also, with only three major d ramp producers, one's in south korea. >> quickly, erin >> concerned about south korea, ewj, don't short korea or s&p. >> okay. >> i'd be buying this post earnings dip by the end of today, probably own more >> jimmy >> jc penney, last call. >> good stuff. power lunch begins now the north korea threat grows, stocks barely react have they decoupled from the news cycle or is wall street right not to be worried? plus are we finally see drug prices come down what mylan just did that's turning heads and moving the stock. and disney trying to change the game on how you watch it's movies and shows will other follow it's lead and dump netflix no matter how you watch us, we're glad you're here as power lunch starts right now welcome to power lunch

new fears about north korea weighing on the markets. three major averages down for a second straight day. the latest round of earnings, also a fear factor here, disney accounting for a good chunk of the dow's losses in today's session. investors meantime are looking for safety and they're finding it in gold prices are sitting near two month highs. >> thank you very much, melissa. i am michelle cabrera and here's what else is happening at this hour more than 85% of the companies of the s&p 500 have now reported earnings, 73% have beaten estimates, 18% have missed fbi agents raided the home of former trump campaign chief paul manafort last, month comes amid the probe to influence the 2016 election. ford is sending out several teams of investigators to police departments across the country they're looking into concerns about carbon monoxide seeping into law enforcement vehicles. >> michelle, thank you very much welcome eastbound, i'm tyler mathis and we again with the north korea threat and the

rhetoric being turned up kayla is in washington following it all for us. kayla. >> hey, ty there's still questions about what the president meant when he made remarks yesterday that fire and fury would be coming for north korea if their provocation continues. the president this morning tweeting, touting the u.s. has nuclear arsenal and then just moments ago, defense secretary mathis, in a statement, saying quote, the combined allied militaries now possess the most precise rehearsed and robust defensive and offensive capabilities on earth. the north korea's regime's actions will continue to be grossly overmatched by ours, and would lose any arm's race or conflict it initiates. other cabinet members have sought a reassuring tone the vice president tweeting that the president has no higher priority than the safety and the security of the u.s. secretary of state rex tillerson who is still seeking a diplomatic fix defended the president's comments as a simpler overture that kim jong-un could understand

>> i think americans should sleep well at night. i have no concerns about this particular rhetoric over the last few days. i think the president again as commander in chief, i think he felt it necessary to issue a very strong statement. directly to north korea. >> the white house declined to comment on whether the fire and fury remarks were preplanned or off the cuff is now the "new york times" and washington post are reporting. only saying the president is in constant contact with his national security team, more of which will be joining him in bedminister this week. tyler, back to you >> thank you very much president trump of course warning north korea of fire and fury if the country continues it's nuclear and other threats, but will mr. trump be able to force kim jong-un to give up his nuclear weapons? former nato supreme allied commander westerly clark addressed that this morning on squawk box >> the only person we've convinced to get rid of the nuclear capability was muammar

gaddafi. tony blair and look what happened, as soon as he got rid of it, two years later, we don't like that guy much anyway. that's a real lesson to kim jong-un. he could look at that and see, even if he was generous, what's the odds that two years, three years from now someone wouldn't say, now that they don't have nuclear weapons, we didn't like him anyway >> joining us now, fred kemp, president and ceo of the atlantic and bruce clingner. welcome. fred, let me get your reaction to what general clark just said there. should kim jong-un rely on representations that we'd go easy on him? wouldn't have any problem with him if he just gave up his nukes? >> kim jong-un, not only is general clark right, but kim jong-un is actually told foreign visitors that muammar gaddafi is his warning sign he doesn't to want go the way that he went but if you actually take donald

trump at his word, then his regime may be more endangered by not negotiating some sort of settlement than negotiating. if you look at the fire and fury statement. it really has echoes, chilling echoes of harry truman's statement in 1945 before attacking hiroshima where he said a reign of ruin would fall from the air on japan if they didn't agree to the settlement that the u.s. was achieving that time but as you said, before, it's unclear to me whether this was an impulsive statement or interagency statement that has some strategy and intent behind it >> bruce, what do you think, especially when you listen to what general clark said this morning, what incentives would north korea ever have to come to the table? if you really crystallize what is going through his mind and the struggles we face and trying to get him to negotiate. >> right north korea will say both publicly and privately that they will point to u.s. attacks on not only gaddafi, but also yooug

slav yan they use that as justification for having nuclear weapons and having broken eight international agreements they reached before to promising never to build them or give them up once they had built them. with the idea of pressure tactics is to try to alter their calculous on that seeing that as they get increasingly isolated from the u.s. and the international financial system while leaving open the door for negotiations but we've had -- we've gone down the negotiations path and it hasn't gone well >> it sounds like both of you, fred, saying fundamentally the same thing, that the negotiating path makes no sense based on our history, the united states history makes no sense for kim jong-un. >> well, it makes no sense for kim jong-un, but we have to make it make sense to him the key in this, and this is what we can't forget, particularly for your viewers because what's really going to move markets is how do thing goes with the u.s./chinese relationship this is the most important bilateral relationship of this

generation and this is a catalytic moment for that relationship. if we manage this well, and so far, we've managed north korea okay with china, then that could actually set the terms for a new way of corresponding with them, cooperating with them on the world stage. and if we don't, that could make for a long period of confrontation to come, and that could have a heavy impact on the world economy and obviously security as well >> bruce, i asked fred this question the other day, i will ask you, the more predictions. north korea's going to have nuclear weapons and the world is going to live with it. >> well, i think we, we're going to live with it in the short term, but we need to try to alter that and continue to have denuclearization as a policy on negotiations as i said, we've had eight international agreements with north korea and all of them failed because north korea broke all of them. we've had two party, three party, six party talks, et cetera -- >> if negotiations have failed, then i jump to the conclusion then, what, do we have to bomb

them somebody's got to bomb them? what do we do? >> i would say that you don't have premature negotiations and i'm against a preventive attack. i think that would precipitate, you know, perhaps in all out war on the peninsula there's much more more we can do on the pressure side it's wrong with president obama says they're the most cut off nation on earth. there's more we can do on that we've been pulling our punches on a number of issues. and so i think we continue down that path -- >> be specific there and doesn't that depend on china being -- and the soviets -- the russians, i show my age there, and the russianing being willing to enforce and go along with whatever sanctions are promulgated. >> what we need to do is divorce law enforcement from diplomacy we continue to try to get china to fulfill required u.n. sanctions. we know they're turning a blind eye to proliferation and elicit activities benefitting north

korea on their soil. but the kus do things with it's own law. we know the vast majority of all international financial transactions in the world including north korea's and chinas are denominated in dollars which means they have to go through u.s. banks. the u.s. imposed $12 million for money laundering we haven't imposed a single penny on chinese banks last year was the first the u.s. had cumulative sanctioned as many north korean entities those in zimbabwe. a couple weeks ago, the trump administration sanctioned the bank in one chinese bank that was the first chinese bank in 127 years that the u.s. had taken action against for violating u.s. law so we're in essence giving de facto immunity from u.s. law to chinese entities that are working to facilitate north korea's nuclear and missile programs so we can use lust law to wean away those entities from dealing with north korea >> very important relationship as you've highlighted, fred, between the united states and china. you mentioned earlier, for our

audience, this could be catalytic moment for the u.s./china relationship. you just heard what bruce said, what is the takeaway do you think most importantly for our audience when it comes to the north korea situation? >> well, i couldn't agree more that the unilateral financial sanctions are what could do the most to push this another notch up don't forget we did get the chinese and the russians to sign on to a 15-0 vote at the security council to ramp up sanctions more a billion dollars of north korea's $3 billion of exports will be affected by that but that comes nowhere near the hurt that would come from the financial sanctions. and then from the chinese, and the iranians perhaps, but the chinese more likely, oil sanctions, the export of oil to north korea. so there's a way to really screw the screws much tighter on north korea. and then the people around kim jong-un have to start asking themselves, is this really smart for us

is his course saber rattling and building a nuclear weapon's system that threatens the united states the way that we're going to save north korea or not and i think what i worry about with the ramping up of rhetoric on trump's part is he's starting to draw a red line he's not yet ready to enforce and we should be screwing the screws a little bit tighter on the financial and economic side before we start talking about war. >> using other options instead thank you fred, thank you, bruce. >> thank you >> thank you we have a news alert in the bond market right now. ten year notes up for auction, rick santelli is tracking the action demand would be heavier in light of what is going on around the world. >> you know, that would make perfect sense. think about it we walk in the low 220s. that took away all the concessi concession, market already rallied, so buying late didn't seem to be the rate idea because

no, this one was d as in dog, and i'm probably being generous. probably a d minus let's go through it. if billion first times tens, 2.25 the big side of the one issue market was 2.235 so tailed off, rather large, and if you look at 2.23 bid to cover, that's life from a 2.45 option average 57.9 on the indirect, weakest since november 16. weakest since november of '16. the only metric that was average was 6.8 on direct. steelers take a large 35.3% of this auction and of course, unlike yesterday's a plus three year, let's see how the third year goes tomorrow completing supply. back to you. >> all right rick, thank you very much. so let's wrap it up for you, north korea threatens u.s. territory of guam, president trump promising fire and fury, trump's former campaign manager had as i home raided by the fbi last month yet, dow stocks are higher

today. the question is, has the stock market completely broken free from the actual news cycle of course, david, north korea's threatened -- they've threaten guam pretty much every year. it's like a ritual thing at this point, 2013, they threatened hawaii as well we have to have longer memories i think than we do the dow is down 60, but it's basically only because of disney half the dow stocks are higher why isn't the market reacting to any of this stuff? >> look, i think they're focussed on the news that matters. and the news that matters is not necessarily north korea or -- >> we just led the show for ten minutes. doesn't matter at all. it's got to matter >> sure, it's a potential nuclear event -- >> that matters. nuclear war matters in my book >> what's the alternative? if you sell your apple today and we have a nuclear event tomorrow in new york, does it really matter it doesn't >> it's a binary thing things won't happen or it won't matter

>> simply economic when it translates into an economic event, then it starts to affect stocks good earnings season right now most of the company reported block buster earnings where we can see top line growth. not only that, companies reinvest in themselves it's not just the amazons of the world. we have industrial companies doing just the same. and it's not just fame, companies like boeing, industrials like caterpillar are doing well so investors have learned to buy the dip here, and it's paid off. >> lamar, david is outlining exactly what the market reaction is, but the markets are telling me that while equity markets don't care about what's going on, look at the other asset classes and there is something to be worried about. so are we saying that we discount the message of one asset class over the other or stocks, right, are bonds gold and the bigs wrong or vice versa? >> sure. so we would argue that stocks are right. obviously there's a possibility of something were to happen if things escalate, there might be a pullback, but i think investors, particularly in the

equity market have seen time and time again that the people who buy on the dip have been rewarded so every time we see a brexit, even the financial crisis, even september 11th, investors who buy on the dip tend to do better so we're holding a little more cash than we usually do, but not a ton. we're not making a huge bet here, but we're looking at the opportunity to potentially if there is a dip, that it'd be a great -- >> if there is a dip, what'd you look to buy? >> we look to buy things that haven't run so far so, you know, if you look at the market, you've seen the fangs, the facebook, and amazon that have incredible runs you've seen some of the sleepier stocks, the boring dow type stocks that pay dividend that investors have been buying based on trying to find yield that can't find yield anywhere. they've been buying those. some of the companies that have great growth prospects that really have gotten left behind in this market rally, we think there's some great opportunities there. >> is it noise, david? i hate to use that term to

minimize it. >> on a day-to-day basis, yeah, but look, we could have an event that could cause a correction, and look, 10% correction, investors are likely going to pull back -- >> let's stop -- i hear you saying it, let's stop saying event. it is, to my point, it is binary either, we just keep blabbing with north korea or at them, or something happens. and if something happens, militarily, don't -- that's not an event, that's not -- >> we're beyond the military answer at this point nearly every president since reagan bears some responsibility here we do did nothing. they are in the nuclear convent right now. it -- >> pakistan, iran -- >> once you're in the club, you're there usually for keep so unless you're going to make a massive strike, you wipe out, you wipe out, you know, half the peninsula, you've got conventional weapons on the border that could hit seoul, south korea, 30 miles away >> i would imagine that it's not just binary, it's not just we'll blab and nothing happens, or we'll blab and something happens. there is something in between, and that is a completely change

the relationship that we have say china and that could create an actual trade war -- >> and that's what it translates into >> when that happens and it spills over into the economy, but i can't anticipate that right now. you know, i'm not seeing it in the numbers yet. and maybe it'll be a little too late if it happens, i pulled out -- every time i had a geopolitical event in the planet i'd never be in the market. >> david, lamar, thank you all right. coming up, zinz looking to own a bigger piece of the streaming pie. will others follow and ditch netflix or will the move backfire we'll debate that one ahead. lower generic drug prices hurting mylan? one of our next guys say it's not that bad the other says, it's not good either what's in store for the stock in the company next

welcome back, sharing staging a bit of a comeback after plunging nearly 10% only their missed earnings. stock briefly turned positive today before moving back in the red. certainly off the lows meg is here with more, meg >> investors may have been expecting the worst from mylan's

second quarter that stock has been plunging as warned about generic price erosion for generic drugs in if the united states. now mylan is feeling the impact as well. second quarter earnings missed estimates today and mylan lowered it's forecast. our industry along with the entire health care sector is at an inflection point while saying the company's diversifying it's products and geographic areas. now some of the weakness was due to competition or the epipen which it said it would launch amid prices controversy last year in addition two major new drugs will be deferred to at least next year, launches of those drugs, generic drugs and asthma drug mylan citing an uncertain u.s. regulatory environment for the delay. that's making some scratch as the fda is on track for record passing this year.

that's the same category where we've seen setbacks to identical competitors to mylan's ep pen. that is an area that new fda commissioner has pledged to speed up, guys but a lot of dynamics here at play >> they said it was an unprecedented, an increase in the number of generics approved at the fda that caused drug pricing to be down and here we have mylan saying the opposite so what's going on >> that's a good point they were saying there are more competitors flowing into the marketplace, and of course more competition sum presses prices mylan was talking about the supply chain and how there is a succession in purchasers and distributors, that could be weighing on some of that pricing pressure as well but you are seeing across the board, pricing going down whereas these record approvals in fda are going up. >> meg, stick around we to want keep the conversation going on mylan, we want to bring in david mers and ronny of bernstein. guys, great to have you with us. ronny, overweight rating on

mylan, $52 price target. how long do you stick? it seems like a lot of things telegraphed from the generic industry indicate that pricing is going to be lower for longer. mylan saying it today, and heather is out, basically, it sounds as if she's saying that the industries at an inflection point in it's time, the sector should be rerated. >> that's correct. so what we are seeing here is a general decline in commodity generic prices in the united states the u.s. is directly had pretty decent prices when generic went out and the prices are coming down to commodity as the essentially buying chain and consolidated the thing about mylan, they buy 50% of their operating profits are made outside of the united states they have a wave of potential products which will allow them to sustain the onslaught and just the way my numbers work given how far the stock went down, there's more upside than downside even under assumption of

continued pricing pressure, which is what i expect what will kill mylan, or my thesis of mylan would be they could not get the differentiators back to prove, but we know the fda, officially stated they're going to move to improve some of those products and if you assume that mylan gets the fair share, in my view the odds is better than the odds for a downside that said, i kind of want to throw that point out there, that if pressure on the commodity side will continue, folks will stop making the commodity drugs and we have a chance in a couple of years end to up with some shortages of products that we had with ejectable generics about three or four years ago. >> yeah, that's how the products work i see you shaking your head, make sure i understand here, generic drugs are supposed to provide competition to brand name drugs, and now we're getting more and more genetic drugs providing more competition. is that basically the overall story for some of these companies. >> that's what's happening on the commodity side the idea that people stop making the drugs because they can't

make money in it just to be clear, they run at around 25% operating margins if you x out some of the other things -- >> 25% operating margins on generics >> on generics take out some of the things they add back, you might get to like 15, 20%. you're still not down at 10% where other important companies to the economy, like -- >> is that net or gross? what about the rebates, david, where do they come in on the net basis? >> that's what we estimate it to be i think this idea -- >> they keep that close to the vest you don't exactly know what they're getting back you know maybe the gross, but you don't know the net, you estimate it's 20, 25 >> for branded, it's around 40%. it's very little but there's no transparency. my point is they're not going to stop making these. you see lots of any entrants into the market the last couple of years, and they're growing, they're making money >> you know what this reminds me of, one of meg's favorite topics, martin, who he bought

these drugs argued if if the prices were higher, there would be more producers and the market wouldn't be beholdened to the only one producer or some of the vaccines out there that nobody wanted to bother to make because they didn't actually bring in that much money. >> we were very early on this idea that generics were raising prices a lot, about a year and a half ago, two years ago, and what you're seeing is the tail side all of the sudden competitors came in and start to kill the price. on top of that, fda that's working to get drugs approved. now they're not approving some of the mylan drugs they want to get approved, maybe that's because they're not good enough to get approved. there's no upside for the fda to say, oh, we don't want a generic version. >> but this is an industry with all of their prices falling, why would you buy it it? >> we're neutral just three months ago, mylan said we're confident we will make our full year guidance -- >> now they're backing away from that >> if an industry is changing so fast that an insider can't tell you what it's going to be half way through the year, i don't know how others can.

>> ronny, i want to ask you about this idea that the fda is the reason for these delayed launches for mylan david is saying maybe the drugs just aren't good enough. what do you make of what he said about the fda griffin the record approvals we're seeing. >> what the fda has done over the last six months or aeroyear is approve drugs that have been approved essentially they sell this of what they require for approval what they have not approved are complex products and as much as i know david loves the mylan team so much, but if we look at this, it's not just mylan, it's mylan, it's essentially the entire leadership off the generic industry that's been saying the same thing, the complex products are getting approved it is true that the fda has to establish a high bar for approving generics, but it does feel like they're making their numbers by approving things they already approved as opposed to spending more of their time. i think the challenges are proving new complex drugs.

we will get there, but we have not gotten there yet and i'm not sure i would put it just on mylan that they have stopped on this. >> okay. just quickly, i'm sure ronny was being sarcastic when he said david, the mylan team after your warning about mylan preearnings have actually sort of blacklisted you, haven't they? >> it's been for a long time we can't ask on the conference calls. >> they're blocking your access. >> before they reported earnings, sent them an e-mail, said hey listen, here the prescription trends. they look bad. what do you make of this is there any other, they didn't reply. ceo, cfo >> they're blocking you out. that's wall street for you thanks guys. right on deck, special wednesday mystery stock. we're going to find out what is driving this stock higher, driving is yr nt th ne,exouhi

welcome back to power lunch. rental car company herfz soaring. issues an optimistic outlook it has made significant progress in it's turn around plan it's up 25% or thereabouts today. shares of trip advisor falling, way off the lows the company beat estimates, but cut it's full year guidance in part because of that shift to less profitable mobile device booking. and price line beating estimates, the bookings falling slightly short of forecasts as

did the current quarter guidance and that stock down about 6% in the past week. about 7% today all right. now let's turn our eye some of the big retail names that investors are losing money in today. first, children's place. sales did grow they were helped by the bankruptcy of their former competitor, but sale's growth was less than expected, that stock is down. now look at these two disaster names. all right. number one, office depot that stock is down more than 20%, sales, earnings, guidance, all missing the mark and fossil shareholders no doubt are petrified today. posting one of their worst days ever, you're welcome >> did you write that? >> i write everything. they're disappointed the cfo resigns, fossil hoping not to go extinct. >> right >> he's here all week, folks >> actually, i wasn't here yesterday. still ahead, disney ditching netflix and pursuing it's on streaming service. this is a good move and will others follow? that is next first, sue herrara with a cnbc

news update, hi sue. >> hi. thank you very much. here's what's happening. french police are searching a building in a suburb west of paris which is believed to be linked to the chief suspect in a car attack that injured six soldie soldiers heavily armed police wearing masks were searching the building and leaving earlier today the suspect was shot and injured before being arrested photos of u.s. air force planes arriving in guam were posted on the twitter page of the u.s. pacific air forces. the aircraft flew from south dakota to guam to conduct bilateral missions with japan and south korea in the wake of the u.s. korea tensions. the u.s. postal service is seeking more freedom to raise prices for mailing letters comes as it looks to invest billions in new delivery trucks. the postal regulatory commission appears likely to grant the power to increase the cost of stamps beyond the rate of inflation. the decision is expected next month. and tiger woods has pleaded not guilty to driving under the influence, but will enter a

diversion program which would allow him to have his reckless driving record wiped clean he did not appear in court today, but his defense attorney did. that's the news uptehida ts hour power lunch returns after a quick break. there's a denture adhesive that holds strong until evening.

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welcome back to power lunch. let's get a check on your markets, all three major industries are all set to be down today quarter of a percent on the dow, s&p down by five and the nasdaq down by 28 points. chipotle, mattel, all trading at multiyear lows and on the flip side defense stocks hitting all time highs today. lockheed martin, all at those highs and financials among the worst performing stocks today. regions financial, citigroup all in the red disney, the biggest loser in the dow today, stock hitting the lowest level on the back of it's earnings the numbers weren't really about earnings the number and the news is really about disney ditching netflix looking to build a bigger piece of the streaming pie he said. julia talked about that with ceo bob ooiger in a cnbc exclusive

and joins us now live from los angeles. more kind of these streaming shock wave heard around the world, julia >> that's right, zinz making a big strategic shift to go directly to consumers. saying that the company's $1.6 billion investment in streaming company will help reduce it's reliance on the tv bundle and enable it to launch an espn subscription service early next year disney will no longer rely on netflix. all of it's disney and pixar to then launch it's own app. >> we'll be making a significant investment in original content both movies and television series for this platform, exclusively. so if you want to -- if you're a family or you're interested in the disney brand you want to subscribe to extremely rich, robust, disney-branded service, you'll be able to do it. >> now disney isn't the only one betting on going direct to consumer, just this monday, cbs

boasting about it's cbs all access and showtime streaming services on track for four million subscribers. that's faster than expected. it's new upcoming star trek show will help add subscribers to those services as well and netflix seems to have anticipated studios pullback by ramping up it's spending on originals. targeting for over half it's content of the original, despite the fact that it costs more up front. now netflix took perhaps it's biggest step towards independents from the movie studios, just monday, buying comic company miller world to help fuel new, exclusive to netflix content. guys, back over to you >> hang with us. what does this move from disney say about the future of streaming or of television content providers? or the cable companies let's bring in steve batalio, steven, this is yet another step it would seem in the unbundling of the bundle. who is best prepared to profit from it and who stands to lose

the most >> disney is one of the greatest brands in the world. so, if someone is going to do their own stand alone streaming service, they are certainly best positioned to do that. at the same time, you have to think about the whole television ecosystem here and just as netflix has taken subscribers away from cable, it has also been a big boost to television production. you have twice as many scripted television shows today as you did ten years ago. and i'm talking about going from around 200 to 400. a lot of that is because you can depend on that check from netflix, from around the world, also other streaming services as well they have become an essential part of the economics of producing tv shows so, all of the sudden, if you're going to try to weaken netflix by taking your product away from them, are you going to make up

enough of that money through the streaming service that you're creating to offset any loss from netflix? i think that's the question going into the future. >> in disney's case, i've read somewhere that they collect something like $100 million a year, which is kind of a rounding error for disney. it would seem to be from netflix, is that the right number there and obviously then their gamable is when they have their own stand alone products, streaming products, they're going to be able to charge and attract enough customers to make a multiple of $100 million a year >> well, i think it's worth noting, tyler, that disney isn't pulling all of their content from netflix they're leaving some of their content. disney has a deal for it's marvel studio to produce exclusive television shows for netflix. those are going to stay on there for now and they have a number of those different shows so they're still going to be generating revenue from netflix that way one reason why they say they're only exploring the idea of potentially maybe some day launching a stand alone marvel

is they're not sure they'd be able to have enough of that type of content to make those stand alone apps with disney however, it makes more sense for them to have a disney-branded product because if they pull over those disney movies, the pixar movies and create more stuff as part of their disney machine it makes sense in a way that few others have that kind of brand that parents, like myself, would be inclined to buy >> go ahead. >> i was going to say, this isn't just going to be disney products that disney's going to make money on right? they're going to have sports, which is an incredibly powerful thing at this point. when i look at this, this only gets interesting if i think bob eiger wants to take on netflix and destroy it i think it's one of the few companies that has the content and the capability to do so right now. >> well there's no question that they're built for it as well or better than anybody else the question down the road though is, okay, you finally broken the hold of the cable

bundle the consumer has greater freedom now and they can make more choice, but, how many bund ms are they going to be able to buy over time? >> the consumer. >> yes, the consumer, exactly. and the companies that go out streaming alone. are they going to be able to generate enough revenue to get the critical mass necessary to make these types of programs of that the consumer is going to want the production values, the big money that's required to make a great tv show or film. >> they're starting from scratch too. i mean, got to start from zero >> who >> the disney app or whatever they come out with >> the disney app does >> it's a lot of work. >> zero. >> they're not starting from zero because they have library content. they'll be able to pull over movies in 2019 -- >> for the number of users on any app they've got. >> i think they could get to millions very, very quickly, don't you think? if anybody could >> remember they have a direct relationship with consumers who

come to the parks. think about the potential for them to offer free subscription as a trial that people who come to their parks they already have a lot of touch points with consumers directly that -- >> and it's data they're going to have a trove of data on your habits, when they view, who views, from which device >> now seeded to netflix >> exactly >> and they can sell other things >> still to the go get people to switch >> let's ask the next guest about that laura morton thanks ladies and gentlemen, what does disney pulling content from netflix mean for both stocks joining us now is laura martin, managing director. laura, good to have you here >> thanks. i'm glad you had me because you really need a valuation perspective here so i think -- >> give it to me. >> i think what's going on is cbs and the walt disney company have netflix envy because netflix loses money and it trades six times revenue, and these poor companies are trading at 12 to 15 times earnings, and they're staying, wait a minute, we own all of this content, why

don't we go direct to consumers, we can lose money, we'll spin off 10% and we'll suddenly have these assets valued at six times revenue enstead of two times revenue. so, i think that while it will cost the disney pnl more money, if they're smart, they'll get these things public, and then they'll spin off part of them and allow investors to come into the disney name for the first time in 40 years >> why is the stock selling off when they sounds like a good idea do you have doubts about whether they can achieve or does espn overhang >> well, you have to invest in these programs and what we've seen from when hbo created their over the top, there's a lot of pressure on the income statement in the first two years both in putting up enough content for 24 hour service, but also the marketing is really hard they've never really marketed direct to consumers. it hits hbo like 18 months to figure it out. >> that was -- laura, that was the point i was trying to make you know why i made that point

i read your research because it's -- even -- >> you're a genius >> thank you even if you're disney, it's hard to start from scratch. so, what do the others do? are we going to have a world where we turn on our fire stick or apple tv or whatever it is and have 1,000 apps, each asking for your business? because i'd rather just stick with cable if that's the case. >> by the way, that's what the research shows the academic research shows that the minute you give somebody ten choices or more and it goes down 90%. they prefer a bundle yep. so what's going to shap we're going to have 40 choices out there, and 20d % of the market will view al la cart and it's a pain in the -- and others will go down to bundles >> which is why i brought up earlier, the only reason i thought this would be interesting is if bob wants to be the netflix and be the streaming company of choice. >> the only thing i'd say about

that, the netflix advantage is itting a investigates everybody. bob's only going to aggregate disney and fox -- >> for now >> why fox would you sell yourself to disney you'd go over the top direct, same thing with cbs. >> you know what i don't, i don't to want log on to 17 pimpbt apps with 17 different pass words and log on names. and i fear that's what it's going to mean. i'm going to have this log on, remember every daggone one of them i'm in your boat, which is to say, give me a cure rated bundle that has most of what i want >> to be fair, tyler, i'm not in that password boat yet, but what i'm agreeing with, i guess is, if you start to add up the skinny bundle, right, if i buy a salad for four bucks with everything in it, then i start to complain about the cost but then i buy all the ingredients and pretty soon it gets to be more than four bucks. and if you only want three or four things, that's one thing,

but i imagine so the-called skinny -- and i'm not going to trump on comcast, same is true with time warner and others, you can get 140 channels and 100 bucks with the internet. >> consumers are willing to pay more nor content how many households have netflix, hulu, they've got cable. they've gotevery single thing out there. >> i'm one of them >> i fall this that category why do we assume that people won't pay a multiple what they're playing right now for separate bundles >> and i think that's a great insight because 75% of netflix subscribers are an add-on to the big bundle we care about time so -- and by the way, cbs all access has two million subs and you can get cbs free with rabbit ears so if somebody's paying $6 a month for something they can get free through rabbit ears, go figure i think you're right, i think some consumers just want everything so they have it at their fingertips, out of home, in the home -- >> do you buy disney here with the sell off or not?

>> what's that >> do you biez disney with the sell off >> no, absolutely not. >> because >> because they said it in their transcripts seven ways they're going to spend more money and today this company trades on earnings per share in the near term, then toy told you in the quote that you guys aired that he's going to spend a lot of money making exclusive content. no way, the pnl will be under pressure here and the eps will have to bring down estimate zplps thank you. >> my pleasure >> all right coming up, more from the middle and why many in wisconsin are not happy about that state's big push and the big bucks to land fox company. whoooo.

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up michael kors, doubters are still out there despite the massive pop in earnings yesterday, reiterating the $mkm saying it's still in the early days of the turn around. also mpm believes it's in a structural decline >> yesterday i was watching you, but the sound was off of the how much of yesterday's move was short covered. got to be. >> a pop like that wow. three reasons for the opt millennium two, highly visible capital plan, and three, shareholder friendly management. justifies a premium, you might

know this company as columbia gas. >> credit suite, lowers ugh, though there are a lot of positives out of the earning reports. stock down 8%. there are a lot of pauses to be mentioned, awards 9 billion, that record also exceeded expectations rare confidence 5% still cautious on this >> four stock, today this glob payments, atlanta base d compan

boosting investment across e-commerce and so-called omnichannel platforms. , raises bar engineers, so 120 target on a $96.30 stock >> no, it isn't. >> thanks, ladies and gentlemen, the makeup line that went from zero to being on track to a billion dollar brand in just 18 months why some of the major beauty player need to warp out. second hour of power starts in two minutes.

welcome to the second hour of "power lunch. here's what's on the menu. north korea turning up the rhetoric after president trump's fire and fury comment. how worried are people in the region we'll take you there the market is down today, but setting near-record highs. optimism is surging. why is this such a miserable summer on weight we'll explain. kylie jenner is taking the cosmetics business by storm. the details on her offthe charts

growth glam it up "power lunch" begins right now ♪ glamorous ♪ glamorous ♪ glamorous you think there could be some patches for thor blue jeans. stocks are lower across the board. this could be only the third day in more than a month when all three averages are lower north korea and weak earnings are hurting stocks a threat of nuclear war will do that it's a good thing that priceline is not in the dow. that's down $155 or about 7% it beat on earnings and revenue, but even the high end of is the third quarter guidance was below -- you follow that you got it brian? >>. also your headlines this hour, the fbi says it raided

former trump campaign manager paul manafort's home last month. also according to sources altice is said to be weighing for is charter bid. it could be worth $200 billion. birchbox has recently discussed the potential if sale, cold to recode the lead bidder apparently is walmart. we begin with the escalating tensions with north korea. how is it being received in the region nbc's bill kneely is in seoul, south korea south korea. >> reporter: the officials reaction from the south korean presidency is there is no imminent crisis and they continue to monitor north korea for any more prove indications unofficially there are new realities, that u.s. intelligence estimate shows that there is a nuclear neighbor to the north of here, and secondly

the fiery rhetoric coming from president trump is new they haven't heard that from any u.s. president before, and they wonder what does it mean what are donald trump's new red lines what is us policy? we told thenoicance we don't want war or regime change, so there is some confusion here, and the problem is the confusion is dangerous, mixed dangerous and there's no question this city seoul would be in the cross hairs of any attack. these people have more to lose from any war and in any miscalculation than anyone else. back to you. joining us now is jack jacobs. good to have you here, colonel it's one thing for a country to create nuclear power, another

thing to create intercontinental ballistic missiles, but to put the two together is another step altogether north korea, where are their capabilities right now >> it's hard to say. about six months ago a lot of people were saying six to 24 months away from being able to deliver a nuclear warhead. >> we're having some trouble with colonel jacobs' -- one day or grandchildren will saying, really cell phones dropped out at one point? >> you were talking about pyongyang and his phone went out. but your point is well taken north korea has had a history of making threats and possibly even hawaii, but ostensibly that would have been with a conventional rocket

you can reach us with a rocket, but can you reach us with a nuclear rocket >> the big catalyst this week was when "the washington post" reported miniaturized nuclear heads. >> sources said the same thing, they have may have the progress they need to make to create a miniaturized weapon that would fit on one of that you are delivery vehicles. the question is whether that delivery vehicle can stay on target and reenter the atmosphere our audience is very intelligence, but they say why guam a huge air base. as we try to get colonel jacobs back, let's talk about how the markets are reacting to this fiery headline out of north korea. the indices are all in the red, but not getting hit too hard yields on the ten-year are at

june lows and the south korea south korea etf is also down we'll talk about it in a bit joining us to talkic tim seymour, "fast money" trader good to see you. >> good to be here this may be a bit misleading >> psalm sung is 23%, and then the banks, you could make an argument that the environment for steel stocks just got a bit more interesting to the up side. samsung has been a heroic run, we talk about apple all the time samsung has huge numbers it's not a bad place to be taking plosts. >> other asset classeser telling me this could be a big deal. why? >> well, i think certainly from a u.s. perspective, this is an issue i think we are trying to

weigh the politics and trying to weigh it against the fundamentals if you think about some of the global markets, they've had enormous runs. if you think about european markets, there is some concern a stronger dollar and weaker euro the sense is the global environment is starting to tighten up >> but back to the thing, the ten-year bond, the yield is not down that much >> no, i don't think markets' reaction - >> and historic low, as you pointed out, korean stocks are down 2%, but up 25% year to date we've had a lot of sabre rattling all years, maybe most intensely the past couple days showing its ability, and i think gold has been a waste of time. very quickly, we as a network,

we's people have use the markets as our gauge for 20 year given the proliferation of u.s.-based atfs, and given the fact banks own -- do you believe the markets, the stocks and bonds are a reflection of mood and the news cycle as much as they used to be. >> sure. >> why if everyone is buying stocks by putting money in a 401(k), they're not thinking north korea is sabre rattling. >> i think there's something circling. >> you love that >> we could do it again. two are watching markets if you think about the fed, i think the fed has been allowed to go two times, because the markets have allowed them to do it i think markets reflect a de namic, which almost means they were able to trade on how they respond themselves >> they're going long, but

they're also going short these instruments, because they're so liquid. >> we used to kyle that the md hedge back in the day. you felt better by shorting some ewis. >> being short for medical doctor >> or managing director. >> for your final appearance, hey -- >> i didn't want to get on into this. >> for your final appearance on "power lunch", it was great. [ laughter ] back on the phone is jack jacobs good you have to you back. we hope the line is better are we going to war with north korea? >> not likely. i mean, the only reason they're developing nuclear weapons is to prevent anyone from making sure they go out of business -- they're basically a continuing criminal enterprise adding nuclear weapons keeps them pretty much in business. neither they nor the united states or anybody else is very interested in going to war over

their nuclear weapons. so that's why you've had something of a slow squeeze and why china has decided that make a judicious nuke le weapons -- >> it's are we likely then not going to go to war to just have to pony up and get used to living with a nuclear-armed north korea that may have a missile that could deliver a package to the continental u.s.? >> well, it's interesting to know, you know, the korean war isn't over yet we don't have an arm cities, just a cease-fire. we are technically still at war. that's one of the reasons we're

very interested in making sure they don't have nuclear weapons, and in particular that they can hit the united states. they are unlikely to give it up unless we, russia and china can reach an accord that guarantees they can continue to be a continuing criminal enterprise, do whatever they want to their own people as long as they don't have nuclear weapons, but we won't be able to do it ourselves. we only can do it if we squeeze china a bit tom them to the table. >> and general clark was on this morning. he said very specifically to that point, listen, they will get libya, and we promised libya and gadhafi he could stay in power as long as he gave up weapons, and he did. guess what, since he didn't have weapons anymore, once we could throw him under the bus, we did. so why would they ever believe us >> they wouldn't were it not for the fact we'll try to get china on our side.

i'm not saying they will agree, but they're most likely to agree not because we say so, but we definitely want to see them out of business, but because china says so. that's the only way we'll get it done, as long as we don't have china on our side to go all the way down to the wire at the table is behind closed doors, by the way, we won't get anything done, and they will continue to be a threat not only to us, but everyone in the region. >> colonel, thanks so much for joining us we appreciate it >> here's what goes coming up. the 19-year-old girl who may be the face of a billion dollar brand and checking on the economy through the eyes of real estate stock traders aren't having a good summer. inside wall street's cruel summer all of that and much more coming up on "power lunch." most american homeowners would be shocked if they knew just how rich they were. the average american home value has increased $40,000

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it has been a good summer, very good for stocks by and large. one record after another 3.5%, but a lousy summer for wall street traders. bob pisani explains. >> hello, tyler. i keep getting calls from my wall street friends who are getting laid off it's a summer of misery, because employment keeping shrinking the head count among wall street traders is now 21% in the last six years and continuing to

shrink what's behind it first, another record year of low volume tilts stocks may be at new high. in the old days volume would pick up as stocks would pick report highs volatility is now 41% in the second quarter it's down even more. look at this, inup and japan it means let trading that's according to virtue look at this, it's even worse, in japan, throwing oceans of money that are leave active management, and the growing use of artificial intelligence they're getting paid let. >> so is it all over for a wall street career? well, it's not necessarily so, but forget about traditional analysts and trades jobs if you're a 22 years old, ubs

says they're hiring psychologists and pricing and shipping experts others are hiring social media consultants and computer geeks who can write code to execute complicated algorithms doug cifu told me yesterday, we're hiring physicists, not ivy league athletes. so maybe physicists have a future on water? traditional analysts maybe not so >> it highlights how every single industry is getting impacted about i technology, whether it's the movie distribution or stock trading. >> that's right. stock trading is not a specific example of what's going on, right across the industries. >> this goes to the point i brought up with our friend, good friend, the handsome tim seymour. if thesize you're talkingto ar getting replaced by software program, or something that's younger, does it again hurt the

idea that the storm is a good discounter of what we think and what we know about what risk is? >> i'm not that concerned with the idea that value ways may be misplaced. i do want people watching the markets, that's one of the reasons i'm a supporter of the floor. there's not as many obvious lip as there used to be, but there are guys behind the walls behind me watching the market at all times. i'm not worried about some valuation mismatch adults are still in charge wrong wall street exists in the form it used to exist in. >> so much of it is automated and programmed, artificial intelligence or etfs, as you say. it has -- so the downing and weighing of human beings acting supposedly raegsal in the market is probably less today

>> that's myopoint automatically in your 401(k) or vanguard index fund, are you going to stop that because kim jong-un is causing problems i don't think so that's all i was trying to make. behavior people to look rat twitter feeds to buy stocks isn't necessarily going to pan out. you can automate that, and it's not clear to me that's necessarily a winning ways to -- >> sounds like spaghetti at the wall. >> thank you, bob. all right. wisconsin riding high on a manufacturing resurgence and big win, maybe, in getting foxconn to build a factory the maybe is because the state needs to approve nearly $3 billion in tax credits and incentives, some incentives some

have been critical of. just moments ago, the leader of the wisconsin state senate says he does not yet have enough votes to approve that incentive package. we did yesterday speak with wisconsin governor scott walker about the deal, and he seemed optimistic >> are you going to get it passed the state legislature has to vote on that. >> 13,000 jobs over the next 15 years, on top of that another 10.5 billion in payro payroll. i think the state legislature. >> when will the vote happen, do you think? >> in august >> the great thing is you have democrats and republicans in this part of the state working together, because they know when you talk about these kind of jobs, it doesn't matter what party you are. people and families benefit.

>> to be clear, there are published reports that the state senate, which by the way is controlled by republicans -- we think we have national problems in congress. wisconsin may be having the same thing. republican-controlled senate not sure it has enough votes because i guess smvt state senators are concerned they'll be giving away the ship. >> we are talking earlier, the $3 billion is mostly in terms of tax credits, forgone revenue to the state? or what? given up what could have been revenue. >> the reason i can't answer that is the foxconn deal is actually a separate law in the state. they have a huge manufacturers and agricultural tax credit passed in the past, but the foxconn deal is its own deal, actually a separate bill rebates for payroll taxes paid, environmental review waivers,

things likes that. totals right now 2.85 billion. >> kayla tausche has a news alert. >> ty, a tweet hitting back, following leader mcdonnell's comments jed, criticizing the president for having excessive expectation. it after seven years of hearing repeal and replace, why not done in those comments that mcconnell made yesterday, he said there were too many artificial deadlines and the president didn't understand the complexity of legislating, the sharpest rebuke yet we have heard from mcdonnell about the president and clearly the president is not taking well to it. >> part of the issue, too, there were certainly demands he put on the health care reform legislation that make it incredibly difficult to pass if you say you must cover preexisting conditions, you

create a moral hazard within the insurance industry, and it makes undoing this things almost unpossible you can do incentives to make sure people are incentivized to buy -- >> and i'm not going to touch medicare >> he sounds like a democrat half the time saying these things >> you have to wonder if there's a deepening rift between mcconnell and trump, who will line up where this and how will that impact the 2018 elections. >> it depends on how much support he has >> that's called a tom swifty. watch out for that dynamite. he exploded. in england they call it a tom swifty why do i know that that's the only thing i know houses, cars and burgers, the good, the bad and the ugly,

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welcome back to "power lunch. time for the good, the bad, the ugh liter. the good red robin, up 9.5%, reversing a streak helping to

beat the earnings estimate even though it's paying higher costs for food and labor zalo down almost 10%, earnings beat, but revenue guidance for the current quarter was a little soft, and ugly day for true car, matching estimates, but guidance also a little weak that stock is down almost 13%. >> ty? >> thank you very much, coming up on "power lunch", what commercial real estate is telling you about the real strength of the economy and why aren't the markets more concerned about what's going on over in north korea. we will get a trader's take, and in six months, the world will descend on sthorou kea for the winter olympics. how will it all work "power lunch" will be right back

hi, everybody. i'm sue herrer era former secretary of state and kenya election observer john kerry has called for candidates to be patient and restrain from commenting until after the final voting results are announced. >> just as we're not prepared to, i think all candidates should restrain themselves and

watch the process play out it deserves after all of the effort the extraordinary outpouring of voters >> four minister condemning ven walea's new industrial -- the minister ministers. the but point brewing company will uninvestigate its pilsner called delayed cuckoo a summer of -- guys, back to you >> thank you very much, sue. i'll have one later. oil market closing for the day

>> it was a mixed inventory report well, that balancinged everything out remember, the story taking it higher is the fact that gas lee demand has picked up we're holding under 50 a session low 48. 0, so a clear range and people are definitely trading it back to you. the dow near session lows, this despite weak earnings and a threat from north korea. let's bring in steve grasso at the nyse tell us about the mood down there. what are people talking about? >> this does not feel like war to me. does it field like war to you, ty

>> i would say it does not feel like war to me but field lying a -- involves an untable regime >>. >> that increases risk i don't see much translating within the market play >> i don't see it in conference sits, don't raely see it in gold the vix is up a bit, but 2 can do lots of funny things for lots of funny reasons with we know what north korea does this is sort of a page out of

the his playbook if there's another step, of course when you heard jeff gundlach talk about a 3% drop, we haven't had anything, even a black swan event is capable of doing that rather quickly. a -- that company contributing to a lot of the point loss there. but would you go so far as to say that people who were of a mind to lighten up in equities got the excuse they needed yesterday to do so >> i would agree wholeheartedly. it's been a losing game plan if you lighten up and this market has gone straight up in your face, but what are the

catalysts? forget about what the catalysts are for a sell-off what are the catalysts for a rally right now? tax reform, health care reform we don't know the likelihood we know the likelihood haz diminished proportionately to what we have seen in the marketplace that's your risk to the up side. the truth is there's a buyer on the dips >> steve, great to see you >> we just got a statement in from governor scott walker regarding the story that the state senate says they may not have the votes required to pass it this just in governor walker is committed to working with members of both parties of the assembly and senate to assure that they take advantage of the opportunity to create 13,000 jobs

>> foxconn is not yet a done deal governor walker clearly thinking they can get it done commercial real estate, is the ceo of mark with us and mill ichap. last year nearly 9,000 deals worth more than $43 billion in sales. thank you for coming on cnbc in you're going to hire more people, you may need a bigger building how does the first half of 2017, compared to the first half of last year, which was a pretty good year?

>> that's no having -- with tenants expanding office space, even industrial warehouse space, demand is still holding up nicely it correlates so the confidence level is very much intact. from an investment perspective, you have an asset class yielding somewhere between a% to 7% that's seen a pullback with the velocity of trade, mainly because of some uncertainty regarding the direction of tax reform and economic stimuli, the fact that we are in the later stages of an economic expansion, so there's a seller/buyer expectation gap that's come into the marketplace. that's the reason for the pullback when we get some clarity on tax

reform and whether there will be stimuli, or infrastructure spending or other things that may prolong this economic expansion, you'll see more capital come in. overall the market is holding up nicely specifically mall reits and mall properties we've heard from a lot of the reit companies with earnings a premier property holder said they're moving away from retail tenants, but still able to find replacement tenants at a pretty goodically to replace them at some point that's got to give, right? how strong is that >> it has everybody to do with -- 12% a year versus retail

growing at 2.5% a year without a doubt there's tremendous pressure, but such a bifurcation amazon coming into the brick and mortar, is an indication of the health of the convenience, if you will, retail and necessity type of retail older shopping malls, as are department store based shoppe centers. what's interesting is the shopping centers that have adapted, using things like entertainment and restaurants to draw people in, are actually doing much better. it's amazing -- for the first time ever, that meetings people are eating out more, and if you can the reuse of retail, is also

happening. thank you for joining us we appreciate it. with tensions rising, the winter olympics starts six months from today in p.m. yeongchang. >> they are working hand in hand with south korea on security if there's an undercurrent of concern, we're told sponsors aren't talking about, niece are the more than 150 u.s. athletes and olympic staff who have participated in these testments in south korea south korea now, nbc, which holds olympic broadcast rights and plans to send 2,000 employees to south korea, says no sports event in the world comes without some security concerns. we are paying close attention to this situation china has banned its travel companies to organizing tour as retaliation with south korea south korea working with the

u.s. on an air missile defense system chinese visitors make up half of the foreign tourists there, so impact has been immediate and dramatic with chinese visiting -- airlines cut seats and routes, retailers are losing business. the south korean tourism organization says they're bracing for a 25% decline in overall tourism this year. so far, at least there's no public ambulance to keep chinese athletes out of the game and american tourism because rhetoric ramped up one word of caution, though, here, of course, if you're planning to go to the games, the state department says stay south of the border, because it's banned passports to north korea. who would go to north korea? some people might think this was their opportunity. >> did you go as a journalist? >> i would love to go.

>> a lot of people would love to go. >> as a journalist >> no, just a regular person the same reason you would want to go to cuba, to see what is happening. >> it's just too dangerous. >> think kidnap people. >> they do, and there's two miles of land mines between the two countries as well. don't walk >> you wouldn't want to walk. >> don't hitchhike >> thank you, contessa. there may be one sector benefiting from all the tension -- defense names they continue to hit new highs we'll tackle that issue. hey, apple, you're hitting a new apple today. you're getting closer to having the first trillion dollar market cap. we'll talk more about that as well stick around

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apple hitting another all-time high. but with the stock up 38% this year, along with almost 50% over the past year, and thousands of percents over the last decade, how much more can it go for can

you still get in is it too late analyst at rbs has put out a note today saying specifically, no, its not too late make yew case. why not? >> listen. near-term basis, the stock always outperforms into iphone cycles so far you have about -- i think the bigger scenario is this stock through the iphone 8 cycle could get to a 12 dollar plus scenario, so it could get to 190, 191, into the trillion market cap so the long-term up side through the iphone 8 cycle that we have coming up. >> in terms of the outperformance nine months after the launch, what is the performance prelaunch? have we -- hall that nine-month

increase been drawn forward? >> that question will be answered in hindsight. so far it seems to be lack historically apple has been up, what 30% it was storily, up 15 m., so f far, but melissa's point is the run this year has been great already.

the last yar was fundamentals are very strong, the stock should kin to perform well it has -- the market never gives it a bigger multiple >> thank you, amit. mean time defense stocks playing offense. all rising today, many of them to new record highs. let's bring in aaron gibbs, s&p global i just combined your two names that's gray. this is a for today, it's definitely all about -- we've been seeing better than expected earnings overall we're still only expecting about

9% earnings growth for this year, 10% for next year. our two fasts are some of the best value, with those antithe merger rumors. even if things escalate or don't. as you know, it's a continuation to the up side i'll tell you how we get to 200. first six month rounded support, from a counter-trend, but the story gets interesting when you zoom out and look longer term. you can see the weekly chart here, a very com binges -- the multiyear trading ranges

that's your poll you project out 730, and it brings us to the $200 target i'm a buyer of the stock here. i think it looks great in textbook pattern and form. >> bringing out the charts and thequotes. thank you very much. for more trading nation, go to our website, tradingnation.cnbc.com while old names are taking a hit, the fresh young face is headlining what could be a billion dollar brand the business of kylie jenner taking off like a rocket next on power lunch. however when short interest

reaches extreme levels, it can be a contrarian indicator because traders are often forced to b buyack a short stock and that can drive the stock much higher

19-year-old kylie jenner is the face of what could be a

billion dollar brand courtney reagan joins us now with an impressive story >> anyone in beauty better be watching the youngest member of the kardashian, jenner family. revealed that the 19-year-old's 18 month old make-up line has hit $420 million in sales. it's on track to hit a billion by 2022. it took bobbi brown 25 years to hit a billion, and lancome, 80 years. it's currently only available on the website, retail stores are in the works the marketing is done by jenner herself on instagram and snapchat team of 500 dedicated to just kylie jenner's brand now kris jenner is interested in selling to a big company one day to really, quote, explode the sales as long as kylie can remain in creative control which, the family says that she is she's very much in control of

the way that the colors come out, the way that the product even smells apparently kylie really liked the fragrance of the lip gloss. >> one mystery for me, purple lips, matte, i've seen that in new york city. okay this is where it comes from. >> i think that's part of the velvet collection which is new >> some are selling for 60 bucks. this is chanel pricing >> exactly this is a lip kit. this is a popular one. this is the cocoa. you have a pencil with a gloss, and this is about $29. >> that's cheaper -- >> i'm sure the margins are much better >> right >> they're not going through any other distributors. >> exactly looks great. >> we're going to try out the lip kits that's nice. >> they smell good >> see you el le net.lease is nex smlsikmoy. whoooo.

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grab your wallet. access denied. and if that's still not enough to help you save... ooo i need these! we'll just bring out the snowplow. you don't need those! we'll do anything, seriously anything, to help our customers. thanks. ally. do it right. all righty you have two ways to win $300 million this week. the powerball jackpot for tonight is up to $307 million. and nobody won the megamillion last night, meaning friday's jackpot, folks, will be $382 million. so you've got two chances there to make 300 plus >> think of the office pools going on >> oh. >> behind me for the fast money team >> gets us to check please >> really? >> yes that would be fast money the downgraded starbucks today because there's just too many starbucks all near each other. 3.6 within one mile of each other on average across the

country, even more in new york city here's a map of the concentration of starbucks in the country. and you highlight certain urban areas where there are tons and tons of them which led me to realize that the onion can always tell the future onion, new starbucks opens in restroom of a existing starbucks. >> always right. >> i'm waiting for celebrity coffee company, my check please is this, look, look at kylie jenner and this company, look at george clooney and selling far billion, jessica alba, not only seeing -- you're not seeing celebrities endorse other brands, they're -- >> owning. >> owning them, in a matter of like months, social media for all we knock it may be starting to work. >> helps them monetize their celebrity like that. >> cut out the middle man. >> amazing. >> i'm watching the bench stocks we were watching a bunch hit new highs. lockheed martin up 1.5%.

even if nothing happens, there are inquiries about missile defense systems. they could be seeing a pop in business in the next few months or so. so that should be one to watch >> thanks for watching power lunch. >> closing bell starts right now. hi everybody, welcome to the closing bell i'm kelly evans here at the new york stock exchange. >> a rare day when we're together. >> and happy belated birthday. >> thank you very much thank you. the celebration continues. by the way, i'm bill griffith, by the way, if you're new to the stock market, this is just a reminder in case you didn't realize it, stocks can go down the dow had been up for i don't know how many days in a row, many days, but not today disney shares are dragging the dow today after issues at espn once again headlined the companie