Transcripts For CNBC Power Lunch 20170811

Power lunch starts right now good day, everybody the three averages bouncing back just a bit from yesterdays selloff and three days of declines the latest inflation data fueling some gains despite those gains, the dow is on track for the worst weekly decline since april. The s p 500 on track for its biggest weekly drop since march. Check out the transports, they are on pace for their best daily performance in a month youd say maybe its a little mixed picture. Fedex, rider systems, avis, budget leading the way. We begin with a stock not doing it right investors are losing 20 of their money again today and that continues a run of pain that put the stock at a 45year low Courtney Reagan is here with more on whats hurting the company. The stock reaction for j. C. Penney and other stores has been more severe for several reasons. They had run up 20 since the last reports we did get trends so some sell on the news here but sell because big industry head winds are still very much alive for this group today the retailer said it was a result of Liquidation Sales and shrinkage bigger than what they thought, including theft and damage and other kinds of loss and also pressured the gross margin the Department Store is reiterating still the fouryear guidance and earnings despite the loss but that means it has to make up all in the last two quarters and investors dont believe it can get there revenues did come in stronger than expected shedding 1. 3 , which was in line with Consensus Forecast j. C. Penney says all improved, particularly kid eas parl. Is it enough to change the trends for j. C. Penney and broader stores. Downgraded the stock, but dana, heres whats confusing about j. C. Penney and other retailers, sales havent been that bad their sales are actually up from the same quarter last year which is amazing although it did lose nine cents a share why the dichotomy and why this massive stock hit . I think overall the fact that the hurdle is so high as courtney just mentioned to make the guidance for the year coupled with fact that gross margin is weaker than expected and you have big sales that need to get flat up 4 in order to meet the guidance. Weve had companies talk about the fact that sales are better but now the back half of the year requires an acceleration. The loss of confidence in these names and their ability to generate a pick jup in the back half of the year is leading to the pressure on the stocks. I did this with a couple of members of the show team how much did j. C. Penney sales fall no, they rose year over year but losing money are they buying stuff for 100 and selling it for 90. It is definitely promotional but also the fact that the new wave of people consuming online, omni channel costs more money. The investment they are making youll get the sales but youre requiring more shipping costs and fulfillment cost in order to produce the same level of sales go ahead, im sorry i thought you were done. No worries. Now what you have companies doing, they are basically saying if youre picking up your online order in the store you may get an additional discount to pick it up in the store thats going to be one of the new things we see to see if traffic is driven and sales can move higher than expected. You seem to be particularly focused on a Comparable Store sales decline as opposed to the overall sales decline. Explain why and is that Comparable Store sales decline quarter to quarter or year to year that Comparable Store decline is year over year. But you look at it both ways the Second Quarter Comp Store Sales for many Department Stores were better than First Quarter but its still negative. Dana, we used to talk to back to school about now. Are we going to bother is that not part of the discussion its part of the discussion but elongated. Back to School Starts and doesnt end until the middle of september. It is starting off well and childrens place talked about it and macys talked about and j. C. Penney talked about it a good back to school is a good read for holiday but new products helps now you want to manage the cost of being able to fulfill with the seltiling of goods. Marvin said on the Conference Call, 600,000 trips per week are generated to the store because of that option to buy online or order online and pick up in store. Is that a number you foresee increasing enough to offset that higher cost . I think its going to help to offset the higher cost but i think the expectations for the comps to meet the guidance seem aggressive. I would agree with that i think almost everyone does based on the share price today. Incredible, you have to go back to literally before you were born. 1972. I was just a little dude, 1972. Thats when i graduated from high school, folks. For first time. Those were the days for j. C. Penn penney, 1972. Transistor radio in my camaro. How did you know i had one . I could tell. Most popular car then awful car really bad i didnt even i didnt bother to buy air conditioning in it and black interior its called a window. Bad idea but i digress. President trump not pulling any punches today the war of words with north korea heating up. Lets get live in washington for the latest. The president has been striking a militaristic tone on twitter. Take a look at the president s tweet from earlier today, saying that military solutions are now fully in place, locked and loaded the president says should north korea act unwisely hopefully kim jongun will find another path the president also retweeting a tweet from the u. S. Pacific command earlier today that tweet from the Pacific Command shows pictures of u. S. B 1b lancer bombers stationed on guam. Retweeting pictures of those bombers sending another militaristic symbol over twitter. What effect all this will have, we dont necessarily know but we do know the president is going to be meeting with secretary Rex Tillerson and secretary of state at 5 00 p. M. Today and u. N. Ambassador nikki haley in that meeting which is scheduled to be on recent asia trip. But clearly, its likely that the north korea subject will come up in the meeting were told the white house will be allowing photographers in to that meeting and cameras its possible we will have additional statements from the president on all of this later on today he of course is in bedminister new jersey, continuing his working vacation. Well watch for those statements thank you. Back in 1994 the Clinton Administration faced a crisis on the Korean Peninsula north korea had withdrawn from the nonproliferation treaties in 1993 United States went so far as to draw up plans to bomb the Nuclear Reactor where they believed they were creating material for test. President clinton wrote, i was determined to prevent north korea from developing a Nuclear Arsenal even at the risk of war. In order to make certain that North Koreans knew we were serious, perry, the defense secretary at the time, continue the tough talk over the next three days even saying we would not rule out a preemptive military strike. That sounds familiar lets bring in someone who was there. Nancy sotoberg ms. Ambassador, good to have you here. My pleasure. Your term included the north korean crisis in 1994. When you look back on the time and some people might look at the words from president bill clinton and say, wow, you should have bombed them when you had the chance what do you think . I dont think anybody thinks that that would have been an outcome that would have been desirable. This is a problem that really has been cycling from the first george bush through president clinton and george w. And obama and now trumps inbox. The difference with how president clinton and other president s have handle d this in the current president is that you work with your team and develop a policy that reflects our allies, our military generals, our intelligence analyses of how the statements will impact this situation here you have a situation where the president is making it up as he goes along with all due respect, i understand his style is incredibly different compared to the last three president s weve had. Its not just style and substance. You marry force with diplomacy, not just threaten and now north korea has more advanced Nuclear Weapons. And the most frustrating problem that a president faces and one of the most dangerous that we have. You didnt tell me why it would not have been a good idea. Make the case. Why did you decide there must have been good reasons very good reasons. What are they millions of casualties in the region, Nuclear Explosions from the North Koreans on our troops in south korea and japan, perhaps guam. They didnt have extensive Nuclear Weapons back then, right . The difference now were much more worried about a more advanced Nuclear Program today than there was back then there was suspicions they had enough material for two bombs. Now they probably have more. Right. The solution isnt to nuke them the solution is to have tough diplomacy to try to put that back in the box. The last option what about bombing the abilities to set off the bombs or arartillery tell me why it hasnt been done thats what im trying to get at. The prn reason is the same situation as today, right . Its more dangerous now they have more weapons and you have extremely erratic leader. And the reason it hasnt been done is that the complication, youre not going to get it all and secondly it makes the North Koreans more determined to develop these and upset the entire region well lose our alliance in trying to quesqueez them it could put our troops in the region at risk thats why we havent done it. They still exist. Let me go to the spirit of if you dont share the idea that a preemptive attack is a smart thing to do in the 90s, is there not truth to the idea we kicked this can down the road from one administration to another and incrementally those decisions are why we find ourselves where we are today with a country that has a highly unstable dictator in charge with a much more advanced capacity to both create and deliver Nuclear Weapons. All of that is true except that the military option first of all has always been on the table. The president said its locked and loaded those have always been ready to go and defend as we do exercises, were ready to move at the moments notice and have been for decades. Force has always been an option but it has always been the last option, not the first. This comes on the heels of having the toughest sanctions against north korea ever taking a billion out of a 3 billion trade relationship with them with china taking the lead rather than let that take effect and squeeze the North Koreans and try to get them back from the brink, were escalating it and using language that he uses, thats not who we are. We need to lead a tough sanctions to squeeze this regime the military option is always on the table and always has been. That is not the wisest course, you want to try to solve it first through tough sanctions and thats what we were doing until this war of words started that thrown that off kilter, its wrong. I hate even suggesting this given its a regime that strarve its own people for no reason and worst dictatorships in the history of modern mankind. Now that thefl a Nuclear Weapon, there any argument to be made to more carrot, less stick, which is do we just sort of appease them and let them go on their way as long as they are not doing anything in the region or to us. I dont consider sanctions imposed which wipes out a third of the trade, a carrot, thats a pretty big stick. China is the key here it has the most of the trade i have to say to your listeners, it is a huge mistake to think a pinprick strike would make it better it would make it far worse they would retal rate wi taiatta fallout and war again with north korea. That is thats a last option, not a first. Be careful when youre advocating that. The sequences which ive looked at personally and hear from generals today, that is a very, very costly option in terms of american lives that is one that cant be done lightly. It should be done only after careful consideration as a last resort we were on the verge of having we had the strongest effort to squeeze this regime. And thats the way to go you can always keep the option of the military on the table its never been taken off the table in the four decades you made it clear its never ever seriously been considered and sounds like maybe the north kore koreans. I did not say that. It has been very seriously considered by all of the last four president s and taken off the table because there were other options very frustrating ones but every president that i know of in the last four decades has considered this option and chosen another path. I suspect donald trump will as well. Thank you for joining us, much appreciated. My pleasure it is friday and remember, that means the Weekly Oil Rig numbersare out jackie has that talk at the cnbc commodity desk. Favorite time of the week rerig counts are up in the United States, three, to 768 were higher from 372 a year ago. Thats almost a little more than double as a matter of fact oil prices took a turn here, were four cents higher and bouncing around in this range for the last couple of days. We were down as much as a percent early this morning dont think the rig count has much to do with todays action as we head into the weekend but baker hughes telling us three more rigs were added here in the United States. Back to you. Thank you very much coming up, snapchat investors are running out of patience and may be running out of money. Why is the management talking about dancing hot dogs heres a market stat you probably didnt know more than 200 companies in the s p 500 are now in correction territory . They are in correction territory and its a slew of different types of industries but a couple really stand out and they are names you know. Well look at all 500 stocks and tell you which are the highlights on the risk of correction and bear market territory after the break. Keep it here on power lunch. music stops bell rings track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. The s p 500 is up 9 for the year, which makes this next statistic all the more amazing, more than 200 companies in the s p 500 are down more than 10 from their highs, dominic chu has the list and how this is even possible. We have this kind of gain overall in the markets but there are that many stocks if you look at the s p 500, 10 or more, it is around 200, a little over 200, at least it was a couple of hours ago. If you look at the overall picture, there are actually around 80 stocks of that s p 500 that are in bear market territory, 20 or more below the recent highs look at these names, they are names we know and indicative of the themes weve seen. Priceline group, big up trend and down 10 from the recent high one to watch there consumer discretionary, netflix down 11 from its recent highs as well. Another up trend has fallen on earnings amazon. Com, we talk about the record highs not so long ago, down 12 from there, target stock, down 30 and then underarmor shares down 57 as we talk about these names, a lot of them are up there we dont have enough real estate if you want to know, go to cnbc. Com back over to you. So should investors like you prepare for a pull back and if so what are the best ways to position your portfolio. Brad mcmillan with Commonwealth Financial Network and cole, directing manager with smeed Capital Management brad, what do you think . Do you think that we are heading towards a correction dom made a case that a lot of s p 500 stocks are already there. I would argue that in fact even with all of those stocks down, other stocks going on. What were seeing is a transfer of leadership. Were not actually seeing the market go down were just seeing normal Market Action that being the case, a lot of damage has been done i think thats actually more of an argument for optimism. What should i do with my money . In the short term, the only time we get really big sustained pull backs when we have a recession or when the feds hikes rates or oil prices go up. You probably shouldnt do anything in the short term we may get a pull back but chances are it will be short and relatively small. Cole, is this a time to play defense, smart offense, a little of each . What what dom is layingundertow i water. He talked about retail and things like media where the strongest parts or Health Care Space thats going on in the same place. The shocking thing is how weak the breadth of this market is and yet its pinned up pretty well in the last 30 days based on large market caps that have sustained. The long and short of this, it does not look like a great setup because youre paying an expensive price for what i would argue is a very narrow market. If those price markets are going on and market is climbing higher, theres a handful of stocks getting higher multiples to sustain the overall index. Stocks like boeing or whatever, apple driving indexes higher correct. What should i do if i have a portfolio that has expanded in terms of my Stock Holdings and im a 60 40 kind of guy. Now at 65 on equities what do i do, cole tyler, youll have to forgive me we only pick stocks. Were pure heroin, the seen risks and unseen risks are out there. Everyone with say media is being absolutely deconstructed according to the consensus of investors, those are all known what are the unseen risks . What this these large big cap tech or activists running after staples at 26 times earnings that is not priced into the markets in comparison. Gentlemen, thank you very much brad, cole, appreciate it. Thanks much. So is this what will put meat back on snaps bones how this dancing hot dog could be playing a crucial role in growing the companys bottom line next. Hey gary, whatd you got here . This bad boy is a mobile trading desk 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 shares of snap are down double digits. Ju julia is live with more and how they hope to turn things around. All fell short of expectations sending shares down double digit percentages, now down 11. 5 snap has 173 million daily active user but thats less than the 250 the similar Instagram Stories feature announced last week and 400 million total daily instagram announced in february. But snapchat reported stronger engagement among its core younger demographic than instagram. Snapchat users under 25 years old spend 40 minutes a day on average. The users over 25 spend over 20 minutes. In contrast, instagram last week announcing that instagram users under 25 spend 32 minutes. Those over 25 spend 24 minutes daily. One reason users are creating 20 snaps a day on average and also over a quarter of all smartphone users in the uk and france and u. S. , use snap chat daily, because of augmented reality filters, this very popular dancing hot dog. The growth has been a big driver for snap because its not just about adding filters to your face but also about the growth of filters for the world around you. Listen to what the ceo had to say. The dancing hot dog is the first augment eed reality superstar. We released several new creative tools this quarter for the community to express themselves and have fun. Now he also dismissed concerns about competition didnt mention facebook or instagram directly but said theyve always been up against giant companies and theres innovation, inno vacativation ls one that continued them to grow. A careers worth of work to build your credibility has just gone down the tubes. Oh, my god i love it. What were you going to ask how real is it for evan to get on the Conference Call and cite this as innovation . Maybe, were laughing. This is a product that his customers want apparently if more than a billion people oh, yeah. 1. 5 billion views i mean, 1. 5 billion of anything, thats a massive a lot a lot of dogs. 40 minutes versus 32 minutes. Every minute somebody is on is presumably more advertising revenue. That 8minute spread between what they are spending on snap versus any any sense of how much more that could bring in per person at this stage or is that unknowable . Its a really interesting question on the call last night there were questions about whether the time spent on snap chat was spent messaging where you could be exposed to ads or brands through branded filters like this could be a branded filter or whether that time spent is on discover, more natural advertising platform because you could have in between discover stories. It seems the more time spent on discover rather than this format will be more profitable for snapchat they wont break that down specifically. Im thinking pokemon go. Augmented reality you can have a brand you can have a logo up here and they have brands pay for access did oscar mayer pay for this . I dont see any logo on this. This is unbranded. Unbranded hot dog its a missed opportunity. You better watch it because then they will take those unbranded hot dog, thats why you brand your hot dog so the hot dog rustlers will know whose ranch it belongs too julia this is my fourth hour live tv today. Well see okay, coming up, another day, another problem for uber the latest headline and headache for that company next. But first, to sue herrera for a cnbc news update heres whats happening at this hour, a portion of Exeter Hospital has been evacuated. Fire crews responding to the hospital for an unknown odor ambulances from the area arriving to evaluate at least 20 victims. One early report said it was caused by an anesthesia chemical leak. A fifth day of testimony under way in a preliminary hearing related to the hazing death of a Penn State Fraternity pledge 16 Fraternity Members are charged in the criminal case returning to court this morning. The judge will decide if prosecutors have enough evidence for that case to go to trial a first glimpse of the renovation work being done inside the white house crews are busy laying down carpet throughout, painting and electricity upgrades are also on the list of repairs. And Dallas Cowboys star running back elliott has been suspended for the first six games after a year long investigation of his Domestic Violence case in ohio. U uott says he will appeal. Yorep to date. Power lunch is back in two minutes time. Who are these people . The Energy Conscious people among us say small actions can add up to something. Humongous. A little thing here. A little thing there. Starts to feel like a badge maybe millions can wear. Who are all these caretakers, advocates too . Turns out, its californians its me and its you. Dont stop now, its easy to add to the routine. Join Energy Upgrade california and do your thing. Lawsuits, Sexual Harassment may sound like a daytime soap opera but it has become part of the day to day at uber heres the latest from san francisco. You said it, theres enough drama for several seasons worth. The benchmark has been playing out through leaks but now it is all out in the open. They are trying to cut ckucut kk out of uber completely at stake is nothing less than control of the company last valued at 70 billion. This is all the more remarkable given that uber is benchmark single most valuable investment. Benchmark accuses kalanick of a selfish power grab and hiding information critical to the lawsuit. They participated in three funding rounds in 2011 which translated into a 13 stake of that company which i mention last valued at 70 billion. This amassed tremendous paper profits but keep in mind the average Holding Duration is around seven years benchmark is getting close to that with uber and has been looking to cash in on those profits. Just to add another layer, sources tell me, the valuation has fallen by billions in secondary markets, giving benchmark more incentive to cash out before another funding round. Softbank could be the right solution under certain circumstances. Remember, guys, still without a ceo. Youre right, it is a soap opera. Speaking of sooperas, theres a week of political infighting between President Trump and Mitch Mcconnell. Showing you some of the tweets President Trump has made about senator mcconnell. Joining us to discuss, ron christie, tony fratto, bushs former White House Press secretary and jared bernstein, former economist to Vice President biden. Sorry about that jared a big meeting at the reagan ranch for republicans in congress to begin planning on tax reform they have with plan coming from the white house. What are the probabilities this gets done this year . Good afternoon to you i think its a very tough hill for republicans to climb right now. Weve seen the inability of House Republicans and colleagues in the senate to find consensus and package to move forward to get to the president s desk. If you thought health care was complicated. I think tax reform will be an even more difficult to get over the finish line. Im cautiously opentimistic the house will move first. But i would put it about 50 50 if i were a betting person. Taking what he just said, do you think we end up with something that is can even be called tax reform or something that is much more sort of incremental tax cuts or targeted changes in the code . Much, much more the latter than the former. I would not call what we may be looking at in the end game tax reform at all. Id call it tax cuts i expect the package that would probably add to the budget deficit, not be revenue neutral which to me is a very simple baseline, should be at least revenue neutral. If anything well need more not less in fact, the way the bill would have to be structured in order to meet budget rules it would have to sunset after ten years like george w. Bush did. Thats nothing like a permanent tax reform thats a temporary tax cut full stop. Tony, were going to show folks some of these tweets here from President Trump mitch, get back to work. Repeal and replace and tax relief and reform and cuts and great infrastructure bill on my desk for signing you can do it. Can you believe Mitch Mcconnell which screamed repeal and replace for seven years couldnt get it done . Must repeal and replace obamacare. Is Mitch Mcconnell going anywhere no, hes not going anywhere he was here before President Trump and probably be here after President Trump, might out survive everyone else on the panel as well. He knows one thing weve seen especially in the past 24 hours since the tweets, very strong support from Mitch Mcconnells caucus standing behind him look, a lot of my clients and people were working with are trying to get tax reform done. This is a distraction from getting tax reform done. Thats whats tony, hes sending a message to his base that Mitch Mcconnell is the problem if youre not really digging in and just looking at the tweets or watching the news or talk about the tweets, donald trump is shoving it all off on Mitch Mcconnell, is he not its kind of a genius political strategy because people will believe Mitch Mcconnell is not getting anything done . I wouldnt call it a genius political strategy for this reason we already have divided government were not going to have democratic support for getting tax reform done. The only way you get tax reform dob done is to have republicans unified. We didnt get health care. But we have a divided government because of the republicans, the republicans control the white house and house and senate in name only. Thats right, dividing republicans is not a way to succeed. They divided themselves already. The basic problem here and i think tony is expressing exactly the rational view of whats happening. Were not really dealing with rational players and we havent started talking about north korea. Trumps goal is to elevate trump, not to unify republicans, its not to sing the kind of tune that Establishment Republicans want to hear its to elevate his brand, exactly like sully was just saying he needs hes far more interested in casting blame than in hold on, jared. Answer this, tony. He let them take the lead on Health Care Reform and to his point weve been hearing for years about repeal and replace and they didnt get it done. Lets be clear. Anyone who took a serious look at Health Care Reform and obamacare and i include i include House Republicans and Senate Republicans and trump and the 16 other rpz who ran for president , anyone who thought it would be easy and even likely to get obamacare repeeled and replaced was fooling themselves and fooling voters it was never going to be easy. There was a lot of division on it its hard to take something away from the American People its different on tax reform i have yet to meet a republican in washington who does not want to have significant tax reform done not one. They are unified on this trying to divide them is really destructive. All right who is trying to get a word in edgewise lets get ron. Hes been so polite. I have been yes, tyler heres the last word were entering a critical phase for the Republican Leadership and congress President Trump apparently will come back to washington, d. C. , needs to find a way to work with the Senate Majority leader not insult him over social media and sit down and layout the perimeters what his plan is and then demand that house and Senate Republicans aseed to his wishes if we cant get anything done in the congress and we have the largest governing majority since 1929, it tells you that perhaps republicans dont deserve the trust to govern. Thats where we find ourselves now not insulting people on twitter are zero what ron just said is a playbook that trump doesnt understand and from someone from the other side of the aisle, i consider that a feature not a bug. Tax cuts, we dont need them right now, theres another side to this argument but while ron and tony have very clearly laid out the traditional path to president s working with congress, were not in that kind of a moment. And its a feature not a bug in the end game. Jared got the last words anyways. He always does. All right, still ahead, why did one of the worlds best poker players burn his shoes in a casino parking lot a man who won the youngest world series of poker over will join us rick, how is it looking . Sully, not looking bad but definitely losing yield, gaining some price action. Remember, 2year note looks like it could close under 1. 30. We had auctions this week, its at 1. 44, up against it, 10year, flirting under 2. 20. And also showing you at 2. 25 bit of a stop. And finally, the interday of 30s, they were a whisker under 2. 82 that was also a bit of a stopper. Whether they hedge it or hold it or let it go in cash, when you have to pay for it and its under water, it alters behavior. Power lunch will return in two minutes. Jack knocked over a candlestick, onto the shag carpeting. And his pants ignited into flames, causing him to stop, drop and roll. Luckily jack recently had geico help him with renters insurance. Because all his belongings went up in flames. Jack got full replacement and now has new pants he ordered from banana republic. Visit geico. Com and see how affordable renters insurance can be. Finding the best hotel price is whoooo. Now a safe bet. Because tripadvisor searches. Over 200 booking sites so you save up to 30 on the. Hotelock it in. Tripadvisor. Our next guest is one of the most successful well known poker players. Occasional tirades at the table have earned him the nickname the poker brat that is the title of his new book poker brat, in which he shares not just the highlights of the poker career and the lows of selfconfidence in high School Congratulations on your success at the tables. What has made you a good poker player i mean, theres great ma mathematic mathematical, elegant theories lts kids have helpdeveloped, i them the kids. Beyond that its super important to have great reading abilities, reads. I would say my reading ability separates me. Reading the other player you mean and reading the cards yeah, well you have to be able to look at someone and know whether they are lying or telling the truth or weak or strong and then have the guts to act accordingly. Im pretty good at that. Youve played some famous Business People who have very high mathematical skills like david einhorn, chalmath happetee ya. You got me. My question goes inevitably too, would President Trump be a good poker player or would you be able to read him . Its interesting. He was a little bit ahead of the curve, im neither democrat or e middle but he was ahead of the curve in that he brought poker to television in 1996, 97 at the u. S. Open. Is that right he was a producer of that . Well, i mean it was at his casino he had his name on it of course. I mean, i think i could read him, but i think that he would be a very fearless opponent. Interesting women in poker, in light of the google memo that has been ripping up the internet, the world series of poker main event at 7221 entries, only 272 women. That 14 347 376 men in the 21 to 25 category, only one woman why do you think that is you know, that is not great for us i think that there is a lot of great women professional poker players who have been crushing for years. So im kind of surprised the numbers are that low another problem weve been facing is like you say, age 21 to 25 not as many. These are the numbers that but why i think video games has been i meaning, i know that my sons love video games they are watching video game tournaments. Whereas the 201 to 25yearolds used to be playing poerk so weve lost some people to that maybe their orlando brothemder sisters have been dom nalinatinn they turn to another direction im sure a lot of our viewer like to play poke, maybe they fancy themselves good poker players. Youre not going to give away all your tips, but can you leave our audience with something basic everybody out there can do to just get a little better so that they can bankruptcy thecanr friends . Well, first of all, your audience i wouldnt be surprised if 40 or 50 of them play poker. Its a very poker rich audience on cnbc here so i mean i would say that the number one thing is patience an amateur defines patience like this many hands. But a pro would define patience like this many hands so just by simply improving the patience, i believe that you can beat 50 or maybe 70 or 80 respect about of the poker games out there in the world just wait it out. Evach hand its about playing maybe 15 of the hands whereas most amateurs think that being patient means that they are playing 30 of the hands so cut some of that fat and that alone will put you in good stead in 70 of the poker games. You just drop out phil knows this, i dont, but ive played in some fun little poerk idiots blow themselves up quick so you a lot of peek blow themselves up quick for whatever reason maybe they are having a bad day. Maybe they are not as card sa y savvy. Or language savvy like me and saying idiots blow themselves up quick. Thank you, phil. Great stuff. Good luck with the book. Thank you street talk full house next. 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. 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 for street talk, Analyst Recommendations on the stocks that you need too though about. First up, blue apron First Quarterly report, so a lot of bulls are changing their tunes downgrading from buy oppenheim said the company is focused on capital preservation, not growth and also pointing on out that the company is seeing delivery performance issues suggesting that they are already facing problems when they try to scale up and you wonder if the publicity i know were cnbc, but wonder if the publicity dissuades customers, too possible. Struggling, better not sign up dont know and your smaller cap name is Supernus Pharmaceuticals sun trust raise estimates and price target it is on optimism over their antimigrating drug. Peak sales estimate to 600 million because they are adding sales reps to get it out more and also for a new launch. The target has boosted to 61 stock at 41. 43 analyst says barricades at worst and 13 down side. So good risk reward. Google cancel addie versity meeting in the wake of the employee fired for the memo on thtoc e piof diversity why did they pull the plug that is ahead. Your Insurance Company wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. There is another fight in washington that is closer to home, one that could have a big impact on Economic Growth nap is ahead. Plus, tech has been on a tear pretty much all year but a number of big name stocks starting to pull back. So we ask, has tech topped out and they are loud, flashy and fast and they cost more than the average house. But is the demand for super car still firing on all cylinders . We take a ride as we turn the key on power lunch the second hour right now stocks are higher following three Straight Days of decline trips, chip, trucks and drugs at the top. And if you are younger than 45, you have never been ale live 00 a day where jcpenney stock has been lower than it is today. Off by 23450nearly 16 and there is so much more to think about. Of course there is north korea, gop infighting and what may or may not get done on capitol hill and the dead crebt ceiling deba. What are economists saying Steve Liesman joining us yeah, suddenly economists have a lot more than just when is the next fed rate hike going to be. Geopolitical risks have joined the list of uncertainties along the risk of a government shutdown, chance that any meaningful tax reform will happen and all the other risks seem trivial by comparison. If north korea can tletsden world trade even with conventional weapons, it can threaten the global economy. The Global Financial system is vulnerable to that same disruption of trade. Jpmorgan putting out their gees political anxiety index which shows different spikes in the past several years you can see there, desert storm is one, bosnia, september 11th, all of the indicators that say the level of geopolitical risk spiking now with this north korea situation. And jpmorgan has what it calls rules of geopolitical risks. One, its the rule not the exception. Two, its delivered four of the six of the past six recessions mostly through the oil price conduit. And the short term reaction in markets is big, but retracement happens within a few weeks or a month. Gold man writing for decades, d complacency has been the right trade. Goldman points out if all the dips are rewarded, then it reduces the chance of an actual dip and this could be why what we see in markets. Investors concerned with geopolitical risk is rising, but it is only barely pricing in the market right now all right thank you very much. Lets get a friday stock strategy session and bring in chad morgan from Washington Crossing advisors and doug butler, rock land trust. No doubt that the issue of north korea a very serious one will rear its head again. However lets take a step aside for a moment if youre a viewer and you are in stocks and youve made 10 to 12, 15 this year, you know the market is getting a little stretched. Do you take some profits, do you trim, do you go more cash or do you just continue to go all in i think itsed it a nobrain, you rebalance, you move up the equaled spectrum, look at consumer staple, health care as well as Large Cap Technology companies. Defensive you want to get more defensive. You do want gold we have spoken about that quite a bit. As well you want to have a healthy slug of long term why are Large Cap Technology stocks defensive, the alphabets of the world no. Were looking at mircosoft, cisco systems, oracle, those companies. The steady eddie companies that have a lot of cash, very little Debt Companies that have Dividend Growth stories behind them so doug, what is your view o where the market stands now and how to factor in everything from Economic Data to geopolitical risk and so forth . I think you hit the nail on the head you have to brace yourself for a pull back, but that didnt mean that you cant make money. We break agree in terms of beine towards the defensive stocks, telecoms we actually like the utilities were probably less sanguine on technology we feel Like Technology has had an extremely strong run and that includes most of the steady eddie techs. And we definitely are sort of very neutral to bearish on financials why i think financials have wrun run ahead of the fed financials are up 27 in the last year. And the Earnings Growth just isnt there for most of the banks and brokerage houses i think also the low vol that we have experienced this year has really benefitted a lot of the banks. And i think a return to volatility will create some because horrific averse and then they will pull back on the banks . I think its derisking. The best performers have been the low quality lsh shy volatility low dividend deal names. We think that that didnt continue so we think that you can still get high Single Digits in the markets over the next year, but its probably not going to come from those things that have run. It will come from your more steady eddies. Chad, its finish the sentence friday. The biggest risk to the stock market right now is deceleration of china, the economy there after their big fiscal stimulus. Isnt that also the risk of north korea . Yes, because if china catch as colds, europe catches the flu and the United States also catches a cold xhooi h china has been the largest economic impulse any deceleration could derail the markets. Were looking for low single digit returns over the next several years. All right thank you very much. So somehow President Trumps locked and loaded warning being received in south korea . Bill neely is in seoul yes, hello from seoul where there is concern that on the three occasions donald trump has spoken about this crisis from fire and fury to locked and loaded, the temperature does rise people concerned that they are the ones ultimately who would suffer from any conflict most people here would like to see the tension eased and diplomacy take center stage. Interestingly, the u. S. Military here has phrase ready to fight tonight. They are if you like locked and loaded at 83 bases around this country all the time there was a phone call earlier today between National Security adviser hr mcmaster in the u. S. And south koreas National Security adviser and the south korean presidency he said that the two sides agree that they would consult each other in each step of this process, suggesting that the u. S. Will not act unilaterally without first consulting their allies in the region at least here in seoul. All right thank you very much. North korea appears to be a poor country and yet it has managed to develop sophisticated weapons and generate Nuclear Power where do they get the money for that short answer, they export commodities, weapons, slave labor and extremely large, i mean huge statues. We know all this because of this, this is an annual report from the u. N. Panel of experts, these are investigators who work for the u. N. And put out this report every year on north koreas progress toward Nuclear Weapons and whether or not countries are enforcing the sanctions imposed by the u. N so the sale of coal and minerals to china widely known. Lets move on to arm sales one of the many examples they discovered north korea sold automatic pistols, assault rifles, antitank missiles to the congo. Take a look at this photo. This is tough, but there are 30,000 rocket propelled grenades seized from a ship manufactured in north korea in those crates under that dirt. North koreans do this through front companies. For example north korea has a Company Called glocom. Makes military equipment like the ones you see here. Company advertises on the internet moving to labor, this let ater shows a north Korean Construction Company built the headquarters using north korean labor. And North Koreans have also built enormous social list style statues. This is in senegal you can see how tiny the flags are at the bottom. U. N. Sanctions were imposed on north korean statues in 2016 so its for tnot just coal. And they were paid cash for that. Yes, or they have been given land instead remember, they are prohibited from a lot of the international financial, so they do a lot of smuggling. We talked about this this morning. For example they gave 20,000 cash to each of the employees to bring back with them to north korea. Which is obviously way more than they 14should have got considering they were basically slave labor. Also they hide stuff they discovered a bentley under a bunch of bananas in a crate at one point i think we have a photo. We were supposed to have that ready where you could see they actually seized it, there you go no, it wasnt under bananas. It was part of a shipment and the bentley was hidden in there. It was being sent back. Back to north korea i would imagine if youre driving the 12r50e9 streets of n in a bently, you better be kim jongun or like kim jongun. Maybe his wife or one his wives secretary of Defense James Mattis saying that the american effort is diplomatically led, its that diplomatic twraks, it is gaining diplomatic results. And with so much emphasis on the potential use of force, what part is diplomacy playing in this latest flare up joining us now is former undersecretary of state for arms control and interNational Security affairs from 2009 to 2012 welcome, good to have you with us thank you i want to get to the question of diplomacy, but my notes say that you say we need to deescalate the rhetoric and that is an important step here. But i want to challenge that premise a little bit and ask you whether there is a place in a negotiation like what were seeing now between the United States and north korea and china for kind of a calculated Good Cop Bad Cop approach which seems to be what may be going on whether there is a place as secretary tillerson said the other day for a president to speak to a dictator using the kind of language that that dictator is most familiar with that that is a way to negotiate, to get his attention is that a legitimate point of view i dont know if its legitimate, except its never been done before now which is why you said that the republic of korea said that it had conversations with hr mcmaster because they are sending a very strong signal as im sure the japanese are that they are uneasy and they want to know that we wont do anything preemptively or unilaterally so its important to be as frank as possible. I did that when i was negotiating with the russians. But its unusual to have the head of state, any head of state, that is legitimate unlike 3 mr. Kim and north korea take such an active role and be so out front and use such tough language it is very upsetting for the bystanders and for people that are allies what about the president s point that weve used measured language, measured rhetoric for decades and we really havent got gotten the rut results that we l like to see and now is the time to speak more forcefully in the Public Square about what is going on here and be real clear in drawing what the consequences will be for continued behavior of the sort that we want to discourage i hope youre not suggesting that people werent speaking forcefully to the North Koreans all this time. We just didnt do it in public because you dont want to put somebody in a corner, but also because this is not a perfect situation. We have a rogue dictator who is starving his people, selling them as slaves, trading in contraband, trading in arms. Under u. N. Sanction. Without any real influence by the United States or the west. Apparently the only country that has any influence over them is the place that they get their food and fuel which is china and china for their own reasons does china care that maybe that is too strong a way to phrase it. But is china really alarmed that north korea is causing problems for the United States . On some levels, no. For their own geopolitical reasons, the chinese dont mind that were distracted, that were talking about war, that were upsetting people and ourselves, that were in this very tense situation with the North Koreans. They dont mind it at all. They prefer to have us distracted andnot doing our business so for their own reasons, that is okay. As it gets higher in escalation of course they will be concerned. They share the same opinion that the North Koreans do that they would rather have no americans on the Korean Peninsula. That means that the 28,000 troops that we have in south korea, they would like those gone and the idea that there is a Nuclear Weapon on the peninsula, they would much prefer to be in north korea than south korea so why should we bother dealing with the chinese then at all since it sounds like they have no incentive to do anything well, the president outsourced our diplomacy to them when he said i have a good trade deal that is here if the chinese will just do this for us, get this north korea thing out of our way. The chinese have their own motives as i said to have us destabilized they have their own reasons to prefer that. They obviously dont want this to go to nuclear catastrophe, but at the same time, they are happy to have this kind of roll on as long as its contained the problem we have is we have two uncertainties right now. What is kim really going to do hes escalated, hes got the icbm, apparently he has miniaturized a Nuclear Weapon. That is at least most recent intelligence assessment. Those are the two elements needed to hold us at risk. One thing we havent talked about is natural succession. This is a kid who is not healthy. In fact he has disappeared for periods of time not quite the length of time many of his family members have disappeared for permanently exactly what if he were to die without an heir, what happen to the kim dynastity . I dont think we understand that pipe sure that he has a plan with some of the generals hes in power because he has the military behind him. He has some kind of informal succession of how to manage it but everything that kim does from the moment he wakes up in the morning until he goes to bed is about regime survival and that is the point weve made which is dictators like him, august thll they want to de in power and drink champagne so they wont do anything necessarily that would jeopardize that. Ive read a few books on north korea. There arent many. Do you believe the north Korean People believe the pr . In other words, if he were to die without an heir, do you think the country would go on the way it is or the people would relish the chance to finally take power or do you believe they actually believe the stuff that they feed them i went to korea many times. I once flew from okinawa on a p3 which is one of our kind of spyish planes. And as we approached korea, the pilot took me along the parallel of the line between north korea and south korea. And as i looked to the right, it was completely dark. And as i looked to the left where south korea was, it was obviously very bright and lots of lights. North Korean People are deprived, starved, sold as slaves and they dont have basic things like a steady supply of food and fuel. So im not so sure that they are sitting around watching cnbc trying to decide what they really think the regime is doing. They are fed a very steady diet of propaganda by him they are told to be afraid, very afraid so i dont think this is really about them unfortunately they need a rescue and they need to be in a country that does not have someone running it just for his own pleasure, which is the way mr. Kim and police dad hahis dad har 50 years thank you very much to your insights google plans to discuss the diversity memo and controversy and then cancels it. More on that ahead plus listen up job hunters we have a list of the best and worst jobs for the future about that. Meantime, there is a 500,000 lamborghini parked out side we got to drive it well show it to you in California Wine country, a battle is brewing between wine and weed the states legalization of Recreational Marijuana prompting some entrepreneurs to set up shop in wine country we go out to red wood for that story. Reporter the question is, if they pair well together. Take a look at this, it looks like a scene from a wild west. The company took over the property here. One of californias biggest wine marks n makers now own it and just one way that they are building up their businesses here they will be providing the processing facilities for gro r growers. And they have Research Areas and eventually a wellness retreat. The ceo says wine country is the ideal spot to set up shop. They can use the same labor pool and they have a readymade Customer Base with wine tourists that is kind of what were targeting, more sophisticated consumer that is looking for better products and a better experience reporter but some skeptics say the payoff may not be high as some think because more supply will mean lower prices and then there is the question of regulations cannabis will be the most highly regulated Agricultural Commodity in the state of california reporter in the county, only about two dozen people have applied to grow. That of course could grow by the end of this month. Back to you. All right thank you very much. Coming up, well go outside to take a closer look at this 500,000 lamborghini pretty. I got to drive it earlier robert frank likes to drive things like that every day and plus breaking news coming up on uber that you will want to hear doesnt have anything do with that car, dont woy. Rr stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Welcome back were outside with robert frank who always has the coolest car this is the latest lamborghini yes, they make the 12 cylinder this costs 522,000. A lot of it because of the carbon fiber i just want to show you the inside of the engine 12 cylinder, 740 horsepower. 0 to 62 in under 2. 9 seconds tell me what you told me about these. Just this part here, this cross bar, over 5,000 the one bar just for that bar all the carbon fiber is really expensive. What lamborghini did, its already the most insane looking car. They wanted to make it more responsive so this is fourwheel drive and four wheel steering. So same direction when youre going fast, opposite when youre going slow and the most amazing thing about this arrest when y car when yous the engine sound this is the launch button here oh, its red like batman. Thats right. Are we going to hear it are you ready [ engine starts another good thing about this car, it has a strata setting, sport setting, a track setting and an ego setting what does that mean so were driving it and he let me drive it, i was driving it, and of course we got caught behind like a dump truck going like 20 miles an hour. Egee setting, robert frank immediately turns into an attractive woman and it drives us right to the yacht. And lamborghini having already the broader car market is really stuff right now, but at the very top end specifically for these lichltsed Edition Super models, just crazy demand right now why . Not so much the chinese, its north america americans are buying these and its an arms race. Who has the most power, craziest design, the most technology and demands is through the roof. All right see you later, robert. Is throuf all right see you later, robert. That was cool. Literally he let me drive it and i got behind like a 96yearold man and a dump truck. Im sorry but then i passed them on the shoulder and sped off. No you a snooze update. Wasnt that cool totally cool. Lets hope robert comes back might want to just keep going. Here is the news update at this hour new orleans is scrambling to prepare for more rain this weekend as that city works to shore up its drainage system last weekends torrential rain overwhelmed the citys pumping system flooding many neighborhoods. And the mayor had this warning during the heavy rainfall again uft out of an bun bbundan caution, move your vehicles to hire ground and take off the roadways unless an emergency makes it absolutely for you to be on it overseas a 6. 3 magnitude earthquake struck in the northern philippines and it was felt all the way to Manila Office workers left their buildings, but no damage was apparent after the quake struck. And 13 zoo animals that were trapped without food or water in allepo were safely evacuated to their new homes in jordan. The animals spent almost three weeks in cages, but they were fine allegatially arriving at t life ig reserve today. That is the news update this hour it has been a rough week for the nasdaq big caps. Just a blip or the start of more selling . Ene tu lunch will explore that wh wrern more drama at uber a group of ish investors have asked benchmark that it does even down from the companys board of directors the move comes a day after benchmark sued the former uber Ceo Travis Kalanick for fraud. Joining us on the cnbc news line is dan primak. Dan, this is getting curiouser first benchmark sues kalanick for fraud and basically kick him off the board and make it impossible for him to ever come back and now a couple of other hol r holders are suing wants wench mark off the board what is going on they are asking benchmark to leave. They just circulated a letter to all uber shareholders and board of directors asking that benchmark basically step off the board and sell enough of its equity interests so it wont have a right to a board seat and they did this its an email, but structured like a petition you can see he at the end of it they are asking for other sha shareholders to join their fight. This is really an effort to keep Travis Kalanick in the loop. So this is these are allies of kalanick who want to defend him and keep him involved or at least not destructive toward uber . Its not official allies of kalanick they are certainly people who feel that in what has become the benchmark versus Travis Kalanick battle that benchmark is more destructive than kalanick is that is their feeling. And what are you hearing . You know, i think its remarkable when you think about benchmark has made an investment of 27 million at uber, that has ballooned to 8. 4 billion. One of the points that this letter makes that weve had access to as well is what about the role of employees. And im interested, dan, what youre hearing from within uber because it seems that if benchmark is trying to get rid of some its stake, where does that leave the many employees that uber has hired . Well, if benchmark is trying to get rid of its stake and we have been hearing differing opinions on that, my personal sense of that is that while benchmark certainly had had conversations with soft bank and other parties about selling part of its equity, i believe the lawsuit that it filed yesterday kind of put an end to that two reasons. One, they were about to sell all their stock, why didbenchmark sue to get travis off the board, why does it care you will be out of the company in a week, why go through a legal battle and two, benchmark put out a tweet a couple days ago saying its modeling shows that iber could be valued at 100 billion in two years that is just a tweet, they are supporting their company but they have investors, too and if they sell at 50 billion, if im an investor in benchmark, while thrilled about the return, i might have a case against them to say wait a minute, you believe this company was worth twice that all right, thanks to you both and if you have been investing in technology stocks, you can probably afford that lamborghini we just showed you most have been on fire until lately big names falling 10 administers or more. So we ask has tech finally topped out gene, do you think technology as a whole, as an investment, has topped out for the next two months, yes. Next two years, absolutely not is the simple answer there are some really cool insights what has happened over the past five days i think can build a roadmap of how to trade that, but the simple answer is i would brace and the number is if you just think about the fang is up 32 , nasdaq up 15 year to date, and so there is room for some of these bigger names to pull back. Why are you so kaft especially at some of these valuations, gene because the world is changing you cant own them all paypal for example will be in some problems. But apple with august mmented reality, and a quick point on tesla. Ben pointed this out that in the last five day, tesla shares are up 3 where the fang is down 3 . There is something bigger going on there this is around commerce and separately cloud so those that is how we get this confidence over the long term jason, i know you feel the same way do you have the same level though of longer term confidence in technologies, especially going again, 21, 22, 25 times forward earnings for some of these big names. Well, its a great question forecasts are always difficult especially those about the future as mark twain once equiped. So its difficult to i wont sit here and say were define where stock prices will go but longer term, the fundamentals of these Companies Remain strong. We just got through q2 earnings for a the most part and technology was the second best sector as far as Earnings Growth was concerned. Meanwhile the Leaders Within the group, there is a real secular growth story happening here with the facebooks and with the amazons. Not technically classically defined as technology, but certainly doing a lot in technology and google, alphabet continue to do what they will do and we think there is a good strong fundamental underpinning and leaders that should continue over the longer term gene, im looking at the notes. You cover snap yeah, we do so you brought up augmented reality with apple that is what they were talking about in the conversation call yesterday with this augmented reality hot dog here that we shot earlier i mean how much do you buy this argument that this kind of, quote, innovation is enough to drive User Engagement and how significant it is it that they can get somebody to stay on for 40 minutes rather than 32 and i suppose when you have eight more minute, you have a lot more ads, right . Snap is having a rough day, so i dont want to pile on that, but i am concerned about what apple and ultimately facebook is doing to try to pull some of those engagement away. What snap is getting right is this concept of augustmented reality. And there is going to be a lot of carnage around augmented reality like there was around mobile so i think they are in a tight spot glp spot so right to talk about the hot dog, but everybody else will be doing other stuff as well right apple will have tools that will help power snap. Facebook will compete. But i think to say were scratching the surface around what we can do with understanding augmented reality is an understatement and i know you love it, in fact your firm has some investments in like spruce bot and other things give us like a longer term your whole firms m. O. Is about the future if you will loop of course as you note, wolf in french, what will be the biggest thing, augmented reality . Ai because 3d printing was going to be huge five years ago and its huge, but its kind of faded away i think there will be three of them. Ai will bowyer robw power robotics tesla is a super controversial story, but i dont think people understand the magnitude of how that will change all our lives so ai robotics and then augmented reality. Tech always moves in waves in there is a hugewave coming around those three things we talked about okay, guys, thank you booming business of esports, which stocks stand to benefit . Well speak with one analyst who made a big call today on the ultimate couch potato sport. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Going somewhere . Whoooo. Heres some advice. Tripadvisor now searches more. Than 200 booking sites to find the hotel you want and save you up to 30 . Trust this birds words. Tripadvisor. All those people who said playing video games in your parents basement a waste of time you might need to rethink that stance there is a new report that says competitive gaming or esports is on track to be a billion dollar industry and it could seriously power up gaming stocks. Joining us now is michael olson. Good to have you here. Good afternoon. I want to make sure i understand e gaming. These are a lot of people sitting there watching other people playing video games you got it. This is esports is watching other people play video games. And when you combine that with a billion dollar industry, its hard to believe, but in some ways no harder to believe than User Generated Content being posted on the internet and becoming youtube or keeping track of peoples daily activities and that becoming facebook so e supports is reaesports is. 200 Million People are watching this year. And as far as the leaders in the space, there is a lot of private companies out there, but activision is the big one. And i still want to understand the process here. People are going to stadiums to watch this, they are going to theaters, just watching it at home what is the mechanism and then the the monetization they have sold out the Staple Center or other arenas with these types of events. And then were seeing huge viewer ship online and surprisingly were also seeing a lot of viewer ship on broadcast tv so weve seen a few events on abc, espn and a number of other networks as well what is my experience if i go to one of these . What do i see when im there do i see a bunch of different players seated at consoles or is it played up on big screens in front of he me so thme so i can . Its a screen was i asking you . Thoo. No. Thank you brian is right. Youre right. Youre watching it on a big screen there are teams typically the most popular games are Multiplayer Games where youre having typically groups of four or five playing against each other in a combat game and youre probably eating a lot of doritos and drinking redbrian, t details so activision, electronic arts, take two, they are monetizing this how they are selling games to these individuals, they are selling advertising . What is it that they are making money off of initially its more of a marketing halo, so you get more people at these events watching more people online play these games. And it creates a higher level of engagement which leads to more sales of digital add on contents and that is the high margin of the business but there is certainly other things that come along with that, broadcast rights, sponsorship, advertising and then even just the ticket and event and merchandise sales. Yeah, the ticket, gate receipts could be pretty significant i imagine. Michael, thank you very much thank you and there are colleges offering scholarships for their esports teams now. Wow and by the way, no joke, its driving sales of computers and chips because you have to have the absolute fastest computer and chip, these graphic cards im told saying for a friend yeah. Falling below 2. 2 falling yields next. Im living that yacht life, life, life top speed fifty knots life on the caribbean seas its a champagne and models potpourri on my yacht made of cuban mahogany, gany, gany, gany, gany watch this dont get mad bell mnemonic get e trade and get invested we created the ripple the doughnut in a doughnut in a doughnut. Right away, it was a success. I mean, it really took off. What people dont know is that it all started with points from my chase ink card. I bought the ingredients, utensils, even custom donut cutters. Wow all with 80,000 points. What will you create with your points . Learn more about the ink business preferred card. Ten year bond yield falling to its lowest level since june lets bring in our team. Gina, will the benchmark 10 year yield go back to below 2 . Look like its headed that way definitely is headed that way. Two things remember pushing it in that direction. First soft cpi data and all this talk the fed has been talking about cpi being transcurrent, every dater is soft. That has to come in to question. That could push us below 2 and then the growing tensions in north korea. Thats trending. What say you . Whats the next move for the ten year continues decline of yield or a reversal back up i think over the intermediate to longer term we see more pressure and possibly below 2. It could be choppy in the short run. Say immediate Thermo Nuclear threat, as scary as it is over blown in the short run longer run were worried about the debt ceiling were also seeing deceleration people are looking for smaller Tech Companies or nonu. S. Stories. That changed the mix and that favors more money migrating in to fixed income and safety which pushes down that yield does a falling bond market mean an increasing stock markeit hard to say depending on what pushes that down you could see the market continfall a the same time. However, if you see a reversal in the dollar which contributes soft inflation, that could actually be the equity market because, you know, that would be it thank you both very much. A reminder for more trading nation go to the website there are leagues that play trading nation at home for days on end. Drinking red bull and eating cheetos. Doritos were not done with the dancing hot dog. I know youre thrilled with that check please is next there it is announcer and now the latest from trading nation. Cnbc. Com and a word from our sponsor. Duncan just protected his family with a 500,000 Life Insurance policy. How much do you think it cost him . 100 a month . 75 . 50 . Actually, duncan got his 500,000 for under 28 a month. Less than 1 a day his secret . Selectquote. In just minutes a selectquote agent will comparison shop nearly a dozen highly rated Life Insurance companies, and give you a choice of your five best rates. Duncans wife cassie got a 750,000 policy for under 21 per month. Give your family the security it needs, at a price you can afford. Since 1985, selectquote has saved over a million families millions of dollars on Life Insurance. Check please check please. For days weve had on former members of various administrations complaining this isnt the way we should be handling the situation with north korea. Theres a lot to complain about. What seems lost on all these individuals who say you cant do that and this is how its done is the way it didnt work and they have no seems lost on them thats why i asked our second guest is there a case to be made that calculated unpredictability and speaking in the same language as the korean dictator doesnt have some virtue to it we dont know. We havent gotten good results so far doing it the other way, i dont know theres a gaps sp if you want to read a good book its called the reluctant communist. Mine is on esports the dow makes 6,000 computer for gamers theres a lot of subsidiary effects. 10,000 bicycles now so you have these big computers. Are these games done on computers or game consoles computers it shows you what i know. The other thing i dont understand is the dancing weiner lets show it. The augmented reality thing that everybody is paying attention to on snap. You dont get it. Thats okay. I dont either thanks for watching power lunch needs to catch up with Technology Closing bell starts right now. Hi, everybody. Welcome to the closing bell on this friday. Im as confused as tyler about the hot dog. But since youre here youre lucky enough to become a hot dog today. It is snap hotting to strategy shares of the company thats fascinating. Those shares getting crushed after earnings, bu