Transcripts For CNBC Power Lunch 20170330

I want candy i love m ms and i think theres a new candy. Welcome to power lunch, everybody. Sweet moves in the market at this hour. S p erasing its march deficit going positive for the month. Seeing its fifth straight day of gains. The dow has 100 point deficit to make up to break even for the month. A few notable movers, here, expecting annual grows through 2021 and will return 8 billion shareholders. Investors dont seem too impressed. The stock is down about 4 right now. Goodyear tire also lower. It was downgraded to a neutral from a buyover at Goldman Sachs evaluation call and chipotle shares are moving higher to 2 1 4 . Tyler . Mely sarks thank you very much. Welcome, everybody. Here is what else is happening at this hour. Good news for home buyers right now, morgans rates are falling again. 30year rate dropping to its lowest level in a month, averaging 4. 4 . Not as low as they used to be, but still pretty low. The debt, National Debt that is on track to keep rising over the next three decades. Congressional Budget Office saying u. S. Debt could reach 150 of gdp by 2047 and that would be the highest level in the nations history. And facebook unveiling a new crowd funding feature to help users raise money for themselves for personal emergencies and other stuff, like education and medical costs. Brian . Thank you. Now lets get to the big interview on cnbc today, really around the world, russian president Vladimir Putin denying his administration played any role in the u. S. Election, but that is not all he said. Cnbc europe jeff cutmore conducted the interview. First off, spectacular job. I know this morning for us obviously Late Afternoon for you, a wideranging panel. Some really interesting comments from Vladimir Putin. What stuck out to you . I think it was the denial of involvement in the u. S. Election that was key here. He used that phrase read my lips, no, we did not try to influence the u. S. Election. Of course, we have a Senate Intelligence committee which will look into that very issue. Vladimir putin, though, insisting they will not find any evidence. The other issue i thought was very interesting, the question of when we will get a facetoface meeting between the two president s. So far weve only had a telephone call. President putin called up President Trump to congratulate him after he won the election. Since then, radio silence. And at the moment, the current agenda is for a meeting in germany at the g20, but thats not until july. So i asked president putin whether he would be ready to sit down earlier. Lets hear what he said. Translator i said i expressed my position a number of occasions. Were ready for the meeting which will discuss the agenda and that depends to a large extent on the american side. You see what is happening, what has been happening. Youre just trying to involve me until those squabbles and kwaurl quarrels. You know what has been happening there. The newly elected president is barred from implementing his agenda and delivering on his pledges in health care and in National Affairs and relations with the russian federation. Were just wait . Things recollect fie and stabilize. We dont interfere in any way and i believe, which is the best proof that we didnt do that before. The other issue that i brought into the conversation whether washington would push ahead and ratify the paris agenda on climate change. And obviously at this point it does appear as though President Trump and scott pruitt at the epa are backing away from that. The russians will implement the paris accord, but president putin being very careful not to be critical of the administration in washington, which suggests to me he is looking for some kind of connection here with President Trump and hoping that there will be some early meeting. Back to you. All right, geoff, thank you very much. Do you have a question . Thank you very much. Appreciate it. All right, lets bring in donald jenson, senior fellow with the center for transatlantic relations. Welcome. Good to have you with us. Lets begin with the headline that geoff just sited and that is that mr. Putin repeatedly said that there was no russian involvement in the u. S. Election. Do you believe him . I do not actually. I believe our own u. S. Authorities which have found there was interference, not necessarily for one candidate or another, but he was meddling. And that mr. Putin says a lot of things, as in this case a lot of it is not true. So can you do business with a liar . I find a whole talk of a partnership, the whole talk of joint Strategic Interests very difficult to believe and even more so to implement. Russias fundamental goal is to push the u. S. Out of europe, diminish its role in the world and diminish frankly undermine the system. I find that makes it very difficult to do business with, although you can cooperate on some specific issues. You point out on a whole host of issues from europe, which russia sees as its sphere of influence to syria to russias relationship with iran, we and they do not see eye to eye on any of those things and are harshly critical of them. We are. We do not see eye to eye and we are justly harshly critical. For example, in ukraine, most of the violations of the socalled mince accords are committed by Russian Troops or russian sep ratists. Russia does not want ukraine to chart a prowestern course. In sere yarks we have very serious differences about strategic goals, about the future of the assad regime and in fact we dont agree on who is a terrorist. This makes it very difficult to operate on serious substantive issues of course its worthwhile trying. Its worthwhile talking but it will be very difficult to come to any kind of agreement as putin suggests. Do you think the u. S. Administration has stepped back from its desire to maybe find ways to improve relations with russia . I think its more important to look at the kremlin. The kremlin since december has noticeably stepped back from what was frankly cheer leading for the u. S. Administration. There are a number of people around the president who have been critical of russia and recently President Trump himself was critical of their illegal annexation of crimea. I think rather than a month or two months ago, the kremlin is now much more cautious, much more trying to get the measure of the corallation of forces in washington. In many ways its not going as well as they thought it would be in november. Whats also changed, donald, is seemingly that the president surrounded himself with advisers that seem to be taking a harder line stance on russia, whether it be tillerson or mattis or hailey. When you take a look at the number of World Leaders President Trump will have met with, before even meeting with president putin, it sort of sends a different signal from the rhetoric he gave on the campaign trail, doesnt it . It certainly does. He met with the baltic Foreign Ministers this week. They were very pleased secretary tillerson did and they were very pleased with the meetings. And i think moscow is much more concerned than it was, as i said, a few weeks ago about whats going on. I would add to your list the designate for the National Security adviser fee owe that hill who is excellent. Geoff cutmore is still there. If youre going to go all the way to northern rush sharks were going to bring you on tv im curious about why this event was in russia, but thats a different issue. Im going to use this word loosely because Vladimir Putin to me seemed almost casual, a little jovial. Im using it in the putin sense obviously. Thats about as much casualness were going to get. What was it like being on stage with Vladimir Putin . What kind of security is around him . What kind of presence does he wield in a country where he literally is the ruler . Yeah. I think youre absolutely on the mark there. The security is intense and tight. The event is carefully prepared. There is an intensity while youre on stage with Vladimir Putin, as you might expect here. And i think just to pick up on some of the comments that we heard from donald there, i think that he is a man who at the moment is struggling to understand what the russian policy is from the white house. And i think that might be to an extent why he used this opportunity to reach out. When i asked him several times about whether he would be prepared to meet President Trump, he said pretty much anywhere. And of course there are a number of cities that are offering that meeting. So, i think just to pick up on that point, there is an unpredictability about the Current Administration that the russians are not used to. And i think we were here primarily to talk about the arctic, arctic security, about energy and the Energy Reserves we know that are in this part of the world, but it was clear to me that president putin also wanted to use this opportunity to show that they are keen to begin talking again about some issues where u. S. russian bilateral relations are incredibly important for the rest of the world, be it terrorism, syria, shared resources in the arctic, security in the arctic zone or indeed the potential for relations to worsen from what is already a very, very low ebb. Back to you. Its donalds view, donald, that on those key areas, terrorism less so but syria certainly and iran, we just dont agree and are unlikely to, but donald, you mentioned some areas of more narrow common interest. What would they be where progress could be made, what would they be . Certainly on Environmental Issues as you mentioned earlier. I think consultations between the u. S. And russian militaries in syria and elsewhere are very useful for lowering tensions and reducing the chances of misunderstanding. But that should not be mistaken for benign intent on their part and not be mistaken for somehow russia agreeing with us on what are Strategic Interests could be because they very much disagree. Geoff, before we let you go, the thing about putin i was in the room with him once in russia in the sochi olympics. I didnt talk to him. He was there. He was close by. Two things stuck out to me. Number one, physically hes a lot smaller than i thought he would be. You see him him on the back of pumas whatever it is. But the aura he carries with shim and the people around him, you didnt need to know he was coming into the room, you almost felt it because the other people in the room stiffened up. You sense that sort of power that comes around him. Yeah. No, i absolutely agree with you. There is an intensity and there is i guess, we would have called it charisma back in the past, but im not sure if it sounds right when you talk about it being applied to president putin. But clearly, you know, in spite of the protests that have taken place here over recent days, his own popularity rating remains high when people here talk about corruption and how angry they are about that, they dont necessarily point the finger at him personally. They point it at the Prime Minister or they point it at other parts of the government here. So, i think what is remarkable in spite of so many areas where there is potential for disagreement, not least in the relationship between washington and moscow, president putin himself has a certain teflon characteristic where he just seems to come through that without any csignificant dent t his personal popularity here. Back to you, brian. Geoff cutmore. Thank you very much and donald jensen. The country is standing out in the stock market for one big not so good reason. Did you know that the russian market is the only major stock market not participating in a recent global rally. More than 20 global etfs we track, russian is the only one lower this year. But does that mean it might actually be good investment for you and your money if you can hold your nose and stomach all the headlines that . Bring in tim seymore, man who lived and worked in russia as well. Two questions, why isnt russia participating . Two, do you think it will be ultimately a good investment at this price . Well, look, brian, russia was up 45 last year and outperformed just about every emerging market. Most of that was before the trump bump. Obviously we pulled back on the back of oil and on the back of politics that i think were expecting a lifting of sanctions which by the way i dont think will happen soon and i dont think it really matters. When youre investing in rush sharks theres two dynamics to think about, one is that russia is always cheap. Its mostly oil and Gas Companies that traded four to five times earnings. But a weaker rue bell and it went from 34 to 80 ultimately over the last couple years before pulling back has been very good for russia. Very good for the Oil Companies 60 oil with 60 to the u. S. Dollar rubel is win fall time. Thats part of what you need to think about. With oil where sit now, tim . We pulled back technically lets talk about that first. It bounced off the 200day russia looks very interesting if oil stabilizes. Youre going into dividend season in russia where the russian stock market and the russian yeah, the russian equity market offers the best dividend yields in markets outside of turkey. May, june a ton of dividends are paying out. They may soon be to paying north of 50 . Thats what youre investing in russia. If oil stays higher, the trickle down effect into the real economy means youre buying names like mts, mbt which is their walmart and you buy the consumer. Tim, thank you. Tim seymore. Still ahead todays downward dog, the lululemon. The company claiming lack of colors down in sales. The ceo will join us with the headlines next. And jeff bay soez just up staged Warren Buffett well tell you how next. Is your daughter ok . Thats where i felt relief. Were the rivera family, and we will be with usaa for life. 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. Well a few owned amazon. Com stock for a few years, you have made a lot of money, but not as much money as this guy, founder and Ceo Jeff Bezos is now your second richest person on the planet with amazons recent run, he officially leapfrogged the struggling Warren Buffett. Bezos wealth climbing to 75. 6 billion. This despite amazon planning to cut 263 jobs and pull the plug on its kwid si unit that runs sites like diapers. Com and soap. Com. Amazon bought it in 2011 but failed to turn a profit. Of course the guy that started that went on to buy jet. Com which was bought by walmart. It is todays downward facing dog. Shares of lululemon getting crushed after an earnings much. Jim cramer just sat down with the ceo who joins us now with all the details. What did he have to say . First, thank you for having me on, melissa. It was ill tell you, it was a little contrary to what the stock is doing. Why dont you take a look at this. After a fabulous run, just a great, great, great couple of lets say years, you reported a number that was good but you gave us dramatically weaker than expected guidance. Help us here. Whats happened . The stock is getting killed. You know, i believe weve had an incredible q4, incredible 2016 as you mentioned. Im super grateful for the team, for the first time were returning to Earnings Growth since 2013. Were a little disappointed. Were not satisfied with q1. We had a slow start. Weve taken drastic steps to fix it. I also pressed him. I pressed him about the competition that its got to be the competition. Listen to this one. There was such a sudden shift, was it the fickle consumer . Was it something you did wrong . I felt the health and wellness theme was a great secular trend what you were behind it, you were riding it, theres a new players, j. Crew, have they caught on to what youre doing . I dont think they have. There are a lot of great brands there and we continue to lead the market. Theres no doubt in my mind that the healthy active mind style we created we continue to lead that. I see the strengths of oi business in china. Our business in china is on fire. You know what, you were talking to Laurent Scott was talking to the founder. His main beef was a criticism of a kmodization of the product which is skiend of a different way of saying youve got a lot more people doing what you did. I listened to that interview and i think scott was right to press chip because i do feel that this is the one company that had bucked the trend. This is a terrible business right now, apparel. They had 22 quarters doing this man has done a remarkable job. This is a sevenweek phenomenon that this thing has fallen off cliff. It is denim, the competition the fact they missed in colors, the fact that theres less traffic in the mall, is it the fact that athleisure is dead . I think my i have a little surprising view on this. Their buying back stock hand over fist. He told me that in the interview. They are still sticking by their guidance for the year. Now, you cant pay a premium price because it turns out to be a lot more fashion oriented than we think and that means its fickle. But its not the end of the world. So you believe snhim . He sounded a little oblivious in the sound bites. You should have asked him in french . True. This is what you said is so triegt. My executive producer in the middle of interview and said with a quizzical look, maybe this thing isnt as horrible. But it is quizzical and the problem here is that this is a company thats consistency dropped off so quickly that you know that whatever he says you have to say, well, wait a second. You werent just wrong but you were really wrong. But i dont want to write this company off. Am i interested in buying here . I think the halftime guys it can go down again. There will be more downgrades. A lot of people have turned on it. But you know what the competition is just fierce. Is it a lulu problem or sector problem . I think its both. Athleisure. Dont forget the mall traffic in february was horrendous. They did have the wrong colors. But i dont want to be hostage to a company where they had the wrong colors. I mean youre wearing the wrong color. This color. No. Wait a minute this is the right color. Im a buyer. Im a buyer. I think you cant pay as much but the idea that this thing is in a death spiral, im going can i defend lulu from a stock perspective. Absolutely. This was a 37 stock 2. 5 years ago. 48 a year ago went to 80. If you bought it the last couple months youre under water, but its been a volatile name. Some people have still made money yes. In this stock. Valuation has also come down. We have to know, is it a Tipping Point . I have to tell you that these competitors. Look, geez, i went to my wife. My wife is a classic yoga went to yoga today. Said, you know what, i bought some new balance. New balance . We have a lulu right across the street. Are you kidding me . Then you speak to everyone, you know, who is involved and theyre suddenly sampling another player. So, i do think that the competition has caught up, but this guy is the leader. I dont want to give up. Its also been a stock that you had to you had to buy and sell at the right time. Tyler, thats the problem. Wait a second, its a timing play. Its a timing play. Pva has been a timing play. Vf is a timing play and apple has not been a timing play. Chip wilson, by the way, uses that to indict the current management. He says look back at five years and the stock is basically flattened down a little bit. He would say the patriots are a bunch of losers because they once lost to the eagles on a sunday night. You take a look at the space, jim, you see nike and lulu almost the same. Do you pay up for under armour . I think under armour is bottoming. I see i know that some of the Department Stores lately have been telling me that theres been a pit cop. I think you did have easier compares. But then i come back and say, you know what, in the end, if you sell into a mall, theyre not going to the mall. I feel very lonely at the mall. I really do. Not like i need a Security Guard or anything, wow, where is everybody . Theyre in the apple store. Or cruise ship, hotel, plane, taking trips. Its true. Its no fun to take youre right. The rest of the mall is a pretty more abundant place right now. Thats the problem. The strip mall is doing better obviously and some of the guys burlington doing fabulous, but it is just he sounded fairly optimistic. I listened to that interview. Dont you know youre supposed to be doing badly. This is the second time. The previous guy in the end, what it comes down to is that the consumer is just not the same consumer that we thought. I want to see what the investor reaction will be to your interview because with all due respect, you asked him specific questions and he sort of gave the ceo answer. Hey, your car is on fire in the parking lot. We have a great team. We have a Great Company and very happy theres some pointed moments in the interview. See, i didnt give you the whole interview because its called a tease. I want you to watch the show. Boy was that a tease. I always want to come on your show because i love it. Slightly disappointed. Wow. Thank you, jim. Be sure to catch the whole interview mad money tonight catch not only laurnt potdevin but the ceo dave cote of honeywell. Mining and medicine the good, bad, ugly in todays trade. Its back, good, bad and ugly. 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. 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. Welcome back to power lunch. The white house is confirming that White House Deputy chief of staff katie walsh is leaving the white house in a staff shakeup. White house official emailing me this statement, has accepted a position with an outside organization. She has been a tremendous asset to the president and we are confident she will be so in her new role as well. Reportedly the outside organization here is going to be a group that helps defend the trump agenda from outside the white house. Brian, this is an interesting staff shakeup because katie walsh was seen as an ally of Reince Priebus the white house chief of staff who has reportedly been under some fire himself. Theres intrigue going on at the bhous. Well wait and see what White House Press Secretary Sean Spicer says when he briefs the moment in just a few moments. More palace intrigue is right. Thank you. Lets get to subaru with a news update. Thank you very much. House Speaker Paul Ryan in his Daily Briefing says he understands President Trumps frustrations with conservatives. The president this morning tweeted that the House Freedom caucus is blocking the partys agenda, vowing to fight them if they dont get on board. Its very understandable that the president is frustrated that we havent gotten to where we need to go because this is something we all said we would do. So he is just expressing his frustration. You all know that he does that in various forms, including twitter. And i understand his frustration. Quebec city mosque shooting suspects making a brief court appearance. The 27yearold is accused of killing six people and the attempted murder of five others. He obtained a new lawyer. New Research Shows that megadoses of concentrated vitamin c can damage brain cancer cells without harming the healthy ones. Scientists says this does not mean vitamin c is a cure for cancer but may improve how patients respond to chemotherapy and radiation. Youre up to date. Thank you very much, sue. Welcome back to power lunch, everybody. Time now for the good, the bad, the ugly in todays trade. First to the good, close to reaching a deal once again to export indonesian copper after exports stopped back in january is mcmoran. Worth stocks down after they missed earnings forecast. Ugly day for halozyme therapeutics, independent network of researchers says the Clinical Trial for the companys pancreatic Cancer Treatment will not result in a significant improvement for patients. Now lets switch and talk about the bond market right now. The bond report. And lets take a look at how the numbers are fairing. A red day for bond prices as Interest Rates rise just a little bit. Theres the twoyear at 128. The fiveyear at 195 and the ten which we watched most closely at 2. 41. There for good measure, the 30 year. A little above 3 . That, folks, is your look at bonds for a thursday. Could i put x in the center square, tyler . Yes. Thank you. On deck, major news from one of americas most iconic brand, the woman who runs mars chocolate empire north america breaks it to us first. What is it . You got to stick around to find out as jim cramer said, its called a tease. Were back after this. Whether youre after supreme performance. Advanced intelligence. Or breathtaking style. Theres a cclass just for you. Decisions, decisions, decisions. Lease the c300 sedan for 389 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. 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. [and her new business i do, to jeanetgo. Jeanette was excellent at marrying people. But had trouble getting paid. Not a good time, jeanette. Even worse. Now im uncomfortable. But heres the good news, jeanette got quickbooks. Send that invoice, jeanette. Looks like they viewed it. And, tada paid twice as fast. Oh, shes an efficient officiant. Way to grow, jeanette. New. Get paid twice as fast for free. Visit quickbooksdotcom. Americas most iconic brands set to bring more jobs to america. The mars chocolate empire announcing a 70 Million Investment in the u. S. , plus adding 250 jobs in the states, all part of a fiveyear billion dollar commitment to manufacturing in the United States. North american president tracy macy joins us in studio and brings with her a brand new m m, too. Well get to that in a minute. What are you doing with this 70 million is it a new plant or an expansion or retooling of a plant . Where and why . Yeah, the 70 is across our existing factories for m m is seeing really good growth in our core m m products. Expanding that to produce more. Also in albany, georgia, we launched a new product called goodness knows. Goodness knows, take a shot. Can you come over to look at this. Goodness knows, these are fruit bars and it in. Chocolate also, strawberry almond, dark chocolate. We love our chocolate. It certainly gets on trend with the Healthy Snacking only 150 calories, four squares and perfect for sharing. Politically its good timing for such an announcement. Well, honestly this is just what we do. Weve been around for 100 years. Family owned privately held enables us to invest for the longterm. Our philosophy is domestic manufacturing. We believe we should invest in the country thats you make most of the chocolates and products that you sell here in the United States, you make them here. But more of your workers are actually overseas manufacturing in plants for their local markets, i assume. For their local markets. We manufacture in the market for the market as long as its big enough. How is business . M ms is doing well . Business is great. The confection nar category is a very robust category. We see strong growth in the past and in the future. Consumers always like to treat themselves. When they treat themselves, they treat themselves with really good tasting indulgent chocolate. Do you have trouble finding workers . We hear that a lot . We actually dont. Its one of the things why were proud to make these announcem t announcemen announcements. Its probably the most important thing in business is getting the best associates. So actually just last month we made the fortune 100 top best places to work. We made number 50. That tells you how much our associates like working in the factories. One of these associates here, what do they make typically . Whats their hourly rate . I couldnt tell you. Its across the board. Really across the board, but we pay very good, very competitive wages, again thats a reason why people stay with us. Crackling youre hearing is brian eating his care mel m ms. What do you do with the ws that come off . No ws, all ms. 12 of our u. S. Work force has been with us over 20 years. On average i would never leave a chocolate plant. We were just talking about that earlier. Thats the ultimate retention very popular at parties. Thats what you told me earlier. One of the reasons youre here, m m has been around forever. Yes. Youre launching a new m m which is what we were dipping into the m mcaramel. I dont know whats right. All i know is theyre delicious. Whats the expectation for this product . Why mess with a brand as iconic as m m . Its not messing with the brand. Can you make this answer long. Yes, so you can eat that. When i was here last year we were announced 100 Million Investment in our line in topeka, kansas. It comes to stores in may. And we expect it to be our biggest innovation ever. Its what your customers are telling us. Theres a huge demand for it. Youre lucky to have some. Were having to produce pretty fast to make up for the demand. What are the challenges of putting caramel into an m m. Its really complicated. Small needle. Making m ms in general is surprisingly complicated. Its one of the reasons its difficult to copy. In business you want to have products that are distinctive, hard to copy. These are really difficult to make. Its taken us at least 15 years to perfect this technology. 15 years to perfect the m and ms. Speaker technology. In caramel. This has been in the works for a long time. If youre going to bring out a new version of m ms, it better be good. Peanut is our biggest youre going to look into putting a peanut in here, though. I will look into it. Probably 15 years before you bring it back to us. By the way, do you expect to hear from the president for your announcement . I mean, he praised heaps praise on ceos who announce jobs in manufacturing jobs specifically in the u. S. . This is really one more year in 100 years. You said in your title over the last five years we invested a billion dollars and created 1,000 jobs. Well be here next year the year after, we were here last year. Its what we do and believe its right. It has longterm benefits. As a gear head, you and i talked about, tell kyle busch to stop fighting. Will this be on his car . Yes. Nascar raise, kyle busch 18 in caramel . It was. We had a lot of success when we launched crispy on the car. Nascar fans are loyal and love the product and it works well for us. Thank you. And thanks for giving us a sneak preview of the caramel. Youre welcome. By the way log on to the cnbc. Com right now for his exclusive oped in manufacturing in the america. Coming up, government rules can certainly be boring. But not government rules that could change the entire landscape of media ownership. The details of that ahead. Plus, how one Company Wants to turn a profit by putting a stadium jumbotron basically in the palm of your hand, if you were ever on the kiss cam, fear not, you can see yourself again. Stick around. Usaa gives me the peace of mind 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. 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 back to power lunch. The New York Times is now reporting that it was two white house officials who helped give house Intelligence Committee chairman devin nunes intelligence reports that showed the President Trump had been incidentally swept up intelligence collection by u. S. Officials. The New York Times is reporting here that several current american officials identified the white house officials who were involved in passing that information as ezra cohen watt nick, the Center Director fer intelligence at the National Security council and Michael Ellis a lawyer who works on National Security issues at the White House Councils office and who formerly worked on the staff of the house Intelligence Committee. Now, devin nunes staff just put out a statement and we can bring that to you. They say as he stated many times, chairman nunes will not confirm or deny speculation about his sources identity, and he will not respond to speculation from anonymous sources. Brian, this is all going to raise questions about why National Security council officials, if this is true, felt a need to leak information to the head of the Intelligence Committee up on capitol hill when, in fact, those same officials work for the president of the United States. Why did they have to go to devin nunes on the hill and have nunes come back to the white house and brief the president when, in fact, that information was sitting in the white house all along . So this gets a little curiouser and curiouser, brian. It does. Amen, thank you very much. You bet. As the quarter comes to an end, were taking a look at one sector which has outperformed in part because some relatively wonky anticipated changes in the administration. Julia . Reporter hey, brian. President trump has been on the attack against media companys news divisions. Over the past quarter, their Parent Companies have been thriving. Come cast and disney shares up 8 and fox up 16s for viacom shares soared. Media giants benefitting from strong q4 results including digital revenue from skinny bundles and Record Box Office plus the Trump Administration is expected to be more friendly to media mergers. As for those wonky regulation changes, brian just mentioned, today s. E. C. Chair is expected to introduce plans to loosen the national cap on local station ownership, which prevents Media Companies from owning more than 39 of National Audience share. They would do this by changing how certain stations are counted towards that cap. Now, this could set off a spate of deals. Les moonves said he is interesting in buying stations. Sinclair broadcast shares are up 23 on expectations it will buy try bun media only possible if the rule is changed. Well look commentary on deal making and regulation. Media giants next Earnings Report roll out starting in a few weeks. Melissa . Thank you very much. Can media stocks continue their run in the Second Quarter . Lets bring in brian crock. Great to see you. I want to talk about what julia was talking about in terms of getting rid of regulation that will pave the way for station owners to buy more stations. Would you want to see cbs buy a bunch of stations . I think theres a lot of efficiency that can come from owning more stations. I think cbs could add a few with these rules being loosened in the way that were hearing. So its helpful for the story. You know, i think that the tv stations have a very kind of hockey stick growth trajectory in how much money theyre getting out of the traditional paid tv bundle companies. So owning more stations would increase their exposure to that and we think that would be good for the business. You also made the prediction in 2017 thats when well see telcom and media sing kumbaya. Youre foreseeing cross industry deals . I think theres a lot of secular head winds in media. I one of the things thats resulting from that is more consolidation. So, i think at t, time warner will get through and thats set a template for people to think about more combinations of pipes and content going forward. And so, you know, i think when at t and time warner close, well see the benefits of that deal that could insent at t to double down or verizon to look more at this or other platform guys to get deeper in content. We think thats a very good setup for the content companies. One name we like in particular around that is cbs. Are local stations healthier financially in as businesses some of the Cable Networks . Yeah. In a very curious way this is Truly Old School media tv. Exactly. But these guys were not paid to be part of the paid tv bundle like Cable Networks were. Theyre make up for lost grounds, more loyalty, bigger audiences, this is where you see the nfl on sunday, on thursday night and the march madness kind of finals coming up this weekend on cbs. So these guys have the opportunity to get paid more. Theyre getting paid more. And theyre also the guys that are survivors in the skinny bundles. Youtube tv is focussed around networks owned by the guys who own broadcast. Its not including the Cable Network conglomerates. So i think these guys are on the right side of the divide in tv and also be benefitted by some of the consolidation that could consolidation that can come. Appreciate it. Bringing millennials back to the ballpark, its a sale for major League Baseball. Up next, we will talk to one company that is trying to change that by bringing the jumbotron to your smartphone. There is no other big thrill than that a. Beer in one hand and you are on the jumbotron. If you have medicare parts a and b and want more coverage, guess what . You could apply for a Medicare Supplement Insurance Plan whenever you want. No enrollment window. No waiting to apply. That means now may be a great time to shop for an aarp Medicare Supplement Insurance Plan, insured by unitedhealthcare insurance company. Medicare doesnt cover everything. And like all standardized Medicare Supplement Insurance Plans, these help cover some of what medicare doesnt pay. So dont wait. Call now to request your free decision guide. It could help you find the aarp Medicare Supplement plan that works for you. These types of plans have no networks, so you get to choose any doctor who accepts medicare patients. Rates are competitive, and theyre the only plans of their kind endorsed by aarp. Remember these plans let you apply all year round. So call today. Because nows the perfect time to learn more. Go long. Opening day for baseball kicks off this weekend for fans headed to the ballpark. You know the scenario, right. You are watching the game. Suddenly you look up. Just for a moment, you see the big screen all to yourself. Maybe the kids cam, a few seconds later, your friends say, hey, i saw you on tv dancing like a fool. The only person that didnt see you was you. Thats changing, though, because of the new app. The cofounder found 15 seconds of fame. Stare of our life. People turn into hundred a ticks f lunatics for a camera. Its up there, they know where you are in the stands, how do you know where im sitting . Its very simple, from a fans perspective, they download the app and take a selfie at registration, using our proprietary technology and inputs and algorithms, we can identify those people at events. Face recognition . Its not the whole thing. Its a part of what we do. Again, its very simple. We take a selfie, you check in at that event. In fact, you can be at a game months from now, realize you are on camera way back when, downloading you sent a notice . Mellissa and i were at the islanders game. Hey no. Watch yourself. Doing this. So what happens is people see themselves on the jumbotron typically. Starting on sunday with major League Baseball, we will be delivering for the first time if broadcast history fans who are on camera on tv. We will be sending those moments as well. So those people may not necessarily you pick up the feed from correct. Major League Baseball advanced media. So we will have access to over 5,000 feeds for the entire baseball season. What if you were at the game with someone you would rather not know that you were there with . Well, its funny. People always ask that question. First of all, if are you at a game, if you were there with somebody, you might end up on the jumbotron, on tv, right, so you kind of give an implicit. Your neighbor could be sitting there. Implicitly. Were on the kids scale. Its a public venue. So you have a lower expectation of privacy, but we are very conscious of that. Legal issues and privacy issues are something that is always forefront in your mind. Once you go in we only deliver content to people who register for the app. So these are people who have opted into the platform. Theyve agreed to our terms and use. The reality is, most people on camera at these events, they do want their footage. We see this. Is there an error rate, are you 100 accurate . No, no technology is 100 . What we are focused on is making sure all those people who should get clips do get clips, obviously, if somebody is wearing a mask of their face is 90 obstructed. Why obstruct it . Do people pay for this . For fans and consumers, its free, i should mention were not just a sports app. We are live events across the board. Our Business Model is a sponsorship model, so brands attach their brands to our content. Every time that content is shared on social media, and over 95 of the clips that we deliver are shared on social media, its so its a sponsorshipdriven modem. I think in todays wide events phase as sponsors are increasingly looking for new ways to engage fans and millennials, this is a much more organic way to reach fans. Its the most personal way, obviously, to reach fans. I think that market is changing a lot. 15 seconds of fame is the name . 15 seconds. On an apple store . You dont have to buy it. I get it. Acquire it. Exactly. Or google play . Or whatever . Google or iphone, yep. A mixture of a crossing road app. Fascinating. Thank you very much. Thank you. Up next, the sect trade the sector is on fire, will it be a safe bet for investors . Plus the Freedom Caucus the democrats finally have something in common. They get top billing in a tweet from washington, d. C. With a 1 nor 40 character fallout. And each job created by the Energy Industry supports two others in the community. Altogether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energy lives here. All while reducing americas emissions. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. 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. Zblrnlgs. Folks, welcome back to the second hour of power lunch im tyler mathieson, melissa is here. Two hours until the closing bell. Senate hearing on russias involvement in the u. S. President ial election taking place right now. This as Vladimir Putin tells cnbc those accusations are lies. First quarter almost in the books. Its been a red hot start for technology, but a brutal year so far for energy, diverging lines, that tells the story. Well talk about the numbers. And President Trump softens a bit on nasa or does he . He is taking a hard line meantime on the Freedom Caucus. What does it all mean for you and your money . Stick around to find out. Meantime, lets get a quick check on the markets here, a broader markets are higher across the board. We do have the dow up, lets take a look here a. Third of a percent. 68 points is the gain here. The nasdaq is on pace for a fifth straight session of gains. Lulu memen is the one we are watching. It is the downward facing talk of the day. It is down by 23 and a third percent. This is session lows. The company is saying that its forecast to be weaker than what the street expected. They also say they missed a mark fashion wise, they didnt have enough color in their assortment. The company ceo, see jim cramer, that full interview on mad money. Regional banks, the third lincoln, suntrust among the winners here. As tyler said, the roomy bottom trend, very apparent in that stock today. All right, two big issues in washington right now t. President calling out the Freedom Caucus, that story plus a Senate Committee looking into russian hacking, eamon javers is on that. Lets look at you and new developments in the past hour. Thats right the New York Times reporting in the past hour, in fact two white house officials were the folks that helped give chairman devin nunes information that President Donald Trump or his associates have been incidentally collected by u. S. Intelligence officials during the campaign in 2016. The New York Times naming those officials ezra coen watnik and Michael Ellis, a lawyer who works on National Security issues at the White House Counsels Office and works on the staff. No comment from mr. Nunes office who put out a statement, as he stated several times, chairman nunes will not confirm or deny speculation about his sources identity and he will not respond to speculation from anonymous sources. Obviously, the significance of all this, is it will be something of a headscratcher as officials at the National Security council is that works for the president of the United States felt they had to give this information to devin nunes up here on capitol hill, who then went back to the white house to brief the president that apparently his own National Security staffers already have. If thats not enough, we have this hearing on capitol hill about potential russian involvement in the 2016 election. The Senate Intelligence committee are conducting the second of two hearings just today on this, thats expected to get under way at any moment. Heres who is testifying this afternoon. In the earlier session this morning, once the expert witnesses said the key for investigators in all of this is not just following the money, but also following the trail of dead russian bodies. The other part that i think we should be look at is follow the trail of dead russians. There has been more dead russians in the past three months tied to this investigation, who have assets in banks all over the world. They are dropping dead even in western countries. So, guys, intrigue on just about every kind mabe right backing oback breaking out in washington. Over to you. Its an odd occurrence the information was in the white house with nasa security people who gave it to congressmen that felt compelled to go back and brief the very same white house. President trump tweeting this morning the Freedom Caucus will hurt the entire republican agenda if they dont get on the team and fast. We must fight them and the democrats in 2016. How is that being received in washington . Tyler, its rare the conservatives and democrats have something in common in this town. Sarah sanders of the White House Press office would only say the tweet speaks for himself around house Speaker Paul Ryan for his part agrees with the president. I understand the president s frustration. I share frustration. About 90 of our conference is for this bill to repeal and replace obamacare and about 10 are not and thats not enough to pass a bill. Were close. That 10 is the lions share of the Freedom Caucus, about three dozen republicans that last week drew the hardest line. Freedom caucus member, though, have been warning the president about targeting specific lawmakers saying hes going to need their support for tax reform, u. S. Fund debate for the Mexico Border Wall and infrastructure. These are things republicans dont necessarily support outright. They say the president will need to win them over in other ways. Interestingly the Freedom Caucus attempted to reach out to the moderate socalled tuesday group. Reportedly, that group rejected the overture. Its interesting toee the opposition might be fine, but whether they can win over the other people that they distanced themselves from is still unclear. A big question thank you. Well, the techs in the First Quarter have been rewarded. Its the best performing sector. Lets go to San Francisco with that story. Hey, josh. Reporter well, melissa, in the First Quarter the tech sector surged 12 . Strategists say techs outperformance can be traced back to a few reasons, including betterthanexpected earnings results, softening dollar and homes for that cash repatriation holiday. Within the tech sector, one big scene was apple. That stock is up almost 25 . The next catalyst could be q2 earnings results, thats when apple is expected to update the Capital Return Program and they could boost the Buyback Program by another 40 billion. Then the chip names, stayworks, micron, and qorvo, fewer companies, which means less competition and greater pricing hower. Many of the chip names are tied to the iphone, where investors are bullish that a big upgrade cycle is company. Qualcomm down 12 . Bernstein safety says the big overhang here, apple is suing qualcomm, accusing them of mon open liesing the market for wireless chip sets. They point to valuation concerns for tech. Cfras, sam stovall says the sector is trading at 18 times 2017 earnings, in line with the broad gauge. Josh. Thank you. Techs on fire, leading the pack of all the s p sectors. Also helping the big advances by amazon and apple, which were at new highs earlier today t. Question is will tech keep serving . Is this a mustowned sector in the principal, jason weir, guys, good to see you. Tim, im going to start off with you. I imagine you will invest in other things other than technology. Im wondering how you explain performance in technology, particularly when we started off the year with certain biggest functions. A lot of people start off the year thinking that bank stocks would rally, that the bond market, all these assumptions didnt come true. Here we are, technology is the best performing 500 sector, which not many people predicted. Well, i think you have a few things happening, maybe since the trump rally has made people feel better about Capital Expenditures coming out of business. You are finally seeing the Old Tech Companies show Revenue Growth. So along with, you know, the bank stocks that have done so well in 2015 and 2016, we have other names come along for the ride, like microsoft, apple rebounding, oracle is starting to rebound. We have had a broader participation in techs than we have over the past three years. It has been brorksd all eyes on apple. We have them being bullish on apple a number of times. As josh has mentioned, is a part of the rally thanks, to apple and the anticipation for the iphone 8 . Not just in up a him shares the apple ecosystem. Yes, certainly. I think the narrative on wall street is starting to shift from, this is just an iphone company to, hey, maybe there is Something Else going on here, and the Software Business carries high margins. It started to, you know, commented at thieves esis we han talking about in a long time. I think another thing is we talked about as you mentioned, talking about apple several times, the donut hole in apple sales and earnings are three quarters they saw the back of an iphone 6 cycle. Our thought is the stock would gin to work. It has begun to work. There are things that have been tail winds, going forward, we think there is a lot to like. Tim, are the es going to keep up with the ps here . The Way Investors started to anticipate . Thats the hope, timer. You see the ecarried by stock buybacks and huge cash balances on the Balance Sheet of these big companies. Finally, you are starting to see Revenue Growth. You see it out of pretty big companies. So hopefully, the movement has been from licensing revenue to subscription revenue. That can be at a higher margin business. So if we can see Revenue Growth and higher margins from companies that have, some historically depressed multiples, you can see them continue to rally. Jason, you may not be able to answer this. The new Samsung Phone getting great reviews. Do you care . Its always apple versus samsung, has anybody really changed . If samsung produced the greatest phones, would you think again about the stock . Well, i mean, we are always keeping an eye on competition. Its important as an investor. Its nearly impossible to change, lets be clear. If you got a bunch of apps and music, you are probably never switching ever. Right. Thats the core on the software and services side, its really sticky. Again when samsung had pardon the pun with the 7 lighting on fire, everyone said, well, thats great for apple. Was it really great for apple . No, there were itself things fundamentally helping. So the product is exploding, thats probably a bad sign. Literally pants on fire. Yeah, sure, of course. So what were saying is that, when you look at this on a quartertoquarter basis, yeah, there are certainly some at the margin there will be changes. Again, the stickiness of the ecosystem is whats most important. If anything, we see people going away from android to apple. It would be if you were to define any change happening, its in that direction. So again, its not something that has us terribly concerned. Last question for you, if are you an investor and you had to put fresh money to work, would you put it into technology or financials . Well, i think you are seeing a little bit of both. In both sectors, you have some areas where there is probably a valuations that are a little too high, in some areas where valuations are low enough to continue to add money. Id add to the samsung thought, i would not want to be another android manufacturer, i think thats where samsung will continue to gain its share, not really from apple. All right. Gentleman, thank you. Thank you. All right. Much more to do, including as a great First Quarter wraps up for stocks. Were going to bring you a strategy session for the rest of the year. Plus, is President Trump changing his tune on nafta . One very interesting trend in the stockmarket. And after a number of health scares, are customers finally coming back to chipotle. The stocks are providing many today, we are back right after this. The command performance sales event is here. Experience exciting offers on 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. Remember here at ally, nothing stops us from doing right by our customers. Whos with me . Were like a Basketball Team here at ally. If a Basketball Team had over 7. Im in. 7,000 players. Our plays are a little unorthodox. But to beat the big boys, you need smarter ways to save people money. We know what you want from a Financial Company and well stop at. Nothing to make sure you get it. One, two. And we mean nothing. Just two days until we close the book on the First Quarter. We were only oneandahalf. Major averages posting big gains, the dow and s p up 5 t. Fax rallying 10 , will the rally keep up in q2 and what are major head winds ahead . They have strategies, they say they do. Lets bring in the manager of the hen see focus fund, chief investment strategist. Welcome. David, let me dpin with you. We gin with you. Deal or no deal. We have a five or ten Year Investment rising in front of us. We will have lots of little bumps on the way. There is a lot of anticipation in the market. Right, that things are going to get real good . Yes. Certain industry, certain sectors. What i would say is the biggest benefit so far is that 800 pound gorilla, the federal government is slowly coming off the chest of the commitment everyone is breathing a little easier about government regulation, the pace and severity of it. Slowing down, or slowing to a trickle. This is beneficial for the economy and consumer confidence. Now, would you agree, we are certainly seeing the confidence return when you look at measures of small business, consumer confidence. I feel like the market is so fixed on the notion of rolling back regulation, if you simply dont create more regulation, thats deregulation in and of itself. Yeah, i mean, i think he is definitely picking up confidence. I think he has gone handinhand, people are dismissing too much, how much the actual data has gotten better. We use the pmi data, say, its one of the historically strong moves since october. So i think that is a part of what is being reflected in the market. So, david, what do i want to do with my money . Where do i want to put some . I get my tax refund in three weeks. Sure, fair enough. You know, im more encourages about u. S. Equities today than i have been in years. One is that we are likely to push the gdp growth rate slowly from the oneandahalf to 2 range to some number approaching 3 . It has miraculous improvement or what would be a miraculous event for most of america. We think the best course of action is select portfolio of u. S. Growth businesses that are reasonably priced. You mentioned three, american tower, hexel and american woodmark. Sure. Large cap american power, boston days, 50 billion market cap. They build cell towers . They build cell towers in the u. S. And roughly ten countries around the world. Its a washrinse repeat business, theyre growing their afo cash earnings and theyre trading below market mobile. Bill stone, let me turn to you, you like financials and small caps. Unless the large caps fit the line. I link the large cap in the financial space. He hit it on the head, we are going to see we think better Economic Growth rates and we think gdp grows 3. 3 . Also Interest Rates moving up helps the financials. We would argue theyre not expensive. All those argue there. The small caps again good growth out of the u. S. , thats a good thing for small caps, secondarily, you probably get some sort of ill say tax cut at least if not some sort of better tax policy. That benefits the small caps more than it does the large cap. Better Economic Growth, lower taxes. That sounds good for a lot of companies. David, bill stone, thank you. We had a little of everything on street talk, one analyst and another that can rise 25 plus the u. S. Dollar is weaker against the mexican peso, what it could mean for the dollar . Thats next on power launch. Onto the shag carpeting. Power lunch. Roll. Luckily jack recently had geico help him with renters insurance. Because all his belongings went up in flames. Jack got full replacement and now has new pants he ordered from banana republic. Visit geico. Com and see how affordable renters insurance can be. Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade 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. P time to drive into the key wall street calls of the day. We kick it off with goodyear tires, they are downgrading from neutral to a buy. Removing the stock from americas buy list t. Firm says while the demand back drops, it has been near term pricing uncertainty the price target dropped by a buck to 33 a share. Your second stock is actually three. Thats three stock inflation. Conoco resources, range resources, they upgrade all of them. Conoco is selling the canadian assets cenovus. They go 55 on chronicle, up 10 in the same call. They up the stories at a reasonable price. Range resources sounds more attractive. Third stock here, fedex updating the stock to be positive. They were poised for a right wing spread bright. Its like a red bull. What that means is a basic financial upside from earnings, cash flow, greater than the down side risk. Its an economic deterioration. But, anyway, they raised it to 237. The small cap aims iowa, the biotech company, a huge run after collapsing a year ago, suntrust updating it to a buy. They see further upside data driven from the melanoma treatment. In fact, new indication for the melanoma treatment is they did a higher stock price as well, that goes to 30 t. Target is 30 ups with todays move, its about another 23 to 25 upside. Be careful the average target, analysts covered it at 2250, stocks ought 2350. The performance is tricky. Fast money back in eastern times, discussion, it goes like this. Thats good t. Universal news i noise for bad news. Its back to kind of where it was. Ames, iowa. President trump has nauld nafta a disaster. The worst deal ever, but what he is saying about it now may really surprise you next on power lunch. Hi, everybody, both the North Carolina house and senates have approved a compromised bill to overturn the states controversial bathroom law. It now goes to the government for his 60. But lbgtq and civil rights activists denounce the law claiming it denounces one law with another. The russian leader is expected to remain in deal, he was arrested on sunday as he walked to a demonstration in moscow. He was jailed for 15 days on monday for resisting police orders. And twitter has found another way to ease that 140 character limit without raising it. Today, starting today, when users reply to someone, their user name will no longer count towards those 140 characters. Prince charles is taking part in a dance during a visit to romania, he toured a village in bucharest. He was invited to dabs as you c dance as you can see there with local folk dancers. Thank you so much. We are 90 minutes away from the closing bell. Stocks are higher. All three major indices are up a third of a percent t. Oil market closing for the day right now. Lets go to jackie deangelis. Hi, jackie. Good afternoon, another good day for oil prices here. You can see we are up 1. 5 at the close. We will have a close over 50 here. We had the momentum coming into yesterday. Hitting some of those Technical Levels and traders are saying we could potentially move higher from here. There is optimism from opec. There is optimism as we head into the beginning of the summer driving season, april 1st is typically when the refiners get ready for it. The department of Energy Inventory report added optimism as well. So a lot of reasons to push us here. Remember, look at the chart for last year. We see this phenomenon every year, a bounce from june and july, if supply isnt working out, it tends to come back. Watching that chart closely, over 50 is significant. Back to you . Thanks, jackie. After spending a lot of time on the campaign trail bashing nafta, calling it a disaster and worst deal ever, reports today that President Trump may will seeking relatively more modest changes in it. Elon, have you the draft letter that was sent up to capitol hill. Ive read a good humping of it and while one can argue thats sort of incremental change. Not a repeal and replace. Some of the things in it suggest that it is all but a repeal of nafta. Theres a lot in there. Yeah, we did get a cope copy of that draft letter. It does signal the administrations attempt to start renegotiating nafta. They say it demand quote swift action to revise the relationship. It lays out prod principles for a new deal, including leveling the Playing Field on tax treatment. Now, there are no details on what that actually means. But it could be a reference to the border tax that President Trump will call for on the campaign trail. But its unclear if that might also incorporate the separate border adjustment provision that House Republicans have been pushing so far. In addition, the white house wants to change the way that trade dissputes are settled, saying International Panels ignored review and bear decisions have not been corrected. The letter raise it is possibility that tariffs could be reinstituted on mexico, if imports flood in, causing serious injury or threats to the u. S. Industry. The white house also wants to remove barriers to u. S. Investment in other countries, going forward, no mention, however, in the letter of currency manipulation. The laws around that are very restrictive. Im told by two sources that the administration is looking at ways to penalize countries that under value their currencies, i got more on that on cnbc. Com. Elon, thank you very much. So, america, another question. If i ask you which stockmarket has done better for investors this year, the u. S. Or mexico, what would you guess . Well give you all the headlines about trade on a border wall, youd probably say america. No question, youd be wrong. The mexican stockmarket is up 7 yeartodate t. Etf, eww is up 13 . That means the market maybe way over estimated the negative new nafta trade deal will be. Lets bring in Economic Policy contributor. The market doesnt know everything, when we see a mexican stockmarket going up, there seems to be some optimism there and given elons excellent reporting it seems clear maybe this new nafta may not be as onerous as we first thought. The market may have gotten this one right. My reading of this letter is that many of the things that the Trump Administration might try to get were things the Obama Administration got in the pacific trade deal and in many ways that pacific trade deal was sort of an upgrade of nafta when it came to labor agreements. And intel electricual properties owe intellectual properties. The language is very friendly. I mean, this gold sheet, they wanted to achieve in the new deal, it was positive about mexico, great trading partners t. Up with thing that caught my eye and touched on taxes, they want a fair shake, sort of a fair deal, which is either reimpose a bvat on mexican stuf or kill it . The tax flow cash. You dont need another dollar to add to that. I think i would like a lot thats the one area, that and a snapback tariff provision. That and the taxes are the two areas id like a lot more clarity. Those two aside, its just, to me, again, looks like a tpp upgrade. I definitely want to know whats going out to tax. Let me tell you something, if the novarro wing in the white house were extended in this graham i game of thrones the battle over trade, i would expect it will be a lot harsher than we seen in that letter. The tax you referred to, the snapback tariff would apply when, at what rate and two what . Okay. Unclear, unclear, unclear. I think the way they have it phrased there is a seven flood of exports in a particular sector. I dont know what that means. Because elsewhere in this letter they dont talk about a lot of numerical targets. There is a numerical target for trade deficits, the president focused a lot on. If we have any sort of deficit that we are losing. Again, that area you want a lot more clarity. Its something to watch as this process unfolds. Jimmy, i want to get your reaction to comments the ceo made to an event in new york city the fax reform is not achieved, people are going to get quote unquote thrown out in the next election. She also says if the republicanled government cannot achieve tax reform, quote, why have the Republican Party and presumably, what are they in there for . I mean, would you agree there could be a major change in terms of the landscape in washington if this does not get done . Let me shorten up that phrase, why the Republican Party. Its been said the Republican Party cannot cut taxes. There is no reason to have the Republican Party. That been an overstatement. But this has been the core of the gop. Itsnary and dear to paul ryans heard. If they cannot get i think significant tax reform, most likely, its going to be a tax cut rather than i think a revenue neutral tax reform. Then that really goes to the viability of the Republican Party and that certainly i think to those majorities in the house and senate would be in great danger, especially coming on the heel, listen, people do not vote for republicans for ivankas child care plan. Thats not why people are voting republicans. We are milking you. Here you go, Eu Commission president jeanclaude junker has a warning, if trump encourages other countries in europe to do a brexit and leave, then he is going to promote the independence of ohio and why those two states, i dont know, ohio and texas. Whats your take on jeanclaude basically saying we want to break up the u. S. Of a, make it the u. S. Listen, apparently, it may not take a whole lot of nudging for texas and california to leave. In california, they already have something in the works. Of course, texas they already think theyre independent. The 8th flag, 7th flag over texas it is. But thinking throwing barbs . Trying to play the game or do you think it was one of those statements thats meant to be funny but there is a lot of truth behind it . I do think there is something. They are worried about Rising National sentiment and you know the potential elections. I think there is a great concern what the trump people called the davos elite theyve unleashed forces they cant control, leading them to a destination they dont completely understand. Truth in gest. You bet. Jimmy, thanks. All right. Right. Speaking of trade and commerce and all the stuff that we just talked about. Get this, got a huge interview coming up on the closing bell. Commerce secretary will lure ross, he will talk, what else . Trade. Taxes, the trump agenda. Its on closing bell 4 30 p. M. Eastern time. Can you not afford to miss that. Energy the worst performing sector so far this year. Can it go from worst to first in the Second Quarter . And why is this man smiling . Jeff besos has even me billns of reasons to be happy. You will not believe what the guy is now worth i crie stick around. They put jeff besos past warren buffet as the second richest man on the planet. When can he pass bill gates in they wouldnt take the time. Not a lot. Bill gates better watch his back, jeff besos is on his way to becoming the richest man in the world. Amazon ceo to pass warren buffet to become the second richest man in the world t. Surge in the past week added 2 money 5 billion. That makes him 700 million richer than buffet. Heres how they all stack up. Gates has 86 become. Besos is number two with 76 buffet now at 75 and a third. Or tell ga at fourth with 74 billion. These numbers according to bloomberg billionaires index. Get this, the past year alone, bezos added 22 billion which works out to 64 million a day or 42,000 per minute. Hes going to be 50 grand richer after im done talking. Its been a long ride. He made his debut in 1998 with a net worth of 1. 6 billion. By 2013, his net worth was 27 billion. What would it take for bezos to become number one in the world . Amazon stocks would have to increase about 13 to 990 bucks a share for him to top 86 billion. So not too much there. Very possible. Certainly this year. Gates has held the title of the worlds richest man for 18 of the last 23 years, it would be so nice for us wealth reporters to have a new number. How do these all of us. How do these numbers account for the fact that mr. Gates or mr. Buffet. I dont know what jeff bezos give away, those two guys give away a lot. Thats why buffet has been dropping, he gave away 2 billion last year. If he gives away that much this year, he could fall below four or five. That is accounted for. Gates a problem is he gives away a lot. He makes even more with microsoft and cascade, a successful company. Did you see the math i did last week if you didnt i did the math on my facebook page. I said that zuckerberg will probably become the first trillion nair in the world. The market doubles every seven years, hes only 32. Even by 70yearsold, he will be a trillion nair. I think the next horse race, we had buffet, gate, buffet, gate the last 23 years, its been these two guys a duopoly on the billion airs list. I think it will be one and two, those are the guys whose companies have a lot of momentum. They have so much of their Company Shares and theyre doing great. So i think they will be the new gates and buffet. Not bad for an english major. Exactly, thank you, guys. All right, this was a good quarter for most stock sectors, then of the 11 major groups are out. Yes, jeff bezos, that means you. On the opposite end, energy, anyone betting on a recovery of oil and grass stocks have been let down big time. The s p sector is down 6 this year. Should you expect a touch around . The bell tolls for us. Nina, oil is back above 50 today. Do you think well get a rebound in oil and gas stocks . Well, remember that the energy slump that we saw really was about natural gas, not about oil. Because oil was actually doing reasonably well. We had a very High Compliance within opec. So everybody was reasonably positive on oil stocks while natural gas got hit by the double wham my may went into the huge winter stock piles. We had very low demand. Thats what killed the energy sector. However, going into q2, we are probably going to sew a leg down, because we are starting to see rig counts going up in the u. S. So if you look, for example, at the end of february, were up 85 from the lows in 2016 for rig counts in the u. S. So were probably going to sew an uptick in production. That more likely going to drive oil sector down. Would you agree that, a sell, dump, hold, what . I agree, the oil prices, we are seeing a relief ramally, oil is back above 50. Yes, it feels good the bulls are liking it. This newly found downtrend is going to resume. Right now kuwait came out today, expecting the second half cuts to contain you and the market lifted up a little bit. So mostly, there is a lot of reasons why this market will continue lower. As gina mentioned, the rig counts, i expect to see production pick up about 100,000 barrels per day, in each month going into the summer. Thats going to add quite a bit to oil. We are already 400,000 barrels a day ahead of where we were in november. At. 1 barrels right now. Ultimately, by the end of the summer, we will take up about twothirds of the cut that opec implemented, with this, a third of the year less. So i think fundament ally, we will see a lot of oil come back on. Also, there is a lot of technicals in this market. The exxon has a tremendous down channel. We are touching the tip top of that down channel right now today as well as a 200 day moving average, ultimately as well, its just above, its prices come down, we will see the death cross in oil, the excel lead as well as wti. I think the prices are headed to 40 in the next few months. The death crawl. Thank you guy, appreciate it. For more trading nation. Head to our website, trading nation. Cnbc. Com. Chipotle on the comeback trail. The scott bouncing back. Now the time to stuff a burrito in your portfolio, mcdonalds quarter pounders taste better. How it is fighting back against the competition. Food talk next. At fidelity, trades are now just 4. 95. 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. And at 4. 95, you can trade with a clear advantage. At where instead of payinging a befor middlemen,em. We work directly with family farms to deliver Higher Quality ingredients for less than you pay at the store. Get 30 off at blueapron. Com cook welcome back, mcdonalds uses fresh, not frozen beef in its quarter pounders starting sometime next year. It doesnt expect the price increase as a result of the move. Shares up more than 6 this year. Other chains like wendys have been clsh. Just the last week, so whats driving this rebound . Lets bring in rj, morning stars global director of consumer equities and senior restaurant analyst set a neutral rating on the stock. Great to see you. We saw a huge move in the past week alone highlighting, and that is traced back to a competitor seeing momentum at the end of the q1 from the same store sales traffic. Are you seeing that same momentum . Yeah. I think we are. We look at the past couple months, january was the nice month for the company. They talked up comps 24 , 2 had 4. 6 , giving nice acceleration on a twoyear basis. February was baek for hans, the way the refunds checked. But march bounced back solidly. Momentum is continuing. Thats what the market is paying for here, recoverys on track and numbers improving. What costs . You highlight the fact you are concerned about marketing promotional costs. What promotions do they have in tax . What do you see in growth margins on a year on year or quarter on quarter basis . That is where it gets difficult. They look like a normal restaurant company, dependent on p promotional marketing activity, implementing food safety practices, and they talked about the Guest Experience and getting throughputs through at pique hours. Thats been lost throughout the turnover at the crew level. Factor in all expenses, plus on top of that, Additional Technology needs to satisfy mobile ordering, thats a damp picture on potential margins this year and next year. I think if you look at the same, you got to be mindful that even though sales recovering, youre not going to be used to the same kind of mid to high 20 restaurant mar joins, high teen operating margins. Probably more like a mid20s restaurant margin, and youll have mid teen operating story going forward. Wasnt it not too long ago we heard from the cfo at an icr conference maybe a couple quarters ago saying he was not certain that the customers who left after the food skaers would come back. Do you think increasingly those customers will come back . I mean, whats sort of the missing element in your story when it comes to the rating opposed to it being a buy . Thats a big part of it. They will struggle to bring back that audience they lost. Particularly that millennium audience, an Influential Group and meaningful driver of sales. That group found theres a number of options in the fast states, a lot of Healthy Options in this market, privately Held Companies in Market Making their concept resinate. I think that group will struggle to come back. The core audience that 1830 male demographics come back, but the others are lost and will take promotional activity to bring them back in the fold. You nailed it. I know in my family, my wife wont go there. Why go there . How do you market out of that . The addage is heavy promotions, next step is a loyalty program, and theyll have future it rations of that. We have not heard the last of them from a loyalty standpoint. You know thats costly. Very. Its going to weigh on margins. You cant assume the same margins you had for the company, and i think thats something thats got to be baked in for the company as well. This is not the same coming out of the recovery. Its not dead, but i think you have to reset expectations about this. Thank you. Absolutely. Were not done yet, theres a segment, check please, final thoughts of the show is next. He . Umm. 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. 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. Say hello to at ts best, unlimited data deal ever. Its a total gamechanger. So now the whole family can binge,. Surf, shop, navigate, listen, game, stream and more. All without the hassle of worrying about overages. Or running out of data. Its less than 40 per line per month with 4 lines. And remember, its at ts best, unlimited data deal ever. So get at t, get unlimited and get everyone more for less. 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. Now a news alert. An interesting moment in the Senate Intelligence committee hearing. A few seconds ago, rubio told the committee that during the president ial campaign, Russian Hackers aparentally tried to get into an account of his former Campaign Staffers and said dramatically a 1045 yesterday morning there was another attempt by some russian hacker to get into the former Campaign Staffers account. Revolution there about ongoing efforts by Russian Hackers to access u. S. Political information. We began this hour, the two hours ago, with the interview that jeff did with mischief, what do you believe . Fascinating moment it was. He was quoting reagan, george h. W. Bush, saying, watch my lips, no, was the answer, but putin is probably student of history to know just how much that promise ended up being worth from george h. W. Bush. All right. Thank you very much. That and other developments over the past couchple hours in the hacking matters. Thank you for watching power lunch. It starts right now. Hi, everybody, welcome to closing bell. Tax reform has been front and center today. President trump met earlier at the white house with top economic advisers, and one of the ideas reportedly discussed is a tax reform plan that was put on the table in 2014 by then chairman of the house ways and Means Committee dave camp. Mr. Camp is joining us live in an exclusive interview coming up later here