january following very strong fourth quarter and as you start to see some of the tax benefits coming through to the consumers you'll see the retail sector work well. >> i think you have to look at biotech sector i'm giving joe time. >> mastercard joins visa. >> good stuff. thanks all "power lunch" starts now. welcome to "power lunch. i'm tyler mathisen, here is what is on the menu inside of the fed's head, investors getting ready for new clues about inflation and the rate hikes and the economy and it could move the market in a big way. we'll have that in the next hour mining for growth. apple reportedly making an out-of-the box move to fuel growth for the iphones what they are planning to do and president trump meets with students and parents and teachers impacted by mass shootings. we've seen a number of ceo's take the lead when it comes to

social responsibility. should they take the lead on possible gun control "power lunch" starts right now and welcome to "power lunch," i'm michelle caruso-cabrera and stocks are carving out accident gain ahead of the fed minutes but that could change in less than an hour. yields on the two-year note hitting the highest level since the beginning of the financial crisis and watch the five-year because results of an auction moments away home building stocks are rallying today tri-point and kd home and pulte are leading the way and fueled by advanced auto parts, stocks are up double-digits on the back of the earnings. we have eamon javers with breaking news at the white house. >> reporter: we've been watching this student protest in front of the white house this afternoon protesting against gun violence. we've seen the president has a meeting later on today with a

number of students who have been affected by gun violence and i spoke to a white house official who signaled new flexibility on the part of the president in terms of his thinking about gun violence this official telling me the white house is now open to the idea of rather than banning some guns for all people, that is at salt weapons ban or banning ar-15s for all people, they would propose banning all guns for some people. that is the people who are flagged in some way as mental health concerns. this official said this idea is not fully processed yet and needs to go through several steps and this is an idea they are working on here at the white house and it signals new flexibility on the part of the president of the united states the official told me that the debate around guns has become calcified in this country. officials said our posture right now is listening to everything but expressed a skepticism that traditional gun control as proposed by democrats on capitol hill could pass. instead looking for new ways into the gun control debate and

one option they are considering here at the white house is a way to ban some people from getting access to all guns, including perhaps handguns, rifles and the ar-15 as opposed to an assault weapons ban that could ban everybody from getting types of particular guns. so new approaches on the gun control issue on a week where it is front and center in the nation's mind. >> thank you so much well the dow is up triple-digits ahead of the release. and bob pisani is tracking from the stock exchange. >> look at the sectors -- [ inaudible ]. tech modest winner they are down as much as the rest but the cyclical groups and industrials and energy aren't doing much at all. >> i think we're having trouble with bob's mic we'll work on. >> that we'll discuss the markets with how much of a

concern higher inflation rates are. joining us is job tennesy and neal floult. and are you worried about rising rates or can the markets look through them and move higher >> i'm not worried about it, michelle simply if you look, we've been called for the last six or seven months for a correction in the market and it wasn't anything more than just a correction. this makes our 19th correction but we've been saying that the corrections since 2010 of all -- have all been swift. and from the peak to the trough in this latest correction which is down 10.5%, took nine trading days and only four trading days to get back to even. and now the dow jones is up 1.5% for the year so they've been swift and in quick moves in the past and this was swift and quick but not the end of the bull market we still have a lot of room to run. especially if you look at where

pe's are on the indexes today, they're at 20. down from 22 reality is with corporate earnings going up because of the tax cut, they're probably down about 17 to 18 on the pe so there is a lot of room to move. >> and neal, are you as bullish. >> i echo a lot of neal's comments in that as interest rates move higher from these levels, historically it shouldn't be detrimental to the equity market. it shouldn't be until you have a ten-year north of 4%, to 4.5% before a relation between stock multiples but as inflation data begins to pick up and it continues to grind higher, there is concern that central banks around the world are more hawkish than expected. that is going to lead to higher volatility so we are looking for markets to grind higher from here but we do think it is a little bit choppy. >> so neal made the very good point, joe, that we are getting rising earnings and at this

point perhaps the p.e. should be 17 or 18 does 4.5% account for that at what point do you say we're in the zone where valuations may be going higher or maybe approaching historical highs and 4.5% is still the right number, the right line in the sand on yields. >> i think despite where you are with valuations today, your perspective, if you think 18.5 is the right number or 16 or 17, from these levels, i don't think we can expect a whole lot more multiple expansion moving forward, at this part of the cycle, we're looking at earnings to do the heavy lifting and as neal pointed out the earnings data in the fourth quarter looks very encouraging and expectations for 2018 looks ken -- looks encouraging and those numbers are higher on the bax of the tax reform. so we think earnings will do the heavy lifting but not expecting a whole lot out of multiples skeerj -- either expanding or contracting. >> you have three picks, kb,

boise and cascade and thor and what ties them together and why you like them. >> i like the home builders and boise cascade. if you look at problems last year in florida and houston, northern california, southern california, there is a lot of rebuilding that has to be done and you start to look at jib son, drywall, you name it, boise cascade and look at kb homes, they could actually come in and build a development very, very quickly. they have the personnel and the expert eegs, they could do it to rebuild the communities. thor is a different from one from the standpoint we know box stores are having a problem. but when you think about it, you are not going to buy an airstreamer or a motor home on the internet you want to go see it. and as more money is going back in the consumer's pocket because of the tax cut there is expenditures that people will go out and maybe buy them they all have both price of

sales on all three companies that are below one and more importantly they have a huge amount of room to raise the dividends into the future. >> i don't know. i never thought about that and it happened. maybe, we'll see thanks, guys neal and joe good to have you on. a five-year auction and the results just out mr. santelli is following it at the cmi. >> this isn't a terrific auction but above average. it is a c-plus so we have 35 billion five-year notes an the yield 2.658 the issue market was 2.66 on the bid side offered at 2.655 so we slipped it right in the middle that is good and you had 2.44 bid to cover a little below the ten auction average of 2.48. 58% on indirects the week since april of last year, ten auction average at

65%. the golden spot 12.7 on direct versus a 9% ten auction average and dealers take 29.3. so charlie plus -- and by the way, last thursday we learned the fed balance sheet grew by 11 billion and they are still buying today you could see the auction was $43.5 billion because the fed bought 8.5 billion of five years for some of the runoffs. so indeed they still are buying and i think that is -- that deserves a special annotation in front of tomorrow's seven-year auction completing 92 billion in supply without including soma which is system open market account. back to you. >> very big week snoop retail rebounding from tuesday's big drop the number of names flying high. but walmart getting hit hard once again today questions being raised about the future of the person who runs walmart's online business. we have some answers about that. but the cerent selloff in the stock been over done we'll take a closer look

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walmart dropping again the stock down another 2 plus percent following the worst drop yesterday. courtney reagan is tracking the pull back and the head of the e-commerce future at the company. she joins us now. >> so yes, shares of walmart are selling off by more than 2%. after shedding more than 10% on tuesday following earnings a big disappointment for

investors but mark lurie said he is not going anywhere. i asked him directly, are you planning to leave walmart and he said absolutely not. i feel like we are just getting started. i've only been here 17 months. we're having a ton of fun and making value progress and excited about this year coming up and i couldn't be happier so i asked him if doug mcmillan was allowing him to be his entrepreneurial self and he said nothing has changed and if anything trust is building between me and the board and we have a lot of work to do and things to be excited about in the future so he is critical to the walmart e-commerce vision and viewed as an innovator and founding jet.com which walmart bought for $3 billion in september and he sold quidsy, that was the parent of diapers.com and soap.com and sold that to amazon for

$545 million that deal closed in early 2011 >> did he give you any insight into why they wolfed it in the last quarter. >> they gave me two minutes on the phone with him he was walking in between meetings and a lot of sound in the background. >> but he couldn't be happier. >> he's not going anywhere. >> he sounded calm like i don't know why we're having this conversation was the tone i picked up at least. but i didn't get a ton of time to talk to him about a quarter or why he wasn't on the call i wish i did >> still a key question answered thank you. well we're seeing another down day but the retail etf, the xrt is higher and on track for the best day since november of 2017 should you look to buy walmart at these levels or shopping a different aisle so to speak. let's find out what dina telsy says dana, good to see you. >> thank you, nice to see you too. >> as soon as courtney popped on cnbc with the news with the comment from mark lore and the stock didn't do much in reaction

to his comment that he is staying. what does that tell you. >> i think people want to see the ans behind the e-commerce accelerate i think the 23% number and the 40% expectation for the upcoming year, credibility builds as you build out the numbers. the strength of the plan -- no one doubts that. it is this new growing area that frankly is always some bumps along the road and seeing it get back to the 40% growth rate, i think is what it takes. >> given the quarter. >> what sort ever multiples should walmart have. it was already -- it was on the high side. it was trading more on the e-commerce business even though it is a sliver of total sales. >> i think one of the things with the names is that you always have to look at what is the opportunity to buy them. because down the road they're going to get bigger and they are certainly more buying power. and when you think about what the world becomes, it is a walmart and amazon world so i think the multiple detraction that you had because of the stock price weakness for those long-term investors, it

provides an opportunity. >> can you answer your own question about what you think in the terms of the online strategy a lot of runup in the stock last year was based on the assumption they could have a solid strategy against amazon you highlight the online numbers from yesterday weren't that good. what do you think? is this a hiccup or is this a bigger issue. >> i think it is a hiccup along the way. i think there is integration and a lot of integration with online and physical stores and there is price point work being done, customer work that is being done they've bought other companies that they are integrating also so i think there is a lot that goes into the ball of wax in order to make it the continued growth rate that is expected so i think it is a bump along the road and i think overall when you think about e-commerce, growth for the retailers is continuing to grow. but not as the giant rates that it was even a couple of years ago. because you're building off of a bigger base. >> this was a stock that

languished for quite a few years. and in the past, what, 18 months or so, it has done very well it had become one of the retail heroes people were pointing to it as a success story. what -- what has it done right even though in this most recent quarter clearly there were errors of things they didn't do well >> wasn't it interesting that a few months ago they changed the name of the company from walmart stores to walmart. and what that is saying is that they are an all-channel retailer not just a single chnl retailer. the investment in personnel and the investment in wages in the united states. that certainly is helping to create a better store environment and help to improve the look of the store and helped to drive more traffic to the store. so overall, the investments in digital and investments in stores along with the pricing power they have, and frankly the footprint that they have, that could allow them to integrate digital and physical is

differentiated. >> dana next week is a very big week for earnings. what do you expect and your top pick in the group? >> i think overall next week is a busy week. we've gotten a lot of kpz pre-released holiday sales which were good. most interested to see what kohl's have to say with the amazon partnership, that 6.9% comp was impressive and seen improvement there. and i can't wait to see what gap has to say given the departure of jeff kerwin with the gap brand and old navy which is 45% of the business continues to do well and want to see the guidance for next week. i think sales are important. and then also obviously we're seeing differentiated experiences that companies are bringing in their foot prints so i think we want to see a experienceal too >> dana, thank you for your time. at $1.5 trillion and

growing. that is the america's student debt crisis doubling in the past five years and crippling millions of people in the process. the trump administration now looking to take steps perhaps to change that. and if you have a student loan or have a child going to aro ege, and then you need t he about this. "power lunch" is back in a moment 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. to grow your business with us in new york state with its high-tech the cameras and radar, contemporary cockpit, 360 degree network of driver-assist technologies,

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there you see the markets if the green. the trump administration reportedly considering allowing more americans to eliminate their student loan debt by declaring bankruptcy for more on what this could mean for students and the companies that provide the loans, scott cohn joins us now. hi, scott. >> hi, tyler put this in the category of thank goodness for small favors. the trump administration is put out a request for public comment on something that activists have been talking about for some time, making it easier for borrowers to discharge debts in bankruptcy right now it is one of the most difficult things about this mounting student debt problem and that is that you can -- cannot except in extreme circumstances get rid of the debts in bankruptcy. one attorney working with student borrowers said it is not a bad thing that they are looking at this but most of the moves from this administration have been in the opposite

direction. >> we're seeing the programs that can provide the most benefits to borrowers like defense to repayment and income driven payment and public service loan forgiveness and we're seeing those programs targeted for elimination and don't think that is a good sign. >> these are some of the proposals targeted by the administration in the budget proposal, they include as you heard, con soil dati-- consolidg the programs to repay debt based on income and ending the public service loan forgiveness program and if you work in public service, certain industries get some of your debt forgiven allowing the government to go after borrowers in deitaly a --n default, a lot put in place by the obama administration now undone by this administration by the trump administration involving things that make it tougher for the student loan servers to go after students and also cutting the federal funding for work study

look at the level of student debt in this country and it is in a straight line for many, many years when we first started reporting on this problem about seven years ago, we were closing in on a trillion dollars in student debt and now into $1.5 trillion and still no end in sight. so this idea to let students possibly declare bankruptcy to get out of their student debt may be a small step but a very small step in the general scheme of things. guys. >> scott, it is possible that student debt has increased so dramatically because the government subsidizes it in the first place. when you sub siz -- subsidize something everybody wants because it benefits them further you have a lot of demand and the colleges they claim they are nonprofit but they'll charge what the market will bear and what the market will bear goes up dramatically every single time the federal government makes it easier for students to borrow >> reporter: well, i think that that is a small slice of it,

michelle and yes, that is part of it. there are really no underwriting standards for student loans and that is why the interest rate is high and, yes, there is sort of a dependency that a lot of critics have talked about where institutions and for-profit institutions when the obama administration was cracking down and the trump administration has eased are big consumers of federal financial aid and student debt and the system does tend to feed on itself the issue is the rising cost of college which is for any number of reasons some is of which is the ease of borrowing, some of which is the rapid decline in state support over the years so this is a continued problem and if all that we're looking at is after the fact, letting students declare or borrowers declare bankruptcy and get rid of the debt. well you wind up with a class of young borrowers in bankruptcy just as they're supposed to be starting to earn, make money and be able to contribute to the

economy. >> all good points, scott. thanks so much scott is covering this issue for us for years here at cnbc. good fof -- to have you on. so the mass shooting of gun violence back into the spotlight and students protesting and president trump meeting with parents and teachers and students affected by it. and we've seen this but should theyo re dmo when it comes to gun and gun control. we'll debate mom and dad got a new car...

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i'm scott wapner here is your update for this hour vice president pence traveling to the space coast to chair the second meeting of the national space council. he said the trump administration wants to remove government support for the international space station in seven years >> it redirects government support of the international space station by 2025. and encourages america's pioneering space companies in the private sector to increase activity in low earth orbit where the government will be a partner and a customer, not a competitor survivors of the florida

school shooting and hundreds of others at the state capitol to demand action on gun control and mental health issues, coming a week after 17 students were killed in at a high school in parkland, florida. the flood watch continues in metro detroit as more rain fell this morning residents were dealing with flooded roads while the rising water left some drivers stranded with their vehicles. that is the cnbc update at this hour back to you. >> thank you so much. let's get a check on the markets. stocks are in the green and s&p 500 is higher been 17 and dow has creigh -- recouped and the s&p higher by nearly 18. and the nasdaq higher by 68.5. and real estate and telecom are your laggards. >> the president will meet with parents and students and teachers affected by gun violence eamon javers is live at the

white house. >> that comes at 4:00 p.m. and an official here tells me the president has got new flexibility on the issue of guns telling me that one of the possibilities they're considering here is an openness to a new proposal that would instead of a ban on some types of guns for all people, so such as the assault weapons ban that would block everyone from having that type of gun, the white house now open to a proposal that would ban specific people from getting all guns. that is people who have been flagged as a mental health risk for example, from getting any type of gun, including potentially handguns, and rifles and the ar-15 which is such a -- flash point and they are kals feed and looking for a new alternative and the white house saying our posture is listening to everything and we're seeing the high school students and in cities across the country taking to the streets to demand an end

to gun violence. we saw some protesters here at the white house a short time ago, hundreds of high school students showing up here saying enough is enough holding up their hands in the air and saying hands up, don't shoot. and chanting for an end to the nra as well. so some real political pressure in the streets now on this issue from high school students. the president is meeting with some people affected by this wave of school violence here at the white house this afternoon and officials signaling to us there is new flexibility in the white house thinking on an issue where both sides have been so deeply entrenched. >> how would the nra be expected to react to that change in position from a president who basically in a speech to the nra last year said i've got your back >> this is a president, you're right, who campaigned absolutely as a second amendment hero on guns for the right it was one of the key pieces of his appeal on the right. now the question is have the politics of that changed since the 2016 campaign in the wake of all of this school violence.

will this wave of protests move the needle at all on that debate and does the nra sort of drop back into a more defensive position and say, we're going to allow -- not resist and not oppose the measures in order to preserve the core second amendment protections that we so value. so the question is one for the nra. a strategically and politically how they might respond here. >> and this is a signal that lots of things are being discussed in the white house, but not necessarily a definitive policy change or policy stance thank you. >> that is right andrew ross sorkin published an op ed piece saying if banks wouldn't control the gun sales, maybe the courts would and that caught the attention of many, johnsonenfeld and thanks

for being -- >> good to be with you. >> >> i don't know where to begin. we could talk about andrew's piece which you are family with and in which he basically said that banks and other financial services providers could potentially stop doing business with retailers or the sellers of automatic weapons like the ar-15. but let me broaden it out. what do you see as the role of the korld large company ceo in staking out positions on questions of social import whether it is gun control or something that might not be quite as inflammatory as that? do they have a role to do that or should they just stick to managing their company and serving shareholders. >> i think it is a very important question and that tees it up well and it is not just andrew ross sorkin amazing turn-around if people are thinking it was sleepless delirium at 3:00 in

the morning he -- 4:00 minute morning he was still having discussions. >> i'm sure some read it and thought it was sleepless -- >> and probably michelle who just lurched forward on that but i think that it is a brilliant question to ask, that there is a role for the leader to be more than just a convener, or a difference of opinions but to actually take a position of conscious. now if it is a private company, say a company that is like ch k chick-fil-a and if it is company-owned, they may not all agree and still you should touch base with your board to make sure the board supports your position on and that this is a statement of the ceo's character and the company's brand. and if shareholders don't like it, they could sell or they could change the leadership. but they should get involved and i think there is a big distortion in what historically has been the role of the u.s. business community the u.s. business community has been involved in social issues

for as far back as we could think. most recently you take a look at the religious freedom acts, as they were called in the last couple of years. companies from apple to at&t to walmart, ups, jumping on board to making sure that we didn't creat create -- intolerance and it was add merable but not a vote of shareholders to get involved when you go back to the founding of the business round table, they were created to do just this, they were not the chamber of commerce, not the national association of manufacturers, but those progressive business leaders are the one who created the environmental legislation we refer to as super fund it was business leaders. the foreign corrupt practices act, they created it and said we're competing on uneven playing fields and we want to know when we're dealing with international exchanges that we play by the same rules >> there is shareholder power here investors could say i'm not going to invest in a gun company

or invest in a tobacco company or in alcohol company. i'm not going to invest in a company like walmart that sells guns or dick's sporting goods that sells guns. there are customers who can say, i'm not shopping at walmart if you continue to sell guns. and then there are corporations like walmart, like dick's that could say we're getting out of that line of business. >> exactly >> we had on yesterday the former head of walmart of the united states and i paraphrase here and i hope i'm not getting him wrong, he made the case that there is a problem to be solved with respect to the sale of weapons in this country. but that it is better for a responsibility retailer operating scrupulously under the laws of the localities in which it operatesto be in that business than it is for -- to get out of that business and

leave the landscape open to less maybe reputable scrupulous retailers who aren't as careful about compliance, who aren't video taping every transaction. >> i saw that interview. it was a good interview and he acknowledged that walmart got out of the ar-15 years ago they don't sell that assault weapon and in fact, in 1934 with the support of the business community, the national firearms act passed banning the use of simil similar machinery. the tommy gun and that was banned and supported by the second amendment some of these assault weapons could be banned if we have -- the u.s. is 5% of the world's population and a third of the mass shootings. something -- in 25 times the rest of the industrialized world, something is wrong here business leaders can take a stand and make a difference. the argument you just suggested was the when in rome argument, living by the local rules and

customs. no, set a higher standard as a business leader. >> certainly you can and then on the other hand, jeff, obviously there would certainly be a constituency of -- i don't mean to single out walmart but since they were here yesterday i do there would be a group of people that would say if you take out a position on this and pull out of selling guns, i'm not going to do business with you or i'm not going to invest with you because it is a legal product and you are taking a political stance that i don't agree with. >> and if i could add to that, jeff, i covered the mass shootings from france. were those guns -- they are completely legal and there they are. wouldn't it be better to know where these people got their guns through a legitimate retailer instead of when people want something, even if it is prohibited, they will get it whether it is drugs or whether it is guns, always. >> that is an argument for -- allowing people to have their own howitzers, everything short

of nuclear proliferation is legal. is there no limit to the artillery we let somebody have in the backyard. a hunter will tell you, that an ar-15 is not one of the top 20 weapons that you would prefer for a deer hunter. and as senator dick durbin said -- >> that wasn't the point i was making that wasn't the point. you can -- you can prohibit them and make them illegal and yet they still exist and will still get used by criminals. >> yes and there are still millions out there. but you start somewhere. we're not going to stop all murdered or stop all thefts. people will still run out of a restaurant would you paying. does it mean you don't try to enforce it you try to enforce it to the best of your ability starting somewhere. there are about a hundred companies right now with different forms of gun bans of restrictions on guns in their premises whether they are boycotts from consumers and they weather them fine from amc theaters and to read them out and starbucks and

things and they survive just n fun -- fine. and there could be consumer boycotts for those who don't instill the bans george wearhouser said in response to the milton freedom that it is the responsibility of the business is the bottom line and we have a license to operate from society if we violate the terms of the license it could be revoked and recently larry fink has echoed the spirit of that. suggesting business leaders could fill a void that is left in the legal system and raise higher standards and in his annual letter and look at pepsi coand what they've send for standards and nutrition and not legally required, it is very successful 16 great quarters of record-setting profitings. and that is doing good and well. and look at ken fraser at merck. >> a lot of examples we appreciate it thanks so much >> we have to run. thank you. >> thanks. watch out cvs and walgreens

and watch out for walmart. and a new piece about whether google should be broken up getting a lot of buzz out there. could it happen and will it be a good idea. we'll debate that next but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

amazon making the latest push with a exclusive line of over-the-counter health products we have the story from san francisco. high diedra. >> that is right amazon is take aim at the front of the store with a line of otc drugs called basic care. now it is made by perrigo for amazon and includes 60 products from nicotine gun to allergy medicine and hair regrowth treatment. and amazon has entered a crowded field where everyone from walmart to walgreens has their own private label brands but amazon is approaching it much the same way that it approached e-commerce over the last few decades, thin margins and lower prices basic care ibuprofen cost the

same as walmart and less than half of the price from the major pharmacy retail chains like walgreens and cvs and rite aid and the tag line is transparent, authentic and basic. also adding a line of what has become the central disruptive idea behind amazon's move in the health care space at large that is everyone should have their basic health care needs met without having to pay for extras like expensive marketing. now that notion not just weighing on pharma stocks but also analysts say playing a big part in recent m&a moves by them. >> thank you very much seeing the impact on the entire sector in sector into turning our attention to another tech giant. "the new york times" out with a case against google, making a case to break up the company saying it is squelching competition before it begins jimmy is from american

enterprise and contributor and said it is a bad idea and chris sagers said there should be an anti-trust investigation against google gentlemen, good to have you here it is a long article for those of you that haven't read it. the author brings the story, makes the case around a competing search engine done by a couple when it comes to finding goods online with lots of specific characteristics and their struggle to break into the search world chris, explain to me why you think there should be an anti-trust action against google >> yeah, sure. so google has a lot of power i don't think any serious person disputes that. having power is not legal or inherently bad but if you take action to get it or keep it, that excludes competitors, some bad stuff can happen and i think

i'm not prepared to say google is guilty of anything but an investigation needs to happen. >> here is what i don't understand, chris. if ultimately a lot of people say break up google, look i understand how you broke up standard oil you could split refinery and split away exploration or do all of those things, but how do you break up a search engine do you do it by state or region? what do you do. >> you don't i think some people are talking about that maybe "the new york times" magazine did, i don't the breakup remedy is very rare and extraordinary and won't happen here. you get an oversight remedy like the one seen in the united states versus microsoft and we could have a debate about that too. but i think it is feasible, relatively likely and it would do real good. >> jimmy p., why do you think it is a bad idea. >> i think the problem here is you have -- you have a lot of sort of activists who want for maybe ideological reasons who

want to go after the big tech companies. google, amazon, facebook, and they have been unable to come up with an actual harm done it is usually a harm to consumers. well consumers love the companies. they love the services and they love amazon prime. >> ask me -- >> so they've created a second reason to go after the companies. >> so if you read the article they make the argument there could have been other search engines out there that maybe people would like better but we wouldn't know because google is so dominant. >> there are other search engines out there. google has a large percentage of the search market and not 100% having a dominant position is not a crime. and the argument the people are making is again -- it is squelching innovation and they've been unable to come up with any sort of empirical case that they are currently squelching innovation. so it is a like a we'll squelch innovation tomorrow but not a reason to break up the companies

which is are the crown jewels of the economy that europe and china would love to have they don't have them and we do. >> that was all dead wrong i don't know if i'm oneof the activists who just wanted to break big companies for the heck of it. >> who do you want to break up >> you want to respond what did you want to say, chris. >> i think he wants to break up amazon. >> if you would let me talk i'll tell you i don't want to break up anybody. i do have a theory of harm and i'm not one of the activists. the theory of harm is a very empirically well established damage to innovation laid out in the new york times magazine and by the way, the european commission is not a bunch of populist activists. >> so what is the harm. >> innovation is the different harm which is -- the harm that sounds in what anti-trust lawyers and economists would refer to as mon onsy and google

could take a huge share of ad revenues from for example, periodicals and newspapers and online content providers it is a bad thing. it is -- and it is not not a bu. >> aren't google, facebook, amazon the most innovative companies in the world >> we are not going to solve this today chris, thank you very much. >> you bet. >> good to have you on. >> thanks. let's get back to eamon javers at the white house with a news alert >> we are getting a new release from the securities & exchange commission putting out new guidance on cyber security the guidance here warns public companies they need to disclose cyber security material risks and incidents. they say this applies even to companies that have not had a specific incident yet. there is also a warning here for corporate insiders, directors and executives who they say should be aware of all of the

cyber security incidents inside their own companies. they are also saying they should not trade on that knowledge in the stock market saying additionally directors, officers, and other corporate insiders must not trade a public company's securities while in possession of material nonpublic information which may include knowledge regarding a significant cyber security incident experienced by the company. the s.e.c. here wants a robust disclosure of cyber security incidents. they want executives not to trade during that period in which they are aware an incident has happened but it hasn't been disclosed to the ub i can will yet. they will have a conference call at the top of the hour we'll bring you new information from the s.e.c. >> apple planning a bold move to fuel growth for the iphones. fight security threats 60 times faster with ai that sees threats coming. the ibm cloud. the cloud for smarter business.

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. stocks are now at session highs and apple is helping to fuel the dow the company in talks to buy long-term supplies of cobalt used in iphone batteries directly from miners let's go to san francisco. hi, josh. >> tyler, apple apparently seeking contracts here to secure several thousand metric tons of cobalt a year.

this is a hard, grayish metal with a lot of different use cases. 53% of global production used for rechargeable batteries, the ones in mobile phones, tablets and even electric vehicles which is seen as a real big growth area in the years ahead. demand helped drive a big move in the price of cobalt trading above $80,000 a metric ton last year apple suspended buying cobalt from a supplier in the con go following reports of child labor and dangerous work conditions there apple publishes a full list now of its cobalt smelters casey chang said there is political risk to mining the metals there he said apple would try to lock down suppliers in canada, australia, the u.s its major suppliers are companies like vine and glen corps. >> authority issue for them.

we are moments from breaking news on the federal reserve. what new clues will we get about inflation and future rate hikes? this could be a major rkmaet mover. we are all over it after the break. with a class leading 31 mpg combined estimate. take advantage of special president's day offers now through the 28th, on the 2018 nx 300. experience amazing at your lexus dealer. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. 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!

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we are awaiting the release of the minutes from the last fed meeting. the industrials are higher by 152 points the s&p higher by 18 the nasdaq is up by 70 we want to see what's going on with treasuries. the ten-year hitting a session high two year at 2.27 as we wait for the numbers. this report. >> yeah, we have a minute before the report will hit. let's bring in the panel of experts. the former dallas fed adviser, greg kelly, bob pisani, rick santelli 35 seconds. >> danielle, what do you want to notes to say >> i just want them to be clean. famously in 2018 in the transcript it says the minutes should be manipulated as any other tool in the tool box i hope we truly see it reflected what occurred around the table. >> manipulated meaning how and

what >> again, it's her words in the transcript she didn't use the word manipulated. she said the minutes should be altered to reflect anything the market misunderstood in the initial statement. >> the statement she would have made. >> i'm looking for clean minutes. that's it. >> bob pisani, how much -- oh, let's go to kayla. kayla, take it away. >> tyler, the federal reserve in january across the board talked about stronger growth in the u.s. economy than it had previously forecast and said it was the outlook for stronger growth that affirmed the gradual approach to raising rates saying the gradual approach would sustain economic growth and it was the increase likelihood that a gradual upward trajectory of the federal funds rate would be appropriate which is what led them to add the word further that the market has been hung up on to the phrase further gradual increases. they said inflation was basically still expected to hit that 2% rate they have been

targeting in the medium term they held the expectation. there is a lengthy discussion about inflation. various models and projections they basically still held the line on that they said the decline in the dollar would potentially move them toward that inflation target they said they have seen few signs of a broad-based pickup in wage growth. that there is an absence of clear signs. that's something the fed is looking for. they did say that the tax cuts are a near term positive though the effect isn't quite seen yet. it will be early stages. they said the increased growth forecast is partly because of the tax legislation being enacted. this is the first meeting after the law was passed and put into place. they said regional business contacts site the tax law as a positive several members saying there is uncertainty about whether the savings would be channelled into further business investment. but a couple noted that the allocation of savings is just

beginning. i want to point out though that several members, a higher number of members this month than at the last meeting raised some red flags about market factors and asset valuations this time saying elevated asset valuations and increased use of debt by nonfinancial corporations could potentially provide some imbalances in the market so they are basically cautious on asset valuations and the leverage outside of the financial sector saying that's potentially a place of caution with several members weighing in there. certainly tea leave that is the market would read, but holding the line outside of the idea that growth across the board is stronger than forecast, guys. >> our fed panel rejoins us. danielle, david, greg, pizzbob pisani, santelli. >> they spent all that time talking inflation saying the lower dollar would add to inflation but they didn't come

out worried about it we could have a temporary move in inflation oh to or above the 2% target. they will consider it temporary. it's surprising they do not think they see growth effects from the tax cut why is the stock market up why are business confidence surveys up they are not attributing it to the tax code that tells me they are skeptical about growth and that aten waits the need to raise rates faster. >> bob, markets hitting session highs. what's your sense? >> i would agree with greg this is marginally dovish. the key statement is few if any signs of broad-based increases in wage growth that's what everybody was concerned about. we are talking about firms out there that are talking about potentially four rate hikes this year if you look at the fed fund futures it's not there they have march in there and june you go past that the odds drop. people will participate in the

futures market start believing that there are four out there. i'm not sure that's necessarily in the market. i think that would be negative and it calmed the market down. the other thing, remember the budget was passed after this fed meeting. if you are concerned about inflation -- >> was it the jobs report after this meeting >> and the market sell-off was after the fed meeting. >> none of it was reflected in the minutes. >> it was what >> not reflected in the minutes. the yellen minutes would have reflect those things. >> really? >> even though the meeting happened before -- >> oh, yeah. >> so what so what? >> speak cleanly and clearly to the markets. don't placate to them. >> rick, bob was talking about the stocks at a session high at this point in the wake of the fed minutes. is the bond market sending the same dovish message? >> maybe you could argue the 30-year bond staying at the high yield of the day at 3.18

we made it to 2.27 in a two-year and it is back down to 2.25. these are subtle moves i don't want to use a magnifying glass on a mega phone. you got a little steepening which means the market thinks whatever is going to happen with regard to the fed is appropriate and the long end may be up for inflation concerns i don't know my own personal feeling is, first of all, when you say upside risk to the economy, only the fed could make something good happening in the economy sound like a bad thing there are a lot of ifs if this, then this, gradual. seriously. i walk away thinking they pray they can move gradual. but really isn't all the market trade in the future going to be in gradual isn't the right ointment whether we get less or more inflation, but i doubt we'll get it picture perfect as they reduce a 16.4 cumulative central bank balance sheet.

>> you have been quiet over there. you have been polite jump in. >> the first thing is three weeks is a long time in monetary policy three weeks to go as the panelists pointed out. we didn't have a budget agreement. that's highly stimulative and the risk of a government shutdown is gone also, we had a wage scare. also we had a cpi inflation scare. however the minutes read, i think the fed is more hawkish today. you will see it in jay powell's testimony next week where the fed has to be up to date in terms of where things are. i think we'll see four rate hikes this year. there is one other point i recognize we are not seeing a big jump in investment spending. i don't regard that as particularly dovish. the problem is we can see more consumer spending. this tax cut is heavily weighted toward consumers if we get more consumer spending but not productivity that overheat it is economy if the fed were to meet today they would be more hawkish

i think the minutes are more on the hawkish side >> bob pisani, going to market reaction we have the kre with a fresh intraday all time high on this banks like jpmorgan and morgan stanley with highs up 2% apiece at this point. the markets are telling me that there are rate hikes coming but there may be more than expected. >> yep i agree with that. we did a story this morning about how a number of firms in the last week including nomora and credit suisse have hiked their projections for the year my point in being cautious is if you look at the fed fund futures where people are placing real bets and not just strategists talking about it, there is really only two and a half to three in the market right now. certainly in march and certainly in june. the odds are 60% in june and near 100% in march if you look past that into september and december, the odds are much lower

i don't think that's completely fully priced in. i don't think the street itself is fully priced in for a rate hike. >> just to follow up, the good thing here is the vix is at session lows here and the markets are calm about it. even though we had sell offs since the last fed meeting which may not be in the minutes, the market seems to be taking it in stride. >> separate question about whether you have stronger economic growth, earnings at historic highs, global economic expansion. jpmorgan put out a note this morning highlighting that we may be able to handle higher interest rates i'm just saying careful. the whole street isn't positioned for four hikes. >> if people see the intrasession charts for the major averages they have spiked higher because of the fed minutes. why? >> they are extrapolating back in time to the message of the minute as i mentioned earlier. i'm with david we either see a sea change in the message from the fed when

powell goes in front of congress next week which is altogether a possibility and then you see the fed funds market catch up. it might not reflect two and a half hikes going forward it might reflect three after powell's testimony >> david, i thought i heard you begin your commentary by saying the minutes were dovish. then i thought i heard you end it by saying they were hawkish did i mishear you? >> yes, you did. they are a little bit more hawkish than people were saying. this is not very dovish. on the fed funds futures market, important point. the cash market is distorted by a central bank buying at the long end if you distort the cash market you're going to distort the futures market, too. the fed funds futures market isn't an unbiased predictor of where the federal funds rate will go. >> six months ahead of time

ever all of the sudden -- >> it's a biased prediction. >> trying to decide -- it's always been biased until you are three, four weeks from a meeting. historically in the '80s when we started to trade it, put percentages on it. it's like extrapolating that we are a 317 in a 30 year we closed at 288 so we'll have so many fed tightenings. you learn as much from the long end in fed funds until you are close to a meeting that's where the bets are about the fed versus another short rate going up. >> want to bring in greg >> i wanted to thread the needle david was alluding to about whether it's hawkish or dovish the minutes were dovish relative to the fed and the world in january. events since then ought to have pushed the fed like all of us in a hawkish direction. a lot of strategists are looking for core rate increases. the fed isn't yet. i doubt jay powell will tell us he's ready for it yet.

events will push them in that direction. the overall picture here is, yes, the fed will react to events which are pushing themi a direction that needs higher rather than lower rates. they'll get there more slowly than the market thinks they will. >> am i right to be confused that bank stocks are moving higher and yet yields are moving lower? bank stocks are going up we are looking at the intrasession yields going down if bank stocks are going up as melissa pointed out that means you are expecting more fed rate hikes. then i see yields going down which suggests either the market is nervous the fed will invert the curve or it is selling a different message. anybody want to jump in? >> i think you may be overthinking it a little bit. >> i don't doubt it. >> the market does not doubt that it might be able to handle four rate hikes because global economic activity is expanding earnings are at new highs and the economy can handle it. if the market believes that then banks can go up even if rates

are flat to slightly down. that's the simple explanation. >> to your point, a few weeks ago when the markets were having a hissy fit the differential was at 63 basis points the markets have gone back to different messages. >> by the way, the difference in the yields here going into the meeting at the highs, these are -- >> that's a good point they are tiny. >> small moves >> let's do the 35-second closure here danielle, thank you very much. david kelly, thank you always good to see you greg ip, bob pisani, rick santelli, thanks. >> here's what's coming up banks have been bouncing as rates rise pete thnajarian has a look. and sexual harassment issues at small businesses nationwide. and pancakes and profits

the ceo of ihop and applebee's joins us for the first interview as ceo as with head out it is a fed-fuelled rally. stocks at session highs and amazon is hitting a new all-time high you know what's awesome? gig-speed internet.

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welcome back pete joins us now. good to see you. >> good to see you

where are you on banks >> you're tired of hearing this from me. some banks have more upside than others great example. jpmorgan we talk about the banks but how do we talk about them? in terms of a p.e. no usually in terms of the price versus the book. usually the rule is at one times you buy it at two times you sell it jpmorgan is at 1.7 i like the name but in terms of the names that can form the best right now it's some of the names that are closer to one that's bank of america, citi and goldman sachs. 1.1 to 1.3 price versus book when you look at what happened in term os of earnings in the last quarter they come through with not only earnings but even with trading down the companies still performed extremely well >> i get liking bank of america and citi

they see the upside. goldman sachs doesn't have that. they have the prospect of improving trading but not the yield curve. >> they don't. but they like volatility if we hold on today it's down 14%. now we are in the 17 area. it will be a lot more trading. we talk about fixed all the time fixed income and commodities, the fic. we talk about it all the time. that's what goldman sachs's bread and butter is. >> that's coming back. >> they have performed well without that being right there now. imagine an environment where that starts to improve that's just more to the bottom line of the banks. >> for so long people were willing to pay more for the earnings of the regional banks >> yep. >> are we seeing that reversed >> i like both frankly i'm involved in the regionals as

well today i bought regions financial. i own the kre. there are areas in there i still like some of the regionals deregulation, there are all kinds of reasons to like both sides. the big caps and the regionals we never have seen the m & a pick-up people expected. we haven't seen it yet. >> we are seeing leadership in technology switching gears the bank stops doing nicely. in china -- >> killing it. >> ali baba. they are up 3% >> what are the stats? i don't know this. >> what's the t? >> ten cent. the game maker >> tyler, everybody knows. >> come on >> fangs and stabs vicious. >> technology strength we have talked about it for a long time. what are some of the biggest

strengths. financials are number one. technology you look at most of the names you brought up they aren't the high flyers. yes, amazon is doing well. >> 1500 for the first time >> nice upgrade. it's amazing what they have managed to do. >> stab me once, shame on you. stab me twice, shame on me >> i'm a big fan i know something i have seen a lot of this stabbing going on out there. >> all right we wanted to update you on a story about something that aired last week. a lawsuit filed a class action lawsuit against riot, the ceo and the cfo. the rosen law firm accuses him of false and misleading statements in violation of securities laws. they are filing on behalf of one investor attempting to achieve class action status.

riot stock is down 35% for the week right now unchanged. we have spoken with another law firm that's considering filing more comprehensive class action lawsuit in the next couple of weeks. we'll bring you the update if and when it happens. there might be more of these to come >> all right the numbers seem to be getting uglier for potential home buyers and homeowners looking to save money. we have the details. it's not just diamonds and fine art on the auction block you can buy diggers, trucks, cranes and machinery those sales might be a good indicator of where the economy is moving. we'll tell you what it is signalling right now interesting story ahead. >> announcer: the cnbc trend tracker live data board brought to you by the cme group. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow.

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looked at harassment policies at small businesses nationwide. what we found out is interesting. with all of the businesses about half have an official harassment policy in place. the smallest business owners which is important because they make up the majority of small businesses in this country they were much less likely to have an official policy. only 39% of those with zero to four employees have a policy in place. that's compared to 85% of those businesses with 50 or more workers. at the smallest businesses the owner is also more likely to handle harassment claims while human resources is usually in charge of such claims at larger businesses there is also a gender divide in who handles harassment claims as well at male owned businesses 64% handle claims directly versus 54% where the owner is in charge of handling the claims at male owned businesses, 14% are sent to h.r. while at women run businesses is number is under 10%. in the wake of the me too movement, 13% of male owned

businesses have issued company wide policies on the issue 9% of both male and female run businesses say they have reviewed policies on diversity and gender equality in the wake of all this we have been talking about. >> does the small business need to have -- i mean, it's not allowed a policy >> there are only four people in the business >> that's not allowed. >> it is the policy. federal law says if you are below 50 employees you don't have to have a policy in place it's like filing taxes or any other regulation this falls many times to the small business owner if you own the business you have to think if you want people coming to you personally with references what if somebody has a claim against you? it puts you in a sticky situation. it's something to think about. >> thank you. >> home building stocks rallying despite a drop in home sales what you need to know about the latest housing numbers, plus the owner of ihop and applebee's

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i'm scott wapner vice president pence in florida today to chair a space council meeting. earlier he addressed the mass shooting at a florida high school proving a white house meeting with students and parents affected by school gun attacks. >> later today i will travel back to washington to join the president for a listening session. we'll gather together with students, parents, and teachers from parkland, florida, and from communities impacted by past shootings including columbine and sandy hook >> one person is dead after a small plane crashed near an airport in san diego aerials from the scene captured the wreckage there were no other reports of injuries the hearse carrying the reverend billy graham's body leaving his home in western north carolina he died this morning at the age of 99. he counselled presidents for decades from truman to obama and was awarded the presidential

medal of freedom in 1983 that's the update this hour. back to you. >> thanks, scott let's check on the markets stocks are jumping 300 points. we are on the highs now. the dow jones industrial average higher by 245 points, about 1% the nasdaq higher by more than 1% 91 points and the s&p is higher by 26 points banks are the big winners in the session. the regional bank index is hitting a new all-time high with a gain of 2% amazon also hitting another all-time high as well crossing 1500 dollars per share. >> the oil market is closing for the day. jackie d knows the numbers at the desk. >> crude in negative territory as we close out the session partly because of the rise in the dollar index day partly because of expectations for inventories tomorrow the market is looking for a build between three and four million barrels. we are in the period where

refineries switch from winter blend to the summer blend. they use less product in the transition after that the transition is over, demand picks up. expectations for summer driving kick in and the prices go higher the expectation is we'll hold over $60 a barrel unless we get a drastic number the report will be 11:00 a.m. tomorrow delayed because of the holiday. >> thank you new housing data out including a big fall in existing home sales analysts didn't see coming we have more from washington with a look at what it means for home buyers. >> reporter: i don't know why they didn't see it coming. we have been talking about the supply crisis for months let's get to it. january sales of existing homes dropped 3% for the month they were down nearly 5% compared to a year ago that's the biggest annual drop in three years the problem no surprise, a big drop in supply down nearly 10% from a year ago. it's not the total supply that's a problem. it's affordable supply look at where sales are falling

most, all on the lower end steepest under $100,000 home prices still down between $100,000 and $250,000. sales are gaining on the high end but more than half of the market is on the low end that's a problem because these numbers are from deals made before mortgage rates began to rise now rates are up more than half a percentage point since the beginning of the year and are headed higher. mortgage applications dropped last week. barely ahead of the same week a year ago we are on the verge of testing a new annual low in these applications that will translate into lower home sales in the future realtors are harping on new construction but builders aren't active on the low end. it's pricy to do those homes too expensive to build them. the realtors are also making a big plea to investors who bought the foreclosed homes during the recession. they are asking them to sell more on that on cnbc.com back to you. >> we'll read it and see if they listen

thanks. another economic indicator we are looking at -- sales of heavy equipment. machinery like diggers, trucks, cranes joining us is the ceo of richie brothers, a leader er in the auction of heavy equipment he's holding an auction now in orlando. good to have you here. >> i'm delighted to be on cnbc thank you. >> i have to think your business is a really good indicator of how the economy is going am i right about that? does your business move along with improvements in the economy? >> well, we do think that the demand for instance of oerld which is our flagship option of the year is really incredible. we have 12,500 lots which is a record an all-time record last year it was about 10,000. that's heavy pieces of equipment.

they are used for building bridges, tunnels, airports, dams, correctional facilities. it is impressive to see the focus on infrastructure. a lot of it is state and local-driven that creates demand for equipment because equipment is the livelihood of a lot of our contractor customers >> what kind of discount do you get if i buy one of these at auction and i think we are showing video of miles and miles of stuff you have for sale what was list price versus what i can buy them for used. >> well, i think we look at the used equipment pricing as really not so much. it depends every category of equipment and the different types of customers we have equipment which is maybe two years old and depends on the hours. whereas there may be some which are five years some may be ten. there are different types of

customers for different pieces of equipment what i can say is used equipment pricing now is very strong there's also a huge shortage of new equipment right now. because the original equipment out of factories cannot keep up with demand. therefore, there is a huge shortage of that which is therefore meaning that used equipment demand is very high. prices in our auction have been very strong. >> okay. >> but i think customers are impressed by the variety of equipment. you were talking about miles and miles. if we lined up all the equipment in our auction just in a straight line that will stretch 48 miles our auction site here is 200 acres. there is so much that we are actually now doing a virtual auction simultaneously from equipment in different parts of the country, more than 2,000 lots which are being done

virtually but live through an on line digital transformation. >> i'm glad you mentioned used prices and the new equipment markets. based on what you are seeing demand for the kinds of -- the brands for instance. the manufacturers and the types of equipment, what does that tell us about what public companies might see the most demand for their new equipment i would imagine it's a very -- you are getting a lot of demand for caterpillar earth movers for instance that's a good data point for caterpillar to stock. >> i think clearly caterpillar is the leader in this business we have a strategic alliance with them. so they are represented extremely well in our auction. but we are a brand neutral company. that's what our customers love we are switzerland we represent different brands.

>> in other words, he doesn't want to be specific, melissa. >> no, i'm not trying to be -- that's the whole thing we represent -- we have brands for everyone different categories but definitely caterpillar is the one that we have the most equipment of in this auction. >> who do you buy equipment from and from what parts -- regionally which parts of the country are sellers to you and which parts of the country are buyers from you? >> so, tyler, i hope i got your name right. >> you did thank you. >> we source equipment -- you know, richie brothers as an auction company connects globally buyers and sellers. >> mm-hmm. >> our sellers are consigners from around the world. for this auction inparticular it's all over the united states. >> mm-hmm. >> they consign it because they have trust in us that we can maximize pricing for them. so it's throughout the u.s., but

for this auction because it is a mega event to give you a sense of that we did close to $188 million last year in this auction you talk about buyers. we have registrants for this auction from more than 80 countries. last year our equipment went all over the world. >> you did $188 million last year what are you going to do this year >> we'll see clearly 12,500 lots. that's a 10% increase over last year. >> we'll see what the number is. thank you so much. >> it's been a pleasure. >> good luck with the auction. >> amazing footage. >> i know. miles and miles. >> i think i was in a traffic jam behind that stuff. the owner of applebee's and ihop seeing stocks pop. it is up 32% this year the new ceo joins us to discuss the recipe for success stocks are near session highs on

the back of the latest fed minutes. financials and industrials leading. moond'anech, mcdals d jprgan leading the dow that binge watch over the weekend thing. that back from the dead or robot-cowboy thing. or maybe it's watching satisfyingly-satisfying things. organic avocado on everything thing. doing it yourself or tagging a friend thing. more checking-in or checking out things. like faaaaaaaaaar out of this world things. far out. more revolutions in the making thing. that play like a girl thing. is it a '4 your eyez only,' thing. more of a 'no role modelz' thing. that triple-double thing. "is he the g.o.a.t.? thing." no, not that goat thing. no no no no no no no more saving the world from the darkness thing. that selfie game strong thing. that four-legged friends thing. oo la la! at&t gives you more for your thing. more entertainment, internet, and unlimited plans.

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all right. stocks are in rally mode now look there you see the russell 2000 up almost 21 points on the back of the fed minutes that came out about 45 minutes ago the small caps crossing above the 50-day moving average. on pace now to close above i for the first time since february the dow and s&p also above their 50-day moving averages look at the gains in the dow up 234 points the s&p up about 1% and the nasdaq up one and a quarter percent. >> there is a dyii din brands gl after they grabbed a bigger slice of the fast casual service. they announced quarterly results. more now from steven joyce his first broadcast interview since taking the reins six months ago good to see you. >> glad to be hear. >> what stood out to me was the reduction in the quarterly dividend which doesn't go over

quarterly dividend in order to repurchase, invest in the business potentially do some acquisitions what are your priorities >> the first priority is our job is to return capital when we move the dividend to what we thought was the appropriate level we immediately made the commitment to turn that around and use it for share repurchase right now that's a more efficient return to the shareholders anyway. i think they recognize it. i think people knew we would do something with the dividend. the fact we are at the upper end of the industry in terms of yield is comforting people a lot of people went to it for the dividend when they see the opportunity to buy shares at a fairly discounted value they see it as an exciting opportunity as well. >> your fresh eyes on the business, being six months on the job at this point, you are closing stores, opening stores at the same time when you came in, what do you think was wrong with the business and how do these steps reflect getting at the problem >> i have been on the board for five years i knew a little bit about the

company. one of my best friends was the cfo of one of the larger franchises we would go to applebee's and he would do this the entire time. we lost some of our relevance with the core consumers. we had moved on based on demographics and forgotten what brought us there in the first place. what you see us doing is returning to our roots and innovating on the menu, trying to make it interesting we have had fun promotions that resonated strongly with consumers. our guests coming in the restaurants, we did all you can eat riblets in january >> $12.99? >> $11.99. it was also $3.99 all you can eat pancakes at ihop it's fun to do the guests love it we do a drink promotion on the applebee's side. we are now running dollar mamas all month. >> what's that

>> that's a bahama mama. half of our customers are under the age of 34. those promotions bring in groups, heavily female, african-american and hispanic are target markets for us. we love the way it's working out. >> you are closing stores and opening other stores i spent time not long ago with the ceo of texas roadhouse we talked about how he decides where to locate a new store. it's a real process. >> yep. >> i'm sure it is the same with you. >> yep >> as you close and now open, what are the deciders there that tell you this one goes, we are going to open here and how has it changed >> i think the company was hesitant to move restaurants out that were no longer relevant when marketplaces moved away from them or it obsoleted

itself >> because of its location >> and also the product. it didn't make sense to bring it back in a lot of cases what we have done in the last couple of years is prune the inventory appropriately. ihop is on a tear. they had a big development year last year and a bigger year this year applebee's is slow but we are expecting it to return to growth next year. the system is better though because the restaurants are healthier. most of those -- >> what's the ideal location for applebee's >> we are the restaurant in a lot of small towns we have 1,800 restaurants. we represent the 99% right? our other customer is the family making $75,000 a year. we are the hometown restaurant for a lot of folks they view it as that and we like the idea of eating good in the neighborhood and we are the neighborhood place that represents -- this is interesting for both restaurants. that welcome everyone as they

are, your true authentic self. people see it as a respite in a world that's not so welcoming at this point both ihop and applebee's try to be genuine, authentic and we want to greet people as they are and as they want to come that seems to be resonating. >> the food in the video looked great. >> i have seen your add ads in e olympics and elsewhere there is a hamburger that looks -- >> the quesadilla burger is worth trying. >> that's what it was. >> thank you so much. >> steven joyce. now a market flash and what's moving in the market >> we are looking at industrials and financials, but leading the rally rising about 1.3% on the industrials side, 1.5% on the financials side. financials, largely a lot of the regional banks which would be helped by the rising interest rate environment because they can charge more for loans. with today's gains the s&p 500 has recovered nearly

three-fourths of recent losses while the knack has recovered 92% of the big losses it had this month >> thank you very much amazon versus netflix. the two fang names seeking a comeback both up 7% which is the better bet now? n'moebe. dot ve from farm, to pot, to jar, to table. and serve with confidence that it's safe. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud. this is the ibm blockchain, built for smarter business. mom anit's not theirs.car... 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.

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netflix signing a new deal with independent filmmakers, the duplass brothers, as the streaming giant continues to spend big on original content. we are in los angeles with the details and i hope the correct pronounce nation of the name >> reporter: that's right, duplass brothers, the latest in a string of high profile content as netflix plans to spend as much as $8 billion on content this year. now, netflix today announcing a deal for worldwide rights to the next four movieins from duplass starring ray ramano. they made three shows for hbo and animated series, "animals," and netflix shares up 2% today, and that's about 48% through the

beginning of january as the company doubles down on originals following faster than expected subscriber growth just last week, netflix announced overall deal with ryan murphy, reportedly paying as much as $300 million to bring him away from fox where he delivered hits like "glee" and "american horror story," this after last year netflix won over shonda in a deal worth $100 million. just this year, netflix original content announcements ranged from david letterman's new show to three different shows for preschoolers, a wide range of content coming to netflix competing with the others out there. back to you. >> julia, thank you. shares, meantime, hovering below the all-time high. that's not the only thing boosting amazon hit a fresh record high today, and they are in double digits this year if you had to choose, which is the better buy, we play, would you rather

we have tom with tradinin tradinganalysis.com. mark >> two of the best growth stocks here we like both amazon's taking over the world and crushing competition along the way whether it's growing prime membership base to the self-driving cars or over the counter health care products, but we like netflix. netflix is changing the way we all consume video con techbt, so if i had to pick one, it's netflix. the reason for that is pricing power so amazon is oftentimes the low cost provider, you know, it -- you can see that with the over the counter health care products versus cvs. netflix, on the other hand, could raise prices 50% and nobody bats an eye we would take on netflix at this level. >> last price increase went through well todd, as far as the charts go, which is better? >> i agree looking what's actually

happening versus what should be happening, look at the ratio, take netflix divide into amazon. right now, we are .2, meaning netflix is 20% of the price of amazon, and that's this chart down here at the bottom, so what you see is this is moving higher, so, again, netflix outperformed on a relative basis. get above the% 25 level, we come back and retest so you get more bang for the buck in netflix as we head to the next chart phenomenon an upside target, netflix is very, very well-conta well-contained, a very beautiful parallel channel connect the lows and project off the swing high for the target. you are 500 in 2018 and possibly 750 until you start to reach the upper end of the channel, so netflix is a holding i put on. i hold amazon, but based on this, i get into netflix >> quickly, because we have you. >> yeah. >> amazon at a record high, the

chart does not look bad, though, at this time >> absolutely not. on "trading nation", i put the long trade on live i have the long position i like it. looks great. i think netflix is something i have to add. >> got it. >> exposure there. >> mark, todd,thank you, good to see you "check please" is next and now, the latest from tradingnation.cnbc.com and a word from our sponsor. technicians look to wedge patterns for catalysts for stocks a bullish wedge occurs in an uptrend consistent of two lines downward break of the upper line is a bullish signal inversely, a bearish wedge occurs within the down trend and consists of two converging line pointed upwards. a break of the lower line is cared a bearish signal

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mercedes-benz. the best or nothing. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. check, please. if you are watching to see the stocks moving higher at the wake of the fed minutes, but what's going on with yields they've been going higher. a little bit of selling from the treasury market. ten-year yield now at 2.937, the high of the session, and the 30-year, it's dropped by more than a point in terms of prices, and now the yield there at 3.21%, so session highs yields definitely moving higher in the wake of the fed minutes. >> you got the ten-year at 10.94, housing retails slowing, certainly because there's not much inventory, but i wonder whether rising mortgage rates arebeginning to take a little

bit of bite out of that. prices have gone up. now you're seeing interest rates go up so the carrying cost on homes goes higher as well, and, obviously, refinances are down >> it's all about the monthly payment, and higher interest rates bites into that. thank you for watching "closing bell" starts right now. ♪ >> 2.941 on the ten-year it's creeping right up to that level. >> back up to geez >> welcome to closing bell, i'm kelly evans. >> i'm scott griffeth. the dow was up 303 points after the release of the fed minutes at 2:00 eastern time and all kind of other market moves occurred, but now they moderated since then i'm guessing that computers move the market after the headlines hit, and humans brought them