>> i was going to ask you about apple specifically, but we have a new record high. >> record highs. obviously you can still put it on the table and say it's cheap. >> doc, what do you got? >> i was buying a lot of love. >> jimmy? >> cisco. thanks so much. power starts right now. happy girth day, scott wapner, did you any no one would no? trump, yellen, retail all in play, and wall street is focused on all of it. we are live in d.c. straight ahead. also ahead you'll hear from one of the most prominent venture capitalists. and then we're hitting the tracks, the amtrak ceo, his take on president trump and the promise of an infrastructure bill. all aboard. "power lunch" starts right now.

♪ c'mon ride the train it's another record-setting day, as all three major averages hitting all-time highs, now on the longest winning streak from september 2013. procter & gamble making an unusual appearance, following the news that trian took a major stake in the company during the quarter. >> yahoo layers jumping respect sources telling david faber that verizon is close to a revised offer. h & r block shares under pressure, this after coming soon, the president saying, quote, other than h & r block, people are going to love it.

and fossil is getting, buried after they -- fossil shares are down 18%. welcome, everybody. water laser focused. janet yellen testifying before congress, president trump meeting with benjamin netanyahu, a few amounts ago finishing up a press conference. steve liesman is watching the fed chair, ylans mui keeping eye eye on the retailers. >> tyler, thanks very much.

defending fed policy against republican criticism that it has lowered the growth rate. also that it's held back the economy. i think this exchange with representative huizenga from michigan really encapsulates the back-and-forth. >> srcht it not true that we would throw out of the shackles, that we would have had a faster, steeper recovery? >> i mean, i would not generally agree with that? >> more regulation would have caused faster recovery? >> by cleaning up our financial institutions and requiring them to build their capital buffers. >> time, time. >> time for the gentleman has expired. >> a lot of that back-and-forth.

the real action was not in the hearing today. it was from the date of this, you can see the probability of that rate hike rising to 27%, quite a bit lower jed, and that's because of the data we got. that's really that's driving it. even retail sales, both hotter than expected. archlts it really comes down to this, phones. it all comes down to the january jobs report. mark your calendars right, but -- >> on the cleanse dear right now.

happening now, president trump is holding a bilateral meeting with prime minister netanyahu in the oval office, the two wrapping up a joint news conference. let's get to eamon javers at the white house. >> reporter: a couple points of news from the press conference we did just see wrap up. no particular comments or commitment from the president of the united states in terms of moving the embassy the president simply saying we're going to take a look at it. very gentle pressure here from the united states in the form of president trump talking directly to prime minister netanyahu. here's exactly what he had to say. >> as far as settlements, i'd like to see you hold back on settlements a bit. we'll work something out, but i would like to see a deal be made, i think a deal will be made. >> you always heard the

president talking a bit about the issue of contacts between the trump camp and russian intelligence officers. that's a story dominating the headlines here in washington, simply saying that he thought that general michael flynn, the national security adviser whose resignation donald trump asked for this week, had been badly treated by the media. michelle? >> thank you, eamon. president trump promising make tax reforming with the retail ceos today. ylan has more. >> reporter: i'm in the senate now, where retailers just finished up a meeting with senator orrin hatch, of course he's chairman of the finance committee. they were here to push against the border adjustment tax. bill rhodes made some very brief remarks on this. here's what he had to say. >> we just had the opportunity to meet with chairman hatch.

we had a great conversation just like we had earlier today at the white house. i think our key message today is we appreciate the openness of everyone from the white house to the house to the senate. we represent over 42 million american jobs, and we're here to make sure we're all looking for a pro-growth agenda to move this economy forecast. >> and retailers are arguing that that border adjustment tax could raise the price of goods for consumers, also force them to cut costs, and of course cutting costs could mean cutting jobs in the future. not all businesses are against this border adjustment tax. there are big businesses like ge, like boeing, that are in favor of a border adjustment tax. they're part of a coalition called the american-made coalition. here is a statement from them today. they want opponents of tax reform are defending an outdated and broken system that subsidizes cheap foreign

imports. so this is an issue that's divided the business community. retailers will continue to make their pitch today. they're scheduled to meet with kevin brady. chairman of the house ways and means committee later on this afternoon. >> thank you very much, yla ylan mui. let's get right now to courtney reagan. >> a statement from target on the meeting with president trump this morning, and target is calling the meeting positive and substantive. they said they discussed policies about economic growth, job creation, but then also said they discussed with the house of representatives proposal for border adjustability tax, which is a priority issue for target, because it will raise prices for american families on everyday essentiallies. if enacted, it would have a profound implications for our guests and business. target we believe that anything that raises prices for families

is not a good idea for america. target set they will continue to immediate with the house of representatives, as well as those members in washington, to continue these discussions. back to you. >> thanks very much, courtney. at least i was hoping forsh i think a lot of us were hoping for, we would see president trump three times today, with the retailers, and benjamin netanyahu. will we ever finally learn how does he feel about the border adjustment tax? the political consensus is if he doesn't back it, it doesn't make it into the final bill, and those darn reporters never ask in washington when they get him in front of him. >> at least the ones he calls on. >> i know eamon would have asked. >> it may not be top of mind for some of the reporters. >> it's amazing. >> from the christian broadcasting system. >> i'm very neutral, but i think it's high time for the president to sit down with cnbc.

>> why not? >> i'm saying that from a neutral position. >> exactly. mr. trump, you're invited. >> open invitation, mr. president. your money seems to be riding good news so far, a wave of deregulation and overall economy that continues to improve, but if you only read the national news headlines, you would think that the country was crumbling in the middle. joins us is chris saccarelli, and chris christopher. two questions -- how much of this is based on optimism about future pro-growth policies, and is there a risk those policies will be -- and you willy hurt stock prices? >> well, you know, those are great questions. really i think investors are

trying to digest those questions, i think about half of it is probably priced in. i think there's expectations that those pro-growth policies, there's a lot of belief that that will happen, stocks have mo of in anticipation. there's room to go much higher if enacted. it's tax reform that i think there's a lot of questions about, both the border tax adjustability issue that you were talking about, and really that will have profound implications for various companies within all the different sectors. >> chris and chris, stick around. don't go anywhere. we're going to continue that discussion. we have some breaking news from steve liesman. >> thanks, brian. other fed members are still speaking, one of them eric rosin

gren. he's saying he sees at least three rate hikes this years. i want to read something from his speech -- at least as quickly as suggested by the fed's current forecast, which is three times, and possibly even a bit more rapidly than that forecast. as you know, a lot of what the fed will say and what they forecast depends on what comes out of the fiscal side of washington. several fed members have been reluctant to change their forecast until they sigh the whites of the eyes of the trump policy, but this notion that perhaps we may have to hike faster if the policies come through. >> which chris did he ask the first question to. chris christopher -- and by the way, my first name is christopher, so chris christopher, inflation numbers, ppi yesterday highest in quite some time, are you concerned that inflation may prompt the

fed to move faster, quicker, higher, sooner, and that that might make the market stumble? >> not really. for the most part, you know, the cpi report today, which was for the month of january did show that inflation is gaining traction with the pretty strong employment record we had for january as well. we think that a fed hike is more likely in march, but we sort of think our baseline scenario is for three hikes, but starting sort of in june. >> a little inflation is a good thing, right? >> it's -- >> wages go up? >> yeah, that's true, however, for consumers for the on most part they don't like to see food prices higher or gasoline, even a lot of good prices that they've been enjoeing. they have been in an inflationary mode for the most

part, especially lower-income households. >> certainly not. >> but for the overall economic environment, it is sort of a good thin. the fed wants tore higher inflation. we are notices that this is happening. so with all the news we had on retail sales, which was very good, you know, with the market doing well, we do think that consumers are looking towards stronger spend. >> chris sack relyi, do you think the fed has this under control, or do you think we're moving to territory where there is risk in terms of fed policy the odds for a march hike moved up to 40%. not very high yet. >> that's a good point. that gets to the key issue, is,

you know, if the on fed is going to start raising rates, the problem is that will make the dollar a lot stronger. if you book he border adjustability tax proposal, i think a lot of people think that will make the dollar stronger. the fed has to be careful. if we get this border tax adjustability, that could be pretty detrimental both to the economy as well as cold earnings. >> mr. zaccarelli. bottom like, all of this stuff, there's talk that the agenda gets derailed because the president gets distracted or consequence gets distracted. do you think tax reform happens despite these other issues that have raised their head? >> i think tax reform is such an important issue for both the administration and really for the congress. i think it will happen, but it's going to be more different than a lot of people think.

i think there's a lot of tradeoffs that will happen and it's going to take a lot of work to move through congress. the key issue is how long does it take? i think it definitely will happen. >> thanks, guys. chris zaccarelli, and chris christopher joining us. more on president trump's meeting with prime minister netanyahu. we'll talk to the former israeli ambassador to the united states straight ahead, plus an alamenting new number. that is highway fatalities, while driving is go ahead deadlier even as cars are supposed to be getting safer. cries, the nation's tallest dam on the brink. live on the scene when "power lunch" returns. ♪

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moments ago president trump wrapping up a press are with prime minister netanyahu. prompt vowing to promote a peace deal, but warns that both sides will have to make compromises. sir, good to have you here. >> my pleasure. i don't know what the elee happens to think of prompt, but it's not very positive. he seems to think he can do a deal here does he have what it

takes? >> the last thing i want to do is in the crossfire. >> this is republicans and republicans. absolutely. >> all domestic. i respect the democratic system, and israel we are a sister democracy. we have our own. >> i don't understand what that has to do with my question. dao he get a deal done? >> i would say it's not up to him. we've had five presidents. it's up to the party. so long as there is leaning on only one party, israel, as long as there's one issue being cherry picked, the settlement issue is among main. if the palestinians come forward, and would also make concessions in terms of recognizing israel's right to exist as a jewish state, that is the self-determination.

>> did you watch the news conference, sir? >> i did. >> i have a question for you. i don't know if you remember john kerry's last speech, more than an hour of him being very upset about the lack of focus on a two-state solution. i watched that today, and i think the two-state solution is dead. am i a novice here? what does this mean? >> i think if he read between the lines, it is not dead, but it's only one option among many options. what we have known, michelle, and this is the main problem, for the last 23 years, since 1993 oslo. israel has made so many conkeg without reciprocity from the palestinia palestinians. the same thing happened in 2008,

when prime minister olmert offered everything to abu mazen, and he walked away. i think trump is offering a fresh look, as a negotiator, he wants to not preempt himself and look at the contingencies and possibilities and look up to the parties. israel will have to make concessions, and we have made concessions. we removed settlements, excruciating painful national experience. what did we get? the land that we gave the palestinians was used as a platform to launch missiles. >> the president was equivocal at the very least, less equivocal in talking about the settlements, saying we would like you to slow down, basically. mr. netanyahu was sort of nonresponsive by way of hans. how important are those settlements, in terms of mr. netanyahu says, he does not believe they are the impediment

to peace, that they are a symbol of something that is an impediment to peace. explain that to us form there is many, many other issues that settlements. if you put them all together, you can negotiate, but if you just cherry pick settlements and say all the onus is on israel, of course you cannot move forward. there's 700,000 who live there in the settlements. they have life going on, legalized and authorized by successful governments. i hope there will be a deal. i think also foes and friends alike, when they see there's no daylight between israel and the united states, they think the incentive for mischief on our enemies will go down and israel will be more confident to make concessions. >> mr. ambassador, thank you for

joins us. >> my pleasure. more alarming news about our nation's highways. if you'd rather take the train instead of driving, the head of amtrak will be here, and take some tough questions. that's when "power lunch" returns.

all hitting new highs this morning on encouraging commit

data. they continue to lead this rally higher. and take a look at the vix. we're seeing a spike here. see some concerns here in up 9.25%. up next our exclusive interview with the amtrak ceo, and the promise of a big intra structure bill, but first more on the crisis in california. cnbc's aditi roy is on the scene. >> reporter: thanks so much, melissa. there are choppers bottom mer carrying bags of heavy rocks as officials are say the lake levels of manageable right now. the latest from oroville is coming up. ♪ guysywher anythiney nile, this new ehappenin t mar

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here is your cnbc news update. speaking in jericho, a senior palestinian official has strongly reacted to comments made by the trump administration, which suggests peace between the israelis and the palestinians may not come in the form of a two-state solution. >> those who believe that they can undermine the two-state

solution and replace it with what i call one-state/two systems, maintaining status quo, i don't think in the 21st century they will get away with it. it's impossible. rex tillerson is on his way to germany to attend the g20 meeting. and american girl dolls is set to release the very first boy doll this week. his name is logan everest. he's a drummer, the accessory he comes with is a drug set. they plays alongside his female singer teddy grant. they'll be released tomorrow. expect long lines. >> they're going to have to change the signs of the

building? reports indicate this is just the beginning of america's infrastructure woes. aditi roy is in california with the latest. officials say they have managed to lower the water levels even as another round of rain is approaches. over on this other way, that's the emergency spillway behind me. you can bailey mace, that spillway is eroding prompting fears. workers ver fortifies it by using helicopters to drop back filled with rocks. you can hear a chopper right above me in fact, officials have downgraded it to an evacuation

warning to the nearly 200,000 residents downstream. the incidents have also brought up the issue of dam safety. the american society of civil engineers which comes out with a report card every four years, gave america's dams a "d" in the most recent report in 2013. it will cost $21 billion to repair the country's aging dams. >> there's a lacks of funding and resource and authority for the regulatory programs that work with the dam owners to make sure they're inspected, operated and maintained properly and there are emergency procedures in play. >> here in oroville, the trump administration has just approved funds. we're going to stick with

infrastructure. we're here with a.m. trak president and ceo mr. moreman. ladies first. >> thank you, tyler. thanks for joining us today. let's start with why you're on the hill testifying in front of senators today. what is your wish list and how much money are we talking about.

and your former rival, there could potentially be a change in leadership there, giving the fact what is your take the way trainings are run could affect amtrak? >> well, i think right now we have a very good relationship, as you said, i was in that world, i know all of these folks i'm not any industry anymore, so i'm like everyone else, watching

from afar inch used tore a daily commuter. >> good. >> and i'm going to ask this question on behalf of the hundreds of thousands of people every day who suffer from arguably the worst service in the world. i know you had little to do with this, but can you offer -- many who try to ride the train every day, but they have to track breakdowns, everything else, why is it so awful? what is it going to take to fix it? the northeast corridor is arguably the most important train line in the united states, and i've literally ridden trains in third worlds which make us look we. >> i would hope you characterize amtrak's service itself something better than awful, but your broader question is very

germane inch and i'm sorry to jump in but it will -- but nobody has the guts, the political will to get anything done are we going tots rails that were built before my grandfather was born? >> i think that actually i'm quite optimistic that people now are really coming to the understanding of exactly what you're saying that we have 100-year-old major infrastructure out there, it suffers from reliability issues today. they're only going to get worse, and something has to be done. in fact, you have seen recently the states of new york and new jersey come together, and we're going to start replacing a

bridge up there, as the first step in the long process that's well over 100 years old. i think the impetus is there, and that's what i'm going to be talking about. >> you come from the private sector. should amtrak be privatized? would we get better service? part of that question is, can it actually ever be profitable? how should we think about amtrak? it's subsidized by the taxpayer every single day. is that something we should just live with? we want a train system, therefore the -- or can it be fixed so that it's profitable and run like private industry? we just map to have a big model

in which users pay most of the am track operating requirements, and the government funds the rest. so there is no reason in the world that am track can't run as efficiently and effectively as norfolk southern or -- and that's the attitude you have. and run it as a private company? would that be better? >> you know, if you think back in time about how -- why amtrak was formed. it was formed for our long-distance network, which is the place that require extensive subsidies. the reason it was formed is the freight railroads were hemorrhages cash. that's a business model that hasn't change d there's no passenger carrying rail

operation that i'm aware of anywhere, even europe, places like that where trains make money. >> can't that change? i mean elon musk and hyper-loop is challenging people to think about transportation, whether it's moving people or freight, in a very different way. when you think about eventually like a hyper-loop, do you think that's a solution or just so far off that this is a system we're stuck with, this rail system? quite frankly, if you look at hyper loop and a lot of other technologies, they require a totally new dedicated. >> reporter:. for leg moss and more easily you can accomplish the same thing.

>> i know there'sic improvement with the positive train control for safety issues on the northeast corridor. i don't know where you are in total totally or metro north or other rail lines have ended up where the cause of the accident was an engineer who either zufd suffered from sleep apnea, fell asleep or lost concentration. how are you addressing the questions of training versus automation to keep those trainings nonon time, but running safely. the goodness about the northwest corridor it's done for positive train control except for the portion we run on the metro

north trackage from new york to new haven. i think there's other significant issues out there, as you mentioned about sleep apnea, things like that. we're looking at the ways in which we can try to start addressing that and addressing the individuals who may have some issue like that. the one thing i will say about am track is the number one job and my number one priority since coming here is to create a strong safety culture and safer railroad. not just for our employees, but for everyone that rides on the trains and the communities we serve. >> from the rails to the roads, new estimates saying that allo fatalities are on the rise, even as they -- phil lebeau is live, is it just a fact that the

economy is better so more people are on the roads? >> there's a number of factors there. we're seeing more texting, take a look at these numbers, and you'll see that the number of estimated road fatalities last year topped 40,000. that is the highest amount since 2007. here's the step that blows me away. it's the biggest two-year increase percentage-wise in highway fatalities since 1964. here's the ceo of the national safety council. >> if we can't fick out how to address these behavioral issues, we're not going to make progress. technology can be a game-changer for us, but until we have cars that 100% drive themselves and the fleet penetration is across vehicles, we still have drivers behind the wheel. we have to make better choices. >> part of that is how we handle

distraction. there's a device -- at the front of that screen, made by a form offer san francisco, see how they throw up imageses, e-mail on a screen. it allows you not to pick up the phone. the company started this die, launched in november. here is the ceo talking about why he believes this system is better than people picking up their phone? >> people are going to make phone calls. they're going to use turn be turn navigation, listen to music, this is a far safer way to do those things in the cars than the alternatives. >> the bottom line, the number of facilities on the road continue toss go up. don't be surprised if it rises again in 2017. >> that technology seems worse. >> that's the arguments from critic, you're distracted, looking down, but they say

you're looking ahead on the road. >> there's always a widely available device. it's called a stick shift. if we went back to a five speed. >> brian, i don't buy that. >> just turn the phone off. >> i have seen people text and drive while they are stick shifting. >> really? >> yes. >> that's impressive. >> people are addicted to texting and driving. >> go back to your eyeliner, phil. >> your mascara? >> you too, tyler. one of the silicon valley's capital investors will join us, "power lunch" will be right back.

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welcome back, tech has been a focus this week, but what do top investors think of tech's recent return? or next guest is the founder of

the silicon valley vc form, a former facebook executive and part-owner of the golden state warriors. he joins us with our own josh lipton, so josh, kick it off. >> thank you, melissa. thank you for joining us. i want to start with president trump. my interest is his rhetoric, at least some of his proposed policies like that executive order on immigration, have you seen any impact on the portfolio of startups that you're invested in, slack, wealth fund, just for example anecdotally i've heard service engineers overseas, maybe some not as enthusiastic about working here. what are you seeing? >> i would say the impacts have been twofold, to be honest and factium, i would say there's been positive and negative impacts. on the positive, healthary and education, where the things we have built will be deeply in demand irrespective of how and

what replaces obamacare. meanwhile, it always just has to be cheaper, faster and more effective. on the one hand that's been quite positive, but the deeply negative parts have been around the morale. explicitly what i have seen, which is quite concerning to me is some very talented technical people, who would have otherwise considered coming to the your honor are making decisions to stay where they are, to stay in india, to stay in china. i think the very practical question we should ask ourselves is, what is the negative implication of not having them here? a, to the job creation and value that can be created and captured by americans? but then also b, to the strategic advantage that india, china and other countries get by the deeply talented people, who from a morale per spect tiff are deciding to state here, one tech

person that did support president trump would you say thiel. would you work with thiel, or after that support, would you still do deals with him? serve on corporate boards with him? >> yeah. we've invest add lot together for years before that, i think we'll continue to invest together, the technical perspectives that we have are quite similar and quite shared. the reality is he has a political ideology that i disagree with, but he has a futuristic ideology and perspective on the future that i share. for the benefit of all, i think it makes sense to find the common ground and continue to invest in great businesses together. >> certain the news that snap ipo is coming up one question is, is snap the next facebook or next twitter? as a former facebook executive, how do you answer that question? >> it's tracking to look more like twitter than facebook

specifically from the per pick of the top-line growth does support a long-term growth-oriented model. the reality is fay fay or twitter grows pulp engage emergency and total using. if you cut total usage off at the knees, you only grow by engagement and only grow by advertising and monetizing that base even more than otherwise. facebook has shown you the conrestaurants on how much on monetization is possible. you kind of see two companies that are more similar than different. >> and a half is more like twitter, and then you throw on top of it the fact that they are essentially asking investors to hand over money to the company to do with it what it pleases, because investors will have no say at all in the running of the

company. >> you know, i think it's a great comment. i think the heartburn around this ipo will be the following. you combine a non-obvious growth story with a lot of deep innovation, so a negative and positive, and a shareholder rights model which frankly is probably one of the most extreme we have seen. it's one thing to give common investors a vote and has 5 munz for a class, but it's different to give them none entirely. when you combine those things together, it makes it at least to me as a manager of public equities, a nonoften story of why one would buy this until, again, the engagement or growth story is dramatically more clear. >> chamath, we've talked to you several times, you've been bearish on apple, what are you missing about the story? why can't you see what ears are seeing, that is an iphone super-cycle coming, increasing

over the next four years? >> well, with all due respect, i don't see a technology story there. i see a luxury brand with pricing power. much like warren buffett has said, he doesn't buy technology, because he, i will not buy consumer goods companies, because i don't understand them. in the time that i could have bought apple, i'm own amazoned and that's 4-x'd, so at the end of the day good investors have to allocate their mind share with the capital they have. from my perspective, the dynamics of that business donnell support long-term secular growth. they support a business on model heavy on cash, heavy on value, but still uss septemberable to deep technical disruption. >> we're going to leave it there, guys. thanks so much. we appreciate it. still ahead, health care, education, a whole lot of nuts,

no, not to the has of congress. it's "street talk" straight ahead on "power lunch." ahead on "power lunch." sfloo

i love to see businesses that just started from ground up grow into further success. it just feels good to know that i'm helping someone else. my first goal is to learn about their business, what they're currently doing in their advertising. pull some research, create a great story. trying to figure out some way of building some kind of trust in a very quick moment. you have to love to work with people. our goal, without a doubt, is that all customers are satisfied before they leave. ♪ . welcome back. we just learned that rex tillerson and homeland security head tom kellie will visit

mexico next thursday. they'll continue their dialogue. there you can see the peso not moving a whole lot. it's struggled in the wake of trump's ascendancy. president trump speaking with top retailer, what they had to say about jobs and the key tax changes. that's ahead here on "power lunch." say cawee es abo yoragee id you hd? i n'ow$65 tr

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welcome to the second hour of "power lunch." i'm melissa lee with tyler, michelle and brightent. rally on. the dow, s&p 500 and nasdaq hitting record highs once again what could derail this rally? cutting taxes and removing regulations, president trump meeting with the retailers, but the stocks that will be impacted the most, and alexa, call tim

cook, amazon's next big moves and how many rely on the echo and google home in their daily routi routine. >> i wonder if she knows his number. melissa highlighted the dow, the nasdaq, but southwest, delta united, continental and america alps up between 2 and 5%. integra lifesciences up about 3%. groupon is soaring 20%, the online daily deal site comfortably beating top and bottom-line estimates. i'm brian sullivan, fed chair janelle yellen still be grilled on capitol hill, this time in front of house lawmakers, defending the fed, sayers their policies have been a help, nots a hindrance. meanwhile, eric rosingren

making headlines say he sees at least three rate hikes this year. bob? >> hello, brian. i notice there's worries about a slow down, but it happened against today the minute president trump -- the market moved up. that was about 10:a eastern time. so far take a look at banks, these four banks here, they're responsible for 18-point move, you see in the s&p 500. 18 points higher, because of the big moves in they banks day. it's not just about trump here. we've been talking about that. central banks are still accommodative.

february 28th is when the president will be speaking in front of the congress. and it's likely, guys, he'll probably lea some of that before the actual presentation to congress. guys, back to you. >> bob, thank you very much. the big questions the markets want to know -- will the president be able to get his agenda through? john harwood is in washington. >> hi, tyler. the issue for the president is getting off the dime and giving congress signals of where he wants to go on policy. let's just run thus quickly what are the elements. >> there's no white house plan for infrastructure improvements. we've had a talk about a trillion dollar plan, but no details. no replacement plan for obamacare. we still don't have a tax cut plan. many questions about whether both individuals and corporate

can be done. the president said today about retailers, he intended to lower rates, at call gyres of income. steve mnuchin, his treasury secretary had said something different, but we simply don't have the details. what are the obstacles facing the administration that is slowing down their proing? of course we saw the depart earlier this week, but a lot of factions one the white house that are futuring. secondly his team is not complete. not just flynn. we have reports that andy pud cert may be withdrawing his nomination senate republicans are not denying a report that they've asked the white house to withdraw the nomination, but we have not heard publicly on that. finally, you've got big challenges for the administration in getting past

the cloud of controversy surrounding russia, which is hanging over the administration. calls for a bipartisan investigation in congress, don't know where those will but it's consuming a lot of attention at the white house right now. >> thank you very, john harwood from washington. investors shrugging off concerns about what could deray the rally. they same pretty happy. joining is is jack ablin, i get it's tempting, i don't want to ask the question, is it too late to get in, but i am going to ask the question, what do i do if i have a spare x-thousand dollars, 100,000? 50,000? how do i put it to work intelligently in today's market? >> great question.

i do get a sense there's some panicked buying goods on, maybe dow 20,000, but remarkable that it's the dow exchange-traded fund that has been attracting most of the inflows ever since dow 20,000, so it seemed to be a wake-up call for would-be investors. i think it's one of the huge conundr conundrum. if you believe that the s&p 500 will continue to edge higher this year, and you know what? valuations are stretched. there are other markets that are relatively highly correlated to the s&p like foreign, like emerging, that are substantially cheaper. if you look at the correlation between the s&p 500 and, say, international stocks, we're like 80%. 80 out of 100, so directionally they're going to move in the same way, but the international stocks are trading anywhere

between 20 and 30% cheaper than u.s. large caps. >> so maybe if ump choosing between an index fund or a european index fund or japanese index fund, you may lean to the foreign places? is that what i'm hearing? >> that's my sense. that's what we've been doing, and we're doing it currency unhedged. we're saying the u.s. dollar is relatively expensive, rallied nearly 40% over the last four years. now anyway between 10% and 15%. i can't say they're bargains relative to their own history,

but certainly priced as a -- >> what's the benefit if it's correlated to the u.s. markets? you're in a cheaper invest, but you're still see that down side? >> you're absolutely right. that's why i said at the beginning, if you believe that the s&p 500 can still edge higher, then that's the place to be. if you think, you know, priced to sales of two times, we have not seen price to sales of two times since the tech bubble. all i'm saying is we have a lot of enthusiasm right now, and i think that's braille, but it sdl tend to get in the way of -- if there's really a lot of cash on the sidelines, if we're seeing -- hey, maybe it can

continue, but if they start to explode to the up side, that can justify the current prices, so there are a lot of factors at play certain what's driving the market is i believe as tyler mentioned cash on the sidelines, combined with a lot of enthusiasm. >> thanks very much. we appreciate it. all right. counter-veiling forces for crude oil. on one side tough tomb from trump on iran, the others, the biggest jump in american oil inventories in more than 30 president years. how about it balance out? i raced through that, because your insight is so good, i just wanted to get to the interview. biggest jump in oil inventories, gasoline stocks up, distillates stocks up, but oil is not moving

much. >> i would say the counter vailing forces are the -- and then the story obviously with the u.s. stockpiles. part of the reason are shrugging it off a business d. they've this big cut it refinery runs. we've had unplanned outages, and also weakness in gasoline demand that's probably storm-related. so right now people people are not overly concerned. >> a temporary build? >> people are not overly concerned that there's a real structure weakness in demand. >> talk about the other side. the opec finally seems to have its act together, does it? they're doing what they've -- >> which is not cheating? >> this is really the story that saudi -- we keep saying that saudi really wanted this deal. it's sawedu plus the ggc allies that come out and say we are

doing more than we even were asked to do. we want to show our compliant is much better. >> here's what i don't understand. the rig count goes up. i don't see how it benefits them. >> a, they were worried about the domestic population, but the big issue is the story of ipo or ramco for 2018. >> how does it make it look better? >> because there is a view out there that in a sub-$50 oil price environment you're not going to get the $2 trillion valuation, it would create the sovereign wealth fund. this is the most important priority for saudi arabia, to get this public investment fund. i think they stick with it for very clear domestic ideas. >> the last year it yo-yoed, but last couple months right there in the 50s. >> range bowen.

we think it's a sideways trade. we think it grinds higher into the low 60s, but we have massive inventories we have to work out. what could break us skouf this range if there was a flare-up between the u.s. and iran. that's a catalyst for something higher. >> i think we all can agree it's not a full day unless we say border adjustment tax. >> we've said it several times. >> but it's a different hour. this is 51% of the show. [ laughter ] now i've lost my own trained. it's pulled out of the station. they import oil. have you doing any -- >> what one of to see is where you identified the, the gig group will be the refinery lobyy

paul ryan is saying everything that is to be included, do i think there's a potential for carveout for energy? >> yes, helima, always great insight. excellent. thank you. let's give to steve liesman. >> the marathon of testimony ending. she made skeptical comments about it. she said there was agreed uncertainty about how marx would really respond. there's a strong set of assumptions to believe that they would fully offset those changes. where he difficult to know just what would happen. there are more factors than trade. she also expressed concern about

what would happen, and to the value of that wealth. she was asked about why -- and i think her answer was kind of revealing. >> likely anticipating shifts in policy that will stimulate growth and race perhaps raise earnings, maybe tax cuts that will boost earns. we have seen longer-term interest rates go up and the dollars strengthen. that's consistent with expectation of an expansionary fiscal policy. >> so the significant of that is she sees -- there's the probability, by the way of the fed's fund rate, that's for a march rate hike.

>> it's implicit in what she said that it is a trump rally, right? >> absolutely. she all but said trump rally. >> if you acnods that. >> all right. steve, thank you. here's what's coming up on "power lunch." david tepper making a big move into big pharma. >> meeting with the president in a $4 million lamborghini recalled, all that and much more coming up on "power lunch." i me owinec thheel t l taxes ecad i me owinec thheel t l iatmarig.d ornipoere turel

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biggest names in investic are releasing stock picks. leslie picker joins us with the details. >> hey, thanks for having me. pharmaceutical now represent 26% of appaloosa's portfolio followed by tech and energy, largely thanks to a huge stake in allergan. they tripled the stake during the fourth quarter. the filing based on appaloosa's position at the end of the year showed he owned 4.3 million shares worth today roughly $1 billion. that's more than double of size of any other position in miss portfolio. he said he took advantage of what he saw to be an oppressed price.

allergan's stock has gained about 20%. and he also gained new positions in testiva, pfizer and mylan. >> did he say anything about the timing of the purchases and whether or not the elections played a role. >> he wouldn't comment on that, but other hedge fund managers didn't want to touch pharmaceuticals because of the election. >> did he also say he's going to move back to new jersey and help fill the budget gap he created when he moved for florida. meg tirrell, we want your take on tepper, but you've been tracking movers. >> huge movesers, this is a new

gene edited technology named crisper. there's a patent case going on affecting three stocks. you can see these are all swinging wildly on the results of a uspto decision in that case in favorite of editas. it's up more than 20%, the competitors almost down as much. they ruled in favor of this patent that editas holds. however, this may not signal the end. there could be appeals or other things, but big november in these names, guys. are these biotech specialists? i'm just could you yurt who would know enough to be taking bets in this. >> pretty small name -- so probably a lot of biotech

specialists invested here. crispr gene editing. >> i want to get to david tepper's buys happening in the last quarter. what could have happened that could have been catalyst for his investments? >> there was a lot of interest after the election, as leslie correctly pointed out there's nervousness right now. there was a sort of short-lived rally in pharmaceutical thoughts around the thought that hillary clinton wasn't going to be president, maybe there wasn't going to be the same kind of pressures that trump may take a more favorable view on pricing and also on taxes. a lot of these companies have a lot of money overseas, so the expectation that a pfizer, for example, could bring back all that money and brick put it to works investors like that ideas,

but there's still a lot of nervousness, as the president said is drug companies are getting away with murder on the pricing. so a lot of people sitting on their hands waiting to see what happens there. >> meg, thanks. street talk is next. plus important news about your lamborghini, besides not letting your kid drive it. more information, more advice, "power lunch" will be right back. u reize stti n'just whayoinvest i you in wit u♪reize stti if oe gns bv wn tre. yo pot p pts.smarr enexitntt deli -whte wibe

time for "street talk." ageist recommendations on stocks you need to know about. credit sweet is more bullish on humana, boosting the price start to 220. humana raised 2016 guidance, increased the dividend and unveiled a new buy-back all on the conference call yell post breakup. it also signaled it's opened to a new merger partner. holx is your ticket, a special imaging company. they like the recent deal to buy a company for about a million and a half bucks like hair removal. mine is doing it naturally.

[ laughter ] his target is $36, about a 14% to 15% up side. >> don't touch it, it might fall out. >> you're just fine. third stock up to, yes, investors may be confirmed about limited margin bosch expected it would be giving past commentary. they say tax advantage of the weakness. >> little notwithstanding and probably little cared by stat, this guy was founded by the guy that ran torcha toys. the small cap of the day needers lance. with a snyders lance. >> who knew? >> weakness -- >> i like crackers and nuts. >> apparently it's because of a

lot of nut allergies, you company has doubled revenues all while increasing profit margins, notes only a couple companies in all the world has done, has the margins and potential to go even higher. part of a broader call. maybe he'll hit on it on "fast money" at 5:00 p.m. >> perhaps. the one big issue at the white house with the retail cos, we'll talk about that next. yoar , prettsmar welle alouucatg on optistrategi. wen'rry, lethccplento hd. i'stth o gy. u your fh dinary i'stth o gy. ohcho ias. he on s ading inkowi lyt td atr

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hi, everyone. here is your cnbc news update. president trump holding a joint news conference with prime minister netanyahu. the president made his first public comments on the firing of michael flynn. >> i think it's very, very unfair what's happened to general flynn, the way he was treated and the documents and papers that were illegally i stress that, illegally leaked. i stress that. illegally leaked. it was in response to

comments from the white house that the u.s. expects the black sea peninsula to be returned. a spokeswoman for the ministry said, quote, we don't give back our own territory, end quote. cdc reporting an 18% decline in hiv infections between 2008 and on 14. the drop was even greater among heterosexual and iv users, but an increase in young gay and bisexual men. michelle, back to you. >> thank you very much, sue. the return of crimea is what sean spicer said yesterday. kayla has breaksing news. the confirm hearings for peter pudzer was scheduled for yesterday, but nbcs in confirming that he's expect to do withdraw his nomination. remember, this is a hear that

had been delayed as many as four times as the government ethics office had been awaiting paperwork about financial disclosures. there had been mounting opposition from the senate committee on health, education, labor and pensions. as of monday "the washington post" reported there were at least four republicans on the committee noncommittal about their stance on pudzer, but peter alexander confirming with a senior administration official that pudzer is expected to withdraw his nomination. i think a lot of restaurant owners were hopeful he would succeed, because remember he was against the minimum wage working -- there were a lot of positions he took that a lot of people he those were very pro-restaurant industry. >> if he is out, who is in? >> right. 90 minutes to the closing bell. all three major indices are higher aiming for a fifth straight day of gains. look at the gain of

procter & gamble, that's a rare move after nelson peltz disclosed a stake in a filing last night. cisco reports earnings after the bell. oil meantime closing the day ending for the session pretty much flat. let's take a check on the bond market. the cpi made a big difference. we zoomed a bit. we were up three basis ponce, and if you look at a year-to-day chart, you can clearly seen we are moving to areas that we haven't closed -- it was on the 11th day potentially. real quickly. the curve is steepening.

all in all, whether it's the fed yesterday or today's data, as we certainly seep to see, stocks aren't that afraid. >> with president trump at the white house today this morning, and courtney reagan shows us with more. >> the ceos of several retail companies all met with president trump this morning, and then senator orrin hatch and representative kevin brady later on to discuss the border adjustment tax in the republican tack reform plan. s if enacted, the house proposal would have profound implications for our guests, and at -- we believe that anything raises prices for family is not a good idea for america. the president that is said he will discuss a tax plan in the

coming weeks, but still not clear where he stands on the border adjustment tax. at one point he said it's complected, but we don't know what that means. >> question keep waiting to hear what he decides. whether he can push the senate to go along with it. don't move, courtney. let's bring in simian siegle. good to have you here. you used to have to do things like monitor sales. and now the retail starts is all about it whether it will be in the final gop plan. >> the balls don't matter. it's all about the taxes. the backdrop is the the layer that on. if we had an answer, that would be a different positioning.

so at the end of the day, you try who work. >> are they asking about this? >> i would say they're not buys stocks because of it. >> what do you think to put up gap, best buy, targets, what would it do to their margins? >> there's certainly companies here that will make them structurally unprofitable, which is a very academics -- people a lot smarter than i am can opine there. i think to oversimplify it, what it does is puts more cost into a system. if you tell me that you think the consumer can absorb that cost, that's one conversation. generally speaking, i think that's going to be tough. it becomes within the retail system, and then which one?

the brand? the retailer? factory? a lot of players. >> have you done out the math, where you say dollar adjusts 25%. the tax rate goes down, so net net. the reason i ask is the supporters of the tax will put out all kinds of numbers where walmart will actually be better off, because it will rally and a lot. >> walmart is listed on an opposition. >> i get that. i get that. it's interesting to see how much -- to find themselves actually poised to benefit, and it's clear between importers or exporters, the companies that i look at, there's a few that could get hurt less. there are a few that could benefit. >> a few could benefit?

>> we view it off-price and ultimata, which we have suppose for in other contexts, but there's this cost, who will absorb it? if you tell me there's a product that consumers are willing to price, if you tell me off-price right now will change, when they become the department stores, that might be different, but right now they're used as an important part of the chain. >> and the higher players could pass on it like a tiffany, perhaps, but they have issues there, too. >> i guess i'll push back a bit and say that, you know, it's kind of weird. we have this fascination with the '70s lately where you could make a good living as a manufacturer, put your kits through colleges, but we also tend to forget that the retailer did just fine in the '70s, '60s and as 50s before we took anything from china.

i'm not supporting the tax or going against it. i'm just saying it was acting like the retail instrument was going to die. how did they grow for the first 200 years before we started cheap imports? we were the cheap importer to the uk for -- i mine things adjust. >> i apologize, i did not buy a sweater in 1970, but how much did it cost? things have change. look back the past five years. you've had this element here where, if you told me, if we believed consensus that there is the consumer does not have the pricing power we have, because e-commerce has not existed. you tell me as a retailer that you have a product that consumers will pay up for, then it doesn't matter. pricing will readjust and people will go on their way. >> but most retailers don't. >> very few do. >> i don't disgray. the '70s were so great, right, from a manufacturing people made more, because we made more in

america. there's your balance, i guess. >> and laborers could service the factories that existed, and neither exist like this he did now. >> we won't solve it today. simeon, thank you so much. on deck -- why a big jump in mortgage delinquency foss fha loans? we investigate, next. gy ofits partners a ing aps to cr arov 1 ory se.rosoftlo ofits partners a ing aps to cr arovanlyze t da thaev bore. wcan dete new

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all right. a big spike in mortgage delinquencies on fha loans. diana? >> we haven't seen delinquencies jump since 2006. fha is the government insurer, they stepped in to save the market during the crisis and then needed a bailout in 2013, but credit scores jump result. recently as the market and economy, and the scores have been coming down. the seasonally adjusted rate increased to.02, from 8.3% in the third quarter, according to the mortgage bankers association. the jump which came off the

lowest rate since 1997, was driven by loans made since 2014, and early-stage delinquencies, those just 30 days past due. the mba ceo says it's definitely of concern. >> we've been experiences great credit quality for so long. to suddenly sees this quarter over quarter reversal was a surprise. >> on inauguration dates, the trump administration froze a last-minute cut, saying they wanted to study it further. the house financial services committee put out kind of an "i told you so" statement saying trump made the right decision. >> a lot of taxpayer money involved there. all right. so is the run for housing stocks over? by the way, there's been a run for housing stocks. is it over? may amatt and stayy, home

builders a good investment? >> yes, quick answer we think so. you need to lift up the hood and figure out what's inside. about 65% is housing stocks. our analyst has a bullish view on home builders thinking that the first-time buyers are returning, two top names, dr shortened and len noor, so fundamentally we market the argument it's not over. yes, the talk about these increased rates is definitely going to gift some headwind here, but sentiment really quickly here, we would make the argument, the sentiment we've not seen any indications that investors are nervous. that being said, certainty not the trade du jour. >> susquehanna, horton hear es a

buyer, at least? >> yes. >> do you agree or disagree with stacey? >> on a technical basis it's kind of a critical juncture, what stacey mentioned is getting up to the 30 level, which is incredibly important resistance. so if it can finely break above it it should break some of that momentum money to fuel it higher. however, we have to realize the last two times, that rolled over hand fell 15% over the next two months, and with some of these issues like diane olick was talking about and then we saw in the nahb, number which was lower than expected, we're not sure which way it did go. one thing that stacey talked about on dh horton, that stock

lagged. if it can finally get moving it should help the rest of the group go. >> matt and stacey, thank you. for more "trading nation" go to our website. up next it's google or amazon in the battle for your home. only one can win, only one will survive. who will it be? we'll find out, coming up. >> announcer: and now the latest from trading nation.cnbc.com, and a word from our sponsor.

attention lamborghini drivers. your car may be recalled. robert frank joins us now with more on this decidedly first-world kind of problem. >> high-class problem, tyler. imagine buying a $4 million call and it's recalled for fire risk. that's what happened.

lamborghini issuing a recall of 5900 of the sports cars because of a fire risk from the exhaust. there had been no reported injuries or incidents. the company said the fault in the emissions system could result in fuel vapor and hot gases combining in the exhaust to catch fire. customers can take their cars to the dealership for a new emission system. the model sells for $130,000 or more. the benigno is one of the most sought after cars on the planet with a sticker price of $4 million. the roadster, the open-top, goes for $4.5 million. they've soared in value since 2015 with one being offered for $11 million last year. i drove one of the three ever sold. that's me driving. that's owned by a long island car dealer who owns a coupe and

roadster. he is a dealer so he can bring the car to himself to be fixed. >> good. >> we won't worry about him. he'll be okay. >> is it worth less? must be worth less because it's recalled. >> people are flipping these cars for two times what they bought for. >> somebody tweeted at you, "tens affected." [ laughter ] >> it's 5900 cars in total. 5,900 people. what we're highlighting -- >> i want to see fire come out of the exhaust. >> batman style. >> like an after burner on an f-16. >> not in a good way. >> if you have one of the lamborghinis, do not let a millennial drive it. according to the aaa foundation for traffic safety. many millennials engage in risky behavior behind the wheel. does it include while they're driving?

speeding, running red lights or the big one. texting while driving. nobody wants to comment on my wink at the camera? >> we don't want to comment on millennials. >> i don't think it's breaking news. teenagers do all of that. teenagers are dumb. >> distracted. >> dumb. >> when it comes to driving. i don't know why i am alive. >> that was fun, robert. amazon and google, battling it out for control of your living room. 43% of americans have used home assistants like the echo or google home in the last three months but which device is winning the war? gene munster, founder of loop ventures. when you say 43%, that means they've tried it, right? they don't necessarily own it. >> 7% of u.s. homes actually have either an alexa or google home. it's a much smaller percentage of people who actually have it. >> what have you found in terms of accuracy? >> well, first i have to give

credit to two of our analysts, david and steve, because they soldiered through 800 queries on each of these and found that google home is slightly more accurate. 39% of the times you ask google home a question is returns the right question. and alexa was slightly lower at 34%. google home tends to do better at information, which makes sense because google is good at information. not surprising alexa tends to do better with shopping related. i think at the -- if you are going to make a call on the race, it's a slight advantage to google home. >> is it really a slight advantage to google home, gene? if i am a prime member i'm going to get an echo or dot because it's connected to my ecosystem and it's that much easier to make it more convenient for myself. >> if you are an amazon prime user, that changes the equation. we were just looking at a recommendation based on purely does it answer the questions that you are asking it. we looked over five different groups. commerce was one of the five groups. so in the case of someone who is

an amazon prime user they'd probably see alexa as the beneficiary. >> what are some of the questions that they found hardest to get right. >> the things that were hardest were questions about people. so, for example, if you asked who is christopher columbus, it would struggle with that. also we noticed when we asked a location-based question, it struggled with that. i think that's an easy thing that both alexa and google home can do better. so the two analysts went back and reviewed what these -- what the answers were and double-checked them online. >> right. >> and found that, in the case of location it struggled. >> incorporating the survey and what you found, gene, put your analyst cap on. who do you think has the lead in terms of selling the devices to get into your home? google or amazon? >> that's alexa. part of the reason is that they've opened themselves up not only to skills -- there are

about a thousand different skills third parties can build. google has not done that yet. alexa has opened up the hardware piece to be included in other people's hardware of the you'll see alexa inside other devices not made by amazon. that's a big piece that will benefit amazon down the road. >> my friends here are worried that alexa is always listening. are you? >> she is! [ laughter ] >> is she? >> i think it's a very legitimate question. i mean, it records about a five-second loop, and so just keep that in mind. and separately -- >> is google not always listening? >> google is listening too. >> all right, gene. going to leave it there. gene munster, loup ventures. "check, please" is next. thep ofheowts dades a taedce d clinnoti

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check please. senior administration official tells nbc news andy puzder is expected to withdraw his nomination for labor secretary at this point. a lot of issues surrounding it. there had been speculation that donald trump might get through every single cabinet member. not going to happen, it appears. >> puzder in the omb nominee is finding resistance most notably from john mccain and others. that one may also be in a little more trouble than we thought. >> what does this do to corporate tax reform? a big question for the markets. investors saying snapchat is

more like twitter. could be tough questions from potential investors. all we've been talking about today a year ago was the fed and janet yellen. the boston head says three rate hikes this year, folks. my check please is that "the closing bell" is coming up next. tax reform is one of the best opportunities to really impact our economy. so we're doing a massive tax plan. it's coming along really well. it will be submitted in the not too distant future. it will be not only good and simpler. it will be -- you're talking about big numbers of savings. we're talking also middle income and very much for business. we're going to simplify greatly the tax code. it's too complicated. we're going to