technology with the opportunity to potential be aeye game at the end of the year. >> al friday hitchcock is over your how would, by the way >> apple, adding to that one's well. >> jim. >> nike's confirmed its new high. >> sully is a strong buy "power lunch." >> i like the upgrade, josh. here's what's a the menu watching machines, the market doesn't seem worried about a trade war. should you be? netflix wearing the crown, shares glowing after a big subscriber beat, now worth $100 billion with revenue just a tenth of that, should you buy the dock or are there stranger things ahead? i'm brian sullivan, "power lunch" starts right now.

and welcome to "power lunch. eye melissa lee, your money carving out some small money today, and russell 2000 at rosh highs. it's a global rally. let's check out bitcoin is bouncing back after falling below 10,000, goldman sachs say it's a bubble bigger than the dot-com era and famous tulip bulb mania, and p & g was down travelers rallying by almostsh topping expectations tyler? >> thank you very much, melissa. welcome, everybody we begin with a major decision from the white house the administration saying it will slap tariffs on solar panels and washing machines. if you've got a solar powered washing machine, you are not,

kayla, going to have whiter whites kayla tausche is at the very white house with more. >> reporter: those tariffs are steep and final. for companies outside the united states empowereding washing machines into the united states they'll sue new tariffing between 20% and 50%, depending on the number of washing machines they are importing. for components that 50%. for solar part manufacturers outside the united states, they will see tariffs of 30%. that decrease over the next four year the assumption by the administration is what they consider malpractice and flooding of the market with cheap products will start to decrease over time the tariffs are a result of complains by companies in these industries, whirlpool, and suniva and solar world in the solar industry the issues were studied for much of 2017, and president trump and

his top trade official, ambassador robert ligeithiser it's not wow backlash, companies say prices will go up, will hurt competition and ultimately the consumer will breer the brunt, but gop lawmakers are pushing back as well i want to show you a quote from republican senator from new hampshire -- nebraska ben sasse. tariffs are taxes on families. moms and dads shopping on a budgets for a new washing machine will may for this. you don't fix eight years of bad energy policy with with bad trade policy these relatively low-hanging fruit, but we'll see if this is a precursor for more we'll hear from the president

later on this hour guys, back to you. >> thank you, kayla. is there a rick of retaliation? let's bring in larry kudlow, libby cantrell is head of public policy at pimco. welcome to both of you larry, you go first you are a free trader, also a fair trade. >> it's unfair practice? >> i haven't seen all the stats from the itc they're pretty reliable, but i don't like this as a general rule president trump has done so much things to restructure the economy toward the private business investment sector, and it's all working the tax reform and deregulation is all working, so i hope he goes light on these kinds of protectionist issues it's kind of strange you talk about washing machines and solar panels, right? so one of the big -- let's see

the solar panel company is a chinese company operating in the united states. there's a german company, solarworld is a german company operating in the united states, samsung wants to begin a washing machine company with 600 workers operated in tennessee. >> well, they are. >> who are we harming and who are we helping here? that's what -- i'd like to see a more broad-based approach rather than one nick at a time. >> if you dig into this, and i'm kind of disappointed the number of mainstream publication that haven't mentioned that samsung and lg are going to be manufacturing them here very soon it makes a difference. here's why -- here's the political optics we know everything is optics, you slap the tariffs on. the majority of the washing machines have likely already been imported. both samsung and lg are starting factories samsung first, lg next

year, i don't know if this is a tariff program it seems like you're going to do it, what is it on post-talk fallacy, after the fact truth? >> i want to answer that, but let's get libby into it. >> thanks, larry. >> we viewed trade as one of the potential policy risks, since president trump was elected. we think this is going to be a real focus in 2018 not only is he going to talk about it at davos, likely he'll talk about it in the state of the union, but in some ways this is the beginning i think it's a precursor of other trade actions. this won't likely be a more isolated action, you'll see mislike section 2-32 on steel and aluminum, and on never transfer in terms of intellectual property. those could actually be a quite significant, and i think it's how china reacts. >> section 232, which is

military, all our equipment is domestic kevin, has be metzic co back to sully's point, because president has done magic on the tax reform, you can see the explosion in response to what he's done. all these companies, new investment projects, wages, even stock giveaways, and minimum wages. look, this -- you don't know in the modern wage, we are low tack/low regulation now, so these companies will come here that's the thing. >> to manufacture. >> they will come here, because we are going to be the most hospitable investment environment in the world, and therefore the need for these old-time 1950s, 1960s trade deals i think is being blown away. >> i'll tell you this, larry if the president is get somebody

to come and do my iranly, he's got my vote. i don't care which machine he uses >> look, on this stuff, it's scatter shot, washing machines, solar panels, i think the question is here and it's a gigantic question is nafta as i said, nafta neither a refurbishing after 20 years, no question about it, but my hope is the president stays in the game we have smart people to negotiate and we negotiate with mexico and canada. if he walks away, i believe that will have an extremely bad effect on the stock market and an extremely bad effect on the economy large sectors of the economy will rebel mr. trump has the confidence of the business community they may not love him, but they like his policies and they're working toward them.

walking away from nafta would be a business mistake. >> we would agree. in terms of what we think is an indication is just the administration acknowledgement that the dispute resolution process at the wto is not working. whether we agree or not, we don't agree, but i think that is what is being expressed here, that they don't feel like going through this bureaucratic longer dated wto process is working, so they're going to use the unilateral ability they have under trade law, which is extensive i. >> and the wto often rules against the united states, so i think that's an important point. again, to me, mexico, canada, nafta is absolutely the key, litmus test. i happen to think the president is going to negotiate. i don't think he's going to withdraw i think he may say such a thing in davos when he speaks. tax reform is wonderful, regular torrie reform has been

wonderful. trade reform is necessary, there are bad players on the other side china stealing our property assets, so forth, that has to be fixed, but let's fix them, now throw the baby out with the barth water. >> bhirl pool has suffered through a lot of stuff to stay here they could have had cheaper manufacturing, on maybe a shoutout to them, but the point i was trying to make is lg and samsung have already announced they'll make many of their washing machine in the united states beginning this year and next year, so you're slapping a tariff on companies who have already agreed to come here you get my point absolutely i think people in the market has discounted this. you have to take president trump seriously and literally on trade issues he's been incredibly consistent on trade his entire life

nafta, china, sent to the wto. this is a public policy issue that i think he very sincerely believes, whether it necessarily makes sense. >> libby, i want to cap this real fast. i worked with him in the campaign on economics, trade, taxes, whatever, he is not against trade, and we had an example before the detroit economics club speech, we are working on the speech. i said, sir, would you accept the suggestion of the benefits of free trade and world trade? and quick, snap, he said yes, i will i believe that, too. he was ross porosity i would like to see fewer of the willy nilly tariffs and broad-based strategy libby, larry thank you very much we have a news alert in the bond market. rick santelli, it seemed like a

pretty decent auction. >> yeah, more than decent. i gave it an a-minus and almost a straight-up a. this tranche two years, $26 billion, 2.066 was the yield at the dutch action that fits right nicely in the been and offered market. that was good, just not spectacular. that was the highest yield at a dutch auction since sages februaand 15.9 in directs was almost a full percent over the ten auction average. solid auction top to bottom. tomorrow we'll have 34 billion five-year notes. melissa lee, back to you. rick, thank you. shares of netflix soaring today. can it go even higher?

plus a new payment plan for elon musk, tying his compensation to the company's performance, are there pitfalls that's coming up next on "power that's coming up next on "power lunch. has exposure to energy infrastructure mlps? think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfoli" and add potential income. bring amlp into the game. before investing, consider the fund's investment objectives, risks, charges, and expenses. read the prospectus carefully at alpsfunds.com/amlp

your top story is shares of netflix on a big beat in the number of subscribers, but with years of making investors money already in a market cap now around $100 billion, is this a stock that's priced perfection rob, it's a good quarter let's move on from that, whatever was your estimate in marketing costs, 200 million in investing in i.t for a company that's doing so well, why spent more on marketing? what do you think they're spending on with regards to technology >> good questions. i think they're putting up a very significant investment in content. the increase in marketing spend is very much related to promoting those brands, those stories, and building more attention to the content itself.

i think putting dollars behind it does make sense they clearly see a much bigger global audience the ease of use of this palace form, compared to other alternatives is night and day. at the end of the day when you're sitting on your couch, looking to be entertained, ease of use matters a lot, and the netflix app is by far the most easy, and they're taking it to another level with these technology estimates rob or, two, the whole pie is growing.

the number of hours streamed war actually up 9% year on year. people are watching more on their netflix memberships. what's going on here is it netflix at the expense of others or is everybody winning here >> i think it is clearly netflix at the expense of other entertainment options the interto consume mere in at the same time. , not necessarily other internet television options, but other entertainment options. >> you know, rob, this stock has had a great year this month. when does it start to get note bleed-y for you? >> you know, for a long time i thoug

thought. you know, i'm still a firm bull that the global opportunity is there never has existed for an entertainmenter to reach -- the old world those in tens of millions, because it was a local assets that only could scale to tens of millions the internet turns the econveys upsidedown, so i think we have a lot in front of the it >> rob, to tyler's point, why doesn't anybody seems to care about the growing negative cash flow issue i mean business school 101, you need operating and free cash flow they've never had it, it doesn't

like they over will, and nobody seems to care. >> the question is not what is the cash dynamic in the investment period. the question is, what does it produce on the other side? that is the fundamental debade on near-term valuation versus long-term earnings power clearly there is an expectation the company will produce very meaningful cash flow as the subscriber-based scales. i have high conviction that that is the case. >> rob sanderson, i guess in the red is the new black [ laughter ] rob, thank you >> thank you. melissa with an eye roll. >> he's like no thanks. so much with the annoying airline fees you hate are adding up for one good way to make money. plus you can hate the tax bill, but some jpmorgan employees likely very happy today. we'll tell you what moanjprg just did, makes some pretty doggone happy. still around

♪ ♪ ♪ what we do every night is like something out of a strange dream. except that the next morning... it all makes sense. fedex powers global commerce with vast, far-reaching networks... deep knowledge of industries... and, yes... maybe a little magic. ♪

nothey're not investing iney commoditiesies.

or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more. sploo jpmorgan the latest to announce a spending plan. >> the highlights include wage increases of around 10%, 22,000 of the lowest-paid employees, who will now by paid between 15 and 18 dollars per hour. 4 hounds new jobs, as well as

increase toss lendsing targets to small businesses and affordable housing let's assess deeper. the wage increase is relatively small, hits just 13% of the u.s. workforce, but jpmorgan were already paying a minimum wage above the rest the 4,000 new jobs relates to a current total head count of 252,000, a 1.6% increase, and u.s. headcount of 170,000, so a 2.3% increase. from 2016 to 2017, head count did rise by 9,000, that said, the broader trend for both jpmorgan and the -- has been cutting of head counts the 400 new branching relates to a total of 5,130, so this is a 7.8% increase, and is most definitely a move against the trend for the industry, which has been reducing branching. however, the move is not driven by the tax bill, rather a desire

to move into new marx where they currently have no exposure this requires approval from regulators, the occ in particular, in that sense it could be said to be aid i had by the president's push to reduce regulation, but not the tax bill itself jamie dimon will join "squawk box" tomorrow live from davos. >> thank you very much. tesla saying elan musk will only get paid in stock and only if he meets financial targets, including market capitalization, do you want a ceo managing to please the stock market so purely we will debate this coming up on "power lunch."

you might take something for your heart... or joints. but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house.

i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

a suspect has been taken into custody after one person was killed and nine others injured at a rural high school in southwestern kentucky police say the school remains on lockdown and the fbi says it is working with state and local law

enforcement in response. thestate department confirming tlup u.s. citizen fatalities and injuries from the taliban attack on kabul's intercontinental hotel the death toll has risen to 22 six taliban attackers were killed turkish soldiers preparing to enter combat and join an offensive on a kurdish-held enclave in northern syria. it plans to secure a zone down there, the operation is straining relations with turkey's nato allies. sotheby's says a print of the declaration of independence by ezekiel russell sold. three are in private hands while others are in institutions, including the boston public library and the harvard library. you are up to date that's the news update brian, back to you. >> sue, thank you very much.

guess what, guys hitting another all-time high. we've never said that in the last couple years. >> no, no, this is new. >> new all-time -- >> new news, not fake news. >> real estate, utilities are the leaders, utilities pow, telecom and materials are the lag guards travelers, ibm, even ge is recovered. j lag guard. j & j, p & g and goldman sachs. phil le beau joins us. i think people will be focused on what they have to say, but it's more what do they say about 2018, and where they are positioned relative to their competitor so when you're looking at the three things to watch for when united reports earnings after the bell, let's start first off with passengers revenue growth it probably did improve in the

fourth quarter, that's the expectations, not likely up to the level of their competitors the capacity forecast will be fascinating, because many believed that they have been adding too much capacity too quickly. does that continue and that always gets into the issue of their margins versus their competitors. they have said for a long time they would like to get up to the level of american an delta they are nowhere close right now. do we get any sense that will improved in 2018 that also speaks to how investors feel about the stock yet it's moved higher, but this shows you everything right here. it is not keeping pace with the growth from delta. delta outperforming it just a bit, this is at the crux of the earnings, then an analyst called and investor update. >> what investors think is one thing. what customers think is another. where does united fall >> improving, but nowhere close to their competitors yet

there was a time when it was an absolute joke. you would talk with people inside the company, they would admit we're not that good with on-time set -- oscar munoz has gone a long ways towards addressing that by working with the flight attendens union, the pilots, et cetera. he deserves kudos no that. having said that, they have a long way to close before they're close to american or delta they in essence had a head start -- >> what did you hear was the issue? we all fly united a lot. i always talked to the cabin crew and they would say the computer systems -- it was a culture clash, it's this what do you think it was -- >> it was definitely a culture clash. the continental people did not like the united people when the merger too place i would hear from your continental-based flight crew -- >> wow. >> this was a couple years, and

i said something, what does that mean and they were like we were part of continental does that mean that you're special? he did not get along for a long time i have not heard that for a while, but it was at the crux of the poor performance >> did united tell us what to expect from tax reform in terms of the impact? >> they have not, and i expect that when oscar munoz talks withagists and investors, that will be a key component of what they discuss, i'm sure. >> kind of helps boeing, too, they can depreciate planes a lot quicker. make they'll get a surge in odds now is the time to buy it? >> you've also got a big backlog there. look, delta had a big order with airbus a couple months ago or last month, but you have such a bag lock right now

the airlines want to be careful about adding capacity, but not too much. >> i wanted to ask you while you're here, phil, about elon musk's compensation plan which tesla released this morning, tied to both market cap and performance. >> if you look back at the last five years, it's the same thing, very similar maybe not the exact same metrics. i remember when hi last compensation plan was put together, people said he's nuts, he's crazy, and as they have hit the benchmarks and he hayes received his compensation, then you hear the other comment, boy, they're paying hem a lot of money. look, this is what you want a ceo to do. i think that's why shares of tesla got a bit of nudge, investors are saying he's not going anywhere if he hit the benchmarks we all win. if he doesn't, he doesn't get paid

>> phil, stay with us, we want to talk more about whether this is a good idea for tesla and its shareholders with us is david cite cert, and betsy, is a board member of volvo cars phil just ended our part of the discussion by saying it's a win/win. would you agree here >> i don't know if it's good for tesla or not betsy could speak to that better what i like is they can do it. we don't have a bunch of people saying, no, we don't want people to be rich, we don't want lots of restrictions. well, this is a great american story, rolling the dice, there's a great chance he gets nothing, but if he performs, he gets a huge payout. we should applaud that i'm glad the board can do that and a ceo willing to take the same challenge. >> what's interesting about this plan, betsy, one elon musk is awarded stock, he's got to hold

on to it to five years, so let's not get it up to this market cap or get these metrics up here and then i'm going to sell that stock. he's got to be a holder as well. s>> that's true, but he's being paid like a tech company ceo. >> what's wrong with that, betsy? >> well, you have to look at the metrics that would be important to someone who was buying a car or buys shares in a car company. metrics like quality, meeting production requirements, safety. those are other important metrics that auto companies tend to measure pen to market cap, profit and revenue i would argue you start cranking

out a bunch of clunkers, five years from now the stock won't be where they want it. >> but with a very high-value stock, the tendency could be -- it could be a risk to shareholders that if there was bad news on qualities or safety, that you might mitigate that news you know, compensation plans that are heavily reliant on stock price introduce risk, and i think it's important to account for that, and i think that's why other plans are more balanced and why when you look at picking your peer companies as a compensation chair, you should consider automotive companies, not just tech companies. this compensation plan is pretty much a pure tech company comp plan. >> is one of the your main objectives, betsy, that he gets paid on a total amount, what is equivalent to a tech company's compensation do you think he's just simply being paid too much?

>> i think the equity is way high he currently has 22%, and in this comp plan, he can gain, earn, another 12%. 22 plus 12, that's an enormous amount that's know shareholder-friendly that's a lot of dilution 1% or a little more per year for a ceo to earn is a huge amount that's an outlier compensation plan. >> david, that's a fair point. would you be concerned >> the bigger picture, tesla is not disrupting the automobile industry doing the same way the other companies do it. he's bringing something different. he's not even the same as the other electric car company makers he used the cell phone model he didn't start out saying how do we make cell phones for the homeless they started making them for the captains of the university, and

finally all the sailors have cell phones. same thing with this car fee they're doing it a completely different way. i think it's great will it fail i don't know, but that's what i like about it. let industries, firms, people make decisions if it's works they'll thoo they will by copied, if it doesn't, they'll be right. i mean, phil, do you think there's any shot that any other companies you covered -- >> no, no, none of the tradition all auto makers will doth, in part because of the how the stock holdings are set up and the institutional controls there is also no other company that is run by a ceo the way tesla is no other company sergio marchione has the same amount of influence on chrysler, but it's set up different. at the end of this year, he's probably going to hand the reins

over to somebody else. this is singular to both elon musk and to tesla. >> i think that's a good point, betsy. part of it is to keep elon musk as ceo for longest he a eluded once it gets up to scale, he my kit other opportunities. with a company that's so entwined with the cult of this ceo, isn't it important for him to stay in place and is compensated for that >> you certainly want to keep an inspirational ceo, but you also need balance, when you have a charismatic ceo that you are considering all of the other things that could impact your company. ultimately they're making a vehicle that should be safe, that they can produce reliably they've had a lot of production issues if i was looking at a comp plan, i might be looking for metrics on shipping, because they haven't been able to fulfill their requirements

i think it's important to keep an inspirational ceo, i think with a disruptive new manufacturers, being software centric, that's all very, very important, and you can see in their comp plan, that they reword their chief technology officer ford rewards their north american operational leaders, but still you need other metrics, i think, in addition. i think that not accounting for safety and production in your metrics would be an oversight. >> all right we're going to leave it there, guys thank you so much, and thanks for phil >> see you at 5:00. coming up, two tom female venture capitalists will join us to talk about the culture in silicon valley. plus apple releasing its own exme voice assistant ala, are you worried "power lunch" will be right back

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apple releasing its home pod. can you start presales on friday josh, tell me why i need another assistant. >> it's going to be available february 9th ma mart speaker missed the initial ship date in december buyers will be able to use home pods to stream apple music, check the news, sports, traffic and control a range of smart home accessory apple will be playing cashup like amazon and the popular echo speakers, as well as google's line of home speakers. they dominate 92% of the market

but there are key differences. within wouldn't the price homepod will runs you $349 the lathe it's echo -- and apple is very clearly emphasizing the high-quality sound of this product with an apple-designed would havish, betting that will give it a competitive it advantage, but ben behairen said sound quality will not make or break this products. consumers are obvious obvious fine with -- it's going to come down to the value users find in siri, which the company says is actively used on 500 million devices. >> maybe a big competition to google there thank you, josh. when can the future -- when new technology are being used to modernize a number of aging industries here now, treeso goh and

jennifer phonestat, cofounders of aspect -- today they announced a capital raise from investor, including melinda gates, cisco and others. congratulations. thanks for coming on "power lunch. >> brian, thank you so much for having us. >> hopefully you got my riddle, that there's so many old industries, we just focus on new stuff like electric cars or uber or ridesharing, but hope old industries are ripe for destruction or new value creation, based on the technology that's around a.i. and other times of innovative technologies >> you're absolutely right we're sees a number of industries really harnessing a.i. in a new and novel way to boost and improve their experience for the customers for example, health care is one of the areas we invest in it focuses on using a.i. in

managing chronic care and conditions, in other areas, something like your inbox with e-mail with a company called astro, where how hard that is for us, with a combination to manage that in a way that's much more effective for how we use and operate today. >> give us a better example of that that's -- i think e-mail pollution is probably a problem that the majority of our cnbc viewers have, right? about 3% of your e-mails are actually meant for you or important? maybe that's just me how does a.i. fix that problem >> astrowas started by a group of folks who started zimbro which is the first platform that sorted started the problem now they're trying to help fix it they're using astro-bot, which a smart digital assistant to do exactly what you said, brian it reads through and parses through your e-mail,

automatically prioritizes the things that are most it relevant based on whether it's important, jennifer senting me an e-mail and further it integrates like slack, if you want to integrate into your slack channels, as well as siri on amazon, alexa and the echo, which i find super useful i know i never e-mail or text when i'm driving, but i can now speak to my astroastro-bot app and read me e-mails only from vips, and i'll get just jennifer and not only to hear them, but i can respond. >> i've done that using siri. >> this is way better, trust me. >> siri, it's like sentence thursday, june 3rd from, and by the time you get to it you crashed into a tree. so hopefully that would eliminate that i want to ask about the backlash

on big tech. over in davos, mark ben oioff sitting with andrew sorkin listen to this. >> you do it the same way you regulated the great industry here's a product, cigarettes, they're addictive, you know, they're not good for you maybe there's all different kinds of forces for you trying to get you to do certain things. >> is that how you feel, by the way, about social media? >> for the most part, yeah >> thinking about it as like a cigarette, in that kind of addictive way? >> i think that foe shush technology has addictive qualities and product designers are working to make it more addictive, and we need to rein

that back as much as possible. >> there's mark benioff, a big name in silicon valley sake that facebook is kind of like smoking, what that marc is very interesting he said several things i'm going to start with that but i want to tie to trust as well they're two sides of the same coin i was fortunate enough to be one of the three people who walked down the street and gave mark zuckerberg his term. i'm biased a facebook fan i think it's more addictive, but i think it's more like, say, sugar, than nicotine so there are different ways we regulate i think there's a range of ways the government has tried to help people help themselves from being sucked into various, whether technology platforms or other things which are not so great for them i think, though, why i want to get back to what he said earlier in the conversation on his panel about trust when he was on a panel with dara and others,

saying you need to put trust ahead of just growth for growth's sake. by trust, what he really meant, and what i heard from it was leadership and we take that very seriously to heart at aspect we believe that setting the right culture from day one, and we invest in companies from the very earliest days, is critical. and by right culture, we think that data is super clear cultures and companies and teams that embrace diversity across all dimensions and operating backgrounds see that they have better investment results. they do better, they make more money, and fundamentally, that's our job, to help our investors like bill and melinda gates and cisco make more money. >> if i might ask you to give a quick answer, how worried are people in silicon valley that this year or next year may be the year that the government gets much, much, much more interested in the scale and activities of big tech companies? whether it's facebook or google or amazon.

is there a concern there >> i think we have seen an increase in activity in regulation in a number of areas in technology. much more naturally, because of the nature of working, many of these businesses are now large multinational corporations, and so they are now adept and understand that there's a lot more regulation that plays into that but i don't think that we worry about that we certainly have developed capabilities for focusing on that, and how we think about that is by bringing in diverse teams that understand, now you have management teams that actually appreciate and understand those perspectives of how the government may think about or approach that problem, so that's built in from the ground up, and then when we think about our teams, that is what diversity really means for us it's making better decisions because you now have that capability inhouse when you're thinking about that from day one. and regulation is one aspect, but we find those companies that think about that from day one deliver better returns overall

>> thank you both very much. we'll see you soon again on cnbc take care. >> cheers. thank you so much. >> thank you steak and gambling two of the things we'll be talking about intrt seetalk blus, how difficult is it to take a company public?

got a couple analyst recommendations on the stocks for today. wynn resort raising the price to $199 from $176 both mass and vip volumes accelerated in january from what were already better than expected levels. steve wynn on the call reaching levels of $5 million a day they expect these trends to continue into february >> $5 million a day on ebita >> two stocks today. your last stock, your second one, texas roadhouse, the restaurant chain credit suisse, the latest to jump on the food upgrade bandwagon. they upgrade to outperform from neutral. they say taex reform is a big part, and they also think the fundamentals of texas roadhouse are getting better big target to $65 from $48 still, it's about 10% more

upside by the way, redbush began coverage on texas roadhouse last week with a $67 target they're bullish on steak, tyler. >> i get it. that's good. i don't want to steere viewers the wrong way. >> coming up on the second hower of power, what investors are saying on the markets, and another slide for bitcoin. $5 billion of tequila. sounds like a good hour. come on back after the break many small businesses, from kitchens to factories to contractors, rely on their equipment to serve customers every day. when equipment is broken, it means lost revenue.

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years. many many decades, really, and we're very proud of it that's why the stock market is reacting the way it is thank you all very much. very proud of this thank you. >> i'm not at all concerned. >> did you talk to him about it? >> no, but i'm not concerned thank you very much. thank you. >> no, he didn't at all. he didn't. he did not even a little bit no and he's going to do a good job. >> thanks, everyone. >> we're looking at it we're looking at a lot of things >> are you concerned about the new -- >> let's see how it all works out. >> are you concerned about - >> thank you all very much >> thank you all thanks, everyone thank you. >> there won't be a trade war, by the way >> and that is the president concluding his brief extemporaneous remarks, saying there will not be a trade war.

he had been asked, i think, what was being questioned there was was he concerned about the reports that attorney general jeff sessions had been interrogated by investigators on robert mueller, the special counsel's staff, and he said no, he was not at all concerned. he does say, i guess earlier in that, that he was going to davos. he says the nafta negotiations, he'll be talking about investing in the u.s. when he goes to davos later this week. i believe his speech is friday and that he said nafta negotiations are going well. kayla tausche is at the white house with more. hi, kayla. >> hi, tyler interesting to hear the president say there will not be a trade war because normally when a country institutes tariffs on a product category for the first time, that is the first thing that people talk about. many international headlines are calling this potentially the first salvo in a trade war but importantly, these tariffs are not targeted at a specific country.

they're targeted at products imported from any country from outside the u.s. so that makes them unique in that aspect. last month, the president told the "wall street journal" if there is a trade war, there is but he certainly seems this is not the issue that would spark one if in fact it were to happen >> all right so he says, and any more color on his remarks on nafta? >> he just says it's moving along pretty well. and used a familiar refrain, saying that if it doesn't go well, and doesn't go the way the u.s. wants it to, that he will terminate it that's what he said about the deal over and over and over again. leaving sort of both options on the table. but he has said that he's willing to be a little flexible, understanding that mexico has an election coming up this summer but we did hear from the canadian prime minister, justin trudeau, in davos, who expressed his concern that the u.s. would withdraw from nafta and his basically voicing how important it is for the economies of all

three countries. so certainly, it's on the mind of prime minister trudeau. we're waiting to hear whether he will have a bilateral with president trump when he gets to davos this week. >> you and i were going back and forth on e-mail. you make an important point. i was making a point about how the factories for lg and samsung are done or close to done, but you point out they announced these plans in 2017 after a complaint from whirlpool, and now maybe these companies are saying hey, if we have these tariffs, maybe these plants aren't such a good idea. and i'm talking about in the united states. >> right so the investigation was first opened up in may by the international trade commission the samsung announcement came in june, and then lg broke ground on its plant in august so the companies, i'm sure, would say these plans were under way for long before, but if whirlpool felt that it had reached a point where it needed to bring it to a higher authority, then there must have been complaints going on for some time.

samsung says that its plant in south carolina opened on january 12th, that's it's already hired 600 american workers and some lawmakers from south carolina are concerned about what happens to that plant if in fact the price increases negatively impact those investment plans. but we'll see. certainly, they are trying to manufacture those appliances here so that they can avoid those tariffs. >> kayla tausche at the white house, thank you >> sure. >> meanwhile, we have a news alert on disney. julia boorstin is here with that >> disney's ceo bob iger announcing 125,000 disney employees will receive a $1,000 cash bonus and the company is also launching a new $50 million higher education program bob iger saying that the two new initiatives together, that's more than $170 million of a commitment in this fiscal year iger saying i have always believed education is the key to opportunity and opens new doors and creates more opportunities matched with a $1,000 cash

bonus, these will have an immediate and long-term positive impact and they say they have another educational reimbursement program which is open to all of its employees that will remain unchanged. disney shares down just half apa percent on this news >> president trump is set to speak in davos switzerland on friday some of the world's top business leaders are there weighing in on the state of the economy and the markets. let's take a listen. >> the real thing we benefit by is the general economy, and it's in pretty good shape in the united states. we project it to grow at 2.7% versus say in this year, low 2s. >> the stock market has outrun our expectations in the short run. the concern i say we have at this point is that you could be a little bit set up for maybe a 1994 type scenario where corporate earnings are up 20% plus, but the stock market already had its run and therefore is uneventful or flat. >> to think that economy of $20

trillion can grow at 3% or 3.5% consistently is hard to believe. >> we're going to be, i think, inundated with cash. i think that's going to produce a lot of stimulation, and i think perhaps a market blowoff in other words, we're in a situation if you're holding cash, you're going to feel pretty stupid. >> let's bring in two market experts with their take. dave, cio of cibc atlantic trust private wealth management. michael, president and portfolio manager with the permanent portfolio family of funds. michael, what say you. you heard ray dalio, who is among the most respected hedge fund managers in the world, say that maybe there is yet another sort of blowoffstage coming in the market maybe we're in it now. what do you think? >> well, all the people commenting were reasonable sounded reasonable, but i think he's right i agree with him that you can do better in cash he runs a diversified fund similar to something we run. i think if you do have a blow off or a period where you need

to hedge your bets, so to speak, i think you can do better than cash by being in a diversified portfolio. i would agree with that. the blow off situation, i don't know if you look at the stock market right now there's a reason it's going up granted the moves have been bigger on the up and down side a little more volatility this year than last year so far you look at corporate earnings you look at the impact, the expected impact of the tax cut the way the corporations appear to be spreading around the benefits of that tax cut some going to shareholders some dividends, some to employees. some business development. you look at excess depreciation coming out of this tax plan. there's a reason for businesses to be optimistic, and there's a reason for profit expectations to go up and profits are the foundation for higher stock prices. so it's a reasonable market. not cheap, but it's reasonable >> dave, this is one of the most sort of death defying bull markets of my lifetime, frankly. and the president, i think, deserves a fair amount of credit

for creating an environment where business feels much more comfortable and so do investors. comment on that, if you don't mind and also, on the trade sanctions that he introduced today and whether trade is something that you worry about and factor into or trade restrictions are things you worry about and factor into your investing decisions >> yeah, our view on d.c. all through 2017 was follow the policy not the tweets. and the policy we got was progressive deregulation of many industries obviously, late in the year, the significant tax cut, which i think will end up being more of a boon to the economy in 2018 and 2019, even than most people realize. and an environment in which the economy was already beginning to do better. so we have had from a market perspective, positive policy momentum i think to your point on trade, things get a little more dicy here in 2018 i don't expect a lot to happen legislatively. all the oxygen has been sucked

out of the room by this short-term budget wrangling and now immigration is going to take up a lot of time in washington the actions we do see are going to come through presidential executive order or perhaps through the courts some of those things i think will be market friendly. continuing down the path of deregulation and probably a positive interpretation and implementation of the new tax law, but trade is the issue we're watching most closely. the news we got last night was the easy decision to make on those narrow industries. things like chinese intellectual property and nafta are much bigger deals for the market. >> the two, washing machines and solar panels seem rather random in the grand scheme of things, but whatever michael, another thing i think investors are going to have to pay attention to this year much more than in recent years is rising interest rates and some signs, as wages go up, of incipient nflation is that one of the tells that investors need to be paying closer attention to this year? >> definitely.

we have not really had a growth economy in a while you know, you think back to last 10, 15 years or so, and policy is now configured for a growth economy, and a byproduct of that is rising interest rates and inflation. you know, ray dahlio mentioned a lot of cash going into the economy. some will go into stocks and bonds, but a lot will go into the productive economy as well, and that's going to be increasing money, which has been dormant over the last several years and that could potentially impact inflation the risk with inflation, gradual inflation is fine. the risk is it overheats too quickly, the fed has to act too quickly and flattening and inverting the yield curve, which leads to recession the other problem with interest rates that i'm also concerned with is you have global interest rates beginning to turn and move in sync with the u.s. in terms of rising. and that's a positive. it likely will weaken the dollar over time if it's allowed to continue, and that makes u.s.

exports -- it makes a better climate for u.s. exports to the degree you ruin that climate with restrictive trade, it offsets the potential growth from global economic production. and that would be something i would keep an eye on as well >> it is really, dave and michael, a fascinating time to be doing what you're doing, doing what we're doing and watching the economy and you guys having to put investment dollars to work. dave, michael, we appreciate it. >> thanks. volatile day for bitcoin, after falling below $10,000, the crypto currency or crypto commodity making a comeback, and now reports say 10% of all money raised through so-called ico, initial coin offerings is either lost or stolen by hackers. seema mody joining us with more on this intriguing story. >> brian, nearly $400 million lost in stolen from sales of new digital coins. that's the takeaway from this jaw-dropping earnest and jung report which analysts over 370

initial coin offerings researchers point out the typical ico has no customers, no revenue, and in most cases, no working product. plus, different countries have varying levels of restrictions for ico. a growing number of start-ups are citing total ico proceeds are approaching $4 billion, that's twice the volume of venture capitalist investments notable investors have joined the craze, sequoia capital, mark cuban have participated in rounds, which some say lends credibility to this controversial fund-raising method the market is now earrigerly awaiting telegram's open, looking to raise $1 billion in its own token offering >> seema, thank you. let's get to morgan brennan for a market flash >> shares of norfolk southern are halted i reached out to the company for more

they're scheduled to report earnings tomorrow morning, but we will bring you more once we know what this news pending is back over to you >> morgan, thank you here's what's coming up on "power lunch" as we head into the big spring buying season, will rising mortgage rates crush home sales bicardi is buying patron as tequila sales soar >> plus, why some of the biggest stars in aivctist investing may be fading. all that coming up on "power lunch. contemporary cockpit, 360 degree network of driver-assist technologies and sporty performance what's most impressive about the glc? all depends on your point of view. lease the glc300 for $449 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

real estate brokerage redfin out with data on the health of the housing market according toilities new report, the number of homes for sale dropping 14.5% from a year ago december also marked the 27th month in a row of inventory declines glen is the ceo of redfin, and he joins us in a "power lunch" exclusive. this is quite a streak here. 27th month in a row of inventory declines what does that tell us about pricing right now? >> it tells you that we're going to continue to see price increases. so we're just printing money much faster than we can build houses that's going to create a long-term seller mfs market where there's an inventory shortage that continues into 2018 >> where is the crunch seen the most i'm not talking necessarily geographically, but kinds of homes, types of homes? >> affordable homes. we need more affordable homes.

and the luxury market, you sometimes see a glut, but mostly it's in the $300,000, $400,000, $200,000 home that we see demand outstripping supply, and what's unique about this particular rally is that it's not located in one or two coastal cities it's across the entire united states we're seeing bidding wars in almost every american city >> so tell me about -- you know, usually, higher mortgage rates, as an offset to higher housing prices because a whole entire payment theoretically needs to stay the same for any typical home buyer are we starting to see that the consumers are a little concerned on price because they're thinking mortgage rates are higher >> i think we will see that as mortgage rates climb but the increases that we have seen so far have only gotten people off the couch and into the market so people are worrying that they need to hurry and buy a house now before rates go up further so actually, i think it's had a perverse effect of driving more home buyer demand, not less. >> the last time we had you, the

tax bill had not been signed into law and we were sort of asking you, theoretically, what you thought the impact would be on the housing mark now that it is signed into law and we do know about the deductibility of mortgage interest and also the limits of the size of the mortgage, what are the impacts, are you seeing any impact at all right now? >> i think the major impact is going to be this transformational migration from high-tech states to low-tech states >> you still think that? >> we're seeing people going from new york and california to the center of the country, to texas, to the american south even when wall street people, silicon valleyicon valley and wl street, that's a sign of things to come. we see a lot of movement across the country as people react to this tax change. >> are they finding jobs in those places because you know, basically, house prices are tied to job growth and income growth and the areas that you just

mentioned, silicon valley and wall street, they're the homes of specialized industries that are largely concentrated there yes, there are obviously branches of bank of america or jpmorgan in st. louis and chicago and elsewhere. but those are where the jobs have been. >> well, i think the employers are going to chase affordable housing. we saw that with amazon and hq2. we see that now with apple almost every silicon valley company is looking to open another campus the has a lot to do with how wall street accounts for stock-based pay. harder to pay engineers through the nose to afford a home in seattle and san francisco. you're seeing google and almost every other technology company exploring pittsburgh and everyplace in between so they can employ people who can afford the house. and slack and get-hub and all these other technologies for letting people work remotely is also having an effect. so we just see a lot of technology workers, a lot of jobs that used to be centered in new york or san francisco moving

to other places in the country and it's not going to happen overnight, but it is certainly the long-term trend driving the real estate business right now >> glenn, you're a rich guy. if you could move one place, not where you live now, pick one city you would invest in with your own money where would it be? >> nashville or san antonio. >> that's two, not one >> i know. i can't decide they're both so good >> this is a game show you have to pick, actually not a game show. >> i'll go with nashville. i think it's a city on the rise. >> on the rise based on what, glenn? is it just your personal preference for nashville >> well, i do like the grand ole opry, but mostly it's based on the fact that so many people are moving there it's got good liveability, good affordability. >> no state income tax >> hot chicken good music >> it's been a very hot market for us san antonio is right behind it >> glenn, thanks for your time appreciate it. always fun >> thank you we just want to show you shares of mattel, the stock is

popping. the rise right now is just about 8% we'll bring you more information on this move as we have it, but again, you see that spike there in shares of mattel. something we're watching all right, coming up, from homeless to making money off a $5 billion tequila deal, incredible story around another big booze deal and why companies are going all in on agave. plus, the first etf to use artificial intelligence to pick stocks we'll tell you exactly how it works. stay with us

the rum giant bicardi expacts in tequila business. landon dowdy joins us with a look at the deal >> bicardi is buying patron in a deal that values the company at more than $5 billion one of the biggest liquor deals in years this comes as more companies scramble to own more top shelf spirits. they're credited with producing

high-end tequila, and sales have soared more than 700% from 2002 to 2016. patron west cofounded by a billionaire who also cofounded the paul mitchell systems hair care company it's the first major deal under the man who was named bicardi's ceo in october by the family which has controlled the company since its founding in 1862 patron will join grey goose vodka, bombay gin, and st. jermaine in the bacardi pote folio. it will become the second largest spirits company in market share buy value in the u.s. according to iwsr data. put tequila has been hot not only for m&a, but deaugio agreeing last year to spend up to $1 billion to acquire cosamigos founded by george clooney. it's not just consumers who can't get enough of the high-end tequila brands here, guys.

>> i presume this follows the trends tequila consumption is growing >> 700% since 2002 to 2016 but guys these valuations are unreal. $5 billion for this one. $1 billion for cosamigos >> which had like $100 million in sales the valuation, 10%, 11%, whatever sales that's a fat multiple. >> it values the case at $1700 for case, and $6,000 for case amigos these companies are willing to pay to get in on this tequila. >> i didn't know tequila is that popular. >> it's hot. >> it's that hot i thought it was bourbon >> bourbon as well those are the two leaders in the segments but tequila is just -- >> i wonder if the rise in uber and lyft coincide with the rise in consumption of hard liquor. tequila? >> it's trendy the cocktails, milelians are loving in and willing to pay up.

>> let's have a few shots. >> satan's little conconscion. >> straight ahead, where are we? exclusive interview with jeff curry. we'll bring you his 2018 commodity call straight ahead on "power lunch," and tune in tomorrow for our annual event at morning star morning star will announce their top fund managers of the year. we'll talk to all the winners. i'm out of here in just two minutes, but "power lunch" is ba itwckn o.

hello, everybody i'm sue herera here's your cnbc news update at this hour. secretary of state rex tillerson meeting with the french foreign minister in paris. afterwards, he joined diplomats from 28 other countries to launch a new plan to punish anyone who uses chemical weapons. he blamed russia for chemical weapons attacks in syria >> there's simply no denying that russia by shielding its syrian ally has breached its commitments to the united states as a framework guarantor it has betrayed the chemical weapons convention, and u.n. security council resolution 2218 >> five gas rig workers missing after yesterday's explosion in oklahoma are now presumed dead

officials say the search for the missing men has ended and they now have switched over to a recovery mission >> a new survey from creditcard.com says 23% of those surveyed admitted to keeping secret accounts from their current or previous partners and when it comes to financial versus physical cheating, 31% said hiding money is much worse than having an affair. >> there's some food for thought for you. that's the news update this hour melissa, back to you >> i think both are equally bad. >> they are. you are right. tushea very nice. >> thank you let's get a check on the markets. new record intraday highs across the board. literally, dow, s&p, nasdaq, and the russell 2,000 as well sitting closer at intraday highs. dow down by 17.5 points. s&p higher by 5. utilities and tech, your sector leaders today. consumer staples and telecom,

the laggards hewlett-packard enterprises higher mattel and has bro, look at them spiking right now. no news yet attributed to this move, but this is something we're watching mattel shares now higher by almost 15% norfolk southern halted for news pending. we'll bring that to you as soon as that hits >> the market is set to close for the day. let's get your final numbers at the cnbc commodity desk. >> good afternoon to you crude popping today. holding well over $64 a barrel about a 1.5% gain. brent managed to touch 70 again, but it didn't hold for the close. the optimism coming on the back of the imf numbers about global growth and demand. those are positive, and also the notion that opec may be willing to extend its production cut even further than the end othe year a wait and see approach. still, at the world economic forum in davos, the saudi oil minister said he's angsess about the fragility of the market and the potential for black swan by and large, we're on our way,

but we're not there yet. something to keep in mind. >> thank you very much >> despite higher prices for both oil and some metals last year, not a very strong one overall for commodities. but your next guest says now is the time to bet on commodities they'll outperform here is jeff curry, edof commodities research at goldman sachs. we have a lot to talk about, but before we get into oil and metals and all that stuff, we were having a discussion in the commercial break about bitcoin in your mind, and i know some at goldman may disagree, in your mind, is bitcoin and other cryptocurrencies, are they actually crypto commodities? >> absolutely. >> make the case >> i like to think about the financial markets, we call them securities because they're securitized to a real asset. therefore, they have an obligation or a liability to that real asset. in contrast, commodities do not have any liability think of a dollar bill a dollar bill has a liability to

the u.s. government. a barrel of oil has a liability to nobody. so when we think about a bar of gold, an ingot of aluminum, they have no liabilities. bitcoin is mined, it has no liability. therefore it's a commodity >> does that influence the way you think about price movements in bitcoin and volatility and what's going on in how it's traded >> absolutely not. you look at the way it's trading. it's trading similar to a nascent commodity. a nascent technology when we think about the bitcoin as a commodity, they have to think about its physical characteristics. its financial characteristics and economic characteristics physically, it's produced with a lot of power and very little labor. you have one guy on an oil rig producing a lot of oil from a lot of capital >> almost nobody is transacting with bit coin. i know you can, but i could probably go to -- tell me this, can i go to kansas and buy a car with bushels of wheat?

i probably could just from kansas city, by the way, it would be inefficient the point is it's me selling it to you selling it to you selling it to melissa. it's a commodity, not a currency >> does that even matter you could transact more. will it change it from a commodity to a currency? your first argument was the obligation it lacks the obligation even if you transact with it >> gold you can transact with. but if you think about its ability to be used as like gold or pressures metals, one thing that separates it from all other commodities, it's very low-cost to store and very easy to conceal. better than diamonds it naturally, if you thing about why was it created, what economic problem does it solve it solves an economic problem that are primarily for the under world. >> a really good quote, one of the founders of bitcoin years ago said something to the effect that gold not in jewelry because it's expensive jewelry has gold because it's expensive.

you flip the idea being that way. let's flip it outside of bitcoin. how do we make money on commodities in 2018? what looks good to you and your team >> we look at the overall basket for the first time in years, we have a positive carry to own commodities more broadly so all the commodities in the gsci, the goldman sachs commodity index, is now a positive carry to own. point number one point number two, we look at the macro backdrop, it's the best in decades for owning commodities we think about the three rs. reflation, reconvergence of global growth, and releveraging. reflation, reconvergence, and releveraging you put those three together, they create a really strong positive macro backdrop. the best i have seen since maybe 2004 >> so how far along are we in the cycle? i read equity reports more than i read commodities a lot of analysts are bullish on

caterpillar and say we're at the beginning of a multi-year cycle which would imply the backdrop for commodities is very good >> you have to split commodities into the non-energy sectors like metal versus energy. in the metal sector, they have 7 1/2 years of underinvestment in capx to produce new supplies of everything from copper and other types of core metals it has a similar supply story as what we saw in the 2000s overlay that demand story on it, you put the two together, you have a lot of potential price upside energy on the other hand, i have to say, the best thing that ever happened to base metals is they didn't have the best r&d departments that created shale the problem with energy, it's got a shale. it's got new technology and a supply source, which means the long-term story can't be as good as metals. >> do you feel bitcoin and the other ones, they take attention and maybe dollars away from other commodity investments?

>> no, you know what they take away, it's taken away from commodity investments are the faangs technology >> really? people are buying facebook over palladium? >> absolutely. the equity market, and i think it has a lot to do with the fact that the equity market has the wind in its sails. it had a great year last year, as you pointed out you started this, commodities had a miserable year history says commodities will outperform equities this year. it's equities, commodities bonds, cash. history says it's commodities, equities, bonds, cash. i think a lot of it has to do with who had the wind in their sails. >> jeff curry, goldman sachs good discussion. thanks for rolling with the bitcoin stuff. we'll see you soon >> appreciate it well, the market as we mentioned, full rally mode, but not everyone is reaping the benefits some of the biggest stars in the activist universe aren't shining as brightly. one is willing to give up perks to try to make a comeback. it's a comeback that is laungs in the making here at this point. >> we keep waiting, that's for

sure i wanted to give a heads-up to my fellow new york city subway riders you may soon see this familiar face yes, that's bill ackman, the hedge fund manager after three years of losses is laying off about ten people in his firm, including his own driver since 2015, pershing square's assets have been cut in half they did have redemptions at the end of the year, but that wasn't necessarily the catalyst for the restructuring. it's part of a longer soul searching within the firm to turn around performance. that means acuman plans to do less time marketing and more time investing as they say, though, misery loves company, and ackman has plenty of it in fact, many brand name activists posted returns last year that not just lagged the s&p 500 but also the broader hedge fund industry and their smaller activism peers these are names like nelson pel peltz, who was up 3.7%, and davidine horn's greenlight

capital was up on the year barry rosenstein is only a third activism was up 5.6% the bigception is third point, led by dan loeb. his firm reported returns of 18.1%, and unlike his star-powered peers, he didn't wage any major activist pushes in 2017 aside from some notes about nestle trian, as you remember, essentially tied a proxy fight at p&g, lost anyway, and greenlight lost its fight at general motors however, as loeb tells it in his fourth quarter letter, that we got a copy of yesterday, the key to the firm's success in 2017 was hiring sector specialists who he said just picked good stocks, guys it's as simple as that, apparently >> imagine that. picking good stocks. >> and ackman on the subway? i'll believe it when i see it. >> make sure to have your iphone ready to get a picture

>> thank you leslie picker. >> can artificial intelligence pick stocks better than a human investor we'll discuss. plus, shares of apple losing half their gains in the last few minutes. why? jpmorgan chase says they see signs of maybe a weakening iphone x cycle that news coming out straight ahead. you're watching "power lunch." we'll be right back. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated.

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nfl commissioner roger goodell speaking at the economic club of new york this afternoon, weighing on nfl ratings and the ongoing controversy over the national angtsm. >> ratings of the protest have been the league's two biggest challenges this year commissioner goodell said he's trying to reach younger, more distracted viewers by signing more mobile streaming viewers like the recent one with verizon. >> they're probably more distracted they have more options, more opportunities to go get information whenever they want it and we have to adjust as the league for that. and we have been focused on that that's why we're focusing on new

deals with verizon, as an example, to make our game available on hand sets and phones and tablets >> he said he disagreed with the national anthem protests but the ensuing discussions afterwards brought owners and players together >> we wanted to also listen to our players and understand what it is that they were actually protesting and what it is that they were concerned about. and it led to unprecedented dialogue with our players and owners in the league where we really even though we may disagree with the form of protest, it forced us to listen. >> the super bowl is just 12 days away. people will be watching for the rating numbers and if any players protest. >> thank you >> you got it. >> equal bot recently launched equibot, they launched a fund they call the world's first artificial intelligence etf.

how does it work bob pisani joining us with equibot cofounder? >> the machines are picking stocks now, brian. we have a big problem. >> we have to put microphones on >> let's talk to the man -- the important thing here is they're picking stocks let me talk to the man in charge art, as you mentioned, the ceo of equibot, and also the etf itself, the symbol is aieq okay, a machine picks stocks explain this to us how this works. >> yeah, so the high-level strategy is that the a.i. technology mimics the process of an army of research analysts working around the clock we're processing about a million news articles every day as well as financial statements on over 6,000 companies. we combine all that information together to build a portfolio of 60 to 70 holdings. >> i have heard this before. your point is a human being could never process 1 million pieces of information a day or a

million news articles. we can't make enough sense of it an a.i. can and somehow sort it out, is that the idea? >> absolutely, and we believe there will be more information tomorrow than today. >> does the machine get better over time? self-learning that goes on >> absolutely. we apply learning in many fashions we're better today than we were yesterday and we'll be better tomorrow than today. >> somebody has to make an initial decision about what we call structured learning somebody has to tell a machine this news article more than this news artcome how does that happen, and at some point, does the machine decide itself what ratings to give >> the whole thing is autonomous the machine is driving the decisions on what has more important weight over something else our ip actually looks at the data and tries to find the truth and credibility behind the data so we can see how important the information is and how important it is to the security prices >> so initially, you gave it some rules to say do this, and then eventually, said you can now start setting your own

rules? >> absolutely. so we said, financial -- >> that's the amazing part, the unstructured learning, the learning you're saying is semiintelligence in a way. >> more than semiintelligent, bob. >> let's talk about what the picks are, how brilliant you really are amazon alphabet, looks like the faang stocks here. you have a bunch of financials, you had t. rowe, nasdaq in there, your capital one. these are a lot of financials. can you explain what it's doing here, what's the logic behind this and why are these the top picks right now? >> yeah, as i mentioned, we look at financials. we build valuation models on over 6,000 companies the companies in here are undervalued companies but that's not enough the 1 million articles we're processing, we're looking for events or catalysts to push those prices closer to entrance values >> so what's the benchmark, how do we grade you? how do you know -- how do we know if you're doing well or not? you started october 18th, so it's been three months

i think the s&p is up more than 10% in that time period. how is the fund doing? >> we're up about 11% over that time period. but actually, going back to what you initially said, initially, we were actually underperforming and now we're actually outperforming a little bit so we believe that just like ibm, watson believes the a.i. grows in value and we'll see it over time. >> the symbol is aieq. the primary claim, the machine is learning and gets better over time we'll hold you to that claim thank you very much for joining us this is not the end of this conversation i want to talk to this machine later on guys, back to you. >> good luck with that, bob. bob pisani >> you get plugged in here often? he's going to talk to the machine later. >> moving on, we're watching apple losing about half its gains today, this after jp morgan saying they see signs of weakening iphone x orders.

is the prime for a pullback? we'll debate that straight ahead on "power lunch.

welcome back to "power lunch. i'm josh lipton with a market note on apple. a research note attracting a lot of attention from jpmorgan the title of that note, has apple gone sour? analysts saying they've picked up more signs of what they call weakening iphone x orders, they expect it to be down $50 billion, larger than the 8 line. they believe that weakness will continue in the first half as they say high-end smartphones are, in their words, hitting a plateau this year. atlantic equity downgraded apple because they saw signs of iphone demand starting to soften. perhaps traders and investors will have a better insight next

week when apple reports q1 results next week. >> interesting stuff there, thank you very much. let us trade apple now the "trading nation" team. we're going to bring you on to talk about apple kind of the last couple days has done well, despite a couple of downgrades now this max wolf, what is your reaction? >> i'm not super surprised we think the 8 and 8 plus have been weak, underwhelming some people are going to pixel and looking at other eco systems. the 10 was the bright spot i don't think it hits this quarter but the bloom is tarnished on the rose here i don't think apple has had a great month but i think fundamentally people want their stuff. they command a high price. they're sitting on a ton of cash they're not bad for the next couple of quarters, certainly not this one, but there are some storm clouds on the horizon for sure. >> boris, max saying google and

the pixel may be taking a little bit of apple's cell phone business what do you think of this report i don't want to say in trouble, that's dumb, but do you think apple's iphone x sales are slowing? >> i think it's in trouble they're basically betting on the fact that high, expensive products can be sold at this point. it's clearly becoming evidence that everybody else has caught up to them and some have surpassed them the home pod will be as big a failure as the 10. the functionality of those products is just nowhere near as great as it needs to be relative to the price difference. and this is a big problem. the key question is, can they make it up in services that's the very, very big tell if the whole conversation on the call is all about financial engineering and how much they're bringing money back, that's a one-time story it's not a business story. i think the market will be watching it carefully as we go forward. >> we're watching. boris and max, thank you very much more more trading nation, go to

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take a look at norforeign southern news it out the company is raising its dividend and that stock is now open for trade, down by half a percent. >> you know, critics of the tax reform bill suggested that the money will not go to wages, at jpmorgan today and a number of others proving that wrong but, rather, to shareholders in the form of buybacks and dividends what do the "fast money" think do they think this is a major trend and another lift to the market >> all of it can be a lift to the market in terms of the wages, that's obviously a good thing, more money in consumer pockets, that can help, consumer discretionary shares and so do bonuses share buybacks shrinks the shares. a big day tomorrow on "power lunch," we'll be speaking with

wppo sir martin sorrell, greg hayes, and chip brewer >> it's a big show here's an update on the stock, thanks to mattel keep watching. "closing bell" is next hi, everybody, i'm kelly efef evans at the new york stock exchange. >> i'm bill griffeth big question for consumers and manufacturers, is our country headed for a trade war >> we'll have a debate on that in just a minute we begin with kayla tausche in washington president trump and canada's prime minister both talking tariffs. >> reporter: the administration introducing new tariffs