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that's all for us." power lunch" starts now. >> melissa lee live from a snowy new york city. the storm hammers the northeast, 50 million people under a winter weather advisory of sorts at this hour and 2500 flights cancelled. while it's cold outside, it's a red hot day on wall street. coming up, big money advice for the dow, nasdaq, and s&p 500 hitting record highs. ahead, sky high expectations. the big changes president trump wants to see following his meeting with airline executives. later, not a good thing, what happens when one multimillionaire and a familiar

face for cnbc viewers tries to plow? "power lunch" starts right now. ♪ welcome to "power lunch," i'm wilfred frost. the record rally continues on wall street. the trump trade is back, dollar high, yields high, and equities are, too, all three major averagings hitting new high, and if these gains hold, the s&p 500 sees the sixth up day? seven sessions. financials and energy are the best sectors there, and worthy lagards, and biotech on pace for the best day since january 31. i'm michelle caruso-cabrera, markets are higher at president trump promised details within two or three weeks on his tax reform plan. we got all the angles of the story covered for you.

bob pasani has market reaction, but, first, kicking off with the actual news, amon is live at the white house. >> reporter: the president going through a number of agenda items, attorney general sworn in as seg as session's family was here at the white house. there was a tease, the president talked about the idea of tax reform coming, not a whole lot of detail, though, that's still all dvd. here's what the president said earlier today. >> we're going to be announcing something, i'd say over the next, two, three weeks that will be financial in terms of tax. developing our aviation infrastructure. >> reporter: so the president saying that whatever the plan is that comes from the white house is going to be phenomenal. you can imagine there's a lot of scrambling behind the scenes. lawmakers up on capitol hillment to know what's in the

president's plan. folks downtown in the big trade associations want to know what's in the president's plan, and, of course, today, another big industry group here at the white house today. the airline ceos and airport executives also here at the white house meeting with the president, so this administration comets to go sector by sector, meeting with top business leaders, michelle, talking about all the issues on businesses' plates. >> thank you, eamon. talking about the tease donald trump is. he's a television man, he knows how to tease. what's not clear is does donald trump, the president, support the border adjustment tax provision that chairman kevin brady definitely me lly wants i? we're learning today it's hitting big issues in the senate. senator david purdue said, yes, support lower corporate rates and simplify the tax code. let's go to territorial system, but let's reject the border adjustment tax. he said specifically the 20% tax on all imports is regressive, hammers consumers, shuts down economic growth.

what makes this interesting, he's a junior senator from georgia. not powerful yet, only there two years. however, he's the former ceo of dollar general and reebok and knows about the consumer. >> retailer. >> fascinating to see the way the market reacted to this tease from donald trump that we're getting at tax time, dollar pronounced move, against the yen, moving 1% from the intra-day low off the back of that. people feel that's on the agenda, border adjustment tax, having a strong echffect pushin the dollar up if it comes through. >> after the president made comments on tax reform, let's go to bob at the new york stock exchange. bob, a a couple three weeks, that seems very aggressive, and yet the markets bought in, seemed like. >> reporter: that's right. they only want to hear that it's coming. so look at the s&p 500. we moved seven to eight points on the s&p. that's a lot when he talked an hour later, so watch that. markets move on this, the bond

yields moved up, banks looked up, the kre, bank etf up 2%. big day for the banks as well. russell 2,000 is underperforming since the middle of december, and now it's outperforming today, a sign people are getting back into the underperforming group. high volume etfs, otf, we don't talk about it, but s&p 500, the biggest of the big cap. heavy vehicle newspaper rear, energy a loser all year. that's got heavy volume, and retail, that's curious. that's got heavy volume today, but, again, look at the big retail names, all the straight down for two months. big move up today. i think people are trying to get back in a little bit here. as for where we are in the markets today, here, this is very simple. tax reform moves the market. if you take a look at the full screen, you can see that. we're going higher. even with the discussions about immigration and trade, whenever that happens, it stalls the market out, but the market does not go down on those kinds of worries. the market, right now, is upside, and that's because tax reform is on everybody's mind.

guys, back to you. >> bob, i'm wondering if part of the strength in the move comes from the idea that maybe because donald trump mentioned this today there's tax reform before obamacare. there are been a push to change the chronology here. is that a signal that's going to happen? >> exactly. obamacare as well as immigration is perceived to be a little bit of a kwag mire by the markets taking months and months to reform. but a number, 20% from 35%, a number something everyone plugs in models in terms of tax reform. that's what people want now. >> thank you very much for that. the question for investors, is the market getting ahead of itself with all these tax promises? are the record levels justified? joining us to discuss, scott clemons from brown brothers, and rich weiss, senior portfolio manager from investments. don't look at the day-to-day

headlines, scot, in the notes, but focus on the bigger picture. markets are doing the opposite. is it getting ahead of itself? >> i don't think it is today, precisely because it's important to distinguish between things that affect price and those things that affect value of corporate america. a change in the underlying tax structure for corporate america, whatever form it takes, devil in the details, that improves the incentive structure for doing business in america. it improves bottom lines and equity markets talking about value and price and sentiment. >> rich, do you agree, void the talk of tax reform coming sooner than expected? >> you know, we are taking profits here. we are taking profits off the table from the recent market upmovings. fact is, it's important to remember three months ago, a mere three months ago, this bull market, second economic recovery was virtually on life support, and granted, the new administration open elections were shot in the arm, a shot of adrenaline for the corporate profits and, certainly, the

corporate sector of the economy, but not one major economist at this point has increased at all much less significantly their forecast for real gdp growth. in 2017 or 2018, and so until, if and when the rubber meets the road here, we don't know what's going to be in the plan, when it's going to take effect, when that follows through to the real economy, so we're much more kaurks on this, and, you know, we're very hopeful it goes through, and hope, as we know, good for the soul, but it makes a crummy investment strategy. >> scott, before today, the story of the week was really that yields had slipped, and slipped quite significantly, and in the light of that, we were not seeing equities rally. clearly, yields rising today, equities rising too. does that suggest we do not see equities have a leg higher unless yields rise as well? >> i think they go hand in hand because many of the structural things that the white house has proposed, be it tax reform or

deregulation, longer term things to implement, but things that tend to cost money raise defi t deficits over time. i think the bond market reaction is consistent with the equity market reaction. i'm not surprised to see those two things happen. we've certainly had a breather after the 8% rally in the s&p 500. since the election, the market is now looking beyond the short term ben nits of executive orders, the low hanging fruit that the white house can accomplish on its own to the more legislative, more durable accomplishments yet to come of which tax reform is a big part. >> rich, final question, retail with another good day. are you a buyer of that from here? >> no. again, we're market neutral across the board on u.s. equities. real values we see elsewhere at this point. a lot of good news already discounted in the market, vix futures at all-time lows, irrational complacency, if you will, we are cautiously optimistic on the stock market and the economy right now.

>> thank you very much for joining us, scott and rich. >> all right. as we've been telling you, stocks have risen, bonds sold off in the wake of what donald trump said about potential tax reform. at the same time, already got a 30 year bond auction as well. rick santelli has the details, rick? >> reporter: absolutely, an as risk on all complements. rated moved up long before anything was spoken by anybody. there was a bias much different yesterday, and that actually was good for this auction. a concession that means you like to see the price go down when you buy something. think about all nose president's day sales. today, $15 billion, first time 30 year bonds put forth and yield at dutch onyx, where it was trading for 15 minutes before they buttoned up at 1:00 p.m. eastern. agreed, c-minus. priced where it was supposed to.

nothing more or less. a bit light. 28.9% go to primary dealers, and 62 billion in supply, now under new ownership. wilfred, back to you. >> thank you very much, rick, for that. stimahead on "power lunch," big changes donald trumpments to see following the meeting with airline executives, and some snow day trivia. can you name the spot that typically averages a 1% gain the day after a major snowstorm hits new york? >> can i guess? >> the answer when "power lunch" returns. it's a great answer. mpiesshe inthy, hof t tain d woror, mpiesshe inthy, rld-cls n n as whthstanonador,

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to have the greatest public service with an absolute minimum of delays and with the greatest convenience all at the lowest possible cost. >> nose were some of the more positive comments from the

president. in es sense, what he said, look, we used to have the best airports, now the airports are near the bottom when compared to others around the world. it's a little hard to know exactly how much improving all of the airports might cost. there's estimates it could be as much as $75 billion, but one thing the airlines, the airports, almost everybody agrees with that you could upgrade the air traffic control system to ease congestion, improve flow of traffic. here's the ceo of southwest airlines talking about how that could happen. >> we believe there's $25 billion of waste annually with the system currently being used. that's where our focus is. that's where the airlines for america focus is and where you get the biggest bang for the buck. >> reporter: here's why you need to fix the air traffic control system and fix a number of the most busy airports in the country. you're now looking at a record number of people, almost 800

million people flying in the united states. that was in 2015, and that number just continues to increase, especially with the addition of international flights. i'll be interested, guys, to see what happens in terms of a commitment towards freeing up federal dollars and getting them to the airports for infrastructure projects. how quickly will that happen? >> you and me both, phil. would love it. thank you, phil. the president says the airports are in bad shape because spending priorities have been wrong. >> we spent, right now, $6 trillion in the middle east. we have nothing and obsolete plane system. we have obsolete airports. we have obsolete trains. we have bad roads. we're going to change all of that, folks. >> bring in a veteran to the airline industry, gordon, former continental airline ceo and cnbc contributor. gordon, explain something to me. every time we fly in and out of any new york city airport, there's all kinds of user fees, and yet we users don't seem to

see a better airport. is there money there that's not being allocateallocated? can it be fixed quickly? >> it's not going to be quickly. it's trying to keep up with a vehic volume as they grow. obviously, newark is an easier airport, but there's big investments in laguardia, so they are addressing those concrete brick and mortar issues. i think the biggest upside is the air traffic control system as mr. kelly mentioned to make it an efficient air transportation system, thereby saving billions of dollars of people's time and money. >> give me an example. i mean, does that mean you're not sitting for 20 minutes waiting to take off when you know your ticket says you take off at this time, but there's all kinds of ran don delays that happen? >> we're running a world war ii type of radar tracking system in our aircraft traffic control. that means the satellite based, but needs to be prooiftized like in can ka, and delays, wasted time on the runway, your wasted

time, will be put to good use by letting you get to the destination on time safely and with your underwear. >> hopefully with the underwear, gord gordon, especially if you have them on your person. the possible things that could happen to improve infrastructure, whether it be air traffic control or improving an airport, as a former continental ceo, what has the most sensitivity in terms of if you did one thing, what impact would that have on the eps? >> all do. >> what is the most exciting if you had to choose one? >> well, i hope one time, for sure, they make and privatize the air traffic control system to modernize it so we could have more productive use of the air space, thereby getting you to your destination on time. i think that's the biggest upside. of course, the brick and mortar and parking needs to be

addressed for the volume. >> gordon, on that point, which is more beneficial for airline stock prices? infrastructure spend on airlines or some changes to the regulations? i mean, if we get improvements to the airports, is it really just a benefit for those people that use them opposed to stock prices of the airlines? >> well, those were airport fees, and that's what nay are supposed to produce, the infrastructure upgrades to the airport. the airlines want to grow, and what inhibits growth are regulations, and issues today are the gulf carriers subsidi subsidized. that precludes growth. some of are the norweigans using viens from ireland to temper traffic across the north atlantic. those are about jocbs, and thats on their minds as far as protecting jobs here in america. >> gordon, thank you very much for joining us. >> you bet ya. major airlines trading

higher following today's meeting at the white house. bringing in david vernon, airline analyst, david, welcome. you recently upgraded delta as well as american, just this week, in fact. in terms of regulation, you think of the banking industry, rolling back regulation, but what is the biggest regulation hole holding the airlines back, and if you take that away, what happens? >> well, i think some of the regulatory oversight is the biggest area to your question you put to gordon about where is the biggest impact on eps? if you modernize the air traffic control system, you cut down spacing between the planes. >> e more flights. >> more asset velocity allowing carriers to earn more money on fleets, bring fares down, grow more in markets they could not serve. that inefficiency in the air traffic system credates bottlenecks. that's the biggest thing to move needle as far as regulatory change. >> right. in terms of eps sensitivity, what could that mean?

which airlines benefit from that the most? the ones with the highest number of flights within the united states because they are most exposed to air traffic drcontro for instance? >> some of the domestic, waiting for domestic flying and utilization. it's hard to measure. what it does is give airlines a chance to lower the operating cost. would they then choose to save as profit or choose to maybe reinvest that to grow more. either way, upside to numbers right now, but more importantly, upside to returns and stable business, which is what investors have been worried about with the sector. >> we talk about the threats from various international airlines that perhaps could see regulation tightened under the trump administration, as we heard from gordon, and we have a play of the potential benefits airlines get in the areas? they do not compete domestically. >> no. look what's happened, one of the things that got the sector to

rerate in the last couple years is that real yields held in in real terms. not big declines in overall average pricing. the domestic market's stronger than the international market. international yields are depressed because of excess capacity and oversupply. what the large airlines in the u.s. argue is airlines from the middle east have been maybe abusing rights under agreements to dump capacity in that otherwise would be out of the market. >> subsidized often by their governments. >> that's the argument. >> right, yeah. david, thank you, david veron. up next, early check-ins, cheap flights, and gallons of mayonnai mayonnaise. the all-time high club when "power lunch" continues. ou anene escaromonoto.

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welcome back. 3 vp stocks at 52 week highs, and a couple of them all-time highs. priceline, marriot international, costco, honeywell, and marshall mcclennon. >> if president trump can't make twitter great, who can? that story's ahead. >> snow day trivia. who averages a 1% gain when there's a major new york city snowstorm? i got it wrong. >> it's the second time we teased this. the answer coming up. still not telling you. take a look at the picture. you never will guess who is behind the wheel of the snowplow. let's just say it's not a good thing.

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hi, everybody. i'm sue herera with your update for this hour. turkish security officials say four detains isis militants -- excuse me -- were allegedly planning to carry out a, quote, sensational take in turkey, arrested with 24 explosive belts and other weapons in an anti-terror operation near the border with syria. general motors recalling 107,000 older sports cars worldwide because of a faulty sensor that disables the front seat passenger airline bag. sol stas and 2007 and 2010 sat turn skies. the cars are no longer made. after hosting a a dozen olympics since 1992, bob costas called it an olympic career, passing the torch to mike hosting the winter games in seoul, south korea. he made the announcement on "today" this morning. >> i'm going to be, like, the rest of the country watching

mike who will be an abled successor in korea for the winter olympics beginning a year from today. >> and we wish him the best. that's the cnbc update this hour. back over to you guys. >> i just cannot imagine an olympics without his voice. >> he said he might contribute, but he's not the host of the olympics. >> well, we'll see. good for him. thank you, sue. >> sure. a series of tornados slammed into the southeastern united states this week. the latest hitting st. johns county in floor florida and officials say winds peaked at 100 miles per hour knocking down power lines and trees and breaking windows across a half mile area. a blizzard crushes the northeast at this hour. here's chris from nbc news with the latest, chris? >> reporter: yeah, good afternoon. just as you tossed to me, the wind started to pick up here in new york city central park. the snow is tapering off for the better part of p our now, seeing the final bands of the snowstorm

come through. latest snow totals i saw were 9 inches here in central park today, a little bit more than that out on long island, but, of course, this storm is moving to the north and east, and some of the worst parts of it going to be on long island and on cape cod in massachusetts. both places under blizzard warnings, but we just learned in the last couple minutes that now boston has been moved to be included in a blizzard warning as well, so, of course, conditions up in that part of new england really starting to deteriora deteriorate. around here in new york, you know it was a mess of a day with lots of problems on the roadways. of course, a million school children are out of school today. new york city does not like to cancel school because it causes parents to scramble to find child care for their children, but today, as you can probably see behind me, a lot of children are out with their parents today in central park sledding, having snowball fights, meanwhile, transportation is an absolute mess.

jfk airport today shut down until 2:00 for incoming and outgoing flights, and out of laguardia, also, a lot of mess, so people here enjoying the weather when they can, but for those who have to go to work today, not so pleasanpleasant, ? >> thanks for the update. a scary start to the morning in lynn, massachusetts. the car slid at the top of the icy hill slamming other cars as it spins, barely missing a pedestrian. dozens of -- >> holy smokes, watch out. >> east coast struggling with the major storm. gosh, that's -- >> get out of the way! get out the way! >> just keeps going. >> oh, i'd go back inside. >> lucky escape. >> now to the reveal of the mystery snowplower. it is? martha stewart. that's right. under that thick yellow jacket and black wool hat is america's domestic diva saying i decided

to plow, and now i'm stuck, darn. maybe snoop dog will rescue her. what was she thinking? >> now, speaking of snow, guys, it's time for that big reveal. it's no surprise that netflix is a winner in a snowstorm. we crunched numbers, and they gain 1% the day after new york city is hit request four or more inches of snow. as for the broader markets, the s&p 500 typically trades lower. there we go. people signing up, perhaps. >> i wonder how many instances there were since 2010. >> probably -- >> four inches in new york city. >> the stock goes up because we presume more people sign up because they have nothing to do. >> that's the rationale behind it. i like it. >> makes sense. >> moving on, the most powerful leader of the free world may use twitter as the prefer method communication, but it's not made the company great. they follow a revenue miss. what's the biggest challenges, we are live in los angeles with

the details. julia? >> reporter: well, all the media attention to president trump's tweets is not increasing twitter's revenue. not only did the revenue in the fourth quarter fall short of expectations, but the company's earnings forecast for the first quarter of this year was about half what analysts projectsed. twitter added two million monthly active users, half the additions of the prior quarter. the ceo says double digit percentage daily user growth confirms that product changes are on track saying this year, the company focuses on turning around revenue and taking on heightened competition. twitter shareholders, steve ballmer, critical of the turn around so far. >> i'm going to stand by the ocean that says running two companies is probably not the best idea, and i'll stand by the notion that jack's a very creative, innovative guy as well as evidenced by the fact he started two amazing companies. i think now's the time for him

to focus down, at least, from my perspective, on the stock i own. >> reporter: when asked on the earnings call if he could continue running both twitter and square, jack said he has mountain teams in place to continue running both. guys, back to you. >> thank you, julia. straight to the analysts with their take. my corral grahichael graham is hold on the stock, and victor has a sell rating on the stock. great to have you with us. kicking off the interview with the notion, can, michael, jack dorsey continue to run two companies at this point seeing the forecast for the current quarter? >> it's a challenge. the two officers are across the street from each other. not far to go in the commute from each other, but there's two big companies in fairly different parts of the market. square in financial services and twitter being a media company. you know, you have seen a lot of management turnover at twitter, so i think that could be a sign that maybe some more change and

focus is needed, so i don't think it's twitter's biggest problem, but it certainly could be one of them. >> you're sort of looking past the first half, a and you're going out to the second half. you're still optimistic because of the rebounding popularity, the new political climate, cautiously optimistic revenue picks up in the second half? why? what evidence do we see that that's going to have in the second half if we don't have any evidence of that happening since the election? >> that's a great question. i mean, the thing that led us to be cautious on the stock the last year was that we saw the user engagement deteriorate a little bit. we're still not, you know, recommending the stock, but we do think that there is a little bit of a light at the end of the tunnel because now we see engagement metrics turning positive again. i think it was mentioned in the segment that daily active users grew 11%, morn. monthly active users grew 4%. the typical user spending more

time on the platform, an indicator for the rest of the users and advertisers to come in behind that. they are clearly not out of the woods, but that's really aed fwoo light at end of the tin. >> victor, increasingly, a lot of people think this just can't be a stand alone company, that twitter should be a product that's part of a portfolio. is it time for this board to say, you know what, we asked too much. look at the numbers. now time to lower their expectations and hand this off to a bigger company that maybe can help it out? >> caller: yes. actually, they think they need to seek inquirer soon. i think the competitor, as is just as intense and insurmountable for twitter as we progress. snapchat, facebook, and more, apply for advertising dollars, demand is shifting from twitter and other platforms, advertisers we speak with are telling us that they are getting better

returns on the alternative platforms than twitter. there's a lot of work to do, i think, to compete against platforms and video, and compete with video, but that would be insurmentment. there's challenges. at some point, a few things need to happen. one, jack needs to decide which company he wants to serve. that's one. number two, they have to seek an inquirer, and operationally, this should focus on video, only thing working for them right now. >> victor, i mean, this is raised every quarter, this is an issue, but they are becoming somewhat more a news platform than a pure social media platform, and there's a lot of competition for ad dollars with other social media players, should they ever consider changing their model and start charging customers? the likes of the "new york city times" "financial times" gained since the election. >> caller: that's the wrong way

to go, just start charging for usage. they'll see precipitous job in the user pace. so that's not the rights way to go. if i ran twitter, invest heavily in video because that's working. even though there's significant competition, they need to invest aggressively there. they are continuing to propose product changes. i like twitter. i use it multiple times a day. it's a good product, but you have to communicate that and do a better job communicating that to the masses. it's not all doom and gloom. things could be done, but i think right now, giving competitor pressures for advertising dollars, from competitors in the market, that that may prove insurmountable for them to grow advertising revenues. >> thank you very much. also, michael, thank you very much. twitter down some 11% today. so as earnings season comets, ceos are asked, talking about opinions about president

trump. last night on "mad money" jeff weighed in, and morgan brennan with the details. >> that's right. ge's ceo is saying there's a lot of like about president trump's plans, infrastructure, regulatory reform, tax reform, but he largely slugged off risks saying we have to keep running our company. >> we're a net exporters. in other words, we run the president's play. we're at $20 billion u.s. exporter, export more than we import, and i think at the end of the day, look, we have 5% of the world's population 25% of the world's gdp. we create great jobs here when we sell products every place. i think the president knows that. >> adding, quote, you're winning, mr. president, but keep in mind as a net exporter, ge would like to see a border adjustment tax. also, after jim pressed on disappointing quarterly results, he doubled down on guidance.

>> we're forecasting 3-5% organic growth, 100 points improvement, good bag log and momentum, a strong 2017. i like the way we're positioned in 2017. >> you're going through the bears. >> and there are bears. this stock's dramatically lagged the market since he took over in 2001. to that, he says ge's a different company now, shedding financial services and outperformed the s&p and xli over two years. guys, if you take a look of shares of ge, they are up slightly today, but as you mentioned, it's been a major under performer in 15 years. >> morgan, thank you, the ge story. three big stock calls of the day, daily dose of "street talk" is next. say ,

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special edition of "street talk," michelle and wilfred are here, accurate substitutes for brian sullivan, although we love him. micron tech, stronger turn around, less competition, lower financial risk, more chip demand, bank of america's price target is $35 a share, up 20%, a monster performer, up 146% in the past year and outperformer compared to the semiconductor index, going gang busters. >> a huge move. >> samsunk has done fantastic, and video, related, and -- >> all right, second stock is baker hughs, positive to neutral, the analyst says the

recently sell off created a buying opportunity. there's upside opportunities associated with the u.s. spendsing cycle seeing more drilling here. synergies from a recent merger and growth opportunities that koulds result of a partnership with the diversitied field services company. you see the stock is higher by two-thirds percent. >> the selloff is the market's stall. look at the longer chart, it's a run. >> i wonder if the border adjustment tax has anything to do with it? >> not refining as much. >> no, no. >> could potentially. >> oil is close to rebounding over the last 24 hours as well. downgrading the stock from neutral from buy. the stock's valuation says while they are still fairly positive on panera success long term fundamenta fundamentals, they recommend take a force from the stock, of course, off the back of earnings yesterday and strong runup in the price yesterday as you see from the chart, one year up 25%.

>> the new 52-week high in today's session. to the daughters of steve daughters, bill gates, michael bloomberg, and bruce springsteen have in common? the answer when two minutes. a hint, it has four legs. you're watching "power lunch" with melissa lee, michelle caruso-cabrera, brian sullivan, and tyler mathison on cnbc. i ve usagis mepe mdd e se i. oneointi dian to aifntny thare

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welcome back to if the power lunch," dom has a market flash. >> shares of vista outdoor sports, incoming guns and ammuniti ammunition, down 20% today. third quarter profits beat expectations, but the miss on sales. they slashed their full year outlook in the company's statement, the ceo says he expects revenues and margin pressures to continue next year as well. late last month, you recall the company warned there was a challenging retail environment forced to record a material asset impairment charge between 400 and 450 million dollars. back over to you. >> i have a question.

>> sure. >> because donald trump won the election? so much of gun sales were drip by fears that president obama and then president clinton would increase gun regulation. >> there's been analyst and trader commentary today with regard whether or not a trump victory dampens demand for guns. there was a fear -- i shouldn't say that, a concern among people who are enthusiast of this kind of stuff, that if there was a hillary clinton win, that the gun industry would see a surge in sales as people rushed before there was regulations on some of the pieces of equipment, but, again, trump victory may say it's part of the story here that's playing into the narrative, although, it's hard to pin a 20% drop fully on just that fact, guys. >> dom, thanks very much for that, 48% the share price decline since the election. it's thursday. a brand new episode of the secret lives of the super rich. what do the daughters of steve jobs, bill gates, michael

bloomberg, and bruce springsteen have in common? a love for competition horse jumping. >> jumping over six foot tall fences at breakneck speeds at south beach are worth millions, but the young women riding them are worth billions. that's steve job's youngest daughter, eve, competing against jennifer gates, her dad, bill, of course, the richest man in the world. for gates and jobs, it's a friendly rivally, like their dads have had for years, and this is serious business for bloomberg, daughter of billionaire michael bloomberg. he's watching her ride frustrate vip section. >> i love the competition, and i always said i would never just ride for fun. it's the top level or nothing for me. >> our wealth reporter, robert frank, with us now with more about this. >> before we get to horse jumping and show jumping, let's look at the concentration of wealth in that one ring. you have the daughters of steve jobs, bill gates, michael

bloomberg, bruce springsteen all, you know, over 250 billion worth of family wealth all in one rink. there's not a single sport in terms of global circuit that's wealthier than show jumping. they rarely allow cameras in, and we got in. >> is polo concentrated? >> team owners are, but the riders are not billionaire heiresses. i've been a lot of matches. the horses get up there -- >> i have not been to a lot >> not as valuable. >> wait, wait, wait. [ laughter ] >> so, tell me, you've been to at least one match? >> i have, but not a lot. >> okay. >> i have too. [ laughter ] >> i have too. >> i've never been to one. >> really? >> a fun a day as it is, i do not deny that. >> horse is how much? >> so these horses top -- they are sell fran say, the top breed for show horses go between

10-15 million dollars. >> wow. >> now, georgina is a savvy horse woman and buys them once she'sst she's owned them, she can resell them for more money. a rare people because she's owned one, it's got the prom nans of a bloomberg horse, and they are worth more. for most people, it's not a great investment. >> how much does a show jumping horse cost relative? >> thoroughbreds can get up to 20 million for the top breeding horses, so there's -- mid market. 10-15 million. >> super rich horses are not your fancy, what about super rich houses? >> check this out. the super sugar lips clothing brand, famous for affordable fashion brand, but now the founder, charles park, is breaking into the business of making and selling ultra

expensive homes. check this out. >> when you walk inside this modern mansion up for sale in beverly hills 90210, you are greeted by a $40,000 chandler, half million work of art, and high-tech machine that wraps your shoes so your shoes never touch $900,000 worth of flooring. it's a five star resort, but your own. successful l.a. broker aaron kerman is impressed by the sleek new 43.9 million listing, and the lush hillside o say sis out back. >> it's the garden of eden. if all that's not enough, the wine cellar has a thumbprint recognition system, the landscape was a million dollars with importsed olive trees, and doors of the home cost $250,000 imported from italy.

>> i like the idea of the wine cellar. the shoe thing, ridiculous. >> you can't take off your shoes? >> i like it. >> you like it? >> rather than have your guests take off shoes, put them through the shrink wrapper, floors are clean. when the floors -- >> or you just clean the floors the following day. >> 800,000 floors with a special stone that can't get any marks on it. it stays that pristine white. you get a shoe wrapper. >> that material is not meant to be a floor. >> exactly. bottom line. >> could be a ceiling, a wall, a counter. >> what about a $50 million horse came into the house? >> shrink wrap the hooves. >> that's the next episode of "secret lives." >> i can't wait until next thursday. we love the franchise, robert. don't miss "secret lives of the super rich" tonight on cnbc, 10:00 p.m. eastern time and pacific time. don't want to miss it. all right, thank you, robert. >> thank you. one of the best performers this time last year is doing the exact same thing again. the reveal ahead in the second

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i'm michelle caruso-cabrera, here at the nasdaq with melissa and wilfred, two hours until the closing bell, this is what we are watching at this hour. president trump meeting with airline ceos, an announcement on taxes in a few weeks, two to three. stocks sore to new highs on the comments. retail rally, sector up 1% today and on pace for the second straight day of 1% moves. names to watch straight ahead. and then charles is charged, former new york knicks player, charles oakley arrested after a brawl at madison square garden. >> you see the new york city police there, security, looking over, apparently -- >> another record setting rally, dow and s&p 500 and nasdaq hit new all-time highs, nasdaq's biggest move in two weeks. shares of tempur saley, they adopted a plan despite the big move, the stock is down 30% this

year. dunkin brand up, beating estimates, raising quarterly dividend dividends. >> to dom looking at individual stocks setting records today. dom? >> interesting moves overall, netflix record high today, look at the sector heat map overall, 100 stocks in the s&p 500 in the red today. you see there about 50 stocks per line, two red lines here, 50, 100 shares total in the red, predome in a minutely green so far. look at the sector heat map, again, showing signs of life here, only materials and utilities going to the downside so far today. financials, energy, industrials, the more economically sensitive cyclical sectors doing heavy lifting. we want to look at some of the e etfs, showing interesting stories in the first part of the year, the early going so far as well. if you look at the ishares emerging markets etf, that's one, nice move higher, up 8%.

more macro theme playing out as well. check out what's happening here because this is an interesting move. if you take a look at the overall picture for the gold trust and the gold miners, you talked about this at the end of last hour, so far this year, the gold miners and gold etf perform best in terms of asset class and etfs out there, mirroring last year. so far, the gdx, the market vectors, gold miners, etf, up about 20% year to date. in the same time period last year, it was up 22%. melis melissa, call it di that view all over again with precious metals, miners, and stocks with them, guys, back over to you. >> thank you. happening now, white house press secretary sean spicer briefing, another day for the president. let's get to john harwood in washington, john? >> he came out, opened the briefing by recounting president trump's swearing in of.

>> jeff: sessions, executive orders signed, directing sessions to crack down on activity and toughen punishments for crimes against law enforcement officers. in addition to the swearing in, president trump met with the airline executives promising them help with deregulation, also with infrastructure, we've fallen behind infrastructure, and he said this on taxes. >> we're going to be announcing something i would say over the next two, three weeks that will be phenomenal in terms of tax, and in developing our aviation infrastructure. >> i got to tell you, republicans on capitol hill don't know what the president was referring to. there is no prospect of serious progress on tax legislation until several months down the

road later in the year, and republicans do not have a common plan between house and senate. you had david, republican senator from georgia today, coming out with a blistering statement criticizing the house proposal for a border adjustment tax saying it would harm consumers, cause seniors' retirement savings to evaporate, and hurt economic growth. we're a long way from having tax legislation on capitol hill, and there's no clear signal as to whether it's going to be a comprehensive rewrite of the code or a smaller version of corporate tax reform or, perhaps, even just international tax reform, guys? >> got it, good run down, john. thank you so much. talk more about president trump says he's going to announce taxes in the next few weeks. investors like what they are hearing, you what's it mean? you heard what john said. what's the plan? can he get it done? a former congressman with mercury partners, good to have you here, sir. >> nice to be here. >> what do you think of what president trump said because on

o'reilly o'reilly, he said obamacare replacement before next year. today, talking about taxes and tax plan within the next couple weeks. is it possible that the chronology shifted here under the pressure of people saying get tax reform before you do obamacare? >> i think that that's possible. i think that's desirable. i think that there's a lot of optimism about the direction that the president wants to take us on taxes. i think that there's been a prolonged uncertainty because of the foot drags in congress on approving the president's cab innocent nominees, and once they are confirmed, you see uncertainty lifted, but, certainly, we've got further away from agreement on how we're going to approach the issue of health care. i believe that the president can move the tax issue along much more rapidly than he can move health care along, but that's very good for the economy. republicans in congress have a huge interest in getting the tax

component done because it's the most stimlative thing we can do in the short term, and they need a strong economy for the 2018 midterm elections. >> here's the thing, there's republican civil war over the tax code. this is the senator's letter sent out today criticizing what chairman brady wants to do with the border adjustment tax. i mean, if they were not doing that, i think it would be easy, but there is this huge battle underway. what are you hearing about how that plays out? >> i think that it's -- i think the congressman brady has the right approach. you need the border adjustment tax for overall reform they want to do. it's a tough sell. all the people adversely impacted or think they would be adversely impacted by the border adjustment tax are told, don't worry about it, the dollar strengthens and takes care of your problems. the response is, that's an economic theory. if your theory is wrong, we're screwed. people against it are not likely to be moved by the arguments put

forward by congressman brady. >> sir, one second, sorry to interrupt you. we have to listen to sean spicer. >> one is fy17 budget, you can get obamacare repeal and replace done and use fy 8 reconciliation budget to utilize second opportunity, comprehensive reform. we recognize the need. i mean, it's been since 1986 that something like this of this scale magnitude has happened. the president recognizes that middle class americans need tax relief, that is going to be part of that, but we recognize, and you saw that in all of these business meetings, whether it's inversions or other means in which people are shipping jobs overseas or reestablishing themselves or profits kept over there, we need fundamental comprehensive tax reform that addresses both sides of those -- of that income stream. >> if this is a mix between what was out there in the campaign and what else republicans put out there before because there's some similarities, but, clearly,

some differences as well. >> you have to wait before we put out the outline, but i can tell you that it's -- it's something that's going to spur economic growth. it's going to recognize the need to give so many working americans the relief they need, but more importantly, part of the issue that we continue to see over and over again with businesses is that we're facing competition from abroad because of the tax code. it favors companies from not wanting to stay, and the president recognizes that, and what he wants to do is create a tax climate that not only keeps joc jobs here, but incentivizes companies to come here, grow here, and create jobs here, to bring their profits back here, so i think, i don't want to get any further ahead of it, but i'll tell you it's going to be the first time that this nation's seen a full comprehensive tax reform in a long, long time. yeah? >> yeah, the president this morning tweeted that our country's, quote, bogged down in conflict all over the place. where are we bogged down? >> all right.

we're going to come out of that because they stopped talking about tax reform. ben, were you able to hear that? >> yes. >> when you listened to the first part of sean spicer's answer, the chronology has not changed. plan is obamacare through 2017 budget and then around august, hopefully, they do the 2018 budget and corporate tax reform. is that what you heard? no change to the chronology or hesitation? >> i heard that, but that's not resolved yet. i think there's going to be more political pressure to get the tax reform done sooner because it's the only stimulus we can do in time to impact the economy for the 2018 midterm elections, but, you know, both of these issues are huge issues. both of these issues need clarity brought, and as i said before, the most important thing is to get cabinet people in place. now we got secretary price in place to help on the issue of health care reform. but this dragging of feet in congress on approving cabinet nominees created uncertainty around all issues. >> yeah, sure. the senator's letter, he's a

junior senator from georgia, only been in government for dtw years, a former retail ceo. how significant is it that he sent this letter? is this just him getting publicity or him staking out this position, truly significant? >> well, i think, you know, he's a very good man, but, you're right, he's more junior. doesn't mean he does not matter, but he's more junior than the people crafting this. he's raising the concerns that all the people that would be affected by the import tax are raising, and retailers, manufacturers, importing their parts as well as some consumers. as i said, there is an argument on the other side, but it's an economic theory argument about what happens to the value of the dollar if we impose tax. they are saying, don't give us any theories, we'll just leave the cash on the table, if you will. >> all right. mr. weber, thank you so much for joining us. >> thank you. >> ben weber. new alert, mexico central bank

raised rates to 6.25 from 5.75. big surge in the peso as a result of that. let's bring up the chart. you can see. that's a chart of the dollar we're showing you. that decline shows how much the peso strengthened because of this move. mexico's raised interest rates several times as donald trump started to run for president. has had to spend billions in order to defend the currency. really, the currency's got hammered. >> all right. here's what's next on "power lunch," coke is one of the few down stocks lower today after reporting earnings. which is a better bet? coke, pepsi? ugly scene in madison square garden last night. does that hurt the stock, and why? it's main drug works really well. all that and more coming up on "power lunch." you're watching "power lunch" with melissa lee, michelle caruso-cabrera, brian sullivan, andty ler on cnbc.

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welcome back to "power lunch," shares of coca-cola down 2%, the seventh straight drop. it met estimates, profit met the street, but guidance is short. we spoke with coca-cola's incoming ceo earlier about business in north america. >> we made a transformation, obviously, to north america. we focused the portfolio on more cat gores. we upped the markets investment. we improved the execution. we transformed the bottling system, refranchising it, and

the whole team pulled that together, and now there's two really strong years capped off with a great fourth quarter. the north american business is humming. a lot to do in 2017 with the biggest year of refranchising, and we're confident that the team is confident that we can continue to drive that business forward. shares of coke down today, and under performing pepsi. what's the benefactor, coke or pepsi. rating coke an outperformer, $49 price target, and pepsi is a market perform with a $106 target. sarah, starting with you, you interviewing the new ceo as we heard. what was your main take away? what can we expect from him? >> incoming ceo, good to see you, wilfred, expect to see continuation. there's more work to do on the strategy and transformation of coca-cola. they are turning the company

into an asset light company, spinning off bottlers, taking a year, leading to messy results. they have to work through foreign exchange issues and diversifying the portfolio for exposure to bottled water, juices, teas, away from the carbonated beverages that is shrinking. he has to execute on that turn around, leaving coke in a better position, at least, profitably, higher margins. the question from there is, how is he going to tackle this secular trend after lower soda consumption. they have been a little bit behind the curve here. so far the answer to the question has been smaller cans and smaller bottles, which they did see 10% volume growth, but investors are excited that there's eye on mergers and acquisitions, background is in that, and to cut costs further, that would also potentially lead to higher profitability. >> so, nick, a lot on the agenda for the incoming ceo.

shares reacting disappointedly to the numbers, they are down, what's the take away for why shares are down this afternoon? >> definitely. the bottom line is 017 guidance was short of consensus expectations. baht ton line, it was not operating. it was not bottling or price driven, so we see a lot of what i call green shoots in the coke story. north america has been exceeding expectations for the last five quarters. international markets are tough. company with global exposure that quarter miss the expectations. i think coke's issue is more mechanic crow than company pacific, and keep in mind, sprite grew 5% this quarter or 4%, and coke classic was flat in a declining category. they are taking share, i think the marketing is working. refranchising is affecting as well. >> bring pepsi into the debate as well. what's the reason for why coke has under performed pepsi in recent months?

>> well, first of all, pepsi is a snacks company. yes, it is a beverage company and biggest competitor to coca-cola, but half of its business comes from global snacks, and it owns frito lay with the most popular brands out there. fritos, cheetos, and more. it's 50% of the profits, it's the profit engine of pepsi and let the ceo go into the healthier, better-for-you categories, like naked juices and hummus. they get on the trend faster than coca-cola. outperformer, higher margins, higher growth, and a little bit more focus there on the healthier eating, but, again, there's the snack section of the portfolio. when it comes to coca-cola, can coke get to some sort of growth, volume growth again, and not just growth from pricing, and that's going to be the big challenge as he takes over.

>> and you like the snack business of pepsi, but in valuation terms, you still perform coca-cola as a stock, right? >> absolutely. >> look at coke and pepsi over the years. they go in cycles. they under perform for four year, but this is a precipice of a derivative call on coke. they will outperform pepsi. the expectations on coke are low. not so much for pepsi. i think institutional ownership for coke is low relative to pepsi, and so, you know, at the end of the day, we go back to the old say, buy low, sell high. coke is actually an interesting opportunity here with the valuation, and keep in mind, there's a 3.4% dividend yield equaling the highest across coverage, so i think that's a good value for a big cap company like this. >> remind us of your price target? >> there's warren buffet. >> price target is $49, so we still see some pretty decent upside here. >> lovely stuff, nick, thank you. sarah, also. thank you as always.

>> so in the old days, everyone got an hour-long lunch break. not anymore. now the power lunch people get is this one, our daily program. is the lack of lunch hurting restaurants? susan lee has the story. susan? >> i liked the introduction. remember wall street, lunch is for wimps? people are taking that to heart. fewer and fewer people are going out to eat and grabbing that midday meal, and you're probably wondering what the reasons are, start with the labor prapgs rate, which has been declining since 2010, and for every.1% move, that translates to 200,000 people dropping out of the work force. that means less people to step out to buy or eat their lunch in restaurants, also, more people working from home and more online shopping. that means fewer consumers are grabbing a meal while out producing and shops and mall. lunch visits to fast food and other restaurants dropped by 2%,

the main reason that foot traffic stalled and dropped for full service offerings in 2016, and it's not just lunch, but weekend, dinner, and independent restaurant visits are also showing a weakening trend, but on the flip side, when people are going out to eat, they are averaging check size is larger, and you have to remember that even with fewer visits, and visitors, prices are going up to make up for higher labor and capital costs. other bright spots headed into the year continued strength we see in morning and late night snacks, you got drive-thru visits, and breakfasts are bringing people back. >> i thought you said with the average ticket price even though they eat out less, it's special occasion, but it's not? but prices are going up. >> prices are going up. it's a restaurant recession, so restaurants cut prices, right? that's not the case. you pay for higher wages, you know, pay the represent, and the capital costs. period, with interest rates.

>> i eat at the desk. >> me too. >> i can see that. >> right now, my lunch is here. >> harder to find quick healthy meals in in new york than london. that's my take away. harder and expensive in new york. london is expensive, in general, not shying away from that, but new york for quick meals a expensive. >> ten bucks easily. thank you, susan li. >> bubble wrap robots and zen. a typical evening at michelle's house. >> how did you know? >> yes. it's a good, bad, and ugly stocks coming up next, plus, you may not have noticed, by viacom up 25% this year. can new leadership turn the troubled company around? we're right back. nnnnting o amg g ading knowledgth areatdr

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time for the good, the bad, and ugly in today's trade. first, to the good, zenesk makes software, and they lost less money than expected, and sales were better as well. the shares of that up 15% today. on to the bad, sealed air, this company makes bubble wrap, earnings beat sales, below what the street looked for, shares

down 8%. it's on to the ugly, which is irobot, the company behind roomba vacuum, which melissa speaks highly off, results looked good, but guidance is troubling, was up 50% in last six months, but guidance does not justify continuing net run, and now shares are down some 15%. >> all right, a quick correction here on tuesday, we misstated january returns review of the hedge fund industry players, glen view, persing square, partners, and global posts losses for the month, and glenview posted a return to its investors of better than 5% last month, and persing with gains of a third percent, and trian with a loss, and it should be note returns for trian are through the 27th of january. imagine this. a publicly traded company where the chairman is verbly attacked

by a former very famous employee. that employee is physically removed by security, and it's all caught on camera. well, it happened last night at madison square garden. would you invest in the company? can the stock rebound? that powerful discussion on power lunch next. ututwh wcallou m! n tom

hi, everybody. i'm sue herara with your update at this hour. rouhani says his country's weapons were for defense, with no intention of attacking its neighbors. they were on notice for a recent missile test. listen to that. the biggest storm to hit the northeast this year continuing toregion. a woman in connecticut captured that a rare thunder snow. more than 3400 flights cancelled. american airlines plane made an unscheduled stop in st. louis this morning for what an airport spokesperson called a security issue. all bags laid out on the tarmac where a bomb sniffing dog

checked it out. the flight went from columbus to phoenix. there's never a dull moment for pandas at the research center in china. in fact, you call it a bit of panda-monium. three cubs stealing from each other ate bamboo, and a fourth came to play, and the ban da with his taken took from another, and, oh, and in another incident, a panda trying to scare a play mate tumbled off the wooden platform. they are just so darn cute. that's the news update this hour. that's my very favorite animal in the whole world. can you tell? can you tell? >> everyone agrees. everyone agrees. >> so cute. >> back to you guys. >> sue, thank you very much. >> sure. >> we are 90 minutes from the closing bell, and another record day for stocks. dow and nasdaq, and s&p hit new highs at president trump promised tax reform. the naz dat saw the best day in two weeks. goldman sachs, jpmorgan, and nike led the way for the dou,

and, of course, banks declined for first three trading days of the week. the gold market closed for the day. let's get to the cnbc commodity desk. >> nice to see you in the afternoon. crude oil settling up now about 1.2%, still dancing around the 53 per barrel mark in the narrow trading range we've been sitting in since actually before the beginning of the year. now, the supply and demand fundamentals are not supportive of prices for crude. the supply gut is a trend, though, not abating. they say the price is just bouncing offal bottom of recent ranges, and for reasons we see the move higher. oil and equities continue to dance in the same direction. we saw it yesterday. it is true again for today. let's go a quick check on natural gas as north ooeeast bas a snowstorm. smaller an expected inventory, and prices on the contact slightly higher. a relatively mild winter, so gas prices are bouncing off two

month lows, the trend that we've seen most recently, michelle? >> that's true. thanks. one of the stocks helping to power the s&p to now highs is viacom. yes. they are surging 25% already this year. david faber sat down exclusively with the new ceo. the street likes what they are hearing. >> yes, they liked earnings this morning. affiliate feed growth earnings up, providing momentum to the shares, and the new ceo at the company held the job for a number months, and it was a very difficult for viacom for years of mismanagement. he comes in and today present his new plan, his strategic plan for helping turn around the company, focused on creating six flag ship brands, most of whom already known, there ri that, nick, bet, nick jr., mtv, and comedy central. they will rename the spike

channel and reprogram it to a certain extent to combine them with some of the more dominant cable network properties. all this takes time. i asked the ceo views on how quickly the turn-around in his mind can actually occur. >> my objective for vaccine is to have a continued evidence of improvement, so it's not about a story one day or three months from now or end of the fiscal year. we'll continually put points on the board. in the case of mtv, we already -- in the u.s., we started to do that, and as we get to the up front, we'll unveil a new slate of programming, on air in the fourth fiscal quarter in the summer. in the summer, new programming. i believe that trajectory continues. >> the question is about the paramount studio, which is not doing much of anything when it comes to profits for some time. revenues declined year after year since 2013.

something backish admitted, but he is a believe they'll right that ship as well, cutting out overhead costs and nancy gracing the revenue and profitability of what's an important unit for the company. >> we will restore growth and probability, a typical film studio should be in the 8-12% margin range. we'll get there. >> how many years? >> it's exciting for the company. >> how many years? >> i think it'll take -- two and a half years, you know, we'll be on a continued improvement, and paramount and it has, i would believe, solid performance in the back half of the year, and we'll keep going incrementally. >> one thing they did not talk about selling any part of the studio, you recall they embraced the plan in selling 50% of the paramount, establishing a significant value for it. that's noting? redstone, the controlling

shareholdersmented, and that is not something, guys, he is in any way going to be pursuing. there may be some other assets sales, perhaps their ownership portion of epix pays down debt, but they are staying there at vaccine, 100%. >> especially if they rebrands the spike channel, that doubles down on the commitment it seems. >> exactly. and interestingly, spike, of course; as you said, renamed, and they start to use their cable properties like nick, to start doing movies on a more specific schedule, like three, four a year. >> all right. david, thank you very much. david faber with that exclusive. investors sour on chairs of msg after an incident at the world's most famous arena. beloved former knicks tloin out of the of the garden after reportedly heckling the owner of the team, james dolan, as you

can see from the video. a fight with security ensued. oakley was handcuffed and arrested. knicks lost to the clippers. >>fuls that john mcenrow? >> it was. >> it was. >> of course it is. >> that's appropriate. he likes a good fight. >> we're not supposed to chime in? >> no. >> that's what we came here for. that's the story. >> came early for "fast money," here on "power lunch." >> this is a sad day, fabled knicks, symbolizes, heart, integrity, toughness from the best teams ever on the floor at the barden, so charles oakley, seeing handled in that way, without knowing the background here is a sad day for a team in a difficult season where the star player is going through an open and childish exchange with the president of the knicks, a very well-established, i would say iconic figure in the nba. this is soap opera sufficient,

and last night was sad. >> one thing, i know, listen, they have no idea because les carmen breaks out, and she's not going, yes or no? true, right? true. >> you don't have to say yes to that. >> i read a lot about this. >> take the fifth. >> with that staid, if everybody that heckled james at a knicks game was thrown out, only person left is woody allen and his young wife, what's her name? prebin. >> spike lee let it be known. he's think about packing it in. >> it's unfortunate at best, but in temples of the stock -- >> yeah. >> no denying. look at the last quarter, revenues, better, margins improving, and it goes to show you even when the knicks are lousy, it does not matter. the place is filled. imagine if they got back to the glory days. >> how many seasons can they go through without it affecting attendan attendance? >> this team is selling out the garden. the rangers before they did

anything or in between the stanley cup, competitive for five, six years, but the garden is the world's most famous. these are teams that probably p will continue to sell out. have sport franchises, i think, globally, piqued in terms ever asset values, especially as msg splintered off its own network? something to be considered about this. i think msg continues to be filled. fans are passionate for knicks, rangers, concerts, bibb erliber name it. the stock, key really is what is the sum of the parts here? listen to wall street, some of the parts say there's more upside in msg. look what franchises do and where they have top tickets, there's a claim that a lot of best days are blind them. >> saying last night, by the way, the knicks have to move melo before the deadline. >> totally. >> it's a great conversation, fantastic what's going on at "fast money."

. >> take a listen to this. charles oakley, i know as a player, running into him now that he's a former player, and it's not something you want to see in your league. >> there we have it. see you again later. >> i hope so. fun for me, will, thanks for having us. >> thanks for the candy. >> you made it in the snow, how was traffic? >> light. traffic is light. you know what i'm saying? not at lot of people. not like us. we show up. >> when is it bad for company's products to work when it makes a drug that cures a disease and, therefore, eliminates the need for the drug. interesting debate on the topic coming up, and another good day for retail. the xrt etf up 1.5%. is the retail sector a buy from here? trading nation is next. tuss in new statealreadn.ieieaca intheconomy,

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retail stocks seeing a substantial bounce today. let's trade this beaten down group with the trading nation team. aaron gibbs is with s&p global, and tina sanchez.

starting with you, there's talk of tax reform, moving yields, is that what's driving retail higher or a longer term bounce? from a beaten up sector. >> it's a broad macro trend driving the sector. look at the outlook for consumpti consumption, private cop consumption, and how it trickles through retail sales, oxford economics has the economy continuing to balance going into 2017 until, really, into 2018. by 2018, it starts to fall back again, but we think that big bounce really is going to be a huge driver because a lot of the retail sector is largely under valued. now, that's going to hide some of the idiocieidiocies, but we the broad trend is supportive of retail right now. >> we got quite a few companies to report within the retail sector for this quarter's earnings. what do you expect? can that drive stocks higher?

>> yes. one of the things we'll just start getting into the retail earnings reports for the fourth quarter, and then, also, guidance for 2017, which is what we're looking at. who cares what they did in the past. and going into 2017, the retailing sector is expecting about 13% earnings growth. that's higher than we have seen in the past previous four years, and it's higher than the s&p 500, and higher than consumer discretionary in general, so overall, they are looking very attractive. of course, most comes from the internet retailers, direct marketers, where we are really seeing the growth, and a lot of that push, and so those are the companies that are also going to drive some of the potential volatility seen over three weeks or so. >> thank you very much. to find out more, go to tradingnation.cnbc.com. making a drug that works. it's great. making a drug that cures. turns out that's a problem. at least for profit. this is a debate you're going to want to stick around for next on "power lunch."

and now, the latest from tradingnation.cnbc.com and a word from our sponsor. different sectors of the market do well in different periods of the economic cycle. when the economy is expanding, industrial and technology stocks historically outperformed the broader market. when the economy is contracting, more defensive secretaries such as utilities outperform. when choosing to invest, consider where we are in the economic cycle.

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shares of gilead sciences lower again, down 10% over two days, hitting a fresh low, multiyear low, in fact, the problem? the main drug works, cures hepatitis c, but once cured, there's no need for the medication anymore. that's the drug. >> quite a pickle. they said tuesday that more than 1.150 people in the u.s., europe, and japan started treatment with the drugs given there's a cure rate of 90%. implying at least a million people may have been cured in the countries by the chronic viral infection by gilead's therapies. the average price of the biggest hep c drug is $15,000 a month.

that's $45,000 for 12 weeks. they are not only curing hepatitis c, but at lower prices. the result? well, declining revenue. questions about the company's future growth and, of course, future growth and as you mentioned, now plummeting stock. quite a pickle there. >> don't move. we want to talk more about this. it's super interesting. for pharma companies, are cures bad for business? let's bring in dr. peter boch and brian scorney at baird. isn't gilead vilified for the cost of this drug when it came out? >> yeah, there was a lot of push back given how expensive it was. it was the $1,000 pill. that was the headline that came with them. because it's curative or at least gets the virus to disappear from the patient, you know, it was viewed as they were

really over charging patients to be cured. and it certainly has led to a number of patients, as peter will allude to, who didn't get the cure because it's been too expensive and too much of a cost for the system to bear. >> how do you structure a company to incentivize cures when this happens? . it's he a pia pickle, isn't it? >> they do want to do the best by patients and find a cure. from an investor perspective, it's scary. investors want to buy into something where they have some level of comfort in their analysis to say this is what revenues are going to be this year and this is what they're going to be the following year. this curative dynamic becomes impossible to analyze and, therefore, you see gilead's stock as it's plummeted. >> dr. boch, you have a suggestion. government should just buy the company. >> yeah. >> for $88 billion?

>> well, it's getting to be a bargain now. the truth is the treatment although each patient who gets a treatment only gets it once, there's 2.7 million people in the u.s. who have yet to get the treatment. more than 100 million worldwide. in the western world the prevalence is over 100%. there's lots of patients. the problem is that public health officials and programs with limited budgets like medicaid and prisons actually can't afford the treatment if they do find it. >> but to put it very simply, the cost-benefit analysis by drugs for all of these people who need it or buy the company and the company is cheaper? >> absolutely. you can give a premium to the shareholders and non-u.s. assets and it's actually paid for at this point because the return from treating "the help" c patients is $12,000. so we would actually -- the government would be ahead and we could treat 2.7 million people. >> realistically is that going

to happen? >> highly unlikely. >> i think we're in a certain time and you have to evaluate the deal. >> in terms of saying whether it's bad for business to find a cure, gilead bought this essentially, right? for $11 billion way back when. so break down, brian, did the company make money? because with every drug there is an implicit end date. there's an expiration in terms of profits. they face generic competition. in this case they solve a problem for a patient population. so how much did gilead actually make? >> they made a ton and they continue to make money. i think it's erroneous to say it's bad for business. it's a bad way to set up an investment dynamic when we think about the world of investing and biotech and pharma. what you want is you want the investor capital to go to this type of thing. you don't want investor capital to go to the next botox or

another tnf alpha. you want curative, durable treatments. from the investor perspective here, people are freaked out about investing. >> and this is becoming a more and more acute problem. we are starting to develop more curative therapies. closer to gene therapies but we're reaching sort of the tipping point with antibiotics. peter, what would you say about the way we incentive advise thin -- incentivize things. paying for this or paying for cancer which you have a lot of experience in. >> it's often the case that patients can only take one particular therapy once, that's true in cancer also. to brian's point, we want treatments that are highly effective. this is not as scary -- it may be scary for investors. we only treat about 1/6 of the hep c patients in the u.s. the share price today after being pummelled is still three times the day it was before they

bought pharma set. and the shareholders got an 89% premium. there's no sob story here. this has been a great return. this is the long-term question of how are we going to pay for all of these expensive treatments. we want benefits. the shareholder return has to be reasonable offset with the fact that programs like medicaid can't afford the treatments that gilead makes even at 45,000. >> when you look at the system, you make this point, we don't pay big prices for things or something is not chronic, investors are not incentivized to invest like antibiotics. >> that's correct. you can look at the number of companies that are on the large pharma side investing in antibiotic development. it's essentially zero. it's a poor business model. >> without a profit motive, you don't get the drugs that you need. they go hand in hand. so crucial. >> super interesting, meg.

thanks for bringing it with us. >> my pleasure. >> check, please, is next. im vhengnetirero help youetrgiz syournt. coiply. e?t wh? s eemoy for entoday. yoknying bls, maaournt. ttng... e?t wh? it etoelapr entoday. ani etokg. it ei' tit o foundntlcanyzed font, way to say t we aperfectlla our wa hets o. i knowhis d,

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check, please. >> check please, welcome back. guys, i'm going for the reignition of the trump trade today started when president trump suggested that tax plans are on the agenda and going to come in the middle of the weeks.

sean spicer confirmed what the president said. it has sparked a move higher. dollar yield higher. the power of a trump announcement. >> my check please, can science decide which is a good dancer? >> women who have a very specific dance move appear to be better dancers than others. scientists in the u.k. mapped women's dance moves on to avitars. this woman is considered a good dancer. women whose hips did not move quite as much did not rate as well. >> are we going to see an avitar with bad dancing? >> this one is bad. >> you are a scientist. >> that's bad. >> yeah, that is bad. >> michelle is a very good dancer, aren't you? >> thank you. >> you dance all the time. >> women love to move their hips. >> that is a shocking dancer. >> who is? >> wilfred. >> referring to yourself? by the way, a little bit more on michelle. today, according to sources, is

your birthday. happy birthday michelle caruso ka br cabrera. >> we're so excited for you. >> thank you, everybody. that was nice of you. >> thank you for watching "power lunch" and thank you, will, for joining us. "closing bell" starts right now. hi, everybody. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> i'm michael santoli in for bill griffeth. washington watching the dow today as they hit record highs on tax reform. plus, trump holding a meeting with airline ceos this morning. >> got the details from ben baldanza. dunkin' brands higher on the back of its earnings report. ceo nigel travis will join us in a first on cnbc.