Transcripts For CNBC Power Lunch 20170725

Welcome to power lunch. Im michelle carusocabrera. Recordbreaking day for the markets. Take a look. The s p 500 with new highs with 60 members of the index at all atime highs the russell 2,000 also at new highs. Morgan stanley is one of the winners. Its market cap for the First Time Since before the national crisis, bigger than goldman sachs. Other big movers today include aetna, cigna, boeing, carnival and royal caribbean. And one name not feeling the love today though. Snap shares falling to new lows again. Stock trading below 14 a share. This record breaking day for the markets. A year of records it has been. Driven today by a flood of earnings five dow components. New housing data and a sky high read on consumer confidence. Weve got it all covered for you. Bob pisani is at the New York Stock Exchange phil lebeau with gm. We begin with bob at the big board. 21 declining stocks. More winners than losers on the story. Lets look at several dow components caterpillar great global sales overall. Good guidance. Mcdonalds strong global same store sales and traffic. Utx had a good number, a small beat but thats not enough in this market you need to have a nice beat to get your stock moving up they didnt quite have that. Heaven help you if you missed though 3m at a small miss seagate big miss here. Weve got the 25 of the s p reporting. Whats the lesson so far more beating on the top and bottom line and by a bigger percentage thats why the markets up but prices are high. Youve got to have a really good beat, a really good guidance to move the stock caterpillar is the good example there. Heaven help you if you miss because youre penalized heavily. One big winner is an asset group here all of the Money Managers are hitting new highs. T. Rowe and eaton and frank inwill these guys are paid as a sets under management they get more money. Simple story from them back to you. All right, robert thank you very much. The democrats putting a target on the drug industry with their new socalled better deal plan meg tirrell here to take us inside the numbers hey, tyler. Bob was just mentioning eli lilly and biogen had reactions neither stock reacting largely bmo points out even though they had a beat in the Second Quarter, it was driven by older medicines. They also reported on their Rheumatoid Arthritis drug. That weighing on eli lilly and partner incyte there which is driven by better than expected sales of their new drug for Muscular Atrophy however, that stock has come down a little bit from those exciting highs earlier due to some management commentary on the call saying that growth of that drug may slow down a little bit as it will be harder to expand to certain patient populations. They did talk a lot about m a on that call there. Back to you. All right thanks ill pick it up, meg lets talk about shares of the ibb and biotech in general the etf is down more than a percent today. How much is washington a part of the equation for the companies and not just the earning data . Lets bring in eric schmidt. Good to have you here. Thanks for having me. Lets start with the macro question you saw the plan yesterday theyre not in power however, they are talking about a drug price czar. And by the way, the president of the United States is a member of the Republican Party is also negative about the growth in the cost of drugs. Have we seen this sector finally be able to shake off that Hillary Clinton tweet . Or is it just going to be just as bad when it comes to the politics of the sector well, i think were certainly seeing this specter of drug price controls fading for sure up 25 year to date. I think a lot of that is because investors are more comfortable, the fact that not much is going to happen in congress these days with regard to health care let alone with regard to drug pricing. So i dont think that the dem plan proposed yesterday is actually as vicious as we expected given what theyve said in the past. Most investors are actually rotating money into biotech on those perceived nondrug price control head winds fading. Lets drill down a little bit. Eli lilly and incyte, both of them are down. I see you cover incyte what do you think of those we like incyte but not based on the drug that had issues today. The report next week and a drug in the pipeline that looks like it could be a revolutionary drug well get some more key data on it later this fall as well as about year end we like to make money here on cnbc so help our viewers make some money on names we dont talk about as much bioveritiv, why is this name catching your attention so strongly thanks for bringing that name up it is a name we like a lot right now. Lies some scarcity value there just arent that many Cap Companies that you can buy that are profitable in this industry right now. They have a new kicker coming on a drug and late stage trials called tnt 009 for a rare disease of red blood cell. Drug goes though heart of the issue. Has terrific phase two data. Should be in phase three later this year and potentially in front of the fda in two years time a Great Growth Company with profitability that almost anyone can own here thanks so much for weighing in on that sector which has become much hotter in the last months eric schmidt thank you from drugs to cars, shares of General Motors slightly higher ahead of most expectations however, investors and analysts are still concerned about one big issue. Rising inventories especially in the highly profitable big trucks. Phil lebeau here to break down more on gm i think barkley summarized what weve seen with the gm earnings today as a set of positives likely another quarter with no love from investors. Though we are seeing shares go higher today take a look at the profits and numbers from gm. Well above street expectations earning 1. 89 a share. And t with the estimate on the street. The revenue was hit by the fact that we are seeing slower u. S. Sales. We were expecting that the street was expecting that. But the north american Profit Margins in the Second Quarter . 12. 2 . Folks, those are sensational margin profits the concern comes on the inventory side inventories are starting to back up at 105 days on july 1st then it brings up the question will gm have to change its production forecasts so far its saying no. Earlier today on squawk box when we talked with chuck stevens, he was cagey about talking about whether the company will end production of certain sedans due to slow sales. We are always going to be focused on supply and demand as weve seen she shift from pattern cars to crossovers, weve taken proactive action to reduce the production of cars. Were comparing it here with the s p 500 over the last three years. Sure its come back a little bit but overall this stock has done nothing compared to the market overall over the last three years. Guys, we should also point out on the Earnings Call several analysts asked about whether General Motors will move away from productions of certain sedans because of slower sales time and again, mary barra said she likes where General Motors is positioned when it comes to the car side of the business around the world back to you. All right, phil thank you skrr much. Joining us to further discuss this is u. S. Equities analyst at ubs. The stocks not done badly its up 4 for the year. Why do you think gm is not getting more love from investors to phils point. Also are you concerned about this inventory buildup i do think theyve been very clear at the start of the year that q3 was going to be a bit tough in terms they were probably expecting double digit declines thats going to go a long way of getting those in line. Theyre launching their new suv and that should help the market share a bit. I think the combination they seem to feel confident theyll end inventory in line. I think thats fairly reasonable still going to be a challenge. But i dont think theyre going to be too off the mark General Motors has some very good sedans. The malibu, the chevy impala very highly regarded and very successful but it sounds like the era of the sedan is waning. Agree . And not just at gm. Thats absolutely true. If you look at year to date, cars down 10 . Trucks up 6 one of the reasons we like the auto names is theyre still truck heavy. I actually, you know, tend to agree that as phil mentioned, theres going to be announcements later this year of more car cuts. Maybe reducing while you might keep the cruz and malibu, you may cut certain models and versions and you also may actually relocate production to other parts of the world ford recently announced theyre moving the focus to china. And that actually could help it trades at a big discount when it comes to its pe. Why is that . Do you expect that to turn around at this point where do you get growth in this stock . Absolutely, i do expect it to turn around. If you look at the Free Cash Flow yield, this thing is actually skraz cheap the problem here is youre lo fighting the cycle even today they had a solid quarter and they continue to remain skeptical they have to remain moving forward. I think what would really help in the interim is announcing a small car strategy yield of more than 4 i shouldnt kb worried about that at all, right what was that i shouldnt be worried about the yield of 4 . Thats a great amount in this environment. I think theyre doing well in the vierm theyre in today which of the auto stocks do you like the best . In our pecking order, we buys on ford and gm were slightly more positive on ford its the opposite of gm. Their comps get easier also well get the strategy from the new ceo i think from ford in the second half of the year as well. Colin, good to see you. Thanks for joining us. News alert on the bond market right now Rick Santelli tracking the action on the cme. Whats the demand like i gave demand an a as in apple. Thats the grade of demand 26 billion 2year notes. The first of 88 billion in supply 1. 395. The one issue was trading lower yield higher price im sure the three base Point Conception pushing up three basis points that might have been one of the reasons it was solid lets go through it quickly. 3. 06 bid to cover over 3 going for every dollar available best since november 2015 58. 5 on indirects. Thats the second best number in eight years on indirects 16. 9 indirect. Well above the 13 option average. And fanlly dealers only take 24. 6 . Tomorrow would be 34 billion 5year notes back to you. Well be watching for that. Thank you. Big evening on tap for President Trump. He is set to meet with the Prime Minister of lebanon shortly. Then hell talk health care. This comes off a morning and overnight tweet storm that targeted so many people. Jeff sessions, Hillary Clinton, amazon, the Washington Post. This is a wall, a big beautiful huge wall that we have built of as many trump tweets that we could fit. They do not all fit. Because he just did so many tweets in the last 12 hours. He was not sleeping no. This was a sleepless night. If youre on the radio which a lot of the audience is, theres a lot of stuff on the wall and so many topics and so many exclamation points. What do the 85 of american who is are not on twitter do they look at our wall they sign up. I dont know i said to michelle earlier, we need to take away his exclamation points thats basically its not twitter. And the capital letters. That would be like cutting off a dogs tail, though, right . Its such an expression of their joy or anger yeah. But if some dogs need their tails cut off. Elon is live with the latest. Today is a perfect example of the difficulty this administration has had in stays focused on their key agenda items. That tweet storm on the wall set off a Heated Exchange with a member of his own party. Republican senator Lindsey Graham it started with trump attacking Jeff Sessions calling him very weak in investigating Hillary Clintons email and stopping Intelligence Leaks that prompted this reply from senator graham who tweeted out himself prosecutorial decisions should be based applying facts to the law without hint of political motivation now, the white houses official schedule here today is dominating by that meeting with the Prime Minister of lebanon. That will be followed by a press conference in the rose garden at about 3 00 p. M. This afternoon meanwhile, over on capitol hill as we all know, the senate is poised to take that Critical Health care vote dont worry. Donald trump tweeted about that too. He said that his pen is in his hand and he is ready to sign any bill if republicans can just pass it and get it to his desk back over to you a consequential day at the white house and on capitol hill. Thank you very much. From surviving the Great Outdoors to using it as a laboratory, the new set of skills americas girl scouts are learning the ceo joins us straight ahead. But first we may be sitting at market highs, but august and september, they are risky months historically the two worst market months of the year coming our way. So where do you put your money now . Thats next. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Welcome back, everybody. A record breaking day on wall street the russell 2000 hitting new highs. Dow going along for the ride up 133 points names like mcdonalds, aetna, boeing, honeywell among the 60 names in the s p 500 now at alltime highs despite the recordbreaking performance this month, folks, analysts warn that two of the markets worst months of the year august and september are right around the corner. We cannot avoid them august is going to happen whether we like it or not. Is now the time to bail or buy lets ask Richard Bernstein and jason ware richard, let me go with you first. You think that investors have remained too conservative throughout all of this why do you think that is and what would get them to change particularly heading in as we point to the two roughest months of the year historically well, tyler, good afternoon i think that why have people stayed so conservative is really the hangover from 2008 i think people have throughout this whole bull market have been very concerned that for some reason or another 2008 was going to reoccur despite the fact that the fundamentals couldnt be more different than what led us into 2008 people have that concern and so i think youve seen that not only among individual investors, but youve seen that among pensions and endowments and Hedge Fund Positions youve seen that in a lot of different groups that theyre very conservative and have no time in the bull market have embraced the bull market which is remarkable jason, your view here i mean, personally i dont think trying to do something because two historically rough months are ahead of us is a good reason to do anything so what do you agree with that disagree with that where do you think we are . Well, i absolutely agree with that i think if youre a longterm oriented investor and whatwe tell our clients is you want to stay the course. You want to have a sound Investment Strategy. You want have an appropriate Asset Allocation and you need to ignore the noise. While its true if there is some seasonality in the market particularly in september, the reality is with that knowledge theres very little actionable information. Most investors should retain that high Quality Investments orientation in the portfolios to benefit from what the market has to offer i think over time its time in the market not timing the market thats going to make the most impact on the average persons returns. Do you think theres an issue right now with time . Put aside august and september are there issues in the market that make you worry . You know, michelle, i think its a matter of this point in the cycle you worry about what you always should worry about at this point in the cycle. And that is whether Central Banks whether it be the fed or ecb or whoever, Central Banks tighten too much now, i think thats kind of a silly worry right now. But i think thats the next important thing to worry about you know, august, september, i mean, if youre off by a day the returns could be very, very different. I dont think too many people are very good at timing in shortterm anyway. You heard our previous segment. Does a price matter for a stock market thats a question we get a lot. Obviously given how much this president is in the headlines every day and oftentimes not favorable, we get that question a lot. The reality is the impact of any one president , they get much more credit than they deserve and get too much blame when things go wrong. Congress is really controlling the pursestrings and a lot of what were seeing with regard to fiscal policy and the president will sign depending on, you know, whether political tilt is. Over the long run, i think the impact is minimal at best. You think in the long run it matters more policy matters, doesnt it eventually policies come to fruition because and thats what drives profits, et cetera. When there was a massive tax reduction. That led to a better economy, right . What you said, youve got to parse that a little bit. The policy itself doesnt matter its the impact it has on the fundamentals thats a lot of policies that come on youre splitting the difference, right . Theres actually a lot of policy that goes on that makes a lot of noise we got to talk about what stocks were talking about the dow, half the dow is getting half their earnings from around the world. So i think if were just talking about the dow, i would argue that the president of the United States not this one or the last one or the next one matters zero well, i mean, its a great point. I mean, whether you liked president obama or you didnt like president obama, the reality was we had a sevenyear bull market. Whether you like President Trump or dont like President Trump, the reality is the bull market is continuing. So to set an Investment Strategy based on a political view, i think its a little short sided. All right, folks. I will agree. We appreciate it. Thank you. Change the way tv ratings are measur ia joedn mar way. Well tell you what that 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. Welcome back, everybody. The Way Television watching is measured hasnt changed in decades until now. Jul Julia Boorstin has that story. Hey, tyler. Thats right nielsen announcing it will start including digital tv views on hulu and youtube tvs new streaming services in the ratings it reports for tv shows. This will give a more accurate picture across the spectrum. Nielsen has included digital viewing on sling tv and sonys playstation vue. But this could be eaningful. Googles tv last week tripling its footprint expanding to ten new markets and hulus launched just in may. Now, this move comes as major media giants battle concerns about cord cutting remember disney shares dipping two years ago in august on those concerns about ratings and cord cutting for espn in particular in fact, espns svp of marketing saying in nielsens press release today, quote, we are encouraged by nielsens efforts to capture viewing across the shifts media ecosystem now, when it comes to streaming, nielsen is strieing to pressure, its Net Neutrality that could be a big issue that could impact how quickly and seamlessly that is delivered to consumers. To testify about Net Neutrality before congress coming up in september. Now, alphabet and facebook want to make sure that internet providers cant either slow their video or charge them to make the delivery of their content faster guys, we have to remember premium video content is only going to become more important to companies not just like alphabets youtube but also facebook. Back topher to you. Its a key Battle Ground in that industry. Thanks home values just hit a major milestone. Ur meyhe best housing place for yoon all that straight ahead here on power lunch. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Im sue herrera. Heres your cnbc news update for this hour. In his daily briefing, House Speaker paul ryan says its up to President Trump to decide who he wants on his White House Team this following reports the president has spoken with advisers about firing attorney general Jeff Sessions. The president gets to decide what his personnel is. You all know that. Hes the executive branch for the legislative branch he decides who is hires and fired in that branch thats his prerogative if he has problems with the attorney general, im sure hell bring them up with him for sure. First daughter ivanka trump and betsy devos taking turns reading rosie revere the engineer part of the department of educations Summer Reading initiative on a sad note, seaworlds last orca born in captivity died this morning she recently contracted an infection. Seaworld says its staff has spent the last three days trying to keep her alive. To no avail. And that is the news update this hour back over to you guys. All right yeah, is that era comes to an end. Thanks, sue. Take the family to dinner tonight and order an extra appetizer. It is another recordbreaking day for many of your stock investments. Most of the major index is hitting new highs. The dow left out of the party just a bit you can blame 3m and United Technologies for that on the back of their lackluster earnings but the dow closing at 21,640 set on july 19th were also waiting for Senate Leader Mitch Mcconnell and other Senate Republicans to talk about the Upcoming Health care vote. We expect to see them around 2 00 p. M. Eastern time senator john mccain has returned to the hill to cast his vote his first time back since he was diagnosed with brain cancer. For which he was operated on about ten days ago lets turn to housing because kay shiller reporting home prices rose slowly than expected in may. Home values are hitting a new milestone. Diana olick has that live in washington for us. Prices are still going up by a lot. And thats why the median value of all u. S. Homes has now surpassed 200,000 the highest level ever even than the last housing boom. And thats according to zillow youre probably saying, wait, the realtors just reported a higher number than that yesterday and have been for awhile thats the median value of homes that sold. And right now more high end homes are selling because there are so few cheap homes for sale nap skews the median higher but it doesnt speak to the value of all homes in america zillow is using a different model that looks at sales but extrapolates that out to comparable houses not for sale for the first time zillow reports that median value hit 200,400 which is up over 7 from a year ago. Why do we care if were not selling the house . Two words. Home ec withquiequity that the s the primary cause of foreclosure. There are still 1. 8 million under water but that number is falling faster than ever when borrowers are under water, it is of course tough to refinance and costly to sell the home more home equity also means more money you can cash out of your house and spend at Home Improvement retailers. Thanks very much. For more now on zillows new data on soaring home values, lets go to the source let me make sure i understand, that 200,400 figure up 7 from last june is basically an extrapolated number. Its not based purely on actual sales of houses, right thats correct. Its basically encompassing the entire Housing Stock of the u. S. We have a unique data base that covers almost every home in the United States. So we give you a median value of the entire stock versus just looking at the homes that actually ended up selling in a given ma rkt and so i assume that this is happening for two reasons. One, money is cheap so the principle value or the value of the asset can go up more than it otherwise would. Money is cheap and inventory is down and demand is high would be the third one in there thats right were seeing a lot of the fundamental drivers making home values climb quite a bit right now. And you have extraordinary demand especially with millennials coming to the market and wanting to buy homes very tight inventory and of course on top of that, Mortgage Rates are still very, very low the hot markets seem to be in the northwest and the southeast broadly defined from dallas moving east towards atlanta, orlando, et cetera nashville is very hot these days are some markets that are lagging in this very favorable lets call it hot Real Estate Market where has it not hit yet its a great question a lot of places northeast, for example, some places in the midwest are lagging behind a little bit were seeing chicago, for example, is not seeing quite a strong value of home appreciation or some places in the northeast even outside of boston or new york most of the time were seeing cities that are not showing as strong of job growth or not adding as many jobs in general are the ones lagging behind a little bit the rest of the economic recovery isnt quite as strong were also seeing home values lagging behind didnt you have a number that was outmigration in chicago cook county had the largest outmigration of any county in the United States last year according to the census department. If you lose that, you lose job growth you basically dont have a floor under house prices that explains where you see the lagging prices what about the supply of houses in the United States in general . Diana has long reported that there just isnt enough. Is that still the case that is still the case. Were seeing 11 fewer homes on the market right now compared to last year nationally and some markets such as san jose, san diego, columbus are seeing almost 40 fewer homes on the market i see in your notes there in 1 1994 it was still the same number of homes for sale yet there are millions more of people in america. Yeah. Its quite drastic and even as some markets are starting to see a little bit of uptick in inventory, were so far off from where we should be that even that is not making a large debt because were lacking homes to buy right now all right thank very much. We appreciate your time. All right. So i know that buying a home has been a good investment in many places around america. But thats a lot of work lets find out how you can make money on the housing without the hassle of paying taxes and taking care of a yard. Megan mcgrath at mkm partners. Based on your ratings and your price targets, okay . Cal Atlantic Group has the highest upside what makes caa such an attractive name for you and your clients . Yeah. Theres a couple things. Theyve lagged is little this year their order growth has declined but when we do an analysis where they are, where are the strong markets . Cal atlantic is there. Theyve had some integration issues a merger of ryland and standard pacific about a year and a half ago. But i think once they get everything up and running and they start to perform in those markets, youre going to see some you see based on your target and the current price, you see 17 upside yes definitely youre not worried about the integration, you just love their markets. I love their markets and i think they can accelerate their ofrder growth. Thats the number they need to look for them. Thats what they need. At what point do we start to worry about housing getting too expensive . Weve been here before all of us. Weve looked at markets where homes are trading at 8, 9, 10 times the average income and in some markets are we not getting close to that again . Yeah. Well, we started to get some worry about affordability. I think its fair. To put this in perspective, we had homes report they stated theyre actually starting to feel a little pricing pressure they had to increase discounts in the southeast of the United States because inventory, theres a bit more competition there. So i think you are potentially seeing at that middle price point, that about 400,000, youre starting to see people push back a little bit against the price increases. The markets shrugging that off today. Most Home Building stocks are up, but i think we need to listen carefully as we get through earnings if others say the same thing what part of the market in terms of price is the hottest right now . Is it that 400,000 . Obviously its different city to city. Well, the most recent number we got, their middle price point was up 21 year over year in terms of orders. Firsttime buyers and active adult were up about 6 even though the prices are high active adult whab is that that me . 55 and over why do you call them active adults because you want them to feel better about themselves . You cant say old anymore. Its a new generation theyre still working. Theyre still active you would never call a Group Inactive adults, right slothful old people thats the group you used to call fat but now you cant say that either. Active adults yeah wait until you come into this demographic. Youll feel differently about it is the driveway longer because youre forced to plow the snow the golf carts. So youre not that active can you dispel a vicious rumor. Theres a rumor the millennials, 85 to 88 Million People between the ages of 18 and 33, that theyre all going to live in an apartment in brooklyn and drive Autonomous Cars shared by uber thats not true, is it yes, theyre moving out of the basement and buying homes. Absolutely. So thats a giant demographic wave coming. It is its not going to start tomorrow, but its over time its gradual theyre getting older and having kids theyre having fewer kids. Some of them may stay in the city i think that longterm homeownership rates probably going to be low per. But the trend is urban living people dont want to live in sue bu suburbia because people dont want to live there they still have to be housed somewhere. Tough get out of the parents basement and go somewhere. Where they go might be different. Taking some old warehouses and turning it into apartments or maybe more townhouses because of fewer kids yes, youre right. It might not be the fullon suburbia retreat outside of the city center, but there will need to be housing structure. We baby boomers are just waiting for those millennials to come bail ourselves out. I almost said Something Else thank you. You cant say that either you cant say old or that word you were going to say. Your rump. Bail our rumps out. Thank you my pleasure from wilderness survival skills to mastering science. Americas girl scouts are learning a whole different set e cewi jn today. Tho lloiugh next because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Today the girl scouts are introducing 1e ining 23 new bad. Thats the biggest rollout of new badges in almost a decade. While youll see badges still for camps and survival, many are for activities robotics, programming, Cyber Security joining us now is the ceo of girl scouts of the usa and Rocket Scientist good to have you here. Thank you all for hosting us. So tell us about the decision to create new badges based on stem as they say science, telephone, et cetera. Technology, excuse me. From the beginning weve had that we just didnt call it that. Electrician badge, carpenter badge. That over our hundred years allowed us to create this great workforce of women who first got their start in science, technology, engineering, math in girl scouts. We are always seeking to make ourselves more relevant to girls today. Thats what youre seeing with our 23 new badges. Its about programming robots. Its about writing code. Its about designing race cars its about, you know, environmental adventures outside. To earn those badges, you have to do those things in some kind of curriculum workshop. So how does that get done by what are a huge band of volunteers around the country . Absolutely. We do have curriculum that is age appropriate. Were really the leaders in that girl experience. We know a lot about how to get girls interested in all sorts of different topics including stem. So youre right. The curriculum is based on age appropriate. Whether its the daisies which are kindergarten girls that curriculum is age appropriate. In addition you guys create it and give it out to we work with partners to help us create the subject matter and we put our special girl scout leadership one of the things that makes us different, its not just learning a skill we ask them to apply the skill youve got to do something with that you have to do it in a way that has teamwork and collaboration theyre all awesome things. How have the girl scout hs to evolve like i imagine the girl scouts have had to evolve because of the cell phone and instagram and snapchat and the things taking our young kids and teens and tweens attention so much. How do you integrate that into the experience with stem, thats really what were focused on we dont want girls to just be users of technology. We want them to know how to program the technology in addition to that, the first s in stem is science and thats why weve never lost focus on the out of doors. In addition to our science badges, were also including those outdoor badges to get girls that real world experience so that, you know, eventhe youngest ages were asking you to do understand photosynthesis as you get older, look at the cloud patterns being able to synthesize and analyze and report into science agencies let me ask you a broad question as the father of two boys. Are girls kicking boys butts . Are they ahead of boys age to age my gosh when you look at the United States right now, there is a yawning workforce gap. We saw this recently with our workforce introduction with Palo Alto Networks and security badges with less than 10 plst of the workforce in Cyber Security are women. So girls are an untapped market. And if you look at stem, a lot of those jobs, you know, women are really, you know, a very small percentage of that those are where the jobs are. At the Elementary School level, at the junior high level, even at the college level, there are more girls doing Getting Better grades. We see it all the time we see criticism that boys are not being treated very well in schools. I mean, its what happens between what hes talking about and what youre talking about . Yeah, i mean, i take your point. The data dont lie on this that females are not getting the Job Opportunities in stem, perhaps, that they deserve but what im pointing to is what youre talking about and that is i worry about boys being left not just because im a father of sons but because i worry that with a lot of the attention that has been rightly turned to helping girls get more opportunities, that boys who have much more trouble focusing, who are much less well suited to the classroom than girls because of their behavioral patterns are falling behind you know, we really are i may overpersonalizing it we are the premier Leadership Organization for girls there are other organizations that focus on boys were really focused on girls and we still know theres a very large gender gap in america. And especial tlly to develop a workforce that can compete globally thats why were so excited about these 23 different stem and outdoor badges were introducing. Because were giving girls that opportunity to experience Stem Science Technology engineering and maybe we ask the boy scouts keep up the good up the goodk my point i am delighted and sincerely of course, i am i mean, yeah, thank you for this batch, every president of the girls scout gets their own batch. Your name is on there. And tell my story and helping me to become a Rocket Scientist. Thats fantastic, we should do thank you very much right on deck, a deal that happens today which can set off a huge battle in luxury details and why other reiltaers may have a big fight on its hand. Stick around 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 gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Youre in the match app. Now tap on the new missed connections feature. It says ive crossed paths with kate six times this week. That is a lot of times. Shes cute too yea how did i miss her . You didnt. Match picked it up for you. Check out new missed connections on match. Start for free today welcome back to power lunch. Michael kors agreed to buy jimmy choo Courtney Reagan is here. Hi michelle since then, the speculations swirled that michael kors was a possible buyer todays deal represents a premium for jimmy choo stock price. I spoke to michael kors ceo on the phone this morning hes looking to build a luxury portfolio with brands that has International Exposure and appears to an asian luxury fire. Michael kors is looking to return to growth by the year of 2018 jimmy choo is not a company that we have to turn around o significantly change in product or marketing strategy. Though, to be share, jimmy choos sales fall 28 and wholesale revenue sales 4 idol is not planning the changes nor will you see jimmy choo for sale in michael kors stores. Analysts are not convinced aaron murphy has reservations on the near terms delusion and not seeing energy for things li like idol admitted to me they have not figured out the exact identity yet never could have too many choos. I like that is that cute you have another career i have been successful in giving choos to jojo. His wife. Thank you, courtney our partner at oc c strategy, consultant on fashion market, good to have you here. If you were michael kors, would uhyou have bought jimmy o at this price . It is an interesting deal it is a better place to be in the market than luxury currently. It is a great growth platform. For them, as long as they remain disciplined and dont over expand and the retail footprints and categories historically jimmy choo struggled with successful category expansion particularly in handbags the final thing thats interesting is e commerce, jimmy choo also lagged in the number of markets if it is, of building a luxury portfolio, it is certainly an interesting for sale when it comes to michael kors, there is luxury and thats gucci and chanel and jimmy choo and there is affordable luxury and approachable luxury and thats the michael kors of the world and coach which are not quite expensive but trying to position themselves as an almost luxury brand the knock on this is that michael kors itself needs to do a turn around at this point. This company was a sale because they were being a fashion analyst, i dont know how many those it theyre slow on the mini bag trends and trying get into shoes and Mens Clothing and apparel thats larger margins. Can kors take this on now . They do have a lot of problems related mostly to their expansion and the rapid expansion so the store portfolio and the size of it, they announced theyre going to be closing on quite a few stores. You know their products and they have been reducing skews and looking at how they can rationalize the range. They have quite a lot going on i suspect part of it is they, this deal was available is available now and a lot of these they dont come along all the time it may not be the best timing. It certainly had a role on them in taking a look right now coy, thank you very much. Exactly you got to start some where. Ahchoo investors are loving this thats next. Welcome back, we begin this hour at the white house. President trump is ready to greet lebanon Prime Minister reporter michelle, we are waiting for his motorcade, we are expecting h i im to sit dowi the oval office for a bilateral meeting in a few minutes it is expected that these two men may find some common ground. His father had also been Prime Minister of lebanon as well and hariri is serving his second term as Prime Minister he prooeviously served back in h 2000s. The agenda today is on terrorism and focusing on economy and refugees we are expecting hariri to bring up this 80 million in u. S. Military aid that had been f funneled to the state department it is likely that he will bring up and ask for that money to be restored with no Strings Attached there will also be a press conference in the rose garden at 3 00 p. M. , both leaders will be speaking but i wont be surprised if that conference is over taken by the other news that we have been talking about all morning whether it is Jared Kushner or healthcare or trumps tweets about attorney general Jeff Sessions. Clearly a lot of things are competing for this administrations attention at this moment. We just saw Jared Kushner, looks like him coming out of the executive office on the side there as we await for this big event this afternoon thats right. You know we have seen the president s soninlaw mixed statements yesterday at the white house in order to clear his name of any potential collusion with russia. It remains to be seen that whether or not some of other trumps associates and his son or trump jr. Or manafort to work with him in the campaign, he will have to testify in public hearing later this week still many questions of this russia investigation swirling around this administration they cannot put this to bed yet. All right, thank you very much, well see you soon all of this comes as america waits ton a vote on healthcare a vote that brought senator mccain back to washington while battling the cancer. We are waiting the senate, following an all member lunch thats served as a sounding board for republican members on healthcare over the course of the last several months. It was the last podium that leader mcconnell less than a month ago after various itulatii iteration s on this bill is voted. She receives surgery above his left eye followed by brain cancer diagnoses he will be debating we got to interrupt the Prime Minister is arriving, lets go to minister hariri there. They share a huge border with syria that dealt with a huge number of refugees as well second only to turkey, thats a big issue and the issue of the southern part of the country being controlled by hesla. Lets get back to cayla, sorry about that thats okay, there is a lot happen ing in washington these days and we are having split events on the white house here on the hill. In terms of controversies around healthcare, President Trump made his feelings known of what he believes of what republicans should do, vote to repeal or repeal or replace. He does not mind what they do. He wants some progress to move forward. While the personnel changes within the administration have largely concerned of attorney general Jeff Sessions, i want you to listen what President Trump said last night of the secretary joking some what but talking about what would happen if healthcare did not pass by the way, you are going to get to vote . You better get them he better get them oh, he better get them, otherwise, i will say todd, you are fired. So of course, the administration is trying to ramp up pressure here of those add minute stral administrations have been working so hard. Thats something thats been talking about for so long at this point, michelle thank you, talking and talking and not doing. President trump had a tweet storm and attacked everyone to the Washington Post and his attorney general, Jeff Sessions. This is a wall, we built a wall to some of the tweets that President Trump has done in the last 24 hours. There are so many that we could not fit them all joining us is sarah fagan and our cnbc contributor we were joking yesterday it is a big wall of tweets the wall hes trying to build, right you can throw cocaine bag on top of it on the other side. I dont know where to start let me ask you this, hes making some peoples lives miserable, Jeff Sessions, for example. He joked that hes going to fire tom price if he does not get this deal done from what i can tell is that he does not like to fire people, he just makes you so miserable that you just quit instead. Yeah, the sessions stuff is odd. You are right, this narrative about the apprentice has wore out sean spicer of all the talk about him and he actually did have to resign it looks that trump is goating session to quit. I dont know why you would keep ongoing out and attack the earliest and most prominent support that enough the United States senate whos serving quite well as attorney general he did fire comey before and it took a lot. Comey did not take a hint right, it is a little bit of a different scenario because comey is not a trump guy trump kept on trying to get him to pledge his allegiance when he refused. That was the thing that a lot of trump in his mind to fire comey, a huge mistake politically but nonetheless is done now. Who knows when it comes to the next election. Yeah, that remains to be seen i will say talking to a lot of members of the conservative based on our party, they are furious. They are furious at the senate for not acting and turning this into a longer and drawn out process than it needs to be. The base want this is done and wants this done at almost any cost sara, lets go back to our big wall here and switching the narratives most of americans are not on twitter. Lets call 20 and one and five American Adults is on twitter, 74 are on facebook. The president does not put this kind of stuff on facebook. Do you think who is the president trying to reach . What is he trying to accomplish . Twitter is arguably, younger and more left leaning and heavily media. Is the president punking us in the media with all these tweets . What is he doing this for . Hes not doing it for the country . It is a good point. Many of us assumes that donald trump wakes up and getting mad and many analysts agree doing this is intentional. Sara, hold on, we are getting breaking news. Lets go to cayla. Senator heller of nevada is on a yes on the notion the statement came out of his office obamacare is no t the answer but doing nothing to solve the problem is not the answer either you may remember on june 23rd, they announced they are opposed at the time. In terms of actually turning some votes that does appear that we are getting some support for this motion to proceed and in addition to heller, senator portman on ohio is going to be a yes. Senator paul e erranor rand pauy appears to be a yes. Thank you very much cayla it does look like mcconnell may pull the rabbit out of the hat. As i understand it, the only publicly opposed republicans is Susan Collins of maine how angry are people at Susan Collins. There is many in the bay thats not Susan Collins fans the politics for her and her home state of maine dont change a ton. There will be several votes and the senate bill and amendments and probably ultimately, well be end up with a kind of adam down version of an Obamacare Repealed so, does this mean the president s pressure worked when what he was saying last night at his rally or the things hes tweeting or when heller sat next to him during that luncheon last week the president s pressure is moving some of these folks i think that theyre getting pressured from both sides. Senator heller and portman are hearing from the base of the Republican Party they want this bill repealed and they are fine with it being replaced with Something Else they want it repealed. I think many of these senators will come around to the notion of not getting something done is far worse than getting something done why there is growing chatter and you can talk to people thatll say healthcare is unfixable. And unless we make hard decisions of Self Reliance and other things do republicans want to own this going into 2018 . Well, i think again, and dif they dont do it, their fears does fnot showoff or support them there is a section of the electric thats going to be angry because theyre going to be affected by this. One of the things i think that republicans need to do a much better job is selling this one of the thing in the senate bill even though it seems like the mcconnells bill is likely to fail. Definitely, there are people thats going to lose coverage and that needs to be addressed some how there is also, from cbs, that premiums would go down 30 yes, it is a tragedy for anyone to lose healthcare coverage, why is it not a tragedy for millions and millions of americans who seem their premiums go up, it is a positive thing that republicans can talk about and campaign on and it is going to impact the significant number of working class americans. I think the party needs to do a much better job selling the positive aspects of these bills and how they impact millions of americans. One of the reasons people losing coverage is because they choose not to buy it and thats the big reason sarah, we got to go. Thank you. Lets get to one o f the big stock stories of the day mcdonalds sharing its all time highs. That stock is down 30 this year, wow, lets talk about how this is happening. Jeff borstein is joining us now. It sounds good, although we have seen transitive change that has not transformed so well. Why are you so confident that this one will. They dominated for much of the past decades we have new leadership in place and seems like theyre taking aggressive actions and started with the allday breakfast a year ago and now theyre getting technological on enhancements and in terms of delivables and motor hand pay you got all the buzz words in there. Mobile delivery and mobile pay it was just people parking and washingtoni walking in how much of these initiatives are going to matter to mcdonalds is it still pulling up to the drivethru with their kids in the back smo when you put together of three or four initiatives and the momentum they had going in, it is a powerful combination whos mcdonalds biggest threat yes, when you look at the Quick Service of categories, nobody is half the size of mcdonalds i think they would argue that theyre fighting above with people like fast casual brands like chipotle or panera and fighting below like Convenient Stores of lower end type concepts are reaching up and stealing mcdonalds clustomers tyler and michelle, when you go to any stocks and i drove back to every stock, every interchange is the same, we got wendys and mcdonalds and starbucks and everything is the same here is the thing, jeff, all that it matters in winning of business is making sure that the madisons family pulling into that mcdonalds and not end up eating wendys are they winning on that front they have positive traffic now and every regional of the world this quarter they doubled the number of restaurant us to your question of a wendys orbu burger king the proof is in the pudding from that perspective. They have so many stores and so much in sales, it is all a percentage of that, it is all on tv multiple at times as everybody else thats driving the subject. How important is our store refreshing this whole business very important. Mcdonalds franchise requiring a certain number of years to do a refresh. Nobody incline to have been in a store thats not updated in ten years. Mcdonalds is making a big push of experiencing of the future,spending hundreds of thousands of dollars to re reinvest in the store it better feel new or i am skipping it. It better looks good and feels new. Is that new equating to clean . New is clean and i feel better eating at place like that if it is a place thats been around for a long time, i will skip it. All right, thats just me jeff, thank you here is what else is coming up on power lunch. Less from the feds and washington how is that going to play out in the market and the Small Business gap, what finding Skilled Labor is becoming more and more difficult for main street and the city is handing its first meeting from the financial crisis have cities become investable again . All that and much more coming up on power lunch. Are you loyou are looking a at capitol hill, thats senator schum schumer. This the procedural vote that would have blocked any such debate or measure coming into the floor of the house now, it looks like senator mcconnell is slowly but surely putting the bricks on the wall to move to a debate. We shall see maybe the only vote we are getting. It is difficult to get into this point. A lot of debates are going on right now whether or not janet yellen will be replaced. Wholl take over from here Steve Liesman has the exclusives i want to talk about what you guys are covering as breaking news right now which actual street wall street is expecting it. We have gary comb and john taylor of a renown there is been some perspective taylor fell 9 and kevin warsh remains 27 where he was look at gary kcohn, how about th outlook for what kind of policy the next fed chair will enact. And 48 say unchanged. You can read this chart anywhere you like 58 say loser or unchanged or more and more than 80 says tighter or unchanged the risk seems to be on tighter. Lets look at the expectations for Monetary Policy and physical policy on monetary the outlook is coming down. It had been 2. 3 for 2018 for the fed funds rate and now it is down to two. Partly because of the screen the outlook for fiscal policy has also come down if you look at the average it is all plus 3 quarters and 1 quarter, thats half a year later than expected. If you look at the nevers, 31 would be healthcare reform theyre following the healthcare reform why part of the reason because the expectations if healthcare reform stumbles, thats a negative for tax cuts. Back to you guys. Thank you very much the latest polls revealed, whats the impact on the market and the economy. Lets bring in our Kevin Nicholson and our strategist with the river front investment group. Je gentlemen, let me start with you with the feds, nobody expects to do anything. What about september and december, inflation has turned tepid. I think of the predicament. They have a duo mandate and as you pointed out. Inflation is very low and theyre over feuding and potentially theorem employment whats going to happen is the feds will be on hold for rate hikes. In september theyll announce theyll begin their Balance Sheet roll off what they are hoping for is the yield curve steepens and thatll act as a tightening perhaps without actually having a rate hike i think they may end up hiking in december. I think thats exactly right. When you are talking about Wage Inflation and the feds still living with this orthodox notion of the lower Unemployment Rate goes, the higher wages is likely to go. Construction workers now have robots laying bricks and it is ten times faster than a human can do it. We are talking about warehouse activities of retailers being done from robots i think the feds are going to be disappointed on the inflation front. It maybe too much of the junction they may want to slow things down and see what the economy looks like Going Forward where do i put my money to make money over the next twelve months for us, the value over seas and International Markets in europe, we moved our portfolio towards europe earlier in the year because when you look at it on a relative value, relative to the u. S. Here about three multiple points cheaper and when we look at our longterm work, and the trend, europe is 32 below its longterm trend and where the u. S. Is 9 above you just recently seen the euro breakthrough 115 thats actually symbolic of having stability in the euro zone if macron can have reform in france, it is going to bring down the odds of the euro block breaking up and gets rid of a lot of political risk. That in itself will lend a lot of win at the backs of the European Companies if you look at the head winds of tail winds of equities and the various variables that could affect prices, or what steve was talking about of the washingtons agenda and healthcare in centfrastructure d etcetera, how do you rate those in terms of their likely effect . Well, whats most important and descending to least. The former is beating the ladder stocks are going record highs as they are today we have the political situation virtually being ignored and i think the dollar behavior is a bit of a cold mind i would watch that but a weaker dollar also have some to exports. There is a bit of a wash. If there is a large scale event in washington, it would be disruptive as we said before markets are going high and although those tail winds and the dollar for a while will be a tail winds ron, thank you very much. Kevin nicholson appreciate it. Regulations and taxes. Some of the biggest issues for Small Business all around america right now. There is not a big concern finding any workers for any job and in some cases, kate rogers are live in denver with a tight job market reporter finding Skilled Labor in denver is a big challenge. The Unemployment Rate here is just over 2 as you said it is a tight labor market, it is something that entrepreneurs when theyre trying to retain the workers, they already have. Song is owner of evergreen bicycle owner, something thatll be tough to replace of his employee experience. What stands today of how competitive in the front range, it would be very difficult for us to find a replacement for somebody with that level of experience denise burgesses feel that at her Small Business can meet up to 100 contractors at a time and talents can be tough to come by. The younger and not as trained and seasoned as previously and it is also a career path thats not glamorous. It is not Silicon Valley software or facebook reporter add Something Like legalized marijuana in a place here of denver, colorado, it is challenging to find workers and passing the drug tests and where safety is so key mainstream advocates do point out things theyre looking to hire so thats a good sign or the economy, back to you guys. It is, kate rogers. Take one of the tony romo tomat was roaring his engines next to you. Deangelis. So is what we are hearing from Energy Companies that drilling may slow a little because of the prices that they experienced earlier. Pricing is a delicate dance between supply and demand. The u. S. Producers taking advantage of support from opec cuts to pump more but they push prices down. Perhaps, there is a little change of the strategy no one is expecting opec to deliver deeper cuts also, inventories on deck, api reports for tomorrow thanks Jackie Deangelis President Trumps new communication chief, Anthony Scarramucci is caught up hes trying to sell his funds to chinese virals could it be derailed former secretary homeland owg bethattohes in on that and grincyr res t United States. Whats going on here . Um. Im babysitting. Thatll be 50 bucks. You said 30. Yeah, well it was 30 before my fees, like the pizzaordering fee and the dogsitting fee. And the rummage through your closet fee. Who is she, verizon . Are those my heels . Yeah yeah, were the same size. In shoes. With tmobile taxes and fees are already included, so you get four lines of unlimited for just 40 bucks each. The price we say is the price you pay. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. A procedural vote, mcconnell, is pulling every possible rabbits or hats to get this done. Standing by on votes of whether or not theyll change healthcare reporter it is been monitors and years in the making. The the motion to proceed to vote is under way. Role is being called and republicans are voting yes that had been previously undecided. Listening into the senate floor and the role being called. You can hear audible protesters out in the hallway and when members are leaving and opening the door, the chance were getting louder and they were saying kill the bill and shame this is a dividing issue of the country. There is been protests here on capitol hill everyday there is been events like this taken place. To be able to move this forward and begin this debate and well bring it to you as we have it. What happens if it passes what then next, cayla . Reporter well, theyll start debating various iterations of what the bill looks like the first iteration theyll take up is an out right repeal with the assumption of repeal thats expected to fail. Then there is going to be some amendments that are brought forward and the end result is expected to be something thats called skinny repeal and i am over simplifying this and you will repeal the individual and mandates and you leave a lot of taxes and regulations in place and you infuse a lot of funding into the states and the senators have been asking for thats the way to get moderates on board and win approval on some of the states well see what it looks like it is unclear what is in it and what it will loong lik like in end. Well watch that as cayla mentions experts are meet ing in las vegas for the annual black hat conference, getting government officials to Work Together on fighting cyber crime cnbc aditi is there with the homeland security. Reporter hi there michelle we are here with our former dhs secretary, it is great to have you with us. Good to be here reporter a cyber attack on u. S. Critical infrastructure, we are talking about anything from a power grid and a nuclear incision is like to happen in the next two years, do you agree with this . We have seen Cyber Attacks on Critical Infrastructure in ukraine, for example, they shut the lights out for several hours during christmas and similar attacks in saudi arabia and georgia and other places as well a cyber attack on Critical Infrastructure in the u. S. Could be regarding as an active war. We worry of terrorists or network, non state actors trying to do something to impair our infrastructure how do we protect ourselves from that . Its got to be a private partnership and on the one hand we want to have the government giving us warnings secretary chertoff, i am so sorry to interrupt, senator john mccain has arrived the first time we have seen him after suffering from a brain tumor. Hes arrived so he can participate in the key procedural vote when it comes to healthcare reform. Back to you, and apologies reporter no worries about that god bless john mccain and we wish him the best. Getting back to what the private sector can do, you have to build rour infrastructure and you have to be aware of what the threats are and adaptable and resilience plan in place if something happens. This is a part of what we are doing in the United States sir, it is michelle here again. I apologize for interrupting you. When you left government, there was very little Chinese Foreign investment in the united stats states, it has skyrocketed in the last few years it is getting difficult when it comes to approving chinese deals. Do you think it is a good idea we are bringing this all up now because scarramucci is trying to sell his funds to cfius right and being held up. Over the last several years the definition of security has broaden quite a bit and now there is an argument of Economic Security as part of the mix. Do you want to put a Foreign Government particularly one thats a bit of an adversary in possession of critical asset which may give my suspicion is there will be increase scrutiny on this kind of deal and you dont want to say no to everything i think as long as you are taking a balance approach, it is reasonable to consider economic leverages as well as security of itself as part of the mix on approving deals. Secretary chertoff, you have been in administration in the past and this one has been critical of the attorney general, the president personally has been critical of the attorney general, what would you do if you were in Jeff Sessions shoes, would you quit in. I think Jeff Sessions, people may agree or disagree with him, i knew him as a u. S. Attorney and as tenure and i agree with something and dispute with others hes a public servant. I cannot read his mind but as long as he feels he can be effective, he will stay. If at some point, he felt hes not able to do his job, i suspect him to think again it is too early to tell what hes going to do do you think he still as the president s confidence thats important of ones ability of doing ones job if i go back to the 90s there was a period of time that janet reno and bill clinton had disagreements because of situations that bill clinton found himself in and janet reno hung in for eight years so it depends on individual circumstances. Jared kushner is being questioned by the senate this week, how do you think the Trump Administration has handled the probe . I have not been involved in what they have doing in my ways of a serious issue and on the other hand, there is a little too much of attention paid to every minor twists and turns in the investigation you are getting breaking news while somebody says preserve the documents. I was a prosecutor for many years and every prosecution has that it is good to let the committee do their jobs and not necessarily hang on every minor or little tweak in what goes on and recognize there are serious issues involving russia we need to think about i am worried about 2018 and 2020 do the russians try to interfere with our election or civic discourse Going Forward and i think thatll be a constructive discussion to have Michael Chertoff thank you for joining us thank you. Well listen in on the senate floor as they begin on this procedural vote whether or not theyll debate on healthcare senat senat senator mccalsky already voted no senator murkowski voted no. Has collins voted i think it is important to be clear. More so, this is a vote to proceed on a debate. This is not the healthcare vote. You got to go back to civic class because of all these things it is a vote to vote on whether to debate on the beginning of the debate of the end. Yes if you did not get a yes on this the move to repeal and they want to get some kind of vote, any kind of vote at some point if you are not going to get anywhere, you got to put it to bed and move onto other parts of the agenda. You go t t to move on tax refor and decide what do you get out of this when it comes to taxes or revenues or etcetera, to help you do the budget they need to win. If this vote fails, the whole thing is over. I would hope. I think the current effort to repeal and replace obamacare is dead if this vote goes down. If it wins and goes through, it does not mean repealing and replace will happen. Absolutely not. There is clearly still d disagreements from multiple senators on the state of the senates bill as it existed late last week. We are watching here, we have video of a few moments ago of john mccain as he was on the tarmac at the National Airport which is probably with a Police Escort of 10 or 12 minutes away from capitol hill where he would be expected to cast a vote i dont believe he has said which way hes leaning, those speculations would be he would go with the republican conference and voting aye. For him to come back and vote no is unusual exactly well take a quick break as we keep our eyes on this procedural vote. It is procedural but really important for the future of repeal and rla oobace. Epcef amar there is a lot going on right now in washington in two different ways on the side of your screen is the white house where the president is expected to meet with the Prime Minister of lebanon hariri on the right is the vote live, the senate is voting to begin the debate on the repeal of the Affordable Care act, better known as obamacare the vote there, if it passes, it will be a vote thatll allow the bill and its repeal to proceed so it is a procedural vote it is a very important one sarah fagen is rejoining we har of rhetorically asked here a few moments ago was that if this procedural vote fails, is this really the end of the attempt to repeal and replace obamacare is this it reporter well, it would certainly be the end for now i think if they cant move forward on the debate, they are going to have to come back probably with something that has enough support for it to to move the actual underlying legislation. If they cant vote to begin the debate process that would then require another vote to actually repeal and replace, if they cant agree to that, what are they saying . It doesnt speak well of where the party stands on this issue for sure, but i think there are probably some senators who have trepidation about voting to proceed because they will be forced on other things and they dont know what the end game s. My point is if there was a clear end game, you know, you maybe would come back and do another one of these votes on a motion to debate and then have an underlying bill it is unclear here you know, theres a number of things that are likely to happen with this, if this motion to proceed goes forward Obamacare Repeal is likely to be voted on its likely to fail. The Senate Health care bill is likely to be voted on. Its likely to fail, and then, of course, there is some view that where senators would end up is a dumped down version to repeal obamacare. And this looks like, guys, its going to come down and john harwood is joining us. Based on the vote count right now that i am seeing, this is going to come down oddly enough to the senior senator from perhaps the single most important state that flipped the election for donald trump, and that is wisconsin. Ron johnson has yet to vote, and is ron johnson really going to be the decisionmaker here . I doubt that ron johnson will vote to stop debate here, but you never know hes been somewhat unpredictable in this process. Of course, john mccain also hasnt voted, but on the question you were talking about earlier to sarah i just got off the phone with a strategist familiar with Mitch Mcconnells thinking who said that one of the reasons that they have been able to get the votes as close as they are right now, they just need to get the last two in order to begin debate is because they recognized to your earlier question that its not going to be the end if it fails, that this issue still is going to be hanging around they are still going to have pressure from their base, and so a vote to begin debate with an uncertainty about what comes out of it is a kick the can solution, and its going to delay it if they can ultimately get that socalled skinny repeal, they will have a conference with the house. Dont know how long that Conference Goes on, and there is a risk if it goes on very long its going to delay the ability to move on tax reform. Senator ron johnson, according to twitter, coming through the subway and walking up to vote right now, so there will be clarity there. Sara, we cant put this to bed when can we move on to tax reform reporter look, i think its appalling. Speaking as a republican, im really frustrated that there isnt a clear bill and a president championing it and, you know, members of the house and Senate Behind it, but its complicated, and there are many factions within the Republican Party, and the factions have grown bigger and wider in the last election cycle, and so, you know, this is where we are, and absent a president with his own plan charging to congress, its hard to get these things done, and so i think ultimately i do believe something is going to get done because for republicans it has to get done. Guys, dont move. Were going were going to pay some bills here, as we like to say, take a commercial break. John and sara will rejoin us as we watch this drama unfold to see whether or not well get through this procedural vote on whether to debate the bill dont move you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back as we wrap up power lunch. One eye on the senate floor where the procedural vote is taking place to take up debate over the repeal and the replacement of the Affordable Care act u. S. Markets moving higher at thishour the dow industrials on the back of some very strong earnings, up about half a percent s p 500 records earlier today, up about a third of a percent and nasdaq higher by just a little bit. Twitter tells me that ron johnson is now on the floor talking to cornyn and mcconnell so we await that key vote. And lets go to Kayla Tausche who is standing by on the hill today. Kayla, the vote is to begin debate begin debate on what exactly, and how quickly if this vote passes would they start debating the next thing, and what is that next thing reporter in the most technical of terms, tyler, what they will begin debating is the house bill that was approved back in may. Ah. Reporter the American Health care act thats sort of the of the slate from which they will be working, but thats just the technical way that they have to do this. They can then basically slice and dice parts of that to fit with what the senate has been discussing the last several months, to make it look more like what Senate Majority leader Mitch Mcconnell has agreed in theory with these members and some of the holdouts interestingly though the vote stands at 482 the two nos were collins and murkowski, two of the female senators who have had reservations throughout this process. Senator collins voted for the outright repeal in 2015 and has always been thought of as a hard no on any of these issues, but ron johnson of wisconsin was not expected to be a holdout in this way. He was part of the group back in june that announced initial opposition when the senate came out with the text of its bill at that time, but the fact that he is now on the floor talking to leadership about ostensibly about this vote where he stands right now, that is taking some people by surprise because even if johnson and mccain had come out and voted for the bill, because you have two nos you still would have needed the Vice President to break a tie so Senate Leadership needs ron johnson and you can believe they are trying to win him over right now. Ron johnson is a guy from wisconsin, from oshkosh, started a company and is an accountant by trade and his whole thing is health care in particular is helping to bankrupt america so hes a little more strict on the budget item and believes the private sector can do more so we havent seen a lot of details from the Senate Health care plan, but would i imagine if they are trying to sway ron johnson from wisconsin they are going to have to do it by making some cuts. Thats that makes sense. I mean, he is a hes definitely a deficit hawk and somebody who has been willing to buck the party this is an odd time to show up. If they are talking a long time ive got to think that hes going to i think john didnt expect us to hear that finish your thought, sara . Reporter this is an odd time to show up with reservations i mean, he decks press concern early in the process, but he really wasnt on the radar as somebody whose vote was in jeopardy on just the motion to proceed, and so, you know theres john mccain, because were seeing the senators stand and clap hold on a second what a wonderful moment. Mr. E mr. Johnson. Mr. Johnson aye. I think its done. Mccain just say aye and johnson said aye. I heard one aye if what we heard is accurate the senator is not recorded mr. Schumer no. The they are moving to democrats