Transcripts For CNBC Power Lunch 20170407

Lunch. Happy friday. Im melissa lee. As brian mentioned markets seemed to be shrugging off the weak jobs report and Geopolitical Uncertainty out there. Three major averages Holding Steady and all three in the green. We are watching oil rise to onemonth highs. Gold fivemonth highs following the u. S. Air strikes on syria. Movers were watching, dominos is down 4 , on pace for its worst day of the year. Dpz could see below consensus sales growth. The Cloud Company upgraded to an overweight from a neutral over jpmorgan. Tyler . Thank you very much, melissa. Im tyler mathisen. Welcome. Here is what else is happening on this busy news day. Republicanled senate today confirms neil gorsuch as the next Supreme Court justice. The move restores a conservative majority on the Nations Court and fills out the bench that had been a person short since the death of antonin scalia. At least three People Killed in central stock holm when a truck crashed into a store. Ent president xi jinping walking on the grounds of maralago. Certainly the most important foreign visitor thus far in President Trumps presidency and also coming at the same time that we saw syrian air strikes that surprised the world last night amidst this visit. Were going to wait and see what all the implications are of what happened last night, how it might affect xis thinking and his measure of donald trump he is pegs ly in the context of north korea. We have Kayla Tausche standing by live in palm beach for day two of President Trumps meeting with chinas xi jinping. Steve liesman with an update on the economy because of that bummer jobs report. Reporter thats an official economic term f. Maybe not a surprise if you think about the idea its right in line with weak economic quar. We got another sign of that today. Q1 gdp tracking 1. 4 . Its an estimate of seven. Mitsubishi at the high end. Goldman sacks, 1. 4 . And theres the atlanta fed, all the way down at 0. 6 growth for the First Quarter. And heres the data thats animating the forecast there. Just 98,000 against a forecast of 75,000. Average Hourly Earnings a modest 0. 2 gain. How does it fall to a tenyear low . Job growth is weak. The answer two different surveys that usually track together but sometimes they become disjointed. The survey of Companies Says 98,000 found jobs and a survey says 472,000 found jobs. The number of unemployed declined by 326,000. So a lot more commentary over there leading jeffires to say the data suggests the labor market is in far better shape than implied by the Establishment Survey and gives us a more accurate look. There were big job losses in retail and many economists think that foul march weather could have hurt places like construction. Some pretty good agreement, though, that a 4. 5 Unemployment Rate keeps the fed on track for a 25point basis hike. Bill dudley in a speech moments ago taking questions from the audience says he expects the Balance Sheet to decline late this year or early next year. He sees a gradual winddown. Remember there was a question as to whether or not its going to be gradual. He sees it as gradual. He sees something we talked about yesterday, a little pause a little pause, he said, in rate hikes when they begin to reduce that Balance Sheet. Steve, thank you very much. Well see you in a bit. Your big money question on this friday. Why arent stocks reacting more neglect it tifl to that fairly weak that bummer, that disappointing jobs number and also the air strikes in syria. Both good questions. Lets get answers. Chief Market Strategist with boston private, rob lutz, president and ceo with cabot wealth management. When the strikes happened, you immediately go and look at the futures. Were holding up pretty well despite the jobs number, despite the attacks in syria. Why . You know, i think its because of how trump handled the situation. First of all they sent sort of a headsup with tillerson and his comments yesterday. And then they reached out to the various allies and they gave them a headsup. And they even reached out to the russians and told them they thought something was going to be happening. I think the muted response by russia sort of gave the world and the markets a little bit of confidence that this may not be as bad as what was initially seen and how the markets or the futures were initially handling it. I think thats pretty much the main reason why the market is not overreacting to the news. What about the Underlying Health of the economy, rob . I get the jobs report was weaker than expected. Retail, though, really was the anchor trying to drag everything down. Do you think that what happened overnight is going to affect the things that should be moving stock prices, earnings, valuations, Economic Growth . So, yeah, brian. I think today you have to look at the markets and say there is a really Firm Foundation under this market. You still have relatively low Interest Rates, the monetary conditions are positive. Earnings are really growing at 9 this it last quarter, maybe 14 to 16 for the full year. You also have a psychology today and a pretty positive environment. I think investors are not really participating a great deal in this market, and theyre very skeptical. So were climbing that wall of worry. The only negative to todays valuation, thats in the sort of high category, so i put three of the four categories i look at very positive today, and i think markets are going higher. A true testament to a bull market is when bad news comes out and prices go to new highs and shrug off that data. And thats exactly what we saw this week. We had bombs drop and then we had a jobs report that was really weak and the market doesnt care. And the reason for that is we see a Strong Economy six to eight months down the road and investors like whats happening in washington. And that puts together a pretty good situation for equities today. Could it just could there be a it technical answer to this question, bob . That volatility the volatility index at current levels up about 2. 5 on the day, so still pretty low and certainly not even at the levels we saw at the beginning of april. That allows investors to hedge their positions, correct, for pretty cheap and remain long in this market despite all these wore jri worries. To that point i have seen some rotation out of some of the more early cyclicals, the ones that will be benefiting from the trump agenda. But they havent been completely getting out of this trump agenda trade. I think there is concern about the Federal Reserve and how they will unwind the Balance Sheet but thats these concerns about trump and the fed i think are sort of floating one and two. I think valuations are like three on the list and they can trade off between three and four. I think what youre probably going to see happening is the market really starting to Pay Attention to the First Quarter earnings season. It can take over the headlines and come in better than expected. Then we start to move forward and see maybe a rotation back into the early cyclicals. Got it, bob and rob, thank you. Chinese president xi jinpi jinpings facetoface meeting is wrapping up at maralago. The strikes in syria putting a different spin on the get together. Hi, kayla. Reporter hi, tyler. The leaders appeared cordial, congenial, polite when they were walking the grounds of maralago, Donald Trumps golf resort. President trump was pointing out appeared amused. This follows two dozen of their top lieutenants meeting in a bilateral meeting where President Trump for his part touted the progress of the relationship. I think we have made tremendous progress in our relationship with china. Meeting with their counterparts from china and truly progress has been made. As for the chinese delegation the comments by president xi were not translated by the press for the white house. Two rough translations who heard it, the president touted the warm welcome in palm beach, talk about the lines of communication and the importance of the u. S. china relationship on the global scale. There was no mention from either the u. S. Or china about the air strikes. Its unclear how china has been dealing with that development here on the ground and behindthescenes. We do have a little bit we can clean from an oped in a newspaper in china called the global times link ed to the communist Chinese Party and they write this overnight. Trumps decision to attack the Assad Government is a show of force from the u. S. President. He wants to prove that he dares to do what obama dared not. He wants to prove to the world he is no businessman president and he will use military force without hesitation. It believes the attack was made in haste given trumps prior position against attacking syria. They still support a u. S. Approach to syria but we will see what developments we have if there are briefings here in palm beach throughout the afternoon. Finally i want to show you a picture the press secretary tweeted of the room last night when the president was on the phone. And people have been trying to read the tea leaves. Theyre pointing out that gary cohn, the head of the National Economic council, thats not a role you would typically have in that room carrying out a military operations. Let the parlor games begin. Well let you know if we have any more news. Lets bring in it dan who served as a trade adviser to the Trump Campaign and the former sceo of newcorp. Great to have you with us. My pleasure. The eu slapped chinese steel imports with tariffs. Reported very angrily and then theres this New York Times article that when xi leaves the president is expected to sign an executive order essentially doing the same, antidumping tariffs. So, dan, whats your take on what that could do to the overall relationship . Is it important to maintain this positive momentum that seems to be coming out of the meeting, the outstanding relationship with china or sign once xi leaves . Its great everybody is saying nice things about the twoday meeting and everything was outstanding but here is the hard reality of it. The problems that exist between our two countries still remain and theyre serious whether it be International Property theft or trade cheat iing and dumpingf products, steel, aluminum and others. Its real and good they got together. We have a long way to go. And i think you wont read anything into it right now. Im pretty sure what was discussed was north korea and the strikes in syria, trade, im sure, came up. So trade takes a back receipt for now and how does that impact the momentum for the trade side of his agenda . I dont think it takes a back seat. I think its sill up there as a main part of his agenda. He made that promise to the American People and i believe the president will follow through on it. Certainly at this point in time in this twoday meeting while im sure trade came up and im sure there was some discussion of future opportunities to get together and resolve some of these issues it would be foolish to think they didnt focus on north korea and the president s action. Im sure the significance was not lost on the chinese or north koreans. Okay, dan, thank you. Appreciate it. Lets get to Jackie Deangelis for a news alert. Good afternoon, melissa. We are seeing oil prices come off a couple pennies after baker hughes came out with its weekly report. We went up ten oil rigs last week to 672. Thats up more than 300. This is the 12th straight week were seeing it increase here that would be bearish for oil prices. Not really having an impact today. That probably will continue here but these numbers are something to keep an eye on when you think about the supply and demand ballads. Geo politics. Thanks, jackie. Betting on the banks. The sector had a nice rally but is it about to get derailed . The banks havent even done as well as some had hoped by now. Should you get in or stay away . Thats still ahead. Air line jobs taking off. What kind of jobs and how much do they pay . We have where the jobs are segment. First, though, the latest on the u. S. Air strikes in syria. Where do we go from here . Welcome to holiday inn thank you wait, i have something for you making every stay a special stay. Holiday inn, smiles ahead. Whether for big meetings or little getaways, member always save more at holidayinn. Com welcome back to power lunch. Im Julia Boorstin with an update on twitter. Twitter has withdrawn its lawsuit filed yesterday over an antitrump account saying that the u. S. Has withdrawn its request for Background Information about an anonymous account. Yesterday twitter sued. Weve just learned they have withdrawn their filing because that request for information about that account has been withdrawn. Back over to you. Julia, thank you very much. Lets go to dom chu. Reporter on the heels of a bloomberg report saying a bid could be made by fresenius. Weve reached out to see if they have a comment. We have not heard back yet but we will monitor those akorn shares. Back over to you. Thanks very much, dom. A live picture of the u. N. Security Council Meeting going on. Nikki haley speaking. This meeting was called as a result of the u. S. Air strikes in syria. The Russian Ambassador to the up Unsecurity Council spoke earlier condemning what happened. He said these were illegitimate actions taken by the u. S. More responses to last nights missile attack are rolling in from all over the world. Canada, turkey, jordan, germany, france, saudi arabia, japan among others issuing statements of support of the move by president donald trump. European union says it understands the aim of those u. S. Missile strikes last night in syria, sees them as an effort to deter any more Chemical Attacks there. They also believe a political solution is the only way to end the war. In syria rebels fighting to oust the countrys leader Bashar Al Assad applauded this missile attack were showing on the air base saying, however, it cant be just a oneoff, that its not enough to stop government warplanes from hitting rebelheld areas. The attacks struck this airfield because the u. S. Believes it was used to launch a chemical weapons attack by the Syrian Government. The Syrian Government denies the attack. After the meeting concludes this afternoon there will likely be another meeting with the United States, the United Kingdom and france by bringing in russia and china they believe they might have enough power to resolve this conflict. Lets bring in richard murphy, former u. S. Ambassador to syria. Good to have you here. Thank you. President obama wanted to bomb the Syrian Government back in 2013. The whole world saw something very similar. Innocent civilians suffering dramatically, dying because of a chemical weapons attack people thought was conducted by the Syrian Government. The u. S. Public wasnt ready for it. Congress wasnt ready. The world wasnt ready. The world appears ready now. At least thats what it seems to me. Do you agree and why have things changed . I think the amount of time that has passed since the earlier effort to check out support for military action. Four years have passed and the ceasefires simply are not working. So why the president moved is, i believe, because the photographs, the coverage of the deaths of the children from chemical weapons motivated him to authorize what i think is a clearly limited operation. But it hit him on a human scale, and he felt he had to do something. Does this change anything really . I dont think it does change the basic policies of the United States towards the Syrian Crisis. It is an incredibly messy, complicated affair. As we can see today in the north of korea, the different factions forming, unforming themselves, getting together with apparent enemies and critics. Its totally disorganized. I dont think the president wants to get into the Syrian Crisis in a major way. But he was shocked by the action on the use of chemical weapons and there was a message also to moscow. You know, you have an influence over syria. Certainly. Why did this happen . It seems it was a message delivered and a punishment delivered for the attacks, but i take it you do not think this advances what apparently now is the american position and that is that assad must go. I dont think the United States is trying to get assad out by this attack. There seems to be it an assumption in the long run someone who has overseen such destruction in his country will not be able to rule. But were not pressing for that to get him out right now. And i think that putins reaction reflects some doubt on his part about american intentions. Hes very sensitive to american actions which appear aimed at regime change be it in syria or elsewhere. Ambassador murphy, thank you very much. Appreciate it. Coming up a contrarian call in retail. One analyst bets this retailer will regain its dominance in brick and mortar. We will name the name ahead. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. 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. Carnival raised dividends to 40 cents a share from a prior 35 cents a share. The companys board had proven 1 billion buyback. Shares were flat in todays session. Some investors with that dividend buyback, brian. Dom, thank you very much. Still ahead, how the jobs number and bank stocks may be linked. It is a big money story. Plus, boarding now. Airline jobs. Where, how much, and what skills you need to get a job in the skies. That story next. 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. 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. 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. Im Courtney Reagan and here is your cnbc update. Swedish police say they cant say how many people were killed or injured when a truck ran into a crowd in downtown stockholm. They said they havent found the driver. The swedish Prime Minister called it an act of terrorism. Senior u. S. Officials say the pentagon is looking into whether russia participated in the Syrian Chemical Weapons attack. This as the Russian Deputy ambassador to the United Nations slammed the u. S. For its attack on a syrian air base. The aggression by the u. S. Has only facilitated the strengthening terrorism. The attack came against Syrian Armed Forces infrastructure and its air force. That is against those who over all these years have been combatting terrorism. The Senate Confirmed neil gorsuch to become the newest justice on the Supreme Court. Three moderate democrats joined the 51 Senate Republicans to vote in favor of gorsuch who fills the seat vacated by the late justice antonin scalia. Thats your cnbc news update this hour. Lots going on. Tyler, back over to you. Thanks very much, courtney. The economy and geo politics front and center but not really moving the markets much at all. Only 98,000 jobs added in march. Thats the few nest a year with big losses in retail, by the way. Meantime President Trump, of course, meeting with xi jinping hours after launching air strikes on syria. Can the president pursue his domestic agenda and deal with conflicts in syria and north korea . The ceo of the National Urban league, the former mayor of new orleans, former special assist ant to president george w. Bush will join us. Lets start with jobs, big losses in retail. This could be a real depressant, couldnt it, for jobs reports going into the future. Or it could be that the report is an outlier because in the month of march we had a heavy snowstorm in much of the country and theres a good possibility that these numbers could get, if you will, adjusted upward. Think back, we had two months in 2016, i believe, that were outliers. The question is, is this the beginning of a trend of the slowing of the economy, or is it an outlier . Im going to say i think its an outlier because Consumer Spending and some other things are strong. Its hard, isnt it, ron christie, to square this number. I dont mean to wonk off with the idea were going to bear down on all kinds of different measures but earlier this week the payroll numbers, the private payroll numbers were very strong. Indeed. Good afternoon, tyler. I think youre right. Im going to look at this the same way. This is an outlier, an indication of bad days ahead or is this an outlier of good days to come . I think when we look at the last several months we have seen sustained jobs growth. The thing i like about look iin at this report in more depth, the number has gone down from 9. 2 down, of course, to just under 8 meaning in the upper 8s. There are things that are very positive here and more importantly the Unemployment Rate has dropped a couple of points, tenths of a point as well. There are many positive aspects we can take out of this. A mixed back. Im an optimist. I love both of your optimism. Lets say this number is an outlier. Who cares . We know retail is in trouble. Louisiana and a lot the of other states you have half empty strip malls, theyre blighting on the neighborhood, bring down property values. If you were still mayor of new orleans, do you need to take some action to protect the traditional brick and mortar retailer, no jobs, empty buildings, bad combination . And i want an amazon warehouse. I mean, i think can you have both . You can have both. Lets remember moodys and i just had a conversation with a moodys analyst charles owe shea. He will be on the show in half an hour. He said 90 of all sales remain in traditional brick and mortar stores. The math says Something Else. So youve got an adjustment. Theres no doubt. Doesnt it feel to you like we saw manufacturing suffer for 20 years and those good jobs go away, oil suffers, those were good jobs. Retail jobs were never great jobs, right . But they were jobs. They were entry level jobs. Now we see that getting decimated. It feels like the middle and lower income individuals in the United States keep getting slapped around here. They do but, you know, michelle, the important thing about the adjustment, which is being driven by the technical revolution is that it creates a different type of jobs, transportation, logistics jobs, warehouse jobs if i were leading a city i would be looking to the future, how to capture the jobs that will emerge in the next 10 to 15 years. Ron, take us inside the white house where you have worked before to address the question of all of the Different Things the president and his staff have to confront simultaneously, the visit of president xi, north korea, syria, trade issues around the globe, and his domestic agenda. Can a white house have the bandwidth to get everything done as trains move on separate tracks all at once . Im confident that he does, ty. Its very complicated. The white house never sleeps. The 18 hours at the white house complex theyre always awake and particularly in moments like this i can certainly remember back to being there on 9 11, the National Security Council Staff is there. Theyre in the situation room monitoring events but also as a domestic policy counsel adviser, i was to advance the president s agenda, to work with the legislative affairs team, to coordinate with capitol hill with the president s authorities and outline those priorities so, yes, i think he has the bandwidth and the team in place. But its very, very difficult it particularly with the president meeting with the foreign head of state, getting him prepared for that, getting the state department, getting the department of defense, all those officials cooordinated while addressing the domestic issues of the nation. Does that mean Corporate Tax reform does not get derailed and is not distracted by big Foreign Policy issues . Michelle, i have to tell you, i spoke to a leading member of the tuesday group, an Important Group of moderates about 50 and they feel there is a certain amount of unity on the tax bill, that they do believe after the debacle with Health Care Reform that republicans can form together and coalesce around a package that can get senate approval, that would give republicans and the president a muchneeded victory. Let me tell you what would be best for the country, for the domestic agenda to focus on infrastructure. I think the opportunity to build the biggest coalition of republicans and democrats exists if you talk about infrastructure which is to really expand the economy. I see tax reform but what part . Bridges in louisiana . No. Or is it new train stations or new plane stations or what is it . The money cant go everywhere. All of the above. And if its done intelligently and if its done fairly, that would be a down payment on the future of the american economy. I think tax reform is a much more difficult thing. I think its very difficult to suggest that you can have Corporate Tax reform without some relief for infrastructure. Undoubtedly. The reason i asked the question, what the markets want most is Corporate Tax reform. Infrastructure would be nice, but tax reform. They have been expecting it since day one, right. And they still expect it to happen. And its far more complex now, right . Sure. The president has a lot of things on his plate and, let me just say this, can the president can the white house do it . This is why we elect the president to walk, chew gum, bounce a ball, play chess and compose classical music. And hes being test ed right now at those for sure. Thats the job. This is one of those days. It sure is. Weeks. It all has to be juggled. Thank you. Always a pleasure. Likewise. The weaker than expected headline number in the jobs report is getting all the attention but the report was not that bad. Those big jobs losses skewing the overall number down. So if you were looking for a new job, maybe a new career, why not look to the airlines . They are hiring in a big way. Kate rogers is live in dallas with more. Kate . Reporter hey, brian, Southwest Airlines is set to hire some 4,000 workers for ground operations positions as the Global Airline industry continues to grow. Now the job can be fiphysical a demanding, as you can see brian back here behind me, ramp agents say the perks make it well worth it. With 20 years on the job at southwest as a ramp agent, shawn parker says hes hoping for 20 more. Im responsible for making sure the passengers luggage gets transported to the proper destinations. Im responsible for making sure the aircraft gets turned on time and responsible for the safety of me and the fellow crew around me. Reporter at southwest long hen toured ramp agents can make around 30 an hour with the opportunity for overtime. The company employs some 19,000 ground operations workers and hired only about 2. 5 out of more than 116,000 applicants for ground ops positions for 2016. We are picky. We hire for attitude and train for skill. Reporter the perks for ramp agents like sean parker include free travel for themselves and their families, 401 k matches and profit sharing. The job is very physical. Parker spends the majority of his Time Outdoors rain or shine. You put 35degree weather with rain and heavy loads and it can get chaotic. Reporter sean says he has the freedom to create his own schedule. In fact, for some of his tenure he worked as a Police Officer while also working as a ramp agent for southwest and, get this, he and a few others made a band called the blue 22s and they used to fly to l. A. For free on the weekends to perform gigs. Thats fun. Kate, very quickly, we have to go but two quick questions. Do they still hug in the hallways of southwest . They used to do that. If youve not been to the lost and found building, go there. It will blow your mind. Literally people have prosthetic limbs that they had left on planes, a giant sombrero, even a kitchen sink. Its amazing. Amazing reporter i was just going to say, brian, nobody has hugged me yet but the day is still early. Ill let you know next week. How do you leave a leg on the plane . Might be carrying it for somebody else. That was quick. Just transporting the leg. This is so harvard. Maybe somebody else was carrying it on the plane. Dont make fun. A big blow to the banks. Todays jobs miss sending financials lower. Well explain the connection next on power lunch. 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 welcome back. Treasury yields falling. Rick santelli is live at the cme with more. People expecting less growth, rick. Reporter ill tell you what, i didnt expect those yields would stay down and every once in a while even a broken clock is right twice a day. Its changed dramatically. I really do think the adults in the room in many cases are the markets. Look at interday of ten. Up two on the day. To the oneweek chart only down three now on the week. If you look at woutwo, look at starting in march. Why . Because its very significant. The high was 2. 63. The low closed. Then on a closing basis that continues to be the bogey to pay most attention to. A lot of traders down here in the smartest technicians i know say the euro could be toast and ill show you why. Lets show you that chart from early in december and what you find is theres a low in early january and late february. Imagine connecting this it red line to those lows. Were now through it. Thats important. Sully, back to you. Rick, thank you very much. Well, those falling yields could have major implications for banks and banks stock. Dom chu here to tell us why. Brian, well dove tail off what Rick Santelli was talking about with the red line connecting certain areas and channels of support. If you take a look at this chart you may recall from yesterday we showed this chart to you yesterday saying financials are a point of concern. They are a laggard in todays trade on the heels of whats happening in syria and with the jobs number. With that support now acting as resistance for the xlf, the big etf that tracks them, take a look at some of these. The two tenyear spread, this is the spread between tenyear yields and twoyear yields, some view it as a proxy for bank profitability. The wider the spread is, the more banks make in terms of profits. The narrower it becomes, the worse off they are. You can see here weve been trending lower for some time so bank Profit Margins could be squeezed because of this Interest Rate environment. As a result in the last month when banks really started roll overs, three have stood out in particular representing three different parts of financial services. Number one, zion bank you can see here a down trend off by about 8 over the past month. Mosh gan stanley showing some signs of weakness off by about 9 . Andcal tal one shares off about 9. 5 , 10 . Three different parts of the market all tied to the Interest Rate market. Financials have taken a turn for the worse. Is this the beginning of a bigger drop or can the bank stocks turn around . Lets bring in these two gentlemen. I will kick it off with you, jeffrey. Wheredom chu left off, with the yield curve. Mid december or maybe even before that. But on the other side we have the positive of bringing back glass steagall. Is that the biggest thing for the banks in terms of catalyst . I wouldnt get carried away. That would be a major undertaking i think would have global river indications. There could be regulatory changes but i wouldnt get too excited. It is better for the banks and is steep er than a year ago. Were still in better territory. The question is, whats going to happen Going Forward. I think you have to look at the underlying fundamental environment. Were still looking at what may be better with gdp growth. We have some signs of inflation we hadnt seen before. There are signs of regulatory pullback. Were seeing Investment Banking pick up in europe. I think the mid to longer term trend is still good for banks. Im as hard pressed to tell you what the yield curve will do tomorrow as anyone. And you have, ron, a fed that has been explicit about saying theyre going to push Interest Rates up either by pushing Interest Rates up or taking bonds out of the market. I think you can be explicit about that as long as the data supports it. Weve seen the atlanta fed downgraded its First Quarter gdp estimates, thats happened five years in a row. Auto sales have slowed and the subsequent revisions to prior months were weaker than expected. You do have to, i think, for a moment pause and see whether or not the economy is going to maintain accelerating pace, whether the yield curve steepens. And, melissa, with respect to glass steagall, decided winners and losers if that were to return. You would have to look at Goldman Sachs as winners. Gary cohn being the one ta talking about this, Steve Mnuchin also talking about this. Why is it a winner for Goldman Sachs . All the constraints they have, Goldman Sachs and Morgan Stanley were largely investment, nonretail banking establishments. They did that for cover and safety. Because everybody had to be in the pool together. Now if you take them out and they get back into proprietary trading, back into businesses that theyre currently forbidden from participating in get rid of their banking to the extent they have any retail banking. And associated with this. They got into Retail Lending because theyre under the Bank Holding Company act and its a way to draw capital into the bank. If theyre freed from that it goes back to the old days, the bigger banks still operate under the constraints of regular banks and then also maybe face a slowing economy, fewer loans, and a flatter yield curve which is lower net interest margin. Jeff, why shouldnt we get too excited about going back to the good old days Goldman Sachs could trade its own book . It wasnt their idea to become a holding company. They were company, they were forced to do it, they would probably rather not be a Bank Holding Company but they are one. With their Balance Sheet, they are a nonbank globally significant financial institution. They are con strained anyways . Thats not certain, to the extent that dodd frank is going to be rolled back and Consumer Financial Protection Bureau may be defunded and there are a lot of different ways they have complied with the agreements over time. U. S. Banks are far better capitalized than overseas banks. I think you have to take some of this stuff into account. I would say banks are probably at risk in the short run for further correction that was my question. Do you buy these . You do have to consider it but ultimately they have to assess the probability of things happening and if you want to take the bet they are going to repeal dodd frank ill be on the other side of that trade all day long. Money will change hands here . You can make your own side bets. Sounds good to me. Goldman will take the bet. Theyll do the market for you. All righty, thank you very much. The four big wall street calls you need to know about today, including one analysts bet this this retailer will regain dominance in brook and mortar. Your daily dose of street talk is next. To fix the elevator. To fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. Usaa gives me the 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. You didnt know we had over 26,000 local activities listed on our app. Or that you could book them right from your phone. A few weeks ago, you still didnt know if you were gonna go. Now the only thing you dont know, is why it took you so long to come here. Expedia. Everything in one place, so you can travel the world better. Time for street talk we kick it off withally bab ba. Raymond james continues strong margin growth and so far First Quarter trends look strong with Online Consumer sales in january and february up 25. 5 versus last year. Stocks done well, 15 in 90 days. Stock number two, up and coming retailer known as walmart. I picture big things for them. They take it to an outperform and jack the price target from 82 to 73 and increase focus on food and e commerce and say the Customer Experience is Getting Better and all of that should be a winning formula for walmart. About 10 bucks of upside. Third stock, con stelation brands, sticking with the neutral rating and corona and stel la are the winners and they dont have many levers to pull, other brands to take the place. I dont know about you, but ive been doing my best to help out all of the beverage companies. Theres a lot of beverages. As my two and a half year old boy says, all dem. Jp morgan chase outdefending the name they upgraded from overweight to neutral. The crowd Communications Company has a number of unappreciated aspects and one big thing, a better valuation and stock tumble, it was a 69 stock and 28 now and analysts like the fact they are using it to power new products and people dont realize when you use an uber and they give you the driver and contact its not the real name or number. Thats the service, provides the backing stuff there. Jp morgans target stays at 26, 8 bucks, 25 of upside. Can we agree to retire the term Cloud Computing . Everything is Cloud Computing. There is no other type of computing. What do you have a 5 1 4 inch floppy drive . Job losses and retail has become a big drag on the economy. Has retail become the new oil . Thats ahead in the second hour of power lunch. Why pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. 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. 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. Deartheres no other way to say this. Its over. Ive found a permanent escape from monotony. Together, we are perfectly balanced, our senses awake, our hearts racing as one. I know this is sudden, but they say if you love something. Set it free. See you around, giulia can i get some help. Watch his head. Im so happy. Whatever they went through, they went through together. Welcome guys. Life well planned. See what a Raymond James Financial Advisor can do for you. Welcome to the second hour of power lunch. Two hours until the closing bell and heres what were watch being at this hour. Huge miss on the employment number, retail a bit part of the wif there. Is retail the new oil . Speaking of oil, its higher on the back of the u. S. Air strikes in syria, so is gold. Should you be in these trades right now . Earnings season is kicking off next week. Unique insight on how the season is shaping up. Lets check out the movers at this hour, google hoping to calm the nerves of worried advertisers saying only channels with 10,000 views will qualify to get advertisements and introducing fact check for google searches to combat fake news. As michelle mentioned, gold moving a little higher today, stocks off the best levels of the day on that coming up more on that coming up in trading nation. Fmc keeps its run going, the best performing stock on the s p 500 over the past month. It is up 27 . Store closings and job losses, retail have become a big drag on the economy and Courtney Reagan has more on this. What a day. As more purchases shift online and other categories all together, retailers close stores and that means jobs are lost. Some retail workers will good reasorped but certainly not always as jobs numbers reveal today. In march general Merchandise Stores lost 32,000 jobs, 13,000 lost at Department Stores during the month. Employees lost jobs, 6,000 of them at clothing and accessory stores and health and personal care retailers said another 4,000 jobs. Credit suisse tallies closures have been announced already this year, more than double at the same time last year. And more strikingly, when you extrapolate that number, youll see here that nearly 8700 stores could be closed this year. Thats 2500 more than we saw in 2008. We all remember what happened that year. Already this year ten retailers or brands have filed for chapter 11 bankruptcy already more than last year and there are several more expected to be coming soon. Theyve got billions in debt payments that are due. In fairness, not all of these retailers are brands are shuttersing stores and shutting jobs completely yet. Bcbc is restructuring and looking for a new buyer hoping to avoid those dire scenarios, there were jobs added in some areas of retail Like Electronics and Appliance Stores and building and Garden Supply stores. Spring is their big season. They have added 25,000 jobs and warehouse jobs up 50,000, year over year. Those are where the e commerce jobs are and amazon has been adding recently. Re accelerating dramatically the last few months, a moodys report shows the number of stressed retailers with retail replacing oil and gas is the most troubled in america. 20 retailers now at or nearing junk territory. Charlie oshea, the lead analyst who did that report and steven, the founder and former chairman and ceo of sachs. If i buy one and it doesnt go well, okay, if i buy 50 and then leveraged to the hit and lose my shirt, im an idiot. Is that what the retailers have done . Expanded on the back of debt so we dont have a retail problem but a Balance Sheet problem . We do have a Balance Sheet problem thats being exacerbated by the retail problem. You have retailers out there that leveraged up and buyout financing and private equity deals and equity extractions through dividends to the private equity owners at a time when retailers need as much as Financial Flexibility as they can get to transition online. If you cant make that online transition, youre going to end up where were seeing a lot of retailers today. With competitive positions that are weakening and acute liquidity problems and it ends up being a perfect storm. 19 names in your portfolio, 3. 7 billion in debt, 30 of that debt due by the end of 2018. Yes. How many more bankruptcies will we see . Wow, well, we added a 20th name to that 19 since i was here last, neiman marcus. Out of the 20, youre going to see we had a bankruptcy earlier this week, payless filed chapter 11. Youll see some coming off that list. Its hard to imagine which ones but any one of our names in caa territory is something that is acute and critical at this point. We call this the new oil. But if oil comes back, oil jobs come back, i do not get the impression these jobs are ever coming back. If they go bankrupt, its not a reorganization, its a seminole change in the Retail Industry . Retail is going a secular change, fundamental dislocation and people are shopping differently. We have to start with the point that retail actually is growing, retail is up 4 . Because of online. But retail in the consumers buying, they are buying differently. Sales were up 25 last month. The consumer is thinking differently and buying differently. If youre a traditional brick and mortar retailer that havent evolved to being internet, you have maj are problems and a lot of debt issues because you have a lot of private equity thats where i want to go. It is always the leverage that kills, right . I dont care what the industry is, whether its retail or banking or rental apartments. Rental apartments, its that was made up by the way. Office builders and so forth. How much of this debt problem traces back to the door step of the private equity with the big investors with so many like sports authorities and others, how they run their businesses by saddling these companies with debt. There was a lot of debt chasing a few deals back in the binge period back in the late 08 092010, when you look at the companies that have been able to perform well in that environment youve got bjs whole sale which is doing very well right now but thats a business that can handle more leverage. One of the mistakes over time has been the wrong retailers carrying too much debt and they are cyclical. This goes back several years when we looked at we did a piece in 2012 that called this out and said if youre a brick and mortar retailer, you have the advantage to move online but you have to move online quickly. For the most part they havent done that. Its an important point, all retailers arent created equal. If you have a stable cash flow, then you can take on a lot of debt, if youre a highly volatile retailer like a department store, its awful hard to have that debt. Look what happened to mer vins macys what are stable retailers . Bjs would be a great example and home depot. Anything stable these days . Some disruption comes along that nobody expected and then anything can happen but if you look at the private equity firms in for 5 to 7 years in terms of the time framg they are looking for in and out of a deal i think if you have good predictability of earnings you can bit of leverage on. Leverage is when leverage works oh, its cocaine, right . Anybody who managed to do a Good Real Estate deal on the house, i put down this much and holy smokes. I bought a solid gold boat of equity line. I think an excellent point, lets talk about this. When you hear retailers have bad numbers or go under, you say the consumer is in trouble. The consume is better than ever . They may be buying homes and cell phones and cars and jeans, but the consumer is out there. This is a storish yao. I want to be clear about that. Super confident set report high. Digging into those numbers and i know youll have mark zandi on later. But when you dig into the numbers you look at a lot of it for future events like tax reform. That hasnt happened yet may not happen. Some consumers are still suffering on an individual basis but on balance consumer does seem to be feeling better but its on a retail by retail we havent even talked about that yet. Retail is bleeding jobs, 30,000 today. If we have a border adjustment tax, thats a job killer for retail. Best buy goes to 2 billion of loss as a result of border tax, its going to kill more jobs. Lets say you put on that ceo not anymore. And pretend do you want the president to do something he is known to intervene in industries to try and save jobs and save industries from themself. You cant bring back retailing jobs from mexico, right . Some of them cant be made in the u. S. Retailing jobs arent going anywhere, they are just you cant stop them. You can have tax reform. Theres enormous amount of things we can do. Ill give an example, we have internet taxation that hasnt been solved. Given the trend towards the internet why shouldnt we equalize and not have the free ride one of my predictions, we make these fun predictions, the president will go after amazon. Do you think something every story needs an antagonist. And i do wonder if amazon i dont know if its going to be amazon. On the taxes amazon is collecting taxes now ebay is more of an issue they get all of the attention but anything is possible. You have a major issue that the president has to deal with relative to the jobs and retail and that is a weve lost manufacturing jobs and now in the same situation with retail. The jobs dont come back that easily because of technology. Thanks, guys. Charlie oshea and steve im thoroughly depressed now. Go shopping it will cheer you up. Go shopping. Thats funny. When people are worried about losing jobs they are less likely to buy a house. Those worries about house are creeping into the house market. Diana joins us with more on that. Reporter on that weaker than expected employment report we see a big drop in home buyer sent. A monthly survey from fannie mae fell substantially after hitting an alltime high in february. For most americans it is the single largest investment in employment and income are major factors in deciding whether or not to buy. In march the share of mesh americans who reported it was a good time to buy, fell 10 Percentage Points. This is consumers also reported dramatically less confidence in the stability of their jobs down 8 from the survey. Those who reported that the Household Income is significantly higher, also fell 8 Percentage Points compared to february. Home price gains accelerate in most major markets with some hitting new highs and without more starter homes for sale it will toenl get worse. More online, cnbc. Com. The u. S. Missile attack against a key military installation in syria marks the first major Foreign Policy test ever President Trump. Sending a strong signal to the rest of the world, were decisive, justified and proportional, the big question remains what happens next. Insight to president obama on middle east issues. I asked 45 minutes or so ago, does this strike which is direct to the place where the chemical weapons were launched, does this change or produce the possibility of a positive outcome in syria in any way . Does it change anything . I dont think it changes the fundamentals. I think were in a position where everybody is recovering from whiplash. The president started the week being very opposed to regime change and suddenly were all now talking about how assad needs to be gone. So hes actually reset his center back into the basically the heart of the republican party, Foreign Policy establishment on syria. But i dont think this changes the fundamental math of the syrian conflict and i think he really as put us in a position where we responded to aggressiveness but it doesnt change. Does there have to be another u. S. Strike of some sort or could it be like kentucky basketball, one and done. As a kansas fan, im not sure im willing to agree to anything about kentucky. Not today not tomorrow, but on sunday dont do that ever again because were not going to save your bacon, i think that could be just a oneoff and i think thats probably what the Trump Administration is hoping for. Whats the likelihood of that happening . I think they are in a position where they really have to recalibrate. They probably made misjudgment about where they thought the Trump Administration would put its first platoon down and i think they are now recalibrating. Is it possible that because trump was so antiregime change and seems not set in intervening in syria that it em boldened assad, i can get away with more than i thought . I think a couple of things led to this. I think certainly tillersons comments didnt help. I think remind us when he said this is up to russia and iran to get this solved. He did that, hasnt been playing a very big role in the whole game of syria at all, sacrificed his portfolio to others and i think he also basically said were not in the business of telling assad whether to go or thats going to have to be up to others. Lets be clear. The man you work for, president obama a number of years ago said this is the red line. Then they continued the chemical attack men women and children killing hundreds and thousands general side we havent seen since and we did nothing. What happened . On cw, i think the numbers are quite a bit different on chemical weapons the numbers are quite different. Whether its by bodily injmb missiles or chemicals. Its a fair critique. What happened in the chemical weapons face, we threatened use of force there was all of the back and forth whether we go to congress and then the secretary of state kerry offered an out, if theres removal then there wouldnt need to be an air strike. Foreign monday industry he said all of the chemical weapons are gone or remaining 10 would be extracted. He said. Clearly that was not accurate. Clearly there were some left behind. Nobody is making claims about whether there was some left or not left. But the file was preserved and there was a continuing effort by the Obama Administration to get the Security Council to move against the sir yans. Let me put you into an area that will make you uncomfortable, maybe not. President trump has been criticized for being too close to putin. Does this prove trump is not putins boy . I dont think it proves anything on that. I think there was a moment in time where the president said im not going to do anything in the space, im done with this issue, were going to let people manage it and the problem came to him and flipped his position, very drat mattically, the use of cw under the Obama Administration was killed nearly 1400 people and several uses. This was actually a fairly small use of sarin, killed about 100 or 200. We have learned that the world is not selfregulating and needs a regulator and global cop. Every year theres bad people doing bad things. Im not even going to but it on any add mrs where are nato allies . I know they condemn it. Im going to write a strongly worded letter to assad. Wheres the rest of the world to prevent hundreds of thousands of innocent people being slaughtered by a guy, a dentist has no goal other than to keep himself in power while he executives his own people . I think theres unquestionably a strong desire for lots of governments to take the bold action and not do the cleanup. Theres absolutely were in a world where firing missiles is easy and doing the nation building or rebuilding after a conflict is over is very hard. Its what happens afterwards that thank you so much. Dom chu has breaking news. We have a verdict in the case of Billy Walters Insider Trading and being found guilty of all charges, ten counts including wire fraud, securities fraud, conspiracy among others. Youre watching that right now, video footage of Billy Walters. Some of the background, this was loosely tied to phil mickelson, not part of the case nor was he mentioned at all in terms of actual involvement. He has not been accused of wrong doing. Billy walters case centers around this idea that years ago, he had received tips from then former dean foods chairman, tom davis, who is pled guilty to Insider Trading and cooperating with the u. S. Attorneys office after all of this and now it appears that again for the record now that Billy Walters has been found guilty of all ten charges. The verdict was being read moments ago. Well bring you more details but for right now, a guilty verdict. Thanks. Heres what else is coming up on power lunch, President Trump says his relationship with chinas xi jinping is outstanding. But what can really get accomplished in one short meeting and does the u. S. Strike on syria matter to the oil markets . Erngds season just around the corner, what impact will it have on the stock market, all of that and much more on qupower lunch 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 crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. [ [ screams ] ] [ shouting ] brace yourself this is crazy [ tires screeching ] whoo boom baby rated pg13. [ screams ] with all of the news and lets not forget the big meeting between President Trump and xi jinpi jinping. Will impact will it have on trumps trade agenda. First, tell us your assessment of what you heard from both President Trump and president xi today. When President Trump says their relationshipship in the meeting was outstanding, do you believe that . This is a first meeting between the two leaders and its an opportunity for them to get to know each other and hopefully develop a rapport, layout respective positions on trade issues and create a process for dealing with the issues Going Forward. I dont think anyone expected major announcements or outcomes xbl but people were worried it would be very negative, right . Yet so far its all been happy talk. Is that how you expected it to go . Is this better than what people thought . I dont think it was likely to be a terribly contentious meeting, they have other issues to talk about too like north korea, which has played a significant role on the agenda. I think its the first opportunity to exchange views and kick down the road a process that can try to address those issue u. S. The real question is where do they go from here. The chinese view President Trump as quite transactional in nature and they have a tradition of wanting to offer to buy a few exports or invest in the u. S. And provide tweetable outcomes down the road. Whether President Trump will be attracted by that or continue to push for the kind of fundamental changes in the chinese system that are necessary to put our relationship on firmer footing, that remains to be seen. Steel and antidumping is a huge issue when it comes to trade. Whats your sense on whether or not the president might have the initiative to go ahead with signing an executive order as reported by the New York Times after president xi leaves to impose tariffs against dumping for steel specifically . We have already several hundred orders in place against the dumping of steal and duties are put on steel exports from china and other countries in the Steel Industry and Steel Workers are very adept at using trade remedies to ebonsure if there i dumping to prevent it from happening. Its unclear what the new executive order would do other than highlight countries that have been already subject to our antidumping rules. Well have to see how that plays out. Ultimately, china has huge overcapacity in areas like steel, o lum nualuminum, solar whether the Trump Administration to get the chinese to close down that overcapacity to stop distorting the Global Market. Thanks so much. Stick afround, youll want to hear the next headlines about the Trump Administration, john harwood is in d. C. With more. Michelle, what weve got is escalating speculation about the fate of Reince Priebus and steve bannon, the two most powerful white house aides roer than Jared Kushner. Weve had two different reports today, one most recently from dow jones that the president is considering replacing Reince Priebus and steve branannon who the cheief strategist. The poll rating is low and so theres going to be this talk and theres no news at this point. I just got a note as i was coming on air from a republican official who ought to know when i asked is it your impression that priebus is about to get replaced. The answer was one word, no. Well be monitoring this and nobody would be surprised if sometime in the next few weeks, next month or so, theres a change but no concrete development on that yet. Game of thrones of the white house, who would be asendant so to speak if steve bannon and Reince Priebus were dedescendin . Dont know who the next chief of staff might be, but we certainly know that the most powerful person in the white house other than those two gentlemen is Jared Kushner. Look at the portfolio the president shoved his way, whether its the middle east, reinventing government or preparing for this meeting with the chinese leader, so he is going to be important whoever would take the job of chief of staff if priebus is replaced but i want to emphasize, theres no concrete development on that at this point. Theres just a lot of speculation and that will continue until the Trump White House is in a Stronger Political footing. It would be a tremendous change, right . These two gentlemen were so loyal to President Trump, go back to the Republican Convention and Never Trump Movement that shut that thing down for 20 minutes and reince backed him up every step of the way, right . For him to go would be for a man who really prizes loyalty, i think it would be a very tough decision . Yes and they come at it from different angles, Reince Priebus was the institutional guardian, National Chairman of the party and steve bannon tb looking from another direction to go after the establishment. Extremely early supporter. Exactly. We were talking about it the other day, that bannon really is i think mr. Trumps sort of sill sof cal muse. Or at least he has had the the ability influence President Trump and his rhetoric. President trump is not somebody from what i can tell from watching him over a long period of time who has a well developed political philosophy. No. Bannon does. He has been putting pouring material into the beaker. And not just that, wow donald trump really tapped into something but i wondered if it wasnt steve bannon who first identified it and heard it and coraled it. Bannon said to not good along with Jared Kushner. There are varying reports as to the extent its personal versus policy division but theres clearly a division. They look the issues much differently and steve bannon somebody who is talking about a nationalist approach, that Jared Kushner and gary cohen, they dont view it that way. And the president lately has seemed to want to listen more to Jared Kushner and Reince Priebus and gary cohn. Differences of opinion are not always a bad thing. Correct. Lets be careful of this story because last night hey, can we have that picture again of the room at march ra lag go. They were watching the operations and launch of the tomahawk missiles. You will see steve bannon is in that room. Theres wilbur ross. The back of the room. I looked at that and thought, hes in the wrong place. To quote tyler to quote hamilton, you want to be in the room where it happens and theres hes in the back but in the room, i wonder how much of a split that really shows. That is true, but Jared Kushner is at the table where it happens and he is sitting seating matters. In the slot that the secretary of state might be expected to sit in. All leads back to hamilton winning thsz hard stuff, john harwood, thanks. Lets get to Courtney Reagan. Good afternoon to you. Heres whats happening at this hour. Nikki haley, u. S. Ambassador to the u. N. Telling the Security Council the u. S. Is prepared to do more against syria but hopes that will not be necessary. She then slammed russia. It could be that russia is knowingly allowing chemical weapons to remain in syria. It could be that russia has been incompetent in its efforts to remove the chemical weapons or it could be that the assad regime is playing the russians for fools. Swedish police are interviewing to people in relation to the deadly truck attack in stockholm today. It doesnt necessarily mean those two are suspects, they are yet to find the driver of the truck. Proxy Advisory Firm iss suggesting wells fargo shareholders vote against 12 of the 14 board members. This following last falls sales practices scandal. The board responded with the statement saying it strongly disagrees with the iss recommendation. Thats your cnbc news update. Power lunch is back in two minutes. Rchestration to growing businesses across the city, increasing productivity like never before, which is amazing, unless youre a barista. Cdw implemented Dell Poweredge servers with intel xeon processors to allow people to work from anywhere, so lucky me. So nobody wants coffee . hey, can i get a couple copies . Enhanced mobility by dell. I. T. Orchestration by cdw. Predictable. The comfort in knowing where things are headed. Because as we live longer. And markets continue to rise and fall. Predictable is one thing you need in retirement to help protect what youve earned and ensure it lasts. Introducing brighthouse financial. A new company established by metlife to specialize in annuities life insurance. Talk to your advisor about a brighter financial future. One sector that has seen a big reaction in the strikes in syria, morgan . So defense stocks are near the highs of the day. You can see this right behind me on the chart. This is the itaaerospace and defense etf, up 1 . A standout ratheon, you can see that right here. Shares up about 1. 5 . The tomahawk is a long range sub sonic cruise missile. Launched from navy ships or subs 1,000 miles away from the target and can fly at low altitudes over 500 Miles Per Hour and dodge threats and do this with hitting the target with high accuracy. This graphic behind me is very close to full scale for one of these missiles and gives an idea how big these are. The cost for each one of these missiles is upwards of a million dollars, 59 missiles were launched last night and the Defense Department likely to buy more now to replenish its stock pile, thats part of what is propelling it higher today and suppliers to tomahawk including Lockheed Martin and bea systems, all of those stocks are up today but analysts do warn this rally could be short lived because this was a targeted solitary strike at least for now. The bigger issue here, getting funding for defense given the fact that the government is still operating under a continuing resolution. That is the thing analysts think is more likely to pressure defense stocks in the coming days and weeks. Thank you very much. Oil had big moves following those u. S. Air strikes in syria but does this conflict really matter to the oil market . Well tell you three things you need to know when we return. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Wont replace the full value of your totaled new car. The guy says you picked the wrong Insurance Plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. And if you have more than one Liberty Mutual policy, you qualify for a multipolicy discount, saving you money on your car and home coverage. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. The oil market is closing for the day. Hi, jackie. We did finish with a gain of 1 , 52. 24, session high was 52. 94 overnight after we got the news of the air strikes. This was an interesting day because it reminded us that geo politics are still in focus when it comes to the crude oil trade. We have momentum to the upside but this news is supportive and traders are saying they remember the days that different wars in different places took crude prices up very fast. This is something theyll be watching. For the week we saw a little more than a 3 gain for crude oil. And over that 50 price here 60 could be the next stop. Back to you. How big of an impact will the u. S. Air strikes in syria have on the Global Oil Market . Lets bring in our kill duf and michael cohen, michael, does this matter to oil . I think it does. The main reasons are where this is occurring. This is happening in the middle east, a place that experts 25 Million Barrels out into the Global Market and matters when this conflict is occurring because its happening at the same time that were getting ready for the summer driving season and at a very same time when opec exports have been cut dramatically over the course of the last 4 to 5 months. So thats important because weve already seen inventory come off and now we have this conflict in a critical part of the global economy. The dumb question is but syria is not an oil producer. Syria only produces roughly 2 to 300 barrels a day. Its been producing less and less as the conflict continued but the important thing to make keep into account, there is always a market risk premium. Sometimes its high and sometimes its low. At this period of time whether this conflict, it xser baits the fault lines between iran and russia and iran and United States and between saudi arabia and iran. That is important to take into account if you have the possibility of further conflict in a place like iraq and place like yemen and the rest of the region. Do you think oil should be higher because of this . Not so much. I would point out though in agreement with michael, keep in mibd while syria doesnt produce a lot of oil, its two sponsors do. Iran and russia. So youre talking arguably the top three in russia and iran coming on strong lately im trying to understand, disruption in supply, right . We have something happening now in syria, not much supply there but somehow due to proxy wars, et cetera, this expands and were getting lack of supply . No, but if you had any doubt which way President Trump was leaning towards the dealings with say iran Going Forward as opposed to what president obama did, accommodating them and getting back into the Global Market and supplying us and the world terrifically, theres a risk to that. My thought was the opposite. That we would see lower prices because ill tell you why, this could drive a wedge between the sunni nations what all of these countries need is for everybody to cooperate, right and make sure they uphold the production quotas and that means russia as well. Is anything has driven a wedge, all of the Companies Think they are going to cheat and iraq is going to cheat and nigeria may cheat and production goes up. Is that take likelihood . That is the biggest bearish risk to all of this, weve got this opec meeting on may 25th and one of the most important factors that led all of these countries to get to a deal back in november of 2016 is the involvement of russia. And to if we are now looking at this possibility that theres this as you said a wedge between some of the key players, then the likelihood of an amicable outcome on may 25th is therefore less. Im curious what your take is on the move. When i heard the headlines i assumed oil would be higher, i didnt think it would be less than 1 the next day. Typically whenever we have these situations you get a briefest of spikes and i think were only held up because over the weekend what could happen next, whether the shoe could drop. Come monday the reality will set in. I know theres analysis out there and michael has it that inventory globally are coming down. They remain at record levels here and northwest europe. They are down in the caribbean and they are down sporadically in venezuela but we are still in the middle of a glut of all gluts and i still see that ultimately weighing on prices, this is not enough angst to cause the price to stay up above 50. Love, glut and angst in the same sentence, thats great. Thanks, again. Will uncertainty around syria and north korea send Something Else higher . Gold. Our Investment Team weighs in. If you have medicare parts a and b and want more coverage, guess what . 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Before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds. Com. We just talked about how oil wasnt up as much. Gold wasnt either. It was hot but cooled off in the afternoon. Lets find out where gold may be going, we have gina sanchez, like oil the conversation we gist had, gold would be up 20 or 30 bucks, its not. Whats going on with gold . The long Term Economic trends are against gold. If you look for example at the economy, it is a strengthening economy, you do have firming labor markets, im looking beyond the job growth number and you have rising Interest Rates, were expecting the fed to hike two more times and that could come a strengthening dollar. All of those three things work against gold but you have a fairly ineffective administration ayou need some political prouess to push an aj agenda in washington. The debt ceiling deadline will be a test for gold. Obviously syria was a push towards gold going up but well have to see how that shakes out. Matt, gold with the exception of a short run has been in a down trend since 2011. Had a nice popup about a year ago. Do you think this is just a hiding place, a parking spot and that gold will ultimately return to its longer term down trend . Well, its going to be interesting. Were coming into a critical area in the next few weeks. On a technical basis, today is a disappointing day gold made a very nice higher low back in march and it was bumping up against the 200 Day Moving Average which was providing tough resistance and broke above that today. The fact it rolled back over and not going to hold that level by the close is disappointing. However, if things heat ub, whether it be putin says things that raises tensions or we have a problem in d. C. At the end of the month, that could take gold higher. The 200 Day Moving Average is important but the more important level will be the trend line going back to the 2011 highs you mentioned. That comes in at 12. 85. It will decline over time. If we break above that momeleve that will give momentum and above 1300, that could be a key higher high. It could go either way and we have to watch the key levels. Matt and gina, thank you both very much. For more trading nation, go to trading nation at cnbc. Com. What this picture reveals that many will not now a word from our sponsor. By yo tech stocks can be quite volatile so when trading this group, its important to explore and consider a companys pipeline of drugs as well as their schedule for research and development. Those results can have a dr dratmatic effect. Hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . 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They say they have engage a Security Firm to investigate the claims, and theyll continue to work to address this report and take measures to eradicate any issue they identified. They also advise their customers to monitor payment card account statements for unauthorized charges. Game stop shares down 1 on this news. Melissa, back to you. Thank you very much. A picture is worth a thousand words, but this one says a lot more than that. What this photo of President Trumps Security Team after the air strikes on syria reveal. Thats next. 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 for decades, investors have used a 60 40 stock and bond model, with little in alternatives. 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Not when weve got so much more to give when you have the right Financial Advisor, life can be brilliant. Ameriprise doing Something Different today, back into this picture, 45 minutes after the missiles hilt in syria, but before the public knew. Thank you for sticking around. Hes been in the room with president obama and his team. What stuck out to us on set was that because this is nat maralago, and normally those would not be in the room, would they not . They would not. They would not be making policy on use of force. They would be economic issues, so they are there because the china event is happening. They were there, and so this it was taking place at the white house, who would be in the room . In that room youd have the secretary of defense, youd have the chairman of joint chiefs, the Vice President , and youd have the staff for the National Security counsel, all the people that work for general mcmaster and powell, so those people are not here. Eric, what do we read into the way everybodys sitting and where they are seated . Steve bannon in the back of the room. We asked the context of the headline, that there are supposed rumors and reports he could be reassigned. His location is weakness, strength, neither . I have to guess it doesnt speak to either. I think, frankly, this was, they put the cab innocent secretaries at the table. Chief of staff at the table, you have tillerson at the table. In the white house, in the situation room when these things break, no matter how urgent it is, you will always have the protocol laid out very neatly. This room is too small for that. So i think they probably did a scatter shot when they tried to figure out where every was sitting. Got it. Its significant that it was in florida versus the white house, hence bigger changes a different list. Exactly. You got so hr mcmaster would be at the head of the table, but because the president is there, the president sits at the head, and mcmaster moves around. We could say theres spicer in the corner, but we wouldnt say that, but there is the press secretary, kushner, and what they are doing is not they are having a video conference, apparently, with the secretary of defense, so one assumes these are the people that donald trump would trust the most . Thats exactly right. And as i said, the secretaries of the cabinet are at the table, and you got the briefing, the postmortem coming from the video screen in washington where they are getting the reports. But if this were in washington, youd expect to see many more uniform military, waunt y wouldnt you . The chairman of the joint chiefs would bring his people and youd also have people who worked on the security counsel staff who are uniformed. They dont wear uniform at the meetings, but they are part of it. What i know is that reinec hates that photo. You think . Thanks, guys. Thank you very much. Thank you, all, for watching power lunch on a friday. Closing bell starts right now. Hi issue everybody, welcome to closing bell. This afternoon, the markets are painting a different picture than they showed last night. The dow higher after futures fell about 100 points overnight on the news of the u. S. Attack on syria, and stocks have made up earlier declines after this mornings jobs report. The dow was down 56 points at its low of the session, up 18 right now. So were regressing to the mean as it were, but well talk about how resilient the market has been coming up in a little here