10% off the highs. >> fxi. alex onbounces back. good stuff that does it for us, dow, as we said, 400 points "power lunch" begins right now. welcome, everybody i'm tyler mathisen here is what is on the -- another big rally on the street. is the bottom really in now, or is a bigger shakeout still ahead? either way, we have some names that look pretty cheap s. president trump unveiling his big -- on the what chance does either of these proposals have of going anywhere we'll take a look at that as "power lunch" starts right now

welcome, as tyler set, stocks bouncing back from the work week in two years, the dow up, the action in the bond market yields on the benchmark ten-year coming back to four-year highs, justened 3%. perhaps that's spooking investors in consumer-related stocks, some retailers are sees losses, it is, though, a full steam ahead. that stock is higher after raising the different. no whopper here. burger king's parent bead the street courtney, welcome. >> the do you soaring, the s&p 500 back above it's average.

bob, what is going on here today? >> actually it's time for the point moves, look at the sectors here, the old growth sectors we used to talk about, reits are down, that's not surprising, but let's look at the markets. breadth is good. 5 to 20 advancing to declining stocks, the volume, believe it or not, just average we've had enormous volume in the week and a half, volatility has been dropping today, a bits unusual. with the peak gains today, the three major averages have recovered nearly half of their losses, thanks to my old producer for that. 2800, down as much in the dow and we have regained about half of them, almost 1300 of this this is moving so fast this morning and over the weekend, the big debate was do we have a tradeable bottom or not. a lot of people were arguing,

positives, well, we have average issue is down 14%, that's a lot of the indices are way oversold. tradeable bottom a lot of the negatives, guys says it's only six days old, and it's a technical correction. that's not a good sign they said, well a fundamental correction would have been better, so a the lot of debate, but now it's moved so fast the debate is have we gone too far too fast there's a lot of weak longs out there. and a lot of people are saying it's gone so fast we need a retest of the lows some people blaming the rise of the machines, so how worried, if at you will and more

importantly, have we hit the bottom and david laughery is chief market strategist, he manages close to a trillion. it seems to me weights gets infatuated with creating products product was invert levered etfs, do we need these kinds the product? do they serve any real purpose the real yesterday is that for certain traders leveraged, and more volume it will etfs could be use for long-term investors, i think

you have tore skeptical. what i think we saw last week was more of a deleverages event in terms of the managed strategies all the strategies have to de-risk. i would point out there was a lot of demand for investors after the financial crisis if they products serve a purpose one of the you have this small esoteric, dimly misunderstood that's the tip of the tale walking the dog. that frightens people.

>> i think we do have to monitor how the we also have to monitor how the -- i goat back from a week the monitoring. we account get into a whole debate i do think that -- i think that's a good balance. >> david, it seems like so many investors are latching on to what they were talking about, and this being a technical move, which does incite some nervouses in, if you're trying to understand why it happened >> i think it needs to change

investors' expectations. what's ha happened in the last two weeks for me hasn't changed the fundamental nature of the market, the commit is grows. earnings are improving and that's usually a euphemism we don't have a it should moved up on stronger economy, but what i think has changed is their expectation. living life much closer to the edge, and the potential for central banks to less benign, i do think our volatility has changed. i think it's been a bucket of washington in the.

>> should be buying now after a 7% move from the highs >> i always look at the data, and we found that it was -- your and we're in the middle of earnings, so it's hard to say, but let's assume earnings don't change, you would have needed a 2.5% drop to get back to that -- that tells you there's one more bad day left. >> so are we mildly expensive? >> i think we're fairly valued right now. where do we find value >> i think one of the more interesting sectors is actually the -- comes cheap -- the stocks have gotten i'm cheaper, finishing are readily the area you want to be invested in

there are a lot of expectation, and also a lot of expectation. ylan moilan mui has more >> cuts to mandatory changes that medicare, well fair perhaps. the white house is looking to roll back the once it expires, it's proposing reducing, by 2% ayear across the board it's not a binding document. it's more of a vision statement and one thing the 3.29%, that

eases down to 3% in 2021, and 2.1% by the end of the decade eventually the white house says it will hit 7%, but combining big cuts with big growth, is it still enough s. >> well, president trump also speaking about his ambulance kayla tausche has the details. >> the white house released a 55-page legislative blueprint followed by the meeting with state and local officials, talking about their role in this plan president trump said state involvement will be crucial. >> what was very important to me

was the military and tax cuts and egulation. this is of great important, because the states will have to do it themselves i would like to help the states out. >> just 14% of the total package, but about 100 billion for states, cities and towns that find their own creative ways to -- and while republicans have praised the legislative outline, democrats are already resisten chuck schumer releasing a statement saying the president's infrastructure proposal would put unsustainable and lead to trump tolls all over the country. the administration has said they'll need buy-in from at least 1 congressional

committees, six in the house, five in the senate and seven agencies will be involved. now the president will be meeting with buy -- part of those committees here at the white house on went. guys, back to you. >> kayla, thank you very much. the question everybody wants to know is was last week's sell-off just a correction, or is it the start of a bigger market slide? or tweet your questions at

"power lunch." you have questions we have answers. stay with us today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit esd.ny.gov.

your investments are bouncing back in a big way today, the dow up 425 points with today's move only about 7% from the recent highs. while nobody knows exactly what's going to happen from here, perhaps history can be a guide as to exactly what's been going on joins us is jeff hirsch, a lot of explanations, jeff for what

may have happened. if it's not that, we do have history. we don't have that history, but we do have, a, big januarys typically lead to bad februarys, and the market loves to test new fed chairs. >> they sure do. we're looking at a technical emotional move here. just after the election we were in the nice line for a while, blew way above it. the sentiment has been super high, and now we bounced off, so now it's a technical emotional move for me i think we have seen the bottom here. >> you think so. >> at least for now. we did break the december closing low, that's another indicator, but it was during years -- >> bus history says when we have a big january, we even have a

bad february, but the whole year end up turning out good. >> that's right. >> the average gain is around 20%. are you in that bullish camp >> i have been my forecast from december was, you know, 50%, maybe 8 to 15% gain, like way up, dow 29,000 i mentioned a while ago from the bull market low in february 2016 i'm still in that bullish camp this is a technical shake outfor us february is a weak liven i think we could get back up towards the upper end by march, april. and then we won't -- very typical midterm election year. >> might be bullish for the long term, but what happens when you have seen volatility swings like this in the past what happens instead immediate following months. >> up the type i like to look at is daily swings, not the implied volatility of said vix, when we

see big daily moves, it does take a white for the market tags back up to where it was. after 30 days, 60 days, it starts to go sideways, and then you start to see higher frequency of gains. >> it seems like you feel like the worst of this volatility trade is behind us, but there are those who argue there's a fair amount more to do. >> i think there's a fair amount more to go, unwinding. we know there is there's a day of february 15th where they will settle up some things. >> that's thursday. >> a few days out, but we're talking intra-day swings is long term the week, or is it 20 years when you really want to look at things that work over the long haul the market now knows what's happening and it's bouncing around wednesday intraday high, there's

a little w through there, if we can get through that and hold it, i think we'll be in better shape, but we have some work to do here iflts what about international markets, global patterns what are you have sees there volatility that seemingly starts here. >> what i have seen is most of it tracks the u.s. market we're all traveling along the same pattern. there's opportunities in other parts of the world. >> concern about history is that question we really have never been here before, in the sense that the etf and, quote, passive investment market is now above $5 trillion dollars. 5 trillion is there any risk to ever being concentrated -- i sound like a broken drum, you've been talking about this for a while, but $5 trillion is a lot of money. >> it's not what it was 50 years ago with inflation, but i warned back in my november outlook in

october, that the market is very strong, the only thing that could rock is something that's mushrooming from the etf arena 87 with the portfolio insurance, but we have learned something since '87. things are more orderly and less action carnage -- >> orderly now. >> than it was in '87. >> it took us only 13 days for the s&p to go into correction. the average time it take for the index to drop 10% is 64 days. >> it took -- >> we did it in 13 days. >> it took a day in '87. >> that stat says to me -- this is a highly technical term -- ain't right. >> i think we have seen the edge taken off that ain't right area. i think we'll settle down here going forward. >> thank you, jeff. >> thanks for joining us. coming up, the latest olympic action from carl

quintanilla, and we've got some free advice. get to us ttt a"ponwiert ower lunch. stay with us feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom.

with the right financial advisor, life can be brilliant. at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest. thank you so much. thank you! so we're a go? yes! we got a yes! what does that mean for purchasing? purchase. let's do this. got it. book the flights! hai! si! si! ya! ya! ya! what does that mean for us? we can get stuff. what's it mean for shipping? ship the goods. you're a go! you got the green light. that means go! oh, yeah. start saying yes to your company's best ideas.

we're gonna hit our launch date! (scream) thank you! goodbye! we help all types of businesses with money, tools and know-how to get business done. american express open. flexshares etfs are built around the way investors think.e. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. welcome back the manch averages up about 1.5% or more, as dow jones industrial average soaring more than 400 points s&p 500 back above the 100-day

moving average apple, american secrets and boeing, they're -- it's down at least by 0.6 of a% transports on the move as well the u.s. has picked up the first gold medals, both game in snowboarding, carl is following all the olympic action from pyeonchang, south korea south korea. carl >> reporter: day three of competition here the u.s. is doing especially well on mountain events, central snowboard slopestyle both men and women winning gold, four for four now, in both so much ir, and reg gerard is just 17-year-old from colorado, 5'5", 115 pounds, the youngest snowboarder ever to wince gold, and the first athlete to be born in the 200s to win a winter

olympic medal. jamie anderson won in the women's. but the weather continues to be a get of a concern icy winds affecting cancelling some events. alpine skiing was postponed for the second consecutive day we talked to jamie anderson about how it forces her to be more creative. >> today with the conditions not being ideal, and a lot of wind, i somehow like stayed pretty calm and collected for me, yeah, i wasn't able to put down my most difficult run, but it forced me to be a bit more creative and compromise instead of a double nine, i decided to do a five, and focus more of my rails. >> it's about 20 degrees or so here, well after midnight local time, but we are expecting the weather to warm up a bit in the coming days, along with more high-profile events with the likes of lindsey vonn, so the

week will be exciting. back to you. >> carl quintanilla, thanks. courtney pointed out she would have gone for the double nine. cnbc is the place for curling. i love how they yell when they're -- >> i think about that, too, with golf and the ball, you're like go, go, right. >> it's harder than you think. >> we're going to try it later. >> i did the real one four years ago and literally pulled a scooby doo. >> a gold medal is at stake. >> by the way, female ski jumper from -- i met last year in northern wisconsin, made the team her nay is nita englund. you can wand olympic coverage. meantime, president trump consistently referring to the failing "new york times.

get what the stock is at a ten-year high. up next the times' ceo is here to talk about the paper, the stock and the president named trump. it's not theirs. it's mine. mine. mine. and it always will be, forever and forever. the new rx 350l with three rows for seven passengers. experience amazing at your lexus dealer. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms

and swimming pools, public cafes, bars and bistros even pet care services. and there's never been an easier way to get great advice. a place for mom is a free service that pairs you with a local advisor to help you sort through your options and find a perfect place. a place for mom. you know your family we know senior living. together we'll make the right choice.

into hello, everybody. we begin with the fact that skosh of state rex tillerson is meeting with egypt's foreign minister in cairo as part of his week-long trip to the middle east he also commented on the possibility of a reduction of tensions with north korea. >> as we've said for some time it's up to the north koreans to decide when they're ready to engage with us in a sincere, meaningful way they know what has to be on the table for conversations. flights in and out of london's city airport were canceled after an 1100-pound unexploded world war ii era bomb was found nearby in the river thames work to remove the bomb will continue into tuesday. and singer vicdamone has

passed away. he passed away in miami beach on sunday he was 89d years old. you're up to date. that's the news update this hours. back to you, courtney. thank you, sue a quick check on the markets. the dow jones industrial average up almost it was up 456 points we're watching some key helps there. 2655, up 1.4%. the nasdaq is up more than 1.4% at this point. energy, financials, materials are the best performing sectors. real estate in the red "new york times," a market bright spot amid the recent volatility, shares up 8% over the last week. not many companiescan claim that better than expected fourth quarter profits. the stock sits at around ten-year highs digit at subscriptions grew, and

that helped offset a decline in print sales. joining us now is mark thompson, ceo of "new york times." mr. thompson, welcome back good as always, to see you. >> hi there. hi, tyler. >> i'm a print subscriber, and have been for a long time. i go out there in my pajamas, and slippers would you rather have me as a print subscriber or as a digital subscrib subscriber or dour care >> we'll take you any way you want to come no, look, the -- our desire is to serve people who want serious news in whatever way works for them we've got a great print platform it may by time limited, there may be a point where the economics of that no longer make sense. our plan is to go on serving our loyal print subscribers as we

can, but meanwhile, to build up the digital business so we have a successful news operation long after print is gone. we're trying to optimize both. i think the positive reaction is because the market thinking we're doing a good job of building both, in particular of getting that digital business to grow steadily. >> you have certainly proved that people are willing to pay a separate charge for digital news they're willing to do it i get it thrown in, because i'm a monthly print subscriber i want to come back to that question do you make more on a print or more money on a digital subscriber, or does it matter? >> without a question we make more money on a print subdescriber, but the point about digital is we believe we can grow many, many more than we have already got very substantial more digital subscribers than print, and

whereas we're keeping the print subscribers relatively constant with a bit of decline over time, digital is growing very rapidly. ultimately i think there are many times compared to print. >> mark, you did just say you think at some point you won't have a print version of "new york times." do you have a time line for that that could be a big, big shift for the paper. >> sure. i believe it's many years in the future >> okay. >> by the way, we think our print product is a wonderful product. we would love for it to survive and thrive as long as it can i believe that at least ten years is what we can see in the u.s. for our print product we'll decide that not on -- simply on the economics, you know, when the print platform continues to make sense. as i say that, the key thing is we're pivoting so we're not relying on the print product in 2017 we grew the total revenue, total profitability,

even though the print side of the business is still somewhat challenged. is donald trump the greatest thing to ever happens to "new york times," mark? >> a great news cycle is good for everyone in the news business, but of course last year wasn't about trump. the biggest story of the year for "new york times" was probably the harvey weinstein story, and all the revelations on the story that was probably the biggest single game changer for the news organization, and for the times, we have a big enough newsroom, 1400 people, we have a big enough newsroom to covering trump, but doing great international news, great opinion, great enterprise, all at the same time let me talk about a story that was done over the weekend, and received some criticism, and obviously any single story you take out can be criticized there was some criticism over coverage of the visit to south

korea of the sister of kim jong-un, and to shorthand it, mark, critics felt the coverage was too fawning and didn't point out that she represented a regime that has systematically exterminated its opponents and the cheerleaders who were sent there were effectively if they were not supporters of the regime, they would be incarcera incarcerated, so forth do you have any reaction to that criticism? >> i read the piece. i thought it felt like good reporting to me. it shouldn't come as a surprise to anyone that the "new york times" elicits strong pins its think our coverage of the olympic games and the entire political dimension has been really brilliant, actually of course, we're in the middle of the conversation, and what's

amazing about the "new york times," it's probably mob are more in the middle of the conversation than 15, 20 years ago. there will be occasions when not everyone likes what we see. >> would you like to have seen a perhaps that conceded this is a regime that's brutal. >> "new york times" is for sophisticated readers of news. "new york times" covers north korea week in/week out, year in/year out. no one that reads the times could think for a second that "new york times" doesn't know about the regime that's a naive and really foolish way of looking at news if we can go back for a moment, you talk about "new york times" leading the way with the harvey weinstein investigation, and other stories in that regarding, but it certainly

wasn't the only paper that did so larry nassar, the doctor accused of all those abuses, that was brought about by another more regional paper to begin with do you think this is suggestive there's a great appetite for investigative journalism, that there's a revival of investigative journalism >> i certainly hope so. and hoe helpful is that? >> i think our democracy ben if its when you have a strong press that is willing to investigate, particularly things that powerful interests don't want to be known many, many news organizations have done very good work on the sexual harassment story. i still want to say "new york times," and "new yorker" did do something that led to a breakthrough, giving our news organization and it must be said other victims, the confidence to do the stories and to come

forward. the point i would make about the times is this kind of journalism is expensive, time-consuming, difficult to achieve, and quite often you put in the resources and there isn't a story at the end of it. what i feel excited about is we're creating a business model which can afford to fund that journalism at scale. >> is social media helping or hurting true journalism? >> that's a complicated question, as you know it's very good for propagating our journalism, for reaching new readers. the economics historically frankly have not favored publishers they favorite the platforms rather than the publishers i want to say, though, in recent months, we have seen both google in the extreme of pay model journalism and the way they have decided to help us with our business models rather than somebody driving their own and facebook's recent announcement

about favoring trustworthy news sources in the field these are modest, but in both cases i would say positive. >> you would like to see facebook do more, "new york times," "los angeles times", "the boston globe," "miami herald" "cleveland plain dealer," real newspapers that they are featured more prominent by >> i think the key is quality journalism. >> i mean not like sully's blog. that's what i'm referring to. >> of course, that's good for our business models which fund professional, serious journalism, but it's good in combatting the blurry, dangerous world where news and opinion and kind of false news and news paid for by foreign governments is all blurred in with serious responsible journalism so yeah, definitely. >> take a look at sully's blog from the basement. it's not to be missed.

[ laughter ] >> thank you, sir. don't worry if you are worried -- goldman sachs has a better idea. plus tv should not be a one-way street coming up, we are taking your questions. e-mail us at "power lunch", or tweet us read your questions, and we've got a nepal of experience to give you some answers. a lot more to do stick around out things. or checking that triple-double thing doing it yourself or tagging a friend thing. more revolutions in the making thing. that play like a girl thing. that four-legged friends thing. at&t gives you more for your thing. more entertainment, internet, and unlimited plans. more for your thing. yeah, that's our thing.

today, innovation in the finger lakes is helping build the new new york. once home to the world's image center, new york state is now a leader in optics, photonics and imaging. fueled by strong university partnerships, providing the world's best talent. and supported with workforce development to create even more opportunities. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.

welcome back to "power lunch. the dow is higher today. still been a rough ride over the past ten days or so. should investors look to put their money elsewhere? that is outside the u.s. seema mody has been covering that. >> the pullback was global japan, china, hong kong still in correction terr tire, down over 10% while india, brazil and russia are trading 6% below their recent highs

the broader sell-off in emergen markets has materially been in line with the s&p 500, which god man sax is notable here's what's helping the broader e.m. story, organic growth are supporting deman for resources like russia and brazil, plus central banks are in the midst of easing global investors are looking to the bond market for direction. it makes emerging markets less appealing, because the average yield 6%, which of course is attractive when a you're looking at 2.9 here, but if that story inits, that may not be the case. >> thank you very much, seema. stocking rebounding, now the best two-day gain, with investors seemingly going

bargain hunty is paul hickey, cofounder of the spoke investment group let's start off with a question that comes to us in twitter -- is starbucks, a buy, sell or hold now what do you think about starbucks? >> i think this is an interesting question starbucks, the big knock against starbucks has been the valuation for a while, since we have seen it near 52-week lows, it's become more attractive it's traiting at the cheaper valuation since the financial crisis that's a name enable we were buying a bit of last week. over the long term you should le -- a 2% yield, which is relatively attractive. >> so watch the left brian, what do you think about starbucks? a relatively new ceo for the country.

>> yeah, i think we need to see how the new ceo will play out and how they'll handle some of the price increase on the employment side. let's see if starbucks can pass that cots onto the consumers right now you're looking at the stock and it's pretty much range-bound, like paul mentioned here, maybe it's a good bike at this level, but i'm in a hold pattern here on starbucks until we break out this, i think there's other stocks i would be holding the stock right now. >> shana wants to know has chipotle hit rocket bottom or should she wait to purchase? what do you think? >> i think when you look at chipotle, it's been pretty ugly and the growth hasn't been there. when i look at it, i'm looking at other names like del taco, taken public by the levy group i would rather own that if i'm going to play the quick

restaurant mexican side of the food play here chipotle has been a disaster i started shorting it, i wish i didn't cover my short, because i think it's heading lower. >> it's had a rough time to brian's point competition has been tough for the stock, but also we had the foodborne issues, and usually those have worked themselves out, but at the sibling firm bespoke, we do a lot of customer issues, and the foodborne problem isn't necessarily -- >> because the 17-year-old who won the gold, he was which i poet lay to sponsor, because he eats there every day a survey of one who is not worried. >> so the point is that what's happened is traffic isn't decliningian more, but it's not bouncing back. what we are seeing is people who used to go there maybe four times a week are going there once a week now. so the multiple weekly eaters

aren't going back as often as possible brian was saying there's other alternative. >> so brian had a short on it, you're just not interested. >> when you're down 30%, if you can get it in the -- you put in a bid 4, 5% below here, not a bad idea >> clancy in connecticut e-mailed, is the sellout in u.p.s. overdone? what's your thought on this one? >> i think you look at some of the grocery stores that bounced back, there's a feeling that every time amazon makes an announce metropolitan certain sectors get hit. last wreak it was fedex and u.p.s. i don't think amazon will end up doing everything well, as much as most people expect. that will be down the road the percentage of revenues

generates isn't necessarily a large amount from amazon, so i think it's a bit of an overreaction. >> fair enough a question on ge brian, john asks us what are your thoughts on what may happen and where ge will be the next ye year. >> ge is a name that plays into the capital markets and sort of moves with the market in general. so obviously when we had a sell-off it will very negativity, but looking at stocks, i like stocks right now, our fundamental over the next year or so is look at stock that is have cash, and they're paying their different out of that cash basis. i think when you look at ge i think they're lagging behind, so i look at other names that have growth at a reasonable price for ge, i think it's a hold area here i don't love it, i don't hate it since it has sold off a bit.

i think you look at kinds of names that will do better than ge. >> there's a lot of fixing to be done. with the big sell-off last week, which company has the greatest opportunity to rebound with double-did you get reboundh double digit gains in the short term a pretty specific question, but what do you think? >> great handle. >> in the next one to three weeks. not that he's greedy or anything >> double digit gains. >> a trip planned or something >> maybe a trip to vegas i think one name that's interesting that sold off real hard in the last couple weeks is diamondback energy the ticker is fang >> the real fang >> they have great assets in the basin. very clean balance sheet over $130 two weeks ago, below $110 last friday so it's a name that saw a big pullback if the market does continue this rally, that should bounce back >> nothing like the real fang, baby >> yeah, up 4% here today. brian, we want your thoughts what do you think about ticker

fang, not the fang stock group >> ticker fang, well, you know, i think in terms of we talked about amazon and the fang group there. you know, i think that's a name you want to own. are you talking about the ticker symbol fang? >> yes, ticker symbol, she tried to say, fang, diamondback energy >> when you look at fang, it's a name high flyer people are looking for quick fixes on the rebound here in the market after the significant selloff. i don't know that this is necessarily a name you want to play for your quick fix back to the upside here, i'm probably hold to a seller on fang >> fair enough thank you for joining us, brian and paul thanks for being here. >> i like that segment now to the bond market rick santelli at the cme i know you bond guys like to say you're the more important market i think the last few weeks it's proven true. >> well, i tell you what i think the action last week is important because of the way we are sticking like glue as we

continue to move onward and higher in an orderly way consider this. we all know that we're going to have a lot more issuance this year from the treasury but if you look atthe trillion dollar issuance, well over half of that is in t-bills. to that end, six-month t-bill, here's the chart at the highest yields and we have t-bill auctions today cash management bill auctions today. and they're ramping up in a big way. highest yields, a bit under 180 since, well, about august of 2008 what's fascinating is about the same comp for a two-year note yield on the short end, and that makes perfect sense. sticking with the notion of flattening yield curve, which is really what we're talking about today, if you look at tens minus twos, it's now hovering 25 basis points steeper than it closed last year, and finally, one week of the dollar index, hovering just below 90. 90.60 failure you see on the chart, that's midway for the high and low close of the year

why is it important? an easy down and dirty whether the market is going to change direction, and traders obviously don't think so sully, back to you >> all right, thank you. >> on deck, the stocks and the calls you need to know about, including one analyst who says you should run for this stock, street talk is next. >> and the dow soaring higher, hitting session highs moments ago. it's possibly aiming for a 500-point gain today wow. ckft ts.ilt in turmo ba aerhi this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do.

visit learnfuturestoday.com to see what adding futures can do for you. with its high-tech the cameras and radar, 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 just $449 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪

trade 24/5, only with td ameritrade.

well, the dow is up more than 500 points. 518 points, better than 2% right now. nasdaq sporting about a 1.8% gain and most of the other averages roughly in that 1.8%, 2% neighborhood but 523 points now on the dow, brian. >> time now for street talk, where we scour wall street research every day so you do not have to. we're doing two stocks today number one, pharmaceuticals. credit suisse says they will

outperform, crediting their achievable outlook for the year. the analysts raising their price to $23 from $20. they added that even though the genetics industry is expected to see volatility, last week week's selloff creates a clear path >> second one, duncan brands they're going to out perform and raise their price target to $69. a 16% upside from here it reflects increased optimism following the company's investor day. they believe their image can refresh the brand. stocks higher on that. back over to you >> thank you very much >> two hours now or thereabouts from the closing bell. wall streak stocks are soaring gains better than 2% for the dow, almost 2% for the s&p 500 and nasdaq the big swings have come in the

next two hours for most of the past five days, six days you can't take your eyes off the ayith s, and neither will we st wus for the second hour of "power" right after this.

tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night. with the right financial advisor, life can be brilliant. on the only bed that adjusts on both sides to your ideal comfort, your sleep number setting. does your bed do that? right now, save 50% on the ultimate limited edition bed. ends soon. visit sleepnumber.com fora store near you.

and the nx hybrid with a class beating 31 mpg combined estimate. lease the 2018 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer.

half menu. call it mega market monday the dow up 520 points, and we have got $800 billion worth of advice on what you should be doing in this crazy market the white house targeting drug prices again, but is the industry so big and so powerful that even the president will not be able to change it >> and higher rates going to bring a new real estate reality? what a 4% mortgage may mean for the value of your home guszy the place up "power lunch" begins right now >> and welcome, everybody, to the second hour of "power" for a monday i'm tyler mathisen glad to have you with us if you're in the markets, you're glad to see these numbers. stocks near session highs, up more than 500 points right now 24,701 is the quote there, s&p, the dow on pace for their

strongest two-day gains since all the way back in june of 2016 there you see the numbers, better than 2% gain for the dow. almost 2% for the other two. energy and tech the leaders right now. real estate is the only sector among the s&p 500 11 sectors in the red. topping the dow, american express, apple, boeing, general electric the only down member. we have big movers to tell you about. csra jumping after it agrees to be baht by general dynamic under armour jumping those are among the s&p top performers infrastructure stocks moving cat abiller, deere, steel dyn dynami dynamics, they're all higher, and bigly, as you see there. courtney >> thank you very much it was a wild week for stocks with multiple days of thousand point plus swings for the dow. today, we have been surging since the open actually, at session highs here. is this a sign the bull market

was bent last week but not entirely broken. let's bring in bob and mike. bob, why are we higher on the dow by more than 500 points? what's leading us here >> there are a lot of people who are trying to pick a tradeable bottom and i think it's absolutely remarkable that the whole discussion over the weekend is are we at a tradeable bottom and the answer is a lot of people feel yes, to have we gone too far too fast people are calling me for a while now, saying bob, this is crazy. we have retraced half of our losses and i think we'll have a retest of the low s next week. there's a big debate about why we're going so fast. >> what you have to look at is yes, this market continues to kind of check off the boxes if you really wanted to see last week's lows hold it's doing what it has to do, but as bob says, only recapturing not quite half of the losses if you look at the s&p 500 from january 26th down that is the easier half. i know it's glib to say, but the big rebound over very oversold

level when things looked washed out a couple days last week, that's the snap back now it's a matter of the conditions calm down enough where real money feels comfortable, genuinely putting itself to work here. >> i would give two warning signs. number one, the russell 2,000 went negative in the middle of the morning. it's come back, but that was a real shot across the bow that's higher rates concerns that are out there number two, the volume today, absolutely average for the first time in two weeks. we're not seeing huge buying enthusiasm or huge selling interest as well sort of like everyone has stepped back sellers don't want to sell much, so the prices had to come up to attract everybody. >> what about the speed, the way things are changing? we're up sharply, we're down sharply, and it's happening very quickly. what do you make of those moves? that seems to be a little fear inducing on either the upside or downp side >> definitely a little disorienting a lot of things about this market in this age are

compressed i also would say the market was wound so tight by going more than a year without a real pullback and have people build into their assumptions volatility was going to stay low that maybe you got more of a recoil effect than you otherwise would. by the way, a lot of that talk over the weekend that bob referred to was a huge rush of outflows from the s&p 500 index fund, the spy. that shows you how you're so easily able to come in and out of this market in an efficient way. some of that has been reflected in the day-to-day moves right there. >> bob, final thought? >> well, i think the debate now has moved from tradeable bottom to too far too fast. i would say a good 40% of the people i have talked to today feel that we're going to retest the lows some time next week that's probably a good thing and more specifically, that this is a week-long here, these are people coming in for the tradeable is the key word here, meaning they don't necessarily believe there's a long-term bottom they just think we're going to

get a short-term bounce. let's find out in the next few days >> robert, mike, thanks very much let's bring in mike kelly, head of global assets at pine bridge investments. daddy, why is the stock market higher today tell me. got any ideas, son >> stocks go up most of the time where we're in more of an awakening, we had a regime change from a very, very post-crisis deleveraging slows things down every single time. we're off in the middle of 2016, confidence accelerated growth is accelerating growth assets, profits are literally surging as we speak, and they're picking up much faster than anyone appreciated and bond rates can't keep up fast enough to spoil that party. so all the good reasons don't get nervous and out of your chair. it's -- good times are still ahead. >> i have to jump in

with all due respect, we're down 1,000 points in 30 minutes last week. >> yes >> we're down 500, then we're up 300. now we're up 500 points today for no particular reason except for maybe there's rumors china might have stepped in or the ecb is rethinking, whatever rumor of the day you want to believe. a healthy stock market does not go down 1,000 points in an hour or up 500 points for no reason that should not happen >> the way we see it, we're fundamental investors. >> but this is not fundamental, you agree with this. that is weird, algorithm, machine-driven craziness that is going to cause people to lose faith in the capital markets >> again, we see this regime shift was very fundamental and equities picked up on it, and commodities picked up on it, and currencies picked up on it the rates curve ignored it and so did the volatility markets. and then all day one day, one economic number, they're

changing their view. they're stopping lookb two weeks in front of themselves and looking further in advance, and what we have seen is these markets coming together and repricing. equities have to use a little more humility. they're very confident that things are getting better, but they can't be absolutely certain. >> the regime change you're talking about and the number is the 2.9% income growth number in the most recent employment report and that was the stalking horse for higher interest rates that you think are now being expressed in the market. >> i think the fixed income market was ignoring growth, only focusing on inflation. and that was the first sign there might be some. now, they're carrying this away. it's going to take -- global output gaps are still very wide. they are what determine pricing. not local -- >> what does that mean, global output gaps? >> how much slack is in the

world. still a lot of slack pricing is not taking off. thank goodness it's getting better so we're at a major regime change different markets have incorporated that at different times. we had a clashing of markets, which kicked off a lot of technical activity these low ball strategies. >> what are you doing in your portfolios now to take advantage of the lower equity prices and lower bond prices, really? >> well, the last thing we have done is we have embraced some european small cap stocks. just last week, because they are more domestic. one thing you have to worry about today is the currency markets are very far looking they're looking very far forward. and they were able to last year, remember, europe was the strongest economy and in the first half of the year, the strongest stock market, and then it hit the skids when their currency took off. today, stock markets are worried about currency strength being too strong

and the small caps are more domestically insulated from those things so yes - >> that's where you see the opportunity. >> european small cap stocks >> good to see you thanks for being with us >> thank you >> president trump rolling out two big proposals today. a budget blueprint for 2019, and $1.5 trillion infrastructure plan infrastructure was a major plank in the president's 2016 campaign, but real challenges lie ahead, to say the least. ameamon javers is in washington with more. good afternoon >> you're right about those challenges the president rolled out the budget today that one faces the challenge of the fact that they have already agreed on capitol hill to a two-year budget deal, so this budget is sort of a blueprint of ideas of what the president would like to see, not necessarily going anywhere also, the president rolling out that infrastructure plan he held an event today at the white house to talk about some ideas for state and local and federal infrastructure spending. and at that event, he laid out

his vision for the economy, which he says is doing very, very well. here's what he said. >> unemployment is at virtually record lows. black unemployment is at the lowest level in history. hispanic unemployment is at the lowest level in recorded history, which is something that's so great. and we're very, very -- it's amazing what's been going on with the economy >> so the challenge for the president, though, with this infrastructure plan is figuring out how to get congress to pay for it he envisions about $200 billion in federal spending, an additional number of billions of dollars up to $1.5 trillion in terms of state and local and private sector incentives to pick up the rest of the slack, making up what he calls a $1.5 to $1.7 trillion infrastructure bill not a whole lot of appetite after the most recent spending bill on capitol hill among conservative republicans for that kind of federal spending. we'll see how his powers of persuasion do in the coming months the other thing to watch with the trump administration is just the amount of tension and

infighting inside the white house. the chief of staff, john kelly, some real questions about the way he handled that rob porter spousal abuse scandal last week. and whether or not he could survive as chief of staff in the wake of that there has been speculation over the weekend that he might be replaced by somebody like a gary cohn from the national economic council or mick mulvaney no indication he's going anywhere the white house was at pains to send signals over the weekend that the president still has faith in john kelly. a numbers of spokespeople saying that, but when you get that kind of speculation, it turns a lot of people against each other a lot of long knives out politically here in washington, so we'll see where that goes it's bound to be distracting for the trump team as they move forward. >> thank you very much >> let's stay on this topic and get more on how the president's infrastructure and budget plans may be received by members of congress let's bring in melanie, staff writer with the hill it's nice to say but congress writes the laws. not the president.

do you believe that congressional -- especially gop congressional members have the willingness, the fiscal guts to take on more deficit spending in the form of infrastructure >> infrastructure became somewhat of a punch line on capitol hill last year so far, there's no sign that lawmakers feel differently that's because you have pushback on both sides of the political spectrum for democrats, they're worried about putting the burden on cash strapped states. they say this is no more than a private incentive. it's going to lead to more tollways and environmental rollbacks and just the political reality facing the white house is that democrats are going to be very reluctant to head trump a win heading into midterm elections especially after the partisan fights after immigration, taxes, health care, and then you have conservatives, and the last thing they want to do, especially after this big budget deal, the tax reform adding to the deficit, is back a massive federal spending

transportation bill. unless the president uses his bully pulpit and sells this to not only lawmakers but local officials, it will have a tough time >> he has two thing on his side. one is a big rural spending package that is included in some of the president's ideas that could make some republicans in rural midwest happy also, provisions for the rebuilding of inner cities and schools and buildings. sort of on the back end, the way it handles it. there could be some democrats that find that attractive enough to maybe come onboard, no? >> well, i think you're exactly right. the key here is going to be those red state democrats who are up for re-election in 2018 it's going to be crucial to pick off their support, especially in the senate and you already saw bill nelson, the democrat from florida, who is the ranking member on the commerce committee he was one of the few democrats who came out and did not bash this plan immediately. he actually had a bipartisan statement with the chairman, john thune, from south dakota. it's going to be interesting to watch how those democrats handle

this plan, how they vote, and whether it's going to be advantageous for them to vote for it or work against the president. >> melanie, very simply, because i'm thick, how does $200 billion become $1.5 trillion >> well, the key here is that they want the state and local governments to pick up the tab >> but they don't have that much they're close to the wind here, right? they don't have much money >> that's why you have democrats pushing back so strongly against this plan, because number one, the math is very unclear originally, the white house had said this was going to generate a trillion dollars using $200 billion. now it's saying $want.5, $1.7, $1.8 >> let's go for $5 trillion, why not? but new jersey is basically broke. i mean, it's not going to -- >> you have the highway trust fund that's due to run out of money in a few years the tax gas hasn't been raised in over 20 years these are problems washington has been dealing with for a long time, and despite the bipartisan support for the idea of building

roads and bridges, there's far less consensus on how to pay for it >> does the president just throw it out because he has to he said he husband to deal with infrastructure spending, even though everyone thinks it's dead on arrival >> i think the president does believe strongly in the need to rebuild roads and bridges. he himself is a builder. he came from a real estate background he flies through these airports all the time, he would lament about the third-world airports good they didn't do it off the bat, it's going to be hard to get done they're finally putting out a proposal after a year. they said it was going to be a 100-day priority for them, but the chances of it getting done at this point seem very slim >> thank you very much we appreciate your time. >> thanks for having me. >> let's tell you what's coming up the maker of oxycontin, perdue pharma, said it will no longer market opioids to doctors. that's straight ahead.

>> plus, america's appetite for trucks and suvs is growing and growing. we'll tell you how u.s. automakers are responding. they're making more suvs that's how they're responding. >> and will a spike in mortgage rates send a chill through the hot housing market all that and much more coming up on "power lunch. i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. today, the new new york is sparking innovation. you see it in the southern tier with companies

that are developing powerful batteries that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.

you know what's not awesome? withgig-speed internet.te, when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party.

time for our power rundown with meg there's a lot to talk about. first up, the trump administration taking aim at high drug prices as part of the 2019 budget proposal this is something the president called out in the state of the union address as well. >> he's been talking about it for a while. in the state of the union address, he said drug prices will come down substantially this a big political issue we're getting some hints as to how he'll try to tackle it a lot of it has to do with the way medicare and medicaid pays for prescription drugs one of the things they're trying do do is incentivize the use of generic drugs. even taking away the out of pocket costs for paying for generic drugs. also changing the way drug maker rebates are applied. applying them directly to the medicine they're paid on rather than spreading them throughout the pool of covered medicare beneficiarie beneficiaries. this could lower what they pay for medicines out of pocket, but it could raise premiums overall. and in medicaid, allowing a few

states to test direct negotiation for their plans with drug makers which would be very new. overall, a lot of people saying this looks pretty okay for pharma, and this would all have to potentially go through congress, so it's not clear any of this would happen >> we have another topic, perdue phar pharma, the maker of oxycontin, announcing it's going to stop promoting opioids to doctors this is a big deal >> this a big deal the company makes oxycontin, which is a huge prescription opioid they have eliminated about half of their sales force and they're not going to promote opioids this comes as purdue pharma and other makers are facing multiple state and municipal lawsuits over their marketing of opioids. a lot of people saying why didn't it happen before? the company say it's being responsible. >> would others follow suit? >> potentially what's really interesting today is there's a stock of another company that makes opioids which

is up on this. a much smaller company, and it makes an extended release what it calls abuse deterrent form of oxycodone, that stock is up more than 10%, because analysts are saying less competition. >> finally, the center for disease control saying the flu is still on the rise so how severe is this flu season overall? it's not going aanyway, either >> no, it's not. we still have several more weeks, and we know it's been a severe flu season. we have a graphic that illustrates this this is doctors visits with flu-like symptoms. the orange line is this season the lines to the left of that is the 2009 swine flu season. you can see the doctor visits are getting up to the same level that we saw in 2009. remember, that was the swine thru pandemic. a lot of people were visiting their doctors. we still have a few more weeks to go, and the cdc says even though the vaccine hasn't been as effective, you should still get it >> i think i got it twice

because i forgot i had it. and i went two weeks ago and got it again >> what about the japanese company with the new drug that's out that could kill the drug in 24 hours >> an antiviral kind of like tamiflu. it's a way of trying to treat the virus after you have gotten it versus trying to prevent it with a vaccine this is in trials. they're partners with roche, which makes tamiflu. they're hoping for better ways of shortening the length of the flu virus. >> but it wouldn't be available in this country for some time. it hasn't even been approved, as i understand it, in japan. >> i believe the japanese drug maker has applied for approval there. they would probably apply for approval this year it could be a little while >> thank you so much trying to keep us healthy and up to date with the pharma news thanks >> we like things big in america. especially cars and trucks coming up, we'll hear from the big three automakers for their plans on growth this year.

hint, it involves a lot of trucks >> last week's market freak-out was attributed to rising rates but it's probably the short volatility trade unwinding, and we'll talk more about rising rates. stick around mercedes-benz glc with its high-tech cameras and radar, 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 just $449 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. dawn is serving up dinner for a whole town! that table was like... so big! can one bottle of new dawn clean all the dishes? we did it! 6,000 dishes! a drop of dawn and grease is gone.

anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird.

hello, everybody i'm sue herera here's your cnbc news update at this hour. police say donald trump jr.'s wife vanessa opened an nfl that contained white powder, felt ill and was taken to a new york city hospital as a precaution she called 911 after opening the letter addressed to donald trump jr. at their midtown manhattan apartment. police and secret service are investigating. israeli prime minister netanyahu says he's been discussing possible israeli annexation of jewish settlements in the west bank with u.s. officials. they're under the jurisdiction of the israeli military that occupied the west bank in 1967 no time table for any possible annexation, though and the obamas celebrating the unveiling of their portraits at the smithsonian's national portrait gallery michelle chose amy sherald to

paint hers, while the president picked kehinde vily. >> we miss how you carried yourselves and worked so hard to make this country a better place. >> you're up to date that's the news update this hour i'll send it back to you >> all right thank you very much, sue >> you got it. >> ford shares are a little higher today the automaker has big plans for some of its biggest vehicles phil has the latest from chicago. is this an f-150 world and we're just driving in it >> this is not necessarily about the f-150, not at all. we're talking about big suvs, the expedition and the new lincoln navigator. ford has been hopes for those sales increasing in part because the demand has been so strong. especially since they introduced the redesigned models late last year as a result, they're going to be boosting production by 25%, as i mentioned, there's tight supply on these vehicles right now,

especially when you look at the highest trim levels. in fact, the head of sales for ford said during the sales call, we can't keep the $90,000 version of the navigator in stock. when you look at suv sales, and remember, we're looking at suvs, not crossovers crossover is a completely different category those are car-based. suvs are truck based ford up 4.6% last year these are the higher profit margin vehicles and that's why ford is trying to push those as much as possible the new lincoln navigator, which by the way, starts at $72,000, sales were up 88% in january now, admittedly, it's a small base, guys, compared to january of last year but there is demand in that market right now, especially for those higher end big suvs. >> thank you very much, phil those are not inexpensive cars either let's get a check on the markets at this hour stocks in full rally mode. the dow was up 548 points. we're now on pace for the best

two-day gain in the dow since august 2015 and june 2016 for the s&p. the dow joins industrial is higher by 520 points s&p 500 above 2665, and the nasdaq higher by almost 2% energy and tech are your sector leaders, up by 2%. real estate the only sector in the red. we know interest rate sensitive. your dow leaders, boeing apple, american express, and sisco. >> the oil market set to close for the day. let's find out how it traded with jackie d. >> hey, brian. it's interesting because you can see that crude prices gave back some of the gains too. close to $61 a barrel. now under that $60 mark. this is after we slipped the to correction territory last week the surge in equities today led crude higher as investors are starting to rethink the most recent pause equity volatility will drive crude prices today, we heard from opec as well production down slightly, but still over 32 million a day.

nonopec supply revised higher. that's u.s. shale. it's not a surprise. the eia raised its production figure last week where do we go from here some analysts say mid-50s wouldn't be surprising with these swings in stocks, but right now, a momentum trade. >> thank you very much >> markets in the green after coming off their worst week in two years. how hard could volatility here at home hit the international markets? right now, the vix down 11%. we're going to talk about with goldman sachs vice chairman coming up.

amazing. the dow edging closer to session highs, up about 530 points right now. during last week's market volatility, many pointed the finger at the prospect of a series of rate hikes by the federal reserve. so how have rates affected the market historically? professor steve liesman joins us now with the numbers hi >> hey, tyler. yeah, they call it the great rate debate. what do the rising rates mean for stocks, and the answer is maybe not what you think we went back and looked at six

different instances, all the way back to 1993, and we found in almost every case, except for the first one here, stocks go up during rising rate environments. see here, '93, '94, it went down, but take a look at the other ones huge gains at the end of '98 to 2000 more gains, '03, '04, and by the way, you can see this rate rise. it registers as a somewhat meaningful increase in rates but you have had 24% returns during this environment. now, what happens more importantly six months later, and here's where the rub is, if you will go back modest gain there, but remember, that was the one negative we had. look at the rest of these here now. very modest gains six months later. modest gains again, 8%, and then a negative right there and then for this period here, 8.4% not terrible, but not the double digitst you saw earlier. let's sum it all up for all of this instances that we studied

211 basis points or 2.1% move on average for these six incidents. a 26% move while rates were going up six months later, an average of a 6% gain, guys. brian. >> all right, well steve - >> very interesting. >> it certainly is from rising rates to volatility, etfs to machine trading, there are many things blamed for the crazy market, but the question you have is this is there anything fundamentally worrisome about the economy right now? joining us, former goldman sachs investment officer, and rich bob, let us start with you and go through it. do you see anything that gives you pause about the health and strength of the u.s. economy, which as of 2 weeks ago was rock solid? >> that's the irony of this whole thing. the economy of the united states and of most other countries of the world are going up these economies are rising gdp is rising almost everywhere.

the employment picture is improving in the united states and many other countries and we have synchronized growth in almost every major economy in the world. this is a very unusual and very positive situation when you look at it. the question that i think people in the market are asking, particularly in the united states is, if the economy is going up so rapidly and doing so well, why did we need additional fiscal stimulus? that, to a degree, can cause the economy to overheat. we're also seeing at the same time the fed contracting a little bit, cutting back on its balance sheet somewhat and i think that people have anticipated higher rates, and that has been an environment which has caused an inflection point. we have gone from very, very, very forthcoming monetary policy to somewhat more modest monetary policy here, and probably abroad

that's sort of spooked the market, but it's been doing it because it thinks the economy is growing rapidly, and that's why steve's chart is so interesting. what causes rates to go up that's the key if rates are going up because people think there's going to be more growth, then that should be good for the stock market. and the market is going to have to sorthat out >> so bob, let me ask you this i understand the stimulus that is embedded in the tax bill, which was something that had been talked about for years and years and years. the stimulus that came through in the last couple of weeks in the form of the spending plan feels to me sort of almost like an incidental stimulus let me just explain. stimulus is stimulus, no matter how you look at it, but here, i don't know that both sides intended to stimulate the economy so much as the republicans wanted to give more money to the military. and the price of that for the democrats was to provide more money for domestic spending. so the intention was not to

stimulate an economy that really needed stimulating >> that's correct. >> follow my point >> i definitely follow your point. it's a very valid point. the goal of the tax cuts and the goal of the spending deal were not aimed so much at stimulating the economy. the tax cuts were aimed at giving corporations a benefit. and that was to provide for longer term growth, more investment, and hopefully they would hire more people and that was somewhat stimulative. i would say it was basically stimulative. the spending plan was basically a deal, money for the military and money for domestic programs. i don't think they were looking at it through a keynesian lens of additional stimulus, but that's the effect. that's the effect of both. you have big tax cuts over ten-year period, $1.5 trillion, and then all the spending. so if you look at it from the point of view of the government, the government's going to have

to issue bonds to pay for this because it does provide for a higher deficit now and over the longer term, so the government will be in the markets borrowing more money, and it will be stimulative in an economy where we're already for the most part at full employment >> i don't want to be a broken record, bob, but interest rates doubled in 2012 and 2013 to 3% they were higher then than they are now. we went a year and a half without having a 3% move for the equity market, a year and a half the all-time lowest volatility market in the history of modern american trading yet in the last seven trading days, we had two 1,000-point drops and 500-point turnarounds nearly every single day. is that because interest rates moved 20 basis points? >> no, it's definitely not >> no, right we have to stop with the interest rate story. >> we have to stop, the interest rate story is not the major story. if there is an interest rate

story, it's not what has happened but the fear, the anticipation, that they'll go a lot higher and that remains to be seen. we have had a lot of false alarms of people anticipating rates. the market anticipating rates going up, way up, and they haven't. so i think what the market is doing, the stock market is going up a lot, and there's an anticipation that rates may go up a lot more than they have and therefore, that creates in the minds of people, a sense that we may not have the supportive monetary environment that we have had in the past and therefore, when you combine that with an already very high market and a reduction in those support, the monetary policy is giving the market, that causes people to be uncertain but the rate increase we have seen so far has been modest, and in historical standards, not something that should cause the markets to act as they have acted. it's more fear than the reality at this point.

>> bob, thank you for laying it out there like that. we appreciate it we'll get you back on again soon >> thanks for having me. >> what does this mean for stocks let's bring in rich weisz with american century he's been overly equities for the better part of seven years but taking profits off the table and moved to an underweight position on stocks late last year rich, you did this before you saw the selloff, but also, i guess, you missed the run-up in january. so am i to believe you think this market run, this market rally, is over >> well, to some extent, yeah. this bull recovery's long in the tooth. and if we're looking out a year, two or three, we definitely see better investments in the u.s. stock market let's face it, we have economic growth that's good, but it's finally brought about a tendon inflation, whether it's coming from commodity price inflation or a weaker dollar and imported inflation or domestic wage inflation, but the bottom line

is stocks got a little ahead of themselves and it's going to be a rocky road now, and we see more attractive altern tchbs overseas >> what are those more attractive alternatives. >> developed markets overseas, very broadly go east and go west, and also travel if the dollar continues its downslide, you're better off doing your international travel now. you know, the dollar really had this market wired a few months ago. despite higher interest rates, a strong economy, strong earnings, the dollar was off by 10%, 15% that was a canary in the coal mine, and the stock and bond markets here finally woke up to the fact that there's going to be some inflation. and again, the best way to defend against that is going to be diversify and in particular overseas >> and a sinking dollar is inflationary >> yes, exactly. it's going to be importing inflation down the road. it obviously helps exporters,

but at the margin, it's an inflationary factor. >> so it sounds like you think that maybe we have had a tradeable bottom maybe we havehaven't, but either way, this rally feels a little weak to you. >> exactly it's always a horse race in the financial markets, as we all know, so it's not how fast is your horse running but how fast is your horse running relative to the other horses. and here, we see better plays overseas in some of the major european economies which are accelerating in growth as well they are a little behind us in this economic cycle. we're a little bit towards the end of the recovery. and they're more mid-cycle, so we would be leaning to overweight those markets >> we talked to bob about, as brian led him through the conversation about interest rates, and he said it wasn't really the rate of interest rate rise but maybe the anticipation of higher rates that spooked the market it was also how those numbers

reverberated back through the volatility trade, right, rich? >> exactly >> and the unwinding of it, how much more unwinding of that do you see ahead? >> hard to ell you know, it's a push and pull right now. earnings growth is going to have to come through more solidly, and so we'll just have to see. valuation metrics, according to the way we look at it right now, u.s. market, stock market is about fairly valued. so this recent selloff has basely brought prices back in line with where we thought they should have been in the first place. as far as volatility goes, it's finally woken up you know, there was a big disconnect between the volatility level and the global economic uncertainty measure there was a divergence of those two. it couldn't last it didn't last, and it's finally reconnected with a rise in vix and somewhat calming in the global political uncertainty

index. but we still see more volatility to come. obviously, vix has adjusted. the vix futures curve has also adjusted so stay tuned for more >> that's a really good way to tease the end of your segment there. thanks for joining us. we will stay tuned for more to come in these markets. >> home mortgage rates, highest point in four years. they're primed to head higher. what that may mean for home buyers the spring selling season. "power lunch" returns in two minutes. ♪ (nadia white) the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely. (dane chauvel) sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred.

(tom villa) we took our world class network, and we developed devices to track environmental conditions. this device allows people to understand what's happening with the location, but also if it's too hot, if it's too cold, if it's been dropped... it's completely unique. (dennis woloshuck) if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. who knew a tiny sensor could help keep the food chain safe? ♪

you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember. in the 2018 lexus es and es hybrid. lease the 2018 es 350 for $339 a month for 36 months. experience amazing at your lexus dealer. experience amazing but through goodt times and bad at t. rowe price we've helped our investors stay confident for over 80 years.

call us or your advisor. t. rowe price. invest with confidence. higher mortgageeralties are giving real estate agents higher blood pressure it may be about to get worse diana olick joins us with that story. >> mortgage rates now at their highest level in four years and poised to move higher. they loosely follow the yield on the ten-year treasury which is up again today the timing couldn't be worse the spring market really jump started early this year because of strong competition for a record low supply of homes for sale the average rate on the popular 30-year fixed is now right around 4.5% for the best buyers. still low historically, but

buyers over the past six years have gotten more used to rate in the 3% range mortgage rates have not been at 5% since 2011. now, a 5% rate would cause more than a quarter of today's home buyers to slow their slow their, according to a redfin survey of consumers at the end of last year just 6% said they would drop their plans to buy altogether. about one-fifth of consumers said 5% rates would cause them to move with more urgency to purchase a home, fearing they would rise further another fifth said they would consider more affordable areas or buy a smaller home. rates have been volatile and this could drop again, but the trajectory for the year is much higher more online at realtycheck.cnbc.com. check this out private equity folks taking to the ice, dropping their gloves to fight cancer. band of parents holding their annual play like a pro fund-raiser at madison square

garden last friday helping raise over $110 sthou for the organization for fighting pediatric cancers the oesrganization has granted over $5 million. more research at bandofparents.org. we've seen one dow stock is up more than 6% and one trader says it's getting ready for a breakout stay tuned to find out we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family.

welcome home mom. with the right financial advisor, life can be brilliant. big thinking in the finger lakes is pushing the new new york forward. we're the number one dairy and apple producers in the eastern united states supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov

it is time for trading nation let's look at nike boris, nike one of the better performers in the dow this year, at that's not saying a whole lot. what's nike likely to do going forward? >> if there's ever a marketing hall of fame, nike has to be the candidate for the top job. they've been a marketing machine. the shoe business is doing well. they're intensifying the brand with this new concept of nike members in their stores. so, i think everything looks absolutely great going forward they have a new line of yoga pants. i'm the farthest from being a fashion maven, but looks good to

me the stock looks good because after a couple years of consolidation it's broken out to the top side and i see nothing but good things for nike i like it on an absolute basis but i like it against the dow. i like long nike short diamonds as a relative value trade. >> shouting the dow diamonds, interesting. how does the nike shart look >> the charts are aligned here we are bullish on nike on the prospect of what we think will be a big breakout above the $68 level. shares have paused and this is the peak for the stock, looking back in late 2015 it's been an underperformer over the last two years but we're seeing signs of greater relative strength. we're seeing the trends are improving. it has a rising 200-moving average. i think with a resumption of market strength, top-down

tailwinds, i think nike is set for higher than $68. >> a lot of love for nike. thank you both very much for more trading nation, go to tradingnatio tradingnation.cnbc.com check please and more on the markets. >> announcer: and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> traders shouldn't let their politics affect their trading. instead, look to the current price trend and build an exit strategy based on where and when the present conditions may change this will help keep your biases at bay as the markets often react differently than we might expect

mike and i are both veterans, both served in the navy. i do outrank my husband, not just being in the military, but at home. she thinks she's the boss. she only had me by one grade. we bought our first home together in 2010. his family had used another insurance product but i was like well i've had usaa for a while, why don't we call and check the rates? it was an instant savings and i should've changed a long time ago. there's no point in looking elsewhere really. we're the tenneys and we're usaa members for life. usaa. get your insurance quote today. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.

morgan stanley with its high-tech the cameras and radar, 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 just $449 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

there are the market indexes right now. 478 points higher on the dow one day it was higher by about 550. boeing one of the major contributors adding roughly 90 of those points. apple, another big player. cisco, another big player among the dow stocks at this hour. the s&p 500 up 1.6%. i'm the last person to say if a market has been hit in the market but if you followed on from friday's strong close through this morning, if you were looking for signs that maybe the market found stability, you would take heart in today's action. >> yes ari says look for 2640 if we can hold that on the s&p

500, we can rally above that we are there now but we have trading left to do. >> he was on but he was talking nike >> and the yoga pants. >> don't underestimate -- >> that was boris. >> don't underestimate the short vol product. may be more to come. >> may be more to come thank you very much for watching "power lunch." "closing bell" begins at this moment >> hi, everybody welcome to the "closing bell." i'm kelly evans at the new york stock exchange bill is out and the market is bouncing around. when we sat here last week, the dow was down nearly 1600 points. today we are up about 550 at the high and still up nearly 100 at the lows that makes it the narrowest trading of the month is this a head fake? we'll discuss that coming up. first to our reporters, though michae