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. lower stocks, republicans renew talks on how to replace

obamacare. hear from the ceo of molina health care, one of the companies that could be at risk. the white house appears to take the lead on the push for tax reform now, but will a border adjustment tax be in the bill? hear from the house ways and means committee chair, kevin brady, a key proponent of the tax. that's a first on cnbc interview a little bit later in the program here. >> but we again with a trump administration's reported exploration of two controversial new taxes, eamon has the latest from the white house. >> yeah, hi, kelly. this was a story broken by the washington post hours ago earlier this afternoonment i talked to the white house official. they are not disputing the washington post reporting here. here's what we know from their reporting under consideration in the tax plan that is being worked on here at the white house. two ideas. one is a value added tax. the other one is a carbon tax, value added tax is a tax in which you apply the taxation

throughout the building process of a particular product as it goes to market. the carbon tax, obviously, has to do with pollution. the carbon tax, in particular, is not one that's likely to be extraordinarily popular among republicans up on capitol hill. they are aware of that here at the white house. they caution, though, that you shouldn't necessarily think that they have come to any final decisions about any of this. all different kinds of proposals are under consideration right now. it's very early in the process. they say here at the white house, but one of the things to look at if you look at the art of the deal implications of this trial balloon being floated this afternoon is whether or not this is designed to get the attention of conservatives up on capitol hill, maybe a little of a sfal here saying to conservatives, look, if you are not willing to work with us, we'll file find other votes on the hill to get the major initiatives pass in the trump white house. could be a lesson here depending too much on the freedom caucus,

considering they are willing for flexibility in the tax negotiations coming up later in the year, guys, back over to you. >> all about the intrigue moving the legal conclusion forward. thank you. >> kevin brady will talk about the controversial tax ideas in the next hour of the show. now to comments made by jamie dimon as well as the letter released today. wilfred has it all now. will? >> cited expectations of business friendly environments to come, including possible changes to regulation. >> regulation is huge. i mentioned several there. we want to be a reason voice. we've not. dodd-frank, versatile, absolutely not. we had a crisis. legitimate complaints that should have been fixed, many had been fixed. you should recognize that, and some went too far.

adverse consequence. >> regulation on mortgages for example as being most prohibited saying it cost the u.s. half a percent of gdp per year or more than $300 billion per year in new loans not issued. he suggested a simple change would be for regulators to stop gold plating international rules. he said, quote, if we used the same of national standards of other international banks, that frees up capital. he suggest the other capitals of reform was not required, and he was asked about the meetings at the white house and whether he supports everything that president trump said. >> there's no one that we we agree with everything everyone says, and mr. trump doesn't agree with everything we said. >> overall, president trump appointment ale willingness to engage. guys? >> yeah. will, there was a litany of things, he said it's holding america back in the context of saying he absolutely believes in

america. it's got a great future, but this is a longer and perhaps more, you know, it's a little more down beat than seen in the previous letters. he said turn of the century, trillions in wars, student debt, leaving americans out of the workplace, labor participation is low, inner city schools failing, high schools in vogue too, and corporate taxes, regulation extensive -- >> but the bottom line, he says he thinks growth opportunities are the best. right? >> despite that long list, as you said, kelly, he's optimis c optimistic. in fact, he was re-asked the question moments ago, and he turned it around and said, look, i'm doing an analysis of what needs to be done to better things from where they are, and it's achievable too. i disagree with the overall tone, which i say was particularly upbeat, and as you said, regulations one of the key things he thinks would help and can change relatively simply competitive congressional laws

and tax reform, smoke he spoke about, if we saw lower corporate tax, receive higher investment and higher wages coming through. >> all right. thank you, will. i wonder if he's going to show up on cherry coke cans at some point. everybody listens to him. >> warren originally drank pepsi. there was a switch over, and now he's on cherry coke cans. >> closing bell exchange, up 20 points now, a 100 point swing top to bottom for the dow today. we're at post nine, and who look who is back, rick santelli to the cme in chicago, and welcome back. i'm going to start with you, rick. i'm wondering what strikes you most of what you notice in the markets from the time you left to when you got back here. yields lower, but other than that, what else is going on that caught your attention? >> you know, i continue to say

that for those who want to invest and have the best strategy, i think the equities tell the best tale, and bob pasani spent on it quite a while. the amount of giveback in stocks in percentage terms is modest, yet, yield slipped back a little. 235 is nine points away from unchanged. 263 hit at the top of the range, and that's perfect technical analys analysis, what most look at. keep it simple. 230 to 260, it took us base 1 months last year to take over that level. it happened at mid-november, and what's interesting, though, from november 4 to november 17th, 4th was a friday, session trading days, went from a 177 yield to a a 222 yield. if we slip back to 227, we can

fill in some of that, but i'm in the frame of mind that stocks are there because not because donald trumpments it, but the other candidate did it. there's another way to look at this. i don't know how it turns out, but nobody's adding more regulations, not raising taxes, and part of that is what the target's placed on, but that does not mean growth will grow any time soon. that's the dynamic grappling, and the treasury market comes down a bit. >> interesting. one of the things that was true earlier when the white house reportedly talked about a value added tax. . >> and a carbon tax. >> exactly. sown like that's posturing here, but the one certainty is we're going to deregulatory tax environment giving incementives that's not the case? >> listen, i think that's absolutely the truth considering this major move in the markets since we have -- since the election has been all about the

coming reforms, whatever it is, it was built upon that. after we went through the health care debacle last week, now we talk about taxes, and throughing about value added tax, quarter tax, whatever you want to talk about it, it causes anxiety in the market, but the market is holding in. as rick said, we're only 1.5% off the highs. no reason to panic. what you're going to see as there's more discussion, you'll see it start to affect how investors perceive market value at the moment. are we basening it off what it looks like versus what we get versus what we expected to get. >> oliver, you were a strong bull for a while and turned cautious here. where are you right now? are you buying stocks at these levels here? >> yeah, we are. we continue to buy, invest, continue with the thesis it's a bell curve of a market, and we

don't see the trump rally ending in the immediate future. look, first quarter earnings come out. those are going to be critical. there's one who resigned today, net-net bullish for stocks. there's an environment where the expectation and the fate is going to be able to pass regulatory reform and tax reform. all in basis with earnings expected to grow by 10% year over year, we think that the environment is still very well poised for well managed, you know, strong balancing companies. >> the s&p price target, 57 points above that. >> that's the bell curve. >> what do you mean bell curve? just the way it looks this year? >> exactly. first half of the year, a runup, then air comes out of the balloon, floating back down to where the market started, but it could rally again. that's part of a normal cycle when you're eight and a half years into or over eight years into a bull market. don't forget that.

comparisons are becoming easier in the sense that you had a very bad start to 2016 in the market, and so now the s&p's up 14% year over year opposed to 24% there a couple months ago. >> the target on the ten-year is 3.5%. well below that right now, and although everyone expects fully the fed raises rates a couple more times this year. >> so we set targets in the beginning of the year so the vin esthers can see the targets. it should come down, if you do, that's a very positive thing because that signals a strong economy and accelerating growth. that's what you want to see. >> investors should scram. if you don't want to put on the price targets, you shouldn't have to. especially if you don't feel strongly about it. >> well, the client's right. >> oh, no. >> customer centric business. all right. thank you, guys. appreciate your time. on today's market anksz. welcome back, rick.

>> thank you. >> we have 49 minutes left in the trading session with the dow up 21 points. a sideways day here so far. >> coming up, chair of the ways and means committee giving his take on the poignant expiration of the value added tax and maybe a carbon tax. >> up next, ceo of medicaid molina health care is here to give us his take on the new gop plan to replace health care or as much as we know about it at this point. say hello to at&t's best, unlimited data deal ever. it's a total game-changer. so now the whole family can binge,... ...surf, shop, navigate, listen, game, stream and more.

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20 stocks higher among the components, ten lower. caterpillar's among the leaders today with goldman sachsed adding the equipment maker stock to the buy list citing several factors including cast exposure to under invested machinery markets in the early stages of recovery. there it is. up 2% right now. >> health care stocks lower, though. john harwood has the latest now. >> kelly, neither republican

lawmakers nor republican voters were happy at all with the collapse of their health care bill weeks ago. there's animal effort within the administration and capitol hill to resume talks to revive the american health care act, in particular, mike pence has been working with the freedom caucus with objections to the original bill on ideas that might move it more in their direction, which is for less regulation. one option is to allow states to opt out, and another allows them to ovpt out of community rating, but the news conference today cautioned everyone this is just getting started. >> i won't get into the details of the thing other than to say this is all about getting to the stage. we don't have text or an agreement yet. throw around concepts. that's occurring now. but that's not to say we're not ready to go. we want to ensure when we go we have the votes to pass the bill.

the changes talked about would lead to lower premiums for some people but higher prep yums for older people, and also others who have preexisting conditions. in fact, it potentially negates the preexisting condition protection popular among republicans. most likely you can interpret the talk as an effort to have something to tell voters when they go home for easter break that they have not given up yet. >> john, thank you. joining us now, dr. molina, ceo of molina health care, someone we go back to to sort of get your gauge of response to the negotiations as they continue. what are you hearing right now

from congress, and are you encouraged or dismayed by what you're hearing. >> my father said if something's worth doing, it's worth doing right, and what concerns me is the rush to do a piecemeal repeal of the law without really considering the whole thing in total and getting a bipartisan view. >> when you say "worth doing right," newer things on the table is allowing states to opt out of key provisions, essential benefits, community ratings, a lot of language here, but do you have a problem of states choosing how to proceed on health care? >> well, what worries me is it allows insurance companies to charge much higher premiums for people with preexisting conditions issue and at the same time, by changing the essential health benefits, insurance policy companies offer packages at a lower price that appeals to

younger people. the problem is, the people find out when they get sick, the insurance premium and the pack caption they purchased do not cover their sickness or the treatment needed or the medications. this is a rush to accomplish something when we really need a comprehensive bipartisan approach to health care reform. >> well, i mean, let's face it, they do seem to be, for them, taking their time this time. i mean, there was a rush before. they set up the official deadline they wanted to have the thing done by the 7th anniversary of the passage of obamacare. that did not happen. now it seems like there's a lot more casual conversations about how they are portraying it right now, and it really is becoming, as paul ryan said, a way to figure out how to get to 216 votes in the house. they do seem to be learning from their previous mistakes, but be that as it may, that's right, this is this movement to think about how to get votes rather

than trying to provide health care, which is what this is all about. these cost shares reductions that we talk about last time. no talk about that yet. do you think they get to that as a way to try to save on premiums as well? >> the cautionary reductions are crucial to preserve the market place in the short term. they need to fund the csrs for the next two years to buy congress the time to come up with some reform legislation. if they don't do that, the individual market collapses, and that would be terrible for the country. it would be terrible for people buying individual insurance, and it would be a black eye for the republicans. >> doctor, one final question, so if repeal and replace is back on the table, the question for the business becomes what in term of medicaid is back on the table, and we don't know yet, but seems unlikely they leave the program as is with open ended grants, right? now you guys have been through

this roller coaster, but it sounds like you have to at least consider the possibility again that program may be tailored or widdled going forward. >> it is a responsibility. it's not been discussed. if i were the president, what i'd do is get senator hatch and senator wyden and i would get senator alexander and i would get them all together and say, build me a bipartisan solution to all this. pass the csrs to buy us some time to do this thoughtfully, but that's what needs to be done. this piecemeal approach will end up with a health care disaster. >> all right. doctor, good to talk to you. thank you for the time again. appreciate it. >> thank you. >> dr. molina from molina health care. a news alert from ride sharing industry up in seattle there. what's going on? >> reporter: hey, guys. well, here in seattle, a federal judge temporarily block the

city's first law that attempts to allow uber, lyft, and taxi drivers to unionize. it was passed in 2016 and scheduled to be in effect this week. it was the first of its kind in the country. ubering r has been actively fighting it, and this month, they told heat wire app option was to leave the city entirely if passed. a federal judge temporarily blocked that law, and they could leave the city where they don't like regulation. guys, back over to you. >> we have to mention, we checked uber, we have not heard back from them yet. >> surprising turn this, especially for seattle and the company somewhat relieved. thank you for now. >> for sure. as we mention, house ways and means committee kevin brady weighs in on the latest proposals. >> up next, why kate spade is deep in the red today. kevin, meet your father.

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shares of kate spade tumbling, coach lower as well. kate spade reportedly spending the next few weeks negotiating a possible sale of the company on the heels of an offer from coach. we asked about akwaring companies in late january.

remember what he said? >> we're not averse. priorities for capital is to be opportunistic looking at acquisitions where we believe we can drive value and we continue to be on the lookout. >> yes, kelly, that was on our show of you were gone there. the company's first priority is to invest in organic growth of coach's business. now they made the offer for kate spade. as long rumored. coming up, why staples is catching a big bid unlike ralph lauren, urban outfitters, and elle brand. >> a money manager who likes one of the retail names. stick around to find out which one.

welcome back. look at the dow 16 points, down from the highs, in fact, the other averages turned negative again. s&p down a couple points, nasdaq down four, russell down five. chip maker nvidia the worst today down nearly 7%. they were downgraded from underweight to sector weight. they cited saturation in unit market or gpu, and lower margins from nintendo switch revenue.

one of the best performers in recent years is cut down a bit today. eye opening story late this afternoon, a top fed official abruptly resigning. steve leisman has the story now. steve? >> bill, thanks. resigning disclosing he played a key role. lacque lacker said he spoke to a news letter and confirmed fed deliberations on monetary policy. he said in a statement, e regret i cross the line to confirming information that should have remaineded confident rl. here's the time line. he spoke with the reporter on october 2, 2012. october 3, there was a story with certain confidential details that would have been difficult to get without that conversation, and on december, interviewed by the fed general counsel, failing to disclose that animalysts had confidentia

information. 2015 sometime he was interviewed by law enforcement officials including the fbi and the u.s. attorney's office for the southern district. in january, he announced his retirement effective object. today, he announced it effective immediately. the resignation, the result of negotiation with law enforcement officials and his attorney told us that lacker was told by the u.s. attorney that he'll face no charges. he's been replaced by mark mullen. as you said, guys, interesting story out there we'll talk tomorrow with the fed gov nonand this will, obviously, be one of the questions and the key architect of federal reserve regulations surrounding dodd-frank. >> be clear on this. jeff lacker is not the original source of the leaked

information. he was just confirming. >> appears the reporter had the information previously and lacker suggested in the letter that he inadd vert tently confirmed it by not hanging up the phone, but not denying it. it's unclear how deid that, but the reporter had the information ahead of time. >> and, steve, you said there's not going to be charges pressed against him, but why did he negotiate departure with law enforcement? >> apparently, there's some sort of rule we're trying to get to the bottom of, but the he should have discolossianed in the interview with the general counsel that the reporter had confidential information. he otherwise disclosed the conversation, but it seems like i can't tell if it's a technicality or what and inadvertent disclosure of information; i don't know if that was something chargeable. >> all right. thank you, steve. >> thank you. >> pleasure. >> our steve leisman.

time for a cnbc news update. hi, sue. >> hi, everybody. the u.k.'s ambassador to the united nations called the deadly chemical attack on civilians by the government a war crime and indirectly criticized russia and china for protecting syria with resolutions. >> horrified by what happened. we do not have all the information yesterday, but the attack, yet another deliberate campaign by the syria regime and their military backers to use chemical weapons. >> here at home, the georgia department of transportation completes reconstruction of the i-85 bridge earlier than expected. fer officials say it's rebuilt by mid june rather than the end of the year. the bridge collapsed last week. former president george bush arrive in botswana with laura to

promote his aids initiative. launch in 2003, it is the largest provider of aids fighting medicine. that is the news update this hour. back downtown to you guys. >> yeah. tough one, sue, thank you. we'll see you. about 30 minutes to go, a little less. dow's up 30, s&p barely higher now. nasdaq and russell negative. and the clothing brand known to be upscale, downsizing next. jp morgan chase chief, jamie dimon warns, quote, something is wrong with the u.s. economy. a debate on whether he's right coming up.

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welcome back. a look at a couple movers in the market today, staples leading the gainers in the s&p today after reports that the office supplies retailer is in talks

about a possible sale. a takeover deal could value staples at $7 billion. the talks are in early stages. staples has declined comment, but the market is commenting up almost 10% right now. urban outfitters and l brands hitting 52-week lows today downgraded neutral from buy citing weak traffic and too many stores. urban outfitter reported disappointing sales so far this quarter. kelly? >> another retailer facing challenges, ralph lauren announcing restructuring, and stores here in new york city, in fact, why we are right now, court? >> reporter: good afternoon, so here on 5th avenue and 55th street, and this is the flag ship store for that particular brand. it is going to be closing on april 15th after occupying the lower two floors of the

coca-cola building for the last few years or so. they say it's part of the 50 store closure program which is part of the way forward plan announced in june of 2016. however, this store closing along with conversions to a new platform and some job cuts will save the brand an estimated $140 million annually. that's on top of the cost savings outlined last june. now, shares are down about 18%. the plan was introduced, and comp sales fell 5% in the most recent quarter and know larson is officially vacating his role at the helm on may 1st. this 5th avenue location, though, made a splash when the lease was first signed. at the time, it was the most valuable retail location in manhattan. $400 million in rental income over a 16-year lease. as you can tell, the lease is ending quite a bit short.

no word from the leasing agent what's coming in, but when we find out, we'll let you know. kelly, bill, you may remember before it was ralph lauren, it was a disney store. >> i don't want to be too hard on the company, but when bill and i, this just struck us, they are exploring new retail concepts including ralph coffee. is that the future for ralph lauren? >> ralph coffee, their own blend of coffee. the company has been trying to figure out ways to leverage its brand in different ways, perhaps over different platforms, so many of the -- at least a possibility of doing something with it. we don't know what. that way forward plan had a lot of thins involved in it from job cuts to closures and realigning brands, restructuring, a lot going on there. we know they are continuing with the plan, you they also are

going to be getting a new ceo at some point soon since we know mr. larson is leaving so maybe that changes. it's all tbd. >> all tbd. all right, thank you very much. ralph coffee. despite the troubles in retail, the next guest, though, still sees opportunity in the space, and we welcome to post nine today, first of ail, big picture. we are seeing a lot of retailers flailing about now, aren't we? suffering mightily herement what's going on? >> the valuation discrepancy is fascinating. look at the e-tailers, they get the market base on top line growth, irrespective of profitability. the brick and mortar guys get hammered on the bottom line, which is actually what matters, so where i see opportunity is in sectors where it is a lot harder to buy on line that people like to try on.

such as jewelry and bras, two companies that are category killers that dominate the market share, and they are down 50% in the last 12 months, 30% this year, and they are great companies. l brand. >> exactly. talking about l brand, both taking hit for a variety of reasons, by the way. >> yeah. >> l brands just downgraded today, as a matter of fact. >> exactly. the question is, are you tamaki a case for the long term flur iring of the companies or saying they are too cheap at current levels? >> i think they are too cheap and cheap for different reasons. it's an interesting situation for signet. they run a great jewelry business, but they are also in the financing business, and they don't actually do it that well, but to the credit they admitted it, and they said they are going to spin it off. now, these businesses go for a little premium to book. take the financing business, it's worth a billion dollars. the market cap is $4.5 billion.

they could buy back 20% of their shares and it would be acretive. >> l brands said there's too many stores out there. that's a case for a lot of retailers reducing footprints because they can't keep up cost-wise with the e-tailers everybody loves, right? >> absolutely. >> what's the deal? >> l brands is where restoration hardware was a year ago. stories in the fact that the ceo and founder of the largest shareholder in both cases made a brave call to get rid of the iconic catalogs, and to update the products, right? so they did the bottom line, and with l brands, they are doing the -- it's great confusion. analysts don't know, what's it mean for a possibility? what's it mean for growth? and, you know, look at l brands, that's up 70% from the low of 5, not even a year ago, and i think l brands is at that point, and with a 5% dividend yield and 11

times earnings, i'm willing to wait. >> shares now under $44. so it's interesting to do away with the catalog, that's more direct to the consumer, not emphasizing the footprint of the future for the retailer. >> it was a higher return on their dollar if they did e-marketing. so they are going to social media, and urgs yo know, mailing cue m cue pops. >> do you own amazon? >> i don't. >> now buying the whole retail sector. >> well, i mean, that's where the growth is right now. >> amazon's profitability is from the cloud and not the >> which is the problem for everybody else in the sector. you mentioned the two companies hit hard, but anywhere else you think there's a more promising future than the way it's port y portrayed now? >> yeah, so actually i got back from two weeks in asia, and that was an interesting trip. i think they, to the upside there, and what i was really taken by was the changes in consumer confidence for this time last year.

remarkably different. you're seeing that in the visitor rates up 18% year on year last month, seeing that in retail sales, and they don't see a slowdown, all companies are giddy. you are seeing that in the property prices. you know, they are all-time highs, and we don't see that changing. so the other thing that was really remarkable was the chinese quiet confidence that china is too big to be bullied by trump, and, you know, ooem not saying that one has the upper hand over the other, but the reality is they are tied at the hip, opening one star bucks a day in china. >> right. >> majority -- most gm sales are from china. they have -- to your appointment, asia looks good, but that's the best news a lot of businesses could hear. >> i agree. >> very good. barbara ann, good to see you.

>> thank you very much. >> barbara bernard from wincrest capital. 15 minutes to go, a little less than that. the dow hanging on to a gain, the s&p by the flat line, up less than a point now. the vix lower again, and the russell and nasdaq too. >> talk snap, twitter, facebook, they are looking alike, right? from a chronic perspective. looking at whether one is a better investment than the other. is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential.

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art walked by saying the market closed showing an imbalance of $400 million to the buy side. up 37 points. we'll see if that carries the day or whether somebody steps into meet those orders hereme h. we'll see. news feed, live broadcasting, private messaging, stories, all features added to the top of social company's must-have lists, and that includes facebook, instagram, twitter,

and snapchat. >> in a world where they look similar, what stands out to investors? welcome to you both. who do you think are the better plays in the social media space? >> well, there's no question it's the facebook, instagram juggernauts that are the only real play in social media in my mind, not just profitable, but monetizing beautifully, and pretty much everyone in the world is using it, so facebook's in a great position overall, and that's what the position we have as a firm. >> yeah. you are our bull. you only like them, not anybody else. david -- >> well, let -- >> let me get david's thoughts. dave, you don't like anyone because of valuations? >> i like what he said. facebook's the only one we'd consider, and we won't consider it, and essentially it's a valuation story. i have to pay 25 times

facebook's cash flow to buy it. i certainly agree with him. facebook's in a different world than snap and twitter. we don't consider snap or twitter remotely investble, but to the extent that facebook falls out of rational valuation schemes, although they are incredible operators, it's uninvestble to us. >> do you think it's uninvestble? >> yes and no. the issue with twitter and snap is management, not the product. both products are great products, and they have a great place in social media, a ton of activity in both platforms, but both management have no idea how to make money, no path to profit the, and they would be better served as part of a bigger social media empire with google or some other player, so i love the platform, but i don't love the direction, i guess. >> well, i note that you said snap is a fun toy, but not a

business. >> right. >> sort of contradicts what you said there. >> no, no, kids love using it, but it's not a business. >> right. >> they could if they sold to another company that could leverage the user base, but as a stand alone business, it's hard i think. >> and is there anybody you would consider from a business stand point, you know, valuations aside, anybody you like in this space? you said you like facebook, but what about the others here like ross said twitter is the best social media platform with the worst management now. >> it is, but even with better management, it doesn't make it monetizeable. the comment about snap is more of a toy than a business, i totally agree with other than i have three young kids. the toys i buy them don't cost $27 billion. i not only wouldn't buy snap, but any company that pays $27 billion for that.

>> what's the valuation of a toys "r" us or something like that? selling toys can be period of timele. >> absolutely. i agree it's a fun past form and we're approaching from an invester standpoint, and i think that the discounting of cash flows says that this price point is not attractive. if twitter were cheap enough, say you want to buy it, but i agree with ross that the management is disfunctional. facebook has real cash flows. the most likely company to actually be the google of this era. >> it is. >> with valuation and grows into it. the problem? it's already grown into it. it's sitting 140 bucks at four times earns. i look forward and just say it's perfection. >> a bigger question, actually, which is, what -- has to be just one social media, that's it, end of the ten year expeemplt in the face of time, and now snapchat was the last one?

have we got to that point now in the industry? >> yes. i think we have. i think facebook is google, and i think this is what david is wrong, over ten years, look at how much money facebook, ips instagram makes, it's unquant y unquantifiab unquantifiable. to miss this opportunity is the greatest mistake an investor could make, and, david, think twice about this decision. >> you through oculus in there. >> vr will be an amazing platform. just takes time. >> if one is going to be google and facebook executes that way in ten years there's a story that makes return to investors. we can want do that divorced from risk-reward calculation. i have a chart i look at at cisco's price, the year 2000, and took 17 years for one of the best companies in the world to

get back to 50% of its value than it was back then. >> now to 2000, so, you know, your choosing a time period that works for you. you are missing the point here -- >> no, what about video? >> what about the video? >> 27 year timeline. >> listen -- >> there's no question ever young person in the world and even middle-aged people is on facebook and instagram, humanly monetizeble, and not seeing this move to video and what facebook's going to become in video, and all the problems with youtube and ad dollars shifting from google to facebook i think is now -- looking at this a lot deeper. and we didn't mention china, an incredible company, and one must take a very good look at this company. we have. looking closely at this. >> lotly agree. every day over facebook, and

they come in and dominate google ad revenue, you have to agree that's the play. >> not at all. >> you have to talk to more kids. >> finally rs you disagreed. took this long. >> there you go. thank you, rose, david, good to see you both. >> heading to the close, the dow up 40 points, closing countdown in a moment. >> after the bell, a word this afternoon that the white house is looking at a value added tax, and a carbon tax as the tax reform plan. reaction from the tax man in the house, the ways and means chair, kevin brady joining us coming up. you're watching cnbc first in business worldwide.

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it's your trade. ♪ ♪ e*trade. ♪ ♪ start trading today at etrade.com one minute left in the trading session here with the dow up 35.s. showing a start from today, bob, we're back into a coma here. maybe until friday. i'm thinking when the jobs number comes out. what do you think? >> that could be. dealing with low volatility for a month now, several years now, but particularly for a month. >> delta below expectations. look at that. and emphasize the retailers, comments about kate spade, maybe

less than people thought. of course, payless filed for bankruptcy. ralph lauren we hear. 4% down in the retail group. >> 40 point gain to close the day. ringing the closing bell. stay tuned for the second hour of "closing bell" with kelly evans and company. see you tomorrow, kelly. >> thank you, bill. welcome to the closing bell, everybody. i'm kelly evans. we got positive errors to the broad market here, s&p up one point to 2360, and we'll see if that shakes out positive. the nasdaq, by the way, turning green on the bell. 5898 at the closing level there. the dow was leading certainly for the afternoon session, closing with a gain of 38 points, helped in large part by an upgrade from goldman and

caterpillar this morning. you imagine it looks weaker without that execution. cat up 2%. russell couldn't quite get there, closing lower at 1368. investors await tax reform, coming up, house ways and means committee share kevin brady joins us to discuss new reports just this afternoon about the white house working on its own plan and that that looks like. joining us now for the hour, cnbc market commentator, michael santoli, and michael from capital innovations. welcome, everybody. the market today, oil, crude oil above 51 bucks, that doesn't hurt. overall, what do you think of it? >> a stalemate today. again, down, open, and then clawed back a little bit of it. again, really, a flat line, 50/50 in terms of up and down volume today. retail on no news, but

downgrades continue to get blasted. something that caught my eye, semiconductors weak again, and it seems like there's a little consternation building up, we're stuck in this range. i will say i think a little bit too much is made of the treasury yield being compressed down, and now, obviously, if it goes lower, that's the concern. it goes back to the late february lows and ten-years at this level, 2360 at that time. it's not giving information about the next move from here. >> the huge run on the market, people points out, just 4% of the s&p 500 currently is overbought on the relative strength basis. you know, and yet we're coming where we were six weeks ago when the numbers were worse. >> absolutely. internal process where things came off the boil, and, in fact, look at the s&p 500 stocks that are above, 20 day high, that's an extremely low level too.

basically, inside the market, things cooled off a lot. >> one trading all-time highs today because it is a juggernaut is amazon. what do you do with that name, where we feel it's amazon and apple relentlessly powering the market? >> i'm sorry, i did not catch all that. >> what would you do with names with apple and amazon, so much in the first quarter, and comets to make new highs. what do you do with the market? >> well, we think that it's actually a pit stop in this trump rally, and it certainly has been in the tech sector been very, very helpful. seen great returns there. we think it fell on shaky foundation, if you will. there's a lot of margin, people buying passive, and we see the market is turned upsidedown where the cheap stocks are not doing as well as the expensive ones, and the full earnings stocks do as good as the other stocks. there's a few foundations kicked out, if you will, with the fed raising rates, and we had the

three steps and a stumble, which we've seen the market down a little since the fed raised rates. we're in the pit stop for a while, and it depends whether it's a massive overhaul of the engine or just a quick refuel and go again. >> now because let's call them value names have not done as well, maybe that gives you more entry points. you like western digital, unite renta rentals, and trinity. those are attractive? >> what we like in this current market is things that are going to benefit from a good strong economy such as united rental, which the president talked about there. and we also like trinity, and we like western digital on the tech side. all cheap, good earnings, good relative strength, and we think they'll do well. >> all right, michael, coming back to you in a moment. we have breaking news from the fed on former fed president, jeffrey lacker. steve, what's happening?

>> reminding folks about the case, jeff lacker abruptly resigned today saying he was involved in a 2012 leak of confidential information to a news letter writer. now the federal reserve board of governors has a statement as well as the inspector general. the federal reserve saying it is, quote, committed to maintaining the security of confidential steps fomc information, cooperating fully with the independent law enforcement investigation into unauthorized disclosure 2012. we appreciate the diligent efforts made to bring this matter to a conclusion. r regarding that, the inspector general out with a statement saying it would be resolved soon, not saying exactly when, but saying that we are currently concluding the investigation into this matter, and not putting any timeline on it that i can see, but it's just being concluded right now. so hopefully in the next who knows how long here, but a short period of time we'll get some conclusion of this from the inspector general, and just to

tag on this note as reported, and now they are out with an official statement, jeff lackering r's attorney telling cnbc earlier today that he has been informed by the u.s. attorney's office for the southern district. that there will be no charges brought against jeff lacker for involvement in the case, kelly. >> steve, the guest last hour suggested the fed would be dovish with leaving -- would you -- the story -- what would you read into this? >> you know, here's the thing. jeff was a noted hawk. it didn't mean he opposed every easing by the federal reserve, but usually more often than not he was considered to be a very smart economist. he was a research director. so nobody takes anything away from his career at the richmond fed which he spent quite a long time. the question that remains to be seen is first of all, up to the

board of directors to replace him. do they want to go with a more hawkish perp, but the interesting question you know everybody's talking about is what does donald trump want? he has the ability to replace as many four or five members of the board of governors with a permanent vote, so some have said in the past, the president in the past has said that he's criticized political in not raising rates issue and now the president's thinking he's like every other president that wants to keep rates as low as possible. >> right. okay. if he's going to put that on the board, we want to stick with it. >> that could be or could be that the board of directors is hawkish and that's who they want in office there. that's why we have this decentralized system to they come to that cop collusion and you get sort of a difference of opinion on the board. >> steve, thank you. steve leisman with the statement out of the fed. mike, anything to add? >> i wouldn't say in terms of market impact.

obviously, it's a very, very marginal round. it changes in the potential of the overall voting committee. i would not say so, but underscores the odd decentralized and hybrid system with the regional president just, you know, beholding to a local board of governors. >> for sure. covering a big area of the mid atlantic. meanwhile, i wanted to bring you in, figuring out the state of the economy this morning. we have trade deficit numbers, durable goods and so forth. you're saying there's other good investments here, right? >> absolutely. look at global pmi, the trade, a little bit of consolidation, a little bit retrenchment mark back into march, now seeing replumbing, reinflation going back up, timber and product names like wire house or catch mark, rayonier, they are named that owned, and the new home, existing home remodelling cycle

continues to grind higher. these are 40% of new home construction, involve some kind of lumber or journaled wood product. these games continue to grind higher throughout 2017. >> that's what i was going to ask you quickly. the new homes made of lumber the traditional way? >> absolutely. look at wood products, engineered wood products, plywood, 40% of all homes, base material are lumber wood products. look at future shifts, they cycled 30% higher, and there's another upshift between now and february of 2018. >> the journal talked about how it would be a huge season for housing. good stuff. turning to the president with the town hall meeting, and we have the highlights now. eamon. >> reporter: a wide ranging session. a bunch of ceos about a couple dozen ceos here at the white house auditorium on the white

house complex sitting through a number of panel discussions on a wide range of topics incoming everything from the hyperloop and musk's plan to tunnel high speed rail and work force issues, and how to build apprenticeship into vocational training. a lot on the table here today. what stood out to me, though, the president talking about who he's talking to, who the kitchen cabinet is in terms of infrastructure plan, which could be a trillion dollars or more. expected to roll out later this year. a couple familiar names here from the real estate team. take a listen. >> i'm working with steve and richard lefrak, two good builders, great builders, and they know how to get things done. we'll set up a committee headed by steve and richard, and we're going to cut a lot of red tape. >> reporter: close-knit comment as you know up there. they have been involved with jared, the president's

son-in-law, one of the topmost influ end issue advisers here at the white house and real estate deals in the past. everyone in the world knows everybody, and we had tom, not up with you, but down here at the white house offering his reactions to the meetings as well. here's what he said. >> reflects the government that's responsive to business. you really got the sense this morning that, you know, this government does not view business as a problem or the problem, but on the contrary, using it as quite possibly the solution to many problems. >> reporter: a lot of the att attendees thought it was a refreshing tone in the meeting today, a pro-business attitude is one of the white house wants to project, and the president is meeting with the treasury secretary this afternoon. they are talking about the tax bill. we were told they are talking about infrastructure here at the white house in terms of where we go from here. one of the things that is on the table, kelly, we learned in the past several hours, is the idea they are talking about a vat tax, value added tax, or car bop

e possessions tax as possible parts of the tax proposal. all that in the mix at the white house this afternoon. kelly? >> we'll ask much more about that and the markets turning positive in the meeting this morning. eamon, thank you for the latest from the white house. thank you guys for joining us this afternoon as well. nursing ideas how to play the market. appreciate it. see you soon. >> have a good day. >> thank you. president trump pushing tax reform to the top of the ajep da after the failed health care bill. will the controversial border adjustment tax be a part of the push? congressman brady head of the ways and means committee will join us next. jp morgan's ceo weighs in on what's holding back the u.s. economy right now. talking about that and whether he's right coming up on "closing bell." alright, and before that? you mean after that? no, i'm talking before that. do you have things you want to do before you retire? oh yeah sure... ok, like what? but i thought we were supposed to be talking about investing for retirement?

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welcome back. the white house reportedly exploring new tax proposals including a carbon tax and value added tax, and as president trump is meeting with treasury secretary this hour, house ways and means committee chair kevin brady is expected to meet with democrats tomorrow to talk about ways to simplify the u.s. tax code.

he joins us now on a first on cnbc interview. welcome to you. >> thanks, kelly, thank you for having me. >> so much to doiscuss, and i don't know you wanted it to be that way, but reports that taxes are on the table. do you support the two taxes potentially? >> well, look, both the house and senate in recent years have weighed in heavily with resistance against those ideas. here's the important thing, a white house is engaged in really looking at a broad range option. i think that is encouraging and helpful. i think all the ideas, you know, are focused on some key questions. will this nearly double the growth rate of our economy? will it involve america in the top three places on the planet for that new job or that new investment? does that make sure our tax code doesn't encourage companies to move overseas, so as we look at these ideas, as you look to get this done in the white house and economic team, they are focusing

on the key questions. >> oh, sure, and i understand that, you know, got to come up with the ways to fund all this you want to see happen, but still i'm surprised people would give you, you know, take the idea of a carbon tax as something valid. sounds like it's against the idea of trump's war on coal is over, we want drilling and more oil production in this country. >> well, i'll leave those discussions to the white house if they consider this at this point, but i'll tell you my conversations with the trump economic's team, secretary of the treasury, and then the directors, saying, look, they are trying to fine the right pro-growth tax code. they are looking at a number of options and community kated that to us. at the enof the day, no one can defend the current tax code, especially in the way it incentivizes companies to move overseas. each of the almoselements focus that target. >> we talked about the

ryan-brady plan, and now we are talking about all the different plans, you know, so you guys have something that looks different from what former congressman put forward, and what looks different from what the white house's plan is. does that mean the border adjustment tax is left behind? >> so i don't think it does. at the end of the day, and i want to not speak for the president, but he said he wants to equalize taxes between made in america products and foreign products coming in. we think the border adjustable tax with modifications can achieve that, not only that, but under the blueprint, we have better than regular reforms to grow the economy. americans are the top three places on the planet for that next new job in a great budget, all which we think are important to conservatives and some democrats as well. >> certainly atrative to bringing everybody together. although, it was interesting you said with modifications. what would the modifications be?

>> yeah. the more we look into the import industry, whether it's the raw commodities, finished products, component parts that go into automobiles or cell phone, for example, clearly, we need a very smooth deliberate transition that recognizes valid concern about border adjustability in a way that creates certainty and growth both in the import and export industry as well. the more we engage with leaders and ceos, take hold of the industries, the more convinced we can bring the president into the house, the most pro-growth border equalization tax that's possible. >> that's the bet, not the bat. >> yes, ma'am. >> all right. >> that's what it does, just equalizes tax treatment for made in america products around the world as well. >> understood. the industries you mentioned retail components for technologies, components for

autos, if they are exempted, though, there's less revenue, right? >> we're not looking to excepts to carve out, but specific designs in fluid transitions that addresses concerns. >> okay. so this all leads us to, i'm sure people are like, please, stop with the tax policy talk, but if a value added tax, which is a more traditional european style, you know, sales tax, you don't see it, embedded along the chain, if that's now on the table, you know, what would your proposal, you know, call it the b.e.t., offer, superior to that concept. >> here's the strength in equalizing tax at the border. one for the first time ever, foreign products and made in america products taxed equally in the united states. secondly, you have much lower tax rates because you really tax foreign capital and foreign labor, not american capital or american laborment that's important. you have a simplified tax code so the companies that cannot game the system by moving the

profits overseas, their manufacturing, or the patents overseas, and the most important is that, we eliminate any tax incementives to move jobs or manufacturing overseas. in fact, just the opposite. you create a giant suction sound towards america on jobs, in plants, we think, frankly, that's the tax code america needs for the 21st century. >> before we leave this issue, what do you think the timing is now? there are plans on the table, new things proposed here, so what are we looking at? >> yeah. great question. i really think this is part of a healthy process. i think one of the lessons from health care is that to to the rush, to be dlieliberate. i think they need to be on the same plan the better it is. look, we're looking very much to reform in 2017, we're going to keep that process going forward. >> but maybe not by august. >> yeah, so from the house ways

and means perspective, we're moving towards it, bringing action in our committee, but we're also going to make sure we really draw members in, make sure we're trading the best product possible. >> so you mentioned health care, and sounds like that issue's not put to bed yet. there's talk of salvaging the plan, making tweaks, more flexibility, is that something that you could support that you think republicans could support? something to talk about now because there's no much a plan to brap our heads around, but sounds like it's alive and fieging. >> there is. i think this is what's happening, so when details are not known, but there are discussions occurring among members of conversation, organic in the sense they look at this idea or that. i think discussions are critical. there's no timetable moving forward. in fact, i think everyone made

clear let's take the time, do this right. i think having the white house engaged in this, you know, as a facilitat facilitator, listener, those who hope to bring ideas forward certainly from the ways and means committee stand point, you know, we are helpful in the discussions. you know, let's see if this can't deliver the commonground we're looking for. >> stay there for a moment. there's a state from the white house on the value added tax. we'd like to have eamon bring that to us and get your and reaction. >> reporter: something changed in the white house in the past few minutes. earlier today, i asked the white house about this report they are considering a vat tax and carbon tax. the white house earlier was not knocking down that report, in fact, saying that simply everything is under consideration here at the white house although it's early in the process. now, though, they have issued a new statement knocking down some of that reporting. here's what nay say at the white house. they say as we have said many

times, the president's team hears input from experts on all sides of the debate as we formulate what's ultimately the president's plan to have dax reform since 1986. they say as of now neither a carbon tax nor a vat are under consideration. that's the statement from the deputy press secretary here that as of now might be a key phrase there, buying them political wiggle room, but, clearly, the white house decided to tamp down speculation they are interested in a carbon or vat tax as well, kl kelly. >> appreciate that. eamon at the white house. congressman brady with us, maybe they heard you, congressman. >> well, i don't know that that's the case, but, look, they are thinking outside the box, you know, engaged, and i know your viewers, certainly my constituents back home are anxious for us to come forward.

i think together the white house and congress will begin the work to move this forward this year, so, look, let's do that. let's deliver tax care, tax reform in 2017. >> all right. we'll leave it on that hopeful note, thank you again for the time and for joining us this afternoon. >> you bet. >> appreciate it. now ralph lauren is the latest retailer in trouble. why is amazon's ceo opening up a brick and mortar store? a look at the first amazon bookstores in order to see the vision for retail. procter & gamble's division bleeds sales in the razor business because of dollar shave club and others. how they are trying to stage a comeback when we come back. kwlp and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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welcome back. here are some other stories we're watching today. boeing signing a $3 billion deal with an iranian airline for 30 of its 737 mass jets with an option to purchase an additional 30 aircraft. it's boeing's first deal with iran since president trump took office. trump vowed to be tough on iran but yet to state views on aircraft deals. aig getting into the cyber security insurance business. the company offered consumers a new option that covers, get this, online bullying, extortion, data restoration, and other cyber expenses. the product costs 15% of the

homeowner's premium. procter & gamble gets nicked in the razor business. gillette slashes prices by as much as 20% for losing share for six straight years. they have been giving up to dollar shave club and harry's, seeing a combined market shear of 12% from 7% two years ago according to euromonitor. mike, what do you use? >> gillette, probably three generations old. i do not keep up. i think they have three blades, perhaps, but what's interesting to me here, this is just a cop session to the market, old-timers like me remember marlboro friday, cutting the price in 1983 because of generic competition, and it was really exceptive branded products out there, and i think razors fall in that category as well. >> classic behind the drugstore shelf, hard to get to, by the way, procter & gamble, just watch it, a business for them,

this situation is like the opec thing, keeps market share, but what's happening? >> this brand of product was at a big premium and said it's because, well, maybe people think it's not performance, but also enough men don't feel like they have to shave every day. >> really? >> for their wives, other than us who are unfortunate like this. >> unfortunately fortunate to be employed. governor dan -- sue has the story. sue? >> i do, kelly. here's what mr. tarullo is saying. the volcker rule is too complicated, the dodd-frank rules did not hurt the economy, and says reduction of capital at u.s. banks would be ill-advised and suggests higher capitals for u.s. banks, but he did repeat the call to exempt ball banks and community banks from the dodd-frank rule. back to you. >> sue, thank you very much.

you know, mike, obviously one of the most important regulatory figures that we have, but tomorrow's the last day, and we have an exit interview with him. >> true, but he gives voice to the theme out there about dodd-frank, one of the elements that is overbroad, so there might be -- >> means more trading in banks. >> you know, to some degree. i think a lot less kind of pain taking to categorize things as done as market making. i think it's more of a recordkeeping and one of these things that is a chilling effect. >> arguing for liquidity because inventory. >> i think they are flnot goingo tie on a will the of risk, but it's more about loosening up restrictions. >> we'll have more in the morning, of course, speaking with our steve leisman, exclusive interview live from washington at 8:15 a.m. eastern

time. all right. jpmorgan's ceo dimon says something is wrong with the u.s. economy and laying out the reasons why. debating the reasons next. the battle for ad dollars heats up as cable companies pitch the network as a safe harbor over digital ads, more on that still to come on the "closing bell." 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.

23630, the dow up -- 39 points on the session, but caterpillar outpaced other averages today, and positive on the close by three points, the russell down by a tenth percent today. jp morgan chase publishing the annual share hold every letter today emphasizing overall speaking highly of it, quote, something is wrong, and it's holding us back. pointed outside factors impacting america's growth and address the concerns this afternoon in a conversation with yahoo! finance. >> corporate taxes can add.2%, better immigration policies, better education. we just need to do it. i blame ourselves.

>> so that would add up to more than a percentage appointment on growth right there. let's get to more reactions, post nine from deutsche bank, and checking in for the economic cycle research institute, great to see both of you. >> thank you. >> so, joe, i mean, i think this is the frustration a lot of leaders have. they say, you know, you tack on a couple things, corporate taxes, immigration, education, and you really get to three or plus percent growth quickly. what's your advice about how this is doable arior how to get that level? >> points valid, productivity growth needs to be stronger. it's weak. the worst five year period since the early '80s. corporate tax reform, absolutely would be a factor. regulatory relief would be an issue, and, look, there's no question, the economy can talk. larry summers famous with the secular stagnation thesis. we don't have to go that route, but felt that way.

>> can it with the election? >> it can. the annual growth rate in the business cycle it 2.1%, per capita, it's weaker, the poorest performance. >> you're positive on the economy. what do you see happening here? >> well, you know, first on mr. dimon's points, those are old news, and at this point, they are practically ancient news. the most important issue is it's conflating structural problems with what's going on sicklically, and cyclely, things have not been this good in many years. we started a new growth rate cycle upturn forward overall economy starting before the election in the middle of 2016. before that we begin an inflation sierkle upturn that we needed. moreover, the global economy is now a tail wind on the u.s. economy helping us further, and all of this is adding up to

essentially the best as i said, the best cyclical outlook we had in many, many years, which is why the fed is finally able to start a full fledged rate hike cycle. >> okay. >> which, in fact, should be making banks like jpmorgan happier. >> absolutely, but, mike, all that being said, we are not seeing the gdp numbers yet, where the ten-year trade is yielding. >> we're not seeing that. i think the struggle -- i don't know that you have to buy into secular stagnation to feel the potential growth rate is not what it used to be. you can argue what the potential growth rate is, the federal reserve, i guess last year, recently down scaled what they think the potential growth rate is, and so i think that kind of effect, how you score how we're doing and how much more we can get with policy changes. >> do you think the potential is labor force and productivity growth? has that come down for good? >> on a structural basis. nothing's for good, but

certainly for the foreseeable future for many years. productivity growth and demographic trends are keeping us and other major market economies, major developing economies at lower growth rates, so if you're going to talk about policies, and we mentioned some earlier on deregulation, tax reform, infrastructure, government investment and infrastructure, those kinds of things if they move the productivity growth longer term, then you talk about potential labor force, potential growth getting higher, but the key thing here is all the time people are complaining cyclical and structural. >> okay. >> sicklically, not this good for many years. there's two key cycles, inflation cycles going up. >> and the global one. >> and global. >> so education's a good example as one of the things jamie said. you get the long term, structural benefit from it, right? >> that's rights. and the immigration policy, obviously, very important.

the economy there's pockets that is okay. look, donald trump did well in states nobody thought he could do because, clearly, there's large parts of the economy, the country that did not do well, and when you have a rising tide, it does lift all boats, or some boats. the yachts and dingies as one said, to me, we can do better than the growth we had. no question. pane, you know, what happens is the problem with saying you're conflating structural is cyclical, after awhile the long run is the theory of the short run, so if you have a weak dynamic because with bad policy, i argue is part of the story, then it stretches out so then it becomes structural. it becomes lasting. >> and we got to go, but we started talking about how another move from the federal reserve tightens. >> twice? >> yeah. >> in ten years, not normal. >> yeah. they messed up in 2014.

they should have gone. didn't go. now they are going. >> might have got that recession call you had. >> now they are going. >> opening up a lot more cans of worms. we'll separate you two. >> well, the fact is, cycles are better. >> what data suggests things are turning? i think it will turn, but this has been crappy to this point. >> oh, yeah, year over year gdps, a one-year high, ip growth, industrial production growth is at one and a half year high, job growth solid. people are confused because the inflation cycle upturn began before the growth rate cycle upturn so it's undercutting real gdp. >> it's a story, though. that's -- the reason -- we have -- >> i'm not talking about oil. >> it's been 2% -- five months

in the business cycle where it's been there, late 2010, early 2011. >> well if we go back, the same reason we did not do a rate hike in 2014, zero or flat real income growth is present today, but we're doing a cycle. figure that out. >> very slow cycle. two hikes in ten years. >> structurally we're on the same page. things are better than people understand. >> gets better, i agree. >> gentleman, thank you. separating you, but you you're coming to the. >> we came together. >> solving problems. talking growth. amazon started selling books online, but with amazon books it moves offline into physical retail stores. the retail giant making the push as traditional retailers struggle. look at why it -- look at why in a rare inside look at the company's vision for the future coming up.

the majority of the ad revenue has begun. strategies networks use to beat out for ad dollars next. you're watching cnbc. ♪ energy is amazing. how we use it is only limited by our imagination. and at southern company we're building the future of energy, for you.

welcome back. the ad sales period is when tv networks pick shows and draw commitments for three quarters of the annual ad dollars. this year's cable network presentations are beginning as brands take a hard look at the safety of digital and tv content

with their advertising. julia has more. julia? >> hey, kelly. well, new high-tech ad targeting in the television will be front and center in this year's up front ad sales. including scripts and discovery pitched their lines showcasing digital reach in measurement capability, and universal switching to total audience guarantees including broadcast and digital for the olympics while the total content rating includes video on demand viewing. in the wake of boycotting google, and youtube, the safety of premium video content is expected to have its appeal. >> i do think there's some because i think, you know, a lot of the advertisers move dollars into digital, and now they are recognizing that they need to go back to where they can actually control where their message is played. even television is not

considered a number of companies are boycotting fox news, including bmw, all state, and others. with advertiser boycotts at fox news and youtube, the number of new streaming video bundles hitting the market sees how advertisers decide how to shift spending for the coming year. kelly? >> yeah, they do. mike, it says it all, i'll get it slightly wrong, but you want digital, 83 billion, you know, i think the 70 range we're talking about in terms of the ad spend on tv. the shift has been made. it's not to say it's not lucrative for tv that there's not still app appetite there, but do you expect bigger ships this year? >> i don't know about bigger shifts, but tv is continuing to punch above its weight in terms of size of audience, sort of that dollar per eyeball still is routine, most of the value, but because of, i think, a couple

things. as yule ya mentioned, control over what ads appear next to, but that so-called mass premium where vastly more people to access online at any given time and place and station you can find more of them on tv, so i think it's going to be grudging, talking about it as a big shift. will be one big blob. especially now with tv networks talking about different measurements and metrics with dvr and digital. things like that. >> sounds like settlement time for trading day. >> going the other direction. keeps getting shorter. >> all right. may seem counter intutive to open a brick and mortar book shop as more shop online, but amazon is doing that. a behind the scenes look, and retail getting crushed, and the one top technician has three names you can still buy. revealing them at the top of the hour.

welcome back. first amazon changed the way people bought books driving from physical stores to its website. now it is moving to brick and mortar despite borders going out of business and barnes and no e nobles struggles. the details behind this shift. >> it has been a quiet but fairly quick ramp up in physical book stores for amazon. this one is the first one that opened in 2015. two years later, there are five opened from san diego to portland and chicago. most recently, by the end of this year, there will be 11 across the country. amazon metric, kindlet and echo devices are showcased. amazon's private labels are sold. nearly everywhere you turn into stores, there are posters and

signs touting the benefit of prime membership, a business that morgan stanley estimates brought in nearly 5.8 billion in subscription revenue last year t. company's foray into brick and mortar groceries hasn't been or may not be as smooth, unable to crack the online grocery market. am zoen is experimenting with an automated physical grocery store to get rid of amazon go, it was supposed to open to the public in 2017. there is still no sign of that launch, repeat reports in the "wall street journal" says it may be held up by technical complications. for now brick and mortar is a tiny part of amazon's overall business. as you mentioned at the top, it was once a small ebooks business, competitors are eager to see if it can revolutionize the retail experience once again, over to you. >> to your question. i saw this was maybe an effort to push more people into signing

up for amazon prime, how will the book locations achieve that? >> reporter: well, let me tell you, when you walk in, you should shop in this book store, they encourage you to actually take out your phone, go into your amazon app, if you do, you get a lower price on nearly everything in the store from gadgets to book, not the echo device, but almost everything else. so when you visit them, you realize what a great deal you are getting, but, of course, you do have to spend the $99 a year for that prime membership, but you can see how much cheaper you can buy these things for on amazon.com, it directs you back to the website, you get all those deals if you are a prime member. so it does appeal to you once you get into store. >> i don't know about you, i would appreciate having a book store, the one supposed to open in the time warner center, the borders is gone, there are one of two book shops left in that neighborhood. >> luckily, we are a couple blocks of one. it's the scarcity effect. every retailer is looking for a

way to be agnostic as to how you shop. amazon is coming at this hybrid modem. many people made the analogy to sears, right, that was catalogue retailer and it became a physical presence. amazon is so physical lila bore and space intensive already with its warehouses and logistics, that this is not that big a shift. >> i thought it was amazing, amazon took over 70% of all new downtown seattle office space last year. holly mole, they should just remain the whole city. thank you both in that city of amazon.com. the new york yankees no longer have major league's most expensive on day roster who dethroned the bonks bomber next? and a team of experienced traders ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade ♪ predictable. the comfort in knowing where things are headed.

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welcome back. it's sort of a bronze bombshell the new york yankees no longer hold the largest payroll the los angeles dodgers claimed the top spot $225 million. this i found interesting, the detroit tielgers came in second, that means the yanks are in third place for a total of $595 million. it's the first time they haven't

placed in the top two spots, mike. >> it is a huge shift, basically from the '70 they have been the freest spending team give or take. i do think you need an asterisk on this a little bit. i look at how they calculate this roster, they play rodriguez -- >> this doesn't include a. rod? >> they took it opening day, so, obviously the more cash that's going out the door, they would be in second place if he was actually on the roster. >> what about the tigers? >> it's an older team. they have a rich owner, older meaning they have a bunch of guys in their 30s, paid for their performance, justin verlander, all these guys, i don't think they've done anything us a tashs. they have a higher payroll. also, though the economics of baseball is improved as revenue sharing now, the top payroll teams pay out and digital deals have been very good for

financing. >> does that mean this thing with the yankee, that's a big asterisk. i have to take that into consideration. you wonder, back when they were winning so much, it's paper performance. now it doesn't feel so much like that. >> that's exactly true. you had a bunch of teams, low payroll. they did well, a lot is the new metrics the teams are using the stats and these younger players to fill these specific roles. so i do think there is downward pressure on what they will earn. a lot of these huge contracts have not gone well for the teams when you give somebody a ten-year deal. >> speaking of huge contract, we thought we'd overlay this with the top ceos, does the price tag determine or reflect performance? and by the way, here they are. a closer shot, expedia number one. mark hurd at oracle all making over 50 million. >> i think there is an industry effect there. media ceos get paid a fortune.

so, no, i don't think there is a direct link on the one-to-one basis on how these guys get paid. >> the mets, they took a poll. there is a new favorite team in new york city, so times have changed. they've changed. >> i was there through the '80s. it always swings back. >> "fast money" begins right now. >> "fast money" starts right now! live on the nasdaq markets overlooking new york city's time's square, i'm melissa lee, your players over there tonight on "fast" j.p. morgan jamie diamond speaking out moments ago after releasing a shareholder letter, is that a good thing for the bay? we'll bring you a surprising comment. plus where is airline nirvana? the economy is improving. deem costs are low, more people are traveling than ever before. you wouldn't know it by looking at the stocks this year, so what is wrong with this picture? later when it