by dow 20,000 but the story's been intact there. josh? >> i'm in google. i'm not big enough. so if tonight's a disappointment i'm a buyer. >> sxl. i mentioned before let's stay with it. it's trending up positively. there's no reason -- that's a good story to own here. >> watch s&p 5002300, key level according to art karkin was right there. dow closing above 20,000 for the first time ever yesterday. waiting for the president as well. "power" starts now. indeed it does start now. thank you very much, scott. welcome, everybody. i'm tile yerm math i'm tile yerl mathisen. here is what's on the menu in addition to waiting for the president. president trump about to speak in philadelphia to a republican gathering as mexico's president makes some big news. we've got full coverage of all of it coming right up straight ahead. also ahead, forget the dogs of the dow. we're talking about deals in the dow. not one, not two, but three pieces of m&a news that could propel the dow to its next milestone.

and later, exclusive access inside the $50 million mansion that tequila built. break out your saltshakers and your lime wedges because "power lunch" starts right now. >> and welcome to "power lunch." i'm melissa lee. the record rally rolling on. the dow, s&p and nasdaq, transports all hitting record highs in today's session although we're take a bit of a pause right now. sps and nasdaq just off the highs. if the dow holds at this level it would be posting its first three-day winning streak of the year. >> i'm brian sullivan along with michelle caruso-cabrera. know what's not hitting records? the mexico etf. the eww. that is falling hard on the news out in the past hour or so the mexican president will cancel his planned working group meeting with president trump that eww down 2.3%. >> that meeting was supposed to happen on tuesday. we are also awaiting president trump. he's about to speak in

philadelphia. the big republican retreat. we will bring it to you when he begins. it's going to be the first we hear from him after the news that the president of mexico is not coming. in the meantime let's get to cnbc's eamon javers who's at the white house. >> hi, michelle. president trum as you guys have been saying did leave the white house late this morning. it was his first opportunity to take a ride in marine one and also air force one for the quick flight up to philadelphia. but we've been watching this twitter diplomatic standoff playing out very much in public and online today. here's how it all went down, starting with the president's tweets. from earlier today the president tweeted "the u.s. has a $60 billion trade deficit with mexico. it has been a one-sided deal from the beginning of nafta with massive numbers of jobs and companies lost. if mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting." and then shortly after that we saw a tweet from the president of mexico in spanish. in english it says, "this morning we informed the white house they'll not attend next

tuesday's scheduled meeting with the president of the united states." so where does that leave us? well, in philadelphia after air force one landed sean spicer the white house press spokesman told reporters they do hope to reschedule something with the mexican president at some point in the future but left it fairly open-ended. and michelle, as you know, mexican officials have been here at the white house meeting with trump aides today and yesterday hoerngs to pull something together but it looks like those efforts were for naught. looks like this meeting next week is simply not going to happen now, guys. >> i've heard from people familiar with the situation that they were actually very surprised. this meeting had been scheduled over these two days and then suddenly the executive orders happened yesterday, took them by surprise. they were not happy about that. they thought it was going to be a much friendlier discussion than the one it turned out to be, eamon. thanks so much. >> so much of washington is about giving the diplomatic heads-up to people who are affected by what you do before you do it, both on capitol hill and diplomatically around the world. the trump team may be learning

that some of what they do in public needs to be telegraphed privately first. that's one of the fine arts of operating the machinery of the white house. >> mm-hmm. certainly. thank you, amy okay. joining us now on the phone, former new mexico governor bill richardson. sir, good to have you here. not only are you former governor of a state that bordered on mexico, you're also a former ambassador, negotiator on behalf of the united states during some tense situations. your assessment of the situation right now between mexico and the united states. >> well, this is the worst state of the relationship in many years. and it basically is showing that the president's negotiating style of tweets, of provocation is backfiring. mexico is one of our closest allies. trade, immigration, a lot of issues, border issues. and now i think he has insulted the mexicans by publicly talking about the wall, mexico's going to pay for the wall, mexico said

they won't. they're going to renegotiate the north america treaty, the nafta treaty without any kind of advance warning to mexico. you just can't conduct diplomacy publicly by tweet, by beating up other countries like mexico, like canada, now mexico, china. you know, this is a serious setback. and it shows the importance of having the professionals at the state department and the trade office prepare the president for these kind of negotiations. that's the problem. >> you know, governor, i think we sometimes overstate the economic importance of china. our exports to china about 160 billion a year. it sounds like a lot. it's not. do we understate the economic importance of mexico? our exports to mexico are about 50% more than they are to china, a country whose economy is ten times bigger. >> that's right. i mean, canada and mexico are our main trading partners. and you look at the border.

i was a border governor. because of nafta there are a lot of u.s. companies on the border, new mexico companies. if you renegotiate nafta, which politically the president said he would do, it's going to affect a very important trading relationship. now, what's going to happen with canada? are they not going to show up? i mean, the problem here is you cannot negotiate publicly. president pena nieto of mexico, he's got domestic problems. he's not very popular. he's got long gasoline lines. he's got an opposition saying he's been too soft on trump. he invited trump during the presidential election. and now he's upset. he's mad. mexico's a very nationalistic country, and it just shows this is not how you negotiate with countries. this is backfire number one, and it's going to continue with other countries. >> which of the issues on the table, governor, between the u.s. and mexico, nafta or the

wall, is the more inflammatory one in mexico? >> the more inflammatory one is the wall. i mean, it's basically saying we're going to shut down the flow of mexicans coming into the united states for economic reasons. the main problem with the wall, the immigration problem that we have is refugees, political refugees from guatemala, central america, not necessarily from mexico, that flow has reduced. yes, we do need border security. yes, we need a comprehensive immigration bill. but you do this negotiating with mexico. and we're going to need mexico on fighting the cartels, on migration issues, on trade issues, on public safety issues. and now we've ticked them off over this wall. and what if mexico says okay, fine, u.s., we're not going to cooperate with you on the drug -- war on drugs? they've really got their back up. and the president of mexico

right now is under enormous domestic pressure to respond the way he did, and he's done it. >> will the wall work? would it do what the president hopes it would do? >> no. in my view it won't work. it's $13 billion, first of all. we should be building bridges. and it's not going to work because there will be ways that desperate people will come either over the wall or under the wall with tunnels. it's a terrible symbol. and you can ask any official at the border that opinion. the problem is we need comprehensive immigration reform. yes, we need border security, more agents. i think that was part of the president's announcement i can support. but to say that we're going to build a wall and mexico's going to pay for it, i mean, that is cutting deep into their nationalism and -- >> governor, we just want to let everybody know we're showing a live picture where we expect donald trump, president trump to

speak at the gop retreat. >> okay. >> but don't move. we're still deep in this conversation, governor, a good one in fact. you sound pretty sure that the relationship is shot at this point. mexico needs the united states just as much as we need them, maybe more so. i mean, you can make some chase for that. so what is the next step in terms of retaliation you can see that would make this situation even worse? >> well, i think president trump needs to extend an olive branch and basically say, look, we've got to discuss these issues. you cannot predetermine negotiations in the press. you cannot insult the mexicans. you cannot insult any country. that's bad foreign policy. hopefully the new secretary of state, who's involved in sensitive negotiations, can help. but when the president's alone tweeting, watching television, reacting to foreign policy that way without his team in place, without advice from his sound policy team, this is what's going to happen.

>> let's say president trump wants to just dig in his heels and stand where he stands. what do you think the mexican president will do next? >> well, for one, he might say we're not going to renegotiate nafta, in fact we'll get out of nafta. that is going to hurt the u.s. he might also say, well, all right, president trump, we're going to stop cooperating on drug smuggling at the border. okay, president trump, we're going to stop the migration issue, ways that we can detain people at the border so they don't come into the u.s. we can stop fighting the cartels together the way we have with a number of joint military operations. i mean, they've got leverage over us -- >> governor? >> yeah. >> we're showing people the mexican peso. it's gotten hammered for months now, ever since donald trump started to rise in the polls before the election. we've seen the central bank have to step in and spend billions to

try to defend it. not working. they've raised interest rates, which then slows down their economy. in some ways it seems -- and by the way, they've already lost jobs, right? and american ceos are thinking twice about doing anything down in mexico. doesn't it seem like mexico is already paying? >> yes, they're already paying. and they've got, as i said, a very deep nationalistic streak. i mean, there's that saying that, you know, mexico's biggest problem is a giant across the border, but it's also very involved in mexico's future and its economy. i mean, we're bound together very closely. and for years republican and democratic presidents have considered the u.s.-mexico relationship one of the most important. but now, you know, it's in tatters. i think it can recover. but i think president trump needs to make the first move, and he also needs to stop

conducting foreign policy and trade policy by twitter and by executive order -- >> i don't think that's going to happen. >> is there a chance, and maybe this is a little bit of the glass half full view, governor, is there a chance that i think the kids would call this back in the '80s, fronting, that trump has said -- they have private conversations, trump says listen, mr. president, i'm going to say this and then the president says i'm going to say, this we'll act angry but we're working behind the scenes. any chance that that's going on? because neither wants to look bad in front of their base. >> well, right now that's not going on because you had the spectacle of the mexican foreign secretary and trade secretary coming to washington not knowing that an announcement was going to be made by executive order on the wall and being embarrassed. so maybe they will recover and these negotiations can start again. look, the relationship is so

important. it will start again, but there will still be tension because both sides, both bases, political bases of the president's and president pena nieto are in a real combat situation right now. especially the president of mexico with gasoline prices, renegotiate nafta, you know, the 70 billion trade deficit. they're under a lot of pressure. >> governor, thank you so much for joining us. we really appreciate your expertise on this day with this breaking news. good to have you here. governor bill richardson, formerly governor of new mexico. house speaker paul ryan is being introduced here at the retreat going on down in philadelphia, the gop retreat. we're going to take a quick break and bring you all the headlines when we come right back after this break. so what else is new? how's your mother?

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philadelphia, the gop retreat, and president trump. >> and i want to thank everybody in the room. so many friends. thank you very much. sit down, everybody. let's enjoy ourselves. it's great to be in philadelphia. i went to school in philadelphia. this is a very special place in our nation's history. it's the place where we launched our american independence. the state of pennsylvania's very special to me for lots of reasons. especially from a couple of months ago.

remember? pennsylvania cannot be won. remember? pennsylvania cannot be won. right, congressman? there is no path to victory for trump. in pennsylvania. except we won. now, it has been a long time since you guys did this. but it was just a great victory. it was a great evening. it was a great evening. but it started in pennsylvania. they all said that pennsylvania was the bride that got away, that it was the state that everybody from the republican party that ran in pennsylvania for 38 years thought they won. except they never won. and i thought i won too. but i was afraid to say it, mitch, because it just seemed that it wasn't working out. so i said you know what? i think we did great but let's see what happens. so we love this state, and we will see it many times again.

now is the dawn of a new era of american independence, a rededication to the idea that the people are in charge of their own destiny. i want to thank majority leader mcconnell. great guy. and speaker paul ryan. very, very special. and he is writing his heart out. right? and we're actually going to sign this stuff that you're writing. you're not wasting your time. [ applause ] he would write and he'd send it up and nothing would happen. but now it's going to happen. for their leadership and for inviting me here today, thank you very much. and thank you, leader mccarthy, senator cornyn, congressman scalise, congresswoman cathy mcmorris rogers, and congressman messer for your leadership as well. it's been terrific.

this congress is going to be the busiest congress we've had in decades, maybe ever. think about that. and think of everything we can achieve. and remember who we must achieve it for. we're here now because tens of millions of americans have placed their hopes in us to transfer power from washington, d.c. and give it back to the people. [ applause ] so important. now we have to deliver. enough all talk no action. we have to deliver. this is our chance to achieve great and lasting change for our beloved nation. since taking office, i have taken major contractual steps to restore the rule of law and to

return power to everyday americans. [ applause ] and even though it's only a few days, we've done it in record numbers. we've issued executive orders to build the keystone and dakota pipelines. [ applause ] and issued a new requirement for american pipelines to be made with american steel and fabricated in the united states. [ applause ] and i was sitting at my desk and i'm getting ready to sign keystone and dakota. i say where's the pipe coming from? and i won't tell you where but you wouldn't be happy. i said why is it we build pipelines and we're not using pipe that's made in our country? and i say let's put that little clause in like it's a one-sentence clause. but that clause is going to

attract a lot of people. and we're going to make that pipe right here in america. okay? [ applause ] if people want to build pipelines on our land, we want the pipe to be manufactured -- and not only that. manufactured here, but you will see a level of quality you're not going to see when they bring pipe from far distances, have to bring it in small chunks and then fabricate it on the land. give me a break. we can do much better than that, and we're going to do it much better, and it's going to end up costing less money. believe me. we've reinstated the mexico city policy, a long-standing policy. [ applause ]

isn't that nice. and by the way, on friday a lot of people are going to be showing up to washington. right, mike? a lot of people. you know, the press never gives them the credit that they deserve. they'll have 300, 400, 500, 600 thousand people. you won't even read about it. when other people show up you read big-time about it. right? so it's not fair. but nothing fair about the media. nothing. a long-standing policy toward your taxpayer dollars do not fund abortion services overseas. we've issued executive orders to remove wasteful regulations that slow down commerce and delay infrastructure which we desperately need.

the very beginning of a massive effort to reduce the crushing regulations on our economy. and we are going to reduce regulations big-time. [ applause ] we've also withdrawn from the transpacific partnership, paving the way for new one-on-one trade deals that protect and defend the american worker. and believe me, we'ring go to have a lot of trade deals. mitch, don't worry about it. just give me a little time. but they will be one on one. they won't be a whole big mash pot. they'll be one-on-one deals. and if that particular country doesn't treat us fairly, we send them a 30-day termination, notice of termination. and then they'll come and say please don't do that, and we'll negotiate a better deal during that 30-day period. the other way you can't get out of it. it's like quicksand. plus we're going to have very, very strong controls over monetary manipulation and devaluation, which they didn't

have in tpp. so this is going to be so much better. and we're already on it. i would like to have my commerce secretary, wilbur, approved because i hear he did fantastically well. but they're not quick with the pen on signing these people because we'd like to have him approved as soon as possible. i know. and mitch says it will be done. and it will be. they could move faster on the other side. i will say that. could move faster. [ applause ] i mean, i'm meeting with the prime minister tomorrow, as you know. great britain. so i'm meeting with her tomorrow. i don't have my commerce secretary. they want to talk trade. so i'll have to handle it myself. which is okay. we've put in place the first steps in our immigration plan, ordering the immediate construction of the border wall, putting an end to catch and release, expediting the removal

of criminal -- this is so important to me. from day one i've said it. and i mean the immediate removal of criminal aliens. they're going to be gone, fast. and finally, at long last, cracking down on sanctuary cities. [ applause ] it's time to restore the civil rights of americans, to protect their jobs, their hopes and their dreams for a much better future. congress passed these laws to serve our citizens, and it's about time those laws were properly enforced. they're not enforced. the hour of justice for the american worker has arrived. border security is a serious, serious national issue and

problem. a lack of security poses a substantial threat to the sovereignty and safety of the united states of america and its citizens. most illegal immigration is coming from our southern border. i've said many times that the american people will not pay for the wall. and i've made that clear to the government of mexico. nafta has been a terrible deal, a total disaster for the united states from its inception, costing us as much as $60 billion a year with mexico alone in trade deficits. you say who negotiates these deals? not to mention millions of jobs and thousands and thousands of factories and plants closing down all over our country. on top of that are the trillions

of dollars the u.s. taxpayers have spent to pay the cost of illegal immigration. much of it has then been sent back, and much of it goes back to other countries, and oftentimes because they don't respect us the other countries will not accept the criminals that we send back to them that are illegally in our country. i promise you they will start accepting them again quickly. we're not going to have them any longer. [ applause ] i will not allow the taxpayers or the citizens of the united states to pay the cost of this defective transaction, nafta, one that should have been renegotiated many years ago except that the politicians were too preoccupied to do so. now, these people are not in that category, you understand. this is a different group. i think.

to that end the president of mexico and myself have agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treat the united states fairly, with respect, such a meeting would be fruitless and i want to go a different route. we have no choice. paul ryan and other leaders in congress and i and mike pence, who by the way how good a choice was vice president mike pence? [ applause ] stand up. everybody loves him. [ applause ] in fact, anytime i got myself into a jam early -- you know, i haven't been doing this stuff too long, right? but anytime i got myself into a jam, oftentimes they'd say on television, yeah, but look, he

picked mike pence. so he's got to have something going, right? so mike really helped me a lot. well, we're working on a tax reform bill that will reduce our trade deficits, increase american exports, and will generate revenue from mexico that will pay for the wall if we decide to go that route. it is time that the american people had a president fighting as hard for its citizens as other countries do for theirs. and that's exactly what i am going to do for you. [ applause ] believe me. thank you. thank you. it's time that somebody fought for our country and didn't let anyone take advantage of us anymore. the world has taken advantage of us for many years. not going to happen anymore. we will have an ambitious legislative agenda as well. our legislative work starts with

repealing and replacing obamacare and saving families from the catastrophic rise in premiums and debilitating loss of choice and just about everything else. and remember this, for this room in particular, obamacare is a disaster. the democrats are up and they're saying they're putting up signs like it's wonderful. it's a disaster. i actually talked with paul and the group about just doing nothing for two years and the dems would come begging to do something because '17 is going to be catastrophic price increases. your deductibles are through the roof. you can't use it. you can't use it. and they would come to us. except we have one problem. we have to take care of the american people immediately. so we can't wait. every time they tell you about

obamacare we're taking them out of a big jam. big jam. we're putting ourselves at risk to a certain extent because we're taking it off their platter. but i think, congressman, i think we have no choice. i think we have no choice. we have to get it going. i'm serious. if we waited two years, it's going to explode like you've never seen an explosion. nobody's going to be able to afford it. it's a disaster. and that's politically what we should do. but we don't want to do that. we want to get something done and get it done right. and by the way, tom price is going to do a phenomenal job. i don't know if he's here. but he's going to do a phenomenal job. on my first day in office i signed an executive order to roll back the burdens of obamacare and pave the way for real reform like health savings accounts that empower individuals to choose the customized plan that is truly right for them and have so many

choices. tom price will soon be leading health and human services. he is a true advocate for patients. he's going to do a phenomenal job. we have no doubt about that. he joins an all-star roster that includes many of your colleagues. ryan zinke, mick mulvaney. these guys have had a pretty tough time in congress too, in the senate but actually came out very well. mike pompeo. is mike here? mike? mike pompeo, phenomenal guy. and jeff sessions. jeff is a fine person. jeff was one of my earliest endorsers, never endorsed a presidential candidate before, and he was one of my earliest endorsers, respected by everybody. and did unbelievably in front of committee. unbelievable. in addition to nixing our health care, we're going to pursue new trade deals that create higher wages and more opportunities. for american workers bringing

back those magnificent words "made in the usa." we used to have that. we don't have that anymore. it's going to be america first again. we will create millions of new good-paying jobs by removing the economic burdens that krim our ability to compete. at the center of that agenda is bold tax reform that massively lowers taxes for our middle class and for all american businesses. we will also pursue financial reform that will help striving americans get the credit they need to realize their dreams. republicans have always been the party of american industry and the american worker. we must embrace that heritage, rebuilding this country with american goods and american lab labor. and we've started.

believe me. over the last couple of months. i'd like to say i've done as much as anybody or more in terms of getting industry to start coming back to our country before we took office. but we have a lot of great news with ford and general motors and fiat chrysler and so many others. a lot of great news. lockheed is adding a lot of different people, a lot of additional people. boeing. we have a lot of positive things happening. and it's really going to start bursting out. you're going to be seeing it very soon. we want to get our people off of welfare and back to work. so important. it's out of control. [ applause ] it's out of control. and we believe that the world's best country ought to have the world's best infrastructure. it's what our people deserve. and it's what we will ensure they get. our infrastructure's in serious trouble. we will build new roads and highways and tunnels and airports and railways across the

nation. we'll fix our existing product before we build anything brand new, however. we have to fix what we have. it's a mess. so we're going to fix it first. the thing i do best in life is build. we will fix it first. because we have a lot of things that are in bad smahape. and we will rebuild our military and take care of our great veterans. [ applause ] thank you. and we're working hard with the veterans. we're going to do something very special with the veterans. it's time. at the same time we will unleash the full power of american eni, ending the job-killing restrictions on shale, oil, natural gas and clean beautiful coal, and we're going to put our coal miners back to work. [ applause ]

thank you. and we will protect our farmers, our ranchers, our hunters, our anglers, and all who enjoy the outdoors. but to be a rich country we must also be a safe country. right now too many families don't feel secure. just look at the 30 largest cities. in the last year alone the murder rate has increased by an estimated 14%. here in philadelphia the murder rate has been steady, terribly increasing. and then you look at chicago. what's going on in chicago? i said the other day, what the hell is going on? >> democrats. >> a lot of truth to that.

that is why we will continue to stand with the incredible men and women of law enforcement. [ applause ] yesterday i had the honor of swearing in general john kelley as our secretary of homeland security. he's going to be amazing. tomorrow i will swear in general james mattis as our new secretary of defense. these men have devoted their lives to defending america, and now i look forward to working with them, along with our great new head of the csa -- you know, we have so many different people that we are putting in office. i think it's the group of

all-stars like really nobody has seen before, right? where is pompeo? where the hell is he? did he ever come here? oh, he's working? he is so -- he's going to be another one of the big stars. i have to mention him every single time. he's going to be great. one of you. and with you in congress to keep our country safe from the many threats we face today. that includes protecting americans from radical islamic terrorism. [ applause ] we also need to keep the ballot box safe from illegal voting. and believe me, you take a look at what's registering, folks. they like to say oh, trump, trump, trump. take a look at what's registering. we're going to protect the integrity of the ballot box and

we're going to defend the votes of the american citizen. so important. all of us here today for the same reason. to serve the citizens of our country. we are not here for ourselves. we are here for them. we are here for the people. we pleased by divinity and honored by history with the task of preserving this great republic and expanding its blessings to every single american. [ applause ] thank you. thank you. all of us are joined in this effort. all of us are bound by duty and bound by god to give our full devotion to this country and its people. that obligation forms the moral

foundation of our agenda. that agenda includes a lean efficient government, appointing supreme court justices, so important, who will uphold and defend our constitution, reducing taxation and regulation, fair trade that creates a level playing field as opposed to what we have right now, and fostering respect for our country and its flag. we are now only at the beginning of this incredible journey together. i am honored to be your partner in this amazing quest. i am privileged to stand with you shoulder to shoulder as we work every single day to make america great again. thank you, god bless you, and god bless america. it's a great honor to be here. thank you very much. [ applause ] >> the president concluding his remarks at the gop retreat in philadelphia.

a full sort of catalog of the things he has done this week and the things he intends to do. a big focus on the repeal of obamacare, which of course will affect about 18% of the american economy in one way or another. that sliver represented by health care in the united states. nafta. talking about the deal there and how it has not worked in the united states benefit. the reconstruction or the restarting of the new building of the keystone and dakota pipeline, which he says will be made with american steel. and of course overshadowing the cancellation of the meeting next week with president pena of mexico. >> he said that he and the mexican president had agreed to cancel their planned neeting. even though it certainly sounds like when you look at what happened with twitter today that it was the president of mexico who skied decided to pull out after donald trump had said they don't want to pay for the wall, maybe we should cancel the

meeting. >> and also talking there with mr. ryan next to him about the writing of a tax reform law. and he certainly hit that and said that we're going to get that done and the last times the tax reform had come up it went nowhere because either democrats blocked it or the president wouldn't have gone along with it. well, obviously there's a new president. >> and mexican stocks -- we've highlighted the eww and some others. mexican stocks have come off their lows. i think the word agreed -- i think trump wasn't as tough about the mexico issue perhaps as some had expected. it certainly wasn't conciliatory by any means but at the same time saying we agreed to do it and maybe we'll do it at a later date-i think the market is perceiving perhaps the relationship maybe not as strained right now as we thought. >> let's ask roger noriega. he's visiting fellow at the american enterprise institute. his expertise is latin america. mr. noriega, i assume you heard donald trump. what did you think?

>> well, i'm certainly satisfied that they have backed away from sort of a confrontational approach and talked about meeting again in the future. but it has caused a considerable amount of consternation on the mexican side. a very weak president who had very little choice but to cancel the planned meeting. they won't see the kind of meeting of minds over how do you confront discussions on trade or on the border, on cooperation in terms of against drugs and against terrorism. we have to find a way to have an adult conversation with one of the most important trade partners and a neighbor with which we share -- >> are you hoping for too much, mr. noriega? because here's the thing. yesterday when president trump spoke at department of homeland security he was also more conciliatory. he said that we had to work with mexico to deal with all the central americans that are coming, that they want to help

mexico. the peso rallied. and then boom, the hammer comes down the next morning via twitter. he gives with one hand and takes with the other. >> it's a very serious challenge to diplomacy and normal conversation with key trade and secured partners if the president insists on delivering these haymakers over twitter. that's not the way you can do normal business. maybe it's a tactic in terms of softening up targets but it's going to wear pretty thin because it's going to be harder and harder for some of our partners to predict this kind of relationship and engage in a constructive way. >> roger, you referenced the president of mexico as being, quote, weak. and i think that's an important point. according to polling, which if you believe polling, he is the most unpopular president since

polls began of this kind in mexico. his approval rating is 23% according to the major newspaper reforma. do you think trump knows this, he senses the weakness, and is using it as leverage. the president of mexico is exceptionally unpopular in his ohm country. >> absolutely. that 20% is higher than some of the numbers i've seen. but the problem with that theory is that weakening this man, who can't run for re-election anyway, and weaken his party only plays into the hands of the far left anti-american demagogue named andre manuel lopez lorador, who will -- who is quite frankly thriving on this contentious environment because he's going to be able to whip up populism and nationalism. and his strategy for his economy will collapse that economy. if we think venezuela's a problem, how would we like to

have venezuela on our border? >> yeah. mr. noriega, thanks so much. you highlight the big problem of the guy that everybody refers to as am-lo, who would be a very leftist version, say, of a donald trump in terms of his populism. thank you so much for joining us on the phone. we really appreciate it. >> my pleasure. thank you. >> now we go to on the cnbc news line from mexico city christine murray is mexico correspondent with reuters. christine, welcome. how is this playing in mexico city? what are people saying? what are people talking about? >> well, this is a very fast-moving story. people are really trying to keep up with every twist and turn. but the headline on the biggest newspaper here today was [ speaking spanish ] basically that trump is complying with his threat. i think people are just like in the u.s. realizing he's serious. and you know, this issue of the wall is going to keep coming up.

and people are really just trying to accept this new normal of extreme uncertainty. >> you know, the economic challenges between the united states and mexico are one thing. and certainly large. but the wall assumes, i assume, christine, a huge or an even bigger symbolic importance than does pulling out of or renegotiating nafta. >> well, i think the word "symbolic" is right. obviously, one of the words people keep mentioning here is humiliation and feeling like mexico's being humiliated by the united states. but i do think what a lot of people feel is nafta is the bigger issue. because whatever form of payment trump comes up with for the wall, even in his own words it's really a one-off payment whereas changes to nafta or even the tearing up of nafta would last

for years and have arguably a much longer-term impact on mexico. >> that was kind of the point that i was sort of ham-handedly trying to make there, was the idea that nafta really in the grand scheme of things is the big issue, the big economic issue, the enduring one, but that the wall has a symbolic power that a trade pact just cannot have. but what are mexican business people saying about the relationship, the trade relationship most especially, between the united states and mexico and how concerned are they, how worried are they that, well, the economy in mexico may be at extreme peril. >> well, people here, have -- the issue of the rules of origin which will probably be key in any nafta negotiations. the percentage of products that come from north america as a

whole, some people think mexico will come to some sort of agreement about raising that and various suggestions that trump will try to put something in that may benefit the united states over the rest of north america. but i think you -- for a number of people that's the best case scenario, that that negotiation could come good. but since trump won the peso has fallen some 15%. and that has a real effect on day one. businesses can't -- it's hard to make plans. imports become more expensive. that uncertainty is already having an impact on the economy. >> christine murray of reuters in mexico city. >> coming up we're going to talk to the ceo of royal caribbean, who sail to mexico. see what the ceo thinks. don't move. "power lunch" will be right back.

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welcome back. joining us know, richard feign, chairman and ceo of royal caribbean cruises. sir, good to have you here. your stock's doing great today in the wake of your report. we want to talk all about that. but first we want to get your thoughts as the ceo of an

american company. your cruise ships sail to mexico, cozumel in particular. what do you make of the breakdown in relations xen mexico and the united states today that we see under way? >> well, thank you for having me back. and great pleasure to be here. and as you say, it's a good day for us. i wasn't able to see the president's comments. so i really can't comment. we do do business. a lot of business in mexico both with mexicans as consumers and we go into mexico. and we think what we do is good for both countries. so i'm hoping that whatever does come of this is positive to both countries and we'll continue to work with both of them to continue to please our guests. >> you mentioned mexican consumers, their buying power is getting weaker by the day. are they seeing a decline in sales because they can no longer afford the pricing because the peso has come down so much? >> the peso came down, of course

it came down immediately after the election and it's been heading south. but that's a small part of our total foreign exchange portfolio and overall we don't see that as a big factor at least for our company. >> richard, i want to talk about the quarter because we are seeing your stock as you well know hitting a new high in today's session. your book position is heaved last year and is in fact at record levels. according to the earnings call you're seeing tremendous strength in north america. when did that strength start to happen? do you attribute that in part to the elections? >> we've actually been seeing strength basically from late last year, even before the election. i think people are just beginning to feel a little lit better. the economy has been strong. and so we're seeing here and frankly in all the pan-anglo countries, strength in here, in ourp, in asia. so across the world it's just been a good period for us. as you say, the bookings are at

the highest levels they've ever been. and we really see that from late last year right through today. >> what about cuba and your plans there? is it full steam ahead or is it a trump risk? >> it is full steam ahead. it's a trivial part of our business so i can't really -- so whatever happens will happen. but yeah, at this point we haven't seen any change. and if there is a change in u.s. policy will accommodate to it. >> do you have a sense of the economy on your ships? not just bookings to get on the ship but once people are on the ship. are they spending more? do you sense that there's a sense of economic optimism based on how people are transacting on each ship? >> we really are seeing a tremendous sign of strength from our guests. we carry close to 6 million guests a year. and we have really begun to see a much more sense of optimism both in terms of bookses, when

they book. they're booking further out. they're booking at higher prices. they're booking at better suites, better accommodations -- >> but are they gambling more? are they drinking more? ing -- i know eating is all included. but you get the point. >> yeah. well, of course so much of what we offer is all-inclusive. but they are buying more. we see more activity in the spas. we see more activity in the retail. we see a lot more in shore excursions. pretty much across the board. people are spending more. we see it in our restaurants, in our specialty restaurants. people, at least from what we see of our guests, there is a real sense of positive view of the economy. i can only speak of that. >> richard, you can afford a lot more today yourself because the stock is up 8%. good for you. thanks for joining us. >> it really is a good day. thank you for that. >> and fill up with fuel in mexico now. it's a little bit cheaper.

president trump's newest target. could it be retail? we're going to explain straight ahead.

and welcome to the second hour of "power lunch." it's got to be powerful when you've got tyler and melissa and michelle and even myself. welcome. two hours until the closing bell. here's what we are watching at this hour. trump's next target. mexico, boeing, lockheed, ford, gm, they've all been put on notice. what industry may be next in trump's crosshairs? dow 20,000. can i say it like this, tyler? and beyond. we're going to drill down on the 30 stocks that make up the index. this hour we are focusing in on apple, intel, ibm, microsoft, and cisco. the big tech plays and how they should play into your portfolio. and starbucks getting set to release its earnings in about two hours. despite the record rally. starbucks has gone nowhere in the past year. is the coffee king's double-digit growth plan still on track, tyler? >> some of the movers at this hour, caterpillar a bit lower. one of the biggest drags in the dow at this hour.

world's biggest construction and equipment maker reporting a mixed quarter and expecting profit for 2017 to be a little bit lower than expected. unilever shares sliding 5%. the consumer goods giant disappointing investors, reporting revenue declines. the company warning of a difficult start to the year. sherwin williams up 8%. a lot of paint there. paint maker comfortably beating on the top and bottom line forecasts. president trump speaking about mexico, trade, and a number of other red hot items. right now john harwood is live at the republicans' retreat in philadelphia with the highlights from that speech earlier. john? >> michelle, a lot of turbulence on the foreign policy front today. and so much so fat thakt fact that the entire senior leadership of career officials at the state department either resigned or were fired. that's not the big story today. the big story is president trump having signed the executive order commencing construction of the wall, saying that he is

still going to force mexico to pay for it, though the u.s. congress and u.s. taxpayers are going to pay for the money up front. then you had the mexican president saying no, we're not and canceled the meeting. now donald trump has come to this meeting of congressional republicans and here's the spin he put on that cancellation. >> the president of mexico and myself have agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treat the united states fairly with respect, such a meeting would be fruitless, and i want to go a different route. we have no choice. >> now, of course that complicates the prospects for renegotiating nafta with both mexico and canada. we'll see where that goes if anywhere. you also had the president while exhorting republicans to promptly enact his agenda complaining that senate democrats are holding up his

nominees including wilbur ross for the commerce department, saying that when he meets with theresa may at the white house tomorrow he wants to talk about a bilateral trade deal with her. wilbur ross is not going to be available to join that meeting. so he's going to have to do it himself, guys. >> so john, i think some of those votes, congress is out i gather for the rest of the week in part because of this getaway in philadelphia. >> yes. >> but several votes, i can't remember whether mr. ross's vote is scheduled. but there are several scheduled including the tillerson monday and tuesday of next week, right? >> yes. and there's no question wilber ross is going to be confirmed. so is rex tillerson. having cleared that foreign relations committee where one republican defection could have sunk him. nearly all are going to be approved but democrats who have adapted a resistance policy are slow-walking those. wilbur ross is one of those caught up in that. >> john, thank you. john harwood at the gop retreat

in philly. let's get to simeema mody with look at companies most exposed. >> it's those companies that have deep ties with mexico that are in focus today. but it's important to know that wall street has been growing cautious of these names ever since the election. back in november bank of america, merrill lynch downgrading delphi automotive saying it starts to lose if nafta is dismantied. it also lowered other supplies like adient, american axle all of which do business in mexico. citigroup by far has the greatest exposure to mexico largely through its subsidiary. but a lot of these banks like citigroup have been slowly scaling back their exposure to mexico in recent years. other names of mexico exposure in the financial space include hsbc, american express, and santander. and speaking of spanish banks, b

bdva makes a significant portion of its sales in mexico. cross-border trade with mexico. it has railroads deep into the country and has been negatively impacted by the peso. shares already down about 5% since the election in november. take a look at constellation brands. it has been under pressure on fears of a trade war brewing with mexico as it's a big importer of mexican beer which makes up aw significant amount of its total shares. down about 8% over the past three months. analysts say it's these names that are most vulnerable to volatility in the u.s.-dollar peso exchange rate. and of course escalated tensions between the two trading partners. >> seema, thank you very much. seema mody at the new york stock exchange. to the markets we go and the record rally rolling on for the dow. at least the dow, the nasdaq and the s&p 500. shall we look at them? why not? you want to? i guess not. dom chu is at the nyse with what is driving. there it is right there. you got it. >> there it is.

>> industrials are higher but nasdaq a little bit lower. so snpt. basically flat on those as well. now to dom chu. hi, dom. >> tyler, this is what we got here. overall i'm in a kind of interesting sweet spot because we got a number of stocks trading all around me that are the focus of a lot of traders today, especially when it comes to dow 20,000. behind me a gts, chevron, those shares shaving about four points off the dow. united technologies trades at imc post 6 right next to me here. those shares taking five points off the dow today. and then caterpillar shares on the heels of earnings taking about six points off there as well. so the biggest attractors, ask for where the big strength-s united health care and goldman sachs, both those also trade at citadel post 5. the reason why i mention them is we're bup maybe -- we were up about 25 points about five minutes ago, the majority, and i mean like 80%, 90% of the gains in the dow are attribute annual

to just those two stocks, goldman sachs, united health care. those continue to be in the focus of traders today when it comes to this dow 20,000 mark. but as you can see, the motion's been pretty steady sofor today. we gravitated between gains and losses in the s&p. the dow pretty much positive for the entire day, only up about 20 points, still record territory, guys, we'll see if it can get some fraction going toward the closing bell. back over to you. >> still ahead, we will debate the dow. and up next we talk tech. could tech, the constituents in the dow that are tech stocks, move us to the next milestone? we'll discuss that and much more when we return on "power lunch." seeing is believing, and that's why

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investors also wnt to know about the profitability of that business. braceland expects a gross margin of 45% or higher. microsoft stock in the green this year and just touched a new high this morning. then there's alphabet. you want to know how core google

is performing. rbc's mark mahaney a bull on that name is looking for core google gross revenue of 24.2 billion. that would imply a jump of 14% year over year. drivers there include increasing strength in mobile search and youtube. other questions for investors, do operating losses moderate at the company's so-called other bets? as well as any color on capital return at the search giant, which now sits on a cash mountain of some $79 billion. and finally, we have intel. betsy have not heese of loop capital says she's expecting pcs to be less bad with client computing group revenue of 8.5 billion. that would be down some 5% sequentially. she points to strong results from western digital and seagate as good tells for that division. but her real attention will be on the data center group or chips for servers. she's expecting revenue of 4.9 billion. a 7% sequential jump. also some changes in intel's c suite. this is the first quarter under the direction of new cfo bob swan. guys, back to you.

>> all right. thanks so much, josh. let's drill down on techs of the dow. shares of ibm, apple, intel, microsoft, all up between 5% and 15% since november 8th. that of course is the day of the election. so report quarterly results tonight, others next week. as an investor what should you do with these stocks? let's bring in dan morgan, senior vice president and paul meeks, portfolio manager with sloy daul and host. good to have you here. we in a have some new viewers that saw dow 20,000 in the paper on the phones when they woke up or last night. tuning in for the first time thinking should i participate in this rally? based on all these tech stocks we've just talked about, what do we think? is it time to buy any of sneeze they've moved so much since the election. >> you're right. we mentioned tonight we've got intel, nierkt reporting. also we've got google coming out with numbers. we're still very optimistic on tech.

where you find your entry point, that's kind of up to the viewer in terms of finding that specific point where they feel comfortable with those stocks. you know, we still are very optimistic and positive about anything that's unfolding. netflix had good numbers last week and we expect pretty good numbers going into this evening with facebook and apple and so forth. we're pretty positive on tech going forward. >> do you wait for the earnings season to be over and see how it goes or would you get it now? >> i think you've got to take it on individual opportunities. if the stock pulled back after earnings and you do your work on the company and you say hey, it looks pretty good, you might find an entry point based on an overreaction that came out during the conference call or something that came out when everybody was uncovering the different segment growth rates and so forth. i think it's an individual basis but we're still overall positive. >> paul, win tell reporting tonight semiconductors will be in focus, it's been a key driver when it comes to the nasdaq hitting new record highs.

you invested in xpi but sounds like it's an arbitrage play. it has to do with the qualcomm deal. do you like semis in general? >> i do like semis in general but i prefer the companies that are not pc focused. like intel for example, what i look for with intel is over time on the smartphone and the other wireless devices are going to to take some share from qualcomm? you do not buy intel for its 1990s pc client server business. that's a stock that cannot be owned. the other two reporting today i bought them for their cloud businesses and they should be bought on dips but not today. >> qualcomm had numbers out last night. they were disappointing in some respects. they've been getting hammered first. the ftc lawsuit and then the apple lawsuit. at what point do you think it's worth a look? this is not a pc focused semiconductor company as you say. >> i think their -- >> then it's even less so.

>> yeah. very good question. the problem with qualcomm is its business model, driven by the licensing is under assault. from a couple sovereign nations and also from the biggest customer they have in apple. i think qualcomm is uninvestable. about a year ago in february of '16 the stock got down to the low 40s. maybe you take a bite there or on any run close to there. the key thing is buy nxp semiconductors because qualcomm has to do the deal. they're desperate to diversify. and they're offering $110 a share. so you're not getting qualcomm stock. i think the deal gets done. i think the deal is executed before the end of calendar '17 and you'll get from this point with an xpi a pretty easy in my view 13%. >> paul, let's swing back to those five stocks that are in the dow, the tech stocks ibm, apple, intel, microsoft, and cisco. let's say you didn't own any of

them today. which one of those, which one of those by basis on how you do the research, which one of those looks like the best value at today's price? >> it may not be the best value. but the only one i would buy today is microsoft because of their renaissance as a cloud computing company. i'll take a look at apple if it weakens as it runs up into the iphone ramp. those other three of the five tech companies in the dow 30 are 1990s crap in my view. >> okay. all right. >> paul, what do you say on that same question? if you didn't own any of them, which would the one be that would be the right value? >> dan. >> i'm sorry. did i say dan? i wanted to talk to paul. i want dan. i'm sorry. >> okay. if i could rank those five stocks, i'd pretty much be in line with what you're talking about. i think you've got to put microsoft on the top because of acer and microsoft 365, the migration of the cloud.

still like apple. apple's been a stock that everybody's been talking bad about the last couple years but they still have the iphone 7 and the migration. they have 600 million users. if they can get 10% or 15% of them to migrate over. it's a huge increase in terms of sales. i agree that cisco is a company that it's an old router switcher company. they're trying to make a transition but it's probably going to take a lot of time get there. if you kind of rank them down i think you're going to put apple and microsoft on the top, kind of cisco on the bottom and intel kind of in the middle. >> thanks, guys. dan morgan and paul meeks. speaking of text, lamb research's ceo joins jim cramer tonight on "mad money" right here on cnbc. still ahead why dow 20,000 could be a big warning sign for your money. want to know more? of course you do. stick around. "power lunch" will be right back. un on intel? that means you can take a universe of data - in your case literally - and turn it into medical discoveries, diagnostic breakthroughs...

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put it all together into one pot, see what it comes up with the gdp, and the number is 2.4%. we are tracking for the fourth quarter so far. still? data to come beginning toward the end here. up 0.1%. quite a good range there. 17 to 2.9. we'll show you where it is in the forecast. this is the forecast of the economies at 2.1%. you see there we did the third quarter, gdp actual 3.5. see you can remember those numbers. the atlanta fed is at 2.9% for the fourth quarter. they're on the high side. hf sechlt at 2.3. morgan stanley at 1.9. and at bottom of this whole thing at yx economics 1.7%. so all of that comes together and it comes out to about a 2% economy is where we are right now. >> so i'm looking at a dow that says 20,000. it says everything's great. it says optimism. does the economy also say dow 20,000? >> i think it does. because if you remember we had this very, very weak first half of the year.

we did 1.1%. second half of the year if you do 2.4 and 3.5 we're averaging around 3 or so and it looks like the forecast at least for now is we continue around 2. plus i think there's something we're missing which is a lot of risk has been taken off the table. you put the republican congress in, what were some of the risks that caused the dow to -- things like government shutdowns. that's gone. as far as i can tell, aim looking at the headlines. there's a lot of reduced risk from the european financial crisis. brexit has appeared so far to be a non-issue. we've got the unemployment rate near a two-year low and that's the accelerated growth. i think those things say it's okay to take a flyer on donald trump and the possibility of lower tax rates, deregulation being offset by who knows about the trade situation and whether or not -- most economists i speak with see his trade policies as a negative for gdp yet they give high marks to the other things that are out there. >> is the second half of this year likely to be stronger take

i. economically than the first half? >> you mean '17 now? >> '17. >> it's very hard to know. you ask me what's my year ahead. my year ahead is that a staff member in the ways and means committee now is more important to listen to than the fed official. because you're going to get a leak from a staff member are about a blueprint for the tax plan that's going to tell us when this stuff starts to phase in or a blueprint on the infrastructure plan so you can start to count this stuff and you can get into gdp. i think the market might be optimistic about the wheels of government and when this stuff stars starts to work. i think the second half has a chance but it may be more for some of these things a 2018 story. >> got it. thank you, sir. >> pleasure. >> it took slightly more than seven years to get the dow 20,000 from the last time it crossed 10k. that was october 14th, 2009. the stocks that led the way, united health care, home depot, apple and visa. as for the laggards, they would be walmart, cisco, goldman

sachs, though not lately, and exxonmobil. so now that we have hit dow 20,000, can we expect stocks to rally from here or could a correction be in store? let's bring in katie nixon, chief investment strategist with northern trust wealth management, and eric ristobin, chief investment strategist with russell investments. welcome to both of you. eric, you're a little more cautious than katie is. make your case. >> first of all, i refer back to the conversation you just had with steve. we're optimistic about the u.s. economy. we actually have increased our growth expectation since the election. the challenge we have with u.s. equities is they're very expensive. the adjusted p/e in the market is 28. that's in the top 6% of historical valuations. we think there's head winds for earnings both in the strong dollar and rising wages and we frankly from a -- think there are better alternatives elsewhere in the world and u.s.

equities not the place to fish. >> better equity alternatives elsewhere in the world. is that what you're saying? >> i think yes, absolutely, there are better regional equity -- we like japan, emerging markets, and europe all over the u.s. and by the way, in the last month they've all outperformed the u.s. equity market. if you're looking at inside the u.s., we like high yield better than we like u.s. equities. use high yield as an equity replacement instead of actually loading up on u.s. large cap equities in particular. >> katie, you have a slightly different view. take on erik here. >> well, tyler, we're very positive on u.s. equities. we also like international developed and emerging market equities but we still want to place our shorter-term bets on u.s. equities, seeing that the really confluence of really exciting things happen around the macro picture. we just talked about the improvement in gdp and the outlook. employment certainly is a strong, strong positive. and then on the micro side we've got earnings that are coming out of an earnings recession that are really going to experience quite a nice tailwind this year.

i do agree, though, that we're starting with equities that are fairly richly priced. but i would urge investors to recognize that valuation is a very poor predictor of short-term market returns and we see the momentum around the earnings picture really pushing and propelling u.s. equities this year, even if we do see some multiple contraction. >> you think the earnings may bail out the multiple. is that right? >> we have an earnings growth estimate this year, we have an earnings number on the s&p of around $130 a share. even with a slight multiple contraction. so acknowledging that stocks are expensive, but recognizing we don't think there's going to be a valuation correction. peeling off a few percentage points for valuation still gives you around a 7% total return for equities this year, which is very, very good. >> katie, thanks. erik, thank you very much for being with us. appreciate it. president trump has gone after industries that import from overseas while cutting jobs

here. so which industry could potentially be the next target? coming up next on "power lunch." i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound)

hello, everybody. i'm sue herera. here is your cnbc news update for this hour.

a survey of dornths shows overwhelming opposition to the effort by president trump and the gop-held congress to repeal obamacare. the results published by the "new england journal of medicine" show only 15% of 426 primary care physicians favor total repeal. mark morgan, the chief of the border control -- patrol i should say, has left that agency. it is in charge of securing america's borders with mexico and canada. it is not immediately clear, though, whether he resigned or was asked to leave. a group of protesters displaying a banner with a message supporting immigration over a highway in east boston. that banner, written in spanish, translates to "a day without immigrants." and pro golfers rickie fowler and ricky horschel taking aim at something other than the pin, shooting rainmakers at moving targets. in an impressive display of skill and accuracy both shot golf balls at moving drone targets during the tee up for kids youth clinic at torrey

pines. he missed that one. that's the cnbc news update. back to you guys. >> impressive. >> got it. >> 2% gain for oil today. let's get to jackie deangelis. she's at the cnbc energy desk. >> we've seen crude prices close below the $54 mark. losing some steam as we head into the close. this has been a seesaw for crude oil prices. we saw pressure yesterday. people are getting back in today. back and forth movements. choppy movements when it comes to this trade. 54.06 was the session high. you can see it's not getting enough momentum to try to get out of the high of the range. crude traders watching equities very closely. they want to have more confidence in this market, that the rally is real that it's more lo long-lasting to really break out to the outside. back over to you. >> thank you very much, jackie. shares of abercrombie & fitch slightly higher today.

the company plans to cut 150 jobs at its corporate headquarters in new albany, ohio. in august a & f said it was closing 60 stores in the u.s. thanks, tyler. and sadly that story speaks well to this next one. in its quest to fulfill the promise of jobs, jobs, and jobs the then candidate and now president has mostly gone after big manufacturers like the auto makers and boeing. what everybody wants to know is what company or industries may be next to fall under trump's focus. in an op-ed on cnbc.com today i argued that industry may be retail and that company may be amazon.com. few industries import as much as retail and nearly everything sitting on store shelves you made outside the country trump could use them as a lever perhaps to make his make america push happen. two, if you're talking jobs, you've got to talk retail. nearly 5 million people work in the industry. stores have been closing all over the country. so even a 5% drop in the retail workforce would equal 250,000 lost jobs. far more than the manufacturing

jobs we've gained so far. trump does not want that on his record. and three, think real estate. the true love of our president. he will not want to see half empty malls or empty storefronts. which is why i argue he may turn his attention to amazon. the online shopping industry impacting brick and mortar. amazon the big daddy of online retailers. remember trump has made some negative comments about the company in the past. powerlunch.cnbc.com and bring out a bunch of people who no doubt agree with my genius. january jan rogers and jeem pethokoukis. do you think he could come after amazon or retail? >> i think you've connected the dots pretty well in that piece. we know that the president has had some problems with the jeff bezos and the "washington post" and amazon before. we know he doesn't like economic disruption that results in lost jobs. and by one jpmorgan estimate if not for amazon and online

retailing overall there would be over a million more retailing jobs in the united states. so if he's worried about people losing their jobs, online retailing would seem to be something to go after and who's the king of online retailing? amazon. >> by the way, a president who duns use a computer. >> only a smartphone. >> yeah. and use that's a lot. some would say too much. do you think this is an industry that should be on trump's focus, will be on trump's focus list? >> i don't think you can have high enough tariffs or cross-border taxes to ever bring manufacturing and retailing back to the united states of america. and if you did bring it back it would have to be so automated that there wouldn't be any people in the factory anyway. so it seems unlikely to me that you can get any real gains in jobs by trying to bring apparel and accessories manufacturing back to the u.s. we haven't had a pattern maker in america in 40 years. where would you even get the people to do it? it would have to be all automated. >> and the facts get in the way. politically speaking, the way brian describes it, it still

seems it could be ripe for an attack by trump, no? >> especially amazon. >> i think we have enough trouble with the cross-border tax that may come through with the tax bill, much less the president himself becoming involved. because if we just passed right now the cross-border tax as set forth in the gop blueprint it would essentially reduce the profitability in retailing by about half. >> but i want to be clear, i'm sorry to jump in again because i know it was in my head when i wrote it, which is think of it this way. michelle, you're our de facto border adjustment tax expert. if we do that all the stuff we import is going to go up in price meaning retailers' margins are going to fall which means retailers are going to shut down even more which means a lot of lost jobs. trump doesn't want that. but he wants the tax. they don't seem to mesh up. it's a mash pot of different theories. >> listen, you have some internal contradictions in trumponomics one of which you just outlined. but i don't think that necessarily would stop him from in the short term trying to

tweet or otherwise make a point. listen, a lot of these companies aren't going to fundamentally restructure their businesses because of what the president said but they might do some very symbolic things. you already had amazon talk about creating 100,000 jobs. i can see companies doing those kinds of things to at least get the president off their backs and give him sort of a symbolic victory. how that affects the stock price in the near term i'm not sure. >> it's not just retailers are losing jobs and they might do layoffs, et cetera but amazon's actually creating jobs. you mentioned 100,000 jobs by mid 2018. when they opened a fulfillment center in boulder, colorado they're going to create 1,000 jobs right there. >> and they're going to destroy 10,000 in brick and mortar retailing when they do that. that's happening every time they add a job. we're watching that -- >> wait, wait. hold on. back up. they add one job -- >> get out of the way here. >> -- and they destroy 1,000? >> no, i said 1 for 10. you said they're going to add 1,000. and i said that will destroy 10,000. that's not a real number. but my point is they destroy more jobs than they create

because they're very efficient at what they're doing. have you been -- >> retailing jobs. >> yeah. >> they have a store with brick and mortar jobs. >> we're not picking on amazon. i think the company's amazing. i order stuff from them all the time. i'm just wondering because of what you all are talking about, if this could be a company -- what are we calling it, the tweetstorm? >> if history is a guide, he's already gone after bezos. for him to repeat it wouldn't be a surprise. >> i'm not sure what you would do with amazon, though, that would change the playing field. amazon imports everything they sell basically but so do all the rest of us. we all import everything we sell in the retail space. and all amazon's doing is basically taking the business out of brick and mortar and putting it online, being actually more efficient, highly automated in their distribution centers and -- >> does amazon have any antitrust risk? apart from whether it's attacked as a job destroyer or an importer, which a lot of its products are. >> i think we've all wondered about them becoming much more

dominant and when anybody would bring that up -- it never happened as walmart took over the world. and they did, right? amazon's not even as big as walmart yet. >> we're real unclear what the trump administration thinks about antitrust more broadly-b these sort of tech companies which look like good monopolies but they have a tremendous -- we really don't know. also don't forget about retailers that who are going to try to compete with the online people by maybe putting more kiosks and things in their stores. is that also the kind of thing that the trump administration would go after because you have, again, more disruptions, machines replacing workers? we know he doesn't like trade very much or trade disruption costing people their jobs. we'll see what he thinks about automation, which is the much bigger issue going forward. >> hey, ghiuys, it was a good decision, jan kniffen and jimmy

p. what is the better investment right now? the trading nation teams know and when l. tell you next. y nic. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade. to err is human. to anticipate..... ...is lexus. the lexus rx with advanced safety standard.

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and whether you've lost your shaker of salt or not. pat ronn spirits president ed brown bought this 40,000-square-foot mansion in florida's billionaire row. as an investment they liked it so much they moved in. now it's on the market for $48.9 million. take a look. >> this almost $50 million mega mansion sits on what's known as billionaire's row in the ritzy beachside town of manalapan, florida which it commands 315 feet of florida's most sought-after gold coast. the views of the atlantic ocean are magnificent. you'll find patron bottles on the bars, painted on the walls, and even in almost all 16 bathrooms, where the distinctive glass is filled with mouthwash. and you won't believe what's buried underground. >> so underneath us is my man cave. >> there's a man cave right underneath our feet? >> yes, sir. >> you've got to show me this.

>> below the faux lawn, two professional race cars bookend the ultimate bar. >> scott, nine bedrooms, 16 bathrooms, and yes, that was the ultimate man cave. he's a race car driver. and since he took over patron they went from 100,000 cases to over 2 million. incredible guy on the track -- >> so the patron is in the bathrooms as a mouthwash? as a what? >> he used the patron bottles as dispenser for -- >> cleans wounds, antiseptics. >> so that's not liquor in the bathroom, that's mouthwash -- >> oh, i thought it was actually -- >> at the end of our shoot we drank shots of an $8,000 bottle of tequila. needless to say we had to do that shoot several times to get it right. >> a yoert who's very involved. how did it taste? >> it's really good. and by the way, you know the best way to make a real fast margarita? and he showed me this.

mountain dew and patron together. >> what? >> it's amazing. you wouldn't think it. but it tastes just like a margarita. it's really good. that's ed brown's secret recipe right there. >> is it just coincidence we have you on talking about tequila and patron on this day we're talking about mexico so much? >> you know, all by design. but i guess mezcal is going to get cheaper because the peso's cheaper. >> maybe a border tax. >> exactly. you can see more of cher's former house. secret lives of the super rich. along with a $4 million pair of sneakers. >> what? >> my wife is a cher freak. we will be watching. >> that's right. you've been -- >> she's a cher freak. >> you've seen her final tour several times. >> i have gone -- yes. >> you will share a moment tonight with your lovely bride. all right. staying with tequila because why not? jose cuervo is going public. yep, the world's biggest tequila maker looking to raise more than 700 million in its ipo.

planning to offer about 477 million shares give or take. price between 30 to 34 pesos per share. ipo date set for february 8th. that is after putting the ipo on hold twice last year after the election of u.s. president donald trump sent the peso to record lows. and by the way, it continues to fall today. i guess the up side, maybe tequila will get cheaper. the s&p 500 and the nasdaq 100 both hitting record highs today. but what index might be a better pick for your money now? if you just had to pick one. let's ask the trading nation team, matt manley. chaz with washington crossing advisers. it's obviously kind of a fun rhetorical question. you don't have to just buy one. but if you did which one would look better for you? >> i would definitely go with the qqqs. >> the nasdaq 100. >> exactly. which is very heavily weighted in the -- in technology. a couple reasons. number one on the fundamentals side we're in the infancy of so many technological advances. whether it be robotics or drones

or -- and even in the automobile area. it may not be in the early innings but we're certainly not in the late innings with all the innovation that's are coming there. and of course the early innings of cloud computing. but also on the technical level. the s&p or spy, has been trading in a narrow range for five weeks. it's broken above that. that's very nice. the nasdaq 100, triple qs, they were in a five-month range and they broke dramatically above that. it's a much bigger breakout. and we haven't had a breakout yet in microsoft, in amazon or in facebook. they're breaking out now. if they break out now or maybe after a little bit of a breather they might pull back. the qqqs are going to be the place to go. >> chad morganlander, do you agree or disagree? >> i would go with the s&p 500. we have a long-term forecast return of roughly about 6%. i like the sectors within the s&p 500. one, health care. there's a value there. materials as well as oil as well as financials. and that's broad exposure to the

overall u.s. economy. so valuations also matter here. and valuations within the s&p 500 and in some of these subsectors also are quite cheap. so again, go long the s&p 500 for more consistent, less volatile return for 2017. >> all right. chad says s&p 500. matt says nasdaq 100. guys, thank you. literally covered it all. for more "trading nation" go to tradingnation.cnbc.com. melissa. >> starbucks shares are up nearly 10% over the past three months. can today's earnings report send the stock even higher? plus taco bell rolls out the naked chicken chalupa. you'll want to review before you make a taco bell run. we'll be eating them here on set. "power lunch" will be right back. >> announcer: and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> trading with the trend is key for many traders. so trend-following indicators

are important. when the markets are trading down many trenders watch moving averages which will generally have a downward slope. as long as the stock or index stays below the moving average most trend traders believe the weakness in the market is being confirmed.

earnings after the bell

today, weakness in the restaurants overall. the stock is up 5% since the first of the year. let's bring in the senior equity analyst for redbush. nice to have you with us. this is the last time they will be on. what do you think will happen? >> i think there will be a lot of confidence exuded. going into the quarter, starbuck's managed to, you know, buck the trend in december. we saw it retail across the board, including restaurants. we've seen a lot of weakness in december, so the overall question we're really paying attention to, is that comp? transition we already kind of went over. again, the focus is going to be on that comp. >> yeah, and the comp for u.s. sales in particular, nick, are there certain initiatives you

think may have picked up? at the last komconference call, they alluded to the uncertainty because of the election. that's all behind us. do you think there will be some stability because of that? >> we haven't seen much stability in restaurants post election. in fact, we've seen it go down. from our conversations, we do feel like a 4% comp for starbuck's is realistic even in this environment, and that is being led by, you know, the regular beverage innovation that we see, the christmas and the holiday drinks, the increase in food, the mobile order in pay and increasing loyalty. we're going to see some retrofits of storage to drive-throughs. that would add 10 to 20% to the overall sales of those stores. there's a lot of things that are working for starbuck's. in the near term, it should continue to work in the near term as well. >> internationally when we look at starbuck's business, they

pointed to a ceo for china, i believe it was in october. they have grand plans for china. is it a concern that this administration might be a little more protectionist and there might be some issues with china and, therefore, for starbuck's? or could this maybe be a catalyst for starbuck's to spin off into the china business into a separate company? >> i think if they have to, they will. that's definitely an option. i think it's too early to really comment on something like that. i don't think they are making any kind of risk like that into the valuation today, and i do think that the spinoff is the right solution if we were to go down that road politically. >> but only if we go down that road, so, therefore, you see starbuck's china being an integral part of starbuck's. how much of that is in the share part? how much is china, how much is the u.s.? >> i would say it's about 25% valuation. china is still a fraction of the

u.s. domestic units, but it's growing much faster and opportunity is probably three or four times as large. that's really being driven by the catch returns there. they're twice what we've seen in the u.s. so that implies a very, very long runway. >> nick, we're going to leave it there. thank you. >> thank you. taco bell is releasing its naked chicken chalupa on "power lunch" today. they explain exactly what that is. >> when we fry it, we have a fryer that curves it up and it looks just like a chalupa shell. a little lettuce, cheese and sauce. it's it it's awesome. >> we're going to try it. we'll let you know if it really is awesome on this mexican theme

of "power lunch." on the other side. ♪ ♪

time for "check, please" and as we've hit fresh record highs in today's session, we'll be looking at a lot of tech earnings after the bell today to see whether or not the rally can continue, whether these records can be maintained. particularly on the nasdaq we have microsoft, intel, we have a slew of them tonight. >> so much of the focus today

has been on mexico and the relationship between u.s. and mexico because of the mexican president pulling out of the visit next week. however, up next, theresa may making a speech today at the gop retreat in philadelphia, 3:30. we may carry that live, then she's at the white house tomorrow. it moves now to the united kingdom. and on an obviously lighter note and a weird moment of serendipity given all the news and everything else, taco bell's naked chicken chalupa is debuting. it goes on sale today. this is something already scheduled to happen. >> it has nothing to do with the wall. >> someone somehow organized a naked chicken chalupa testing. >> i want to know how they baked the chicken. >> notice there is no shell. the shell is deep fried chicken.

fried chicken is the bun. >> good. very good. >> do you put sauce on it or go sauceless? >> put the sauce on it. >> do you like it spicy? >> i do need a napkin. >> he's trying it wouithout the sauce to see if it tastes good alone and then with the sauce to make sure it doesn't taste good wi because of the sauce. >> i was so worried when i started in this business that you were not a real tv anchor until you ate on live television. we've done it. we've really made it. >> should we see where they are as we head into the last hour of trading for the day? the dow above 20,000. it's in the green by about a fifth of a percent. s&p 500 basically as flat as it can get, and the nasdaq the same but up about two points. >> don't lose sight of oil. oil another good day. up 2% despite decreased accounts

in america. oil at 53.7. a little more than 9% in nine days. maybe good news on that front, guys. >> continue to watch mexico. thanks a lot from "power lunch" as we eat our lunch. "closing bell" starts right now. hi, everybody, and welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. they ate chicken chalupas, but we don't have to. >> i do think it looks tasty. >> you do. okay. the dow down toward 21,000, i guess. >> we're already at 21,100, so there's a round number for you. >> the big question is where does this market head next? >> we've got top analy