selloff in the safer, bonds of the world, gold as well, about down a percent so -- >> and apple has gained 153 billion in market cap in 16 weeks. >> wow. >> wow. >> and the dow back above 21,000, folks. >> thank you for watching "power lunch." >> and "closing bell" starts in three, two, one. ♪ right on cue. welcome to "the closing bell," i'm sara eisen in for kelly evans. >> i'm bill griffeth. happy dna day. have you taken a test? >> no, but i read your book. >> strong earnings from caterpillar, especially, mcdonald's, and dupont powering higher today. the nasdaq above 6,000 now for the first time ever, as you see the dow is above 21,000 again,

and we've got someone who says it's time to fade the growth driven fang stocks that are in the nasdaq composite. he'll explain why in a little bit here. >> home builders are under pressure today after president trump slapped as much as a 20% tariff on canadian lumber. more on that plus the president meeting with farmers at this hour to sign an executive order in just a few moments, of course, we'll bring that to you live as soon as it is released. >> and transportation problems, shares of ryder system hit hard today, down 12%, the ceo of the company joining us to explain why this business is under pressure. they were almost $100 stock two years ago. now they trade at $69. >> the trump administration is considered friendly for truckers, deregulation, infrastructure. >> just the economy's hot. >> talking about all of this. after the bell, big earnings for at

at&t, numbers and analysis for you after the bell. beginning with the market, nasdaq hits 6,000 for the first time ever, dow revisits 21,000, and bertha is at the floor of the stock exchange. only right that we begin with you today. >> all right. we got the big round number today, and the small cap, russell 2,000, also at a new record, nearly 300 new highs on the nasdaq. biotech is the best performer after earnings beat, but large caps fueled this move above 6,000. the nasdaq 100 gained more than twice the s&p, up nearly 14% year to date with more than two dozen new highs or -- on the nasdaq 100 alone today, and that's really been the story, these megacap tech names at record highs driving the action, not really fang so to speak, but in terms of the nasdaq 100s,

672% gain this year, apple provided a quarter of the gains in the market weight index, and amazon, facebook, and microsoft make up another 30%. sector-wise, it's been chips that are the standout. the index 20% below the all-time high in 2,000. we see a lot of consolidatiocon and upgrade cycle for memory chip technology is drivie inings like micron when the nasdaq reclaimed the 5,000 point, and chip equipment makers like lamb research at an all-time high today, and, bill, i have taken my test. i am west african and southern european. >> very good. >> very, very exotic, as we all know about, bertha, thank you. now bob on what's powering the dow, back above 21,000, bob. >> yes. yesterday was the french elections. today's earnings beating top and bottom line, which is important. caterpillar, 50 points on the dow right there. they beat and raised their full

year guidance. that's very important, raising that guidance. ceo saw encouraging signs on sales, all machinery stocks, deere, terrace, upside. swing around here, 3m, a lot of historic highs. they beat. they raised their full year guidance as well. fractional gains overall there, but nice numbers still nonetheless. swing around here, this is another historic high on mcdojd's. great numbers. look at that. $7, and they had they had expansion on breakfast offerings, and, finally, another one, the third all-time high, dupont, remember the merger with dow, right in line on track, and they also beat -- they talk about numbers as well, ahead of analysts' expectations. this is not just about the bottom line this time, but the top line. look at expectations for the first quarter earnings. we are now up towards 12% earnings growth, but revenue growth is showing numbers.

remember the horrible numbers, 0%, 1%, 2% revenue we saw for many, many years? revenue's finally starting to catch up close to 7% so mufar. that's an important factorment you can't play with the top line that easily. back to you. >> bob, thank you, see you later as well. getting to the closing bell exchange. we have larry from mayflower advisers, kenny from o'neil securities at post niep, and bringing in the cnbc senior markets commentator early. >> you know it's a big day in the markets. >> yes. >> and rick santelli is in chicago another the cme. michael, starting with you. we tend to characterize a rally, whether it's the trump trade, it's earnings related -- >> sure. >> what's going on here. two days in a row. first time we had two back-to-back 200 gains on the dow since after the election. >> a tension release, i think. i think there was a legitimate question after yesterday whether that was a one-day adjustment to the passing of the anxiety of the french elections.

clearly, those that shadow of we don't know what happens is keeping the market somewhat in check, but i do think today it shows you with treasury yields going up, it gives the wink to the cyclical stocks in the dow, megacap industrials, and it starts working again. we had a quiet correction, about a week ago, appointmented out that a lot of stocksing cyclicals pulled back, seven, 8% 10%. there's people kwisay it's not the all-time high, it's close, but people say the average stock is not necessarily keeping pace or it's been nixed. that shows you it's a a selective market. put it positive spin on it, say it's winners winning and some are left aside. >> larry, i wanted to ask you specifically about tech and some of the big fang names that propelled the rally. what is it about them? that they growth or cyclical,

and they make them the darlings again. >> it's an amazing story, looking at it. closing at the first 100 days of trump, heightened level of uncertainty, unpredictability, and yet a low level of stock market anxiety. the market is on prozac. it's comfortable chasing megacap valuations because it was anything but the trump trade. money gravitated into large cap growth at the expense valuation, and expense of fundamentals and any real value in the market. you know, it reminds me of the stock market adagdage, picking dimes in fronts of a bulldozer, right? pick up dimes in front of the french election, we got away with it, maybe tax reform comes up, past the debt ceiling and government shutdown. i think at the end of the day, this market is a little bit too complacent. if you believe that this market is priced to perfection, everything's great, going to get all the policies we need to drive earnings materially higher, then, like in the lego movie, everything is awesome!

buy upsale. like me, you believe a height ped level of political uncertainty bringing in question what things look like, be selective and brace yourself for increased volatility here. >> that adage needs to be adjusted for inflation. picking up silver dollars now in prompt of the machine. kenny, you watched the order flow here at the exchange. you know, volume is not that heavy, and let's, again, highlight the volatility index, the fear indicator, that continues to plunge down now at 10 and change. >> it was down 25% yesterday on that move yesterday. today, though, it's really -- it's flat essentially today r right? i agree with larry in the last comment. i think it's gotten well ahead of itself. as much as you agree that the economy's turned around, caterpillar really talks to the international economic turn around, right? caterpillar's the international infrastructure name. so that's positive, i get it.

i think the market's pressing complete perfection, and i don't think we'll get that. i think it's the political uncertainty that's going to be the catalyst to cause the market to back up. i'm not by any sense talking about the market crashing, but i think the -- you know, feels like it's momentum, it's computer driven. you talk to climates, talk to customers, and everyone is watching it. no one's making active let's take them. it's computer driven. >> i wonder, rick, if that's why the bond market payments a different picture than the equity market now. look at stocks, and it's a rosy picture of the trump economy, whether it's earnings or international growth, and you just don't see that in the bond market these days. >> no. i'm not sure the stock market still focusing on trump. we've had a lot of issues whether it's tariffs, lumber, dairy, steel. the catalyst really was europe to some extent, and the equity markets, you know, they are big dimes, 450 points in two days, but you're right, sara.

when it comes to the flixed income market, they are watching the stock market and waiting to see did this lasts. i'll tell ya, for the first three and a half hours in our time zone, it was flat as a pancake. you were hovering around 126, 230, 295 and 30s, and in the last hour, especially after a very solid two-year note auction, rates are creeping up, and it's significant. now we find tens are right back into the bottom of the 230 to 260 range. we experienced that most of 2017. i think tomorrow's auction's going to be really important, the five-year, because if you consider investors, why they buy twos? they settle 118 friday, eight base sis point conception. in essence, they bought the dip. will they correct tomorrow? we'll know when they close today, watch 34 billion five-years tomorrow. >> quickly, rick, i have to follow-up. which is right? bond market is usually right, does that signal a stock selloff

is coming, or are bonds going to play catchup here and we can expect a sharp rise in rates? >> well, you know what. i permly still say the equity markets have it right. if that's the case, yields should start to creep up. the real issue is how much horsepower will they get? how much foreign demand will we continue to see in our treasuries because everybody says europe's rosy, i just see lots of red ink and mario draghi has reins superglued to the hands. >> not only does the bond market necessarily reflect awesome behavior, but the energy market does not reflect it either. the energy market doesn't see this as an awesome economy. i think you got several barometers with conflicting signals here playing out. when -- with that said, that's an opportunity to invest in energy stocks here. do it through a basket approach. kenny makes it a point, baskets drive the market. passive investing increases

velocity of rollovers. get ahead of the rotation, out of the fang, megacap large tech into the energy stocks left behind. ahead of the rotation, before it happens, in case this is an awesome market. >> do you see two different stories told here? >> i don't think it's a screaming disagreement between stocks and bonds right here, and i mean, it's not as if, you know, treasury are rallying and driving yields to new lows and breaking below the range rick talked about. nms you saw that, and, look, stocks are trading at levels they first touched, you know, a month and a half, two months ago, and it does not seem to me at this point to be a big di ver skbrens. you still have treasury yields yielding more than the s&p 500. there's times when it's been upsidedown. i don't necessarily think it's one of the things you have to say this is a big problem. by the way, if it's a slow growth high liquidity market, which, by the way, we had most of the last few years, stocks went up. they were led by stocks like the big nasdaq names. it's not of if the market goes

up, but which works better. >> earnings growth is there. look at mcdonald's, caterpillar, and that's fuelling the dow. >> fuelling lately, like bob said, we can't fool around with top line. >> that's finally looking better as well. good to see you guys, larry, kenny, thank you. the law firm of santoli. >> what is that? there you are. home builder stocks not taking part in the rally thanks to the trump's administration on canadian lumber imports. details on what this could mean for your new home prices next. and later, get ready for the

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home builder stocks lower today after the trump administration imposed as much as a 20% tariff on imported soft wood lumber from canada. we have the story. how will that impact the housing crisis? >> sara, builders are not happy about it at all, raising their costs, they say, passed on to home buyers. one-third of lumber in the u.s. was imported, the vast majority from canada. lumber makes up 10-15% of the construction cost of the home, framing, moldings, flooring. commerce secretary ross said, however, not expect a big cost for builders rise by much. >> we do not think that the price of lumber will go up by anything like the 20%, but there may be some small increase in

the price of lumber for the house. >> but lumber prices were already up 22% this year on the expectation of this tariff. the association of home biuildes say this cost adds $1200 to the new price of a home and could cost over 8,000 u.s. jobs. higher costs means fewer homes and afford fewer workers and gives businesses that sell and transport building materials as well. the secretary did not comment on u.s. jobs, but said it wouldn't see any competition between the u.s. and canadian lumber producers. more online, of course, on cnbc.com. >> i'm sure diana, thank you very much. we have a lot more on this as well as top lumber company executives, both sides will be joining us, daepti indebating t of the tariff next hour on "closing bell," it's a hotly

contested issue right now. meantime, we're head theed to close with 40 minutes left in the trading session here of the dow, rally day again, back above 2 21,000, up 250-plus points, and nasdaq up at 6,000. the russell 2,000 is a record high. >> oh, by the way. >> up next, highlights from the exclusive interview with coca-cola's ceo, and how he plans to put the new spin in the soda diet stock. he takes over as ceo on monday. and what in the world is sending trump and logistics company ryder into reverse today? the ceo speaking with us exclusively coming up. [pony neighing]

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dow up 258 points now, like yesterday, there's yours, coca-cola. >> mine? >> the one you'll call for here, ge, and verizon, but pinned at the top there, two standouts in the earnings category today. caterpillar and mcdonalds, both

with a sell earnings report, powering the market higher. >> together 100 points, the two of those. >> then coke is underperforming the market. out with earnings this morning. stock is down of the it was a mixed quarter. remember, there's still a lot of noise around the results lately, because they are refranchising the bottlers, in the middle of the transition period. i spoke exclusively with the company's incoming ceo taking the job next week. this is what he said about announcements today around restructuring. they are saving another $800 million in cost cuts, but that means they cut 20% of the corporate staff. this is what he said about that in the vision there. >> by next year, we'll finished refranchising, a smaller company going from a high of 150,000 employees, transferred those operating employees to the bonding partners, and we'll be under 40,000 next year. it's painful.

we'll impact people in the corporate center, but we think the slimmer center reflencts th reality of the company. >> they are talking about how the company is in the middle of a transition, to the only spinning off the bottlers with the results in a lot to the people working at coke, but also the staff cuts coming out of corporate, a little more than a thousand, and never is easy to talk about. they are doing it to use savings to reinvest in what's working. some of the growth categories like success in waters and the nonsparkling, as they say, the a growth profit machine because of these moves they are making. credit swisse said, and bears who say, consumption in the country is declining for 12 years in a row, and the company is most exposed. yes, it is growing some of the other portfolios like teas, waters, and noncarbonated drinks, but, ultimately, it's going to have a growth problem if it wants to get back to growth rates that it used to

have five, ten years ago. >> i often think they teach you in business school how to grow a company, but rarely teach you how to turn it back to turn it around. that's something you learn on the job, and that's a tough job to execute day one coming in here, trying to turn things around, cutting back to make it a -- it's a smaller company with 40,000 employees, but that's, you know, the nature of the beast. >> a difference from 100,000 employees around the world, and that's the bold case on the bus, they are going to be able to continue to squeeze higher prices out of the smaller camps, which they are doing, and lead to a more profitable, leaner company without the costs of the doll bottling. >> as with retail, broadcasting, media, they are beholding to the customers whose tastes change dramatically. no, you know, fewer people drink the soda these days, health

conscious for whatever reason, diabetic, whatever, and they are going more towards the healthy choices here. companies played catchup in that regard. >> it doesn't help that you continue to have study after study, and just the latest one from the american heart association journal last week saying that diet coke, drinking it, every single day makes it more likely to have dementia and strokes than drinking once a week. i asked them about that. he said that there was no cause and effect in that study, which he's absolutely right about, but the press around it, the negative, and you're having increasing regulations, like soda taxes popping up. that's another big challenge. >> a head wind there. all right. we're going to break here, 34 minutes left, dow up 250 points, ryder speaks with us exclusively about the truck rental, cuts guidance, and 12% on the stock as a result next. (fans cheering) because when you really, really want to be there... but you can't.

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another strong dow is up, strong earnings from caterpillar, mcdonald's, and s&p

500 up.7 aft5%. >> we have 30 minutes left in the trading session with the dow 250 points. here talking about it all is gordgo gordon, and are you convince the the rally's for real? >> i happen to be the other way. we're stuck in a range, and then not satisfied, bust out on the upside. that takes care of the technical guys. fundamental guys, earnings are coming in well, strong as you mentioned, and we are just halfway down through earnings season. we have a political climate here, talking about tax reform that's business-friendly. listen rs it's an all-clear to the upside risk -- >> wait a minute, facing a government shutdown friday, we got the problem with north korea, syria, i mean -- >> itemizing the wall of worry that exists. >> not to mention wall street veterans, you name them, who feel this market is overpriced right now. >> look, there's definitely

worries out there, and you hit them. there's political, and, i mean, spectrum on that is wide. we could have a shutdown to the everybody keeps getting in behind a pro-business tax reform policy and trade policy. we have the geopolitical risks, and sea of japan is out this, beijing, and, i mean, there's a lot of thing that can happen, and i mean, there's china growth, something like that, people have been talking about that too, so it's out there. >> i mean, you feel the market is taking comfort from the earnings seen here? >> no question, bill. listen, the shorts are squeezed. wait too long trying to find the dip you're going to buy, you're going to miss it, so, you know, you have to be aggressive to the upside, and we see in the most important half hour of the day, the closing bell, leaning to the upside. i mean, k look, volume is there, people on both sides of the market. the market's behaving well. >> you're talking a lot about the excitement around the

administration's policies, we'll know more on tax reform tomorrow, and, certainly, there's hope of a 15% tax cut corporation. here on the floor, i'm hearing that. is a situation that it's buy the rumor, sell the fact. seeing the policy seeing the buying in the leadup here? >> no question. repatriation of some of the funds overseas is a part of the idea. the idea there's a business of government, you know, washington is behaving in such a pro-businessmaner, but that's right. the outcomes are diverse here. none is done because there's so much upheaval to the worst case scenario of a shutdown. >> we are going to washington. the president minutes ago welcoming a group of farmers holding a round table discussion there. he's going to sign an executive order called promoting agriculture and grower prosperity in america. let's listen in. >> so i just want to welcome you

very much to the white house, special place, america's farmers and ranchers. i especially want to congratlation secretary, now i can say, secretary sonny perdue, just sworn in as the secretary of agriculture. [ applause ] sworn in by justice thomas, and he was -- it was a beautiful ceremony, and we're going to celebrate later. that's great. you had a good vote. >> yes, sir. >> you didn't have one of those 51-49 votes. [ laughter ] he had a very big vote. justice thomas, a great man, great person, we appreciate him. america's farming tradition stretches back to the earliest days, farmers led the way across the great plains and put down roots coast to coast. today, america's farmers feed

not only our nation, but millions of people around the world. we're going to open that up much more for you folks, because, as you know, it's not totally open, to put it mildly. we learned that yesterday, frankly, with canada, the dairy farmers, wisconsin, upstate new york, different places, border stas states in particular cant sell into canada. it's been going on for a while. we're not going to put up with it. separately, we put a big tax -- tariff on lumber, timber coming into this country. people don't realize canada's been rough on the united states. everyone thinks of canada as being wonderful, and so do i, i love canada, but they outsmarted our politicians for years issue and you people understand that. we did institute a very big tariff, announced it yesterday, and we're going to take care of our dairy farmers in wisconsin and upstate new york and a lot

of other place, so i think you people all probably agree with that, right? would you agree with that? >> i would. >> you better believe it. our government serves farmers that empowers them to do the hard work they love to do so much, and that's what today's executive order is all about. with this order, i'm directing secretary to work with other members of my cabinet to identify and eliminate unnecessary regulations that hurt our nation's farmers and rural communities. now, sonny, all of you signed a lot of regulations and terminations that really help the farmer a lot. you know what i'm talking about. we have some left that you'll identify them, and we really got rid of the biggest ones. >> absolutely. >> that was a big help, right? >> yes. >> all nodding. they won't tell you about it, but they are big numbers, and that means a lot to the farmers. i want to also establish the interagency task force on

agriculture and rural prosperity to be led by secretary perdue. i just want to tell you that it's an honor to be with you because among many other things with this order, we continue to have a very relentless effort to make life better for hard working americans, and that includes the farmers and all those gathered around the table, including our ranchers, rural community folks. we are having a very, very big impact. it's already started. sonny's now going to identify additional areas where to get rid of unnecessary regulations, and you people are going to be so prosperous and hire so many more people that work for you, and that's going to make me very happy, okay? so i want to thank you very much. do we have the executive order, please? so this is promoting agriculture and rural prosperity in america.

and now there's a lot of words i won't bother reading everything, but agriculture and rural prosperity in america. that's what we want. >> here, here. >> we don't want to be taken advantage of by other countries, and that's stopping, and that's stopping fast. okay. thank you. p perhaps i should give this pen to sonny, what do you think? [ applause ] thank you very much, everybody. thank you. >> mr. president do you fear a trade war with canada, sir? >> no, not at all. >> why not? >> they have a tremendous surplus with the united states. whenever they have a surplus, i have no fear. by the way, virtually every country has a surplus with the

united states. we have massive trade deficit. when we're the country with the deficits, we have no fear. >> what's your honest opinion, sir, of the hundred-day mark? >> the wall funded by government? >> the wall's going to get built, if there's questions, the wall will be built, it's going to stop drugs and stop a lot of people from coming in that shouldn't be here, and it's going to have a huge effect on human trafficking, a tremendous problem in this world, a problem that nobody talks about, and it's a problem that probably is worse at any time in the history of the world, human trafficking, what's going on, the wall is going to be built, and we're setting record numbers in terms of stopping people from coming in and stopping drugs from coming in you see the number's down, 74%. i will say secretary kelly, formally general kelly, is doing an incredible job. i was with him awhile ago, and he said, we definitely

desperately need the wall. and we're going to have the wall built. i don't know what people are talking about. i watch these shows and pundits in the morning don't know what they are talking about. the wall gets built. 100%. >> when, sir? when? when, mr. president? when? when will the wall get built? when will the wall get built? >> soon. >> thank you. we're all ready, we're doing plans and specifications. we're doing a lot of work on the wall, and the wall gets built. >> in the first term? in the first term? >> definitely -- yeah, yeah. sure. >> first term? >> we have a lot of time. >> thank you, mr. president. >> thank you. >> president signing that executive order to promote agriculture and rural prosperity as he met with farmers there, dealing with the lumber tariff and dairy question and trade relations with canada. >> canada tough on the united states, something president

trump said, referring to the dairy farmer trade, the lumber tariff as well. we have eamon standing by at the white house with the executive order. this is like the others, it's a 180-day review on the industry? >> reporter: exactly what it is. that's right. 180-day review, directs the secretary of agriculture as of today to conduct a review of regulations and policies unduly harsh and holding back agriculture profits, not clear what they'll find in that review and what action they'll take as a result of it, but this intended to send a message from the white house, and this president is behind the agriculture industry 100%, and which industry group wouldn't want to come to the white house and have a meeting with the president where he says you people are going to be so prosperous and hire so many people as he did herement you heard the president there defending funding for the wall, even though the white house acknowledges they are not going to get it in the spending bill that moves this week. he's saying it will happen soop. you heard them answer a

reporter's question there saying it will be done in the first term. a lot on the president's plate here today. >> eamon, the question with the farmers, two important issues for them is trade and immigration, and both of which have got some worrisome signals from the administration. wonder if that came up? >> reporter: well, we don't know what happened in the rest of the meeting. you heard the wranglers there forcing reporters out of the room at the end of it. we'll see if anything else comes up, seems like farmers are getting slightly mixed signals here in terms of trade and immigrati immigration. this is a trade initiative they could support, but on immigration, there are other things, big agriculture interests don't necessarily support, so a bit of a mixed message here from the trump white house, nonetheless president here very much signifying he's with the farmers. >> all right. thanks very much. we'll see you a little bit later. moe mentous day, 20 minutes left in the trading day, dow up 1.2%,

back above 21,000. nasdaq in record territory, above 6,000 for the first time ever. >> s&p not too far. watching 2395, a record close, and netflix big winner today after announced it established a place in china, but it follows a different blueprint than previous expansions. looking at the deal and what has shares soaring today coming up. your insurance company

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ryder system sinks today after the company missed on earnings and reduced full year earnings forecast due to weak demand in the truck rental market, down roughly 13% now. >> for more on the results, ryder's chairman and ceo, welcome to "closing bell," robert, nice to see you. >> hi, sara, thank you for having me. >> the stock is crushed today as we just showed. what drove weak demand? talk about the factors behind the miss. >> yeah. it's really a tale of two cities at ryder. we're the outsourcing business, so companies outsource to us,

management of the fleeted trucks and drivers, so we have over 230,000 vehicles in the fleet, over 7,000 commercial truck drivers, or some customers outsource entire logistics and supply chain activity to us so we run distribution centers. there's most of those services that we provide of multiyear contracts with relatively steadily revenue and earnings. however, we also provide truck rental for customers that are leasing trucks from us to use in surge capacity, and when we resell used trucks in the truck market, one of the largest independent retailers of used trucks, the two product lines are susceptible to the supply and demand of trucks on the road and freight needing to be moved. there's been an imbalance there over the last year and a half, and that's created pressure on pricing, and it's created pressure on demand for rental trucks, so what happened to us this first quarter is we saw our

commercial rental business really come in a little lower than expected, and we are now forecasting that for the balance of the year. it is a cyclical down turn meaning this thing comes back up, but in the meantime, we're feeling earnings pressure of that. >> robert, we're running tight on time because of the president signing that executive order, but i am curious, i look back at the stock price, and you were almost $100 stock two, three years ago. now you're at about $70 right now. so, clearly, you got turning around to do here. what do you have to do? wait it out, the cyclical downturn, softness in the truck pricing market or what do you do in the meantime? >> we're focusing on growing all the other parts of the business, which is something different. there is a secular trend to outsourcing, anything to do with trucks and logistics, it's hard to do on their own, seeing growth in the area, 5% growth in the leasing business, and 12% growth in logistics.

the exciting thing is that as the transactional pieces turn around, you're going to get momentum of the growth we are currently seeing and contract continuing. this will be the sixth year of growth in our full service lease fleet, first time we have done that if a long time. it's working our way through the transactional downturn and see the snap back of earnings. >> all right. robert sanchez, chairman, ceo of ryder systems, thank you for the time today, appreciate it. and patience too, by the way. >> thank you, bill. 12 minutes left in the trading session here. it's another one of those days, a rally that held. dow up 253 points now. >> shares of chipolte up 25% this year, but earnings arrive in minutes. could it change all that? we have a bull-bear debate coming up.

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for a free quote today. liberty stands with you™ liberty mutual insurance. shares up nearly 25% so far this year, near 52 week highs now. the company reporting quarterly numbers after the bell tonight. >> so does chipotle have more room to run or the stock too hot? joining us is david, and

starting with you, david, the bearish one. the company has been working really hart to turn itself around from the food safety scandal, raising menu prices, looking for a double digit gain on same-store sales. why bearish? >> people overlook a few things. valuation is much more expensive than you think because of the 2 $2.6 billion that a most don't take in account. in addition, numbers are overstate because they include new stores. if you keep the comps just to stores that have been open more than a coupling years, there's a significant decline going on, so there's use in the numbers here, and that's never a good thing, especially with the company and track record. >> we have to point out, steven, you have a hold on the stock. >> yes. >> 5 analysts who cover the company, seven with buys, not available, but glad you are with us today. what do you say to david and his

thoughts on like, for example, same-store sales and comparisons to previous years? really suffering. >> we upgraded the stock to a hold, we take a look at the sales, this year's sales on top of last year's sales issue and what we've seen is an acceleration from a negative 19 -- 20% level to negative 11. that improvement alone justifies the stock for improved outlook on the company. more importantly, sales are done at higher margins than taken last year. recall throughout 2016, buy one get one offers, free coupon promotions. not the case this year. they are taking menu prices up in select markets, and having the confidence to do that enables them to see the margins. markets where labor costs are higher. >> so, david, i'm wondering if

you can read into the mcdonald's results today, strong, especially in the u.s., 1.7% same-store sales. is that mcdonalds takes shares from companies like chipotle or restaurant industry recovering over that period? >> they are taking share from other restaurant companies for decades. when it comes to a stock like chipotle, it's not a bad company, but the stock triples margins and 10% growth in revenue for 15 years, there's better stocks out there. mcdonald's is one of them. >> all right. we have to go, guys. we'll know what the report card looks like on chipotle next hour. thank you for joining us. >> thank you for having me on. >> coming back with the closing countdown. >> yes, we are. >> such a frenzy in the day. >> after the bell, it's not just chipotle, but earnings from panera bread, wynn resorts,

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election last november, but, really, the story today is the nasdaq gives it its due. the nasdaq composite above 6,000 now for the first time ever, took 17 years from the first time it hit 5,000, the lost decade, and now it's back, above 6,000 today. the dow on its own account if two-day gain seen here back above 21,000 for the first time in a little while. the trading pattern, up it went, and then just hit cruising altitude and never moved. white house slapping up to 20% tariffs on lumber from canada. that's inflationary, but futures down perversely, bought the rumor, sold the fact. the other thing down is the canadian dollar or runi, down sharply as well. the dollar versus canadian dollar there. we have earnings coming, looking good, but aft the close, we have

at&t, arconic chipotle, and many others reporting here. >> the industrials have been fantastic. i have to appointment out while the nasdaq 100, set a new high, we're six points away on the s&p 500. 2400 would be an intra-day high. we are five points away from that one. >> russell as well. >> that's right. other important things is revenues are better than expected. not just earnings. look at caterpillar. their better numbers top and bottom line dragged up the whole sector, the whole machinery sector, and anything in that ree machinery area was stronger today, and because revenues are much, much better, revenue drought we had for many, many years, we are finally starting to see it make a difference. that's one of the reasons markets are moving up because it's hard to fake it on the top line, a lit easier to fudge on the bottom lines, and the market loves that when the revenues go up. >> so up more than 230 points on

the dow and the nasdaq above 6,000 for the first time in history. stay tuned for that flood of important earnings reports coming up on second hour of the closing bell. welcome to "closing bell," i'm sara eisen in for kelly evans. bill is rejoining us in just a minute. let's see how we finished a strong rally day on wall street. the dow closing up 1.1%. that is a gain of 232 points. s&p 500, up six tenths, just a few points shy, less than half a percentage point high of its own record close. nasdaq star of the day closes in at record high above 6,000 for the first time ever, so russell 2,000, just missing its own record high as well. closing almost 1%. it's going to be ooze busy hour

for earnings, and susan lee is covers chipotle and panera for us. julia with at&t, dom with arconic, and leroy is all over wynn. mike is with us as always, and david is with us of matrix asset advisers. boy, mike, another strong day, best back-to-back gain since the election. what was the big driving factor? >> you know, it's hard to isolate one driving factor. i do think there's been a refreshing return to attention on corporate fundamentals. 100 points off the dow's game, two stocks, caterpillar and mcdonalds. earningings are not coming in so overwhelmingly strong stocks go up, but in aggregate, earnings perform well enough to keep impacting this idea it's a rebound phase of profits,

probably going to be something towards 10% gain of the year, and that basically got the bears back on their heels. they flushed the opportunity to get the numbers down. we'll see where it goes. >> despite technology, nasdaq, and rustle 2,000, small caps. >> yeah. you had to kind of rerotation back into smaller stocks, a little bit, at least in a halting way, and the cyclical stocks. trade did not perform, that was a ryder move to the downside, but in general, it's back to stocks that should benefit from an economy that quickens a little bit. you want to see treasuries higher than they are. that's not necessarily confirming this idea that it's a bustout move of the economy, but you have to be encouraged by a little bit of follow through at least today. >> david, are you as impressed with the earnings as seen -- the market seems to be? >> today's earnings were really good. pretty much across the board, they said good things and very

importantly, it's not so much that the coronaries were good, but outlooks were good. seems like inflections in many areas that industrials operate. that's good not just for this quarter but for the year. >> all right. we got one for you, we want to hear your thoughts on at&t, your holdings, julia with the numbers for us. how do they look? >> hey, bill, earnings right in line with expectations, adjusted earnings of 74 cents a share, exactly what wall street analysts expected. we saw 2 cents from a year ago period. revenues, though, beating expectations by a hair, 39.37 billion. estimates had been for 40.53 billion. now, the company updated its guidance and also say it's the lowest it's -- best ever first quarter, lower than expected now, and right now, the stock is trading down a fraction of a percent. let's dig through the release.

back to you. >> thank you. david, you long championed at&t, and for little as you know now, what did you hear? >> okay. verizon reported last week, and there were a lot of negative things on short term basis for veriz verizon. people looked for at&t to miss today with negative trends. we heard trends now, so the fact they made earnings, kept guidance for the year and lowest person, all are positive. we have to remember on at&t, yield is 4.9%, you're not looking for the stock to shoot lites out upside, but a nice yield and think longer term there's a good game plan and reasonable evaluation. happy with today's earnings. >> at&t says they continue to expect closing pending time warner acquisition later this year, mike, at a time when the m&a speculation is really heating up across the industry with the sector coming over, and that limit on deals ending thursday. at&t has a deal to get through.

>> they have their own deal. it's interesting, some say at&t, obviously a charge for markets. market share is tough in wireless, but they already announced and are executing a big risky deal, and arguably, they are the big incumbent with a big risky deal ahead of them, that's back handed to at&t, but making strategy work is a a big up answered question. >> we have more earnings coming out right now. >> susan? >> looks like panera, the company, of course, taken private in the 30 quarter of this year. learning through the earnings, in line with estimates, adjusted revenues beating, and they say they they have delivery, announcing this week at 26% of the bakery's higher 10,000 drivers as a result in digital saying digital sales also is in the 27% range, and this is something we are watching. back to you. >> all right.

our foodie correspondent, susan lee, she's back when chipotle reports. down a fraction for now, looks like a bigger drop than that, but i guess not. >> would be silly for the stock to go down. >> yeah. >> only stock goes down is if the deal price is -- >> if it's a special situation with jeb holdings buying the company for $7.8 billion. what are you watching now, and what do you make of the rally we are seeing these days? >> it's a goldire locks environment. overall earnings could be up more, and we have a surprisingly low treasury bond yield, so corporate america will continue to sell debt and buy back more stock. i think we're going to see a lot of dividend increases and increase buy backs from the earnings season when it's over.

>> mike, what clues are on the front? the buybacks have been lower. >> less than focused, but i think between that and cash m&a, another source of kind of new money into the investors' hands, it's all supportive. it's the bottom line. the corporate credit markets, look at the measures of liquidity, you understand why the market is well supported, and i think the big question is whether you kind of paint the price with the pullback that we have, that's going to get you very significant short term new highs or just going to be a little more slow paced steady ongoing bull market. >> are earnings estimates rising faster than economic projections? about to get the first number gdp friday from the 1% range, and, yes, they are expecting to rebound in the second quarter, but how much? >> well, first of all, please remember the first quarter gdp is always weak, and maybe it's shares that are negative. a lot of that is forp related.

the second thing is the tax refund checks were delayed by the treasury, so that did impact retail sales for a couple months, but second quarter is shaping up to be a lot better. tomorrow is one of the reasons earnings are so good other than taxes have a horrible quarter. energy is often a very good quarter because the year over year comparisons are easy, and even though crude oil prices have moved a little lower, they've stabilized in a high level, just great to the shale producers in network. >> all right. more earnings coming out. >> the win numbers, what's strong? what do you see? >> looks like all the metrics we are looking at now, sara, a strong, a beat on top and bottom lines, revenue at 1.48 billion, beating expectations of 1.38 billion. eft was 1.24, and analysts looked for $1.01. a a big beat there as well.

look at, expectations for 500 million, and revenues from their new property, wynn palace, and the street looked for 475.6 million, a slight beat there. one factor was gross gaining revenues, and all three quarters, month of the quarter, and we'll hear more color on the call. by the way, the stock is up 3% right now. see you guys. >> it's gone well. obviously, it's very cyclical industry, and it's sounded lately like they are coming back. >> they are coming back, a new 52 week high, basically opening up through tomorrow, well below the 2013 highs. >> right. >> what's interesting is consumer discretionary has been very split, so retailers have had trouble, hotels, gaming, and other travel-related very strong, and wynn is right there with that. >> i wonder why that is.

retail, travel -- >> we know why retail is weak and structurally charged, yet people spend more on experiences and just sort of share of wallet, plus dollars need exposure to discretionary. that's one of the places they go. media as well. >> you want to go to julia now? okay. julia, you have more on at and t, and david is listening very carefully. what do you have? >> that's right. we have the company reaffirmed adjusted earnings growth to be the mid-single digit range, and it is also reaffirmed adjusted operating market, the key numbers are about what's going on with the wireless business, added 2.7 million wireless ads, 2.1 just in the u.s., the best ever quarter first quarter for turn for holding on to subscribers. the entertainment group, directv gained. that's the new over the top streaming service, helped

offsetting tv subscriber decline. interesting speaking to an overall trend for the industry of the they said they saw strong broadband gains, 242,000 ip broadband net ads, 215,000 total net broadband ads. they are expressing 4.6 million at&t fiber locations with plans to add 2 million in 2017. very much investing in the future there. back over to you. >> julia, thank you. few more details there, david, and i have to add context, john legere of t-mobile on yesterday, hitting it out of the park, and there's consolidation coming to the industry, and, you know, you like at&t, is it at the expense of other companies or a reason you picked that one? >> well, we all saw verizon, frustrated with verizon in the short term, but, again, we had this in a dividend focused fund, looking for modest appreciation in the stock market, a lot of stability, and very healthy

yield, and so in the scheme of all portfolio, probably at&t, veriz verizon, the least exciting. they are slow and steady in terms of what e we heard, at&t, they are good in a difficult environment. t-mobile clearly is the hot growth company, so, you know, if you were looking for something a lot more exciting, there's a higher risk-reward proposition. we think at&t had a low risk and reasonable reward potential with the good yield while you wait. >> underline on reasonable, i heard. >> verizon down 12.5% in year. back to susan lee with chipotle's numbers. >> strong quarter for chipotle. quickly through the numbers, calling it a crush. 1.60 is what they made in the quarter, well ahead of analysts estimates. revenues topping as well. coming to restaurants, same-store sales for the quarter, comps comparable sales up 17.8%, well ahead of the

14.9% pencilled in, and they had a cap to come in at the high single digits, and you can thank pretty warm weather in the first quarter, a lot of strong promotions, and that's why there's been a cot of kofd in chipotle to be able to raise prices on average 5% and 20% of the stores, and looks like they are back on track, at least for the numbers in the first quarter. back to you. >> wow. that's a big deal. >> more than 6% there. above $500. >> yeah. the stock's been running hard. >> yeah. >> the stock's been telling you the analysts are way behind in terms how much earnings power comes back. this report seems to confirm that. just for context, in 2015, the company earned over $15 a share. the estimate for the share is 8. the estimate -- >> wow. >> estimate next year is 11.74. >> wow. >> talking about what it was, the street is potentially far bind. it's a respective stock, expensive based on what they earn now and even then, but

traded at 7.50 as the high. that's where the bull case comes in. >> thanks. into the quarter, analysts just wanted clarity for the rest of the year. that's the same-store sales return was actually happening, happening and materializing, and it was not just not lacking easy comps from the year before. >> exactly. >> last year, down double digits, last kwaurquarter, down double digits. >> they want to see the customer's forgiven, just not promotion until gimmicks. >> i can't imagine you own this, but what do you think? >> i don't own it, but the same-store sales are stunning, absolutely stunning. they are seeing where the consumer spending is because it disappeared for months. at least we found some of it with chipotle. good news. >> i think also the positive news here at the restaurant level operating margin actually went up 17.7%, mike, there was a worry that that was going to get

hammered as a result of some of the new marketing efforts, the new tv campaign going, and it took a lot of spending to get here, but now we are getting that margin increase from 6.8% in the first quarter of last year. >> yeah. and, you know, chipotle in the hay day, store level margins was the standout characteristics of the stock. again, i go back to those days. >> pointed out in the debate last hour, that, you were telling me about this, the 3 pennsylvania analysts followed chipotle, only 7 had buys, and we had a fellow on last hour with a hold, and you wonder how many of those will be upgrading after they see this report. >> usually how the whole process works, right? people who have been skeptical belatedly, and now have to rush to catch up with what the market is telling us. by the way, the chart, folks, have been on this the last 50 bucks because it's a long bottom, and so a lot of people see momentum here. question is, you know, just

exactly how much the leg of the run will go. >> finally, the markets, what we're watching now continues to be watch ever washington. we'll get details or at least a blueprint on the president's tax policies tomorrow morning. there's a lot more earnings including amazon, google, and microsoft coming later this week, and there's the geopolitical noise. what are you watching to see whether this market can continue to climb what is near record highs now? >> well, first of all, the checked flag ships look at cloud computing. that's where they make money lately. hopefully they'll continue to expand and help companies and other people that facilitate cloud computing. as far as the any time trump talked about tax cuts, that helps the market. everybody rallies. it's a wonderful thing. we like to see it, of course, and i'd love to see the corporate tax reform implemented sometime this year, but any time trump says "tax cuts," the market rallies. we're a little overbought right

now, but hopefully we'll get more overbought tomorrow. >> all right. let's -- dom chu with arconics's earnings. how do they look? >> reporting earnings of 33 cents a share versus 24, revenue at 3 billion, but, of course, the numbers are playing second fiddle these days to the development at arconic, spunoff from arcoa, downstream or value added engineer product side of the aluminum business, make aerospace parts, and klaus and ceo of arconic was dismissed from the board of directors for improprieties that happened with elliot mountain there. i will tell you guys, sara, bill, aside from the top line and bottom line numbers, there is yet no mention of elliot

management or klaus in the release. of course, the conference call may be a completely different story. that happens at 5:00 p.m. eastern time today. a conference call that i'll be on listening very closely to to see if there's any mention in there whatsoever, bearnings bea, stocks beat, moving up after hours session, and we are watching and listening closely for any mention what happens going forward with that activist investor elliot management and what happened to the former ceo, guys, back to you. >> i'll say. that's going to be juicy. >> when they split them up, so alcoa was the bad company, arconic, the good company. >> i wonder if the performance has to do with the fact, elliot, the activist invester, today issued a new letter to shareholders urging them to put all four members on the board. this is a day, of course, after arconic would nominate two of them and ousting of klaus. >> better than expected results

at the very margin might help management, but it's really going to trade based on elliot's success or not in the campaign of new leadership. >> so far, it's working, they are the best in the s&p this year. >> all right. we have all earnings out now, i think. everyone's accounted for at this point. thank you, and david, always good to see you as well. >> thanks a lot. >> thanks for joining us. in the mean time, yes, if you joined us, the nasdaq closing above 6,000 level for the first time ever, but as markets tear higher, is tech too expensive? a good old fashioned bull-bear debate coming up. >> the trump administration posing a 20% tariff on canadian lumber to the u.s. is this the beginning of a trade war with canada? that's coming up. you're watching first in business with cnbc world wise.

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to be exploring strategic alternatives for the company. reminding viewers several months ago they took an activist position in the company, and urged some changes, and you can see shares are responding here. after hours, almost 4%. decker says they will give an update when they release earnings towards the end of may, i believe, on may 25th, back to you. >> thank you, court. i'm reminded jimmy chu is for sale. a lot of shoes for sale now. >> want to go shoe shopping maybe? >> retailer looking at options. kate spade, the list goes on. >> private equity could be a candidate, $2 billion market cap, by the way. >> moving on, nasdaq crosses a milestone, closing above 6,000 for the first time ever, the tech heavy index nearly doubled the dow and s&p 500 this year, up 12%. >> all right. pay attention here. more room to run in the tech

sector? let's bring in michael from permanent portfolio funds, and michael, a bear on tech, and michael santoli is in the conversation as well. >> we have to name michael. >> exactly. >> the bull, why? 6,000. i mean, it's -- and that are plenty of people who feel like the fang stocks are getting pricey here, what do you think? >> well, i wouldn't disagree with valuations. they are getting a little pricey. with relong term investors thinking out long term, and when i think you look at long term investing in equities, you're looking for growth. and one of the only areas, sectors, and sub sectors, if you will, with a lot of double digit revenue growth, earnings growth, growth in cash flow, especially, is technology. they are on the cutting edge of growing goods and services of what is needed to live in today's society, and dynamic,

and to be a growth sector, you need exposure here. you can argue valuations, and you never want to overpay for anything, but to beat, you want to be in the sector long term, and that's the bull case here. >> you said you're bearish for some time. you really missed out here on the rally. >> i definitely have. i have to admit that, but, you know, for me, i can't argue the points made, but because people have been overpaying for growth, and i think that's the problem here, you're talking about the technology sector, the s&p 500, and it's trading 25 times earnings, and the past decade traded 18 times. because of the rest of the economy is so slow in the recovery, people are paying added premiums for technology, and then the expectations of earnings growth this year are actually very high, you know, the forecast for earnings growth, the technology sector in 2017 is about 30%, which is --

it's really tough to think that we're going to match those expectations. >> yeah. i mean, the interesting thing about nasdaq's success, spin is, wow, the nasdaq accelerated to the upside relative to the rest of the market, or over 17 years, 1% annualize. >> right. >> shows you how high it was back then. also, it's a very different index right now. the top five stocks, apple, alphabet, amazon, facebook, are 30% of the index. they are megaplatform companies, and i think you get in phases where the market falls in love with them a little bit too much, and there's nothing but upset, talking about which one is going to be the first to get to a trillion, fore gone conclusion that any company gets to a trillion. >> people talk about better earnings, the fact they are growth names, michael, i wonder if that's a trump trade here, too, as well. according to moody s, they account for 53% of the overseas

cash held abroad by u.s. corporations. if we do get repatriation, a priority of the trump administration and of congress, that would be a huge benefici y beneficiary. >> sure. it's a big number. tech benefits. i think the way the immigration debate plays out, i mean, tech is heavily influenced by, say, the visa program, for example, and so and i think that all businesses are going to be impacted favorably if you are able to cut, you know, the corporate tax rates, and make businesses more efficient, and that, you know, less taxes flows directly to the bottom line, increasing the earnings number on pe. there's a lot of positives there. the negatives would be so far this year, the clock keeps on ticking, and we are going to hear, i guess, details tomorrow on taxation. i think we are aways away from any sort of definitive policy proposals, not only that you have to pass them to get through congress, proven amazingly difficult with other things so far this year, but they also have to have time to work, and, you know, the midterms are only

15-16, 17 months away now, and so, you know, the clock is ticking. you got to get the stuff done to take advantage of it, but tech would benefit substantially from better trump policies, if you will. >> quickly, michael intrigued on the blanket statement. is there nothing, no group within technology that you feel you could buy into right now? >> no, well, the problem is -- it's funny, just think about the trump trade you talked about. this is a group where their effective tax rate is below 20%, you talk about a corporate tax trade, the cash for repatriation, this is the behavior that trump condemned in the election. to think they get a one-time, you know, low tax rate to bring all that money back, then trump's rewarding behavior that he's been criticizing all election, so i think, you know, until we know what the policy is, people should be concerned when they get too enthusiastic

in the trump trades, especially in this sector. >> all right. >> we'll see earnings of alphabet on thursday. >> i would say mike and mike, but that's taken on espn, but thank you, guys. u.s. steel out with earnings, not looking good, did they? >> goomp, bill. the stock is sliding here. the earnings numbers did not come in line with estimates, as a matter of fact, earnings per share, negative 83 cents. we were looking for positive 34 cents there. revenues light too. 2.7 2.73 billion. it looks like in the segment analysis is the problem of the flat world segment. higher raw material costs, increased planned outage costs, seasonally lower results from some of the mining operations. these things seem to get in the way here. some accounting charges seemed a little strange as well. the guidance for u.s. steel, positive, maybe the trump policies are expected to take

effect, and help the company. the conference call for the company tomorrow morning. we'll get clarity from them. back to you. >> thank you. this is a stock up 70% in the last 12 months, considered a key ben rieficiary of infrastructure, pipelines, and tariffs. >> and the ceo was high profile at the white house before that talk. >> exactly. just in the last week, it rallied hard on potential foreign steel. you are playing with house money now when it comes to sell off in terms of the here and now, and how business is performing, well above the election levels, but, look, another reminder this has never been a predictable or consistent business. >> all right. it is time for a cnbc news update now with sue. hi, sue. >> hi, guys. this is what's happening at this hourment an audience greeting ivanka trump with boos and hisses in germany. >> enabling us, and the new reality --

>> but she brushed off the heckling and stuck with the remarks. the president's daughter took part in a special summit today focusing on empowerment for women and girls. she's on the first official outing in her white house advisory role. crews cleaning up a deadly freeway accident near los angeles today. look at that. the fire crash involved a big rig and tanker truck. at least one person was killed. nine others were injured. authorities refusing to publicly release surveillance video of the train robbery in oakland, california because the suspects are likely juveniles saying 40 to 60 minors stormed the bay area rapid transit train p saturday and robbed passeng s passengers. two people were injured. would you pay $425 for the jeans? that's what nordstrom charges for these working class inspired jeans. the price tag includes fake caked on mud. they come in a straight leg cut,

i'm told. that's what my son, daniel, jeans look like as well, and they are not $425. they are, like, $12 at target. >> we have a lot of thoughts on this, but no time. >> they muzzled us. we have plenty to say, but no time. thank you, sue. >> shares of netflix popping after it announced they are moving into china. the first step, what it means for the company's bottom line coming up. tax reform supposedly on the way if the white house and capitol hill agree on just what it's looking like. a look at where the sides stand right now when we come back.

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type in your idea. select from designs tailored just for you and publish your site with just a few clicks-even from your... ...mobile phone. the internet is waiting start for free today at godaddy. as you may know, the trump administration promised tax reform plan to be reveal tomorrow, but parts of the plan are met with some confusion and concerns. ylan is on capitol hill with part of the story. ylan? >> reporter: bill, big questions about the president's tax plan here on capitol hill. ahead of the meeting this afternoon between republican leadership and treasury secretary steven mnuchin and gary cohen. kevin brady told reporters he wants to ensure tax reform is permanent. meanwhile mitch mcconnell says he has priority is ensuring all businesses, big and small, get equal treatment under the tax code. mcconnell conceded republicans

may have to do this by themselves. >> regretfully, we don't expect to have any democratic involvement in that, so we'll have to reach an agreement among ourselves, requiring a reconciliation vehicle. >> reporter: cutting the corporate tax rate to 15% as the president suggested could violate congressional rules. we got a copy of the government report found lowering corporate rate to just 20% for three years would still add to the deficit in the long term. that would complicate republicans' plans to do this alone without democratic support. for his part, democratic senator schumerments to see a full plan before making any judgment whether or not to help out republicans on this issue. guys, that means we're all waiting for the white house to weigh in tomorrow. back to you. >> oh, yes, we are. ylan, thank you. president trump's lumber tariff against canada today wri wrinkled the neighbors to the north and some on this side of the border fearing a trade war. we have a debate on this next. i mean wish i had time to take care of my portfolio, but..

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home builder stocks tumble after the tariff on lumber from

canada, five companies pay a tax of 3-24%, and all other companies pay 20%. here's the president's rationality outlined a short time ago. >> we won't be putting a very big tariff on lumber, timber coming into this country. people don't realize canada's been rough on the united states. everyone thinks of canada as being wonderful, and so do i, i love canada, but they outsmarted our politicians for many years, and you people understand that, so we instituted a big tariff. >> on both sides of the border, we have seth, vice president of corporate communications stainability, and government affairs at forest products, one of the companies singled out by this tariff, and andrew miller, ceo of lumber company in the u.s. first, to you, seth, any

allocations they are subsidizing imports of the line up bore to the u.s. true? >> i can certainly speak for quebec and ontario where we operate, and we remain confident we should have nothing left free unencumbered access to the u.s. market place. everyone looking at the issue since 1983 found in canada's favor, and look specifically what's undertaken in quebec with tenure reform, it's a market based system, replicating what's done in the united states, and in ontario, a binational panel under nafta in 2005 already determined any subsidy level to be deminimus, why accept anything less than free trade? >> all right, sorry, seth, yes or no? are the -- is the lumber coming to the united states here from your parts of canada, are they subsidized? >> absolutely not. >> okay. that's what we were after. mr. miller, have your company been materially hurt by lumber

imports from canada? >> yes, and seth's arguments are patently wrong. i mean, they do subsidize their timber. it's an established fact. that's why the commerce department is levying these duties. the government provides this company with 75% of their timber at a fixed price, and timber is two-thirds the price or cost of manufacturing lumber. in d.c., the subsidies are more substantial. the government of canada use their own timber to operate saw mills to produce maximum employment in jobs and cost jobs in rural america day in and day out. that's been the case for decades, and, yes, we are harmed. we could operate mill at higher rates of capacity if it were not for the fact we're facing an overburdened market with depressed prices caused by the canadian system which operates their saw mills and public utilities as job and economic creation engines. >> all right. playing a game of semantics

here, seth? >> no, i think it's far more than semantics. >> one person's subsidy is another person's public utility? >> this is unfortunately another example in the united states where a small group benefitted by or motivated by greed are taking advantage of the many. you have a group of timber barren who are trying to raise the value of their real estate, their land holding at the except of canadian workers and families and american workers and families. every thousand dollar increase in the price of a home puts 153,000 american families out of home ownership. this is not good for consumers. this is not good for workers on either side of the border. president trump is going to achieve that 4% economic prosperity that he speaks to, and we certainly hope it's true, if housing remitting up to 18% of u.s. gdp, you can't afford to

have a great deal of volatility and price surges. >> andrew, can you just respond to that? people are saying we've already see a 21% surge in the price of bum ler this year. that will result in higher new home sales for american consumers. on prices. >> i respectfully disagree. the facts don't support that contention, both the canadians, the national association of home builders have been touting facts that are just not supported by the reality. lumber, framing lumber, not all the other lumber. >> sorry, just econ 101 if we impose a 20% tariff on lumber comes into the country, the price has to go up. you're free to raise prices as well. >> the homeowner takes the cost? >> well, lumber accounts for 2% of the cost of a home. okay. the national -- it's not -- ask.

are lumber prices going up? >> not necessarily. we are in a global market for a commodity. the price of lumber's going to settle down based on fundamentals of supply and demand meaning how many people are building homes, how much lumber is used -- >> and what is it if it doesn't mean higher margins for you? >> levels the playing field, the subsidies calculated speak for themselves, resolute, they determined has a 12% cost advantage because of the timber price they receive from their provisional government. it levels the playing field so they absorb the 12%. in british columbia, they absorb 20%. cost of lumber is demin mus to the cost of the home. >> all right. >> looking at the national association of home builders -- >> i got it. i am sorry. we heard the point before. we're tight on time. it deserves more time, but we

don't have it right now. thank you so much. netflix is finally entering the chinese market, but not in the way you may think they are doing it. they landed another country. very interesting story when we come back.

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securities. overweight rating on netflix, 170 price target, and also, bob, cofounder of -- excutes and coproductions and live streaming of western films in china. we'll get the china perspective there, but, first, andy, what's it do to the numbers? a sharp climb in netflix, was that the optimism around this deal? >> i'm laughing because it doesn't do anything to the numbers. the oddity of it is the deal alluded to last q3 at the time and reiterated today, and in my conversations with them, it was described as immaterial, something we would not notice if they dcidn't call it out. i don't think we'll notice it, but it just does help the brand. >> is it the beginning of the process of trying to penetrate the chinese markets that they have been shut out from so far? >> they'll know more about the process there than i do. is it a start?

it's a start in terms of raising awarene awareness, critical for if and when they for if and when they get the licenses and operating there. the process for getting that doesn't is completely separate than what's been negotiationed. >> mark, my question to you, is you have penetrated the chinese market. does china prohibit outside media companies from coming into the company for economic reason, competitive reasons or social reasons? whatever the social message might be? >> all of the above. the bottom line is netflix can't operate in china as netflix reed hastings said that numerous times. andy is right. this will have a diminimus effect on revenue. it is at least a first effort to try to get their programing better known through legal means in china. so that's a good start. >> you know, china was notable

absent in that rollout of 130 countries. the last was a little disappointing. is this just a sentiment game? >> you know, there is a lot of seasonality. i think the company is learning quite frankly, like you said, they launched globally a year ago. so they actually are lighter than expected. q2 will be better than we saw. the trend will be quite good. >> mark, i wonder, we obviously know nothing really about the terms that netflix may be getting. of course, it's modest in its sail. it would strike me as ironic if they have someone else to distribute. in retrospect they helped netflix get it started streaming by basically getting its own content available, programs at a

lower market price. so i guess it would be interesting to see if this, in fact, helps the 84 all streaming market for its partners in china. >> you are right. it is iron tick way netflix got developed. it's eating the lunch of the companies that help to get started. in china, this will be a very small part of icheese programing mix. the real big trend in china is to, for the big three streaming companies for chinese content. they're spending roughly 80% of the content spend on their own content now and chinese content. the nets, they're really using the netflix model if you think about it to develop the next phase of their streaming companies somplt this will be a pretty small deal. keep something in mind, there was a study a year ago, 25 million chinese use vpns to kind of pirate netflix content for certain programing.

so some of their shows are known in china. so there has been this kind of back doorway that some chinese have been getting netflix. >> very interesting. good to see you both. thank you. you bet. anger, it was in full force this morning at wells fargo shareholder meeting where investors were still unhappy over the bank sales practices scandal. we have a live report coming up. stay tuned.

>> the news on costco just in, the hotel retailer announced a $7 per share redeemable may 26th. additionally the company is raisings its regularly quarterly dividend from 56 per share to 45

centers. shares of the costco up 3% on that news, sarah. >> mid-day fireworks today at the wells fargo shareholder meeting. we will take you there live next. ♪ it's not just a car, it's your daily treat. ♪ go ahead, spoil yourself. the es and es hybrid. experience amazing. at crowne plaza we know business travel isn't just business. there's this.

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>> wells fargo held its annual meeting today, tensions run high after this scandal, leslie picker is in florida with the fireworks. >> hey, bill, a massive rebuke of the wells fargo board today with more than half the directors sitting less than 70% of shareholders support, but all 16 directors made it above the 50% threshold, meaning they don't need to resign. i asked the ceo, tim sloan, if he expected any directors to resign anyway after today's results, he says he hopes not. >> we got a message from our shareholders. we will be very responsive. not at the board level but the manager level to make sure it fits and everything was broken and bailed better wells fargo. >> share holders were very dissatisfied with the board handling of the sales practice scandal and they showed their anger, not just in their vote, but in pointing fingers at the

executives of today's meeting, take a listen to what one shareholder said. >> all we'd like to know if why you didn't see snit and if you did see it, why didn'tp didn't you answer is it so why is it so must have much to ask. >> reporter: that anger is emblem attic of hair shoulders alike. guys. >> what a story. i guess we should have seen the texter. oh, look at the time. that does it for requests closing bell." >> on borrowed time. >> we'll all see you tomorrow. >> a record day on wall street as the dow closed more than 200 points and crossed over 21,000 before ending slightly below that level, making it the best