move away from north america. i want to be everywhere else but north america now. >> all right. we have some great final trades there, guys. the dow up 112 points. kevin o'leary, mr. wonderful, thank you. >> "power lunch" is on right now. >> say it all together. and we are ready, guys. i'm melissa lee. here is what's on the menu. a big win for activists. arconic. first the video of a man being dragged off a plane, now another pr mess for united and it comes just as the airline gears up for earnings in just a few hours' time. what investors need to know. and facebook facing heat after a man posts a gruesome video, him committing murder. this isn't the first time violence has been broadcast in the social media platform. just how bad will this be for facebook? "power lunch" starts right now. and welcome to "power lunch." i'm michelle caruso-cabrera. as you can see investors are shrugging off geopolitical

fears. the three major averages all having their best gains of april. the dow high er by triple digit, 113 points. nasdaq and s&p, all three of them higher by more than half a percent. amd, nydia, netflix higher by more than 3%. boeing is the biggest winner of the dow higher than 1%. the company is planning more job cuts affecting hundreds of engineers. let's get you to the trading action. bob pisani joins us with more. bob? >> reporter: hello, michelle. happy monday. we're rallying today. look at the s&p 500. the big question he is why exactly are we rallying? the short answer is we have been oversold for a while now. the s&p closed on thursday at its lowest level since the middle of february. the drift slow and downward. overall i think that's the clearest answer. let's look at the sectors today.

more back. we started poor on the reflation trade. banks, techs, industrials, there's your reflation rate. we've had very modest volume today again but we've seen some high volume etfs, the reflation stocks, copper miners have been better, that core s&p 500 is the growth sector of the s&p 500. and yet if you look elsewhere, the dollar is not moving much. the ten-year note is not moving much, the yield is not that amazing. it's just in stocks. they've been puzzled by this rally because the reflation trade hasn't done much. retail sales fell the second straight month. consume earp prices, the end of last week down for the first time in seven months. this is not good. this is not the reflation trade we're expecting. so everyone is scratching their heads and trying to figure out where to go from here.

prices on the weaker side. the advance decline line is not falling apart but there's not a lot of buying interest. nobody is out trying to buy stocks in big quantities and yet at the same time nobody is trying to sell. that should be low there, selling pressure should be low not high. nobody is out trying to sell the market tremendously. we're all trying to figure it out. i'm sticking with the idea this is an oversold bounce for today. guys, back to you. >> all right. thank you very much, bob pisani. the gains being made today are happening despite the rising tensions around the globe. eamon javers at the white house. >> reporter: it's a bit of a festive mood given it's the day of the annual easter egg roll here. we have the easter bunny here, a bunch of other characters here at the white house, a lot of children. it's like take your child to work day today here at the white house. the president was asked briefly at the easter egg roll about north korea.

he said simply north korea has got to behave given the tense standoff between the united states and north korea that's going on right now. interestly yesterday the president tied labeling china currency manipulator to this debate tweeting the following. he said, why would you call china currency manipulator when they are working with us on the north korean problem? we will see what happens. yesterday we saw the vice president, mike pence, at the demilitarized zone in north korea, with a stern message for the north korean leadership. here is what he said. >> over the past 18 months north korea has conducted two unlawful nuclear tests in an unprecedented number of ballistic missile tests. even conducting a failed missile launch as i traveled here for this visit. the era of strategic patience is over. >> reporter: not explicitly clear what the vice president means when he says the era of strategic patience is over. i talked to a white house official who said to say they

are concerned here at the white house is maybe a bit of an overstatement, but he said that north korea definitely has this administration's attention today. back over to you. >> i'll bet. thanks, eamon. so what is the biggest risk to the markets right now? geo politics, earnings, something else? let's bring in the global market strategist with jpmorgan asset management and adam shore, director of janus capital. an intelligence official tells nbc news that a preemtive strike against north korea is possible if they're worried about a nuclear strike. the french election coming up. and we're up 100 points on the dow. does that make sense to you? >> it does. if you zoom out broadly geopolitical risks have always been bubbling under the surface. we can say maybe there's more now than before but this is something the market brushes off, and it all comes back to the reflation trade, back to global growth and earnings and inflation. if that's picking up a lot can cause volatility in the short term. >> and is it picking up? the reflation trade.

is that going to drive markets further or are you bullish, in other words? >> yes. it's interesting. day-to-day, week to week we talk about whether the market is on the reflation trade or not. i think it comes back to global growth. as traders we look at that but for the long run investors that are our clients we're looking longer term. we would have to wait until the fall to see if global growth picks up. >> adam, any worries about the situation with north korea or the french election coming up this weekend, the first round of it? >> i think the north korea situation is not a big worry for us from an investment perspective. the french election, the first round is probably more clear. the second round will raise some issues but even there we don't expect a horrible outcome and we don't think longer term it affects -- >> define horrible. is that marie la pen wins?

>> she needs to get a coalition. we have elections in september. we think there might be market reaction as we've seen with other elections last summer with prbrexit but what's at the compy level. really derailing. >> your call fascinates me. you say the share prices are indicating there's a further fall but what are you looking at? the shares aren't warranted. >> you can plateau at these levels. if you look in terms of auto sales, you've seen that in the past. you don't have to go straight up or down. >> you're not worried about falling used vehicle prices?

that's going to impact the prices new cars can be sold and the prices of which they can be financed to a company like a ford with a big credit arm could be exposed the most in terms of falling vehicle prices and the ability to carry those loans. >> yeah, but you have enough new buyers coming in, enough demographic issues. and when you look at the suppliers they have increasing levels of content as these cars become more advanced and offer more safety issues and safety services and so on that we think at these valuations people are pricing in a lot -- a great negleative outcome we just don' think is there. it's not a go growth story for sure. we don't think it will fall off the cliff. >> you're telling investors you would be overweight international equities versus u.s. equities. why? >> they are more tethered to global growth. while the u.s. equity has more room to run, valuations are more

frothy so you have to be more selective. growth picking up will benefit international. we saw that at the end of the last cycle, and that's where we think we are now, closer to the end of the cycle. >> got it. good to see you. thanks, samantha and adam. >> thank you. >> shares of arconic surging off their high but up at 4% after klaus kleinfield stepped down. >> arkanic ceo klaus kleinfield is out and this is amade a contentious proxy battle with elliott management which has called for his ouster since january. it was not made in response to proxy fight or elliott management's criticism but rather because without consult ing the board kleinfield sent a letter to an he wielliott offic that showed poor judgment and before that the board had fanly backed him.

so what's next for arconic? board member david hess, a former pratt and whitney executive, becomes ceo and the search for a permanent replacement begins. the street is betting on larry lawson, the former spirit aero systems manager. that's who elliott wants to see. arconic may not be open to this. last week it did point out that putting lawson would violate his noncompete with spirit but more will be revealed may 16. that's the next date to watch. arconic's first share holding meeting since separating. five people have been nominated for board seats. shares are up nearly 4% off the highs of the day. but they are up about 20% since elliott first waged this proxy war. >> a fascinating story. morgan, thank you. so what is next for the company? deutsche bank's head of american metals who has a buy rating. jorge, great to have you with us.

>> thanks, melissa. >> does this mean elliott could have more success when it comes to the may 16 shareholder meeting in terms of getting its five directors to the board? >> well, i think it clears a major hurdle which was klaus is fighting this quite actively. the fact he's stepping down one full month ahead of schedule actually pretty much clears the way, i think, for the slate elliott is nominating. >> do you think that alcoa has done quite well versus arconic. how much of that was klaus kleinfield's problem, his rap was that he had a credibility problem on the street after every earnings report he came on tv, was extremely bullish. as the stock was falling in the after market session. >> i think elliott did a good job of the guidance misses that arconic and previously a will lcoa had under his tenure. i think credibility right there

is an easy win in terms of putting in a manager like larry lawson who comes are from a background of delivering results and i think that's largely related to the rally that arconic has had year to date has really been driven by the activism of elliott. >> can the activism drive more? is it all priced in or would you stick with the stock? >> we think there's more upside here. thus far the move has been an expectation that elliott could get their ceo in place and while it's not a done deal that lawson will take it, we think that the story of arconic's cost cutting upside remains. it is under earning and i think under someone like lawson it will accelerate the bringing forward of those cost savings and ultimately the growth which is what arconic has become very leveraged to aerospace and auto. >> below where the stock is trading now, do you have to move that up? >> no, sorry, our current target is $32. >> okay, that makes sense. >> we think there's a bit of

upside from here and it's really a valuation story from here so if the market were to price its equity similar to other aerospace peers, it has the sensitivity of about $4 per share based on each one turn of the multiple. >> jorge, thank you. wells fargo is on the move. let's get to dom chu. shares up more than about a percent and a half right now. they're on track to snap a five-day losing streak. this after ceo tim sloan and the chairman reported purchasing wells fargo common stock on the open market. they paid $51.65 a share. sanger and sloan report the purchases of 58,000 and 59,000 shares respectively. the financial select sector spyder. still insider buying, michelle, cause for bulls on wells fargo. the stock off about 15% since its record highs last month.

>> climbing a little bit today. thanks so much, dom. all right. we've shown you that video over and over again, a man being dragged off a united plane. now united airlines changing its booking policy ahead of its earnings after the bell today. plus, rival delta piling on united. we'll tell you about it. plus, why the death of the hedge fund may be greatly exaggerated. that's straight ahead on "power lunch." lunch." so how old do you want to be when you retire? lunch." uhh, i was thinking around 70. 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

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delta announcing a big

change in policy when it comes to bumping passengers from flights. customer service agents can offer up to $10,000 in compensation for passengers who voluntarily give up their seats although there are some rules before agents can go that high. >> that's really going to make it a lot easier, isn't it? >> it is. >> united making changes following this incident when a passenger was forcibly removed from a flight to make room for crew members. now traveling crew on united will have to check in to flights 60 minutes prior to departure and will no longer be allowed to bump passengers already seated on the plane. >> still more bad pr for united. a couple flying to costa rica for their wedding were removed from a flight in houston. the couple noticed a man sleeping across their row of seats. they did not want to wake him up so sat three rows up which united considers economy plus. a flight attendant approached and asked if they were in their assigned seats, they explained and asked if they could get an upgrade. after being denied they returned to their seats but soon after a marshal came on the plane and

asked them to leave the flight. they deplaned without incident but said they still don't understand why. united saying the couple repeatedly tried to sit in the upgraded seats and would not follow crew instructions. shares are higher ahead of earnings after the bell. susan lee is here with the numbers and a preview. >> so the market seems to be anticipating pretty good numbers later on today after the bell from united's first quarter which will not be impacted by the passenger incident last week. in fact, united has said bookings in march were running ahead of expectations and they had kept their passenger revenue guidance intact unlike their other competitors like delta who had been revising their forecast down wards and that is the most important metric when it comes to airlines. how much revenue are you getting per seat for every mile flown? in united's case the market is anticipating a positive read of 1% in the quarter. as for profits, higher costs

will take that down from last year but united is on a roll having beaten earnings the past five quarters. in fact, they've only missed twice, guys, in the past four years. so they seem to usually put in some pretty good figures at the end of it. >> one to watch. susan, thank you. susan li. is the worst over for united? what can we expect from the earnings today after the bell? had let's bring in managing partner of airline weekly, jim corridor, airline analyst. jim, i'll start with you. what's your most burning question for united on the conference call? >> first of all the question should be, how are they handling the situation? you look at delta where they came out with a statement that's going to empower their employees to make sure they never run into this situation. united is still reviewing its operations and will come back by april 30th. so they need to be quicker. they need to be more proactive in these situations and they need to make sure it's not going to it impact the bottom line. >> i would ask them what their traffic trends have been. what's your guess and do you

think what united has done in terms of 60 minutes crew 34e78s have to check in, they can't boot passengers after they've been seated. is that enough? >> look, the big question is going forward one-off events don't have a lasting impact but united had some reputational issues anyway. the 60-minute thing will be an operational complexity but they did this to themselves. they had to do something. what delta has done is both more impactful in terms of pr. up to $10,000, though they're rarely going to have to pay anything close to that, and it won't hamstring them operationally. the question here is can yunite continue doing the everyday things that it's been doing to improve its operations and then overcome the reputational issues that it rather fairly has after what happened last week. >> jim, we spent time debating whether or not we would see fewer people on united because of the incident. there were calls for boycotts

because people were disgusted. there are a lot of routes you don't have much choice as a result. when you say you want to know how they're handling the situation on the conference call, is that because you're worried that it could directly affect the bottom line when it comes to passengers buying seats? >> we're not expecting it to directly impact the bottom line because, like you said, you don't have many choices. also, the economy is doing better. people are feeling better about themselves. there is pent-up demand for air travel. the airlines have done some smart things on the capacity front that's leading to higher ticket prices and, like you said earlier in the piece, they will see higher revenues. these things are positives but they have huge reputational damage. i think most people who follow stocks knows united trades at a discount to its peers. they need to show they can do a better job when these reputational things come up, make sure they can close the gap to peers on that valuation measure. >> these airlines have done a spectacular job of creating these impenetrable regional monopolies. if you live in san fran or

houston or parts of chicago or newark, you're not going to have many choices. these are probably heavily protected. but do they have a labor issue, i wonder? are we going to see labor issues bubble up? it's a hard job. everywhere you go people are yelling at the gate agents, they're yelling back. flight attendants, a very difficult job. do you see labor trouble coming for any of these companies, maybe not just united? >> i bet united, the botched initial response was probably because oscar munoz was afraid. it's not their fault. i'm the ceo. i didn't give them the right tools to do the right thing. i bet that had a lot to do with how caution they were about acknowledging the obvious. >> walking on eggshells. when i read that i thought this guy is nervous about his employees. >> he doesn't want to be sued. >> he's going to get news. the good thing is insurance will pick up what this doctor gets, not united is my suspicion.

>> and that's exactly what i think was going on. in terms of choice, look, it's a less xcompetitive industry than it once was. in most big cities he depending on where you're going you still have choices. y united flights are not going to be empty. when you are an airline trying to be a prem numbium airline, y don't want to be the airline of last resort. if people are paying a few buck s less to fly united than delta, that's a problem for united. in little ways they've been working to improve that. this is not going to help. >> thanks. >> thank you. >> thank you. so late they are week france heads to the polts for the first round of the presidential election. polls are neck and neck. a four-way race. we'll talk through the possible outcomes and what they mean for your money straight ahead here on "power lunch." lunch."

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brian? straight ahead, get this, apple co-founder steve wozniak will join us. we'll ask him about the state of technology and how he has brought comic con to silicon valley. most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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hi, everybody. i'm sue herera. here is your cnbc news update this hour. former afghan president hamid karzai condemning the use of a massive bomb against isis calling it an atrocity against the afghan people. >> the bomb three days ago with all the history with all the events cannot be any other thing that afghanistan has used disrespectfully by the u.s. to test its weapons of mass destruction. >> the search it continues for 37-year-old steve stephens, the

man police say shot and killed an elderly man in cold blood on easter and then posted the murder on facebook. at a news conference today local and federal officials say they will continue to look for stephens in the cleveland area but at least five other states. the and the first lady welcoming thousands of children and families to the white house for the trump white house's debut of the easter egg roll. they were joined their son and the easter bunny. the president joined in on the festivities as well. you are up to date. melissa, back to you. all right, thank you very much, sue herera. a check on the u.s. markets here up about a half a percent across-the-board. the dow up triple digits up 136 points. the nasdaq is higher about 34 points, the s&p 500 up by about 14. we're seeing tech, financials lead in terms of sectors on the s&p. boeing and nike leading the dow, meantime, both up by about 1.5%. the first round of the

french elections this weekend. there were marked concerns about the election because one of the leading candidates is marine lepen. most market participants based on the polls don't believe she will ultimately win. however, we want to highlight one viewpoint which suggests the markets may be too complacent. goldman sachs' global head of market strategist sent an e-mail, just his opinion, but it's getting a lot of attention because brexit and trump correctly. marine lepen loses, however, chances of winning are higher. there are undecided voters if this it goes to a second round and he thinks undecided may mean unwilling to admit that you're voting for marine le pen. mlp has the more animated voters. average turnout is 80%. he thinks she gets 85% turnout

versus others who get 75% turnout. the market is so complacent that insurance is cheap, buy some. go long equity the or forex volatility. the swiss franc or the japanese yen. i've oversimplified his e-mail. we'll be live in france on friday and monday because the elections are so important. >> that was a great point going long a month ago. now euro vix is up by 20% in the past few weeks. it has really spiked. >> and so this is -- this call, we're telling you about it later than he actually did it. >> can i ask a dumb question. what is the worry around the french election? >> if marine le pen loses she poses an existential threat to the euro. >> if she loses? >> if she wins -- i'm sorry. >> she has the potential frexit. we're still talking years out, would we not? she would win, enter office,

would have to get parliament -- french elections have so many political parties. it's not like republicans/defensemmocrats. they have many. >> a huge percentage saying that's something that they're willing to do, right? she softened her position. years ago she said if i became president the first thing i'm going to do is sign the franc back in. we'll have a discussion, a renegotiation and a vote, et cetera, et cetera. >> you can promise many things but getting them through could be more difficult. i'm not using any country as an example of that. >> yes, definitely. >> that's too bad. what will be, will be. are hedge funds back from the brink? despite continued record in flows and etfs, leslie picker is here to tell you it has been greatly exaggerated. >> things are looking up, sort of. according to the strategies hedge fund benchmark, the gauge showed hedge funds gained 3.18%

during the first quarter and 11.6% for the year. now the performance comes at a pivotal time for the industry as hedge fund managers face redemptions, liquidations and pressure on fees. does the first quarter performance signal new life in the hedge fund industry? potentially. despite their gains hedge funds trail the s&p 500 during both the quarter and the year. even the best performing strategies which were event driven trailed the s&p during the quarter. their solid first quarter may not be enough to bring hoards back in. and it's clear from the first quarter investment letters that we've seen that hedge fund managers are anxious about the markets in the future. lee cooper of omega advisers said in his letter the u.s. equity markets will take a rest and value act will return $5.2 billion to investors due to a lack of investable opportunities. we should see more investor

letters trickle out that could unveil a similar pattern. >> what type of hedge fund is doing the best in the first quarter? >> the equities are doing very well. and event driven. interestingly. the ones doing the worst are the value which is not too surprising given the runup in the markets. >> leslie, thank you. leslie picker. it's not just google and it tesla, apple is one step closer towards autonomous driving receiving a permit from california to test driverless cars. josh has the story. hi, josh. >> reporter: apple ceo tim cook has said that there are technologies coming that could revolutionize the car experience, perhaps he thinks his company could be the one developing those new products. the california dmv has now given apple a test permit for autonomous driving in three lexus vehicles like the one you see here. apple did decline to comment on that permit referring us to a statement it made to regulators last year. the company is investing heavily

in learning and automation and is excited about the potential of automated systems in many areas including transportation, apple said. so what are cook's ultimate ambitions in this space? they do not believe cook wants to actually build a car. instead thinks cook is more interested in developing autonomous driving software and systems he could then license to carmakers meaning operating system better user interface and services. it makes sense for cook to explore the auto industry a $3.5 trillion market. of course there's a lot of competition, too. apple joins 29 other companies that have received it test permits including wamo which has driven more than 2 million miles on public roads. back to you. >> i can't wait. thanks so much. let's bring in steve wozniak and see if he can't wait either.

the co-founder of apple. before we get to comic-con where you are right now, we wanted to get your thoughts on this. on apple's self-driving car. are you convinced this is a good idea, a place for them to enter? >> well, apple is such a large company they have to go after large markets so self-driving cars is one we're all reading about every day and we're aware of it in almost every car company is working towards that. i'd go back and think about what made apple successful and as big as it is. look at the iphone, the first time to say a phone can be an entire flat screen. and, you know, it was questionable at first but that was the way everyone wanted to go. so i'm hoping apple does the same thing with autonomous cars that you have the first car that can absolutely be sold without a steering wheel maybe that is so perfect everyone says, oh, my gosh, i want this. i can use this. it's so much better than the others and not just another player. >> it's brian sullivan. we chatted in singapore and i have to admit, steve, i'm sad. i'm a long time mac user and i

feel apple has abandoned the macbook, the phones are great. what do they need to do to your baby, the computer side of the business? it's starting to feel a little stale. >> well, i know, we started as apple computers. the market went into a home lifestyle direction how computers let us live our lives as humans and apple neglected the computer side, the servers, the workstations went to hewlett-packard and dell over time. we ran movie editing and we're way down on the list now. i think it's time but we didn't have an independent division that had their own profit loss responsibility. everything is tightly under control. a huge company that has hundreds and hundreds of different aspects going on. so i hope that apple does reverse that because i'm a computer person. i like what computers do. the trouble is your computer is no longer in your hand. your computer is out in the data center. >> steve, you're a huge fan of

artificial intelligence or ai. do you think apple is doing enough? when you think of ai, google's efforts, amazon, a lot of other competitors. you're not the necessarily thinking of apple being the forefront. do you think apple is where it needs to be right now in order to be a lead er in ai in the future? >> a lot of other companies like google have been more forthcoming and talking about what they're doing. apple's tendency is to be quiet and shock you with what they come up with. apple doesn't have to do everything in the world either but artificial intelligence or semi intelligence, a good hi high-level putting information together and coming up with how to drive a car is -- these are going to be very important things in our future. every day we have more and more outstanding examples that humans used to do but artificial intelligence can do better. >> are you as worried as steven hawking has professed to be about artificial intelligence, about some sort of ai war? >> sure.

two years before hawking was talking that way i was talking that way on stage. i reversed myself. i've totally changed my mind. some fear of takeover, we don't -- we're not talking about artificial intelligence that sits down and says what is my life in the world? what do i have as obstacles? how do i solve them? what should i solve? only humans do that. we can tell a machine to learn to play a game faster than a human after some methods of learning and practice, but we are the ones who chose what to do. what we're talking about for artificial intelligence hasn't got tone that level of brain functionality. >> it can't ever get to -- >> sing late. >> singulari itty or emotion? >> it is a concept that at a certain point in time computers may be processing as much information as human brain, but that -- and then beyond the singularity you cannot see.

the computers that train themselves and go further than we, you can't predict beyond it. all i ever see are humans and machines intelligence are there to help us and give us a better life. robotics will be an important part of it. robotics that help us. >> i guess we're asking if androids do dream of electric sheep, steve. the reason you are here which is comic-con. runs april 21st-23rd in silicon valley. you have john cusack. a bunch of cool people coming except for us. we did not get an invite but we'd love to attend. the first people who came up with the idea decades ago were probably called crazy. oh, comic books, it's kids. nobody cares. how big do you anticipate comic-con silicon valley can actually be? >> you know, silicon valley comic-con, we're trying to be different than the others around the country. so we may undergo some big changes even as to how we

address ourselves. we don't think of how big we can be. can we be bigger, be the biggest of all. we never think that way. we think how can we be different and the best. >> what do you do differently then? one thing you will do than the other ones. >> we bring in a lot of science based, technology based, futuristic thinking. we've turned a lot of what was science fiction into reality and we've done that with companies right and left in silicon valley. we're primed for these ideas that seem impossible, like they will never happen. maybe with the right stroke of luck and the right finding by scientists we can create futures you can't imagine. i mean, somebody mentions the stars in outer space, and our comic-con is focused on a lot of space travel and what would be involved, getting to mars, the difficulties. we'll have nasa there, a lot of demonstrations along with the robots walking around. >> excellent. steve, always great to have you on. good luck with comic-con silicon valley. >> have fun. >> oh, my gosh.

it's going to be amazing. >> i don't doubt it. thanks. >> steve wozniak. to the bond market. rick san tetelli tracking the action. hi, rick. >> reporter: a curve steepen in. two-year note deals are down three points looking at interday of ten. it's down one. and 30-year bonds are actually up a basis point. so if you're looking from 2 to 30s, we want to monitor that. dollar index, it has taken a hit today and, indeed, it is about 2% down on the year. in a counter intuitive direction though it's holding 100, that is the exact low today. brian, back to you. >> rick, thank you very much. meantime a multistate search is under way for a man who murdered an unarmed elderly man in cold blood and uploaded the video to facebook. obviously a terrible tragic human story no one would ever

take anything away from that. but we have to ask, is this also a big business problem for pace book, social media, and the advertisers they rely on? we discuss coming up. iscuss com.

disturbing video of a gunman who posted video of a random shooting on facebook. authorities are searching for the cowardly gunman who killed an unarmed elderly man in cold blood but also claims in the video to have killed others. this is not the first case of a violent act being posted or streamed on facebook or other social media. it is obviously, however, a disturbing window and could be for facebook and other media companies.

let's bring in senior editor at recode. welcome. it's hard to talk about anything related to business given what happened. the 78-year-old man walking home from a family outing on easter shot down in cold blood, but let's talk about this because it's not the first episode for facebook or any other social media company. they're going to say, well, we'll work on it, we'll try to fix it. do they need to shut it down? the live stream? >> yeah. i was asking myself that same we earlier this morning. when you look at what live streaming does and who it's beneficial for, facebook's media partners it makes sense, folks like a cnbc or recode use facebook live. celebrities as well. but do regular users really need it or have we come to a point where so many people are using it for the wrong things that it's creating a brand issue and a major headache for facebook? >> you think even though this particular event wasn't live

streamed but you think it speaks to the possibility that it could be live streamed, do i understand that correctly? >> absolutely. facebook doesn't have the technology to detect violence in videos automatically. so they can't necessarily see that something like this is happening and automatically have it removed, therefore, they have to wait for people to flag it and have a human come in and take it down. that takes time and the video is up on the service, creates a huge issue. >> james, this really oepts a pandora's because because you get to the notion of them having to police, there could be policing for video and live streaming being broadcast but also images. everything falls into that bucket. do you think facebook will have to go as far as saying we will police content on our platform. >> that's interesting. i think we're going to find out more this week to see how much mark zuckerberg approaches this topic. how objective he is. does he institute his political biases as well. we'll see how the broader

facebook video and live strategy rolls out. as it relates to the business on this news it's a terrible piece of news but at the same time you have to think about the fact that 30% of30% of the world's population is on there. it's very difficult for advertisers to ignore but the one thing it does impact, the broader facebook video strategy. this is something that facebook did want to make front and center and mark zuckerberg made it the centerpiece of the ad. >> they shut down already thousands and thousands of what they called fake accounts because they thought they were generating fake news. what does it cost to monitor and start policing content on a large scale? how much does that dent profitability? >> i don't think it's going to be a cost in terms ever revenue that much. i mean, i think it's more of societal cost. the more you police content, the

more you have the propensity to see further filter bubbles and more isolationism of ideas and idealogies, you know, if you do police content on your own or through users or through third parties. what's going to police -- >> i get that, it's not a facebook problem could have done a couple of different outlets, probably a humanity problem. this guy clearly is a psychopath who wants people to know who he is and getting what he wants, 99.999% of humanity is good. does silicon valley have a problem with the other 1 1-1,000ths of a percent who tries to become a martyr, media outdsz lets everywhere like this coward is. >> i think they do have a problem -- >> they'll blame everything else but themselves. >> we're sitting here talking about if, right?

that is .001% is the part we notice and associate with facebook live. the question they have to figure out and mark zuckerberg wrote about how wants it to change communities and go beyond the basic technological platform. he has to think what does that mean, if we're going to be more than just a social net work, we're going to influence the the way people interact, that comes with a responsibility. >> maybe he discovers instead of changing it maybe he ends up reflecting it. good to have you. >> thank you. >> calls on the street you need to know about. street talk is back and on deck next. next. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions?

ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

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time for daily dive, we call it street talk. >> first up amd getting a positive note saying channel checks indicate amd had strong unit sales in march, highest they've been since the 2014 holiday season. amd is a huge winner of 367% over the past 12 months. >> second stock is mcdonald's, shares accelerating and multiple

expansion because of refranchising activity and especially because of the first mover advantage they think mcdonald's has in digital and mobile pay. wells fargo increasing the range to 145 to 150 a share to 1.30 a share. >> s&p global, $143 price target, it's a great business and steady revenue growth and healthy capital returns, better investor appreciation of the stability of the business model will lead to multiple expansion. stocks up 21% already. >> fourth is the smaller cap call of the day, patrick industries, materials for rvs and mobile homes, $80 target and the markets showed steady growth. ie baby boomers retiring and buying big rvs -- >> don't you love --

>> i'm not sure -- i own 1.5 rvs, one does not work. >> go on. >> two giant eagles on the side -- >> make my rv great again. make an offer, america. $80 target that is 25% upside from here. not everybody is bullish, wells fargo has a market perform rating on patrick industries up to 5% next year. not kidding about the broken down rv. >> i know you're not kidding. >> special price just for you. >> i'm not surprised. >> might want to stay home and watch fet flix, 7 million subscribeds la ers last questio. the question everyone is asking, can they do that again? bringing you a preview. power lunch is back in two. h is.

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when liberty stands with you™. liberty stands with you™ liberty mutual insurance two hours until the closing bell. here are some of the top cnbc headlines, michael pence touring south korea, sending a warning to north korea and saying that president trump should not be tested. this coming after north korea tried and failed to launch a

missile over the weekend. here's the question you may be asking, with tension in the korean peninsula rising and threat of a far right candidate becoming president in france, why are stocks still going up? we'll find out. we're all over netflix, its earnings out after the bell. the stock has been a star but we speak with an analyst who says go on, take your money and run and sell netflix. >> check out the other movers this morning. afternoon actually, united continental moving ahead and higher ahead of its earnings after the bell. stock is up more than 1% and shares of alere rising even though they accepted a discounted price because investors are relieved the deal is happening at all. and financials the biggest winner on the s&p 500, m and t, wells fargo among stocks moving higher. the big earnings report we're watching after the bell, netflix is up 18% so far this year. julia has a rundown what to

expect. >> the stocks have more than 2.5% today on hopes they will continue last quarter's outperform aerngs they reported a 7 million new subscribers last quarter and projected it would add 5.2 million this quarter. earnings persecute share are expected to grow more than six times to 37 cents and revenue projected to go 35% to $2.6 billion. investors expect netflix to project 2 million new subscribers in the second quarter and hopes are high for shows 13 reasons why and orange is the new black, there are concerned about the u.s. market in particular becoming saturated. there's also concerns about growing competition from amazon and hbo streaming services as well as the slew of new live streaming tv bundles from dish, direct tv and they give consumers over the top options and driving up content cost.

netflix swings an average of 12% either up or down after earnings. we'll have all the details after the closing bell. >> something important to note, they moved their video conference call, say that in quote because it's not an active one where you can actively ask questions. they take the questions and they've already sorted through them but they move that to 6:00. the stock will move without anything from the conference call. >> yes, it's a very unique way they handle this, write a letter to shareholders which has a lot of content and details that in other companies would come out during the conference call, there's a letter to shareholders and that comes at 4:00 p.m. eastern and two hours after the market is closed, that long after the markets is closed, they do this video earnings call where they have analysts asking questions and fielding questions from analysts via twitter, it's quite an interesting for mat. julia, what we should expect

from netflix after the bell. you've had a sell rating, michael on the stock as long as i can remember. price target of $68 a share. what you're expecting is an inline quarter and sticking with this. do you think the inline quarter is enough to keep the stock moving higher? >> i do and memory is the first thing that goes -- it was 2012 that i downgraded. i was early by about six years. look, julia actually said it perfectly, she didn't mention earnings. she mentioned subscribers and that's what investors pay for. they are looking for subscriber growth. i have to give netflix a huge compliment. they finally mastered the flows of their customers. they understand that it is driven after they show big shows so they've stacked them up. you've got in slew of really big shows coming out, april through june. they used to have their second most popular show "house of

cards" come out in february or march then have a gap between then and june with orange is the new black. now have "house of cards" may 30th and master of none and kimmie schmit, pretty good shows, they will keep people and big surprise won't be the march sub number but the guide for june -- >> i'm confused michael, you said all of the positive things and then you've got a sell on the stock. why do you have a sell when you're impressed by their ability to manage the calendar? >> last i checked our job is to tell you what something is worth, not tell you what investors are willing to pay for it. netflix is a greater fool stock and the greater fool has this belief that's wrong that they are going to grow subs forever and one day jack up price and keep the excess price increase, all of the excess price will drop the bottom line. the truth is their content costs will rise as they choose to

raise price. i think that's going to attract more competition, they are never going to make the profits that justify $145 stock. but as long as investors will pay for subscriber growth and as long as netflix delivers it, the stock will go up. i'm at the dilemma, what's it worth? half of what it's trading at. >> same problem amazon analysts have, tesla analysts have. it's very common on the street and yet the stock here moves higher. you said it's a greater fool kind of stock. when you think the jig is up for netfl netflix? what is the thing in your mind that will get investors to see some of the parts valuation that you so diligently put together? >> i actually think it's going to be guys like you or women like you that actually call them out on negative free cash flow. i'm starting to hear it on cnbc and elsewhere where you are paying attention to something other than subscribers and no disrespect to julia's report but

the negative free cash flow will be $500 million this quarter and probably get worse throughout the year. the turning point is when investors are focused on cash flow. i don't think they are going to focus on it until you start calling out -- >> michael, i would argue we are. we have you on -- >> i agree. >> 30 analysts have buy ratings with average price of 153. we're having you on -- >> brian -- brian -- when you call them out on air, that's when investors will be shaken a little bit. >> that's not our job. >> no. >> but i think back to the dot com bubble and started to focus on cash burn because some companies were going to go bust, the cash is running out. we're not near there for netflix? >> i don't think they are going out of business. they are not making money, they make book earnings but they have negative $2 billion in free cash flow. they are not going broke until lenders say we're not going to lend to you.

enterprise value of the company is probably 10 or 15 billion just because of the customer concern. so until they get the debt level to there, they are not at risk at going bankrupt. they have $10 million to, when does it turn to positive anything to justify $70 billion valuation? i say never. i think that when that becomes apparent to everybody, investors will run for the exits, i'm not suggesting it's your job to call them out. when you guys start calling out the bulls, i think the bulls will start to get sheepish about making these dopey calls all that matters are subs -- >> certainly not today. >> interesting to see if you still have that in another five years, michael. >> quickly, michael, did they move the conference call time to 6:00 p.m.? >> they did. we just established it. >> do we know why? >> back when julia was on the conference call they got tough questions and what they are trying to do now is make sure

they don't have to answer any questions, they are taping this thing, not even going to be run live. there's no opportunity to make a mid course correction if they get a tough question. they are able to screen everything. >> the way you talk, i don't think you'll be allowed a question. >> i've never been allowed a question. >> not surprising. michael, thank you. you want to stay tuned for live coverage of netflix earnings and united airlines starting at 4:00 p.m. and extends through fast money at 5:00. sue herrera with breaking news. >> elliott management is responding very strongly worded response to clause kleinfeld's resignation, the pattern of failed board oversight demonstrates that meaningful board level change is mandatory at arconic and that comes after mr. clinefeld's resignation. they say arconic noted dr.

kleinfeld's departure came that showed poor judgment, to be clear, the letter read as a threat to intimidate or extort a senior officer of elliott management, based on completely false insinuations. a threat we took seriously and about which we immediately and privately informed the board. this is highly inappropriate behavior by anyone and certainly by the ceo of i regulated publicly trusted company in the mid of the of a proxy context. this letter cannot be viewed in isolation, it is simply the latest debacle in a pattern of conduct which the board has repeatedly excused and endorsed and participated in. dr. kleinfeld's poor leadership and attempts to entrench himself on the board. when such conduct manifests itself as it has here, it is not a ceo problem, it is a board problem. so brian, it really appears as though there is going to be another chapter of this

particular story. it's a very strongly worded response. >> i'm looking here, did somebody physically threaten somebody here, a threat to intimidate or extort? >> it implies that. i have not had a chance to go through the entire response but that particular paragraph kaugtd my eye as well and it does appear as though that certainly is their implication. >> basically, you know, kleinfeld, very well known face to cnbc, didn't like something elliott management was doing and tried to make an offer they couldn't refuse. >> they are saying that behavior not only was inappropriate -- >> back fired because they revealed it to the board, look what your boss is doing. >> it would be amazing if they release the actual letter. >> we'll get it. >> elliott management essentially twisting the knife so to speak because they are seeking an additional five members to the board --

>> i think they are making 2 clear they are not going to stop here. this behavior they consider inappropriate and that it was condoned by the board is the implication. you the board should be out. great story, sue, thank you. >> sue herrera. >> steve joins us now. >> a not to good friday when it came to economic reports, the surging soft data like consumer confidence and hard data not so good. check out the cpi, the core 0.1 and retail under expectation and february revised down for retrail. a weaker consumer in march and february to finish the first first quarter. here's our rapid update. eight forecasts in the poll here, 0.9%, under 1% for first quarter for the first time. and that compares to 2.1% for

the fourth quarter. here is who is where, action economics in the top line, barclay's even moodies as.8 and there's the fed, a half point of growth. this is not first time we had this split between the hard and soft data. take a look at the three different moments here. you can see the blue line there is up and that is high, consumer spending, that is just after -- early '90s there. you can see there that confidence was down low. move over to post 9/11, very low confidence, decent consumer spending and there we are right now with low consumer confidence -- high consumer confidence and low spending. kp kpli indicate gs the situation for the fed. first quarter data has been k w notoriously weak. the fed could be temtded to look beyond it. many economists are forecasting a second quarter rebound just like we had the year before and the year before that. at around 2 or 3%. some people even 3.5% for the

second quarter right now. >> deja vu all over again. >> i think in general you've made money playing the second quarter rebound. >> got it. >> thanks, steve. >> here's what's coming up on "power lunch." walmart may buy another online retailer. how big of a threat is north korea? we'll talk to a former u.n. ambassador bill richardson. gold at a five-month high. will it go even higher? all of that coming up on "pou r power lunch." power lunch." you always pay

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walmart in talks to acquire the online retailer. is this walmart's strategy to kp combat amazon? >> in part. walmart is in the final stajds of acquiring bonobos, it would be walmart's e commerce fourth acquisition since september when walmart bought his company. at the time wall marlt ceo mcmillan said he would work as the bodyguard, that means giving lore's credit card for a shopping spree. in january he bought shoe buy and amazon owned zappos competitive for $70 billion and in february they bought moose jaw. for $51 million. in march, they bought mod cloth

and walmart didn't disclose the price tag, other than saying it's the same range as others. bonobos has 30 physical guide shops for trying on since the right fit is the hall mark. most say it will be a bigger purchase than the others so far this year at least based on revenue s but again, it's stilla report. mark lore is buying up brands to get customers and basically content both online and physical material that he can't get. >> also -- we're going to bring in -- also buying up. i buy some of their stuff, it's not cheap. you sort of picture wall marlt as a price oriented business but it seems he's also trying to elevate the price point of the company. >> possibly, right now he's buying companies and letting them sit on their own and operate as wholly owned subsidiaries, they are not incorporating any walmart branding, he's buying them but

they are staying as is. >> let's bring in patrick mckeefr as well. patrick, bonobos is a great company. what is walmart doing? what is their strategy, $110 jeans, what's their goal? >> i think it's intellectual capital, assets they are going after. that was true i think with jet.com. walmart could have built up its own jet.com and basically copied that business model but there's a ton of proprietary intellectual capital they were after with jet.com and some relates to the way a basket of merchandise is priced as you add merchandise and you combine it into a basket, the price changes. prices change with individual items and the basket price comes down. so i think they are doing the same thing here with these smaller acquisitions bonobos is

a premiere brand right now, really hot brand in retail. they are shaking things up. they've got 30 stores but it's primarily an online retailer. >> is it smart for them to -- their last four small acquisitions for all to be in the apparel space? >> well, yeah, melissa, i don't think it matters necessarily because it's intellectual capital and they are going to take it and apply it across the entire business. >> you mean data. is that data? >> customer purchase behavior? >> yeah, people. mark lore for example, some of these startups are small but they've got top thinkers in retail. that's what they are going after. it's people. they are buying people and also buying ideas and buying true intellectual capital. >> it's not about you know, walmart as a buyer has incredible power, i'll bet they could reduce the input cost for a lot of companies very quickly,

but you're saying synergies aren't what this is about?