After the bell tesla is not only stock revving up Group One Auto soaring to record highs. After its Earnings Report, the ceo will be here to break down whats driving profits later, the wework water cooler tensions are high for employees with thousands of layoffs. Many might be heading for the exits with empty pockets weve got the details on that as power lunch starts right now welcome. A mixed bag we got for markets thanks to earnings the dow is in the red. The nasdaq is the only one that is higher right now by just about half a percent lets look at what is driving. The dow held by back 3m. Vice president mike pence with some harsh words for china and for some of the companies doing business there kelly, it was a highly anticipated speech after being twice delayed due to development o s on trade it was hawkish speech. The u. S. Maintains an adversarial view of china and its economy and actions oversaes ev even though washington wants to keep engaging. America is reachi ining out hand to china. We hope soon that beijing will reach back this time with deeds, not words and with renewed respect for america. In critiquing china pence took a swipe at nike and the nba. Inciting with the chinese communityist party and silencing free speech, the nba is acting like a wholly own subsidiary the Vice President says u. S. Stands with demonstrators in hong kong. The president said the issue was chinas to handle. It was interest ing seemed to be playing bad cop as trade talks and trade deal signings are just weeks away you make a very good point. At the last part of what you said this is the first time that the administration has come out in a kind of more full throated way critical of the way china has been dealing with hong kong. The very thing they the administration was criticizing the nba for doing. Exactly this had been a few that the Vice President was expected to be delivering for months this censure on the human rights record the escalation in hong kong and ensnaring of a lot of American Brands in that process gave the Vice President quite a bid more fodder to use in this speech and specifically a dig at nike saying that the company is a so called social activists and that seemed to be a play toward the president s base where he has criticized nike as well. Thank you very much today, is the busiest day of earnings season of all with 46 s p 500 Companies Set to report. Were seeing a big divide between the winners in the center on how to digest this earnings buffet. Lets bring in bob and steve bob, lets kick it off with you. This season so far has been pretty good, really. The number of beats is running roughly where it usually does. Maybe a little above thats right. About 83 of the companies are beeting. Thats typical 14 are missing. Its been some high profile misses i note a theme to these misses or the ones providing poor guidance if youre in automotive business, industrial business internationally and heavy ple presence in china youre probably providing disappointing guidance you have everything that was looking not so forward to trade issues that is taken it a bit on the chin but if you look at the earnings theyre all back ward lookings arent earnings a lagging i understand indicator. Whats been good is the consumer visa will be after the close. Well hear great things from them they want a reason to dive back into technology and a reason to think about where growth is going to be coming from. You need tech to perform you need any kind of tech to perform whether its software, hardware, whether its consumer facing yes, i think it has to get better by its nature for the market to move on. Technology has been strong. Land research did very well. Its still not entirely clear picture here not automatically bad news if you have exposure to china i make it easier for myself reinvolving around investment. Recession fears have lessened. The powell issue has lessened. Across the board things are looking better than they did a month ago. I think the key here, recession is off the table looks more like slow growth in 2020 than recession talk back to you. Slow growth but nonetheless twitter tanking following a big earnings miss. Blaming a glitch in its Advertising Technology and wanting shareholders to expect head winds user growth did take off we broke out of this range that we have been in of 9 to 15 . We look at this as a validation of our strategy. Ill start off with you. I want to go into the map bug and how long you think this could be a head wind for this company. Its interesting is this map bug is a Technical Glitch that minimized twitters ability to target advertising and report back how well those ads were doing. Its key they added twice as many new yearsers in the quarter than projected. To see advertising slowed down is this a glitch they can limit to one or two quarters of impact or some bigger challenge to their advertising. Michael, theres going to be a launch of the new version in 20 im woernndering if this will b permanent head wind or a fixable problem. I dont think its permanent which is why we stuck with our buy rating on the stock. I didnt catch us as much by surprise that had contracted and it could use it my gut says this is probably more temporal. I think its a challenge for the stock is you basically had an overt lower for the fourth quarter. I think they can see better user growth next year around japan and the olympics your next update may be another estimate revision slower you totally hit on my uninformed mind. Its a Political Year and you think twitter will be the platform where everybody will play it feels like it will be real show me kind of stock. The form of you based on the 12, 18 month view of the company i think it will get righted. Were not talking about facebook, google or amazon where they build credibility over the course of multiple years its for a company like twitter. You probably have some rebuilding this is so unexpected because this story has been very different for twitter. For so long its all about the user growth. They started to grow users they show they have advertising business that worked thats why they show they are users and disappointing on advertising was such a discrepan discrepancy. It came out of the nowhere. Yeah. Julian, thank you now to the big Earnings Report after the bell. Q3 results from amazon will feature sales from prime day where sales surpass black friday and cyber monday combined. The company is expected to show more signs of growth after it spent over 800 million in speedier delivery the last couple of quarters as well can they turn things around. Going into the important Holiday Quarter that were talking about operating income here the build up we saw in 16, 17, d. C. Where house build out took a lot longer than anticipated. It will be interesting osi wh ie what they talk about the clear focal point is on operating income in the short term the journal has a big story today about amazon selling bangladeshi products on its website that other retailers blackballed a few years ago. If amazon says its going have to spend billions basically policing its site better, how does that affect your operating forecast income . Amazon is such a behemoth every year i think thats part in parcel of who they are they wouldnt impact my operating income on more than i think they will spend on building out fleets in one day deliveries cost is always the main focal point for a company like amazon. The cost of building out that infrastructure you have in your forecast, youre expecting lower costs for the quarter. Why is that . I think that there might be some flow through from revenue im a bit higher than my colleagues on revenue. Perhaps on an absolute dollar basis im below the streak on my operating income q4 might be higher with the products they have plus the same day delivery build out could push it a little bit lower because they spent so much building out that infrastructure, i dont know if it will take as long as it took years ago. I think that will be a welcome story along with a reaccelerated top line thanks. Thank you very much coming up, you thought this was peak auto. Check out the shares of group 1 auto now nearly 100 higher on the year up next, the companys ceo will join us and we will get a read on the consumer from the ceo as well of the Kimco Realty Group tesla shares soaring on pace for the best day in six years. Stay with power lunch. [spokesman] if youve tried college but never finished, group cheering 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 tesla shares shocking wall street phil breaks all the numbers down a trio of reasons of why tesla posted this profit most analysts were expecting them foes a loss for the third quarter. Three things many of them were fully counting on. Maybe they were counting on all of them but not some, lower operational expenses higher gross automotive margins and deferred revenue from advanced driverer systems that tesla has been charging customers for and as they roll those out, they are saying were going to recognize the preferred revenue. Tesla shares having the best day since march. There were some questions on the call about the new factory in dmie a china and where things stand there. Here is elon musk on the wall were planning to build in shanghai we hope to announce the location update in fact, we will announce before the end of this year weve got more tesla coverage tomorrow morning on squawk box you do not want to miss the interview with chairman robyn denholm. This is our chance to hear from her since she has take tennesn chairman position. Elon musk was stripped that position after the troubles he ran into on social media you dont want to miss that. Thank you very much tesla not the only auto stock rising high. Group 1 accelerated record highs today with the back of a strong third quarter. The stock has nearly doubled this year so far this morning the car retailer reported record quarterly revenue of 3. 1 billion. Thats a 7. 9 increase year over year powered by strong growth in used vehicle sales up nearly 9 from the same quarter a year ago. Joining us now, returning for a power lunch exclusive is Group One Automotive president good to have you with us thank you how do you squeeze 8, 9 growth out of an overall market that is flat, 1 or so and in many ways is declining in sales. Yeah, actually we just kind of rolled with the market which is a stronger used car market than a new car market right now. Theres a lot of supply and a lot of good value in these cars. We rolled with that punch. Also, we put a lot of emphasis for more than a year now on parts and service and theres a big universe of units in operation out there for our brand. We drove this quarter with parts and services why are used cars so hot and where are the used cars coming from are they off leased cars or what off lease is the primary increase in supply new vehicle sales have held up pretty well. Trade ins are a big source for us its all kind of a cycle i would say the off lease cars are probably whats really different from the market this year compared to two or three years ago. Are sedans dead not completely but 68 of our sales are truck and suv and it keeps going. Theres still some brands that do a lot of sedan business, honda, toyota. Its not completely dead the market demand is clearly shifting toward truck and suv and crossover. Does that shift to used cars and parts and services does that tell you anything about the health of the u. S. Consumer or the economy . Well, i think it shows a little more inclination toward value seeking. The price of new cars has gone up some people are keeping their cars longer and some see used cars as a better relative value. Yeah, there might be a subtle message in there of a little more value conscious market. Greg has a piece where he talked about peak carry and automotive weakness and the new cars come up everything from 3m to germanys gdp slowdown is it true that new car sales are topping out. How strong do you think the used market and dealers continue to be new vehicle sales peaked out about two years ago at 17. 5 million. We have been kind of vacillating around 17 million since. For this recent quarter the Retail Market was up a couple our new vehicle sales were up 2. 9 as a company this quarter the new car market is softer than it was two years ago but on a historic basis its still quite strong our Business Model is diversified with used cars and parts and service. I think with people working and low Interest Rates the auto market will stay pretty good for the near term. Thank you very much thank you very much the dow falling a little bit today. Which 11 sectors should you ride for the nec lxt leg the popeyes chicken sandwich is a job creator well explain the boom created by the phenomenon, coming up man can i find an Investment Firm that has a truly longterm view . It begins by being privately owned. With more than 85 years of experience over multiple market cycles. With Portfolio Managers who are encouraged to do whats right over whats popular. Focused on helping me achieve my investors unique goals. Can i find an Investment Firm that gets long term the way i do . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Welcome back stocks still inching toward record highs with the busiest day of earning season under way. Which sector could be the next to break out todd, you have 11 sectors to choose from. Which one seems set up the best to you i like kmoocommunications the best here. You already seen a move in technology we have the Top Ten Holdings in xlc in terms of holdings netflix came out we had comcast earnings were solid. We have google and facebook. If you look at the chart right now you can see much like this overall market a lot of consolidation, a lot of back and forth. Higher low, lower highs. A lot of frustration i do think this consolidation resolves right here. Through about 52 watch that xlc i hold the stock myself. One trade if you want to play one of biggest holdings, alphabet earnings are coming out on the 28th really just a stones throw from all time high. Theres a chance that the buyers will take us through a lot of those charts like like they are trying to crack the ceiling. Yould would you be looking for the leading sectors . I think over the next 12 months the Energy Sector could be one of the better performing. Its less than 5 of the Overall Index thats unbelievable to think where we were ten years ago. If you look at the larger cap e and m, i think the most attractive here, we get a deal with china youre seeing production slowdown which should hopefully tighten supply and demand dynamic and post the 2016 collapse and oil prices. Most of these Energy Companies have become Capital Allocators focusing on repairing the balance street aheet and returns to shareholders. I think theres a lot of catalysts to drive to the upside not to mention the geo Political Risk going on in the middle east which i dont think is being properly reflected in stock prices today all right a little bit of a contrarian call ahead, wework deal would be good for the cofounder but bad news for every other employee. Well explain, next. A retail reality check the ceo of kimco realty will join us live to discuss the state of the consumer and why the return of popeyes popular chicken sandwich could help spice up the jobs market all this when power lunch returns. I consulted with your grandmothers doctor. We can do the screening at her house. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. Welcome back here is your cnbc news update. Hes concerned isis will regain strength after isis prisoners escaped. I have stated several times im concerned about the risk of the increased violence and instability we have seen can lead to that isis fighters who are increasingly able to escape or set free. The white house is planning to instruct federal agencies not to renew their subscriptions to the New York Times and washington post. This escalating the president s war with the media dow jones reports White House Press secretary said in an email that it will be a significant cost savings with hundreds of thousands of taxpayer dollars saved how about this world record. The question is why. A nine member team broke their own record of most layered bed of nails the men lied on top of each over with four to six inches of nails placed between them as an audience watched not to put a point on it but that looked very painful going to produce the worst case of prickly feet why would you want to do that in. I know its the world record. How about the poor guy at the bottom of the stack . Who wants to be that guy i love that womans reaction. Got to look at his reaction stop im glad they got the record. All right. Thank you. Lets take a check on the markets now. We have the dow still lower. How do you follow that . I dont know. Just with a straight face, i guess. S p fi500 as well as the nasdaq are higher weworks cofounder will get 1. 8 billion pay out big news for neummann but bad news for staff the employees could be on the chopping block they would walk away empty handed here to dive in deeper is the Corporate Governance expert and professor at new York Law School good to have you both. This sounds like this goes way back to the very first board that allowed all of this to happen i think thats right. I think were seeing is a symbol that things were going wrong from a long time ago its a kind of story where everything that you would not want to have happen to a company, to the board, to management, to the ceo is coming to fruition with the work. It points to something is amiss and Corporate Governance whether i