other things, it eventually will come back. it's oil. it's a natural resource. it's going to come back and exxonmobil took a hit that maybe it shouldn't have and i see it coming back. >> good stuff. thanks to all of you guys. see you back here on the set. kourtney, thanks, john, pete, as well. "power lunch" now. >> thank you. >> three, two -- >> welcome to "power lunch." this is the snowmageddon edition of "power lunch." maybe it was not the big snow event that a lot of people in the northeast expected. but it is a major disruption of travel, travel, highways, there's a lot of ice coming down. >> well, that's why we're playing this song. by the way, the commute is impacting millions of people all up and down the eastern seaboard but we know a lot of you have suffered but you got to be smart and this just in to the cnbc newsroom. tyler mathisen making his way to work today. that is tyler skiing or maybe not on that snowboard. what do you think, michelle?

you're in new york. are you okay there. >> they asked us to step outside for the beginning of the show but said no. >> i left my cowboy hat ott home so i couldn't possibly do it. >> also you don't want to get assaulted by the tickle me elmos -- tackle me elmo. >> they're doing a whole show fromout side. >> i'm michelle caruso-cabrera along with melissa lee. the wind behind us late winter blizzard is continuing to pack a punch, 72 million from west virginia up to maine impacted by the storm. more than 6,000 flights canceled and the weather channel putting the hardest hit area from the storm here, dingman's ferry, pennsylvania. 24 inches of snow. >> wow, we will have the latest on the storm straight ahead. first a check on the action on wall street. stocks, they're lower across the board, energy is certainly the biggest drive in today's session as crude oil touches its lowest level since november.

47.32 a barrel. fed kick off a two-day meeting and yield on ten-year treasury, 2.6%, just a bit below right now. >> the worst of the storm missing new york city but the northeast is getting walloped. let's get to angie with the latest on the path of the storm. >> yeah, continuing to keep an eye on this storm. many especially new york city, d.c., not hit the hardest but inland seeing heavy stuff. let's take a look outside. you can see times square. still busy, busier than you would expect but we are still dealing with a whole lot of travel delays. i'm going to get to that. windwise is the big story for folks along the coast. you can see we're talking about 33-mile-per-hour wind gusts for philadelphia, new york city, montauk, 40. the worst of the winds not even here yet especially as the system moves up the east coast and we'll continue to be watching areas of portland, maine, to deal with strong winds and also more snow. so, those areas inland, albany,

dealing with heavy snowfall and that accumulation. now, as far as what our radar looks like right now, you can see rain and sleet line continuing to affect the coastal areas dealing with flood. big picture for those of you that may be headed out and mr., i know travel has been rough. i want to show you what's going on with that. we have our metro north railroad service is suspended. since noon and we continue to see that going on all the way into the afternoon hours. you see the subway express service suspended and goes on. if you're planning on traveling keeping an update on those will be a good idea. >> hold on. you're from miami, right? >> i am. >> here you go. >> i think -- i think it looks better on me, what do you think? >> of course, it does. >> we'll send it back over to you. >> definitely better on you, angie. no offense, brian. as we said the storm not as bad as first thought here in new york city but surrounding areas are still getting hit hard. nbc's blake mccoy standing by in ridgewood, new jersey, with the latest. blake. >> hi there. it is still snowing.

i know the snow was a bust for you in the city but out here inland a little we have seen a lot of snow. take a look. the plows out all day working to make the roads passable but the people have not. everyone stayed home today. kids are home from school. i know a lot of traders live out this way, northern new jersey. they're all home, as well. you like numbers at cnbc. let's see what we can do with this ruler. oh, it's about 6 inches. about halfway up the ruler here in northern new jersey. even more as you go further inland. you may be able to hear the snowplows, though, i think this will be pretty much cleared out as far as the roads are concerned tomorrow and we've seen the new jersey transit trains still running despite the weather. guys. >> our thanks to you from ridgewood, new jersey, not far from where we are seated inside right now. travel disruptions across the country as a result of this winter storm, let's go to phil lebeau live at chicago's o'hare with delays there.

hi, phil. >> tyler, the cancellations continue for most of the northeast. this map because this will give you some perspective on just how few flights are either taking off or getting in on a typical day if there was no storm, you'd see a ton of little airplanes flying into those major airports in new york, boston, philadelphia, today we're only seeing a handful right now. here are the numbers in terms of the number of canceled flights. more than 5900 flights canceled today according to flight aware. as for tomorrow, it'll be 814 flights at this moment. that number could increase over the next couple of hours as airlines continue to adjust their schedules. that's why the airports are virtually empty. the good news is that by tomorrow afternoon, we should see some normalcy returning in terms of the flight schedules and then you should see all the airlines back up to really full service by the middle of thursday. if not thursday morning. you know what's ironic about it,

we're coming off a record low for flight cancellations in the u.s. that was last year. and really we haven't had any bad storms this winter so as much as this is a pain for those people traveling to the northeast, really it has not been a bad winter for the airlines and for travelers going that way. back to you. >> yeah, it's great context, a lot being impacted but not that up. phil, thank you very much. now let's bring in seth kaplan at airline weekly. an important point he made, seth, which is, yeah, this stinks and there's people stuck at airports and for a couple of days will be snarled up, but the last two winters have been pretty mild overall in the northeast. how do you think it's going to net out for the airlines, a big blow or does the rest of the year being a little bit more mild make it okay? >> it mitigates it no question. this kind of makes this look more like a typical winter as opposed to an uncharacteristically easy one. when you add it up. numbers, something, i don't know. a quarter billion dollars, $250

million net impact for the industry. a lot of money but the kind of thing where, hey, wti goes up or down by a couple of bucks a barrel. an industry, 35 billion in revenue this quarter so, yeah, not a devastating impact even if a material one perhaps and nothing all that much worse than a lot of others. >> is there one airline that would be more affected than others? >> yeah, you know, if anything jetblue as a percentage of its revenue, more northeast focused airline. so when you see all those cancellations places like newark, jfk, laguardia, boston, you know, as a percentage of overall business that will be more jetblue than anybody else. again, that's always the case so nothing terribly unusual for a winter storm but something, that, yeah, if you're jetblue for than alaska or southwest, let's say. >> sometimes it does snow in the northeast during winter. that has happened but this is a pain in the butt for people all

over the country, last question, tell our audience, this is also key even if you're watching in phoenix, why do i care, so many flights go through new york, correct, that if we get disrupted in the -- in the new york area it screws up people that have nothing to do with the storm, does it not because flights can't get through? >> yeah, by definition you've got, you know, if you're in atlanta, busiest airport in the world and lots of flights are canceled up in the northeast guess where a lot of those are coming to and from. that's despite the fact that airlines nowadays do a better job of trying to set things up so that you don't have the impact cascade through the system as much so a flight nowadays from atlanta to los angeles, let's say, is less likely to be impacted as in the old days. try to make sure that airplane wasn't coming from the northeast. but, yeah, you know, we're talking about a corridor with thousands and thousands of flights, you know, so some of those flights are going to and from airports. >> another reason to petition management to move cnbc's

headquarters to san diego. le seth kaplan, thank you. a total botch job. big ackman's big valeant bomb started with botox. we'll explain and take you through the anatomy of what many are calling the worst trade maybe ever. plus, if this late season blizzard has you criming of warmer climes, we have you covered with the ceo of norwegian cruise line coming up. all that and more straight ahead on "power lunch." so what else is new? how's your mother? umm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. experience exciting offers on sales event is here.

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welcome whack to "power lunch." i'm melissa lee. valeant down over 11% after bill ackman revealed he was exiting his stake in the company. here's meg with what it means and why his fund finally decided to pull the plug. >> hey, it's been quite the saga for big ackman and val. a story that began with botox. we have to take this back a couple of years because, of course, the sort of marriage between these two entities began when ackman teamed up with valeant in valeant's attempt to take over allergan being the maker of botox. when that didn't end up working out allergan instead was sold to activist that changed its maim. and then he decided to invest in valeant and continue that. it was early 2015, february 2015 that pershing square started acquiring its stake. we have a time line of their involvement so it was february

of 2015 he started to make that invest investment. then in march pershing disclosed that in valeant. about a 5% stake worth about $3.3 billion. then, of course, later that year was when we started to see trouble stirring the valeant. citroen put out a short report asking if it was the pharmaceutical enron causing controversy and causing it to start its fall. then in march of 2016 pershing got more involved adding streiff fraid in and ackman joined later and mike pearson stepped down and joe papa joins as ceo in may 2016 in an appointment orchestrated by pershing's bill ackman and hoping they would turn around. in january 1017 at the investor conference valeant announced they had made some asset sales worth $12.1 billion and investors thought that would be the beginning of a turnaround

that's been promised for so long then, of course, march 13th was yesterday and david faber announced that valeant was exiting causing shares to fall quite a bit. as folks steck late maybe there isn't a turnaround to come here at valeant. guys. melissa, back to you. >> we spoke to andrew and asked about valeant after this news came out that ackman exited the position and what he thought about the stock and he said he still thought it could go bankrupt. what's the credit situation look like right now because bmo makes a good point. at this point his exit underscores a point that perhaps the turnaround is going to have many, many more challenges than we anticipated and take much longer than anticipated as well. >> that is a key concern of a lot of folks that i'm hearing from, as well. the company has $30 billion worth of debt. it has been kind of refinancing some of that trying to push out things, make it a little looser in terms of being able to meet all of its obligations there but the key concern is that the company -- its business won't be

able to support its obligations and that is a concern that i'm hearing a lot today. >> all right. meg, thank you. meg tirrell. so 4 billion on a single trade, is this going to go down as the worst trade ever? and what are the ripple effects for the future of activist investors. let's bring in bethany and herb greenberg parter in pacific square research. herb, we've seen hedge funds go bust bigger than 4 billion but on a single trade have we ever seen a loss this big on a single trade that you can recall? >> i don't know. i have no idea. i know that this was a trade when it occurred the first time some of us looked and didn't understand and i think there are a lot of lessons from this and one of the lessons is, you know, activist names and short selling names are sometimes the same and end up in the same place because they hit the same screens but sometimes i'm always surprised why people don't do the same level of work on the activist side that say the shorts did.

sometimes they can pull it out. in this case, you could see even back in 2014 there were some significant issues that we didn't even know were going to go down the road that this one ended up going. >> sure, bethany, what does this mean for other activist investors? are they looking at it saying there but for the grace of god go i or are they saying, he blew it. i would never make the mistakes that guy made? >> well, i don't actually think this is a comment on activist investing. what ackman did was a betrayal of his traditional investing style. he didn't take an activist stake and a biten down company instead he took a passive stake in a high-flying company in a very pricey stock. he became an activist only after the company hit the skids then went on the board and so had he invested at that point i still think it would have been a mistake but not nearly the magnitude it is. the comment is a different one, the group think that so prevalent in the hedge fund industry today.

have all these guys, mostly guys paid tens of millions of dollars for doing independent due diligence and research and being iconoclastic and thinking differently and there they all were invested in this company. >> it was a hedge fund motel. i mean, this is almost along the lines of the sun edison where we saw all these guys pile into the same exact trade and follow it down because for some reason they were emotionally attached to this trade so that's what it sounded like, herb, when scott walker talked to bill ackman all the statements bill was saying it sounded like he was looking back thinking i wish i had sold earlier. he was really attached to this trade. >> well, i think as david said they're all human but in this case the case is i come back, i'll always come back, why -- they should have seen it coming and the hedge fund hotels, when i'm involved in a situation where we're researching and i see a bunch of hedge funds on the other side you get nervous sometimes but i think they --

there is a group think. i think bethany is exactly right. as much as people talk about doing, you know, their independent work, i see a lot of comfort in numbers. even today. >> is it that? >> long and short. >> or is sometimes their pride. they can't admit that it's wrong at some point it's going to go right and they'll be proven right in their heads. >> emotions are real. >> a couple of questions here for either herb or bethany. there were a lot of hedge funds that were in valeant at one time. wasn't just pershing as i recall. the initial history was that he got into the valeant orbit, so to speak, as a result of a position he took presumably in concert one way or another with valeant with respect to allergan and didn't he correct me if i'm wrong here, didn't he have a profit in this stock? >> yep. >> before he had a big loss. >> yep. it's a really important point. he actually had about a $2 billion profit on the allergan

trade and that allergan trade is a very controversial thing in and of itself still being litigated and may be a precursor to this. you do something borderline sleazy maybe get your head handed to you. he could have walked away from this. what i see again to come back to my initial point it was a betrayal of ackman's investing style. this wasn't activist investing. this was exactly the opposite. >> you know, herb, hey -- >> by the way, can i say one thing? if you had seen -- if you look back in time and said the moment you knew this was going to turn, couldn't you have said the day that jeff at value act who was the original -- i don't know if you want to call it value investor passed the baton to ackman, ackman went on the board. ackman took some of the shares, at that point you almost wonder was he the smart seller? >> another aspect which i think michelle touched on and you touched on the gambler's

fallacy. i'll lose and every time i lose i'll keep doubling down because eventually i'll win and since i doubled every time i'll get back all my losses. eventually you walk away bankrupt and having to pawn your watch. the point with ackman because he's investing not with his own money other people's money. shouldn't somebody have said you cannot do this? where were his investors saying stop or give me my money back. you shouldn't keep doubling down on a losing bet. walk away. >> can we back up on that point because -- >> herb and bethany, want to respond? >> i want to back up. look, back to this idea this is the big -- huge disaster of a trade. some $90 billion of investors' money lost while hedge funds not just ackman but plenty of others from paulson to viking capital management collected tens of millions of dollars in fees from their investors on the way up. bore none of the consequences personally financially as investors lost $90 billion and leaving behind a legacy for

patients of jacked up drug prices that the most vulnerable people in our population can now no longer afford the medicines they need to stay alive. appallingly ugly story. >> i wonder if we stumbled across the reason why ackman stuck with this trade for so long. when you bring up the original questions about allergan. he should be sued for insider trading. he knew what they would do with allergan and kept saying, no, i'm in this for a bigger thick, this is a longer-term trade. i'm sticking with valeant. did he have to stick with valeant to make that other trade look cleaner? >> i suppose. i don't think so. i think he could have walked away from the allergan trade. maybe that was a part of it, though. it's a really interesting thesis. maybe he had to be and maybe he became convinced in the sort of glory valeant's business model. there was a great moment on cnbc you guys have which was bill

ackman going on cnbc after he accumulated his enormous take in valeant and saying about jim's analysis and remember james, a prominent skeptical of valeant and saying, oh, yeah, i've gone through all of jim's analysis and he's just wrong. a great moment in history and a great moment in tv and it shows that people just don't always do their homework. they get it wrong. >> i was thinking because i'm always thinking of you, let's say bill ackman is right about he herb herbalife. does the entire model through etf's passive investing make it harder to be a bill ackman on the short side because even if you're right, if everyone is buying index funds this stock may be a piece of whatever and it's going to go higher just because everyone is buying everything and doesn't care about individual stock analysis. >> well, actually i agree and disagree. i disagree -- sdmrfshgs, you do.

>> herbalife. i believe bill was 100% right on his analysis and the ftc bore him out pretty much almost to the very end. i think that in the end individual companies that do blow up etfs notwithstanding all the way up, the stocks will go up because of whatever the algorithms and machines and etfs do. when the moment hits that things go bad that's when it comes tumbling down especially in these kind of markets and i think -- so i think that the issue of individual stocks still hold. he he herbalife is different. it became a personality clash. the one thing that surprised me all along is to see so many people on the opposite side of that one that normally wouldn't have been with me but they were betting against bill. >> yeah. he inspires that sometimes, guys, thanks so much. bethany and herb. well, every time a winter storm hits you can expect long lines at the hardware store for every kind of snow removal device or salt or generators but

do winter storms have that much of an effect on the bottom lines of companies like home depot? analysis straight ahead.

citrix exploring alternatives according to reuters. the stock down more than 4% after spiking before the close on monday. verizon now being sued by new york city which accusing the

telecom giant of failing to fulfill its agreement to offer its fios service to every home in the city and alexio number will cut 7% of its work force. we will speak to some of the top marketwatch attorneys find out what they want to hear if we get a rate hike from the central bank. it's always the language that matters so my language to you is stay with "power lunch." back right after this.

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welcome back to "power lunch," everybody. i'm sue herera. here's your update. british prime minister treason have may telling the house of commons that brexit article 50 would be triggered by the end of the month. >> last night the bill on article 50 successfully

completed its passage through both houses unchanged. it will now proceed to asent in the coming days so we remain on track with the timetable i set out six months ago. and i will return to this house before the end of this month to notify when i have formally triggered article 50 and begun the process through which the united kingdom will leave the european union. >> meantime, the eu's top court ruling employers can ban staff from wearing visible religious symbols such as women wearing islamic head scarves at work. the islamic head scarf is a contentious issue in several european countries. subaru is recalling nearly 27,000 new cars to fix a problem with the rear view camera display. this is due it a software problem and recalls the 2017 impreza. you are up to date. that's the news update this hour. i'll send it back to you, melissa. >> thank you, sue. folks feeling pretty good

these days, a business roundtable says opticism posting biggest increase in seven years for ceos. hey, bob. >> listen, the reason they're optimistic, they still believe president trump can deliver on less taxes, lower regulation and infrastructure spending and as long as they believe in that they'll be optimistic. i'm not so optimistic and worried about the market. let me show you three thing, transportation average near the lows for the year, not just airlines railroads and truckers are weak. russell 2000, small cap down almost 4% from its historic high just march 1th. don't like that the collapse in oil, what everybody is talking about. down 12%. just for the month of march. take a look at some of the big oil names down and they're down 6% to 8% for the month. most of the big names down 2% or 3%. the list of woes going on. today saudi arabia indicated it raised the output back above 10

million a day. the immediate source. look at the high rig counts, inventory trends going against oil, speculative longs are high and capital spending growing, the fed rate hike is around the corner and could impact the dollar that could hurt oil as well. a long list of problems. what does it mean? it means there is no way a lot of companies like exxonmobil will hit their numbers not with oil at 45 or 47. they're working off $60 oil, the analysts there. these numbers are too high. exxon is expected to increase their earnings 60%. their revenues 30%. it's not going to happen with oil at $45 so the market is taking down everybody's numbers. exxon was at a 52-week low just last week and it's right here again and that's the big problem now coming to grips with the fact that we're not getting to that close to $60 level where these guys earnings expectations are at. analyst also have to start cutting those numbers very, very fast. guy, back to you.

>> thanks. some of those stocks back to preelection levels. bob pisani brought up what will likely be a fed rate hike. rick santelli tracking interest rates at the cme. rickster. >> in front of the fed meeting flattening in the curve. short maturities like the two-year unchanged looking to intradays of 10, down 5 but it is up 15 on the year. and if you look at a two-day chart puts it in more perspective. yesterday's 2.63 yield close usurped september 19th of 2015 and pushed us back to july. key highs going back several years, 2.60 and 2.64. look at two etfs. hqd so pretty as a barometer, everybody was working together. seeing a little of this show up as they come off extreme levels and dip lower and dollar index.

bob brought up the fed meeting. it certainly doesn't seem like it's going through the roof due to fed tightening. as a matter of fact, still 3/4 of a cent down on 2017. back to you. >> all right. rick, thank you very much. well, the president has certainly promised a lot of things about job, the economy, infrastructure and tax reform. it is a very ambitious agenda. but do most big money players believe that will get done? here's steve liesman with his latest exclusive survey. >> brian, thanks very much. yes, they do. they think it happens but happens over time. what we get we asked our 50 respond dents that include fund managers and economists and strategists when they think these major pieces of legislation will happen. take a look here in the third quarter of 2017 is when they think health care happens. tax cuts, that's a matter for the fourth quarter of 2017. and then the first quarter of 2018 promises to be busy. dodd/frank reform and that infrastructure spending on average are believed -- they

will happen then and then the third quarter of 2018 is when we get fannie/freddie reform maybe. 33% of our respondents said fannie/freddie reform would never happen. how about the border adjustment tax? they don't really have a very good opinion of it. 60% saying it is negative for the economy and that's up by the way from 45% when we last asked this question in the january survey. they think deregulation is good and business tax cuts are good and individual tax cults are good. they do not like the border adjustment tax or the trade policies. another thing they don't like the president's tweets. 47% saying that the president is hurting himself and his ability to enact his economic agenda through the tweets, a less likely 9% say more likely, 38% say is doesn't make a difference and like the agenda more or less, guys, don't necessarily like the tweets or the border adjustment tax and, tyler, you

can read all about it on cnbc.com. we have a full article on all the results of the survey. >> steve, thanks very much. you'll, of course, cover tomorrow's meeting of the fed or the release of the results of that meeting in washington. let's talk about all of this with jim mcdonald chief investment strategy with northern trust and steve masaka with web bush. the border adjustment tax. jim, first you then steve. do you think the border adjustment tax would be "a," bad for the economy and "b," bad for the markets or quite the option or neither? >> i think the uncertainty around it, tyler, is too high. that's why the odds of it coming to pass are maybe a third or lower. i think that there's too much uncertainty around the inflation impact and this big assumption that the dollar would appreciate to offset that so i think it

would be too risky and believe it's probably not going to happen. >> if it did happen, hypothetically would it be good for the markets and good for the economy, steve? >> i don't think so. i'm a free market guy and i like free markets. if people want to sell you subsidized products at a chief price i'm happy to buy them. i understand the argument behind the tax but i think a free market will benefit the economy and market. >> let's go to two questions top of mind and top of agenda. what the fed will do and what effects that might have down the road. not just what may well be a quarter point hike tomorrow but the longer term trajectory of interest rates since i asked jim the first question, steve, you get this one first. >> well, i think clearly we're going to see a quarter point increase tomorrow. i think that's been well telegraphed by the hawks and doves on the fed but i think the real issue will be the commentary afterwards. dot plot so to speak afterwards.

how hawkish is that and point out some of these economic data numbers have been tilted by the weather. the weather has been very, very good. these are seasonally adjusted numbers, so the economy really as strong as everyone thinks it is. >> jim, your thought on the fed and the economy. >> well, so there's concern about what the fed's impact on the markets will be and if you look back at the last two big rate cycles the key is that they have to move in line with market expectations. if that happens the market can continue to do well so i think they will be tempered in their language. they will indicate continued slow but steady interest rate increases but that's a long side better economic growth so i don't expect this to be a head wind for the stock market. >> gentlemen, thanks very much. jim mcdonald. steve massocca. melissa. as it continues to steam up the east coast, homeowners prepare to dig out. do winter storms mean it's time to buy hardware stocks like home

depot? that story ahead on "power lunch." various: (shouting) heigh! ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here. all while reducing america's emissions. i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss

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a massive storm pounding the northeast. not many benefit from these except for maybe stores like home depot that sell products you'll need to dig yourself out. how much do they really benefit from storms like these? let's bring in jamie catten. great to have you here. >> thanks for having me on. >> they might buy snowblowers and salt. how does this shake out? >> that's right. i think if you look back at some of the past storms where home depot and lowe's have benefited from sandy, it sure doesn't seem it's panning out that way, a number of revisions to the storm

totals across the new york and boston area, so i think, you know, when you think about the offsets on store closures and inability to proceed with spring projects you really sort of have a net neutral on the storm right now for these names. >> maybe because of the timing of the storm that it's taking place so late in the winter season. does that make it more of a negative for the home improvement retailers? >> it could. i mean, you know, in what they save on things like advertising or marketing in this period is you don't want to advertise, you know, garden or outside at this point in time. you're also missing out on those project, so it could leave a little bit of money on the table but i don't think we anticipate that it's going to be a huge swing factor for either name and, you know, we are unlikely to change our intrinsic value. >> i mean the bigger issue for investors at this point especially for home depot the price of these stocks and valuations of these. home depot right now it's only a buck off its all-time high at this point. it's been a real outperformer in retail. is this one you still like?

>> we think it's slightly over valued and lowe's is a better valuation at this time. shares seem to have run up with some of the trump tax regulations people are anticipating coming out so i think we view lowe's as much more favorable. >> jaime. thanks for joining us. if you live in the northeast you probably are staring out your windough dreaming of a tropical vacation. our next guest knows how to cash in on winter doldrums. we have the "power lunch" exclusive from ft. lauderdale with norwegian cruise line ceo frank del rio. hi, guys. -- [ no audio ] >> i think we're having trouble with the audio from susan lee and frank del rio. we are looking forward to that interview as soon as we get the audio back. so don't move. we'll carry that interview right

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i'm ricardo, a sales and service consultant here at the xfinity store in bellevue, washington. here at the store, we offer internet, tv, phone, customer service, home security. every situation is a little different. it could be about billing, simple questions like changing the phone number. sometimes, they want to upgrade, downgrade, but at the end of the day, you want to take care of the customer. one of the great things about comcast, there's always room to move up. of course, it depends on you, how hard you work. ♪ we think the hamsters are rung the generator. susan lee has that "power lunch" exclusive with norwegian cruise line ceo frank del rio.

>> all right, michelle, let's try it again. you know the number of people cruising is outstripping land-based vacations by over 20% at last count. and to talk more about that we have frank with us today. and, frank, you know, exciting times in cruising since demand is at the highest in years. what is stoking all this growth? >> susan, i think there's a lot of factors. first of all cruise vacations are a wonderful way for just about everyone to visit the world. we have new ships coming out. the economy is strong. stock market is at an all-time high. >> strong u.s. dollar. >> we do. >> concern with chinese growth and election uncertainty. >> is gob. the trump effect, let's not discount that. so, all indicators are positive and the industry as a whole is having its best year and probably -- >> how do you feel about your share price lagging the others in the space. >> our share price is up 50% since the low in early

september. >> right. >> so we're very happy. >> behind royal and carnival. >> we are the smallest and so we had a situation last year with some geopolitical events that didn't allow us to optimize our profitability. geopolitical events have calmed down and when things are smooth i think you'll see that our company outperforms because we are a north america centric company. we source a disproportionate amount of business from north america and north americans, quite frankly, are the customers you want on board self-vessels. they tend to buy early and the higher priced cabin. >> more of a policy risk. two executive orders and people concerned about border taxes and the future. china as a currency manipulator. >> no ill effects that have taken effect.

the travel ban, for example, covered five, six countries in the middle east that we as an industry don't source very much from. so, so far those kinds of policies have had no effect. >> but for a long time, you know, you've basically telestrated to the market norwegian was going to earn am epf of $5 each. you rach chelted down that expectation and now even analysts don't expect $5. not even at $4 so business isn't going as great as you had hoped. i'm just wondering what happened during that time. >> well, as i said, what happened was the geopolitical events. that had a dampening effect on consumer demand primarily from your north american consumer who pays the most. business began to bounce back strongly from the north american consumers and those traveling to europe. in many ways, europe is the big

determinant of profitability. the industry's third quarter generates half the industry's profits. and so you ask why is the third quarter so important? that's the european quarter and so in many ways, the cruise industry ultimate profitability somehow hinges upon how well the third quarter does and that has a big -- to do with europe and alaska, the two highest yielding destinations for us. >> frank, it's michelle here back in new york. it would be nice to be in florida right now. you mentioned earlier the trump effect. we have seen the trump effect in the stock market. we have seen it with surveys from business people who are much more optimistic. are you seeing it in bookings, have customers improved do you think post-election because of the election? >> hi, michelle. yeah, i think so. if you look at our booking curves we saw a spike right after the elections. we saw business building up to the election believe it or not and certainly post the election

business has been on fire in the last earnings call we mentioned that in the previous eight weeks our business was up solid double digits. pricing was up solid double digits and so we're very happy with the way business is going so far for 2017. >> all right. well, frank, thank you so much for joining us. frank del rio, ceo of norwegian cruises. >> always a pleasure. the water is warm. weather is fine. we're going to send it back up to you guys and, yeah, somebody has to do this in florida. back to you. >> it's tough but somebody has to get that spot. thank you. much appreciated i bill ackman thrown in the towel on his investment in valeant losing $4 billion in the process. earlier on "power lunch" well-known journalist bethany mclean highlighted a moment when bill ackman was a guest on the network and said famed short seller jim chainos was bearish. >> i picked up the phone and called jim.

i didn't tell him we're looking at a potential transaction but asked for his thoughts. 26-page analysis. i went through every word. i had access inside information, and unfortunately jim does not have valeant right. you know, jim has never been a fan of serial acquirers. >> well, he's right about that. jim has never been a fan of serial acquirers but he looks -- it's a really damning sound bite. >> herb made the point. so many signs along the way. that was one certainly. you know, when sequoia exited and when andrew got in on the short side. so many moments in time where you said that could have been the time. could have been the time. >> yep. >> all right, time now for straight talk. >> our daily dive into the calls of the day and do it literally, by state, new york, new jersey. see if we can pull it off. >> first up, i have every confidence, occidental, raising estimate, the price goes to 79

and energy valuations may look expensive. relatively s&p 500 but the analysts think occi is toward the low end of a net asset value and their position to further lower costs in its new logistics hub. >> everyone is going lower on costs. stock number two, questioning diagnost diagnostics. goldman likes it, love is it adds it to its conviction buy list and boosts it from 113 to 101. likes lower cost lab testers and think it will gain more. that $113 target on quest is about 14% upside. >> next up, abbott labs, bmo downgrading after it outperformed up 19% versus the s&p 500. abbott is within striking distance of 48 bucks a share and st. jude acquisition is closed and so maybe it is time for the stock to take a pause. >> maybe. all right, and finally your small cap stock of the day.

nautilus. the home fitness company, imperial upgrades them and boost the target to 20 from 16. recently met with management and like what they heard and nautilus should have an easy quarterly comp and their new bowflex, high velocity trainer. i can see your questions, also heavy promotions have abbated. $20 target on nautilus is 20% upside. remember the bowflex? >> i bow when i flex. >> everybody had one. >> didn't chuck norris promote it? >> i think you're right. >> chuck norris should promote everything. >> a deep pull. >> street talk. >> done for tuesday. coming up, janet cramer joining the "power lunch" as we walk you through bill ackman's big loss. you will not want to miss it. if you have medicare

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pour you are, i'm michelle caruso-cabrera and we're here at the nasdaq with melissa lee, tyler and brian at cnbc headquarters. two hours until the closing bell. massive winter storm blanketing much of the northeast. two feet of snow in some parts.

thousands of flights canceled. the very latest from the path of the storm. bill ackman bailing on valeant. losing about $4 billion on that bad bet but are investors going bail on im. crude collapsing, plunging 10% in the past week. how low is oil headed? meantime, let's get a check on where we stand in the markets. stocks off session lows but down across the board. energy the biggest lager. real estate spending discretiona discretionary. check out some of the movers we're tracking. dsw up 1.5% up more than 3% earlier. mixed earnings for the discount shoe retailer. profit beat but revenue missed the mark. synopsis down 2%. joining the s&p 500 replacing harman international. alexion down restructuring biscuiting 7% of its workforce. brian. >> let's get the latest on the snowstorm. really nice storm. here's what we know.

five states under state of emergency, that is new york, new jersey, connecticut, virginia and pennsylvania. the rest of you are singing. more than 70 million are being impacted by the storm. 6500 flights canceled. that's according to flightaware. straight to meteorologist annually lassman at cnbc hq for us. what's the latest. >> we've seen -- those of us along the coast dealing with much better conditions and still seeing wind as an issue. if we take a look at our live radar we're definitely seeing the clearing for areas of the mid-atlantic moving up to the northeast into portions of new england. we're actually watching for heavy snowfall. a couple of things to keep in mind. looking at worcester, massachusetts, you can see we're dealing with near zero visibility in spots and plenty of snowfall there and we definitely have those blizzard conditions staying with us for much of the day. here's what we're talking about as far as snowfall totals go. you can see 23 feet or 23 inches

rather almost two feet out there for mt. pocono. in pennsylvania, wilton, connecticut, 17.2 inches and just as you go down you can notice the difference between the snowfall totals as far as what we're dealing with through basically the new england area. we don't have all that snowfall just yet but definitely will be watching for the next couple of hours to be dealing with it. new york will start to rebound and washington, d.c. starts to rebound as far as travel goes. but not thinking about getting out on those flights this afternoon and into the evening hours. i think those are pretty much out of the picture for anyone that's trying to get out of those big cities along the i-95 corridor. nice conditions will be on that ware but still going to be dealing with cooler air in place as we go through the rest of our workweek. guys. >> one thing i would say, angie, i shoveled out this morning, the ice made that snow very heavy. >> yeah, actually it was very heavy snow and this is a problem when it comes to this kind of snowfall. very heavy.

wet. that means it's turf for anyone trying to shovel out especially elderly people so asking for help a good idea. >> those gun, shouldn't have been a problem. >> not the gun, it's the back. angie, thanks. big ackman closing the book on what could be the worst trade ever. who knows getting out of valeant with an estimated $4 billion or the thereabouts loss. he's had good ones, as well. leslie picker is taking -- we'll have a little sound bite here. let's listen. >> when you understand the operating philosophy and approach to capital allocation discipline, cost discipline, the way they compensate their team it fit into the pershing mold of an investment. that's what got us interested. >> if you find yourself as an he herbalife employee, my advice, you leave the company. i think they have the best management team in the industry. harrison, famed railroader, this is his third turnaround.

already the most profitable railroad in north america. 'done an incredible job and burger king was far, far behind mcdonald's call it four years ago when 3g bought the company. 4 1/2 years ago and now they're making enormous profits and mcdonald's is trying to catch up and it shows the you pore of a talented management team. >> leslie is here to see how they worked out. hits, big misses. >> as expected with mr. ackman, when you make these types of big concentrated bets you can expect sizable losses, nothing compares to the $4 billion loss in valeant. his biggest ever but for many watchers this is a deja vu of sorts. for one the valeant trade is reminiscent of jcpenney when he sold out 2013 and took losses 1/10 the size of valeant. just like with valeant he sought influence over management and strategy which later backfired. another trade that has yet to go

ackman's way is herbalife. disclosed a $1 billion short position four years ago and since then the stock price continued to rise after cutting losses on valeant many are wondering when he will do the same with herbalife. but he's had big win as long the way too. he exited his stake in canadian pacific after inducing a turnaround that produced big gains for pershing and booked a big one when allergen was sold to activist in 20134. more indicative is the fund's net performance beaten the s&p once in the last four years in 2014 during the remaining years either lagged the s&p 500 or posted negative returns. while many lps are glad valeant is behind him the question is whether they'll stick around for his next big bet, guys. >> l'eggsly, thanks very much. what does this mean for the future of actavis, joining us is

scott wapner and jim cramer. can we draw any conclusions from actavism. >> there are successful actavists. nelson peltz. dupont, pepsi. you can go down the list. i don't think it has a broader impact on what's happening in actavis. the biggest impact is on what's happened in the stock mary. if you look at or actavist investors were doing in 2015 that was -- you could maybe point to a peak. you had more than 80 13 ds with regulators announcing a big position and the numbers were staggering more than $30 billion invested in new filings. that was in 2015. in 2016 which was a down year you had 61 filings for 9 billion

so go from 30 to 9 billion. by market conditions, volatility, a number of other narc, i don't think this has a broad impact on -- >> jim, let me ask you two questions. your thought on that point and draw any inclusions from actavism and i don't know whether you can say this. one investor told me years ago the last thing you want to do ever is fall in love with a stock. >> these are pieces of paper. >> i don't know whether that happened here but before he had a loss in valeant he had a profit. maybe he thought it was going to come back. >> voucher never supposed to turn a profit into a loss. i don't think it has that much impact on activism. these guys were joiners. i think that he may have pushed pearson but pearson certainly had his own agenda. the former ceo. >> former ceo, rollup philosophy which obviously suited bill. i mean he said -- >> it suited everyone, right? >> it suited everyone.

>> until the music stopped. >> is it possible that with this loss and maybe nobody has any idea, jim, but is it possible with this bill ackman's net history would be to never have made money for anybody. >> his wins were smaller. 20% annualized returns over his career at pershing square. it's just the most recent one that is so spectacular -- >> always a guy who says, you know what, this is the low and i want to get in on actavis -- he's a charming guy. he'll meet some rich people and say, i screwed up and admit it and now is the time to buy ackman because 20% and you got to be with me. this will be the worst i've made. worst mistake i made and learn add loy the. the thing always intimidated me about valeant, the amount of debt, 30 billion in debt. brought pop in -- i like joe papa. did a nice job at pergo then a

bad job at pergo. everything changed for this investment. everything changed. you got a president who -- and political election where both sides hated the drug companies and companies that raised prices, that's valeant. you got -- you have a shkreli factor, who is next. i don't -- >> i don't think we knock ackman's investment in valeant because, listen, i didn't -- i mean who knew. jim chain nonos but that's it. he kept doubling down and his losses are bigger than most funds' entireties. >> his gains are too. trying to paint a mixed picture because the guy has big wins. some of those are extraordinary. the one thing bill ackman does he comes on our air and just tells you, listen, gieks like chanos, forget about it. i would have said, i mean, honestly we can run this clip about chanos. he says i have insider

information that he's dead wrong and -- >> what he's talking about -- that was a sound bite from 2014. so he was referring to the allergan deal because he partnered with valeant, he was privy to valeant's financials. >> but i'm saying -- >> that's the inside information. >> he's inside but that doesn't mean anything. chanos. >> apparently not. >> chanos is a bright guy and looked at the balance sheet and price increases. >> any inferences we can draw from what he's just done with valeant as to what he might do with herbalife. >> herbalife is hard. >> i said this many times, you needed the government to comply. you needed the government to shut them down and the government is loathe after arthur andersen to shut any company down because it puts ace lot of people out of business. he may say everyone has been irreparably harmed and it's a toxic waste. that didn't happen. he needed the government.

without the government you couldn't complete the short. now, maybe herbalife, they have a lot ofcash. >> depends what level you wanted to complete a short, right? when you bet on zero and you bet on such a binary outcome, you diminish even if the stock goes down a bunch, if it doesn't go to zero then what do you -- >> that's the last -- that's the shakespearean tragedy, guy comes on and is just -- he ought to temper what he says. i have to do this because i've been on a dozen years for "mad money" and haven't figured out how to temper. he comes out with grandiose strategies and he buried himself but steve fraida -- >> vice chairman of the firm. >> extremely smart. you say it's going to do "x" and then you kind of committed that it's going to do "x." >> hubris. >> he is a nice guy, i've had

the pleasure of meeting him casually a couple of times. i know you knew him. here's the reality for motion of our viewers. if you're a salesman and you lose money every three or four years wildly underperforming the s&p -- wildly underperforming and lose a couple billion dollar, most of our audience would be fired from their job. they would have -- >> this is money management. it doesn't work like that. money management is one of the great -- >> warren buffett said -- >> will investors fire him. >> no, probably -- >> this is -- >> what buffett said about how people can talk people into giving them money. >> over the course of the last few years, so ackman was up 40% in 2014. he led the entire industry. he was the best performing hedge fund manager. now large portion of that was in allergan but so what. it was a win -- >> doesn't matter. >> i talked to some of his

investors, all along the way of the declines in value and some of the other things and not a single one i spoke with, not one told me they were leaving or pulling money out -- that's not just to say he had redemptions. he's obviously had redemptions. but the ones i talked to are not like in mass runing away from the firm. he's going to continue to manage money. >> he needs -- >> albeit a smaller pot. >> he needs a win. >> obviously he needs a win bad. >> an nfl franchise, not that many of them, right? he has to get some wins. had a really bad couple of seasons but we've seen people come back and i'm telling you i think the guy will come back. i think that this was a terrible investment. because, because many things went wrong but they did pile on a lot of debt. i don't understand why he had such a level conviction but that's the hubris part. but you know what, individual rich people want to be with him. they want to be with him and he

is in a lot of different circles where very rich people are and very rich people want to give money to a guy who has had a couple of bad years and is about to make a big comeback. i'm not saying he's belichick and you have to bet on him. >> he's undeny incredibly smart and fell in love a little too hard with ron johnson and what he thought ron johnson could do at jw penny and michael pearson running valeant but there are a lot of other people who missed all of the warning signs that jim chanos laid out in some 26 pages of a short thesis letter he shared with ackman back in -- >> bill mueller. >> he said, listen -- >> i don't -- snrs. >> sequoia. >> i didn't know. i'm saying those kind of losses -- hard to come back. >> when you do fall in love mr. market can school you. >> i love ackman coming on tv but in retrospect one of the things he did well was tell us all how smart he was. >> jim, thanks. >> by the way, 12th anniversary

for "mad money". >> 12th anniversary. an odd one, yeah. we'll do a little -- something at the beginning but, yeah, i mean it's an odd number. just -- >> hold on. we did something. >> what? >> for you. a little montage of the places you've been over the years. >> welcome to the heart of american manufacturing. coming to you from the ford f150 plant in dearborn, michigan. who says we don't make anything anymore? "mad money" is boots on the ground in the badlands to show you how home grown and innovation and technology have opened up one of other biggest oil discoveries. >> all about america. >> "mad money" is in the heart of steel country to show you how the biggest oil and gas discover irys in a decade are putting a fire back under an industry left for dead. >> we're on the mississippi river, louisiana talking jobs, national gas and the u.s. manufacturing revolution. this is what we'll do.

new ideas, what heights we'll go to to invest in america. >> the problem is you have no enthusiasm, jim. you're going today -- >> i love american business so much. it is tough to watch a valeant because it's just a bad american business. >> based in quebec. >> true. save ourselves. but that i do love american business so much and that's one of the reasons i do the show for fan, viewers and for american business and i love -- >> congratulations. >> it puts dinner on people's table. the government does a crummy job at doing that. corporations do a great job. >> "mad money" tonight and he will aek spree with the ceo of nucor at 6:00 p.m. tomorrow, the fed is expected to raise rates, the bond titan jeff gundlach will sit down with scott and the "halftime" gang at roughly 12:30. michelle. >> here's what's coming up on

"power lunch" today, tyler, the fight over health care going to jeopardize the push for tax reform. we talk to mr. tax reform himself. larry kudlow. which do businesses want more, health care reform, tax reform or both? plus, what do businesses need from workers? how do you train people for the skills that companies actually need? all that and much more coming up here on "power lunch." welcome to the heart of american manufacturing. coming to you from the ford f-150 plant in dearborn, michigan. who says we don't make anything anymore? "mad money" is boots on the ground in the badlands to show you how home grown innovation in technology has opened it up.

welcome back to "power lunch." corner offices across america are feeling pretty good. the business roundtable says ceo optimism seeing its biggest increase in 7 years. president trump celebrating that jump in a tweet. to john harwood in washington, d.c. john. >> michelle, one of the reasons they're optimistic because on the question that you posed before the break, they do not believe that the struggles that we're seeing now over health care is going to derail tax reform later in the year, in fact, josh bolton, the president of the business roundtable told me that the drive for both deregulation and tax reform

remains on track despite the fact that the cbo score has clouded the outlook for health care. now, let's just take a look at the results of this survey by the business roundtable. first of all they show a higher quarter-to-quarter jump in confidence than they've shown since 2009. they're above the historical average of ceo optimism by -- for the first time in two years and they also show double-digit increases in the index that they compile on the outlook for sales for hiring and for capital expenditure. what josh bolton said ceos are taking notice of the signs that the new administration will foster a climate for both job creation and investment. no doubt about it, however, the more that the health care process is slowed down, the longer it will take them to get to tax reform and there's no doubt about it on the other question you posed before the break, michelle. tax reform rather than health

reform is the priority. these are the largest in the cup and provide health care to their workers already. they want to see corporate tax rate down. >> makes them more competitive in the world. thanks, john. john harwood. >> john was highlighting the t optimism. but what do small businesses want more of. kate. >> the answer is that they want both of those things and very soon. while main street's outlook post-election is still holding at historically high levels according to the national federation of independent businesses' monthly reading 105.3 for february. the lobbying group is not leading to small business growth. optimism has not faded but enthusiasm has yet to be translated into an equally impressive increase in spending and hiring and will require progress on the agenda that business owners voted for. in other words, small companies will need greater action on tax and health care reform before

deciding to invest and expand. now, i spoke with the nifb's chief economist bill dunkleburg and he said those remain the top two issues and if isn't action soon this sunny outlook may fade. ka tall spending among them rose 2 points it 62%, the second highest reading since 2007 so it appears smaller companies may be gearing up to invest. but once again, guys, a conservative group using ail little more pointed language in terms of the new administration and what they really want and need to see. back over to you. >> thanks for pointing that out. kate rogers, thanks. let's re-address it. the fight over health care reform going on right now. is it going to derail president trump's economic agenda including tax reform? let's bring in cnbc senior contributor larry kudlow. the news in the last 24 hour, the congressional budget office, cbo cops out and says the new health care bill will cost the government a lot less money but it's going to ensure far fewer

people. a lot hate the cbo. how do you feel. >> i don't hate the cbo. it would be unwise for the white house or anybody else to launch some kind of jihad against the cbo. they do the best they k i don't happen to agree with their models. one thing by the way they're scoring capital gains tax cut as $158 billion loss. >> in revenue. >> down through the years if you lower the cap gains tax rate you get more investment and higher revenues and this one we're lowering it back to 20% from 23.8%. maybe back to 15%. okay, that drives me crazy. they don't have an incentive model. let's go back to the basics here. the cbo and a lot of other people, we've never done this before. they had no clue about aca. >> the american health care act under obama. >> they never understood why the premiums had to shoot up or understand why healthy people

shouldn't be put in the same box as sick people. there are so many issues and don't understand what choice means. i mean, you could argue this. i know they're saying you're going to lose people. i can make the same point that you're going to pick up people. here's a point. just think about this for a second. healthy people should be in different boxes than sick, ill people. now, the ill, the pry condition should be covered every one of them by government spending and subsidies. every one of them and should be taken out, therefore, of the exchange premiums. let them have vouchers or whatever, but don't count them as the same. just pay for them. america is a generous country. however, healthy people, therefore, would comprises the rest of the participants in the exchanges and then since the cost structure is going to come way down, sick -- >> because they're not paying for sick people. >> sick people by the way consume about 50%, 50% of the expenses so pie point is this,

if you put in just the healthy and you create new choices, right, instead of the mandates you could see an explosion of subscriptions to this new animal called choice and insurance company so who knows. we don't know. the cbo doesn't know and the cbo should just be, uh, okay, that's interesting but we have more things. >> you said at the start that there should not be a jihad launched against the cbo but wasn't secretary price's response saying that it was unbelievable, i mean, statements like that, that's essentially a jihad but what does that do in terms of setting up the debate over this and also the path tax reform. >> well, tom price got a little emotional. he's a good man. >> they were both -- mick mulvaney was also -- >> price is responsible for getting keith hall. he was price's guy. i don't know. fight it out, kids. the main thing is the score card should never determine policy. never. >> what about tax reform? will it delay corporate tax reform. >> it shouldn't.

by the way can i just put in, if you do the medicare -- if you do the whole aca thing right, if you have the right reforms, it's pro-growth. you are not knocking out a lot of taxes, we just mentioned the capital gains tax. there is a across the board tax hikes that will be knocked out. this could be very pro-growth. now, it's not too late to take the product the republicans will put together, republicans have to be bipartisan amongst themselves, okay. that's what they need. they have to -- amongst themselves. >> speaking to the freedom caucuses which is on the very far right. >> just saying. >> just saying. now, if you get that right -- i think they will come up with a bill and it will probably be in the next month or so. you could still technically, listen to me, you could still technically put business tax reform, graft it onto the same reconciliation. >> larry's dream. >> technically you could do it.

i talked to a lot of people about it. business tax reform they won't get it done by the august recess. it will come way later in the year. i don't want to give up hope. we all wanted forbes and i wanted it to come first. obviously that's not going to happen. you could still put it in reconciliation but the sooner the better, okay. >> thank you, larry. good to have you on. >> never let the good be the enemy of the perfect. never. >> thank you, larry. always good and sage advice, right, tyler. >> absolutely, thanks, guys. coke drugs and the cloud, it's not what you think. it is the good, the bad and the ugly next. plus, oil down 10% in a week. are oil companies starting to get nervous? we'll be right back with that and more.

i said, there is no reason why i shouldn't retire today. 10, 12 years earlier than i had anticipated. in the first year, mike's cash flow savings totaled $8,736. after 5 years, it will be over $40,000.

it really is worth a call to find out if a reverse mortgage can help you too. call one reverse mortgage now and ask for your free information kit. welcome back. i'm sue herera. your up date, senate minority leader chuck schumer and nancy pelosi welcoming a pro-obamacare bus tour to washington. schumer labeling trump care a disaster. >> the cbo report should be a knockout blow for republicans in

congress. they should heed the warning, turn back from their plan that would be a disaster for our dear country. >> u.s. middle east envoy jason greenblatt meeting with palestinian president mahmood abbas in the west bank. this comes as the tropical stum administration tries to restart peace talks. american workers are feeling more guilt than ever about taking a vacation. that's according to the alamo rent-a-car annual family vacation survey. 49% of all american workers surveyed reported feeling guilty compared to 47% a year ago. you need some time off. that's the news update this hour. ty, send it back to you. >> i feel no guilt ever. >> i don't either. >> taking a vacation. >> you come back refreshed. >> absolutely. sue, thank you. welcome back poto "power lunch." it is the good, bad and ugly. the good first, coca-cola

bottling, coke, the company is being added to the s&p small cap 600. that means index fund managers that mimic that bench mark will have to buy the stock. now, on to the bad. coupa posts a loss. the stock getting punished even though forward guidance is better than the street, down 12%. ugly day for aurinia pharmaceuticals selling more shares to raise money, the problem is they were sold at $6.75, that's well below yesterday's close but the stock was only $3.50 last month so it is up from there if you are lucky enough to buy it then. if you are unlucky enough to buy it yesterday you got a big loss. brian. >> all right, tyler, oil is down again today now at three-month lows as supplies continue to remain high. so as a snapback on tap or is opec's move forced more oil on the market? we'll explain and tell you why facebook billion mare mark

zuckerberg was shooting hoops with duke and the unc basketball teams. that story coming up.

we're going live to the washington where press secretary sean spicer is taking a question on health care reform. >> levers the playing field allows people who aren't getting it through an employer-based system to get a tax credit that at the same time lowers costs and creates more competition and choice is actually going to give more people the option to have health care and to give more americans that ability. i mean right now they don't -- they're choosing not to do it. >> that's still not everybody. >> no, but everybody -- everybody has a choice to get it and that's what i think we want to do. see, if everyone wants to get health care, the financial ability to get it is what the president is trying to achieve through this. and i think this is the system that will get him there. right now they're being forced to get it by a government run system and in huge margins choosing not to. i think that's the system and by the way they're getting a system that's failing. and that is collapsing on its own only going in the wrong direction with higher price, higher premiums. higher deductibles and lower

choice. that's what you've got now. if you're an american citizen on the obamacare exchange you're paying more and have a higher deductable and your choice is going down. and so that is an unsustainable, unacceptable outcome for americans who need care. dave. >> thanks, sean. on immigration, a group that tracks the number of sanctuary cities in the u.s. came out with a report today saying there's now nearly 500 sanctuary city as cross the country and that number has grown by about -- >> that was sean spicer commenting on health care. let's talk about energy. energy is the biggest laggard in the s&p 500 dragging do you know the rest of the market today. there's something very interesting happening with oil. prices continue to fall even as opec is smack dab in the middle of a production cut. that seems illogical. let's figure it out with kate richards of warwick energy, investments at more than 4500 operating gas and oil wells. is there a scenario where opec is kind of shot itself in the

collective foot because they forced the u.s. shale producers to become so doggone efficient that we're just going to keep pumping more oil? >> i think there's a real risk of that and one of the things we've been telling our investors throughout the year the biggest risk for crude this year is the prospect of a market share war or at least showdown between opec producers and the u.s. producers because what opec has shown is that it clearly cannot stomach $40 to $50 oil whereas u.s. producers have gotten more efficient and retooled our cost structure and become cheaper and more efficient and we can now make really good money in the core plays in the u.s. at $40 to $50 oil and unclear how opec is going to work with that and resolve those issues. >> well, we'll see if they can, kate. we heard at the conference last week that iraq wants to go by 5 million by the second half of the year. the other nations, if they go 5 million, i'm not getting screwed over and we have way too much

oil. is that what you think will happen. continued supply glut and second half of the year. >> you know, it takes more time than people think for an oil well to come online. this is one of the things people are so confused about in 2015 because prices fell into the 20s in the first quarter and crude production didn't go down and part of the reason is that it takes six to eight months between a drilling decision and drilling coming online, something the market continues not to understand so iraq is aing it can go to 5,000 barrels a day. 5 million barrels a day. huge amount of risk from timing and infrastructure standpoint. the biggest issue you'll see huge dispersion in returns from the core haves and core have-nots so the u.s. has plays like the scoop and the tack that make money between 40 and $50 oil, but there are parts of those plays that are the most core and so the companies that have core acreage in those plays are the ones that will pay out and you know the other thing about this -- you know trade down from $55 oil to $47 oil

we've seen it's driven by technical factors related to the hedge fund, speculative link that has been well reported. one of my favorite analysts tall called it a clown car trade officer the weekend and that is -- that's a source of instability for the market an so partly what you're seeing is not oversupply or inventories growing or demand falling, you know, the fundamental things you would be concerned about with crude, part of it is just speculative net long kind of hedge fund length in the market falling and much healthier for the market overall. >> it is healthier. well, hopefully nobody will blame it on bill ackman. last question, you work amongst all these oil companies and own stakes in 4500 operating oil and gas wells and you literally live around a lot of oil executives in oklahoma. what are they saying? are they saying prices are down but we'll keep drilling and rig count also go up because we're just going to do it because we can make money at 40 bucks a barrel? >> you'll see that in the course so in the scoop and the stack is

a big five like marathon, newfield, those guy also make money between 40 and 50. ramping red count this year but there are other parts of plays like the southern middle basin or bakken that don't make money at $40 oil. they don't make it at $50 oil and that's where you'll see rig count decline and production is slower to actually rise, all of these companies kind of came out and raised cap x and production. you won't see that come home to roost. the most important thing most of the production growth in the u.s. for the public companies is intended to occur in the latter part of the third quarter and in the fourth quarter of 2017 so there's a lot of risk to that actually happening. but also if you look at the market overall demand is up, so global demand is going toboro 1.2 to 1.4 million barrels this year. inventories are correcting in terms of crude supply and, you know, speculative net length getting out of the market maybes

it more stable so there are a lot of positive things in the market we've seen and the other thing interesting, we obsess about the forward curve and it's been like pretty flat between 42 and 52 and $55 oil for the past few weeks but the forward curve is a terrible predictor of crude prices. if you look over the past ten years the forward curve for the next two years versus what prices ultimately was has an r squared of 2%. so -- >> we'll end it. we got to end it. you said r squared and -- you know, i'm out because i'm not obsessed with the forward curve but obsessed with the ice storm. katie richard, awesome analysis. thank you very much. >> oil has fallen. >> do you know what r squared is. >> if you pushed me i might be able to -- >> i'll push you. oil is falling 10% in a week. the s&p 500 basically flat. why isn't oil bringing down the market? we'll ask the trading nation team in a moment. this is my headquarters. this is where i trade and manage my portfolio.

since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

time for trading nation. the overall s&p 500. your team today, boris and bill. bill, actually we're down 0.4%

which is not a lot at all but surprisingly is the worst day of the year. we've been a little weak lately. what do you think is going on? >> you know, there is a point where headed in the fed meeting as well as head of the debt ceiling talk and as well i think coming off of a culmination of enthusiasm around the first week of march, everybody got really pulled up. s&p to 2400 and the shorts in the market as well have pulled back. i think this culmination of enthusiasm is starting to work the market lower. there is a lot of support down here that's why it's held up. 2350 area. if that goes and get a close below there on the week we could see more selling. crude oil is weighing on the market. at the same time other leaders, bioteches, technology, so i am watching crude oil and if that goes below $45 i expect it to weigh on the parke quite a bit more and we could see that next week. >> okay. well, we're watching that. boris, what do you think is

going on and what are you watching same thing as bill or something else. >> you know, everybody keeps talking about the fact there is no complacency in sentiment but i think there is a lot in price and the market is setting up for a serious correction. just because the volatility has been so tepid over the last couple of months. it may not be an economic factor. in fact, i doubt it will be an economic catalyst but some sort of perhaps geopolitical catalyst that will trip the market up and could have a press serious and fast correction like the one we've had in the oil market. >> boris and bill, good brief but good discussion. thank you. for more trading nation head to our website, tradingnation.cnbc.com. >> workers need jobs. the problem is sometimes workers don't always have the skills the companies need. how do you fix that? the answer next on "power lunch." >> and now the latest from trading nation.cnbc.com and a word from our sponsor.

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welcome back to "power lunch." the biotech company is under pressure after data was released from as stra zen anything ka. yesaro is there. you can see an impact and it's working in the same class of drugs. astrazeneca just up 1.5%. heading them hard. big problem for america's work force. there simply aren't enough workers possessed of the skills they need. contessa brewer is live in wisconsin looking how to close the skills gap. hi, contessa. >> hi. how are you? nice to talk to you. you know, we're here in wisconsin where the plant is

massive. they actually have more than 22,000 workers globally, 57 plants around the nation. in wisconsin looking for 150 people to fill these jobs. you look around, you can see the high tech environment. the robots are everywhere. they're moving from place to place. they're picking up these big logs of printed materials. the human workers have computers as well. everything operating on a fast pace expertly coordinated production schedule. to get the skilled workers needed for the job they have launched high school apprenticeships to get teenagers into the pipeline. >> our relationship with the high schools is important. it's essential that we show them the types of opportunities that we have here in the manufacturing and open those pipelines up to bring in more and more kids in here and allow them to see what we have to offer. >> so applied graphics is offering high school credit.

it pays 12 bucks an hour. out of 16 high schools, nine students applied, only nine. all were accepted. one of the big challenges here when i talked to the tech ed teachers in the high school as well as the apprenticeship program here and they say it's this whole idea that you have to funnel everybody into a four-year college. it doesn't make sense for the companies who need these skilled workers. it doesn't make sense for technically minded kids who would then bypass a lucrative career. $50,000 a year roughly after they finish an adult apprenticeship. it doesn't make sense for them. >> good points. contessa brewer. staffing a recruiting firm they surveyed 6,000 people. 83% of them stated that finding skilled candidates was the biggest challenge. let's bring in fom gimball. great to have you with us. the government spends a lot of money to train workers yet the gap still exists. should the solution exist in the private sector or should it be

on the school front where kids are he heducated specifically o trained specifically for skilled jobs? >> there's really two sides of it. we do need to have more training within the high school on skills that will help them post college if they go to college or in lieu of college like your report showed. in the s.t.e.m. classes, the s.t.e.m. training, science, technology, engineering and math is crucial for that. we have to realize that not everyone has the brain aptitude for the s.t.e.m. classes and the s.t.e.m. jobs so it may be a situation quite frankly that we don't have that base here in the united states. i'm not saying we can't get it. i'm not saying education doesn't develop it, but that talent level may be over seas and that gets into the whole immigration issue. >> where are the biggest gaps, tom? i would imagine this works like anything else in the marketplace. as you fix it. i'll re-ask that question for you. where do the biggest gaps exist? i would imagine that it would work with the supply and demand

situation in the marketplace where if there's not enough workers for a specific kind of job the salaries might go up. people might be attracted to going into those fields. where is that gap currently? >> well, the problem as you see is that's really on the development side, software development, computer programming, higher wage, higher type of jobs. so those are paying 125, 150, $200,000. we're talking about the big facebooks, the googles, the uber, so on and so forth. and then what we're talking about here though are what used to be traditional factory jobs that are now requiring a technology bent. not everybody has that. the earlier report, like i mentioned, that's dead on. now the bigger challenge may be that the factories that are in the rural areas of wisconsin, ohio, and in pennsylvania, the rust belt, if you will, they may have to move their factories to a more dense metropolitan area near, outside of the chicago, the pittsburgh, the new york. >> that would mean higher costs

for them, right? >> it does. and profits may shrink and the companies have to reinvent on how to expand their profit margins. i'm not saying they're going to go out of business but smaller profits may be a short-term sacrifice to get the workers you need to offer better things for your customers. >> tom, thanks so much. >> thank you. we've got a two-state edition of check please. that's up next. i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

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check please. you lose that kind of money, maybe sort of rethink things. at the same time it proves a lot of the hedge funds guys are too big. you're forced to take big bets. maybe smaller is better for both ice storms and hedge funds. >> i am taking a look at shares of tesla. in a town market tesla shares are going strong here. up by 4.4%. yesterday on "fast money" we had andrew from sit tron research, he's been short on tesla since -- i don't know, 180 or so. he covered a short on the heels of the intel mobile idea saying this proves the value of self-driving technology. also, there are many reports out today about the model y. yes, even before the 3 is out they're talking about the model y, a crossover vehicle. >> let's talk about a little basketball and brackets. one guy apparently is interested in the march madness is mark zuckerberg because he was down on tobacco road visiting with

the duke basketball team. looking up to them. i'm sure they look up to him in a certain way. then he went down the road about nine miles to unc and visited to them. >> he's not short, they're tall. tune in tomorrow because we have a big fed show. tomorrow could be the day the fed raises rates. thanks for watching "power lunc lunch". >> "closing bell" is next. ♪ ♪ welcome to the "closing bell", everybody. i feel like chilly evans. >> you went with it. i like it. >> setting you up. >> i know. and i'm frosty the snow man in for bill griffeth. a blizzard slamming into the northeast bringing transportation to a halt. the transport stocks are dragging down the market as a result. coming up, we'll look at which names could take the biggest earnings hit because of this weather. ceo optimism about sales and hiring is increasing by the