Transcripts For CNBC Power Lunch 20170719

Capital. Happening right now, President Trump giving senators both a prep talk and beattodown, too, r not getting the health care over the finish lime. Eamon javers is at the white house. Eamon. Reporter thats right. I can tell you that we know some of what he has said to these republican senators. Hes gathering them here to talk about ways forward on the Obamacare Repeal and replace effort which was all but dead earlier this week. Today the president says he wants to continue to push forward. He says ultimately that we have no choice. We have to repeal and replace obamacare. The best option is repeal and replace even though the president suggested early that maybe the best option was to repeal obamacare and wait to replace it until sometime in the indefinite future. Today, the president saying that obamacare was a big lie. It was a lie directly from the president. That was from president obama. He also says that he thinks the senators should stay in town until they have the opportunity to pass this he said the democrats are not going to help them theyre obstructionists, they have no ideas and they want singlepayer health care which is going to bankrupt the country. Real tension was expected in this room because you have republican senators who did not want to walk the plank politically and vote for this Obamacare Repeal and replace and a president who wants to pass the bill, send it to him so he can sign it. The president expressing some frustration that the republican senators voted to repeal and replace for seven years but now a president who will sign the bill, they are not willing to do that frustration on both sides here, michelle. I was surprised, eamon, and well see on the tape playback, when asked yesterday and i wonder if it comes up today if hes angry at some of the republican holdouts. He said he didnt hold it against them clearly, hes they are the reason that they are not on the same page. Reporter he said theyve been talking about this for seven years and now im ready to sign the bill but went out of his way not to antagonize those senators that coming after he did antagonize a bunch of republicans in the house by saying that the bill that they passed and he held a celebration for here at the rose garden in the white house was, quote, mean that didnt sit well with the republicans who took a dangerous political vote to pass that and send it to the president , as he requested. And then for the president to turn around and call it mean the president clearly not trying to do the same thing to Senate Republicans because he needs them he needs these votes its not clear where they will go from here well wait to see what the white house has to say. Well see what our guests say. Joe watkins is joining me, former white house aide to george w. Bush joe, theres supposedly a republican majority in the senate but when you look at, for example, susan collins, a republican in maine, is very different than a republican in texas. We dont have republican majority at this point what do they do . Its going to be hard at the end of the day, all politics are local and they have to consider dltheir own state a how they are treated if they vote for a bill that doesnt support Medicaid Expansion and some of the other things that are supported like in ohio and maine and the like they have a difficult job to agree together on the Health Care Bill that replaces obamacare but at the same time doesnt reduce Medicaid Expansion in the states that have signed on ben, should they go smaller here should they just put this thing aside and when the whole when it seems weve heard now for 16 years that everybody agrees there needs to be Corporate Tax reform, that they focus on something much more targeted and small right now rather than this quagmire of health care . Ive got to say, this is what frustrates republicans on capitol hill so much about this white house. Trump has been on every side of this in the past week. First you absolutely have to repeal and replace then its, no, we can just repeal it and well deal with replace later. Then its let obamacare die and democrats will come to the table. Theres no consistent message on this, it drives them nuts and tax reform, they should go big theres no reason to go small, i dont think, on tax reform. You can criticize trump all you want i dont think its going to move susan collins. He had an actual plan and was invested in the detail. They have no fundamental agreement. And he laughed he laughed when he was asked that and he was right. But i had understand, joe, republicans having fights about how republican you ought to be when dealing with this situation. But what do you do when you have somebody who actually doesnt believe fundamentally in changing and reforming medicaid, which is core. Hold on. President trump was speaking moments ago at the white house about his meeting with the gop senators. Were in this room today to deliver on our promise to the American People to repeal obamacare and to ensure that they have the health care that they need. We have no choice. We have to repeal and replace obamacare. We can repeal it but the best is repeal and replace and lets get going. I intent to keep my promise and i know you will, too since 2013, obamacare premiums have skyrocketed in alaska, they went up over 200 recently. We know that in arizona, theyve been up 118 and those states are good compared to some of the numbers that are coming out. Despite the promise that premiums would decrease by 2,500 on average, theyre actually increased by almost 3,000 and even much more than that in some cases its crushing the middle class and the families of the middle class. Its frankly crushing our country. Obamacare was a big lie. You can keep your doctor, lie. You can keep your plan, lie. It was a lie directly from the president. You can keep your doctor you can keep your plan 28 times he said it. 28 times and it was a lie and he knew it was. And now its hurting this country ir rep pra blee. Premiums are so high that 6. 5 million americans chose to pay a fine to the irs instead of buying insurance, the famous mandate. We will pay not to take the insurance. People dont understand that they dont even understand what it is or what it represents. If obamacare is not repealed in 2018 over 1,300 counties in the United States will have only one insurer. 40 county also have absolutely no coverage in the exchange. And that number will grow rapidly and i think those numbers are extremely conservative i think they are very low. Ive been here just six months im ready to act i have pen in hand believe me im sitting in that office i have pen in hand you never had that before. You know, for seven years you had an easy route. Well repeal, replace and hes never going to sign it but im signing it so its a little different for seven years, youve promised the American People that you would repeal obamacare people are hurting inaction is not an option and, frankly, i dont think we should leave town unless we have a Health Insurance plan and unless we can give our people great health care. Were close. Were very close the other night, i was very surprised when i heard a couple of my friends, my friends, they really were and are they may not be for very much longer. I think i have to get them back. You didnt go out there. Youre going to be youre going to be look, he wants to remain a senator, doesnt he . I think the people of your state are going to appreciate what you hopefully will do. Any senator who votes against starting is telling america that youre fine with obamacare but being fine with obamacare isnt an option for another reason because its gone its failed. Not going to be around we pay hundreds of millions of dollars in subsidy when those payments stop, it stops immediately. It doesnt take two years, three years, one year, it stops immediately. On the other hand, and i have to say this, a yes vote will let the senators debate the future of health care and suggest different ways to improve the bill thats what were going to do at lunch. We are so close, the way i looked at it, we have no democrat help. Theyre obstructionists. Thats all their good at, is obstruction. They have no ideas theyve gone so far left theyre looking for a single payer. Thats what they want. Single payer will bankrupt our country because its more than we take in for just health care. So single payers never going to work but thats what theyd like to do they have no idea what the consequence will be and it will be horrible, horrible health care where you wait in line for weeks to even see a doctor but were going to expand the hsas to increase health care coverage, getting washington out of the way and giving more control and funding back to the states, stabilizing exchanges so that those preexisting conditions are protected and before he knew what the plan said, he didnt say it he was saying, death, everyones going to die death. Thats the only thing they are good at. This is a great plan this isnt just a good plan. This is far better than obamacare and more generous than obamacare. Saving medicaid, which is on an unsustainable path and lets states spend those dollars freely, the states are going to be able to spend the dollars and as a smaller entity, the states will be able to take better care of a person with a bad back, with a bad prognosis, with a problem id like the federal government to focus on the middleeast, to focus on north korea to focus on things where we have very big problems. The states can do a better job than the federal government when it comes to health care. And thats what were letting you do and were committed 45 billion to help combat the Opioid Epidemic and some states in particular like that. So my message today is really simple we have to stay here we shouldnt leave town and we should hammerthis out and get it done. And not just a repeal. Hey, it was sort of early on, along with a few of the other folks at the table the repeal was fun i think the people of this country need more than a repeal. They need a repeal and a replace. And we were very, very close and then Little Things happened but now were very close again we have to get it there. Now, with john cornyn, the other need we had a couple of things that we put down on paper. Im just going to read them really fast. These are some of the things that are done because the democrats are always selling their plan but they dont do that anymore they dont talk Obamacare Anymore because they cant because its failed. They know it so theyre selling their plan and we never sell our plan if weve done anything, its on letting people know how good it was. So we wrote down these few things repeals the individual mandate how big is that . People are paying not to have insurance. Nobody ever talks about that repeals just killing employer mandate. How big is that . Well, substantially lower premiums crosscountry lines, crosscountry state lines where its almost impossible for Insurance Companies to compete in different states, we cant because, unfortunately, the 60 votes. But its going to come very soon were putting it in a popular bill and that will come. That will come and your premiums will be down 60 and 70 . People dont know that nobody hears it. Nobody talks about it. Were going to have to cross state lines and youll have Insurance Companies bidding. Youll have forms of insurance that you dont even know about right now because thats the way it works theres tremendous competition so, your premiums will be substantially lower. Repeals burdensome taxes, big. Well restore choices. The bill also provides for Coverage Options so youre going to have a tremendously expanded coverage and options. Well stabilize Insurance Markets. The markets right now, by the way, are gone. They are a mess. And depending on what happens here, depending on what happens over the next couple of weeks, the Insurance Companies are all fleeing. Well protect preexisting condition coverage you listen to the democrats and they say, oh, youre giving up youre going to have better preexisting than they had in their plan and youre going to be protected well allow the use of pretax dollars to use premiums. Well expand the hsas. Well devote substantial resources to fight opioid and substance abuse. Well provide better coverage for lowincome americans by the way, lowincome americans under our plan and were doing things at this meeting which i think youll be very happy about because were going to spend some more money to make sure everybody is protected well provide better coverage for lowincome americans well improve medical outcomes for lowincome americans and put medicaid on a sustainable path, which its not on right now, levels the Playing Field when it comes to federal dollars, now a principle driver of the 20 trillion debt that we have and will redirect authority from washington, d. C. , to the states, which ive already said where they can innovate and develop the best practices and on a smaller basis theyll be able to take care of People Better so we can repeal but we should repeal and replace and we shouldnt leave town until this is complete, until this bill is on my desk and until we all go over to the oval office. Ill sign it and we can celebrate for the American People thank you very much. Thank you. [ applause ] all right well, we were told that there was more i guess not. A couple of things one observation, he talked about being able to buy across state lines. Thats not officially in any of the current legislation, just part of the bigger plan that paul ryan outlined months ago. Just to clarify that and the president saying dont go on vacation until you actually bring something to my desk and trying to sell the plan once again, another observation weve made, a big focus on the individual Insurance Market, where most of his comments were directed and very little discussion of what prevents anything from happening. Thats the reform of medicaid. Which senators in maine, senators in virginia right senator dean heller. Why do you think they sat him right next to him. Hes one of the holdouts that doesnt like what is happening with medicaid. Ben white, he repeatedly said were so close we cant get any closer. How close are they not close not at all close republicans are pretty much desperate to move on from this mess, from this fiasco that has crossed it him for the last six months the problem the big problem here is where was this trump speech three months ago, six months ago, where was he on the stump saying, this is what is in the bill and good for your health care and it was nowhere. I think thats a fair point, joe watkins. Has the president underplayed his happened he was strong, forceful and in full salesmanship mode there thats right. We wouldnt have found ourselves not we. The congress may not have found itself in the position it is in right now if he had been a more forceful salesman along the lines we just saw four weeks ago, six weeks ago. If he had worked on this sooner and applied the pressure, we might have a bill already being signed into law. But that being said, this was the right speech and at the right time at least america knows where he stands on the issue and likewise hes saying, dont blame me if we dont get this done im doing everything i can to bring folks to the table and to get this done. It may be late but, guess what, better late than never hes saying the right things its still going to be hard because for those senators facing reelection, like dean heller in nevada, they have hard decisions to make. The white house has to get its hands dirty and make deals with the republican side who may be a holdout and get them on board. If they can get their 50 members on board, they have a bill they have a bill. They need lyndon johnson. A very quick issue with one thing in there we know where the president stands he could stand somewhere else in three hours from now 24 hours ago he was saying replace the sucker and let obamacare die. And now hes saying repeal and replace. He could be different at 2 00, at 4 00. He just wants a victory no matter what it is. He just wants to win something. For the insurers, this is a huge sigh of relief as opposed to just letting it die in a couple of days, theres going to be a subsidy payment due to the insurers. He says were not going to let that happen and destabilization of the Insurance Market happen, at least not at this point joe . This was a good timing speech from that standpoint and a message, of course, to the market as well as to those members of the u. S. Senate tax reform, joe ever the holy grail of the markets. Its there, isnt it when ever hopefully soon. Hopefully next coming soon to a capitol hill near you. All right, guys, thank you. Great to have you. Thanks. And now to Kayla Tausche with breaking news where else, d. C. Kayla . We got headlines from the Supreme Court which has again voted to uphold the president s travel ban on a temporary basis but its taking a little bit of a stricter approach and now is saying that the president will not be able to bar people who have relatives, specifically grandparents, here in this courcour country. Thats something that was sued over and it appears to be a temporary relaxation of that travel ban that the Supreme Court last month did vote to uphold 90 days for travelers. 120 days for refugees from six muslimmajority countries but it does now appear that the Supreme Court is saying that people with relatives and specifically grandparents in this country can still travel here. Back to you. Thanks for that update, kayla. So while dysfunction continues in d. C. , the nasdaq and s p 500 are at alltime s. He tre a limit that the stock market can ignore . Coming up. 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. So, your new prescription does have oh, like what . Ects. Youre gonna have dizziness, nausea, and sweaty eyelids. And in certain cases chronic flatulence. No sooooo gassy girl. So gassy. If youre boyz ii men, you make anything sound good. Its what you do. If you want to save 15 percent or more on car insurance, you switch to geico. Its what you do. Next next markets moving higher today. Nasdaq calling for a ninesession winning streak. Bob pisani is live from the new york stock exchange. Hi, bob. Hi, melissa the market is doing fine a lot of comments about paul ryan saying that hes going to start legislation to overhaul the tax code as soon as they get back from the summer recess. Thats helping things. Yes, still very much alive s p is doing well. Very rarely when you see the s p doing better than the Dow Jones Industrial average in the meantime, banks are doing well and Morgan Stanley had good wealth management. U. S. Bancorp based in minneapolis, they did better loan growth was up 3. 5 . Most are 1 or 2 banks are doing better and tech stocks are doing well. All of the f. A. N. G. Stocks are doing better facebook, amazon, microsoft is there, netflix at a new high as well weve had a weak dollar for a while now. Thats helping some of the Aerospace Stocks boeing is there, Stanley Black decker and borgwarner. And for at t, new 52week lows for at t its down 16 of the year. Of course, were still waiting on that time warner merger the dow is up 33 points. Back to you. Thank you very much, bob pisani investors are not over the moon in this market and thats a good thing for the health of this rally. He believes there are no expectations joining me is jim paulson. Good to see you. You actually think we could have about 130 or so points to the upside on the s p. That sounds really bullish its not as much as it used to be. Its 2600. Its around 5 from where we are. But you know, i guess i think the biggest thing that hits me, melissa, is that were kind of in a backdrop for the stock market which is close to goldilocks its Still Producing a pretty solid rate of job creation weve got rising real wages for workers. Weve got rising profitability, rebirth, if you will, of the earning cycle. All of that without inflation challenging price earnings multiples. Weve got a fed moving to titan but the best you can say about them is really they are just easing less from still a very accommodative policy. So is a big component that the fed is going to raise but they are doing it so gradually and at what point do you get concerned about what the ecb may do tomorrow or at future meetings or Central Banks around the world might do that could propel bond yields higher . Im not as worried about that i think their moves will be much like the fed and they are coming from such accommodative positions that i dont think its going to be impactful what will change this is if we do get and i think well eventually get more inflationary pressure. I think it will go above 3 and one big important catalyst hovering out there is that dollar the u. S. Dollar is right on the cusp of a 30month trading range low. That will put juice back into commodity prices, particularly oil. If that comes at the same time that wages break through 3 , you can start to see, you know, angst among bond vigilantes and the feds slow and steady process. I also think for a while that inflation will come with better Economic Growth i think its a tenyear yield. In the hierarchy, i must say, when everyone says its goldilocks, i want to call somebody and say sell. At any rate, if i were to ask you to order the hierarchy of risks as you see them, it sounds like you just did that and that you would say that over the long term, the risk comes from a weaker dollar and higher inflation that spawns higher Interest Rates is that the principle . So its not washington thats not your big worry, right . No. I think youre right i look at washington and i think the market looks at it this way, too. The positive price index out of washington is so negative that it cant get any worse and theres no expectations for anything to be done. So if it does happen, its a positive if it doesnt, the market is prepared for that. Under washingtons wound, if you will, as long as we have the type of global and u. S. Goldilocks sort of economy going, they can screw up badly and the stocks will continue to do well. If that momentum changes, stocks will start to struggle. Jim, thank you so much. Jim paulson, he was talking about Interest Rates lets talk about them in the bond market. Rick santelli is at the cme. Rick two years settle at 1. 35. 308s are at 2. 85 unchanged. If you look at intradays of twos and tens, they jump out at you its been the glide path look at oneweek and tens, it still glides down. Theres wild action today. You like looking at dyhg, its important because usually what sovereign prices are going up, yields are going down. High yield becomes the new love affair of investors. Look at the chart. New highs of the year and for this etf going back to june of 2015 melissa lee, back to you. Rick, thank you rick santelli. Scripps and discovery rising today on rumors of merger talks. What this says about content how you get it and the future of media. And a retail worker at Amazon Everything that weve heard y tat the job losses in reil mabe wrong weve got that debate coming up next this is a story about mail and packages. And its also a story about people. People who rely on us every day to deliver their dreams theyre handing us more than mail theyre handing us their business and while we make more ecommerce deliveries to homes than anyone else in the country, we never forget. That your business is our business the United States postal service. Priority you yeah, and i can watch thee bgame with directv now. . Oh, sorry, most broadcast and sports channels arent included. And you can only stream on two devices at once. This is fun, were having fun. Yeah, we are. No, youre not jimmy. Dont let directv now limit your entertainment. Xfinity gives you more to stream to more screens. Hi, everybody, im sue herera President Trump addressing the opening meeting of the controversial Voter Fraud Commission he told members that voter fraud is a menace to the rights of lawabiding voters. Your work will help protect our democracy. This will be a very transparent process. Its going to be very open for everybody to see youll approach this important task with a very open mind and with no conclusions already drawn. Airline passengers traveling from mexico to the United States will begin a new enhanced security measures today. All Electronic Devices bigger than a phone will have to be fully charged for potential inspection. And why did the alligator cross the road well, this one doesnt seem to know the individual kbroe shows the gator going one way and then another way and then he turns around and then eventually he runs into the woods. The gator needs a garmin youre up to date. Ty, ill send it back to you sue, thank you. You got it. Two Media Companies may look to merge scripps and discovery. Julia boorstin is in l. A. With more fill us in. Reporter tyler, neither discovery nor scripps would comment but they held merger talks three years ago and have long been speculated as a good match. Discovery which owns Animal Planet and scripps ratings and advertising are under pressure from streaming and bundles that dont include all of their channels a combined discovery and scripps could offer a streaming service and have negotiating leverage with cable and satellite tv carriers this comes as a media mogul tries to reinvent television for the mobile age its original movie series of episodes of ten minutes or less and in line with top tier tv costs. He says that he has top show runners on board, such as j. J. Abrams and ron howard and hell be able to license custom content for media giants including disney, fox, cbs and lionsgate. It will take at least 2 billion to launch this new tv service. Sources tell me hes talking about funding and distribution with apple, google, at t, verizon, spotify, among others whatever partner he should end up with would determine what the final Business Model would look like there could be a free adsupported version and also a Subscription Service that potentially has no ads and no more exclusive content certainly a fascinating thing to watch. Lets talk more about the potential for this media merger and what it could be telling us. Joining us is the staff writer with the l. A. Times. Steven, i dont understand what this gets other than maybe a lifeline would a merger directly address headon the secular changes going on in the industry or does this buy them time in that theyve got cost energies to bring out of the thing and it gives them cost negotiating with the Cable Companies . I think its a combination of all of those things. These channels have done relatively well. Others are facing double digit rating declines last year and this year as well. Food network, hdtv, theyve held up pretty well thats because theres still a market out there for people who want to turn on the tv and know what they are going to get and maybe just sit there and watch it these Channels Program to their audience distinctively because you have a few channels like that, you put them together and you could put together a formidable overthetop product because they serve the audience in the same way. Let me turn to benjamin with a twoheaded question, if i might. Content is king. Id like you to talk about that, whether content may still be king but some kings are more powerful than others and consolidation, second part, seems like it is coming but where does it ultimately end whats after consolidation well, i think content is king but you have to be careful they are seeing increase in competition. If you think about youtube and netflix and what theyve done to the Television Landscape in the last five to ten years theyve devalued the traditional content provided by traditional, quote, bundled Networks Like discovery or hg. Yeah. And you could even just remove yourself from the media discussion and look at any industry when there is significant new competition bringing massives amounts of capital, return goes down. I think the market has been waiting for media consolidation for a long time. It hasnt happened a lot of these companies are family controlled or have majority shareholders. A lot has to line up for consolidation to take place. If you look at these companies, the Cable Network stocks in particular, on the advertising side you see facebook and google, which are multiples larger than anything these tv companies are able to aggregate in terms of eyeballs whats the end game lets say you get the natural consolidation. What does it look like deeper down i think they have to start thinking about offering new products you know, smaller bundles are the way to go. A generation of viewers are growing up not getting their tv through cable or a satellite and youre going to have to find a way to reach that audience primetime usage among 18 to 49yearolds has gone down dramatically about 25 . Its not because they are not watching tv. Theyre just watching tv the new way. You have to learn to connect with those people who are getting their content from netflix and amazon and often without commercials. Yeah, those are all the trends that we keep watching and wondering about. Ben, should these two Companies Get together or is there a better deal out there to be made theyve been talking about others going after scripps and what if they do get together and have enough of that passive content that people like to put on and tune in to the food network. You know what youre going to get. Is that enough to drive an overthetop consumption ala netflix and ala hbo . I was asking ben, thank you well, obviously time will tell but i think that these big brands, Discovery Food network and hdtv have more success together to combine a large audience with dedicated fans than they do by themselves its an incredibly crowded overthetop market already. Weve seen a lot of demand not just netflix and hulu. Theres a lot of success stories. They all have a million plus customers in the United States people like ott content and you would think that scripps and discovery can explore that better than on their own. And you have each of these weighted equal if they combine does that make it overweight well, wed have to assess the deal determines and the opportunities there. We are one of the few media bulls out there on the sell side market right now we upgraded media earlier this year when you can buy stocks at 11 times cash flow and you think those cash flows are relatively durable, thats pretty attractive in this Interest Rate environment. My favorites are disney and viacom. Very quickly, how are christina and terry doing . Whats the latest . Im not up on that show but the thing is, you know, these networks do so well because you can turn them on and you dont have to know the mythology or see them in the past they reach the passive viewer in a way a lot of other channels are not doing anymore. You have to be must have or must watch. Just turn on the radio and yeah, whatever comes on yeah steven, benjamin, thank you thank you interesting debate earlier today on cnbc squawk box about the state of the labor market and how jobs are counted we can make that interesting because we are cnbc. How labor is counted particularly in the struggling retail sector. Heres a guy who made it interesting. Steve liesman. Thank you very much im going to be as interesting as i possibly can. Our rumors greatly exaggerated the National Federation is acknowledging the industry challenge but still growing, they say, and the Government Data itself could be misleading. It has been a tough year according to that data for government jobs. The economy has gained more than 800,000 raising the specter of the death of stores with ecommerce we talk about that a lot the data could be missing. More warehousing and transportation jobs have become more a part of retail employment even at the brick and mortar companies, not just the ecommerce ones. This has made headquarter jobs for anyone not involved in retail and actually selling to people here are some other points 87 million square feet of new retail space add in 2016 retail is at the highest level since 2008 and pure play, ecommerce, online retail, they are less than 6 of total sales but they are growing and highprofile stores get headlines but dont tell the real story what is happening at the million of small shops that are responsible for the bulk of hiring we could not reach the bureau of labor statistics. 87 million new feet square feet thats net . Retail Square Footage went up in 2016 thats right. Does that count Warehouse Space . They want those jobs covered under retail. The best answer when you dont know the answer is to say i dont know the answer to that. There could be some warehouses in there i think thats fair enough to say. Its not quite as much and if they are building new square feet and rents are high, both of those would speak to market lets challenged overall than perhaps the data suggests. Where should those jobs be counted if youre going to count them in other words, someone who works for, lets say, macys or target in a warehousing function or are they really retail jobs or are they in shipping or distribution what would you say the other thing ive learned over the past decade or so is to be very clear what question im asking the data to answer. Yeah. Why am i asking that question to find out about the health of the Retail Industry . Am i asking that question because i really care about how jobs are classified . I dont think i care about how jobs are classified. I think i care about the health of the Retail Industry and if theres more people there and the other thing that is interesting, when macys or somebody shuts down stores, 1, 2, 3,000. Big headlines. We all do it to the Overall Health of the industry its Something Like 91 of all retail employment is at stores with less than 20 people. So if target has lost a thousand workers on the floor of target Stores Across the country but theyve added 1500 workers in Distribution Centers to pack and ship and so forth, is it a loss or a gain i guess i would say its a gain because the ultimate employer is in retail. I think thats fair to say. Just as i would count the backoffice accountant who works at the headquarters. Can i ask a question . Why do we care so much because it drives is it related to the employment number i mean its a perception issue, right . But you know, melissa, these people in the financial business those perceptions drive prices about the future right. And if you put up that chart of the overall future the overall trend what is that one . This is the rise of ecommerce jobs its the next one. When somebody in the busies a flat line like that and a dip, what does that do to your expected returns im going to lower them. What does that do to the prices for capital . Im going to raise it. Thats why as an industry its fighting back against this perception i will say i was beginning to read a paper that has to do with the way we classify jobs and asking the question about whether or not a big change we made in 1997 from one classification to another, they say its overall reduced the number of manufacturing jobs in classification and in resale and wholesale jobs where you classify them. Again, that has impact on peoples perceptions and thats what we care about this because we can discuss it. Its fascinating. An interesting topic. Content is king. Man versus machine robots are shaking up a wide range of industries. Retail among them. But meet the surgeon who is leading the charge to use robots in the operating room. Operatin. Are costs worth it how much better are the surgeries turning out . What are the outcomes . Well explore all of it. May not look like much is going on in the market, but new record high for the s p 500 as lcoin tthe nasdaq wel ntueo follow this rally when power lunch comes right back to keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Robots are changic the way many businesses how would the field if a robot was being used to operate on you . Drove farris had amount d is the first surgeon in england to use robots to help do knee surgeries. Thank you for being with us today. We understand theres a bit of a delay between us, so ill ask the question and wait for your answer first question will there be a time where robotswill be better surgeons than surgeons . I there wont be a time when robots necessarily better surgeons, about were already in a time when robots can make a surgeon better in my field, it gives us an opportunity for better planning, more accuracy, more precision, less trauma too the tissues, so quicker recoveries, and for tenchally fewer problems down. Line i dont think were in a situation where the robots will take over, but the robots are there making it much easier for us to do our job, and much, much more straightforward to do the right job for that patient at the right time. Tell us how the outcomes have improved or the Patient Satisfaction has improved when you use robots on knees versus hips versus other things i understand youre an orthopedic surgeon, but how are the outcomes different my hear is hip and knee surgeries, and our experience so far has been that we have seen less pain, less swelling, and less inflammation, and weve seen a quicker recovery. Thats been reflected in a shorter length of stay in hospital, in less need for medication afterwards, and in fewer physiotherapy appointments before follow,up our patients have generally been much happier earlier to return to their activities, to return to work and get their motion and function back. Weve seen that as the biggest advantage in the knee. Thats really been the area where the biggest gains have been there to be had in the hip what we have seen is greater accuracy in terms of restoring the mechanics of hip to gain better strength and reduce the risks of instability and subsequent pain. Doctor, ive read youre a pioneer when it comes to would be robots. Does the nhs pay for it at this point. At this point the nhs has yet to pay for robots, though there are robots being accessed for research through Research Funds to come into the nhs one of the pieces of work that were doing on the back of our prospective studies is do the Health Economics ultimately the capital expense to buy a robot i think is rapidly offset by reduced length of stay, but less returns to the operating theater, about i fewer outpatient appointments and by happier patients very quickly, are you using them for total hips and knees for acl repairs. At the moment partial knees, total knees and total hips not to the stage yet of yew acls doctor, thank you very much. We appreciate it President Trump making his case for made in america in the next hour. It comes as leaders pleat today to avoid a trade war 17 years later, this sector is about to finally wipe out lotions from dotcom bubble is rnames you need to own in thun, the second hour of power is ahead i think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading Companies Lead with digital. Welcome, everybody here is whats on the hour two menu the record that wont quit today f. A. N. G. Stocks on a tear. Where you can still find value in todays equity market. Plus a tax revolt in seattle. Washington states gop calling for civil disobedience from some of the citys residents and biotech bounce can you still get in or has it gotten away from you power lunch, hour two, starts right now. Major indices in the green across the board right now s p and nasdaq hitting alltime highs. Look at where we stand the dow is higher by 0. 2, and the nasdaq adds 0. 6 of a percent. Ibm the biggest drag on the dow, trading on a 52week low after disappointing earnings mastercard and visa hitting alltime highs today we should know that American Express is at a oneyear high ahead of its earnings release, and vertex after positive results for a Cystic Fibrosis drugs. The president putting the pressure on, saying they need to make good to the promise they made to the American People that this he would repeal obamacare eamon. Reporter youre right. He even chided those republican senators saying he change his mind from yet. To come to republicans to negotiate, today he put the pressure on the republicans to, instead, pass, repeal and replace. Heres how he expressed himself just a little while ago. Im ready to act, for seven years you promised the American People you would repeal obamacare. People are hurting, inaction is not an option. Frankly i dont think we should leave town unless we have a Health Insurance plan. Reporter the president hammering home that point about not leaving town thats something sacrosanct. The senators go home to campaign and take a bit of a vacation, but the president said they shouldnt do that unless this mess has been sorted out. We have to stay here. We shouldnt leave town, and we should hammer this out and get it done. Not just a repeal. Hey, it was sort of early on, along with a few of the other folks at the table, the repeal was fine but we ought to get more i think the people of this country need more than a repeal. They need a repeal and a replace. Reporter well see what the reaction in my experience senators dont much like the feeling theyre being lectured to. Well see if this breaks the logjam and well hear from Sarah Huckabee sanders at the press briefing, which is again offcamera well see if she has insights given the near failure of this bill is there anything they can do now to resurrect it, michelle. Back over to you. Thank you, eamon. Despite the gridlock the markets continue to march higher the nasdaq seeing the longest winning streak in two years, casey math thee and jordan pose ner are here gentlemen, welcome to the both you seem to flag a notion that the leadership is coming from four tech stocks, and thats really concerning. Why . In every market rally, isnt there a concentrated leadership among some of the biggest cap stocks in the market why the difference i dont know that anything is different, but the fact that these you know, a small number of very largecap highgrowth names have driven the market makes for a narrow advance. Were not expecting necessarily the tech stocks to it decline, but we do think that a lot of the leadership will likely rotate, because theres been a significant valuation disparity thats developed between what i call the growth value stocks, and as a result Growth Technology is re highly valued, leaves room for error, and the valuation of the is a lot more attractive and doesnt count for potential up side. Casey, would you agree in that jordan was saying you see them being leadership in the second half of the year . I think the story is not a new stories. We had a earns recession, and the f. A. N. G. Stocks provided Earnings Growth and Revenue Growth its the same book, just a different chapter. When you look at valuations, wait a minute, you look at amazon 20 times ebitda, with 20 Revenue Growth that sounds rational, so i think you have some legs, because you have this growth profile. Dont you get nervous, though its been so long since weve even had a 5 correction, never mind a 10 correction, just reversion to mean at some point means theres a selloff correct, i agree with we havent seen one since mid august, its almost a year, but the thing is, its a crowded trade. Technology is a crowded trade. I still think a lot of people missed the ride. So you get a correction on some of these highgrowth profile stocks, i think youll see buying. Jordan, what have been your latest moves, both adding to positions, subtracting or maybe opening a new division explain why youve been adding and southbound tracting and what it says. In a tax base, one of the names weve been adding to where weve had available cash has cisco systems. The stock has done okay, a 3. 7 yield, trades at ten times earnings, adjusted for 7 per share in cash. We think the valuation is astou astounding the nuismt ceo, chuck robbins, hes been there a couple years and performed well both in terms of improving execution and focusing on strategy improvements. Is this a growth stock or really a different play . Which is it . We think growth can accelerate from the mid singlesignature level, and its still going to pay an important dividend we think between the dividend and also we think reasonable capital appreciation, perhaps 40 , we think the stock can be a contributor. Thats a nice total return right there. Guys, thank you. A pleasure. U. S. And chinese officials trying to hammer out their differences without starting a trade war. Kayla tausche is live in washington. They passed the first 100day dead like on small boar items, but now the two countries will try to tackle larger issue, special the u. S. Trade deficit in opening remarks this morning, commerce secretary wilbur ross blamed this phenomenon on the chinese. China now accounts for nearly 50 of the u. S. Goods trade deficit. If this was just the natural product of free market forces, we could understand it but its not chinas vice premier publicly was deferential, quoting henry ford, but contributing it to donald trump saying talks need to be visionary, yet down to earth, but its unclear how the stocks have proceeded or whether they may have broken down both the chinese delegation and u. S. Delve each canceled press conferences scheduled for this afternoon to recap the meetings. While we arent sure exactly house these meetings are going so far, we did before i came to air just get a statement from the private sector leaders from each country that met yesterday. They urged cooperation between the countries and increased bilateral trade, but were still waiting to see how this fret hencive de low is oing. Canceled press conference not a good sign, though. Thanks, kayla. The United States and china, are these on a collision course for a trade war . Lets bring in michael simmo, and scott kennedy. Guys, good to have you here. You know, when we lately when we have this discussion, we get somebody on who quotes me chapter and verse ricardo theory of comparative advantage, free trade is good no everybody, we shouldnt have a trade war, blah blah blah. Can we be more specific . Lets talk about steel for 20 years hef and they have Steel Production facilities that are not profitable. Yet they dont shut them down. They keep them going ive been in rooms behind closed doors who express deep frustration about this chinas asense to the wto was about them acting less political and more economically rational, like we do in the United States, like we do in europe i think its an excellent point that chinas economy is still driven by state fee at the chinese even admit that. Even xi jinping would say so, thats why you have overcapacity in steel obviously the trump administrati administrations hard is in the right place trying to push china. I dont know if we have all the tools. The dialogue we have right now thats happening today i dont think is going to get the two sides where they need to be. President trump has talked about tariffs and quotas, is that a tool to use we have to consider it, but i dont think its effective unless its combined with multilateral agreements and also more allies on our side. The Trump Administration is pushing as hard on korea, japan and orders with trade surpluses, and we all need to actually Work Together to deal with the china problem. Michael, what do you think . Secretary ross is exactly right to continue focusing on the trade deficit. Thats what workingclass americans voted for President Trump to do, to fix the trade deficit. China is nearly 50 of our goods defic deficit. Can we drill down though, beyond the trait deficit theres this big mac rho idea whacks about affecting change in the way they operate in Certain Industries steel being emblematic of them how would you get them to be different actors. Sure, the statecontrolled economy providings an overcapacity the they overproduce, underconsume and rely on u. S. Consumers to grow tariffs could be on the table, really the dollar overvaluation, we just released a study showing the u. S. Dollar is about 25 overvalued we could even pressure our dollar to devalue our dallas to equilibrium rate, but Exchange Rates have a large part of the trade imbalance in the global trade imbalances we seed between china and the u. S. Japan and the u. S. , germany and the u. S. , et cetera. Scott, how do you get a fix without getting in a fix, i. E. A trade war . Well, you definitely need to up the pressure, because the chinese will not change unless they think theres a big cost to pay. That will come through bilaterally threatening a trade war, and i think the 232 investigation on steel is about that, but its hard to get them, unless get your allies involved and others china is the Worlds Largest exporter, the economy is still growing fast xi jinping is facing a big transition meeting, so theyre not in the mood to majore make major concessions unless they think businesses a big cost to pay. Give me an example. I wouldnt have drop out of the tpp, but maybe through greater consultation with the japanese and our european friends, we may all bring the same message to china on the importance of reducing overcapacity the chinese report these very teeny numbers of steel mills they have closed. But then what so you get everybody together. If they dont, you do . Then you raise penalties, and i think actually theres a lot of american industry willing to accept some shortterm pain for longterm gain there is a big problem that has to be fixed. China is the number one challenge in the global economy, not the u. S. If we put aside dealing with the smaller trade deficit issues, i think we can get somewhere. Gentlemen, good to have you much appreciated. Heres whats coming up on power lunch. United airlines grounded following the earnings report. Well hear from the ceo. Plus the wealthy in seattle being urged to revolt by the members of the republican party. The woman behind that move will join us. And whats ahead for chipotle, as the stock continues to suffer. A little bull bear debate is ahead. Bring the queso, all of that and more coming occupy power lunch. Whats with the dogsized . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. [ intense music playing ] ] its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the e300 for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. A. Time now, first up, downgrading goldman sachs, a Market Performance the big miss in trading yet they cut revenue estimates, so they cut the price target from 260 to 230 bucks, which is still higher than where it is right now. With a buy, the analyst says that mobile games and premium Business Model, that implies up side. Premium means free to start, but youve got to pay. More raising the pride target on mcdonalds from 172. Thats 12 higher from where its trading right now new promotions such as the dollar for any soft and National Launch of the signature crafted recipes, the semicustomized burgers, they say they are selling well thof a news Sriracha Burger really i cant wait. L brands, sell the stock showing the pink line is peaking. The firm says this could add more risk, lower the target to 32. Pink dress. Yes, not pink other thinks. John harwood, save us. The Supreme Court has set the date for arguments on the travel ban, attempting since jan rather are less than three months from now is when the Supreme Court is going to hear those arguments. We know that lower courts had been holding up part of the travel ban the Supreme Court lifted the stay in part while saying theyre going to consider these snow arguments and consider the Civil Liberties questions, and the other objections that have been made to the travel ban. So we have a date for arguments. Thats october 10th. Thank you, john. Phil lebeau spoke with the companys ceo exclusively, and he joins us now. Tyler, its not look the outlack they beat them on the top and bottom line, but the numbers are a bit concerning down 5. 5 . China in particular is a huge market, but notices thats weighs on the results there. With regard to Third Quarter and the guidance from the ompany, its in particular the passengers revenue for a seat, the targets the company set, theyre disappointing to investors, as well as to those on wall street ed guisian is to be on the range of negative 1 to here is Ceo Oscar Munoz talking about that guidance. Again, i think united is firmly, and i mean firmly on the right path a quarter does not make a difference the simple difference is others have guided a little higher. Part of is theyre cycling some negative issues, and then its a forecast united is post did not 13. 2 , the gap between the leading airlines and united is narrows despite the fact that its one of reason is why and i look at that on the past one year, and thats the best among delta president any part and they point out to other metrics saying, look, we have improved our performance despite some of the issues that happened in april with the passenger being removed from the plane and some of the other Public Relations issues. They say when you look at how theyre operating this airline, its far better than where it was a year ago, and improving relative to competitors. Lets bring in someone who knows a little bit about the inner workings former president and ceo of spirit great to have you with us. Good to be with you. Lets pick up on that thought, the idea that unites maintains despite some splips and falls, that their Operational Performance is vastly improved from where it was a year ago do you see it that way well, its a low bar to go over there, because they were in bad shape a year ago, but youre right. They still have a ways to go is we were talking, michelle and melissa and i were talking earlier n. Ingly it seems most people focus on price, whos got the best fare to where i want to go, and also the idea that in many, many markets like the new york markets and many others, your choices are comparatively restricted, because one or another carrier basically dominates. Price matters a lot one of the challenges is on both ends of the price spec tum at the low end ko compete with the frontier and spirit at the hire ens denver is a threehub market for a city thats really not that big so united that delta or dallas or miami that american has, and that puts them in more Competitive Pressure with lowfare carriers on the low end and makes it harder for them to attract business customers at the high end. I get why everyone assumes customers are mostly focused on pric price. S im wrongering, is there any training, that somebody actually smiles at you when you walk up they look terrified, my god, here is another person can he please get a blanket . Instead of, no, we dont know that, im sorry, we dont have the tonality is horrific. You nailed it with what you want its free to smile, its easy to smile, but its so hard to get crews who are dispersed all around the country, theyre flying in all these airplanes, they have tough jobs, under pressure, but its a tough them. The Industry Needs to train and recruit bers thank you, ben. Thank you very much civil disobedience for the wealthy . Highincome earners are being urged to rise up and not pay a tax. Today is National Hot Dog day. Weve been having a consequential debate in the newsroom is a hot dog in a bun a sandwich questions people really are asking let us know what you think we want to hear from you visit us tweet us or visit us on facebook lots more ahead on power lunch right here on cnbc first in business worldwide. And the wolf huffed and puffed. Like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. 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President trumps Voter Fraud Commission has been met with growing opposition ever since it requested voter information from every state in response, the Democratic National committee launches a commission called protecting american democracy from the Trump Administration. We understand, we hear this nonsensical myth of voter fraud. It is not happening, we are not seeing that, but what we are seeing is people need more opportunities to have a chance to go vote, and we are committed to that here at the dnc. Massachusetts lawmakers and gun control advocates gathering at the statehouse. They are urging passage of a bill that would ought loy police, doctors and family members to temporarily keep firearms out of the hands of someone at risk of hurting themselves or others this come after more than half of that states gun deaths were suicide in 2015. A new Duke University Study Reveals very few smokers take medication to help them quit after a heart attack it says only 7 fill prescriptions for drugs that would help reduce youre up to day thank you very much, sue. Lets look at some of the movers Morgan Stanley higher on the back of better than expected earnings, and take a look at all the f. A. N. G. Stocks in the green. Facebook hitting all new highs, blue apron moving higher today that stock is up more than march. The markets are closing for today. Jackie what a day it was for oil it looks like were going to settle over that mark after that kniffin tore report. Large draws in crude, and adding support to all right lifted levels. U. S. Production did go up, but its being the dollar index also adding support for this and it was technically significant as we had. Saudi imports to the u. S. , it slowing to the lowest in 2015. For this time of the year, the slowest in five years. For the moment right now, the market is saying theres nor bullish factors than bearish ones back over to seattle, the city of seattle is trying to pass a new tax targetings its wealthier residents. The states Republican Leaders are encouraging them not to pay it robert this is the latest battleground for taxes the rich, passing a new high income take that opponents say you should gentlemen ignore for now 250,000 for single filers or above 500 though joint filers. Its the first of the kind in Washington State they have no income tax and no other cities in washington have an income tax. City Council Members say the projected revenue is needed to offset potential federal cuts and bring fairness to a growth boom fueledly amazon, microsoft and other companies thats done a lotfoot foot top, but not so much on the bottom they are urging the rich not to pay. Theyre calling the wealthy to engage in civil disobedience and Forcible Resistance to refuse to pay or comply with the tax they say its unconstitutional, and a vail attempt to impose eventually a statewide income tax. Seattles Median Income is now over 80,000, and the median home price just stopped 700,000, twice the level it was just five years ago. And the two will not pay the tax, because theyre in medinah. Got it. Robert, dont move we have the chairman of Washington States gop and the leader in this not my tax movement, susan hutchison. Thanks for joining us. Youre welcome. Thanks for having me. Tell us what you are telling the wealthier to do right snow were really talking to all the people the Democratic Party has made it clear they will stop at nothing to get an income tax in our state. Of you are your viewers live in states with income taxes, and they say whats the big deal we are so taxed despite not having an income tax the property taxes are sky high, with the largest sales tax in the country, one of the most highly taxed states per capita so adding an income talks is a huge burden. Theres a tax fatigue among everyone those of you on a business channel can handle numbers 5. 4 billion is the budget of the city this is expected to bring in 100 billion, about 2 . Im so sorry. We have breaking news. Were going to listen to Mitch Mcconnell at the white house with out republican senators engaged in everything we have done for the last two weeks. As you know, the president likes to talk on the phone with a load of conversations hes talked to a lot of members, and one of thes on outgrowths of the discussion today is that the Vice President , secretary of health and human services, and head of cns will be on capitol hill tonight working with some of our members who at least so far have gotten had some difficulty in getting to yes let me describe what yes is. Its the motion to proceed we cannot wait to keep the commit unless we get on the bill so next week well be voting to get on the bill. I would remind those of you who dont cover capitol hill that this particular type of bill is totally open for amendment theres no way i or anybody else could prevent members from having amendments, that any 51 of us can pass and changele bill, but we cannot have a debate until we get on the bill. So next week we will be voting on the motion to proceed i have every expectation we will be able to get on the bill reporter the president seemed to go back to his original position. It look like the direct erg going to and replace at a later date where are you with that . I think we have two options here there is a large majority in our conference that want to demonstrate to the American People that they intend to keep the commitment they made in four straight election. I think we all agree its better to both repeal and replace but we could have a vote on either and if we end up voting on repeal only, it will be fully amendable on the senate floor. If it were to pass without any amendment at all, its a twoyear delay before it kicks in the takeaway, no harm is done by getting on the bill. Wide open for amendment, n matter what i offer as a substitute first, its fully amendable. Reporter given the president s comments today, and a followup on that question, are you experiencing some political whiplash here . Well, its pretty obviouses weve had difficulty in getting 50 votes for proceed what i said to disabuse any of you of is the notion we will not have that vote next week we will vote on the motion to proceed to the bill next week. Reporter will you cancel all of august recess. Well have a vote next week thanks, everybody. Insists they will vote weve heard that before. Lets see if they actually do that lets get back to ms. Hutchison. Sorry to interrupt you there what about seattles you were talking about how taxed the residents of Washington State are because of property taxes, other taxes, forgetting about income taxes what is are spending levels like the budget of the city haus grown 35 in the past four years, so they are obviously our city is growing, we have a tech boom going on. Things are very positive, but this is really a power grab. Its a phony bill, because the whole to overturn the constitutionality of the no income tax that has been the tradition of our state, as well as state laws, we voted on our bill very much like this, just a few years ago, and the voters of the state turned it down in fact we turned down an income tack nine times. When we are asking our folks to not comply, not pay and ignore this, we are basically saying ignore an illegal ploy that has you paying the spirit of those who supports this, in seattle you have all they tech firms, where you have penthouses in brandnew towers selling for millions, yet tent cities and large Homeless Population should government do anything about that problem well, in fact we do have a terrible homeless problem, but its not because of the weather that people are homeless, that people move here its because of the policies of this city that have made it an attractive place for the homeless to come and set up camp so this is one of the things that the democrats do. The city is totally in democrat and socialist rule so they make a problem, and then they decide they have to get all of us, which is mostly middle class, to pay for it so thats why this tax is such a farce. We dont have enough wealthy people to pay a tax that could make any difference in solving problems we have a huge city government, and they have had a huge budget. You say this law that the city council has passed is in violation of the constitution and of state statute. Yes. But why would they do that if it were so clearly a violation of the constitution . I mean, they must see it differently. Whats their argument . They want to take it through the court system in fact, it is already written into the prospectus on this bill that they expect to take it to the Supreme Court. Theyre waiting for someone to sue them so they can move it through, of course the taxpayers of seattle will have to foot the bill for the defense, then they will take it to the Supreme Court, which is mostly liberal judges in the hopes they would overturn the constitutionality of no income tax in our state. That would be a big moment. It would be, and it would be so burdensome to the people of this state to add an income tax on top of everything else. Susans thanks for joining us and thanks for your patience while we interrupt you to for the on press conference. Cho pot lay following another nor ovirus scare, and a bull and a bear will debate. Is a hot dog a sandwich . We want to know what you think weve been debating that fiercely all day longs es pou es. A who knew that phones would start doing everything . Entertaining us, getting us back on track and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save when you choose by the gig or unlimited. Call or go to xfinitymobile. Com. Xfinity mobile. Its a new kind of network, designed to save you money. Shares up today after this mornings lows, following reports of a norovirus outbreak. Guys, great to have you with us, youre on opposite ends of the spectrum there and bob, you have an outperform rating, 440. In terms of the stock sensitivity, to just scares, arent you just waiting in wont you about he beholden to the next possible scare out there when it comes to this stock and the momentum absolutely. You know, the Biggest Issue i think around this brand has continued to be headline risk. Weve been on the sideline for i guess about a year and six months now the stock has fallen down, i think it was around 450 or so when we downgraded the stock if the stock were considerably higher than it is now, i would be less optimistic the thing that address more confident is clearly the menu innovati innovation the more aggressive approach, the addition of Scott Boatright from ashys i think this is substantial Stronger Team and brand than it was 18 months ago. Matt, in terms of the risk to celebrating, there is a big investor in this stock, bill ackman not successful so far, but he tweeted today, this is his first tweet hes ever tweeted, a picture of himself at a chipotle ordering foot. I get to help bolster and address concerns it is safe toite there. S i just think theres more competition there. I think thats up until this that caused them to have a stepback which will cause them to come back with marketing dollars, all that means higher costs versus what the stock means. As a stock it was not the same investment as 18 months ago. Theres a lot of lack of visibility certainly on the outlook looking beyond the current quarter. Guys, i have to wrap there weve got a lot of breaking news we should note we did reach out to chipotle and they had no comment. For more go to tradingnation. Com. The ibb up almost 20 so far this year. Should you ride the rally . Or is it too late. One of those hot biotechs is rallying big today, how much sty aranerat it go myerinto my business. Thing and i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. The ibb biotech is up over a percent on the day on pace for its best day since july 5th leaving the group up more than 20 today, trading on an alltime high in 1991. Lets bring in michael ye, managing director. Great to have you with us. Thank you, great to be here up 20 , up 21 , do you still like vertex . What was so staggering and you were pounding your fist on the table, when the data was released it was better by orders of magnitude according to a lot of analysts. Yeah, yeah, so i think the key is we are telling people wed be buying vertex here, and a takeout or an upside case. Vertex zoomed to be become the fastest large cap Growth Company out there in the sector. Revenues are doubling three to six to seven billion now earnings 10 to 12 bucks in earnings powers. 15, 20 multiple can get you to 185 to 200 even up 20 , you would buy this stock even up 20 , we would buy the stock, the revenues are doubling from three to six to seven billion. So theres a move here today, and i think theres more to come one of the reasons why we love having you on, michael, youre able to address the sector in sort of a from a market perspective and so i wanted you to interpret what you see going on with biotech especially as were seeing an appetite for growth in the market piddling Economic Growth ic the key is if you have context, the last two years were in some ways a disaster for biotech. The group was painful. Headlines are mainly passing, thats important two is, from evaluation perspective, with that big pull back in the group, you know, biotech at a whole is trading near the ten year low multiples. Meanwhile the markets at an alltime high. We think theres still valuation call here particularly with the political rhetoric passing wed stick to that youd see that tick higher in the past month or so on the overall index. We saw that in shares, michael, up about 12 in the past month is something going to happen people are saying they have to do some kind of deal, 2017 or 18 going to be it look, i think that first of all, next week, gilead will put up good earnings i think the group will put up good numbers, and gilead continues to look for things i think theyre going to be patient. I think those are looking for some gigantic transformational deal are not going to get that you know, midcap type companies. And i think theyre going to take some time 2018 is a better year for gilead, thats our call. Next year, early here. And people will come back to gile gilead great to see you, michael ye of jefferies it is, maybe you didnt know this, now you will hotdog day in america. National hotdog day is a hotdog, in a bun, a sandwich we agree that a hotdog outside of a bun is no sandwich. Were going to debate it check please is next i joined the army in july of 98. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family, and we will be with usaa for life. At the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. Here it is the video of the day, Chris Christie making a bearhanded, onehanded catch of a foul ball at last nights mets game he then got booed. Then handed the ball to a young fan. I believe he signed it and handed it to a little boy. Christie makes a nice catch here look at that he signed it . I wonder if the kid wants a ball signed by Chris Christie popularity ratings arent high popped up wow you know they say that christie may ultimately become a sports talk radio host in new york after he leaves office he had a publicized audition last week on wfan in new york. Long time host is leaving later this year. And if youre going to do that, you have to get used to boos sports radio in new york, tough business all right. Just the ingredient is different, its a hot dog, not cold cuts. Melissa, i used to think you knew everything. I think its its own category i mean, so boxed in, melissa when i go to a an italian street fair on a roll, is that a sandwich its a different kind of hoegy. Its an item of food consists of meat, cheese, other filling, a bun is only one piece of bread. See, i told you they were astute a hoegy is one piece of bread, people. If an Ice Cream Sandwich is a sandwich, then a hotdog is a sand wichl thats a good comparison a hotdog is just the meat. Hotdog on a bun is a sandwich. We solved it very good all the answers thanks for watching power lunch. Closing bell starts right now. Enjoy your hotdog