Lunch begins right now. Welcome to power lunch t shares of boeing are the biggest on the dow that stock down more than 12 in two days well have much more on this story later on thank you. We begin with president s frcomm president. Eamon is at the white house with more. Reporter the president was putting an optimistic spin on where things were going with china. He wants democrats to pass it. He calls them the do nothing democrats but if they pass this one, he will give them all the political credit if they do that the president continuing to lobby there. On china what the president said is they are suffering. Their supply chains are going down the tubes Robert Lighthouser spoke in this Cabinet Meeting to say that ultimately he feels they are going to get toured a phase one deal but not until the president and xi jingping meet later this year he says theres still some issues to be worked out. The president continuing to suggest things are going well and he sees the phase two issues as being easier to deal with than whats in this phase one piece that they are wrapping up. Well see if thats the case theres a long way to go between here and there appreciate it markets approach record high we have the latest over those trade negotiations ongoing, the question is whether earnings can get us to new highs. Were less than 1 away. The s p 500 above 3,000. If we could close there it would be the first time in one month the dow would be above 27,000. Boeing accounting for 80 of the losses theres strengths in financials. Were looking at jpmorgan trading at a 52week high. This week 122 s p 500 Companies Reporting earnings we have 12 dell component and results will shed light on whether these multinationals are able to account for a growing risk like a stronger dollar, tariffs eating into costs as well as slowdown in u. S. Manufacturing. Ill be watching the industrials closely. Its worth noting that profit estimates have come down from 6 in july to 0. 9 from the major industrials. We have united tech, cat terpilr and 3m shares of 3m down 25 in the past stix months. Best performing stock on the s p 500 is kodi. The company exploring sale of its professional Beauty Service as part of its broader turn around strategy. The stock up 13 finally some of the trade sensitive groups Like Technology and chips moving hire. Back to you. Thank you we have some breaking news we have details. All right what were watching right now are shares of Teva Pharmaceuticals up right near the session highs up about 11 plus percent at this stage the reason why because all these Drug Companies had been higher on the day after news of that settlement for the opioid litigation in ohio teva announced they are in a frame work for a wider ranging settlement including agreements with the attorneys general of north carolina, pennsylvania and texas as well as certain defendants for a possible global settlement frame work. It would include around 23 billion worth of drugs and medication provided to help remedy the opioid addiction crisis as well as a cash payment of up to 250 million over the course of a decade that particular news is helping to send shares of not just teva but drug districters to their highs of the day as well were keep a close eye on this but for right now thats the reason youre seeing such sharp moves higher on these drug districte distributors back to you. Thank you Goldman Sachs cautions that buy backs are plummeting will earnings be enough to push stocks to new highs . Lets talk about that with chief Investment Officer and jamie cox who is a managing partner with Harris Financial Group well get to the question of the buy backs in a few minutes how should i invest in that Slower Growth environment . I think it will be good enough to take markets to new highs. You have to look at with the bad news out there, were seeing corporate revenues grow faster than the conomy. That reflects the fact that people are working you talked about the end of the last show about how were seeing strikes because the labor market is so strong those people are making money and spending that will keep driving revenues and probably wil kpmtatioexpect well how should you reposition your portfolio to catch the wind it makes a lot of sense to reorient to things with much more sustainability. Were looking at a corporate debt situation that could spiral out of control if you look at Companies Like diamler and compare them to ford you have a situation where companies have over borrowed and could use that money to find buy backs and dividends. Its produced a situation where companies have been spending way more than their Free Cash Flow investigators need to pay close attention to the stocks they own to try to figure out the ones that cover the payments. The examples diamler, Procter Gamble and Something Like nestle would be good three examples for investors to consider. I dont think the u. S. Economy is going into recession in the next year or so. I think that will fine i agree the company is pretty stable i do believe that stocks in the u. S. Are becoming very stretched and its going to be easier for investors to own these more value oriented names do it now before its too late in that table where you mentioned diamley and nestle, you also havexon mobil its down 16 . I agree 100 with that. Were looking to the future and not to the past. This would be a Good Opportunity to buy exxon mobil the ability for them to sustain that cash blow or the Dividend Payment s really important now i believe that the debt service ray sho rain shows are better. Lets talk a bit about buy backs and are you one who believes they are drying up and if they are, will that lack of sort of tender affect the market more broadly im not talking about the dating site i think what youre seeing here is we might see buybacks pull back a little bit theres two things you need to remember we saw buy backs increase to about 900 billion this year compared to last year. They can pull back a considerable amount and still be at a healthy level the second point is this, were talking about generally new announcements of buy back programs one of the announcements still have some room to run. Were not talking about a cliff. Were talk about maybe a slowdown over time were talking a high level of buy backs. Because of that i dont think thats going to be thing that takes the market down. Theres a lot of head winds but thats not going be it we leave it there thank you for your time. Thank you coming up, the nba season is kicking off and the league is facing a bunch of issues not just the china controversy well get you set for tip off. Boeing is weighing on the dow. Several analysts turning negative well hear from one who says now is time to buy, coming up. Man how can i deliver superior longterm results . It begins with a distinctive approach to managing money. That for over 85 years has focused on keeping confidence up when markets are down. An approach where Portfolio Managers work well independently. And even better together. Who dont just invest, but are personally invested. Can i find a proven approach designed to deliver results . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Welcome back boeing is falling again as wall street is turning its back on the stock. The stock is down 12 now in just two days. Lets get to phil if r tfor thet news this is what happens when you have three analysts downgrade a stock and dropping the stock by more than 100 some of the statements are pretty clear on why they downgraded them. Baird saying long road just got back ubs saying it could increase the likelihood of a pause on the 737 max production system. Suis serks s suisse saying we can no longer defend the shares in light of the latest discoveries we should point out all of this started on friday with the release of instant messages as well as emails from a technical pilot suggesting he may have misled regulators. One other stock we want to point out and its spirit arrow systems. It makes a fuselage for the 737 max. It was downgraded. We could see a drop in production at some point over the next month or two. Thank you for more on what this mean, lets bring in our panel you have a 500 price target yet you say the volatility will be enough to stay away. Whatmakes you think of after this bout of volatility that the stock is going to gain 170 bucks from where we are right now its to your price target, just to be clear what matters to us is what does the future look like not does what instant messages tell us three three years in the past there will be a return to normally at some point with the 737. I think phil highlighted the question which is near term production Quarterly Earnings have been very vor till flatile for the sk we expect continued volatility we think theres substantial value and upside from here im wondering what makes you think this is the dip to buy we have been sort of strung along in this whole boeing saga fo to believe that theses will resolve themselves sooner lan later. What make yous think that now is the time we are bullish. We like when people copitulate on a stock thats almost cutting our 737 max margins in half. We know the next hand boeing has is probably a negative one whether its a rate cut or further delays on the max. We can see that coming but we think its priced in by having where our current max Gross Margins are today. Do you think millingberg stays as ceo or pushed out thats a tough question to answer i think every one thought it was destined he was going to lose his job. As context emerged that they havent been hidden from some areas and hasnt made it to other. I think that become a much more difficult calculus i dont think it does any good dood a leadership change while they are trying to get the airplane back in the air the board would be reluctant to move too soon, to fast you have political pressures and outside activists calling for the upheaval or over throwithro throwing of the entire board boeing is interesting that its part of a duopoly with air bus the one thing you can see that distinguishing boeing from its competitor is that it has to have been financially dented by whats going on here there may be orders that will be lost there will be litigation and theyll have to pay carry yrs for the losses they have suffered there may be large fines how do you factor this in . They struggled. I think that the current share price, ill go back to it. Going back to the financials is pricing in another concession into what the max margins look like r your colleagues at suisse have downgraded the stock to now tra neutral. They are talking about Labor Productivity being a future problem and legal risk do you think none of those issues will be as serious as they seem too. I think we think all those things are real. Im sure its tough to be an engineer and go to boeing every day. I think all of that stuff is real i think where we are at this calendar point to say can i stand by it here and defend it here, its tough the catalyst pad is a tough one. At the end of the day youve got to ask yourself what does normal look like when you get beyond this into a recovery i think there wont be a Material Impact on production rates in this duopaly in profit rates. It will be significant costs that incured over the next 12, 18 months. Youll get back to a well functioning duopoly. That is where we will settle out. Betting back to recovery is the koe poikey point. Is there something in history that you think is comparable to what boeing is going through where a company is facing a risk to its business, challenges to its culture and whether or not culture bred sort of malfeasance and a ceo that could be in the hot seat what comes to mind is wells fargo. So far that scandal has been going on for three years and that stock has underperformed. They are not competing in a duopoly. You have a pretty stellar track record for the 737 you think what is the level of support that boeing will have out in the field i would venture a guess it would be more extensive in the history of human flight. Ill you the plane will probably be incredibly safe in a duopoly where youre not facing a competition, its easy to make those recoveries over time i think well get back to where we started bvr this crisis happened thank you two big named dow stocks hitting record highs well get the traders take on apple and get a closer look at the Housing Trend thats been boostingom he beddepot. Power lunch will be right back obvious. Sometimes, they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu takin it off road station ted goiwagon, eh . Ip, huh . You know its an suv your family is duckin and rollin. While we stowin and goin but thats cool, i know for a fact your suv does not suck. And why is that . It aint got that vacuum in the back, whoo sucking stuff up what else are we gonna find . We got to go. Vacuum in the back, hallelujah get 0 financing for 60 months plus 2,250 total bonus cash on the 2019 chrysler pacifica. Welcome back to power lunch. Apple hitting fresh records after Raymond James upped its share price to 280. Thats the most bullish on the street Craig Johnson and mark teper, are your trading nation todaeam. Pretty upbeat commentary right there. I guess the only question if you look at the chart is it gets stretched at all or does the trend seem okay . Mike, i think the trend looks great. The stock has broken all time new highs opini when you look at the size of the consolidation and do a measurement on it, you can argue for a price objective that based upon the chart north of 300 ill still be a buyer of apple here mark, not all that much as changed since the business of apple. In early january you had the panic over china iphone sales and the rest of it do you think right now people are looking too much on the bright side or you still think the long term story is intact . We own apple and you almost have to own it because its about 3. 5 of the s p 500 we have recently taken some properties this call was really about the iphone 11. They are faphasing out some oldr models production has been higher than expected what the call doesnt mention are some of the things that interest us when it comes to apple. For the first time in a long time the iphone makes up 50 of apples revenues why is that important . They are in the process of becoming just reliant on one product. They are diversifying their business thats good for companies and multiples. Wearables are doing well services are up 13 year over year and shifting towards more recurring revenue. Wearable and services are about one third of their revenues. Love the company well continue to own the stock but i believe most of the easy money has already been made. All right its interesting we mentioned 280 is the highest price. Thats only 16 up side. Its unusual for a marquee stock not to have anymore bullish analysts than that well see what that says about the overall sentiment. Thank you very much. For more trading nation head to our website. Home improvement stocks have had a constructive year but a new study says spending on repairs could hit a wall in 2020 what the means for the Housing Market more than half of the s p stocks are yieldsing dividend higher than the tenyear bond. The nba season tips off tomorrow night will the lingering fall out with china dampen the big event well sit down with a top nba insider. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. Welcome book here is your cnbc news update. Dallas Officials Say they are grateful that no one was hurt or killed in last nights powerful storm but they are assessing the damage across thecity. A tornado was believed to have hit part of that region. Considering the path that the storm took, it went across a pretty dense lly pop youlate pod part of our city we should consider ourselves lucky that we didnt experience any fatalities a three alarm fire tore through a West Philadelphia auto body shop this morning sending smoke and flakes into the air and forcing the evacuation of hundreds of students from a nearby high school dozens of firefighters pouring water on surrounding properties in an attempt to prevent the fire from spreading. Nearly 65,000 pounds of ground beef sold under different brands including circle a and clarks have been recalled this due to e. Coli concerns it sold to restaurants in 12 to 60 pound paccases. Youre up to date. Back to you. Lets check on markets now the dow has been held back all day by boeing which is having a rough session. Its up about 46 . Nasdaq is the out performer. Well, actually the russell is. The s p up twothirds of one percent. Time for todays power movers we start off with travis on the news coming this hour. A Pharmaceutical Company reached a global settlement. Next, another drug company, seattle genetic stocks soaring to a new high for Breast Cancer treatment up 16 the indian i. T. Company down big. They received an anonymous whistleblower complaint alleging unethical practices the company is being accused of using unethical means to boost earnings oil lost some ground today w. T. I. Is down. 90 . Heres about a no deal brexit fears have eased the concerns here demand continue to weigh on the oil market if you look right now at natural gas down 3. 3 . We got news from russia yesterday saying it did not meet its september reduction commitment because of increase in natural gas out