the last few months, i think a good earnings report could propel it higher. >> i have my tractor ready >> you better. >> i agree with jimmy's comments before a energy. xle and fang, two names to look at stock is up, clearly a lot of focus on tech, too. so much more now. >> i'm michelle caruso-cabrera here's what's on the "power lunch" menu. facebook fallout the sort media giant holding an emergency meeting at this hour to address the latest scandal. the stock tumbling yet, so far, radio silence from ceo mark zuckerberg. we have the latest straight ahead. big data, the cloud, block chain, a.i., gin ny ra metti wih an exclusive interview minutes away. what matt when driverless cars get confused? you get an actual driver, but

not in the car are you confused you have to see this with phil lebeau fasting your seat belts. "power lunch" starts right now investors are flees facebook that's on top of yesterday's 7% decline. zuckerberg has now lost 9 billion in wealth. stocks are holding up. decent gains ahead of the fed's two-day meeting, and check out the price of oil cruel is rallies this hour.

one person has injured after a package bound for austin texas exploded at a fedex facility federal agents say the attacks are linkenedred. mean time shares of mulesoft, there are reports that salesforce is in talks to invest in it. and amazon has reportedly looked at the possibility of expanding the retail footprint by snapping up some locations from the bankrupt toys "r" us chain.

julia boorstin is looking at how facebook is handling the --, d.c. and the uk coming after facebook lastly bob pisani on the markets. are they being de-fanged as a result julia we start with you. it's my understandings that ceo mark zuckerberg is not expected to -- >> facebook shares droppings another 5% today is it does not have an indication of a formal probe the ftc says cannot comments on whether we are investigating.

wall street is evaluating the fallout. a lot of analysts maintains buyers saying they don't expect significant impact george fang sis the biggest impact would be -- to gather and deploy data. jpmorgan says it's critical for facebook and large tech overall to proactively -- rather than regulatory bodies. tyler, back over to you. >> julia, thank you. whether users will abandon facebook over this issue remains to be seen, of course, but potential government regulation may be an even bigger cloud over the company. kayla tausche is in washington

the house and senate judiciary committees, house committee, and the senate commerce committee. what's what a -- but no world on which relate, they favored a light tough so far. >> so far the regulation has simply targeted disclosure in the u.s. a senate pror proposal would require political ads to be publicly cataloged, but one of the sponsors off camera called that just a first pep. a european commission study suggested that more paid content

by more clearly labeled. the eu is having a -- to combat disinformation you can bet this new development will figure prominently. back to you. >> thank you, kayla. >> bob pisani is at the new york stock exchange bob, it looks like stability in the marketplace even though facebook is being bid lower today. >> but there's a lot of underlying damage. social media in general as a group was a huge mover last year it not being a market leader is now causing tech to sort of drop off. that's a problem okay oil is up about 2%, but folks, this hasn't happened in a long time.

>> can you see continuing fallout from the whole social 3450edia crisis. why does facebook matter >> it's because the market bought that, this is all the big sort media names, including, of course, facebook that was up 50% last year. >> what i can tell you right now is losing so much media is causing temperature to fall out everyone because tech and financials were the two big ones, now they're not for the last couple weeks, but not energy, not discretionary, and you see there's a leadership vacuum right now what will power the markets

forward? >> he'll be very, very calm and moderate in decisions of any rate increases out there and much higher political ritz, a lot of things to talk about, tyler. back to you. what is your simple explanation? >> i'm not sure i have an explanation. i would say we have seen center

prices very depressed despite the fact we have oil back up to over $63 a barrel. those are starting to move today. we like a few of those, namely chevron and sschlumberger. we've seen financials not doing so welllately, though the specter of rising interest rates is very positive for financial stock. earlier today, they were up, they've been given back a bit, but we like suntrust, air lease, pinnacle financial partners. i think that yesterday was oversold, people were getting too involved in this facebook naivete, if you will, and, you know, the fact that the data is used, manipulated, fed back to us in another form so we're going to see the cybersecurity stocks up today. it's no surprise to me

facebook has been one of the bell cows of this market for a long, long time. if it isn't anymore, what does that do to the broader indexes of which it's a constituent? >>r rwell, this definitely is something that you can't narrow down to facebook just the fact that a lot of these disruptor type tech companies might have some challenges going forward the fact that the tech sector has been a pillar leading is the market upward during thinks bull market run, specifically over the last year, so the fact ear losing that pillar is a concern, but at the same time what the markets i believe are focused on is not just the lack of leadership in tech, but also looking forward to the fed meetings this week, is something that, you know, if you do see a

bit more of a hawkish view, that could lead to more market volatility, as well as the continued revolving door of personnel within the white house and like wise the talk of tariffs. it suggests increases in volatility within that framework, one of the things we're telling our clients is one way to mute that level of volatility would be to probably focus on dividend-paying stocks you know, from dividends, you know, payouts are always positives whereas gains are positive and negative. >> mary ann, in terms of valuations, it seemed like yesterday the real question was, is the market priced to what could be four rate hikes this year do you think after yesterday's pre-powell puke, if you want to call it that, that stocks

reflect that already, that was sort of a tantrum that gets us through the valuation question, here we are, and we're going to wait to see what he says >> i think that we just need to look at the fact that it is large-cap growth leading the markets. we have a lot of lower volatility stocks such as financials that have been underperforming, and we are looking to reduce that level of volatility, just, you know, investors have an innate aversion to volatility, so we probably have reached that point where we think we'll see a rotation into the lower volatility names, and, again, as he was saying, you know, they tend to pay dividends, they tend to, you know, give you a return, and, you know, of 228 on a dow chemical is a good sleep well at night type of stock, so with the markets have been gone from

volatility of 9 last fall to about 20 these days, i think people have reached that tipping point in valuations, and they want to get lower valuations and to sleep well at night. >> mary ann, thank you, byrnes, thank you. we appreciate your time. >> the do you has rallied in the past year nearly up 20%. ibm was down 11% up next, an exclusive interview with the ceo, what she's dngoi, and what will she say about block chain? "power lunch" will be right back i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

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lunch. let's go back to las vegas >> i'm here with ginni rometty thanks for being with us. >> thank you for being here, too. i want to ask you about, one of the biggest stories we're covering this week you guys managed so much data. how do you make sure it's properly protected >> you're right. i just walked off the main stage. this was a topic that we had up there. i mean, i covered three things one about the inflection point for clients, we can come back to that, but the second was how

important it is about data truth and respond. we spoke about this. we are very clear about this moment i think with data, this is going to be an opportunity of our lifetime, but it can be an issue. so we've been very clear. >> it's not only a tech company, every company has to abidely those rules. >> expanding to the rest of technology, do you think that regulator

regulators. >> i am always a believer that this is about principles and a pledge >> we have made a commitment and built built our a.i., if you are as a bank, your dastays with you people will work with who they trust. society and companies will decide who they trust. >> do you think this is an opportunity, especially tech companies start to confront these issues. >> yes, in one hand we focus on the innovative technologies. the tech part would be about the industry expertise to make them go to work for you, and the third is trust and security.

it's also the security of what we provide we manage 40 billions a day. but when we came out with our new main fran, it enscripts everything only 40% of the data is encrypted, believe it or not you could encrypt everything with no added cost -- >> so is facebook doing enough, you think? >> all companies have to do more on this front. i also believe the future is going to be when you enter quantum, we're working on methods -- i think it is not just tech. every company has to be very clear, opt in, opt out, you have to be very clear and clear on how you steward security. >> last quash you guys painted it as a victory.

>> the point was that i'm really proud, the work we have repositioned this company, it's a different company than ten, five, three years ago. the point being 46% of what we make today are growing 11% and new to the ibm and a strong pipeline behind it, block chain, quantum. the second part, the skills, 60% of the ibmers are new to the company. it goes on this is where your

question comes in. you know, first off, for those watching that don't look at us all the time the gross profit margins were -- this is not being about a low margin company it's about continues to move that up. we've got investing. now that margin question is about -- we talked about this year margins will stabilize. that's free cash flow, it went up, return to growth >> and as you talk about this transformation, it's called strategic xwesh tiff block chain you mentioned. when will you starred to give us more revenues? i think that's what a lot of people want to know. how much is it contributing or not? >> you know, first after watson has been a part of our big analytic segment

you see it, clients here, whether it was royal bank of canada, whether it was verizon, american airlines, both the ebm cloud and watson, it's a silver credit through so many things, one after another are up on the stage talking about it it doesn't always go by the name of watson. royal bank of canada calls it ava. that's what's inside it is the silver threat with our products and others, but your point about our strategic comparatives are not 46% of ibm, 37 billion growing at 11%. that's a key piece of it we're going to continue down that path. i think it's important we made a commitment about those being at least 40 billion this year, finish that up. >> are there plans to ever break it out then? >> not -- i think we'll decide if and when it's needed. today we made a bunch of announcement, if you haven't

seen, the biggest one with apple. 16 million apple developers have core ml. that's what apple uses for machine learning, goes right to watson that's a big announcement as well as watson studio and assistant. >> i do want to get your take on another big topic, tha tariffs. do they worry you? >> you would not be surprised that we're a strong supporter of global trade our view is all companies and all people have benefited. i also believe the way you solve that is through good dialogue. you have dave mckie up next. >> and you were on the advisory council. do you still talk to him >> i've been so clear, this is about engagement there it's the data topic,

whether it's policy issues, the best route is engagement that's how things change in this country, by engagement. >> ginni, thank you for being with us. guys, back over to you thanks very much, folks. coming up, the northeast is bracing for yet another snowstorm. yippee we will get the latest forecast from the weather channel, blue the shadowy company at the source of the scandal. what is cambridge analytica. we'll explain it all when "power lunch" returns hi i'm joan lunden.

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well k. the calendar says it's the first day of spring, folks, but it feels more like january, early february. a big snowstorm headed to the northeast,and the weather channel's chris warren joins us now. chris, tell us about it. >> can you believe it? here we go again there could be another one early next week. we won't get into that right now. this is a teaser this is the main action right here that will work through the northeast. look at how much snow is going to come down for some areas. in many areas potentially more than a foot of snow. a foot to even a foot and a half of snow is going to be possibility for new york city and long island. michelle, if central park ends up getting a foot of snow, that would be the most snow on record for springtime, the biggest

springtime snowstorm >> it's too late in the year for this kind of weather we're all very unhappy about it. good to have you. >> thank you. more on the facebook fallout, the stock sinking for a second straight day. we'll talk to an insider about the culture, a wthndheer mark zuckerberg is the right person to lead facebook "power lunch" will be right back ♪ slap on some cologne ♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo. ...with its high-tech cameras and radar...

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hello, everyone. i'm sue herera here's your cnbc news update for this hour. law enforcement officials say the student shooter at a maryland high school has died after a school resource officer returned fire. at least two students were wounded during that shooting, one of those students is now in critical condition the authorities just moments ago identified the shooter as austin wyatt rawlins, 17 years old. police have found a second bomb at the fedex facility in san antonio just a short time ago. this follows a package bomb believed to be linked to the recent bombings in austin,

texas, which exploded this morning inside that same distribution center. that blast leaving one worker with minor injuries, the white house releasing a statement saying there is no known link to terrorism at this time. president trump confirming he called russian president vladimir putin to congratulate him on his recent election victory earlier this morning among the topics discussed, future economic cooperation and russia/u.s. tensions. it is not just politics for peter theel, he's not investing in a new professional football team the league alliance of american football plans to debut one week after super bowl liii. that's the new update this hour melissa, back to you. >> we want a check on the markets right now. we have some important moves here energy is your sector leader and the dow jones industrial average is now negative for the

year >> a lot of people confused about the relationship between cambridge analytica and facebook this is based on the "new york times" investigative piece, which is based on a whistle-blower from cambridge analytica. there's an academic at cambridge named alexander cogan, and he creates an app there is no spaces in the title. a year later, he teams up with cambridge analytica, and they start paying people to download the app, use it and take the personality test that's on there. here is what's key about that app. it's not just the people who download the app and take the test that they can get information on they also start to scrape the facebook friends of everybody who used that app, and then according to facebook, they retained that data

2016 cambridge annual l littica that whistle-blower that we talked about, finally his story gets published in the "new york times," and facebook suspends cambridge analytica's accounts who better to speak to than someone who knows the ins and outs let's bring in kevin knight. kevin, good to have you here >> thank you for having me >> can you tell me what kind of data would came bring analytica have on the friends of the people who use this a.m.

>> generally this kind of data is the things that would be interesting to an advertiser if you were looking to understand if somebody might be interested in this type of furnace. it's what they refer to as -- their age, that is gender, it's going to be put on facebook to share with their friends up shopping centers, things like that >> so facebook has said the reason app developers were allowed to scrape data was only to make the app more usable, and that what has since happened, which is alleged in the papers, there was a violation when they transferred the data do i understand that correctly am i articulating that policy correctly?

>> yeah. that sounds exactly right. it's about, if you have a person using an app from facebook, or that was built on the facebook platform by an app developer, and their friends might be interested in using that app as well, then you can make the app social if you can pull those friends into the app as well so it was designed to make apps social, to make them interactive, to extend the facebook experience into these app and yeah the violation here is a violation of policy. >> have you reads all of the arguments, "new york times" piece, the stuff coming out of the -- and what do you think of everything you have read >> there's a conphrase here of a few different things one is the incredible mistrust of advertising in general, people are wary of the motivations of advertisersand platforms that make money off of them the second is the incredible influence that facebook has in the lives of billions of people every single day the third is people's angst over

the 2016 election and the perception that we have been manipulated, and that facebook and the way that information was discement nated played a role in that so i think there's a lot of fear here i think there's a lot of facts that remain to be uncovered. i think that's why we're not seeing executives step up and makes statements about this, but generally i think there is a risk here that we have a near-jerk reaction against the wrong thing. people should not and companies should not be able to share that data, but the fact that people do share their data on places like facebook does make it a much more interesting and compelling experience for users who gets that experience for free >> let me make sure i understand the chain of custody an app developer gets you to use the app. the app allows the app developer to collect data on your friends, okay

and then did that app developer sell other share that collected data with this intelligence firm cambridge annualytica, and if tt is on right, where is facebook's foul in this >> i think -- that is right. the problem here is the app developer sold the data to the advertiser as you say. they're not allowed to do that that's why they've been sudden down that's why facebook demanded that certification that the data had been deleted facebook isn't completely without fault here, of course, and i think the reason for that is when people go to facebook and they put their personal data on here, they don't have a full understanding of how that data might be used. facebook needs tore more transparent about that if you look back in the early

days of facebook, it was very difficult to see the privacy levering you could pull. if you posted something, it will almost impossible to who you were sharing that with facebook has made that easier and easier over the years, and if facebook wants to avoid regulation, if they want to avoid people leaving the platform because of the outrageous fears, they need to do an even better job of making this transparent, and even more user-friendly. >> kevin, i understand this might be a voyles of facebook's current policy, that sale of the data to a firm like cambridge analytica, but are consumers aware that may even happen it seems like there's no way to make sure when facebook allows an app developer to collect data like that, that it ends there. there's no way to sort of track that data throughout cyberspace and make sure it doesn't land in anybody else's hands for that reason, that policy seems really lame.

>> yeah, they need to do a better job of that, of course. when people sign up for an app, there is a dialogue box that pops up and set the app developer, if you choose to move forward, will get assist to this data about you, but, of course, a lot of people don't read that. that's kind of what i mean, that they need to make it more transparent. >> is it that we don't know what happens to the data when it's in the appear developer's hands, or is it understood that that data goes there and nowhere else. facebook cannot ensure that the data goes nowhere else. >> that's right. that's what i think facebook needs to beef up here. they need to beef up the enforcement of the policies, the understanding for these app developers are the ramifications if he this violate the policies. if they've been clear about that potentially this data would never have been sold to cambridge analytica. as you say, there is no way to

track this in a user-friendly way. so i think they'll have to rely to some extent on policies, but the extent to which those are enforced and how facebook reacts in enforcing these, making the policies more transparent, is what people will be watching. >> when it comes to facebook's reaction, why haven't we heard from mark zhukker ber zuckerbers so many facts coming to light even now as we speak there's the investigation going on in the uk, there's forensic auditors that auditors have hired. there's a lot of he says/she says going on. in order for mark zuckerberg to give the statement that will aswage stakeholders and mike people feel comfortable. there needs to be the third parties including the government to complete the investigation and ensure there's an unbiased

review of the facts. otherwise it would be perceived as spin, and the reality is nobody knows all of the facts because of this hearsay going on >> kevin, how much did you interact with mark zuckerberg when you were there? >> not a lot i joined the company in 2010 there was about 2,000 employees. he did week le town has. i had more interaction with sheryl sandberg. what i saw was generally the people outside the building assumed the worst of what was going inside the building. as i had exposure to these executives and thought processes, and decision-making, i almost always found that the perception of what was going on and what was really going on were very, very different. i'm optimistic that when the facts come to light and the company steps forward and makes their public declarations on

this that they'll be able to aswaj a lot of the concerns. that said it's a big deal when somebody violates the policies, and facebook did facilitate that, so they're not without blame. >> thank you, kevin. we would also like the audience to weigh in are you going to stop using facebook because she share so much data with outside companies. take or twitter poll, and we're going to have the results later in the show. and to the bond market we go rick santelli is there at the cme. hi, rick. >> hi, tyler you can almost feel feel it's the first day of a two-day fed market meeting we're at 287, up one basis point, 87 and 288 is about all i've seen for hours and hours. we're in the elevated part of what now is 18 trading days with

settlements in the 280s. here we are the day before a fed rate hike most likely outcome and we're up a bit we're just a whisker shy of 229, which means we're only six basis points away from challenging 29 year wides on that relationship. once again it's failed around 90 1/2 look at the one-week chart it's midpoint for the year on and closing dollar, and it seems to be big resistance mostly sideways the last couple weeks. melissa lee, back to you. >> rick, thank you. facebook or the fed. what is are markets most concerned about? the dow is in the green right now. much more markets coming up. plus president trump means the crown prcein, the latest on the meeting when "power lunch"

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that's lesson one. education to take your trading to the next level. only with td ameritrade. s. the saudi prince wrapping up a visit with president trump at the white house. aim eamon javers is live there. >> what did they talk about? the president even inviting a press pool in to have a look at the working lunch. there you see the two men in the oval office. between the two countries. here's what the president had to say on the visit here. >> saudi arabia is a very wealthy nation, they're going to give the united states some of that wealth hopefully, in the

form of jobs and the perform of the finest military equipment. also making some news in that session, which is that he's going to be meeting with vladimir putin at some point in the future he wants to discuss the arms race that is in the wakes and could defeat u.s. missiles defenses. news on another topic there, as the president welcome the crown prince to the white house. >> thanks, eamon >> mo more on his visit. let let's. >> thank you for having me. what is the prince's number within order >> that the u.s. takes a very tough line on iran

>> so what would he say? >> i think he would talk up the regional threat. i think he would certainly be encouraging trump to potential pull out trump has to make a decision on whether to extend waivers for sanctions. and if we pull out of that sanctions waiver, we're out of the deal. >> the president sounded like he was pulling out of it. >> the elevation of mike pompeii i don't signaled that the united states would be pulling out of that agreement he's been very critical of the nuclear deal, called iran the biggest state sponsor of terrorism. >> donald trump was explicit that one of his biggest disagreements was about this particular deal that tillerson wanted to extend it. the president didn't >> yes. >> is he going to convince the

investors there's enough rule of law to invest there, that the people put in this so-called prison >> i think he's legals with the release of most, that they'll be able to turn the page on that. it's all vision 2030 saudi arabia open for business and stressing the reforms that are taking place there, particularly the social reforms. >> how does it tie into, in terms of convincing investors, it's a safe play to invest, how does it connect with the delay of the saudi aramco. >> you had people talking about a local listing first and then the question is do you do private placement in asia along with a local listing before international? i think the regulatory challenges of international listing remain a very heavy hurdle for aramco. >> it's an opaque company. >> it performed many functions of state, housing, stadiums.

it was really what funded the saudi state machinery. disentangling that is going to be challenging >> so fused to the balance sheet of the country together, it's incredibly difficult thank you. >> thank you >> does the idea of being chauffeured around in a car with no driver make you a little nervous? what about the idea of someone driving your car with a remote control? >> that's worse. >> my 12-year-old. that's what's happening with phil lebeau right now. phil >> tyler, i have done a lot of cool live shots, but this may be the coolest. we're in a phantom auto driverless test vehicle. and i'm not going to be controlling it the car won't be controlling itself it will be driven by a remote operator and why might this be the key to the future of autonomous dveri vehicles we'll explain when "power lunch" returns. sometimes, they just drop in. cme group can help you navigate risks

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the fatal accident involving a self-driving uber car is raising new concerns about the future of autonomous vehicles. phil lebeau joins us from mountain view, california, in the back seat of a driverless car. phil lebeau has probably spent more time in autonomous cars than any human being phil >> thank you, tyler. i'm here in phantom auto's test

vehicle. now, this is a driveless test vehicle, but the founder and ceo of phantom autos is there for safety reasons because we have inclement weather and we want to make sure there are no issues as we're going around west assured, he's not driving the car. you see, he doesn't have his hands on the steering wheel. the person driving, he is back there, brian and there's a shot of brian. he's in the command center for phantom auto this is what many believe is the key to solving those tricky situations that autonomous drive vehicles come across those autonomous drive vehicles that might hit a construction site or a driveway that's blocked. they can then be controlled via remote operators like ben, who basically, as you can see, he's in a cockpit he has an accelerator, a brake, a steering wheel when he turns there, within milliseconds, the vehicle here on the road is turning so there's no lag between when he says it's time to move the vehicle and the vehicle actually

does that. how important is telepresence, what they refer to it as it's important because increasingly, we're hearing from people within the auto industry, within the tech community, who are saying look, autonomous drive vehicles are great 95%, 96% of the time. when they're on roads where there's no traffic or major traffic jams or on the highway, but it's those end of trips where they're dropping somebody off, where they're picking somebody up. unusual situations where the computers, the sensors, the cameras of the car are saying i'm not really sure what to do that's where a remote operator steps in phantom auto has done one round of fund-raising. plenty of interest not only in the technology but the business model they're setting up they would like to have call centers around the world so that if you're in an autonomous drive vehicle, let's say in chicago, and all of a sudden you come across a situation where your autonomous drive vehicle with no

driver in it slows down or stops, you can hit a button and that's when a remote operator would take control of the vehicle within a couple seconds. very cool technology one of the funnest stories i had a chance to do in a while, and thank you to shy, who is the ceo and founder of phantom auto, who is in the driver's seat today, though not, as you can see, steering the car back to you. >> all right, thanks to you and shy. appreciate it. looks really cool, phil. >> we're going to talk a lot more about driverless cars should we fear them or are they the inevitable future? >> are they actually safer than human drivers who get distracted by cell phone calls or putting on mascara we'll debate it, and we are 24 hours away from what will likely be the first fed hike from new fed chair jay powell also his first post decision news conference. what are the markets expecting

welcome to "power lunch. the countdown is on to what could be the most important day of the year so far for your money. in 24 hours we'll get the fed interest rate decision and hear from fed chair jerome powell in his first news conference as fed chairman it's why we expected we'll get a rate hike tomorrow and how hawkish or dovish will

he be. >> thank you very much i'm michelle caruso-cabrera. let's get you a check on the markets. making a comeback. all three indices were on pace to have their best day in seven sessions right now, the dow is higher by about 70 points. s&p lower by a little more than 2, and nasdaq lower by six points energy, discretionary, and industrials, those are the leaders right now. while telecom is lagging by more than 1%. facebook is falling again today, trading below its 200-day moving average and down nearly 12% this week >> other big movers today. oracle it's sinking after giving weak guidance ge is also lower, hitting the lowest level since 2009, and twitter falling big time right now. it's near session lows, off by nearly 12% on reports that israel is considering legal action against the company and also children's place is sinking on weak same-store sales. tyler. >> all right, does the 2018 fed committee fly with the hawks or

nest with the cooing doves we ask some of the nation's top investors. steve liesman joins us with the results. >> that was poetic very nice. >> nicely done >> let's call to our exclusive cnbc fed survey, dove/hawk index to get the answers and just so everybody remembers, zero is most dovish, and 10 is most hawkish and we're going to give you an indication of where various people are, not show you everybody. the most dovish member now, charlie evans. most hawkish, kansas city fed president, esther george what's interesting is these guys are actually in a little bit it's a more moderate extremes if you will let's look at other folks on it. brainard, one of only three fed governors or members of the board of governors, 3 1/2 right there. john williams and randy corals, the first time we have an assessment of him, the new vice cheer for bank supervision he comes in at 5.4 the center of the board is right

about here, 4.9. very much the same as last time. so the question is, how much of this matters we're going to learn over time, is jay powell the new fed chairman, is he running from the front, for example, is he a leading chairman the way greenspan was, or leading from behind the way bernanke and yellen did, because there's a big difference between powell and yellen take a look here powell is a 5.4, so definitely more hawkish than the center at least that's the initial impression of him. where yellen was seen as more dovish, 3.2. so if that matters, if he leads from the front, it could be a more hawkish federal reserve very quickly, let me show you some of the top line results of the fed survey 100% see a rate hike coming tomorrow 83% say the second hike comes in june the rate hikes are three in 2018, two in 2019, but all the risks is for one more hike i can show you that quickly. this is a distribution of where

our 40 respondents were. 21 right here at 3, but what's the second choice? all the tail risk is this side there's no tail risk here at zero or one or two michelle >> got it. thanks so much, steve. as he highlighted, 24 hours until the fed's decision on interest rates central bank widely expected to hike by 25 basis points tomorrow focus moves, steve said, to the dot plot on where each member expects rates to be over the next few years what do investors want to see? morning star's fixed income manager of the year is mike collins with pgim. also with us is john tewy, head of equities for usaa investors which has $166 billion under management welcome to "power lunch," both of you >> thank you >> you heard what steve said most people are expecting three. the risk is seventy-four what are you thinking? >> i think they're going to sound -- the risk is they sound

a little hawkish we believe they should lean a little dovish. i think if they move along the way the markets expect, which is three this year and two next year, as steve said, maybe even three and three, that gets the funds rate close to 3% by the end of next year and we think that's too high we think that's going to shift people into the front of the curve, back into money market funds at 3% or 3.5%, and cause the economy to slow down >> also take interest away from the stock market you're saying also provide competition to the stock market. >> absolutely. provide competition for everything if you can buy money markets at 3.5%, i know a lot of people who would plow their money into the front end of 3.5%. >> john, what's your thought >> i would say that, we at usaa would say that economic growth seems to be picking up you're seeing a pick-up a little bit in real growth you're seeing higher inflation and to the extent that that is sustainable, four hikes may be

possible and we're seeing strong fundamentals in the stock market from companies so that's another indication that the economy is on sound footing, and we're seeing a global synchronized economic recovery so we're thinking three hikes but we wouldn't be surprised by four >> would that be detrimental to the market if we got four instead of three >> if we got four for the right reasons, that economic growth is picking up, we think it will be fine for the markets the risk is the policy error, that the economic growth is not sustainable, we're getting a little bit of a pickup here. the fed raises too quickly, and that's been the recipe for weak stock markets and economic hiccups in the past. >> john makes a good point in terms of rising rates for the right reasons, because your scenario of raising rates to the point where stocks get competition from other asset

classes really only existed if you believe that the rate hikes will dampen growth for these companies. but if the rate hikes don't dampen growth for the companies i would imagine growth rates for stocks and for the companies' balance sheets would be far better than what you can get in a bond >> yeah, you know, the growth rate in equities is supposed to be in the mid-teens this year and decelerate significantly next year already. i think 8% is the expected growth rate in earnings for 2019 that might be on the high side decelerating earnings growth at the best, and i would argue the economy, the economic data, which looks good, it feels like we're on a really good trajectory is probably at a peak meaning it's very difficult from this level to see an acceleration in global growth from here. i mean, optimism is really surging. growth has synchronized and it's hard to reaccelerate even furth from the rate we're at i think we're setting up for a classic cycle where the fed hikes toward the peak in the cycle and toward the end and the

economy is probably going to be rolling over in 18 months from now. >> john, when you talk to, and i don't know whether you do this as a customary thing when you talk to companies, are they raising prices? are they raising pay because that's what inflation really is. >> yea, we do talk to companies at usaa. we meet with them and meet with management teams and we're certainly seeing in some areas there's definitely deflationary pressures others, there are inflationary pressures. companies are raising wages. we're seeing tightness, certainly in the trucking market so there are signs of an incipient inflation. we're not thinking there's going to be a big acceleration, but we're thinking it's going to creep up >> because when we talk about inflation, you know, mike, we do tend to look at the aggregate numbers. the 50,000 foot numbers, and really, it takes place company by company >> yeah. >> are you seeing the same

thing? companies are raises prices. >> we look at a lot of individual companies from a creditors'standpoint, and it's different than the macro economic story you see the problems going on, even the markets today where the retailers and media companies and even tech companies are really struggling here >> financial services companies. you're getting squeezed. >> those who have done well are probably poised to contract. companies don't really have the ability to pass through higher wages to their end consumers that's something that's going to be with us for a long time >> thanks, guys. mike and john. good to have you >> thank you well, dow off its highs but the index ends up for today or down triple digits, it will be the 36th triple-digit move of 2018volatility reigns in the sectors. let's bring in bob and mike at the new york stock exchange. bob, that's a critical question,

and in today's session, it's not clear what has resumed the leadership mantle. >> no, and energy is up because oil is up about 2%, but oil has gone nowhere for ages. tech's not going anywhere. banks were earlier, and they stopped going up now, we have energy still not doing much we have industrials not doing much materials, consumer discretionary. that's a problem utilities are not a leadership group at 2% of the s&p 500 my hope, mike, is that powell and company will be moderate enough so that the market will calm down a bit and that will be a catalyst for the next move >> obviously, the market is today really idling ahead of a fed meeting. got in a neutral position. i agree that it's not necessarily something where it seems like one group is going to rescue the market right now. the way it stands. that's been a change this year versus last year where last year, you had this almostcor choreographs daily rotation. if one group was taking a rest, another came in there.

you never had the indexes swinging now we have almost as many 1% moves so far as all of 2017. >> one of the reasons this matters, the facebook debate, is social media was one of the big subclasses that moved last year. social media and semi-conductors and cybersecurity were the three thingsige tech that moves all of the technology stocks to the upside when you get that going away, social media not going to climb anymore, that's a major loss of leadership for the market. >> what's interesting, if you look at facebook stock relative to the sapp sapp or the nasdaq, facebook has been a relative underperformer since about november so we have sort of lost that leadership from facebook it has just become much more pronounced in the past couple days >> i was pointing out earlier if you looked at fang, amazon and netflix have really lifted off versus facebook and alphabet, google and it seems as if the ad supported social media plays definitely were put aside, and the other guys took the fore, but as bob mentioned semi-conductors. fang like names have carried

things, not to the exclusion of everything else, but there's an effort today to kind of sequester facebook and see if the rest of the group can perform better >> overall, we could say, don't you think, bob, that the breath had really started to narrow markedly, especially in some of these names. when ryou see a tremor in facebook, you start to worry about the overall market >> yeah. so for example, social media, melissa is right facebook has not been a market leader necessarily in social media, but social media stocks have continued to climb into january, february. the social media etf was up 50% last year, and kept going up into february. so the rest of social media was doing fine even if facebook didn't now, this whole thing has been happening in it last two days, all of the social media stocks are now coming down. what are we going to say social media is at a top because the country is suddenly realizing the negative effects of social media. that may be a good conversation to have, and necessary, but it's a problem because that leadership is now gone

so your premise is correct, michelle >> got it. thanks, guys >> all right, here's what's coming up on "power lunch. as the fallout from facebook's data scandal grows, will users delete their accounts to protect their privacy? we will debate that one. >> and a fatal accident in arizona brings first uber's and now toyota's autonomous vehicle testing to a halt. will this technology be ready for the roads or is the fear factor too high? >> plus, rbc president and ceo joins us for a "power lunch" rvw.usive inteie all that and more coming up on "power lunch." you know what's awesome? gig-speed internet.

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worst day since 2014 here's what wall street analysts are saying jpmorgan writing they don't believe advertisers are moving away from facebook the platform remains important in terms of scale and return on investment they would buy on a pullback they have gone overweight on the stock. one writes much of the company's issues for self-inflicted on the pr front facebook and google enjoy a monopoly duopoly and steeple says facebook has not moved swiftly enough to address skuft concerns about the platform they need to tackle the security issues and it could ultimately lead to lower engagement and negative monetizations

it keeps the hold rating at the $195 price target. >> mark zuckerberg under fire for remaining silent on the latest scandal for the company is his job in jeopardy joining us is scott galloway, professor of marketing great to have you with us. >> thanks. >> he has been silent, but perhaps silent for good reason there's an ongoing probe right now that the company is holding. they hired a third party firm. they're also probes under way by various government agencies. why should he come out and say anything when it's not clear what happed? >> because it sucks to be a grown-up when you're the ceo of a company that assembled a community more vast than christianity, and it appears your firm has been weaponized by foreign actors or agencies that don't necessarily disclose how they're using your data, you have an obligation to immediately address the issue, even if it's we don't have all the facts. we're in the midst of a textbook

case study, and this is what i'll tell my 170 students tonight, we're in the midst of the textbook case study in how not to handle a crisis rule number one, top guy or gal have to address the issue. it appears mark zuckerberg and sheryl sandberg have retreated to caves of kandahar here. where the heck are they? two, you have to acknowledge the issue. the only thing they said is this wasn't a breach. three, you have to overcorrect there's been absolutely no indication that they're willing to do anything about this. we're in the midst of one of the worst handled crises in the history of modern business >> could this claim his job? >> no, because there's two classes of shares here and just to give you an indication into tmark zuckerber. last year, he proposed a share holder structure with three classes meaning his interests could go to zero, he could sell all his shares and still control

the company. that's the equivalent of an information age autocrat we have the most powerful individual in the world that sees what 2.2 billion people see every day. he can't be removed from office. he appears to have the business strength of rob gronkowski with a gross motor skills of a 3-year-old this is why power corrupts this is why dual class shareholder structures are bad and this is why having a duopoly, as the analyst noted before, where basically there's -- advertisers have no choice this is a terrible situation >> scott, that's where congress may come in, right i have been asking this question for the last couple days like tyler asked now. is mark zuckerberg safe. and people respond usually the way you do it's impossible. he controls the stock. but you know, congress starts to breathe down your neck and says, well, there could be this regulation, this regulation, and this regulation. or you could give us your head on a platter which is not unheard of in the

past we have seen that happen i mean, i think he's potentially at risk here, even with this dual class structure that in theory gives him so much power political heat is something that can be tremendously powerful >> i agree with you, but i don't think it's going to come out of d.c. i don't think d.c. has a collective will or domain expertise around technology to take on big tech right now, where you might see regulation start is from an attorney general in a red state or most likely out of brussels there's a non-zero probability that europe may ban one or more of these companies we register, we do register a lot of gains from it companies in the u.s we're having a very important conversation about some of the downsides, but in europe, they register all of the downsides with a fraction of the upside. there aren't many university buildings or hospital wings named after facebook billionaires in europe the war against big tech is going to break out where the major conflicts of the 20th century break out, in

continental europe >> can any of this happen, the increased regulation, a ban in brussels, et cetera, happen if users don't care if ultimately users say, you know what. i know that my data, when i download the apps, my data is sold i get it and i accept it doesn't this all just fall on deaf ears then >> that's a great point. this is -- i don't believe this is going to be a consumer-led revolution people are outraged and where do they express their outrage they go on facebook and instagram. just as having no regulation or epa, letting manufacturers dump mercury into rivers was a better business model in the '60s and '70s then people started getting sick because the firms were subject to liability, they were sued and they stopped it. the problem here is that for reason, we decided to exempt these companies from the same scrutiny as every other media company. if cnbc was weaponized by the intelligence arm of the russian government, you would be subject to fines and legal liability

we have decided to protect the nace nscent industry of big tech they say they're a company, not a platform, because they don't want to be subject to the same scrutiny and liability >> you say zuckerberg is safe because of the structure of the share classes. is, however, the company put, or as i put it yesterday, is this their chipotle moment where the consumers and the advertisers might be gun shy >> the problem is there are some outstanding leadership from some of their biggest advertisers that are veterans, that are disgusted by what's going on, but what you have here is not only a munaupalcy, but if you want to announce your e-commerce sales are continuing to grow, there's only two places you can spend money. that's google or facebook. and most of these advertisers don't want to disarm unilaterally, and keep in mind, facebook has over 5 million advertisers. the sad truth is that these advertisers need facebook more than facebook needs them which is why in my view the only

long-term solution here is to break these companies up it's not going to be a consumer nor an advertising-led revolution at the end of the day, it's probably these companies need to be broken up or we need some sort of leadership out of brussels or d.c. or from an a.g. to regulate these guys, because just as tobacco never saw the link between tobacco and cancer, facebook is never going to see the link between screening content and inhibiting advertisers until the government steps in >> thanks for your strong viewpoint, thanks for weighing in much appreciated >> thank you >> our viewers can join the debate will you stop using facebook because it's sharing so much of your data with outside companies? take our twitter poll poll, @powerlunch. we'll have the results later in the meantime, we found out the family of pete peterson has announced he's died at the age of 91. the co founder of blackstone, once the u.s. secretary of commerce and also famous for being quite concerned about the level of debt in the united

states and champions efforting to reduce it and to control the level of spending in congress. pete peterson dead at the age of 91 an important and iconic figure on wall street and in the financial markets. and he will be missed. >> chairman of the media company electronic stepping down ahead of reports of inappropriate behavior in his previous job we have the details. plus, uber putting a stop to autonomous car testing after a fatal accident and toyota is now following suit just in the past hour. will americans embrace thunew technology or will setfeafy ars push it out of the marketplace we'll debate straight ahead.

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newspaper and online media publisher tronc stepping down ahead of a report accusing him of inappropriate sexual conduct. leslie pickard joins us now with that story >> hey, tyler. that's right yesterday morning, michael ferro stepped down as owner of trump, owner of the chicago news. fortune published a story with two on the record accounts of late night business interactions

with ferro they revealed stories of unwanted touching, advances, and innuendo with women who did not work with him but seeking mentorship and future job opportunities. the magazine also spoke with nine of his former staffers on background about his propensity to comment on women's appearances. this reporting echoes some i did a few years ago for "the new york times." at the time, we came across this video of ferro on youtube. he was giving a presentation at the city club of chicago when he was chairman of the chicago sun times. he highlighted a female reporter, michael snead's appearance, in front of the crowd. >> michael snead's column looks more colorful. she's even better looking in person she's right over there somewhere. where are you, michael there you are. there's michael. >> a spokesperson for ferro told cnbc, quote. over more than 20 years of leading public companies and other enterprises, michael ferro has never had a claim filed against him, nor a settlement made on his behalf ferro through the spokesperson

did not confirm or deny the report >> he was acting as what at tronc? he was the chairman? >> the chairman of the company >> nonexecutive chairman >> nonexecutive chairman remains a large investor, as does his investment company. that will stay the same. he will also, according to fortune, receive $5 million a year through 2020 in a consulting capacity for tronc. he's not leaving entirely. he's just stepping down as chairman >> is it possible this departure is just a fig leaf and yet he'll still be able to control a lot of the company especially when he's such a big investor >> absolutely. absolutely >> it seems silly. >> there's not much he did add chairman that i don't think he could do now as a massive investor not to mention, justin dearborn, who was put in as chairman, is one of his longtime partners he brought him in to be the ceo

of tronc when he was chairman. >> why would the board members still allow this liability to continue there still may be louts coming down the pike. we know howthies work. a couple come out and then more and more we don't know where this ends. why would they let him stick around >> a good question important to note that the exact tales that were told in fortune magazine on the record from these women, they were not employees of tronc so the company and the spokesperson for ferro like to make that distinction. >> he allegedly harassed nonemployees but him working there is okay because he doesn't harass employees >> according to the spokesperson, they say it doesn't make it okay, per se, but it at least kind of, they think, distances themselves from liability. >> from some liability i'm thinking of steve wynn, who is out but a massive shareholder in wynn. >> and another interesting distinction -- >> they say he may sell a lot or all of his shares, but he could certainly influence the company

with the stake the size he has >> absolutely. and it's interesting, one thing i have been kind of wondering about is the stock price for tronc. you know, it's down marginally today. it was down marginally yesterday when the news came out it could be just because he owns such a large proportion of the company, but i'm curious why investors aren't selling their shares when they see news like this come out. >> the difference between him and wynn is wynn was viewed as this visionary in vegas and the creator of this -- perhaps to a greater extent to a much greater extent than this guy and his control of, you know, newspapers who are struggling regardless. >> he was not making the distinction by the allegations between employees of wynn and others as asserted here >> yeah, exactly >> leslie, thank you let's get to sue herera. let's make a right turn and go to sue herera with a news update >> a sharp right turn, indeed. here's what's happening at this hour, everybody. a winter storm warning once

again for large parts of the northeast new jersey area and southeast new york area. we'll go into effect at midnight tonight until 8:00 a.m. eastern on thursday. heavy wind, snow, and sleet is expected with the heaviest downfall likely wednesday afternoon. more conflict in syria today with local state media reporting at least 29 people killed in a rocket attack at a busy marketplace. the strike happened in an eastern suburb of the syrian capital of damascus. according to the alzheimer's association, there has been a sharp increase in the number of people living with that disease. by the year 2050, the total cost of care for alzheimer's is projected to rise to more than $1.1 trillion. >> and the l.a. dodgers star justin turner could be out until may. he was struck by a pitch in a spring training game against the oakland a's, and he suffered a broken wrist that is not good luck at all >> no, it looked like it hurt.

>> oh, yeah, it did. that's the news update guys, back to you. >> thank you >> let's get a check on the markets. the market indices in the green, but off the session highs. the dow had been up as much as 192 points now it's higher by 135 points. the s&p 500 is higher by 4.5 points, and the nasdaq is higher by almost 18 points. that's a gabe of a quarter of a percent. energy and consumer discretionary are the leading s&p sectors. you can see they're higher by nearly 1% and a half of a percent, where utilities and telecoms are laggards. telecoms off by more than 1% leading the dow, boeing, visa, nike, and intel. they're all higher by more than 1% the biggest losers, ge, verizon, ibm, and dow dupont. they're all negative ge is off nearly 3%. when you're only $13.69, a 39 cent move becomes pretty big >> the oil markets closing for the day. let's get to jackie deangelis. >> well, crude prices spiking on the session, closer higher than

2% this is mbs of saudi arabia continues his tour a tough stance on iran, part of the conversation, and that's impacting oil prices key technical levels breached today. a pass through of $63 creates support in a new range a session high of $64 says the market tested the market in preparation to break through stocks are seeing a lift as well that's helping, but it's not the primary factor in today's session. $63.40 was the closing price, guys back to you. >> thank you jackie deangelis >> would you trust a car with no driver tesla, uber, and virtually every major carmaker have invested billions into the idea that you will but as accidents start to build, will regulation and customer anxiety pump the brakes on the new technology that debate is ahead stay with us on "power lunch." thou hast the patchy beard of a pre-pubescent squire!

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toyota has suspended driverless car tests following the fatal accident involving a self-driving uber. some are arguing that companies are rushing this technology to the streets without sufficient testing. joining us now is jim shineman, managing partner at maven ventures he invested in autonomous car companies and says we should move faster to improve the technology and get it out there.

also, mary cummings, rejoins us, a professor of robotics at duke who believes this technology should not be widely deployed. welcome to both of you one of things that struck me was that maricopa county, where this fatality took place, had the second highest number of pedestrian fatalities in 2016, the last year for which data are available. exceeded only by los angeles 133 pedestrians killed in maricopa, where tempe is what does that tell you, if anything, mr. shineman, about where these cars ought to be deployed or whether they're ready? >> well, first of all, thanks for having me on i'm glad to be here. you know, this is a tragic situation. and we still don't know really the data, the facts of what exactly happened, although some preliminary data is that it was probably more human error caused

than machine error in this particular incident. >> who is the human here the pedestrian >> one, the report was it was a pedestrian jumping out of the shadows. that's what i read i think, look, the reality is, in the last 24 hours, what we're not going to talk about is the 100 people who have been killed by human errors on the road today. and what we have to remember is that there's a reason why we need to have self-driving vehicles on the road today it's going to make the world a better place we're going to save nearly a million lives with tens of millions of people who would have been injured otherwise by human error. it's going to be -- we're not going to have traffic. much more productive society people who can't drive today, the blind and, as we have an aging population, the elderly who live into the 80s, 90s, and 100s won't be able to drive. we'll solve all those problems it will be a much safer place at scale, and when the tragic situation happens, i think we have to have a measured reaction to this.

>> so there's the argument eloquently put by jim, mary. how do you respond to it and if the technology can be made to work, will the streets and highways be safer and less congested? >> well, first of all, i think it's completely unacceptable to both shame and blame a person who lost their life over this. there's no question this woman did not jump out of the shadows. she was pushing a bike, and it looks like she was pushing her bike towards what looked to be a very beautifully enticing walkway on the other side of the street that had a very small sign that was no doubt unreadable to her that pedestrians should not cross there, even though it very much looked like a pedestrian crossing first, the county needs to look at its own road design i think we'll find that they're going to be culpable because if they had posted a sign there, then it's probably in the past that other pedestrians were hit there.

so i think blaming the victim is not the right thing to do. but on the broader question of whether this technology is safe, it is unquestionably not safe. we know that the perception system of these cars are deeply flawed and you can go to every single company and if they're honest with you, they're going to tell you that they have major gaps in computer vision, sensor fusion, building a world model that comes from all the data they're gathering. and i have been advocating for some time that these tests, these cars need vision tests we certify and license humans by checking their vision. i think we need to do the same for cars >> mary, is it that -- it sounds like, i mean, elkwtly put, all your concerns about what's wrong with the cars at this moment but it sounds like eventually maybe you would be okay with them as long as they were tested better or are you against them period or gueagainst them right now >> it's a great question look, i'm a robotics professor i'm very pro-technology.

i also have a 10-year-old and i would like these cars in place before she turns 16. i'm very much pro the technology, but what i'm not advocating for is to put these cars on public streets and use the public as guinea pigs testing these technologies, which is in fact what is happening. there are no set of accepted standardized tests that these vehicles have to go through to prove they're worthy to be on the roads. you would never go to an airport and fly in an airplane with a brand-new auto land system that had never been tested before driverless cars, their technology onboard is much more complicated than that of an automated landing aircraft so if it's that much more complex, why are we not insisting that these cars are tested in formal settings before we deploy them on public roads >> let me pose that question to jim. you have heard the professor's argument there and she makes some very good points and i guess -- go ahead. you take it. >> i want to clarify clearly, i don't want to put

shame and victim blame it's a tragic situation, as i said i'm not here to defend uber. if they were at fault, they should be punished my point is that the industry at large shouldn't be punished. maybe it's uber and lyft and companies doing ride sharing shouldn't be focused on self-driving technology. the companies we invest in, we were invested in cruze, safety first. one of our companies in detroit is - >> get to the professor's point, jim, if i might, on the wisdom or the ethics, i guess, is really her drive there, that these things should not be tested in a live environment on highways and streets with real human beings just yet. >> yeah, i disagree with that. i think that, again, the companies that we look to back have founders who put safety first, and there are standards in place i think i do agree that those standards are going to be tested

and improved but i think that the right thing to do is to test this in controlled environments and to put safety first and it's the way that we're going to move forward much quicker to get to market first >> does this meet the category of a controlled environment then, to you does what seems to have happened in tempe >> i think that -- again, i don't know the specifics of that, of what happened i don't want to comment on that. and but i think there are, yes, there are controlled environments for example, main mobility is working in downtown detroit in a controlled environment and there's safety first and bark, which is doing self-driving trucks is in controlled environments. we're very focused on the safety issues i think these are concerns that we have. >> i'm sorry we're out of time we have to leave it there. jim, we appreciate your time, a good conversation. mary cummings of tuke, thank you very much. we appreciate it

straight ahead, we'll take you live to las vegas for a "power lunch" exclusive interview with the rbc ceo and president. "power lunch" is back in two

see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

the ibm think conference is under way in las vegas

let's get out to deirdre who is sitting down with rbc ceo and president for a "power lunch" exclusive. hey, deirdre >> hey, that's right i'm here with dave mckay, who just got off the stage here with gin ginni rometty and a few others you're talking blockchain, a.i., all of the buzziest technology here at the conference i want to delve into what we have seen. you're expanding your business in the u.s. in terms of focusing on wealth management and capital markets. what have you made of the volatility we have seen in markets this year? is that good for your business or are you worried about a bigger correction? >> volatility affects our clients in different ways from our asset management clients who may want to hedge their portfolios, but generally technology is driving volatility and uncertainty in our market. i love warren buffett's comment that in a short term, markets are voting machines, but in the long term, they're weighing machines what you see at this conference is people are trying to understand what technologies are going to move and what business

models are getting impacted. when i was on stage, i talked a lot about business architecture disrupt and technology architecture disruption. markets are struggling to understand business architecture disruption, what models are going to thrive, which will be challenged that's a contributor to the volatility in markets beyond the normal movers like uncertainty around rates, geopolitical, all contributors to that, but specifically, you look around us here, technology is a big driver of volatility. >> it's great you're here to look at it, but we can't get away from rates and geopolitics. let's talk about nafta interested in your perspective at davos, you said there was a way for these negotiations to be win-win-win. i wonder if that's changed now that president trump has tied tariffs to negotiations. do you still think it could be win-win-win? >> absolutely. there's so much at stake for both sides all three sides, to get this right. there's more to be lost by getting this wrong, as you look at the trade and the amount of

jobs over 9 million jobs in the united states that are directly related to trade with canada almost 2 million jobs in canada related to trade there's room for nafta to be improved certainly, you look at the auto trade, the auto sector and amount of content both sides of the border, there's room for modernizing nafta that includes the technology you see and a maserati hyped us with all sorts sf capabilities. we're not counting that technology and that contribution if you look at the future, of transportation and building cars, it's the technology. we're not counting a lot of that modernizing nafta, upgrading it, recognizing we're in a balanced goods and service agreement define bilaterally canada and united states. it's so important we get this right. >> negotiation an important part of that, but how much longer can canada, the u.s., mexico, how long can these countries afford to wait? i listened to your last earnings

call and you said already the uncertainty around nafta is having an affect on long-term corporate decisions by your corporate customers? >> absolutely. uncertainty hurts business in the short and long term. we're certainly seeing that in canada as people defer investment decisions at the same time, we just negotiated free trade with europe through ceta, same time canada's participating in tpp. it's opening new markets at the same time we're having our core market, our trading partner, we're having protracted negotiations at the end of the day, i'm still hopeful that markets are generally looking through this some volatility in fx rates, obviously in the canadian dollar markets are looking through to a successful conclusion of the nafta negotiations. >> lastly, we're in store for a fed meeting, rates expected to rise how are you viewing that, especially discrepancy, too, if canada decides to hold on interest rates >> certainly, the differential in rates will impact the dollar, but for our business in the united states, particularly our

wealth management franchise, which has a significant deposit base, rates are good for business we're in a relatively stimulative monetary environment as we tighten. watch how that impacts our customers. but for every 25-basis point increase in the united states, it's rough by $50 million revenue for us more that drops with the bottom line, and tax reductions give us the benefits, so we're excited about our u.s. wealth franchise and u.s. cap franchise more than half was made in the united states and we benefitted from the tax cuts. >> david, thank you for being with us today. throwing it back to you. that was dave mckay with rbc. >> thanks. the fed decision, less than 24 hours away in snowy washington we've got the bond rates straight ahead, ahead of the next -- ahead of the decision next mulate exhilaration or you can experience it for real,

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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. treasury yields rallying across the board. let's bring in the trading nation team for more boris with bk asset management,

and matt with miller what do you do with bonds? >> it's not surprising bond yields are rallying but it's interesting the spread is compressing. the two-year, ten-year spread is down to 54 basis points. that's troubling because that means the market is suggesting it's going to be a slowdown, at best, and perhaps a recession at worst. until that spread widens, i'll be careful going long equities. >> it's been tough for banks matt, what do you think? >> we're in the process where long-term trend is going from down to up this has been going on for 18 months now first thing we did, we broke above the trend line going back to the 2010 highs and then when we rolled back over, we didn't break back below that trend line that was the first indication that the trend was changing. then when the next spike we had just recently, that's taken it above the longer term trend line going back multiple decades and that's another indication it's changing we break off 3%. that's a big problem >> boris and matt, thank you for more market inside, head to

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breaking news. the board of cambridge analytica suspending ceo alexander nix immediately. cambridge analytica, of course, the company at the center of the facebook data controversy. twitter poll question. will you stop using facebook 51% said yes, 49% said no. >> thanks for watching "closing bell" is up next. hi, everybody. we're live at the new york stock exchange welcome to the "closing bell." i'm kelly evans. >> i'm wilfred frost today's advance just about restoring the dow's territory. what's moving the markets and what should you be buying? facebook fallout the compan