dge. >> ceo of double line. t's go around the horn and do fil trades we have 15 seconds. >> best buy. >> in addition to the market, royal dutch shell. >> i think if you could with stand the volatility, i would buy tech. >> t.s. >> thank you. that does it for us. "power lunch" starts right now melissa lee. here on the menu, the trump trade tantrum, u.s. and china going blow for blow and ooi-- ad ooins are getting worried. and from cheaper bacon to tv and wine and some impacts could have an impact on what you buy and pay. we'll go inside of the numbers and from soy beans to cotton to corn, china's new tariffs could hit the farming industry hard. we're down on the farm for a look at what is ahead for the industry "power lunch" starts right now welcome to "power lunch.

i'm michelle caruso-cabrera. michelle are way off session lows dow more than 500 and now lower than 47 and thought it would make a run in the positive territory like the s&p 500 by 1.5 points and the nasdaq is higher by 14 points. energy and industrials, those are the laggards, consumer and staples and discretionary are the winners. and leading the afternoon comeback, nike, ibm and apple and coke b, but boeing would be hard hit by the chinese tariffs. we'll talk about that a lot more facebook under pressure again as mark zuckerberg agrees to testify on the hill take a look. that stock is off by nearly 2% and retail seeing nice gains under armor and macy's and retail is leading at this hour. >> welcome to "power lunch," i'm tyler mathisen what is happening athis hour facebook ceo mark zuckerberg

will testify in front of a house oversight committee on april 11th the hearing will folk on the facebook use and protection of user data. motorists log more miles on u.s. roads in january over last year for a total of 234.5 billion miles. that's with an increase of 0.4%. that is a -- a trivia question to take to the bank. and strong demand for transportation equipment and soaring by 7%. and now a very special welcome to sara eisen. >> thank you. from mottos to defense to the tech industry, the current trade tantrum could affect the u.s. economy we have team coverage from every angle across the globe and we'll begin with bob pisani at the new york stock exchange and the turn around midday what is driving it. >> good to see you important thing here, 40 points down on the s&p at the open. we've come all the way back.

i think there is a lot of relief that perhaps, perhaps negotiations could mullfy the effects -- or mitigate the effects of the trade war issues. take a look at the sectors for the s&p 500. pointing out that the sectors most exposed to a trade war, tech and industrials are down but off of the lows, like consumer staples less so dow laggards, notice one thing about them they are all big industrial names. boeing, cater pillar and still off of the lows but still down and with good reason industrials have exposure to and 3-m and caterpillar and ge but still double-digit for boeing and 3m. and many have significant exposure all on the down side so they move to positive territory but take a look at technology and revenues from china.

micron gets half of the revenues from china and invidia and you might be surprised at other dow components that also have significant exposure in china. mcdonald's, 14% of their revenue in china nike, chevron, visa all double-digits. fisa up about 8% the key point about all of the big industrial and tech names in the last few weeks as trade war issues has emerged is compression of the multiples they are not trading as richly as they were even several weeks ago and that is the effect about the broad issues on earnings but largely about the china trade war issues dow is down 69 points. back to you. >> you know what else is helping to turn the markets around, larry kudlow with his comments on trade this morning. let's get to kayla with more. >> reporter: the president's resident free trader joining the chorus of officials categorizing

china's response as an uncomfortable but perhaps necessary part of the negotiating process as they try sh ork out the trading relation -- relationship between the two. larry kudlow told reporters when asked not once but twice where b whether it would be possible that the tariffs don't even come into effect because they have worked out their differences behind the scenes, he said the probability of that is not zero. listen >> it is part of the process i would take the president seriously in this tariff issue there are carrots and sticks in life but he is ultimately a free trader he said that to me, he said it publicly so he wants to solve this with the least amount of pain >> but two sides have a relatively short timeline to sort out very long-standing difference just about six weeks stand between right now and when the office of the u.s. trade

representative could publish the final list of tariffs and at that point could actually implement some of these tariffs. remember, bilateral talks between china have reached impasses in the past and in july of last year, october of last year, and we'll see whether they turn out differently this time that is a short window and markets do not like uncertainty but guys, it appears that for the time being, for the next several weeks, this could be a situation that remains uncertain. back to you. >> we'll watch those for potential catalysts. so as you heard, white house calling it a negotiation china seems to think it is more trade war and slapping new tariffs on more than 100 u.s. products in response eunices live in beijing with the chinese response >> reporter: well president trump may see this as a negotiating tactic but the chinese see it as a threat i got a window into the way the chinese are thinking about the tariffs when i spoke with the

vice finance minister. the minister is a person who has oversight over a working group that specializing in economic affairs for xi jinping and his message for investors is china is not going to be bullied by the united states. this is what he to say >> china will not yield to the outside appreciate and we hope with mutual respect we can find a way to solve the problem. >> and he said that outside pressure is only going to embolden china to act even further. now the second message that he had for ooinvestors and american businesses is that he sees china as the hurt party, on intellectual property, china has made progress with intellectual property rights but the trump administration is choosing a confrontational approach this is what he had to say

>> china recently had hard work to promote multi-lateral system and i think there is no reason to blame china for any cause of global protectionism and that is a fact >> and finally, china sees this action that it just took as a response in kind to what the u.s. did some people would say that they are an aggressor but the chinese definitely don't see them in that way and that is why they said for example they put the u.s. put chinese aircraft on theirs michelle >> got. it thank you very much turning back to the markets, a wild day for stocks on fears of those trade troubles with china. that is the dominant headline. but we are seeing a rebound from the steep selloff that saw the dow tumble more than 500 points right after the open so a trade tantrum a good reason for the markets to be so

jittery? mona is u.s. strategist from global and david katz is chief investment officer and let me begin by asking if you see what is going on here as a trade war, or the beginning of a a negotiation? because there are a lot of intermediate steps, month as months before this would take effect, it might not affect as many products as stated and before any economic impact occurs, as opposed to market impact, will be months. >> i think our overall view is this is a beginning of a negotiation. and that is our overall hope as well just yesterday we were talking about how china seemed quite restrained in their response $3 billion in retaliatory tariffs that it didn't include soy beans and aircraft and this morning when the market woke up to $50 billion and including soy

beans an aircraft and it wasn't surprising to see the selloff. but then we step back and looked at it, they hadn't yet given a date for when the tariffs will be implemented $50 billion is much larger than the $3 but compared to $2 trillion economy less than .2% of the economy, similar to ours, so we think that still there is ultimatelgoing to be a negotiation that happens behind the scenes. is escalation is not what the market wants to see. >> so david, let me ask you, this feels like a fair amount of posturing which i suspect is par for the course in times like this but the other thing that occurs to me is that all of this talk raises the importance of this earnings season that will begin next week and the week after >> we would like to think so but the reality is the market is being influenced by the threat of a trade war we think that it is a negotiation but the threat of a trade war is real, if it were

tootake place the markets woul go down even more than they have so the fact that earnings are very good and we're upbeat about the earning season but unless there is progress on the trade front it wouldn't have a significant impact. >> i my point is if the earning season disappointed in material ways, it would be worse for the market than under normal circumstances. >> we would agree with that because the psychology is negative and things that are good are not getting positive affect and so we think the earnings season is important but a good earning season. so we worry about things in the world, the trade war at most but we are comfortable it is a good earning season and the outlook might be off if people try to weigh in what the tariff would mean. >> over the course of the quarter -- at this point is

there more upside or down side risk given the context in which the earning season takes place. >> that is a great point we don't see upside potential from the levels. like you said, q1, up 17% and the highest since 20 the market does have a void in terms of headline data around technology and trade we haven't yet seen the headlines around earnings coming next we are cautiously optimistic this should be a strong earning season but two areas of caution, one the weather, this quarter has been volatile so could you see some hit to the consumer discretionary names and then secondly the yield curve has flattened over the quarter so financials are another one we'll be looking at closely. so overall remain optimistic but i don't think there is upside from here. >> mona and david, thank you very much. we appreciate your insight. >> and before we head to breakk we want to extend a formal welcome to the newest of our "power lunch" family, sara eisen joining us every day and

continue to work with the "squawk on the street" gang at the 10:00 a.m. it is her first day back from maternity leave. we'll show a little picture of samuel harrison levine there he is. how old is he now? >> 3 and a half months >> well we are delighted to have you here >> quit lowering the demo. >> there are a couple of tests you have to answer here as -- to join the -- >> hazing. >> cat videos or dog videos. >> i prefer dogs i'm allergic to cats >> yankees or mets >> mets. >> pizza or pasta. >> pizza i'm a pizza fanatic. >> any other questions, your honor. >> that will work very well. with the mets -- >> we're delighted. >> look -- we're delighted. >> "power lunch" and market talk, we couldn't come back at a busier time. >> and enough about me -- never enough about you. >> china is hitting back after

u.s. tariffs slapping its own sanctions from orange juice to whiskey to cars. are the president and his advisers making a big mistake taking on china. our next guest said wilbur ross and peter navarro should resign over this. "power lunch" will be right back you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- 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. welcome back china leveling tariffs on over 100 u.s. products in response to

the trump administration trade policy like soy bean, cotton, wheat and aircraft targeted so is this the beginning of a trade war or another negotiating tactic joining us now patrick travanic from silver crest and peter bookvar. and peter, you issued or write these notes at least once daily if not more often and in this particular note this morning, you were calling for the resignation of peter navarro and lighthizer and -- [ inaudible question ] after six years of pain on the farm is going to get us to the point of protecting and preserving our intellectual property >> right. >> are you serious about this? >> being a wise guy, i just don't like the negotiating tactics. because we have to understand the collateral damage that is impact -- take the farmner iowa through a six-year bear markets with crop prices falling and then you wake up and see, well my biggest customer, i can't sell to.

or if i do, it is going to cost me this much more. so i don't know the answer on how best to deal with china's theft of intellectual property i'm confident that this is not the way to go about it in such a scatter shot w. >> thearkets right now at least -- after seeing this market bounce, it seems like they are taking it in stride and believing this is just a negotiating tactic at the same time the rhetoric from china has been much more hardline. they are ready to fight. and they've said that through many different officials, whether a spokesperson for the ministry of finance or whoever you want to name in the beijing administration, they are ready to go full-out here. who should we believe? >> so i think that looking at just today, the trading today, yes, people took a step back and realized that there is some period for negotiation here. they don't go into effect right away but looking at it over the past couple of weeks, the prospect of trade friction, of trade conflict has hung like a

lengthening shadow over the market and i think that there are good reasons to think of it that way. when president tweets things like trade wars are good and easily won and today he tweets that -- well if you are $500 billion down, what is there to lose? it makes people think he doesn't understand what is at stake and what there is to lose from u.s. exporters, from imports, consumers. >> you think he doesn't understand that. >> he's always framed trade in a win-loose sort of way and several times over the last several weeks has said if you are running a trade deaf fit citiwith a country, it is just a net negative for the u.s. economy instead of looking at the whole composite of the trade relationship. >> we have many economists have lamented what they perceive to be the lack of understanding about trade deficits of the administration day after day we hear -- peter, ultimately we're talking about $60 billion worth of products on

multi-trillion dollar economy. what do you think of the market reaction to that because those are small numbers. is the market telling us that it fears a much greater escalation or -- let me ask you, are you convinced the selloff is all because of trade >> well, it is $60 billion in the value of those products itself but look at the supply chains that feed into creating those products so it is probably much greater than that. now in the context of an 18, $19 trillion economy, yes, it is small. but when wilber ross said this morning it is just three tenths but when you are going only 2.5 that is a big deal and tell it to the small or medium size business owner, you could cut ess bee everything will be okay now to your last point, i still think the biggest risk is the change in monetary landscape when the fed is shrinking balance sheet and raising interest rates it is the landscape more vulnerable to these externality. >> so $50 billion of tariffs or

$50 billion worth of product, but does all of that commerce go away >> no. it just -- >> it just becomes more expensive. >> but we lose business. so china will buy soy beans from brazil and argentina instead of the u.s. >> marginally, yes i think that is right. but not in the entirety. it doesn't all go away. >> if you watch what happened with the steel and aluminum tariffs, those got watered down. these tariffs don't even go into effect immediately they haven't until may 22nd. we'll have a public hearing and even months after that, china is just threatening is there a chance here that the bark is is just bigger than the bite and that when push comes to shove it is just a negotiating tactic >> there is a lot of bark here and it is hard to see exactly what the bite is but for me the problem is a missed opportunity china ip theft is a real problem. it is a huge problem that cost a lot of american companies a great deal and the u.s. is right to want to respond seriously to it.

i don't think these go-it-alone tariffs are the way to do it and nor do most u.s. companies, including companies hard hit by this we led with the steel tariff which burned a lost bridges with trading partners who we could actually use their help in putting pressure on china over ip theft it was on dubious grounds and national security and will get struck down at wto and the trump administration did not coordinate and work in getting u.s. businesses on board these tariffs on ip, which means that the united states -- >> they don't have any more -- >> it is isolation and retaliation in a way we don't need to be so i think we have missed an opportunity to put more cohesive longer term pressure on china on these issues by building a domestic and international coalition that could hold together in the face of chinese retaliation. >> thank you patrick and peter so, how is spotify doing on

the second day of trading? we'll check on that. and. a huge intra day turn around the dow has been down more than 500 and made a run in positive territory. we've been talking about it. is the market overreacting with ts mtariff tantrum loore ahead here on "power lunch. 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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$132 but below the peak ne $166esterday viacom preparing to counter offer to cbs sources saying viacom rejected the offer below market value and came on the condition that cbs management would run the combined company and shares of cloud era plummeting and less than the street expected the problem was guidance the company predicting a slower growth rate and the stock getting pummelled to the tune of 40%. tyler. >> planes and chips and automobiles. how key areas of the u.s. economy could be affected by a possible trade war with china. that is next and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you when it might be time to buy or sell? with fidelity's real-time analytics,

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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. i'm urtney reagan. here is your cnbc news update. >> two women shot by nas imag dan have been released shooter was angry about the policy and practices of the company. >> a smith and wesson 9

millimeter semi-automatic handgun register to the suspect was recovered at scene the investigators learned the suspect went to a local gun range yesterday morning prior to visiting youtube. >> widespread damage in northern ke kentucky after a powerful storm tuesday night. the storm destroying homes an downing trees an power lines no one was seriously injured so you may have heard augusta national has banned the marketing phrase dilly dilly being said during the masters. and a proclamation said the royal tailers are making a thousand dilly dilly t-shirts to send to the tournament and that is your cnbc news update for this hour back over to you >> thank you very much i have nothing to say about dilly, dilly i can't stand it so i think it should be a federal law. but king john barley can issue another proclamation. >> i'm getting you a t-shirt. >> thank you let's take a quick check of

the markets. again a matt -- massive reversal down by 125 points or half a percent and the nasdaq down by 19 nike and coke and ibm and disney leading and boeing and cater pillar and bit count down 18% below -- we're showing bitcoin below 7,000 and down 40% in the past month. the thre of a trade war with china having a big impact on nearly every industry in the economy one way or another josh lipton and morgan brennan looking at boeing but we begin with phil lebeau with a look at how car companies will be impacted >> this would hurt a number of the auto makers, talk about the german and bmw and mercedes. why? because the u.s. has become a centrally map export hub for suvs, many sent over to china.

here is what china is proposing. an additional 25% tariff on vehicles sent over to china. that would be on top of the current 25% so about a 50% tariff on u.s. built vehicles primarily suvs and electric cars auto exports to china have been rising at a steady clip. last year the u.s. exported $9.8 billion worth of vehicles primarily suvs to chooiina. more than 267,000 of them. and when you look at last ten years, you can see that this part of the game plan. especially for the foreign -- auto makers and build and serve in the u.s. and ship over to china and sell well over there today as you look at shares of the auto makers, daimler and bmw and ford which also exports to china and tesla which would be impacted by another increase in the tariff, these stocks were all down 4% to 6% this morning and have come back with the rest of the market throughout the

day. >> is one of the areas of tariff on auto parts, not just cars >> yeah, but the auto parts production is primarily over in china -- to begin with we actually have a huge deficit when it comes in terms of auto parts. china is ground zero for sending their parts over to us and no doubt if that is a trade war, that would be a focus,. >> and we have proposed a tariff on those imported auto parts. >> right, but again, the part could start there and come over here and then go somewhere else and come back here it is not as easy to track. >> phil, i have a quick question about tesla because the shares are trading as if there is no additional tariff on top of the 25% is that because they are not included because according to -- we have a list of all of the items that are affected by the tariffs and it looks like if there is an internal cost -- a combustion engine and a mi-- a

hybrid would be impacted by not an e. b. >> and eunice asked that question specifically to the finance minister over in china and they said, well look, tesla would be one impacted. so that is part of what is driving the concern that tesla could face an additional 25% tariff but again, this is all negotiatable nobody is sure it would -- might ultimately be hit with a tariff. >> and doesn't tesla do all of the manufacturing in the united states versus other car manufacturers which have construction in china so it would be doubly hit in that way as well. >> and phil, i spoke with one of the early negotiators, older gentleman who had been involved back when they were reducing -- i said why are tariffs still at 25%. because 25% looked good way back when we had it reduced dramatically, so a good reminder we've been here before and we were in a

much worse situation and perhaps as we negotiate these things will improve. >> and it serves china well to have it at 20 -- at 25% becauset prompted the auto makers to say -- and that is not just a u.s. sent rick 25%, if you want to sell in china if you are not building with a local company as your partner, you will face a 25% tariff even if you are based in europe. >> got it. thank you, phil. another big culprit in today's market decline is boeing that is down 2.5%. morgan brennan looking at how a trade war could impact that company. >> so boeing, the top u.s. exporter sliding again today after trying to propose 25% levy that would, based on weight guidelines, take aim at some of the 737 jeiner family but not the popular max model. china counted for a good portion of the global delivery and prospect of a trade war would be a one-two punch and give a rival a leg up but if trade weighs on

global growth that could dent future demand. now boeing said tariffs still in the proposal stage so they are just assessing this right now. but it wouldn't be alone in terms of trade cross hairs gulf stream made by defense contractor general dine amibs, those shares are also down 1.5%. they would be impacted by a potential tariff it is not just plane makers either honeywell, general electric, united tech, all falling today and with big aerospace businesses but other segments could be impacted as well if you see a perspective trade war that he is cal ates and same story for deere and cater pillar co -- kmidities are slumping and oil and copper slow, that is affecting the business too they also operate and sell in china. >> the best way to think about this as they said on cnbc today, industrial kong blomer ats were not built on populism but built

on globalization if you see the trade tensions ripple around the globe. there are no wirns here,t leasin thendustrial sector, only losers. there is still? ambiitand discussing with phil how things might be lost in translation. things are sort of unclear so what fits in but that whole notion of empty weight is critical for boeing because that determines whether the 737 and the maxes are included and the maxes are the future growth stream for boeing, right we still don't know if that is included or not. >> i think there are a lost questions here including how all of this shakes out the other thing that i -- and you were just touching on this in the conversation before, you are looking at potentially months before all of this actually materialized. so we have a lot of stuff -- i think that is the reason boeing is not getting into details and the other companies are not getting into details about just how much impact you could see here yet. >> and they also trade lower on commodity and oil and copper all down today on this china news. thank you. let's bring in josh lipton

for how tech is reacting to the trade troubles and how they could be impacted >> from the 1300 product categories listed there are many high-tech products like industrial robots, semiconductor machinery and consumer like plat panel television and certain kinds of cars, electric and gas-powered and leaving out other consumer favorites like mobile phones, the tech industry response not happy the itic, the trade association who remember -- remember include apple, amazon, microsoft call the tariffs counter productive they say they will raise costs for both tech companies and consumers. >> some uld be felt by consumers immediately agai thugprices on products, many of them would be felt through the cost structure of companies that are incorporating input and building things and employing

people and finding the cost they phase to do all of those things are going up >> now the chinese released their own list of more than 100 u.s. products that will get new tariffs and there went many tech products on it but still they worry about further chinese retaliation against members and american tech companies an everybody from apple to hp and many of the products assembled in china and rely on access to that market so the threat remains and comer said chinese don't play fair but he think the smarter response would be coordinated reaction with allies to pressure beijing and not tariffs. >> thank you very much turning to the bond market rick santelli tracking the action >> i know there is a lot of intense aspects to the issue of trade. but it seems as though the treasury complex globally just isn't really unnerved by it all. 24 hours of two-year note

yields, yes everything on the yield curve is within one basis point and 24 hour of ten-year and we had good data, whether it was adp or service sector, low in flation and even though it backtracked, still a lofty level. overseas and blund, going back to the second week of january, but they are not flinching from that and they're not bothered by the trade issue. remember in some ways, china's best weapon is thinegotiation process goes on is us. our -- markets and how they move in an rhythm because this puts pressure on policymakers hyg, it is a good barometer for equity and credit. they've been hovering around

this 8490 to 85 area and that would be a new low going back to november of '16. they are not and look at the progression moving lower since february. and finally, the dollarin tex dollar index if you could find any significant flight in or out of the dollar index, you are a better person than i even with a microscope back to you. >> thank you very much well tesla skid take a pause for today. the scock is rebounding more than 4%. what analysts are saying about it next in street talk. plus did the markets have a tariff tablet rum and get over it fast. from down 510 to down by 63 points right now we have much more on this market turn around straight ahead

volatility is the name of the game over the past two months and major indices are deep in the red. and here is what jeffrey gund lavp had to say. >> it is pay back time 2017 was the easiest investment year of all time and the risk of the stock market were the best in history and of course this year as i've said before, we're going to have a negative year in the stock market >> let's bring in kenny pickary from o'neill securities from the florida. so do you agree whether it is the trade warning shots fired by the president or of course the vendetta against big american companies like amazon or twitter and certainly feels like it is more uncertain. >> i don't think it is a vendetta it is just the uncertainty and the chatter of late, the back and forth and the they -- the theys back and forth, whether it is china or u.s. or

trump, the threats back and forth create that anxiety that creates then the reaction in the market and i thought wilber ross and larry kudlow coming out before the market opens, everything is taking a step back and calm down. it is not as big as it appears when you read the story or see it on twitter or see somebody reposting it on twitter because you are reading it and in a certain mindset and so therefore quite honestly, the markets tested real hard this morning, just to see if the buys would defend the position and they did. the minute they realize the buyers weren't going anywhere they backed off and the market recovered and so honestly it feels okay we're back above the 200-day moving average and so if it closed here then i think the market will get more used to this back and forth. >> i don't know how much you talked about the 1930s and said the u.s. is raising interest

rates late in the cycle and talking about tariffs. a very bad combination historically and he predicted a negative year for the market that is pretty tough. >> that is tough that might be true but we'reactually in -- our market is -- not our economy is actually in a good place we have a stronger economy, the whole reason that rates in fact are going to go up, not for any other reason and than the economy is strong and we need to normalize. we don't want to get behind the eight ball but in front of it so it is a little bit too bearish for me i think it is bearish for most people people are comfortable where the market and the economy is and i don't think that people are so against these trade talks and these trade tariffs and trade dispute. people realize that we've got the short end of the stick for a while. whether or not you like the way trump presents it, might be confrontational, but he brings everyone to the table and end up talking and it is not as negative as first blush. one way or another the i'm not

nearly as bearish as gundlach. >> so you are a buyer? >> i'm a patient buyer patience is a virtue don't dump all in one shot the market will have volatility and the market will test lower again but just because it tests lower doesn't mean you got to sell everything and go in a bunker quite the opposite look at your portfolio and the names you like and the names that have -- >> yes. >> yes. >> steve bannon just crossing the wires tells reuters to hell with wall street if it doesn't like trump's trade moves >> steve bannon, you're going to throw at me now. >> he is not in the white house any more. >> i hear you. and so who will pay attention to him? he's not in the white house any more so why would anybody pay that much -- >> to what degree does he -- echo the way the president thinks, they were simpatico -- and i'm not sure they are different on the view on trade.

>> i think that is true but it is quite obvious trump reacts an the way he presented it. he is very confrontational but yet i think -- i really do think deep inside that he's got the best interests of the country at heart maybe you want to talk about how he goes about it, fine but one way or another i think that wall street will get more used to and wall street is not going to start reacting as violentent violently -- and i wonder if he would say to hell with the companies and this is the ceo president listening to the advice of his advisers >> thank you very much on the floor of the new york stock exchange with a rosie view on the trade policy. time now for street talk today we're following the action on tesla with three major firms cutting price targets. ever core lowering price target to 272 from 307 citing production lee lays and slashing

the 2018 delivery by 39% estimated gross profit cut by half and the analyst maintaining the in line rating next up rbc cutting price target from $305 to $380 and says it is nun clear if tesla could hit his objective. and finally j.p. morgan, trimming the price target to 185 on lower estimates of valuation that seems to be pricing in a lot. the naumts notes that even though tesla indicated it does not knee -- or -- capital raise is not required to use tesla's words in 2018, the company said the same thing in 2016 before raising several billion dollars and keeping his underweight rating and the stock is up by almost 4% and down 16% in the past month. soybeans are being etally ated against by the chinese so how does it feel it be caught in the cross fire

we're talking to a soy bean farmer next. ♪ ♪ where's jack? he's on holiday. what do you need? i need the temperature for pipe five. ask the new guy. the new guy? jack trained him. jack's guidance would be to maintain the temperature at negative 160 degrees celsius. that doesn't sound like jack. actually, jack would say, hey mate, just cool it to minus 160 and we're set. good on ya. oh yeah. that's jack. tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities.

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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. soybeans are taking a hit

today on concerns of a possible trade war. china faced soybeans on a list of 106 products targeted for additional tariffs it is the number one u.s. agricultural export to china you can see they are down 33 cents per bushel, a decline of 3% kevin scott, owner of scott family farms in south dakota and head of the soybean association. good to have you here, mr. scott. >> good to be here thank you. >> we don't often quote soybean futures on cnbc. not every day, but we are doing it today a decline of 33 cents. what does that mean for your industry, the farming community when it comes to, say, next year's crop or this year's crop? >> well, it's pretty critical for us it opened about 40 under this morning. that means about $1.7 billion in value in the u.s. on our soybean crop for me personally, a 40 cent

drop, 4% drop basically in the market it's 5% of my market would be $20,000 or 10% would be $40,000 for my -- and i'm a fairly small farmer, but that's typical across farm country. >> $1.7 billion across the farming community isn't small beans, excuse the pun. you're not surprised by this we had you on a couple of weeks ago and you were concerned the soybeans would be collateral damage in fact, the soybean association asked to meet with the president for other ways to deal with china. did you get a response >> we did not get a direct response from the president. you know, you send the letters and you're not sure whether you will get a response or not they know we are concerned we expected a bumpy ride on the soybean side it seems we are getting it today. the market thinks it is.

the traders love volatility, but for farmers it gives us a lot of heartburn. >> you put a sharp number on how this could affect your business. how much of u.s. soybean production is exported to china? >> nationally, 60% of the soybeans go to exports and about half of that would go to china one in every three rows is what we figure in the farm sector it's a large part of our soybeans go there. >> you have to educate me a becausi don't follow yr business that clel but if 30% of company sales go to effectively one customer, that feels risky by the laws of diversification. >> yeah. i would agree with you but as far as a business plan, you try to fill the need where

the demand is. >> right you sell to who wants it. >> why can't you sell to mexico and mexico will export it to china? why not go to another country if this is going to be a bilateral tariff problem >> well, you know, there are going to be games played, i'm sure as far as infrastructure goes, there are only certain places that can handle that type of logistics. soybeans is a huge market. we had 14 billion dollars worth of beans go to china last year to get someone else to play that game for us would be difficult we would prefer to deal direct, of course, without the tariffs. >> got it. we might have you back to talk more about this as we watch the kedates coming up when it comes to the possible negotiations and what will happen good to have you on. >> thank you. >> kevin scott of scott family farms. jeff bezos is a target of

president trump but is amazon the reason for retail's struggles? we'll get to the bottom of it. plus, mark zuckerberg will head to washington next week what can he say to persuade congress that he has the privacy problem under control. a huge turnaround in the markets today. what will happen in the next two hours before the bell? stay tunedo find out

here's what's on the menu. finding shelter in the midst of volatility areas of the market that could be safe harbors if the tariff terror continues. a bad dream and the big loser will be american families. and blame it on amazon the president is attacking the company and says the destruction of retail is their fault is he right? is amazon really to blame for all the retail sector's woes "power lunch" starts now >> welcome, everybody, to "power nch. i'm tyler matheson glad you could join the market taking investors on a

wild ride. the dow falling 510 points at that time lows now the dow is down just 77, 23,955 the s&p off about 3 and nasdaq down 1.8 points telecom is a leader. the big losers in energy are newfield, range resources and conocophilips. lgi homes, pulte and toll brothers are up. a good day for restaurant stocks dine brands, cheesecake factory and chipotle up. sarah? >> here's what else is happening at this hour apple saying that apple music now has 40 million paid subscribers, growing by 2 million in just the last two weeks. apple said it has another 8 million currently using the service on a trial basis tjx companies, owners of

marshall's home goods and tjmaxx raising dividends by 25% this marks their second consecutive year of dividend hikes. amazon will had 1,000 jobs in nevada as it opens its fourth fulfillment center it employs more than 3,000 people at the existing three centers in the state melissa? global trade in turmoil as the united states and china announce competing tariffs bob pisani is at the new york stock exchange kayla has the latest from diaz and seema mody is in china bob? >> take a look at the s&p 500. an impressive move about 40 points today from the low to the high. falling back here. why the turnaround well, hope springs eternal that what will happen with the tariffs here is we are not going to have real long-term effects

we'll have negotiations on the tariffs. there will be hope for a negotiated outcoming -- outcome. and we heard kudlow and ross arguing it this morning. these are the sectors that would be most affected they are to the down side. two stocks, the poster child for the whole trade war issue, boeing and caterpillar that's almost an entire decline in the dow jones industrial average. about 70 points. high volume exchange traded funds. we don't have a lot of big volume i like to look at the big volume movers there is agriculture that's d/b/a they buy agricultural futures. that's a trade war issue some of the emerging market etfs like india have been weak. vanguard europe is near the lows for the year something that's picked up recently is thdivides etfs

like vanguard. that's vig symbol there. back to you. >> thank you very much, bob pisa pisani let's go to kayla in washington with reaction from the white house. >> reporter: the white house reaction, they have been unfazed by china's threat of retaliation overnight. the president saying the u.s. is already losing in a trade war with china his top economic add vviser sayg this is a carrot and a stick situation and the president is using them to negotiate. the ross todays there are talks ongoing and they hope there will be a negotiated settlement but the outcome may not happen by may. you have heard strategists throughout the day -- market strategists, political strategists -- reluctant to call it a trade war they said china was put on notice months ago when the white house opened the investigations p. beacon research said inciting a trade war requires opening a

new investigation or expanding the list of tariffed products that the u.s. tr put out last night. they said we believe the list is more likely to be reduced than expanded as u.s. companies lobby to have various items removed. companies have roughly a month to submit comments on which products they feel would be causing harm to the u.s. consumer or the u.s. economy if those tariffs were actually levied and by may 21, treasury must recommend whether the administration puts forth new investment restrictions on china. i'm told treasury is studying the market reaction to all of this news very closely and that it is vetting with other agencies exactly what the response should be by may 22, ustr will be soliciting final comments from companies. we could have about six to eight weeks until we see actual action, if there is action this is a short window for the two cripps with lokrip -- counth

longstanding issues to negotiate. >> thank you very much seema, you spoke with the chinese ambassador about all this kerfuffle to put it mildly, china doesn't like being confronted in public this way. >> they absolutely do not. china is ready to play ball. that's the big takeaway. the chinese ambassador to the united states has been involved in key trade discussions with secretary wilbur ross, trade representative rob leitheiser. he says beijing doesn't want a trade war but will fight back if further protectionist measures are unveiled this morning up to $50 billion in tariffs on soybeans, cars, whiskey and other u.s. goods the real question is whether china will hit washington and wall street where it hurts by scaling back its purchases of u.s. treasuries. i asked the ambassador whether that was in the cards.

>> any unilateralist measures will hurt the other side but the end result would be probably to hurt itself. we have done our uost to avoid this kind of situation if the other side makes the wrong choice then we have no alternative but to fight back. >> meantime the ambassador denies allegations that china is stealing intellectual property from the united states if no progress is made, the question is whether the trade conflict will escalate he admitted this tit for at that time approach that not only the united states is engaged with but china as well that will have negative economic impact on both economies. >> the important point in the conversation is if they curtail purchases they will hurt themselves >> i think he meant for the tariffs there will be negative consequences >> in terms of treasuries. >> treasuries, too, for sure, absolutely both ways it hurts >> all right

let's get more on how the trade turmoil will affect the economy, the markets and your money joining us now, u.s. bank senior portfolio manager eric wegan, barry james. danielle, whether the tariffs actually come to light or not, when does it start to become a global economic event. when do we see the policy or the unpredictability of it enter into global economic forecasts if at all. >> it's interesting. the past few days we have seen ism reports come out of 45 different companies. you have seen the peak we saw in february, the ultimate reination ade has come off this high boil fewer countries are in an expanding mode you have to ask yourself if this will bleed into the real economies, not just in the united states but globally as well. >> eric, do you see it as a risk and, if so, where should we be looking for that in the confidence surveys?

>> confidence surveys have remained elevated. we agree the data points while remaining elevated had certainly given up some of their -- lost some of their sheen, if you will from that perspective we think it is certainly in everyone's interest to get greater clarity sooner rather than later as far as businesses being able to plan and allocate, it has been a rather charmed environment. we find ourselves in a transition from a backdrop that was highly accommodative and supportive to one that is in transition and flux. you know, we are not surprised to see some of the data points come off but we would be hopeful to get more clarity sooner rather than later. >> what moves, if any, do you make on this do you want to have a more defensive posture, for instance, not knowing how this will pan out or do you stay the course? >> well, i think what this

confirms is we are in a corrective phase they last 200 days and we are only 60 days in. we use counterpunching so if the market goes up a bit, do a little trimming market goes down, do some selling. we are still above the moving averages, 200-day moving average. yes, be more concrete in being defensive. also there is a shift going on smaller cap stocks are holding up better. the bargains which have good earnings but are cheap and have been holding up well from price standpoints. that looks attractive and should be shifting away from the highly speculative stocks into those. >> i'm hearing from the panel, the recent sell-off. are you convinced it is all because of trade or is trade an excuse >> it's interesting. if you look at the most recent university of michigan report the upper income earners, their confidence has taken a hit as of late we are seeing it show up in their perceptions of the news flow if upper income americans are

nervous about the trade war and everytng they e hearing y in anday out and they step back from the markets that becomes a problem. >> it's not the tariffs themselves that curtail boeing's earnings you are saying -- >> it's the constancy that doesn't stop. >> i see. >> as an economist how do you factor that in moody's came out today they said it will hit gdp.1 to.2%. i assume the only thing you can plug in is the exact amount of tariffs in terms of the economic cost there is not a psychological cost or the overhang we saw starting to come through in the ism survey for instance. >> bear in mind, morgan stanley says upper income americans are responsible for 30% of consumption. if they were to close their wallets it makes a huge economic impact. >> the estimates in terms of hits to gdp could be greater because we are not factoring

that in. >> absolutely. the jittery markets aren't helping situations with high income earners either. >> we got another adp report that showed 241,000 jobs added in the private sector. earnings are visiorevisions are higher we are looking at the impact of lower corporate taxes which were passed december 22 how do you balance the good news from the trump policy with wha you are talking about around trade? >> there is no dbt generally toward the middle of the first quarter we advised clients to take a more balanced assessment after being very pro risk and overweight equities for the last two years we do think the policy risks are elevated the volatility has created opportunities for us we want to be cognizant but, again, we think the data has

come off a little bit. that gives us cause for concern. we were priced for perfection at elevated levels from a valuation standpoint we still think valuations are fair, not necessarily excessive. instead of having three decided tail winds we're in a muddle along place now. >> so, barry no less than an esteemed authority than lawrence kudlow is fond of saying profits are the mother's milk of the stock market it feels to me like the market needs milk what if it doesn't get it? >> well, there are plenty of reasons why it may not get it and a trade war would be one of those. i talked to oil drillers in oklahoma they said the price of the pipe that jumped 25% and they can't pass along the costs

that's eating at profits if we continue to see that, it will be a problem. technology is so dependent on exports. 60% of revenues come from overseas one quarter of the economy is trade. any of this that spills over and becomes real -- it's not real yet. if it becomes real, it will hurt earnings, hurt retail, hurt individuals and so that would definitely be a real problem for the market >> maybe it will be the soy milk maybe that's the wrong metaphor. >> we'll leave it there. i guess that's why the guidance is key. >> yeah, if there are disappointments, that pulls one of the legs out. >> absolutely. >> eric, danielle, thank you here's what's coming up on "power lunch." amazon changed the way americans shop but are retail woes all amazon's fault that's straight ahead on "power

lunch." president trump says the trade deficit with china hurts the american economy is he right? and with the market's big names selling off is the pouny t sll cap space? you know, i used to be good at this. then you turn 40 and everything goes. tell me about it. you know, it's made me think, i'm closer to my retirement days than i am my college days. hm. i'm thinking... will i have enough? should i change something? well, you're asking the right questions. i just want to know, am i gonna be okay? i know people who specialize in "am i going to be okay." i like that. you may need glasses though. yeah. schedule a complimentary goal planning session today with td ameritrade.

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. weome tohe pty the dow has turned positive. it is now up 23 points all three indices are out of correction territory remember, the dow was down more than 500 points. big turnaround.

meanwhile the president continues to go after amazon saying it is hurting the industry badly is he right? is amazon to blame for all of retail's woes? courtney reagan joins us now with the story. >> not all of them among the president's tweets about amazon he said the online retailer is putting, quote, many thousands of retailers out of business amazon has changed retail but doesn't get all the blame. for starters, thousands of retailers haven't gone out of business alex partners says 2017 did see more retail bankruptcies than 2008, but just 27 retailers with liabilities more than $50 million. thousands of stores have closed, some from bankruptcy, but far from all u.s. retailers opened too many stores in the '90s and 2000s when amazon was still mainly a book seller. the u.s. has more than five times the retail square footage per person than the uk, more than twice that of australia then you look at most of the biggest retailers that filed for

bankruptcy recently. they were crippled by heavy debt from private equity ownership including toys r us, payless, the limited, gymboree and more that took away the ability to invest to compete with market forces including e-commerce. amazon is part of the story but did you wa doesn't get all the blame for what retailers haven't done right. >> let's dig into the retail landscape and president trump's constant jabs at amazon and whether his argument that it is crushing mom and pops are valid or not mark cohen of sears canada joins us welcome back to "power lunch." >> thank you. >> what's funny is the same argument could have been made years ago when it comes to walmart and the impact of mom and pops here we are. amazon is threatening walmart. we are just looking for a scapegoat at this point? let's face it

if the washington post endlessly praised trump and his administration as one of your peer networks does almost every day, he would be singing the praises of this archetype american success amazon similar to the american success that was walmart a few years ago. amazon started because jeff bezos had an interesting idea -- at least he thought so he created a business in a garage in seattle. most folks who bore witness to what he was doing thought he was nuts, except customers loved it. 25 years later it is one of the large largest enterprises in the world. what is wrong with this picture? >> implicit in how you opened the answer to my question, mark, is you don't think president trump's arguments have a leg -- i mean, there is no validity to them that's what you're saying? that it is a politically fuelled

vendetta. >> i feel the need to be polite and careful in saying that there is absolutely no legitimacy to his complaint, none whatsoever it's clear that amazon has been an extraordinary disruptor as t it's created a marketplace that displaced old world legacy retailers who haven't gotten the end of the day amazon created access to goods for millio of customers who otherwise would have had to have shopped in a crappy old mall somewhere at prices that would have been inflated >> did they build a monopoly in doing that >> we don't live in a world where consumers play into a monopo monopoly everyone has choices. >> they dominate online sales. >> they dominate it because they do a better job than virtually anybody in the planet. >> i can shop in a dingy basement at my own home now. >> your choice. >> let me get your thought on

this one of the criticisms that the president made and others have made is that while amazon pays its sales tax in the states where sales tax are due on goods that are bought and sold by amazon, they do that but they do not collect sales tax on behalf of third party retailers. some of the third party retailers do not pay the sales tax either this is, i gather, a case in front of the supreme court now what do you think about that should those third party retailers be benefitted by not having to pay sales tax on sales they make on amazon's platform >> the imposition of sales tax is typically adjudicated at state and local levels it is in the hands of legislatures amazon doesn't decide the tax policies that it will adhere to in and of itself it complies with the regulations

that are imposed upon it if trump and his congress wants to overrule the power of the states and create a federal mandate for internet commerce, they can do that. >> a lot of the third party retailers are mom and pops, companies that would not find a big enough market to operate. >> i cited the business of my brother-in-law yesterday he has a retail location on long island. >> does he pay taxes >> i was with him and i didn't ask. i'll find out and get you an answerorrow. >> if he had to pay xes his goods are more expensive than what amazon is selli ining themr >> if amazon sells them. >> it puts them at a disadvantage it's just such -- i don't know -- such a complicated -- >> thorny. >> amazon's fundamental success doesn't hinge upon its imposition of sales taxes or the failure to impose sales tax.

>> totally agree >> nor does it hinge on the rate it pays for delivery of packages to the post office. >> i get that's not the reason for their success. but you used to run a retailer did you get bulk shipping discounts? are they getten an -- getting an unfair taxpayer subsidized advantage to ship at a iscount discounts put in place back when mail was the way we communicated, right? it was the cyber network of the world at one point they wanted to subsidize it. are they exploiting it now >> they are not exploiting anything in and of itself. the post office has always offered bulk rate discounts to bulk users this is not a new condition. by the way, amazon negotiates for bulk rate discounts from fed ex, u.p.s. and the other carriers they use. oh, they have also created a carrier network of their own in northern california. they have leased 42 767s for

their own internal needs to move goods between their own facilities the notion that they are somehow behaving as a standard oil-like enterprise taking advantage of the little guy and the consumer is false. >> i think it just pushed us to a point where we wonder if the business model of the post of really is just -- gosh, it's not been valid for a long time but now when we have a behemoth like amazon it focuses everybody to say, why is the pricing structure like that exactly? you know >> the biggest problem the post office has is the ongoing continual decline of first class mail that's not amazon. >> and funding health care benefits. >> they also fund their own health care benefits. >> and have their rates approved by the postal rate commission. >> they are not permitted to end first class saturday deliveries. >> they are forbidden from

operating like an efficient terise. >> so the last problhey ve on the face of the earth is their business with amazon in fact, they need amazon a lot more than amazon needs them. if amazon were to pull the plug on its business with the post office, the post office would be in an accelerated state of collapse. >> mark, good to see you thank you. >> coming up, one china watcher says the real loser from escalating trade tiffs is the american consumer. he'll explain. and mr. zuckerberg heads to washington details ahead. speaking of washington we await the white house press briefing we'll bring it to you live as news warrants when we return financial services right. but if that's not enough, we have more than 8000 allys looking out for one thing: you. call in the next ten minutes... and if that's not enough, we'll look after your every dollar. put down the phone. and if that's not enough, we'll look after your every cent. grab your wallet. (beeping sound) (computer voice) access denied. and if that's still not enough to help you save...

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this easy-to-understand guide will answer some of your questions and help you find the aarp medicare supplement plan that's right for you. time for a news update the father of the youtube shooter said he warned police his daughter was upset with the company's handling of her vid yous and may be planning to go to the office. police said the family gave no warning that she may commit violence nikki haley warning that the world is rapidly sliding backward where chemical weapons use is tolerated

she addressed the security council on the one-year anniversary of a gas attack by the regime that killed dozens of syrians. >> the assad regime keeps dropping chlorine bombs on innocent men, women and children just these past few weeks when the regime seized eastern gutta there were credible reports of chlorine gas attacks. the baltimore ravens are giving robert griffin, iii, another chance he last played for the cleveland browns in 2016 he appeared in only five games this is your cnbc update this hour back to you. >> thank you the house energy and commerce committee announcingmark zuckerberg agreed to testify on april 11 julia boarsten has more. >> his testimony before the house energy and commerce committee will be live streamed on youtube as he's pressed on facebook's handling of usinger

information. ahead of the hearing today facebook announced updates to the data policies and terms of service. now it explains data is collected across messenger, oculus and across all devices people use inclungnformation from your battery level to your nearby wifi access points. now the company also explains how it manages data for news services like marketplace live and 360 video. facebook is giving the public seven days to comment on changes before users will have to consent to the new rules which are the first in three years zuckerberg is hosting a press q&a with reporters this afternoon at 4:00 p.m. eastern he's going to be answering a lot of questions he's on the hot seat today and next week. >> do you have any idea how long these new rules will read and how small the type will be >> i read them it depends on how big you make the type on your computer,

tyler. >> you just hit agree. >> that's the problem. everybody just hits agree usually. >> usually i think what will be interesting to see how people think of this differently. anyone who knows facebook owns these different platforms won't be surprised facebook is targeting them with ads and gathering data across instagram, facebook, what's app. >> it's what they do with the data after. >> and the disclosure and clarity. of course they are gathering information about what you are doing on different devices it is explicit now in a way it wasn't before. >> thank you, julia. nice to see you. >> good to be here. >> privacy is an issue for companies across the social media landscape including twitter. if you would like to see all the things twitter knows about and download your twitter history, check out todd hazelton's piece on cnbc.com today.

>> trump tweeting this morning about the $500 billion trade deficit with china claiming they hurt the u.s. economy. we'll dig deeper on trade deficits and their effects stay with "power lunch" and we are awaiting the white house press briefing we'll bring it to you live you know what's awesome? gig-speed internet.

you know what's not awesome? 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.

another wild day for the markets. we had a sell-off at the markets but we have come a long way. the dow higher by about 46 points keep in mind from peak to trough we have traveled about 600 points on the dow jones industrial average in this session. ibm, microsoft, nike, coke your dow leaders. lennar, hormel, under armour leading the s&p. >> the trump administration arguing the deficit with china hurts the u.s. economy and businesses are they right steve liesman joins us with the analysis i guess we have asked the question before with president trump. now that we are starting to see policy evolve it's relevant. >> i have fresh data i have crunched here. i will show you in a second. really what's happening is there is a questioning of the theory of the trade case from the

administration the trade deficit should be reduced and it will help growth. that sparks criticism from economists this after china slapped tariffs on 106 u.s. products worth $50 billion. that's in response to $50 billion in u.s. tariffs levied on china the day before. wilbur ross reiterated on cnbc the administration's view. trade deficits are a negative for the u.s. economy. >> we have had a big problem with trade deficit for a long, long time. this is the president who is going to get us out of it. he's determined to go forward and this response should really not have surprised anyone. >> here is the trouble for the administration as growth increases trade deficits increase. the more growth, the more u.s. consumers import from french wines to german cars to chinese electronics. when the economy contracts imports fall that's the negative number on the left

when gdp has averaged zero since the year 2000. look what happens when growth is greater than 4%. imports grow because we have more money and we like stuff from overseas. we buy everything here and then we buy everything over there that's what mark zandy says from moody's. >> you have bigger trade deficits because we are buying everything we produce and everything everyone else produces you get big trade deficits when the economy is strong. >> when president trump came in office the trade deficit was at $510 billion in january it was $576 billion that's a 13% increase under trump's watch. why? because the u.s. grew more people bought more from abroad it may be possible to grow the economy and lower imports, but that's a trade theory that so far has defied a couple decades of past history. >> larry kudlow has been on the show before. he went into the administration lamenting his frustration. he said, i have told president

trump that the trade deficit is going to get bigger under your presidency because the economy will get better. we have been saying this for years now. >> if you had a chart like mine that shows -- >> that's the game changer. >> i crunched the data today and i have crunched it before. i looked at it again by decade we have gotten more reliant on imported goods there are areas we could definitely improve with the trade deficit but the fiscal deficit, as we borrow more our trade defenicit goes up along wt it you can't import your cake and not eat it, too, i guess is the way to look at it. >> steve liesman, thank you very much steven roach is an export on china's economy. in his book he explains why a trade war with china would flatten global markets and economies and the aftershocks

would leave american consumers vulnerable good to have you back on "power lunch." >> good to talk to you, tyler. >> sum it up for us. tell us why a trade conflict of the sort that seems to be brewing, whether it comes into full blossom or not remains to be seen, could be so harmful to american consumers play it out for us. >> >> we depend a lot on china number one for providing the low cost goods that help consumers as steve just addressed. we also depend on china to support our export businesses. next to mexico and canada and china is our third largest and most rapidly growing major export market. finally, of course, we depend on china to fund our budget deficits which, as you know, will get bigger and bigger china is t largest foreign holder ou.s. treasury

secuties and if they just reduced their buying at a time when we are increasing our supply of new treasuries into the market that could lead to a real route in the bond marketment. >> we have a goods deficit with china. goods and services, i suppose. but we have a capital surplus with china they are exporting their money into the united states to buy u.s. treasuries. >> well, that's exactly what steve was just alluding to we don't save as a nation. our overall savings rate, if you add it up for businesses, households and the government sector adjusted for depreciation as you need to do fell to 1.3% of national income in the fourth quarter of last year so lacking in saving and wanting to grow we import surplus savings from abroad to square

the circle china loans us their surplus saving to help us square the circle >> right. >> if they stopped doing that, where are we going to get the money from >> you have spent as much time in china as anybody i have ever met. there are legitimate concerns about our commercial relationships with the chinese they insist on technology transfer, on a joint venture approach they put tariffs on a lot of goods that we export to them and they aren't exactly playing cricket with intellectual property how do you address those fundamental inequities in our commercial relationships with the chinese or do you dispute whether they are intechnical es >> these are fair points but they tend to be exaggerated a lot. especially by the politicians that get a lot of air time on shows like "squawk box."

this thorny issue of technology transfer there is a big difference between the contractual sharing of operating systems that was agreed upon by joint venture partners, yes, and commercially negotiated partnerships. and that's very different than outright theft, cyber hacking, and coercion we have to make certain that we understand the difference. if a company signs a deal, again, that's commercially and legally valid in the form of a joint venture, it's not being forced to do that. for us to complain and whine about it, i think it really blows this whole issue out of proportion. >> how much -- just to zero in on that, i would think and i have never been on the inside of one of these negotiations but the price of doing business in some cases would be that you have to transfer this technology and that if we were doing

business with another -- entities in other countries it might not be exactly that way. >> tyler, look was side one of these deals. morgnleyan sta set up a joint venture with a china construction bank to build china's first investment bank called cicc. i that didn't take us into a room and, you know, tie us up and say, we're not going to do business with you if you don't tell us how to run an investment bank we were in this venture together we made a spectacular return during the period we owned it. that's the way it worked in some cases it may be different. these generalizations that are thrown about like the chinese are taking mature responsible intelligent businessmen and locking them in a room until they turn over their technology, in many cases are completely

ludicrous. in some cases they may be valid and those are unwith wit ones tv to look at. >> i will give you credit for turning the dow positive. >> that would be a first >> steve roach, yale school of management and author of "unbalanced". >> we have breaking news on facebook and cambridge analytica. >> facebook information up to 87 million people mostly in the u.s. may have been improperly shared with cambridge. that's a big jump from the number of 50 million people which was originally reported by the "new york times" when it broke this scandal facebook says it will disclose people starting april 9 if their information was shar this comes ahead of mark zuckerberg testifying on capitol

hill next week back to you. >> the stock down 1.3% or so julia, thank you. could investors find safety in small caps if the trade turmoil intensifies? ovloedmaing you erok sll cap picks straight ahead

over the past month the russell 2000 has outperformed the major indices. it is still trading lower but down only half a percent when you compare it to the dow or the s&p which is off more than 2%. so what do you think small caps is that the place to look for safety amid the volatility let's bring in chief investment officer with north star investment manager eric kuby is there still room for small caps to perform here >> oh, yeah. there is tremendous room for small caps to perform. what we have looked at is a 13-month period that ended at the end of january where a large cap growth stocks went up 35%. during that timeframe the small cap value stocks were up only 14%. huge dispersion that left the small cap value stocks really cheap relative to the market so we think this is early in

this transition to small cap beginning to perform again. >> you distinguish between small caps and small cap value a lot of people look at the russell 2000 and think it is very expensive now it trades at a looking at the russell 2,000 thinking it is very expensive right now >> right, right, there is two elements one is big verses small and the other is verses growth we focus on the value end of the sm small. there's a huge performance of not only the small and the large but the value of the growth. they are not expensive >> all right, eric, thanks so much we are running out of time good to have you >> the dow is positive but boeing is still down 2%. a chance to get on board or will trade fear cause more turbulence for that stock all that and more coming up on "power."

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time now for trading nation. check out shares of boeing falling 2% the worst performance of the dow today. larry mcdonald, and barry,

larry, it will start with you what is it telling us today on a day we see their overall market is reversed but boeing is still trading lower. >> the big thing is melissa, you are talking about a stock where 70 etfs have boeing in their top 15 holdings. that's a scary, scary statistic. the last time we had a real break in the market, this morning we were a whisper away from breaking the famous technical trend lines around the 200-day moving average if we were to break a critical trend line in a meaningful way the ecosystem within the eft fear today would not have the

liquidity. >> billy, your thoughts in boeing >> you should have some caution here i think the chart is constructive i like the turn o f the overall market right now i am looking at the s&p, it is never taken out. boeing held the 100 moving day average. i think it is setting up a long-term handle type. i think we'll make it back at 341 if the broader markets continue to work higher. bill and larry, thank you. and now the latest from tradingnation.com and words from our respoinvestor a rising short interest can mean investors are becoming more

berrish. traders are often forced to buy back their short stocks and that could drive the stock much higher

again, a warm welcome to sara who's been joining the "power lunch" team we want to show you what have changed or not changed so much since you've been gone

>> when i left, it was not 500,000 points swing if you add it all up, end of november i went off of thanksgiving break the s&p 500 is down less than 10%. it is barely new >> while you were here for most of 2017, the market moved up >> correct >> and now that you are back -- >> the dow is positive >> you are back. >> there were some big moves bitcoin lost 55% of its value. the japanese yen gained 6% of its value and there is problems with technology. >> and facebook had some bad news >> when bitcoin was falling apart. was this a signal or a sentiment thing or anything of the market? >> a lot of people saw it including him as a leader for

the overall market >> absolutely. >> well, i think it was growing. >> we are waiting for the effect to kick in >> thank you >> thank you for watching "power lunch. >> "closing bell" starts right now. life in the new york stock exchange, i am kelly entrepreneur vaevans. >> i am wilfred frost. >> this is huge come bk. it is a 700-point swings since the lows this morning. the market is coming back. gun gundlach does not think it could be sustained >> the re