wynn i think they're an opportunity i ng tthink is going to be $200. >> you can never call scott judge again. do you have advice for the stock drafters >> find a double look what kevin o'leary did the year before. >> all right that does it for me. i'm doug >> way to go thanks, doug i'm melissa lee, here's what is on the menu. stocks making nice gains investors putting aside fears about rising rates, instead focusing on good earnings. where the money it's going technology it's the best performing sector today. it has been battered lately. ford phasing out cars. focusing on suvs and trucks instead. is the sedan running out of gas? what it means for the automakers power lunch starts right now

welcome to power lunch stocks are having their best day in over a week the dow and the s&p 500 up for a second day in a row. nasdaq higher for the first time in six sessions. melissa highlighted tech, facebook shares on pace for their best day in two years. check out other big movers, chipotle soaring, royal caribbean taking a hit everyone loves pizza domino's surging on its huge beat michelle some. thank you, here's what else is happening at this hour. mortgage rates, they're climbing for the third straight week to the highest level in more than four years the average 30 year fixed rate mortgage is 4.58%. durable goods jumped 2.6% in march. transportation was the big driver and according to reports, the labor department is probing

wells fargo's 401(k) practices the department is examining if the bank pushed participants in lower cost 401(k) plans into their own in house funds. thank you very much. on draft day in america, let's start with a big rally in the stock market we're at the new york stock exchange hey, bob. >> a nice day, better than the two to one advancing for the declining stocks a sigh of relief around facebook all the fang names are up today and up nicely. facebook did well. not so much for everybody else illinois tool, a big industrial, they raised guidance but it was modest not good enough for the street it's down. american airlines, good numbers overall. they beat on earnings, missed on the revenues and they lowered their guidance citing higher fuel costs this is a problem. higher commodity cost, higher steel, aluminum, wages, a common

thing. ing ing ing ingersol rand. inflation was higher than we planned. overall, the earnings are terrific let me show you, we're essentially at the halfway point for earnings 227 companies reporting. let's not quibble about a few. we're there. earnings, 23%. the best we've seen in seven years. it keeps going up. not down that's growth since fourth quarter 2010 revenue is up nearly 8%. the best in many, many years as well earnings are going up for the rest of the year as well they've risen even for the second quarter, third quarter is holding up it's 20% throughout the rest of the year this is why i keep saying, peak earnings, it's a little too early to argue about that. some people still want to. what's happened? the market is not impressed. that's an issue. since we started, jp morgan, the

s&p 500, has done nothing. it's flat. same with the russell 2000 maybe it's up 0.2% that lack of interest on the market is definitely a hot topic right now. back to you. >> oh, yes, it's a theme we've been all over. we've been talking about the tug of war between earnings and rising rates there's that great graphic earnings seem to be winning out but will it be enough to keep it going and fuel the rallies let's bring in david katz and steve misoka steve, earnings getting better, is that why they seem to be winning out in today's trade world? we're seeing it falling off from the 3% level on the ten year. >> we're having another great quarter of earnings. roughly 70% of the companies that have reported breeating expectations large cap were up 70%, beating

expectations small cap more like the high 50s. it's a continuation of five to six quarters where the beat has pretty much been the same. in regard to interest rates, if you look around the world, the ecb, the boj, they continue to be very aggressive i think you have to take a global view of interest rates. i think the market's going to start to suspect that 3% maybe is the top of about how far you'll be able to get with interest rates moving up in this environment. >> we'll see to that point, the euro is down .5% we're seeing the best revenue growth we've seen in years decent outlooks from companies, but yet the market is pretty much flat. >> the market is focusing on the negatives. we think the dust is going to settle and clear a little bit and then the market is going to focus on the fact it was a wonderful earnings season. as good as the season is -- it's

running 5% better in terms of versus expectations than the last four to eight quarters. the outlooks for favorable companies are saying the rest of the year is going to continue to be good. they're not setting too high a bar but they're definitely feeling good we think the market will focus on that. you're continuing to see significant dividend raises. >> david >> yes. >> in the notes it says you have cable pounding buys. do you always have that or evaluations at a level that you really find compelling >> no, usually we like stock and there's always things to buy as a result of the sell off over the last two months, there were a lot of buys. the stock was at 120, now it's at 94. they had great earnings today. they announced they're going to do a dutch auction tender. we haven't seen that in forever. the company made that point.

it's very attractive. >> do you have a table there in front of you would you pound it for me. no pound it. >> we like kimberly clark and qualcomm. >> i want you to pound the table on what you think might be your best idea for the rest of the year. >> i'm going to go with the group. i think we saw an article last week about mlps. i think they're undervalued. you can buy them in single digit multiples yielding double digits the oil patch is back. commodity prices have moved up really, mlps haven't caught up yet. i won't name a specific name, but i'll tell you you can hunt that group and find great buys. >> you've given us the idea. thanks very much i love the pounding of the table. come back anytime. >> with your table. we'll rendt a new table. seven year notes are up for

auction. we're tracking the action at the cme. what's your grade, rick? >> we had a c minus two year a b minus five year. we have a b, b as in boy for seven years. i guess it makes the best of breed. let's go through the internals $29 billion completing $96 billion with the three auctions. the yields 2.952. which was a bit below the offered side of 295.5 on the one issue market lower yield, higher price. 2.56 above to cover. 65.8 on indirects. only thing a little light, 12.7 direct, but only a bit 13% average. what is a small 21.6 based on history? therefore a b.

we've seen a little bit of buyi buying keep in mind, everybody's thinking foregone conclusion that rates are going higher. i don't disagree here we sit. rates move higher, goes sideways this doesn't seem to be an exception. melissa lee back to you. thank you. is the traditional car a thing of the past? automakers are putting their focus next. chipotle is surging on earnings the ceo says we're planning to innovate it's almost time, the 2018 cnbc stock draft kicks off at the top of the hour. the teams are starting to arrive right now. that war room is getting set up. who will wk ayalaw with the trophy this year maybe wrest it away from mr. wonderful. you won't want to miss it. stay tuned

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for north america. both companies putting more energy into those red hot selling truck and suvs according to lmc automotive suvs and trucks went from less than 50% of the u.s. market in 2008 to 65% at the end of the 2017. and that continues to grow >> your next guest knows a thing or two about suvs, he owns the third largest auto dealer in the u.s. group 1 shares rising today after earnings estimates earl esterburg is the company's ceo. great to have you with us. we appreciate your time. >> thank you. >> are you seeing what ford is seeing, and that is that basically all that's selling are suvs, crossovers and trucks? >> absolutely. we've been seeing it for at least three years. currently, our business is about 66% trucks and suv and i expect we'll get to 70% before too long. >> where are most of your

dealerships geographically >> we have a heavy footprint in texas and oklahoma, so clearly we're in -- >> you're in truck country. >> that's true >> for sure. is it smart move for forward to de-emphasize sedans the way they are? gosh, an awful lot of the other brands are doing the same thing. or will they find themselves in five years, three years, two years wondering why the heck we did that if oil prices go back up to $4 a gallon? >> well, i expect they know what they're doing. i think what they're telling us is they're tired of investing, you know, hundreds of millions of dollars in products where they don't make money. quite frankly, we don't make much money retailing these cars either i think they have brand strength that's on the truck and suv side and with power train developments both small internal combusti

combustion engines and hybrids, i think they'll be able to deal with the shift away from cars. i don't think they'll regret itit much. >> at what point do you start hearing from consumers that they're worried about high gas prices how much higher does it need to go before you get consumers saying maybe i won't buy that crossover or suv and i'm going to go for the car? >> it's funny. we see it in our sales immediately. we're not seeing it yet. but, you know, we look at things -- we're very good with toyota the sales of toyota prius. that's a barometer that never fails. i would expect we still probably have another 10% to 20% to go on the gasoline prices before it gets back to being a serious purchase consideration but there's so many offerings right now that we'll still meet those needs if that's a primary consideration. the market is still in pretty

good shape. >> just so i understand, when gas prices start to rise and they cross a critical point, you immediately see an increase sales of priuses >> that's a hybrid vehicle more fuel efficient vehicles it could be smaller engines in terms of internal combustion or hybrids, but absolutely. the market reacts. >> have you seen that so far >> no. >> it has to get to some threshold point where the pain at the pump is graeater than the gain of having a larger automobile. >> it's somewhere probably in the mid $3 range where you would expect to see a shift. >> in terms of other consumer behaviors, are consumers reacting to higher borrowing cos costs? we've seen that rise over the past couple of months, does that

impact the total purchase riepr you're seeing? >> not yet but we expect it to be imminent. there's an awful lot of low interest rate loans available. they may be a percentage point higher than a year ago that drives payments up $10, $20, $30 a month thus far it's not a noticeable drag on the market. >> all right great to speak with you, thank you. from autos to airplanes. shares of southwest airlines are under pressure following results. the company being on eps southwest saying that reservations declined in the wake of the deadly midair engine failure earlier this month the ceo telling cnbc that they're making great progress on engine inspections >> as of this morning we've inspected over 80% of our fleet, including inspections that we had already undertaken dating back to late 2016. so we're on a very accelerated cycle compared to what had

previously been done in the industry, which is to look at engines and these fan blades roughly every 18 months or every 3,000 cycles yeah, i feel very comfortable with what we're doing. >> the ceo also adding the company is in a strong position with very little debt, lots of cash and a lot of liquidity. pepsi and a so what else is new? how's your mother? a power lunch. comm chipotle's ceo speaks to us, power lurch is back in two

pepsi is reporting earnings deep today it's the snack business that is fuelling the rise. the beverage business in north america was soft hugh johnson told us earlier he plans to ramp up spending on advertising to deal with the loss and compete with coca cola. they talked to johnson about the stock's performance, pepsi down 13% this year. overall consumer staples down 11%. listen to what he said about that >> if you look at our broader portfolio, we have pepsi zero sugar as well as diet pepsi. it's the smaller business, the

diet pepsi business i think will respond in line with the regular pepsi business as you see the advertising take effect. >> that was his response to whether diet pepsi would match diet coke which saw growth for the first time in years. as you can see, he did sound optimistic about that. he said that pepsi zero sugar was growing. coke zero sugar is growing pretty well. here's what johnson said about the overall environment and pepsi's under performance. >> you could see staples as a group really underperforming quite a bit. if you look at us broadly over the course of the year, staples was in a low interest rate environments rates have begun to rise, i think back into the bond arena. >> a good example of what we talk about with those rising interest rates and treasury

yields and who gets hurt by that the dividend paying stocks we talked about the theme about inflation rising, which is something that pepsi is seeing, especially on steel and aluminum the aluminum cans. johnson said it was stable in terms of the outlook they're not expecting things to get a whole lot worse. >> the other negative impact for the staples is the rise in dollar we've seen yields rise, the dollar will follow suit or slowly has been. >> three month high. >> than what people had expected it would be by this time, but to go forward, that could hurt them they have been benefitting here. >> absolutely. and they're still benefitting from it. still a tailwind because it moves with the lag and the dollar has been weakening at the end of last year that's helping them. yes, absolutely they're watching this it's at a three month high you put that with the geo political tensions, they have a big business in russia that's one of their key international markets. it did really well in the past quarter.

of course the trade tensions and you've got uncertainty on what was the strongest part of the market. chipotle up 24% on the session. our kate rogers sat down with the ceo earlier. he joins us live from denver hi, kate >> reporter: hi, tyler chipotle is rallying on the back of the strong earnings report. and also a lot of optimism about their new executive officer he did take over last night we spoke to him for the first time in that role today. he said priority number one, reminding people what they love about chipotle and why the fresh food is so great. >> we need to focus on leveraging the platform that we have the capability of people to get their food and move down this line is really amazing and the food is cravable i think there's opportunities to use what we have and present it in new forms, new varieties to

get people reengaged with what they love about chipotle. >> reporter: you'll be focusing on the items you have on hand? >> for now there's definitely opportunities to bring in some new flavors as well. >> reporter: he also said they're be focusing on things like marketing, digital innovation, investing in their staff. you can see they're working very hard he did confirm he had a meeting with bill ackman they discussed breakfast they are interested in extending hours. they didn't commit to the breakfast burrito anytime soon. >> i love a good breakfast burri burrito, i'm hopeful. will they be the stock that p propels one of the teams to win at the cnbc stock draft? it's one of the 60 stocks contestants can choose from.

will they? we'll find out today at 2:00 p.m don't move sticking with food, jim chanos revealing restaurant and du dunkin brands. restaurants have struggling. he adds that in both the cases there's a battle of the franchisers versus the franchisees. here's what he said to say about do dunkin. >> it's as low as 2% returns this is not an economic deal for their expansion. this gets back to the heart of the problem. the boxes by and large, as more and more of these franchisers grow by increasing units, if they're not same store sales, as we saw this morning, they aren't growing. >> stocks are down this year dunkin reporting results this

morning, missing on revenue. >> see that? royal caribbean, also a key read on the consumer the cruise operator posting mixed results. the stock is taking a hit. 15% in the past one year but struggling in 2018 are there more choppy waters ahead or will it be blue sky and cool breezes for the rest of the year the royal caribbean ceo will join us next. check out the llray happening? visa, home depot and microsoft are all leading the dow. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it-

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hello, everyone. here's your cnbc news update for this hour. for the second year in a row, president trump welcoming a group of wounded warriors to the white house. during brief remarks, he honored the service and sacrifices of the country's bravest fighters >> on stage with me are wounded warriors from the air force, the army, the navy, and the marine corp we salute you, we thank you and we will forever be grateful for the sacrifices you made for all of us.

really incredible sacrifices >> 14-7 vote, the senate judiciary committee approved a bipartisan bill that would prevent president trump from firing special counsel robert muller mitch mcconnell has refused to let the full senate vote the cnbc says tdc says the e coa is the worst in two years. so far no deaths have been reported that's the news update this hour nice rally on wall street this hour. take a look at the major averages right now with the dow up almost 300 points got most of the s&p sectors in the green led by technology, real estate and consumer discretionary. they're the best performing sectors. industrials and telecom are the

only losers. facebook is a big part of the story. they're leading, share on pace for their best day in two years on the back of those strong earnings it's amd and facebook that are feeling the rise right now. >> 10% higher on facebook. for more big names, let's check in. >> so it is "power lunch," shares of domino's pizza, it's a new record high in trading on the heels of a better than expected report for profits and sales. those sales at existing store locations, also better than average. a lot of that strength was due to new promotional campaigns and enhancements made to its ordering and delivery service. so now what can brown do for you? how about a nice investor day in the green? ups is near session highs right now. it reported bullish reports, both profits and sales topped estimates thanks in part to better results in its

international markets and its freight business there are some concerns about rising costs and then there's shares of hershey, the candy giant topped estimates for sales. it did warn that profit margins could be under pressure due to higher transportation and commodity costs. back over to you. got it , thanks so much royal caribbean is reporting before the bell this morning, the cruise company beat on earnings, although revenues came in weaker than expected. the stock is down 3% at this hour let's bring in royal caribbean's ceo. welcome to "power lunch," good to have you. >> thank you, michelle nice to be back. >> the analysts are upset you didn't guide higher. their expectations were higher for the year what's the problem >> well, you know, we looked at it very nicely we beat on the last quarter. we raised our guidance over our

own expectations and over the consensus expectations you know, we all wanted to be better we've been outperforming so many times, maybe people got a little bit overexcited. we're looking forward. we're seeing a great year in 2018 we're looking to the future, '19 and beyond and we see a very positive picture ahead of us. so we're actually looking quite nicely. >> what about one of the primary concerns we've talked about a number of times on the show already with various ceos, the rising cost of oil which leads to higher fuel costs for you how much is that going to eat into margins what are you doing about that? do you hedge like the airlines used to do >> we actually do hedge a fair amount the most important thing we do, we try to conserve on energy we have taken strong steps to cut down on our energy

consumption. we hedge about 50% going forward. so while fuel is a bit of a concern, i don't think i'm hearing that it's a huge concern for too many because we've managed it so well. >> just to follow up, could we be going into an environment where you have incremental costs rising and that adds up to inaggregate, a bigger head wind for you? but you add fuel, increasing borrowing costs, labor, does this lead to a headwind for you? >> none of these are small it's all relative. but we've taken good steps to protect ourselves on many of these costs. i think in terms of the street's reaction and in terms of our own position, we're not terribly focused on the cost side we've kept it under very strong

control for a number of years now. i expect we will continue to be able to maintain control of that i think our real focus is on driving the top line we think that's very good. i know some people are more worried about it but we've shown that we can drive demand and i think we will continue to do so. >> with that focus on the top line in mind, are you raising prices are you raising wages? >> we are raising prices we actually, our crews are better off one of our objectives is to increase our employee engage it's been a consistent theme for us our employee soisatisfaction an engagement scores keep rising. at the end of last year we put in place a large bonus we completed a double double, we wanted to give a total of $80 million back to all of our employeesi employees. >> was that partly a throw

through from the tax law >> no, this had nothing to do with the tax law we set goals for ourselves three or four years ago. we achieved those goals. we felt kind of reflecting on the fact that our goals was something called the double double, we should give something called a thank you thank you to our employees who really made it happen. >> quickly, can you just give us a snapshot of demand in the coming quarters? we've seen consumer confidence remain pretty high how do you see that playing out into spending on cruises >> well, so far i think what the address has done and particularly what our brands have done is create the demand we're seeing more and more people want cruising we're raising our prices so we're carrying more people at higher prices. as you said earlier, the street would have liked to have seen us have more people at higher prices, but i think it's continuing to grow do well. we're responding to the changes in what people expect from their

vacations. overall, looking forward for us, we think this is a very happy picture. maybe more of your listeners should take a cruise and chill out. >> all right says the ceo of a major cruise operator thank you for joining us here on "power lunch." amazon is out with earnings after the bell wall street is expecting pretty big things will amazon deliver? the stock is rallying right now. it's up by 4%, up 30% this year. plus -- >> cnbc stock draft is back. and with a field of hungry competitors, a repeat won't come easy for the reigning champion mr. wonderful. >> you're all going down >> will an nfl legend reclaim his magic? will there be a cinderella story? who is this year's underdogs or ducks it's wide open 60 stocks, ehtig teams three rounds the cnbc stock draft the "power lunch" special event

today. 2:00 eastern 2:00 eastern cnbcif your brokerageng offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

the stock draft, the countdown is on. almost over, 19 minutes to go. minutes away from the 2018 cnbc stock draft. and the dow jones industrial is celebrating. eight teams, four were with us last year, including the 2017 champion kevin o'leary there you see him getting ready with a newcomer bethany frankal who is ready to -- she thinks she's going to be thrown in. first making their debuts this year, nicklowry and eric dickerson, they're here on set are you ready? do you know, nick, who you're going to pick with your pick

you're like, eighth pick or seventh? >> seventh we have to be very astute. we don't know what will be available. >> how about you, do you have a first and second in mind >> i have a first for sure it's hot if i can get my hands on it. i should be taking second like i got drafted but i'm picking fifth. >> were there any lessons you learned from the actual nfl draft that you're applying to today's stock draft? when you're drafting a player, you don't just want a player that does well in year one, you want him to have a great career like eric dickerson. in this case we want a flash in the pan. if they do later, great. >> you want a one and done. >> exactly >> if you can't get who you want, you have to go for the best available player. that's what they teach in the nfl. i'm going for the best available stock. >> how often are you looking at stocks when you're not involved in the stock draft >> we watch cnbc all the time.

>> excellent great answer. >> we like to evaluate earnings. earnings per share something new this year is currency exchange. very important to affect how much you make. who is a disrupter by the way, eric dickerson, another disrupter. somebody that changed the game. >> yes, i do watch it. i don't know what i'm watching, but i watch my money go up and down >> are you an active investor? what are you doing now >> actually i'm excited because a company that you should start watching is about to go public it has the only license for the investigation of cbds for concussions and for opioids. tremendous research and progress on the benefits of cbds which are legal, low thc for the brain for dementia, cte, for players and those that are addicted to opioids. i think we're entering a new era. >> you're on the board >> i'm the spokesman for them. frankly, eric's known a lot. my teammate mike webster was

featured in the film concussion. he died a tortuous death we want to make sure the nfl continues to absolutely prosper. we take advantage of this new science. >> dartmouth grad, harvard mba you were a great running back, now you're working with the rams who have a hot young coach >> very hot. we have a very good football team a lot of good draft picks. we just picked up ndamukong suh. on paper, we look like we could win the super bowl we have an up and coming football team. >> are there teams you're worried about going in the stock draft? you take a look at the teams like kevin o'leary >> kevin ocle'leary needs to be taken down now. >> eric? >> i come to win it's go big or go home i come to get mr. wonderful. >> that's right. >> we'll check in with you in a

few minutes as the draft gets underway. >> sound good. >> thank you. trash talking, it's already begun. between these two people the reigning champion, kevin o'leary and stock draft newcomer bethany frankal, they're in the war room where it goes down. sarah, take it away. >> bethany, he call you'd a grasshopper. >> i'm coming for him. >> i have to teach her the ways of money i'm not going to invoice her. >> i don't need it. >> i don't know about that. >> sometimes the student can -- >> is this the 2017. we're doing it one more time. >> you don't have the first pick this time. >> it doesn't matter where i am in the rankings, i'm going to kick stock picking hiny. >> what is your strategy >> i know all things i believe in cash flow i'm constantly watching the ebb and flows of the market. i come with the knowledge to

crush grasshoppers like you. >> how can you do all that and stay so pretty at the same time? >> thank you sucking up works >> they really actually like each other. >> going down, winning again thank you. >> bethany, i'm curious about your strategy. we followed your business. skinny girl margarita. >> my strategy is i know what i know and i know what i don't know i never pretend. >> are you an active stock picker >> semi active stock picker. things i love and see and think that's undervalued i can't believe more people haven't bought that yet. >> this is going to end badly. >> your ego is exploding and that trophy is flying into the universe. >> it's binary it's black and white you either win or you lose where do you think you're going to end up in this whole thing? >> i have won many times in my life i'm a winner i wouldn't be here -- this is what you do every day. you know what? >> he does not do this this is interesting. this is not just about outperforming the market or

getting your dividends which you like this is about picking some explosive names. right? >> you know that i was threatening to bring my lawyer here today because dividends are not included and 70% of the returns of the market are dividends. >> you got a 90% rise in boeing last night. >> it doesn't matter had you added my dividends that would have been 93.2%. i left 3.2% on the table i'll be litigating tomorrow. >> all right i'll be going with my gut. >> we cannot wait for that this is coming in just a few moments. >> it's important if you're an entrepreneur to lose and pick yourself up. remember that after i crush you in this contest. >> why don't we live in the moment you're living in twev2017 i'm living in 2018. >> i have to go polish this now. >> we'll send it back to you in the studio we're getting excited sdp. >> the incredibly humble mr. wonderful. it's going to be good. amazon earnings e t te

e bellafr wall street is expecting a big jump in revenue. is the company going to deliver? one of amazon's earliest investors joins us next.

welcome back, everyone i'm sue herera with breaking news on bill cosby

the jury has come back and they have found bill cosby guilty on all three counts of aggravated sexual assault the first count, it all -- it basically all revolved around the issue of consent each count carries a sentencing range of between 5 and 10 years in prison. his attorneys are expected, however, to ask the judge to lump those together. the minimum amount he would spend in prison under the sentencing guidelines, which the judge does have some leeway on, would be five years in prison. pennsylvania law, though, is interesting. it also allows sentencing judges to consider what's called uncharged conduct. in that case, in mr. cosby's case, that could involve more than 60 other women who have accused him of assault dating back to the 1960s, but bill cosby has been found guilty by the jury on all three counts of aggravated sexual assault. ty, back to you. amazon will come out with its earnings after the bell.

we're live in san francisco with the numbers to look for. >> so, bill cosby, guilty. >> hey, ty, seemingly gone are the days when bezos would sacrifice profit for growth. amazon posting its 12th straight profitable quarter the company earned more than $1 billion for the first time. that was the holiday report. some analysts say that fiscal discipline could take a backseat so we will be looking at margin pressure morgan stanley, though, expects that high margin revenue streams like subscription revenue, which includes prime memberships, cloud computing, to let amazon keep spending big in these new areas. ms has a price target of $1,550. revenue, on the other hand, expected to jump nearly 40% from last year, partly due growth from the whole foods acquisition. of course we'll be on the earnings call. we're hoping to get more color on other developments like how whole foods is progressing that

integration, how it will double down on alexa, and from time to time -- prime memberships. matching partner matt is here to tell us what is going on in the tech space and where the best opportunities are right now. welcome to "power lunch," matt good to see you in person. in terms of amazon, you know, they had one of the biggest profits ever posted in their history. i think it was the biggest in the fourth quarter it was $1 billion. and now there's concerns that they're going to be spending a lot of money, spending it on warehouses, doubling down as she mentioned on devices and things like that. is that a good strategy right now for amazon to continue to operate as if it's a, you know, a start-up investing in growth >> i think they are an innovation factory, and that jeff has done an incredible job maintaining a culture at 500,000-plus employees so i think it makes sense for them. they start with the customer and work their way back and keep on innovating what you're seeing now is some

of those bets from a decade ago like cloud, like advertising, are really paying off and that's what i'm looking for in the results today, that those are the areas that are going to be really generating cash as they continue to invest in new areas. >> how has he been able -- and i was on a phone call rliearlier today with a human resources person, who cited amazon's culture as being one of their strongest attributes what is the core of it and how's he been able to do it? >> the core of it is an obsession with the customer but a willingness to experiment. he talked about he wants to preserve the culture like the world of a start-up in this sense. a start-up goes to 20 vcs and 19 say no and 1 says yes, they're in business. amazon, you can go shop your idea and get support for it and try a little experiment and if it starts to move forward, something like amazon bookstore, for example, before you know it, you got a bunch of amazon book torz and you' stores and you're buying whole foods. >> from the vc perspective, how has amazon changed the

landscape? i would imagine there are plenty of businesses, plenty of entrepreneurs who don't dare go into that space that amazon competes in. >> you have to be careful as a start-up but there's two roads to victory one is understanding that you've got something better than anybody else, including amazon has. we've got a company called snowflake that does that for next generation cloud data warehouses and they're just really taking off and partnering with amazon. ultimately, though, there's more than one cloud azure is a great cloud service google's coming on now too having something that's multicloud in that area would be a way to partner with amazon successfully >> he and mazon have been able to do things that seem so, why didn't i think of that kind of thing and the whole foods purchase, which at first felt like a little -- now i get it. because we order groceries from there. and we're getting whole foods quality food delivered from our local distributor or store and it really, really works. so, how does he keep innovating? i mean, is it just -- it's in the -- in his dna?

it's in the water? it's something >> he does encourage his team to take those risks too and the question eiis, when you take a risk and it doesn't work out, it's more what did you learn from it. if you think about all the successes that steve and his team had inventing the kindle, that was the team that had the fire phone that didn't work out as well but then moved on to the echo so those folks weren't pushed aside. they learned a lot from it and they improved and innovated and came up with something even better once again. >> do you think president trump is in bezos' head or not >> not at all. i think that jeff is so focused on the customer, doesn't want those distractions of the public sector >> do you think bezos is in trump's head >> absolutely. absolutely >> that's not hard to answer matt, good to see you. the time has almost come, 8 team, 60 stocks, one winner and the voice of al michaels you know it's big. >> hey, everybody.

this is nick lowry, kansas city chiefs hall of fame and this is cnbc's stock draft 2018 and we're kicking it off right now ♪ there's nothing more important than your health. so if you're on medicare or will be soon,

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it's a bottom line battle royale, the reigning champ, mr. wonderful, versus the skinny girl who's the better stock picker? a hungry band of millennials and a technician named flash squaring off with an emerging star they're all fighting for this famed trophy and the title stock draft champion 60 stocks, 8 teams, 3 rounds >> get your popcorn ready. >> our nine-month journey to the investing promised land begins right now. this is a "power lunch" special event, the 2018 cnbc stock draft.

>> and you are looking live at cnbc stock draft central where the teams are going their final preparation for this year's big event. we are minutes away from putting the students from stevens institute of technology on the clock. they have the number one pick. the excitement is building welcome, everybody, to this special edition of "power lunch. i'm tyler mathisen here with me in studio, melissa lee and our dynamic stack analyzing duo, "mad money's" jim cramer, thank you for joining us >> amazing >> it is intense >> you can feel it in the room >> pulsing >> pulsing in just a minute, we will run through how exactly this whole draft is going to work, but first, let's get out to sarah and michelle at draft headquarters to set up the table for today's big event. ladies >> well, there is a big crowd here, let me tell you. things are getting pretty serious. the stevens duck is ere. the original splash gordon is here miss usa is here

the gang is all here, and it's take your kid to workd day so we got a big crowd here >> and the knives are out for kevin o'leary. i haven't heard so much trash talk >> everybody wants to dethrone you, dude. >> he was, of course, last year's champion, has his trophy, 2017 champion, but he's a third pick he was a first pick last year so we will see what happens anyone's guess here. people are taking notes. >> yeah, the competition is going to be intense. melissa, back to you >> those at home who are checking out the stock draft for the very first time, let's explain exactly how this works and who is taking part there are eight teams. four are returning, including last year's champion, kevin o'leary and four new teams have been added, including bethenny frankel and we randomly selected the draft order. the stevens tech traders will have the first pick but here's how it will work

this year, there are three rounds, the first two you can see right here on tv the third place -- the third one will take place on cnbc.com, facebook live, apple tv, amazon tv, twitter, as well as youtube. each team makes one pick per round from a predetermined list of 60 investments, 57 stocks plus bitcoin plus oil plus gold. there are big named components like 3m, exxon, boeing here, mcdonald's and the tech heavy weights are up for grabs, facebook, apple, amazon, much more and for the gamblers, we've got general electric, jcpenney and chipotle which is not looking so beaten up today we also have new listings like drop box and spotify on this list how do you win we're going to track the combined performance of the three investments each team drafts, starting with the closing price today all the way through the friday before the super bowl next february the best average price appreciation wins, not including

dividends. mr. wonderful, i know you're listening. not including dividends. those are the key things to remember ty >> all right, melissa, and you'll be coming over here in just a second. the stevens tech traders are now on the clock they've got seconds before they have to say how they're going to spend their first pick but jim and guy are here jim, if you had the first pick off this list of 60 stocks, what would it be and why? >> well, i've got to tell you. when i look at this list, i have to pick something. it's very hard to project out a full year but what you want is a stock that has dramatic upside, that's explosive, and i'm not talking about fit bit. i see a lot of people going for that small cap stuff that does not interest me. i'm going to look bad immediately. i'm going for amazon >> you're going to look bad to the media. >> out of the gate >> they report tonight and we said on cnbc fast money, on in a few hours, by the way, that amazon is going to report a monster quarter, why

because you have not heard one from jeff bezos since the trump stuff started. >> everybody can hear you. >> we're on tv, guys >> i don't want that -- well, i'm going to tell you right now, my number one pick would be bitcoin or drop box. >> what is that? >> what is that sound? >> that is the signal they are ready for the first pick of the draft. let's go to our sideline reporter, michelle, in the draft room >> thank you, tyler. i'm here with daniel and laura from the stevens institute of technology with the first pick in the 2018 stock draft. the stevens tech traders select? >> we're picking facebook. >> she's got the hat on. hold on, facebook, millennials aren't supposed to like facebook >> the crowd likes it. >> the crowd is with you >> that's good to hear >> millennials aren't supposed to -- i thought facebook is out with you kids.

>> is it yesterday >> without the 10% >> i think they're picking yesterday. today, that's a hard -- they get today. >> guys, just want to be sure. i heard jim sigh there >> the stock is up already 10% today. and you don't get by the stock until after the close so you missed a lot of the upside already. >> yeah, well, it's confirmed our belief in the analysis you know, we've identified key revenue drivers, such as the mobile growth expansion, artificial intelligence, virtual reality, instagram, what's app and we see those grow throughout the nine-month period. >> you're not worried about user engagement or this talk about some of these privacy scandals >> no, because -- >> i was talking to laura. >> sorry >> that's okay, dan. >> no, you know, i think all my -- after the privacy scandals, the stock took a hit but i think they're on the rebound now after the great earnings >> you heard it first, melissa, the first pick of the draft for 2018, the stock draft, facebook. back to you.

>> thanks, michelle. and we should note that on the clock right now, flash crash gordon before we get to that pick we know what jim thinks about facebook i think you also had that reaction because part of this game goes for one year you've got one year to book performance. the part of this game is trying to figure out where the stock is right now and how much more upside it has. >> jim was on fast money a few weeks ago and he said there's a reason why facebook trades at such a steep discount in terms of valuation and that scared him and i've been saying for a while, this cambridge analytica, is that the only one out there or is there another one coming down instead of being $153 stock, we might be looking at $140 stock >> that's why you get -- government risk. i don't know if everyone remembers when microsoft got clobbered when the government decided to get voinvolved and wn after them you have a little step back. >> and it was years. >> you know what's tough is something you mentioned. the idea that these picks have to succeed quickly

they have to have explosiveness. >> yes >> don't we have -- we have a running back who's pretty explosive? he was in my fantasy league. now he's going to be my reality league >> i think facebook would have been there at seven when they picked in the second round in my opinion. >> second round pick >> all right stevens tech >> go. >> if the blue apron kind of thing, if someone does a blue apron thing, that's like picking the data now it better have better fundamentals than blue apron that's like picking somebody who tore their acl like six minutes ago. >> the stevens tech traders have chosen facebook. flash gordon is on the clock before we get the pick, we're going to sneak in a quick break. you are watching a special edition of "power lunch," the o tk af febk drt,acoo isffhe board

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tech traders took on facebook with the first pick in the draft to the dismay of jim cramer and guy. the second pick is in. >> i've always wanted to be a sideline reporter. i've got todd gordon here. >> sarah, i can't believe i was given this gift of bitcoin >> i knew you were going to pick bitcoin. >> i mean -- >> good call here. flash crash, thumbs up >> flash gordon, my team helped me get this but i think what a gift this is this is a new digital currency revolution we've seen this be embraced by institutions, goldman now has a trading deck >> we've also seen the price get cut in half. >> the price got cut in half and stability has been found i think crypto space has come back i'm bringing the technicals to you. that's how i placed second last year >> it's at, what, $8,000 or something like that? $8,800 >> we've already broken down

trend resistance, so even if we recapture half of what was lost, we went from $20,000 to $6,000, a 50% retracement gets you to $13,000 from today's level, that's a 40% or 50% return i think it's over. >> you're getting technical. the millennials did not pick bitcoin but we have todd gordon picking bitcoin. first time this has been in the stock draft, guys. >> our draft analysts here, jim and guy, were both saying, i bet he goes with bitcoin >> here's the problem. i think it could have a 20% increase but i don't think 20% wins the trophy. so i'm on board for upside but not the upside he's looking for. >> so you think there's a better pick still on the board here >> oh, geez. amazon -- come on, somebodytak over we were talking -- those are better they do nothing but go up. >> i'm with j.c. but we had mr. pepper on fast money last

night and he said something could be a $700,000 item we could be talking -- i will tell you this right now. if bitcoin didn't go two, it would have dropped to tim seymour at six >> had to go in the first round. >> the sound has been heard and kevin o'leary is ready to make his pick at number three michelle >> the defending champion, kevin o'leary, here still polishing his trophy from last year. last year, your pick was apple >> and boeing. >> and boeing. well, but your first round pick last year was apple. >> it's the combined power, michelle you don't just pick one. >> what are you picking? >> so i'm going to after both the leadership sector of energy and a really good balance sheet in chevron >> chevron all right. i'm going to hold this way put on the hat >> please don't put any marks on that here we go my feeling is, even though i'm not being credited with dividend, the market's looking for leadership group i'm feeling bullish about energy it will be reflected in my stock

and i'll be polishing my other trophy >> this is only 4% so it would be great >> this is why i have to litigate on this content >> you said during the break that you would have picked bitcoin. >> absolutely not. i know i don't know what you're talking about. it's an unregulated currency i want nothing to do with it >> on the clock now are the ladies, melissa. we'll talk afterwards. i'll tell you what he said during the break >> if you take out the dividend, jim, is that the first place you would go, chevron within the oil patch? >> i think mr. not so hot may not have that one right. if you want to go that category, i would have gone darko. and mr. ok not bad, i think, is going to end up feeling not so hot. >> and i'm throwing in chesapeake if you want to flplay the game chevron, where's it going? >> $126.58 >> this time, we're heading to

the draft room of the beardstown ladies investment club in illinois they finished third, by the way, last year's draft. lovely picker is there >> hey, guys we're here in beardstown with the iconic beardstown ladies and the voice of the group, none other than buffy what is your pick? >> our pick is cell gene if you pick a drug company, you can go through the roof or end up in the bargain basement so there's a couple things we like about this company anyway for example, it's near its yearly low, so this is based on percentages, so if we're near the year low, we've got potential to grow. in the last three years, their eps has gone up. they're projected to go up 16% this year. >> you think you're buying it on the cheap here, it's a value play for you which is different than last year's strategy when you guys picked facebook and amazon, more of a tech play. is this a change >> this is a value play.

they were high dollar stocks we are trying to keep a little cheaper initial price in the scary part is, i know it's a drug company, but they're working on drugs for auto immune diseases and that's a big issue right now. >> all right, buffy, we're going to send it back to the studio. back over to you guys. >> all right leslie, the stock picker says they've chosen celgene you guys were talking about this >> i think they have a bug in here, jim. >> it's actually very strange because you know i didn't think this is the kind of off the wall pick that i like and that you like it's based in summit, new jersey, which is where i'm from. i will say, i also am partial to amgen, either one of these i don't think both are going to be independent this time next year >> a lot of grinders, a lot of offensive linemen, not a lot of quarterbacks no flash no apple no amazon. when are they coming through do they even get picked in the first round? we're going to find out. facebook, bitcoin, chevron, and

celgene are off the board. sarah's in the draft room. >> it's eric dickerson and this is not his first draft he was the second overall pick in the 1983 nfl draft, first time at the stock draft here with the number five pick for 2018 stock draft what do you select >> i'm going to select exxon i'm going energy >> oh, we got a little battle here with kevin o'leary for the energy >> mr. wonderful there i think as a former athlete, you know, you want to have a good team around you and talking to the hedge fund guys and they think that this is the way to go right now. it's down a little bit >> did you want chevron or was this your first pick >> this is not my first pick what i wanted to have, bitcoin they got me! i was like, i should have been picking number two >> yeah. i can't believe it wasn't the first pick but -- >> i like it >> exxon, you're feeling good about it energy oil prices are rising. >> they are. >> melissa, another energy pick here dickerson. going with exxon >> i feel like we have to say,

see earlier analysis on chevron when it comes to exxon here. at least, though, for exxon, what we're down 5% this year so maybe the numbers -- >> again, the valuation thing. he goes 17 times, where's exxon going from here? that's, you know, you needed craig james, maybe, instead of eric dickerson >> i will tell you that when he was at goldman-sachs, we always said, no one ever got hurt recommending exxon and i think that's true but that's not going to be enough to win a trophy >> yeah. >> not when you've got some of these other names on the board still, and amazon, for example >> you need a coiled spring. there's nothing coiled about exxon. >> these guys are just -- >> the next pick is in >> go for blue apron or fit bit. he's going to -- what's he got >> you had a good run last year with your picks. you had valiant and then mattel. >> maybe they called the fcc on me last year for picking

valiant, get arrested but valiant was a number one stock and i like to buy other people's problems my strategy this year is a little different and i'm very excited to say that i'm going with a stock jimmy just talked act. amgen. >> yes, yes! >> i cleaned up my act a little bit. if you think about biotech and what's gone on the last 24 months or so, there been regulatory scrutiny. amgen trades cheap to the peer group. pop of first quarter sales were better than expected >> was that your first choice? >> we don't need to get into that i'm crushed right now. >> what did you want >> the b word was number one the beardstown ladies have edged me out two years in a row and i'm not happy about it we may have the better team but to be totally candid, i think

they took one from me. >> all right thank you. on the clock now is nick the kicks pick >> all right what do you think, guys? >> i like this one i like both of these i like it for the drug because this time last year, we'll have more studies everybody's cholesterol will go down to 25 i think they may have the best migrant. these are both not reflected in the numbers. i love this pick >> is it a target or is it the acquirer >> i don't know if it's going to be the boxer or the bag, to quote pearl jam. >> it's stand alone. it could be a $200 stock if not higher one of the best pipelines out there. celgene is cheaper but amgen is cheap. >> i like it let me tell you why i love this pick i love this pick, this sector is hated. and i love that. >> we are going to go to our central italy pi seventh pick and sarah has it. >> another man with some experience on the field, nick

all lowery >> i select amazon there's been a buyback but they are the sean mcvay disrupter because amazon is rewriting the rules the way sean mcvay in one year took the rams and turned it around right, eric dickerson? >> you got it. >> there we go >> we love the earnings per share and no currency surprises. but they're going to continue to cannibalize the market, i think they're a huge advertising giant. and they're just going to continue to set the standard for customer service >> this is a lot of pressure on jeff bezos, not just to carry the stock but now he's got the number seven pick. jim cramer picked it i wonder if you were listening >> 65 yards, right through the goal post. unbelievable that's why i always pick lowery every year when he was playing for my fantasy he's doing it now. most accurate kicker in the history of the league. >> incredible. >> but you know what

the smart dartmouth undergrad i think a harvard business school guy and i bet you he is shocked that amazon dropped to seven for him. it's not a set-up. >> instead of going through -- you get the bell price today before the earnings, up 4.5% already. the possibility for a selloff on earnings today >> so he gets closing points >> closing points today. >> but look, lowery's always been accurate. >> there's the sound last pick. last pick. >> the "mad money" favorite's about to pick. >> michelle. >> hey, here now with the last pick in the first round, she is one of the stars of the real house wives of new york as well as an check chi, author, produc entrepreneur, bethenny frankel, thank you for being here >> my pick is ge >> put on the hat. >> okay. >> you know what we call ge? from the jaws of the dow because it's had a really tough time you're betting on a turn around here >> well, i am disruptive i bet on the underdog, and i'm

part of a family you can't go against the family. and i think that the parts are worth more than the sum. they're in turn around phase, they're restructuring, and this is my pick and i stand by it so i hope i don't have to have a throwdown with jim cramer. i'm ready. >> you were the last person to pick was this your first choice >> a woman never tells >> great to have you thank you. maybe you will take down kevin o'leary with that kind of sass that wraps up the first round. the stevens tech trader are on the clock for their second round pick, tyler. >> what do we think about ge >> my daughter's watching for the first time ever because she loves bethenny frankel >> i love bethenny frankel >> my friend said ge is back to bottom willing to pay $20 billion for that life science business i think bethenny frankel's right. it's a slow start but by next year this time, i think she

could have a good one. >> we might come back next year and say it's 14.35 the turn around in this story could take years, not months >> it could. could be double in a year. >> big move for the stock price. >> yeah. it could go to 18 and everyone would be thrilled but that news today, that he was rebuffed for $20 billion in a division that a lot of people didn't feel was worth half of that bethenny frankel's a value player >> the story is fascinating, by the way. the tributary. >> it could have been nokia, which is a river in finland. >> that could have happened. sorry, mel >> which ones are you surprised that are left? >> everybody, apple. it's the greatest company of all time i don't know >> apple to the nikolext year >> i think the beardstown ladies did a great job with celgene i thought they were going to

pick apple >> i thought spotify would be picked you can't live without it. can't live without drop box or netflix, any of one of those top suggestions for james, i just got for netflix right now push it to me. >> interesting >> the first round of the 2018 stock draft is in the books. still two rounds to go right now, the teams are getting ready for their second picks we'll take a quick break ene meack, the students from stevens tech will make their second pick. it took guts to start my business.

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welcome back to a special edition of "power lunch," the 2018 stock draft we'll get back to the picks in in a moment but first a quick check on the markets the dow is up by about 256 points right now, good for a gain of more than 1% s&p 500, ditto the nasdaq is up by 123 points or 1.75% and this is ahead of a big night of earnings from microsoft, intel, as well as amazon and tech, by the way, is the leading sector home depot, visa, and intel all leading the dow right now. >> we're going to get to the second round in just a minute, but let's look more, one more time, at the first round and get

zb zb guy and jim's reaction there first pick went to facebook. second, flash gordon chose bitcoin. chevron, mr. o'leary going with the rebounding energy prices celgene, the beardstown ladies generally i think you two liked that pick. exxon went to eric dickerson tim seymour chose amgen, another favorite on the desk amazon, nick lowery, that was his pick and ge, bethenny frankel. who do you think got the best pick of the first draft? >> in value, i could argue that the ge bethaenny frankel pick is very interesting if flanery gets it going and brings it back, then you're going to have this fellow, steve, at jpmorgan he may change his mind and go more positive. he could take the stock to 20 in a heartbeat. >> i think with the eighth pick, she did well to get general electric but poibitcoin stands t

i thought that would go number one. i knew the stevens guys and gals wouldn't widgo that route becau they had professors. bitcoin is fascinating the energy stocks do nothing for me and i love mr. wonderful, but i think it was mr. zero on that pick >> oh! >> wow >> holy cow. >> all right >> you know, they do have a big stake in a lot of gulf of mexico poa annua dro foundries but that's not enough. >> guys, where are the binary picks? >> you know what they are, jim >> ge and bitcoin were the binary picks for the first round. >> we didn't get one of those -- that's what i'm looking for. or under armour. jcpenney would be amazing. >> second round is up. >> mr. wonderful could go buy everything at a jcpenney >> round two of the 2018 stock draft begins right after this.

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this is a "power lunch" special event, the 2018 cnbc stock draft. >> welcome, everybody, back to the 2018 cnbc stock draft. the stevens tech traders picked facebook in the first round, and joining me now to make the second round pick, james and madison, who is your first pick of the second round? >> jim, we're sorry to disappoint but we're going with disney >> disney. >> maybe that deal will close sometime in the next ten years >> down 7% this year madison, why are you picking disney >> we know they're completing their acquisition with 21st century fox soon we think it's going to be a major powerhouse in the industry that they already dominate streaming services, they're going to start snagging customers from netflix >> streaming so you guys are getting a lot of grief for being the millennials of the first pick and not going with bitcoin. why not? would your professor have gotten

mad at you >> i don't think he would have been too happy with us we think it's a bubble that's going to burst soon. >> we're going to stand by our pick >> you guys are kind of conventional here. facebook and disney. >> yeah, we're trying -- we think they're going to -- the revenues are going to be soaring in the next year we think they're safe picks and undervalued. disney is about $100 we think that's going to increase in the next nine months >> second round, first pick, stevens tech going with disney >> jim, that was interesting because there are several streaming options on this list available to these young people of stevens technology institute. that would be netflix, r roku, spotify. where would you go >> not disney. why do they have a premium valuation to the extent they do to the rest of the space i understand they deserve it but not that much of a premium the entire sector is being downgraded in terms of valuation and this is getting lurmped in

with the rest of them. where's it going to go from 1 thun m maybe 110 i don't like the pick. >> if you get the deal closed and we start talking about "blank panther 2" but without the deal closing, this is a slow and steady grind to 107. >> 107 that's a 7% -- i can do that math that's 7%. >> next pick is in >> todd gordon, flash crash gordon is in michelle >> here now with the second pick is flash crash gordon and joining him is a special guest, sam jones, the real flash gordon who are you guys picking >> well, nvidium >> well, we talk about an amazing technology company we have a leader, a chip leader we've got autonomous cars, a mining space, only 5% of the business in our prior pick, which was bitcoin, which i'm so happy to have.

>> you really don't care about nvidia you think you already won it with bitcoin >> i don't think we need any other picks. i can't believe college kids, respectfully, gave me bitcoin. i can't get over this. i feel like it's over. i'm sorry. >> tell them about the font. the font matches the red it really does it's a good complement >> and the bitcoin was not an individual -- it was a team aspect just like flash gordon, he was a quarterback for the jets >> the new york jets, that's right. >> teamwork approach >> so bitcoin and nvidia flash crash gordon >> ask flash whether he got his first two picks. did he get exactly what he wanted >> today couldn't have gone any better it was perfect >> you like this >> would i have named my dog nvidia if i didn't like this call look at this rescue mutt that's nvidia.

do i like this call? dog answers to win >> it's the set-up for nvidia. in one month, it's lost with the chip wreck so maybe this is an interesting time to step in here >> obviously look, i mean, when andrew famously, the stock was trading 94, we said if they get half of this story right, it's a $200 stock. here we are now. the next catalyst on autonomous vehicles, i get it but at a certain point, valuation is going to matter not now, but within the next six months >> jen-hsun huang gets his i love this pick >> and you love your dog >> i love my dog >> pick number two >> this time last year, he picked boeing which was a winning ticket to victory. >> before i disclose my name, i heard guy trash talking me back there. i'm now demoting him to grasshopper status and i will teach him the merits of rotation

and free cash flow for the rest of the year. >> he wouldn't be the person you've called a grasshopper. >> that's the status he's achieved blue apron tell you what. because if you recall, plated was a "shark tank" deal. i sold that to albertson's just a few months ago for $300 million i'm very familiar with this company's assets i assume an acquisition in the next 12 months >> are you afraid to put the hat on >> no, i'm ready to do it. >> down 80% since the ipo. >> yes, but the assets, the logistics, somebody's going to pick it up because they're seeing a model change. obviously, with albertson's buying plated, who's going to buy blue apron i'm betting on an acquisition. >> mr. wonder why. >> it's over between us, guy >> come on, kevin, you know i love you and i like what you -- listen, i like your moxie here because there's -- this is a buying area.

>> exactly >> but i think there are other binary plays that i would have gone with but this is as good as the other ones >> home run or strikeout >> i think it's the exact opposite of his first pick that was right to do chevron, so what do you need binary you need the hail mary pass. that's what that is. >> would that have been your hail mary? >> no. honestly, i would rather be in jcpenney than that one >> i would have taken a shot with pfit bit, to be honest with you. >> third pick is in, beardstown ladies, leslie >> we've got a lot of swiveling and shouting some plenty of strategizing here to come up with a second round pick buffy, what do we got? >> we're picking apple we've studied the fundamentals it's a strong company. it's got $200 billion in the bank if they want to buy in some other companies up, they've got plenty of money. they're p.e. is only 18 which is low for a tech stock

and we don't plan on giving up our phones >> not any time soon plenty of phones around the table here how do you guys decide on a pick is there any disagreements around the table >> we have healthy discussions each person gets one vote, no matter what their share is in the partnership. they still get their one vote. and we have changed our order of picks probably 20 times since we started but it's worth it in the end. we're all still friends. >> all still friends excellent. back to you, tyler >> jim is hyperventilating >> josh lipton right now just says the -- right here, right now. right in the -- just -- you have to follow josh because had they been watching him on twitter, they wouldn't have picked this >> we want to show you a chart blue apron is spiking up 36% short interest on this stock

but mr. wonderful, you get the stock's closing price. if the stock holds on to this gain, that works against you >> very interesting point. >> that's right. at the end of the day -- >> who gets the bar on that. >> i was going to say, look, i think the beardstown ladies, understanding what they do, they have to be, oh my god, apple dropped to the 12th pick in the draft. is my math right but you know, katie, you know her well, she's on your show from time to time. she had cautious comments. she said buy the tip but you got to say to yourself, katie, now tony makes you wonder >> it didn't drop because of character issues it's not one of those kind of situations something happened in the dorm or anything like that. it dropped off handsets and the china retaliation, possible boycott. >> we are officially now halfway through the 2018 stock draft, round two will continue right after this tony is on the clock

r@c make his pick. stay with us

welcome back to "power lunch" and the 2018 cnbc stock draft. we are halfway through the second round of three rounds eric dickerson of the pony express is here. what's your second pick? >> well, this pick kind of came to me. i was going to take it in the first round but i got it in the second round i'm very happy to have it. >> going with another oil company. >> another oil company first of all, i think my competitors are kind of throwing the hail mary so me being a running back, i'm going to run it slow and easy when it's all said and done, 10% or 15% wins this whole deal. >> you told us you wanted bitcoin originally >> but this was my second pick i didn't think nobody would get it and i was right. so i got what i wanted i got my man, as they say. >> let's see what the gang thinks >> energy, dickerson, what do you think?

>> i think he has blockers this can go for a lot. is it going to be special teams? no i think this can go for 40 yards before it gets tackled >> 40 yards probably gets you an $80 stock. you could speak to it. i mean, i think eric did well. i'm telling you rightl@ now, t seymour is saying, i'm one away again. >> speaking of tim seymour, he is up. sarah's in the draft room with tim and his team wow, his teammate. >> we've got a teammate here miss usa >> yes >> here with your second pick. >> with the second pick, we're going best available, drop box >> there's the hat why drop box >> bottom line, we are looking for high delta stocks this year. >> not exactly the miss usa crown. >> but that will be the crown. >> what's your basis here? >> through the catalyst, through the ipo, i think you've got work

through some of the lock-up, you have a 25% arpu which i think they're going to get into premium skus and i think the product actually -- >> do you use drop box i >> i do. cloud storage is very high in demand >> this is down the fairway as we go. we're excited. >> pharma, cloud storage >> as well as relatively inexpensive compared to our competitors. >> there it is second pick is dropbox, tyler. >> gentlemen, you like this one. >> powerhouse. >> you like his two picks. >> yes, oh no, he's -- he's position he's playing for keeps i really like this this is a stock that could be 24 or 38, maybe 40. i think they're going to make the quota. i think they're about a quarter away >> i think you have -- you know this better than i do, probably a 40% earnings growth if not more i think this stock -- people

underestimate it it's not salesforce.com, i'm not suggesting that but you bet against these on valuation, it's the wrong thing to do. i think it's a great pick. >> it's a millennial pick too. approximate p let's share the photos share the photos dropbox. >> michelle has the next pick. how do you gauge the greatness of an suv?

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the digital divide is splitting this country. we have parents who are trying to get their kids off of too much social media and computers, and then we have parents who would only hope their children have access. middle school is a really key transition point, right. the stakes start changing. students begin to really start thinking about their futures. what i like about verizon's approach is that

it's not limited to just giving kids new tools, it's really about empowering educators to teach in different ways, and exposing kids to more active forms of learning. giving technology is not a total solution. teaching technology, now that is.

picking last in the first and last round, and it's fair to say it's an honor for me to be amongst the three of you >> all the other people here that i know want to be judged, and we are judged. >> thank you >> your pick in terms of how things are - >> mr. annoying may have won it with this blue apron >> mr. annoying. >> yeah. that's the kind of pick that could make it so next year at this time he'll be so insufferable >> who decides this, though, the distribution, et cetera, amazon doesn't need this. >> you know everything's set up. changed the setup. >> sorry >> that is beautiful stuff i think flash gordon has two good picks in bitcoin and

nvidia >> same true - >> happiest of the crowd. >> and staying true to fast money, amgen and drop box is compelling compelling picks absolutely >> i like them >> not showing love on steven tech folks >> conservative? >> too safe. just kind of - >> so this - >> yes >> it's a barclay pick, safe, good pick. >> this is -- we want big returns, but not looking at -- >> that's it >> they are young. they'll learn. >> they're young they're learn. i hope >> thank you for watching "power lunch," it was a blast the fun does not stop here, though, we have one more round of picks, round three. >> a short break, join us on

cnbc.com and facebook live, twitter, youtube, apple tv, amazon tv, lots of ways to watch round three of the cnbc stock draft and "closing bell" is ready to get underway. let's bring in kelly and wilf, i hope you have been watching, guys >> are you competing with us, the viewers now? taking the - >> we've had such a fantastic two hours as well. >> migrating the audience. >> yeah, away. >> it's a strategy, guys, watch us at the same time. >> multitask >> we want to know what happens, so i was going to say tweet us, but e-mail i don't know keep us posted >> guys, outstanding two hours i'm sure the third hour will be particularly good. kelly, work is cut out >> we do bringing our a-game. >> thank you for that outstanding "power lunch," and now "closing bell," averages positive for the month, what is driving it higher and what stocks t