i totally disagree that it's not not cornell's fault. he should have been rolling it out a long time ago. i have questions. >> we have very capable people that will be asking him those questions. >> i'm sure they are. >> i would be happy to. because guess what -- >> "power lunch" starts right now. "power lunch" does start right now. as scott and the gang noted we are moments away from the interview of the day. the ceo of target, sitting down exclusively with us as that stock suffers its worst day in more than 18 years. target, reporting terrible holiday results, missing on both the top and bottom lines, slashing guidance for the current quarter and the full year. what we want to know. how can consumer confidence be at a record high, but target struggles so much? a can't-miss interview is seconds away. hi, everyone. i'm michelle caruso-cabrera.

laser focus on washington today as president trump gears up for his first address to a joint session to congress tonight. what you can expect from the big speech straight ahead. >> i'm melissa lee. the battle for your trades. fidelity cutting fees. take a snapshot of that, schwab, e-trade, tdameritrade firmly in the red this hour. what every investor wants to see, exclusive of the ceo of target. courtney reagan is live with brian cornell in new york city. courtney? >> hi there, brian. thank you very much. that's right, target just wrapped up its 2017 financial meeting. i'm here with ceo brian cornell thank you so much for joining us. your stock price is down 13%. worst day in 18 years. do you have a confidence problem with wall street? >> courtney, we're really confident about the direction we're setting. today was about taking our

shareholders through the new direction of the company. the investments we're going to make, both from an operating margin standpoint but importantly from a capital standpoint to reposition the company for the future. so, we think we've got the right plan in place. in fact, we know we have the right plan in place. we'll be investing in reimagining our stores, remodeling hundreds of stores across the country. we've seen great response to these small format stores we've opened up. you'll see us accelerate that going forward. transforming our supply chain to meet the needs of today's business model. we'll be launching new brands and continuing to make very important digital investments. we think todays with a very important day to set the tone for where we're going in the future and position the company for future growth and market share gains. >> so, today you definitely reset the guidance numbers. but they're not really new investments. they're investments that you talked about and initiatives you've been doing for several years. i don't quite understand why you think it will work going forward if it hasn't worked so far. >> well, the fact of the matter is it has been working.

we've been very disciplined about testing and validating. now we're ready to roll out. we have to increase one thing. that's speed. so we spent a lot of time over the last couple of years testing a new store design, remodeling stores in los angeles. we call it la 25. we're taking a learning from that, making minor adjustments and now you'll see us remodel hundreds of stores over the next few years. we were very thoughtful about entering new markets, new neighborhoods with smaller formats, taking a learning from tribecca and chicago, you'll see us double those stores next year and we see a path to continued growth going forward. we've been reworking our supply chain system. you'll see us advance that in the next couple of years. we had a very successful new brand launch this year, two big brands. they're on the path to being billion dollar brands. we talked today about the fact that we'll have over a dozen new brands we'll roll out over the next few years. and we've had two or three

really solid years of digital performance. we finished the fourth quarter, we were up 34%. in the last couple of years, we've more than doubled our digital footprint. we're going to accelerate going forward. to do that, we had to make investments, both in operating margin and in capital. but they're the right investments for the business, for the brand and our shareholders going forward. and today we just talked about the fact we're ready to go a lot faster. >> i'm still just a little confused about how it's different going forward, though. your comp sales trend has been declining about the last nine quarters if you look at that trend. what you're saying is that you're investing this your stores, in online. but you've been doing that and it's not working yet. so, what is different? >> well, we'll be doing it at scale. this last year, we remodeled 25 stores. we have 1800. over the next few years, we'll take that learning to over 600 stores. as we reimagine these stores, we know how the guest reacts. it drives more traffic. it brings our guests back more

often, brings greater engagement. we have to do that to scale. it will take some time. next year we'll remodel 100 stores but in the next three years we'll touch over 600 stores. a handful of these small format stores we opened up are delivering great productivity, three to four times productivity. we'll double that next year and you'll see hundreds new locations. strengthening our supply chain so we take costs out and build more speed. we've been testing that very carefully and now we'll start to roll it out at scale. we'll populate our business with more proprietary brands. all these things come together. what we also talk about today is embracing the new reality of retail. we have to embrace digital, recognize how shoppers are shopping and make the right investments to build market share over the next few years, to make sure target is one of the future winners of retail. >> you're not closing stores at all. in fact, you're opening 100 new

stores, remodeling 600. if you already lost shoppers and these stores are losing productivity, at what point do you say we have to close stores? this doesn't make sense for us financially. when do you get to that point? >> we look at our store base all the time. over the last few years, we have closed stores, dozens of stores each year. over the last few years, a couple hundred stores over the last decade. but we're fortunate. they're in great locations. we're not attached to dying shopping malls. we're in great locations across the country. now, we've got to bring those stores to life differently. we know some of our stores have gotten tired, they've gotten old. i've got stores that haven't been remodelled in over a decade. we have to go back and bring the best of target to those stores. when we do that, the guest responds, it brings traffic back and delivers the experience had an today's guest expects from target. >> walmart did a couple of years ago, cleaned up their stores,

invested in digital. kind of sounds like your plan. how are you going to make it for you? how are you going to get back shoppers and sales that you've lost as they've grown share and you've fallen? >> we're looking to create a smart network of stores where our stores, our distribution centers, digital capabilities really allow the guest to connect with target any way they want. we have to make sure we provide a great in-store experience and continue to elevate our style brands but also deliver the value our guest is looking for. we have to make it really easy to shop online. we have to make sure we take all the friction away and make it easy and reliable. and we want to make sure, if you want to order online, you can pick up one of our stores. we to have bring all those elements together. we've got lots of work to do. what we talked to the investment community about today is this isn't going to be overnight but a three-year plan we put in place. this first year is about investment. we have to mature and transition these initiatives but ultimately we'll return to a point of

stability and growth. with the disruption in retail today, there's significant market share opportunities because people are closing stores, as you mentioned. and as they close, we have an opportunity to be one of the future winners. to pick up market share both in store and online. >> part of what you're trying to do to pick up market share is drop your prices, lower your prices, be more price competitive. to do that, you're willing to pull back on those margins. what happens, though, if the border adjustment tax comes through? do you have to abandon your pricing plan all together? >> let's talk pricing first and then i'll talk about border adjustment. what we talked about today is going back to our traditional pricing model and coming out of the data breach, we became very promotional. you'll see us go back to our traditional, everyday low price model and making sure we deliver great value across the store. but starting with household essentials, personal care, food and beverage business. we're really going back to where we have been in the past, a model that's worked for us

before. now certainly you know i'm spending a lot of time looking at the new plan that the house has proposed for corporate tax reform, the impact of the border adjustability component. we're looking at that very carefully. i think we've had great meetings in washington, including with president trump and members of the house and senate. i think they understand that the current border adjustability plan could have a really detrimental impact on american family. >> they understand it. are they willing to do it? where does president trump stand? >> they don't want to see prices go up 15, 20, 25% for families buying clothing for their kids, school supplies, basic staples. they understand the impact of retail. target pays 35% effective taxes today. if this were to go forward, our tax rate would go over 75%. and so they understand the implications and i think we're going to end up in a much better place. >> what does happen for target? target specifically, what happens to your profit? what happens to the prices that

consumers pay if border adjustability goes through? >> i talked about it. we modeled -- this is across the entire industry, not just target. as this plan is structured, we could see consumer price go up 20 or 25%. that's not good for anyone in america and it's certainly not good for families that shop our stores. those 30 million guests in target every week. so we've been out there in washington really on behalf of the families and the target guests we served and making sure they don't see higher prices, because we all know as prices rise we'll see further retraction in retail. it's not good for america, for families and we've had great conversations to make sure everyone understands the unintended consequences of this plan. >> there's a lot going none retail right now, both with target as well as the broader industry. there is a lot you have to juggle. does the board still support you and your initiatives? >> the board has been incredibly supportive. obviously, we spent a lot of

time with the board prior to today. universally, they support the plan. because they know it's the right thing long term for the company. it's the right thing for the brand and it's the right thing for our shareholders. so, what we talked about today is building the target of the future. and our board is not thinking about next quarter. they're really thinking about how we make sure ten years from now we're one of the future retail winners. so a lot of time in the board room. a lot of time sitting down, setting priorities, making sure we understand what's required to go forward, but tremendous support. >> so how long has the board given your four-year plan you? said it's a long game not a short game but certainly it's not forever. >> it's a three-year initiative. it's going to take some time. this is year one. we've got to invest. we'll see these initiatives mature over time. three years from now, i hope to be sitting here, talking about the fact that we returned a growth, we're a marketshare winner, both physically and digitally. >> you don't want to become one of those distressed retailers?

you don't want tonight one of those headlines? >> we will not be on that list. we want to make sure we move into that retail winner's circle. >> back over to you all in englewood cliffs. >> courtney reagan, thank you so much for the exclusive with brian cornell, ceo of target. what do you think about how convincing he was, putting forth the strategy to reignite growth? >> i was surprised of about how he was on the physical presence of target, more stores reer s r the current ones in this day and age when more and more people are shopping online. why he would focus so much on the physicality rather than cyber. >> or maintaining the number of stores even. >> increasing them, right. >> with all due respect to brian cornell. and i appreciate him sitting down with cnbc. there was a lot of buzz words in there but not a lot of meat. reimagining, repositioning, our target guests. target stock has unldperformed

walmart in the last year, last five years and last ten years. that says it is not a macro retail situation as much as a target specific situation to me. >> i agree. two target analysts, michael lasser and oliver chen. you heard what we had to say in terms of our review of how brian cornell did. oliver, what do you think? this is where walmart was back in 2015. why couldn't target have made that turn back then instead of finding itself behind the eight ball two years later? >> yeah. i think what we're witnessing now is really seismic shifts going on in retail. there's a revolution here. right now, target is really resetting itself, reinventing itself and thinking about how to best leverage its existing assets. this has been an ongoing problem. the bottom line is consumers have changed. they want more ease. they want value. they want convenience. it's about bricks and clicks. keep in mind, 68% of digital

orders were fulfilled by target stores. online is growing by 44%, 7 prs of mix. it's about bricks and clicks. but these are issues that are all coming to a head and underlying this is price investment. what does that mean? consumers want low prices. target is putting up the money to invest here. so i think this is a reset. as we look at the long term. and target is playing the long game. we have a market perform rating on target. we are recommending walmart and have seen these changes earlier at walmart and have to acknowledge that. target needs to play the long game. there's a revolution in retail. >> sure. >> think about amazon, customers and it's very different. >> of course. the question, though, is can it do it at this point? michael, an analyst made the point that two years ago when walmart was making this shift and reinvestment in its own business, it had a bigger footprint. it was a bigger company so it could afford to do it. for a company -- granted target

is a very big company but for target to do it, it increases the risk profile for target to launch 12 new brands which they expect to be $10 billion in sales the next two years, to reduce -- to compete on margins almost at all costs. what do you think? >> i think there's two key questions here. number one, they're taking their margins down from 7% to 5.5%. the key question is have they gone low enough? >> you want them to go lower? >> we don't know. >> if there's a border adjustment tax, it's all gone. >> well, that remains to be seen. >> right. >> the other question is, if they have gone low enough, at what point are they going to drive sustainable sales and earnings growth? on the stock it's trading at 14.5 times base number dividend yield. those provide some downside support. it probably hangs out at this high $50 level until we get more answers about those two key questions. >> michael, what about the focus

on the physical stores? when you heard that interview with courtney, yes, he talked about investing in digital. he talked about ease of buying, going from online to into the store. but ultimately it was about revamping the stores, making them look nicer. he said it doubles the productivity. at this day and age, is that the smart place to put your focus? expanding the physical presence of the retailer rather than focusing more on the digital experience? >> yeah. let's keep everything in perspective. right now about 15% of retail sales are done online. over time, maybe that grows to 25%. so 75% of retail sales will still take place in a store. the consumer likes to see, touch and feel the products that they're going to buy. there's an immediacy of the need. there's a plethora of value trends to go into a store. i think target is understanding that. and they're aiming their

strategying accordingly. i think the real question from here is does overall retail profitability by virtue of price transparency, the very low switch in costs for consumer does that all take a step lower? that remains to be seen. >> oliver, this is an uncomfortable question. you may not want to address this the reality is, it's out there. 1.14 million people have signed a pledge to boycott target because of their bathroom policy. i don't know if any of those people have actually boycotted target or they're signing a pledge online. who knows. the reality is this. do you think target has stepped in it a little bit politically? do they need to change certain policies? have you noticed any impact? >> management's take on this is that they have not noticed impact in terms of this. target is an exclusive culture. for them it's about back to the basics. it's about this lower price investment. also, keep in mind another story here is target is a well-loved brand. it's also a merchant company

that does a great job developing product. the cat and jack brand is a new brand that reached $1 billion very quickly. it's a well-loved brand, dividend yield as well. an earlier topic is stores, future of stores. the future of stores is really -- you shop on your phone first, then you go into a store. so, buy online pickup, ship from store -- >> sounds like you're almost at a buy, oliver. >> well, i think there's a balancing act here. and giving them credit, they're facing the music. so, you really are facing the music about this revolution that's happening. and that's what you have to do. a setback is a setup for a comeback. we'll see. it's really a test of managerial leadership and how they allocate capital. you can't forget about amazon and the reality of the threat there. and also millenials and generation z, and drone sbts future of retail. everybody wants their goods in ten minutes and less. have you to worry about food, pharmacy, diversification.

there's a lot happening in retail. it's a very exciting time. it's going to come down to -- >> we have to go, michael. i find it odd that 1.4 million people, it's not 3,000 angry people but 1.4 million have sign aid pledge saying they'll boycott the store and the target ceo is not addressing it. >> ultimately the skoorm wants a good experience, be treated fairly. that's what matters most from an economic perspective. target has a great brand within the consumer space. it has a good set of assets. it will get there eventually. >> guys, thank you so much. michael and oliver. >> thanks for having us. your investments just got a boost in the form of lower fees. discount brokers like target, trying to slash prices. you may love it. are they shooting themselves in the collective foot? the president giving himself an a for achievement. what else? but a c in communication. the question is, what and how will he be communicating tonight in his first address to a joint session of congress? all that straight ahead.

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welcome back. president trump is addressing a joint session of congress. kayla tausche is at the white

house. >> reporter: i'm told by a senior administration official we should hear an optimistic speech yet one that is realistic, that focuses on real problems and challenges, faced by the american people. it is expected that the speech is going to be advised by the same team that helped the president with the inaugural address from the white house listening sessions that the president and his staff have been conducting with ceos and executives for the last five weeks he has been in office. expect specific references to the companies that are already creating new jobs or will announced new jobs. infrastructure, health care and tax reform, expect more politics than policy with the audience being congress, those who will actually be in charge of any timelines affecting these policies. so, more end proposals, guys, and less means to those ends. >> got it, kayla.

thank you for the rundown. let's talk more about this big speech tonight with cnbc contributor and author of "winning," suzy welch and former white house press secretary, ari fleischer. >> three word, give people confidence. let people watch him and then say, yeah, i think he can get these policies through. i hope he koss doedoes. to do that, he needs to be thoughtful. don't be the entertainer in chief that he sometimes has the habit of being. >> sometimes? >> but convince people he has thought about these ideas, he has a thoughtful approach, understands the nuances of these policies and makes his case for them. give people confidence. >> suzy, do you agree? what would you add to that? >> i agree with ari. thoughtful is a great word. i don't think that's part of his style tool kit, per se. i would add to that, i think people are hoping this is not a campaign speech, that this is

not another rally speech, that this is actually a presidential speech. this is not a time where he talks against the media or talks about how he won again, or any of the -- >> are you confident about that? that's so against his type, suzy. >> i'm hoping that they realize that they have their base. they won their base over. everything he has done since the day he was elected was to build and support his base. they're happy. and they probably realize that the resistance is not going to be moved. he could get up there and read poetry by barack obama and they would still hate everything he says. so i hope he's going to speak to the sort of hopeful skeptical middle, that people on both the left and right who have made peace with different levels of enthusiasm with the fact that he is president of the united states. i hope that's who they talk to. i don't know if he can do it in a thoughtful way, but perhaps he can. >> ari, how important is detail in this speech? you know, what we have noticed here in the markets is 12 consecutive record highs for the dow jones industrial average on

very little detail. the minute the president puts out detail, some think he puts himself into a box. all of a sudden he has detail to deliver against. how important is detail in your view for this particular speech? >> a small dose of detail is help fel bful but that's not wh speech is about. it's inspiring, set the direction, the tone. here is what i'm going to do as president, substantive policy speech. the details come in form of legislation and negotiations with congress. that's much more the work of the president and the legislature. it should not be a detailed speech. a couple of details to reinforce the point that it's thoughtful. he understands there are tradeoffs to various policies but nevertheless this one, a, is so much more important because we can accomplish c, d and e as opposed to b and we can't accomplish d, e and f. there can be a dose of it. but his message is to rise up and inspire people, the persuadables that, yeah, donald trump can get it done.

>> suzy, the president is a man who likes to pride himself on a power of negotiation. anything he has said or done, you feel he needs to negotiate at all even with members of presumably his own party, the gop? >> i think he thinks he's negotiating all the time. i think his strategy is to go very big with a gigantic, big statement and negotiate backwards from there. i think he is negotiating every minute. and -- but i want to part ways with ari and what he just said. while i love the term the persuadables, i do think this speech should have a lot of specifics and detail. all we've really heard from donald trump at this point are these big, soaring speeches. we're going to win so much we're going to be sick of winning. and those kinds of statements. and i actually -- i think for the persuadables -- again, fantastic term -- i think they do want to hear specifics. they want to hear how we're going to do all these amazing things he has been promising the past year and a half. >> i was thinking the same thing. persuadables. i love that phrase. ari, copying is the sincerest

form of flattery so we're going to use that, okay? >> well, you persuaded me. apple meeting of shareholders, tim cook fielding questions right now at headquarters. we'll take you live there straight ahead. speaking of apple, are they about to throw a giant curveball at the market? we'll explain when "power lunch" returns. what did you have in mind? i don't know. $6.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissis back ife're not happy. so can you offer me what schwab is oerin what's with all the questions? ask yo broker if there offery trades and a satisfacon guarant. if don't like eir answ, ask ah

welcome back to "power lunch." i'm phil lebeau. mary barra, gm ceo said the border adjustment tax could be problematic if not done properly. that's all the headline says that we were hearing from the speech in washington or q & a session. there's a reason it could be problematic, especially for general motors and other automakers. gm imports 876,000 vehicles from canada and mexico. that's about 28% of their u.s. sales. you bet they have a vested interest in seeing what happens with the border adjustment tax and how it is implemented. >> at the same time, they get territoriality at a much lower rate. like everything they do overseas would no longer be taxed. >> well, yeah. in theory, yes. but you're also looking at how it's implemented, let's say, for the large pickup trucks manufactured in mexico, high-profit vehicles manufactured down there. what's the rate going to be when

you bring those in from mexico? it's one thing to say, look, if we're bringing in low content vehicles, small cars like ford, the impact not as great. you bring in a high-content, high-profit pickup truck, it might be a far different story. the devil is in the details, as you well know. >> got it. thanks. >> phil, thank you. >> you bet. discount brokers under pressure as the pricing wars heat up. fidelity cutting fees, schwab following quickly to match fidelity's fees. rich, great to have you with us. schwab rushed to do that. but as a percent of its revenues, fees are among the lowest of discount brokers, 11%. can etrade and ameritrade match that price war? >> they don't necessarily have to match but will have to come down in their pricing. they can afford it now. but, again, it's going to -- as

you just said, it will cut in more to their revenue than it does for schwab. >> is this a loss leader in trades? in actuality, are these people who trade often? these are not the active traders who get a prenegotiated or already discounted fee per trade. is that correct? >> that's right. the rule is that 20% of the accounts do 80% of the trades and those 20% accounts get discounted pricing. but we are going to levels now, even if you have a discounted price, ameritrade's published price is $9.99. you might get something below that. we are getting to levels where you might go back and renegotiate that discounted price as well. >> so bottom line, when i look at these stocks, rich, we're talking about a price war. and price wars are bad for companies, generally, because they get less revenues. when i see the reaction in the stocks today, is it overdone based on everything you've said

or should people throw in the towel here because it looks like a race to the bottom? >> i think there is, what do you call it, rightful concern about where price something going. there are other revenue streams. schwab does have asset management and banking revenue. so, you know, we'll have to see how far things go, whether they go down further and how far these -- the e-trades and ameritrades respond. the reaction today, i think, reflects this risk that you just bring up, michelle. >> richard, on a separate note, clsa, a research firm owned by a chinese bank shut its doors last night, can kind of unexpectedly. 90 more analysts lost their job, including mike mayo. every single person i know in the research community says you can't make money. no one is crying for them. except i do wonder as discount brokerages lure in our audience,

who will provide the research? will it be all passive investing? what's the state of wall street and our audience to be able to get unbiased, smart research? >> you bring up a good point, brian. there's been heavy pressure with the etfs, the reduction in commissions being paid by institutions. and clsa is an example of that today. so, i do still think that somewhere research is valuable. the online discount brokers -- they're a different audience. retail investors predominantly. so they don't use, per se, the institutional research. but you may see things that are more innovative and creative, whether it be even with social media somehow trying to educate investors and get them back into the game of picking stocks. that hasn't been happening over the -- you know, the trend has been away from individual stocks over the last, you know, several years. >> quickly, rich, which of these three are a buy, if any?

>> well, our ratings right now, we haven't published, are under review. i'll have to -- right now we are looking at it closely, given the risks that we've discussed. >> got it. rich, thank you. good to see you. rich repetto, sandler. tim cook wrapping up his big meeting with shareholders. what exactly did he tell them? we'll let you know next. big bet on soccer. excuse me, futbol. here in america, will it pay off? guess what, it already has. where is the mls going next? the commissioner is live with us, coming up.

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liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call for a free quote today. liberty stands with you™. liberty mutual insurance. hello, everyone. i'm sue herera. here is your cnbc update this hour. west bank settlement following a court decision that the homes were built on private palestinian land. security forces had to carry away some of the settlers protesting that move. french presidential candidate marie lepen meeting with farmers in paris.

she promised new solutions for struggling farmers and said she wants to nationalize farming, replacing subsidies from the european union. xbox unveiling a monthly subscription for video games. at $9.99, game pass allows users to download games directly on to a console. the game pass launching later this spring include games like lego batman and halo v guardians. that news has put a lot of pressure on the stock of game stop today. on a lighter note, cuteness alert. panda cubs at the vienna zoo have emerged from their compound for the first time since their birth seven months ago, exploring shrubs and climbed trees but mom kept a very close eye on them. there you go. that's the news update this hour. i'll send it back to you, guys. brian, that panda's for you. >> we know, we knew you're back. as soon as the panda cam was

back. >> there we go. >> all together now. >> ahh. >> oh. >> i hate pandas. >> stop. >> you're evil. >> you do not. >> i adopted six. lucky 13 or will it be a bad case of investor tricit makes headlines. it feels like dow 20,000, right? headline, general news, whatever. do you care? >> tonight is going to be -- >> going up is better than going down. >> people are making money when it goeses up, right? investors are happy, good out of the gate, making money out of the gate. >> but you were going to say tonight? >> people are look for clarity. they're starving. clearly, the market is looked at -- >> clarity on what?

>> you don't think he's going to come out and say i like the border adjustment tax or something, do you? >> you wish he would. >> say something at least about it. >> for sure. what they're looking for is any kind of posturing, ability to work across the aisle and see if any of these policies, which the market is giving credit for, tax reform, deregulation, those types of issues, if there's any clarity on that. so, probably not much like you're saying but check the box. investors want clarity. >> david, the market has done pretty well without any sort of clarity, with just sort of the hope of stuff getting done. at the same time if you take a look at the sectors that have been doing well over the past month, utilities, consumer staples, bonds. what's the message of the markets right now? >> the market is look at the good things from the trump administration and overlooking the possible negatives. we're not expecting any kind of clarity tonight. we think you'll get the same message you've been getting the last few months which is he's going to try to lower taxes.

he's going to try to increase fiscal spending. our concern will be if he focused on a trade war or chinese policies. beyond that, we think the market is eventually going to enter a trading range. we would not be chasing this rally. running to buy any significant pullback. from an investment perspective, the best thing you can do is look at individual stocks. >> what's significant in your view? >> at some point, it's perfectly normal for the stock market to pull back 3%, 5%, 7%. you don't know if it will go up 5% first. we wouldn't try to time the market but focus on individual companies. >> what about you? what do you do? >> i agree with him. we do get a little bit of a pullback. it's healthy. there are a lot of concerns out there as to what he's going to say, what is the forward. right now he's going to get a little more time. our institutional clients at oppenheim are saying he will get the benefit of the doubt a little longer. that will help the market -- >> what's the worst thing he could say? >> there's a lot. he's always going to say something that gets everybody a

little -- >> i mean, just specifically for the stock market. >> you know, anything that will get the bond market and yields ripping to the upside, which is fight quality and safety. >> not because you're worried he's going to spend too much money and it will be inflationary, but a rush to safety trade because you think -- >> bashing china all night? >> that could be a game changer. yes. >> we'll wrap it there. david and deron, thank you so much. will you be watching as well tonight. >> thanks so much. soccer season kicks off this friday. you may be surprised how much a good investment soccer franchises have been. first to rick santelli at the cme for today's bond report. hey, rick. >> hi, melissa lee. not a lot of action with regard to breaking out of the range. there's a good amount of volatility. tens, we are drifting. open the chart up to the beginning of november, you can see for the most part sideways,

lower end of the 230, 260. 2017 range. the dollar index up, really it's not much different. steady as she goes, despite the big negative rate swapping that's been going on, on the euro curve and it seems to be withstanding it. with all these prices calm and equities flying hyg etf are making the highest level trades since july 2015. don't change that channel. "power lunch" will return in two minutes. sir! there's been a breach. we need your password so we can lock down the system. my password? yes, sir, we need your password. the password that i use? yes, sir, your password. there's been another breach! sir! right. okay. i-h-a... ...t-e-m-y-j-o-b-1. ihatemyjob1?

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lunch." i'm jackie deangelis. on a report that the white house says the trump administration is denying an executive order to change the renewable fuel standard. there was some conversation out there that this hotly debated provision might see a change that we wouldn't necessarily see ethanol or as much ethanol being blended into gasoline. of course, that comes at a very high cost for companies when you do it that way. this would benefit them if it wasn't exactly like that. you can see crude oil futures trading 53.84. we were very close to that $53 mark earlier. >> food rundown. thank you, jackie. apple just wrapping up its annual shareholder meeting. josh lipton is outside apple headquarters with the details. josh? >> reporter: well, the meeting itself, the vote itself went as expected there, michelle. you saw the directors elected, including tim cook, al gore, among others. on the subject, for example, of the product pipeline ahead, tim

cook was tight lipped as ever. of course, apple doesn't reveal what's in the pipeline, just saying they continue to invest a lot in r & d, excited about what's on the horizon. for investors, you see that pop, 20% year today. part of that explains what investors think could be coming in the fall, regarding that new iphone. cook opened the floor to some shareholders, asking investors what is apple doing to create jobs, reminding shareholders they created 2 million jobs, 1.4 million being developers to write apps for devices. apple does a fair amount of manufacturing, components for the iphone like adhesives and semi conductors. president trump said a big victory for him would be to get apple to strt a new plant or many big plants here in the u.s. whether bringing back large-scale, low-scale assembly iphone here makes economic sense is a question. back to you. >> josh lipton, thank you.

major league soccer has been a good investment so far. what's the next stage of growth? mls commissioner joins us live next. e*trade's powerful trading tools, give you access to in-depth analysis, and a team of experienced traders ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade

major league soccer kicking off its season. two new teams including atlanta, also known as the united. the league is coming off a record-breaking year for attendance. 22 teams. the average team worth $185 million. way up from just ten years ago. games are now broadcast in 170 countries and average more than 21,000 fans per game. here on set, don gar bchber, commissioner for major league soccer. thanks for being here. >> great being here. >> this is cnbc not espn, by the way. toronto team started for $10 million. now it's 200. >> it is. >> what's the rli? >> think of that $10 million investment that maple leaf sports entertainment made. that team is probably worth $250 million today. it's all driven by the growth of sort of millenials, hispanics and the fact that people like you -- you've attended soccer

games. >> metro stars first-ever home game in 1996. >> it was. that influencer is coming, helping to create a real soccer nation in our country. it's good for investors. it's good for sponsors, good for our broadcasters. just a lot of growth. >> you have 12 teams, i believe, vying for the next round of expansion. >> at a -- >> can i ask you who is going to get that? you won't tell me. >> i will tell you. it actually goes to the current owners. it deludes their national revenue. everybody thinks it goes into their pockets. it ultimately is there to sort of compensate for more owners more partners but also to go back into infrastructure, stadiums, player development, academies and the like. those 12 teams represent more teams we had in the league when it was founded. places like san diego, st. louis with mitt romney's former partner. investors that see this as the last -- >> who is going to get it?

>> i can't tell you that. >> that's what he was asking. >> that's what i'm asking. >> you told us during the break that -- >> san diego is looking good. >> more than 30% of your players come from overseas, 62 different countries. you were talking about whether or not immigration will be an issue under president trump. is it? >> it isn't yet. we still need to see how it all plays itself out. many of our players are here on work visas or are getting green cards because they're coming in and following the imabrasion mi laws and policies in place today. we want to be the lead for a new america, diversity and immigration that's driven growth. >> are you lob heing the white house? >> all the leagues are doing what they can to pay close attention to it, for sure. >> obviously your attendance is very strong right now. at the same time you have a very engaged social media audience, right? fast of the growing league on media. 687% since 2013. what is your online distribution

strategy in terms of streaming games? >> trying to get our players, games, fan connections everywhere we can on every device. we're really no different than any other content holder or provider. you can't just depend on your broadcasters to do that. you want your mls games available on any device through your broadcasters but connect, watch it with twitter, social media feeds on facebook, working on a facebook live program for some of our content as well. >> ever going to be as big as the nfl? >> i don't know that we will be as big as the nfl but among the top soccer leagues in the world and i believe we will continue to creep higher and higher on the food chain with the other major leagues. they got a hundred-year start. mls is only 22 years old. >> but there's a new kid. you always competed for players with the premiere league in england and the bundas league in spain to a point. now there's chinese super league. and they're starting to pay -- i'll say it. you don't have to.

dumb money for players. how do you compete with that? >> you just have to have your league become a league of choice. great environment, great place to live, surrounding them with the right support for their families. by the way, we have guys that are making $7 million and $8 million a year, far cry from the early days when you were a metro stars fan. i am convinced we'll be a great alternative. >> let me correct you. i never liked the metro stars. they were just close. >> thank you, don. >> great to see you. >> guys, i have to be a bearer of gifts for -- >> cool. >> look at this. l.a. galaxy. someone told you -- >> love presents. >> when you sign a contract -- >> you're a red bull. >> you have to hold up your -- there you go, melissa. new york city team. >> thank you. >> nfl, you get a cap. in major league soccer, you get a jersey. that's what happens when you sign a new contract. >> l.a. galaxy, cool. >> thank you. pharma shares up more than

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welcome to the second hour of "power lunch." i'm michelle caruso-cabrera, with melissa, brian. two hours till the closing bell. target in the crosshairs, getting hit by a lot of 12%. target ceo was on "power lunch" saying he's investing in revamping and remodeling and confident in the new direction. counting down to president trump's big speech before congress tonight. obamacare, tax reform, jobs, big promises. can he make the sale? and dimon's view of the world taking q & a right now this hour in new york. we're there with all the live breaking headlines. don't move. >> last trading day of february. three major averages up between 3% and 4% this month.

dow is struggling for a 13th straight day of gains we are in the red right now. valeant and perrigo taking. opposite end of the spectrum, kite pharma soaring more than 25% right now on strong data. kite's ceo will join us in a moment. signet jewelers down more than 10%, a parent of sterling jewelers, which owns kay jewelers and jared, hundreds of employees claiming sksual harassment and discrimination in the workplace. >> top corporate story, target. that stock down 11% right now. it is on track for its worst day in nearly 20 years. and if you missed it, we had the ceo on last hour with courtney

reagan. he made it clear they want to cut prices but invest in stores. grocery is not doing well. he affectively said the company needs an entire revamp. >> yeah. that's exactly right. the company is not doing very well. matter of fact, it was very far short of the guidance that he gave to investors. when it put out those full holiday quarter numbers it missed on earnings, sales, on comps and then target had to speak to analysts. it was their financial community meeting here today. as soon as that was over, we sat down with brian cornell exclusively, asked him pretty tough questions. yes, as you pointed out, shares are on -- >> the board has been incredibly supportive. we spent a lot of time with the board prior to today. universally, they support the plan. they know it's the right thing long term for the company, right thing for the brand and the

right thing for our shareholders. what we talked about today is building the target of the future. and our board is not thinking about next quarter. they're really thinking about how we make sure ten years from now they're one of the future retail winners. >> reporter: so, he's playing for the long game, that's clear. what target laid out today is more investment in online and remodeling, reimagining that experience. if it hasn't worked so far, i asked cornell why he thinks it will work, going forward. >> the fact of the matter, it has been working. we're ready to roll out. we have to increase one thing. that's speed. we spent a lot of time over the last couple of years testing a new store design, we called it la 25 in los angeles. we're taking a learning from that, making minor adjustments and you'll see us remodel hundreds of stores over the next few years. >> not only will it remodel more

than 600 stores over the next three years, it will open 100 new small format stores. this, as other retailers are cutting their store fleets. cornell says that's where he sees an opportunity to come in and potentially grab share. as shares dictate today, i don't think the shareholders are quite so sure. as president trump prepares to deliver a major speech tonight, could parts of his agenda be in trouble? john harwood joins us. >> reporter: they are in trouble, melissa. let's run through those difficulties. on obamacare, still no white house repeal and replace plan. second of all, conservatives have been saying they object to the house republican leadership's replacement plan, saying it's too much like obamacare. finally, republican governors and senators are on the other side. they want a plan with more protections for beneficiaries than the house plan. secondly, on the budget, mick

mulvaney yesterday outlined a plan to shift $54 billion through cuts and domestic spending to increase defense. problem is that pretty much all democrats and some republican don't want to cut domestic spending that much. if they don't offset the increases, they're going to have trouble raising the debt limit, which republicans have to do. finally, on tax reform, that's a key priority for business and for the white house. any delay in obama dcare repeal slows down or delays. no plan on tax reform. finally senate republicans have objections to the house border adjustment tax. they are a long way from consensus on that. we'll see whether or not president trump can build up some of that consensus tonight. >> good rundown, john. thanks so much. let's talk more about this big speech with cnbc senior contributor larry kudlow and strategist christy spencer.

suzy welch last hour said supporters of hillary clinton will listen to donald trump tonight. they hate him so much that he could read barack obama poetry out loud and they're still going to criticize him. is that true? can he just not catch a break with you guys at all? >> that is true. although, we haven't really seen him extending his hand to us very much either. one way in which you can typically read the tea leaves of what a president is going to talk about is by looking at who the they have invited for their guest box. president trump has invited the families of someone who was killed by an undocumented immigrant. that gives you a pretty good sense of at least not just one of the topics that he's going to talk about, but the tone he's going to take as well, right? one that is negative, scary, and paints a picture of a dark world. that's not really the world that a lot of democrats think we live in. so, you know, from the get-go that is not going to be something we respond

particularly well to. >> it appears to be the world that got him elected. what are you hearing about the speech, larry? >> lots of interesting things. by the way, there may be a reach out to democrats. i'm hearing that. president trump today, in an interview early in the morning, said that his communications on the immigration refugee thing were not good. i think he gave himself a c or c plus. he wants to do better on that. there may be -- >> rare moment of humility. >> it was quite interesting. i saw it, read the transcript to make sure that's exactly what was said. >> double-check. >> you have to do these things. >> he did give himself an a plus in other areas, larry. he did. >> i give him an a on a lot of stuff myself. if you want to see what he's going to say, the governor's speech on monday, it's right there. the whole thing is right there. he talked about security and safety and tax cuts and growth. it's going to be right there. i am hearing there will be a level of detail in this speech that will be unexpected. and that probably will include

taxes, budgets and health care. the white house has come up with a lot of positions. they're very close. he's going to defend the 3% economic growth rate people have been talking b the one that i can't get a read on -- i'm going to tell you who is on who. the b.a.t. >> border adjustment tax, the b.a.t. >> the dumb, batty b.a.t., according to me. here is the lineup so far. mnuchin and cohn are against the b.a.t. >> this is your own sources people telling you this? >> mnuchin and cohn against. >> i heard cohn as well. >> bannon pro. >> priebus pro, wilbur ross, pro. free market guys, free trade guys don't love this. one person we haven't heard from on the staff yet is president trump. he may have a lot to say.

>> and 535 members of congress, christy. right? let's not forget they're going to write the laws. we're acting like the president is going to singlehandedly do this, this, this and this. yes, he signed a bunch of executive orders but congress still matters. does it not? does paul ryan, nancy pelosi, mitch mcconnell, do they matter at all? >> they matter quite a bit. and there's quite a number of different factions who can potentially oppose donald trump on even just fiscal issues, right? they can look at his budget and he would be against some of the fiscal hawks in congress, who really don't want to see that big hike in military spending. to say nothing of the many, many democrats who, of course, will oppose him on most of these things. >> christy, this moment in time -- for example, on the border adjustment tax -- >> sure. >> the gop is divided. >> right. >> pressure from donald trump can push it one way or the other. he still has the most political capital right now. you want to be that holdout who

goes back to your constituency and says i defy donald trump at this point? >> got to give senator mcconnell -- hang on, christy, just a second. senator mcconnell, who is a j e judicious man when it comes to communication, but nonetheless the senate rules -- trump is expected to say the health care, aca repeal will come first. that may not be the final word. remember this the supreme court said health care, obamacare is a tax. remember, the mandates are a tax. the entire aca is essentially a tax and spend. it fits into reconciliation. they could still move up the business tax reform and put it right in to reconciliation bill. that is doable. that is legal. they may have to fire a set of

parliame parliamentarian to do it. the kudlow plan. >> the president gave a speech where i swear he was speaking directly to larry and said obamacare is going to come first. >> right. but -- it will, but the question is, if you redefine it as a tax -- that's all i'm saying, which the supreme court has done -- that opens the door for business tax reform to go into that reconciliation bill. that's the pro-growth measure that everybody wants and is looking for. i'm not saying it will happen. i'm saying it is doable, legal, parliamentarian, whatever. >> christy, my point was michelle has been down to d.c. i've been down to d.c. a couple of times the last couple of months for off-the-record meetings speaking with senators and the people actually writing the laws, chief of staffs, bunch of lobbyists, sat in closed rooms and talked to these people. they're all saying -- trump can say what he wants. ways and means, the house

committee, kevin brady. we're writing the law. they're adamant. and i sense conflict. what do you mean, no? come on, larry. this is what they're saying to me in meetings. >> i don't care what they're saying. you can't do without the senate. be real about this. by the way, the senate -- christy, i don't know what you're hearing. the border adjustable tax is dead. are you hearing it differently? dead in the center. >> i'm not sure about that. these congressmen are going back to their home districts, holding town halls and hearing from their constituents. no matter what donald trump says they are going to be in a tight spot. do we do what the president wants or listen to our constituents who don't want to make adjustments to the affordable care act, who don't see corporate tax reform. >> they hate it. >> that's not true. actually it's more popular than ever, 54% popularity. >> they love it? >> right. tom cotton has faced 2,000

constitue constituents, screaming at him. they're in a tough spot. >> how about budget cuts? budget cuts. >> we've got to go. >> trump, budget cuts. you can't pass legislation without the senate. >> larry, christy, thank you. >> i agree. threw the senate in there. on "power lunch" what the markets want to hear from president trump tonight. is there enough support in congress to get anything done? we'll speak to congressmen on both sides of the aisle. next, kite pharma ceo joins us. soaring 22% today alone. what did you have in mind? i don't know. $6.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $6.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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welcome back. shares of kite pharma up 20%. the company's ceo joins us in a moment. first, let's get to meg tirrell with all the details. rare day when you see a stock up 22%. >> and something that the pharma industry needs right now. aggressive therapy in nonhodgkin's lymphoma. it's know as car-t, chimeric ant anti-gen reseptemberer t-cell therapy. it multiplies them, reintroduces them to the patient. new results out today, 26 out of 101 patients tested had a complete response after six months. meaning the disappearance of signs of cancer at that point. no new safety issues were observed. though previously two patients

died in the trial, thought to be a result of taking the therapy. kite says it plans to apply for regulatory approval at the end of this quarter, which puts it at the head of the pack which includes juno, novartis and bluebird. >> arie belldegrun, the ceo of kite parm suharmaceuticals. thank you for joining us. in september you released results on the same drug. 2 of the 62 patients passed away. this larger study was 101 patients, without any patient deaths. what was the difference between these two studies? and why the success, bigger success for the second study? >> first, thanks for being on the show again. this is essentially the same study. in september, when we talk ed about this opportunity, we talked about the interim analysis. this was a short-term follow-up

of patients. the question, can we repeat the data with more patients? can we follow the patients for a longer period of time and still see that these patients are responding? the baseline for these patients is their median survival, is two, four, six months. that's average of what they have. they have failed every other possible chemotherapy, every other treatments. they have essentially no other hope. the question was, can we do anything at six months to this patient? so, what we are showing today, that 82% of the patients actually responded to the treatment, about half of that, 41% at six months are doing well. and this is a single infusion to

the patient. we take the blood, as you describe. we engineer it. we put like a gps in. we send it back to the patient and then that's the end. 41 of these patients are still going strong with one single infusion, no additional therapy whatsoever. and some of them we cannot see any cancer. >> this is for aggressive nonhodno nonhodgkin's lymphoma. are you forecasting the end of 2017? >> it's up to the fda to decide. having said that, if we look at the data, this data is actually about six to seven times better than anything that has been described so far for these patients. this is not a 20% increase, 40% increase. this is significant. so, therefore, we believe if

that will hold, we will see an approval by the end of the year. however, we do have a breakthrough designation that allows the fda to expedite the process so that we could see it on the market well before that. kite is ready at any point we get an approval by fda, we will be ready to deliver these therapies to patients globally. >> i see durability, how long this response is going to last. right now this these results you have out to six months that you're reporting now. in the press release, clinical development says more than a third of patients base d on thee data could potentially be cured after a single infusion of your drug. a lot of people say it's too soon to use the "cure" word here. >> we are not working in vacuum.

we are working with the fda very closely. everything we say and everything that dr. jeffrey zorich said here is absolutely correct and it was vetted with previous discussion with the fda. in this case we know six months is beyond actually even what we show today is 8.7 month was the median survival of the patients. by that time, we anticipated majority of these patients would have been dead because of their disease. so six months is significant. this is not the first study we have done. we have done studies at the national cancer institute, run by dr. steve rosenberg, our partner. this data was actually presented, later study was presented two days ago at the society of bone marrow,

additional conference. at that conference patients were followed over 22 months. 11 of the 12 patients that were so far with no evidence of disease continue. we now have patient with nih, no evidence of december. >> that's impressive. >> at some point you need to cut. six months is very significant. >> president trump, what's your assessment of him so far? what can he do for your industry, if anything? >> you know, i'm a drug developer and a physician. i take care of patients. and we want to make sure regardless of the pricing -- i thought you would ask me about pricing. but if not, what we want to make sure that we can deliver -- >> tell me about pricing. profits bring more drugs, so -- >> are you concerned that his focus on pricing will impact the entire industry's ability to invest in rt? >> my personal philosophy, there

are two types of drug. two drugs that are revolutionary, disruptive that are really deserving the attention from everywhere, including the government, to make it happen efficiently, quickly and with the right price. and then there are medications that are improving somewhat. and they should be some difference between the two. but let's leave it here. >> thank you so much. arie belldegrun and meg tirrell. >> thank you. senator majority leader mitch mcconnell says he opposes slashing the state department budget, saying it would not pass the senate. he also says republicans are not in agreement on a replacement for obamacare. this comes as we're learning more and more about the budget priorities of the trump administration, specifically more spending in the defense department while cutting spending in other areas of the budget. >> dieting, medical research and

a reverse stock split coming up in the good, the bad and the ugly. all of that. do you ever get so tired of being so pedestrian and having your dinner on the ground? good news. now a company wants to make it easier for you to have dinner in the sky. we're back after this.

>> welcome back to "power lunch." time now for the good, the bad and the ugly. suck in your gut. the good? nutrisystem stock is higher by 21%. the bad? frontier communications, the board approved of a reverse stock split. not generally a good sign. stock lower by nearly 11%. jp morgan overweight to neutral. and an ugly day for inc research. the stock is tanking after missing fourth quarter revenue expectations. biotech and medical device companies in clinical trials and is lower by 23%. brian? >> michelle, thank you. check this out. eating dinner on the ground is so passe apparently that a new company wants to have dinner in the sky. not on a plane.

guests of this company eat their meal on an open-air platform. guys, i believe we have to take a break from dinner in the sky. there it is. you saw it. that's it. let's go now -- >> will be a rather busy night. i want to thank majority leader kevin mccarthy, who has done an amazing job. and i want to thank you. appreciate it. so much to do with it. i also want to thank everyone else who is with us today. i have some names and i'll read some off. not everybody knows everybody, but leader mccarthy, barbara comstock. lamar smith. joni ernst, who has been a terrific, terrific senator, very talented woman. >> mr. president, thank you. >> and deb fisher, thank you

very much. >> thank you. >> we also have senator barrasso and senator. joni, heidi kamp. thank you, heidi, senator jim inhoff, senator dan sullivan, representative bob gibbs, bill shuster. we really appreciate you being here. and, of course, we have our new sba director, linda mcmahon and secretary devos. today i am signing two bills that promote women entering and leading the stem field, science, technology, engineering and math. currently only one in four women who gets a stem degree is working in a stem job, which is not fair and it's not even smart to the people not taking advantage of t it's

unacceptable. we have so many american women who have these degrees but yet are not being employed in these fields. i think that's going to change and change very rapidly. protecting women with stem degrees, all americans with stem degrees, very important. it also means you have to crack down on offshoring, because the off d offshoring is a tremendous problem that displaces many of our best american workers and brains, the brain power. so i just want to thank you all for being here. vice president pence, always felt very, very strongly about this issue and many others. mike, i appreciate that very much. i'm going to sign this right now. i want to congratulate everybody in the room. we have to sign it today. i know we have a lot of things coming on, later on. if you don't sign this one and the next one today, we have to start the process all over again, joni, right? >> yes, yes. >> so that's why.

>> thank you very much. thank you very much. >> we look forward to it. >> i think we all know what this is. even though somebody took my notes. it makes no difference. but this is the second bill that we're signing. and that's the hr-321 inspire women act that ensures existing nasa programs recruit women to stem-related jobs and aerospace

careers. go very heavy into the whole nasa situation so women will be a big, big part of it. hr 255, promoting women in entrepreneurship act enables the national science foundation to support women inventors, which there are many, researchers and scientists and bring into discoveries in the business world championing science and entrepreneurship and creating new ways to improve people's lives. so important. we need policies that help support women in the workforce and that's really very much going to be addressed by my administration over the years. going to get more and more of these bills coming out and address female entrepreneurs and those in stem fields. we want american women who graduate from college with stem degrees to be able to get stem jobs that can support their families and help these american women to live out the american

dream, which they are so qualified to live out. so, again, i want to thank you all for being here. fantastic. this is so important. thank you all for being here very much. thank you, folks. thank you all very much. i appreciate it. >> the president signing the inspire act. behind him you can see first lady, melania trump, ivanka trump and barbara comstock. this was her bill, who introduced this for the 10th district of virginia. >> and executive order, the rule

put in place by president obama, small waterways, great subject of debate at the state level for sure. joining us now congressman ted lui, democrat from california and jake renassi, republican from ohio. interesting timing. we did mot know we were going to get that tape, signing a couple of executive orders for the president. we were talking earlier and i said congressman lu, congress still matters. we've been seeing trump a lot the last six to eight weeks and not heard a lot from congress. what are the 535 men and women of congress doing? do you guys still matter? do you a say in what happens to this country? >> the framers of foundation did a great job in setting up the three branches of government. i'm honored to be here with

representative renassi. as the baseline i want the president to stop lying and make stuff up. the washington post has documented 143 false and misleading statements from our president. that's not acceptable. >> so, what are you going to do about it, congressman? what can you do about it? >> we can expose. and the free press is one of the great institutions of our democracy. exposing his false, misleading statements. >> they do it all the time. they fact check every day, every single day. i can read about fact check, the new york times is bragging to me about all the truth that they're going to tell me. but do you really think that's moving the needle, sir? when you survey people who voted for him, they're very happy with his performance at this point. >> again, i would just say coming from ohio -- and i'm glad to hear congressman lu, who used to live in my district, ohioans

supported president trump because he is doing what he said he would do. he is not an orator. he's a businessman. sometimes you don't say exactly what you mean but you're trying to get information out. and he's trying to get things done. i think the american people are happy with that. i'm hoping to hear that tonight and hoping to hear some of the things that he wants to continue to do. i heard you ask the question. he has been doing a lot of things, overturning rules. soon he will have to work with congress on tax reform and repeal and reforming of the affordable care act. this is where we need, as colleagues here in the house and in the senate, to be able to wrk with him. >> representative renacci, we heard that the agenda is dead. that there's so much in-fighting, it can't get done. border adjustment tax is dead in the senate, everything is going to get stuck in a quagmire of obamacare. six months from now are we going to have tax reform? >> i don't believe we will, because one thing that donald trump is going to realize is he needs to understand math.

he can't increase defense spending, increase infrastructure spending, provide health care for everybody and lower taxes. i was on the budget committee. the math just doesn't add up. tonight i hope he explains how he he's going to balance the budget. otherwise, it will blow a hole through our federal deficit and debt. >> i'm so glad to hear democrats concerned about that at this point. >> i am, too. i'm glad to hear that as well. we do have to look at our budget but to make america great again we have to make it competitive again. we have to look at our tax rates. we have the highest tax rate in the world. companies are leaving because our tax rate is too high. we have to reform our tax code. we have to reduce our tax rates. the corporate tax income is only 10% of the total in the treasury. 90% is from employment. we have to get employment up, make sure our corporations are willing to stay here, do business here and employ people. >> are you going to get tax reform done, though? i mean, is it going to happen? even though there's all this -

in-fighting about the border adjustment tax, et cetera? >> democrats will support middle class tax cuts. >> and i do believe that in the end we're going to work together to get some things done. america knows we need to reduce tax rates not only on middle class americans but also to make sure our businesses are willing to stay here. so, with that in mind, we'll work together. i do think there will be a lot of changes in the next couple of months as we work together. we're going to get bipartisan support and have a tax package ultimately that will be good, as my colleague said, for middle americans and also -- >> congressman lu, aside from that tax reform, which is huge, you're speaking to a national audience. can you tell us what you've been working on? all we've been seeing is the president signing executive orders. he has dominated the dialogue -- >> sorry to interrupt. the president is signing an executive order. >> through go. >> about environmental regulation. take a look. >> make counties great again. hold that for me. i'll take it.

well, thank you, everybody. appreciate you being here. thank you very much. first of all, i want to congratulate scott pruitt, who is here some place. where is scott? so important. we're going to free up our country and it's going to be done in a very environmental and positive environmental way, i will tell you that. but create millions of jobs, so many jobs were delayed for so many years. it's unfair to everybody. i want to congratulate scott and thank everyone for being here today. we have a great group of farmers, home builders and county commissioners that are all represented. they're standing alongside of me. i would also like to thank jim inhoff who has been so terrific in so many different ways beyond even this. so, i want to thank jim and also the leadership in the senate. a great friend of mine, john barrasso.

epa water rule is one of the examples of federal regulation that has truly run amuck and of the rules most strongly opposed by farmers, ranchers and agricultural workers across our land. it's prohibiting them from being allowed to do what they're supposed to be doing. it's been a disaster. the clean waters act says the epa can regulate navigable waters. but a few years ago epa decided that could mean every puddle, ditch on a farmer's land or every place else they decide. right? >> yes, sir. >> it was a massive power grab. epa regulators were putting people out of jobs by the hundreds of thousands and regulations and permits started treating our wonderful small farmers and small businesses as if they were a major industrial

polluter. they treated them horribly. horribly. if you want to build a new home, for example, you have to worry about getting hit with a huge fine if you fill in as much as a puddle -- just a puddle on your lot. i've seen it. in fact, when it was first shown to me, i said, no, you're kidding. aren't you? they weren't kidding. in one case in wyoming, a rancher was fined $37,000 a day by the epa for digging a small watering hole for his cattle. his land. these abuses were and are why such incredible opposition to this rule from the hundreds of organizations took place in all 50 states. it's a horrible, horrible rule. has sort of a nice name but everything else is bad. i've been hearing about it for years and years. i didn't know i would necessarily be in this position to do something about it. but we've been hearing about it for years. with today's executive order, i'm directing the epa to take

action paving the way for the elimination of this very destructive and horrible rule. so i want to thank everybody for being here and i will sign wherever i'm supposed to sign. there we are. thank you very much. >> thank you, mr. president. >> it will make a big difference. how important is this? >> huge. >> very. >> huge. >> the farmers, the ranchers, people that make their living off the land. this is putting people back to work. >> strong and healthy economy. >> i will tell you, you have a righteous man with scott pruitt. >> thank you. appreciate it. >> thank you.

all right. the president signing a bill that would roll back regulations that were put in force by president obama on water rules. let's get back to our congressmen, ted lu, representative jim renacci, who have been very patient with us. it was kind of funny. right when i went to that i was saying trump is sort of dominating the headlines and we had to cut you off. almost a perfect example of what i was talking about. congressman lu, tell the american people what you guys are working on right now. all they've done is seen the president. they haven't heard from you all that much. what are you doing? >> keep in mind, the republicans are the establishment now. they control the white house, republicans control congress. executive orders simply enforce laws that congress has passed. for the president to move the country forward he needs to pass laws through congress and has shown very little willingness to work with democrats and the congress. i hope tonight he shows a

willingness to speak to the majority of americans who did not support him. i hope he is inclusive and does that in his speech tonight. >> i would also -- >> congressman renacci, you're the ruling party on both sides of the hill. what's job one? >> in ways and means we're looking at tax reform, repeal and repair of the affordable care act. i disagree, though, that the president has been bringing people into the white house, manufacturers, farmers. he has been bringing in union and so he's talking to the people, trying to come up -- remember, he has only been there 30 days. as a business guy, he is listening. he is doing what washington doesn't do enough of, which is listen, take in information and get things done. i think you're going to see him doing that over the next couple of months. here is what we're doing. we'll tn to work on tax reform, repeal and reforming the affordable care act. we're going to continue to look at reducing regulations and getting the economy growing again for those middle class americans. >> all right. congressman jim renacci and ted

lieu, both tokt. maybe there is hope. thank you. appreciate it. >> thank you. a news alert coming in from washington, d.c. a senior white house official telling nbc news the president may call for an immigration bill in a speech tonight before a joint session of congress. when we learn more we will bring it to you. >> pretty big. two big biotech stocks are making moves today. the men involved in both of those next on power lunch.

valeant pharmaceutical and perrigo. welcome in once again meg tirrell. >> it's been a tough couple of years in this space. perrigo, affecting the stock today, the company reporting earnings and giving a forecast for 2017, that forecast coming in quite light. also a lot of changes in perrigo's business. ceo left to take a position at another company. not hearing about why she's leaving. seems like a good opportunity. that's wu she's leaving. also saying it's 10k will be delayed in its filing. lot of moving parts for perrigo. a lot of people wondering where does growth come from for this

company. valeant, former ceo of perrigo and current ceo of valeant, joe papa. just like with perrigo where does growth come from declining sales and have a lot of debt to pay off, a lot of questions about will they have enough growth and can they sell enough assets to pay off that debt and really just kind of end the cycle of a lot of questions. you can see where the revenue has been going for valiant. analysts coming out today saying it still doesn't appear that management has a realistic outlook on organic growth. people not believing what they are hearing right now. >> got it. >> thank you. much of the markets want to hear from president trump's speech tonight. we will debate that next.

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we have a news alert on amazon. amazon web services having service issues for several hours. amazon thinks they have identified the problem and are working to fix it. not much reaction here. >> you having trouble with websites that would explain it. >> the major indexes trading

lower as investors eagerly await president trump's address to congress. what will the impact be to the market? chief investment strategist. chief investment strategist for city private bank. i have my doubts but larry kudlow was on earlier. he speaks to people in the administration. he says there could be a reach up from president trump from the other side of the aisle. there could be more details tonight than what you would get in what is the equivalent of the state of the union. what would that do for the markets if you saw a more conciliatory donald trump? >> i think it's very important point to say the market has been going up on specifics meaning mr. trump in his platform. i think it would be nice to see a bit of compromises and politicking that people would feel better about that. companies react to specifics. so that is why the market is up.

we feel pretty good about the specifics of a platform. we need to get them done. now it is an issue of timing which we believe will probably happen faster than what everybody thinks because everybody has turned so negative. >> what do you want to hear? >> i have never seen a state of the union where there was a lot of talk about the great sacrifices that need to be made and who needs to give up something. there probably will be principles, what they want to get done perhaps a little bit more specificity but this is not a time to talk about the technical aspects. sounds like the -- >> last year we reached annualize td. a record all-time high in

profits before the start of the new administration. so we have a high likelihood of seeing decenteps growth this year and tax cuts and economic stimulus would add to that. that was about what stocks was like last year. why we moved up without gains. we have eaten into some of that. you have seen defensive sectors, things like health care which don't benefit doing quite well but that is exactly the point that we are not relying a tremendous amount on stimulus or tax cuts. >> i have to cut you off. we had the president on twice in the last half hour. you are looking good. really tan there. >> the surface of the sun. >> he is from minneapolis so that could be 40 degree weather. >> check please is next.

what's critical thinking like?

a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

on the eve of the pricing of snap ipo we have evaluations who says snap should be valued at 25% less than it is. >> i start with the interview and how focussed he was on the physical plant of target when the whole world is moving towards cyber. >> that does not bode well for

profitability. >> throw in border adjustment tax and those margins go away. interesting. >>. >> there may be a target on new jobs. thanks for watching power lunch. >> "closing bell" starts just now. >> welcome to "closing bell." i am kelly evans. >> what do you think? are we going to have history today? >> i bet we do. >> we did have it yesterday. >> this could be history. that would make it a 13-day win streak for the industrial average. 13 records in a row. that has never happened before so we will see what happens in the next hour. many investors