well? >> added to allergan. it's not a health care company that's had the very high prices of drugs. it's cheap. 12 times earnings. >> all right. it's all about apple today in some respects. keep an eye on the markets. thanks for being here. >> mr. prime minister -- i mean kevin o'leary, good to see you. "power" starts right now. >> scott, folks, thank you very much. welcome, everybody, to "power lunch." i'm taylor mathisen. busy afternoon as they all have been recently. the fed making a big decision on interest rates in less than an hour from now. will janet yellin surprise the markets and hike rates? apple crushing earnings and powering the dow into the green. but that is old news by now. coming up, three staggering stats you need to know about america's biggest company by market value. and it is another busy day at the intersection of wall street and washington. we are headed live to the white

house to talk trump-o-nomics and much more. "power lunch" starts right now. welcome to "power lunch." i'm melissa lee. easy come, easy go. erasing a 10 -point gain, up by only 20 points. ibm having the biggest gain on the dow. triple its 30-day average today. nasdaq is higher up nearly 5% this year. brian? >> today's show is brought to you by the letters j, e and t. jet. get it? which is fueling the market? is it j, januaet yellin and the fed or is it earning and the economy, which would make it jeet or is it trump-o-nomics?

eamon javers is at the white house for us. steve, i'm into the music. kick it off for us right now. >> maybe i would be amazed if the federal reserve would hike interest rates today. that is not what is expected. fed expected to stand pat on its 62 basis point fed rate. we're watching carefully to see whether or not it puts march in play. it could do this for upping the outlook for the economy, jobs or inflation. take a look at some of the keys to the fed we'll be watching for today. first thing, strong adp jobs number this morning. be on the lookout, folks. a lot of economists have been upping the forecast by friday 10,000, 20,000. a bunch looking for 200,000 on friday. ism manufacturing came stronger than expected. beware the ides of march. 30% chance of a rate hike built n the fed is like everybody else, waiting on trump policies. they don't know the politics of getting these things through and the tradeoffs. for example, the negative ideas

people have heard about trade and the positive ideas about growth and tax cuts. and, again, all this may come through by watching the balance of risks, which right now are set to be balanced. and then there's the two-year, which reacted to the data at 8:15 this morning, reacted to the data again at 10:00. let me show you what the outlook is for the market versus the fed. for the first time in a long time, what we see is some agreement there. look at that, 1.3% expected this year, .1, 2.7, 2.9. the big story for this year for the fed will be whether or not it's 2 or 3. the fed thinks it's going to be 3. we have to nudge that back into the market. the market is looking for only two right now. >> steve, thank you. we'll check in with you later on. >> sure. let's turn to the "e" in jet, earnings. bob pisani is live for us. >> good news and bad news, about halfway through the earnings season here. earnings improving up 7% for the quarter so far, blended numbers,

revenue up 4.2%. that's good. earnings recession sshl essenti is over. expectations are really high. that's what the market is grappling with right now. expectations up 10.5% for the s&p, tech and financials, mid double digit range. this is a lot to push on the market. can it really deliver? that's what we're dealing with right now. here are my concerns. three concerns. number one, revenue growth is the money driver we need to see. there's been a lot of revenue misses in the fourth quarter, including a couple today. it upperware, for example, telling me expectations are a little high on the revenue growth. number two, guidance is still very conservative for 2017. there are no ceos going out on a limb saying trump-o-nomics will boost our earnings x percent. how much oomph is there? 15% to 20% boost in earnings. most people now think it's way overemphasized.

bottom line, look at a more realistic way of looking at this. can we pass that baton from easing monetary policy to tax cut and fiscal stimulus? that's the big question for now. back to you. >> bob, thank you very much. let's bring in this jet for a landing. as with the "t" in trump, eamon javers is live at the white house. >> reporter: the president clearly in a good mood today. they are confident here at the white house that they had a successful rollout of the president's supreme court nomination last night. we saw the president meeting in the roosevelt room earlier today with a host of conservative groups, groups on tax issues, on gun issues, on right to life issues, all meeting with the president. they plan to mobilize all those moves. the president did take a question toward the end from the media who gathered there to watch it and gave a sense of just how aggressive he wants to be up on capitol hill in terms of the nuclear option in the senate. here is what he said. >> we end up with that gridlock. i would say if you can, go

nuclear. because that would be an absolute shame if a man of this quality was caught up in the web. so i would say it's up to mitch, but i would say go for it. >> reporter: not clear that the senate would necessarily have to do that just yet. that would be breaking precedent and going with a majority vote in the senate instead of a 60 vote threshold in the united states senate. republicans have 52 votes there. in order to get to 60 they need to peel off eight or nine democrats. that's something they're weighing in the balance up on capitol hill. this president wants them to be very, very aggressive. i can tell you, guys, they're rolling out the supreme court strategy that's been planned for a while now. last week, i was in the press secretary's office, sean spicer's private office here at the white house. he had a binder on his desk about this thick that said scotus rollout on the top of it. the game plan had been drawn up for a while and now they're executing it. >> thank you, eamon.

president trump doubling down on his promise on american steel for the keystone pipelines. here is what he said earlier this week. >> i want the pipe to be manufactured with united states steel. that doesn't mean the company united states steel. it means steel from the united states. united states steel will be absolutely a bidder. and i also want it to be fabricated in the united states. so, if we're doing these massive pipelines, i want workers in the united states to fabricate the pipe. >> shares of one of america's biggest steel producers, u.s. steel, the president just mentioning it, in the red today, after reporting some slumping sales. let's bring in mario longhi, ceo of american steel. good to have you with us. >> morning, tyler. how are you? >> we enjoyed your visit last time. let's go to the point about whether u.s. companies can make the steel that would be used in the keystone and dakota

pipelines and specifically whether your company makes that kind of product. >> absolutely, tyler. american manufacturing base on steel is fully prepared to supply what is needed for the pipelines and for the general infrastructure products that are certainly going to come. our company has developed over the years a full fledge of capabilities. but we mostly have focus on the ogct side. >> what is that? >> that is more focused on the energy side. but the exploration and production. but we are fully capable of supplying all of the substrates that go into the components. >> if not making the pipe itself, you could contribute the components to do it? >> that's correct. >> one thing we have been

probing over the last couple of days has been the possible intellectual disconnect of being a pro-business administration on one hand and pro-protectionist administration on the other. i would like to hear your view about whether you can be both of those things at the same time. >> well, my understanding is that the administration is fully committed to improving the contribution from manufacturing to the economic development of the country. and, therefore, promoting what is widely known of an increase in the quality of job creation that can come from that perspective. one of the important things comes from the fact that, you know, over the past couple of decades, several thousands of plants have lost in the united states, operations. many people have lost their jobs. in a significant dimension of that has been consequence of unfair trade. so you have to be promoting an

ability for manufacturing to contribute to the economy, therefore creating good quality jobs and making sure that the rule of law is what governs all the globalized environment of which we participate so that folks can benefit from better quality jobs to be created here. >> you address in the conference call the role of tariffs and how they're working to prevent chinese steel being dumped here in the united states. but there is steel that gets moved to other markets and then brought back into the united states. what you're seeing from pricing and in this context, if america used american steel to make whatever it's going to make for infrastructure, will that cost the american people more as you've seen the president is very cost conscience when it comes to spending the american people's dollar? >> absolutely, melissa. trans-shipment has been used in a very nefarious way that's damaged the ability to benefit

from the businesses that were available. and it normally comes from the fact that a subsidizing country moves their steel to another country. in many cases, relabels it. it has made more difficult for the trade laws to be enforced. so this is one area where we've been working very close with the government in order to improve industry but also makes sure that we have the capability to see where in appropriate trans-shipment is taking place so that the rule of law applies to everybody in the same manner. in that environment we don't have a problem in competing. as far as the cost of product if you're dealing with the completely artificial prices that come out of a subsidized environment, those are not sustainable. and that's not the way in which the global trade environment has been designed. that's called a circum vengs of

the law. the economy grows then at a higher rate, you're going to be creating better-pay jobs. you need to look at this as the overall virtual cycle that comes of a fair, balanced and supporting environment for the participation of manufacturing. >> mario, i want to ask sort of the same question tyler did in a different way. can you produce steel for a pipeline like the dakota access, which the army core of engineers was basically ordered to complete right now? if they say i need steel for pipeline now, can you do it in can you make it? do you have it? >> absolutely. the north american industry, american industry is fully capable of producing what is required here. >> it sounds like, though, mario, in the answer to my question, just to sort of piece the two together, that if we are to use american steel -- not u.s. steel, but u.s.'s steel,

american steel for any of these projects that it would, in fact, cost more because it's subsidized in such a way that it's not sustainable but it would cost less. is that correct? >> it is. it's an artificial cost that is being used to create this environment. so i think for the long term if you have a fair environment where the same rules apply to everybody and you do create economic environment that improves the participation of folks in the economy and you can then have better paying jobs, et cetera, in the overall scheme of things, that's the way in which the globalized environment should behave and it would be good for america. >> mario, last time you were on, december 7th, you said you would like to bring 10,000 jobs back to the united states. is that going to happen? are you underway? have you ramped up your hiring? >> the industry is prepared to bring that kind of quantity of jobs to the market. for every single job that the

steel industry creates, you associate another seven solidly paying jobs in that value chain and it all happens inside of our country. we have already started to deploy. we have an operation, city we're going to start rolling back in february. and we have another one in our mining operations that are going to come back in minnesota come march. so, we began to address that. >> very quickly, if there were a single -- i may have asked you this last time. if there was a single regulation you would like to see rolled back or amended for your company and your business, what would it be and why? >> well, we have several regulations that for the process, better processes that can generate better products going forward. and in some cases in order to get the proper approvals it has taken more than two years. and i think that's a significant -- it's

significantly detrimental. >> who is delaying it? who is delaying it? what agency? >> it's the epa for the most part. >> i believe you said the last time that one of the rules pertain to water that you take out as part of your process and that you're required to put water back into the system that is not just as clean, but cleaner than what you took out. am i remembering that correctly? >> well, you're directionally correct, tyler. most of the water that gets treated and reput into the environment, it fulfills all of the requirements so that nature is never damaged. what we're seeing is the requirements are going beyond, by far, what nature would be able to receive back without any negative impact to it. >> i'll take directionally correct any time, mario. thanks, man. appreciate it. >> good talking to you. >> mario longhi, u.s. steel. the latest crash test results are in. it's not good news for two luxury automakers. results still ahead.

plus, how amazon plans to dominate shipping and shopping. should fedex and u.p.s. be worried? and three things about apple that might surprise you straight ahead. so beautiful. what shall we call you? tom! name it tom! studies show that toms have the highest average earning potential over their professional lifetime. see? uh, it's a girl.

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you already know the stock

is up and you also already know that apple has a lot of cash on hand. let's tell you a few things that you might not already know about apple. apple's cash pile is now $246 billion. for some perspective, if that stock were a company's market cap it would make apple's cash alone the 13th biggest company in the united states. put another way, apple could pay cash for disney, the entire company, with a 30% premium and still have money leftover for thousands of giant turkey legs to celebrate the deal f those stats did not make you up, maybe this will. apple services, app store, itunes music and video this year is on pace to have more revenue than all of facebook. consider that. apple's second bigger business is bigger than the entire business of america's sixth

biggest company. >> great stats, brian. from raymond james, tavis, thanks for being with us. >> great to be here, melissa. >> what's the one nugget out of the earnings report that has you most excited to stick by an overrate rating even with this pop? >> i don't know if it's out of the earnings report but the nugget is valuation. we're nine months into the stock starting this move of outperformance and think there's probably another six to 12 months to go. on the last time they had a very strong iphone cycle, the stock got back to a priced earnings ratio similar to the s&p 500. our price target now, which is $152 is consistent with a 15% discount to the s&p 500 on a forward earnings basis. so, you know, the stock got exceptionally inexpensive last year at this time and it's kind of, i would say, halfway through its recovery. >> 6 to 12 months to take us

through, plus first quarter fiscal results which would include -- but beyond that, tavis, can you see the path for apple to continue growth in terms of what we saw after launches is that things slow down a bit until the next launch. and so i'm wondering if, for instance, double services in the next four years. is that the path, the new path for apple's growth? >> yeah. each one of these cycles, the volatility gets a little more muted. so i think this year's iphone will be very successful. it's not going to put up the type of growth that the iphone 6 put up. and, therefore, the hangover from that will not be nearly as severe either. and so part of that, the market is getting bigger shall more mature and part of it is that you have the recurring revenue streams like services gaining, percentage of sales. you mentioned earlier that the scale the services business is truly impressive. but, you know, it is still just

10% to 15% revenue. >> but it's a higher -- it will be a higher percentage of their profit, will it not? more profitable than the iphone. >> yeah. it's modestly more profitable than the iphone on an incremental basis. but you're still going to have a situation where december quarters are going to be a lot more earnings savvy than june quarters, for instance. >> tavis, got to go. tavis mccourt, raymond james. news crossing the wires that jamie dimon and other ceos will meet with president trump at the white house friday. i've not received confirmation of that from the white house yet. but this is significant because donald trump continues to reach out to corporate america, trying to get -- generate some momentum for his agenda on taxes, trade, regulation, generate confidence in the economy. we've seen the dow be wobbly the last couple of days and, of course, the controversy surrounding the immigration

executive order has drawn criticism from wall street and silicon valley as well. so, trying to get back on track, the president has scheduled this meeting for, according to dow jones, with jamie dimon and other ceos on friday. we'll continue to monitor this story. >> second straight friday jamie dimon is in d.c. john, thank you. >> all right. up next, here is a question for your amazon echo. how many airplanes does amazon own? whatever the answer is now, it is going to grow big league. that story and why u.p.s. and fedex may need to worry. that's ahead.

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amazon.com already dominates online shopping. now it is apparently going after another big world -- shipping. and if we're talking both, we need to bring in both courtney reagan and morgan brennan. courtney, let's begin with you. amazon earnings tomorrow, just how big is amazon? >> so, some new data out from slice intelligence shows online shop something basically just amazon. according to a sample of more than 2 million e-mail receipts. slice says that amazon is responsible for 43% of all online shopping in 2016. that is just incredible. that means all the other online players make up some significantly smaller piece of

the rest. then it gets even more impressive if you talk about growth. amazon is responsible for more than 53% or more than half of all online sales growth in 2016. electronics, including amazon's own echo products, make up the biggest percentage of the sales growth, followed by home and kitchen. but then third, apparel and accessories and that should scare traditional retail as they grow in dominance there. for shoppers that have a need for speed, amazon wins when it comes to shipping. getting packages to your home or office, an average of 3.4 days. that's all prime and nonprime included. compared to everybody else takes 5.6 days. could be getting even faster depending on what morgan has to tell us here. >> thank you very much, courtney. appreciate that. morgan brennan, aforementioned one. new report suggests there might be some very high flying reasons for u.p.s. and fedex to be

nervous here. what's going on? >> yes, yes. so this is -- we're taking to the skies here. add air cargo hub to the pieces that amazon is putting together as it builds out its own shipping network. this is a $1.5 billion investment at the northern kentucky airport. this is expected to employ over 2,000 workers. no timeline given by amazon, but this will be home base for the prime air fleet of 40 cargo planes leased from atlass air as well as air transport services group of which 16 are currently in service right now. this, as amazon looks to lessen its reliance on u.p.s. and fedex for its prime two-day ship ipin operation. truck trailers, transpacific ocean containers, which it's recently gotten into. u.p.s. and fedex have said that they're not worried about the past but this is picking up

steam here. moving about 250,000 packages while u.p.s. and fede combined shipped 340,000 via air and deferred services according to ship matrix. note worthy, the location. this region is home to the main express hubs of both u.p.s., in nearby louisville and fedex, a bit further away in memphis. also dhl, which has a presence at the cincinnati airport as well. so it's easy access, via truck or plane, to a majority of the u.s. population from this region of the country. keep in mind, weather is always a big factor when you're delivering. the weather in this area seems to be a bit better than other parts of the country. >> do you happen to know whether they have a big distribution fulfillment center near cincinnati? >> i believe it's 11 throughout the state of the kentucky. >> a lot. >> and a big footprint around the louisville airport as well. this is just adding to the

infrastructure they already have in place. >> u.p.s. shares are trading even lower after yesterday. >> yes, and fedex as well. >> don't quote me on this. i guess i'm going to say it anyway. >> anything you say can be quoted. >> i'm on live television. i could say rhonosaurus. >> atlas air, amazons had a right to buy a stake in them. >> yes, it does. >> amazon has already gotten on the back end of the big seven -- one of those big 747 companies like the unmarked planes you see at the airport. who is that? it's probably atlas. >> yeah. 40 planes. most of them are through atsg so far but atlas does have an option to buy, stake and option to buy a bigger stake. this is going to play out for years to come. >> don't quote me on this, morgan, but thank you. >> okay, i won't. >> shhh. fed rate decision said to

drop at the top of the hour. jeff rosenburg is strategist for blackrock income. no changes in rates are expected but how do you think janet yellin and company will handle the uncertainty of policy? >> it's a good point. not a lot of expectations for this meeting and not a lot of room for communication around your question. i don't think we're going to see that in the statement. i think we're going to see some mechanical upgrades to the characterization of the company's context. as you look further out that's what's on your mind and everyone in the market's minds, how does the fed respond to, how do fiscal policy reforms impact monetary policy? those will be the big questions for the market. it's probably not going to be answered here today. >> how much more complicated, jeff, does the fed's job get with all of the moving parts of policy making in washington?

because for most of the past eight years with -- given the log jam there. and there may be a log jam now but given the log jam they were kind of the only game in town. now it would seem to me there are a lot of pieces from tariffs, border taxes, infrastructure spending that complicate what they do. >> well, it is a complicated set of proposals. but on the other hand it's the implications of those proposals on economic growth that is sort of clear. if the direction of the fiscal reforms results in a significant change to the growth outlook -- and that will factor into the fed's decision making. it factors in by changing how much slack is in the economy, what the inflationary consequences would be and, most critically for investors, what the path and pace of normalization from the fed should be. and will be. >> hard to read the tea leaves, jeff. if you had to read the tea

leaves, do you think the fed would be more inclined to raise for sure in march and maybe front end load the rate increases so it has room in the back end or maybe next year to actually lower some of these policies that are of concern to them? >> your question is, i think, would the fed try to get out in front of -- >> right. >> the fiscal policy changes? i think they've been very clear to say that that wouldn't be the reason why they would be raising rates, that they would be anticipating the impact of fiscal policy. they're going to have to wait and see. there's a lot of uncertainty. it's a lot of complexity. it's not at all clear what we're ultimately going to get. i don't think they're going to get out in front of fiscal policy. the bigger issue, for march, is are they simply going to need to respond to what the economy right now is doing? irrespective of fiscal policy. that's where we could see some pricing for march perhaps being a little bit too low. and that the fed needs to get

out ahead of where the economy is already. >> jeff rosenburg, blackrock. what's the best strategy for your money right now? that's up in two minutes. all of this as we count down to the latest fed decision on interest rates. "power lunch" will be back in two minutes. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you.

morgan stanley.

hi, everybody. i'm sue herera. judge neil gorsuch visiting capitol hill this morning where he received a warm welcome from senate republicans. his first meeting was with senate majority leader mitch mcconnell, joined by vice president pence and former senator kelly ayotte. >> the president made an astounding appointment. we're all thrilled and looking forward to getting the confirmation process started. >> another recall of furniture to tell you about due to serious tip-over hazards to children. it involves south shore's summer breeze chest of drawers, which

are unstable if they are not anchored to a wall. they were sold online from april 2014 through december of 2016. and attention cat lovers. the national zoo in washington is suspending its search for a missing bobcat. as we told you earlier this week, ollie was discovered missing from her enclosure monday but zoo officials say there's enough prey outside of the zoo for ollie to survive on her own. but they do caution that ollie looks an awful lot like a large house cat. if you are used to taking in strays, be careful. that's the news update this hour. back to you guys. ty? >> thank you so much, sue. how are big hedgy funds doing in this market? bridgewater associates earned about $5 billion last year. that, according to a report by hedge fund investor lch investme investments. how about that? bridgewater gained more in absolute terms than any of the

other top 20 hedge funds. soros fund management lost about $1 billion and paulson and company lost about $3 billion. separately ray dalio out with a new note saying he is increasingly concerned about the trump administration's populist policies that could be detrimental. they could be more powerful than the beneficial effects of trump's pro business policy. >> if the world's biggest hedge fund manager is increasing concerned about the benefits of a donald trump presidency, shouldn't you be as well? equity europe and david kelly, chief strategist at jp morgan funds. what's the answer? if ray dalio is getting nervous, should your clients? >> everyone was nervous before the election. i find it rather perplexing that people decided to look at the good side of trump for a couple of months. >> you don't agree that we

should have had a rally post election/gop election rally? >> other than getting rid of the uncertainty and not having clinton attacking the health care industry, i don't understand why the market wasn't more balanced to start with. trade was always going to be an issue. and now it is becoming an issue, whether it's first with nafta or second -- >> because of massive deregulation, like donald trump has promised? >> yeah. >> tax reform like donald trump has promised, because of tax repatriation? >> yep. >> optimism, those things were going to happen. >> absolutely. and i think we may well still see them with a bit of washington gridlock that i think we're now already experiencing. the flip side was that there was always downsides to what president trump was proposing. making america great again means that someone else is less great. >> how do you see the push/pull between the two impulses neil just mentioned, on one hand the pro-business ideas and on the other hand policies that might

stifle trade? >> well, i think it is very complex. you know, i think that the populist move to restrict immigration or to push up tariffs would be very negative. as the administration goes down this path it will get its hands burnt repeatedly. between the republicans in congress and reaction to talk about tariffs or greater immigration restrictions, the administration basically learns on the job. >> who is going to burn their hands? who will do the burning? who is going to burn them? >> well, i think, for example, if you pick a fight with mexico and you think they're going to give in and to whatever trade agreements you want to come up with and discover they're going to fight back like crazy, you realize maybe it's not worth that fight. and the question is, can you then pull back and come to -- okay, let's do something slightly different, which is less dramatic?

a little bit of stimulus, combined with regulatory relief, cut of the corporate income tax or elimination of this type of income tax would be positive. it's important not to go the full populist here. little bit of populism might not do too much harm. >> david, don't go far. you're coming back the top of the hour to talk about the fed. neil, we'll have you back soon. >> thank you. >> thank you very much. the latest crash test results are n and it is not good news for two luxury automakers. that story is straight ahead. but first, rick santelli at cme for today's bond report. hi, rick. >> hey, fed day. we'll be getting into that shortly. intra-day, stronger adp. up two basis points. 1.275 for mid december. highest close since 2009. let look at 2009. now let look at the ten-year, underperforming a bit, wouldn't you think? look at the dollar index. that's the one that's really big

time overperforming. can't wait to see what the fed does. "power lunch" will return in two minutes. runs on intel? that ride share? you actually rode here on the cloud. did not feel like a cloud... that driverless car? i have seen it all. intel's driving...the future! traffic lights, street lamps. business runs on the cloud... and the cloud runs on intel. ♪ i wonder what the other 2% runs on...(car horn)

sean spicer holding the daily press briefing right now. of course if there's any news breaking that pertains to cnbc and trusted and valued audience, we will bring that to you. meantime, let's get back to business. the latest crash test ratings are out. they are not good news for two luxury automakers. phil lebeau is in chicago with more. phil? >> brian, we're talking about electric vehicles from bmw and tesla. let's start off first with bmw, crash tests were done for

highway safety. bmw i3 did not get a safety -- carbon fiber structure is designed to meet and exceed global safety standards. again, it didn't fail this test. it simply did not receive the destination as the top safety pick. there's the statement from bmw. tesla and the model s, also not a top safety pick. it falls short in a key crash test, being where the front corner of the car collides with an object. we reached out to tesla about this, they pointed out that improvements being recently introduced in the january 2017 production of the model s specifically addresses the acceptable or second highest rating that the model s received in the small overlap frontal crash test and we expect new tests to yield the highest possible rating. that would be a good rating, in the crash worthiness category. by the way, if it did get a good rating in the next round of

tests, it would likely be moved up to a top safety pick. take a look at this, guys, up 28% since the election of donald trump. these guys are going to get crushed. he's not going to be favorable to the environment. yet that stock is up almost 30% from his election. >> teslas are made in the u.s. phil, thank you. >> yep. will janet yellin surprise the market and hike rates? we're live straight ahead. four stocks you need to know about today. "street talk" is next. 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 market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

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time for "street talk." recommendations of stocks you need to know about. u.p.s. we talked about this before, bmo downgrading u.p.s. guidance of 2017 below bmo's estimates. the stock simply lacks a positive catalyst. capital spending will rise, margin returns on capitol will contract near term and stock growth is muted. trade at a five-year average premium of 17% to the s&p 500 but headwinds, multiple to u.p.s. come out to about $115 a share, below the $130 price target that it had on the stock previously. >> no amazon bump there. stock two, donaher, raising the

targets of 93 on the back of better than expected earnings. analyst writes ample growth drivers and runway for margin expansion. add that they've got growing enthusiasm for danaher's growing streams. not a lot. upside about 10%. in this market take what you can get. >> advanced microdevices, raising price target after stellar earnings report. cannacord says management is stronger and well established in their roles. the company sets up well for 2017, a critical year. new product and if these are successful, yield higher margins versus today's portfolio products. >> is this the greatest money making stock of the last year or two? >> up 458 over year, 567% off its lows of two years ago.

wow! stock number four, your smaller cap call of the day. crane, ticker cr. oppenheimer upgrades it. margins are getting better. analysts have increased confidence in their big fluid handling division. also says the overhang for many of its issues continues to shrink. their target on crane, 82 bucks. here is some trivia for you, melissa. if somebody says my gosh, who is the world's largest provider of fiber glass reinforced plastic -- >> somebody just said that to me today. >> what did you say? >> i have no idea. >> it's crane. side of rvs. >> you would know about that, having a spare. >> having bunked mine off a few buildings a few times, yes. crane, congratulations, small cap call today. tyler? fed making a big interest rate decision in a few minutes from now. they probably already made the decision but we'll get the news in 7:30.

we're live at the fed straight ahead.

we have a news alert here. president trump is expected to meet with harley-davidson executives tomorrow, according to the white house. we'll keep you posted on any developments. harley-davidson shares are down 1.5% but have been trading lower for most of the session. right now we are four minutes away, four minutes from the fed decision on interest rates with us today, danielle dimartino, scott of gugenheimer. welcome to you both as well. we're not expecting any change in rates. so, what are you looking for, daniel danielle? >> the fed has a great opportunity today because there's this little bit of uncertainty in the markets right now to introduce all the elements that have been coming out of their speeches about potentially slowing down on reinvestments and moving up the timeframe and have that first rate hike in march. i think they have that opportunity. >> scott? >> that's interesting.

the thing we should be looking for is a discussion about the balance sheet. and i think the market may not react well to it. so, you know, we could be vulnerable to some sort of tantrum in the bond market. and i agree with danielle, that if the -- if march is a live meeting, we need to send a signal now. >> you don't think a signal has been sent by janet yellin when she said three this year? >> several a year. >> the market is only discounting a 30% chance. >> edp jobs number bigger than your biceps. >> and he's a big man. >> shouldn't that be the tell? ism better, edp better. almost every piece of data has not only been better but much better. >> then the market being stupid. because if what you're saying is this is enough that -- the market should be pricing at a higher probability. and i think the fed needs to

underline the fact that march is live and it will be interesting to see whether they use this as an opportunity or maybe it's not live. >> elon, do you think the fed is concerned about being tweeted? >> yes, i think so. danielle mentioned that they have the opportunity to signal something about the balance sheet. i don't think they're going to take it. i think the fed strategy is is to try to fly under the twitter radar, if you will, because they have seen what happens when president trump trains his eye in a certain area that can cause a lot of controversy, lot of headache. and that's not a situation they want to be in, particularly when they pride themselves on being such an independent -- >> don't mistweet me. >> don't subtweet me. that's the concern. i think it's going to be nothing to see here out of this statement. >> but, you know, to add to that, she has a great opportunity in two weeks when she's up in front of congress. she can take this friday's jobs report into account and change

the message in two weeks. they can tweak the message in three week. >> so why go out now? >> again if they're going to start preparing the market that's only 30% prepared, that's a very low probability for the march meeting at this point. >> yeah. think of it this way. six weeks to change the market's expectations. that's a very short runway. >> the markets have been right. last year they were right the whole way through. people were saying oh, no it's going to happen before december. >> i don't want to take anything away from our coverage. i've called scott the fed the l.a. rams of the financial markets. they exist. they don't really matter anymore. >> i don't matter anymore? >> no, no, the fed. the fed. >> the fed -- >> how much does the fed matter to you right now, given trump and everything else? >> not a lot. trump and his policy tweets dominate what's going on right now. if the fed sends a signal that the market isn't expecting, i think we're going to get some

turmoil short term but trump is dominatin dominating. >> trump trumps? >> that's right. >> 4% economic growth right now. what is the one institution that can potentially stand in the way of that? federal reserve. they get it wrong on interest rate. >> we've got to go. steve liesman has the fed call. steve? >> no change in interest rates. federal reserve maintain its interest rate range which works out to 62 basis points in a unanimous decision of the new board for 2017 for the federal market committee. there was some rising inflationary concerns. i'll get to those in a second. broad outlines in policy. rate hikes will continue to be gradual. roughly balanced. all this the same as last time. balance sheet reinvestment policy will continue. no changes in the things that matter about policy. let me get got inflation stuff. fed said inflation will rise to

2%, rather than it's expected to rise and they dropped the reference to energy and nonenergy imports being the cause of inflation. and that suggests to me that perhaps it's more sort of embedded in the core. they see it that way or see what's happened with inflation less transient. inflation as increased in recent quarters rather than what they said last time which was earlier this year. perhaps they're seeing some signs of persistence. remember, i put that in context of no change in the broad outlines of policy. just kind of be on your toes about this. because they're seeing a more persistence in inflation. they continue not to mention coming fiscal policy. but they did make a nod to changes in, quote, consumer and business sentiment, saying they have improved of late. when it comes to the outlook for the economy, really a lot of dramatic no change at all. they said the labor market continues to strengthen like last time. economic activity has been expanding at a moderate rate, unemployment has stayed near its recent lows. household spending continues to

rise. a lot of very much the same stuff. investment remains soft. lot of word for word except right at the top. somewhat greater concerns. new committee for 2017. guys? >> steve, thank you very much. and stay with us. >> sure. >> as we bring back our all-star fed panel. danielle dimartino booth, ylan mui, newest d.c. correspondent and back with us, david kelly, chief global strategist with jp morgan funds. david, this day before groundhogs day it seems to me they didn't see their shadow. they went back into their hole. i can't remember what that means. six more weeks of nothing or winter or what. how do you read this statement? >> i think it's very deliberate to mention this higher.

raise march expectses so they don't get precluded from doing that because no one expected it on the date. they don't want to go into a march meeting and having to battle expectations also. they're not determined to do march but want to leave that option open. >> you see the inflation reference as a clear signal that they're getting ready or they're readying the market? >> absolutely. tightening labor markets. steady growth, inflation heading toward 2%. those conditions are all there. they want to underline that. frankly, we get a rate hike in every press conference meeting that we don't have a crisis in this year. >> i think they could have been a bit stronger in their verbiage. janet yellin will have to come

out and be much more hawkish. i think they squandered this opportunity and should have been stronger in the statement. >> i would agree. i think the way they address this was two too soft if they're really thinking about march. and i wouldn't go as far to say they're squandering but don't expect to raise rates as much. >> steve, do you hear it that way? >> no, i don't. there's a lot of time for janet yellin and members of the fed committee to talk to members of the media, the market, scott and danielle. they have many opportunities and i think they've laid a very, very soft predicate. if you really want the fed to raise in march you're disappointed. if you're looking for the optionality to raise in march you got what you were after. i don't see this bump up as huge but modest. it can be used to build a case. remember, there's a lot of uncertainty out there. the fed is, i think, very keen to this uncertainty.

and i think, guys, also very keen to having been burned when they thought it was on the escalator. that keeps stopping and turns into a set of plain old stairs is what happens. it just did a rate hike. there's, what, two or three different -- two reports to gauge, whether or not inflation is rising and whether or not jobs continue to grow strongly. >> i have a real question that i don't know. not a fake tv question for you, danielle. new members of the fed. even though it was a 2016 follow through. >> they would have had input. >> these members were likely to be more dovish. shouldn't that explain sort of the reversal back?

>> i think he has been more hawkish. >> the fed statement we're getting this time was authored by a slightly different group of people than the previous. >> true, true. they've already said that they want three rake hikes. >> that fund futures, by the way, 22% from 29% for the statement. in terms of the tantrum that you were talking about, the market wasn't expecting a march hike. there's less reason to believe for sure that there will be a march hike. what do you do? >> the longer that the fed goes on and is setting expectations like i think they did today or reducing expectations to rate hikes that they're setting themselves up that when they start to talk about things like

reducing the size of the balance sheet that i don't think the market is really ready to absorb a reduction in reinvestments. because at the same time we're talking about a reduction in reinvestments, we're talking about an increase in fiscal stimulus, which will increase deficits and so, you know, all of a sudden we're going to have a change in the supply and the yield curve and i don't think the market is pricing for that. >> go ahead. quick thought. >> they use this term of being well under way in hiking rates. when they get to 1.5, they can start to talk about that. second half of 2016, something of a 40% chance there. more of a first half of 2018 idea for reducing the balance shee sheet. >> ylan since you're the new kid you get the last word.

>> steve liesman's point and say it's really notable that the federal reserve is more cautious in its economic forecast than the private starter has been. been more pessimistic than the fed, predicting 3% around the corne corner. >> thank you very much. really quick thought. >> going back to steve's comment, i don't think it is that the fed has to start reducing the balance sheet. i think they have to start talking about it. that's how the taper tantrum got going. all they have to do is start talking about it and the bond market is not prepared for them to start talking about it. >> records show danielle agrees there. >> i do. >> thank you very much. scott, we'll see you later this evening. ylan, david kelly, steve liesman, thank you very much. bob pisani is at new york

stock exchange. the reaction was muted though gains were roughly halved but they were small to start. >> we're basically flat now. kbe is basically flat on the day. i have to say, the important time here for the first paragraph here, modest upgrade to the inflation statement is important here. defla deflation is well under way. better numbers in europe and japan recently.

what they've been complaining about for years, governments to get more involved and finally fiscal stimulus is on a table. i think the fed has a lot of room, lot of cover to argue for higher rates. i'm surprised it wasn't a little more aggressive on that in the statement. nonetheless that's where it is. you can see little change. back to you. >> bob, thank you very much. coming up, more fed reaction. more reaction to the current environment we're in right now. legendary investor bill gross and one stock in the s&p 500 has been up 90% of the time over the last 20 februarys. could be a good reason why. get that. it rises almost every february for the last 20 years. >> 1-800-flowers? >> not a bad -- it might be. that's a heck of a good guess. i actually don't know. could be budweiser if you live at our house. >> tiffany. >> next on "power lunch." your insurance company

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for a free quote today. liberty stands with you™. liberty mutual insurance. dow ended the month up half a percent. what can we expect from stocks in february? the man who knows is dom chu. dom? >> i don't know that i can predict the future. you guys were guessing about

that stock that is up 90 prs of the time. let's get the setup first. overall we do see perhaps february not being the best month. down about one-tenth of 1%, dow down about .2% and nasdaq down .8%. they're positive most of the time except the nasdaq. we took a look at the screen to figure out which stocks did stand out. our screen was pretty simple. current s&p 500 members, average returns over the last 20 years for the month of february and then looked at positive ones at least 80% of the time. had to be a pretty good batting average. here are some of the big standouts in terms of the overall stock picture. vf corporation over the past 20 februarys, positive 80% of the time. etn corp, up 90% of the time and the one you talked about was not budweiser or 1-800-flowers but hershey's for those kisses.

up 90% of the time. one of the big standouts. not everyone agrees this is a good trade for the month. we're bringing historical context, brian. this stock has typically done well in the month of february. there's a certain holiday, i guess, in the middle of the month, guys. ub. >> tyler more of a flower man. >> yes. >> dom, thank you very much. joining us now, legendary investor bill gross of janus capital. the chocolate craze of february and why to short hershey on the 15th of the month, i suppose. but let's get into the fed. >> i love hershey's. >> let's talk about it. let's get into the fed discussion, bill. you might have heard, he's saying, we're not trying to take anything away from the fed or our coverage thereof. given everything else with trump and everything else going on, the fed's importance in the market has been summarily

reduced a little bit. would you agree or disagree with that? >> i agree with that in terms of the fed relative to fiscal policy in the u.s. i think it's important to point out that other central banks, the ecb, the bank of japan, the bank of england, the uk are all still in the game in terms of buying bonds, they're buying at like 150 billion a month, taking the place of the u.s. so, yes, i think fiscal policy is the dominant trend in the united states. but let's not forget other central banks and the minutes they stop buying bonds is the minute that the bear market in bonds may begin. >> the majority of the media is focused on immigration issues and other executive orders. by the way, i don't even want to say it, but a greece debt payment that nobody else seems to be talking about. what's the biggest risk to you right now, bill? >> well, globally, i think

speaking to it in terms of euro, there's risk in italy, risk in greece, risk politically, of course, in france. you know, as we move through the year. so, you know, perhaps that is the biggest global risk aside from china. china is heavily indebted, increasing debt to gdp at a rapid rate and ultimately countries and companies and individuals can't do that. so, you know, there are a multitude of problems on a global type of basis that ultimately could bear risk and even global bonds. >> you made the point in riding and in commentary, bill, we tend to like big numbers in the media. dow 20,000. that may happen, dollar parody and 2.6% on the ten-year bond.

of those four, 2.6%, the most important number to you? >> on a long-term basis, brian. i do to some extent. there's a long-term downward trend line from perhaps. to 2.45, .5%. first time in the last 25 years. i think it's very significant. you know, it's also significant from the standpoint of, you know, the fed's expectation goesing forward. and what we think about what the fed is going to do. what's critical is treasury yields is the pace that the fed moves toward its new neutral policy rate. to define is a rate or yield at which the economy and inflation are in balance, perhaps 2% inflation, 2% to 3% real gdp.

what's the neutral rate? i think about 2%. i think the fed thinks it's about 2%. and that means another 125 basis points to go. 3% in 2019. and return to bond investors will be 1% or even less. >> bill gross, janus capital. a pleasure as always. thank you. >> thank you very much. news alert with john harwood. john? >> a few headlines from the white house briefing, which is ongoing with sean spicer. a rare appearance by national security adviser michael flynn. and the general said that iran was officially on notice as a result of that missile launch that has been confirmed recently. he said the obama administration has been inadequate previously in responding to provocations from iran. no indications spelled out of what the administration might do. but that's worth watching.

secondly, spicer announced that the executives of harley-davidson, who the president had been scheduled to visit in milwaukee tomorrow is instead coming to the white house. the president feared protests in milwaukee. sean spicer said that was not the case. >> it was easier for the executives to come here. considering the weekend and all the activity that's been going on. we're concerned about american jobs, moving this economy forward and we're excited to welcome them here to washington to talk about the great work they do and the many thousands of people that they employ. >> couple other things of interest to our audience. first of all, sean spicer did not give any details of that reported meeting of jamie dimon and other ceos at the white house friday. said he will have an update tomorrow. he was asked whether or not the president intends to act on his campaign pledge to restore a new version of glass/steagall

abolished during the clinton administration. his position remains unchanged but doesn't have a treasury secretary yet so doesn't know the way forward and first indication of serious trouble for one trump cabinet nominee. that's betsy devos, the choice for education secretary. two republican senators, susan collins of maine, lisa murkowski of alaska have both said they are no votes on betsy devos. republicans have only a 52-seat majority in the senate. that means they need at least 50. the vice president can break a tie. any more erosion would put her in grave danger, assuming democrats stay united against her. guys? >> do you expect, john, that most of these appointments, cabinet-level appointments -- let's set aside the gorsuch appointment for now -- will be straight party line votes? >> no. i think there will be some nominees who will cross party lines and get democratic

support. don't know how much. but the prospects for that are diminishing, tyler. because the way that the temperature has risen in washington over the last week or so, the fallout from the immigration executive order and other things in president trump's demeanor and what he and members of his administration have said have caused democrats to feel a desire to fight. you saw that in the mass protests over the weekend. so what started out as a situation where democrats might provide some cooperation on some legislation like infrastructure, some nominees, there still be may be some but it's getting smaller. >> all right. john, thank you. john harwood. >> metal, mail and a duck coming up in the good, bad and the ugly. and donald trump promising to bring back billions in overseas profits. what would it mean for apple,

who is sitting on piles of cash? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.

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welcome back to "power

lunch." the good, the bad and the ugly. arconic missed its expected adjusted earnings target, it is up by 10.5%. also a tch on to the bad, atlas falling. sticking with its 2017 outlook. aflac down 4%. it is an ugly day, putting it nicely, for pitney bowes tanking after missing earnings. missed analyst earnings expectations in the last four quarters. wow! tyler? >> all right. melissa, thank you very much. coming up, is there a power struggle developing between some key members of president trump's team? and the president tells senator mitch mcconnell to go nuclear with fights on several fronts derail the economic agenda that wall street has been so ard

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good afternoon, everyone, i'm sue herera.

senate judiciary committee advancing sessions nomination. it was split along party lines. now headed to fult senate. president's pick to head the environmental protection agency, senate committee on environment and public works recessed when democrats didn't show up, preventing the committee from voting on oklahoma attorney general scott pruitt's nomination. 15-year-old boy is under arrest after one gun shot was fired during a fight between two teenagers inside a building that houses boston public schools administrative offices. luckily, no one was hurt. it is national signing day, as high school football players make their college intentions known. there is four-star linebacker levi jones unzipping his jacket to show off the florida gators t-shirt. no, then a florida state t-shirt. but he still wasn't finished because, there you go, he removed it to make it official that he is going to usc. there you go.

that's the news update this hour. back over to you, melissa. >> spenuspenseful. >> that is officially the sign we are at peak signing day. >> brian, i think you're right. >> peak signing. >> sue, thank you. >> you're welcome, guys. oil market is closing. crude around session highs up by about 1%. meantime, apple still a big winner right now after reporting strong earnings. the company ending the quarter with $246 billion in cash. 90% of that is stashed outside the united states, so it's not surprising that ceo tim cook is a fan of cash repatriation, t l telling our own josh lipton it is front and center, very good for the country and obviously good for apple as well. >> on that note, donald trump has promised a tax holiday to let u.s. companies repatriate hundreds of billions of dollars. the question is, though, what could companies do with that money if we do get some kind of a deal? seema mody knows.

she joins us now. >> brian, companies on the s&p 500 have nearly $1 trillion currently parked overseas. as you point out that's a lot of capital that could be deployed at home toward research and development, mergers, acquisitions and expansion and help companies pay down their debt that they've been racking out to buy back their own stock. without any restrictions on how to use the repatriated cash, goldman sachs expects about one-fifth of the $1 trillion to be repatriated back into the u.s. and $150 billion of that to be used towards buy backs and dividends, could be a boone for markets as that has been a big source of demand for stocks since 2010. if that were to happen total amount spent on buy backs could reach $800 billion, 24% rise from a year ago. the sector is likely to benefit from this tax holiday. health care which accounts for 5 % of all that cash held in foreign countries in terms of time line, the actual bill around this tax holiday not expected to be passed until late

summer, implying the boost to buybacks is likely a story that happens in late 2017. guys? >> seema, thank you very much. appreciate it. today could potentially go down as an unlucky day 13 as the trump administration. democrats still fighting with the president over several of his cabinet nominations. they're threatening to hold up hes nominee for the supreme court, as you probably know. now the president tells majority leader mitch mcconnell to do whatever it takes to get judge neil gorsuch confirmed. listen. >> we end up with gridlock i would say if you can, mitch, go nuclear. because that would be an absolute shame if a man of this quality was caught up in the web. so i would say it's up to mitch, but i would say go for it. >> so, does all of this fighting to derail the -- might it derail the pro-growth business agenda that wall street has been hoping

for? chuck gabriel joins us now, president of capital alpha partners. referring to the nuclear option there in the senate. for those who don't know or don't remember, like me, what exactly does that mean? and what would it mean for the confirmation of judge gorsuch? >> hi, tyler. nuclear option was what senator harry reid first triggered in 2013 and, in essence what it did was to allow the moving, as we see right now, of this time of trump nominees for cabinet level positions with just a simple majority vote. it has been perceived not to apply to supreme court nominations and so essentially what mr. trump is saying if the democrats filibuster and block the approval of neil gorsuch that majority leader mcconnell

should expand the so-called nuclear option to allow supreme court with a simple majority vote. i simply don't think they're going to need to go there. the first hearings won't be for six weeks. democrats are absolutely trying to rally and sort of gain strategy on the fly here. but at least six or seven moderate democrats, most of them in cycle in red states in the 2018 campaign have already said they're unlikely to filibuster and we've got six or so weeks. the market, particularly media, is very, very breathless on these things. short attention span. long way to go on that one. >> in politics it's good to have an enemy, someone or some cause against which you can rally. and democrats certainly have that now. but does the climate in washington throw into jeopardy mr. trump's ability to stay

focused on his pro-growth business agenda and, two, to accomplish what he wants? what are the stakes here that the environment has become so poisonous so quickly to the overall pro-growth agenda? >> keeping mr. trump focused is going to be a challenge for both team trump and for the markets all year. and for the fed, too, at some point perhaps. with regard to what a real onset of bitter partisanship might mean for the growth agenda, we're going to spend the first part of this year ramming through these confirmations that they can do with simple majority votes then some budget work in march and april. but trying to repeal and replace obamacare will slip into the second quarter and beyond. then the main event for the markets, which is tax reform. and they can move a bill, if

need be, with simple majority for budget reconciliation, as we call it. the partisanship issue really kind of delays things, creates a very negative sound track but it really doesn't change the dynamic that republicans can do this, will do this and, in the end i think they'll have democratic votes by december or february next year. >> from where you sit in the center down there in washington connected to the business community, the political community, how does the administration square the idea that on one hand they're pro business but on the other hand they're pro protection, pro defending our borders? how do those things mix together? >> mr. trump may be a visionary or diversionary. but the goal seems to be to change the whole trade debate, the whole paradigm to move toward more nationalistic approach toward bilateral

agreements rather than multilateral agreements. some optimistically might make the case that he could save free trade going forward because we've reached diminishing returns on multilateral agreements. for the fed watching this, with all the market expectations of quick movement toward fiscal policy, the other side of this is what if he tweets his way into a trade war? the fed has to be there to dance like ginger rogers with fred astaire. if we have a trade war and the fed is committed toward the tightening of policy we could have the same sort of -- very small version of the same toxic mix that created the depression, trade war and a tightening fed. >> you've left me with a wonderful visual of janet yellin and donald trump dancing like fred and ginger. >> want to make your day. >> chuck, thanks. >> cheer. >> on that note, access to the

president is always one key barometer of power in any administration. but perhaps none more so than when donald trump is president. and reports emerging of a power struggle between two very key players of the white house. we're joined now by tara, one of the names very well known to the cnbc viewer. >> anthony scaramucchi is up for the same job held by valerie jarrett. there are already too many cooks in the kitchen in trump's administration. that would put almost five people at a close of chief of staff level with kellyanne conway, steve bannon, reince priebus, the actual chief of staff and his son-in-law, jared kushner. add anthony scaramucci in there, frie close to the children and friends with a close friend of

his. anthony scaramucci was offered, told that he no longer had that position, which he received in a document saying we have the intention of giving you this position. the transition team confirmed it. then he was told by chief of staff reince priebus, listen it's going to take you too long to get through the government of office ethics to get into the position. they suggested it would take 90 days to review the sale of his business, sky bridge, a hedge fund he sold for about $200 million. that's what it's valued at. and, basically, because of that, he was told do the right thing and step away from the job. of course, he just sold his business. he wants this white house job. he's not going to do that. also tax free because of a federal law that allows poi s appointments to sell their businesses without tax. within half an hour he said you have the job but we may have to put someone there in the meantime. today my sources tell me he was

offered another job, an ambassador job. someone is really trying hard to not get him in the white house in that position which, like i said, was held by -- >> by the way tara, i need to tell our viewers that rex tillerson is currently being voted on in the senate as we speak. >> okay. >> live shot of that. so, again, when the news crosses either way about rex tillerson as secretary of state, we will bring that to you. sorry to jump in. it's a newsworthy event. >> very newworthy event. >> when you say someone doesn't want him in the white house, who is that someone? spell it out for us. >> reince priebus called him say & said we need you to back away from this job. so that is the person who appears to be the one not fighting for him to stay. obviously there's a lot of concern that he sold his company to a business with chinese ties. then again, donald trump has said this entire time he wants businesses in his cabinet as

appointees. they have business acumen. so when you push someone out for having sold his business to get into the white house, it sends mix messaging. steve bannon a millionaire who is a very high network individual versus reince priebus, came from the rnc and does not have the same background in business and succes success. >> tara, thank you. >> thank you. >> good run up nearly 20%. should you keep riding this rally in these stocks? ady in mo. companies across the state are growing the economy, with the help of the lowest taxes in decades, a talented workforce, and world-class innovations. like in plattsburgh, where the most advanced transportation is already en route. and in corning, where the future is materializing. let us help grow your company's tomorrow - today at esd.ny.gov

it is time for trading nation. as the graphic implies. let's take a close look at the bank stocks. erin gibbs with s&p global. matt, we'll start with you. this sector was hot, hot, hot. it's cooled off a bit. what do you see happening? >> we have to worry a bit about what's going on with interest rates, of course. it's not just the level of interest rates. we have to worry about the steepness of the yield curve. that's where they make their money, in the yield curve. we have the yield curve flattened a little bit more than the stock, than the bank stocks

have come down. if you look at a chart comparing the kbe bank etf versus that fed between the twos and the tens, they've been very highly correlated and have flattened out more than the bank stocks have. there's a little bit of a gap there that may cause a little bit of headwind in the bank stocks and the issue, of course, of deregulation. if you're on the democratic side -- finally starting to push back a little bit now that trump has been inaugurated. where is one area where you can push back and one place where elizabeth warren is going to push back? she can say, okay, we're going to do a little bit here, giving back on dodd/frank. do we want to go back to what we had before the credit crisis? >> one thing going up is v valuations. they've come out of the zone range they've been the last five years. the fed did not raise rates today. are valuations stretched for banks?

>> no. they've been in this range of trading really tightly in between 13 to 14 times forward earnings ever since we really expected that last december rate hike. until we really see a big change or an acceleration, i would expect them to stay in that similar sort of range we've had the past three months. their earnings going forward for this year are decent. they're sort of in line with the broader index, about 10% to 12%. we're not expecting anything spectacular from them. as long as we're on this slow, no big changes for interest rates, i think they'll be -- they're well positioned here and they'll do at least what the market does. >> at least what the market does. not exactly a resounding bull case, erin. >> not exactly resounding bull case. >> erin and matt, thank you very much. matt, if we don't speak to each other, good luck to your pats. for more trading nation -- a pats fanatic. >> go boston. >> america's biggest retail names are teaming up against any kind of a border adjustment tax

plan. what the industry is planning to do about it, coming up. facebook earnings are after the bell. fast money 5:00 pm eastern will be all over that. excellent host of that program who you'll also see. >> yea, brian. >> after this short break.

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retailers are teaming up to fight a possible border tax. courtney reagan joins us with that developing story. courtney. can you hear us? we're obviously having difficulty connecting with courtney. >> basically what she is going to tell us about -- i won't steal her thunder because i expect we'll get the signal back. as opposed to tyler mathisen and melissa lee fighting with, one

of the lobbying groups called lera, big lobbying group, is going to do something and courtney will tell us now about. >> here we go. okay. many of the tech ceos have been worried about immigration. the retail ceos are concerned about the border adjustment tax proposed by the gop. a new coalition that was formed today called the americans for affordable products has been formed by more than 120 companies. many of them are retailers, including walmart, nike, abercrombie and others. a release announcing the group reads, the retail industry pays among the highest effective taxes of all industries. we therefore enthusiastically support reforming the current tax code. it says, however, the border adjustable tax is harmful, untested and would put american retail jobs at risk and force consumers to pay as much as 20% more for family essentials.

the coalition, which does include retail lobby groups like the nrf, says the goal is to educate lawmakers and consumers. make no mistake. the website says very clearly they're trying to stop any kind of border adjustment tax. back to you. >> thank you very much. courtney reagan. apple earnings are old news. so yesterday. looking ahead to the next big earnings report. it is facebook after the bell. what should we expect? joining us john blackledge from cowan. what are the important metrics you are listening for tonight? >> the revenue growth. we think it will be a good quarter. looking for 40%. they had a huge fourth quarter. the driver of the ad revenue growth, mobile advertising again. it will be driven by higher mobile ad volume and higher pricing. earnings too.

looking or $1.34 in earnings a couple of cents above the street. i think there could be upside across the board mainly because the global digital ad market is strong and facebook is a driver and beneficiary of it. >> how much of a contributor will be the video first platform? you indicated you had done a survey telling you that 17% of ad buyers would use facebook video for stand alone brand campaign. will that be a contributor to the past quarter's results? how should we think about that in terms of ad revenues? >> it will be more of a driver in '17 and '18. that's a great callout. thanks for that callout. we found that number doubled year over year. mark zuckerberg said facebook is transitioning to a video first platform. attacking the global tv ad market. they're still behind tv per our proprietary survey. for the year we were looking for $3 billion in video advertising.

it will help incrementally. it's more '17 and '18 as a driver. >> john, thanks a lot. we have to get to john harwood are breaking news in washington. john. >> donald trump has been complaining that his new administration lacks cabinet picks because democrats have not moved forward. well, now he has a secretary of state. rex tillerson has just cleared the threshold for confirmation in the senate. don't have a final vote yet. last i heard was 52 in favor, 42 in opposition. of course, republicans have 52 votes in the senate, have not heard so far any republican nos or democrat yeses. tillerson's confirmation is all the more important because of just what happened in the white house briefing. general michael flynn, national security adviser walked in and said iran was on notice due to missile tests that the united states considers it in violation of its commitments. so having the secretary of state to begin handling that problem, which could get worse depending on how the u.s. decides to

respond, is all the more significant, guys. >> thank you very much. john harwood reporting on the confirmation of rex tillerson to become secretary of state. "check, please" is next. hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. why pause a spontaneous moment? cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess. to avoid long-term injury, get medical help right away

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results after the bell. this will be a real key for technology to see if we can hold the gains year to date. >> this goes back to a conversation we had a couple of days ago. peter navarro. complaining about the euro being undervalued. one of the reasons is because greece has a lot of economic problems. for years greece dominated our headlines. it was like, oh, greece is the problem. suddenly now we are blaming greece on the currency side? listen. i feel like you can't have it both ways. it can't be artificially holding down the currency and not having its woes. a shot out. poor greece. you are blamed for everything. we feel your pain. >> to the super bowl. former president george h.w. bush, bush 41, and his wife will flip the coin to kick off the game. i can't imagine in houston, his hometown, a more popular choice, certainly after what the bush family has been through with his health issues. i think he just got out of the

hospital yesterday or day before. >> he had been hospitalized for almost a month. >> barbara the same. we'll all be looking forward to that. can't imagine a more popular choice. >> absolutely. thank you for watching "power lunch." "the closing bell" starts in six seconds. >> michelle was supposed to do that. >> she is not here. >> not here. welcome to "the closing bell." i am sara eisen in for kelly evans at the new york stock exchange. >> welcome back. i'm bill griffith. apple is the big story of the day. >> again. >> shares up 7% on the back of those blowout earnings last night. tell you what ceo tim cook told cnbc coming up in a little while. if it were not for apple, what would the dow be doing today? >> senator rob portman met with tim took in washington. they talked tax