great bunch of guys. we're really excited about the future. >> are you going back on the farm or are you going to stay on the street? >> we're staying exactly as we are. >> lunch is on jim today, by the way. >> for everybody. >> ceo. >> you're staying a ceo? >> exactly. >> don't bury the lead, jimmy. >> sorry, buddy. >> congratulations. >> we've traipled the last thre years and we're going to do it again. >> "power lunch" starts right now. i'm michelle caruso-cabrera and here is what's on the menu. david pepper says he is all in on america. should you be too? big market question of the day. we'll debate straight ahead. one woman who keeps mr. teper up at night. and it's not janet yellen. brian is live in houston and the camper stocks, they're crushing it. is there a rocky road ahead? get it? buckle up. "power lunch" starts right now.

>> good day, everybody. welcome to "power lunch." i'm tyler mathisen. stocks are mixed right now. very slight gain for the s&p 500. a little more for the nasdaq. the dow is off, ever so slightly, by about 6 points. let's check out oil, getting hit hard with wti trading at its lowest level in a month, off nearly $2 at 51.15. melissa? >> hi, everybody. i'm melissa lee. adp blowing job expectations out of the water. announcing 290,000 jobs were added last month, far exceeding the 190,000 expected. pimco announcing a new management structure for its total return etf. current management remains in place for pimco's total return fund and president trump is talking infrastructure at the white house. later in the day, the president will meet with conservative leaders to talk health care as well. a very busy two hours coming

your way. brian sullivan is with us from houston. what's on tap? >> tyler opened the door and i'm going to walk right through. he talked about oil's decline. we're back in the low 50s, well above where we were last year. we'll talk to a great lineup of guests. why can't oil get out of its own way? i liked michelle's rocky road pun. oil may have a rocky road ahead. we're also going to ask the natural resource minister about the keystone pipeline. is it going to get done? does he have a good working relationship with rick perry and president trump? and peter thiel talking here last night. we have a lot to do. see you in a few minutes. >> brian, thank you very much. in the interview of the day, the investor, david tepper taking a bullish tone. saying basically he's all in on america. >> we're more long on u.s.

stocks. the bigger bet is -- listen, it's the same sort of bet. if we're short u.s. bonds we're betting on a stronger economy here. >> right. >> that's the bet. we're betting on strength one way or another here, strength around the world. okay? in one way or another. like i said, the only thing that's on the horizon -- different things can happen. hopefully, nothing happens political. different things can happen in france. once you get through there, there's nothing else in the year. >> so tepper is short u.s. bonds, long stocks. should you take those positions as well? let's bring in joe tanius, principle at bessemer trust. paul, let me start with you. are you adding to equities right now? are you bullish on america and stocks? >> yeah. we're positive on the market.

but more sector basis, adding to positions, added u.s. steel this week. the thing we're looking at here is rather than the market that lifts all boats it's more the fed-driven market. we're seeing an economically cyclically driven market. we're going to see economically cyclical response. technology, financials. it's very -- it's important to remember that this is not just a trump rally. we also have an economy and earnings rebounds driving stock prices here. you have to keep that in focus when you're looking at what your decisions are going to be. >> joe, i see that you are constructive on equities, whatever that means. i'll give you a moment to explain t but not euphoric, you say. do you believe that an awful lot of positive anticipation is already priced in? is that a concern? >> it is a concern. i mean, you just look at the pace of this rally that we've had, not only since the

election, but just so far this year, in the first two months of the year. s&p 500 up almost 2.5%, 3% per month. i don't believe that trend is sustainable. while i agree with a lot of underlying themes here, this is momentum in the economy. corporate profitability looks strong. guidance has been encouraging. i do believe you will get tax reform done this year. i worry at just how long in the tooth this business cycle has become, how stretch valuations are. with the fed raising rates, i suspect that volatility is likely to rise in the months to come. >> tepper's point is, look, stocks aren't cheap, but corporate tax reform, as you mentioned. he believes it's coming. the mere election of donald trump over hillary clinton meant that regulation stops and also gets rolled back. he thinks that needs to be put into your calculus when it comes to whether or not you should be

buying stocks here, joe. so he thinks there's more to run, provided those things happen. >> yeah. and i don't disagree with that. i think all these things are supported for risk assets. the issue of tax reform, is that all necessarily going to hit the bottom line or is competition, at some point, going to eat into profit margins and then you ultimately see that savings passed along to the consumer? this is where it does come down to the industries and to sector by sector. overall, i'm willing to bet that markets end the year higher from these levels but i don't think the pace of this rally is sustainable. i do think we'll see some chopiness. >> the other side is short bonds. and tepper said brace yourself, guys, because the fed is so behind the curve when it comes to raising rates we could see so many rate increases in the back half of the year. don't get used to the idea that the fed can only raise rates when there's a press conference afterwards. it could happen more often.

is that something that will be bad for the markets in terms of volatility and rockiness or will it be perceived well? as he puts it, it's probably going to be put done on the back and face of economic data. >> i think it depends how fast the fed goes. do they find themselves behind the eight ball? we'll have to see what happens. in the comments before he said after the election it's smooth sailing. whenever you hear that comment "smooth sailing" by anybody, it makes me cringe. when everyone thinks the coast is clear there's usually a wave coming over the horizon that nobody is expecting. what that come notice form of, you never know. you have to be on the lookout for these things. you need some worry in the market to keep things going. otherwise there's nothing to climb there. but as far as the fed is concerned, that could have a negative impact on the market. this bull market has been going on with ten-year yield anywhere between 1% and 4%.

all the gains in stocks have tended to come during periods when interest rates were rising. so, i think you have considerably more upside cushion in yields before the stock market becomes overly worried. >> so, joe tanious, let's say i'm just about to receive my big fat tax return from 2016. in fact, i'm going to get an even bigger one for 2017. >> if it's retroactive. >> that's right. let's say i'm going to get my big fat tax return. what should i do with that capital if i want to deploy it for long-term purposes? not a quickie. >> for long-term purposes. that's the way we advise all clients to think about assets. you can make tactical shifts from there. as far as our view on the markets and the economy today, we want to beat neutral risk assets. we mentioned there are some -- >> what does that mean in practical sense, joe? what does that mean? >> for instance, you are at a

70/30 risk profile, my risk would be right around 70%. i wouldn't necessarily go overweight. however, within your equities, i think there is room to be leaning a little more toward the united states, considering the underlying backdrop. >> gentlemen, thank you so much. appreciate your insights today. paul, joe, appreciate it. >> david tepper says he's short the bond market. ten-year notes up for auction. rick santelli is at the cme. any signs of shorting there, rick? >> not a sign of shorting. who would have thought we would have had such an aggressive auction at the time that rates are moving up to the top of the range? hold your hearts, i gave this auction an a plus. apple plus. doesn't get much better than this. nine-year, 11-month security, first reopening of a ten-year yield note opened in february. 2.56. that does happen to be the

highest yield at a dutch auction since july 2014. here is what's interesting, all right? go through the internals, you'll see what i mean. when we look at the percent that went to primary dealers, only 18.6%. 2.66, cover well above 2.45. the only metric that isn't like awesome is 65.8 on indirect. still better than the 65% average. and, last, directs. more than double the ten auction average at 15.7 best since may of 2015. i don't disagree with mr. tepper on being short. but i'll tell you what, somebody better be buying to take these people off the hook on what they paid for this auction. back to you. >> thank you, rick santelli. stocks off session lows of the day. we go deeper into the afternoon trade, let's go to courtney reagan. it looks like a bottom or intra-day low when oil spiked

lower as well. >> exactly. that's one you can see pretty clearly in the charts. it's mixed if you look at the pure numbers between the dow, s&p and nasdaq. dow lower. it will be the third straight day, something we haven't seen in a little while. financials are leading the charge. if you sort out what those sectors look like. that's not a surprise. the expectations for a rate hike from the fed around 90%. we got that strong adp report this morning. we still have the jobs report friday. consumer discretionary also strong and health care, too. and, actually, the past 33 rate hikes, prior financial and health care were a leader. that's something to pay attention to, at least what history tells us. bio tech having a pretty strong day there as well. energy is lagging. that's sort of what we were talking about, what brian was talking about and what he's going to talk about throughout the show today. back to banks. typically they become more profitable as interest rates rise. even with the recent run higher

we've seen for the bank stocks, expectation that we'll see some roll back, we've got another higher today, goldman and morgan stanley. a defiant move after those inventory numbers came out at 10:30 that showed the increase. that is what's driving the move in the energy sector today. michelle? >> i can see that. thanks, courtney. >> thanks. coming up, nonbank lenders taking over the housing market. good idea, bad idea? closer look ahead. first, back to brian in houston with what's on tap there. brian? >> do we have high-level leaks in the show? how did courtney know i was going to talk about energy, oil and gas, huh? it's not on the rundown anywhere. kidding. great lineup. coming up, the job market is strong but the one industry that really hasn't grown jobs, in fact has lost jobs is oil and gas.

laredo petroleum ceo will join us about whether we'll see job recoveries, where gas prices are heading. there's a lot to discuss. we'll see you after this short break. the first stock index ♪ (musicwas createdughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks.

welcome back. we're live at the ceraweek conference in houston, texas. we're joined by randy fautsch, ceo of laredo petroleum. we're higher than last year but still in the low 50s. oil down again today. seems every time oil makes a bull move higher it gets pulled back down. where do you see pricing headed? >> it's a little bit of a question of timing. we see today for the next few months or years we have half a million barrels in storage, half a million barrels of gasoline, added a number of rigs. we could see some oversupply short term. but the facts are our base production declines at about 4% a year. so we have to replace that amount. over the next two or three ye s

years, i think oil prices recover very nicely. >> you think we'll be back over 60, 70 bucks a barrel? >> maybe 60 plus. >> in a year timeframe? >> two years maybe. >> two years? >> yeah. >> expect volatility and what prices are doing today, falling? >> volatility is part of the oil and gas industry. it's a very tradeable commodity. short term, we could see some price pressure. >> you know, we had a very strong private sector payroll number. jobs market in america is very strong overall, except for oil and gas. lost hundreds of thousands of jobs. it's turned around a little bit in the last couple of months, randy. are you hiring? do you see a jobs recovery in your industry any time soon? >> that's a good question. what we're seeing is that while we're hiring, we don't need nearly the number of people to do the same job. much more efficient on our drilling, doing a lot more footage with the same crew and the same rigs so we don't need

to hire as many people to come back to the industry. >> you're saying that technology is supplanting people in oil and gas? >> technology and innovation both. best practices. it's a combination of things. but, yeah, we're getting more done with less people. now, we are going to hire. they're good-paying jobs. >> let's talk about your stock as well. it's getting hit with the price of oil. >> uh-huh. >> analysts i talked to, they're a little frustrated -- not at you, but at the industry. every time we get higher prices, we produce more, prices go back down. with the stock down nearly 5%, give them a reason to be optimistic. >> for us, we've had a long-term view. we've not viewed this -- certainly with the kind of resource play we're doing, 90-day-at-a-time project. we're very well hedged for the foreseeable future. our game plan has been to drill

within cash flow, see what happens. we've done that the last couple of years. i anticipate we'll do that going forward. so for us, while there's this negativism, our game plan is the same it's been the last couple of years, well protected on hedges, within cash flow, no long-term debt due for several years. lot of liquidity in our reserve base lending. >> are you seeing cost inflation? things we don't think about, frac sand, water, but things that you need going up. >> frac sand, we're seeing price increase. we're hearing a lot of that is because they stockpile sand up until the winter and when things got cold they don't mind. we used a lot more sand than anybody anticipated. once the spring hits, that sand will come back into the market. water for us is a little different in that we built -- >> you have your own water infrastructure. >> we knew all along water was

going to be an issue. prices, service costs always go up. >> are you bullish on trump? he says he's a petroleum president. nothing has happened with that. do you expect some action? >> i do expect some action. the point i'll make is just the fact that he's pro oil and gas has been wonderful. there's a sense of exuberance and the sense of having someone understand we are a job creator. we are a vital part of this. i don't know that he has done anything directly benefiting us, keystone and other thing. >> we saw the executive order. >> that helps. >> for directing epa to roll back certain regulations. actually had a couple of people protesting that earlier. >> i saw that. >> you saw that as well. that's an order. we haven't -- you haven't felt it yet, have you? >> not in a direct rollback of a regulation or change or tax. >> that takes congress. >> but just the enthusiasm that he has demonstrated for business

and the oil and gas business has been very positive. >> you're going to speak to the president, offer him one piece of advice with oil and gas, what would it be, randy? >> we need to recognize -- if you look at texas, we're about number six in terms of if we were a country in world supply. if you looked at the permeate, brian, we're about 12 or 13. that's a significant position. when you think about the basin being one of the top 12 or 13, if it was a country, we need to acknowledge that we have that type of oil and gas stamina and supply. and act like it. >> randy foutch, laredo petroleum, pleasure to meet with you. thanks for coming on cnbc. tyler? >> disney's shareholder meeting under way. future of espn. the latest from the meeting straight ahead.

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disney's annual shareholder is under way. two unknown, the future of bob iger and espn. julia boorstin has been monitoring the meeting and joins us from los angeles with the headlines. julia? >> that's right, in ceo bob iger's opening remarks he talked about the potential for espn in this digital age, amid layoffs

and subscriber declines. >> espn on a variety of new multichannel platforms, services and a growing number of mobile apps. by the end of this year, we'll also be streaming a new espn branded experience directly to consumers through our partnership with major league baseball. >> iger defended his decision to participate in president trump's business council, responding to a shareholder saying half a million people signed a petition demanding he step down. >> i made a decision that i thought was in the best interest of our company and of industry to have an opportunity to express specific point of views directly to the president of the united states and to his administration. and i did not believe nor do i believe that my membership in that group in any way endorses or supports any specific policy of the president or his administration. >> the big question for disney's board when they meet this afternoon is what happens after bob iger's contract expires in

june 2018 with no clear successor. iger alluded to extending his contract, saying he is more appreciative of his opportunity to run disney every single day. disney's proposals, including re-electing the board were approved and neither the shareholder proposals were approved. >> they've lost potential successors, right? that's why we're facing this issue. there had been people that we thought would be the heir apparent but they're gone? >> yes. tom stags was pushed out, he was expected to succeed iger. there are questions over whether that was iger wanting to stay longer. the expectation is that iger will probably extend his contract even if it's only just for one more year. a number of names have been tossed around from out the company, including sheryl sandberg, ceo of facebook, who is on disney's board. but for now i would expect iger to stick around for a bit longer.

he did talk quite a bit today in the shareholder meeting about how he's very optimistic of the future of disney. as you can imagine, he probably wants to stick around to see some of these things play out. >> julia, thank you. julia boorstin. >> free tickets at the resort, too. >> i'm sure. >> i'm sure that's why he wants to stay. >> he probably gets cheap cable, too. >> discount at the disney store. perfect job. investor peter thiel says we're in a bull market for politics and it's just getting started. that is straight ahead. and nonbank lenders taking over the housing market and shift your loans. what could go wrong? and two in the reserves. our 18 year old was in an accident. when i call usaa it was that voice asking me, "is your daughter ok?" that's where i felt relief. it actually helped to know that somebody else cared and wanted make sure that i was okay. that was really great. we're the rivera family, and we will be with usaa for life. usaa. we know what it means to serve.

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hello, everybody. i'm sue herera. here is your cnbc news update this hour. fbi director james comey, speaking at boston college cyber security conference says easily available encryption technologies are making it harder to fight criminals and terrorists. he also commented on america's privacy. >> there is no such thing as absolute privacy in america. there is no place in america outside of judicial reach. that's the bargain. and we made that bargain over

two centuries ago, to achieve two goals, to achieve the very, very important goal of privacy and to achieve the very important goal of security. >> the youngest son of senator tim kaine was arrested in st. paul, minnesota. linwood kaine was arrested at a rally supporting president trump. in a statement the senator said all three of his children understand the importance of peaceful protesting. l.l. bean is recalling about 3,000 of its adventure snowshoes because the plastic material can weaken and break. the company has received four reports of the snow shoes cracking. not good if you're out in the middle of the woods. that's the cnbc news update this hour. i'll send it back to you guys. >> we'll get some snow here friday. maybe i'll try those out. >> there you go. nonbank lenders taking over the housing market and taking on riskier loans. diana olick is standing by.

hi, di. >> hi, ty. it's perfect timing for this conference of mortgage lenders and leaders, given we're seeing mortgage rates rising today, deregulation in the trump administration and a huge rise in nonbank lending. who better to talk about that than this gentleman? as ceo of caliber home loans, you've seen loan growth up 200% in the last two years. to what do you attribute that? >> i would attribute it to sticking to the basics. we have a very focused distributor sales force. we have spent an enormous amount of effort building a machine that effectively helps people buy a home. 65% of what we lent last year was purchased. >> you're not so much into the refi market. not only are you doing that, you're moving out to riskier loans, outside the credit box,

loans you cannot sell to fannie mae and freddie mac. why take on the risk? >> i would agree with you that these are outside the box but i would disagree that they're riskier loans. they don't fit inside the box as described by fannie and freddie. >> explain what that buyer is. >> fico score for a borrower would be about 700. now in the old days 700 used to be fantastic. debt to income is about 40%. loan to value is about 80%. these are fantastic borrowers that the mainstream lending has left behind that we are lending to and we found that the risk profile has been fantastic in the last two years. it's been really a great market for us. >> and you found investors for these loans? >> we have. those have been rated. one has been rated aaa.

pretty solid institution demand. >> you see more private investors getting into this? you, as we know, were the former ceo of citi manage. rising mortgage rates. that doesn't concern you on these loans? >> no. these are not loans that are not fully documented. these are loans that are thorough thoroughly examined for full underwriting. i find it sad that these are loans not given by mainstream lending. they're perfectly good quality loans and people who went through a massive credit event in a period of time which was systemically hit a lot of people. and they're perfectly ready to come back into the system. >> no risk, you say, now. >> no risk now. >> thank you so much for talking to us, sanjiv das, ceo. melissa, bloomberg is reporting that makers of paints and coating, ppg industries, is

seeking a deal with akzo nobel. ppg is not confirming, though, telling cnbc in an e-mail, quote, the can company does not comment on market rumors or speculation. still a big mover in today's trade, michelle. >> moving on that headline. thank you, seema. apple management tepper telling the "squawk box" team, calm down. it's not the end of the world. >> if they do it in an intelligent way they'll spread it out over five years. a lot of talk about this border adjustment is just a mechanism to raise revenues over time. and it's somewhat effective doing that, raising revenues. so, i think, you know, it's a lot of noise about it. it's not -- it shouldn't be a negative to the people who think it's a negative if they spread it out. >> joining us now is doug holtz.

a big supporter of the border adjustment tax. hi, doug. >> hi. how are you doing? >> i know it raises a lot of money. that's not why you think the border adjustment tax should exist. right? >> right. i think it's also not a big deal. there's been a calculation done by goldman sachs folks who says suppose you do this and don't get any currency appreciation, which has been the heart of this debate. and you look at the kinds of price increases you need to maintain profit margins. the answer in most cases is negative because you're cutting the rate to 20% and doing other things for these companies. the exception to the rule is apparel, upward pressure of only 7 p 7%. it's supposed to generate better growth. and you should get some appreciation. the second reason, which i've talked about before, it's not really about the border swruchlt. it's about the fact that you need to stop firms from moving production offshore or even worse abusing transfer prices to shift their income.

that's what this stops. and so you're always going to have to have a mechanism to do that. and it's not really about border adjustment. >> companies tend to move profits to other jurisdictions with lower taxes, but they don't -- they can't move sales, i think, is the way to put it. i want to move on to another topic because you're so well versed with everything going on with washington. >> sure. >> peter thiel saying there is a bull market in politics right now. >> and this is -- i'm not sure this is a good thing, but it is a fact that maybe politics is becoming more important, it's becoming more intense. >> right. >> the range of outcomes is becoming greater. and that we're in a world in which there is a bull market in politics that's just getting started. >> doug, is that good or bad? >> i think we saw post financial crisis, great recession, increased importance of federal policy.

and who controls that federal policy is ultimately very important. and that's what leads to the rise in importance of politics. i'm actually not a big fan of that. i think the federal government is too involved in many ways. it would be a good idea if we dialled it back. one wing of politics wants to do that. that's why the competition is so fierce. >> health care reform and the health -- i mean, you get a lot more government with the obamacare and part of what they're trying to do is reduce the role of government in health insurance at this point. what do you think of this bill? it's getting hit hard from the left and from the right. >> honestly, i think that's the nature of the beast. it's not going to be an ideal bill. that's what you're hearing from the modest, deep right

conservatives. but it is an enormous accomplishment to put together a bill. >> when it comes to medicaid, for example. >> especially medicaid but also in sort of how they handle keeping their markets vibrant and having reassurance for the carriers. there's a lot of things in this that are steps in the right direction that allow the policies to match market conditions. that wasn't true in the one-size-fits-all, top-down obama world. >> are young people going to buy policies? that's the goal, right? if you can charge older people more money, you don't have to have the young people cross subsidize. there are disincentives if you wait. >> sure. this bill sets up that mechanism. it's important to recognize when people say we're going to charge the old and the sick more, that's relative to the young.

if you get the young people in the pool, the overall premiums should decline. that's what you want to get out of a reform. >> but the young people will get, presumably, a smaller subsidy or tax credit, right? >> sure. yes. >> under this? and so they may be just as disinclined to pay for it, right? >> that in and of itself brings in a lot of people. we saw a large rise in individual insurance under that reform. this bill has more generous tax credits than that one did and if we can get the flexibility out of the state regulators, it should perform just as well. >> premiums come down why? >> modify the essential health

benefits, very expensive. a lot of the market stabilization rules, special enrollment periods which account for a third of the people who are in the pool and they're coming in late with high costs, the grace periods. a variety of things need to be tightened up and having the insurance actually charge people for 12 months of care which they're not doing right now and given the flexibility to design policies that aren't just four flavors. >> you get different policies that still meet the ten standards that are established under obamacare, but presumably the definitions of those standards would be more -- i hesitate to use the word liberal but you know what i mean. broader. >> is it coverage moves or how is it -- >> statute. >> you still got big -- you still got big mandates in these policies, don't you? in other words, that they have to cover pre-existing conditions, that they have to continue to age 26 for family

members and there still be no limit on lifetime payouts. those are big expenses, right? >> they're all there. >> it's the flexibility. >> doug, how do you think the cbo score will do? >> at some level i think this is a nonevent. as you know, that's essentially nothing. and so it should be a yawn for them to hit that mark and then they'll move on to putting a vote on the floor. >> you are a cnbc participant. a billion dollars is nothing, right, in this day and age? >> that comment will get me in

trouble if i were still at the cbo, i promise you. >> in the grand scheme, it is a rounding error, if that. >> right. >> doug, good to see you. >> thank you. sean spicer holding a press briefing at the white house. we are monitoring it and will bring you any gnnews or color tt develops there. they have been crushing it over the past year. will camper stocks stay on track? rv maker thor is down. what to watch for next.

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thanks to low gas prices, interest rates and consolidation in the industry, like thor buying jayco and winnebago acquiring grand design. rv shipments are up at a 14-year high. january is already off to a great start as we head into the prime travel season with shipments up about 7.5% year over year. will the recreational vehicle industry hit a speed bump? thor industries reporting record revenue, beating the top and bottom line. however the stock tanked 10% on report investors worry costs are becoming high for the company and pressuring margins. the question is, if it's specific to thor or problem str industrywide. >> what are some of the main drivers for this industry? low gas prices, the ease of financing? we're seeing rates go higher. maybe it will be harder to get some sort of leasing. >> low gas prices, low interest rate environment. they're acquiring a lot here.

the industry is growing. they're really expanding their footprint. camping world announced they were buyi ining sapphire. >> i wonder if it's like housing where people, if they get nervous, buy more rvs. >> especially with the markets -- the real key was the financing number even more than gasoline. >> that's exactly right. >> you drive down 95, don't you? you know that -- >> maybe i need -- >> south of fredericksburg or maybe north of fredericksburg. i can't remember. it's huge. and he's buying it. it's bane good year for -- >> for marcus, the prophet. >> and the partner. >> thanks, landen. back over to brian in houston with what's going on there. hey, bri. >> michelle we're down below 51 bucks a barrel. the price down since last june

now. coming up after the break, we'll speak to the president of a company that maybe is as good of a leading indicator on where oil and gas investment is going as any company out there. they sell to the companies that pull oil out of the ground. crude oil down 4%, job market, investing around the world and a huge move by the world's second most populous nation. we're back after this short break.

good day for cnbc to be at the ceraweek conference. the next company we're going to chat with may have a window on forward investment as any company out there. president of emerson. almost accidentally gave you a promotion. >> i'll take it. >> doesn't come with a pay

raise, though. you're not pulling oil out of the ground but sell stuff to the oil and gas companies that do. you've got a good leaning sort of window on where oil and gas is going to g where does your order book suggest we'll be in terms of oil investment? >> the last two years have been brutal, as you know. >> last year was tough. >> very tough. >> but what we have seen in the last six months is an uptick. we've actually gone positive now on the order book, which is very nice. more importantly, even a further indicator, is the feed work on future projects. people are fighting for capacity to try to get the engineering done for the quoting, planning and those kinds of activities and it's global. it's here in the u.s., big time in asia. >> so rig counts are up here in the u.s. we talk about it every friday. your order book --

>> i'm trying to spend a lot of time on gas and what's going to happen with l & g and what's going to happen with exports and in that area. a huge amount of work on the infrastructure to support commoditization of gas. >> the minister petroleum for india is here at the conference and a night and a half ago announced they're going to open up their oil and gas markets to foreign investment? >> right. >> tell me what you heard and what it might mean. >> minister of petroleum of natural gas was here the last couple of days. he had a dinner to announce, last year they opened up small tracks to test the market. two nights ago they said they're going to open up all the tracks in india to foreign investment. >> that's a big deal. >> for the first time 100% foreign investment is welcome. the goal that mody has given him

is double domestic production in two years. 20% of the oil for india comes from india. 80% is imported. they want to take that from 20 to 30% in a three-year period. only way to do it is to get outside people from india to come in and help. >> shame on me for not knowing this. you broke the news to me. it's interesting, if i'm hearing you right -- last year they tested the market. i guess they must have gotten a favorable response. make sure we got this news right. india has send to emerson and other people, come invest. how big of a market would that be? >> for the drillers and things like that, i don't know the number, brian. >> got to be big. >> and the consumption is the third largest consumption in the world. the actual barrels, i don't know the number. but what i can tell you is they're very interested in making sure they keep control of it.

they're going to invite in a bunch of foreign investors but want to digitize the process. >> your ceo is head of the national association of manufacturers. >> yes. >> councils with the president, obviously. you guys are big exporters. do you think we'll get a border adjusted tax? doupg we're going to get it? do you support it? >> i would say we know if there's one put in place, there will be a reaction on the other side. and i think it's going to be tied to with whatever happens to taxes in general. >> is that a polite way to say there's a risk of a trade war? >> is, because there will be a reaction. i think there will be some kind of border tax. that's what we expect. particularly in the energy industry. imported oil is likely to see an adjustment. that's probably where it will come. >> let me ask you this, then. if we get some kind of border

tax like you guys think we will -- i assume if you believe we're going to get it, you're making adjustments, at least having meetings internally about what you need to do. would you add u.s. manufacturing jobs if we got the border adjusted tax? >> we run our company as -- in many ways, the u.s. is catching up. you have to look at it from that perspective. we run the company regionally right now. what we sell in china, we make in china. what we sell in india, we make in india. what we sell in the u.s., 80% comes from u.s. factories already. there might be some tweaks in the supply chain for zblus you're not shutting down in china and bringing that back to america. >> no. we serve china for china and the u.s. for the u.s. different model. >> ed monser, president of emerson. thank you. >> sure. >> pretty interesting comments about india stuff, too. got to love it when a guest breaks news to you. >> exactly.

thanks, brian. talking about a woman who wants borders. this woman here. she keeps legendary investor david tepper up at night. we'll tell you why coming up in the second hour of "power lunch."

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welcome, everybody. i'm tyler mathisen with melissa lee, michelle caruso-cabrera and brian sullivan in houston. here's what we're watching. one week away, we'll have a countdown clock here shortly. yellen and company expected to raise rates and what that will mean for the markets. oil following after a big jump in inventories. biggest names in energy from the summit where brian is reporting in houston and oil companies and producers producing just too much? plus the woman who could

cost david tepper his behind. >> hiney. >> hiney, he said, on cnbc, outspoken, but marie le pen could be the wild card in all of that, michelle. >> heen time today is a flat day for markets overall. there are some big movers, though. caterpillar continuing to follow. "new york times" says improper accounting methods to boost its stock, lower than 1.75. children's place, big beat on earnings, doubling its dividend -- wow, look at that stock. on the other side of the mall, however, urban outfitters falling, sales disappointed, that stock lower by 3.5%. as tyler mentioned and steve laughed about in one week, there's your countdown. >> there's the countdown clock. told you. >> 24 seconds, 23. >> we'll find out what the fed has done on interest rates.

a with whopper of a jobs frort adp, what effect did it have on the fed? steve liesman joins us now. >> a profound effect. nobody is more crazy about the fed than i am. i think this is pretty extreme here. adb came out with a blowout number this morning, saying private payrolls grew by 298,000, and that was the street's estimate for adp and the friday jobs report. take a look here. adp. new estimate now 221, based on nine forecasters. pick your favorite forecaster. a list of some and what they did this afternoon. morgan stanley upped it by 50.

jeffries up to 225. and jp morgan holding the line. if you like jp morgan you should make that bet. unchanged on their estimate. tends to be predictive of the subsequent nonfarm payroll surprise. you are looking at error bars. red is the error bars for adp. blue is the consensus error bars. there what does this mean for the fed? six days, 23 hours, 56 minutes and 35 seconds? the question is, will they discount some or all of this? i think some of the strength looks like whether the fed will see that, too. if this number is born out on friday, job growth has shifted upward and that could mean a more aggressive fed. the debate right now has shifted from whether the fed will hike

two or three time this is year, whether it's going to be three or four times is not entirely clear to me that the market has clung on to that just yet. >> take away the punch bowl. take away the cocaine. take away the hheroin. put the marijuana in the drawer. the fed has to get serious now. >> i think he wants them to hike. >> i put all of those things away, for the record. >> a long time ago. >> a long time ago. look, david is not in the policy position. i just want to explain the policy dilemma for the federal reserve. none of this stuff upon which the market appears to be operating has actually passed. >> corporate tax reform. >> your favorite tax reform doesn't exist. >> i don't endorse the b.a.t. >> we know how much you love it. not the tax but the story. >> right. >> the deregulation is not there.

we are, perhaps, in this adp wort beginning to see signs of animal spirits, confidence showing up in jobs. >> people hiring. >> taking a bet on the future. but i think the big changes come from the actual programs. the fed will hold back. what david is saying, though, must be taken into account as follows. if this happens, you have to -- if the fed does more now, it doesn't have to do quite so much later. >> where is inflation? >> he thinks it's going to be 2, 2.25, maybe 2.5. wonky notion we talked about before, what's the underlying real rate for fixed income? the fed has it pegged at 1%. that's really low. what if it's 2%? add on inflation, you could be looking at 4%, 5% bond rates if

that ends up being the case. if it's only one, the fed is okay. it's going to three. if it's another point or another hundred basis points on top of that, the market is behind the curve and the fed is behind the curve. >> steve, thank you. >> pleasure. >> steve liesman. we did speak about a lot of topics here, from trump to tactics but also about the bond markets, specifically his position. >> are you short bonds right now, david? >> you bet your hiney. 2.5% of the ten-year, you're sitting with an 18 multiple. wake me up at 4%, just wake me up. call my number. i'll give it to you. just wake me up. we have a lot of room till we have to worry. >> let's debate this now. jim bianco, president of bianco research and jennifer bale is bearish on bonds in the short term. jim, i'll start off with you. we spoke to each other before about how the position in the

market is so much in the david tepper camp, short bonds camp. how does that play into this whole move in terms of where yields should go? >> pretty much if you can spell the word bond you're short the market right now. date wra says we've got record numbers of shorts in various instruments and i think that if you want an example of it, look at the crude oil market. if you can spell crude oil you're probably long in the market and it can't go up. bonds will have the same problem, that yields will have a hard time going up and we'll probably have a short covering rally into the summer to get rid of this massive short that everybody is on the same position with david. then maybe we can have a rise in yield. first we have to do something about this massive short position. >> jennifer, is that why you're short term bearish on bonds? >> yeah. we're bearish on the shortest

end of the curve. the fed has been very clear this is the direction they're headed. there is no doubt in anyone's mind they're moving in march, earlier than anyone anticipated. even the dovish members of the fed say it's time to start raising rates again. we heard shifting from that whole two to three hikes this year to the three to four hikes this year. i think that's very valid. you have inflation contributing, jobs contributing and then you also have the potential of what will happen here domestically, regarding any policies that the trump presidency puts in place. even yellen on friday was very clear. she made no attempt whatsoever to pull the market back in, to rein them back in, regarding march for the next policy rate hike. the fed is clearly communicating this is the path they're on and you don't want to fight the fed. >> to both of you quickly, we've had a long-term secular bull market in bonds. is it over, jim? >> well, if it's over it ended

in june 2016. there might be a good chance it might be over but we'll go back and revisit those levels or do what technicians call a double bottom first before it's over with. so, it might be a little bit early to say that's it, stick a fork in the bond market. a lot of people have for the last six years. >> jennifer, your thoughts? >> i think you clearly have seen that the bond market has shifted course and is headed up directionally. will we reach the levels we reached before at 4% on the fed funds before we have to start coming back down again? highly unlikely. we certainly made a shift and i think the risk is to the upside and not the downside in this market. >> would you agree with david tepper's thinking that the fed so far behind the eight ball when it comes to raising rates that they've got to do it? and the notion that the fed can only raise when there's a press conference afterwards is completely unfounded and watch out because that could be coming. >> i agree with that. >> absolutely. >> jim first. >> i agree with that idea that

the fed is behind the curve and that the fed could raise rates. i think what he's implying in his statement, if i could, is that there's a way that the fed could be raising rates now and it won't be disruptive for markets. they should be raising rates, they should be normalizing. i fear it will bring some disruption to stocks and bonds. they won't take it lying down, if you will. >> jennifer, last word? >> yeah. i think one of the reasons the fed absolutely is raising is because there isn't going to be a market disruption. markets have already priced it in. it's like a free pass for the fed. we can go ahead and raise rates in march and maybe again in june. right now the march one will not derail the economic recovery. let's go for t we need a bit of a buffer. >> jennifer, jim, thank you. >> thank you. here is what's coming up on "power lunch," nationwide movement by women to flex their economic muscle. plus, david tepper's long stocks here but also in europe. however he has a very big concern. and big drop for oil today. we'll go back to brian at the big energy summit in houston.

brian? >> yeah. thanks, michelle. one the reasons we get on a plane and come to these meetings is sometimes you have an accidental guest. uae minister agreed to join us. we'll talk about opec, price drop today as well. we'll bring the interview to you in moments. stick around. upstate new york is a good place to pursue your dreams. at vicarious visions, i get to be creative, work with awesome people, and we get to make great games. ( ♪ ) what i like about the area, feels like everybody knows each other. and i can go to my local coffee shop and they know who i am. it's really cool. new york state is filled with bright minds like lisa's. to find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin.

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welcome back to "power lunch." agreeing to sit down with cnbc minutes ago. and we're pleased to welcome in uae minister of oil and gas. why do you think we're seeing weakness in the oil market? >> i think, first of all, you don't look at it on a day span or week span. you need to look at, at least, a month average. that's how we look at it. fundamentals on the oil market changes on a daily basis, sometimes speculations drive those movements but they're not the important thing. what's important is the fundamentals. >> and to that -- and i agree. to that point, we have, though, come down. we had a nice run last year. last year this time we were below $30 a barrel. the oil market has been flat to

week the past few months, even with the opec production cut agreement. why do you believe that is? is it u.s. production that's too high in the global market right now? >> i think it's -- first of all, we need to think of the level of prices before the deal. and then just after the deal, then you have the appreciation of the price. but in reality, what happen sd you did not yet get the oil outside the market to balance or to participate in the balancing. and that has an effect on the market. that will continue. and i think look at the compliant percentages that are improving as we speak -- >> the production cut, the agreement? >> yes. >> some have suggested that the uae was not 100% compliant with the agreement. you agreed to take 139,000

barrels a day from your production. >> yes. >> have you done that? >> yes, we did. the first month our compliances with a little bit below the 139,000 by 11,000 barrels. and the second month of the year our compliance have been more than around 105%. the forecast for the next couple of months, this month and next month since we have maintenance shutdowns is going to be definitely in the range of 200,000 to 170,000. >> do you believe all the opec members are compliant right now with the production cut deal? >> overall in the six months i think the level of compliance from all the members is very high.

that is the expectation. we are encouraging everyone to be mindful of that. one thing that we always had a difference in view is the sources that we use when we say secondary sources. we have different sources. if you look at uae as an example and january reporting of each one of them, the difference between the highest and the lowest is 150,000. >> close. >> no, it's not close. one is giving us zero compliance if you look at the variation between them and one is giving us 100% compliance. >> 100,000 barrels on 89, whatever, million a day globally -- but i hear your point, sir. do you think that the production cut agreement, which ends may 25th, should be extended and will be extended? >> i think it depends on three factors. and i think there is a

probability of extending it if those three factors happen. one is we need to see some draw down from the storage, historical high. we need to see level of draw down there. we need to see a price appreciation before the end of the period or at the end of the six-month period. and to see the reaction from the shale oil and how much it retracted production. these are the three parameters, i think, that is important and in achieving them we need a high level of compliance. that's why we in uae are committed 100% to comply with what we agree. >> i appreciate it, sir. thank you so much for joining us, energy minister for the

united arab of emirates. if you listen to what he just told us, a lot of u.s. shale production, inventory and prices are down, there's a good chance that that opec production cut deal could be extended because we don't have any of the three things that he just mentioned. back to you. >> thank you. right when this interview was going, wti hit session lows. we'll get more on that intra-day move in a few moments. next, the good, the bad and the ugly. >> and what happened if all the women stopped working and shopping even for just one day? a worldwide movement to make that happen next on "power lunch." had a bad back injury,

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welcome back to "power lunch." the good, the bad and the ugly. in the good, h & r block. obamacare could help its business. ton the bad, ciena down almost 9%, network equipment company missing earnings as well as sales and it is an ugly day for shares of express, down 11%, hurt by a big drop in sales. hurt by, stop me if you heard

this before, slower mall traffic. surprise, surprise. >> maybe it's because women aren't shopping today, melissa. apparently women are flexing their economic muscle today in honor of international women's day. many women didn't go to work. funny. >> you didn't get the memo. >> neither did melissa. neither did aditi roy, looking at the numbers. aditi? >> definitely working today. thank you so much. we're here live in front of san francisco city hall, where hundreds of women here are gathering, a lot of them wearing red here for a huge noon-time rally. these numbers are from the center for american progress. and they show that if all paid working women in the u.s. took a day off work, the country would lose nearly $21 billion of gdp. here in california alone, the state would lose nearly $2.8 billion. one recent study looked at women in senior leadership roles at 5,500 companies worldwide. here is a snapshot of what they

found. the study found women hold 23% of senior management roles in the u.s. that's up only 3% since the company started tracking that stat 13 years ago. 31% of u.s. businesses have no women in senior leadership positions. among women who do hold senior business roles, the top roles are hr director, chief financial officer, chief marketing officer and chief operating officer. that study also found the percentage of women holding ceo titles increased from 5% to 9%. what about fortune 500 companies? another recent study found only 4.2% of fortune 500 ceos are women and that study also found that last year the number of women ceos at fortune 500 companies actually declined. it was 21 compared to 24 from the year previous. back to you guys. >> i bet most of those women ceos went to work. >> today? >> yeah. >> absolutely. >> i'm a little confused. does anybody doubt that women -- >> the value of women?

>> in the economy and how important they are? >> right. >> what's the statement here? >> why is it that women don't show up to work in the workplace as opposed to being at home, taking care of a family. is that not work then? is there value of work in a workplace over value in the work in the home? >> i love celebrating the value of women in the workplace or anywhere but how do you make that point by -- >> not working. >> or not showing. >> do we need to know that? is that the way to tell us? >> call us skeptical. >> whatever. still ahead -- >> yeah. we're all over this. big drop for oil as crude hits its lowest level of the year at $50 a barrel or thereabouts. the closing trades in oil are coming up on "power lunch." ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪

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hello again, everybody. i'm sue herera. house speaker paul ryan, defending the house republican health care bill, calling it a conservative wish list of reforms. he told reporters obamacare is collapsing without a shred of doubt. >> this law is rapidly collapsing. let's not forget that.

premium went up double digits this year in 31 states. the insurers are telling us it will be even worse next year if we stay on this path. choices have dwindled to the point that one out of every three counties in america is left with just one insurer to choose from. >> the wave of threats against j jewish community centers continuing today. this time in connecticut. police responding in west hartford after a bomb threat was received via e-mail. the building was evacuated but nothing suspicious was found. boxers from new york's fire department conducting their weigh-in before their bouts with boston police. the money raised from the fights will go to an organization that builds mortgage-free homes for returning veterans with severe injuries. you're up-to-date. that's the news update this hour. ty, back to you. >> sue, thank you very much. news alert now on housing, let's go to diana olick.

hi, di. >> hi, ty. officially hit the highest mortgage rate of the year, of 2017. that, according to mortgage news daily. we're right around 4.75%, as we see the yield on the ten-year rise. mortgage rates loosely follow the ten-year. and even bigger news is that we have moved a full quarter percentage points higher on mortgage rates in just the last week and we haven't even gotten to the fed announcement yet. >> that is a pretty fast move, diana. thanks for pointing it out. oil market closing for the day. boy, a whopper of a sell-off. jackie deangelis is at the commodity desk. jackie? >> oil prices more than 5% slide here. session low is $50.05. it was the lowest level of the year for wti and it was a three-month low for brent crude

today. what happened here? we've been stuck in that band, now pushed down to the very low end of the range. it was the department of energy inventory report, that big build over 8 million barrels that triggered the selling. we've been reporting on this for a while, the fact that we've seen the speculative traders on the long side, building up their positions, commitment of trader's report would tell you that. whenever it gets tipped too far to one side, traders say, is when you have the propensity for something like this to happen. the other thing is that inside the report, we saw u.s. production continue to go higher, over 9 million barrels a day. that's a concern when you're looking at the opec cuts and wondering if the shale producers will eclipse them. we've been reporting out of ceraweek and it's not a slam dunk that opec will extend these cuts. that's been supporting the market. people are concerned about it. you test the level like $50.05, you're getting very close of getting back into the 40s. >> brian has done some interviews to that point. thank you, jacky. let's get more on this big

sell-off. a notable is, there was a time when a sell-off in oil like this would be really bad for stocks. stocks are lower today, but we're still not talking about a strong correlation like we were for that time period, if i remember. >> yeah. not much. also, michelle, i'm surprised we're not seeing much movement in the dollar. oil is down 5%. it's a big move down. we'll be here, sort of trying to grab people and ask what the heck is going on with oil. let's talk about the macro deal scene. you're the guy of global m & a credit suisse. good to have you here. you're not pulling oil out of the ground but you do deals and

financing in the space. how healthy -- last year, it was bad. how much healthier are the oil balance sheets now? >> much healthier. commodity prices higher and we're raising tremendous amount of equity. charlie is involved in that, which he can comment on. as long as oil is in a reasonable range we don't care so much about day-to-day movements. but it's an incredibly constructive environment right no now. >> as banker, you're not sitting here watching the ticker on cnbc. is $50 a barrel a good price for your industry? >> yes. what's more important is the stability. yes, the industry has

restructured itself where it can generate very good returns, particularly in the u.s. shale regions at that level. perfectly fine. this industry makes multibillion dollar capital decisions over decades. they're not focused on the day-to-day. >> charlie, we met last year. we spoke last year and you said something very interesting. you hear this theme all the time, oil at $30, don't worry, private equity will bail everybody out. you said no, most of the big private equity firms had uneconomic investments that were already tied up. they had money but it was tied up. they couldn't invest. >> since we lost got together what a difference a year makes. over the last year it's been our busiest year since launching the fund ten years ago. in-court and out-of-court restructurings and corporate carve-outs as well, which we

think will be well positioned for the current environment. on your question of $50 oil, over the last year, the industry, the service companies and the equipment companies have come together with the producers to figure out ways of innovation, efficient and ingenuity to be competitive. >> a lot of them were smaller, mid-sized companies. i think it's more than 100. do you think the bankruptcies are over as a theme? >> i do. the big push, there's lots of private businesses that are still in need of support capital or restructuring. that's, of course, where we spend all of our time, really working with private businesses, trying to get them well positioned and competitive. i think it's slowing but there are still opportunities. >> charlie is being very modest. he has done terrific deals

recently that we'll be talking about as the year unfolds. >> you can say them now to our audience if you want to. >> that's up to him. when you enter, when you exit, when you monetize. and the private equity guys that are doing well are the ones who entered well. as charlie has said, they entered during better times. it all depends on your timeframe, frame of reference. one year, certain winners and losers, multi-year, might be the same group or different group. overall it's a very constructive environment. >> with the exception of snap chat, the ipo market has been terrible, for the most part. they're way down. do you think we'll see oil and gas companies come back to market? will we see more ipos or no? >> yes. >> there are people in the pipe ready to go public? >> a record amount of oil and gas ipos lined up. it should be a record year. >> okay. guys, thank you very much.

i'll send it back to you. that's very interesting. wave of ipos may be coming back up, great news for wall street and the new york stock exchange. right now, the worst day for crude oil in 18 months. i'll hop off this chair and see if i can get somebody to tell us why oil is having such a bad day. >> brian, thank you very much. >> thanks. stocks hitting session lows as oil hits it's worst day in 13 months. not its lowest level in 13 months. worst performance in 13 months. dow down 50 points. david tepper said he is long stocks. he told "squawk box" this morning that now is not time to be negative. >> we are so far behind, in my mind, the curve now, potential upside, downside potential. we can talk about the fed, ecb. everybody still looks on the negative side of life here, on everything.

for some reason. ten years, almost ten years after, nine years after the downfall. it's not just a negative side of life. you have to be on the positive side of life. >> all right. is tepper right? barry bosano, new survey showing increase in demand for alternative beta strategies. we'll get him to explain that and talk about the survey in a minute. first of all, do you think too many people are too negative most of the time and they ought to be more positive, more hopeful as mr. tepper feels? >> i can take two runs of at that. from an industry perspective and a market perspective. from an industry side our survey was optimistic in a capital flow perspective and performance perspective. capital flow perspective, there are really three things. there was a new record in asset management despite the net

outflow last year. secondly, you had a 50/50 split with people expecting to have in-flows and outflows that were much more balanced last year and the number of people expected to maintain or add to their hedge funds. that's the capital flow side. on the performance side, i think there's three stories. a headline story which at 5.5% -- our survey is a little less because we missed the december bounce in the markets but 5.5% of the industry is a good headline. there's an 18 percentage points difference between the top hedge fund performance and the worse, 11.22 versus negative 8.86. that was only a 13% spread last year. the dispersion story. third and last point expectation story, which is -- you know, we've been steady with average

expectations. the median expectation only 6.5. 5.5% headline you didn't miss expectations by much. what you have had is a curtailing of the tale. 59% of people expected they're getting better than 10% of the returns. this year it's 15% that think they get better than 10% of returns. >> scuttlebutt is that hedge funds didn't have a particularly stellar year last year. your research indicates that people who are in hedge funds are intending to put more in this year even than they did last year. why do you think that is, number one? are they able to pk those top jockeys? >> i think it does highlight the importance of manager selection. it's always important to get the right strategy.

now to a greater extent than ever, getting the right manager within the right strategy has been -- i think people hope to exceed that. there's also a differentiation within that universe. and that is that pensions are looking for 5.75% as an average expectation. i think because they're looking at hedge funds and uncorrelated positive health of the portfolio and worried more about the risk characteristics and performance statistics, correlation, volatility, and the others are still facing the absolute return to a greater extent. >> thank you so much, barry, for sharing the data with us today. >> that was a lot of fancy words. >> a lot of content there. content heavy. the woman who keeps david tepper up at night. marine le pen.

he says she could confident him his behind. how to play stocks without losing your behind. trading nation is next.

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one thing that gives david tepper pause? the french election. he brought it up multiple times on "squawk box." here, for example, when he talks about why janet yellen is wrong to project slow economic growth. >> it's crazy. janet yellen was saying three years. that's just wrong. it's wrong if you get the good things happening. it's not wrong if there are no tax cuts, if the french election goes the wrong way, it's not wrong. but it's going to be dead freakin' wrong. wrong. let me not pull a punch here. wrong. if you get the good things to happen, which is a distinct possibility. i am long european equities. i could lose my behind but that's life if it goes the other way. >> if it goes the other way. what does he mean? marine le pen. the reason we focused so much on her guys, we saw brexit, we

thought those were threats to the european union and euro. first time you have a very prominent candidate in europe who believes the euro should go away. >> it goes to the monetary system. >> exactly. exi existential threat to the euro. stop me if you have heard this before. the polls say she can't win. but keep rising every day. that's why he's nervous. if david tepper is betting on europe, should you? let's ask the trading nation team. larry mcdonald is with acg analytics. boris schlossberg with bk asset. boris what do you think? >> what worries the market she's strong enough to go into the second round. once you go into the second round all bets are off. you kind of think that he has a

20% spread. as you said, the polls were wrong in 2016 and investors are still very leery about what happens if she makes it into the second round of french elections. that could put the whole european experiment -- >> right now, boris, do you short the euro, european stocks or bet she's not going to make it and go long? >> i've got to bet she's not going to win. there's huge amount of fear that's been priced into the trade. i like the european stocks more than i like the euro itself. it has, perhaps, maybe other factors behind it. i would be much more favorable going long european stocks, benefiting from a lower euro right now. >> let's get the other side of it. go for it, larry. >> overall, we've been trading politics for almost 20 years. the key is not over analyzing the final outcome. so over the next 60 days we'll have periods where it really, really looks like she's going to do much better than

expectations. the polls globally, over the last year, whether it be brexit or trump have been -- not rigged but highly influenced by the establishment and under playing populous risk. so we know that's the case. so the bottom line is to trade it. you're going to get an opportunity here in the next month with much more european involved. even if she wins, if the government there is going more conservative, it's a better risk/reward in french equities. they're very cheap to u.s. equities. >> guys, thanks so much. >> thank you. >> larry mcdonald and boris schlossberg. go to tradingnation.cnbc.com for more. is too much oil being produced? big part of canada's economy. brian will talk to that country's top oil person next on "power lunch." your insurance company

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liberty mutual insurance. . today's story is all about oil. crude having its worst day in over a year. falling 5% off the close. energy is unsurprisingly the worst performing s&p 500 sector. you can see some of the big movers in the energy space. marathon oil, devon, chesapeake and murphy oil all posting significant losses. back to brian in houston. brian. >> seema, thank you very much. pleased to be joined by the minister of natural resources for the great nation of canada. minister carr, thank you for being with us. >> it's my pleasure. >> oil down 5%. you guys are more reliant on oil than we are i believe. what does a price move down of oil mean for canada and its economy? >> over one day not much.

if you look at what's happened since we were here last year, oil is up a lot and so are the spirits of the oil industry, the regulators, the people who have an interest in a healthy sector. if you compare this moment to a year ago, it's ebullient, hopeful. we feel that way in canada too. rather than one day, we'll look at the long-term trends. >> the long-term trend both with new administrations for both our governments, in canada -- we have neutral trade ballots. >> we do. >> do you fear what's going to happen? >> i prefer to talk about opportunity than fear. and the way that you take advantage of opportunity is to make arguments and make friends. and the arguments we are making is that the interests of canada and the united states are actually aligned very well in the energy sector, and you make friends, so when it's time to make the argument it comes from various sources, from mayor to mayor, from premier to governor,

from legislature to legislature. union to union, ceo to ceo. we really believe that our economies are heavily integrated and it's in the interests of both candidate and the united states. >> president trump wants the keystone pipeline done. the ceo of canada wants it done. does the pipeline get done? >> we want the pipeline done. >> but does it get done? >> i hope so. >> what would hold it up. everybody seems to want it. what's the problem? >> there has to be an approval ultimately and environmental approvals from the state of nebraska. we think it's a good project for canada and a good project for the united states. we are hopeful it will proceed. >> would you say optimistic? >> yes, i would. >> look at tax reform. you are deeply embedded with the oil and energy companies in canada. if we see corporate tax reform cut here, some have said, well, canada will have to cut their rate as well to remain competitive. >> it's not a very good idea to deal with hypotheticals or what somebody had said six months

ago. it's important to look at what people are actually doing. that's the position of the government of canada. we are looking for common ground with the trump administration. and we believe we have found it and will continue to find it because it's inarguable that what's in the interest of the oil industry, in canada and the united states, is part of the same energy economy. and we believe that jobs will depend on that continuing cooperation and that's our belief and we'll act on it. >> quickly. environmental liberalism much more prominent in the trudeau administration than harper. do you see a risk to the oil sands? >> no, because the major companies who are developing the oil sands understand that a price on pollution is a good idea. they understand that partnerships with indigenous communities is also a good idea and we need them all in order to build things and we're developing relationships that will matter. >> so they're safe. if they play by the rules, they're safe. >> i believe so. >> jim carr, thank you.

>> my pleasure. >> take a short break. back on "power lunch" right after this. i'm connecting our brains so we can share our amazing trading knowledge. why don't you just go to thinkorswim's chat rooms, where you can share strategies with thousands of other traders? mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

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are you short bonds right now, david? >> you bet your hiney. >> that sound bite led to a very deep editorial discussion in the newsroom today. >> robust. >> heated at times. >> big. how do you spell "hiney"? i thought it was h-i-n-e-y, to rhyme with whiny. that is incorrect.

>> i thought it was -- it had a -- i couldn't remember. this is not a word i have, a, heard in probably 40 years or, you know, seen, written. but i thought it had a german tweak to it. >> you would be right. h-e-i-n-i-e. >> there you go. >> brian, big journalism here. >> you're not going to find this kind of knowledge on our competitors, all right? >> the thing about that word is, i was joking with tepper said it with the crew. i was like, what is this, the 1940s? look at the gams on that dame. i'm going to knock you in the mug, see. it's not a word you here. >> it's such an antique, quaint word. >> i did get the spelling right. listen, guys, big day for oil. here in houston tomorrow but we're not at the conference. in houston with tillman. new restaurant. billion dollar buyer. but he'll be joined by the ceo of shell.

huge oil guest and tillman. it will be crazy. >> it is. >> thanks for tuning in. "the closing bell" starts now. >> hi, everybody, welcome to "the closing bell." i'm kelly evans of the new york stock exchange. >> what did we decide? h-e-i-? >> i'm bill griffith. oil having the worst day in more than a year. about 13 months. what's behind the 5% decline? trying to hold $50 a barrel. >> back to mid-december. broader market in a bit of a holding partner as gop leadership