out in 19. they did the january of '18 so a lot of activity out there. >> transports are one of the areas that did well and came back to earth. >> and the calls they're buying, scott, are way above where the stock is. >> i'm taking a really hard look at etsy. a new cfo was brought in today, rachel glass er. a $16 target. taking a look at it. >> have a nice die on the semiconductor bus. "power lunch" starts now. big news being reported out of the white house, the past half hour or so could have an impact on your money and your taxes. the full details on all of that straight ahead. plus, as take yoen talks swirl around panera bread we are playing the match game. the two names that might be a good fit for the sandwich maker. think coffee and doughnuts but not together. later on another major disaster du jour in it retail. one household name seeing selling in spades. that's a hint. "power lunch" starts right now.

welcome to "power lunch." i'm melissa lee. stocks right now are mixed -- actually all in the red right now. amazon, though, hitting a new all-time high in today's session. same for tesla, that stock trading above $300 a share for the first time ever. and take a look at gold hitting its highest level since february 27th. tyler? >> melissa, thanks very much. i'm tyler mathisen. glad you could join us on a rainy tuesday in new york. here is what else is happening this hour. the u.s. trade deficit falling in february as exports climbed to a two-year high. cleanup efforts under way from texas to the taerls after another stripping of severe storms ripped across the south. five storm-legalitied deaths reported. and tony romo apparently hanging up his helmet and cleats for a microphone. espn reports the cowboys quarterback will end his 14-year

nfl career and go into broadcasting. michelle? welcome to the business. thanks, tyler. i'm michelle caruso-cabrera. we have a lot to do today. we begin with a big headline coming out of the white house. "the washington post" reporting president trump's team is exploring new tax proposals. listen to this, could include a value-added tax, very common in europe and latin america and/or a carbon tax. let's get more on this developing story, cnbc's eamon javers and numerous ceos spent the morning with the president and the vice president. >> reporter: i just stepped into the white house here a few moments ago and talked to a white house official inside the building. they are not disputing "the washington post" reporting here that they are at least considering what's called a vat tax or value added tax, placed on products incrementally as they go through the building supply chain and also they're considering a carbon tax. they caution they are

considering these things, a wide range of options. they say it's too early now to say that they're ruling any one thing in or one thing out. they're also aware here at the white house that conservatives might be frustrated by the idea of a carbon tax, something they have said would kill jobs up on capitol hill among many conservatives in congress. yet that is still under consideration here at the white house. meanwhile they had a whole host of ceos here, about 50 ceos and top executives from a variety of financial companies and other industries around the economy here at the white house today. gary cone, the white house national economic counsel director talked to the group before the president spoke. he talked about a couple of things he thinks they can achieve in the near term in terms of infrastructure including revamping the u.s. airline system. here is what he had to say. >> air traffic control to me is probably the single most exciting thing we can do for a lot of reasons. number one, everyone else has done is so we know it's

relatively easy to do, which is kind of insulting that we're the to do air traffic control. number two, it affects every state in the country. multiple times. we have multiple air traffic control systems in multiple states all over the country. so this is a project that touches every part of the country. number three, everyone in the country is affected. whether you fly or not. >> reporter: and talking to that super wealthy group in the white house here it at the auditorium gary cohn said the only two groups who might oppose this are congressional appropriators who like to play with the money that goes out to the airline control system but also he said people who fly private aviation, the private jet industry might be against that. you all in this room use private jets. we'll make sure you are not lobbying against us on this. michelle, a lot going on. >> gosh, there sure is, eamon, a ton going on. carbon tax, a republican idea. it was the way democrats wanted to implement it, that it became very controversial, the way the

money would get spent. value added tax, great resistance among the right because they worry it would come in addition to an income tax rather than replacing it, so that's another big issue. and don't forget, eamon, big interview coming up on "the closing bell" later today. chairman of the house ways and means committee live at 4:00 p.m. eastern time. everything you're hearing reporting runs contrary to what representative brady wants to do with ways and means. he wants a border adjustment tax. now a potential battle going on between the two sides. thanks, eamon. let's get right now to caly tausche who was with one of the ceos or is now, in a meeting with the president. congratulations to your tar tels. heels. i hope you got a little bit of sleep. >> just a little. the ceo of first data was in the meeting today. frank, we've seen a lot of these meetings happen at the white house. what did you get out it have today and what sort of action plan do you feel the white house has put in place?

>> first of all it was tremendously invigoratininvigor. i've been watching what's going on here and i find it to be an incredible time. in the broadening of definition s if you think about infrastructure we're not only talking about roads and bridges and tunnels but we're talking about technology and real infrastructure to help power it. i find the leadership is completely dessicated to making this so much better. of course when gary handed the president a process map it reminded me of my first days at first data and all the things in the way and the conversation about get rid of the clutter. so it's an incredible dialogue, well led. >> but it is a dialogue at this point, and you have the manufacturing council, the infrastructure working group, the office of american invasion, you have the strategic policy forum.

what are these groups actually getting done, and what sort of deliverables is the white house asking you for? >> i think today was about the partnership coming to the white house. i mean, there's been lots of ceos in here, great leaders before. i think it's a very, very open to business mentality. but for the betterment of the country. i mean, it's all about the betterment of the country, creating jobs. if you listen to the workforce development programs -- and i think every ceo in there took notes and thought about things we could do in our companies better and how we can partner with the administration better. >> two of the biggest items on the agenda that businesses are focused on are tax reform and deregulation. first on tax reform, when you look at a potential border adjustment tax, a value-added tax, now a carbon tax, when you think about running a business, what is actually advantageous for you understanding that they

need to find revenue from somewhere? >> well, i think that this administration has a ton of thought leaders that know the number one objective is to stimulate the economy and to create jobs and all of this is designed for that. if you're running a company you're thinking about how you, in fact, can get more done, how you can bring more to the market. and i think that's what they're creating, keeping jobs in america, being able to develop more product, innovate. the idea of innovating and even bringing innovation to government. so i think tax reform, the way it's being thought about has tremendous benefits. the devil's in the details always. and, of course, there will be a lot of to and froing. i find it very stimulating. >> we'll see which of these e ideas stick. frank, great to talk to you. thanks for giving us your perspective on today's meeting. frank bisignano of first data. >> jamie dimon releasing his annual letter to investors.

let's get to which will fred frost. >> reporter: it is understandable why so many americans are angry at the leaders of america's institutions. his overall tone was optimistic. he said he strongly disagrees with the view we are in slow growth and outlined boost iing labor participation, better education, lower corporate tax and deregulation. his comments on deregulation likely to attract attention. in particular he said america should eliminate its gold plating of international standards. by this he means the way in which u.s. regulators topped up various stages of the basel rules and if they could use the standards of other international banks it would free up a material amount of capital. on the point of capital he said, quote, we currently have excess capital while we prefer buying our stock at tangible book value

we think it makes sense to do so at around two times tangible book value as well. this suggests they could be set for significant stepup in buybacks or dividends given the valuation somewhere between those two levels at the moment. guys? >> thank you very much, wilfred. jamie dimon optimistic about the future. should you be, too? dia dia diane, mr. dimon says we can grow a lot faster. do you agree? >> i think so, too. the odds of a recession have been pushed out several years. the yield curve is telling us that and the banks are overcapitalized. >> you think it's telling you a recession has been pushed out because everybody is wringing their hands suggesting we're not going to get nearly as much growth as the stock market things? >> the first two years are baked in the cake. it's turned in terms of earnings reversal, turning positive. so far whatever happens in this administration really can't

impact anything except two years and out. the yield curve investors are saying, hmm, we'll wait and see on that. the first two years look pretty good to us. >> two questions closely related. one, do you agree that the u.s. economy can grow at a faster rate than it has been and, number two, do you think that the stock market can continue to move up though maybe not at the rate it has been doing? >> i think the economy can -- >> that was for bob actually. i'm sorry. >> i definitely agree with jamie dimon the market -- or the economy can grow a lot faster than it has. i've never been -- i was a believer in this limits to growth theory. i believe that if you put in the right reforms in terms of better tax policies, better regulatory policies, better monetary policy, the economy could grow a lot -- at a lot quicker pace than it has in recent years. that said, if we get some

positive reforms out of washington in terms of continued regulatory roll backs, we get some tax reform or tax cuts, i do believe we can see the economy grow faster. i think that would be good. >> and stocks, have they gotten ahead of themselves? are they counting on too much good news? >> u.s. stocks have been expensive for some time. i think with a rebound in corporate profits and if you do get some positive policy developments out of washington i think stocks can continue to grind their way higher. i wouldn't expect the returns that we've seen in recent years to continue. i still think we could end the year higher than we are today. >> tax reform is great, sounds great, but the devil's in the details. if the rumored or reported possibility of a value-added tax is out there and that happens, is that a concern for you in terms of squelching consumer demand? >> i think they have to consider that carefully before they enable that and i think that

just lower taxes would be better. clearly the united states is one of the highest in the world. i'd like them to focus on corporate taxes first and then, of course, the individuals. no one wants to be double taxed. >> diane, bob, thank you. all right. elon musk taking a dig at tesla shorts. got us thinking, who are the other big losers in shortsville this year? we have those names coming up. first, though, airlines adding more routes to the summer schedule. good move or could it backfire? we could see too much capacity. you always pay

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welcome back to "power lunch." breaking news from the federal reserve. richmond fed president jeff lacker resigning from the federal reserve. he is acknowledging that he was the source of information about an investigation that came from a story from medley global advisers in september 2012. the story has been out there for five years. we have not known the source of the leak. jeff lacker now saying he was a person who confirmed information in possession of the analysts during the call. jeff lacker saying, quote, my conduct was inconsistent with federal reserve policies. he's disclosing -- he says he did disclose that the analysts had the information in talks with the u.s. attorney's office in the southern district in 2 5

2015, but he did not disclose it in 2012 when he was interviewed by the federal reserve's general counsel. he says, quote, i crossed the line. a 13 year veteran scheduled to retire in october. he is retiring immediately. jeff lacker standing down and resigning after admitting he was the source of the confirmation of information in that medley global adviser story that caused such a controversy back in 2012. confirming there was a quantitative easing. >> should we -- tell us about how the fed works. i know they're appointed. should we assume lacker is stepping down because he knows he would have been removed? he's not an employee like a ceo where you can get fired by a board. >> reporter: he actually is. >> so the federal reserve could have or would have -- >> reporter: right. >> conducted some sort of ex parte hearing and booted him out? >> reporter: he serves, as my understanding, brian, at the pleasure of the board of

directors of the richmond federal reserve bank. those are the people who appoint and vote for the next president. it's important here he did not tell accurately to the general counsel of the fed about this contact with this analyst. he doesn't even seem to be admitting that he told it in a wider investigation. this was the subject of an investigation by the u.s. attorney's office. >> which leads me to a question, steve, could he be prosecuted? >> reporter: look, that's outside my area of knowledge. what i wanted to talk to you about right here is this notion what it says here is, i did disclose in the interview around the broader investigation in 2015 that the analyst was in possession of confidential information, but he doesn't say that he admitted to talking to the analyst about that. that's unclear to me whether or not he actual ly told the full

truth in an investigation that involved the fbi and the inspector general of the fed right there. so certainly in the 2012 interview with the general counsel he says he did not provide the information. >> there should be two stories here. to michelle's point, if he broke fed rules he will not be prosecuted. he will be canned, in which case he stepped down immediately because you step down immediately when you think you're going to be booted anyway. if, however, that information was utilized in some capacity for trading by medley which is an adviser of macro policy -- >> my question is even more simple. the fbi is involved, the doj is involved, the minute you're involved -- >> michelle is asking an excellent question. >> the obvious which is in order to be prosecuted you have to have broken a law not a federal rule. >> reporter: this is a novel insider trading case, and that's something that had been pursued, and i don't know the status of it right now. it's been in the background for almost five years now and things crop up on it every now and then. we have not known the source of the confirmation of the

information. the way president lacker describes it is the analyst already had the information and it appears from reading it that he confirmed that information that the fed was about to do a stimulus package of 45 billion of bonds. >> i know we have to go. it's a big, developing story. our producer, i apologize, what does this mean for the fed in terms of interest interest rate policy? lacker a voting member? >> reporter: he is not right now, i don't believe. let me say this is not strictly directly at interest rate policy. i believe this is a black eye on the reputation of the fed. >> i was wondering if we would be short a voting member or will be short? >> reporter: no. >> when do we get somebody new? >> reporter: somebody will take his place, a research director or vice president at the richmond fed would take his play on the board would be typical fashion. there's not -- it would never be short a member. if a president who is a voting member couldn't vote there's an alternate for each member.

>> got it. like a jury. >> i don't think we've been doing this about 20, 25 years never seen a story like that before. >> jeffrey lack earp was scheduled to retire october 1st so he's moving up his retirement. >> resigning immediately says a lot and not saying anything. we're back. more on this developing story. more on your markets and how airlines are adding more routes to the summer schedule so you don't have to be quite as packed in as sardines. just a different type of slightly larger fish. see things your way. you have access to the right information at the right moment. and when you filter out the noise, it's easy to turn your vision into action. it's your trade. e*trade. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. to growing businesses cdw broacross the city,tration

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several airlines are expanding routes. who is doing it and is it a good move? phil lebeau? >> reporter: it's a good move if you're in one of the smaller cities that has been targeted by united, american, as they try to fill in their route structures. here are the airlines and the flights where the type of flights that they're adding. we're not going to list every new route or destination but united adding 31 destinations, a lot of smaller cities, southwest expanding in 21 markets and american wanting to keep up with united with more flights out of the hub here in chicago will be adding flights. we know that there is strong demand. we're expecting a record number of people to be flying this spring and the airlines want to tap into that so they can fill in their route structure he especially as they're bringing people into their hubs in the different cities. at the same time fares remain relatively low and with high consumer confidence there are a lot of people who have said, yeah, this is the time to fly.

this is from hopper.com, an expectation of what we will see in terms of airfare this summer. right now you see the average domestic ticket $237, or that's what it was in march. in june it's supposed to hit the high water mark for the summer season at $269. can the airlines add this capacity where they are adding it and still have positive passenger revenue per available seat mile? we talk about this all the time called prasm. if they can get that passenger revenue to be positive delta today out with its metrics for march said it had positive prasm for the month of march. this is the time other airlines say, look, coming into march, april and may we think we can swing into the positive ledger when it comes to that passenger revenue and that's why you see the airline stocks moving well. >> it does look good for the year.

phil, thanks so much. let's try to answer that question that phil posed with the managing director and transportation analyst. hi, elaine. phil laid it out perfectly. >> hi, thanks for having me. >> they want to add capacity because demand is higher. will it still mean positive revenue when it comes to passengers? >> some of the cities they're serving will be competitive and fares will come down. they are adding more capacity than they thought they would six months ago. we think it will be positive in the second quarter but not as strong as it would have been had they not added all this he can ses capacity. >> when i see the last year it is already up 20%. how much is priced in and how much of this is going to improve the stock performance? >> none of the futures are

priced in at this point with respect to the service that phil just talking about, all the new capacity going in. most people are concerned it's too much capacity, that pricing won't hold up. with fuel costs trending up a little bit, that should help the pricing side of the ledger, should labor costs trend up. so we're kind of hopeful that the summer months will be a good -- an easy calm. we're hoping that will be up year over year. the trend that delta talked about, so the march quarter was up -- from the december quarter and then up 600 basis points from the september quarter. you look at the trend and the trend is heading in the right direction. as that continues the stock should perform better. you look at year-to-date performance and the stocks aren't doing that well. everybody else is down. >> for delta at least the first

quarter operating margins will be lower and they talk about a slower than expected. what are we seeing in terms of the business travel segment? we like to focus and travel and take trips ourselves, a business is an important part of the business for these guys. >> everybody expected with easter shifting into april, it would be really good. we had a terrific end to the year. a good start to january and things trended down a little bit in february. march was okay and last week was fine. it wasn't the over the top greatness that i think delta he can pecked. >> which airline's business is best and which has the most challenges? quickly just as a stock.

>> i think when you look at delta they over promised and under delivered. i think united and american probably estimated a little more accurately what their numbers would look like and southwest continues to crush it. >> thank you. appreciate it. now let he is switch gears and help you make the best decision when choosing a credit card especially if you are a big world traveler and want the best bang for your buck. so here are some of nerd wallet's favorite travel card picks that will have you raking in the rewards. three of the best travel credit cards around. the bank of america travel rewards card. you'll earn 1.5 points for every $1 spent. the sign-up bonus $200 if you spend $1,000 in three months plus there's no annual fee. the star wood preferred guest card from american express. for every $1 spent at starwood hotels you wrack up five starpoints and two points at marriott properties. the chase sapphire preferred

card. a $500 sign-up bonus for spending $4,000 in three months. the most flexible earning and redeeming rewards around. by the way, these reward cards are good for the airlines. they earn about 1.5 to 2 cents while awarded to each card holder. ralph lauren is closing its flagship polo store on 5th avenue in new york city. courtney reagan is there with the details. >> reporter: so ralph lauren is closing the flagship location here on 5th avenue of the polo ralph lauren store. this has been occupying this space. ralph lauren says this is all part of the way forward plan announced in june 2016. as a refresher they said they would close 50 or more stores.

they're going to be cutting jobs. the combination of these three new items will be an additional $140 million in cost savings. this is beyond the initial cost savings that were first laid out. the company says it will be reinvesting some of the savings into its growth. ralph lauren shares are down about 5% today, down about 18% since the way forward plan was announced last june. the ceo larsen officially vacates the position on may 1st. that was a surprise to investors when that was announced in february. and the company has yet to name his successor. now ralph lauren does still own and operate 485 stores that includes outlet and the club monaco locations. ten flagships and still seven stores in new york city after this closes including those iconic locations on madison avenue. but at the time that this lease was signed on 5th avenue it did make a splash. it was the most expensive retail lease $400 million in total rental income over the lifetime

of a 16-year lease. they are ending it after just about three years. we've reached out to the leasing agent as it pertains to plans going forward. we will let you know when they have more to share with us. you may remember that before this was ralph lauren it was vacated for several years and it was the disney store before that. back over to you. >> two questions. what are they going to do with the restaurant that is adjacent to it, number one. number two, two other retail stocks making news today, kate spade and elle brands. tell me about the restaurant first, if you know. >> reporter: sure, yes. we did reach out to ralph lauren to ask him that. technically it was 1 east 55th street. it is staying open. so the polo bar rent is staying open. there's a ralph's coffee location within. and that will be closing but the company is looking at more ralph coffee locations or other opportunities going forward. >> as for the other two, kate spade and elle brands. >> reporter: yes, yes. kate spade, of course, there has

been speculation this company is a takeover target of potentially michael kors or coach. there are headlines that crossed the wires that coach has submitted a bid. we don't know what the bid is and kate spade has requested more time to evaluate coach's bid or maybe solicit other bids as well. and shares have fallen but had run up once the news of the speculation had actually crossed those wires for several months now and then on elle brands there are some analysts that say that they just have too many locations in malls that aren't seeing the kind of traffic you would want to see. l brands owns victoria's secret, pink, and bath and body works. those are the three brands. back over to you. >> courtney, thank you very much. well, there is more chat thor that panera bread may be looking to sell. on deck, who might be a buyer if any deal happens. hey gary, what you got here?

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i'm sue herera. here is your cnbc news update

this hour. ron johnson, the chairman of the senate homeland security committee says president trump's border wall will cost between $5 billion and $8 billion. one democratic committee member says it's not cost effective. >> i've not met anyone, either a border patrol agent, a fellow member of congress who actually have said they think the most effective way to do that is to build a continuous concrete wall along the entirety of the southern border. i've not met anyone who says that is the best use of our resources in terms of securing our border. >> a los angeles judge has rejected rowman polanski's bid to end his long-running underaged sex abuse case without the fugitive director appearing in court. he denied several requests to resolve the case including sentencing that involved no more presideison time. warren buffett helping out cherry coke with its launch in china.

a likeness of the billionaire investor appears on special edition cans of the soft drink. buffett says he drinks it on a pretty much daily basis. that's the news update this hour. michelle, back to you. thank you very much, sue. we have to get back to steve liesman with more breaking news. steve? >> reporter: michelle, thanks very much. we have learned that the resignation of jeff lacker is the result of negotiations with law enforcement officials. we can't say anything more about the status of that legal case regarding this leak which involved medley global advisers and fed action back in 2012. we do know that his resignation, which was immediate, was negotiated with law enforcement officials. we have a statement from the richmond federal reserve which suggests maybe it was something more or different from a resignation. once our bank's board of directors learned the outcome of the government investigations, they took appropriate actions. unclear from the statement what actions exactly were taken. we also know who was replacing jeffrey lacker. it is first vice president at

the richmond fed mark mullinix as well. one point which is in question here with richmond fed president jeff lacker. he is not saying in the statement he put out that he directly confirmed it. he said that the reporter mentioned the move the fed was likely to take and then he says here -- let me just find it -- i should have declined to comment and perhaps have ended the call. i realize that my failure to comment on this information could have been taken by the analyst as an acknowledgement or confirmation of the information. so there is the possibility the reporter either knew it from another source or had made up a number or heard something and perhaps lacker's silence or continued conversation is what confirmed it. he did not directly say he confirmed the information in question here but says he failed to disclose it, failed to

disclose it to the general counsel, and it's unclear again what he told in an investigation that involved the united states attorney for the southern district as well as the fbi and the inspector general of the federal reserve. melissa? >> go ahead. >> one of the questions i would have if he made some sort of deal with officials in terms of his resignation that implies perhaps he has some sort of immunity or cooperating on another front, he may have heard in the course of the conversation -- and this is all speculation, he may have heard in the course of the conversation who the source was and didn't say no comment, didn't confirm it, didn't do the things he should have done. >> reporter: what it also says, melissa, he should have report this had communication and failed to do that. so that seems to be a certain direct violation. and then later on he says that in the interview he did not disclose this to the general counsel that he had that communication when i'm assuming he was directly asked that he

had that communication with the a analyst at medley global advisers. >> steve, you and i both used to work in florida and used to cover crime, by definition. >> reporter: the most insane crime, yes. >> my memory of those times is when you talk about this is part of a negotiation with law enforcement, to melissa's point, i'm going to step down and as a result a, b, or c may not happen. you may not get prosecuted or your sentence will be lesser than what it would have been otherwise. >> reporter: i would say that's a reasonable extension of that notion that he did negotiate this departure or his departure was part of a negotiation. >> we have to be very careful here, though, right. >> reporter: we always are. >> lacker isn't the one who leaked the information to medley global advisers. the medley global advisers analyst -- >> reporter: if i can stop you there, brian. it may be that no information was leaked. if you heard maybe the fed is going to come out and you reason that the fed would come out with some stimulus and you said what

about $45 billion? and the other guy didn't say anything? is that confirmation and the guy kept going and you can have that understanding that the silence or the failure to redirect in that regard or to correct in that regard is seen as confirmation. that's the impression i'm getting from this. this is a carefully worded statement to the point of being kind of confusing. >> from mr. lacker. >> reporter: exactly. >> the one you're talking about here. there could have been a leak or not a leak. it could have been a smart analyst taking a surmise. what mr. lacker apparently didn't do was tell the people at the fed the next day or that afternoon that he may have tacitly acknowledged -- >> >> reporter: it looks like it was later on counsel talked to him. what's even worse here or potentially worse here is what happened in 2015 when, again, he doesn't come straight out and say what happened in that discussion there with the -- it

says part of the investigation. part of the investigation opened by the fbi and the district attorney for the southern district. >> how this analyst received extremely specific information. that's what we can surmise from the reporting so far. this medley person had some really detailed information that lacker should have said, i don't know where you have that, i shouldn't confirm anything. by maybe nodding or being millenninumb he implied. >> reporter: to come to the conclusion that was come to did not take a whole lot of insider information, the eidea that the fed was going to do something at that meeting. the journalist speculated on that a week before. my recollection is i did, too. they were a bit more specific and talked with a bit more certainty about it, which is what raised everybody -- got everybody's attention to the matter. notion of additional stimulus are from the fed at that meeting, my recollection, was not a huge leap of faith.

>> got it. thanks, steve. >> all right. from the fed we go to the bond market and rick san it telly tracking the action at the cme. rick? >> reporter: well, tyler, yesterday the auto sales definitely put a bid to the market. rates are up a handful. we're still holding the bottom of the reins. this is up month to date. yields are moving lower at a time we're tapering with quantitative easing. mario draghi. maybe here is the answer. look at a three-year chart between bunds in some of the southern paper on tenure like italy. the widest it's been. that is where the pressure point is. and finally february 13, the start of the dollar index, it seems to be coming back right against republic cystance as it sits. melissa, back to you. >> rick santelli, thank you. takeover talks continue to swirl around panera bread, we're playing the match game. two names that might be a good

fit for the sandwich maker.

welcome back to "power lunch." i'm julia boorstin with a developing story. pharma giants the latest companies to boycott fox news' "the o'reilly factor" in the wake that five women were paid $13 million to settle allegations of sexual harassment and misconduct made against anchor bill o'reilly. gsk and sanofi putting a hold on their ad spots are joining bmw, mercedes, hyundai and constant contact stopping advertising in the hit fox news show. the financial impact on fox is still unclear. mercedes is re-assigning its ads elsewhere within fox news while bmw is deciding whether to reallocate those dollars or to pull them from fox.

brian, over to you. >> julia, thank you very much. could panera bread really be in play to sell itself? and if so, who might be a buyer? joining us is the senior restaurant analyst. so, bob, just a quick back story, yesterday a report came out that suggested panera may be seeking strategic alternatives. parlance for maybe selling itself. panera played the we're not going to comment or deny rumors or whatever it is game. do you believe panera bread may be up for sale? >> brian, it wouldn't surprise me. you have the industry bellwether who literally is firing on all its cylinders at this point and when i look at the company's business, not only one of the best fundamentals in the industry there's a number of pieces to panera's story that i think for a strategic buyer makes a lot of sense. especially the technology, the digital platform company has, the loyalty program, all of those are really key pieces that i could see a motivated buyer

would really like to have within their own portfolio. >> who would be that motivated buyer potentially, bob? >> well, you know, i think drn. >> we're mott going to hold you to it but who do you think could be out there? >> i think the most logical for whom it makes the most sense is a company based in luxembourg that operates a number of other brands, einstein bagels, pete's, krispy kreme, green mountain. for a lot of reasons an acquisition of panera bread not only brings them a digital platform that ultimately they could use across their portfolio but also provides them with an opportunity for vertical integration of the coffee business with what panera sells and, oh, by the way, panera has a very great prospect for its cpd, a consumer package business, that they could also benefit from. so there's a lot of reasons why they ultimately would be the

better fit versus anybody else. >> so if you are a shareholder of panera bread, bob, what would you do at this point? would you take the gains and leave the stock? if jab holdings were the buyer at what price, what sorts of premiums have premiums have they paid in the past? >> again, it all depends. beauty is in the eye of the beholder. if you have a motivated buyer and it came down to an auction, the price could drift well over $300 a share. could it be -- just on a fundamental basis, you know, i could see a price target for panera bread if the company continued to operate its business in the low 320, 330 range for the next 12 months, we got $270 price target which obviously the stock has blown through but when i see the operating fundamentals and momentum in the business, i could see how the stock potentially gets into that roughly 320, 325 range within 12 months. that would not be a stretch.

>> all right, bob. thank you. thanks for phoning in. >> next on "power lunch," elon musk tweeted about stormy weather in shortville. what other short positions might be in trouble right now? the answer coming up.

>> nhl announces players will not play in south korea. nhl owners pushing for this. i spoke with the nhl commissioner about this very issue during the 2014 winter games in sochi. >> after each olympics, we sit down and evaluate whether or not it makes sense too go. there's good to being at the olympics and not so good. not so good has to do with obviously disrupting our season, which has a disproportionate impact on some clubs.

we have some with ten players and some with two and 550 players on vacation so teams come back in different shape and depending on where we are in the world has an impact on how powerful our presence is back in north america. >> he sounded like he was leaning toward this decision back then. >> toward a no. >> right. so just this morning one says he'll play regardless for the russian team so that sets up a battle. >> there may be players that will get this exclusion in their contract or say i'm going. stop me. >> depends on which team you're going to play for. the russians historically are medal contenders. if you're a smaller country with less of a chance, you may not go. >> i love it. back to college kids. miracle on ice. we may get crushed but at least we'll be honorable. >> they really want it. >> yes. >> elon musk taking aim at tesla shares as his stock touched an

all-time high. it got us thinking what other stocks in shortville are seeing stormy weather. >> so, melissa, let's take you to shortville because that elon musk tweet inspired the thought process behind this story. we wanted to look in shortville at stocks that had 10% plus short interest as a percent of shares outstanding and have positive year-to-date performance. only a handful of stocks came up. these are six that are no noteworthy. amd is up 20% year-to-date. fundamental buying a possibility there but short squeeze. chipotle is up. seagate up 19%. v verisign is up 15%. best buy up 14% year-to-date. tesla not the only one.

i should point out tesla not in this screen because it's not in the s&p 500. back over to you. >> still ahead, trump talks with ceos almost a weekly occurrence in the west wing these days. are the conversations productive? that debate coming up. >> the cnbc trend tracker live data board is brought to you by the cme group.

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welcome to the second hour of "power lunch." i'm michelle caruso-cabrera. two hours until the closing bell. here's what we're watching at this hour. cutting red tape and growing jobs. president trump meeting the nation's top ceos about his economic plans but are those ceos still buying what the white house is selling? wall street warming on snap with a slew of buy ratings. however, one of the top media and tech analysts says snap's growth may be done. she joins us. and amazon reviciniinventing thg

it disrupted. brick and mortar retail for actual store fronts. one retail stock immune to amazon and one stock that is riding amazon's wave. meantime, let's get a check on the markets. major average wiping out earlier losses and carving out gains. check out movers we're tracking. staples soaring 10% on talks hes of buyout talks. southwestern energy, vertex pharma also. and take a look at tesla marching higher once again. talk about pain in shortville. stock trading above 300 bucks for the first time ever. meantime, president trump hosting ceos at the white house today and sounding very pro-business saying he will cut regulation more and spend a

trillion dollars on infrastructure. our own eamon javers was there and joins us now from the white house with some of the highlights. >> reporter: what a session. dozens of ceos and top executives at the white house to meet with the president, his daughter ivanka trump, the vice president and a whole host of administration officials here. they did a couple breakout sessions, roundtable discussions on a number of issues. at one point the president said we're going to do things that are very good for the banks and he talked about his dodd/frank rollback plans. here's what he said. >> you look at the folks from government that are running all over the banks. they're running the banks. the people that are really, you know, the head people, they're petrified of regulators. they can't move. the regulators are running banks. we'll do a major haircut on dodd/frank. >> reporter: no real specifics on what major haircut of dodd/frank is that the president expects to roll out here. we also got the answer to

another question which is just what is elon musk been doing over here at the white house. we know he's come over here several times for these ceo sessions. he was not here today. he might as well have been here in spirit. the national economic counsel director talking about elon musk on a discussion with infrastructure saying he may have a solution for high-speed rail. >> we can't build high-speed rail in the east coast corridor because it's too curvy. elon musk says i can solve the problem. i can tunnel the whole way. he's been tunneling out in the desert and california to prove it can get done. he can beat high-speed rail. >> reporter: a shout-out there for elon musk's hyper loop. apologies here. they are cleaning the driveway behind me if you can hear that noise. ultimately i talked to a number of ceos after the fact. i talked to stephen on the stairwell after the white house.

he said this is what you want the president to be doing. you want him to talk about cutting regulations and pro-business tone out of the white house. he was very enthusiastic. there were other ceos i can tell you in the room today who were looking at this skeptically saying there were a lot of different industries here represented. the conversation was scatter shot and general all over the map. those ceos are going to watch this for any specific followups to see if this is a useful kind of a way to deploy their time and engage with this white house. >> thank you very much. mr. trump tightens the talk. are these white house ceo meetings effective or have they lost mojo because of frequency? joining us now is susie and steve. a person you know pretty well went to one of these meetings. i haven't seen him quite so -- are they working meetings or

listening sessions? what's the result? >> he was happy when patriots won the super bowl also. it was that -- he was very, very encouraged. speaking of my husband, jack, he's been to meetings with presidents for every administration since reagan. most of them are complete bs. you flap your lips and administration nods. he felt that trump administration was listening closely and is pro-business and wanted to hear what's going on. i'm encouraged to hear that the haircut on dodd/frank because one of the things we hear all the time talking to -- banks need to be regulated obviously they do. when you have regulators sitting in bank hr departments, what's up with that? so i think he's listening and what you're hearing right now is him beginning to respond. the meetings are effective. meetings are work. it's not like they are nothing. >> steve, how meaningful is it as a former ceo and as a

business person to be sitting down in the oval office or cabinet room or wherever they have these meetings and feel that you are among sympathetic listeners? people who know what you need and know what you want in other words other business people? >> well, it's great being with other business people but more importantly with an administration who ran and won the election in no small part because of a promise to grow the economy and create more american jobs. i will tell you, there were 50 people today. i hope these meetings happen every week. i hope a different 50 ceos every week. they prepare before you go in. i've been going to these meetings for many years. you prepare. you talk about what you're going to prepare and deliver to the administration. you listen.e exchange. it's quick. as long as we get feedback on how we can grow and simplify regulations and what tax moves

need to be made, this is great. >> some impact for sure. we also want to ask you about minimum wage. i don't know if you saw this op-ed by andy who tried to be the labor secretary. hiking it to $15 will kill the very jobs of the people they are trying to help. what do you think? do you agree? >> i think robots are coming no matter what. i'm not sure this is what will speed it up. i think that minimum wage in some cities you have to have it or you're going to pay another way because people will not be able to support themselves. i do think that automation is a really big -- that's sort of like a threat with automation coming in to replace low level education. the answer is education and not minimum wage. >> steve, how about you? >> first thing is i don't think there should be a federal

minimum wage. it should be left up to the states and cities. they know their areas best. these are microeconomies. second thing as former retail ceo, when wages get high enough, you do automate. no more checkers. they are self-checkouts. you look in restaurants today. they have ipads for ordering. this automation is happening. maybe it would have happened anyway. when you raise wages, it pays off the cost of automation and it helps a few people who get to keep those jobs at a higher rate but it does in fact very people you're trying to help. >> we also want to get your take on this story. many silicon valley companies are shaking in their boots. a government agency is making what it calls random and unannounced visits at companies suspected of visa fraud. some people are calling these raids. >> we've been hearing the word raid come up in unconfirmed

reports. the trump administration says it's cracking down on h1b abusers by making these unannounced visits to companies. the u.s. immigration office said targeted visits will allow uscis to focus resources where fraud and abuse of the h-1b program may be more likely to occur and will be random and unannounced. unconfirmed reports of raids in silicon valley have emerged including a ceo saying that i hear from friends that uscis showed up and pulled people from meetings. critics say it lowers wages in the tech sector and takes away jobs from americans. those include trump adviser steve bannon. take a listen to this breitbart interview from 2015 where he commented about h1-b.

>> my point is that country is more than an economy. we're a civic society. >> another critic of the h1-about program is attorney general jeff sessions saying the program was hurting stem graduates.iing firms are voicin their concerns. one tells us tcs has significantly reduced its use of high skilled h1b visas over the last three years. melissa, back to you. >> thank you so much. steve, what are your thoughts on this? >> well, the trump administration is cracking down on illegal immigration. there's no news in that. these companies have been warned for a year. the h1-b program is a big one. there's a skill set gap on what companies need and what comes out of post-secondary engine aa

in engineering and technical fields. we need to provide those h1-b visas to provide companies the skills they need to run their companies. >> we need these brains. it's a complicated problem. it's going to have a somewhat complicated solution to it. the question is are we educating people and starting educating people in stem areas early enough. the idea of people being pulled out of meetings doesn't feel american to me. if that's actually happening, that's something that needs to be talked about. this sounds like it was second-hand information. >> similar to the issue of minimum wage. goes back to the issue of education. >> thank you very much. we appreciate your time. let's get to comments from bank of america's ceo. a day for bankers. >> so speaking just moments ago, brian moynihan outlined his

take. >> businesses are optimistic. it charged after the election on the theory that issues were important to them, regulation, administration i believe would deal with regulation and deal with some of those issues. it really rose unprecedented things. reality of the process to get this done meets their needs, there's been a debate about whether it's enthusiastic. demand is solid and things are fine. >> seemed relaxed about q1 earnings but not excited over loan growth. >> 2% growth economy. loan to demand will match that. loan usage is at high levels on historical basis but it isn't going to grow unless the economy grows faster. >> as for reforms, he said there was uniform belief the corporate tax rate needs to come down and deregulation he felt that smaller companies deserved the benefit. >> we believe that the regulatory relief for small

financial institutions has to be real and fast. they just don't have the scale to be able to afford the 3,000 people we have in compliance. >> more coming up on "closing bell." >> here's what's coming up on the rest of "power lunch," apple had a great run this year. what might even push that stock higher? plus, we'll speak to an analyst who has a viewpoint on snapchat that may not be what the bulls want to hear. amazon on a tear as well. we'll talk about their incredible run as well. that and more when "power lunch" returns.

welcome back. let's get a market flash. >> so shares of estee lauder are up. the fimp sarm says they're beneg from new distribution channels and growth in smaller brands. goldman raised price target to 103 bucks a share from 85. shares still down 11% over the past 12 months though up 11% year-to-date. back over to you. >> is growth all about over at snapchat and when can a downgrade be considered bullish? two big questions. let's get answers. laura martin is managing director. laura, those are good questions. let's get some answers. first off, snapchat. you think you have an

underperformer. you believe that the peeps that may use it may already close to sort of maxed out. >> i do. there are three things that limit total dreaddressable mark for snapchat. age of users 13 to 34. you are way too old. you're not using it. >> not just old. way too old. thanks for coming on, laura. >> fired. never invited back. they need a high-end advice and they also need free band width. turns out in top ten markets, total age range is 13 to 34. 650 million people. that's 80% lower than or smaller than facebook and they are already at 50% penetration in the u.s. where they do half their revenue. >> what if they change? your analysis is based on what they are today. could they become something where us old folks would also like to be on the inner web?

>> maybe but facebook has adopted all of snapchat, stolen, borrowed, all of snapchat functionality. copied it all. same name. same tech. i think facebook, which already skews older, is adopting all of that young persons -- >> does facebook have a patent problem? >> they don't. it's software. they use snapchat as r&d lab and copying software. no lawsuits. >> there will be advances in iphone 8 namely better 3-d sensing so when you take a selfie it has a better quality image. you're not sort of distorted. it's going to be a much better image. snap made it clear it's a camera company. when there are these sorts of leaps and bounds advances in iphone technology, won't that help snap and maybe increase the total addressable market in ways we're not thinking about right

now? >> i would say yes. >> how about in the u.s. where they do most of their business? >> it's helpful to snap but people try it on facebook first and think it's a facebook application and don't bother to migrate to snap. >> do you give a darn in your analysis about the fact that you have absolutely zero rights as a shareholder? how much does that play into it? clearly all analysis here irregardless of ownership structure, does that lay on top of it? >> i would say it's emotionally insulting that they gave public shareholders zero votes and the founders have super voting shares nine months after they're dead or if they're fired. that's an insult to public shareholders. >> they don't seem to care. they still buy the stock. let's move onto apple. the other question was a riddle basically. when can a downgrade be also bullish because normally it's

bad. you ungradowngraded apple but bh on the stock. connect those dots. >> apple is our top pick for 2017. we had a strong buy. stock was up $40. we have $165 target price. 20% upside. we love this stock. we think that too many hardware analysts think that you sort of zero base your apple demand every year and all research shows that average turn rate is falling for an apple device. people stay in the ecosystem longer. we are talking about lots of advances for the 10-year iphone and we think it's an ecosystem with services locking people in for longer and longer tenures. lots of problems with galaxy note helping apple elongate its consumer life span as well. >> apple tried to argue that they are a software company because that would get them a bigger multiple. so far the rest of the street, to your point, looks at them as

hardware and doesn't give them a big multiple. >> this company has higher profit margins and it has higher returns on capital than facebook and priceline so why is it being valued like a hardware company as if it has no margins. >> apple services, itunes part of the business, number two business, iphone number one, is bigger than facebook's entire business. >> it's got massive margins. >> no one seems to care. >> we're hammering away at that. there are 50 analysts. we think 40 are wrong. we think we're right and apple is our top pick for 2017. >> laura, a real pleasure. next time i pull out my rotary phone, i'll give you a call. >> the old guy. >> what's that you say, tyler? thank you very much. we all took a look at how much the most expensive diamond would sell for in auction. we'll tell you who came out sparkling and who actually bought this stunner next. at? hey gary.

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yesterday we did a price is right on "power lunch" and made guesses of how much it would go for. 53 million on the low end. tyler guessing a whopping 110 million. >> he likes pink. >> actual selling price, $71.2 million meaning robert frank nailed it almost exactly. he guess 71 million even. >> rigged. >> and that's why he is our wealth editor of course. winn ene ener bidder is a hong based jeweller. >> that's why car salesmen love to see me when i walk into the room. can i get the price above 50,000. >> you're a hard bargain, melissa. >> anyone find it suspicious? $200,000 off robert frank? >> robert frank -- >> big news. >> rigged. >> hacked. >> coming up, we'll talk to the founder of this year's coolest

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hello, everybody. here's your cnbc news update at this hour. rex tillerson meeting with jordan's king abdullah. the king is scheduled to meet with president trump tomorrow. tillerson ignored reporters' questions regarding the syrian chemical attack on sicivilians today. the cdc says one in ten women who contracted zika virus had a baby with the disease. tornadoes causing lots of damage. homes were destroyed. trees uprooted and power lines were down causing power outages. widespread ones. one person was killed in south carolina. and dallas cowboys quarterback tony romo will retire. the sports business journal

reporting that he will take a job in the cbs broadcasting booth replacing phil simms as the network's number one color commentator. the cowboys are expected to release romo today. that's the news update this hour. back to you. >> thank you very much. let's go now to steve liesman for more details about this resignation. >> thanks very much. just got off the phone with jeffrey lacker's attorney. jeffrey lacker as we've reported in the last hour abruptly resigned today for his involvement in the 2012 confidential information case that's been out there and investigated. the attorney telling me that no charges will be brought against jeff lacqu lacker and failure t disclose is a narrow piece of

information that lacker failed to disclose the analyst he was talking to had confidential information. he disclosed that he had the discussion with the analyst. this leaves the question about this case as to whether or not the analysts got the information from another source or whether or not the reporter was merely just fishing and made up a number or some information and jeff lacker saying he failed to hang up the phone or failed to say no comment or deny it and he believes inadvertently the source of the information or confirmation. >> i have been reaching out to people in the last 30 minutes or so. the analyst worked for medley global advisers from australia. i have the report she put out october 3rd, the day before minutes released. lacker spoke to her october 2nd. to your point she could have

guessed 45 billion number but there are specific things. >> also the threshold what the number would be for the fed to stop that. that was a story there. so the failure here of lacker to disclose is to disclose to officials that regina had confidential information which is sort of a strange area but he's required to disclose that as well. >> he talked to her the day before her report came out. >> that he disclosed that he did talk to her. >> three years later in 2015 he disclosed that. >> from what i can tell, from the statement which as we've said is a little convoluted, it doesn't appear as if he denied talking to her in that 2012 general counsel discussion. i don't think he denied that. >> there's still the question where did you get the information in the first place? >> exactly. that's really an interesting question as to whether or not -- what we don't know, we'll try to reach out to the u.s. attorney's office whether or not the

investigation overall continues. it appears to have ended as far as jeff lacker is concerned but whether there was another source of information but whether he got confirmation and got it through jeff lacker or whatever transpired during that call. >> i presume that lacker's attorney didn't disclose if there were no charges in exchange for information on the source the reporter had. >> we didn't get into that. my guess is that lacker would not know that, but i don't know for sure. >> we're just talking about fed rules. there's no law broken. just fed rules. >> unclear whether there was a law broken or what the source of that requirement to disclose that the analyst had confidential information is from. >> can we throw a hand grenade into the entire story because janet yellen met with this regina earlier this year and admitted that back in june of 2012, three months, she had also

met with regina to talk about global issues. >> that's out there and known. as far as i know, no confidential information was passed in that regard. >> i think it was colonel muster in the library with the candlestick. steve liesman, you may have a long night, my friend. this fed story has intrigue. >> always a long night, as you know. >> thank you. >> we're 90 minutes from the closing bell on wall street. major markets are modestly higher. there you see them. industrials up about 36 points. s&p basically flat. nasdaq basically flat as well. in the green. big moves in energy stocks. southwestern energy, range resources, chesapeake, eqt biggest gainers. oil closing for the day higher near a one-month high. year-to-date down 5%. today up 1.5%. back above 51 a barrel.

>> which is one of the reasons that energy stocks are moving higher today. however, the sector was the worst performer in q1. so what do you do in the second quarter and what are top stock picks for your portfolio? let's bring in john. good to have you here. >> thank you for having me. >> will these catch up in the second quarter? >> we believe it is. >> why? >> we believe oil prices will go up. supply and demand is tighter than consensus believes. demand growth is strong. with regard to supply, we think increasing supply to meet that growth will be harder than people think it will be. one dynamic that happened during the downturn is what we call higrating. if an operator planned to drill 100, only had cash to drill 30, you drill 30 best first. the productivity of additional wells won't be as good as best

stuff they dlirilled during the down cycle. it's going to be difficult to do as activity picks up. >> top picks if you believe that oil is coming back, parsley energy. it's an oil company. pe. was down 8.5%. why do you think this is the best pick now? >> the last name. the founder of the firm, it's named after his grandfather. they are one of the most -- they have a 10-year history. the history is longer than that. one of the other companies very favor is pioneer natural. >> pxd. >> the chairman is parsley energy's -- it's brian's dad. they've been working in the base for 50 years. companies that are late to the basin are paying up to 30,000 to 35,000 per acre for leasing rights. pioneer does not have that issue because it's been there with

predecessor companies for 50 years. they have done very well for investors. we think that will continue. >> you also like weatherford. what's your highest convicted sector? is it energy? >> we stay sector neutral overall. within that we are positivity weatherford because of oil prices. >> weatherford was up 30% in the first quarter year-to-date. way outperforming oil. you're going to get more out of that stock? >> that's after a dismal 2016. during the downturn they fired about half of their workforce and closed one-third of their facilities around the world. what that does is create a lot of earnings power with the up cycle kicking in. that was the original earnings thes thesis. earlier they hired a new ceo.

widely respected in the industry. investors love him. not part of our thought process. >> technician must love that chart. higher highs over and over again. >> it's looking much better. >> there's even gravy on top of that within the past couple weeks. weatherford is combining part of its business with industry leaders for fracking so activity increasing and there will be a much more competitive entity while the number of wells being drilled increases this year. >> so some three ideas if you want to play energy for this quarter. thank you. all right. coming up, this is cool. the winner of this year's coolest college startup. we'll tell you who won. plus, janet yellen and fed raised rates at the last meeting and are expected to keep raising them this year so why are bond yields going down all of a sudden and what does it tell us? we're going to find out next.

welcome back to "power lunch." four weeks and thousands of votes later, we have a winner for the coolest college startup contest. it's 101. education tech company that

could be a big game changer for the classroom. joining us is co-founder of 101. great to have you with us. >> thanks so much. >> your basic goal was to further education, improve education particularly for stem classes. that's your background. what were you noticing? what was the inspiration for this startup? >> absolutely. so right now i'm finishing up my ph.d. in chemical engineering and i've been teaching forums of math and science including subjects like chemistry for nearly a decade. i started off as private tutor and continued being a university teaching assistant so i witnessed firsthand the problems that so many students experience across the country with math and science subjects as well as problem that exists in the classroom today. >> and what exactly is it that students aren't paying attention? way back when, i loved chemistry. i took an accelerate class in college. and then i dropped. i stopped. the classes just weren't as

interesting. i didn't even have the problem of having a smartphone at my fingertips at that time. >> the problem that exists in the classroom today is really that the lecture in the classroom in math and science sources hasn't fundamentally changed in centuries. quite honestly since the middle ages because unfortunately for so many students who take these math or science courses in college, the course experience still involves sitting in a classroom or lecture hall and listening to a professor talk at a podium for an hour straight. >> what does this product do? >> so our first product is focused on chemistry allowing professors to engage students in the classroom by pushing out problem solving activities over the cloud to students can receive them on their devices.l on? >> the middle of lecture. students can draw chemical structures to do it on their phone or tablet and send it back to the professor and professor

can see what their class is drawing in realtime. >> make sure they're not playing solitai solitaire. you keep the student engaged on their phone so they're not doing something else on their phone? genius. where were you 30 years ago? >> we hear that a lot. >> students today are so engaged in interactivity in daily lives from social media. >> does the school pay for this? student pay for this? are you monetizing this? >> students pay for this. it's a textbook. professor adopts it and students pay for it as part of their course fees. >> how much does it cost? >> $5 per student. >> you piloted at eight schools including carnegie, columbia and university of cincinnati. any sort of funding or approaches about funding? this sounds like a business. >> we're currently raising our seed round now. we have our first paying customers from all eight of our colleges and universities across

the country. 40% of students who use our products said it became more interesting in chemistry which is incredible and demonstrated 200% improvement for students who used the grade versus students who didn't in the same school. we're looking forward to expa expanding this across math and science subjects across the boards. >> the elevator pitch. you got it down. excellent. >> thank you. best of luck. >> thank you very much. >> all right. let's ask a big money question that may have some of you confused and confused me. why are ten-year bond yields falling as the fed told us they are likely to keep raising rates? let's ask the "trading nation" team. craig, i'll start with you. answer the question. why are yields falling when the stock market is doing okay and economy is okay and fed said we'll keep raising rates? >> the rates have been stuck in

a range of 230 to 260. there's a couple reasons for this. number one, we've got a resetting of expectations that are happening right now. we didn't see the health care bill get put through. fed has raised rates. put up short end of the curve. we haven't seen those inflation expectations accelerate due to challenges in washington. second, from an international perspective, you have some populism issues happening around the globe. whether it's in the uk, whether it's in germany or in france and they come out and buy the safest debt in the world. those two things are weighing but step back and look at long-term chart. it takes a couple times to push at that rusty door before we break that reversal in rates and i think that's what's happening now. we're consolidating. we'll push through it. i think by the end of the year we'll see ten-year bond yields in 3 to 3.25 range. >> wow. a lot of real estate agents and brokers don't want to hear that.

erin, do you agree with craig's analy analyst? >> we see it less so around the fed. you see more attachment closer to the fed. it's about this unwinding of the trump trade. disappointment. we also had disappointing capital goods order yesterday. so that also was putting pressure on the u.s. economy expectations for today and therefore the 10-year as well. overall we still have global pressures. remember that the u.s. treasuries are still some of the most attractive in the world. there's more instability in other developed areas and that's another thing that's keeping those prices up and yields down. >> all right. thank you both very much. looking at the bond market appreciate that. for more "trading nation" go to our website. shares of amazon all-time high today. what else is new? if you think you missed out on

amazon, we'll get two other ideas for you. one that benefits from amazon and rides its coattails and one that could be amazon proof. that's what our guest says next on "power." >> and now the latest from trading nation and a word from our sponsor.

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shares of amazon hitting another new all-time high, and they continue the push to become a store. we are live with the story. >> reporter: behind me, the first physical bookstore opened in seattle less than two years ago, and opening the 11th location this year in new york city. it's a quiet and quick ramp up for a company that built the business online, but that's not to say amazon is now doing retail the traditional way. inside the stores, books are

browsed with the smart phone out using visual sensor technology and the app shows you more information online in realtime. throughout the store, there's ways amazon encourages customers to join the online ecosystem with prime membership incentives or alexa, a virtual system that invites shoppers to play games. now, amenson is testing the grocery shopping experience here in seattle. again physical stores with advanced technology citing this may help more than the $600 billion grocery market. for now, brick and mortar is a tiny part of the business, but it may represent the vision to revolutionize the retail business again. that may be part of the reason analysts are so bullish on the company and its stock that hit record high after record highs this year. back to you. >> thank you very much. the new highs may be good to shareholders, but those who do not own the stock, is there a way to benefit from its big run?

let's bring in the chairman and founder of navalier and associates. good to see you. how are you doing. >> good to be here. >> i know you like amazon. you own it. there are other ways to play. i thought that what i really wanted to be was the box maker for amazon. that would be a smart thing to do? >> that's correct. we like packaging, corporate america, ckg, a nice dividend deal, smooth, steady earnings growth. conservative stock. >> how much of their -- of amazon boxes do they make for other packaging material? do you know? >> that is unknown, but they are benefitting immensely from online sales. >> so they are just in there riding the coat tails of amazon. another one that you like is one that doesn't do business with amazon, and you think has a mote around it. which is it and why? >> that's ulta beauty. average customers in the early 20s, obviously sell makeup, and

it's one of the things that's hard to buy online. >> it's been a great stock. i mean, it's one of the best performing stocks of the past 1 pennsylvan 5 years or so. >> correct. correct. what also helped it is the domestic retailer, when the dollar was strong, everybody wanted to be more domestic, and just like the lowe's or home depot, something like that, domestic presence helps and you have the s&p 500, so now it gets benefits from all that indexing activity. >> that pushes it up in and of itself, so ulta and pkg packaging comp. a quick thought on amazon. why do you think they're investing as they are in brick and mortar locations, books, groceries, whatever, do you think that's ever going to be a corner stone of their business or just the way to sell omni channel. >> well, i don't think so. i think if they get in the grocery business full-time, yeah, obviously, physical

stores, but i watched them in auto parts. you know, o'reilly auto parts, going after that too. they decide they want to go after certain industries out there, and god help you after that. >> great to see you. thank you. appreciate it. check please is next. don't move. usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family, and we're usaa members for life. now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann.

i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.

welcome back, this is the latest on advertisers' boycott of the bill o'reilly show on fox news in the wake of sexual harassment allegations. there are 11 companies that pulled ads from the show. those companies now include terow price, all state insurance, and bmw, hyundai, and others that pulled the ads in the past day. back over to you guys. >> we're all wondering as we sit here, brian was wondering, for a minute, temporary, do we know? clarifying? do we know at this point? >> they are calling it a hold. they are holding off on putting ads in the show. many said the ads may show up in the show tonight because it takes awhile for the changes to take hold, but they called it a hold on the ads evaluating the situation perhaps as they way to see what fox chooses to do in the wake of the allegations. >> the show generated $400 million in ad revenue in the most recent years.

>> yes. i believe the most recent quarter were the highest ratings ever. this is a very popular show. what's interesting is the advertisers say they are reallocated elsewhere on fox, others are still deciding. unclear how much this hits fox in terms of ads. >> what is it up front? >> well, interesting. we are going into the upfront ads selling period, and this is when as much as three quarters of all ad dollars committed for the upcoming year, and advertisers have to start making decisions in the next month or so, and we'll see how fox chooses to handle this. a lot of money could be at stake. >> the gorilla in the room is does he go away. >> doesn't say. >> tremendous earnings power for the network, gone through a lot. this i think story, a little bit wonky, hard to understand now, gets bigger.

the conversation before the day this report came out with specific details, who knows if it goes back, but the fed leak is a big story. >> credibility of the federal reserve here. all right. the story continues to watch, and meantime, thank you for watching "power lunch," "closing bell" starts right now. hi issue everybody. welcome to the "closing bell," i'm kelly evans. >> i'm bill griffeth. i know what you're thinking. more purple? all by accident. >> we need a mirror. >> just happened. not planned. when jamie dimon speaks, wall street listens. he discussed his letter in a town hall event, what he said about the state of the economy coming. >> 11 things wrong with america, he lists them out.