Transcripts For CNBC Power Lunch 20170727

The first trillion dollar company, the details on jeff bezos power lunch. Welcome, everybody im brian sullivans better looking twin brother lets look at the markets. The dow, s p and nasdaq hitting record highs again today telecon and Consumer Discretionary are the best performing sectors not a lot but enough, the nasdaq and the s p may be down a bit right now but hitting lord highs, verizon, merck, boeing, disney are your dow leaders. Boeings move comes on the back of 10 gain yesterday. On the flip side, the transports are having their worst day in over a month 5 below their record high get this, just breaking a few minutes ago, adp shares, they probably make your payroll checks, soaring on news that bill Ackmans Pershing Square is building a stake in the company. Im Michelle Carusocabrera its the busiest names of the earnings season. Check out the names, verizon, u. P. S. , adp, mastercard, twit to name a few lr then the afterthebell biggies, and this is a biggie, amazon, starbucks and intel. Here to take us inside the number on this latest session is bob at the New York Stock Exchange bob . Important thing right now s p was up until 20 minutes ago. I just want to show you the faang names here a little droop apple is tooling along doing great, that propped a little bit there. Same thing with google take a look here you can see in the the last 15 or 20 minutes. What i see here is absence of bids, very, very light volume, drip drop a little bit below the prior lows of the day and suddenly youre down a bit thats what i think is going on. I dont think its doing more than that. Let me go back to the big earnings situation Procter Gamble, better organic sales, improvement in their 2017 outlook, thats up nicely, verizon, telecoms another big leader verizon had good numbers, positive report, big beat on the wireless net ads at t has been strong as well the raytheon and all of the defense stocks have been on fire recently they had very good numbers driven by missiles and laserguided bombs theyre in the defense area. Mastercard and verizon are both up 25 , very good reports overall for mastercard as well big oil is starting to report, Royal Dutch Shell and conocophillips were better than expected the big story here, Capital Spending is dropping for conoco. I expect exxon and chevron will probably be telling us why is this happening, because oil is stuck below 50, everyone thought it would be 60 by now again, exxon, chevron, big story tomorrow finally, here we are, folks, were just about at the halfway. Lets not quibble, 48 on the s p, earnings up 10. 7 , earnings up 5 , thats why the markets continue to be up, earnings for the Third Quarter also still strong and that rally holding in there. Back to you. Should investors fear this seemingly calm and inviting market lets bring in the ceo at hardland financial and the global chief investment strategist at citi private bank. Nancy, is the market too perfect to believe the vix is nothing, everyday we have new records, profits are great, Interest Rates are low and not going much higher in i time soon. It feels too perfect. Good afternoon, tyler i would say this one of the Things Holding this market up, i agree with what you said however i dont pay much attention to the vix because were valuation driven investors still looking for opportunities and were finding them a lot of our clients i speak to on a regular basis have missed a good portion of that rally and some of what were seeing is net new flows into the market as earnings continue to prop this thing up it doesnt feel euphoric to me, it doesnt feel like past markets where weve experienced chasing but i will note i was alarmed with the three upgrades of boeing today after the stock has already moved to 50 year date so were seeing the analysts play catchup, were seeing investors play catchup and i do think were due for a correction i would welcome one. Why does it make you nervous when three analysts upgrade boeing after 50 i get that theyre wrong but nervous suggests that since theyre finally coming to the party maybe its almost over well, and theyre yes, michelle, and theyre chasing, i was on this show talking about boeing in october of last year the stock is up 78 . No one wanted to buy it and own it wall street starts chasing these things, these were upgrade to underperform to neutral, one outperform but mostly just abdication you had an analyst on earlier that was has been bearish on facebook, another stock we recommended on air and own so i do think thats one of the things when they start chasing name that gives that feeling. I want to bring in steven, not to put words in nancys mouth though im good at doing it, she seems to be saying tyler, chill, go with it, its not so dangerous a market but you basically feel as though you are at your max allocation for u. S. Equities and would favor emerging markets explain why. You are at the second largest valuation discount in history and other nonu. S. Dollar developed markets, too if you look at emerging markets the only time the valuation was at a deeper discount through the United States, it was the nasdaq bubble period and the Asian Financial crisis simultaneously. So things have gone right in the United States. Weve had a long period of strong earnings and solid returns, the dollar had a sixyear bull market until the beginning of 2017 and we expect better returns in other International Equities markets but the u. S. Is still supported. This will be a first half of the year where s p 500 eps is up more than 12 . Thats more than expected and we still see the u. S. On the equity side looking good relative to develop markets bonds. Right. So it wont always be this easy and there will be pullbacks but i think theres a lot of money on the sidelines that is still not allocated to equities. Steven, thank you very much, we appreciate your time. Nancy, always nice to see you. Brian . Thanks. Two of todays biggest stocks, facebook and twitter, are two investments going in wildly different directions. Facebook shares up nearly 5 on earnings investors just loved but twitter crashing, more than 12 right now. Shareholders stunned by the fact quarterly revenue fell for the First Time Ever. In other words, they fear twitter may not be a growth story anymore. But has it ever been maybe, but not with investor money. Lets forget about percentages and talk real dollars. If you had invested a thousand bucks in twitter on the day it made its way debut in november of 2013 youd have about 650 left stock went public at 26, rose to 50 before closing over 44 all this happening, of course, during one of the greatest runs for the stock market in recent history. If you put that same thousand bucks into the boring old qqq tech et, if, you cant make up your mind so buy everything youd have about 1873 and if you were smart enough, maybe like nancy, to put it into facebook instead your thousand dollars would be more than 3500 today. The point is this, facebook gets called old and boring, its for the fogeys, not the kids, but for investors, facebook has been a pretty sexy story, michelle. Yeah, it makes money. For them and for other people are. Thanks, brian, lets get to our social showdown. What do you do twitter or facebook now. Joining us now is the managing director who just increased his price target to facebook to 190 a share. Good to have you here. Thank you. Anybody who has been paying attention to cnbc knows the following twitters numbers out this morning, revenue and earnings better than expected however user growth is flat and the stock is getting clocked at this point whereas facebook a juggernaut rising higher, at least last we checked, what do you do right now . Thats been true for so long is it still safe to bye facebook or is this played out . I think its definitely still safe to bye facebook the Revenue Growth story for both of these stocks, the way you build up the revenue, is very similar its user growth, engagement of that user base and ad load and that gets you your ad inventory then pricing whats going well at facebook is that those things are still moving in a good direction, possibly with the exception of the ad load on each user but facebook had a daily active user of 18 and if you switch to twitter which has a much smaller base of users, its growth was only 12 and it just shows a marked difference in just the Underlying Health of the user ba base if you add on twitter has made progress they still have revenue issue issues. How low can twitter go . Our price target is 15, thats a conservatively derived price target the stock has bounced off that level a few times. It did have a run up during the quarter which i think is part of the reason why youre seeing a selloff now. Its basically back where it was when it started the quarter. People got optimistic about users halfway through the quarter but, you know, i think the stock will sort of bounce around here. Twitters quarterly Revenue Growth fell for the First Time Ever is the stock is the Company Contracting now . Well, i think that that will persist for another quarter but i think revenue is likely to bottom out and recover. On what whats going do that who will come back to twitter . Are advertisers going to rediscover its magic there are a couple things number one is when we get into new ad budgets for next year, the user story at twitter heading into 2018 will be better than the user story heading into 2017 when there was no growth. And now youre going to have some growth heading into 2018, a lot of advertisers will be resetting budgets and, most importantly, twitter has taken several ad products and taken them off the market. Suddenly youre defending ryan has you defending twitter when your price target is lower than where it was right now. I just think its an overreaction to say its going to zero and its a possible takeout target so keep that in mind. That was going to be my question i was going to ask you whether you think twitter will be a stand alone independent company. Pick your time frame two years, three years, five years. I kind of doubt it. I think there are several companies that would make sense to buy twitter ive always thought google would make sense to own twitter, one of the phone Companies Might make sense there are lots of scenarios that could play out and i think twitter might need to find a home. Tried once but they apparently didnt like the price but well see. Michael graham, good to have you here. Thank you. News alert in the bond market, sevenyear notes are up for auction. Rick santelli is checking for action whats the demand like we gave an a to the two year, we gave an a to the five year but theres no aaa rating this week because this auction was a c minus. Yes, the final auction of the week, completing 88 billion in supply, 28 billion seven year notes yielded 2. 126. About a half basis point a little over 212 is where the one issue market was trading 2. 54 to cover, spot on 10 auction average. Directs 11. 6, about a half percent higher than 10 auction average so all of those stats are average. 20. 6 go to primary dealers, not a great way to finish the week but all in all it was good moving the supply investors seem to be happy, want to play particularly close attention so we continue to trade the ten year notes to see if they were happy, sully, back to you. Rick, thank you still to come, the ceo of a household name company is bullish on america and consumer but foxconn pledging billions but its not the first time theyve said theyd build something. Will the jobs mariizteale . Well speak to somebody who says they will. Power lunch back with that most etfs only track a benchmark. 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. Or a little internet machine . [ phone ringing ] hi mom. It makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. [ laughing ] so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Call or go to xfinitymobile. Com introducing Xfinity Mobile. A new kind of network designed to save you money. Calling something a huge win for wisconsin used to mean talking about a football upset over ohio state and columbus not anymore. Now the stake in claim title to an expected billion dollar investment from taiwanese giant foxconn who says it will build a massive new factory in the southeast part of the state, like racine, based on our reporting yesterday. But foxconn made promises like this before. Just ask pennsylvania in 2013, still waiting on a factory so is the badger state more confident this will get done lets bring in curt bower ceo of Wisconsin Manufacturers and commerce first off, curt, congratulations are in order that said thank you, appreciate that. Do you believe this will happen are the bulldozers going to start tearing up dirt . Were told that this is going to be an accelerated timeline. That they want to get moving as quickly as this fall, perhaps soon september there are some obstacles that we have to overcome, of course, weve got legislation that weve got to pass to finalize the incentive package but it looks like its all go. What if that doesnt get passed the incentive package . I think it will this is the biggest Economic Development project in wisconsin history. One of the largest in the United States this fundamentally transforms not only the wisconsin economy but howie wi wisconsin wi is vi. We have that rust belt image that i think is unfair but we have that and we have the view of the agricultural economy which isnt accurate either. This will transform that and show we can compete globally with high tech manufacturing jobs. Curt, youre head of the manufactures association there. As you well know, there was a reason why so much manufacturing over the last 30 years relocated to china it was cheaper for so many reasons. Why would it come back now whats happening is chinese lake too expensive . What well, you know, that is part of the dynamics here is that the chinese economy as its grown its kind of come to the same cycle that we were at in the 70s and 80s where the cost of production and the cost of labor is less competitive. Now the United States can compete. Theyre not manipulating their currency like they once were the skill levels i think are comparable and you mentioned the loss of jobs wisconsin got hit hard by jobs moving to asia i love the wonderful irony of now an Asian Company bringing a lot of those back to wisconsin. Do you have enough workers . Its going to be a challenge but yes. Foxconn was savvy about picking the best of both worlds. Foxconn has a very strong Business Climate thanks to our governor, we worked with a very pro Business Legislature and Governor Walker but theyre looking to locate this next to the thirdlargest population center, the chicagoland area, in the United States so i think well be able to draw people in, my hope is that foxconn is going to be to wisconsin what the balken was to north dakota it will draw people in. Do you have the infrastructure because as somebody thats frequently on i95 between ohare and northern wisconsin, that road is a mess and its full because people already live in wisconsin because they work in chicago and they want the friendlier and taxed more affordably wisconsin thing but the road is packed do you have to infrastructure to support this well, that stretch of highway is due to be reworked anyway and i think that were probably going to this is transformational as indicated earlier in that the package that were putting together, a thr 3 billion package over 15 years. Youll see a fundamental change in southeastern wisconsin not only with the freeway system but a variety of different transportation areas i this whey this will mean to milwaukee met upropolitan airpo will look different in the last 15 years. What makes this so expensive. 10 billion . Well, its going to be very large, its going to employ a lot of people and its producing a high tech in demand product, liquid crystal edition plays for a variety of different products. Youre going to need high skilled people talking about jobs somewhere around the 53,000 with benefits and i think youre going to see a lot of higher paying jobs as well and a lot of people with annual advanced degrees, i think it will be worth it. The lcd displays, do those things get exported. Will they go offshore, many of them, for the final assembly of whatever the product is . Whether its a cell phone or a television or a flat screen. My understanding is that this is going to be largely for the western hemisphere market but there could be some exports but im afraid i cant say that definitively i dont know. At the beginning when brian asked, are you convinced this going to get built, we asked that because stories emerged that foxconn went into pennsylvania, promised something, it didnt happen. Other parts of the world, a lot of talk about investment that doesnt happen give us some details without violating any disclosure agreements about why you think it is going to happen and so soon. Again, i think because the accelerated process. This began trump visited kenosha, wisconsin, a snapon tool facility, thats when the process began and theyre talking about maybe breaking ground in the fall as early as september. They want this factory and i cant guarantee you that theyll build it but theres every indication that they are serious about it building in north america. Kurt, sorry to jump in here what will do to wisconsin residents taxes is there a chance this could lower the state income tax or property tax rates in various vicinities because you have this added Corporate Investment im asking for a friend. Im a homeowner in wisconsin. Im not sure. The bottom line is i think if youve got more jobs, goodpaying jobs like these ones, familysupporting jobs, youll have more tax revenue for a variety of Different Things and funding social welfare programs as our population agents, for the uw system, our k12s, youre just going to have more taxpayers at a higher level and it will be great for wisconsin on the private sector and public sector. Smaller percentage of a bigger poohsy better than a bigger percentage of a smaller pie. Jeff bezos is we think still the richest man in the world how much is he worth and which neighbor did he leapfrog to take the top spot well tell you next. Whoooo. I enjoy the fresher things in life. Fresh towels. Fresh soaps. 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He started amazon 23 years ago selling books from his seattle garage and is now worth over 90 billion. He officially took over that title of the richest man in the world from bill gates. Bezos has been a billionaire for nearly 20 years with a net worth of 1. 6 billion in 1998 after amazon went public but his recent game is unprecedented he owns about 16 of amazon so every dollar that amazon gains in share price adds 80 million to his wealth. Hes gained 70 billion for the past five years and more than 45 billion over the past two years alone. Thats about 60 million per day. Now, hes only one of four people since 1998 to hold the title of the richest man in the world along with bill gates, Warren Buffett and carlos slim hes likely to become the ri richest man ever in pure current dollars. If amazon hittes 1200, bezos will become the first man in history with a 12figure fortune of over 100 billion. Wow, thats a milestone. This is worthless but its i told you this, i did the math. Jeff bezos could spend if he put all his money into a checking account, never made another dime its 90 billion. A Million Dollars a day, everyday for for 250 years. Ill taken a hour of that. Id be spending it on bicep implants buffest billionaire in the world. Thanks, robert on deck crude closing back to 50 bucks a barrel, the dollar index down where can you make money in commodities . Plus, President Trumps tough talk on trade, one of the reasons foxconn wants to go to wisconsin and the red hot icarndinous playg t. Stk ou hi, everyone, im sue herera, heres your cnbc news update for this hour South Carolina gop senator Lindsey Graham has come out in strong support of attorney general Jeff Sessions. He strongly urged President Trump not to fire sessions or special counsel robert mueller. If Jeff Sessions is fired there will be holy hell to pay any effort to go after the mueller could be the beginning of the end of the Trump Presidency unless mueller did something wrong. Right now i have no reason to believe that mueller is compromised. Dangerous conditions after heavy rain pelted parts of missouri in kansas city more than seven inches of rain fell overnight, emergency crews responding to numerous water rescue calls. And theres new Research Suggesting that despite an increase in teenagers using headphones and earbuds in recent years, it may not be harming their hearing. The study analyzed data on more than 7,000 teens and have showed the prevalence of hearing loss did not change significantly in the past 10 years. I dont know about that but theyre ignoring you. That must be it they can hear me and theyre ignoring me. Darn. Back to you, michelle. Lets get a quick check on the market the nasdaq after a decent start the day is completely rolled over, were at session lows, netflix, amazon, google lower, i wonder if bezos is still the worlds richest man. The qqq which is the big etf moving to the down side, Applied Materials also weighing on the nasdaq lets find out whats going on dennis, we wanted you on to talk about opportunities in commodities but ive got to ask you. I know youre a chart guy and a stock guy at heart what about the nasdaq in the last hour or two this is going to be a very important day for technicians, guys always Pay Attention to when you get what is known as an outside reversal day, when you make an awl time high then take out the previouss days low, you must close below the previous days low before you get a textbook outside reversal but it looks like this is happening its almost as if there was a panicked Short Covering in the past several days. Now its as if everything has changed. This could be a very important day. I own a little bit of the vxx on this kind of activity. I own a little bit of the short market on this kind of activity. I Pay Attention to outside reversal days and the public should also. A very important day as in perhaps the market has peaked in the short term for the year type important . Well, one well see in the greater time frame but these things have these are important. If you dont Pay Attention to outside reversal days, 85 , 90 of the time you regret having not paid attention it doesnt mean its the peak, may just mean a goodsized correction 506 or 10 is in order but it does mean its something that should be paid attention to and if you dont im certain youll regret it. Lets say youre out there watching cnbc and watching power lunch and you think i think the market has topped out, forget stocks, i want to make money elsewhere, maybe commodities. Copper is at a twoyear high, gold is a sixweek high, oil creeping back towards 50 but who can trust oil . Is there a place to make money in the commodity market right now . I was looking at dont laugh orange juice looks cheap. Orange juice looks cheap, cocoa looks cheap, sugar looks cheap. Something is going on in the Commodity Markets that began about two months ago the broad commodity market indexes didnt make new lows, stopped going down even though the talk on the street was consistently of deflation, the commodity indices in broad terms stopped making new lows, started to make newer highs, began to take out previous highs. I think thats important because the conversation was constantly of deflation and instead the Commodity Markets are telling you that perhaps theres i sip yent inflation taking place. Now, the rains weve had in the past three days or so have put pressure on the grain markets but Everything Else seems to be doing something Everything Else seems to be strengthening, copper is strong as you said but the other base metals are moving higher and perhaps we should Pay Attention to the fact today that dwoeld is up and its up not just against the u. S. Dollar but against the yen, the euro, the ruble. Something is going on that needs to be paid attention to and the fact that its happening what is it . Who knows. Is it fundamental is it that economies are Getting Better obviously gold moves in its own peculiar way basically untied to economics but or to the strength of the economies but those others like copper, those are cyclicals. Theyre cyclicals and they tell you that Economic Activity around the world is doing okay perhaps what the stock market is telling you is that money is now moving out of equities and into plant and equipment. Perhaps money is moving away from the Capital Market and moving into real plant and equipment, real Economic Activity thats not unusual, thats what should happen. Maybe thats whats going on. Well let you go but this may trouble people im looking live at my screen, in the nasdaq 100, the ten worstperforming companies down 4 or 5 are the same ten bestperforming company this is year so there seems to be a wide swath of profit taking being taken in these high rollers, thats what youre talking about i would imagine, dennis. Top level capitulation on those names. You may see the end of the movement in the faangs maybe youll see a Movement Towards quieterlesser known real industrial names boring is the new sexy and the faangs got bit, thank you. Brian, thank you. One virginia boy to another. Love it. Three im surrounded by them. Hes a real one im from california, i just moved there. Weve seen tough talk from the president on trade but could his saber rattling be the reason why a company like foxconn is trying to build factories in the u. S. Is asia preparing for the worst . Lets bring in the head of china equities at black rock in town from hong kong thank yous for being here. Thanks very much. We had Governor Walker on where foxconn is going to put their First Factory and when asked why are they doing it here he said one of the reasons was theyre worried about tariffs, theyre worried about President Trump doing something that makes it difficult for them to import and thence they wanted to have a beachhead here that sounds like if more companies do that, one, they are preparing far trade war, two, we might be wing. Well, i think the companies have to be aware there is such a risk clearly so far year to date whats been implemented by the Trump Administration on the trade war front has been much less versus what was threatened during the entire campaign but nonetheless if youre a company like foxconn where the bulk of your business if not the entirety of your business is dependent on american customers like apple then you have to worry about what if, what if something were to happen over the coming months or quarter or even years a lot of american politics is unpredictable, as you know more than anyone so i think in that regard it doesnt hurt to at least have a plant or diversification. Well, look at whats happened in the Auto Industry with lots of asian manufacturers putting plants here in the United States, german manufacturers putting plants here in the United States. Maybe this is just a very logical fate with a push and the push is being delivered by the administration to come in and build high tech. Well, theres economics and politics, right . From the costefficiency perspective labor costs are obviously much higher here obviously the labor union issues and so on and so forth are tougher to handle versus in china which is where most of foxx cons facilities are but you have to take into considering the political aspect and what trump is trying to achieve in terms of reducing the trade deficit so i understand some Companies Want to preemptively implement strate strategies just in case things dont go their way but from chinas perspective. The strategy is rather rather than importing less 40 can we resolve this issue so we can import more. Some of the concessions so far in terms of beef imports at these things where obviously the u. S. Has more of an advantage, beef, agricultural, lng, thats the direction china wants to go towards. Reporter the administration is incredibly eager for china to allow more financial business by american banks to be done in china. I know wall street executives who have been trying for 20 or 30 years for that to happen and they always think theyre this close and yet it never happens is this leverage finally going to make that any guesses as we might see that actor open up . I think china is making additional commitments towards that direction so for example if you look over the last 12 months weve been very positively surprised by a number of movements so one of these things would be allowing for an institution to participate in the interbank bond markets, that wasnt there maybe two years ago, thats there today. Foreign institutions are allowed to, lets say for example, apply for private Fund Management licenses in china. Thats another major progress so we are seeing steps towards this direction, albeit perhaps not as fast as what people would like to see which is things happen overnight but definitely china is pushing forward on its reform agenda china sees the cyclical picture has been positive, the synchronized Global Recovery has given trade tail winds which allows them to advance towards a number of directions such as open i opening up and talking about deleveraging, very very early stages but nonetheless these things are on the agenda whereas they werent 12 or 24 months ago. So important moments to be watching for helen, thanks so much. Thank you the battle for Procter Gamble is heating up sara eisen has this story. Both sides, the company and its investor digging in and speaking out today i spoke with p gs ceo fresh off the conference call, a report that beat the street and showed signs of progress taylor told me its evidence hes got the right plan and the right portfolio to get back growth but investor nelson peltz is upping the pressure his firm owns 3 billion worth of p g stock, trian saying over the past ten years, p gs total return is less than half of its peers, we believe p g needs to address the root causes of this consistent underperformance which he goes on to say market share and declining costs and calls it a bureaucracy. David taylor tells me he respects peltz and will listen to him as a shareholder but theres nothing incremental peltz has offered. I want to prevent anything from derailing the work were doing the fact he has good advice doesnt mean we can add him to the board. When i pressed taylor on why not pay or wi taylor said peltz brings a group with him and to bring a shadow Management Team isnt what we need so both sides making the case to investors today and likely will continue to do so until the companys annual Shareholder Meeting this fall around october, tyler. All right, thank you very much, sara shares of ethan allen getting a nice bounce but theyre double digit down this year the home furnisher betting on a partnership with amazon to expand its reach wi ipay llt off . Well talk with the companys ceo next time for your business of the week Water Bottles are getting a luxe upgrade. Sara launched s well. She wanted a water bottle as stylish as the rest of her life. Now Water Bottles have become the must have fashion item at fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Shares of ethan allen getting a nice bounce after posting earnings that met estimate still theyre about 12 this year and in the category of cant beat them join them, ethan allen started offering its products on amazon here for a power lunch exclues sieve the ceo, president and chairman of ethan allen and brian was just talking off line, you were one of the longest serving ceos in the country. How have you done it just sheer braziliill brazil . You have to remain relevant ethan allen needs to stay relevant in terms of our people and talent we are one of the few companies that is vertically integrated with 75 manufacturing all in north america, mostly in the United States, we run our retail, our products are sold only on ethan allen so far and i think that to be around year after year it has really helped to be relevant. So whats the partnership with amazon . Youve been selling only on ethan allen online and in your show rooms i go to one quite often in Clifton New Jersey or just beyond there what is the deal with amazon and why are you doing it and is there a risk that you cannibalize your other channels . Well, our channels really is ethan allen. Under the collaboration we did about two years back which we Just Launched this year is for children and moving along we in fact also just introduced in the china. Amazon really the objective is to expand our reach to more people today we have 200 Design Centers or retail outlets in the United States with 300 worldwide. Today 80 or so of the people who come to our Design Centers have first gone on either mobile or our web site. So you want to get people to your web site. So i said who is the leader in where more people today shop its amazon. So we said we are going to go to amazon but on our terms and our terms are that we have established and this is probably one of the first ones for them and ethan allen Design Studio on amazon, the products are going to be sold by us, delivered by us and, very importantly, which we have Just Launched only this week, our interior designers are also going to do live chat with customers so its really on amazon or on your web site on both. Margins of something you sell on your web site versus what you sell on amazon, is there a difference are they the same. Retailers say the minute we end up on amazon we wish we could direct those people to us, we would get a much bigger share of the sale. Our prices that we sell to the customers are the same whether its retail, web site. But thats not what im asking. Ill start from that. Now with amazon, yes, they take a percentage a Sales Commission but the object really is are you going to get incremental business . Are you going to get millions of people coming to you thats an issue. If they dont come certainly it has an impact on margin but we believe it will impact bringing more people to retail. Let me turn you back to the country of or gin igin of your s you say 75 is made in the north American Market but that includes a factory you have in mexico honduras honduras. And i assume theres another the 25 of goods made elsewhere, asia, wherever, i dont know theres been big discussion about the tax, the border adjustment tax how would this affect you . Well, first of all keep in mind that of the 75 we make, most is made in the United States. North carolina, wherever. Well, vermont is our big state. Thats where we got started and North Carolina and we have one plant in passaic, new jersey. Didnt know that. Yes its an important plant. Now, the impact of what is going to take place, potentially border tax, for us is going to be relatively small because of the fact the majority of the products are made here for somebody whose majority of the products are made elsewhere, perhaps the impact on them greater. Are you going to take the Company Private . Youve taken the Company Private before and the stock has been stuck in the same range for a long time. Would you consider selling or taking it private . You cannot take anything off in order keep your sales opened . I think people have different perspectives they say you should sell it, well, look at it you cannot say nothing should be sold at this stage, our objective is to continue what we are doing. We have paid, we pay a lot of dividends out. Yes. The stock have paid off. We have regenerated 2 billion of cash. Almost all of it rerepurchased and we get 400 million in dividends. Building is an important factor. We got to leave it there always good to see you always good to be here. Thank you the four big calls you need to hear about today including the stock thats been flying high thats the clue. The answer in your daily dose of street talk is next. Nasdaq, a big reversal after hitting an all time high of early trading. Well take a look at whats behind this reversal so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Time now for street talk stocks you need to know about. First up, rbc capitol upgrades boeing from sector perform and raising the target 146 following the companys Earnings Release we got it wrong. It was based on the release of marging head wings and boeings head planes. The new 737 max, theyre joining the party here at 239 all right, we are going to give you two names my stock is your small cap and thats wayne new jersey base, Valley National bank the a bank based in new jersey theyre following a merger announced yesterday, they bought a small bank and earnings of stocks was sell off. Does the magnitude of the change being under taken. It is not being appropriately realized and like evaluations first of its Regional Bank peers. 15 outside of Valley National bank lets get back to your market the nasdaq is rolling over our management boris outside of trading days. I also just looked and six of the ten worse performers today are six of the ten best performers year to date. Are you concerned it maybe something of a significant we have been so over bought for so long of this mass connective team. I think this is natural and telling that i am came a day after where the mark is having a blow off top what does it matter when it comes off . The name, the netflix and land researches, those are the names being sold today those are the names thats being bought all yearlong. What does the feds have to do with netflix the take away from the fed is that the economy is not kicking off as they thought it should be it gave the market of a signal to take profits. You can say red is the new red for netflix. Er erin gibbs it does look like this is profit taking and people are getting out of high evaluations. It is just the Technology Sector is trending just bow below when you look at earning seasons, waef thie have a Third Company reporting. All companies fundamentally of a beating and looking to have some of the highest Earnings Growth for this year and next year above the market average fundamentally, it looks secure and it is pricey and we see this as more profit taking rather than real concerns about whats happening of the sector fundamentally. Well be watching here just about two hours left to go until the close, erin and boris thanks for being with us. For more trading information, go to cnbc. Com tradingnation. We debate about amazon the second hour of power lunch. Now words from our sponsor you dont want a single position to be too big of a percentage of your trading asset additionally, you want to make sure there is a potential in justifying your risk adhering to your exit plan can help you build on trading successes. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. It is amazon world that we are living in. Well tell you what to expect and if you should buy the stocks plus, fox conn, the russian saga, the president continuing to beat the drum on saga sayi i is a witch hunt. The second hour of power lunch begins right now the second hour does begin now. Lets take a look at the markets, there is some action today on nasdaq after hitting all time highs t major indexes is in the red with the exception of the industrials when are up by 20 points d nasdaq leading those decline nvidia and netflix are weighing on nasdaq right now. And one more stock to watch, check out shares of, what someone calls the failing New York Times posting strong Second Quarter results, digital subscription surging 56 last ne year it is now up 70 since the election i am michelle in the headlines at this hour thats the biggest gain in nearly three years the increase came from the big surge of civilians aircraft. Travelers turning to uber and lyft uber controls 55 of overall travel expenses. It is a big number the company is assessing another measure of the drugs efficacy, astrazeneca study fails. It results after the bell, of course, we are talking about amazon. Com lets bring in two analysts what are you looking for tonight with amazon, it could be a million things whats going to be the one or two key numbers for you thatll determine whether you change your rating or price objective that to me is the best indicator. Do they have it the numbers have been impressive of the last several quarters those are the best thing to cater not only in non membership but engaging in prime members. That number to me is a big number we continue to see gross numbers. What about the actual eps, would you care about that, i know it is ridiculous to ask a lot of the proceeds right now are being reinvested back in the business i look at this in this in the longterm. And you can take that a long way thats going to be generating. Skyler, is there a number that you can see tonight that can make you change . You know i think what we are looking at similarly, we are looking at u. S. Retail business, making sure margins are holding in there sometimes we get simple when we look at stocks and looking at amazon and competitions should be increasing whether it is Retail Business or evaluations is sky high and we say the risk, sir, are increasing a little bit and particularly coming out of washington so it is fantastic company and really changing retail landscape but at this evaluation and making up for the business, we are happy to be kind of what are the washington talking about . Theyre going through a merger with whole foods and Washington Post has been pretty aggressive and these are the Trump Administration and there is some rumbling verses taxes and everything it is something to watch we are analysts, we dont have a skin in the game on this i think if you are looking at it, you have to say risks are increasing a little bit on the regulatory front rj, i hope that it did not hold the conference well amazon we presume will hold the Conference Calls theyll talk about what they want and how much details you expect and demand and gets clarity. Up until now all we do is geographic footprints. If the company did not host a conference talk and well probably get high level talking points of what they like to do with the deals in terms of and what we see of a motivation of the deal and over lap of prime members and whole foods shop and prime members, i think there was a big private label lay of whole foods. On top of that, i think just credibility and specific target and in terms of Stores Opening and what you do overall of the category and high level talking points of what they think of whole foods. Thank you, guys. We got breaking news on tax reform reporter hi, the border adjustment tax is off the table. This comes from a statement of a principle that was put out by the white house and the republican leadership. Let me read you what they said while they debated the border tax adjustability. They decided to set it aside in order to advance tax reform. The statement goes onto highlight some areas that they do agree on including simpler, fairer and lower rates for both individuals and businesses, it also says that in the upcoming discussions over tax reforms, both sides will put a quote, priorities on permits. Not saying it will definitely be permanent tax cuts but thats something they are seeking to do theyll be supporting unprecedented capital expenses they are committed to get this done this year. Theyre hoping to get some type of legislations to start to move in the committee in the fall all of this comes after a meeting last night from the big six. Treasure secretary Steven Mnuchin and members here on capitol hill met to hash out the details of this plan they want to have something for lawmakers to go home and be able to tout once they go back to their district you see them making small progress here and agreeing to drop the border and highly controversial but still many Big Questions about this bill, unanswered and including whether or not it will be permanent or exce exce accepting the temporary tax cut. When mnuchin came out with the plan, the border tax was not there. The last speech that we heard from brian mentions of all the things and using all the words so theyre giving up basically they have the april document was not mentioning it and not taking it off the table. This statement takes it off the table and saying they are abandoning it. Whether or not they are still able to move to a territorial system that also remains to be seen speaker ryan says it remains a priority of his but whether or not they can find a way to make it happen in this reform bill is unclear. We talked about this before the border tax, they say it is dead but i wonder was it ever alive . It was always kevin brady from houston benefited massive from border tax and speaker ryan, he never took it seriously. Ga gary cohn never took the bat seriously. The weighs and means of the speaker. This is a plan that was con receiv conceived well before the election this was something that was a great idea in theory and paper and perhaps academically but it is something moving tothe hill here i think it was engineered or anticipated to be one of the way to close the revenue holes and would you linger for one second on the permanence verses non permanent tax cut. Was that because under certain rules, if they took it under that, they would not have to get it to 60 votes and tax cuts could not be of sunset of ten years. Am i right oen thn that part of the reasons for paying for them, permanent is saying you need to pay for these tax cuts in order to do reconciliation they dont need to work with democrats or get any democrats on board to make this happen however, if you just go for temporary tax cuts offices have been cleared and thats quote, Magic Unicorn and hard to make the numbers work on the corporate side if you have those tax cuts unset after three years. Not sure how theyre going to make those numbers work in order to have it comply with the complicated procedural rules of the senate got it, well talk about reform with our analyst at the American Enterprise institute and our contributor. Jimmy, what i conclude on this is they have be gone on tax reform and even if we are watching of this whole quagmire linger lingered this is not making a choice this is saying we have yet to figure out how to pay for this listen, what republicans have been telling me that if you want a Corporate Tax rate, anyone near the 15 to 20 that some republicans want, you are going to need this border passed if it is dead, you are going to end up with a corporate much more than 30 than 15 jeff manning, do you agree with that . I think thats the right trade off. It is certainly how the border tax was initially sold or attempted to be sold i am not positive of the reserve new effects but i do think if you dont have one, you are going to have higher rates on the other. It is a trillion dollar hall, right . Yes, trillion dollars over ten years. Again, this was sort of con severcon conceived. They have to come up with a sellable idea to close the hole. If someone thing this tax cuts loses a trillion dollars over a decade, they needed that trillion and wanted very deep cuts, we are getting a smaller and less ambitious tax reform and paul ryans people have been warned about this. Sth do you find it odd that this is coming out of the same day of the news cycle that steve bannon is trying to raise the tax rate on 44 of people making 5 million a year . There is no money tree, right . You have to come up there is a muni tree in Beverly Hills and all the blue stands voted fwor the person that did not win plan b is raising top tax income rates of 44 . I dont think that was the scenario that republicans envisioned when they realized theyre going to have a republican president or a Republican Congress that they would be raising marginal income tax rate it would be extraordinary you are absolutely right what about if they give up on revenue neutral . Well, i am not sure if thats feasible either. You know, something has to give some where and can we raise the elephant in the room, maybe they should try to think about c cutting spending yes, thank you. If i cannot raise revenue through taxes, they should cut spending thats popular to some people taken a lot of things off the board. Well, right it is hard to cut when you dont cut any of those things. When the biggest things thats in the center right medicaid, of course, raises the issues of the states as well and i am not sure i have dove into the details of the proposal there is a problem there as well even if the federal government is able to raise revenue that does not mean that the state is going to continue to struggle as they currently are if their obligation increased, as well, it is going to be an increasing problem for the state. Good point. Well, we saw that [ laughter ] thanks guys we solve that we got it all figured out now. You cannot raise tax and ces and cannot cut spending. All right, whats coming up on power lunch . The economist is getting more and mull bore bullish. And we are waiting for a white houses briefing, well bring it to you live. As soon as the q a session begins, all that and more, coming up on power lunch itbut 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. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Breaking news moments ago. Joining us on the phone is the ceo of the National Retail federation which are doing some lapse today and enjoying some of this how much do you believe that border tax was ever a thing . Brian, first, it is great to be with you, we were troubled as were a number of other industries about the impact on the American Consumers and taxpayers. We cannot do any victory lapse as a country so we get tax reforms done thats where our focus needs to be done. Do you think this is a bigger priority outside of the speakers or kevin bradys districts well, the only two that we seem to hear from is about this. I think the politics for this, if we go back to last november and december of the early part of this year, the politics with sort of the discussion and the dialogue and Campaign Rhetoric around trade and protectionism and efforts to restore competitiveness quote on quote, you can see how Something Like this could have been appealing and attractive as a way to sort of killing multiple birds with one stone we were troubled by that when you get the sort of the initial allure of this thing and understanding how really it impacts consumers and taxpayers and how it impacts competitiveness around the woldd and all other industry, we happen to be out front in this and leaving. Dozens of industries are going to be hurt by this and thats what really turn the ties. This could mean that a Corporate Tax rates would affect a lot of your members of your Small Business members will be higher than otherwise would be there is a trade off potentially, right thats always the thing with tax reform and there is pros and cons to every element that gets discussed. I think we would go back to some of the pass proposals in previous congresses and all of this is about making choices and so if you choose to do, you know, immediate expensing, thats an expensive item if you take away certain elements and adding those to the code, each one of it has a push pull effect lets focus on the big key elements of broadening the base and bringing back some of the offshore dollars and going to a territorial system the fundamentals making us competitive and see how low we can get the rate the key is bringing the entire business along well be turning our attention and voices to support the plan as you have been talking, we have been showing a lot of retail stocks. Retail index is approaching its highs of the day all the individual names are all sitting at the highs of the day and rebounding today on this news thank you very much for joining us thank you, michelle, talk to you soon Steve Liesman is here good numbers. A possible upside surprise of cnbc wraps it up the range is 2. 2 to 3. 3 . Lets see whos rare at the top is amherst pierpont and all the way down to goldman sachs. We had a little pop capitol spending in the past few months. It was down this month, we had a huge revision in may the question is whether this is an early reaction to the positive business sentiment. Well see if so, it will have to be a longer and steeper of some of the better rebounds that we have seen in the past. The u. S. Conditions positive Consumer Spending and adding the Better Business spending that could switch the economy of 2 by the way, guys, we are looking for the forecast of the Third Quarter of never stop estimating the future at 2. 6 i think it is interesting to watch the markets reaction on this bat thing what do you think it is the corporate rate thats the question this is maybe one of those things where we were debating yesterday of the feds where the reality is catching up with the reality of the markets already figured out. I keep on hearing this number as the mid20s. First of all, the idea that the Business Investment tax was so decisive these guys have to put out a statement saying it was dead and shows it how important it was stumbling block that it was. Larry cutler on this show have said several times that your bat is dividing your support group of the cuts. Getting raid of that even if the rate is not 15 thats knocked around. Right there is a key thing in the statement about expensing of Capitol Investment expensing it immediately. But, hold on, can i reach in the swamp and pull o autofrut as well if we dont get the bag, the tax corporate cannot be cut. Lets not forget something. Corporate tax are a small part of government taxes. If these gdp estimates keep ongoing up and if we can hit the growth number, would tax rece t receipts overall and retails and sales tax, jumping up and making that gap it is a big gap to make look, why would you and i hate this term but baby the baby out with the bath water. Why not go for something thats less and not necessarily i dont know who puts the hell me helmet and the pants on. In the previous administration, the republicans worth 25 and democrats worth 28 we should have been able to agree of 26. 5. This should be easy and we should not have to spend so much time get the corporate rate down and you should not have to pay for it and move onto the bigger issue of income tax. Was President Trumps 15 in negotiating a position i yjust got this from a house leadership aid who was close to the speaker. Speaker understood of the device policy, his top party was getting tax reforms done he did not want to holdup reform over this one policy no matter how rights he believes it to be. Hes willing to work forward to get tax reforms. The speaker is saying and according to my source that theyre willing to get tax reforms done well below lower than everyd else get lower listen. Speaker from wisconsin, it all comes back to wisconsin. Fox conn is going to invest in billions of cheese states some did not pan out, what happens in wisconsin well find out plus, oil hovering at a eight week high. Of course, we are awaiting the White House Daily press briefing well bring you the q a like at your dinner table, tyler, where the magic happens. Well be back right back this. Theres nothing more important than your health. So if youre on medicare or will be soon, you may want more than parts a and b heres why. Medicare only covers about 80 of your part b medical expenses. The rest is up to you. You might want to consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like any Medicare Supplement insurance plan, these help pick up some of what medicare doesnt pay. And, these plans let you choose any doctor or hospital that accepts medicare patients. You could stay with the doctor or specialist you trust. Or go with someone new. Youre not stuck in a network. Because there arent any. So dont wait. Call now to request your free decision guide and find the aarp Medicare Supplement plan that works for you. Theres a range to choose from, depending on your needs and your budget. Rates are competitive. And theyre the only plans of their kind endorsed by aarp. Like any of these types of plans, they let you apply whenever you want. Theres no enrollment window. No waiting to apply. So call now. Remember, Medicare Supplement plans help cover some of what medicare doesnt pay. Youll be able to choose any doctor or hospital that accepts medicare patients. Whether youre on medicare now or turning 65 soon, its a good time to get your ducks in a row. Duck quack call to request your free decision guide now. Because the time to think about tomorrow is today. Hello everyone, i am sue herrera. Here is your update for this hour Vladimir Putin is visiting finland as the small nation celebrates 100 years in finland. Israelis Prime Minister Benjamin Netanyahu is visiting the family thats stabbed to death. Benjamin netanyahu is calling for a death penalty. Israel has put only one person to death in 1962 britain, Prince William is completing his final job he gets ready to take on more extensive royal duties hes spent two years flying missions for air balance a las vegas gambling linked to Phil Mickelson for his federal convictions inside federal charges. He was convicted in april making more than 40 million trading the stock of dean foods. You are up to date, thats the news updates at this hour. Brian, back to you. Sue, thank you very much. The nasdaq, of the same story, we open higher and new report highs, oh, the market is selling off and we are coming back and a bit. The retail sector, moving high and following the news that the tax plan will not include a border adjustment tax. The bats which retailers hate it would raise the prices lets go to Jackie Deangelis at the market desk. The session high was 49. 24 cents. Well, we have seen an 11 gain in the last month. Some traders say it is possible. Looks like well be around the 49 mark today multiple factors influencing th recent rise. Dont estimate the dollar index. A 3 drop in a month definitely helping oil out. Yesterdays inventory draws down the market likes that we are working through some of those supplies that we have. Another factor is energy earnings, they have trickling out. Back over to you all right, thank you. Sales of ups are not ready. The Company Delivers an early booming beat investors could not over look the outlook. I will tell you customers demand is a little different than what we expected. In you look at the forecaster and retail sales, they come down a little bit from their forecast three months ago so that means we are seeing more online and so we are making adjustments. Ups is falling from a round joining or s p 500 index we are going to talk to the companys cfo, noes. Next earlier today, bill browder testified and telling investors of the dangerous of lobbiests who have not registered under the foreign agents act. Joining us now is bill browder, it is good to have you here great to be here. What did they want to know and what did you tell them about the lawyer what they wanted to understand was what was going on in terms of this major putin operation of the mitskiyak repealed they wanted to understand that what campaign wasall about and what was going on in washington with her lobbying campaign and what was going on at strtrump te with the meeting with donald trump, jr. Why does he care about it so much well, the main reason he cares about it putin is one of the richest man in the world, hes worth about 200 billion. That money is potentially at risk of being frozen and seized under the act because of his role so hes got a personal sfwr interest in getting rid of that legislation. 200 billion is a lot of money. We are making a big deal of the fact that jeff basol is the richest man in the world worth of 90 billion double that of putin. He unfortunately has made his money not by creativity and making the world a better place, he made his mumbai arresting people and having them tortured in jail and killed in some ca s cases. It is a much more evil even on cnbc for many years you a we are not familiar of your story and your case. When the matniskiyak happens, they wanted to talk about adoption and of this lawyer and that was the cover when donald trump jr. Came out saying the fs it was a meeting of adoption and there it is. It is important when people talk about adoptions of russian officials, what they are talking about is repealing the act so russian ftortures and murders cn spend their money freely looks Like Congress has a new set of sanctions that theyll be able to get through and get through the president s desk how familiar are you with those sanctions and do you support them and are you lobbying the white house to make sure the president signs them or not . I think those sanctions are very good. They take the ukraine, sanctions are imposed on russia for invading ukraine with this new law says, any of those sanctions, they have to go there you congress if it is ever repealed what it means is those sanctions were passed under an executive order by obama what it means is that it will require all of congress to have it repealed and theyre effectively tieing the president s hand so he cannot ease up on russia. I fully supported and remarkably just about everybody in congress does it was voted 972 in the senate. It is a powerful piece of legislation. It tells putin of what we think of zhim feseffectively the pres does not have much of a choice here if he vetoes it here,he will over ride the veto president s have always been negative about congress doing anything like this because they believe the foreign policies absolutely an arm of the white house and not of congress. The russian index is down 14 over the last 6 months which is how long President Trump have been in power. When he was elected, the market skyrocketed on the belief that sanctions were going to go away. It is like the russian market has been telling us that all those hopes are gone they are gone. These sanctions will not go away to the extent that the president wants to be nice to russia hes going to have to find issues to be nice to russia that dont include sanctions. We have sanctions completely locked up by an act of congress. We never see you in person, are you nervous . I know that you usually are worried of scarcity and things like that. Am i nervous . I am not particularly nervous. The russians as you know are out to get me, theyre out to kill me and threatened to kill me today is no difference in any other day in terms of the level of risks from the russians bill browder, thank you very much for skrojoining us thank you shares of s p global are up to 4 no one wants to kill our next guest. Our executive vp of s p global thank you, tyler. Lets talk about one thing the s p numbers are great for the rest of the year the thing that stood out for me is organic revenue that, you cannot fake. Theyre mores easily massaged indeed we were pleased of the res t results this morning we like both at the top line and the Margin Expansion eps is up to 19 . If i look at the under line drive verses the business, there is a lot o thinf things thats and we have very good momentum our business is being helped by the trends of active to passive investments. We look at our Market Intelligence mississip intelligence business. There is high demands from our products we saw it going up by 11 and our rating business, although total bond issues of the world was down and the particular sectors are important for us like below investment grades and corporates and bank loans and structure finance and issuance you got all the indexes that you own and you are the pri proprietor you are making money from them, how do you make money . Do they pay you based on the asset they attract or how does that work . S p was up 20 . How it works is the following. We have apart of the business thats licensing the indexes to produce investment products. 4. 2 trillion in the world are using our businesses these can be etfs and neutral funds and 7. 5 trillions of efforts are being benchmarked. Are the fee a flat fee or a licensing fee thats a percentage of assets most common is a percent. When it is growing, it is great for you. Absolutely. Lets talk about the ratings of business as you well recall, the rating business was heavily criticized during the financial crisis for ratings that did not turn out to be right have the problem been fixed . Secretary of defense s p Global Rating is completely different. What have you done . It is different management. I believe the rating is a aaa and not absolutely. And different compliance and risks and management is completely different it is a regulated business we have more than 15 regulators looking over us. So the analysts that determine the ratings have no particular directions from the commercial side the standards are completely different and it is a difference of day and night the Company Still pays to get the ratings, riegghright . With the separation of the analytical of the commercial part, we have full conference that there is no influence and that the Political Part is done in the right way steenbergen of s p global. Thank you. Foxconn building a factory in woisconsin we cannot guarantee if the factory is actually happening. Well talk more about it coming up. 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. Foxconn is making waves of plans of billions of jobs and many more in direct jobs and constructions and housing and Everything Else that needed to be supported it is a great news for the state of wisconsin foxconn made similar commitment in pennsylvania in the past, harrisburg in 2013 and project in vietnam and indonesia and brazil, they have been short announced but felt short of expectations of doing anything at all mark se joining us our Senior Research of east and they dont do it and were not picking on fox conn im going to buy back my stock and no legal obligation to do it and if i dont do it nobody can do anything. Do you think this is really going to happen in wisconsin well, of course, we dont know we know that this is the trump brand, and we also know that we know that they havent much fulfilled their plans for the u. S. In the past for a simple reason. Labor is too expensive, and its too tempting in china. Another reason is that one of their current most important approaches is robotization so they are in the process of getting rid of a lot of jobs in china with robots. Would that happen here we dont know. All we have is a couple of phrases so far we dont even have wisconsin approval yet since this has to do to pass through. The state government, we talked about has got to vote on certain things. The incentive package. 3 billion or so incentive package. Told by an official. Probably will be able to get that done. However, are we being a little too hard on this fox conn has taken a lot of criticism, a lot in china and taiwan because a Million People sort of living in dorms and very crowded conditions, whatever. Yeah. But if they come here and create 10,000 jobs, even with the assist of automation in a very clean factory, is that thats still a positive. The average pay is going to be 53,000 plus benefits well, i dont know where you get your figures, kelly. That would be very nice if thats the case. My name is brian. My name is brian. Certainly somebody coming and creating jobs, not just jobs and good jobs, we welcome that, of course. Got those from the governor, scott walker, and they created a million jobs in china of a very different kirngsd as you know, with many problems, with many conflicts, and identify been studying the last seven years and did a box on fox conn and they dont look so pretty. On the other hand, they have a lot of company. Tell us the history of the promises that werent kept and keep in mind its cable so not the whole book so if you can give us the shorthand about why people might have doubts about whether wisconsin actually happens. Yeah. Well, let me talk about some fox conn promises that havent been kept first in china and then let me try to turn it over to wisconsin, because the ones in china we know about. The ones in wisconsin we can speculate, but we dont know what the legislature is going to do. Tell us about china. And what fox conn is going to do so the kind of china things that that should interest us are some of the following. China has a series of laws about overtime work in factories, and youre allowed to work i believe its nine hours of overtime for a work fox conn has repeatedly for many years worked its workers almost impossible overtimes, sometimes 10, 20, even 30 hours a week overtime, and theres been a lot of conflict among workers. Apple who is the major producer, although they produce everyone else as well, has tried to pressure fox conn into changing that, but, of course, the possible, in fact, lies with apple itself. You know what, sir. Im so sorry its live cable, and weve got to go to a White House Press briefing where Sarah Huckabee sanders is talking thanks along. No problem. And were going to continue to do that moving forward. Immigration enforcement, so this week when the president spoke in ohio, he spoke about ms13 and gave a litany of the violence that they are capable of, and then he said our guys are rougher than their guys. What did the president mean by that i think the president means that our guys are going to do whatever it takes to protect americans, protect american lives, protect our borders. Is that a license for the use of more force when it comes to making arrests against ms13 look, the president wants people to do their jobs, not go beyond the scope of what they should do, but he wants to protect our country. He wants to protect american people, and hes asked the Law Enforcement agencies to step up and help be part of that process as i think we would all expect for them to. Does he want the Law Enforcement agencies to change the rules of use of force when it comes to making arrests against ms13 . Im not aware of any specific changes. Anthony scaramucci was on cnn talking about Reince Priebus saying, quote, if he wants to prove hes not a leaker, let him do it. I cant imagine that you would speak on anthonys behalf, but if you would does he think that Reince Priebus is a leaker or does the white house, does the white house think that hes the leaker im not going to comment on anthonys suggestion i think ill let him answer for that i think i made pretty clear where the president is, and i dont have anything to add to that. Does the president believe that tax overhaul should increase the budget deficit or should it be revenue neutral look, were continuing to make announcements on the details of the tax reform plan as im sure you all saw. There was a joint statement that came out earlier today, and were making a lot of progress on this front as we get closer to lining out the final details. Well certainly be putting those out in front of all of you the big pieces are simplification and helping take off the relief for the middle class. Those are big places that were focused and were going to continue to do that. As you saw from the statement the border adjustment tax was taken off the table, and thats another big step forward in the process. Peter. Can i ask you quickly about Anthony Scaramucci. Only if you do it quickly. Has he taken an oath of office im sorry has Anthony Scaramucci taken an oath of office . Not that im aware of. Have his securityclearances have gone through . As always we do not discuss security xleernss. It was initially announced it would be in midaugust hes working in the white house. Let me follow up on those. Were going to go with onequestion thursday because were kind of tight on time because the president has an open press event. Ill ask you about the boy scouts im going to go to john. Thank you, sarah. I do have to ask you about the Health Care Bill many who were in the Freedom Caucus say that they would oppose the skinny repeal that was referred to earlier, that if a measure came out with just ending the mandates and ending the tax on medical devices, that that would and not addressing anything else, that they would vote against it. Is the president aware of, and is he making any calls for specific parts of the repeal effort look, the administrations been working hand in hand on pushing repeal and replace of obamacare. We actually like the term freedom bill a lot better because we think it addresses what this bill actually is it removes a lot of those mandates that allow people to have the type of freedom, have states have the freedom that they want, and that was one of the big priorities for this administration were happy about that progress, and were going to wait and see where this bill ends up later this evening john decker. Thanks a lot. Just to follow up on what john just asked you, and i dont think you got to that particular part of the question is the president picking up the phone, calling the seven or eight republican senators hand making the case for them that this may be their last best hope for repeal and replacing obamacare, and if he is, whats his message to those particular senators the same one hes been making all along. Lets get the job done lets replace a Terrible Health care system with a better one, and hes going to be engaged, and ill keep you posted on any specifics and people that he talks to peter all of those republican senators at the white house sorry guys were real tight on time i want to keep you to one question lets be polite to your colleagues go ahead, peter. Anthony scaramucci said this morning that the president might veto the russia sanctions bill, even though senator corker has now withdrawn his objection and the same version weve already seen from the house is going to be up for the senate vote. Is that in fact possible, would he veto a bill that wassed with three negative votes in the house and two in the senate. As i said yesterday, the president and the president supports sanctions against russia, iran and north korea we continue to support strong sanctions against those three countries, and were going to wait and see what that final legislation looks like and make had a decision at that point. As of right now, does he sign if as soon as we have a final piece of legislation well let you know. In terms of working with the dod on this new policy, how long before you find out what the details are, weeks, months i dont have a specific time line but i believe they will start working on it quickly and well keep you posted as the details come out again, i dont have a specific time line on what that looks like but i know that they are ready to start moving and work on that implementation major. Thanks. Several republicans have sent signals to this white house, one, dont make a recess appointment because were not going to allow it, and two, no confirmation hearing if a new attorney general is being nominated. Theres a signal being sent dont do you fear you might be contemplating. Can you for the betterment of the Senate Republicans who are working with this white house on a lot of issues put to rest once and for all the status of the attorney general, that hes not going to be fired, no need for a recess appointment and this issue can be laid to rest for country and for Senate Republicans who appear based on their public statements to be anxious about this prospect . I guess im not sure how many times you have to lay an issue to rest. Ive tried many times. But when you dont say the president has confidence and the president says time will tell as he said earlier this week, im only telling you what Senate Republicans who are in the position to have to deal with this. And ive answered your question and yesterday you probably saw a statement come out from here that that was more fake news from the Washington Post on the fact we were considering a recess appointment. I think that sums that up pretty clearl