2017 micron call. >> intel is. diamondback energy. >> f.a.n.g >> i think cornel has pull out and half half. the new small -- >> we'll see you took? >> absolutely. jimmy, thank you. "power lunch" begins now scott, thank you very much welcome, everybody here is what is on the menu? trade turmoil. 2.3 -- do tariffs work can they reverse dumping or over-capacity, and the broader effect staggering news statistics on -- but what will tariffs mean potential on steel for u.s. oil companies? we're live at a big energy summit down in houston, and the world's biggest defense contractor opening its doors, a rare interview with lockheed martin's ceo her stock is up more than 25% in

the past year. "power lunch" starts right now we have a volatile trading day we're right near the highs of the session. dow's up we have a game -- slash gains to the s&p 500 and the nasdaq general electric, mcdonald's caterpillar and ibm leading the dow's gains today. in fact, xl is leading the s&p that company soaring on news that the company is being brought by axa cf industries, among the top s&p gainers today, and check out oil prices oil rallies right now. you can see that right now that crude oil is up over 2%, this is all happening with brian sullivan down in houston with more coming up in just a bit

>> playing out both sides, a lot of un1er7b8 here, and a lot of questions. we have every sangle covered in the next two hours of power. our reporters far and wide from mexico city to our nation's capital, to the financial capital of the world, and to the heartland of america we begin this hour, a huge reversal from triple-digit losses to triple-digit gains, let's go to bob pisani >> we started negative let me show you the s&p 500 to the down side. and about 10:45, we started lifting. theresa may gave a speech in parliament, talking about the brexit agreement i think that helped european markets, and then we heard from the ryan spokesperson trying to turn trump around. caterpillar rose nicely, that

was a big one, on $44, we went to 150 or so, so caterpillar and the other industrial names moved up deere, we also sought another group, as the bank stocks, they were weaker, morgan stanley, all rose on the news as well this was quite a turnaround in the middle of the day, and of course more than 300 points from the -- ande. >> and tariff turmoil, that is topic a for many people in the markets, and across the political economy. kayla tausche is in washington on how president trump's plan could effect with the ongoing nafta negotiations. >> negotiatoring have made -- but the tariff talk is weighing heavily and will continue to, and whether nafta must be

reupped every five year form the three cunning have made little headway on those big issues. they loomed large in the confession before, but even more so now that the president is directly linking them, suggesting tariffs would be eliminated if they played ball on nafta the president is expected to extend talks by april 1st. that would get the three countries much more time to discuss what option that is might entail and what the president might be looking for from canada and mexico to not advance this plan form the new tax reform law has boosted the economy, and we certainly don't want to jeopardizes those gains, two gop sources say leadership is more focused on thwarting the announcement ahead of time

it could consider -- and asked about -- he is not backing down. becky? >> thank you very much, kayla tausche. eamon javers is live at the white house covering all things prompt trade related and otherwise. today will be a busy today with you, as many days. >> reporter: the president just hit that point again he's meeting with benjamin netanyahu today, and just a few moments ago, he was asked about trade and asked about where he is going on that he raised the prospect of possibly exempting canada and mexico from the steel tariffs if they get on board with the negotiation. take a listen to what the president said, and see if -- here's what the president said >> if i do make a deal which is fair to the workers and the american people that would be i would imagine one of the points wee negotiate. tariffs on steel for canada and

from mexico. so we'll see what happens. right now 1hands%, but it could be a part of nafta i understand i just got a call from people who are right now in mexico city negotiating nafta. mexico and really canada i want to talk about it. >> reporter: i've been asking officials here at the white house about those comments from paul ryan's office on capitol hill about the fears of a trade ward being extended. the folks at the white house, though, not reacting to that more closely than ever -- but for what it says about politics. i can tell you the globalists and nationalists are battling it out. the globalists took that as a positive sign that the trade war fierce would force the president to back off. now we're seeing this rally, the nationalists are looking at that rally in the dow today and

that's evidence that what we are proposing isn't that bad for markets, and there are we're winning the debate that's what's going on in real time >> right now we are looking at the dow almost up 270 points, but the tariff turmoil adding more uncertainly to the bull market, which by the way, turns 9 years old this week. so that begs the question. is there more up side? joining us right now, dave done abeadian, and steve whiting, global chief investment strategist at citi private bank, dave, let's start with you what about the situation with the tariffs and potential trade war. does that change the basic scenario of what has been happens in the markets >> anytime you try to assess the market, there's a list of -- in the negative to column,

throughout the year, not just the steel and aluminum issue we have the likely dispute, as well as nafta, but we shouldn't get compliedly radar locked on just trade and number two, cold earnings growth that's even likely to be even better than 2017. >> steven, you agree people don't -- it's really a question of what do do with the selectual property issues does it make it more or less likely >> that's a great question to

know whether it's just the tip of the iceberg >> it seem just a tiny part of that agenda at the same time, it can be a negotiates tactive. i would be very clear it's more likely to be -- than the last 12 months however, you do have to consider a risk scenario, where you have a round of tariffs and receiptry abu around the word. that has to be considered a risk snare i don't. and it's a rising risk scenario. certainly we had reason for markets tore more volatile we have this clash between central banks which are forcing

savers to fund governments, and i think that's an important issue, when we start thinking about attacking our trading partners we are reliant on the rest of the world for savings flows into the u.s. market to fund larger budget deficits and increased spending in the united states. you may be move at cross-purposes here if you're thinking about the big steel exporters, where their own savers have will to put money to work here. >> do you think it continues despite the volatility, despite the uncertainly surrounding tariffs at this point? s. >> i don't think ebile cents i think there's a more appropriate sentence of both the

opportunities and risks that exist out there. >> and i say, whether it's the trade or the fed i think they are going to len more volatility the policy environment last year with the cuts and tax reform was kind of a perfect world. they are less perfect. >> dave, steven, thank you for your time. the health of america's oil industry, the two big topics at the energy summit taking place in hughesu houston

just a few minutes ago, the iaea put out a 137-page report, jackie, i feel like siskel and ebert. what stuck out here is the tariff talk. >> absolutely. >> they are saying that the u.s. could be producing 17 million barrels a day in five years. that brings us back to the tariff conversation. that costs will go up if the tariff is imposed. we import that grade of steel. the u.s. companies are trying to ramp up to service that demand, but it's going to take time. we are going to rely on those imports. you will fee the costs, but the question is how much

is the fear worse than the reality right now? we talked to an analyst who said it probably is when you spread the tariff cost out, it's really mid to single digits in terms of percentage. >> but it's not pipelines. after labor, steel is a massive cost of building out any refinery we'll be -- viewing a number of ceos about this topic. this is very bullish for america. they think we are not only going to see five yours out that america, for the most part will meet almost all of theworld's demand growth. the united states oil boom could take us from 10.2 million

barrels a today, to perhaps 12 million, but jackie, the people i have talked to here are concerned that we don't have the man spouter that a lot -- and will the service firms be there? >> that's part of the struggle, brian, with oil prices recovered over 60, will they remain table enough to help the instrument? that's part of a sideline conversation here. the panels are great, but the sidelines is where people are talking about the juicy stuff. >> jackie and i double-teaming it tonight we have a huge exclusive with saudi aramco, not only the biggest oil company in the world, the single biggest company in the world we'll roll that out tomorrow we're doing it tonight, and i'll see you back here in a couple minutes. thanks

president trump proposes -- and of course, the question is will they work? will jobs come back to the united states? and after being down about 150 points, the low of the day, the dow is up about 273, we're all ov t mkeerhearts and more, as "power lunch" continues. your top-rated thing. that five stars, two thumbs up, 12-out-of-10, would recommend thing. because if you only want the best thing, you get the #1 thing. directv is rated #1 in customer satisfaction over cable. switch now and get a $200 reward card. more for your thing. that's our thing. call 1.800.directv gglobal bonds, and high-dividend strategies. sure, these are investments. 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

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1% gains for the u.s. markets right now. will president trump's proposed tariffs stop china from doing that joining us, ajillian tedd and stephen selleck, former undersecretary of commerce for trade under president obama. there's little disagreement, i think that there isn't one over capacity in steel and aluminum in the world, and number two, that china is at least partly responsible for that, especially in steel s if we all great, do you think tariffs will solve the problem if so, why if not, why not? >> they're more than partly responsible. chinese overcapacity is in excess of the overcapacity that exists, and chinese overcapacity is actually in excess of total

u.s. production of steel so they are the big elephant in the room the second question about whether tariffs will work is frankly we have seen this move before tariffs have never worked. it will tax you as consumers, it will vitally disrupt supply chains, increase costs and cost american jobs, and fundamentally lead to retaliation. >> that's been the case for decades. we talked to the ceo of on company in oklahoma, and she said we have increased efficiency in equipment and in automation to remain competit e competitive. why not? what changes to make the steel try more competitive in the united states? >> it's enworse than that. the jobs frankly which have been significant. so u.s. job have been lost because of this over-capacity issue. communities have been devastated because of it, but in fact right

now most of those jobs are not coming back because of the automation and technology. so i don't think this narrow tough talking approach is actually going to accomplish what it is intended to. >> jillian, take me on a tour here as we are speaking last week about these tariffs, and we pointed out among all of the exporters of steel to the united states, china which seems to be targeted here exports, quote, only 2% of our imported consumption of steel, canada is much bigger, russia is bigger, mexico is bigger, brazil is bigger, among others, but then the counter-argument is that it isn't just the top-line imports from china that matter it's where and how chinese steel is getting into the united states by other means, and that that's in part why a tariff would hurt the chinese

>> the issue is that china is perceived versus pushing down the prices the problem, though, is that the people that will be hit immediately by these moves is actually probably not china, but mexico and canada. if you're trying to use a security argument to justify them, a national security argument, the idea of hitting your allies which are basically canada, europe, mexico, groups like that, looks very, very odd indeed the problem, as you just heard is maybe a few years ago, introducing tariffs and jobs in the steel sector in the u.s., these days the steel sector is indeed very efficient and effective. there is not a lot of excess capacity, so they coop step up product to immediate a goo up if you like, so in many ways, it will probably end up backfiring badly. politically, thoughs it's more

mixed. i imagine what donald trump has his eyes on is a midterm that's what's driving this move, not stefan, is there a surgical way do-to-do it? >> it's complicated. china is in a different spot they took hints of millions of peasants out of the countryside to go to work in these factories. fundamentally the legitimacy of the communist party is dependent on the economic performance and increasing prosperity, so the likelihood that compliance will be able to do that in the near term is very limited, but we should have a much more targeted approach towards the offenders, and nour our friends and allies, which this blunt instrument of section 232 actually does. >> can i just jump in? >> yes, but let me tee up a question you can take it whichever way you said

you made the point that this is predicated on a section 232 argument, but a lot of people would say this is really a nafta argument, this is aimed at canada and mexico in part as a way to tell them, hey, look, if you don't come to heel on nafta, this is the kind of medicine you're going to get. that's sully the way it's been spun if you're optimistic, this is all part of a carefully planned strategy if you're pessimistic or realistic, i suspect they're basically making up policy on the foot as they go along. but the key point is it's interesting to compare the european response to the tariffs and the chinese response the europeans have responded angrily, they have basically threated to introduce tariffs and all kinds of american goods the chinese, though, have been very calm.

they're trying to play like the grownup in the room. they're trying to signal we are promoting more globalization, we're being the grownups here. you can be cynical and ridiculous, it's simply pot furthering, but it does show the chinese know they need to change their stance a bit and can't carry on with business as usual as they were ten years ago. >> tyler, which is exactly the issue. this is just much broader. will we see global leadership in the global economy to china? >> all right stefan, thank you very much. jillian, thank you as well good as always to see you. can a change at the top lead to a change in direction for chipotle's stock the company has loss more than half its value, but look at the overall markets rebounding, the dow near its session highs this looks like a session high, up 283 points, a gain of over

1.1% the dow is down. caterpillar actually the bigger gainer, and that's one of the stocks under so much pressure on all isth trade and tariff talk last week. stick around, we'll be right back

i just sat down with the ceo of the world's largest defense contractor, and of course f-35 stay tuned for my interview with

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hello, everyone. assignment sue herera. here's your cnbc news update for this hour. the european union says it will responsible to u.s. tariffs on its products in a switch and firm ways, the group's spokesperson repeating it's not a zero-sum game. >> the measures announced by the u.s. president in a way that facts european interests, we shall react, as i said, in a decisive but proportionate and strictly wto-compatible way.

striking west virginia teachers lining up outsided state capitol on day eight, waiting to walk inside to give state senators a piece of their mind the delegate greats to a 5% raise, but the state senate approved only a 4% pay hike. amazon is in early talks with banks including jpmorgan to offer checking accounts. the final product could include amazon-branded accounts, but amazon does not plan to become a bank itself. that's a new update this hour. becky, nice to see you. >> nice to see you, too. let's have a check on the markets now. we have seen is a swine today of about 400 points caterpillar, general electric and goal man sax, and when you

turn to the -- micron, and mosaic >> defense stocks have done well unit president trump, lockheed mardan tip over 40%, but could the tariffs tighten the crews morsing bronnen is in my hometown >> i spoke to marillyn hewson, the ceo of the biggest defense contractor, lockheed martin. they use a lot of steel and aluminum to make all of their hardware i asked her what she thinking of the prospective tariffs. >> i think the tariffing we'll have to see, what the impact would be for our business. i think one of the things that's important is that this administration is focused on making companies more competitive globally the thing i hope we continue to

focus on is how important our strategic partners are around the world and the alliances and our allies as we go in a coalition environment together. >> have you heard from enough your partners or suppliers in terms of these tariffs. >> i have not heard anything directly we do have an extensive supply chain. over 70% of our business is in small and medium sized as well as large sized businesses. >> do you think this issue in terms of national security makes sense? >> i think the administration has a responsibility of looking at the impacts to the extent they see a connection, that's their role. just walk me through of what it would mean for a program like the f-35 if the tariffs were in play the horizontal tail is made in

canada if we saw tariffs across the board, how does it affect a program like f-35. >> like i said earlier, we don't know the details we need the detales before we can get to any specific impact as i said our supply base is critically important we have 170,000 jobs on the f-35 just in the united states. we have other countries producing products and components for the aircraft. so it's a very important job crazy and commission impact not only for the u.s., but for other countries. >> are you concerned about the potential for retaliation from ally we were to see blanket tariffs in place international sales have been growing for lockheed martin. is that a concern? >> international sales is over 35% of our business. we want to at this time to sell our products around the world, but the work we do is protecting

countries and their citizens in that are national defense. gerbilsly we don't see them make those kinds of choices because of oil prices or something of that nature or tariffs so i would expect that they're going to -- their first order is to protect their citizens. sort of shifting gears to another area where there's question marks, the defense budget i know it's poised in the u.s. to grow by double digits, but of course that's if and when we have really operated off of continuing resolutions for the better part of a decade. what's better for business to have a certainly of a budget passed on time or to see growth in the budget even if it's not passed for a while >> i think what's bust for our customer whatever is best for our customer is best for business, franklily. what's best for our customer is stabilized system of funding

so they can plan for not only today's readiness and what they have to address in the situation they face today, but also the modernization and investment in innovation for the long term that planning flows down to industry partners who support them we in turn can have table and consistent investment, and innovation that will support them. >> speaking of investments, tax reform, i know that's tax saves, you have prefunded your pension $200million toward investments which says something that cap ex was at record levels. >> we've increased 200 million in capital expenditures and the independent research and development. so the research and development is also important. we're going to continue to put other tax savings toward investments, where we invest in

small company that is have technologies that we are interested in. we're going to invest in our employees. we think it's important we invest in their skills and education and training we've already increased our tuition reimbursement. we'll continue to do things in that nature and our charitable contributions. it's important to continue to work on the pipeline of stem skills we hire over -- we have over 60,000 scientists and engineers. we hire about 11 or 12,000 employees every year we want that pipeline of stem talent coming into the business. >> i asked if 1/2 that cash could go into m & a. northrop grumman she said they are always looking for the next big opportunity, but that right now she is very happy with where the portfolio

is back over to you. morgan, quick question she said we're waiting to see the details on the tariffs do you think ha hewson and other ceos are hoping for exemptions or carve-outs? >> reporter: i think looking across the broad spectrum of the companies in the industrials, especially aerospace and defense that i covered, this has been the sentiment that i've heard. a wait-and-see approach. for defense contractors like lockheed martin, for some of these major programs they have in place, the contracts they have for suppliers, for the materials used to make things like jet fighters, they're very long-term contracts. so the idea that they could actually see something like price inflation on aluminum or issue with his their suppliers, it could be a longer-term situation not something that would mealy affect them.

so i think that's why there's this let's see what happens and how it plays out. so there you're seeing the ceo of lockheed marting making her case what about the rest of the sector jim, good to talk with you you had in your march 2nd note said you thought eps would benefit from the tax reform bill, they would see -- but a lot of people see this proposed tariff as a tax. does it wipe out any benefit >> well, certain if we do see higher input prices, it's a negative, but what we said to know, look at 2017 during that year, aluminum prices rose 30 percent, steel price from 40%, and at the same time the aerospace and defense sector saw record profits, so certainly while it's a negative in the short term, the markets overreacting, and we think in the long term strong fundamentals will rule out.

>> you heard morgan tacking about the long-term contract for suppliers, with the big ones like boeing and lockheed martin. what about the smaller companies? will they get slammed in do they still have shorter-term contracts where they will be eyeballing what it costs to support steel and aluminum >> yes, they could get the double whammy at the same time companies like a boeing that's adjusting to the future could be pressuring them for concessions at the same time it's definitely a different story for the smaller, less well-positioned partners >> jim, we just had a good point that morgan brought up, a lot of these are long-term contracts that these are situations that maybe won't affect some of these companies for a couple years the last time we saw an import tariff like this, it was unwound before it caught up to some of the companies. do you think that might happen again in this go-around? >> the market is obviously

reacting, the defense stocks are down sharply, and it could continue to run for a little bit while down this is negative news, but the long term, like morgan said, there is cost certainty right now, and also if you look at something like the f-35 program, as production on the current stage of the planes ramp up, they do get a chance to go up -- so there is a chance for the companies to adjust in terms of pricing as well as they see their input prices rise. >> it seems from where i sit, jim, sort of neffible. if china is going to raise its military budget by almost 9%, if russia is assuming a more aggressive stance with respect to the united states and other countries, north korea, that would all argue we're going to end up spending more on defense, and much of that money is going to go to the big four.

>> not just to us, but the allies as well. >> correct. >> make the best of the best technology so there's only going to be more demand. the president recently proposed a defense spending plan that's a sharp increase over fiscal 2017. we see pressure on budgets going up, we see good fundamentals, strong backlogs, and let's not forget during the last five years, these companies cut costs, so they have great opportunities, and now they're getting tax reform as well there's a lot of positive toss look at. >> jim, thank you for adding your perspective. >> thank you. still to come, we will talk to the ceo of an aluminum company about whether these tariffs will actually help his being. plus leslie picker is live in the heart of steel country. leslie >> reporter: hey, becky, we're here in canton, ohio at the newest facility, speaking with employees and the community

about what steel tif warfsould mean for them. more on that after the break rke, but through good 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. but i'm not standing still... and with godaddy, i've made my ideas real. ♪ i made my own way, now it's time to make yours. ♪ everything is working, just like it should ♪

will the president's proposed tariffs on foreign steel revitalize the u.s. steel industry that's a question we've been asking ourselves leslie picker is live at a steel plant in canton, ohio. leslie, good afternoon >> reporter: this is a facility that remained idle for the better part of 2015 and 2016 in a severe downturn in the industry that caused timkin steel to reduce head count by about 12% and they started hiring as the market picked up and may ramp

that up more in tariffs are enacted. employees here are very optimistic about what tariffs could mean for revitalization, but it may not necessarily mean that jobs are coming back en masse. on the long run automation has become a huge factor in this facility only two people are working at all times, and machines are really doing the heavy lifting. the company has improved manhours by ship time over 16% in other words technology that is helped timkensteel become more official. so it may not necessarily be a boon for job in steel country, but the industrial is hopeful it will help to stabilize and maintain the jobs they have now. guys >> leslie, did i hear this

right, only two people are there per shift? >> only two people are here per shift. it's pretty fascinating. they sit in this control room, monitor the screens almost like you would see on a trading floor at a hedge fund, just making sure that everybody is going fully. and then step in if there are issues that arise. >> wow if tariffs are helping the steel industry, where do they add in jobs at a place that is almost fully automated? they also could hire more people that will help be, and other.

>> leslie, thank you very much we're going to get the chance in the -- we'll speak with the ceo and ask him what this could mean for the steel industry >> the proev tariff -- steve fisher is the ceo of novellus, a global aluminum produces that supplying to automakers. steve does not agree that tariffs are the way to go. steve, nice to see you again welcome. >> nice to see you again. >> where do you source the aluminum that you turn into rolled ploukts roducts. >> yes, in novell us's case about a third is sourced from

canada the remainder is from recycled aluminum in the u.s. >> if you had to pay a tariff on inbow inboundimpact on our business unfortunately, with a higher tariff, that's going to mean higher prices to our customers higher prices to consumers that are consumering beverages through aluminum packages, through automobiles, through building and construction. >> but why do you say it would not have a big impact on your business if a third of your input costs, i don't know if that's maybe an oeverbroad way t describe them, but a third of your product is going to be subject to a 25% levy. >> yes, well, 10% in our case for aluminum >> 10%, excuse me. >> as an input cost, that would

rise the way our contractual obligations are with many of our customers, that also is then passed on to our customers in the form of price as well. >> so steve, an economic culting study last year showed that a 7% tariff, less than what's being proposed, would result in boosting aluminum output in the united states by about $850 million. are you being somewhat altruistic when you say you're anti-tariff. are you looking at the bigger, broader economy and not just your particular industry >> yeah, certainly, it is a broader economic impact on tariffs. and what it might mean from further retaliation. but more specifically, novelis is a downstream aluminum producer, the world's largest buyer of aluminum. we're trying to protect our supply chain as it relates to insuring on a long-term basis,

we have competitive prices versus other materials a tariff that is arbitrarily put across all countries versus specifically targeted where the issue is and the overcapacity in china is not really effective as it disproportionately affects our good supply chain, people that other countries that are actually acting in a rational manner >> so ideally, you would like to see no tariff, i suppose if that was not an option, you would like to see a carve-out for canada >> we certainly would like to see if the administration was to move forward with 10%, we do believe a carve-out for canada specifically, it would be required because of the intricate supply chain that we have, and many other aluminum companies have in the u.s. with canada >> steve, nice to see you again. >> thank you >> steve fisher.

>> so president trump targeting the steel and aluminum with his tariffs. could the auto industry be next? "power lunch" will be right back alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

what if the president's tariffs on steel and aluminum are only the beginning could the auto industry be next? phil lebeau joining us from chicago. it's the president's own twitter feed that has us wondering this? >> he threatened over the weekend to raise tariffs on vehicles built in europe that are imported to the united states that's a possibility he raised over the weekend just how many vehicles are we talking about that are built in the u.s. or built overseas but sold here in the u.s.? it's actually about 6%, 7% overall in terms of vehicles that are built in europe and sold here in the u.s it also raises the question, how many vehicles are built here and then exported? those that, by the way, go to europe, have a 10% tariff on them about 2.4 million vehicles last year, and again, those vehicles that go to europe, that's a 10% tariff those coming from europe to here, a 2.5% tariff.

here's the chairman and ceo of audi talking about whether or not all this tariff talk might lead to audi changing its production plans and moving more to north america >> a decision on capacities is based on strategic plans of the company. and surely, not quickly only because of tariffs i think it's a little easier because it's not so price sensitive, but nevertheless, first of all, we have to watch and listen >> for now, they're taking a wait and see approach in europe while the european auto stocks all under pressure in the last week back to you. >> thank you very much, phil >> the big and unexpected market rally today. the dow down as much as 150 points at the lows how you like me now? up 271 points. we're at 24,000 up for the dow, up 63 for the nasdaq much more on the markets and the story we're most excited about,

a. rod, j. lo, and doc there she is diana olick hanging out with yogoa e blk.ny on the oc u ttseit ty 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.

hello, again

i'm becky quick. here's what's on the menu today. the president's proposed new tariffs angering industries across the country and governments across the globe but is all of trump's tuck toff a big negotiation ploy as the nafta talks wrap up today? we'll talk about that. >> plus, suffering for years that's what one top steel ceo summoned to the white house last yeek had to say about why we need more tariffs. is it really the tariffs or automation hurting the industry and the jobs a-rod, j. lo, and diana olick. she sits down about teaching inner city kids to be successful real estate investors. "power lunch" begins right now >> becky, thank you very much. music, a little old school there. welcome to hour two of "power lunch. i'm tyler mathisen stocks staging a comeback midmorning the dow trading in a 450-point or thereabout range. it's hoping to break a four-day losing streak.

right now, as you see, the dow up 288 points. a little more than 1%. the s&p 500, all 11 s&p sectors are higher, led by real estate, utilities, and financials. caterpill caterpillar, ge, and -- ge and mcdonald's leading the dow right now. and the fang stocks are on the move, led by netflix it is up another 3% today. what a great year that company has had so far energy stocks in the green, as crude jumps more than 2% chesapeake, range resources and hess are the winners there >> president trump's comments on tariffs on steel and aluminum dominating the final day of nafta discussions in mexico city steve liesman is in the mexican capital. if this is a negotiation tactic, is it working? >> not getting positive comments so far remains to be seen the stakes could not be higher for the top trade officials who will be standing on the podium right behind me from mexico,

canada, and the united states, as they conclude this seventh round of nafta talks under the looming threat of tariffs on steel and aluminum from the united states. earlier this morning, in a tweet and later in actual comments, the president linked for the first time those steel tariffs with the nafta talks here's what he said. >> we are renegotiating nafta as i said i would and if we don't make a deal, i'll terminate nafta but if i do make a deal, which is fair to the workers and to the american people, that would be, i would imagine, one of the points that we'll negotiate and it will be tariffs on steel for canada and for mexico. so we'll see what happens. >> like i said, ministers will be meeting behind me here. christa freeland from canada, guajardo from mexico, as well as robert lighthizer from the united states. earlier, mr. guajardo did not have things to say, quote, the

wrong way to incentivize the creation of a new and modern nafta. if there weren't the steel tariffs, there would be plenty of problems and issues to discuss. there's an issue of auto content. an issue of regulatory labor practices. the expiration of the nafta deals all together, along with specific industry issues like energy and telecom one bit of good news is they did finalize some of the details about food and animal health safety, a sign they could actually maybe make some progress if not for all of the other issues swirling around these talks, michelle. >> and it's contessa back here steve, the interesting thing is, i covered the dairy part, the back and forth with canada i have been down south of the border and watched really these guys holding bated breath, waiting to see how nafta would shake out. this was a complicated tackle in the first place without injecting tariffs into it. is there any sense that the talk of tariffs has actually set back

negotiations >> well, certainly, they spent a lot of time talking about it, ducking questions from reporters. i think it's going to be the focus of the press conferences that are going to happen, so yes, it's taken the focus as the introduction said, really dominating the talks down here and i think it's become kind of normal for the president to, for lack of a better word, throw a bomb ahead of these nafta talks. seems to happen almost every single time. and so there's two schools of thought. one is to press ahead and to just act like it didn't happen and keep going with the work that needs to be done. the second idea is how can you do that? how can you make a trade agreement when there's this major protectionist act being threatened by the united states. >> steve, thank you. all right, let's get back to your money this week marks the nine-year anniversary of the bull market, and many investors are asking themselves just how late we are in the cycle let's bring in mike santoli and

bob pisani from the floor of the new york stock exchange. what do you think? >> it seems like that's the debate that's shadowing all this talk about the correction that we've had in the markets, what the fed might do not so much that people think a recession is really imminent at all, because all the recession models leading indicators say recession is really not close at all, but a matter of how the market deals with the latter stages of an economic expansion when the economy starts to run hot and you start having those inflation concerns, you start having maybe an aggressive fed getting into the mix so that's why i think the market is contending with right here, so yes, it's nine years in since the bear market low. but it's not necessarily the case that we're looking for that media dip into a bear market it's more whether we get more volatility, more push/pull in the latter stage ofthe expansion. >> what is extraordinary is it is in theory very late in the bull market, but nothing has been normal about this we never had a period where we had fiscal stimulus continue for

this long, it's being withdrawn, but we have monetary stimulus, i should say, slowly being withdrawn. we have fiscal stimulus very late in the rally, which is rather sdrooextraordinary. we have historic highs in the earnings by historic standings, this is a long in the tooth bull market, but we have never seen this kind of combination this is why the bulls are arguing this could continue for longer >> what changed the market's mood this morning? >> what we saw is you wanted to know how much they care about tariffs. the minute we saw comments from ryan's camp that he's trying to turn the president on the tariff thing, the market turned around. comments from theresa may also saying brexit is going >> i would add to that that we got this pretty strong number on ism services services sector is about 80% of the private sector gdp in the country. you could have seen maybe the market say this is really what

the driver of this quarter, next quarter's earnings is as opposed to a relatively small segment of manufacturing and export industries of the united states that might be subject to tariffs. but big picture, we're in this wide swinging range near the january highs and february lows. it seems like the market really can just be taken for multi-hundred points on the dow on a change of mood. >> what really remarkable is the amount of 2% moves we moved today 50 points on the s&p, almost 500 on the dow jones industrial average remember, this is all because of what happened with the jobs report we'll have it this friday. that's when the wage report came out, 2.9% on february 2nd, the s&p moved 50 points, exactly what it moved today. we haven't been the same since that's why i think the big event, i want to see the wage numbers for the month of february >> volatility, the new normal. we better get used to it bob, mike, thank you very much >> let's get to julia boorstin with a news alert. >> espn naming its new president

of espn, james petaro, known as jimmy petaro, namedpresident o espn and co-chair of disney media networks it's of course, replacing george bottom hiemer who was the interim ceo of espn and running that business. of course, taking over after john skipper announced his resignation in december. now, to give you background on james, who is taking on a big role as espn prepared to launch its first direct to consumer over the top service later this spring he joined disney in 2010 as co-head of the interactive group. he became head of the interactive group and added consumer products and licensing to his role. in the press release, bob iger credits him for growing disney consumer products and interactive media, running the world's largest licensing business across toys, apparel, and home goods he has a big job here with espn. certainly in managing the issues

of cord cutting and cord trimming as well as how to go direct to consumer back over to you >> all right, thank you very much, julia. >> nine year anniversary of the bull market this week, but will the uncertainty from all the talk about tariffs and a potential trade war be what finally trips the bulls? let's bring in jim paulson, brad mcmillon is chief investment officer with commonwealth financial. good to have you with us jim, what say you? will the 9-year-old bull make it to 10 or could trade trip it >> i'm betting it will make it to 10, but i think it's going to continue to be a bit of a struggle for both the stock and bond markets this year trade is just another issue now thrown out there that the stock market, bond market, have to contend with i just think it's a year of reagire readjusting values for both the level of bond yields and the level of the price earnings on the stock market for an economy which shows some nominal life.

novel gdp closer to 5%, a pickup in wage and consumer price inflation, and inflation expectations all that is pretty good, really, in a way, but it probably can't be done with a 2% treasury and a 23 times trailing pe multiple on the s&p. i think it's a year where earnings are going to grow, but they're going to grow into these valuations and maybe the market is essentially flat while earnings go up >> brad, what do you say to jim's thesis there, number one, and number two, i think he points to some very interesting ideas, which is it's not just trade, which is a new variable that the market has to contend with, but higher interest rates, potentially higher inflation there's some things there that weren't there or weren't being highlight eedes eed last year >> when you look at what's going on, what's interesting to me is not what's happening but what hasn't happened. the death of the expansion, the death of the bull market has been called for many times over the previous nine years.

and yet when you look at what just happened, we saw the fed chair come out and say the economy is great we're probably going to be raising rates more we saw the president of the united states declare a trade war, and not only is the market not tanking. it actually looks like it's coming back. it's the dog that's not barking. my question is what is going to knock the market down? i see it continuing to rise until we get a recession, which is probably maybe a year away. >> until then, you have consumer confidence approaching its highest level since 2000 you have wages growing this is an economy where it looks like even the american consumer on main street has a lot of optimism about where it's going. do they have reason to have optimism, jim? >> well, i think you raise a good point, contessa, in that there are many aspects that make the bull look older than its calendar old, but character old. one is confidence. when confidence gets to levels we have gotten to in the last

year, you're getting close to the end of the economic recovery and the bull market. profit margins are close to maximum levels or record highs probably can't expand much, but they could contract, for example. the output gap is now positive the unemployment rate is closing in on 4% unemployment claims are about as low as they have ever been, suggesting a pretty good shortage of labor. so there's a number of things that are getting long in the tooth. and i think that's some of the things we're dealing with in this bull market, including now contracting financial liquidity, for example, but the other voice mentioned, i believe that there's things that still make this recovery look young we haven't had a major lending or borrowing cycle we haven't had a major capital spending cycle, major housing cycle. there are some things that could happen now that firms have mighty increase in profitability that could continue to keep this recovery and the bull market alive.

>> jim and the other voice brad. thank you very much. we appreciate it >> thank you >> thanks. here's what's coming up on "power lunch." we'll talk to the ceo of timkensteel about what it was like to be in the room when trump announced the tariffs on steel and aluminum and ask what the tariffs mean for his business plus, is the united states oil boom finally becomes a threat to opec >> and america's large eretailer getting into the meal kit business all that and much more coming up on "power lunch. run your business at cloud speed. and do more with systems you have in place. the ibm cloud. the cloud for smarter business.

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president trump says he is not backing down on his tariff plan, despite house speaker paul ryan urging him to abandon the stiff tariffs on steel and aluminum one person firmly in trump's court, is tim timken he backs the proposal, calling it a step forward after years of suffering under global overcapacity he joins us from canton, ohio. welcome to "power lunch. thanks for being here. >> a pleasure to be here >> we have been talking an awful lot about the oversupply and how china has been overproducing and dumping a lot of steel here. clearly, that has hurt our industry for years and years but there have been other changes that have been taking place, too, namely automation. leslie picker is at the timken facility, and he says there are

only two employees per shift at the facility she's in right now. i wonder if the tariffs kick in, will it bring back jobs to america? >> well, it absolutely will. the big part of the reason why we invested in the aqtf that we're standing in today was to maintain that level of competitiveness. even though there's a high level of automation, it's important to recognize that you have to lean out your entire organization, you have to be as productive as possible in order to compete in a global market that is just awash with excess capacity we spend a lot of time talking about china, and their 400,000 tons you also have to recognize there are another 300,000 tons in the rest of the world that are targeting the u.s. market that is only 94 million tons. it's a significant issue we think 232 will play a role in correcting that. >> let's talk about where you see this in a year, assuming the tarif tariffs go through, with the additional funds, what sort of

additional investmentses would you make >> we continue to grow the business we actively invest about $40 million in capital a year. at certain times we'll surge that into the $200 million, $300 million range to put new capital equipment into place we hire. over the last 12 months, we hired about 175 new people we're actually relatively fully crewed at this point, and we're ready for the turn in the market that we're seeing. we're seeing healthy end markets, to the extent we can get the 232 action done, that will help us as well to throttle some of the imports we have seen over really the last ten years >> it's contessa brewer. are you concerned at all that your customers could start looking for alternate materials or just import the products ready made that they need facing these tariffs and potential higher costs >> well, it's always an issue. our job is ultimately to create value for our customers. if we do that, they should be willing to pay us for the steel, for what it's worth. obviously, to the extent they're

seeing offers from places like china, you know, that creates a challenge for us in generating that kind of value but we know if we're given a level playing field, we can go toe to toe with anybody in the world. what i can't do is compete with foreign governments. that is what we have been doing over the last number of years. >> how do you respond to people who say that china is the principal source of the overcapacity, but that this tariff of 25% would apply to canada, it would apply to mexico, it would apply to brazil, to south korea, and the european union and is that right to smack them along with the principal offender >> well, the biggest exporter of steel to the united states is in fact canada. and so when you begin excepting certain countries and not others, you begin to undermine the effectiveness of the

vehicle. transshipment is a huge issue in our steel industry when you bring an anti-dumping case, it's like whack-a-mole sooner or later, it's going to show up somewhere else that's why we have been supporting of the president. there are ways to exempt certain products from certain countries. the 232 allows countries to bring cases forward to get relief from the tariff there is flexibility in the way this is going to be implemented, but at the end of the day, once you start opening things up, it's a slippery slope, as secretary ross said the other day. >> one of the things people have talked about is china dumping its steel in places like canada and mexico and that eventually winding its way through, but one of the things wilbur ross and others have talked about with nafta is if they can tighten up the rules of origin, if that is successful in the nafta talks, would that satisfy you that that could take care of many of the problems without the tariffs

>> no, i don't think so. i think rules of origin are very important. and will be part of the broader discussion around nafta. i think in the meantime, putting the 232 in place is the right approach and then let's go and step back and have that nafta discussion and figure out the implications of the 232 on it >> tim, i want to thank you for your time today. tim timken, the chairman and ceo of timpc timkensteel >> the iea is out with its new report on the oil market it has a warning brian sullivan is live in houston at the big energy summit down there hi, brian. >> yeah, you know what that warning is it's pretty much to everybody around the world, every company, every country that is not named the united states, you better get your act together because the u.s. shale boom is coming for you. however big you think the u.s. shale boom is, i want you to think again. it's bigger than that. you won't believe some of the numbers that the iea is projecting for the united states, and more importantly, for right here in texas.

we're going to bring them to you wi ainrvthn teiew with the iea director right after this.

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program. teaching inner city kids how to invest in real estate. the event drawing heavy hitters to the big house in the bronx. one of those heavy hitter was our own diana olick. >> it was super fun. it's a really remarkable program called project destined. the brain child of said row bobow, a former executive at the carlyle group. he wanted to give teenagers a path out of poverty by teaching them how to invest in their own neighborhoods. literally learning how to buy buildings. he started in detroit and then partnered with former yankee alex rodriguez, who now ones his own real estate investment company, they brought it to the bronx along with bronx native j. lo >> i was born right down the street in washington heights and i have always loved baseball, and i loved business and real estate is a way out of the hood

>> this project is such a special thing because it is teaching children at that level, at this level or in these inner cities to know what it is, to actually own something very early, and the fact that it goes to their college they're actually owning a piece of a building at such a young age and knowing that's possible for the rest of their lives. that's a skill they'll always have these are things they'll always know that i don't even know you know, things they're talking cap rates and this and that, and i'm like, okay here's what i'm talking about. this is amazing that these kids are learning this right now because there's grown-ups who don't know it. >> now the kids attended seminars learning how to value and finance apartment buildings. then they pitch their offers for two real buildings, shark tank style, to a panel of experts in the yankee board room. no stress there. project destine actually buys the buildings and the kids give dividends in the form of

scholarship cash if they keep with the program taking more courses online they have apps it's really a remarkable program. >> really, it sounds like something that not only do you need in inner cities but in suburbs and rural areas. this is part of financial literacy that kids need, period. >> they were learning things, it was very impressive. we were asking them questions and there were very high-caliber people, jonathan gray from blackstone was the former head of global real estate, now the president and coo, he was peppering them maria yauiano revara was there. might have dollars to invest it was really worthy project and they're hoping to take it to cities across the nation >> how do they value the building is it based on real estate prices could they see the value goes down, not realize the value goes straight up. >> they did their research, they went to the buildings, talked to brokers, lawyers, bankers. they learned how to fnls them. they found out about interest rates. they were talking cap rates, they were, and noi and all the

terms that go along with real estate >> you mejzed jonathan gray of blackstone did you ask about interest rates and its effect >> he said real estate will take a hit. obviously, when you can't get your dent at the right price, the prices will come down on some of these buildings. he does believe the economy is going to be very strong and that will help to keep rents high and keep demand for apartments high, but again, when interest rates going up, it's harder to keep the values high on the buildings. >> thanks. great to see you >> a-rod is not just teaching children about financial literacy, he has also got a new primetime show on cnbc, next tuesday, 10:00 p.m. eastern, don't miss it "back in the game" he helps former nba player joe smith get his finances back on track after he loses nearly all of the $60 million he made in his career maybe he needs to talk to m.c. hammer, too. >> in the meantime, netflix shares continue to rally

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i'm sue herera here's your news update. british prime minister terreshea may insisting there will be no hard border with ireland and the uk and eu have to work together to come up with a solution on how to avoid one when britain does leave the block >> we will not go back to a hard border between northern ireland and ireland. neither will be break up the united kingdom's own common market with a border down the irish sea. as prime minister, i'm not going to let our departure from the eu do anything to set back the historic progress made in northern ireland >> a confidante of benjamin netanyahu agreeing to testify against him in a growing corruption case against the israeli prime minister he's the third former aide to do that the new casting a shadow over talks between netanyahu and president trump in washington today. strong winds from the recent

nor'easter has knocked down a 227-year-old tree believed to have been planted by george washington on his mt. vernon estate the canadian hemlock tree stood watch over washington's tomb you're up to date. that's the news update i'll send it back to you >> thank you very much let's get a check on the markets again. the major indexes staging a big turnaround today the dow had been down about 150 points at the low before it started rallying you can see the dow up by about 280 points that's near the highs of the session. up by 1.1% you also see gained of almost 1% for the s&p and nasdaq by the way, all of the s&p 500 sectors are in the green at this hour real estate and utilities are leading the way. all right, the oil market is closing for the day. crude ending higher by more than 2% to $62.57 a barrel. analysts say prices were being propped up by bullish comments from oil ministers from the opeccountries and other global players at the energy summit in houston. the iea has said by 2023, the

u.s. would become the world's largest oil producer with 12.1 million barrels. you'll likely hear more on that from brian sullivan. he's in houston now. >> interest rates are on the rise, but that is not stopping americans from taking out a record amount in auto loans. phil lebeau joins us now with the latest >> tyler, we're seeing levels in terms of loans, the amount borrowed and how long people are taking to pay them back and monthly payments that we have never seen before. this is data from experian, and it basically shows in the fourth quarter, you had record levels in terms of the average amount borrowed, now topping $31,000. the average monthly payment for a new vehicle is now over $500, and the loan length is now stretching out on average five years and nine months. here is the head of research at experian talking about whether or not we might be close to a top in terms of how much money people can borrow.

>> i think we are nearing a ceiling, and i think consumers are responding to that that's why we're seeing consumers, especially prime consumers, increasingly move into leasing on average, a lease will have a payment at least $100 less on that same car if you have a loan >> who can blame people to lease more vehicles given the fact they could save basically $100 a month in terms of a monthly payment for a vehicle. as you take a look at annual sales, 35% of all the autos financed in the fourth quarter were leased. that's a record high year to date, sales are down 1% here in the united states. as you take a look at shares of the auto dealer stocks a number of people have asked the question, what happens for the auto dealers if we continue to see interest rates move higher because the average rate right now is 5.2%. if you have average credit you can still find zero per isn't, but if you have average credit, 5.2% is the average. that's up compared to last year

and a couple years ago >> financing costs are built into leasing prices. >> yes absolutely so they would go up a little bit. >> a little bit, but still cheaper than buying. and look, at the end of the day, people look at the monthly payment. what's the monthly payment about $100 less on average if you lease versus buy >> how worried are automakers about the potential tariffs for aluminum and steel >> pretty worried. who is more worried, the auto parts manufacturers. they're the ones who are really going to get hit, especially because so many of them bring in specialized steel and aluminum from overseas. and that's capacity that can't be just replicated like a snap here in the united states. it's in china, and it's been there or in asia or somewhere else, and that's where that part is built >> so the engines and those folks. >> the smaller ones. the cummins engines will be hit, but they'll be able to withstand it and pass some of that on.

it's the smaller manufacturers who are really going to feel the brunt of this. >> phil, thanks. phil lebeau. >> walmart escalating its grocery battle with amazon, betting big on the meal kit business the fight for the food delivery dollar straight ahead on "power lunch. plus, battered burrito chipotle trying to recover from a terrible 2017 by bringing on a new ceo. we'll tell you what analysts hope to hear as the new boss start day one on the job ♪

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stocks at session highs right now. up 317 points on the dow better than 1.25%. nasdaq better than 1%, and nasdaq on the button at a 1% gain, up 72 points >> walmart says it will now start offering its own meal kit service. targeting rivals like blue apron and amazon kits now available in 250 stores with plans to expand to more

than 2,000 this year meals serve up to two people and range -- that would be one or two, up to two would be one or two. range in price from $8 to $15. some of the henue options include steak dijon. pork florentine, chicken fried rice meatloaf, and more >> and speaking of lunch, it's a big day for chipotle today its new ceo brian nichicals' first day on the job naming the taco bell chief as the top executive. will the new boss be the same as the old boss our guests say no way. let's bring in nicole, manager director at piper jafry, and rj, who is a consumer equity strategist at morning star looking at the share price, it looks like it's pretty flat on the day. what's the biggest challenge, nicole, for the new ceo coming in, having seen shares fall 23% last year for chipotle

>> probably the greatest challenge is the greatest opportunity. he really needs to reenergize the culture, bring everybody back into that denver environment, is going to go a really long way. we need to see menu and marketing working together of course, that means technology and loyalty initiatives, then finally, capital deployment once they get back on track >> okay, so he's coming from taco bell, the yum brands taco bell, what lessons does he get from taco bell that he can now apply to chipotle? >> i think he's going to do it in his own unique way. i don't think he can tay the playbook from taco bell and apply it to chipotle a lot of things nicole mentioned in terms of the menu and marketing working together is the key, and getting people to talk about the brand in a positive way then the different partnerships taco bell had with the doritos tacos. that's not going to be at his disposal and that's not part of what the chipotle brand is all about. he can put his own unique spin on and bring in new products that don't overly complicate the

menu but create excitement a lot of that will be backed by the success stories the company had at taco bell that's his first goal, getting people to talk about the brand in a positive light. >> when i think, nicole, of taco bell, i think of value menu products thing s that are quick and often ready to go. you walk in and you grab one i think of chipotle, i think of a more bespoke burrito, if i can use that term. do you think the new ceo might take a little bit of the taco bell playbook and emphasize value and speed over the other way? >> i think they can do it in the chipotle way, the way that's right for their brand and their culture. we recently went over and saw what they were doing internationally. there's a couple interesting things they're trying that they may replicate in the u.s one is premade burrito said. they made the top three or four selling items at peak meal periods so the things people

like most at lunch or dinner and have them ready to roll. they can sit up to 30 minutes, but they're taken off the shelves in three minutes that would just be one thing they could do to increase speed of service i think technology and loyalty would probably trump that, though >> rj, when chipotle first came along, they were one of the only games in town doing fresh food, and really had a big head start on everybody else. you may have a new ceo, you may be able to restart it, but what's the risk, just in terms of so many other people and so many other chains that are now doing the same thing with fresh food >> yeah, you're absolutely right. i think that's the biggest challenge. right now, you have effectively three companies. the group that never left, the group that's going less frequently, and the group that's never coming back. think brian's challenge is going to off the group that's going less frequently and creating excitement eventually, you're going to be able to target the group that has gone off and tried other categories and other cuisines within the fast category, but

right now, it's bringing back the customer that hasn't been going as aunch in some cases, i think chipotle has been kind of a follower on a lot of things. the launch of queso was a lot of competition had. i think brian's challenge is coming up with something new that isn't on anybody else's menu to get people talking about it in a positive way if you do that, we'll start to see more steady comp improvement. you could see something in the mid-single digits. a long way to get there, and they'll probably have learning challenges on the way, but that's probably the goal >> steve els is staying on as executive chairman is there any concern in your mind that brian niccol won't have the space he needs to innovate fully with the founder sort of looming over his shoulder >> i can't hear. >> she's lost her earpiece what about you, rj, do you have concern about that >> no, actually, i think this is an interesting situation where if you look at what brian had to deal with at taco bell, part of

a larger organization. reported to the head of yum brands you had activist investors who were also part of yum with a few other people in there. so it's a situation he's probably dealt with in the past. he's been able to change the culture at taco bell and establish some great comp trends at the same time, he's been able to work as a larger part of the organization anybody i can think of for the position, he's probably best suited for something like this there probably are still some concerns, but i can't think of anybody better suited for this position, and the extra wrinkles that come with it. >> nicole put a $318 price target, it's at $319.41 today. thank you so much. >> netflix taking home a gold statue last night for its documentary icarus, but the real gold is in netflix shares. they're up 62% since the start of the year. will the streaming giant continue to surge? we'll debate that rahthestig aad right here on "power lunch."

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welcome back, everybody stocks hitting higher, soaring more than 300 points let's get the traders' take on the rally. gordon joins us from the nyse

floor and at one point we were down by 150 points what turned things around today? >> a resilient market but i think it's a lot of the same retracing we've seen since late last week. it's been a market that's been strong across the board. almost all the sectors are up. the vix has retraced all systems go lear today. >> gordon, thank you great to see you >> pleasure. >> that was the quickest segment we've ever done in the history switching gears now, let's take a look at shares of netflix. soaring nearly 4%. all-time high. the streaming giant now pacing for its best start to the year since 2012 ari wald is with oppenheimer and phil, your trading nations team. this is the first time in all of these years i have ever done trading nation, so be gentle with me. >> seriously >> first time. they don't let me near it because they know i'm going to you know what. take us through netflix.

do you like what the charts say? >> tyler, what's not to like here we have a bullish tre isish tre. what is telling is the stock held up when volatility hit in early february now a few -- fast forward a few weeks, the stock is trying to lead the market higher and i think it ultimately leads higher breaking out to the upside what's not to like here are the levels you have to watch. first, we can see the stock breaking through its january's peak on the upside, that breakout measures to about $337 that was the height of the prior pattern projected from the breakout point bullish trend. we're bullish on netflix rate it buy. >> phil, what about the broader question of nasdaq, what are you seeing, what should i be watching >> it's done a beneficial job for the nasdaq we're up 6% year-to-date

far outperforming the dow and s&p 500, floating around on change your key level is the 50-day moving average if the nasdaq breaks that level, that is a red flag and for risk management purposes you might be looking at another potential washout to the downside. i really think the nasdaq over the next couple of weeks is going to break through that double top so a trading play would be to look at that 7,000 call for june. 100 days until expiration. i think the call itself is a little expensive with volatility being so high. the call outright costs about $4,000 you want to bring that cost down a little bit sell a 72.50 against it. brings the cost down to about 2,000 bucks, maximum profit about 5,000. there's a play on that particular market with the nasdaq hopefully you can catch that broad tech rally up and benefit from it. >> what he said, thank you very much appreciate it. for more - >> how did i do? >> well done. >> for more trading nation, head to our website tradingnation.cnbc.com

we want to head back down to brian in houston who generally does trading nation but he's not here today. he's down at the big energy conference what did you hear at the energy conference how did i do on trading nation >> first off, you did a spectacular job. i never would have thought nothing else it makes me want to buy and/or sell whatever you talked about let's talk about buying -- let's talk about buying pipeline, because this is getting really interesting what's going on. by the way, hello from houston at the oil and energy conference we talk about tariffs, we talk bl buying pipeline you remember last year, get your way back machine, last year president trump back in, i think it was january of 2017, said that newly elected president trump that he wanted all pipeline makers, if they were going to build a pipeline in the united states, to use american steel. think about that here's the problem, though

we don't make a lot of pipeline steel in the united states here's a factory in arkansas i think jackie has been down to that factory in arkansas other than that, the majority of pipeline, the actual 26-inch diameter pipeline, comes from canada, italy and india. earlier today one of the biggest pipeline companies, plains all-american, their ceo said, well, if we have tariffs, we can't really buy the pipeline herele anyway because we don't make it as a country so, tariffs aside, guys, if we're looking to increase domestic steel usage for american pipelines, we have to start making it because we don't make pay whole lot of it not only are we talking about tariffs. it's also a manufacturing story, guys, as well. tariffs, as you would imagine, we're on day one of a three, four-day conference, are the hot topic. the other topic, i'll send it back to you guys, is this. the report out that america --

that oil production is going to soar, that we could do 12 million barrels a day now. that's a 40-year high. it's texas everything is bigger in texas, including, apparently, future oil production >> brian, thank you very much. we'll see you all during the rest of the week from houston. >> you're welcome. >> you bet. check please after we take a quick break. >> announcer: now the latest from tradingnation.cnbc.com and a word from our sponsor. >> one way to manage a winning trade is to place a trailing stop order when your target price has been reached a trailing stop order is an order type that automatically moves your stop loss higher as the stock moves up, but when the stock starts moving down, the stop order remains at the highest level it was dragged to, keeping you in control of your trade.

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left hand amputated when he was four because of a genetic condition because of a lot of pain he has not let that stop him. >> i should have been watching big news here. zaggat is getting sold to a company called the infatuation google bought it for $150 million. >> thanks for watching "power lunch," everybody. ♪ "closing bell" is next live from the new york stock exchange in new york city this is the "closing bell. i'm michelle caruso carrera in for kelly evans. >> i'm bill griffeth discussions over trade do continue to dominate the market moves and the headlines. our reporters are covering the action, literally, from around the globe today. >>