to get over the bridge of a possible government shutdown. Do you believe that the government will be shut down because, once again, congress cannot come to any bipartisan resolution about the budget . Well, i certainly think the odds have increased. I think a lot of folks who might not have had as much leverage in the debate preaca failure do have leverage now. Republicans will treat this as something they cant let happen from a shutdown perspective. I think speaker ryan and leader mcconnell are not going to let that happen. I think theyll find a way to get it done. Weve seen in the past that the Freedom Caucus has been a thorn in their side and theyve been able to turn to leader Republican Leadership has been able to turn to democrats to get some votes. I think theyll probably have to try to do that this time around, too. I think at the end of the day Republican Leadership knows that a shutdown will be on their shoulders, and theyre not going to let it happen. Trevor, you said it there about democrats. There were some discussions made on the sunday news programs by trump people that maybe the president will start to work with democrats on health caver if the republicans arent going to get him what he wants. That seemed like a great shot across the bow. As i read that, its a hopeful sign because trump is not really republicanrepublican, right . Hes not necessarily a party member. Do you think because of the failure of the repeal more bipartisanship . Give us hope, trevor. Im not sure the defensemmoc are willing to give the white house much of a win at this point. If youre talking about a place where democrats and the Trump White House may come into alignment, i think youre looking further down the field maybe at a discussion in the fall. I think with respect to tax reform, with respect to the big issues between now and then im not sure youll see a ton of sort of outward support of the Trump White House from democrats. Well see what happens with the gorsuch nomination. That shapes up to be a pretty interesting fight. I do think democrats feel they have some cards to play around the debt ceiling now. You cant blame a guy for trying to find a little sunshine on a rainy monday, trevor. Appreciate that. Trevor hanger, height. Did you know that if the dow closes down today it will be the eighth straight down day for the dow. That would be the longest down streak in nearly six years. Lets bring in Portfolio Manager of Morgan Stanley and brian levitt with oppenheimer. Maybe being on this side of the camera, weve been up for so long that we tend to be reacting very strongly, shall i say, to a two or threepoint deceleration in the dow. Is 2 down the new 10 down . Yeah, no this is your chance to blame the media, brian. I dont think we should be overreacting to it. You asked about the dow. I would say with the s p 500 theres a greater than 5 correction in every single year over the last 30something years. I think with the exception of 1995. Corrections happen. I think what is surprising is that everybody is reacting as if we didnt know that the realities of governing were difficult. I mean, there was a reasonable base case optimism to be made in the aftermath of the election, but we always knew this wasnt going to be easy. Health care bills dont get written in 17 days. Ronald reagan won reelection 49 states to one and we didnt get tax reform until 1986. These things take time. Any disruption should be taken with a grain of salt and investors should take a breather and not get not overreact to this. How should we interpret investor reaction to this setback in health care because, basically, theyre shirking it off. The vix is higher and is probably the highest level for the year right now, but at the same time the nasdaq has turned positive. We have halved our losses. There was this failure here but we still are believers that tax reform will get done. Sure. Absolutely. I think moving health care to aside is good for reform. I agree with your previous speaker. So i think thats good, but, again, brian, your point is dead on. Its only down 2 . My gosh. Could the market have a further pullback . Its possible. What were forgetting here is what happens in two weeks . Were going to have earnings season and i think it will be pretty good. Theres no better setup than a little weak ness in the market going into earnings season because expectations are lower. Thats actually pretty good. It might be near term weakness. I think were setting up for a good april. Are you saying to buy this small dip, the dip you both say is negligible. I think the market can weaken further. I dont think it is the bottom. We could see another 2 , 2. 5 pullback. I think the story is not about whats going on in washington. The story is about an earnings recovery and good economic data. Youll hear that and more confidence coming out of companies when they start to report in april. I think the market will like that especially if its week going into that period. Lets not forget 9 of the 11 have had earnings projections upward. Leave our audience with actionable advice. If we get a downturn of a couple percent, what would you do with it . Buy protection right now . People have made a lot of money. Should i take some profits . What should our viewers do . I think for most investors they want a plan. Secular bull markets i believe we are in are not going to end with a fed thats generally accommodative. The u. S. Economy is doing okay. I think the reality is the composition of returns have changed somewhat in that everybody thought it was a value trade. I think were still in growth, in a slow growth world. If you look at europe, expectations were not as high as they are in the United States. Valuations were lower. And cyclically theyre better than the United States which is further along. Andrew and brian, thank you. Got a news alert in the bond market. Lets go to sue herera. Hi, melissa. 26 billion of twoyear notes went off the board and the yield came in. That basically was about one basis point below its 1 00 p. M. Offering rate. The bid to cover ratio was stronger than it has been in the past. The tenyear average is 2. 69 to 1. Indirect participation was higher. Direct participation 10. 8 . Leggings apparently dont fly at united if youre part of a pass ride program. A twitter backlash and a big headache for the airline ahead. The trump trade unwind but where is it hurting the most . Well tell you. First the banks getting beaten up. Whats behind the downturn next. Rodney and his new business. He teaches lessons to stanley. And thats kind of it right now. But rodney knew just what to do. He got quickbooks. It organizes all his accounts, so he knows where he stands in an instant. Ahhh. Thats a profit. Which gave him the idea to spend a little cash on some brilliant marketing ha, clever. Wow, look at all these new students way to grow, rodney know where you stand instantly. Visit quickbooks. Com. With e trades powerful trading tools, right at your fingertips, you have access to indepth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade. Start trading today at etrade. Com on a perfect car, then smash it into a tree. Your Insurance Company raises your rates. Maybe you shouldve done more research on them. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Welcome back. A big turnaround. The s p 500 is just a hair away are from turning positive for the day. When you woke up this morning you probably wanted to jump under the bed. It looked like doom and gloom. What have you done . The decline wasnt going to keep me away from work. The nasdaq hovering around session highs, like you said, the index turning positive. The only one to do so thanks to strength from biotech stocks, specifically names like regeneron. The nasdaq has been up in 10 of the last 13 sections, bucked the downturn overall. Leaders include micron. Shares up more than 20 . Also, monster beverage up 13 as well. And then big tech like facebook, microsoft all up between 2 or 3 so far just this month. Back over to you. Thanks so much. Bank stocks on pace it to have their worst month. The Regional Bank etf down 8 and today trading on very heavy volume. Is now the time to buy . Lets bring in the managing director. Great to have you with us. Bank stocks didnt move around this much and here we are where a 3 move is almost par for the course of the how do you interpret these moves on very heavy trading volume. There is bifurcation. Those that looked at the outlook as decent, the benefit of higher interest rates, the income edging higher. And thats consensus. Financial reform and a pullback and a fiscal stimulus agenda things accelerate. What are some of the questions youre getting from investors . When you have a 9 decline over the past month in a name like Goldman Sachs or Morgan Stanley you think the gains they made had in the past month have been made on the premise there would be deregulation, that the yield curve would be steepening. Both of think are in doubt. It has been in flat. Short rates are higher. Most people are thinking june and they went to march predicting two more hikes which is quite beneficial. A multiyear period, one of the things investors fail to appreciate is while some could get through the legislature process a lot of things through changes in policies and personnel. You have Steve Mnuchin and there are policies they can bring in that will be beneficial to the banks that dont necessarily require the house or senate to go along with it. I have a sixmonth time who are eye done, would you say buy the sector versus a twoyear time horizon . We do think the stocks have the ability to work higher. We have a bias because we think there will be larger beneficiaries from a regulatory rollback. Jason, thank you. Jason goldberg. All right, on deck a story that just might, just might signal that we have finally hit peak internet overreacting outrage. I thought you were going to say leggings. It involves an airline, social media and, yes, melissa, leggings. Stick around. To paraphrase the pep ridge farm ads, remember people used to dress up to get on flights. United airlines kind of remembers, dealing with a bit of a Public Relations turbulence after a woman saw two teenaged girls turned away from boarding a plane ostensibly for wearing leggings, a common outfit. She tweeted what she had seen setting off, what else, a firestorm of social media outrage. Celebrities tweeting that we have flown united with literally no pants on. Just a top as a dress. Next time ill only wear jeans and a scarf. United trying to do damage control saying, this is important, these were employee pass they werent employees but were given a pass by an employee and, therefore, subject to employee travel rules. Which is a stricter dress code. Is this another case the internet has overreacted about nonsense . Probably because they didnt know the full story. You see a headline they didnt even see it, they presumed what was happening. They didnt know about the dress code. Whether or not the dress code is still apropropriate in this day and age is a whole other story. As a company they have the right to enforce a dress code for their employees or extension of their employees which this is the case. Have any of these people flown to vegas from newark . Half the flight is wearing pajamas. People dress horribly. The other half is wearing something made of velour, so calm down. Come to newark. Shocking. Is the market moving from benefit of the dow to just what the president can actually accomplish . Not a velour track suit that im wearing today. When i fly i try to dress as best i can. Some stocks have been hit harder than others. Will these hardhit secretators hit next on power lunch. What we do every night is like something out of a strange dream except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive farreaching and, yes a little magical. So what else is new . Humm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. Hi, everybody. Im sue herera. A developing story out of chicago, an amtrak train carrying about 200 passengers derailing outside chicagos union station. No immediate reports of injuries. It is the second derailment involving an amtrak train since friday when an acellera derailed. An avalanche at a ski resort north of tokyo. Authorities say that it happened this morning while the students were mountain climbing. Theres also word that 40 other people were injured. President Trumps Supreme Court pick neil gorsuch will have to wait an extra week to find out if hell get confirmed. Democrats forcing the Judiciary Committee to delay the vote which will happen next monday. Hes still on track for confirmation with solid backing from republicans. And the oakland raid eers could be on the verge of relocating to las vegas. Nfl openers are expected to vote today to approve the move. If everything goes as mrabd, the raiders would move into a 1. 7 billion stadium in vegas that would be ready for play in 2020. Thats the news update this hour. Brian, ill send it back to you. Can you imagine, sue, practice in vegas . I know. In august. I know. Well, im assuming theyll make it an indoor stadium, right . The practice facility better be in, like, northern canada. Sue, thank you very much. Im sure its airconditioned. What a turnaround for your money. Derailment of the trump agenda sending stocks lower. The dow down as much as 184 points at one point this morning. Bob pisani, whats the impetus for the turn around . Reporter tenyear yields bounced, oil bounced. Big sectors move off their lows. The s p down 23 points or so right at the open and right after the open yields started bouncing. The ten year started moving, the dollar started moving on the upside. Oil started moving later. You put it together, you almost go positive here. Banks are still down. The kbe has moved 2. 5 range, thats the first one there, the spdr bank. Techs turned positive. Health care has been positive all throughout the morning overall. Banks here, take a look at zion, all are down. Weve noted theyve been down 10 , 12 from their highs. These are down close to 3 right at the open. We really turned around. A lot of etfs are getting very heavy volume today. People are definitely buying as weve seen these sectors down. So financial stocks, Financial Services etf, iyg, the second one big volume today. Value stocks. What does that mean . Value is basically right now bank stocks and oil stocks. So small cap value, big cap value. Youre talking banks and oil stocks. Theyre picking here. Theyre looking for value here, looking for deals. Stras stocks, the trump play, they were very weak it at the open but, look, even now theyre down fractionally, most down close to 3 . Final ly the Health Care Stocks all up today and that was an obvious play with medicaid stocks and hospitals and even the big drug guys brinstolmyer on the upside. This was a very impressive turnaround. I think the bulls will have a strong argument that the trump rally is not necessarily dead. People are looking to buy stocks 5 lower which is what the bulls have been saying. We wish the market would go down. Were seeing that today. Guys, back to you. Thank you, bob pisani. The European Union green lighted the merger between dow chemical and dupont on the condition the two chemical giants divest. The eventual plan is to split into three independent and publicly traded firms focused on agriculture, materials and specialty products. Dupont spinoff continues to climb, chemours. Up more than 370 the past 12 months. It is a Global Chemical maker behind brands such as it teflon and freon. An exclusive with the ceo. Mark, thank you for joining us. We appreciate it. Great to be here, melissa. I want to get your take on how much your company could possibly benefit from an infrastructure plan by the Trump Administration and by tack cuts. I think those two things can be nice little tail wind for us. To us thats sort of like gravy. What we really have going for us weve executed under perfection on our Transformation Plan. Weve done everything we said we were going to do. And now its really about innovation and new products to meet our customers needs. Youve put to bed some legal liabilities. You announced a global joint settlement in terms of the pfoa issue. And so are all of the legal liabilities behind you in terms of the money you need to set aside or future litigation . I think the big piece of litigation is behind us and i think thats what worried some of our investors. We spun out of a 200yearold company we like to think of ourselves as a startup with a 200year history. Our number one position, our number one position in floor products. And some things we had were liabilities and i think our Transformation Plan and the settlement that we worked at with dupont put those behind us. I want to ask you about the market and thats the stuff that makes things whiter, that make paint and other things whiter. A lot of people were saying that a bet on chemours was a bet on the stabilization of the market. What have you been seeing . Ive counted at least three price hikes that you are charging in the past year or so. And this at a time there are other competitors out there who are closing down their factories. Yeah. For us i think being the leader out there with a low cost position we have, weve been successful bringing prices up in that industry which desperately need ed that to happen. But the other thing about chemours were not a to2 company. We have a brandnew product that really is helping us as well. Yes, weve come out of the trough of the industry but on top of that new products like opteon and teflon are really helping us as well. Mark, i want to broaden out a bit. A lot of debate about the trump agenda. Here is a question for you not specifically about this government but any. Can the federal government create private sector jobs . Is there anything they can do that will make you hire more workers . Brian, i think the government wherever it is can give Companies Like ourselves incentives or help but the majority of jobs are created because you have a market thats growing and trying to invest in that market. For us, were putting a new facility down in corpus christi, texas. It will add jobs. Thats because the market needs that product. Thats the real fundamental inside of that. The government can help and give you lots of different help with subsidies or with practices. But fundamentally its about the economy and the fact that you can put products in play that your customers need. The reason we love speaking to you and Companies Like yours, you dont get a lot of attention but you are literally the front lines of the economy because people will order from you to do anything else they plan to do like build a home to melissas point about paint. So how is the economy . Ten, screaming good, one, terrible. How do you see it . I think you see an economy that has been sitting around a five and is moving to a seven. I was in china week and a half ago. Its starting to feel the chinese economy is starting to bubble up. In the u. S. They are advantaged with low energy costs. Were seeing the Chemical Company starting to move up. Its fundamentally about getting new products into place that really are dealing with a rising middle class or some need that a market has. And im starting to feel that this is start to go bubble up around the world. You obviously operate around the world, mark. Do you manufacture around the world . Do you manufacture in the local market, and do you have to bring in any of the inputs to your final product . For instance into the u. S. From other countries . Just trying to get a sense whether or not a company like yours could possibly be impacted by border adjustment . For us, ill give you the business as an example. We have manufacturing here in the u. S. And mexico and taiwan. It allows us to ship products wherever it needs to go out of mexico. We go to europe and asiapacific duty free here in the u. S. We maintain the product here. It gives us lots of flexibility. So for us that isnt a big impact. Mark, a pleasure to speak with you. Thanks for your time. Great seeing you both. Mark vergnano of chemours. Jeff sessions is making a rare appearance. Released from a jail in late december, despite the fact of a detainer for his removal. When cities and states refuse to enforce immigration laws, our nation is less safe. Failure to deport puts communities at risk especially immigrants in the sanctuary jurisdictions that seek to protect the perpetrators. Duis, assaults, burglaries, drug crimes, gang rapes, crimes against children and murderers. Countless americans would be alive today and countless loved ones would not be grieving today if these policies of sanctuary cities were ended. Not only do these policies endanger lives of every american, just last may the department of justice Inspector General found that these policies also violate federal law. The president has rightly said disregard for law must end. His executive order he stated it is the policy of the executive branch to ensure that states and cities comply with all federal laws including all immigration laws. Today im urging states and l k local jurisdictions to comply with these federal laws including 8usc1373. Moreover, the department of justice will require that jurisdiction seeking or applying for department of justice grants to certify compliance with 1373 as a condition of receiving those awards. This policy is entirely consistent with the department of justices office of Justice Programs guidance issued just last summer under the previous administration. This guidance requires state and local jurisdictions to comply and certify with 1373 in order to be eligible for ojp grants. It also made clear that failure to remedy violations could result in withholding grants, termination of grants, and disbarment or ineligibility for future grants. Department of justice will also take all lawful steps to claw back any funds awarded to a jurisdiction that willfully violates 1373. The department of justices office of Justice Programs and Community Oriented policing services anticipates awarding more than 4. 1 billion in grants. I strongly urge our nations states and cities and counties to consider carefully the harm they are doing to their citizens by refusing to enforce immigration laws and to rethink these policies. Such policies make their cities and states less safe, Public Safety as well as National Security are at stake. And put them at risk of losing federal dollars. American people want and deserve a lawful system of immigration that keeps us safe and one that serves the national interest. This is reasonable, just, and our government has the duty to meet it and will meet it. Montgomery county right up the road, there was a race in maryland at a high skochool. Has anyone had any conversation with anyone in Montgomery County as they describe themselves as sanctuary county and city . And theres a boatload of federal government in Montgomery County. Maryland is talking about a state law, to make the state a sanctuary state. The governor is opposed to that, im glad to hear. That would be such a mistake. I would plead with the people of maryland to understand that this makes the state of maryland more at risk for violence and crime, that its not good policy. And as a form earp prosecutor for many years in state and federal law, i just know the historic relationship different federal agencies have with regard to honoring detainers. Its just a fundamental principle of Law Enforcement that if you have a person arrested and another jurors dick has a charge, they file a retainer and when you finish with the prisoner you turn them over to the next jurisdiction. That is what should be done. Listening to you carefully, it sounds like youre applying the standards and the policy that the Obama Administration put forward on compliance with underlying Justice Department rules. Are you taking any additional steps . Have you asked the president to maybe talk about other federal funds that are not necessarily under your control as a way to punish sanctuary cities or states . Thats a good question. What im saying today is essentially the policies of the Obama Administration we issued last july make clear that you should not be receiving certain federal funds if youre not in compliance with 1373. We believe that grants in the future could be issued that have additional requirements as every grant issued in America Today usually has a requirement that if you qualify for this grant you have to meet certain requirements. So well be looking at that in the future and will continue to pursue it. But fundamentally we intend to use all the Lawful Authority we have to make sure that our state and local officials who are so important to Law Enforcement are in sync with the federal government. Bigger cities have said despite the lack of federal funding they will continue to be sanctuary cities, they dont care theyre losing money essentially. What recourse does the department of justice have in those cities that look at what youre doing and say we dont care, were going to continue to implement the policy . Thats very disheartening, but i hope the American People and their constituents in their own cities will communicate with them. And as we continue a dialogue and a discussion and as we continue to ensure that moneys that go for Law Enforcement only go to cities who are particip e participating in an effective collegial coop operative way w the federal government, that that would also send a message. We have simply got to end this policy. Thank you all. What about the white supremacist all right. We have been listening to attorney general Jeff Sessions again discussing sanctuary cities in the White House Press briefing room. Well take a very short break on power lunch. The big turnaround for stocks and why Home Building is so important to the u. S. Economy. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. Com the Home Builders have been nailing it since the election, but could a big border battle start to hammer away at that winning trade . Lets get to cnbcs landon dowdy with more. Reporter were just full of puns. President trump may have made his name in real estate but some policies might be a pain for this crucial sector of the economy. The president s travel ban and focus on curbing immigration while supporting undocumented immigrants could scare off both foreign buyers and the indust industrys achieved labor force. Foreign buyers account for a big part of the bull market and real estate. Overseas buyers purchase more than 100 billion of Residential Property in 2016. Asia accounted for 34 of foreign buyers. Latin america and the caribbean 21 . And europe 18 . These buyers have been instrumental to the success of new Construction Projects but restricted visas and mass deportations could scare them off reducing a crucial pull of crash for real estate investment, and they would likely increase construction costs. Economists at the nar point to an ar lit Construction Labor market and according to the most recent data unauthorizedunautho immigrant workers account for 16 of construction jobs in the u. S. In 2014. If builders have to pay more for labor expect those costs to be passed on to home buyers or for projects to be scaled back all together. How important is a recovery in Home Building to the overall u. S. Economy . According to one study if Home Builders returned to their long term averages for new home construction, it would add another 300 billion to the economy. Lets talk about this with jerry howard. These are big numbers, jerry. Do you think we will get back any time soon to those historical growth averages . To continue with your point the Home Building has a high ceiling for the national economy. That is nuts. Come on. I think we can. Right now Single Family housing is at about 60 of what we see as 1. 3 million starts a year sustainable number. We have a lot of room to grow. Our recovery has been stunted, but were excited about the future. It looks like demand is strong so why arent the men and women who own the companies that you represent, why arent they more optimistic . Why arent they building more. Is that theyre still too nervous . They cant get financing or maybe the workers arent there . In it takes a long time to start a Housing Project from the time you get to the idea until the first shovel goes in the ground there are a lot of hurdles. You have to look at the regulatory costs. Over the last eight years, regulations have grown to the point where 25 of the costs of every new home now is accountable to regulatory compliance. Thats a huge number. That impacts the financing. We have the homes online. We asked him about specific regulations. Can you dive deeper into that number, that 2016 . What exactly is the cost of regulation . Is it just hiring more lawyers . Is it another person to do the paperwork . Whats in that number . A lot is complying with the regulation. For example a lot of regulations to protect the environment mean that the builders have to do certain things on the project site. They have to take concern actions whether it be to protect against storm water, to protect the habitat of an endangered spsy. People that worked for us left the industry in droves during the recession and we have to get labors back whether its legal immigrants or get some younger americans to recognize what great opportunities we have in our industry, but compliance, costs, labor are big issues. What kind of reception have you had from the Trump Administration in terms of knocking down those regulations that are hindering your industry and are there specific regulations that you can target to say we are we want to help people own homes and so if you get rid of these regulations, we can actually help first time home buyers buy homes . Yes. We actually already the president has lived up to one of his Campaign Programs and he signed an executive order repealing the waters of the United States regulation, which was an overzelous burden that did not protect the waters of the United States so much as it burdenened people trying to develop land and people trying to farm on land. That was number one. Weve had a great reception by the administration on this avenue. Weve been up there to talk to them several times about various regulations and i think that obviously the president understands the Land Development business and the real estate business. I think were looking for good things from them. All right. Thank you. Appreciate it. It is time now for street talk. This is of course our daily dive into finding the key opportunity for you. First off finish line after disappointing earnings last week lowering estimates and the price target for finish line. The price target moves lower and merchandising missteps and gross earnsin earnings were down and the sale of the specialty jack rabbit not enough. Your second stock is starbucks. Starting coverage of starbucks with a perform rating in the 66 target. He said despite the size, he loves the managements fiveyear growth plan for single digit sales and growth of 15 to 20 . It should boost cash flow and grow the dividend. Thats 66 target on starbucks is 15 upside. Thats a lot. If theyre able to fix the store issue with the mobile app, that could be huge. It was supposed to help sales and now maybe hurting it because people are mad because people are cutting in line. You would be mad. If i walk into the store and get my coffee before you. That happens anyway without the app. Thats true. Third stock, bmo. It will be flat to up 5 in 2017 and thats better the anticipated, but Weaker Oil Prices wont effect the forecast. Oil and gas is the biggest market. The smaller cap call today that is cowen likes the color guard test. Its less invasive than the regular colon os co pea. Now that are than 170 Million People are covered for the potential use of this versus 60 million last year. Thats a lot. Plus the number of ordering physicians has more than doubled. We have a 30 target on exact sciences that is 40 upside. Lets hope the companys name lives up and you are exact. Yeah. More problems for uber. Why this crash could be the biggest headache yet for the company. What we do every night is like something out of a strange dream except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive farreaching and, yes a little magical. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Welcome to the second half of power lunch. Two hours until the closing bell rings. D. C. Couldnt get the right prescription for health care. Will President Trump be able to tackle taxes next. Whats in his agenda and your portfolio ahead. Amazon making a bold retail move and googles ad crisis is spreading. Tesla shares up 25 . The model three getting a bullish call from the streets. The analysts telling us what is fueling the optimism. You see the dow is down 50 points. It has been a wild ride. At the hope it fell more than 880 points and then it turned around almost with positive down about 50 points. Still if we do end up lower, we are on pace for an eight straight day of declines. That hasnt happened in nearly six years. Stocks on the move. Astrazeneca winning approval for a pill to treat lung cancer. Sealed air down 4 . Selling cleaning and chemicals and Systems Division to bain capital. On the move is fitbit. That stock is rallying 4 . It hit new lows, but it has turned around. Announcing a new product line. Lets get to the new york stock exchange. Brians right. We had an impressive turn around. Look at the s p. We opened down 200 points, but we turned around immediately. The the s p started rising on several factors. The overall markets lifts, but banks that were down 2 , the kbe, that lifted more partly because ten year yields bottomed at the open and started moving to the upside. It almost was positive. Whats going on here. Heres your mid day sector check. Banks on the upside we had a nearly 200 point turn around in the dow. The dollar turned around and oil rallied off and you put it together and you practically went positive. High volume etf on a low volume day. Value is basically a proxy for banks and oil stocks these days. People seem to be very heavily buying into these sectors because i dont know why. They seem to be interested in maybe buying the bottom. The theme here, people have been saying id like the market to drop 10 and see if i can buy in more. There seems to be some evidence that this pneumonhenomena is ret it is earn couragincouraging to market come off the bottom. Thank you. Lets get back to the center of all things financial these days. D. C. , and with the gops failure to pass an Obamacare Repeal where does the white house and congress go from here. The executive vp at pem co. There seems to be two schools of thought. One is i think weighing the day, which is basically the gop and trump are fractured. This is going to make the rest of the trump agenda difficult and then the school of thought which is maybe this will bring the two sides closer together because they realize they cant have another big failure from the people you talked to, how are they reading it in d. C. Right now . You were right. Youre welcome back at any time. Yeah. Thats a low bar. Exactly. A couple of things on that. First of all, i do think tax reform not comprehensive tax refof reform, thats really hard, but cutting taxes isnt hard. How do you get over the hurdles that it takes to get to tax cutting . A couple of things have to happen. First of all, they need to keep the government open on april the 28th. The spending resolution is going to run out then. Thats not going to be easy. Theyve got to pass a 2018 budget resolution. Thats going to be difficult because of where deficits are going over a trillion dollars on an annual bases within ten years it wont be easy to get that resolution and then final if they get the budget resolution theyll have those reconciliation faster procedures to getting a tax cut through. They have to figure out a way to make it not increase deficits in the long run. Thats not easy to do, but i would suspect that at the end of the day theyre going to get that done. How do you game this all out . Some people are saying that the odds go up that tax cutting happens, but others say maybe whatever passes will have less teeth than a package that would have otherwise passed had health care gone through. So our view really from the right after the election was that tax reform was going to be really difficult sort of regardless of who was in the room. It entails winners and losers and theres a reason why we have not seen comprehensive tax reform done for 30 plus years because theyre difficult, really complex area of policy making. In terms of how the health care nonvote informs the probability of tax reform, i think it marginally makes it a little bit more difficult politically it creates maybe some more head winds to get some things done and then from a policy substantive perspective it makes it more difficult because as you know health care was actually a big tax cut in addition to reforming some of the obamacare. So now in addition to tax reform, they also have to do some of the things that was gho going to be done in the health care forum. From a political and policy Health Care Perspective tax reform probably gets a little more difficult from here. Are there certain planks within tax reform that may be doa than before such as b. A. T. Given the hit that paul ryan has taken in the health care scuffle. I think it was dead before the defeat on health care. The real question is first of all how broad is tax reform . Is it just corporate or is it corporate and individual . I think it is more likely to be just corporate. The second question is how do you finance rate cuts and how deep a rate cut can you get . If you dont have the boarder adjustment tax, theres no way to get down to the 20 rate the house is talking about. They could get down to a lesser rate with other means of offsetting that revenue and thats what i suspect they will do. Your job you work for an Investment Company so your job is to take the stuff that john talks about every day and figure out a way for the clients to make money off it or not lose money from it. Given everything that you see, whats the best advice to a client right now about their money . Weve been pretty clear about this from right after the election. Weve been skeptical in some ways of this sort of bullishness that weve seen in certain risk segments because it really was just assuming that everything would go perfectly and we all know in washington thats very rare, especially when you have folks in the white house who have tremendous business experience, but they dont have governing experience. I think weve always been pretty cautious about sort of the outlook in terms of the trump trade and i think that was just reinforced on friday with the health care vote. All right. It was a pleasure. Thank you both. You are so right. The dow on pace for the eighth straight down day. Markets are making a slight comeback from todays lows. Good to see you. Ill start with you james because prior you said you thought the rally was in danger because of the health care vote, but basically flat for the date at this point. Do you reeval wait whether or not this rally is in jeopardy. I would say absolutely. It doesnt make sense to reevaluate that. I think what were seeing is investors are very complacent. Were seeing people really underreacting. Theres a lot of come plasensy. I think what were seeing on days like today is the tremors before the storm. I think we should expect volatility to increase, but we have to waited for more things to happen to have people become more fearful. At what point do you add up these i dont want to say this is death by a thousand paper clips, but the climb has been lengthened. We were up 9 in the past month. Weve been seeing a reach in the more defensive areas and the come plas ensy come off. When do you say maybe investors are getting concerned . I guess the real question is whether the market takes its lead from washington or from the broad economy. When i say broad economy im not just you ctalking about the u. St the global economy. While weve had a setback here for those who take washington as its lead, behind all of this is a powerful Global Expansion that hasnt happened in close to ten years now. If you look at where the both u. S. From citi bank or business activity, everything points to a surge here. Take china and india as the lead and then for the first time europes kicking in. Were at a very interesting point here in the global economy. Im afraid watching washington is going to make investors lose sight of that so so you buy. Pardon. You would buy the market here . I would buy pretty much across the board. Your defenses that youve pointed out have outperformed recently. Now is the opportunity to step back into all those places that trump or no trump, these the power behind some of these moves have just begun and i think you have to start focusing on that. James, you like defensive stocks right now. Which areas . I would say the areas are things like utility stocks, telecomstocktel telecom stocks. I think the premise was that investors were going to have some Health Care Reform and infrastructure spend, we were going to get tax reform. Now that we see its not so easy to get these things done and because investors were hoping and pulling these returns into the end of last year and the beginning of this year, now theyre questioning that. We believe that its much more sensible to be more focused on the defensive stocks, ones that have lower volatility and safe haven in case there are bumps in the road, but ones that have high dividends so youll be paid to wait while we see this economic growth. Its not going to be nearly as fast as people expect. Thank you for your advice. Thank you. Thank you. Heres whats coming up on the rest of this hour. What do Business Owners want more, Health Care Reform or lower taxes . It seems like an easy question, but well ask two Business Owners what they think. Will tesla model three be the safest car on the road . One of ubers cars ends up on its side. All that and more after this. This. The mercedesbenz of tomorrow will transform not just the automobile, but mobility itself. An autonomousthinking vehicle protecting those inside and out. And its the mercedesbenz of today that will help us get there. The 2017 eclass, with innovations no car has offered before. And that will change driving forever after. Lease the e300 for 549 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. This video is a problem for uber. Its a picture of an uber on its side. One of its self driving suvs ends up on its side after a wreck. Reporter after the crash, uber pulling its entire fleet of self driving vehicles in its testing cities, arizona, where the accident over the weekend occurred, pittsburgh and San Francisco. This morning, though, the self driving cars are back on the road here in San Francisco and the other two cities are expected to follow suit. An Arizona Police speaks person tells us no one was injured and uber was not responsible for the accident, however this is supposed to be a time when drivers are becoming comfortable with taking their hands off the wheel and at such a time accidents like this can seem like a big deal. This is just the latest setback for uber over the last few months. We saw a few months ago an uber car blowing through a red light here in San Francisco. The company is also facing a lawsuit from alphabets self driving car unit and theres been a string of high level departures. As for the bigger picture, problems at the self driving car unit could have wider implications for ubers entire business model. The companys future and nearly 70 billion valuation depends on uber figuring out and leading the way in autonomous driving because uber loses billions of dollars a year. One of the biggest costs is drivers. Thank you. Lets talk about tesla, which obviously has been trading very well. Its about 25 so far this year. The model three could be ten times safer than the average car. The firms been bullish on the stock which is up 25 this year. Lets bring in adam jonas. Great to have you with us. Thanks. It seems obvious that safety is a number one determinant for auto purchasers, but could this mean that tesla has a better chance of sharing market share from others when it goes live with the model three . We think its an opportunity and Vehicle Safety is getting more attention in social media and from regulators because of the spike in fatalities up almost 20 in this country over the past two years. It seems like the only thing progressing faster than the pace of Machine Learning is the pace of human unlearning. Were getting dumber faster than the cars are getting smarter and its due to distracted driver. We dont think theyre putting a computer in every car to make these vehicles twice as safe. Elon tweeted making the cars 10 times as safe. If theyre close to that we think theyre going to have to Pay Attention to. Elon tweeted out video on the model three. Whats your take on the model vehicle and how safe the model three could be on your outlook of tesla hitting its forecast by 2018, 430,000 model threes. As we discussed on your program before, we think that tesla is more of a Transportation Company using vehicle machines sold today as a funding strategy to become something much much bigger, not tapping into hundreds of thousands or millions of cars, but more billions, hundreds of billions of miles. And then the 600 billion hours that humanity spends inside cars. Thats the real prize. Weve been vocal. Those targets are too aggressive. Were not saying theyre impossible, we just dont have them there. We do have them though is doubling their 5 million miles a day to 10 million millions and launching a their drive could be more intelligent. Even if youre driving these cars with a Steering Wheel and you have your hands on the wheel, the car is just watching. Its learning. They put that 8,000 of equipment in there so it can watch what you do well. You dont want the tesla learning from that. Im going to say, brian youre right. They do want to watch the bad driver. They want to watch the drunk driver and the good driver and the kid jumping in front of a car. They want all that. Hopefully nobody drunk is getting behind the wheel. Lets move on. The electric car market in the United States is less than 1 of cars out there. That says two things. It says, wow, what a big market for electric cars. Maybe people just dont want to drive electric cars because theyre still third cars for rich people. Whats the answer. We think the electric cars for private use really are vehicles for human driving pleasure for wealthier individuals. Thats why its so important that in the shared model where youre not driving 10,000 miles a year, but 50 or 100 in a fleet operation, then the economics you can get that pay back period to under three years. Thats the game changer. Youve written in the past month or so about sort of the pit fall of the exposure to the Auto Leasing Market like a ford. When it comes to tesla i know the story line is different because thats not a used car market for tesla for which new car pricing will be pressured, but in terms of financing could it feel the pressure of rising interest rates. Tesla loans are generous terms. Our focus is on the technolo technological of 255 trillion cars on the road. Teslas cars can get better so they can learn. They put in that equipment so the vehicle five years from now is better than the one thats just learning and watching right now. So the tip the thrust of our used car thesis is that in a five year period were running scenarios of used values being off by 50 . We are warning clients to be careful. There are implications on object so less ens and we think its progressi progressing. We think in three to four years theres going to have to be a policy response because there are going to be problems in the market we think. Thank you. Coming up in todays session lets check out the markets because we saw a big turn around for the dow. The dow is down about 80 points. Power lunch will be right back. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . New biwhat are we gonna do . Ys. How about we pump more into promotions . Nah. What else . What if we hire more sales reps . Nah. What else . What if we digitize the whole supply chain . So people can customize their bike before they buy it. That worked better than expected. Ill dial it back. Yeah, dial it back. Just a little. Live business, powered by sap. When you run live, you run simple. Im on it. Ar does weathertech go to protect your vehicle . Weathertech. Made right, in america the market. Redict but through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. We have breaking news on the sports front. The nfl owners have approved the Oakland Raiders and their planned move to las vegas. We have press Conference Footage of the nfl commissioner and the raiders principal owner mark davis speaking to the press about this particular move. It will again happen and we have more comments coming from him right now. What youre seeing is mark davis saying in the last few moments i love owing laakland and i love fans. I understand there will be some anger. It should not be directed at the players. The commissioner saying they worked tirelessly to get a deal in place to keep the team in oakland, but it didnt work out. According to espn citing sources the vote was nearly you monnus. The only holdout was miami. A big move. I wonder what his father would have said. Lets not forget vegas is the 31st biggest city in the area. Its adding a lot of people. And an nfl franchise as well. They join the Golden Knights in las vegas. Now that the Health Care Bill has failed, the Trump Administration is moving on to a bigger fish. Tax reform, but what if that fails as well. What if it succeeds. Well speak with two Small Business owners about what they need to hear. One thing the government could get done, approve the Keystone Pipeline, but do we need more oil. Reporter good afternoon. The irony of course when this project was proposed, we did need the canadian crude and the question now is do we need it since shale supply is up. Well talk about what it means for oil prices all from nebraska. Nebraska. Yes . Please repeat the objective. Thrivent mutual funds. Managed by humans, not robots. Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. Heres your news update. Were following that developing story in chicago where an amtrak train carrying about 200 passengers jumped the track. Three cars derailed as the train was switching from one track to another. No reports of serious injuries and that accident is under investigation. New video out of the city of mosul showing iraq and u. S. Troops fighting to liberate it from isis militants. A tv crew capturing one of iraqs elit military groups. A mystery is unfolding at a tennessee zoo where more than three dozen represent tooils died in one building. The zoo is known for having one of the largest rep Tile Collection in the nation. Carbon monoxide has not been ruled out as a cause. Emojis are big business. 140 millions may be new this summer. The new ones would include a beer bearded man and a vomiting face. Thats the news update this hour. Melissa critiquing my performance on the show. Stop. That would be a kiss. I need to take a lesson. You keep telling yourself that. We are 90 minutes away from the closing bell and it could be eight straight down days for the dow. Goldman sachs weighing the dow down. Universal Health Care Trading higher today and oil trading down. 5 . Approval of the key stone pipeline could mean more Canadian Crude Oil coming to the u. S. Could that mean Lower Crude Oil prices. Reporter in this sleepy town with a population of less than 100 people, we have the connection point for the Keystone Pipeline now that president ial approval has come through that line will come down from canada and connect to the lower leg which exists and it will take oil down to the gulf gas for refining. Its that heavy Canadian Oil Sand oil. The irony is when this was proposed years ago we needed the oil in the United States, now not so much. You have shale producers taking advantage of the fact that opec has paired back and prices have been higher and you can see u. S. Production over 9. 1 Million Barrels a day. The question of course is where do we go from here . The approval on the federal side has come through. The states still need to approve it. Analysts say that could take about a year or so, but when this oil starts flowing well see another 800,000 barrels per day. Probably not going to store that here. Were probably going to export some of it overseas, but the concern there is that demand hasnt necessarily gone up and you do need demand to absorb this. Shortterm theres going to be an oil shock because of this and prices could go lower from here. Low 40s, maybe 30s again are possible. Thats what analysts are speaking about at this point. For the long term vision for the keystone, it gets us closer to that goal of being independent. North America Energy independence and then eventually an American First Energy plan. Thats what the Trump Administration wants. This whole thing comes down to the 100 person town where you are standing two flights and a drive from anywhere. Reporter the sign says population 84. Somebody told me lockally it is 54. This is a small town. So who will benefit from the approval of the Keystone Pipeline. Joining us is the managing director of Capital Advisors the fund is up 37 in the past 12 months. Thank you for joining us. Is there any companys stock that as seen as the keystone is approved you will buy more of this. Obviously transcount is the biggest ben factor. They have a 7 billion project of natural Gas Infrastructure that theyre building out of the shale. Thats a reason to own a company like transcanada. Natural gas is a great way to play as well and we own transcanada and thats the reason why because the u. S. Is the saudi arabia of natural dga. Are you buying more or are you happy with what you have . We buy every day so we are buying more. Any other Pipeline Companies out there this is a specific situation. They get the approval and they moo have on. Anybody else that is well suited whether or not they build a new pipeline. All Energy Infrastructure comes i think are in really good shape. If you think about energy and Energy Infrastructure, its like the cardiovascular system for the economy. If you dont have it you cant drive yourself to work and turn the lights on. Its important. Energy frinfrastructure is critical. Companies that are Building Infrastructure throughout the u. S. Are more really critical companies. Investors are capturing that. The great thing about Energy Infrastructure is you get dividend yield with these companies. A lot of these names youre viewers may or may not be familiar with. More broadly, i know you focus on mlps and pipelines, the Energy Sector is down 10 . Its the worst performing sector. Do you think these have become value stocks, some of them attracted me because theyve come down so much . Right now youre right. Whats happening right now is everybodys focused on one thing. The number every week that comes out in terms of Weekly Oil Inventories is what the focus is and thats going to change. Oil inventories are going to decline. Until that happens the whole market really seems to be focused on crude oil inventories. When that changes we think a lot of the strong fundamentals that weve been experiencing over the last several quarters will start to play out and youll see a rebound in energy stocks. Theres a great opportunity here in the u. S. , the Global Landscape is changing and the u. S. Is becoming a larger supplier of crude oil to the world and thats one of the great things about this sector. Were gonna leave it there. Thank you for your insight. We appreciate it. Thank you. So what do Small Business owners want and need from the Trump Administration . Remember, before the inauguration we spoke with a couple of Small Business owners. We think now is a good time to have them back. Joining us is the founder of bamco and the ceo of cane millwork. First, i want to start with you. We spoke to you a couple of months ago. Has anything changed with your business under the new administration in just a couple of months since we spoke . To be honest with you, not really. For the most part we have been under this cloud of not knowing whats going to happen and that uncertainty has been there since inauguration and has continued. Until that changes, a lot of our customers will be in the wait and see mode. Dan, same question. Has anything changed have you seen a trump bump regardless of your political affiliation . Thank you for having me back. I think that now that the election is over, trump or no trump and now that were settling in. There absolutely has been a bump. Or request for proposals is at a historic high rate. How high . It started before the election, but once the election was over and we kind of had an idea of here are the policies that are going to be pushed going forward, people settled in and the projects that were shovel ready were moving forward. We look at bamco and your business, is it a cyclical business, in other words if we see tax reform change would you know for a while or is it going to ride the overall economy . Our business basically we work with fortune 500s. Its a leading indicator to how people feel about the overall economy and most of the fortune 500s are in wait and see mode when it expenditures. I think what dan has is exclusive to the wood Manufacturing Industry and maybe to the real estate independent is, were not seeing that same level of commitment towards future projects because of the unknown. Dan, you mentioned requests for proposals. Those arent necessarily orders. At what point do you get concerned that theres a failure to pass the Health Care Bill and so therefore the request for proposals wont turn into actual orders . Thats a great question. In our industry would could be unique to construction, the things that were putting estimates on right now are jobs that have Broken Ground and are funded. The chance of those completed is probably near 100 . To phils point there is a level of uncertainty out there. Health care is such a huge line item on the cost of goods sold. So not having an idea of where is this going, is it going to be obamacare, is it going to be something new or something we havent heard of yet, youre talking major dollars and a major percentage of what it takes to employ people. I dont disagree, there is an uncertainty that could start to test the market 24 to 36 months out. Any impact to your business with the failure to pass the Health Care Bill . Weve provided health care for our employees for a long time so for us it hasnt been too much of a difference. Since the first day we put our shingle up premiums have been rising. Wed like clarity on what the direction is, but i expect premiums will continue to increase and just a matter of how much theyll increase by. Here is the most important question. Has dan ordered any cane millwork pens . I havent gotten the call from dan yet. I talked to him after our les segment. You guys are on tv again. We better have some millwork done. Thats what we do on cnbc. Thanks for having me on. The markets remain negative and we are seeing shares of snap moving higher and gold is moving higher. Higher. What powers the Digital World . Communication. Like centurylinks Broadband Network that gives 35,000 fans a cutting edge game experience. Or the network that keeps a leading hotel chains guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. Businesses count on communication, and communication counts on centurylink. The newly advanced gle can see in your blind spot. Ok lets call his agent. Im coming over right now. [ dinosaur roar ] onboard cameras and radar detect danger all around you. Driver assist systems pull you back into your lane if drifting. Bye chief. Bye bobby. And will even help you brake, if necessary. It makes driving less of a production. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Kevin, meet yourkeviner. Kevin Kevin Kevin Kevin Kevin Kevin Kevin kevin kevin trusted advice for life. Kevin, hows your mom . Life well planned. See what a Raymond James Financial Advisor can do for you. Gold on the rise with the highest levels of the year. Well try to figure out where gold goes from here. Craig, look at your charts tell us if gold is going higher or lower . Well, as i look at my crystal ball is gold continues to make a series of lower lows and highs here. I think we have another relief rally happening in gold and its partly driven to a pull back that weve seen in the dollar as of late. Were running into big overhead resistance here. I would say this rally runs out of steam about 3 higher and 1,300 where that long term resistance is. I would be selling into the strength here on gold. So you might have another 2 or 3 pop and thats it in gold in the shortterm. Thats it in our opinion. Fundamentally do you agree with that . Are you a gold seller long term . We think its a macro world. I think its a tug of war on the notion of higher growth and the folks that are scared about the way things are shaping up around the world. We think the folks that are scared have the informational hand. To the extent that we assume a macro world and thats how we run things i think you have to see this as i do and probably fear wins out over over fear of inflation. I like the product here. I think it probably grinds higher. I think when it doesnt do that well which lately it hasnt done great, but weve start to seen the market do a roll over after march 1st. Thank you. We do two additional trading nation segments every day. Go to trading nation cnbc. Alphabet, amazon and snap a tech try effecta trading next. T. Usaa gives me the peace of mind t. And the security just like the marines did. The process through usaa is so effortless, that you feel like youre a part of the family. I love that i can pass the membership to my children. Were the williams family, and were usaa members for life. Experience exciting offers on sales event is here. Our most elevated suvs ever. Get up to 2,500 customer cash on select 2017 models for these terms. Experience amazing at your lexus dealer. More companies abandoning advertising on youtube on concerns their ads would be placed on or next to videos with objectionable or extremist content. We are in los angeles with the look at how much this might cost google. Julia . Reporter could cost as much as 750 million. As boycotts grow over ads over being placed next to extremist content. They suspended advertising, and fx is not spending any money on any google platform. Procter gamble, worlds biggest advertiser, quote, we work with the Media Partners to ensure our advertising appears within the right context of the brands including making changes if we find ads appearing within a context not come plying with our guidelines or business ethics. Some say the boycotts Financial Impact is likely modest, thus far, the timing is unfortunate. Brands lock in a chunk of the annual fronts in may, and google is pressured to provide accountability and discounts, opening the opportunity for googings digital rivals in Traditional Media Companies as well. Guys, back to you. Thank you, julia. Time for the power run down. We have the analyst with us, antho anthony, talk with what julia was talking about. How does it impact the stock . Yeah. I mean, we were forced to lower stirmts. We thought that five of the top 20 advertisers, thats a big chunk, and they are pulling ad campaigns. Its this pull ad spend first ask questions later. They are looking at posturing on behalf of the buyers and behalf of the marketers, but we our checks is that this is a real issue for people whose brands are running next to brand, and so i lowered my 810 of youtube revenue, almost a dollar of earnings impact to google, and we lowered the target, and its a real issue. Theres no question they can fix it. They are working on it. Solution might be costly. You are asking them to cure rate a little, right . Asking them to curat, and make sure its not hate speech, and given the nature youtube ads are received, its not easy. People said, what if the pendulum swings too much the other direction, and now youtube is senscensoring content. They said youtube assured they will be hiring a significant number of people to basically police this issue. Right. Implement internal controls. That could be a cost to the company, yes. All right. Topic two, anthony, amazon is considering opening up augmented reality furniture stores. What do you think of this . Well, i think what amazons trying to do is use offline locations to help consumers with products they dont naturally like to buy online as much as the products, like Retail Products where amazon dominates. If they use it as a showroom, flexibly use them as distribution centers, so you hear about in the furniture category, its one area where the consumerments to, obviously, see the product, try out the product, produce, vegetables, meat like this, grocery is a massive category to make headway. You can bet they are investing in offline locations in a way to sort of remove the friction from the consumer. Sounds expensive. In order to buy in the im a shareholder, they are spending, spending, spending again. Sure. But you could have made that case on the stock three years ago, and i had no doubt, i mean, just look at the numbers from last quarter. They are spending in all sorts of categories, melissa, whether it be media, alexa, india, fulfillment centers, of course, and now offline locations. If you believe in bezos, in the fan club of return on invested capital, youre find with him spending near term for long term returns. Last topic, snap, the company seeing love. Its more buy ratings on the street. No surprise the buy ratings come from shops or part of the deal. Anthony, you have your rating, which is, what, reduce . Yes. I have a reduce rating. What were saying is the valuation is multi. Of twoyear forward sales, 17 times, well in excess of what weve seen. Expectation for revenue growth, as you can see in the reports out today, is really, in my words, like, heroic. You expect the company to quintuple ad dollars in the next two years. Maybe theres enough tv ad dollars or other digital ad dollars sloshing around they could make these numbers, but when you look at some of the reports, also, out today, a lot of the way they get to their high price target or justify the multiple is by looking out to 2022, 23, and looking out that far, in addition to the user growth, i want to see a reacceleration, also, in user growth. Right. And thats, i think, what people are going to be focused on. I think given this heroic or very high valuation, snap needs to connect on user growth reacceleration, and in a market thats competitive with instagram and facebook work to replicate snaps functionality on their platforms. Anthony, thank you. Thanks a lot. Good to see you as always. Check, please, is next. We have aed video thats the best thing youve seen all year or your money back. Were back right after this. Remember here at ally, nothing stops us from doing right by our customers. Whos with me . 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