>> he's been spot on in terms of commodity and year to date i am confused by the short facebook but we'll hear more from jeffery of the reasons behind it. he's pretty accurate >> less than ten seconds you got a final trade name >> i am still with j. pchp. mor. >> that does it for us, "power lunch" starts now. >> good afternoon everybody, i am tyler mathisen, it is all about life at 3% yields on the benchmark and ten yr note hitting the key psy psychological marker we'll tell you what it could mean for you and your money. silicon valley, gathering to unveil their best ideas in this market, we'll take you there, live this hour and fortnite

frenzy, what's fuelling it and is it a threat to other video game makers? "power lunch" starts right now >> and welcome to "power lunch," i am sara eisen. stocks are trading at a narrow range today. the dow trying to avoid its first four day losing streak since early in february. goldman sachs, the biggest loser and merck is the biggest in the group. that's also boosting the dollar, the dollar is pushing higher against the mexican peso, the japanese yen, euro and the british pound. >> i am melissa lee. ford will take bids on adbs managed by wpp william sorrells left last unique after a cloud of

controversie controversies. the airline has made moves in that direction, jet blue with premium cabin services regulators are opening an in-depth investigation with apple verses shazam. we are about to go to lesley picke picker is joining us now >> jeff gundlach just now exiting the stage, a self-described to be a risk where he's done in years past, urging investors to go along the xop, the oil and gas atf and, chamath will set the stage moments away we'll go live with that. >> that's what we are going to talk about today before we do, as i always do, i

want to start with our mission which is to advance humanity by solving the world's problem chblt there is there is a group of people in silicon valley believes to spend time on solutions to global climate change and other really difficult things that are non obvious. the reason we come to that conclusion, we as an organization are comprised by and among people who have otherwise help build some of the most well-known technology companies that we all use everyday and it is through that lens that we start presenting at zohn in 2015 we start with being long amazon. it has been compounding every year by about 54%. a few months later, we were asked to speak at sohn at the

west coast that has been compounding by about 26% a year last year, i was here on this stage and i had the opportunity to talk about hour modern edison the gentleman named elon musk who we thought could create an incredible and impacting climate change now, that has been off to not of a boosteriing of a start it is with that lens we now start to talk about something that we think creates a really interesting disruptive company that's worth considering for 2018 before i do that, i want to impact the thing that we all probably have asking ourselves when you hear the buzz word artificial intelligence, what is it what is it that all these people are talking about? >> let's start with some very, very basics. when people talk about a.i.,

they are talking about two and only two unique and over lapping concepts the first is the idea of learning so how do we use computers to replicate how the human mind learns the second is inferring, inference. how do we observe things in real life and how do we use computers to do the same thing what we have done in computer science is unpack these two problems and allocate resources and smart people to try to resolve them in interesting way. how does learning work learning much like the human mind works in a simple idea which is you take enormous amount of data you train your mind or in this case, you train the computer using algorithm and out of that comes a model. a model that describes everything you see in the past and why that is useful is you

can use that model in realtime so when you encounter the next dog or cat once you have been trained to know what a dog looks like, you can identify the image with extreme high precision. inference as youtake all of those observations in realtime and you apply the model and make predictions. why is artificial intelligence is so sprinteresting. it is this one simple idea where it creates a positive feedback loop and how we as humans can make better and better decisions. the way it works is once you use data and you train computers to think about what it is and they understand what it is then they can predict the new thing and you send that results back to the system and all of a sudden your knowledge starts to compou compound your accuracy compounds and your ability to predict things intelligently compound as you can imagine, it allows you to do those things, these

different things, cheaper and faster and better. this is at the part where everybody is focused on this problem. for example, if you took trillions of search queries of what every human in the world was searching for and you train the model and you created a product around it, it would be called google. we all had this experience when we type in one or two letters in the google and it completes a search term and you think to yourself, how do they know they knew because the computer helped them guess. that guess was not a guess, it was an accurate predictions. these predictions are going to get more and more accurate overtimes. imagine if you took trillions and trillions of photos and you identify each one as a dog or a cat or a human or a beach or a mountain or a lake, what would you be able to do? well, if you use i-photo or facebook, you can identify faces. you can do interesting things

like search for all the times you have been to a beach or the computers understand what beaches are. how does that happen again, it is artificial intelligence, these are models that have been trained over long periods of time. think about how you could do interesting things if you took a car and you put ksensors all around it. sensors that i told you what was in front or behind you your tire pressure and where you were and how fast you were going and the weather and etcetera and etcetera, you could probably create a really intelligent auto pilot system. we have seen it now with companies like tesla and google everybody in silicon valley has come to a really important decision point the last 20 years of value creations of silicon valley balanced by the idea of waves. in the late '90s and early 2000s

we went through the transformation when you think about where value creation existed, this was the idea where you no longer are a computer company but you an internet company in 2008 when steve jobs introduced the iphone, something really interesting happened. it did not matter if you are an internet company like google or facebook, it matters that you are a mobile company like google and snap chat. this third wave is upon us in this third wave, it is really critical to understand what a.i. is and what it can do and what it can't do and who is actually positioned to create incredible amounts of values over the next 10 or 20 years so when we internalize the importance of this idea that we did what we always do which is take a step back and create a logical framework to understand

how value gets created we created a simple level of building blocks that we call the a.i. stack it is using this model that you can organize who does what and where we think real value is going to get created in the past, today and more importantly for our pick coming up in the future there are four important areas, let's talk about it quickly. the first is the idea of compute. the reality is artificial intelligence at the oeend of the day is a lot of math as it turns out when you unpack it, companies make things like ceus are terrible at the kind of math that a.i. needs another product that existed at the time called a graphic processing unit was great at

liner algebra. the gpus was ten times of a hyp high performance that's not the ending point. what google found out that you can make a custom chip by yourself that was better than a tpu. at the end of the day the compute layer has been dominated by two vendors, nvidia and google a lot of the values have been created but we think it is an interesting building block for r where we are going on top of all of these computes, we have infrastructure what dos it mean artificial intelligence requires a different kinds of compute and structure. it is not just about storage or cpus, it is about tpus, it is about the ability to pipeline enormous -- so the simple

question on infrastructure, where will the value be captured it will be in the places where there are three companies who do this, storm warniage, compute a. then you look at algorithm, how do you train the human mind or model the human mind when you look under the hood, there are two companies that dominate here. if y there is another they think called cuda. a lot of the values have been created so now what is next? what's next is around applications and this is where we get to our 2018 pick. it is in this application layer for the next 20 years, you will see most enterprise software get

remade in that will be the reallocation of hundreds and potentially trillions of dollars of i.t. span over the entire time. how do enterprises take advantage of a.i take it and stick it into some training algorithms to create a model. the problem is all of that data is at an unfrinfrastructure way there are not labels or things that classified these stuff. these are powerpoint stuff you need an organizing layer who can take the chaos and create some sanity out of. so we get to our 2008 pick for our sohn which is box. why box? they sit on top of an enormous amount of rnd that these huge giants are doing

last year alone almost $45 billion. these guys benefit from these enormous tail wind they do simple basic applications with all of this infrastructure that's been built for them they give companies the ability to add intelligence to imagery and audio and video. what does it mean to do that imagine you are going to the hospital and millions of x-rays have been classified they can tell you what's a bl k blockage and what's not. those are machines that are trained with participation of great doctors. imagine now you call and get an insurance policy and instead of weeks, what happens is you actually apply over the phone and all of that is automatically created of an application that's translated in the computer and decision is made and policy is created. you take audio and all of a sudden, it exists in structural

data identify people and identify themes and things that have been said anomalies and you see how there is just a wide, wide number of ways in which we believe box can generate an enormous amount of value over the next few years it is always, let's look at our work there is really three ways in which great companies in my perspective get built. the first is you find a core products that works and you use that trust to build the ability to expand to adjacent verticals. box is doing all three quietly and unknown to most people the company with 82,000 enterprise customers with 70% of the fortune 500. companies that we all know of trust and respect, use box everyday and they use them for an obvious set of features that's created

trust repeatable purchase behavior and low turn and high value. in fact, they're now more than 10 million users using this product, paying in the enterprise which when you compare them to other companies, sets the stage for what could be an enormous business being built and quietly under our noses. it is also business that have almost $550 million occurring revenue. it is been steadily and consistently growing this revenue for year as and years. and there is also a business at this point that's meaningfully cash flow period that they can inject cash into their business. highly predictable and what we are going to see a little bit very cheap on top of this what they have been able to do is build a whole suite of value out of services they start to understand how to up selling cross sell and last

quarter, they told us two-thirds of their deal of 100-k involved in these up seats. now, we get to the a.i. layer. great customer base who are now ready to adopt all the a.i. capabilities, through the interphase layer of organization set box. what's great about this is it builds off momentum of core business and the amount of volume and data inside the business that they can organize that's just explode ling. this is a new business stream when they land customers coming in at 90% gross margin it is a business that's incredibly cheap and under value. in fact, when you look at the market cap business relative to others, what you see is a cheap company. with incredibly low turn and an unbelievable margin of safety.

and so when you layer this a.i. digital transatiformation of wh we think is going to happen. we'll see on average of 20 or 25% of compounding of revenue and we'll see expansion of driving value out of services. we think we are going to see even a modest multiple expansion over the next five to ten years. when that happens what you see is a business that can be extremely valuable so to recap, our pick for 2018 is box if you believe and if you care about artificial intelligence and its role in the world and your ability as the public market investor, what i would tell you is belong google and amazon but frankly belong box. thanks everybody and we have been listening to palihapitiya pitching his

best idea at the zsohn his premise is invest in artificial intelligence stack as he calls it and the application level that many other companies have not yet penetrated except for box. box is about 75% as customers right now and he expects a 20% compound annual growth rate when it comes to revenue calendar year 2029. let's bring in leslie picker, it is interesting to hear him laying out his case every turn, is it nvidia or alphabet and then it was box? >> reporter: that was quite the surprise there the response from the investing community on the pick. of course, he had a tremendous

track record from his pick at sohn and now of course, box. as you mention, he looks at this as an a.i. opportunity an opportunity that he sees as kind of the next phase in the tech community and the '90s, it was all about being computer/internet company and 2008 was a mobile company and next wave is a.i. and box's best position to capitalize on that he points out box's low market cap relative to other big tech company involved in a.i. and data storage he talks about how box's a.i. revenue is 90% grosse margins and tremendously high and new opportunity for that company i want to point out because palipapitiya facebook executive

long ago gundlach urged him to go long on the oil and gas and short facebook he pointed out and said this was a riskier trade and certainly an interesting recommendation of what we have seen with facebook these days >> i did not understand the notion of the trade, he was talking about how equity bubbles could be popped by regulations, he was referring to facebook so obviously he sees that as part of his thesis that there could be -- if that's the case, what is the bull case for oil stock in a recession >> reporter: he did not talk about the fundamentals, he did not explain as much specifically as to why oil verses facebook. he pointed more towards the technical analysis and the 200-day moving average of the two over laying the charting both and showing the trend lines moving in opposing directions. it is more of a technical

analysis that's supporting his thesis there than a fundamental trade like he had in years past like last year when he urged investors going long in the market and short on the s&p and etfs this time is a little bit more on the technical side of things. >> all right, leslie picker is joining us from the sohn conference you can hear more from palihapitiya on "closing bell" at 3:00 p.m. eastern today let's get back to the stock market rick santelli is tracking the action at the c.m.e. group >> i have never seen so many traders scrutinizing and dividing multiple of basis points we stack today on top of friday's range and coming close to 3%. you want to look at some year to date charts, it is enlightening. you see our 10-yr and we took

out of the 2.95 high yield look at europe, and bund today of a big move. yields at 1.53 what do they all share in common there seems to be this funnel and it is slowly disappearing and certainly seems to have an effect we can talk about inflation and break evens and we can talk about the dollar index, two days up a penny in two days at the end of the day, all road lead to central bank and our central bank is leading the chart. sara, back to you. >> rick, thank you how big of a threat are these rising yeeields and your portfolio, joining us, steven, our market strategist with

russell investment that's a question as you head into this psychologically 3% level whether we headed today or sometimes soon, is that a big risk for stocks? >> i think it is something you want to strongly consider in one's portfolio. we have been talking about a flattening yield curve now for a number of months i think you ignore that at your own and with the news today, the cohn interview is very important. >> he says it could take a long time in the next five years. >> along the united states, you got a fed that's removin removing -- when you wait 18 or 24 months out, there are some structural risk out and that's why we are looking at more global and in japan, their economy is catching up draft right now and inflation is beginning to stabilize that's an example from a currency and an economic cycle

and valuations and more nimble actively managed jason, there are two things that are unusual that's happening right now and one, what you were just talking about, steven, that's rising interest rates how do i factor that into my investment thesis and what do i do as a result of those two unfamiliar risks >> well, if think trade fiction, it is a great question, you are talking about volatility or if you are talking about the dispersion among equity prices on a given day or week it is a long-term investor of what you want to do and you want to look at the fundamentals. >> i am not talking about trade friction in the sense of friction of the market >> i am talking about global trade. >> yes >> you know our view is that the handling over global trade has peaked for now and i think what

we saw over the last couple of weeks have been a more conciliatory type of tone from china and we are seeing less tweets around tweets and that can pick up because that inherently is unknowable of what's coming out of the president's account. the focus is back on rates and rates are getting closer to 3% the discussion around rates and the calculus is tricky on one hands ov hand over the short run. low levels changes the market's narrative. over the long run on the other hand, if it is smooth and if it is in, if it is along with improving economics then i think the market can digest that so withwe can see positive returns >> steven, i want to ask you about jeff gundlach's so called pair trade in terms of sector which you can

talk about will yoube sure that oil and gas producers into a recession >> it depends on the timing right now. >> okay >> it is critical to get accurate if you are talking about one year to 18 months, that's different than three to five years. i think we have seen the e.m. commodity space and the u.s. economy in 2018 and 2019, they look okay. the strength in economy, earnings are going to look good this year. the near term you will get some something of a tail wind certainly that's going to begin to bite in the two-year time commodities and e.m. and a global growth looks solid. >> melissa said early that gundlach says something to the

effect that regulation could kill equity bubbles and bull markets and pointed specifically at facebook. i know you like some of these companies especially going into earnin earnings, how do you deal with risk and scrutiny and regulations next to what's been double digit earnings growth >> you frame it. the double digit growth and wide economic mode and valuation that is are no longer demanding a number of leading names. meanwhile, you are right regulation is a risk and as an investor unknowable of what it is going to look like. our view while it is a headline risk that regulation could come down the pipe and hurt valuations and earning powers of some of these companies. after watching mark zuckerberg in front of congress for two days last week, it was a bit embarrassing for the congressmen and women in the room that are asking questions to mark

we don't think any regulations >> just because you think they are incompetent? >> your word but not mine. >> it sounds like what you are saying >> there is a disparity in knowledge and the back end of all this technology works. mark zuckerberg showed a strong competency and it is in his purview, he and cheryl sandberg is taking notes and being respectful to work with them we think that sppersuades some the concerns right now if we have another cambridge analytica or something comes up. it is sort of blown over now it is not a big risk of our view >> thank you guys. >> jason and steven, thank you very much. a big state visit in washington today. one of the first french president, emanuel macron will meet with president trump. a lot of topics on the table

we'll speak to a top aid to the president and it is the hottest video game in the world right now, my son and his buddy plays it it is called "fortnite," who's getting rich and who is it hurting? >> those questions are answered next on "power lunch." you know what's awesome? gig-speed internet.

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hello everyone, i am sue herrera, here is your cnbc update at this hour. the foreign minister of mexico responding to president trump's tweet earlier this morning threaten to tie nafta negotiations to immigration control. minister lewis says it would be quote "unacceptable to condition the re-negotiation of nafta. massive fire in new orleans under control, it is blg caeing l total loss new video of police struggling to get a passenger off many miami at an american airlines in miami after a woman says he touched her inappropriately. officers were forced to use the

taser on the passenger after he was asked to leave the aircraft. the flight took off one hour late amazon discloses median worker pay of 28,446 it was well below the median compensation over facebook who knew it was that high. >> that's the news up da it at th at -- update at this hour. >> macron arrived for a state visit with trump there is a lot on the agenda including the iran deal and trade and much more. cayla tausche is live with us. >> reporter: we are joined at

the white house mark shorts to talk about all this. >> thank you for having me >> the iran deal is going to be at the top of the agenda, the white house have been having talks with allies, where do those talks stand in. >> cayla, the president have been clear from the start. he says $1.7 billion in cash to iran and exchange for little as far as concession. today iran continues to so discontent across the middle east and funding across the middle east in yemen the administration wants to shake sure that we hold iran accountable and as we get a new secretary of state confirmed and he'll be working tighten it. >> reporter: the president have been talking about the iran

deal, both macron and merkel is trying to convince the president to stay in have he made up his mind >> i don't think americans are surprise of where he is on this decision he's consistent throughout the campaign and given more time, we have not seen the changes in iran behavior yet and looking to believe that the current deal is a good deal. perhaps there will be more discussions. i don't think america will be surprised of the final decision. >> is that a withdraw? >> i am not going to get ahead of the president's decision, cayla. >> reporter: when the date approaches, will pompeo will be in that role >> we certainly hope so. he served our country and graduated with honors at harvard law school he has done a phenomenal job democrats and conversations acknowledging his job. you really should be there but i

cannot vote for you. how cynical is it in washington today, but at the end of the day i cannot vote for you. >> reporter: it does appear that he'll have enough vote in the senate, approaching major decisions like the iran deal not having that? >> i think it is a sad statement where the united states senate is today again, people and there is not an ethical problem or a policy problem, it is just simply politics when you have an army so energized yeahis, he's the rh pick but we cannot vote for him. >> reporter: on may 1st, that's when the deadline expires. what happens on that date? >> cayla, the president remains committed in working on bilateral agreements he prefers that and continuing

it in several fronts and including nafta. we hope for positive news to make the president is making significant progress and several fronts on trade. >> will the president withdraw on nafta the president has been clear that is an option for him and no way do i want to suggest otherwise to you or your a audience i think the president have made significant progress i think you will see some positive news come out of the here >> reporter: give us an update on the rescission package, will the white house make or request by congress by what we see of the undone rescission package. >> this is a common practice and many cases there are dollars left over from programs that dates back years ago >> reporter: like what >> there is all sorts of

programs that dollars have not been ex pended we are asking congress to do that the president you heard him make the case himself we negotiated of the top line and rebuild our military and making our border secure >> reporter: we are out of time. dodd frank, where does it stand? >> we are angxious to get a bil before memorial day. we want relieves for the smaller banks. >> reporter: marc short from the white house, we appreciate it. >> thank you very much, cayla tausche and marc short >> the scandal is firing back about cambridge analytica.

facebook's ceo mark zuckerberg took kogan to task >> that's a big issue. people have the right to be upset. i am upset that happened >> now kogan says he was not some bad actor but rather one of the tens and thousands of developers who were collecting and selling data from facebook platform joining us now is aleksand aleksandr kogan. >> thank you for having me >> is that how things went down? >> not quite so the reality is i am a facebook friendly. they were working with me for a long time and it was a good ally they hired my students and so the fact that i did this project, i really believe we are doing something super normal and

that nothing to go wrong i thought facebook is going to be upset with it i don't do it. it was business as usual this is a normal thing to do back then. and our project unfortunately blew up and now facebook is saying hey, rogueing actor they're all out there and facebook has no accounting for it >> we talked to a lot of facebook investors as long as there is not another cambridge analytica shoe to drop, we are okay to invest in facebook here you are, how sure are you of that? >> certain facebook has talked about 87 million and the actual number we collected was closer to 50 million. the reality is probably nearly every user in facebook have been collected many times over by many companies facebook does not know where the data is and they are no real way

to figure it out they have an audit that does not work >> so when you hear mr. zuckerberg say what he says in light of your experience, is he a hypocrite? >> totally i mean look working with facebook is about working in a building where you see half employees bring in their dogs so i bring in my dog and my dog pepe pees at the wrong place and management came to me how could you bring your dog and we have a clear pet policy what are you guys talking about? have you looked around and have you enforce this and clearly nobody is following it >> so you feel that he knew exactly what was going on by a company like yours and i love to hear your name and others who did what you did and app developer who not only rake the data and i gather you were

permitted the do but transferred or sold that data, right you think he knew what he exactly was going on >> the amazing thing is if you look at facebook app right now, many, if not most will have language in the terms of service they can transfer the data to third data i am not talking about small companies. i am talking about some of the biggest companies in the world and you do this yourself right now. facebook is still not policing it >> what correspondents if you had with facebook management or executives when they found out this is going on >> they reached out and facebook said we provided certifications that we deleted all the data when they asked. facebook was a close collaborative mind a month before this one down, i was there doing a consulting project, i wanted the make sure we make them happy we were transparent and did

everything they asked me to do >> this has been sort of what we have been getting at is the outcome of the cambridge analytica scandal as it becomes a core part of facebook's business model >> it is >> facebook is data hungry their model is built on selling ads and to sell ads on social media, you want to find the right person at the right place. to do that, you want the know as much as possible about people and so facebook has to backup a little bit and take less data and get people to opt in it is a real threat to the business model >> i want to ask of the question of the time line of your relationship with cambridge analytica. you developed an app that was basically an personality test that went live through facebook. did cambridge analytica ask you to develop that app, in other

words, were they the driver of your enterprise there all along or did they come along after the fact and say hey, he has this cool app and he's got a lot of data, let's see if we can do business with him. i want to get a sense of which comes first here, the chicken or egg? >> the app was initially made so i can collaborate with facebook. i made the app to augment that and cambridge analytica came on and we get to talking. the thing is when i made the app, it was for academic work. so they came in and helped me rewrr re-write everything, we rewrite the terms of service and rename it and providing us all the questions that they wanted to ask for the surveys.

that i were the designer of that perspective and leading the commercial charge. >> you know i am sure you listen to a lot of congressional testimonies and you were up front when you called marc in response to mark zuckerberg. in describing what the problem was, was facebook lying? i ask you that because congress people are listening and taking in what they are saying and telling them and trying to figure out a solution to it but if facebook is not telling the truth of what happened, there could be a disconnect of what the potential solution could be? >> totally in my opinion, facebook is trying to distract, they're trying to make the story about hey, it is a rogue agent and he transferred the data what they don't get is if i had work for cambridge analytica and did the exact same thing, people are still upset. the reason they are upset is they feel violated that their data are used in ways that never expected and imagined.

that all comes down to terms of service. facebook built business where nobody reads the term of service and nobody knows what they are doing with the data and for that tho change, this is where congress comes in. >> i believe you said last night on "60 minutes" everybody knew but nobody cared that's your attitude let me ask you about your knowledge of cambridge analytica and what they didn't do and did. how aware were you of who's working for them and where their money came from and what they were going to do with the data at the time you were initially beginning to collaborate with them now obviously you know what happened but then what did you fo know >> it was limited. i don't know the funders or anybody that's involved in the board. i had a sense of the republicans but there was not a real understanding of potential

candidates or case was not clear. the project actually is kind of stupid for that. >> what do you this i happens next aleksandr and do you think it is possible for facebook to secure our data? >> i think it is possible but i don't know if it is going to come from them they have a fudiciary duty >> those things conflict and what needs to come next is lawmakers need to take a hard look at this and say look, we need to get companies reigned in and make sure they protect data in a sensible way. that's threatening because we don't know where the business model goes from there. >> if another company like cambridge analytica came to you

and say, hey, we cannot to collect data and could you do that and harvest the same type of data as you did before? >> not in facebook >> what flat form wouplatform we >> you use twitter it sells data. >> when you -- you created your terms of service which allowed you not only to rake the data but to transfer cells or convey it, did you know that was in direct conflict of what facebook says its terms of service were between companies like yours at developers at facebook did you know the two were in direct conflict and why do you think facebook, in light of that conflict did nothing for so long >> so actual will i did not know the facebook developer policy presented to developers is presented to users and in a hard

to find manner i relied on cambridge analytica to guide us what was appropriate or illegal >> cambridge analytica someone on behalf of cambridge analytica wrote it it wasn't until a year later we realized there was any inconsistency. the thing is, my terms of service was up there for a year and a half, facebook never said a word, up on the facebook platform we put the link there. they say they will audit and review it but they clearly don't. >> i have to ask, how much did cambridge analytica pay you? >> so, they eventually paid my company about 230,000 pounds me, personally, i didn't see any of that. we spent it on legal bills talking to facebook and on a product that didn't go anywhere, as often startups don't go

anywhere. >> we'll have to leave tlit. we hope you'll join us sometimes in the future. >> thank you. >> president trump tweeting once again today the need for a border wall with mexico. once again the president of mexico says no way his country will pay for it. the battle over the border is next your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

off in miami bringing together some of the smartest minds and ideas across north america, latin america and europe cnbc is there. earlier today our john harwood sat down with the former president of mexico vincente fox. he didn't mince any words when it came to president trump's building a wall. >> building a wall, this is stupidity out of the mind of trump. that wall is no purpose, no positive purpose, just isolating the united states from the rest of the world not to the wall, that wall is only in trump's mind. >> fox weighing in on the battle over trade and nafta. >> nafta and trading is always good for the three, canada,

united states and mexico there is only winners not zero zone like trump pretepds nds tol the people that's false. >> the former president of mexico meantime we've been watching shares of box soaring on pace for its best day since the company's ipo back in 2015 you heard from venture capitalist speaking at the conference unveiling box is the idea for 2018 listen. >> why box for a bunch of reasons first and foremost they sit on an enormous r&d huge internet giants are doing when you look under the hood of spending last year alone almost $45 billion. these guys benefit from the enormous tail wind they do three basic simple applications with all this infrastructure that's been built for them they give companies the ability to add to imagery, audio and

video. >> our jon fortt joins us now covers box, interesting to frame ai. >> john levy, co-finder of box is thrilled. it's been doing better lately. a couple of interesting things they have done, they have set up zones where customer who is want to store data around the world can store it, important in this era of tariffs, companies have gone a little more nationalist then they set up regulatory tranches for different industries you've got specific medical storage within box for storing x-rays and track exactly who is touching it, is the right person touching it, have things gone through the right approval this added look, why they should benefit from mega scale cloud providers interesting. >> who are their competitors >> dropbox is one, they just went public at a significantly

higher valuation. >> you said this was cheap. >> compared to box. >> thank you nothing from airplane leaaron la frequent tweeter. >> we'll be watching what does the collapse of toys "r" us mean for toymakers, not as much as earlier hasbro off market lows and up by more than 3% right now and alphabet due witrelth sus after the bell everything you need to know before that result drops in "power lunch." stay with us ♪ adults are just kids with much, much better toys. introducing the 2018 c-class sedan, coupe and cabriolet. the thrills keep getting better. lease the c300 sedan for $419 a month at your local mercedes-benz dealer.

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. i'm melissa lee. here is what's on the menu ten-year yield inches closer to the level. which sectors will do well and which should you stay away from. a bold call from bond king saying it is time to short facebook he'll join us to explain why and give us his outlook for treasury as a ten-year hedge for that 3% mark from a to z al bet releasing earnings, making big changes how it reports we'll get you set up for that. "power lunch" starts right now ♪

welcome, everyone to "power lunch. i'm sarah eisen. let's get you caught up on markets. relatively quiet day for stocks struggling to make gains here. if we do end in the red, it would be the fourth down day in a row for the dow. as can you see it is green but just barely. gol goldman sachs and walmart biggest loser, merck and verizon leaving. henry sche main under armour up after, deutsche bank, prices after u.s. softened stance, alcoa down more than 12%. tyler. >> thank you welcome. i'm tyler mathisen, here is what else is happening. sears es mr. investment advising sears to purr see divestiture of kenmore brand among others

it could help liquidity position existing home sales up 1.1%, higher than expected sales rose in the northeast and southwest but fell in the south and the west flix ceo reed hastings made $24 million last year. nice from $2 million in 2016 median employee compensation at that company, more than $183,000 last year. >> as we mentioned ten-year yield approaching 3% level, a level it hasn't hit in four years. dominic chu taking us back. >> a different feel back then. still, we were in a market recovering from the financial crisis let's take a look at key bench mark numbers between then and now. we know where markets stand ten-year note yield 10.9%. january 2014 last time we saw above levels in the ten-year take a look at market milestones and indicators if you will take a look at the overall

sector for ten-year note yield and how it compares to what's happening with other parts of the market you take a look at dow jones industrial, s&p 500, oil prices, gold prices, that sort of thing. if you look at those, we are seeing a bit move higher with the dow at 16445 back them, that means 49% higher today than we were then. s&p 5001838 then, 45% gain at that point oil prices were $92 a barrel even if we see prices rise, it will be a while before we get back there gold was cheaper, $4.25 an ounce. we see it stacking up. still, tyler, as you look at the levels we look at with ten-year note yield, it is impressive back then gasoline at $92 a barrel, $3.33 an average unleaded today, closer to $2.75. back to you. >> thank you who, which company, winners and

losers in rising rate environment, let's bring in larry glazer larry, you say rising rates ushers in a new era, end of low volatili volatility don't fear the normalization of rates but do change how you invest how? >> you got it, tyler look, the only thing more exciting than being in the throes of earning season, naming the royal baby or winning night of fortt night it's wonderful, everybody knows it rising rates 3% on treasury all new. for investors we're a quarter of the year in, right, and we've got nothing to show for it in the major market averages. a money market will be paying more than averages will. investors have to realize two things kill the bull

one a big spike in energy, another a big spike in interest rates. right now you have both. you don't have them bad enough to kill the bull you just have enough to kill the leadership you have deer in the headlights member at that time. they are frozen. want to believe 2017 but symptom acturning nausea inducing volatility tells them it's 2018. they have to invest differently. inflation protection, commodities, some of the things they forgot about last year they have to bring back and go light on the feng stock. >> there is some enthusiasm, ben, what do you think >> i think larry is right to the extent that growth has run this interest rate level up i think one of the things happening, in addition to earnings which everybody knows about, sales have been very good, too. i think fiscal policy expansion, unprecedented expansion in late in the cycle is a big story. it might drive interest rates up, but it's probably going to mean we're more in the seventh inning of this advance in the secular bull market than the

ninth inning we think it has more legs left in it, particularly if sales pick up and if this fiscal policy expansion brings about capital spending as expected. >> you want to say for the last two innings of this, if the risks out there include -- >> go to the bullpen. >> rising interest rates. >> in january we really didn't think so as much we took our equity from overweight u.s. down to equal. then we got the sense with fourth quarter earnings how strong sales were and the earnings estimates increases were more than we thought they were going to be we thought, let's go overweight again and get that seventh, eighth, ninth inning hearing, the 10% run. one thing we're saying about the bull market, multiple expansion element of it is probably over it will be earnings driven but the earnings story is pretty good. >> which sort of gets us back to the question 3.% on the ten-year

yield, whether that will affect profit able and growth false starts, three decades of bull market in bonds people are asking themselves, is this it? and is this really the speed that would make investors nerve out about corporate profits down the road. >> that multiple compression we're seeing we've got two generations of investors, those who lived through rising interest rates, who remember what can happen to multiple they remember high-growth bank stocks, compressed multiples you also have older investors who live with rising rates,the realize inflation in corporate earnings, kimberly clark, procter & gamble getting long energy and short facebook, there's a mantra out there where investors may start to reposition their portfolios it doesn't mean the game is over but you've got to change how you're investing here. for a lot of companies you can have decent earnings growth, low regulatory environment, pro

growth investment. there's a whole world of investment not just five or six names driving major market averages the last few years. >> thank you, ben and larry. i think you guys should collaborate on an ice cream sometimes, ben and larry. >> speaking of crazy market moves, i had a chance it sit down with the governor of the bank of japan, top three central banger in the world. take a look at his answer when i asked him about recent market volatility and what's driving it >> from february this year, the u.s. showed somewhat stronger than expected rate increase and improvement increase then along comes response

quickly impacting stock market all over the world but now after some fluctuation, it's now sort of stabilized around the current level so i think you're right you have to continue to monitor carefully markets, not just in the united states but all over the world. so for instance, imf, this one of the risks faced by world bank, world economy. that is to say unexpectedly faster paced or monetary tightening could have ramification over global financial markets as well as economies of emerging countries. >> another risk imf warned about

was rising debt levels, sovereign debt levels. when you look at japan, it's the highest among all major economies, 236% of gdp when should investors worry about that. >> at this stage, that crisis is not in japan first because 95% of jgb is held by japanese viz, companies, and institutions and secondly, japan is still by far the largest net asset holder you go to that at this stage know that crisis psi erupting. but i'm quite sure debt

sustainability or sustainability of public finance must be squarely restored, or maintai d maintained once confidence in the g or country is lost, it's very difficult to restore so at this stage, no crisis. instead of crisis, whenever financial markets fluctuate, japanese yen is seen as -- >> safe haven. is that frustrating to you >> i should say i don't understand why japanese yen is seen as safe haven anyway, at this stage, no debt crisis likely. >> that was the bank of japan governor kuroda.

i thought that was interesting he said i don't understand why japan is safe haven during times of turmoil, why people pile into the yen. look, it shows they don't have a lack of confidence we were talking about rising debt levels. he said -- >> people piling in debt at the level it is in japan, that's a good thing for them. >> clearly not a near-term risk. in a previous question as it relates to the currency, if anything, the yen might be too strong i said is he worried about president trump tweeting at japan because trump likes to call out currency manipulators and people who devalue he said we're not trying to devalue our currency, which they are doing monetary stimulus which does that. it's not every day i get to talk about the yen with the head of the bank of japan. >> that's pretty cool. >> coming up bond king joins us from the conference.

best idea short facebook, long energy stocks. you won't want to miss this. cnbc draft order being announced, happening live in 10 minutes. who will get the first pick? last year was mr. wonderful and you know how that ended. plus sean hannity's secret emre did he fail for disclose crucial information how he amassed these properties we'll lift the curtain straight ahead. 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, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. 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.

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quick check on the arkets, red arrows across the board, dow down 89, s&p down 6.5, nasdaq down 32. ten-year yield 2.99% bers ide best ideas out of the sohn conference we saw the stock surge as he was laying out his case for artificial intelligence. that stock is sustaining gains of 10% right now. >> we want to head back to where that idea first surfaced sohn conference in new york. scott is there to sit down with scott gundlach. >> got off the stage a few minutes ago. two interesting investment ideas. the first a theme we talked about in your office you had long xop in energy play.

you told me back in december. >> december 13th. >> long commodities. this plays into that >> it does play into that. it was really going to be the crux of my presentation. basically what i was talking about, there are many indicators signal inflation that's a change. for years there weren't really inflation indicators what i talked about on the stage here are things leading for core cpi like gdp, real gdp, like pmi surveys. they lead with a pretty high correlation of 0.8 they do it with a year and a half, year and three-quarter lead time and they turn up a year flf, a year and three-quarters ago also historically when you go into late economic cycle and when you start getting closer to recession, commodities go up a lot, back to 1972. the energy sector and i've heard this a lot on cnbc, it's a valid

point, it's lagged in a way that's kind of bizarre this year not a very great performing sector, yet oil has gone up towards $70 a barrel, west texas intermediate if you look historically of the energy sector versus s&p 500, not surprisingly it's correlated with movements in oil. that hasn't happened this time and i think there's catchup there. the charts look good on xop, exploration production part of the energy sector. the only problem with that idea, i think, is maybe we go into a recession. we might get a gain in that sector going into that once the recession comes, it's almost certain to go down. i was a little reluctant for something economically dependent. >> you think we could potentially be in a recession that soon that would upset that kind of investment idea? >> i think we could, these sohn recommendations are arbitrarily judged on one-year horizons, the

pick 33% three months ago and i was up 13. i get tagged with up 13, which isn't bad. i think there's no sign of recession now. so visibility is maybe six months on recessions i do think we could see one potentially in the first quarter of next year i'm not predicting that. it wouldn't be that unlikely given the length of this economic cycle, given interest rates rising, given stock market is wobbling compared to where it was in the fourth quarter of last year. these are giving us things to think about. >> you don't think the new tax law expanded the cycle or extended it? >> i think that's pretty much priced into people's thinking, that narrative on the tax situation. it probably does extend it it's probably why we are now challenging the longest expansion in the post-war era. >> in other words, things might have -- >> already happened. >> what do you make of -- you talk about recession, people

obviously want to talk about rates with you, not necessarily just energy. the 210 spread people look at that and say what's up with that? is that something we need to be worried about? >> not yet, although it was getting a little skinny a week or so ago when it got down 42 basis points 50 is a level once it gets breached, it does start to give pause. historically when you go through 50 basis points on two tens, you generally at some point go to zero, go flat. it's pretty unusual. you don't go to 50 and go back into steepening cycle typically. there's a lot of caveat, so much manipulation negative easing and interest rates overseas and the like it's possible past behavior won't be prologue for what's happening. for example, in japan, they had very, very low interest rates, still do for a long tame they had sequential recessions without inverted curve maybe it has something to do with rates being so low.

when rates are very, very low, will the curve really invert at all? i can see why in the ten-year yield is 8 and the two-year is 8.5, i can see why you're buying ten-year, satisfies investment ten year down, it's not that exciting to pick up 50 basis points to take that amount of rate risk. maybe the curve won't invert this time. it is telling us certainly there's something to start looking at for recession warning. >> what do you make of the ten-year itself. here we are knocking on the door about to bust it down at three then what happens? >> i've been of the opinion that closing above three would lead to acceleration of higher yields we have not closed above three the other big level, i think it's bigger, the ten-year, we did close that that was the high close this year and backed off pretty nicely now back up to 316, 317,

breaking above 3 would be the same as breaking above 322 on third year what's interesting most recent rise 372 up to 299 this morning it's hard to come up with why it's happening the bond market is kind of chronically weak in recent days. i'm reminded of the old adage you need buying to move prices up but prices can fall of their own weight i think it has something to do with all this bond supply and deficits i've been talking about now for 18 months. it's now here in realtime. we're borrowing $100 billion a month. that's kind of a lot i think there is a lot of negative positioning against the bond market. so you would think maybe it would be stubborn to go to higher yields but prices can fall of their own weight looks like shorts have not covered. >> do you worry at all about the fed making a policy mistake? >> of course of course. the fed is back to a variance of their old school mode where 10,

12 years ago they were hiking at every meeting. they do it until something breaks now they are doing it once a quarter. they seem inclined to do it until something bad happens. don't forget they are doing it at the same time we're ramping up quantitative tightening we have this double barreled fed thing. that is something to be worried about. the fed gone from a mode of we will raise rates when the data gets better to a mode of we will raise rates unless the data gets worse. that puts them into that semiautopilot mode certainly the two ten spread we talked about a moment ago isn't giving a warm and fuzzy feeling about what the fed is doing. may not be on the cusp of a big mistake yet but not acting in a way i think the fed would find reassuring. >> let me ask you about the other investment advice you had, short facebook really >> where did that come from?

>> i didn't want to be full on recession exposed in my pick, so i wanted to short against it i saw the congressional testimo testimony, which i thought was terrible i thought it was dismissive, insincere. >> by mark zuckerberg? >> yes i thought he was semantic as opposed to fulsome one of the charts on stage today, once the regulators show up, they tend to cause problems. there's basically two modes of regulation by congress, none and overreaching i think we've moved from nub and we're about to move into ov overreaching i used a slide when they start regulating biotech companies, for example, the stocks start tanki tanking. facebook dropped, it hasn't tanked, it leads to better position for this recommendation i'm reminded of the metaphor oft san francisco earthquake and stock market the legendary investor shorted

the market because he couldn't believe the market was actually unchanged. he said, this is a big event and hasn't been digested into the bullish psychology of the market i think the regulation here is a big event. i think there's never one cockroach in the kitchen we've had this apology tour. we've seen it before it's not the first apology tour. i think we're already one apology too far on this thing. one more problem there's going to be one because there's never one cockroach. i don't know what will happen with the credibility of i'm sorry, we're going to make it better type statements i don't find it reassuring one of his answers that ai is going to answer our problems five or ten years from now this problem happened yesterday, not five or ten years from now i think there's going to be a lot of turbulence in the air for this flight. >> we'll see how the plane gets through it and see if it lands well jeffrey, thank you very much

jeffrey gundlach, founder of double line. >> good to get the clarification and tons of buzz on that purple jacket, considering leslie wearing the same outfit. pretty cute. coming up next countdown to 2018 cnbc stock draft continues. one shiny trophy who gets first pick this thursday you'll find out next when we reveal the draft order live. without starting from scratch. it brings your business up to speed, doing more with systems you have in place. it can bring all your apps to life and run them within your data center. it is... the ibm cloud private. the cloud that's built for all your apps. ai ready. secure to the core. the ibm cloud is the cloud for smarter business.

the time has arrived for the draft order of cnbc's stock draft. this year we have four returning teams as well as hot shot rookies. in this tumbler we have envelopes each cop tang a team name we will choose at random starting with eighth pick down to coveted first pick. tyler and sarah, hand it off to you. >> i am the king of the tumbler. i spin it. i'm told i open it would you like to pick one >> no. you pick and i'll read. >> the eighth choice will be -- number eight. >> bethenny frankel, fema yes. >> going eight. >> there we go let's spin it again and see who gets seventh pick. >> this is my first stock draft. >> every time is like the first time is the saying >> nick lowry. >> wonderful kicker for the

jets, among others. >> the seventh. >> here we go. number six i'm going to spin it this way this time. i'm going to to pull out number six. drafting six will be -- >> tim seymour, alpha. >> careful. >> down wept the thing down went the thing. let's do back and i'll pick it up that way. there you go. >> all right. >> drafting fifth. >> eric dickerson. >> all the nfl players. >> going into fifth. >> i don't have to keep spinning they tell me okay great. >> you're so good at it, tyler you're doing such a good job. >> beardstown ladies. >> fourth. next one i don't have to spin it anymore. >> kevin o'leary, mr. wonderful. >> he got number one last time. >> he gets the third pick. >> not this year.

>> we have two more to go. drafting second. >> a lot of trash talking from mr. puzzle. >> gordon. >> that means tech traders get the first pick there are 60 stocks from which they can choose. >> draft order. >> replaces kevin o'leary, he won last year. we'll see if that was his -- >> edge. >> edge, exactly. >> i think boeing was his pick. >> boeing and apple were two of his picks. >> i would guess by about 3:00 p.m. eastern time you can find this lovely device on ebay somewhere, all right >> valuable. >> after you handled it so well. this all happens thursday. we can't wait. join us for that we'll go to sue herera for cnbc news update. hi, sue. >> hello, everyone here is what's happening this

hour just moments ago the nashville police tweeting the waffle house suspect is in custody arrested in the last hour travis reinking is accused of killing four people in a rampage at a waffle house sunday several other victims are still hospitalized. south korea stopping its anti-north korea propaganda broadcast ahead of talks between both countries leaders which are set to begin this week seoul broadcasting messages and k-pop music from loud speakers since the north's nuclear test back in early 2016. a new survey finds most americans believe teachers don't make enough money, and half say they would support higher taxes to give educators a raise. the poll was conducted by associated press for public affairs research the new british royal. there he is, making his royal debut. prince william and duchess of cambridge showing off new baby

boy whose name has yet to be released this is the couple's third child. the duchess is already back at home so there you have it that's the news update melissa, back to you. >> it is remarkable how good she looks. >> makeup, hair, the whole thing, the heels. >> it's not real that's not really. >> it is a real baby so there you have it. >> thanks, sue. >> you got it. >> the oil market closing for the day let's get to jackie deangelis at the commodity dpesk. >> wti and brent, wti paired losses turned positive before 2:00 the news today surrounding saudis who intercepted missiles from yemen, that didn't seem to get the markets too excited but certainly was supportive of these prices today the dollar index was higher today, close to 91 that should add some pressure for crude. it didn't. the session high today 68383 the session low 6714 holding onto that 67 mark and

closing close to $69 a barrel. guys. >> thank you very much, jackie from executive turnover to store closures and earnings, we're going to look at tubls for toymakers and then sean hannity's secret real estate empire did the television host fail to disclose crucial information on his real estate fortune? is it anybody's business that story straight ahead. you know what's awesome? gig-speed internet.

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now you can get it, too. welcome to the party. here is two major toy makers with a bounce back hasbro fell to lowest levelsation bankruptcy of toys "r" us to blame. should they expect more of the same on thursday senior analyst susan anderson at b. riley, good to have you with us what's behind this reversal. >> stocks sold off year-to-date double digit for toys "r" us i think expectations were low. when it came down to things, really the report wasn't that

bad if you exclude toys "r" us inventories are down at retail they saw pos gains in the quarter at double digit easter over easter. strong gains such as monopoly, marvel overall the business is pretty healthy for them, despite toys "r" us. >> what are if any to mattel. >> i think you'll see something similar. they announced the departure of ceo. because they didn't preannounce during that time, i think they are probably on track with turnaround excluding toys "r" us obviously a big impact from that when you pick that out, i think they are probably similarly on track. >> then in terms of whose better position to survive post toys "r" us, which would you choose >> we have outperform on hasbro. i think they are well positioned

with strategy, six marvel films coming out this year they have done a great job merging entertainment and toys i think they will continue to take market share once the dust settles with all this. i think it's an opportunity to pick up more brands. they already announced "power rangers," which they will start to manage this year. so i think it's really a good opportunity to pick up more brands they can plug into their strategy. >> okay. susan, thanks for your time. susan anderson be sure to catch the interview with brian goldner on mad money, 6:00 p.m. controversy over sean hannity real estate properties, shell companies and hud assistance to secure some of the mortgages. our robert frank digging spoke this one and has more details. >> a lot of political noise and confusion around this. let's get to the facts reports reveal sean hannity co-owns $90 million real estate

portfolio purchased through shell companies and assistance with hud lending reports found llcs linked to hannity bought more than 800 properties purchased out of foreclosure over the past decade they used $18 million in loans obtained with help from hud program. those were loans recently increased by additional $5 million. hannity interviewed hud secretary ben carson on his fox news show last june and did not mention the loans or relationship now in a statement this morning, hannity said he's, quote, being attacked for investing my money in communities that badly need such investment. he said he doesn't collect or control or know the details about the investments. the shell companies are real companies that spend investment money upon real estate henssler financial, llcs registered to the address.

he featured the managing director on his radio show, website and social media during that show, he did mention that hensler, quote, had done some business deals together and so on but didn't give details. hensler said two distinct legalentilegal pent it -- entities. this is not a conflict because they are all separate from fox. >> presumably, what is the name of the company >> henssler financial is the one selecting the properties and doing the deals with capital supply by hannity and by loans secured through hud. >> we would assume so. again, look, he's very successful he says he doesn't like investing in the stock market, so real estate is his investment choice. >> makes $35 million a year. >> all of that is totally fine the question is whether this was

disclosed to the right amount to the fox audience and radio audience and what else may be there that wasn't disclosed. or should he have understood his investments better to know he did need to disclose them. >> has he been a critic of hud has he been a critic of the foreclosure crisis that the country went through in the wake of the -- >> he was. he was a fierce critic of hud, obama, criticizing obama administration for the number and amount of foreclosures they presumably oversaw during that period while he was benefiting from that. so a lot of people pointing out that a contradiction as well it's a big number. $90 million. >> $90 million worth of investment properties. thank you. the google parent alphabet gets ready to release earnings after the bell today the company making big changes in howity reports and we'll tell you everything you need to kw about that headline story coming right up

. google parent alphabet said to report first quarter earnings after closing bell class a shares trading lower about half a percent this afternoon, 1,072.30. over past 12 months the stock is up 25%

analyst anthony clement ai maintaining outperform on the stock, $1300 price target. we welcome him now to "power lunch. anthony, good to see you first talk us through specifics, investors getting something different from alphabet in terms of breakout and investment in companies like uber. how are we going to see that >> there's a new accounting rule if there's a transaction in the quarter, google's nonmarketable securities, it will have to market up to market. people thinking their uber stake will be one reported earnings would be higher than they think, positive gains market to market. i think it's happening to a bigger theme here, which is potentially around assets alphabet owns. of course many large ones, other bets with waymo, perhaps a little transparency we might get in terms of youtube. given the stock is trading at,

we think is a pretty attractive valuation, anything that happens to highlight value of alphabet's holdings, be they uber or other holdings will be helpful. >> what about the core business? >> i think for the core business we're in store for three basic themes that investors are focused on one is certainly revenue growth and ongoing revenue growth grown at 20% seemingly forever driven by mobile search and innovation there. also what is the next second wave of revenue growth for this company. we expect that revenue growth from cloud, from hardware, these should sort of buffer or add to revenue growth from the core business the second theme would be profitability. what are the investments that do behind some of those new markets. i think investors are a little bit perhaps concerned that tonight's earnings report could bring some squishiness around operating income i think it might be timing to

the benefit of q3 and q2 some regulation -- >> to that point, anthony, do you have a clear picture on what the impact of gdr will be on the european business? have you just done as an exercise what would it mean if google implemented similar privacy regulations to the u.s. business how could that impact the overall business >> yeah. so the gdpr regulations, which are going to be put in effect on may 25th, we generally think that search advertising is a bit less reliant on targeted ad tools. while google does track its users very carefully and has a ton of data about us, goo gdr require scale back, targeting tools it uses, i think it could be a moderate, manageable impact we certainly don't have as much

information as we like from the company. in general as it pertains to regulation, i'm sort of of the view that regulation will better entrench leaders in the marketplace over time. they will have the resources to comply with these new regulations. it's really smaller companies r the most >> thank you for the thoughts, appreciate it. >> thank you >> and we're on 3% watch for the 10-year note what's that mean for you and your money adg ti lkst atne next you know, i used to be good at this. then you turn 40 and everything goes. tell me about it. you know, it's made me think, i'm closer to my retirement days than i am my college days. hm. i'm thinking... will i have enough? should i change something? well, you're asking the right questions. i just want to know, am i gonna be okay? i know people who specialize in "am i going to be okay." i like that. you may need glasses though. yeah. schedule a complimentary goal planning session today with td ameritrade.

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time now for "trading nation" and a check of the bond market 10-year treasury yield inching very close to 3%, touching a fresh four year high earlier in the session. there it is. 2.97 turn it to the trading nation team frank and gina and, frank, you see a move up to 3.9%? break down the charts for us, and how important psychologically is that 3% level? >> sure, thanks for having me. i'm bullish on the 10-year yield, and, obviously, 2% in the news today, but i think it was more important to see what happened last fall with the 10-year yield at the 2% support level. what that did was create a

higher low and create this bottoming process that we saw break out through the beginning of the year, the 2.6%. to this day, classic measurement move in the pattern, gets us to 3.9% we like the line up above other areas, and look at the chart, there's resistance from 2008, 2009, and 2010 at 3.9% as well this is going to be an important milestone, and i do think, obviously, it's just a small step in this potential down trend that was been going through the market the last 30 years. >> that would be a big move from here what's your take, and fundamentally, does it make sense to see a continued rise in rates? >> i think you'd have to have a lot of inflation actually occur, not just fear of inflation in order to get up to levels like that i think 3.9 might be considered the highest it could go, but look at the fed, people expect at least three rate hikes, bull case four rate hikes

that would be an incredibly steep curve, and i don't think that's possible. >> thank you very much leaving it there head to our website at tradingnation.cnbc.com for more." check please" is next. and now the latest from tradingnation point cnbc.com and a word from our sponsor. >> technicians look to wedge patterns for catalysts as stocks a bullish wedge is in an uptrend and has two lines slanted downward a break of the upper line is a bullish signalled, and conversely, a bearish wedge is the down trend and consists of two converging lines pointing upwards, and a break of the lower line is a bearish signal

i'm the reigning champion. >> your win last season so impressive >> it was pretty wonderful >> all good things must come to an end i hope you're prepared for this. >> bethany, you can learn from me grasshopper >> grasshopper >> there's no offseason for me, i'm always doing by work and research and bringing up the best names that's why i win all the time. listen, here's what you should do - >> and he's still talking. >> probably, somewhere >> somewhere let's go and revisit the draft order for thursday's big stock draft of t draft.

stephens tech with the first pick, todd gordon, and last year's champ, the third pick, though his second choice that won it for him, boeing, picked apple no. 1. the pony express, eric dickerson with the fifth pick, tim sixth, nick, nfl kicker gets 7th, and bethany gets eight >> it's going to be big. >> big >> it's going to be big. in today's session in washington financials, interesting because the yield has been a head wind for financials, and now there's a 10-year yield rising today financials can't get a bid look at the action, goldman sachs and morgan stanley down by 2% each with the spread widening today and 10-year going up >> they are not in favor they can't catch a break >> i'm -- speaking of yields rising, stocks that hit on that, consumer staples, worst performing group of the year, down 11% kimberly-clark had a beat today,

and that stock a lower as well it was seen as a low quality beat this is a group that does have a lot of growth. >> they need a tissue for today's performance. >> there you go, some tissue margin thank you for watching "power lunch. >> and "closing bell" right now. >> a triple threat for stocks, oil near $70, and gas prices surging, and 10-year close to 3% we assess here on the closing bell what it means for the stock market, and, plus, google reports at 4:00 p.m. after the close, that and much more coming up as the "closing bell" starts right now. good afternoon, and welcome, everybody, i'm wilfred frost at the new york stock exchange, downtown, and kelly evans at at the sohn conferenc