$70 a barrel cash flow increase and stock buybacks you haven't seen in a long time. >> thanks for coming out here. the big story aside from stocks is what's happening to the index. i'm sure we'll talk about that right now. and we'll pick it up from there, scott here's what's on the menu. rising rates and debt. a big warning issued for investors, what it means for your money aluminum is up 30% this month. nickel at three year highs where do prices go from here cuba has a new president for the first time in 60 years he's not a castro. will this lead to a major shift in u.s./cuba relations or more of the same? power lunch starts right now

welcome to power lunch, stocks ared und are under pressure we're at session lows right now. what's fuelling that fear? check out the bond market. maybe that's the problem the benchmark ten year note hitting 2.92%. that's the highest level in about a month. check out some of the movers stocks are getting slammed apple suppliers are getting hit. more on what has taken that group down straight ahead. >> welcome, everybody. let's give you the other headlines rights now michelle mentioned rising interest rates do you know what else is rising with it? mortgage rates rates on 30 year fixed loans have hit a four year high. they average 4.47% the number of americans filing for first time unemployment benefits falling now, third time in four weeks, signaling continued health in the labor market we're following the latest on that fatal engine explosion on a

southwest airlines flight. the faa now ordering ultrasonic inspections of 220 jet engines we're have more in a moment on this developing story. sarah? and hi, tyler. i'm at the ims spring meeting where the focus is on broad strong economic growth around the world. but rising risks are making the outlook cloudy is this as good as it gets more on the growing trade tensions and what policy makers are saying about all of it coming up on the show. a long rally fading right now. we're at session lows. we're on the floor of the new york stock exchange. interesting, we've got financials leading on a day where the markets overall are lower. >> that's right. we're running out of steam we've been up six of the last eight days in the s&p 500. market leadership is tired you can see it with semi conducto

conductors that's weighing on the whole group. smartphones, look at the big names that are up there. consumer staples are a mess. they've been all year. proctor and gamble's upperinrepd pressure the whole sector has been awful all year the market leader, energy stocks up about 10% they've been fabulous this month. they're not really doing anything today that market leadership is missing. the big debate is can we hit the market highs remember the highs back in january? we were awfully close. we're 1% on the russell 2000 from 52 week highs and 5% on the s&p 500. you put that full screen up, i think there's a shot at that but we do have some issues for the markets overall. of course, we've got geo politics may resurface there's some other issues that are floating out there i think the big issue, though, is the fed and whether or not they'll get more aggressive. the final issue i'll bring up is

the issue with slower global growth we had terrible numbers out of europe so far. they're very weak. europe will be up 1.9% 19% for the u.s. that's what a lower economic space will do for you. low lower economic number and stronger euro and a weaker dollar that fl that plays into the inflation picture as well. >> you can add trade worries that have dominated this as well thank you. those trade worries are top of mind here at the imf meeting. multilateral trade deals, pretty much everything the administration has moved away from the head of the imf says the major risk on the horizon is trade. she's highlighting a clear message that she hopes the administration hears that is on rising debt levels. listen >> we have supported and encouraged and are strongly in

support of the corporate tax reform that has taken place. it's a major improvement and it's good. at the same time, we are concerned about the deficit. we are concerned about the debt of the united states and we know that because of aging, because of entitlement, these will come to haunt the american economy and the american people. >> the treasury secretary there. the imf says that global total debt hit $164 trillion that's public and private debt so between the debt worries and the trade worries, it certainly is cutting into some of the optimism here that the world economies seems to be firing on all cylinders right now with an expected growth of 4% for this year and next. but, clearly, some big risks that are developing. >> we're going to talk more about them right now stocks arelower today. pressure being felt by the rise

in treasury yields to the -- i don't know what's the lowest it's not the yields. let's bring in peter bookbar, cio of bleakly advisory group. that sounds like a dickens book. and joe dur arngts cant. welcome to both of you peter, how worried are you by a, rising rates and as christine laguarde pointed out the rising level of debt? >> the rising debt doesn't matter until it does when rates are low, people can borrow and borrow and borrow once interest rates start to rise, it creates a problem especially those that need to refinance. if it starts to impact cash flow, then there's last cash to service those debts. we've created this global debt bubble certainly with negative interest rates still prevalent. that's the definition of a bubble the only way you make money is to sell it to somebody else. rising rates threatens that

environment. >> how worried are you about this it's certainly true that in almost every case where there's been either afinancial crisis or whether it would be s&l crisis or the financial crisis a decade ago, the problem traces its way back to so much leverage in the system. >> and i'm very concerned with what we've seen. in the last six months we've got for 1.25% to 1.5%. that's a big impact. the u.s., most borrowers live on the short end of the curb. which means they're paying much higher interest rates because they borrow short term money as does the u.s. government. the impact of rates doubling basically means our trillions of dollars of deficit become a lot more expensive which is why we're seeing the dollar not do what it should be with interest rates going up,

which is go up it keeps getting worse why is that? i think the trade deficit that the tariff talk is not constructive secondly, the exploding of the deficit, which, obviously, neither republicans nor democrats seem to care at all about, is telling us something i don't think it's normal to see rates go up this much and see the dollar going down on the face of it >> i hate too much government spending i wrote a whole book about it, drives me crazy. it's not just what president trump and this congress has done i mean, you highlighted, the reason there is so much more debt in the world is that is what the central banks wanted. that's why they did what they did with interest rates. we knew this reckoning was coming up until now, it was all oh, we're finally at liftoff and we'll be able to overcome this hurdle. >> grow our way out of it. >> you make great point. that's the whole purpose of monetary policy, to encourage you to borrow.

bring forward activity today that you might have put off by saving so when the central banks ease, well, there's your credit cycle. when central banks begin to tighten, that threatens the cycle to possibly the down side. >> in terms of breaking down, the real impact to the markets and to the economy, i mean, the sectors that are most exposed to short term borrowing, energy, oil prices are rising, so that's in their favor real estate, utilities i mean, these are sectors that are not big enough, necessarily to move the needle on the overall stock market >> well, also, energy goes up because the dollar is going down and it's denominated in dollars, right? with commodities the dollar getting weaker increases the price, generally and so the thing i generally warn people about is market declines typically happen when rates are going up and you see this often we have a term called well oiled

endings. when oil rallies -- it's often the precursor to a market decline, typically because rates are going up everyone's feeling very optim t optimistic, that's priced into multiples. the more lofty multiples are, especially with rates going up remember, multiples are more expensive when interest rates are going up you're making it less attractive to own stock and you're pricing in for more perfection the more that's true, then the more likely you are to get a price that's not as good as you'd like. >> we're running out of time here but i want to ask one final question for both of you it's the same one. what do i need to be ready for and what should i do with my money? quick answer, joe, you first, and then you, peter. >> well, be ready for more volatility you should expect a 10% to 15% decline in the next nine months. you should be allocated to protect yourself so make sure that you're staring at your current allocation, especially with stocks balance --

>> 10% to 15% decline on the s&p 500 is what you're saying? >> from here. >> yeah, in the next year. >> with a very pleasant smile on his face peter, what do you say >> cash is paying you something now. that's an alternative. i'm bullish on gold and silver. >> i don't know that's i'm happier, but it's okay. >> you're educated. >> i'll deal with it. the faa is ordering inspections on aircraft earlier this week. should it have been done earlier? hi, phil. >> hi, michelle. the reason people are asking if this should have been done earlier is because last year, the faa in the federal register, which i'm looking at right here, which a lot of people have been looking at over the last 24 to 48 hours, they had proposed airworthyiness director regarding inspection of this type of engine it was never made mandatory. it's unclear why

here's the latest on the investigation. there are varietiinvestigators e ntsb who is analyzing debris the flight crew has been interviewed. the faa said it will require engine inspections, ultrasonic inspections of fan blades in specific engines and it will apply to cfm56-67 engines. similar to the one that was on the southwest airlines plane they think it's about 220 engines, but they haven't given an exact number. the focus, again, will be on the fan blades meanwhile, ge is working with the faa and the airlines on putting together an inspection plan they did issue a service bulletin on this engine last year that was right before the

proposed air worthyiness directive that was proposed. there may be a question or two about this and what kind of an impact it may have on ge aviation but let's keep in mind, that they're very early in the investigation. and it's probably going to be too soon to say that this may have some type of an impact or quantifying what that impact might be on ge aviation. back to you. >> do the inspections extend beyond this specific type of engine because the fan blades might have been removed and placed into other kinds of engines? >> correct that's part of the issue here. this is not as simple as saying all of these engines right here, inspect these. it has to do with the fan blade. that's where they saw the metal fatigue. investigators are saying we want to focus on the fan blades how do we know which ones relative to the batch we're seeing do we think there might be an issue with

have they been replace? that's part of what they'll be sorting out over the next couple of weeks. >> phil, there was also a delta flight from atlanta to london yesterday turned around after takeoff because of smoke pouring out of an engine the details appear to be different than what happened at southwest. fliers are wondering if there are reasons to be concerned. >> anytime you see video like this, it will have people saying what's going on. more than any other industry, the airline industry, it has any potential problems scrutinized because of video like this or because of people on social media saying, hey i saw something happen with an aborted takeoff or emergency landing my feeling is this, we are not seeing more engine failures. what we are seeing is greater scrutiny this happened usually after you see some type of an air accident or some type of an issue involving an airline >> all right

phil, thank you. >> what about the picture from southwest? >> show them yeah great piece, show the picture. this is from the southwest flight getting a lot of attention. this is the flight that made the emergency landing. almost everyone in the photo, take a look at closely, is wearing the oxygen masks incorrectly. how do you wear it correctly >> over your nose. >> and mouth not just your mouth. everybody has it just on their mouth. that is really, you know, a warning for people if you're in the situation, keep a cool head and put that mask on both your nose and your mouth. >> and amazing because they show it to you every time. >> nobody is watching. >> nobody is paying attention. right. crude oil prices at three and a half year highs. it's not the only commodity shining. metals plus if jeff bezos had a nickel for everyone who is a member of amazon prime, he wouldn't need

it stay with power lunch. were you satisfied with the attention you were getting? then i explain that being independent gives our firm more freedom to act in their best interests. independence lets us do that. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

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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. hey, we're looking at shares of gw pharma, which has just reopened after being halted for the entire morning overwhelmingly positive vote from the panel, 13-0 to recommend in favor of the risk benefit profile of a medicine. it's up 2.6%

the briefing documents ahead of the meeting had come out on tuesday driving shares up by 11%. this is a milestone because if the fda agrees with the panel, this would be the first u.s. drug derived from the cannabis plant. we'll have a lot more coming up at 2:30, the ceo will join us, stay tuned for that interview. thank you very much. we're watching big moves in commodities. aluminum, seven year high. nickel three year high crude oil, highest in three and a half years what is pushing these commodities higher and higher? >> good afternoon, to you. i want to start with two points before we dig in commodities trade in dollars a weaker dollars makes it cheaper for foreign trade toors buy. it implies the market may see rising inflation commodities are a hedge against inflation.

on the oil front, the more bullish data points, three and a half year highs from crude that's coming from expectations of global demand and the saudis and opec, they have an interest in keeping prices elevated. they'll probably cross the $70 level soon gasoline, that's also up retail gas prices, as you mentioned. this can be at over $3 a gallon this summer. on the metals front, let's switch gears sanctions on russia sending aluminum to nickel u.s. buyers are canceling orders there are reports this is causing stockpiles to build in russian warehouses domestic aluminum companies are benefitting. you can see, they're in green there. china and russia, they are the world's largest producers. after that, canada so those producers could see a benefit as well. many of the producing companies

send product to be refined elsewhere. commodities, certainly on the move. thank you. let's drill down on oil now. our next guest is one of the leading private equity players, here now jeff eaton. welcome to power lunch >> hi, thank you for having me. >> jackie was just mentioning oil, close to three year highs right now. only recently have we seen a real interest though on the part of investors in investing in energy equities. what are you seeing in your space in terms of demand what peaks that demand historically >> so good question. first of all we have to remind everybody the energy industry is a diverse industry if we're talking about what we do, which is raise money for upstream focused managers who are focused on drilling and producing the commodity, that's

been challenging the last couple of years where we've found the most success is raising money for some of the more infrastructure focus groups that are focused on bringing a product to market also service focused funds that are focused on investing in the services which have been very challenged themselves the last couple of years. we're starting to see pricing power for those services that's where we've seen the most interest. >> does the interest parallel what we see in the public markets? >> i think so. you know, energy, again, it's been challenging one of the issues for the upstream focus fund managers are, there hasn't been a lot of liquidity for them unless they've had assets, for instance, you could have success marketing those, same things with other parts other basins have been more challenged it's been tougher to find liquidity from the bigger public buyers. >> the best opportunities, are

they in the past in terms of there had been a shakeout when oil prices with lower and maybe those distressed situations were better for a shop like yours >> good question, again. you know, we've seen some success with the buyout focused funds who are focused on buying into assets that are already existing where maybe the balance sheet's been impaired. there is room for managers because we can always find distress somewhere i would argue that because fundraising for focused funds has been more challenged the last couple of years, we're at a point where we made be undercapitalized fundraising for those types of managers will improve once again. >> what is the appetite among your clients that would be institutions, high net worth

individuals, what kind of hedge funds are they interested in >> right so i'd say where we see the most interest -- for one, there is still interest in hedge funds. >> so the performance hasn't deterred people? or the lack of performance. >> if you were to look at an index, a hedge fund index, that doesn't look compelling. there's a pretty wise dispersion of returns you know, i was looking at this the other day. the best performing manager, for instance, in an event driven strategy versus the worst, it could be as wide as a 30% dispersion of returns. so we focus on trying to find the best managers in a given strategy that are outperforming the indexes. we're seeing a big trend away from the big mega funds who are getting you more of that index return with more of a focus on smaller, more nimble, more nichy

focused managers. >> jeff, fascinating stuff, thanks for your time the u.s., canada and mexico racing against the clock to reach a deal on nafta. will they get something done will president trump like it the latest on those negotiations amazon shareholders have a lot of reasons to smile. the stock is up 70% in a year. rising again today we're going to tell you about the big news jeff boezos broke first to sarah in d.c. speaking of trade, where does europe fit in in a potential trade war between president trump and the rest of the world? a live interview with the european commissioner for economic affairs coming up next on power lunch what people areally 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.

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jeff bezos releasing his shareholder letter and the big number getting the attention is 100 million, the number of prime customers. finally, we got a number, deidre. >> finally it was six pages into his annual letter he finally pulled back the curtain on the key number. 100 million prime subscribers globally who hpay not just the $99 fee but shop more frequently and spend more why he decided to reveal that number is unclear. it comes on the heels of netflix's numbers being released you see here, like spotify and apple music, netflix had 125

million subscribers that about $11 a month for the standard service. amazon's 100 million prime members pay $99 annually and not only that, but once customers are actually in the prime, they can get pulled into other services like fresh grocery delivery and unlimited music streaming which have fees of their own investors cheered the figure pushing the shares higher. we should note that u.s. did het break it down for u.s. versus global subscribers back over to you guys. >> thank you let's get back to sarah who is in washington hi, sarah. >> hey, melissa. trade front and center for the markets today. front and center here at the imf meetings in washington will president trump's trade actions hurt the relations with our allies joining me here, we've got the european commissioner for

economic and financial affairs, taxation and customs welcome. >> hello, good to see you. >> i read your whole title because taxation and customs, that's very much in the news right now when it comes to trade. how would europe not get entangled in any potential showdown between the u.s. and trade? >> we're anti-trade war. it's never easy to win, it's lose-lose. it is a global problem it needs to be dealt with globally we would like to find a solution, which is not protectionist. and which is also designed in the framework of the multilateral discussions we're here we'll have a meeting of the g-20 tonight. that's where we must discuss them i'm not denying that there are difficulties, that there are

overcapacities, especially in china. but let'sdiscuss that between us that's why we welcome the fact that there were exemptions for europe temporary for the time being >> i was going to say, that expires may 1, the temporary examples on steel and aluminum, then what? have you had any assurance from the administration >> no. but here in washington is the place where you meet everybody i met this morning steven mnuchin, tomorrow -- >> did you talk trade with mnuch mnuchin? >> i never say what we discuss privately. my feeling is that the american administration is conscious that protectionism is not the way forward for the world economy. they want to defend their own interest this can be understood but we need to show that we are open economies that we are trading properly

that we are cooperating together that's what people in the business expect from us. they want us to be open economies. >> i think president trump would want that. it's not exactly like europe has been a paradise for free trade there are still taxes and tariffs on u.s. imports of cars and fruits, agriculture. >> we are very open to the u.s. firms. i think that, frankly speaking, globally, the market is more open than the american market. well, we have a very good relationship we want to keep that we want to stick to it and i feel that now, well, that's my hope that's also my belief. tensions are gradually slowing down we will be capable of finding solutions to common problems protectionism in our history, the history of centuries, has never been a solution.

now the u.s. growth is bright. the european growth is very robust >> is it >> yeah, we are at 2.4% in 2017 and 2018 we are creating millions of jobs in the e.u we've made very strong reforms for that, we need to keep openness i think that neither of the interests of the u.s. economy, neither the interest of the european union economy, and you know we are friends. we are allies. let's talk seriously let's consider the problems when they are raised. let's deal with it collectively, but no protectionism, no trade war. >> it's hard to predict what is going to happen, especially between the u.s. and china if china, as it threatens to retaliate on u.s. auto imports, there's a lot of worry that german firms that produce cars in this country and ship them over to china could be hurt a lot more than the american car

makers, what sort of contingency plans do you have to make? >> we of course need to be ready for any kind of situation. we need to avoid trade wars. but we can have, also, responses as well in the wto that's the place to discuss that also bilaterally so we said that. we are, of course, preparing pr a any kind of scenario we have the best case scenario and the worst case scenario. the best case scenario is to find solutions. >> i think everybody agrees with that >> well, it's quite firm but, well, there are still channels of discussions and understanding. it's very important that those channels are maintained. finally, well, the world's growth is in our hands for that, we must not promote any kind of war.

protectionism on the other hand, are the main risks for global growth today let's stay there >> thank you for joining us. journ just a taste of the conversations going on of those rising risks a good picture of where europe sees this trade spat between the u.s., choina and the rest of th world. a number of big movers right now, we can tell you about and some tanking double digits are they in your portfolio we'll name names next, stay with us

hello, everybody, i'm sue herrera. here's your cnbc news updates. prosecutors will not seek charges in the overdose death of artist singer. the investigation found now evidence that any person associated with prince knew he possessed counterfeit pills containing fentanyl. british officials are finalizing their security plan which will be in place for the marriage of prince harry special operations teams will be patrolling the area of windsor

palace. dramatic helmet video, take a look at that, from firefighters in virginia it shows a house engulfed in flames and the moment they found a man trapped inside he was pulled to safety, treated at a local hospital for smoke inhalation pretty dramatic stuff there. and look at this here's your daily dose of cuteness five orphan bear cubs are settling into their new home at a virginia wildlife center workers are trying to limit their interactions with humans so they can be released back into the wild. look at that they're so cute. they are so cute and they love the camera that's the news update michelle, everybody, back to you. makes my day, thanks we have a news alert on the at&t time warner court case taking place in d.c hey, hampton. >> we've had at&t's ceo randall stevenson on the witness stand for about an hour.

basically telling the judge and the court how it came to be that at&t made a pitch to acquire time warner. stevenson did a lot of research himself before he actually made a pitch to his board he concluded that at&t needed to own premium content. he looked at the media disruptions due to netflix, et cetera, taking content direct to consumers because of all that data they had. he basically decided it was time for at&t to make a really dramatic business and strategic move when he made the presentation to his board on october 22, 2016, he described it -- he knew the pitch would have to be something special. because the deal was, in his words, a head snapper. okay what were the basically ingredients in that pitch? he said they needed today own premium content, telling the board the deal was actionable and could get done also, he told his board it would

accelerate innovation to a data driven distribution business model and influence content creation going forward that's where we are right now. there's about an hour or so of direct testimony and then cross-examination by the government back to you. >> all right thank you. hampton pearson in washington. i want to get a check on the markets. the dow is down by triple digits here you see down by one full percentage point treasury yields jumping to new highs. hitting 10.92% the consumer staples are the worst performers a lot of it has to do with philip morris seeing its worst day since 2008 >> pulling the market in somewhat opposite directions, the tobacco company is pushing

the sector towards it's worst day in two months. philip mors philip morris is down 15%. it's on pace for its worst day dating since 2008. take a look at the regional banks, including bank of new york, keycorp, the flattening of the yield curve is taking a break. keep in mind, those regional names, especially the keycorps and the u.s. banks, they don't typically see these kind of massive moves. something to watch for, back over to you. it's a difficult time, of course, for retailers, especially in malls. the retail index is down 10% so what can stores do to survive and thrive in this new world the former macy's ceo is about to join us about the state of retail i was a c130 mechanic in the corps,

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welcome back to power lunch. retail on our radar. cowan says more and more brick and mortar stores will close this year. amazon tops 100 million subscribers around the world nike, another executive hits the

exit >> thanks for having me, i'm going to bring in terry lu lundgren he joins us out in tucson, arizona at the global retailing conference which is done in conjunction with the university of arizona and the retailing school that bears his name thank you for joining us, good to see you >> good to hear your voice. >> we have to start with all the things that are going on in retail today a lot of cards are stacked against department stores. just to run through a couple of them, morgan stanley says amazon is the second largest u.s. apparel seller bonton saying they have to liquidate their 200 department stores that are left there's reports that the house of frazier is looking to restructure, that's a uk department store are we looking at the extinction of department stores as we know it here? >> well, you know, you and others that have asked me that question for most of my career so i'd have to say that the

answer is no but that there will be a shakeout there's going to be winners and losers the examples you mentioned, amazon has done great job of attracting this loyal customer through their prime program. if you can still call them that, they're the only pure online retailer in the top online retailers. bonton on the other side, a highly leveraged regional smasmall department store so those are the i think, extremes of some winners and losers there's going to be plenty other winners along the landscape. including several department stores, and you mentioned nordstrom. that's a separate subject where they wanted to go private or not. they're a solid organization i think macy's has proven they've gotten through the difficult times in the past and will do that again so as we go forward -- i think there will be winners and

losers the key is don't be a highly leveraged retail business. you cannot survive the up and downs of consumer changes. >> quickly, speaking of survivingi surviving, if you have a macy's mall that's in the mall with the bonton stores, what does that have to do with the traffic? isn't there a ripple effect there? >> yeah, you know, you don't -- what you want, certainly, is you want to have a healthy mall shopping center that's attracting multiple consumers. it doesn't have to be another department store so, you know, the opportunities to replace that box with something different, i think, is the way to go. so you're seeing that in certain shopping centers you've experienced the one we talked about once in century city where they put in, you know, an la fitness, they put n

a great food shopping experience all these different entertainments that's happening in the center, great high end restaurants, that's what has to happen to these shopping centers. th there has to be more reasons for shopping for a dress or pair of shoes. that's the opportunity when one of these businesses go out. >> we're making a lot about the amazon prime member, 100 million paid prime subscribers is there any way that bricks and mortar retail who are increasingly beefing up their online presence could move to a model like amazon prime to offer customers discounts and ways to either get free shipping or get a discount on their goods that they pick up in store? amazon is moving towards the traditional models in buying bricks and mortar. >> no question about it. neither one or the other is the way consumers shop today we've had a terrific global

retail conference that's going on right now in tucson with the university of arizona. we just had a presentation of all the data -- you know, start with the data. here's the facts the facts that were just presented here is that 2017 finished the year year that 10% of all sales and transactions in all of our categories, including food and all forms of retail, occurred online only 10% so, 90% is still happening in a brick and mortar environment that's going to go to 89% and 88% but it's not going to 50% overnight. we have to keep in mind that what people say and what people do is not necessarily always the same people are definitely choosing, nine times out of ten transactions, to do in a physical environment, whether it be a grocery store, whether it be a department store or however. so that's the way consumers are shopping i think you're going to see most of -- all retailers having both. you can't, you know, macy's is the fourth largest internet company in america in all these categories, only after walmart, apple, and amazon.

the largest. and so, you know, i think you can do both and you have to do both but as much for research for where you should shop as the actual transaction itself. >> it's that omnichannel world that everybody has to figure out. >> companies like amazon as well as department stores >> you got to master the modes, be everywhere to everyone all the time terry lundgren, thank you so much for joining us from tucson, arizona. very much appreciate your time >> thanks, courtney. >> and today, believe it or not, is the first day in nearly 60 years that cuba is not run by someone named castro what does this change of power mean for the island and for u.s. businesses that might look to invest there i'm not a bigwig. or a c-anything-o. but i've got an idea sir. get domo. it'll connect us to everything that's going on in the company. get it for jean who's always cold. for the sales team, it and the warehouse crew. give us the data we need. in one place, anywhere we need it. help us do our jobs better. with domo we can run this place together.

well that's that's your job i guess. ♪ so lionel, what does 24/5 mean to you?rade well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light.

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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. ooc an historic transfer of power today. for the first time since 1959, a castro is in longer in power in cuba cuban president raul castro standing side-by-side with the man who's going to take his place, vice president miguel diaz-canel what does this mean for the island's relationship with u.s.? let's bring in john. good to have you joining us from london let me start off with what do we know about this new leader of

cuba does he have a single reformist bone in his body are we going to see any kind of market changes in cuba >> he may have a reformist bone in his body, but we're not likely to see it soon. it might be counterintuitive, but the diaz-canel administration is going to primarily be judged by how it manages pain and it has two projects that it has to complete one is the merging of the two currencies, and the other is defining success at what level are individuals allowed to prosper and we may see him as a one-term president as he tries to navigate those two very important points >> what about john bolton now being back in the white house? cubans, i think, were not overstating when i say they hate john bolton and i'm pretty sure he hates them back the fact that john bolton is in the white house, does that suggest that any kind of improvement in the relationship is unlikely to happen as well? >> i think if you judge by

the -- use a metric of statements, then yes, but as we've seen with president trump, what he said was going to happen with respect to cuba was far less than what did in terms of the regulations that were put into place last november so, the rhetoric is probably going to increase from both havana and washington, but for u.s. companies, we're going to try to navigate what's left, and there still are going to be some opportunities, importing, exporting, direct foreign investment, vertical, horizontal, but there's no question the trump administration's -- the aura has limited people's interest. >> yeah, those involved in cuba and washington that i've spoken with actually see him when he says he's going to talk to north korea, they think, wow, maybe he might actually end up talking to the cubans despite what we hear. there was so much hope under president obama. governor cuomo of new york went down there, huge entourage, for example, one of many where they

thought there were going to be all kinds of trade relationships improving between the u.s. and various states what did we finally get out of all of that? >> you know, u.s. businesses are disappointed the obama administration could have done much more, for example, allowed direct correspondent banking which would mean that the millions of dollars a year that are going to banks in third countries could, instead, be going to u.s. banks by making the transactions direct he didn't do that. the castro administration failed to embrace much of what the obama administration put in place. so, that permitted the trump administration to do what it's done i think for companies today, most of them are just in a watch mode as i said, they're still looking for some opportunities, but it's going to be limited. it's going to be very, very limited >> thank you, john well, what can you tell about a hedge fund's performance

by looking at the fund manager's face we will explain. gw farmer shares are continuing higher, an fda panel recommending its cannabis-based drug to treat epilepsy - recycling clothes can both benefit charities

and reduce solid waste. many retailers even offer discounts and rewards for your old items. so, trade before you toss, and earn some green by going green.

i'm here -- here's what's on the menu yields are jumping to new highs. what the threat of rising rates means for your portfolio high hopes get it first cannabis drug getting the green light from an fda advisory committee. shares of the company are moving higher right now the ceo is going to join us in a first on cnbc interview. and it's been a lifelong question on wall street. to alpha males really deliver alpha? sounds almost risque but we have the answer "power lunch" starts right now how about alpha females? welcome to "power lunch. i'm melissa lee. your money under pressure. a rise in treasury yields today. the dow is now down by about 129 points and was down 190 points at its low take a look at the bond market at this hour michelle had been mentioning this

ten-year hitting a high of 2.92%. check out some of the movers we're tracking clorox on pace for its worst day since february phillip morris tracking to its worst day. and american express on pace for its best day since october 2016. home builders, meantime, they are getting slammed. the on pace for their worst day in two weeks d.r. horton, toll brothers leading those declines sarah? >> thanks, melissa i am sara eisen coming to you live from the imf spring meetings in washington coming up, the risks of a trade war and how it may be already hurting u.s. companies plus a more aggressive fed something that investors are certainly wondering about, watching those bond yields it is something that financial

heavy weights are talking about. >> sara, thanks. we start with the markets. what's happening, bob? >> tyler, just like melissa said, it's rate war issues that are front and foremost but we are seeing movements in commodities, and these are ways people play around with inflation issues just take a look at some of the etfs i don't normally mention the saudi arabia etf but that's been getting some of the heavy volume recently peru, a volume sensitive country. you want to own copper or things like aluminum, that actually owns futures contracts again, mixed prices but the volume's been heavy in silver as well oil and gas, xop, those are all commodity based, all around rate issues and commodity issues. speaking of rate issues, banks are outperforming today, finally. they've been lagging a little bit since jpmorgan started but you see them all up about 2% today. you heard melissa talk about philip morris. consumer staples are new lows just everywhere.

proctor and gamble had pricing pressure stories, campbell, pepsi, general mills, hershey, right across the board semis are weighing taiwan semi. even though that move to the upside in the middle of the day. and finally the market leadership group, energy stocks, oil is still hovering right around $68 and i'm encouraged by the fact that they are essentially neutral on the day i think we just ran out of steam here remember, six out of the last eight days, we have been up. it's a lot for the market to move sideways would be nice for a couple days. >> got it, bob thanks so much speaking of rates, five of the six fed governors have been appointed by president trump so this new federal reserve board, will it have the markets back for the next crisis? what we're calling the powell put. >> i keep getting questions about that from people so i thought i'd do some reporting on it and michelle, you remember, strong republican criticism of the fed's response to the financial crisis

there was concern on the one hand, hope among some, that the president -- that president trump's fed appointees would be reluctant to respond in a new crisis so did it happen will this vastly new board have the market's back next time. when it's clear that there's a crisis, the fed should act early and act often. trump's pick for chairman, powell, is a former obama appointee who has praised the fed's response to the crisis and said he would use the tools if it happens again the latest nominee, richard, is clarida, is praised for moderate views on financial policy and monetary policy and knowledge of markets as a managing director of pim co. and john williams was the head of the san francisco fed for a good portion of the fed's crisis response but the next intervention is not going to be as easy or as automatic.

guha says, the politics of intervening are horrendous and far worse than they were the last time around vincent, a former top staffer says, quote, the powell fed is more likely to prefer interventions in markets rather than firms this group worries about moral hazards. so, another lehman-type bankruptcy is possible but likely action if it were to spread wider >> intervention depends on the definition, right? i mean, you can have a debate about liquidity, we're going to accept all kinds of collateral >> i was only given a minute and a half there, michelle but you're 100% right. >> or can we take over aig >> you are 100% correct. there are two big debates going on the first is, should the fed act? pretty much everyone agrees on that how the fed should act -- >> in terms of monetary policy >> in terms of some form of policy of putting a floor underneath the markets the big criticism of europe was that they were one, two, three, count them, even four years too

late in reacting to the financial crisis so, that they should act is agreed how they should act is where there's tremendous, tremendous debate i'm also supposed to tell you that tomorrow i'm going to be talking to neel, the minneapolis fed president. he has a lot of thoughts on this we're going to talk about fed's crisis response, how far rates should go, the economy and maybe a little bit all the snow they've had in minneapolis in the month of april, which is unbelievable >> how about here? we had plenty of winter weather here steve, thank you the gap between the two-year and ten-year treasuries has narrowed to about 0.4% with the yield survey so-called flattening, how worried should investors be joining us is jack and marian. welcome to both of you jack, let me begin with you. we had a very interesting discussion last hour about the level of debt and the level and rising levels of interest rates.

how worried should we be that those rising rates put on rising levels of debt is going to be an economic break >> it is a concern considering that the ten-year treasury has probably been situated below its fair market for nearly ten years you know, historically, the ten-year treasury tracks nominal gdp and nominal gdp, as of the end of fourth quarter last year, the last number was over 4%, like 4.1%. so at 2.9% we still have a little bit more way to go on ten-year treasury yields and that could be really problematic for rates that tend to adjust with higher rates. >> marian, are bond rates and the yield curve telling you anything are they telling you get ready for something, and if so, what >> well, i think what we're trying to focus on is yield

spreads, and four years ago, the spread, the differential between the two-year and the ten-year was about 3% and that spread, as you mentioned, has gone back to about 4% so, people get concerned about whether that spread is going to become negative or inverted and they think that that's a predecessor to a recession >> as it often has been. >> as it has been with quite a bit of delay, actually, the last couple of times. so, you know, indicators are generally not consistent across all situations, and we think that if it were to go inverted, which it could, we don't think it's going to set the pace for a recession down the road. we're looking at other economic indicators that put that probability as pretty low. >> jack, make the case for one of your top picks, which would be mlps, and then if you wouldn't mind, small caps. >> sure. so, of all of the income asset

classes, as we know that they're all vulnerable, typically vulnerable to higher interest rates. however, master limited partnerships, because they're leveraged on growth and because they're leveraged on oil prices, are actually favorably disposed to higher interest rates they rise when rates rise, generally. their correlation to the bond market is negative so if you think about, if you're building an income portfolio, you could have, say, preferred stock in there or rates that are highly, you know, highly inversely related interest rates and then mix mlps with it. you've now brought your interest rate risk overalldown and you still keep your rate pretty high on the small caps side, that's a different trade we're looking at and that is we believe that an outright war -- a trade war with china is -- could be in the cards. at least a lot more than what the average investor is looking at and so one way to stay in the

market, if you want, but insulate yourself would be to shift from sort of these mega cap fang oriented names that do rely on global trade and global sourcing to the smaller cap names. >> jack, mariann, thanks we appreciate your time. >> thank you >> thank you all righty >> well, coming up on "power lunch," do alpha males really deliver? alpha returns. a new study digs deeper into the connection between testosterone and performance on wall street then the first cannabis. >> based drug getting the green light from an fda advisory committee. the ceo will join us live. and to wowing parents, meet the two women who are betting big on kids' luxury clothing but first, let's get back to sara in washington >> hey, melissa. those rising bond yields, trades tensions, record levels of debt, clearly investor headaches today but also weighing on some of the long-term economic optimism here at the imf you'll hear from the former

treasury secretary and the chief of the imf after the break stay with us on "power lunch." this scientist doesn't believe in luck. she believes in research. it can take more than 10 years to develop a single medication. and only 1 in 10,000 ever make it to market. but what if ai could find connections faster. to help this researcher discover new treatments. that's why she's working with watson. it's a smart way to find new hope, which really can't wait. ♪ ♪ welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn.

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welcome back to "power lunch. i'm sara eisen coming to you life from the imf spring meetings in washington, d.c. stocks are lower, as you can see. global growth is at its best level it's been since 2011 so, why are some of the top policymakers so worried?

well, first and foremost, trade. and even if we don't see the tariffs actually come to fruition, imf's managing director christine le guard says the threat of them is already hurting business confidence. listen >> i believe that there is an issue of trust that needs to be preserved and when operators, investors, companies are uncertain about terms and conditions under which to organize their supply chain, terms and condition under which they're going to trade, types of tariffs that they're going to have to pay, they step back, and they don't invest. they delay they wait. so, to, you know, brutally change the course of things without having tried vehemently, directly, forcefully within the multilateral setting to improve the position, i think, is not the most conducive and effective result >> translation well, you heard there, she's very careful not to go after the trump administration by name

she obviously strongly disagrees with the policy and the approach that the administration is taking now, these trade tensions are just one of the factors driving up bond yields and inflation expectations, according to the former treasury secretary who we asked about this very topic. listen >> we're late in a business cycle. there's a lot of geopolitical risks. there are economic risks inflation may pick up. going back to the tax cut, there's questions about what does that do to inflation? going back to trade, what does that do to inflation what does the fed do in response it raises inflation. you're going to see monetary policy start to move >> do you think it's made the fed more aggressive. >> i think it's made the job of the fed harder they're trying to thread a very narrow needle. they don't want to stop the recovery the signals that may be conflicting in terms of policy and confusing are probably going

to accelerate decisions or at least could accelerate decisions. in retrospect, that might be good or it might be bad. but i think it was hard enough without these other factors. >> sounds like what you're saying is that the chances for a potential fed mistake have risen. >> i think their job has gotten harder >> so, what he was saying there, guys, is that actually, the trump administration's policy, fiscal stimulus, this late in the cycle and the expansion could have the effect of driving up inflation and making the fed's job a lot harder, and we might have to see a more aggressive fed i know this is something that traders are talking about in a potentially major reason we're seeing these spiking bond yields and some of the reverberations in the market today. >> thank you another issue actually same issue that we're talking about related, spiking commodity prices those higher interest rates that sara was just mentioning, last night i interviewed the head of the brazilian central bank and although trade is the big risk

in the head looindlines, it's nt the top of his list. >> i will say that this is our first and most important risk to date we mentioned trade wars and protectionism, but i will say that a fast rise inflation that will lead to higher interest rates in the u.s. and in the world is the most relevant risks that in emerging market we face. >> let's bring in greg, chief economics commentator at the "wall street journal." first, tell me what do you think about the rise in commodity prices that we've been talking about all day. it's not just aluminum, which you could understand, because of tariffs, et cetera, or what's going on with oil but we're even talking about cocoa, for example, spiking are we having an incipient inflation problem? >> hard to say i mean, a global economy's been strong for a while with respect to oil and a lot of these things, you've had

restraint on the part of producers that's steady building demand but looks like a confluence of things that are bothering the bond market. the fact that we will probably get some pasture from oil to inflation is certainly one factor but i also think the fiscal stimulus that we've all been talking about is beginning to weigh on people's minds and that is very much a double edged sword. if you look at the imf forecast, they're bullish on growth and the fiscal stimulus spilling over from the u.s. to the rest of the world is a big reason why. the other side is that is putting upward pressure on the inflation rates and it may make for a strengthening dollar and traditionally, stronger dollar is a signal for risk off so i think that could be one of the latent concerns out there. >> how do these numbers net out, greg in other words, you have fiscal stimulus in the form of a tax cut that presumably and factually puts more money in

consumers' pockets on the other hand, you have rising inflation, which robs their purchasing power and third, you have rising interest rates so the person who was paying maybe $1,000 if they have a variable rate debt of any sort, if they were paying $1,000 a month on that debt and now maybe they're paying $1,200 a month of that debt >> the movement to date has thus far truly been minuscule it really doesn't rate as a concern relative to the much larger boost to people's income that's coming from the tax cut >> we're still wringing our hands about it >> because it's a risk that builds up over the medium term, tyler. so the way i would frame it is this the tax cut has practically guaranteed a strong 2018, a pretty good 2019, but it starts to tail off in 2020, exactly around the when the fed has got rates probably over 3% i think that actually leads to higher recession risk two or three years from now >> all right, greg >> just in time for the 2020 election >> perfect timing. >> amazing how that works. >> it's going to be a fun year >> thank you very much >> good to talk to you all righty

let's talk about alpha males, shall we >> i would love to, tyler. >> i'm just going to let that little image right there on the screen with the bull and the horns and testosterone and market returns >> i don't know what you're suggesting >> i'm going to let it speak for itself if you won't come back and watch what that's all about, you must have something really good to do we'll be right back.

welcome back to "power lunch. do alpha males really deliver alpha? there's a new study that finds that higher levels of at the scene tr-- testosterone in hedge fund managers may have an impact on performance >> researchers are starting to look for genetic reasons as to why that is. we went to orlando to talk with the professor who led research into testosterone levels and returns. hedge funds, an industry synonymous with alpha. that's what most of them strive for, alpha or outperformance but

it's also an industry spear headed by a certain stereotype, straight out of central casting, the alpha males. a new study asks, do alpha males or those with higher testosterone levels, deliver better returns research conducted here at the university of central florida and singapore management university found that hedge fund managers with higher testosterone levels tend to underperform those with lower testosterone levels by 5.8% each year on average. >> the distance between them -- >> this researcher used hedge fund manager's facial dimensions as a proxy she studied images of over 3,000 hedge fund managers, all male. she used this square tool to measure the facial ratio to determine their testosterone levels her report cites other studies as a reliable cue to masculine behaviors. she also found that high-t levels in a firm's figure head

made it more likely the fund would close. >> we found like the high level of testosterone can -- for human beings can bring to the aggression, fearlessness, risk taking and egocentrism and these features can also lead to unethical behavior >> other studies have found that testosterone has been beneficial in certain jobs, namely for ceos and high frequency traders but for better returns in the hedge fund world, lu advises investors to avoid alpha male managers >> so why does high testosterone make a difference? well, the study says that managers with high amounts tend to trade more frequently they have a stronger preference for what they call lottery-like stocks and are more likely to succumb to the disposition effect or the tendency to hold on to losing stocks and sell winners. now, interestingly, the study also looked at hedge fund investors, specifically fund to funds to so if higher-t investors are biased toward

high-t managers and it turns out that is the case as well as lower-t investors and lower-t managers >> how would they ever know that my hedge fund manager was a high-t guy >> come on, you know >> i don't know. >> due diligence, tyler. >> whatever it is. >> this is a low-t guy in a nanosecond i don't believe this -- how is it that you can look at some guy's face like this and know they have higher testosterone? that's real? >> there have been several studies that have shown a very, very, very strong correlation, a statistically significant correlation, between -- that software, what today do with the box around the face and then they also test it against the saliva of those gentlemen. it only works in men, by the way. >> we assume they're gentlemen who knows. >> and then they found that it actually is a very significant proxy for testosterone levels. >> i need a very big pair of sunglasses that's all i'm saying. >> good stuff, leslie. coming up, the first

cannabis-based drug getting the green light from an fda advisory committee, good news in the battle against epilepsy. chairs of gw pharma are down now but they have been up. the ceo in a first on cnbc interview is next. to buy or sell?t be tie with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

hello, everybody, i'm sue he are rera the justice department has just received a referral from its inspector general's office recommending it bring charges, criminal charges, against former fbi deputy director andrew mccabe however, that referral does not necessarily mean that charges will definitely be filed "time" magazine is out with its annual 100 most influential people, and making this list this year is houston texans defensive end jj watt. last year, he donated $100,000 of his own money to hurricane harvey relief efforts and he helped raise an additional $37 million. a connecticut

superintendent, principal, and assistant principal have been arrested the trio are being charged with failure to report abuse after police say they became aware of an alleged fight club in a classroom. a substitute teacher was also charged. and first-time home buyers, well, getting together that down payment is usually the biggest hurdle to getting that first property according to a study by gobankingrate.com, it could make millennials over five years to save enough cash in some 16 states that list included california, colorado, and massachusetts, where, of course, housing costs are a lot higher all right. ty, back to you. >> sue, thank you very much. oil market closing down for the day. jackie knows the numbers she's at the commodity desk. hi, jackie >> well, crude slightly higher for most of the session, hitting an intraday high so clearly making a run for 70 but not quite making it. now the price is backing off at the close here closing over $68.

$68 even was the session low stocks could be dragged down by crude but a huge jump yesterday, of course, so it's not surprising to see some selling today with no other clear catalyst, but the bullish factors here are in place. investors, traders, analysts, they all seem to think we're going to cross $70 and head higher into the summer let's review those cat lalysts r a second so, what a difference a year can make, guys oil prices are up more than 30% in the last year alone back to you. >> jackie, thank you now turning to the country's opioid crisis, new data giving us a glimpse at whether efforts to limit the drugs' use are having an impact >> the short answer is, yes, at least when it comes to prescribed opioids which we know have played a major role in this nation's epidemic. new data showed that the volume of prescribed opioids peaked in 2011 and that decline we've seen since then accelerated last year that's as we've seen new

measures from health insurers like limiting the length of opioid prescriptions and monitoring prescribing habits. those measures are working now, the data also showed that so-called medication assisted treatment for opioid addiction with drugs has been on the rise. insurers have been making moves to remove barriers to that treatment though doctors said today more work needs to be done there to remove those barriers of course, prescription drugs aren't the only contributor to the opioid crisis in this country. and in fact, heroin and stronger synthetic opioids like fentanyl now cause more overdose deaths as you can see from the cdc data a lot more work to be done >> stunning numbers, meg the first cannabis-based drug getting the green light from an fda advisory committee and this could be groundbreaking >> it's a very new idea. this is a compound derived from the cannabis plant, though it's not the compound we've all heard of this one is called cbd and doesn't produce the high associated with thc.

drug makers gw pharmaceuticals and its medicine is called epidiolex is designed to seizures caused by rare childhood diseases an outside panel of advisers met to discuss the risk-benefit profile and the outcome was enormously positive. the medicine has a favorable profile. the fda is set to decide my june 27th about whether to approve epidiolex and a reviewer told patients today the agency is worki working hard to accelerate the review and of course this would be the first cannabis-derived drug approved in the u.s >> let's bring gw pharmaceutical ceo justin gover a lot of analysts out there are saying this could be a major turning point for your company but in terms of the importance of this and using cbd to treat various illnesses, can you give us an idea of what are some of the other applications that are potentially out there for this

particular -- i don't want to say element, but for cbd, which is a derivative of the cannabis plant. >> well, as you say, cbd is a nonintoxicating part of the cannabis plant at this point in time, the focus of our research has been in these two very difficult to treat forms of childhood onset epilepsy, lennox-gastaut syndrome, we're continuing to explore the potential of cbd in other forms of childhood onset epilepsy and indeed other cannabinoids first and foremost, i want to stress today the importance around seeking to treat and meet the needs of those children who have these terribly difficult to treat forms of epilepsy and their families that care for them every day >> justin, we appreciate you scooting over to your bureau so quickly after the advisory committee meeting where of course we heard from a lot of those patients who really want

to see this drug approved and we heard from the fda about the urgency in its review process. if and when the drug does reach the market, because it's derived from cannabis, do you expect any additional restrictions on how it's distributed or anything more complicated >> a good body of today's meeting was, in fact, focused on what is termed abuse potential of cbd, and it was clear both from our studies and from the fda's review that the abuse potential was deemed to be low the product will need to be put into a different schedule by the drug enforcement agency -- administration, excuse me, the dea, after the fda approves the drug that process should take 90 days so, after the approval, there will be a gap before the product can be available, but that gap should be no longer than three months >> how should we think about this drug, justin, in terms of the importance for the financials of the company? i mean, analysts are saying that pricing could be between $30,000 to $60,000 per year, peak annual

sales could reach $1 billion to $3 billion you've recently raised $300 million in a secondary offering do you have the wherewithal to scale, particularly when it comes to the production of the cannabis plants, when you need, obviously, to produce this drug? >> the company's very well capitalized. we've undertaken this research over the last five years and in parallel with this research, been scaling up production, ready for commercialization. we've been building a commercial team here in the united states, populated by experts within the epilepsy field to be able to launch this medication so it's a hugely valuable opportunity but it's an incredibly worthwhile opportunity for this company i won't comment today on pricing or sales forecasts, but we do have expectations for this product to make a real impact on patients out on the future prospects for our company. >> justin, it's meg again. already today, you're hearing some reactions from folks, assuming that the positive reception potentially from the fda to your protect signals a

more positive reception toward cannabis in general. is there any read through from your product or are they two completely different categories. >> i really think the read-through here is the recognition that cannabinoids can and should be developed through a rigorous scientific process. we're demonstrating that we can have good manufacturing practice standards, i.e. pharmaceutical grade, that we can study these in rigorous controlled studies and that the fda and government agencies will review that data in the same way that they would review other new drug applications and in that respect, i think what we've been able to show is that there's no reason to think around the future of cannabis-based medicines any differently from any other type of medication we can do this through rigorous science. we're proving that through this process, and we're going to be proving that, i hope, in the future with other pipeline

products >> we're just about out of time. have you noticed a change in your shareholder base now that there's no more interest in marijuana-based stocks, which may or may not be used in pharmaceuticals, it could be other uses, recreational uses, et cetera, but there's real investor interest in this sector are you seeing your investor base change. >> our investor base has been centered around specialist health care institutional funds. we last raised capital as you mentioned in december and that capital raised was dominated by those type of health care specialists, so i would say as of today, and it's my prediction it will stay this way, that gw is a biotech company focused on new farm supharmaceutical devel and the investors that we attract to this company are those focused on this sector in companies such as ours and similar other biotech companies in this stage of development >> thanks for your time. >> thank you >> justin gover, the ceo of gw pharma, and of course our thanks

to meg terrelle as well. gw pharma, one of the stocks that can be selected in the 2018 stock draft. one week from today, eight teams will make their picks, all in an effort to take that coveted trophy away from mr. wonderful, kevin leary, who won last year's competition and hasn't stopped bragging about it since. one newcomer hoping to knock off mr. wonderful is the entrepreneur bethenny frankel. don't miss it. still ahead, it is the booming business of high-end clothing for your little one do you need a $975 tuxedo for your little boy? i bet you do meet the two women who went from vogue kwoez to starting their own company catering exclusively to children, next.

during their time at "vogue" magazine, our two next guests rose from being anna wintour's executive assistants to overseeing the mets gala ball. they made the launch to starting their own online marketplace it sells luxury children's toys, gifts, accessories from all over the world. to tell us why they ventured into the rough and tough world of retail -- how'd i do? >> great >> did i do okay i'm asking i'm afraid here. so, congratulations on the new business it is growing very nicely. which proves that people are willing to spend on their children we mentioned the $975 tuxedo i saw the $575 snow pants. you've got lots of things that aren't quite that expensive, lots of things under $50, many more >> there's the $43 t-shirt for your kid

yep. >> but if you see something you like, people will part money on it >> yes, they will. 60% of the product we sell on the site is under $100 so we have a wide range of product but there are certain areas where people like to invest, whether it's that beautiful crib or that beautiful dress for their christmas card photo but there are other areas that you know your kids are going to grow out of in about five seconds. >> so don't waste the money there. >> exactly so, people shop high/low >> you obviously saw a lot of fashion when you were working at "vogue." when you were going to start a business, why did you pick this sector of fashion, kids, as opposed to, i don't know, i think most people think they want to design for women walking down the cat walk. >> we were really solving our own problem. we had children. we both have three children under the age of six and we found it incredibly difficult to shop for them. we were online, late at night, as working moms, but even as just a mom in general, it's a time in your life when you have

the least amount of time and the market is incredibly fragmented so you're shopping here for shoes and there for special occasion there wasn't a centralized solution for parents to shop everything you needed for your children on one site so we really sought to solve that problem. >> you guys proved that saying, i think, margaret thatcher, if you've got a problem, give it to a busy woman you've both got three kids under six and you're starting a business you like your stress in small doses, don't you, ladies how much of your stuff -- let me ask you this where do you source your fashions and how do you find them >> everywhere. we started with our own network so our favorite shops, our favorite brands where we were shopping for our own kids, and then through the, you know, mommy network. that's how we really discovered, because as she said, it's a highly fragmented market so you really -- there's a lot of discovery a lot of these brands, you've never heard of them and so it's really through your own network. >> so you're not actually creating the product yourself, you are curating from lots of small producers around the world that are high end.

>> exactly high-end and low end we really do cover both ends of the market >> got it. >> you have lots of items -- how much of your -- how many, proportionally, of your sales are what you would call special occasion garments as opposed to everyday garments? >> about 20% is more special occasion >> so the dress that a young girl might wear if she were going to a wedding or a special birthday party >> right we are expanding our assortment such that we're really building out that maintenance items that you're shopping every day for your kids. our customer is shopping once a week for their children, about 60% of our customers are and so -- >> once a week >> so we're expanding that assortment >> that's nice >> so, last question the devil wears prada, was it accurate >> you know, it's a good story, right? it's always a good story, but you know, we had a great time at "vogue." anna was an incredible mentor and a tough boss but that's what made us sort of the businesswomen we are today >> good answer very positive. >> your best bosses are always

your toughest bosses, i have found, or the most demanding >> very true >> thank you, ladies >> thank you so much >> good luck >> thank you >> i want to know how many people buy that $975 tuxedo for their little boy >> it was a cute little tuxedo coming up, melissa, what's coming up? >> apple chip suppliers are coming up. they're getting whacked today. the trading nation team tackles that that's next. let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks,

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time for trading nation, sinking 5% on paper, and worst day since 2016 they cut revenue forecast, so the time to stay out of the once

high flying names, wealth partners, gina, mark, starting with you, seeing a cyclical, a bad sign for the economy >> i don't think it's a bad sign for the economy, but we're a high conviction underweight on the sector in general. it's pushed to the point where five-year earnings forecast hit a high of 20%, a tough hurdle to overcome we feel it's time to dump chip names heavily dependent on smar phones like when 21% of the revenue comes from one source, being apple. i mean, you really don't see people waiting in long lines to buy the newest iphones anymore, and you can see with apple, their strategy changed to include a more balanced mix of reven revenue, getting more from services, so there's, obviously, a changing landscape, and that's why we are underweight on the sector >> gina, your thoughts

>> oh, well, we're not quite as negative as mark is, but he makes good points, which is that, clearly, we are probably slowing, but there is still significant demand there part of what's driving today really had to do with an inventory drawdown which is apple's decision to pull all the inventory of the a 11 chips from taiwan semiconductor to get ready to use the a12 that's nothing to do with demand it was overordering, drawing down inventory to prepare for another cycle. the demand is still in place, but there was parts of the demand that were overhyped, right, like the crypto lining et cetera, but other parts will do well, like artificial intelligence and automotive, et cetera we're not as heavily negative, they are signs of slowing, but there's still demand >> okay, guys, leaving it there,

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check please >> the best sound bite of the week from an interview earlier this week with commerce secretary wilbur frost at the space complex talking about colonizing asteroids for minerals >> we need to have an international basis because we're really talking an inter environment in which they operate and learn the rules of the road you get to the asteroid first, all the minerals there are yours, or are they just what you dig out the first time >> important questions >> you bet your asteroid those are serious questions. >> could be elements out there that will be necessary for new technologies like battery technology, et cetera, rare earth, perhaps, we don't know. this could be very valuable in terms of - >> glad somebody's thinking

about that >> exactly happy about that >> what's your check please? >> well, i've got a graphic for you guys, since i'm among all the economists, i brought a chart, but this is really an eye-opener, and everyone's talking about this it looks at country debt levels, the imf is sounding the alarm bells over debt. look what sticks out on the right side that's the united states it is the only major economy where the debt to gdp ratio or five years is set to grow. so this is, clearly, of concern, it's not a problem until it is, according to the markets, as you guys talked about, but, still, alarming >> and mine is a speech that the president of france gave where he discusses what he sees as a civil war in france pitting the forces of, i believe, what he calls ill liberalism, but not in the narrow sense of liberalism against conservatism, but sees a conflict on the rise in europe

by extension around the world, and thinks we have not done enough thinking about it, and so do a lot of people including an author with a new book out next week addressing this among other things >> important issues. >> yep, certainly. >> "closing bell" starts right now. hi, everybody, welcome to the "closing bell," live at the new york stock exchange, i'm kelly evans. >> i'm wilfred frost the dow is swinging more than 200 points during the day's session, down half a percent for the dow. the nasdaq's down almost 1%. >> real big swings are treasury yields pressuring the market, and look at the rates. we're talking about the highest levels in years for the two-year and five-year today, and look at the difference between what you get for holding a two-year treasury bon