>> joe >> more interaction brokers playing for a break above 75. >> let's take a look at the market we're at the high of the day, we seem to be adding to that. the dow is up 361 points there's been a triple digit mover for what, 20 out of the last 24 sessions it's been quite a volatile ride. that does it for us, power lunch begins now here's what's on the menu. president trump's trade comments fuelling this rally. investors are getting ready for earnings season. very high hopes. will it deliver? we'll debate that. general electric stock on track for his 14th straight month of losses. it's longest losing streak ever. the ceo is laying his plans out. yoga for lunch a major makeover for one of the world's biggest food companies that exclusive is straight ahead and power lunch starts right now.

and welcome to power lunch i'm sara eisen president trump is taking another look at our trade partnership. bed bath and beyond is tanking on paper it's worst day in history bitcoin is rallying, the crypto currency was up 17%, above $8,000 results of a $13.30 year auction just moments away. >> thank you, let's get you caught up on some of the other headlines. walmart reportedly close to buying a 51% stake in flip cart. india's biggest e-commerce site. the deal would be valued at $10 billion and would be walmart's biggest online acquisition yet. a big shakeup at the top of

lennar apple's iphomepod is fading. and a guy who is never a dud. >> we begin with the big moves for your money at this hour. look at the moves in the dow, 370 points right now we're following all the action at the new york stock exchange bob? >> hello, 370 points and yet it's odd, it's only 4-3 advancing to declining stocks. i think partly early on we had geo politics step in take a look at the futures this looks at preopen trading. around 6:00, that's when the president tweeted out that strikes on syria could be coming soon or not so soon at all boosted 12 points immediately.

after the open we rose strongly. in terms of sectors, we're talking about the growth movers. industrials are having a great day. boeing is up $10 all the aerospace guys, honeywell is up. tech doing well. material strong, bank stocks are having a good day. i'll show you that in a minute gold, by the way, had a good run also to the down side. goldman and jp morgan are helping the dow up goldman up $5, about 40 points in the dow remember, we'll get reports from jp morgan tomorrowi it's very good that they're there moving to the upside today. overall, if you look at other important things, we haven't seen this in a little while. obviously, we're not going to go to ten, but certainly below 20 is the good sign for the overall bullish tenor of the market. we're back to flat for the s&p 500. exactly flat

0.0% gains for the year. guys, back to you. president trump getting ready to speak this hour in the rose garden about tax cuts and tax reform he's making big headlines about trade. we're at the white house with the latest. >> reporter: let me bring you up to speed on the headlines. the president is holding a meeting at the white house designed to reassure political leaders that he has their back in terms of a potential trade war, signaling he would have a package of aid for the agriculture sector if the tariffs were put in place. the headline that got everyone's attention was when senator ben sasse came out after the meeting, talking to reporters and then said this. >> definitely the big headline coming out of this meeting is that the president said he was deputizing larry cudlow to look at reentering the tpp negotiates. >> reporter: the senator says the president is looking into beginning those tpp negotiations again. remember, that's the transpacific partnership that

the president campaigned against back in 2016 got the united states out of the tpp in 2017. but the tpp went forward anyway with japan and australia really taking the lead on that. the president had suggested he'd be open to getting into a revamped tpp on his own terms as early as january of this year. but now signaling that he's looking at it because it would benefit u.s. agriculture producers. they've talked about a trade coalition of the willing to offset chinese industry. to a lot of people who are critical of the president's policies, it sounds a lot like the tpp. also going on in trade is nafta. the president gave us an indication of his thinking in that meeting a few moments ago, here's what he said. >> i keep hearing how we're pushing nafta. there's no timeline. there's no timeline. no, in the meantime, nobody's moving into mexico as long as nafta's in flux, no

company is going to spend a billion dollars to build an automobile plant we can negotiate forever because as long as we have this negotiation going, nobody's going to build billion dollar plants in mexico >> reporter: that's a really key element of the president's thinking he believes that as long as those negotiations over nafta are ongoing u.s. companies are not going to move plants to mexico because the uncertainty around the negotiations means it might not be profitable. for the president it's fine to have the negotiations drag on pretty much indefinitely because that means that jobs are not going to mexico in the meantime chb meantime that's an interesting look. >> he thinks it gives him leverage when you bring up tpp if finally someone has been able to convince the president that tpp could be a geo political tool, as has often been suggested against china.

>> reporter: that's what the obama administration said about tpp. we need a benchmark to use against china in terms of the chinese economic rise. but the president didn't believe that on the campaign trail he said tpp would be bad for american jobs. would cause jobs to move to those countries in asia. maybe his thinks has begun to change. >> we'll see, thank you. the battle over trade earnings, volatility, geo political tension. the key for investors is to stay in the market that you should be 100% in equities a big statement. joining us now is an investment strategist and the president of pacer etf. what do you think? do you agree should you be 100% equities right now >> i think the earnings that are going to come out here will be somewhere between 16% and 18%. i was in charlotte yesterday with our friends from cfra and

that's their number. i like that number and i think that's what lifts the market a little bit higher you know, we have this headline risk every day there's an announcement that jolts it one way or the other but at the end of the day investors buy stock and they look at earnings because those future earnings are what they're buying today. >> do you think he means that people's portfolios should be 100% equities. >> i'm not larry, listen i'm an etf guy. i'd like everybody to have all their money in equities too. i don't think that's what he's saying what he was probably saying, if i could be so bold as to speak for him, is he's fairly bullish on the market and it's not the time to be out. >> what do you think, 100% equities are you bullish? >> i think the undercuts that happened on the 9th was the low. i'm not -- i'm never 100% wrong on equities, i always think you should have cash to take

advantage of opportunities as they present themselves. i agree with sean. i think the market is going up secula s we still have six, seven eight years left, i think stock exchan exchanges will be higher. >> i'm 90% right now we did raise some cash i was on your program all through january saying our models suggested that january was the first window of downside vulnerability in years we did raise about 20% cash and we put half of that back to work at the lows. >> any concerns about rising interest rates as we await all of these auctions and all of this debt and all the borrowing that the u.s. government is going to do? are you worried about who is going to buy that stuff and rising interest rates? >> i don't think it's necessary the rates rising, it's how fast they rise that will have a bigger effect. i was looking at the bond yields that's the competition, right? when you look at the developed

markets and you look at where a ten year treasury is, it's at the top of the stack in terms of the yields you get we're competing for money with these fixed income yields. that's the thing that people forget what are you going to do are you going to take your money and buy a ten-year italian bond? >> what does that say about the united states if our yields are that much higher >> i think it's probably dollar related here recently. we're further into the economic cycle than those folks are in europe they're a little bit behind in trying to figure out how to come out of the downturn. it says that the united states at this point from an economic backdrop is probably healthier than europe. that's why you have those other countries with lower rates it's not so much to attract capital, but to put less burden. >> it seems counterintuitive you have to pay more because you're healthier. >> you have negative interest rates in some places you know, those are purely

probably currency based. >> we've got to go jeff, get you more next time >> no worries. >> thank you >> thanks. got a news alert in the bond market 30 year bonds are up hey, rick. >> reporter: the last stock to lead $64 billion out the door in this particular auction, 30 year bonds issued a couple months ago. $13 billion dutch auction yields 3.045. that's pretty darn close to where the one issue market was trading. indeed, if you look at all the metrics, they're all pretty average. all these auctions are average i gave this one a c plus so it's actually the better of the three. the reason i fwgave it a c plus it was close to the average, as was 61% on indirects the thing that made this a bit

better than the rest, 14.6% on direct we had a 14.8% last month. those two numbers are the best two going all the way back to october of 2015. so we get a c plus rates actually have peaked up a little bit around auction time let's see if that moderates a bit now that supply is out the door tyler, back to you thank you very much. let's get to contesa brewer for market flash. >> go pro is spiking up 6% on news that a company, a chinese company, may be weighing bids to buy go pro the company has been exploring sales for months four years ago, it was worth $12 billion market cap now they're throwing around maybe a billion dollars in a sale over the last year, the stock has been down more than 40%. at this point, a sale may be the best hope for the stock price, tyler. thank you very much. general electric shares are

losing more than half their value over the past year and on track now for their longest monthly losing streak ever can the company turn it around ge's ceo spoke with cnbc we'll get the street's idea. subprime loans, they're back but just don't call them that. are we going down that same nasty path again take a look at the biggest gainers on the dow, why don't you? intel, cisco, boeing, power lunch will be right back

welcome back to power lunch. shares of general electric languishing around $13 down more than 50% in a year the company's freshly minted ceo is speaking about his plan to turn it around morgan brennan joins us from the nyse with that morgan >> so at a cnbc event last night, ge's ceo shared his vision for the struggling company a year from now. >> the reality is in one year, we have to have proven, you know, and we have our first report card coming out on april 20th we have to have proven we can run the company better and improve the results and get the

essence of the company to shine. >> and he's referring to the first quarter earnings which are due next friday ahead of a shareholder meeting the week after. he's saying his relationship with a board member has been very positive. >> i want the exact same thing at the board i like the idea that they've got, you know, good well researched thought through ideas. i found that relationship in their involvement to be very positive. >> lastly, flanry chiminery saye believes this will sort itself out. he does expect a lot of noise and drama along the way. i'll also note ahead of results next week, ge is expected to restate 2016 and 2017 earnings due to new accounting rules. those restaltements are expected

tomorrow. "the wall street journal" has out report out that ge could be planning an ipo what does this mean for ge stock? let's bring in christopher glen, an equity analyst at oppenheimer. does this solve the problem? if shareholders are able to retain control of whatever is spun off or whatever is made public, does that solve the problem of the pension liabilities which had always been sort of the obstacles, if you will to breaking the company up >> no, i think there are two separate issues. i think the talk about hybrids as a spinoff, reflects the fact that their plan is to sell off $20 billion worth of assets. and the markets may not be attractive to ge to sell into for each of those pieces on their timeframe. those markets are as they are. not necessarily as ge wants them

to be. this is showing some adaptability and flexibility to get those done. >> are you expecting much clarity over the next couple of months we have a major industrial conference in may, there's a number of potential catalysts out there if he is to get some details? >> yeah, i think in terms of gaining his process, the best so far has been what he hasn't said, which has been locking himself into a pathway or a strategy i mean, this is a complex process to negotiate through finding the insurance reserves, the pension funding, while they're generating sources of cash through the divesturers so i think it's going to be a gradual process. i don't think there's going to be a day or two where we get, you know, final clarity on the liabilities being solved

this is what you're buying with ge now and forever >> he certainly has a very difficult needle or several needles to thread. ge capital has been one of them. what happens there >> so ge capital, it's an equity ownership stake by the parent. in many respects, they're independent. i think they have the funding wherewithal to deal with the insurance reserve requirements over the next several years. but they can only work through that process with the backstop of belonging to the parent so i don't think that's ultimately going to be a draw on the parent other than it restricts their ability to have any discretionary cash they have to build cash in the process. >> there was really -- i was there at the event last night. if you were to play the game of buy, sell, hold, not of the stock, but of the assets that make up the current general

electric, you would have to have come away from that meeting thinking that mr. flannery was seller, not a holder or a buyer. >> i'm not sure what the embedded question is there are assets they want to sell i think in the long term what you're probably looking at is a portfolio with aviation, healthcare, power, and renewables the big kahuna for them is if phed opens very well, that opens up a window where they can ipo their 62% share in bhge. that could put an end to the liabilities. then you're left with those four core segments that might have, you know, $0.75, $0.85 of earnings power and $0.65 of cash. >> lighting go and transportation goes one way or the other? >> yeah, that's fait accompli. >> how confident are you in the

divide dividend >> if you look at the core three cash flow right now, they're generating $6 billion this year, maybe a little better with some working capital liquidation. that $6 billion is going to include about $1.2 billion, $1.5 billion of businesses they're expect toded to devest d some benefit from a lower tax rate so you're looking at kind of $4.5 billion sustainable free cash flow against the $4.2 billion dividends it's tight you'll never see as low as $4.5 billion cash flow because the tax rate will go up gradually as the core businesses continue to grow a little bit and the divestiture process won't be the same. >> safe for now, is that the bottom line? >> i think they could stand to fund a lower dividend at this

point. >> a lower dividend. >> i don't think the math dictates they have to today. >> sure, great to hear from you, thank you. christopher glen from oppenheimer. ten years ago, the stock market and the u.s. economy collapsed as subprime mortgages crashed the housing market that would never happen again, right? turns out subprime is back but it's got a new name. as we head out to break, take a look at the homebuilding stocks taking a beating in das rk rally some of these names down 1% to 2% power lunch, back in two you know what they say about the early bird...

he gets the best deal on the perfect hotel by using tripadvisor! that's because tripadvisor lets you start your trip on the right foot... by comparing prices from over 200 booking sites to find the right hotel for you at the lowest price. saving you up to 30%! you'll be bathing in savings! tripadvisor. check the latest reviews and lowest prices.

flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives,

risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. welcome back to power lunch. let's get a check on the banks as they kick off earning season tomorrow the etf on pace for its best day since march 26th regions, financial and citizens financial among the regionals leading there. take a look at the big banks jp morgan, bank of america, citigroup. citi is on pace for its best day of the year. coming up what is moving the markets with the dow up nearly 300 points at this hour? w ingrn hpi of in the green, hogog eeiselng one of the largest food companies. power lunch will be right back think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfolio

and add potential income. bring amlp into the game. before investing, consider the fund's investment objectives, risks, charges, and expenses. read the prospectus carefully at alpsfunds.com/amlp where can investors seek pin an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

hello, everyone, i'm sue herrera, here's your cnbc news update nbc's andrea mitchell call up with nikki haley who told her there are no easy answers in regard to the suspected chemical attack by the syrian government on its people. >> there's no easy answer to syria.

we definitely have enough proof, but now we just have to be thoughtful in our reaction we'll see what happens i know the president is looking at his options the national security team is trying to give him as many options as we can. we'll be thoughtful about it and see what happens. the oklahoma teacher strike is in its ninth day. the two largest school districts in the state remain closed, but smaller districts say they will resume classes today teachers are demanding salary increases and more school funding. and the new york knicks firing their head coach. the team losing more than 100 games during his two year tenure the associate head coach was also let go. changes in new york. you're up to date, that's the news update this hour. thank you very much. we lost a little steam in the rally here we've got the dow higher, up by almost a percentage point. up by about 14 and the nasdaq composite holding on there remember the dow had been up by

as much as 370 points at the high intel, as well as dupont, boeing leading the dow higher mgm leading the s&p 500. subprime mortgages are back but don't call them subprime diana olick explains. >> reporter: non-prime that's what we're calling them now. they're still mortgages made to borrows with poor scores and high debt. they' carrington says they'll accept borrows going down to 500. they'll accept recent credit events like foreclosure or bankruptcy, as is a history of late payments.

they'll cash out refis self-employed borrowers can use bank statements. >> we're going to keep some of the loans on our books, but we'll secures atize some of the loans. people want to buy non-prime loans that have been properly underwritten. >> properly underwritten, that's the key to remember. carrington says they'll manually underwrite each loan to account for individual risk. if you have higher risk you have to put down a higher down payment or have more cash reserves your interest rate will surely be higher. much more on this new non-prime market on cnbc.com back to you. those cherry blossoms look lovely down there. fathank y thank you you. one of the world's largest

food companies, danone say it's becoming the largest b corp in the world. it's a certification showing that the company meets a host of social, environmental and accountability standards it's the latest news to push into healthy living and sustainability joining me to talk about that in a power lunch exclusive, we welcome the danone ceo and chairman i know this is a big deal for you guys b corps, you usually don't think big food multinationals, how did you get it done? >> i think the essence of the move here is that we see people changing their relationship to food people are moving from big to small. from global to local they want to understand simple reci recipes. they want to understand the ingredients, where they were grown, what kind of agriculture. they want to understand who the

people are behind the brand. this is true all over the place. we decided that we needed to take our own part in embracing this revolution. we need to rebuild trust as companies, as an industry. i think the b corp certification is a fantastic way of saying to everyone that this is the ethos of the people that are behind the brand. >> we saw you moving in this direction back in the middle of 2016 how is that integration going? are you finding any challenges there? >> the integration is going well our synergy plan is slightly ahead of the plan. we continue to see enormous traction in the long-term growth behind the non-dairy alternatives with brands like silk and many others and so delicious non-dairy which is great combination of our dairy

business which is making danone an unparalleled brand company that can address the needs for people to have a variety of protein choices on the market. >> people talk about innovation and technology all the time. i walk into the supermarket, i've never seen so much yogurt in my life it's a very competitive marketplace. there's all these new products what's the next thing when it comes to innovation in yogurt? it seems it's a trend driven business where people are trying different things all the time. >> yeah, you're right. it's very interesting. because this category has been blessed with growth on a global scale basis. you know, for the last 20 years in the u.s. it's been growing fast danone continues to be the leading company in the space we see actually the shelf is growing. >> i bet. >> it's one of the -- >> but aren't the other volumes

down in the u.s. >> the volumes are under pressure right now because there is a lack of innovation from the large companies and the large brands it's populate would a number of smaller ones so you have a choice of either self-destructing your innovation which we're trying to do, but also bring a new slate of brands when we acquire brands like international delight and many smaller ones that are on the shelf, we're basically bringing them into our own ability to push them on the shelf and give their lot a completely diversified offer to our consumers. >> you've been a buyer there's long been rumors that you might be a seller. it's been talked about whether pepsi would buy you. what are you thinking about when it comes to potential deals? >> well, i think this food industry overall has been about consolidation waves from time to time i've been in the company for 20 years. i've been the cfo when a big

wave happens in the early 2000s here in the united states. we've made a choice to go for our vision of one planet, one health nudging people towards healthier and more sustainable practices that's driven our portfolio construction of businesses ten years ago, we switched out of biscuits entirely and moved into baby food and medical nutrition. a year ago we decided to go into the future with the acquisition of white wave. we now have an unparalleled number of categories to -- that are growing. therefore, you don't think the same way about the potential deals or how can i cut my costs because i don't have growth. the same way when you have that future and where you don't it's a matter of really how are you surfs the waves in the food space. you need to be nimble. >> what do you think of the strategy which is facing

increased scrutiny right now to raise margins by cutting costs >> i think the jury is out i'm not here to comment on -- >> it's affecting your business and your -- >> not directly because we're not competitors in the same categories what i see is that when we do savings, we know how to reinvest them into growing categories and brands that are sustainable and are meaningful for consumers and again, the b corp is a huge step in rebuilding trust that i think in many ways cost cutting has been hurting in the minds of consumers and shoppers and the broader community. which is important to say that food is not a business game. >> there's a lot of changes going on in france because of emmanuel macron. back to the idea of whether there would be mna back in 2005 french politicians went crazy at the fact that pepsi might be danone.

when can non-u.s. companies buy a company like danone? >> i think they can. the government is very clear on the fact that having french based global leader companies is part of what france wants to be and what france can be with europe i think they're very focused on what companies are actually bringing to the country. whether they are from outside or inside france. there is this connection, also, in the law that's being made now with the possibility for companies to incorporate in a little bit way of public benefit corporations here in the u.s we're working with macron's government right now in france there is a balance and i think the government will continue to pay attention to what grows at the end of the day. >> you'll have to come back so we can talk more categories.

thank you so much for giving us a snapshot and sharing the news with us. >> thank you. >> ceo and chairman of the danone tyler? thank you. does america have too many stores if so, what's going to happen to all that real estate the ceo of a top store will be here eric jimmy is looking for brand-new suit, what are you seeing, eric >> that's right. i want your advice here. i could get the red suit, the blue suit possibly and maybe the white one. i don't know, a lot of choices dais nordstrom just opened we'll have more when power lunch comes back in a minute

welcome back to power lunch, everybody. nordstrom opening a full service department store for men in manhattan today. and get this, it will be staffed

24 hours a day eric is there to explain why someone might need to go to nordstrom at 3:00 in the morning. eric >> reporter: hey, tyler, that's right. 3:00 in the morning, that might be good for a lot of people here in manhattan that's one of the big attract n attractions. it's nordstrom's first full line store and the first men's store in the entire country. they've got to compete with the online competitors, it's opened 24/7 you can return things downstairs without talking to anybody scan it, drop it in the box and you're done. there are a lot of perks here. there's iphone chargers, a liquor license in the whole building they're trying to find the balance between the in store experience where people want to touch and feel and customize their suit like i'm doing over here i still haven't figured out what color i want but then there's all these online amenities in manhattan, free delivery, same day there are taylors on site.

the women's store that's opening next year, the staock was down 40% in the past couple of years, but this is their big bet. maybe tyler i'll see you here at 3:00 in the morning in a late night pickup. >> is it literally open at 3:00 in the morning for me to go in and browse or is it open at 3:00 in the morning for me to do a pickup how open is it >> reporter: it's open 24/7. so that's the whole idea it's convenience part of the perk is you order something online, you come and pick it up anytime of the day. you can browse too like i'm doing. >> thank you very much, we appreciate it. bring me -- i like the white suit. >> i vote for the white suit. >> we like the white suit, it's very elvis it's good. >> reporter: okay, thank you. retail challenges and higher interest rates is taking a toll

on store capital they have a portfolio over 1,900 properties in 48 states with 70% of those locations in service oriented businesses. such as retail, restaurants, health clubs, berkshire hathaway holds a 9.8% stake in the company. here for an exclusive is the ceo and president, chris bolk. al you carefully corrected me when i said your business model is in retail you would make an important distinction there between retail as we typically think of retail, which is about one fifth of your properties and service businesses >> retail is a mode of distribution if you're thinking about furniture or thinking about bass pro shops, these are places where you can buy goods that might be available over the internet we have some of that but then we also have lots and lots of service businesses i've been trying to get a workout over the internet over the years and it's hard to do. >> in that sense, you try to

focus more heavily on things i would say are amazon proof >> definitely. and things that have a reason for being there. retail is totally experienceal. >> 67% of the mix is in services you actually saw that back in 2011 you saw the train coming and you decided to design a portfolio like this. >> right you have to make certain bets when you're doing this business. we're entering into lease arrangements with middle market companies from across the country. the question is, what industries do we want to get into we're focusing on industries we think are sustainable. >> why middle markets? >> it's the biggest sector out there and the alignments of interest are pure. >> meaning what? >> the middle market companies, for them, a sale lease back is not a debt substitute. for investment grade companies,

when you get them capital, their choice is debt and equity. so you're really fulfilling a huge portion of the capital stack. >> so the business model is you buy the property from the owner or the service provider who owns the property, right? >> yes. >> typically you would lease it back to them >> we would, that's correct. >> on a long term lease. and they get the -- they fundamentally cash out of the real estate, right isn't that -- >> most of the time it's done in concert with acquisitions of companies or refinancing or companies going through multigenerational transfers. i wouldn't say they're cashing out. it's a way of capitalizing. >> talk me through it. >> you'll have for example, veterinary clinic operators, they operate multiple clinicings they' you're acquiring both the real estate and the operations of the business we're there to provide capital for the real estate, we finance that then they put in couple for the operation of the business. >> why wouldn't -- i would imagine the capital markets in

recent years have been wide open who why wouldn't they use the real estate to collateral and go to the markets to raise money >> they have to put up 30%, 40% worth of equity and it costs a lot of money the debt is never assumable. they can't get anybody to assume it in most cases the debt can't be amended later on they can't add to the debt later on they can't close down a location we're here to not only lower their cost of capital but make their companies more flexible. >> what is the impact on your business of rising interest rates? >> we've run three public companies. i've been associated with taking three companies public and our returns in all three environments have been double digits and we've outperformed all these benchmarks one of the myths out there that we talk about is the notion that

rates are interest rates sensitive. lease companies like us are creating long term contracts are more sensitive which is not true. >> you've found that it doesn't matter it's a non-factor? >> correct the goal is to make returns that are double digits in any environment. so whether rates go up or whether they move down we think that that's possible to do. >> you've got a nice glimpse into the psyche of the business owner in terms of what they decide to use that capital for once they sell it and get proceeds back. so what -- how do you gauge sentiment right now? >> we gauge sentiment pretty well our average customer last year grew their revenues by 10% total. most of it was through expansion or acquisition of other companies in their space the customers that we do business with probably run 24,000 locations, employ two million people we helped through our capital to

create almost 200,000 jobs last year. >> thank you very much >> appreciate it. >> ceo of store capital. this week, crude oil is $66 a barrel that's losing energy stocks which has been the best the time your portfolio "power lunch" will be right back your portfolio "power lunch" will be right back one second. barely enough time for this man to take a bite of turkey. but for cyber criminals it's plenty of time to launch thousands of attacks. luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world. it's a smart way to eat lunch in peace. sweet, oblivious peace.

welcome back to "power lunch. energy on the rebound. in fact, one popular energy etf is up more than 5% so far this week there you see the energy spider, xlf, and oil prices yesterday hit their highest levels in three years. they have come off those levels today. will the energy rally keep on rolling? our next guest says 2018 will be a record breaking year for the energy sector and with us is the managing director and portfolio manager at tortoise. good to have you here. when we show people the price of oil, how many dollars do you ascribe to the geopolitical tension we've seen and how much of that is just pure old supply and demand >> at tortoise, we think the oil price should be between $55 to $65 a barrel $6 is probably geopolitical risk >> is it justified because of what we've seen with the missile going into riyad yesterday and

being intercepted? >> well, you get a lot of parties involved you've got saudi arabia, one of the largest oil producers in the world, russia involved, one of the largest oil producers in the world. you haven't even talked act ibot iran and sanctions that could impact a million barrels a day the supply/demand is very tight right now. >> i guess i wondered what could lead to a supply disruption event as they like to say in your business? we're not that close to that, are we >> i hope not. probably the biggest thing is the iran sanctions, right? pre-sanctions, before the sanctions were removed, iran was producing a million barrels less the global oil markets are already undersupplied. oil inventories globally are falling so if you take a million barrels off the markets again, that will probably result in higher oil prices. >> do you believe there's ever really going to be a long-term relationship between saudi arabia and russia, an agreement to cap production? i'm not convinced the russians could go along for that long >> that's a good question. that's a new thing that i think

would be fantastic for the energy sector, an alliance between opec or saudi arabia and russia, that manages the oil inventories longer term, i think that's a great thing what it does is stabilizes oil prices and stable oil prices are really the key for investors to return to the energy sector, because there's some great deals out there in the energy sector if you have stable oil prices. >> you said it's going to be a record breaking year >> yeah. >> for the energy sector production, you mean >> in the u.s. so we think there's a tremendous opportunity in the u.s. across the entire energy sector, all the way from producers to energy infrastructure companies, because it is a recordbreaking year in the u.s. this year and record breaking exports. we're doing it in a major way right now. >> certainly help the trade deficit the president is so obsessed with and upset about. good to have you really appreciate it news alert in the auto sector, phil le beau joins us on

the phone. >> we have a replacement of volkswagen ceo, and this is something that we reported on tuesday would be happening this week he has left the company after three years as ceo of volkswagen he is being replaced by herbert, the ceo of the vw brand for the last years and as the ceo of the vw brand, gets high marks for doing a couple of things one, saying that it is a company that needs to improve its cost structure and outperforming expectations for the vw brand over the last year and a half, he now will face the challenge of moving volkswagen past the dieselgate scandal that has lingered but again, herbert, the vw brand ceo has replaced matthias muller as the ceo of the overall

volkswagen corporation michelle, the hottest thing in the nevada desert right now ice hockey the vegas golden knights winning their first ever playoff game. coming up, we'll talk to the man selling ice in the desert. golden knights owner joins us. and the markets staying hot as well right now. we have a triple digit rally in the dow. financials are the best performing group in theto the s0

experience a blend of refined craftsmanship... ...and raw power, engineered to take the crown. presenting the all-new lexus ls 500 and ls 500h. experience amazing, at your lexus dealer. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. 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. where can investors seek pin an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies

to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. show of hands. let's get started. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online.

i'm michelle and here's what's on the "power lunch" menu stocks are rallying as the president comments on trade and tweets that an attack on syria may not happen soon. what do you do do you buy this rally or tread with caution hog wild the proposed chinese tariffs could put a big freeze on sales for the pork industry. so, what does it mean for your sunday bacon plus, ice hockey in the desert in their first season, the vegas golden knights score a big win in the playoffs. the owner is going to join us to discuss how they got here and how he managed to make hockey in vegas as hot as the weather. "power lunch" starts right now ♪

welcome to "power lunch. i'm sarah. broad rally on wall street with the nasdaq and s&p now on pace for their biggest weekly gain in about five weeks as you can see, we've got a 1% plus move in the dow up 280 points financials, technology, and industrials, those are the leading groups right now real estate and utilities are lagging. powering the dow, intel, cisco, gold dupont, and jpmorgan. some other movers here, blackrock higher on the back of its earnings this morning. zuora soaring in its trading debut and bed bath & beyond, sinking. lots more on that straight ahead. >> welcome, everybody. here's what else is happening at this hour. stewart miller is going to step down to be replaced by the company's president. mr. miller has been with lennar for more than 35 years espn launching its streaming

service with live sports and other programming is going to cost $4.99 a month and is d disney's first ever direct to consumer service in the united states and the names harvey, irma, maria and nate have been retired now by the world meteorological association. storm names are retired if they were so destructive that future use would be insensitive melissa? >> well, tyler, we're on pace for the 20th triple digit move in the dow, up or down we're off the levels now so what happened bob and mike join us from the floor of the new york stock exchange bob, kick it off that happened around 1:20 this afternoon. >> yeah. maybe 1:10 it's not clear what happened now, cnbc.com did run a story saying that president trump was near to making a decision on syria soon, and that they may be targeting up to eight potential targets. that's a little bit of news that we were citing anonymous sources

there but that got people talking a little bit and as you can see, we lost about 15 points in the s&p and got a good part of it back, mike >> obviously a reflex move it's interesting when you have these situations where you have kind of an expected reaction like this in terms of a military action, you don't even know if that tells you what the market's going to do if you eventually do get a strike i remember 2013 syria in the lead-up to it, you had the market very nervous, very sensitive to headlines and it didn't really pan out in terms of how the market reacted to the actual strike. even the invasion of iraq in 2003 was like that to me it's about a headline in a vacuum at this point >> and what it didn't do was drop the market leaders today. i'm very pleased that banks have held up superbly and we're going get jpmorgan tomorrow. we've got rising rates, higher volatility and i think that's going to -- i think you're going to see prizes on the trading front. we've been talking about lower trading for a long time. i bet you'll' 8% to 10% increase and we've got the lower tax story too as well.

so, banks are holding up really well >> it's interesting the mix of stocks being down, going into earnings season, but earnings estimates have not been down, so does that mean that estimates are kind of setting a high bar or that stocks are prime to react positive i think those are some of the offsetting currents we're going to be watching over the next few weeks. i think the market was trying to get back to a normal state >> exactly >> treasurely yields lifting a little bit so, we'll see if that comes through. >> maybe just change the conversation back to the earnings story david faber had my favorite line of the week. he said, remember when we used to cover companies and not geopolitics every day? i'm looking forward to that. >> let's talk about that brad mcmillan joins us, chief investment officer and cnbc contributor david seberg, managing director at cowan what's the buzz? how do you weigh those big, looming geopolitical risks, not to mention a potential trade war with what we're about to see starting with the banks and earnings tomorrow?

>> yeah, i mean, i think we've talked about it on the show a few times. it's about earnings coming in now. you saw what happened at 1:10. they were just talking about and discussing the news that came out on some service, essentially, saying that we were about to, you know, launch missiles on eight targets in syria. the tape reading out shows that. we saw a blip in the s&p but quick to rebound afterwards. it shows you there's a lot of response on this tape based on algorithmic trading. so the near-term moves back and forth don't really pay attention to it's really the set-ups going into certain events and the event right now is earnings and i think that are we going get headlines from the standpoint of president tweets, they're going to rattle the narcotmarket no question. however, the eye is on the ball with earnings season, kicks off tomorrow in a major way. i think they're going to come through and i think the market is going to start to trade in a much more positive way >> talk about the set-up for banks, which are leading the market higher. we'll get earnings season. jim kramer called it the most important earnings season for banks in years because this market is starved for a positive

catt catalyst the question is, can they deliver and is that a group you want to be in. >> i think they will deliver and i think they've got a lot of tail winds that aren't really appreciated. we're coming off a weak growth period, things slowed down a little bit banks are positioned to do well because of the trading, because of the interest rates. and most importantly, because of the deregulation we're going to have a lot of opportunities for banks and that's going to show up this quarter, but even more it's going to show up in guidance we've got high expectations, even if they don't get beaten, i think banks have to be optimistic going forward >> david, what about you what other sectors are you watching maybe you can comment on energy because oil is trading at multiyear highs and all of a sudden we've seen this breakout for energy stocks. >> i'm not really chasing the energy, you know, sector here, just based on some geopolitical events that are taking o oil, the commodity higher in my opinion and i've said it on, i'm a little bit wrong here, but not a buyer of the equity right now. i think a lot of them have

gotten to a level that are fairly valuable but i look at technology i look at some of the names that have been really derisked or taken the valuations have been reset, if you will, just given the concerns over some of the mega cap, facebook, et cetera, i think we saw that sort of purge or that derisking that occurred within some of these really crowded trades to me, that's exciting the pullback was a buying opportunity. i look at the likes of facebook going into earnings. i look at the likes of netflix going into earnings. i've been buying these stocks. i think that facebook is actually set up really well here to really beat the numbers >> they can beat on first quarter but you think they're going to come out, david, in this political context and say, q2 looks amazing and the rest of the year looks amazing that would be sort of tone deaf. >> we went get guidance. >> but talking just in general >> here's what i would say i think this is a trader mentality. the stock is trading based on 11 times -- it's inexpensive for the earnings growth trajectory

they have. but here's the story engagement engagement is not going to be off. we do the study today that showed engagement hasn't pulled back you got zuckerberg's -- he's an arrogant guy let's just call it what it is. he's sitting in front of congress in my opinion, i think he wants to show the streets something. i want he wants to put up a quarter that's incredibly polished and i think it's going to happen. again, guidance aside, we're not going to get it but i think the earnings are going to be good. >> that survey, though, that you said -- you forwarded me that survey, david, users spent about 53 minutes a day on core facebook in the first quarter and only 1 months of it really was potentially tainted by cambridge analytica. and that's versus 58 minutes per day in the first quarter of '17. i mean, it has gone down and it went down also versus the second quarter through the fourth quarter of 2017. >> correct it's been trending down. i wouldn't look at it quarter over quarter

you have to look at it more year over year, take the cyclicality out of the equation. but i will say that the surveys we've done from an ad buyer perspective and the clients that we're talking to, they're waiting for this quarter earnings to come out they want to hear comments, obviously, continued commentary from the company but the engagement factor hasn't been an issue. it's showing up in the surveys that we're currently doing so we're not concerned about the survey side of the equation. q2 is going to be important but we have to get q1 out of the way and allow the traders that and people the investors to have a line of sight here a little bit in the near term and i do believe that at the current level, it's cheap. the stocks will be bought ahead of earnings. >> april 26th, i think, facebook earnings we'll leave it there shares of bed bath & beyond sliding about 19.5% today. joining us on the cnbc newsline is anthony who just cut his price target for the company

great to have you with us. >> thanks for having me. >> does this company last? i mean, does this company stay in business? >> that's a good question. i think that it's -- what we're seeing here is dpeath by a thousand cuts and it seems like the slashes, unfortunately, are getting a bit more deep. you know, look, they have still profitable they are still generating positive free cash flow. they still have a relatively underleveraged balance sheet so they're not going away any time soon but if they remain on their current trajectory, you know, this could be fears just five to ten years earlier. >> it didn't look like they had a lot of short-term debt they had some long-term debt there. in terms of management's plan for 2020, i mean, some pretty big goals for 2020 if they're able to hit that, are they out of the woods completely >> i would not say that they're out of the woods and i think, quite frankly, that's something that kind of spooked investors, the fact that they said, you know what, gross margin is going to be down in 2018 and 2019, we're going to deleverage our

sg&a in 2018 and 2019. i think that investors expected the inflection point would be much earlier, maybe not 2018 but certainly 2019 so the fact that they sort of pushing out, you know, profit margin or, sorry, earnings growth to 2020 is definitely something that really kind of scared a lot of investors. >> so, anthony, the stock is down 23% in a month, 55% in a year, 76% in three years 74% in five years. and yet, you and several others who follow the stock only have a hold rating on it. what in the world would it take for you to switch to a sell? and why don't you have it? explain. >> that's a good question. just in fairness, i did have a sell on the stock last year, which worked quite well. it's just that, you know, given the fact that the stock is down as much as you say that it is and given the fact that the valuation looks relatively inexpensive, we're just not sure

there's significant additional downside from here, at least over the next 12 months. >> why can't they make any headway on the digital side? look, i mean, a lot of companies are competing with amazon when it comes to basics, especially walmart and then they grow their e-commerce business. why does bed bath & beyond seem to be having trouble here. >> i think the problem is that they sell a lot of commodity products that you can find at other places, and in many cases, for less we do a quarterly pricing study and what we found is that bed bath & beyond is about, call it, 18% or 19% more expensive than amazon >> but you get those coupons every time you go. >> i was going to say, if you use the 20% coupon, they are a little bit cheaper but the problem is that bed bath & beyond's gross margin has declined, i mean, a countless number of quarters year over year because more and more people are using those 20% off coupons, so it's sort of darned if you do, darned if you don't for bed bath & beyond. >> are they closing enough stores fast enough >> i don't think that they are

i absolutely positively don't think that they are. they talked about closing 40 of their core bed bath & beyond stores this year i don't think that's enough. and they're actually going to open about 20 bed bath & beyond -- or sorry, bye-bye baby and cost plus stores i think they should be much more aggressive in terms of closing stores >> are they a candidate to be taken over, particularly by private equity since they can lever up the balance sheet >> we have looked at that. and the problem is given the fact that free cash flow is falling off a cliff, given the fact that profit margins are falling off a cliff, and the fact that you have had a pretty terrible track record of retail lbos recently, toys "r" us is liquidating, sports authority, pay less shoe stores >> hasn't private equity been in this before? am i confusing that with another retailer >> maybe linens and things >> yeah. that's correct and they were bought out and ended up going bankrupt and that's a great point

that's certainly something that practically -- they're going to think about as well. >> stores that have names with things in and it beyond in it -- >> it's always that beyond that gets you in trouble. >> sure. i'm not sure it's a good idea. >> anthony, great to speak with you, thank you anthony chukumba >> i went to bye-bye baby every single day this past quarter >> i wonder why. >> that store is addicting >> they also give 20% coupons. >> they do tons of -- >> that's a problem. >> why do you do that instead of amazon >> because you can go when you need it and it's in my neighborhood you have to wait, you know, a day or two on amazon >> and it's a nice outing. >> but the truth is, if i can wait a day or two, then guy i g amazon >> here's what's coming up on "power lunch" and things, beyond miracle or mirage in the desert. sin city's first ever big league team in any sport is winning games and hearts can they keep the streak going the owner of that franchise will

join us ahead. plus, apple's home pod not wowing customers look at what went wrong. but first, delta shares taking off on earnings. what the ceo told cnbc exclusively. all that and much more on "power lunch. there's some heat with intel leading the way. play "do it like this".

[music plays] when everything's connected, it's simple. easy. awesome.

oo delta airlines jumping more than 3%, airline posting record revenues despite the head wind of rising fuel costs here's what the delta ceo told us in a cnbc splexclusive interview. >> it's been volatile. certainly over time it's been up it's been about 25% up on a year over year basis. we have to be able to price it in our revenue base. i think that will be the wild card for the year in terms of where fuel prices go it was bouncing all around in the quarter, actually, down at one point, it's been up so we'll see what's going to happen >> let's bring in brandon. he's senior analyst with barclay's. right now, investors seem to be very pleased about the record breaking revenue, not so worried about the rising cost of fuel. are you as optimistic as the market is acting today when it comes to delta shares. >> i know the stock's up today

but if you look to year to date performance and arguably the last three or four years, in 2014, delta was in the $50 range. it's been volatile since then but year to date, shares of like american, southwest, delta, all down from 10% to 5% versus the market so if you're an institutional holder of these stocks trying to make money in an active portfolio, it's really challenging and it feels like every forward step with make with revenue or initiatives on the commercial side, we take two steps back with fuel and i think that's been the case this year >> do they hedge enough? do they hedge at all i mean, every airline has different philosophies about how much money they want to spend. >> i think the industry for the most part learned its lesson that hedging, even though it's good for an investment bank like us, because we collect a lot of fees, that drives the cost of fuel up over the long run and it doesn't change the underlying cost of fuel so what you really need to do is change the core fundamentals in the business and i think wall street's very fickle we see fuel prices going up every day.

just like ed said, that's the big wild card this year but if we don't see incremental revenue going up right away, people are going to say, this industry doesn't change, that's why these stocks trade at eight times earnings >> you're overweight, the stock, and yet you sound a little not so positive about it explain the rating then. >> look, we do think that over time, you know, what's the s&p trade at, 14 or 15 or 16 times earnings you have delta, which has margins and returns that are upp upp upper coords i think we're a bit too pessimistic pessimistic on this industry there's bad history here and again since the precipitous drop in oil prices since 2015, earnings and margins have been coming down even though the economy is moving in the opposite direction >> brandon, thank you. brandon oglenski

still ahead, apple's home pod is facing the music. failing to wow consumers, that story straight ahead as we head to break, take a look at tech stocks, all moving higher today "power lunch" is back in two nobody's putting their money into equities. they're not investing in commodities or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

welcome back alexa, apple's home pod isn't coming to take your job any time soon disappointing news for apple the stock, though, higher despite reports about its home pod. josh lipton is live in san francisco with more details. hey, josh. >> michelle, apple's home pod started off with a bang in the last week of january, captured 38% of the market in unit sales. that's versus 49% for amazon's echo family and 10% for the google home, according to slice intelligence but by late february, weekly sales slipped to just 4% of the category on average. all told, during homepod first week of sales, it took 10% of the mark, trailing the competition. market share, we know, that's one important metric but revenue is another between late january and april 1st, homepod controlled 19% of

revenue in the category, and that lags amazon but does beat google gene munster of luke ventures says homepod is the best-sounding smart speaker out there, hands down, but he also ran the speaker through more than 780 queries to test its smarts it answered 52% correctly, underperformi underperforming alexa and cortana. still, apple is going to ultimately sell 7 million this year this certainly isn't the first time product tim cook has faced criticism for. remember the apple watch had its share of detractors too but has since won over fans. in 2017, apple shipped nearly 18 million watches, according to idc, seizing the market, leading position apple declining comment for this story. sarah, back to you >> does anyone know why it is? is it they were too late in releasing it as alexa was d dominant is it a pricing thing? >> go back to the reviews,

sarah. we had a lot of reviewers on cnbc reviews say the sound was there. it met that expectation. but we know a lot of those same reviewers thought it lagged competition when it came to the smarts of the speaker. also you mentioned price listen, $349 how did they arrive at that price? when apple's phil introduced that product, he said a high quality wi-fi speaker is going to run you $400. a smart speaker will run you $100 but that is a big chunk of change to people i think bulls on the product long-term like munster will argue, listen, he expects this to be the first version. he thinks you're going to see upgrades to the hardware, the software, and the usability of this product in his words, he told me it's here to stay >> josh lipton, thank you. still ahead, bringing home the bacon could soon become more costly for those producing it. live at one of the largest meat packing facilities in new york with that story. sima >> sarah, i'm in a 29-degree

meat packaging facility surrounded by slabs of pork and yes, as many people on twitter saying, it reminds them of that scene in "rocky" i get it. but this is a serious story. this u.s./china trade dispute having major implications. the paimct on your money and business, that story next on "power lunch." experience the 2018 lexus nx and the nx hybrid with a class leading 31mpg combined estimate. lease the 2018 nx 300 and nx 300 all wheel drive for these terms. experience amazing at your lexus dealer.

but i'm not standing still... and with godaddy, i've made my ideas real. ♪ i made my own way, now it's time to make yours. ♪ everything is working, just like it should ♪

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. swho live within five miles of custyour business?-54, like these two... and that guy. or maybe you want to reach women, ages 18 to 34, who are interested in fitness... namaste. whichever audience you're looking for, we'll find them we're the finders. we work here at comcast spotlight, and we have the best tools for getting

your advertising message out there. anywhere, any way your audience watches. consider them found. hello, everyone, i'm sue herera here's your cnbc news update the u.s. now has blood and urine samples from last saturday's deadly attack in syria, which have tested positive for chemical weapons cnbc reporting the u.s. is now considering striking eight potential targets, which include two syrian airfields, a research center, and a chemical weapons facility a bit earlier, defense secretary james mattis speaking before the house armed services committee said u.s. lawmakers will learn of any potential attack on syria before it happens. >> i believe there was a chemical attack and we're looking for the actual evidence.

some things are simply inexcusable, beyond the pale and in the worst interests of not just the chemical weapons convention but of civilization itself back here at home, uber is adding new safety features for its passengers, the ride hailing company announcing it will begin doing annual criminal background checks on its drivers. it will also hire a company to monitor criminal arrests of u.s. drooifrtz. that drivers. >> let's take a look at the markets, which have been roaring and rocking. there you see the dow industrial is up about 342 points, the s&p up 26. about a 1% gain and the nasdaq co composite up about 1.1%. >> the oil markets closing for the day. let's get to jackie at the cnbc commodity desk >> well, crude prices were lower

for most of the session, closer to the close, they came back into positive territory and we got a settle, over $67 a barrel. this is significant because the big jump that we saw yesterday was on these geopolitical fears. those calmed a little this morning. seems like they're coming a little bit back into the market, at least where oil is concerned, because people have been looking at the president's tweets. but what did he really tell us he wrote, never said when an attack on syria would take place. could be very soon or not so soon at all. so, traders are still thinking it's possible that this could be imminent meantime, that threat is on the table. it could come back to the market, especially tomorrow, friday, traders don't lieke beig short going into the weekend when missile strikes could potentially be at stake. >> good point. so, now, to what has to be one of our favorite live shots in a long time live at one of the largest meat packing facilities innew york to explain how u.s. pork producers are feeling the pressure from the brewing trade war with china

hey. >> that's right, michelle. escalating u.s./china trade tensions would wreak havoc on u.s. pork producers. it's one of the main reasons shares of tyson foods has been under pressure ever since china announced that additional 25% tariff on pork the fear is that china will respond with reducing its purchases of pork from u.s. producers and in response will see an oversupply in the market, which could have an impact on your wallet. >> way that the american consumer might see it in the grocery store and restaurant is actually lower prices. that, however, might be at the detriment of everyone else in the supply chain >> mosner says lower pork prices could lead to a domino effect. consumers may support cheaper pork purchases for chicken or beef, encouraging those industries to reduce their prices and then there's soybeans, a key component of livestock feed

a tariff would increase input costs, impacting margins even further. this specific meat packaging facility doesn't even export their products to china, but it doesn't matter the mere speculation of a tariff has pork producers from the national and local level extremely concerned. back to you. >> have we already seen a rise in pork prices in fear that the tariffs will cause prices to increase >> we've seen the opposite over the past month in the past month, we've seen hog prices move lower by 20% on the fear that china won't be buying as much pork from the united states. interestingly enough, though, it's a different story if you look at pork prices in brazil. the idea is that if these tariffs do get implemented, that china will look to brazil as a destination to buy pork. >> all right, thank you. i assume you're not cutting or chopping any meat today. >> no, no, not for a while

this is high premium meat. >> sarah makes a good point. your jacket is way too white for you to be active on the line >> hard work comes later our next guest says the proposed tariffs could also hurt sales of u.s. goods in china, including at restaurant brands like starbucks, mcdonald's and yum. bob derrington is the senior research analyst have we seen a similar situation in the past where tlehere couldb backlash in some of the other industries operating in china? i ask you this because i wasn't able to pull the most recent but about five days ago on chinese social media, the most searched phrases were china hasn't given up, afraid, and china will follow through to the end in relationship to the tariffs. so, it sounds like there are consumers out there who are really taking this to heart. >> well, especially if it ultimately ripples into higher prices in china for things like pork or it wind up causing some

food inflation within the country. you know, i think the consumers there are relatively educated around the situation if, in fact, we see a negative pushback based on the rhetoric going on between the trump administration and china, ultimately, it could hurt the perception around u.s. brands, whether it's kfc, yum's kfc, pizza hut, or starbucks or mcdonald's you know, there is clearly that risk that said, it's really too soon to say, in my view, that we're going see a discernable trend unless the noise gets a lot more serious, unless the consumers feel threatened and feel the pressure is rising ultimately on their pocketbooks. >> you mentioned mcdonald's, yum china, starbucks who's got the most to lose in terms of its exposure to china as a part of the overall revenues >> well, yum china, there's no

doubt. their business is 100% china so in that regard, they're the poster child for the risk. that said, starbucks also has a pretty significant interest there with approaching 20% of its store level base, company store level base, within china so, clearly, for all of these brands, no one in this very competitive consumer environment can really stand to lose much in the way of same store sales. so in that regard, there's risk all around >> when you go out and connect the dots, bob, what could this mean for the input costs for the businesses that are operating in china? i'm not sure of many who use pork, for instance, but obviously if soybeans are in play here, and the cost of soybeans are going to be higher in china, that's feed and so obviously it goes down the chain. >> you know, it depends on where the products are sourced for example, starbucks doesn't sell that much in the way of pork products, per se. certainly i would expect that pizza hut potentially could have more risk there.

possibly mcdonald's within its breakfast product line now whether all of that is sourced within the country or whether some comes from overseas, that, i specifically don't know, but it does raise a risk factor. >> have you looked in the past at some of the behavior for chinese consumers of what happens? there was a dispute in the south china sea. all sorts of political entanglements between china and other countries and how that impacts consumers' behavior. >> well, it's interesting because if i look back in time to that incident in the middle of 2016, that was probably the most dramatic that i can recall at that time, it led to about a 500 basis point lower than expected same store sales number coming out of kfc versus what the street had been expecting. so it clearly had an effect on consumer use of the brand, which ultimately rippled into the country's reported results >> all right, bob, thank you for joining us bob derrington, covering the

restraint impact tyler? >> thank you we stay with restaurants a new survey out showing that teens are putting their money where their mouths are kate rogers is here with that story. >> hi, tyler that's right well, if you either have or know teens, this shouldn't come as a surprise to you but they're hungry and spending a bulk of their cash on food according to a study released this week, food has moved back into the number one priority when it comes to teenagers while it's representing 24% of their overall spending among upper income teens returning to its peak read. now, men spend about 24% of their wallet share on food, making it their top priority above clothing and video games but when it comes to female teens, food wallet share is tied with clothing and personal care and accessories land in third place. for average income teens, those who live in households where average income is about $56,000 a year, starbucks is the most preferred brand, followed by chick-fil-a, mcdonald's, taco bell, and buffalo wild wings but for upper income teens where the average income is $100,000 a

year, chick-fil-a takes the top spot pip piper says teens are showing continued preferences for service restaurants and relative to full service brands which is why you don't see any casual dining names cracking the top five this trend began as early as 2009 of the big names that we mentioned, chipotle is actually the outperformer for the year. mcdonald's is the lagger >> with guys, it's food, some clothes, and video galz. what a regret group. >> and women are tied with food and clothing because the more food you eat, the less clothing you might want to fit into >> i'm not sure of the correlation but then they have the beauty and personal care items in third place, which makes sense because a lot of people are really flocking to that department too. >> kate, thanks. >> so, in their first season, the vegas golden knights making the playoffs and winning their first game how did ice hockey become so hot in las vegas we're going to speak with the owner next

is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

this was the scene last night after the nhl expansion team, the vegas golden knights, won their first playoff game in their very first season. they beat the l.a. kings 1-0 the golden knights are the first major pro sports franchise to be in vegas bill foley is the owner of the team and he joins us from las vegas. mr. foley, congratulations on an amazing season, a season of firsts, not just the first sports team of a major professional league to be he headquartered in vegas but an expansion team to make the playoffs that just doesn't happen how'd you do it? >> just one small step, tyler. we won our first game so i feel like we got to the dance, we were invited, we went through the front door, and now we're dancing, and boy, we're excited. we really are excited. >> when i think of ice hockey, and i'm sure i'm like many people, i think of places where the temperature routinely goes to 100 degrees, it is landlocked, it is far from canada, but you have managed to

attract a local fan base in addition to attracting people who are there maybe on conventions or coming in from out of town. how's -- what is the mix of the fan base, locals versus tourists >> well, i'd say last night was probably 90% local fans. we did a little deal with our ticketing that if you took the knights vow, you had a modest increase in your ticket price but the you didn't and you wanted to go on stub hub, you had to pay double for the ticket price and we had almost no l.a. fans there and that's our goal we're really a local team. we have local fans we had 18,500 people there last night. it was unbelievable. and they were screaming and going crazy. >> amazing when people consider it's such a transient city i went back and read a profile that espn did of you in 2014, you were hoping for a stanley cup within eight seasons uk you could very well do it in one season back to tyler's first question

how did you do it? why do you think you've gotten -- become so successful in the first season? is it money? is it what >> well, when we did our market studies, we found there were about 140,000 avid hockey fans in las vegas and this is three and a half years ago what's really happened is canadians and people from the upper midwest and from new england and from the northwest have relocated to las vegas, and they love hockey and so their team has always been the vancouver canucks or the chicago black hawks but we converted those people to be our fans also, vegas was ready for something that was about the town as opposed to being about the strip and casinos and so the locals wanted to have something they could call their own and they embraced us and we worked hard at it and we're fortunate that we're winning that's helped a lot. but we have -- we've got doctors, lawyers, firefighters, teachers, those are our fans

those are the people in the stands every night >> one of the -- go ahead, please >> and still you're really giving these locals a taste of vegas, the strip vegas, i mean, we were showing a clip of that pregame show and some of the reviews were saying things like, did people know that there was going to be a hockey game in the middle of this broadway show it was so theatrical, so las vegas. >> las vegas is the entertainment capital of the world. and we're trying to be entertaining and we have -- we always had a vision about the knight and the knight culture and how we could create the golden swords and the protecters of the golden sword or the golden knights and it's really working. it's worked for the team it's worked with the fans. i mean, we're really -- we're really thrilled but we're still a long ways from our goal. >> it looks awesome. >> looks really cool now, of course, one of the big concerns about the professional sports business going into vegas was a concern over gambling. i'd like to hear you talk about

how you've navigated that one and what your success says about the likelihood that the raiders of oeakland, the football team, that they will have a similar reaction obviously they have to attract probably a multiple of three of your crowds to really be productive there >> you know, i would say that gambling has not really been a factor for our team. the -- i guess they call it the handle in terms of the nhl activity is very low it's a very modest amount compared to basketball and to football and we really left the gambling issue to the league and the commissioner, and he's counseled me that i should worry about winning hockey games and he'll worry about the gambling side. >> and you're doing that and i would say that you think that the raiders will have a wonderful success as well there, right? >> oh, i believe they'll be very successful i also believe they'll have more transient fans they'll have people coming from

california to watch them play and those -- that will be their fan base and then other teams will really be in that stadium as well with their fans, little different than our situation >> bill, thank you so much and continued good luck to you >> thanks a lot, tyler >> and speaking of the nhl playoffs, nbc sports groups coverage begins at 7:00 p.m. eastern tonight with the continuation of the game one match-ups in round one of the stanley cup playoffs and a record to tell you about over in the nba. the league breaking the all-time attendance record for the fourth straight year with more than 22 million fans attending games this past regular season it's also been a record breaking year for merchandise, nba league pass and social media. the nba playoffs start this weekend and our "power lunch" friend tillman's rockets are the number one seed in the west. maybe he made a good deal with that purchase. not bad. all right, "mad money's" jim kramer has called it the most important season for big banks

in years earnings kicking off tomorrow. our trading nations team tackles that trade next. and as we go to break, take a look at the financials and how they're doing today. they're actually at the top of the s&p 500. best performing seor ow lchwi bright back getting help getting help from some unexpected friends. these zebra and antelope. they're wearing iot sensors, connected to the ibm cloud. when poachers enter the area, the animals run for it. which alerts rangers, who can track their motions and help stop them before any harm is done. it's a smart way to help increase the rhino population. and turn the poachers into the endangered species. ♪ ♪

time now for trading nation, looking at the financials, leading the market today with names like jpmorgan, citi, and wells dpfargo. time to buy in let's bring in the trading nation team for more craig johnson and chad morganlanding a washington crossing manager you like the financials here, and what name looks best ahead of the trio tomorrow >> so neutral financials right now. watching the 2 to 10 spread. it needs to widen out and then it's a healthy sign. financials work, that's a great sign for the overall market. look at the chart i brought in today. this index has pulled right back to the uptrend support line off the 16 lows, and for us, just a pullbackin and retest of support

rsi improving. that's encouraging the other stock we brought in is jpmorgan, 12% of the index, and, again, pulled back to support, retesting it, looks like it's holding it, looks like it's a buy-in from our perspective. interesting to watch the financials lately, tied to what's happening with the yield curve, whatever comes out in terms of economic data, headline risks around the trump tweets and geopolitics. are the fundamentals going to matter, and if so, what are you looking for specifically inside the earnings reports >> so we agree with craig that in the short run, this is a neutral. we do, though, think, though, that over the long run, you had some pretty compelling characteristics. one, economic growth across the globe is vibrant two, you also have credit trends, in particular with the consumer, that look also pretty stable and growing thirdly, deregulation that we believe gives a big earnings lift for not only 2018, but also

2019 so expectations for the quarter are coming up, roughly about 10% plus earnings growth and around 3% revenue growth, but that's going to improve in 2019 and into 2020. like craig mentioned, net interest margins are critical. you need to see that the steepening of the yield curve to see improvement top line for the financials >> certainly volatility in markets should help. leaving it there, thank you. for more market insight, head to our website, tradi tradingnation.cnbc.com check please is coming up next this is a story about mail and packages.

and it's also a story about people 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

the kayak explore tool shows you the places you can fly on your budget. so you can be confident you're getting the most bang for your buck. alo-ha. kayak. search one and done. check, please. >> market moving higher in part because president trump has told larry kudlow to re-examine the possibility of going into the transpacific partnership that the president pulled from earlier. we talked about this a lot on the show that the tpp seemed dead no matter who won the election >> democrats did not like it >> hillary didn't like it, sanders did not like it, nobody in congress liked it, and now it's back. having the conversation on

twitter, thinking it would pass if voted on. >> like everyone realized that it was a good way to team up against china. >> in counter ways >> even though that's what it was always about >> looking at the aaii sentiment survey, what wall street likes to follow. it's a good snapshot of sentiment for retail investors, mom and pop, and it's notable because the bull-bear spread is at the lowest since february 2016 more bears out there fewer bulls out there. people see that as a sign that the market could rally because people are finally getting - >> that it's a good sign, not a bad sign plenty to be bearish about, certainly, over the last couple months, but that's the prism the market implies >> looking at what's considered another sentiment ton the marke, bitcoin, up by 11% here. a couple reasons behind this some say it's the short covering rally, but also capital gains taxes. almost through tax season with $25 billion in capital gains

season to be paid in cryptocurrency so we could see selling pressure abate here. >> some believe this is the leading indicate for the stock market >> yep >> all right i was going to talk about impressions of john flannery at the net-net event. that's for another time because we are out of time >> we are. thank you for watching "power lunch," and "closing bell" starts right now >> hi, everybody, welcome to "closing bell," i'm kelly evans. >> i'm wilfred frost on the eve of earnings season, stocks in rally mode, stock 373 points at the high today will earnings replace trade as the focus for the markets? >> a big development on trade, you are following it from the white house today, and bertha coops watching nasdaq movers, and bob pisani is on the floor of the new york stock exchange what keys us off