>> none of us are selling here none of us are saying, hey, it is time to hit the exit. that is worth pointing out and also that intel is 1% off of the all-time high and will hit that pretty soon. >> good stuff. thanks, rob. thanks for being here. dow is down 274 points "power lunch" picks up that story and a lot more right now. >> indeed we do. welcome, i'm tyler mathisen. here is what on the menu for the next two hours investors not happy about the resignation of gary cohn from the white house. one economic adviser said this is a sign of terror -- terror for the business community he will join us and explain what he means and apple stalled sales, one analyst said he sees weak demand for the iphone x and is therefore slashing the revenue estimates and what he sees ahead for the company and the stock. and air jordan heaven. we'll take you inside of one of the most insane closets have you

ever seen filled with more than $100,000 worth of pristine condition jordans. lace up, folks, "power lunch" starts right now >> welcome to "power lunch." i'm melissa lee live at the stock exchange we'll check on the markets the cohn resignation having a huge impact on the session dow had come back significantly but fell back near the session lows at this hour. right now it is down by 1.15% or 288 points and the dow laggard is exxon, caterpillar and ge and weak sales by the discounts, dollar tree and ross stores and best bay dollar tree on the the worst day in years and that is down 16%. and steel stocks seeing a move u.s. steel and nu cor falling.

and bitcoin back below 10,000. down 9% of a session over to brian sullivan in houston at the big energy summit oil is in big decline. >> it is a hot topic here today as well as have tariffs and nafta and the news of the white house and oh, by the way sh the expanding role of electric vehicles on an oil world we'll talk about that with the ceo of shell the biggest single cash generator bumping exxon down to two and why investors seemed to have abandoned energy stocks and why they shouldn't and by the way, another stash ta -- cnbc with the ceo. >> here on the floor of the new york stock ex change

we saw that comeback and we're going back to session lows. >> the market is realizing that the tariffs are part of an initial salvo trade. and they've been in denial people are saying this is not going to escalate into a global trade war, it is looking more likely and you see a city off the lows for the day so here is my analysis here. concerns over a wider trade war is now starting to seep into the overall consciousness. remember the global paradigm global -- synchronized global growth and record earnings this could threaten the paradigm of global growth so we're seeing goldman and analysts making comments throughout the day on. this here is yahn saying this situation is more problematic than prior steel tariffs and it is unlikely to be isolated but appears to be followed by other

trade protections, retaliation by trading partners is likely. that is now starting to seep into everybody's consciousness take a look. industrials which is what you want to look at. the vanguard, looking at paccar and cater pillar. >> and these are taking the stock down. >> yes and even the steel stocks in the u.s. are not responding as many -- or related to steel stocks they are down big names in the materials space. heavy volume in some of the country etfs trading partners. so this is latin america here, and l.a., this is korea and france and italy seeing heavy volume in these groups so it is seeping into the consciousness and wider trade war is possible. >> thank you, bob. tyler, back over to you. so what does gary cohn's departure mean for the tumultuous west wing

eamon javers is live at the white housech and before we get to cohn, who you very astutely yesterday at the end of the press briefing -- during the press conference, pointed out he was not there and you -- and his absence hung heavy but before we get to cohn, new news on tariffs just out. >> that is right you heard bob just quoting from goldman sachs, that report has at just about right. i'm told we're going to expect this announcement on tariffs, the details at an event here at the white house either thursday or friday. still fluid as to the times of when that might happen but we'll get the legal underpinning them but simultaneous to that, we should expect at least some conversations around additional trade actions that this white house might take that is behind the scenes, they are considering a basket of other trade actions that might be put into place. they're working through the details on that. we might hear more about that on thursday and friday at that event. but of course those steel and aluminum tariffs are ready to

go, or as close as ready as they are. they are ahead of everything else in the pipeline but i'm told there is a pipeline and there might be more coming behind that. so watch for that. meanwhile, on the gary cohn resignation, it was not surprised that it happening. the timing caught people by surprise, but -- [ technical difficulties ] in the rumor mongering here at the white house, is peter navarro might be slipping behind and other people might be moving ahead of him on that list. larry kudlow of cnbc is one of the people who has been mentioned as a possible candidate for that job but there are others on that list as well tyler. >> there are others on that list a lot has been made over the past hours, including by anthony scaramucci justan hour or so ago on scott's show, there is no

dir -- dearth of talent wanting to work at the white house. i wonder if that is really the case. >> i wonder that too and you don't know that until you get into the head of the top a-list people recruited by the white house to replace the different folks that have left and those rumored to still be exiting this white house there has been a tremendous amount of turnover and drama associated with that and it has to give pause to people to say do i want to get involved in that on the other hand the president said yesterday, everybody wants a piece of the oval office and works in west wing these high-profile jobs with a lot offen flun -- of influence d people could deal with the drama to get that influence but the question is up to the individual and does this white house weed out other people because of the pattern of turnover here. >> thanks very much. appreciate your work the dow and the s&p and the nasdaq in the red. they are near session lows maybe not -- well maybe they

are. i have to check on the dow they are down 343. investors still digesting news of gary cohn's departure so is the worst over or more turmoil on the way let's find out with lee munceon from portfolio wealth adviser and greg from the "wall street journal. and we just showed the tiles of the dow, the s&p and nasdaq and the russell, which is higher and one of your points is that in a tariff world, small caps might outperform explain your thesis? >> well every since the election, back in november, almost 14, 15 months ago, what did we see at the end of the year we saw small caps, small cap value go up about 30% in the span of about six weeks. just repriced the entire category when you sell locally and not dealing with multi-national and

occurrence exchange you could protect those profits. and someone like me is biased toward small cap and abroad so you are seeing the stocks get bid up let's be honest, we don't know how nike and all of the sales an the complexity, it will take a while before analysts understand how the earnings will be affected as well as the -- if you look at xli, the caterpillar and the big industrials. so i would say if you want to commit money, commit on the small capsize but honestly, we're not even back to february 9th inter-day lows so if this is the big news, i would say this is a known unknown. keep it small. insolate yourself and go make some money you don't have to be in the dow to make money in this market. >> greg, you've been around washington and observed a lot over the years gary cohn was not a cabinet member gary cohn's departure had been rumored for quite sometime

actually what role did he play and what does his absence mean about the direction of policy in the white house? >> gary cohn was the leading figure of what you would call the establishment globalist republican wing and in part because of hi competence and influence that the first year of the trump presidency was occupied by things like cutting taxes and rolling back regulations, thing that are unambiguously positive for the business community and the stock market last few weeks have crystalized so an in flexion point we are moving from the pro-business phase to one of the focuses on issues that are neutral to bad for business, protectionism being the main one and cohn brought a level of competition to this administration which was really vital. you don't -- everybody knows gary cohn, they don't know that working for cohn were a lot of affective people, like shakira knight on tax policy

we couldn't have gotten the tax form we did without the confidence and discipline to the process. federal reserve, we have a very -- a very confidence-building appointment in terms of jay powell that is a process run by gary cohn moving forward, i think there is doubt on the wall street that the processes which are important to the functioning of the market and the economy will proceed as smoothly on a week to week and month to month basis. >> mark, let me turn to you and get your thoughts about how important this white house policy apparatus is, not so much to the economy, but to the equity and bond markets. is it -- is it really as important as earnings and interest rates and the macro economy. >> the market is driven by earnings and some of the things you just mentioned i think the umbrella of the policies just described though are important for confidence over all in the market and i

think there is a wait and see now that gary cohn is departing the white house. there was -- as you said, a competence and calmness and order to that i think people are worried about and the market is testing fresh lows and the announcement later in the week with specifics are just the beginning and if it is only the beginning, we're probably gov tor protectionism and that probably leads to more selling. >> are you doing -- you have done anything differently over the past ten days since the tariff promise was made in the white house and as a result of some of the turmoil that the white house is experienced, hope hicks leaving last week, gary cohn leaving this week >> i think you are seeing renewed vigor in some of the nasdaq names and the tech names, some of the faster growth companies that i think are less afflicted by potential tariff wars and you'll also knee another round of people looking at the ipo market, some of the

fastest growing emerging growth, not the big megacap, multi-national companies, as you see that, you will see a large of drop box and that is an interesting bell weather for the over all market. i would watch that and see if that is a haringer for performance and names going forward. >> thank you very much lee,monson, thank you. brian. >> thank you i appreciate it. if somebody goes up to at a party and said who is the biggest single cash generator in the oil and gas world and want you to know the answer to that question it is shell. last quarter bypassing exxon-mobil as the biggest generator of cash, some $38 in operating cash flow and we're joined by the man that is ceo vin bran -- i don't think anybody would ask that, they will have the answer thanks for joining us. >> good to be here. >> brian. >> what do you do with $38 billion and what can we expect from shell? >> well the $38, bear in mind we

are the largest dividend payer in the world it goes straight to the shareholder shareholders and then the rest is used to pay down our debt a bit and we have an investment program of -- of $25 billion and we want to start buybacks in the not too distant feature. >> and the shareholders got burned by the oil bust years ago and now they are demanding cash back but the problem is your industry is so capital intensive, you need to continue to grow an maintain. what is the balance -- making sure the shareholders are taken care of but that you don't lose sight of the investments needed so we don't have a decline in production. >> that is a very important point. we have to serve both things you have to make sure that in the end we create value for shareholders, being able to pay the dividend and grow the dividend over time

at the same time, you are right. we've gone through a vicious downturn but at this point in time we generate much cash -- a $52 brand as we did over $100. it is not a cash pile your cash pile has shuf ru-- shrunk but he you reinvented the company to we are more resilient today than when the oil price was twice as high. >> let's talk about the political dealings you have a big petro chemical plant in pennsylvania under construction and eye on expansion in louisiana they use a lot of steel. if we got -- a big if -- we got a aluminum steel or tariff, would it change your future plans. >> let's be honest i'm not a great opponent of trade barrier. it does affect our investments we have to look at exactly how that will work out but let me give you another take on this, brian

take apomatox, 85% of the spend comes from the united states >> the steel. >> no the entire in the project. some things can't be done in the united states so this comes from overseas with it some steel as well so when the president wants to -- to activate the economy, promote investment and employ, we are all on the same page with him. but not entirely sure but doing it through tariffs is the right way to go about it. >> do you think that would raise costs on consumers in any way that shell operates. >> it depends on how things will play out for energy and et cetera but in general, yes, there is going to be an affect on consumers. if you install tariffs that is just the reality of tariffs. >> and appo mattox is a off shore platform and massive a lot of people have abandoned off shore.

you had online lea-- nine lease- and why are you confident off shores but everybody else is --n abandoned. >> we made our company -- we have to do the same with that as well at this time we don't have a deepwater project with a price above $40 a brand. >> 40. >> and much lower, we're happy with our position and prospect and the acreage in mexico and other places so for us deepwater is at the heart of the our business. >> ben van buerden thank you for spending type with us the platform is bigger than any aircraft carrier would you like to see it. >> that is staggering. me too gary cohn leaving the white house. kbho is -- who is going to replace him and what impact on the president and the agenda

and the markets can't agree to the views but there is a selloff for across the boardch a rebound midday but back lower again. how politics is affecting your money, next on power lunch most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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welcome back to "power lunch. i'm seema moddy. bitcoin falling on strong words from the commission saying the s.e.c. staff has concerns about many online trading platforms appears to investors as s.e.c. registered and regulated market places when they are not many platforms refer to them as exchanges which could give the misimpression to investors they are regul-- regulated or meet te standard of a national security exchange and bitcoin falling nearly 10% after the warning which does suggest that u.s. regulators are more focused on cryptocurrency, specifically with those traded on the exchange. and gary cohn is out over clashing with the president over steel tariffs, after his first

job was selling window frames for u.s. steel his departure to former goldman sachs banker billcohan >> great to be here. >> what is your take on why gary left >> i mean, melissa, i think people have been talking about gary's departure for months now since charlottesville when he gave the inview for the financial times and wrote a resignation letter he was never a trump loyal ti-- loyalist and he's a democrat and supported them politically in the past he was not involved in the campaign he made a bid, as you know, to try to replace lloyd blankfein last fall. that didn't work and this serendipitously came along and it is a great resume place for his -- on his resume it be national economic adviser, following in the foot step of former senior partners at goldman sachs, rob rubin and steve freedman so it makes

perfect sense for him but i never felt he was a long-term player in trump world and was a voice of reason that i think now will be missed >> and i think when the calendar year turned, people were speculating that cohn could be among the first to depart the white house with the new year and yet we have this reaction on wall street. given the circumstances surrounding this resignation, is it your belief or view that perhaps another wall street person could actually step in, that it would be somebody who brings a sort of more global approach or is that pretty much off the table in your view at this point >> look, i don't have any great insight into who donald trump might pick next. but the names being surfaced don't sound globalist to me. peter navarro or even your own larry kudlow who has been a fan of trickle down economics for a long time. i don't see another wall street

nationalist -- globalist kind of tide but i don't think donald trump liked that idea but i think he liked gary cohn as the former president of goldman sachs and because they never wanted to do business with donald trump so it fit his world view at the time now he's sort of circling the ranks and i just don't see -- even though he talked yesterday about wanting to have a more -- more voices and clashing voices, i'm not sure i see that any more think we have been past that era and thinking like he does and doesn't want any challenges at the moment. >> you mentioned mr. cohn was an awkward fit in trump world from the get-go what do you think -- you know him. what do you think he really, really thinks about trump world and being a part of it and what do you think he might do next? >> tyler, i think he was conflicted the whole way through

about working in trump world it wasn't his political ideology i don't think he ever felt comfortable with donald trump. i don't think he -- his firm obviously never felt comfortable doing business with donald trump. it was a great opportunity for him personally and i think he felt that he could make a difference and it was -- it was a good bulwark against other people, more nationalist in nature i i thi-- i think he did that jd did it well. he didn't do it great every day. that is a tough job for him to be one of the few people to do that along with dina powell and another goldman party or anthony scaramucci i think now gary acquitted himself fine he is national economic adviser, what private equity firm or hedge fund or even somebody like a j.p. morgan chase wouldn't want gary cohn at this point the think the world is once

again h again, and he can go wherever he wants. >> melissa, a big winter storm is hitting the north east right now. earlier contessa brewer was having trouble with the wind and her umbrella it was a mary poppins-kind of moment. >> we're going to check in with her on the latest conditions, so chf t lot of wet snow and no mu oit sticks in the new york area. oh good, you're awake! finally. you're still here? come on, denise. we're voya! we stay with you to and through retirement... with solutions to help provide income throughout. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. oh. so, that means no breakfast? i said there might be breakfast. i was really looking forward to breakfast. i know... voya. helping you to and through retirement. i grew up in the projects and so home ownership

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contessa brew ser standing outside in new york city contessa >> reporter: i'm in lower manhattan here, tyler, and we just heard -- what is for me historic thunder snow, not once or twice, but three times in a row plus i saw a flash of lightning which i've never seen in all of my years of covering storms. so i'm here at the edge of wall street behind me there is the testimony district and then in the charming sea port neighborhood these are small businesses that rely on wall street. the finance guys to come here for lunchtime and on a day like today, there is nobody out the place is empty i went inside to dorland's tavern and i talked to the owner. he tells me his business is off 30% this january and february, off of what is normally is even in the slow month because of the

winter weather and how does he know it was winter he is actually charted it. correlated big drops, more than 50% drops in his revenue to days when the temperature drops below 20 degrees or when there is snow and i asked why would you take the time to do that? here is what he told me. >> like most restaurant owners, we have to focus and budget and in many cases we have to explain to investors and to partners and explain to people who have money in our business, how this happens and try to give them a reason that we are doing the best but we cannot control the weather. and this is when -- particularly this winter i was determined to find a better explanation -- >> reporter: multiple flight con se -- cancellations and amtrak trains canceled. it is having an impact on the afternoon. back to you. >> thank you very much, contessa brewer this news accumulating there

keep dry. well will tariffs save steel jobs. this week cnbc we brought you in a steel factory that only had two people working in a booth and controlling everything down below and so were those jobs to foreign competition or automation and larry kudlow is rumored to be a replacement for gary cohn is he headed to the white house. we'll ask him next on "power lunch. selling brain-health supplement in drug stores nationwide. prevagen. the name to remember.

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hello, i'm sue herrera here is your cnbc update for this hour. fbi director christopher wray said cyber crime is one of the biggest threats that our government citizens and businesses face in today's high-tech world and spoke at a cybersecurity conference at boston college >> what was once a comparatively minor threat, people hacking for fun or for bragging rights or to prove some kind of point has now mushrooms into full-blown economic espionage and lucrative cyber crime so the threat is coming at us from all sides. >> british police believe a

former russian spy and his daughter were poisoned with a nerve agent and this is a low risk to the general public close circuit television shows them shopping near his home five days before at tack. and the duchess of cambridge in london, talking with children and met with a representatives of the charity which is called "place to be." the charity provides mental health services in schools across the u.k that is the news update this hour melissa, welcome back and i'll send it back downtown to you >> thank you it is great to be back sue herrera. markets right now taking a check. we're off the session lows but the dow is still down more than 200 points remember we were lower by about 349 points right now the it is down under just 1% and the s&p down by.06 % and the nasdaq is off by 12. and energy and consumer discretionary and staples are laggards and exxon and ge and caterpillar

are dragging the dow lower >> what is the impact of the resignation of gary cohn and who might replace him. there ares rumors that it could be the gentleman sitting to my left, larry kudlow let's bring in larry, the man in the spotlight and austin gullsbiwho knows a thing or two about working inside of white houses welcome to both of you let's get elephant on the table. larry, is this a job that you would like to have you have been spoken to about it and what is your response? >> to be honest, i just don't have a comment on any of it. this is all happened very rapidly. i don't know i can't comment on any of these things i'm very old school any way. we'll see what happens you know i love stash tash. >> we understand >> i love -- i'm larry's friend. and he and i go back a long way

and larry, all i'll caution you is don't put your envelope in an environment if they are not going to listen to you a guy we both know and like kevin hassette is there now and you could see from the economic report of the president how pained kevin must be with the actions that trump people are take so -- larry is not allowed to talk about it because he is a good loyal soldier but just be careful, larry a lot of us care about you and this is a tough environment. >> austin, i appreciate that you and i go back -- you were a star in the kudlow report. i think it helped you get on to these big shot jobs you have -- >> look, we have a lot of agreement. we have some disagreements too i thought you served the president very well. i think you are a class act and i mean that sincerely and i'm listening to all advice but i can't comment. it is way too soon. >> and nor should you. don't put him into a position to

get himself under trouble. >> just be careful. >> and understood. and gave him the same advice, for what it is worth not that mine is worth anything. but austin and larry, let me ask you a question that bears on tariffs. the president points out and has repeatedly said we have a very large trade deficit globally $800 billion i can't remember a time in my lifetime, austin, that the nuts has n -- that the united states has not had a large trade deficit and politicians weren't worried about it but is the size of the trade deficit traceable back to industrial and tariff policy or does it have more -- is it a red herring that has more to do with the fact that we still import a tremendous amount of oil from foreign sources and consumer products from china and asia from textiles to clothing and furniture and more >> well, i think it is a red herring. partly for the reasons you are describing but mostly the trade deficit is

a large macro thing. determined by monetary policy in the united states, how much investors want to invest here. it is not determined by specific industry trade policies and protectionism, economic isolationism is a terrible thing for the economy. could easily lead us into recession and lead to an escalating trade war and think of it this way, if the drive train or some part, if the steel in a manufacture of a car, if you stopped all imports of those products, you would reduce the trade deficit but destroy employment in the united states. because -- the auto manufacturer would say, well, geez, we don't have the parts and we'll have to shut down the line that doesn't help the economy. so i wish president trump would stop thinking about the trade deficit as the major

determineat. >> i think austan makes a lot of good points. i will say this. i want to add to this. the trade deficit is the flip side of the capital surplus. so capital is flowing in we do -- we import more than we export but both are rising because our economy is improving. but i want the capital and we need it for more savings and investment and for tax cuts and deregulation and energy, the united states becoming the most hospitable environment climate in the world and i want people to come here not just our own firms bringing cash home but other firms, foreign firms. i want them to invest in securities and new billings and plants and equipment and productivity and have more capital per worker i've had this conversation with treasurer prup a numb -- with president trump a number of times. the deficit is one thing but the

capital inflow, we have to make that point and austan, i don't know if you read greg manhugh from boston and he's written great blogs and papers and the trade gap is not a reflection of a bad economy. >> it is a reflection of prosperity. >> and he was hinting at this. the only time you get a lower trade deficit or surplus is when we are in recession and i don't think you can link -- tell me if i'm wrong, you can't relate the trade deficit to specific issues of inefficience and i'm puzzled. why is steel so bad or why do we always want to protect them? the cars have recovered. other industries have recovered. so i just think that the trade deficit is a separate animalal toigt. >> that was kind of what was driving at with my initial question. >> and i agree with you. it is not about that

and look, this thing with steel doesn't make sense the economists have researched the decline of the steel industry in the united states, ad nauseam for a long time and steel got more productive. that's why there are fewer employees in the steel industry. mini mills replaced the big old hulking steel mills. that is the main thing that drove it if you do this and if somehow we could just isolate this and it didn't lead to any trade wars, it would still be terribly inefficient. >> let me just say one quick point. >> it destroys more jobs than it creates. >> and tariffs are taxes and there are losers left and right. this is not catastrophic but i agree with the president's goals or the ways and means. one quick point, austan, you think you will like that, if this country and the congress and the president decides that the steel industry must be kept

aloft despite the fact that it is always getting -- you know what i would do? i would subsidize, i would subsidize is and try to link it to the canadian steel industry too because there is always some interlocking. >> oh, no, larry, i hear something. it is ronald reagan rolling over in his grave what are you talking about. >> it is a revolutionary thought to this -- >> if we have to, maybe we have to do it i still think that is more transparent than tariffs. >> words i never thought would you hear from larry kudlow auston, thank you. we would love to have a friend in the white house and even more to have a friend right here. >> thank you, i appreciate it. >> i love this place >> melissa. coming up, we head back to brian in houston what is on tap >> reporter: thank you very much here is the interesting thing about oil and gas, is that mutual fund investors have largely ignored the industry lately because they got so badly burned the last downturn but

capital is needed. so should investors out there stop ignoring it and what are the returns and can we get to 12 million barrels a day. the ceo of work energy will join us on just those topics right after this

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wildly optimistic projections, 12 million barrels a day in the united states and we're at a 47 year high and 10.2 million barrels aday is the money there to get us to to $12 million. >> i don't think so. when you look at the biggest concern out of fourth quarter earnings, they were focused on will companies use the increased cash flow from higher oil to grow rig count or to dividend back to shareholders or buyback stock and the companies were disciplined in fourth quarter earnings they increased dividends and announced buyback of about $7 billion or 50% of the market cap. that is what investors want. >> but that is bad for the industry good for shareholders but you are not growing and investing in the business >> the mandate for mutual funds and public market investors is for growth and profitability for growth sake. >> maybe you can't blame them. return on equity is lousy compared to the s&p 500.

>> so we've had very bad returns over ten years as a sector so it is something like negative 1% return in equity versus a ten year return on equity of s&p of 13%. so investors called times up in the spring of last year. 2017 was a transformation year for how public market investors look at the space and think that is a good thing. it makes a much more healthy oil and gas industry. >> but as an investor watching cnbc, you think well she just made the case for not investing in oil and gas because the industry doesn't know how to make any return on equity or invest in capital. >> i think you have a much more actively managed nut by financial guardians. so if you look ten years ago, 42% of oil and gas ceo's were founding and these were founders that grew shale through expansion and grew their companies through expansion. today only 15% of emp ceo's are founders and they are more disciplined people and that is much better for equity turns

overall in this business. >> but if i'm a private equity fund investing in energy, i'm salivating. >> absolutely. >> because you have hundreds of billion dollars of needed capital and the market market is not doing and it is a massive opportunity for folks like you. >> it is a huge opportunity. and as we see public companies allocate $7 billion of capital to share bye backs rather than drilling capex that means private equity will be -- >> and where are the opportunities. you introduced us to scoop stack. >> texas, new mexico and oklahoma. >> those are your low cost basins that is where you want to be. >> kate warwick, good to see you again. apple one of the biggest loser in the dow today new concerns about sales of the iphone x in china and we'll speak with one analyst who just cut first half performance estimates. how many of a bite will apple take and that is on "street talk" and that is on next. at fidelity, trades are now just $4.95.

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shares of apple down almost 1% today this after rosenblatt securities

slashed iphone numbers citing weak demand over the chinese new year great to have you with us, jun zhang. >> thanks. >> in terms of the weak demand over chinese new year what do you attribute it to? >> so we have been tracking smartphone retail data for years. based on our recent data points from china we found that it was down in february during the chinese new year also i think the feedback we got from the retail channels suggest that after media reported the cheaper iphone model which will be launched in september this year consumers might wait a few more months to buy the cheaper model instead of buying iphone x now. >> do your checks indicate there is a cheaper, larger model out this year that could cannibalize

x sales? >> yeah, i think some of the feedback we got suggests that apple could launch the new model that's going to sell at a cheaper price. >> so you cut the revenue forecasts for the first and second quarter there is a push-pull here in that you are factoring in the belief that there is going to be ipad, a new iphone which we were talking about, as well as home pod production ramps still, an overall revenue cut because of weak x demand >> yeah. i think we cut estimates mostly due to the iphone x production cuts for march and june. ipad growth will ramp in the june quarter so that off sets iphone x for the quarter. >> and you don't believe there is much upside from here, that it's dead water for the coming months 180 is the price target.

>> yeah, that's right. i think overall we think the smartphone market is already matured and, you know, if apple continues taking shares from other android oems in the second half this year and i think, you know, we need to continue to monitor the smartphone sales over the next few quarters but i believe that the iphone model in the second half could be a little bit better product than the last product that iphone launched in the last year especially iphone 8, 8 plus. so we're still positive apple. but we are cautious on the smartphone demands globally. >> in terms of the new model though, it sounds like you said it would be cheaper, larger. but in terms of cheaper does

that mean asps will come down for apple and gross margins will be under pressure? >> i think apple is working to do a lot of cost reduction on the new model including adopting lcd and probably using single camera for the new model esp, i think probably will see a little bit of pressure in the second half. >> all right we'll be watching. thanks for your time. >> no problem. all righty the markets now are moving lower, but they are off the worst levels of the session. we are going to get the beige book at the top of the hour. never has a book been more aptly titled it will move the markets, folks, or at least has the potential to stay with us to find out what's in it. coming up tonight on cnbc at 10:00 eastern time it is the premiere of "secret lives of the super rich." here's a preview of one of the

craziest closets you will ever see. >> let me show you her closet, if you can even call it a closet it was inspired and designed after a chanel boutique. you've got it made when you have a ladder in your closet. what i really want to show you is behind these closed doors it is his closet which he also calls the air jordan room. not one of these shoes has ever been worn. he has a cplely ometdifferent closet for shoes he wears every day. this is his dream come true.

welcome to "power lunch. the federal reserve out with the beige book saying the economy expanded at a modest to moderate pace across all districts steel was up because of foreign imports and foreign suppliers pulling back and, quote, expectations about potential outcomes of pending trade cases. so the threatened steel tariffs already having an effect before the president announced them because of the case that was pending. also, lumber was up due to

construction demand and, quote, the canadian lumber tax. tariffs having an impact on prices in the united states. now to the all important issue of employment and wages. employment growth was said to be moderate persistent labor market tightness was noted and brisk demand for qualified workers across several sectors construction, info, technology and manufacturing. wage growth was a moderate pace. most districts saw employers raise wages and benefit packages in response to these tight labor markets. one large retailer said he was passing along half the tax cuts to selected workers. there was commentary about the tax cuts in cleveland bankers said they were paying a $15 an hour minimum rate because of the tax cuts a montana ski resort said they were providing a way to raise wages. manufacturing increases were broad-based. the lower dollar was said to be a tail wind with tax cuts. consumer spending was mixed. the nonauto part was up in half

the districts, but auto sales were down to flat in every district -- all 12 federal reserve districts. finally, a little bit on tourism. minneapolis saw solid tourism because of the super bowl. even in philly hotels were full because of the playoffs. broadway theater ticket prices were -- volume was up 10% because of strong tourism in new york so those tariffs are already having an impact on prices, even before the steel ones are in place. back to you. >> steve, we are going to bring in our market guest, but in terms of the question of the beige book x steel and x the impact from tariffs or the threat of tariffs, is there anything that would detract from the broad consensus notion that there will be three hikes? doesn't sound like it. >> no. well, you know, i want to go away from the beige book in answering your question. >> sure. >> you had three federal reserve officials already say they are taking a look at this.

they are not ready yet to make a comment on it. one said it could reduce the number of rate hikes overall though, you're right the price rises were said to be moderate inflation moderate no impending sign of hot inflation in the beige book year but the wage information is pretty hot when it comes to what employers are saying about wages now. >> all right steve, stick around. want to bring in the chief investment strategist with bmo capital markets and the senior global equities strategist with wells fargo investment good to have you all scott, i'm just skimming through the wells fargo investment institute thoughts on trade tariffs. it sounds like the outlook for the u.s. stock market is pretty much unchanged because of the threat of tariffs. are you being too sanguine in terms of what it could mean? >> you know, a trade war is bad. face it, a real all out trade war is bad for stocks.

it's not good. we think this is largely a negotiating ploy i don't think it's what the administration is trying to do is anything different than what they tried to do with taxes or immigration or gun control so i think this is the opening salvo and really over the next couple of years trade will be brought from the back burner to the front burner so i think this will be targeted i think the administration is fine now letting people think it will be really broad-based clearly the market is a little bit worried about that wilbur ross was on cnbc earlier today. you know, this is going to be a targeted thing you know, a broad-based trade war isn't a good thing i find it difficult to believe that's what the administration would do we are still positive on the stock market we haven't changed our targets i don't anticipate us changing our targets. >> secretary ross said we are not trying to blow up the world here with the trade tariffs.

brian, if you take the notion of trade tariffs and the potential inflationary impact it could have and you toss in what steve reported about the beige book, how do you think this impacts what the fed does, if at all >> i don't think it changes much at all companies still have to put the tax cut to work. our view is nothing has really changed. second half of the year is probably when you're going to see more fundamental growth come back into the u.s. stock market as companies start to implement changes. more importantly, start to have to deal with the new demand coming in because let's face it, we have not had a cap-x cycle in america for 20 years we haven't had infrastructure for even longer than that. so i'm with mr. wren, we are we think this is largely a negotiating ploy the bark is worse than the bite. we have to take a deep breath on this i think the problem with the market is we think too binary,

melissa. yes or no. buy or sell. it's going to be something in between. i think the comparisons to the 2002 steel tariffs are not very good either. if you look at what's changed in the markets and in the economy in the last 16 years, multinational companies have become diversified, very conservative in terms of how they manage business and growth. so the impact, we believe, with respect to a very strong steel tariff is going to be diminutive relative to 15 years ago. >> we kind of know the history of how bull markets end in the united states. we do not have a lot of recent history about the effect of trade tightening or tariffs on markets because the past 70 years have basically been a period of trade liberalism as

opposed to moving in the other way. we certainly know bull markets do not end because some white house official decides to resign but, scott, is your thesis about the underlying foundation of the bull market, has it been changed at all over the last month >> it has not, ty. we've been looking for good gdp growth, not great. 2.9% we are looking for more wage pressure, not a lot. we think inflation overall will be higher, not a lot i think the market is going to continue to worry about those things and about the trade war you know, really you guys know this well. at 8:30 eastern time when we see this employment number this friday, if we see a 3 or a 3 17b9 -- 3.1 it will be an ugly

day in the stock market. 2.7, 2.6, markets will probably rally. very sensitive to those issues but we have not changed our mind we are expecting a modest 7 to 10% total return this year i think that's in line with the underlying fundamentals. >> i'm not as sanguine about the tariffs as my two fellow guests here they worry a lot of economists greatly just because wilbur ross says he doesn't intend to blow up the world doesn't mean he's not going to do that, although you could read what he says there as potential give in that if it ends up creating a trade war perhaps trump administration will back down i think this creates huge uncertainty. i just want to say in the '90s i watched the stock market and multiples expand as free trade and the breaking down of walls expanded the area of commerce for u.s. companies i feel that area of commerce

could be shrinking now i think that has uncertain impacts on multiples i'd like to see more details about the tariffs and about the responses before i wave them away with a hand if you are seeing them already show up in steel prices you could see those show up in a whole manner of prices out there. >> i have to agree, steve. thanks, guys >> thank you let's head back out to brian sullivan in houston. ihs market brian? >> you know, tyler, this is largely thought of as an oil and gas conference but it is an energy conference. the question for general motors is why are you bringing electric cars to what was an oil and gas conference that's a good question we'll get answers. the ceo of gm about ready to speak live in the room behind me we'll hear from mary barra coming up in another big exclusive. we have it all coming here for wereacafr is

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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. with gary cohn leaving the post of director of the national economic council what happens to the white house agenda over the coming months? will his departure derail anything we have the latest from washington

kayla? >> the national economic council is viewed as the most high level well stocked policy shop within the white house. it manages nearly every piece of the financial agenda the market cares about. the nec's reach is from the g-7 and apac to trade policies like a potential nafta withdrawal and writing the infrastructure proposal that's stalled now on capitol hill at an event today top senate democrat chuck schumer suggested the agenda would suffer. >> the white house is getting hollowed out the number of people capable of doing things -- real things whether you agree or disagree ideologically is getting smaller. >> in the near term the nec is spearheading key financial appointments the fed/vice chair role and the directors of the fdic and cfpb the nominations are in progress. as for personnel in house, other

exits from the nec are likely to follow cohn's but his promotion of three deputies this year is expected to stem some of the tide tyler? >> thank you very much. if you read the headlines you would think the departure of gary cohn is maybe the worst thing that could happento the trump white house, but will it impact policy? the president has pushed through tax cuts already did that last year joining us now, the director of the center for politics at the university of virginia and sarah fagan, white house political director under george w. bush. i think we agree that this is a moment to take a breath. gary cohn, important though he was, is not a cabinet secretary. he's not the vice president. he's not the president the market reaction is quite hyper ventilated here. >> well, you study the market more than i do isn't the reaction in the markets often hyper ventilating? >> surely it is. >> i don't think anybody is

surprised. i agree with what you said i think that's the correct interpretation the sky isn't falling. was gary cohn a good addition to the trump white house? yes. he was seen as one of the sane people in the senior trump circle he was one of the more moderate voices remember the last time he severely dissented from trump was in the charlottesville rioting situation last summer. he was a useful voice there. i'm sure we'll all survive >> sara, let me broaden the discussion a little bit. you have had experience working in a white house how alarming is the rate of departure from this white house to you, and what does it say about future policy or stability? what are the telltales here? >> i think this is a more stressful white house than all white houses which are stressful. that's why you see the high

turnover perhaps the lack of structure, people wondering what working there means for the future that's all part of what goes in to a decision to stay or go. as you pointed out, lots of people have left i think what it means for future policy is that just less gets done the white house pushes fewer proposals. they have fewer voices on capitol hill to promote the president's policies and that the congress plays a bigger role. we are in an election year infrastructure was stalled before gary cohn left. you know, so there is not a big agenda that's moving through congress now, at least another meaningful piece of legislation like the tax legislation was. >> right. >> so i'm not certain gary cohn's departure really means that much once we get past the hysteria of the last few days. >> larry, you study politics maybe you don't study the markets as closely as some of us doer hoo

-- do here what do you make of the fact that some of the most powerful people in the republican party in congress like mitch mcconnell, like the speaker, like senator orin hatch, oppose the tariffs. have you ever seen this kind of philosophical schism be between a president and congress and within the party >> well, i probably have to go back to the '70s and early '80s when you had a split between the conservative wing of the party led by reagan, first out of office and then in the presidency and more moderate republicans. by and large, you're right it is relatively rare. what it says to me is, first of all, there is a real difference. most traditional republicans oppose tariffs they have for a long time on principle. trump is not a traditional republican for him this is in keeping with

the way he does business the other reason is practical. they are on the ballots or some of their members are in tough races come november. they would like to keep control of the house and senate. >> right. >> they are worried the tariffs will cut against the tax bill and the good economy. >> the president said everybody wants a piece of the white house. everybody wants a piece of the oval office. he's going to have no trouble filling jobs because everybody likes to see that on their resumé i'm sure that's true but there is probably another argument here that this is an extraordinarily high turnover white house right now. do you think the president -- that there are people who would say, i don't want a piece of that >> i think that's happened already. there are countless people who looked at taking jobs in the administration who didn't take them he's right he will not have trouble filling the jobs he'll fill them by competent people people at the nec are able to do

this job however, i think where the white house will have trouble is attracting someone like a gary cohn who, just by definition of who he was says something about the white house. it gives the chattering class and the water cooler talkers to say this was a great choice. the president is thinking outside the box. he's putting a diverse team together that type of conversation goes away when you promote somebody not well known, even if they have the skills to do the job. >> thank you very much >> larry, i know you and i will be watching virginia basketball this weekend. >> absolutely. number one. >> number one! can you imagine? thanks, folks. appreciate it. melissa? >> well, with the midterms approaching tech and media are at odds of how to stem the tide of false or misleading news stories. we'll talk to the founder of court tv about fighting fake

news stay with "power lunch." hi i'm joan lunden.

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the age of social media and blogs, it's become all too easy to ub -- publish misleading or false studies with no relation to the truth and no accountability with the goal of fixing the epidemic steven bril is launching a new start-up to rate the trustworthiness of on line news sources a good housekeeping seal of approval, if you will, for news publishers welcome back great to see you. >> thanks, tyler. >> there is so much to talk about here i can't think of a single more important issue than the one you are trying to tackle how the heck are you going to do it >> it is important the way we are going to do it is by using common sense and human

beings the engineers and those who are building algorithms haven't been able to solve it we think we can use trained journalists who will review the 7500 news sites that are responsible for 98% of the news and information that's consumed and shared on line in the united states the key to getting the scale is not reviewing and judging individual articles but looking at the general reliability of the sites themselves the best example -- the denver post is a real newspaper as you know the denver guardian is a fake site posing as a newspaper that went online with hoax articles right before the elections in november we will have red, yellow, and green ratings up for all 7500 sites before the midterm

elections. we'll have a s.w.a.t. team that will work on a 24/7 basis. that way if some site is suddenly trending because it was started the day before yesterday by some teenager in macedonia, we will wrestle that to the ground, too. what we are doing is simple. it's common sense, not getting into the nuances of whether this article in the "new york times" was accurate and that one wasn't or whether the boston globe is more reliable than the boston herald. >> so it's not a fact-checking site >> no. >> i want to bring in melissa lee for a question. >> yeah. steven, it's an honorable mission. how do you keep the mission pure in other words, how will you stay in business, make money and make sure it doesn't interfere -- the judgment you're putting on these different sites? >> when it comes to making money, the way we are going to do it is we anticipate getting

the various platforms and the search services to license our data so our red, yellow and greens and with them a nutrition label of 200 or 300 words describing the history and who is behind each site, who finances it, what their awards are, what their demerits are we expect the platforms and the search services to be willing to pay for the license to use that data we're going to ask them to pay a fraction of what they are paying their p.r. people and lobbyists to talk about how hard the problem is our business model is not the standard & poor's business model of asking those we rate to pay us because we think that's an obvious conflict as you know we are very encouraged in our conversations with the platforms, the search services, and other ago -- aggregators of

ne news. >> thank you again. >> thank you for having me. >> you bet >> melissa >> let's go back to brian in texas. >> thank you very much, my work sister i appreciate that. that sentence will make sense in a few minutes. we'll hear from general motors ceo mary barra she's wrapping up a big lunchtime speech we'll hear from her on cnbc coming up next feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

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. good morning, everyone -- good afternoon, everyone i'm sue herera with your news update this hour president trump telling an audience of hispanic business owners his immigration reform ideas are the main stream view of americans claiming that democrats are stonewalling to score political points >> we have a lot of victories. a lot. we are trying to have a daca victory for everybody, by the way. democrats are nowhere to be found. [ applause ] >> really terrible we are ready

>> florida high school shooting suspect nikolas cruz has been charged with 17 counts of murder and 17 counts of attempted murder it could mean the death sentence if he is convicted cruz's public defender said he'll plead guilty if the death sentence is taken off the table. representatives for the new hampshire woman who won a half a billion dollar powerball jackpot claimed her prize today. the woman asked a judge to let her remain anonymousdespite signing the back of the ticket the state lottery commission said it is obligated to release her name that's the news update this hour melissa, back to you. >> thank you we want to check on the markets now. interesting action the dow had been down by nearly 350 points but has rebounded off the lows now down by 209 points the s&p is off by half a percent or 12.5 points the nasdaq trying to get back into the green here.

it is basically flat now a real outperformer helping the nasdaq facebook which is up by 1.5% sectors in the red energy, consumer staples, discretionary and names in the red. dollar tree, kroger, ross stores and brown-forman stocks dragging down the dow, exxon, g.e., caterpillar >> the market is closing for the day. let's go to the commodities desk. >> energy was in the red and took another leg lower prices for both wti, west texas intermediate and brent crude did get more volatile around 10:30 a.m. eastern time when government inventory data showed crude inventories did rise last week, but not by as much as analysts forecast. you started to see oil prices hit the highest levels of the day. traders noted part of the rise could have been a rush to close out bets on an oil price drop. it's concerns about more inventory, rising u.s.

production that could keep oil prices relatively depressed. we'll see if it plays out. traders will keep eyes and ears on the latest coming out of the conference down in houston as well speaking of which, that's where we find brian sullivan down there in houston we'll send it back over to you >> the magic of television he mentions it and they come to me amazing. thank you, dom just behind us, mary barra is wrapping up a major speech where she's breaking news. they are increasing production of the all electric bolt remember, they have talked about an all electric world. we had a chance to sit down with mary barra a few minutes earlier. we began by asking whether or not she's concerned about the white house and business now that gary cohn is leaving. >> well, i think very highly of gary cohn. i consider him to be, you know, a smart person who understands markets and how things work.

one of the things i think has been very important that i have seen with the administration is they listen. when you look at a complicated issue like nafta and autos are important in nafta we have provided a lot of information to explain the complexities of the supply chain, the potential unintended consequences so i think the listening part is important. >> do you believe nafta will be altered or ripped up >> i think we support nafta being modernized i think there is constructive ways to do that that's going to improve nafta. that's my hope that's what we continue to provide input to ensure happens. >> how do you define modernize what would you change? >> when you look at how technology is affecting cars and how components have changed when you think about nafta 25 years ago, think about the technology that's in a car today, there are rules and things we can modernize with tracing, et cetera, that will make less of an administrative burden but still accomplish what the administration and the three

countries need. >> do you believe we'll get imported steel tariffs if so, what would it mean for the price of a general motors car? >> for general motors specifically we source about 90% of our steel and the majority of our aluminum from the united states when i look at the specific impact that's something we can more than offset you have to look at if changes occur that drive the cost up, it will have a direct impact on demand because there is an affordability issue with cars. we have to stay cognizant of that if there is an increase to the point people stop buying cars and buy used that will affect jobs. >> do you believe it will increase -- have you done studies that would jump the price of a general motors silverado by a hundred dollars is there a gauge >> when we look at it, it's a small impact we would look to find off sets and efficiencies to not have to pass it on to the customer tell me exactly what will happen

and we'll figure out what the outcome should be. >> everywhere in the world we' your products. do you worry about a trade war >> of course what we want at general motors, i believe we have the strongest products we have had across the globe in the markets we compete. give us a level playing field. let us compete and we'll win the customer. >> this conference is an oil and gas conference you have a fleet of electric cars rolling around somewhere here why is gm bringing an electric car to an oil and gas conference itching for a fight, i think. >> i think it is an energy conference. >> okay. they would say that, too. >> we have to work together to find the right solutions general motors believes in an all electric future. we are working toward a goal with zero crashes, zero emissions and zero congestion. we have to work to have the products to drive down the costs. it's important for the globe. >> let's talk about growth we had the ceo of saudi aramco

and he said, listen, it will be an oil world for generations to come e.v.s have a role but they are so small even at fast growth they are not going to be a huge part of the transportation fleet market globally for decades. do you disagree? >> i think it will happen more quickly than decades i do believe internal combustion engines will be here for a long time we are working with every new vehicle to make those vehicles more fuel efficient to use technology so they can be, you know, more fuel efficient, better for the environment when you look at the growth, we have announced we'll have more than 20 e.v.s by 2023. when you look at places like china where there is a portion that's regulatory driven and i looked at a really important data point whether you are talking about the chevrolet volt or the tv that's are satisfied customers as more people recognize we have the right range, understand that

we have a charging infrastructure so they don't think they are going to be stranded. >> yes. >> i think you will see e.v. adoption continue. >> you're making news by saying increased production of the volt. >> absolutely. we are excited about it. we had strong feedback from customers on the chevrolet volt e.v. we are increasing production. >> from what to what >> we haven't given specific numbers. but we are reacting to customer interest and demand. >> theoretically could it bring new jobs >> of course in that factory and it is being done at the lake orion plant north of detroit that means additional jobs. >> we asked the ceo of b.p. the same question yesterday. what is the role of the industry in building out the infrastructure i like gasoline cars because we know there will be a filling station somewhere nearby what's gm's role in building out the infrastructure so the consumer nopes wherever i go

i've got -- knows wherever i go i have a place to recharge. >> you've got to have good consumer confidence that they can drive the vehicle and it will support their hectic life of what they are doing we see a role in investing, partnering, making sure that the customer need is fulfilled i don't have anything to announce today we are working on potential partnerships and also on what we need to do we believe the infrastructure piece of it is very important. a lot of people don't realize there are already 17,000 public charging stations in the united states. >> that are that many? >> there is. >> do you see a role in the industry some say the government should do it. or private industry should do it who pays >> we all have to work together. i don't think it is one answer there will be multiple solutions and everybody's got to play a role. >> i saw an amazing stat correct me if i'm wrong. 2.6 billion miles driven by a gm e.v., correct? >> yes. >> that's a lot of miles.

>> it is >> what have you learned i know you're collecting data constantly. >> absolutely. what we are learning is that the e.v. customer loves their vehicle. they love the fact that they can -- many of them charge at home or find places to charge while they are at work i think it's 80% of most people, their travel is less than 25 miles. they get to a point where they are always on electric power if it is a hybrid like the volt or on the e.v., of course so they are recognizing that they are not giving anything up. the other part that's really -- people think they have to give something up is it's fun to drive. >> lot of torque. >> the torque is right there. >> no combustion lag. >> they're fun >> what is the car of the future you said an all electric future. will it have a little gas engine just in case as an alternator? how will it look >> we see an all electric future we have the volt that has both

but going forward we see pure electric vehicles. >> as you noted we are at an energy conference. it means if everyone is rolling around in an e.v., we are going to need to produce a lot more power. do you worry we won't have the needed investments in the energy grid, the infrastructure to add all the power so i can plug in my car at home >> we have worked with a lot of energy companies on the issue. we have to make sure and we can do it in a cost effective way and also that it's clean power. >> will we own cars in the future if somebody has a 5-year-old when he or she grows up will they own a car or share a fleet of gm electric vehicles? >> i hope they do. i think we already have the book by cadillac we are offering different models for people put the customer in the center we can provide almost an unlimited amount of solutions to make their transportation needs as efficient as possible that's what we are doing at general motors. >> a lot of the stuff is made in america.

expanding, but you make a lot in mexico as well on this issue we'll start and end with this. have you looked at a scenario where you have to pull production out of mexico back to the united states? >> when you look -- you're referring to nafta i believe when you look at the complexity and the long lead business we're in, those shifts aren't economical. when we put in a plant we use it two, three cycles. so it's just not efficient. >> what do you drive >> one of the best -- >> do you have cars? access to automobiles? >> one of the best parts of my job is i can drive almost any product we have. i try to drive all of them right now it's winter in michigan so i'm driving a cadillac escalade >> obviously do you have access to cars was tongue in cheek. but upping the production of the volt could bring more jobs commenting on nafta, certainly a few companies out there are maybe more global or have more

metal or dealings with canada and mexico than general motors. >> no gaming outwhat could happen to their production facilities in mexico or at least that she was willing to share with you about what they might do with the mexican production >> that's correct. again, it is a question that phil lebeau will continue to ask. we'll see what happens with the trade deals, particularly nafta. gm makes cars in canada as well as mexico. they are on all sides, tyler, of the nafta debate. >> thank you very much brian sullivan in houston. melissa? >> we have a news alert on snap. julia has the details. >> snap is ready to lay off about a hundred engineers, less than 10% of the engineering team this news reported first by cheddar. snap declined comment. for context snap has more than 3,000 employees. snap shares were up today. they have given up the gains now they are pretty much flat.

back to you, tyler. >> julia, thank you very much. the dow still down triple digits back into negative territory for the year this is a day of consequence are the markets overreacting to the exit of gary cohn? that story and more when "power lunch" returns

following gary cohn's resignation today as president's top economic adviser we want more on the impact of the markets and bring in chief investment officer jack ablin and o'neal securities director kenny fulcari on the floor of the new york stock exchange. you think this is no big deal? why are you whistling past the graveyard. trade wars aren't good for stocks. >> no. i'm not sure it's not a negative i think it is. although i think one person as much as gary cohn is well liked, as much as the industry likes him and he's pro business he's not the only person that can

fill the role. i don't think anybody should be surprised. he had been hinting after tax reform he had it with the job. i think this gave him the opportunity. he was anti-tariffs. he made it clear if trump pushed forward he would resign. trump pushed forward therefore he resigned. >> jack, according to what i'm reading you're in the same camp in that you think the reaction is overblown do you go in and buy what he was performing so well it's dragging on boeing and caterpillar? >> i would use it as a buying opportunity for the short term i don't think that gary's resignation increased the chance of tariffs being imposed it was a communication issue you have steve mnuchin and wilbur ross falling in line on the communications side and cohn was unwilling to do that i don't think -- there is a lot of rhetoric, tweets going

around i don't think that necessarily is going to amount to a heck of a lot when it comes to the final trade treaties that are signed >> there is a lot of research going around on the street today from economists who are basically outlining the potential impact tariffs could have on the economy. they are not positive at all yet there is a disconnect between what they see and what investors are seeing today at what point do you think maybe they've got something there. maybe it's time to start worrying >> i would say that any kind of disruptive trade, either a trade war or tit for tat tariffs or sanctions is the risk in this market we have pretty much come into alignment on the economy >> jack, i'm sorry to interrupt. we have breaking news. we want to go to eamon javers in washington >> sarah huckabee sanders is in

the press briefing room and said the president is expected to sign the tariffs we have been talking about since last week by the end of the week this week. the "new york times" posted a story a few minutes ago saying the signing ceremony will take place at noon tomorrow my reporting thursday or friday as it is a fluid situation here, and the times saying that's going to happen as early as noon tomorrow, and the president might have a two week implementation period on the new tariffs once they are officially signed, so there could be additional lobbying and potential to add some wiggle room here. you have seen some of the administration officials coming out today to talk about this, talking about flexibility, talking about not wants to start a trade war, and you get the sense there might be a little bit more wiggle room here than had initially been implied by administration officials, but the "times" reporting noon tomorrow, and the briefing room, sometime between now and the end of the week. melissa? >> all right, eamon, thank you so much. gentlemen, sorry for cutting you short for the breaking news,

jack and kenny >> my pleasure all righty, believe it or not, retail, yes, retail is the top performing s&p sector so far this year, up 15%, so should you shop for retail stocks debating which ones might veha room in the aisles to run. straight ahead on "power lunch." whoooo. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews.

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i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know you didn't cut off the light. the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls. together, we're building a better california.

time for trading nation, retail is taking a hit this day, but believe it or not, the group is the best performing, best performing s&p industry group so far this year, and larry mcdonald is here of the bear traps report, and boris with bk asset management what's the outlook here? do i dare go there, mr. bear trap >> yes the best risk-reward is the home building side, home improvement retail ers that's filled with retailers in the home building space. this regulatory relief bill in washington is historic for those across the country, they are going to have a wind fall of lending capacity that's going to increase after this legislation

is going to be passed, 17 democrats are now supporting this legislation with republicans. this is historic, and you want to get long on the xhb retailers in the home building space >> all right, boris, larry says home builders, what says you >> the story is deceiving. the actual return is negative 77 points, so it's really the story of new retail meeting old retail there's been improvements with kohl's and target, and i think overall, the retailers are getting religion at this point and starting to improve their performance, so i don't think the story there is over, but it's really not a story of brick and mortar comeback, but retail outperforming. >> thank you very much, for more trading nation, go to the tradingnation cnbc.com check, please, is next and now, the latest from

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check, please. welcome back to "power lunch," check, please, guys, mine is this, a big theme talked about is, will it be an all-electric world? one says no, gas cars last for decades to come, and maybe the answer is somewhere in the middle, but keep it all electric, we have to produce a huge amount of power globely, which is liquids, and natural gas is the quickest ways to power plants if you need an electric car, you need electricity, that comes from nat gas it'll be fine. >> absolutely. great stuff from the conference. tonight on "fast money," there was breaking news, gary cohen resigned we count get to the ceo, brad garlinghouse, he'll talk tonight

at 5:00. >> i thought ripple was just a fortified wine that people used to drink p n not so anymore. >> or a chip >> i'm interesting in the fact the russell is up a half percent. may be worth paying attention to in an era of trade conflict, small caps, domestics might do better melissa. >> closing bell starts right now. >> this is video shot just a short time ago from right here in new york city where we are expecting a foot or more of snow the wind is really whipping up we've heard thunder, also. i'm michelle caruso-cabrera in for kelly evans smart enough not to come in today >> i had no idea this was happening today. i'm bill griffeth at the new york stock exchange expecting a foot of snow the dow is down 350 points at the low, after news