>> i don't own the clippers so i am holding my twitter. >> i am taking profits on tjx up 20%. >> are you fully out or trimming >> trimming. >> probably with the intentions of doing some more >> i like merck, i think they are a good drug and i would own it >> that does it for us here. going to hand it off to "power lunch. >> welcome everybody you are looking live or soon will be, yes, you will -- it is a black screen right now trust me that's the facebook developer's conference in san jose yes, it is, ladies and gentlemen. mark zuckerberg is ability out k the stage to explain his move of pulling back access data following cambridge analytica data >> there it is st >> there we go

a lot of dark colors and things like screens >> he's going to talk at this developer conference everybody we are going to have full coverage and it is going to come alive for you. look at that >> airplanes >> we'll keep an eyeon that officially welcome everyone to "power lunch," sara eisen here and michelle caruso-cabrera and melissa lee will be back in a moment >> we are going to get to mark zuckerberg's keynote speech in a moment first a check on trading investors are hitting the sales button as we kickoff the new trading month. dow is down triple digits and down for the eighth times in ten sessions industrials are lower than 300 points the s&p is off 3 quarters of a percent and nasdaq is holding

relatively well. financials are taking a hit more than half the stock of the etfs. they're in correction of territory or greater that's including wells fargo and city and goldman and morgan stanley. gold is hitting its lowest level of the year as we talk more of the effects of the strengthening dollars. >> let's get straight to julia boorstin who's live there, julia, could be facing a hostile group this time around >> reporter: i think it is going to be a tough one for mark zuckerberg there are about 5,000 developers and a lot of them are concerned of the fact that facebook over the past month have made a number of changes really to hold back the amount of data that they share with developers, we are seeing him walking on the stage now. a lot of people have a lot of questions they want answers about what this means about their future let's take a listen. >> i cannot believe it is only four months in

>> before we get started, i want to take a moment how much it means for us that you are all here t here today it is not easy being a developer the past couple of months. what i can assure you that we are hard at work and making sure that people don't misuse this platform we are opening avenues so you can all keep moving forward. now, i am looking out i see a lot of people we worked with for a long time and a lot of people traveled to be he travel to be here around the world. i want to take a moment up front to thank you each and everyone of you for all that you are doing to help bring the world closer together. thank you so much. now, we are all here because we are optimistic about the future.

we have real challenges to address but we have to keep that sense of optimism, too what i learned this year is that we need to take a broader view of our responsibility. it is not enough to just build powerful tools, we need to make sure that they're used for good. we will. we are idealistic and we focus on what people can bring and there is a lot of it we have seen the me too movement and march of our lives organized on facebook and we have seen people come together to raise more than $20 million for harvey we have seen 80 million small businesses used these tools to grow and create jobs we have also seen people using this tool for harm that goes for fake news and

russia and data privacy issues we are investing a lot to address these issues and keeping people safe. i am going to go through all of that head on in just a minute. i think it is important that everyone here knows what we are doing to address them. but, we also have a responsibility to move forward on everything else that our community expects from us, too to keep building services that help us expect in feenimeaningfw ways as well the hardest decision that i made this year was not to invest so much on safety and security, that decision was easy i went to the people that run those team and asked them how much can we invest productively and i transferred all the people to them. the hard part was figuring out a way to move forward on everything else we need to do, too. recently, i was having a conversation about what facebook stands for

what is the basic idea, the world would lose if facebook went away? when i was getting started with facebook back in 2004. what struck me was you can go online at that time and find almost anything or you can look up any information or you can find products or download movies and find anything, except for the things that matter to us most, people so i started building a service to do that to put people first and at the center of our experience with technology because our relationships are what matters most to us that's how we find meaning and how we make sense of our place in the world now, we are not the only ones to build al communicati communicate we are the ones that do it again and again and all different ways people want to interact online this is our dna and we have gone service after service that put people at our connections and

relationships at the center of the experience we have come a long way. when i look out today, it surprises me how little of the technology that our industry produces is designed to put people first our phones are designed around apps, that's not how we think. i believe that we need to design technology to help bring people closer together. i believe that that's not going to happen on its own so to do that, part of the solution and just part of i it -- is that one day more of our technology is going to need to focus on people at our relationships. now, there is no guarantee that we get this right. this is hard stuff we'll make mistakes and they'll have consequences and we'll need to fix them. but what i can guarantee is that if we don't work on this, the world is not moving in this

direction by itself. that's what we are all here to do that's what i want to talk about today. i want to start by keeping people safe and we'll discuss all the things we do for keeping to build things and services and helping us connect in a new way. i want to talk about what's really important to all of us and that's the integrity of our elections. in 2016, we were slow to identify russia interference we expected more traditional cyber attacks like fishing and malware and hacking. we identified those and notified the right people but we did not expect these coordinated information operations and large network of fake accounts that we are now aware of i sat down with our team after this and we said we'll never be unprepared for this again.

sense since th since then there is been important elections like the french election and alabama senate election last year and we have been more prepared. we deployed new a.i. tools and took down tens of thousands of fake accounts before they could do anything. we trace the network back to russia and taken down their network. we are doing more. we are requiring everybody requiring running political and issues ads or running large pages to be verified with a government id. we are making ads more transparent. you will be able to see who's running political ads and who they are targeting and how much they are spending and what other messages they are sending to different people that's a higher standard of transparencies than tv ads or print ads or anything you will find on the internet by the end of this year, we'll have 20,000 people working on security and content review at

facebook we have created an innocent election research commission so independent academics can give us ideas and hold us accountable to make sure these systems work. this is an important election year not only the big u.s. midterms that are coming up but there are major elections around the world, in mexico, brazil, and india and pakistan and more, we are focused on this. beyond elections, we are focused on fighting fake news broadly. there are three categories we focus on here. the first category is spam. these people just want to make money, the most sensational junk they can come up with to get you click on it. these are the people in the '90s would have sent you viagra e-mails. the play book is simple. take down their ads on their site that cannot make money and

build tools to protect and remove economic incentives and eventually they'll do something else to make money we are starting to see this. the second category is fake accounts the idea here is as less focused on looking at the content sp specifically and more focus on trying to find bad actors. some of the nations state who are politically motivated like we talked about it before. all of this we fight in the same way of a.i. tools and verifying people who are running large pages and running sensitive ads. the third category is people, real people who are just sharing proof, false hopes the play book here is building tools to get better at flagging contents that's going viral so fact-checkers can go at it so we can show is less

put it into context so people can understand what's going on a lot of work over the last year and a half have been bringing in more and more fact-checking partners all around the world in different countries and speaking all different languages we need to cover there is a lot more we need to do these are the three basic categories and we are making good progress on all of them i want to talk about data privacy. what happened with cambridge analytica was a major breach of trust. that developer took data that was shared with them and sold it we need to make sure that this never happens again. we are taking numbers of steps here first, as you all know, we are restricting data that developers will be able to request from people the good news is back in 2014. we already made a major change to how the platform works to prevent people from sharing a lot of their friends' information so this specific

situation cannot happen again today. since then we have taken a lot more steps as well to restrict more data. there are still more steps we are taking to do this further and with groups and events and data available through log in and prevent future issues that may come on. second, we need to make sure we find any other bad apps that are out there. so we are currently in the process of investigating every single app that had access to a large amount of people and information before we make these changes in 2014 and if we find anything suspicious. were goi we are going to bring in auditors and do a full audit and we'll tell anyone whose data is affected we started putting a tool in front of everyone showing them all the apps they are use ing a let them removing access of what they don't want to use we are asking everyone around the world and not just in europe to review your privacy controls.

so to all developers who are here i know the vast majority of you are focused on billing gouildind things we need to take these steps that everyone is focused on building good things. now, i also want toshare one new thing that we are working on with data privacy. we have a lot more updates like this coming. this is an example of the kind of thing we are working on in your web browser, you today have a simple way to clear your cookies and browsing history the idea that a lot of sites need this data to work and need cookies, you should have the ability to go and clear your history at any point you want. we are working on a version of this for facebook, too it is a simple control where you can clear your browser history

we are going to call it clear history. and, we are starting with something that a lot of people asked about recently and that's the information that we get from websites and apps who are using facebook advertisers and analytics tools. you will be able to use this tool to see information of the apps and websites that you draft with you will be able to turn it off having this information stored with your account going forward. now, to be clear when you clear your cookies in the browsers, it could make part of your experience worse you may have to sign back into dozens of websites and we have to refigure something. the same is truth here or your facebook won't be quite as good as we relearn your preferences after going through our system, this is the kind of control that we think people should have. so we are building this and we'll have a lot more like this to talk about soon.

>> thank you, you have been listening to mark zuckerberg outlining to a group of people facebook developers how the company is taking steps to protect your privacy and elections from interference like actors in russia and how to fact-check fake news and prevent all of these scandals. let's go back to julia boorstin, certainly he got an applause there, julia, cannot be too happy with the changes >> reporter: he was apologetic and specific of taking responsibilities for cambridge analytica and a range of things and a range of areas where he sees facebook is coming up short and disappointed users and causing a lot of problems. the question now is how is he convincing app developers by pulling back access to data, it is going to be better for them over the long run. he says these things over the long run they understand that app developers are trying to do the right thing and strong

businesses they need to understand that facebook needs to be strict now of all these categories and it will benefit them overtime allowing users to clear cookies and browser history which he warns will make your user experience is less good but it is all about gives consumers options now. >> julia, thank you very much. if there is more to report from the app developer event, i am sure julia will bring to us. stocks now near sessions low, let's get to bob pisani live at the new york stocks exchange what's happening >> the slower growth, higher inflation story is combining with the peak earnings story and that's creating significant problem for stocks i don't go over the esm numbers. around 10:00, we got ism number still very strong but a little bit below expectations on the number front you see the mark drooping down

and never recovered since then look at the sectors that are down today their capital good sectors involving in manufacturing and materials and energy and tech is holding up relatively well slower growth. remember ism were still really good if you look at the number here, new orders were lower and export were lower and construction spending a separate data point was also lower now, there is another issue about higher inflation the ism publishes a prices paid component. it was at a seven-year high. you had slower growth and higher inflation combine with the idea. now you got significant head winds for the stock markets here is higher earnings really priced in i think it is still too early and people are pushing that argument global growth, is itslowing

down first quarter have been slower but it has been in the u.s. for a while. rates are a little higher. sara, this is a tough, tough market for the bulls right now the bears are getting a little bit of an upper hand >> 296 on the 10-yr. earnings from apple. the tech giants are set to report after the bell. iphone sales, will apple throw money at investors to dull the effect the biggest gainer in the dow right now, josh lipton, is live in cupertino, what can we expect, josh >> there is plenty of concerns heading into the earnings report of apple in vs.ers a investors are looking at the franchise specifically of the iphone 10. they did not like what they are hearing from suppliers like t

taiwan the street is expecting 2.67 estimate gross margins at 38.5% iphone ship mmments we are lookg at 52.5 million and the june quarter is looking at eps of $2.12. also in focus today, what is apple going to do with all that cash apple was sitting on a roughly $250 billion cash ward before the new tax law cut rates and allowing the company to bring home -- loop ventures says he's looking for apple to increase his buy backs over the next three years by $70 billion and a 15% annual dividend increase questions for investors is how much of the good news is priced

in the stocks. >> bernstein bringing up other potential of concerns here yes, the capital return can mitigate some of the impacts of what he sees on the weak iphone sales. we'll soon have a better idea, guys, back to you. >> josh lipton, thank you very much economic growth and rates stabilizing. the markets just don't seem to find their footing peter anderson, the cio of capital management >> why is the market in the face of the good economy with interest rates moving kind of the way we expected them with inflation roughly where the fed would like to see it why is the market stalling >> the market is struggling

where do we go from here it isheart hard to argue with an excess of 20%. the problem is that's baked in and that's what's happened in the past what really matter is guidance for q 2, it is coming in softer than expected. in addition to that, we see rates rising and we think that's healthy and to be expected particularly with earnings and growing as fast as they are so we are not at all afraid of higher rates i think the market is struggling with this backdrop of is this as good as it gets. >> that'll be my question. you took the words out of my mouth, peter >> is this really the moment at which the market says we got what we got and i like it a lot. that's where i am going to stay. what do you see whaping for the rest of the year >> i see this dreaded phrase that have service tyler of the

so called high water mark of some of the companies reporting most notably caterpillar and other companies so far, that's not based on revenues. revenues are looking very strong they're projecting that the cost may be impacted by tariffs and things of that nature and trump activities there is a big question mark with that. economics is a social science. if we are going to try to project, how the input cost of steal for instance is going to change is really a question mark and i think what you are seeing is a struggle of all of us to try to factor in that question mark unfortunately, right now i think the bears are winning. i would not put the money on the bear on this it is not playing out. it is maybe quarter play out now.

to answer your original question, i am optimistic that i think that the tariffs will work themselves through the negativity that we are seeing are projecting. >> okay, so you are still positive >> amanda. you also sounded positive. you say that you are not afraid of high interest rates, does that mean you like the financial? what would you do right now as you see it selling away the last several months >> we still like the regional banks and environment and we'll continue to be strong. house prices rising and we'll be supportive of continued earnings growth for the regional banks. we also like aerospace and defense, we know they have been selling off lately we think there is a lot of spending particularly in the form of defense and budget really coming their way. we think there is an opportunity there as well >> folks, thank you very much. appreciate it. >> under armour share is making

a come back. the stock is falling over guidance the dow is near session lows, it is the big industrials name for dragging all of them are lower and apple is holding some of the things up ahead of the earnings later today. we'll have much more of today's sell-off coming here on "power lunch. how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not?

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. let's get back to julia in san jose >> mark zuckerberg announcing that facebook is getting into dating he says they'll be creating an app that's separate and using your facebook information that's opted and allowing for people to date this is not a hook up. this is a first time that facebook have ever gone into like this. this is an extension of what's happening of people meeting and fining the finding their partners on facebook iac shares are down 1% the dataiing app will see this s a threat not about dating but about the co-founder and former ceo of

what's up has -- and thanking him of the questionable timing of his resignation guys, back over to you >> thank you, julia. under maarmour is trading slight lily lower today north american sales still falling and inventories are stilwell abo still well above normal. i just talked to the ceo they framed this as a put your head down year as under armour trying to fix their issues from getting too big too fast they're trying to fix their

pipelines. under armour has been called out by the streets, just not keeping up with the fashion trends adidas went retro and that worked well. patrick did say they are doubling down on performance that's under armour's biggest strengths. it will start with running which she says will explode next year in 2019. they're all pointing to hover which is their new running sneakers with built in technology and apparently, melissa, flying off the shelves. have you seen this >> based on what data point are you using? >> the sales are very strong, to your point the overall footwear business only grew one 1%. >> they're focused on it but they need more bigger products to create some buzz and get under armour back on the map let's bring in our sam poser on

the group. sam, how do you pick abbott bon this one >> well, basically you listen to what they have to say. we think they are innovated and energy is well spent so much inventory and a big distribution problems. because we just don't see how they clear the inventory without doing a little damage earnings and so on and even then they have a lot of work ahead of them >> when i go to tj max, there is a ton of under armour stuff. you point out the high inventories as well as high receivables. the two combined are a ticking time bomb. this could explode how do you see it resolving itself >> well, the thing is, they almost got to figure out a way to get rid of those inventories and write it down or something and get it out of the way.

with their inventories if they put more like i would say tj max and kohl's, they would get angry at it and others are angry about it relative to the distribution of kohl's, they have to do something and you know even if they get inventory in line with sales by the end of the year as they said on the kconference cal today, the inventory is still likely over $250 million heavier than an optimum point because inventories have been inflated over the last few years. >> what about the idea that they could get cool again and they got a huge innovation pipeline and they are excited of 2019 and it is going to explode for his words. inventory issues they'll work themselves out as they promise on the call >> well, i mean there is one thing of in innovation and the hover is a good shoes for under

armor. if you compare it to some of the running shoes from nike or adidas, it is not even in the top 20 they're doing better than other shoes the cool factor is product reflective and not product specific for example, nike with the vapor max launched -- it was a clolla of fall of '15 >> let's say they'll lead it for other folks out there. do they have the technology and the intellectual property to convince investors that they are the center of technology when it comes to innovation and athletic wear >> well, i am less concerned of

vitamine the investors. the question is do they have all that to convince their customer s >> that too. >> you are going at a bigger market than others are going after now which makes it complicated and you know they got their hands full without a doubt. this inventory is not going anywhere and it has to go some where to open themselves up to even have the ability to deliver the kind of products and the quantities that they need to >> sam, we'll leave it there with the stock sell up of 20% it came back to a deep hole of last year sam poser, thank you spotify, up 20% since going public just a month ago. can this company continue to hit

the right notes tomorrow when it reports its results for the first time spotify and all the market moving action coming up when "power lunch" returns right here on cnbc. for leisure. so i go national, where i can choose any available upgrade in the aisle - without starting any conversations- -or paying any upcharges. what can i say? control suits me. go national. go like a pro.

. i am sue herrera, here is your cnbc update at the pet gone. defense james mattis says the double bombing in kabul killed 25 people is proof s of the vale that nato forces is fighting against. >> but, unfortunately, once in a while they get through because any organization realizes they can win by ballots, it turns to bombs, this is what they do. they murder innocent people. >> the fda is cracking down on companies that make e-cigs look like candy

it is mislabeling. the post position of 144th running of the kentucky derby. the favorite is justified will start at the seventh post. nbc will carry the race, the post time is 6:46 p.m. eastern time that's the news update at this hour, ladies, get your hats ready. >> i am all for it >> sue herrera >> thank you >> the dow is in correction territory. more on what's driving these stocks lower, coming up. apple and microsoft and intel for the meantime are higher. tyler. melissa, to d.c. we go eamon javers is in washington on what may be next >> reporter: the country benefited from that extension,

canada and mexico and the eu announced last night, wilbur ross was on cnbc talking to david faber and what ross said effectively don't get use to it about these extensions >> i don't think we have any intention of extensions that defeats the whole purpose. eu is around 15% of all the steel we bring in. if we are going to impose it, they'll have to do it pretty soon or else people will start gaming the system. >> he also explain why the c confrontation on trades. listen to the language that he used to describe china's action here >> here is what he said. >> there is been talks between the two countries for years and years. president tru >> what does it mean >> well, our trade deficits are too big and too continuing and

too chronic and too inspired by evol evil practices >> reporter: wilbur ross is saying trade deficits results of evil practices wilbur ross was careful to send any sorts of modest expectations of his trip to china along with economic leaders going over to china later in the week. ross says he got a modest goal for that and ultimately the talk will continue throughout the rest of the week >> trying to send a message ahead of that trip thank you, eamon spotify is hitting all the right notes. shares are up 20% since its initial pricing. morgan stanley initiated coverage of $190 price target saying we believe we are in the early stage of a music renaissance and consumer

spending led by streaming and spotify. >> bethany, the final pick of the round, what are you choo choosing >> spotify sm >> why >> it is the ying to my yang this is more of a future play. it is the streaming -- streaming music is the future. >> joining us now is the analyst behind the car from morgan stanley, hi ben. >> hey michelle. how are you? >> what are the music renaissance in consumers spending music means >> music probably was the first media really disrupted by technology and the internet and spending on music collapse by 2000s and all the way to 2014. the last several years have been promising, double digits growth in 2017. 1 million global users were

added of subscriptions of music. we think there is healthy growth ahead. >> how did all of society make that turn? i remember covering for years nobody is going to pay for musi and suddenly everybody is willing to pay for music, peopl are willing to pay for netflix and movies and now they're paying formusi music, how did it happen >> smart phone penetrations and robust bnetworks were needed to make the products work well for consumers. you need companies and platforms and spotify of compelling products it is a powerful consumer proposition. the growth we have seen powered by mobiles and masmart phones

don't forget about connected cars which is the largest area, largest place people consume music is in the car so that's all ahead of us. >> benjamin before you put out your notify, how frequent are you in touch with bethany? >> i like her call >> you apple and pandora and others the other in this equation is amazon which i use in addition i use them all but in addition to spotify that feels like the direct competition. >> yeah, i think that's right. >> at a high level, i think competing was free in the music space where you start, how do you convince people who historically do not pay f for music. without question and spotify and apple and amazon, the smart speaker opportunity is a huge

positive for spotify but there is no question it is a risk because of what amazon can do in terms of integrating hardware and service overtime when you think of the long-term risk of spotify, amazon is at the top of that risk >> thank you, benjamin >> coming up, we are putting the lunch in "power lunch. our chef from p.f. chang is here with us. of course, we'll sample the good stuff, stay withs. u

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it's a smart way to help increase yields, all before the rest of us get out of bed. but as it grew bigger and bigger,ness. it took a whole lot more. that's why i switched to the spark cash card from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything. what's in your wallet? at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. welcome back to "power lunch. facebook announced they're launching a dating app, this puts pressure on match and ic.

match is suffering its worse day, the stock is down 17.5% a news that facebook is launching a serious rival to match's dating services. mark zuckerberg announced a number of different things on stage and a number of them will connect people and more of a focus on its users and people rather than content including launching a watch party and letting groups watch movies together guys, back over to you >> thank you julia boorstin. >> all roads lead to china p.f. chang's of its opening in shanghai 200 locations in the u.s. and operated in 23 countries around the world. here to talk about his company's expansion plan, the ceo of p.f. chang's, welcome back to the show >> thank you very much >> i tell the ceo of p.f.

chang's is coming on and he's going to talk about opening a restaurant in shanghai, they sort of laughed. how are you branding yourself there? >> it is ironic that we are selling chinese food to the chinese, right >> we tried. when we said that to them, they said well, of course, how else would you cook food in china you know what works though when we tell them we are an american bistro serving some of their favorite dishes for an american style palette which is heavy protein. it is a big difference >> do they know things like general chow chickens of the stuff that we know here in the united states. >> it looks beautiful. >> here is the interesting and i will give you a little bit of data we have been opened three days the top three dishes and we had

tremendous traffic number one is chang's chicken and two number is lettuce wrap and number three is dynamite shrimps. it goes to show the palette is not that different >> did you expect to be so coincidence or other that diffen internationally versus the u.s >> did you expect it to be so coincidence? >> i'm surprised i thought it was going to be some of our other dishes were going to be rock stars we have fantastic duck spring roll that is duck and mozzarella cheese it's been a home run, a home run. but i'm surprised that it's the same dishes that succeed well in the u.s. >> i know p.f. chang's in growing up in cincinnati they were in the malls we report all the time about how mall traffic is down and the department stores are hurting. is that impacting restaurants like yours >> i think it's very -- malls are not all malls. there are great malls, and then there are malls that are struggling, so we work with some

fantastic companies who have remerchandised the entire mall we work with simon properties who have put in ice skating rinks and water parks for kids and town centers, which is giving people a reason >> it may give you an opportunity to occupy vacant real estate in those malls >> that's a great point. and you know what else we draw traffic to the mall so it's putting us in a great position with some of our landlords. >> are you able to cut how much you pay for rent >> we're certainly trying hard. >> so when leases come up, you renegotiate. >> the reason people go to malls is for entertainment and restaurants and we're on trend >> they're telling me to try something. what is this here? >> you're going to use chop sticks on tv i'm impressed. >> noodle bowl >> it's got a little bit of heat to it. >> i like heat please don't keep the camera on me while i do this i can do it but it's going to be a little messy >> the other thing we're really

proud of is our new pad thai that's a new pad thai. i think our chefs spent time literally in thailand to make sure that our recipes fit what really works well in thailand. we took 7 0% of the sodium out of the original pad thai so it's cleaner, better, fresher flavors, better for you. >> i'll try that after the interview it have this is awfully good i was going to go for the egg but that would be a real mess. >> we can have the chef mix it for you. >> in terms of expansion, you're planning a very aggressive global expansion the back story to p.f. chang's, of course, is that it used to be a publicly traded company. you went private as private equity firms do, they leverage you up. to the point now where moody's and s&p recently downgrade your debt they say they're worried about your ability to pay debt, refinance debt that's you in 2022 what can you tell people who might own the bonds about that >> i think our bondholders are actually quite savvy and they understand that the bonds they own are not p.f. chang's,

they're wok holdings, which is a combination of p.f. chang's and our sister company, pei wei. we're doing quite well and the reality is that we have plenty of cash flow generation to satisfy all our crazy aspirations for growth and then some >> s&p says you're going to be free operating cash flow negative over the next 12 to 18 months >> that's assuming to pei wei continues what it's doing. >> i like you and your crazy aspirations. >> michael, good to see you. >> very good thank you. looks like that old saying, sell in may is already under way. the dow kicking off the new trading month in correction territory, plunging triple digits, 238 points right now on the flip side, nasdaq turning positive just moments ago. we'll bring you all up to date in the markets when i finish lunch. mr. elliot, what's your wifi password?

wifi? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. welcome back to "power lunch. we know it's first day, looking to end your day of news. we traded up to 251. we haven't closed on this move above 2.5%, not since august

2008 lock at ten-year versus dow. year to date, see that divergence our central bank is in a tightening mode. if you look at the short end of europe, what you'll notice is that it's a much better look it's all aboutcentral banks. isn't it finally an intraday of the dollar index now at 92.43 we're up on the year going to be important to see which side of that marginal line it closes at >> we will be watching thanks, rick the stocks are selling off today as inflation creeps higher are the markets right to be concerned? and the high end market for cars, crashing which cars are holding their value? we've got two of them out front right now in front of the cnbc headquarters we're going to show them to you. they are beautiful next on "power lunch." - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up!

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apple set to report earnings after the bell and it could be one of the most important reports so far this season we've got your game plan ahead of the numbers and hitting the brakes collectible cars have been one of the hottest investments, outperforming the stock market but now cracks are starting to show the best signal to crash elsewhere. rev your engines "power lunch" starts right now ♪ i can't drive 55 >> welcome to "power lunch." i'm melissa. down day for the markets here, dow falling more than 300 points the lows were well off those lows, though right now, the dow is down by just about 0.75% s&p 500 almost down to flat line, nasdaq flipping to the green. industrials, staples, energy, those are your lag erts. tech, though is a top performer and health care is weighing on the dow with pfizer and merck

leading those declines rough day for steel and the etf, slk, all down more than 2% apiece and check out shares of match sinking as facebook announces it will launch a new dating feature melissa, tyler mathisen here, welcome, everybody here's what else is happening right now. construction spending down 1.7% in march missing estimates, the biggest monthly drop in about a year for that measure the gi a tuitar maker, gibson, n for bankruptcy the company says it will continue to operate during those proceedings. and starbucks adding two new frappuccinos to its permanent menu for the first time in 16 years, can it have been that long since a new frappuccino, the ultra-caramel and the triple mocha frappuccino debut today. >> sounds very sweet i am sarah eisen inflation has been front and center in the markets these days and it's front and center in the

latest survey. steve leishman joins us with the results. >> it's been on the rise and so has the forecast for inflation if you take a look at the survey out today, it's gone up. the forecast for inflation has gone up in four of the past five surveys with one of the bigger jumps for this year happening just between our march survey and the april survey now at nearly 2.5% for this year on the headline cpi number and about 2.5% or about the same for next year so it doesn't go up much further than that, but it comes, though, with pretty strong gdp take a look at the gdp forecast. this is year overyear percent change going up for 2019. not quite the 3% hoped for by the administration maybe those starbucks frappuccinos will get us there taking a look at the current expansion, by the way, is now 106 months, tying for second

place and 81% of our respondents say it's going to hit that on the 20-month mark which could make it the longest expansion on record why? well, the chance of recession, still just 16.5% up a little bit from the prior survey but pretty low comparing, a one in five natural chance of a recession so being below just 20% makes it below average 23% say the number one threat to our expansion right now is protectionist trade policies followed by rising interest rates and 11% saying a fed policy there's some of the commentary we got investment strategist says the long-term positive effects of tax reform are less extreme regulation is not being given the merit it deserves. countering is robert, chief economist, says, i think tax cuts and fiscal stimulus will be the big disappointments of 2018 and 2019 it will leave fed policy as too aggressive michelle, back to you.

>> 23% believe trade is the big concern. >> yeah. they hate -- by the way, this group, and i'm going to talk about this in the 3:00 hour, michelle, this group is generally favorable towards the president's economic policies, but they really dislike his trade policies >> what about this word, stag fla -- stagflation. >> not in the cards, at least according to this group. it's going to hard to have no growth with the amount of fiscal stimulus coming in you've got the tax cuts. and just having a little bit more inflation i think we're a long way from any threat of stagflation, at least right now. >> steve, thank you. typically a positive one for stocks, may, but it's been a rocky start to the first trading day of may, which is today the dow is back in correction territory. we are off session lows but monitoring the selloff let's bring in ron and christian, cio and head of fixed income with oppenheimer funds. a little inflation is usually actually a good thing.

it's a sign of a better economy, something the fed has been fighting for for years, so why does it feel like now people are starting to freak out. >> i think you're getting a typical end of business cycle feel to the economy where today in the "wall street journal," they're talking about paying employees to move, paying their kids' tuition. you have 6.3 million job openings, 6.3 million unemployed people so labor slack is very quickly being diminished and so this may not be anything other than a garden variety end of business cycle experience that we're having, but that also means that the fed typically moves during those periods and may cause a slowdown, may cause a cyclical -- >> are you calling the end of the business cycle here? >> not right here. i would say nine moths out but you' -- months out >> do you think that's what the market's saying? >> seems to be saying. you've got a flattening yield curve, stocks that are selling off even though companies are beating raised earnings expectations you've got with the exception of some commodities that are being -- their price is being

distorted by trade-related matters are starting to roll over >> even though you've got fiscal stimulus coming in, in the late innings of this game, i guess the question is, how close do you think we are from a turn in the business cycle and what worries you on the horizon >> i think the likelihood that we have the end of the business cycle in nine months, in my judgment, is basically zero. you'll finally see the effect of the fiscal stimulus, the budget deal, and it's more likely that we get, by the end of the year, we get close to 3% rather than a recession or any time in 2019. there's just too much momentum in the economy what worries me, that momentum itself the fact that inflation is getting close to 2% and we end up with 3% growth, how would the fed react? would they overreact and if they overreact and tighten too fast, we are going to have a problem. >> krishna, is that what the

market is telling you? we were asking ron if the market is confirming his view about the business cycle what do you think is the message of the markets over the last few months >> i think the message for the market is the outlook on growth is good from a survey standpoint, but right now, we haven't seen that yet. and the market had a meaningful run in 2017, and we need to catch up to that level of profitability and growth at some point in 2018. and therefore, if you have a long-term view in the market, i think it's still quite positive. that is, if you're looking to end of the year, it's going to be higher for those very reasons. >> where's the business spending that everybody thought was coming >> well, interesting how cnbc.com today, there was a note that companies are spending $1 trillion on buybacks and dividend increases that is roughly equal to the size of the corporate tax cut that was passed when you do the math on what was the pre-revenue

estimate of how much this tax cut was going to cost. so we're seeing some improvement in cap x, a mild improvement in wages but that's really coming from a tight labor market, not from the willingness of u.s. corporations to just go out and hand out -- >> are you throwing doubts about whether or not that capx move will happen? because that dollar for dollar may not be the dollars from the savings in tax it may have been already in the works because companies have a lot of cash on their balance sheets even prior to the tax reform >> and then you lead to the classic late cycle mistake to overinvest at the end of the cycle and you've got slack on the other side so to me, this looks like a fairly typical, noncrisis, nonfinancial, nonproblematic slowdown of the usual variety, the type that we haven't been accustomed to for the last several turns in the market and in the economy >> it feels like there's such a -- there's a strong case to be made from the bulls right now and from the bears right now you can count so many risks to this rally, protectionism,

inflation, rising interest rates and you can count just as many positives. >> we have it going on right now, ron and krishna >> what's the catalyst for the market what's going to break the tie either way we have a job support on friday. we've got a few key fed meetings coming up this year. we all thought it was going to be earnings season but it doesn't really appear to be that conclusive >> i don't think we need a catalyst in the market i think people are looking for a catalyst for the dollar, for example, and all of a sudden the dollar turned so i don't think we really have to have a catalyst for the market to go up the bottom line, however, from my perspective, is when we are talking about close to 3% growth rate by the end of the year or let's say it's not 3%, it's 2.5%, the likelihood that you have a recessionary conditions or a downturn, i think is just preposterous at this point our view is growth is good, profitability is going to be high we never expected capx to pick

up in a meaningful way but that doesn't mean that profitability isn't had from tax cuts alone and the spending gives an oomph to the company even if the multiplier doesn't come through. i think all of this will have a payback in 2018, 2019, and 2020 but for most of 2018, i think it's in the bag. >> maybe the market agrees with you. nasdaq is positive krishna, thank you good to see you. >> thank you here's what's coming up on "power lunch." financials falling more than half of the excel left the financials in correction territory. what is behind the downturn and where do we go from here plus this retail box sharply lower on pace for its worst day since last august. you could say earnings were a mixed bag. get it that's your hint and it's been one of the hottest investment out there, outperforming the markets but 've showing signs of cracking. wegot the props for this

one. look at those props. you won't want to miss this. "power lunch" is back in two mr. elliot, what's your wifi password?

wifi? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. welcome back to "power lunch. we've got a news alert on trade. let's get to the white house >> reporter: melissa, a conversation just ended between the trade representative, robert lighthizer, and david ruben

stein of the carlisle group and they were talking about this delegation from the u.s. that is going to china this evening to try to work out a trade deal asked if he was optimistic about reaching an agreement on that deal, lighthizer said he is always hoping but not always hopeful. of course one thing that could resort out of this trip if they do not reach a deal is the implementation of the $50 billion or $150 billion in exports that could see tariffs levied on them, exports from china, that is, and asked whether that was still the case and how long lighthizer would wait after those talks to see if it were still necessary to put those tariffs in place, he is, we' -- we said, we'll see but after may 22nd, the u.s. trade representative would have the authority to do so the president prefers bilateral deals and importantly on nafta, which is still under negotiation, lighthizer says the ministers from canada and mexico will be back in washington next

monday to continue talks and that if they do not reach a deal in the next week or two, which lighthizer is optimistic they will, but if they don't, he said they'll be on thin ice trying to get a deal through congress because of the statutory time line that is required, saying that if they don't get that deal in the next week or two, that it would be the next congress that would vote on this deal and of course the composition of that congress is unclear. guys, back to you. >> that's why the calendar looms. thank you. financials have taken a hit of late with more than half of the financials etf, the xlf in correction territory or greater. over the last three months, the etf is down more than 9% so where do we go from here talked to jeff hart, principal with o'neill goldman-sachs is up 14%, bank of america down %, citi down 15%. interest rates are going higher so the banks were going to be better off what happened? >> yeah, your question earlier,

where do we go from here, i think where we go from here is up but i mean, there's some concerns out there that are certainly weighing on investors, and specifically financials, which you're right are down but the you look within financials there's a differentiation where you have regional banks at least up a few percentage points versus universal banks that kind of consumer finance type that are down quite a bit i think there's quite a few things going on, all of which i think will turn out okay and make this a buying opportunity one, there's concerns about the flattening yield curve and does that turn into an inverted yield curve and does that mean a recession is coming. i think that's a bit of a stretch to me. you know, flattening does not necessarily mean inversion we've never really seen a situation like we're seeing right now. rates are coming from zero on the short end and qe on the long end. >> tell me this. do we need to see the yield curve steepen for these financials to finally move >> steepening would help

a steepening yield curve would be nice to see and i think there is potential for that especially as the fed unwinds qe and actually borrows more. you could see a long-term rates going up some. but really, given what else we're seeing out there, i don't necessarily think we need it to steepen, just kind of stable -- steepen a little bit but i don't think we need to see a lot of steepening when you've still got really good credit quality, really good kind of what still looks like pretty solid economic growth there's a lot of other positives, i think, kind of sitting back there so, ideal scenario, love to see a much deeper curve but i don't think we need to see one, necessarily. >> what's wrong with goldman-sachs, jeff? >> well, one thing that's weighing on the gs and universal banks in general is the -- on the conference call, we got cautious commentary from some of the management teams i think there's a bit of concern about capital returns and this year's seat car for the big guys relative to the little guys, but i really think goldman-sachs here has become a show me story and i think they will show but we still need, i think, the

market still needs to buy into the trading myths last year was a function of last year and not a damage to the franchise. that they can actually see their balance sheet grow and i think that was an important thing we saw last quarter balance sheet growth really kicked in. historically, that's a cyclical kind of inflection point you need to see for goldman to do well so i think goldman's going to wind up having a good year, even though it's off to a rough start. >> we'll watch then. thanks, jeff >> good to be on we got to send it to tyler, who's ready to take a very hot ride >> you know, michelle, i had my valet, robert frank, has brought up my lamborghini here we're going to talk about this beautiful car here and this trans am we'll talk about what's happening in the car market these days, two cars that are surging in price and a leading expert to tell us why, right here on the first gorgeous day of spring, may, spring has sprung we'll be right back. as a control enthusiast,

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i really have no idea what i'm supposed to say here can you see that prompter? welcome back to "power lunch." the classic car market is in a tail spin, it says right here. the expensive models are falling, and the newer ones are more affordable ones are taking off. robert frank is here along with a special guest and a couple of lovely, lovely items to show >> it's really a tale of go markets in the classic car world and we are lucky enough to have the ceo of haggerty group with us thank you for joining us >> my pleasure >> so, overall, auctions of classic cars are down about 11% this year, but the top end, we see a lot of big cars, multimillion dollar ferraris, failing to sell. what's happening at the top? why is it weak >> well, i mean, the market has been so strong for so many years, many of the best examples

have already come to market at the auctions and all that sort of froth thooenesiness, many hao private sale and bitcoin and speculative real estate deals but the car market is actually ste steady at the top. the real story is at the more introductory level and in the middle range >> and i want to talk about these two cars, because these two cars, you think, for investors out there, wherever they are, these are good investments if you buy them now. why is that? tell us about each car >> look, every new car, when you buy new, it depreciates to some level. >> and the worst of them sort of go down and sort of disappear. but what distinguishes a collector car, it develops that sort of curve where it starts making its way back up to its purchase price and then goes up from there we call it the j curve >> and this one's got a good j curve? >> both of these cars -- >> it's a lamborghini. >> a lamborghini and a pontiac both of these have no place to go but up. both of them are highly

collectible. they tick all the boxes for what would make a good investment grade car and they're ready to go >> this is a lightly used 2008 lamborghini model. what would you expect this to go for? >> well, you know, these cars sold in the $300,000 range its value right now is about $225,000, which is not a rapid amount -- a huge amount of depreciation it's going to go up from here. >> ten years, what will this be worth? >> more than double. lamborghinis have been hot for the past few years the ones from "cannonball run" these are the first cars that had italian style but german engineering. >> what's the carry when you have to maintain -- maintenance every year, garage every year. what do you have to assume it's going to cost you to hold it >> well, it's not bad. i know a little bit about the insurance in this space so the insurance is a remarkably affordable here comes robert. but the deal with these cars is that this is an italian style car with german engineering so it works the maintenance is not that

complicated. all the bits and pieces work on it when he presses the button, it's going to start and he can drive away >> it's so beautiful go ahead >> not as easy to start as the newer one. >> hang on o one second. you can keep talking >> so, pontiac more entry level this is a $35,000 car. so, 2002 2002 and this is the last of the pontiac trans ams. >> really? >> yeah. 2002, they only made about 3,000 of these collector edition versions this is a privately owned car. kind of wild looking >> keys in it? >> it does >> come on trans am here. >> there we go >> we collide, it's on you, mister >> there we go >> there he got it i'm telling you. >> nice. >> so, two great cars going up in value and this is the new collector market modern stuff, post-2000.

>> so tell that to michelle. >> michelle, you're on your own. >> two awesome cars, watch them go >> be careful. you guys are going in the same direction. you break it, you buy it pottery barn rules i think i'd rather ride in that one. >> get this thing going or what. >> there you are wall street is bracing for apple, the tech git t anseto report after the bell. several red flags ahead of that report weal tell you to what you need to know next

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now yard time is our time. mr. elliot, what's your wiwifi?ssword? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. [ child offscreen ] hey! let's basement. and thanks to these xfi pods, the signal reaches down here, too. so sophie, i have an xfi password, and it's "daditude". simple. easy. awesome. xfinity. the future of awesome.

check of the markets here. we are well off session lows across the board and the dow has been down more than 350 points at the low now we're down by 152. nasdaq in the green, just about at session highs right now s&p 500 near its session highs intel, apple, microsoft leading the dow. let's get to sue for a cnbc news update >> thanks, melissa here's what's happening at this hour, everyone we begin with pennsylvania's attorney general, who says he wants a judge to reinstate involuntary manslaughter charges against five former penn state fraternity members who were arrested in a hazing case last year shapiro centered the judge's ruling and said a jury not a judge should make that decision. >> we are committed to holding

every responsible individual accountable for their actions in this tragedy, consistent with pennsylvania law and the evidence in this case. >> microsoft's latest windows 10 update has arrived for pcs and tablets. new features include timeline, which lets users resume projects where they left off across multiple devices and also contains a dictation service and the cdc says the number of illnesses from mosquitos, ticks and flea bites has triple since 2004 with more than 640,000 cases reported these include diseases like zika, west nile, and lyme disease. get out the bug spray. summer may never be the same >> thank you very much, sue. the oil market is closing for the day. let's go to jackie at the cnbc commodity desk jackie knows how to start a car. >> hi there, guys. well, crude prices giving back

some of their recent gains today. the session high was 68.90 market participants are calling for choppy trade until we know what's going to happen with the iran nuclear deal with those sanctions be are reimposed? u.s. stocks have come down about 20% since last year, so that inventory coming down, but also the opec cut of about 1.8 million barrels is firmly in place and venezuela production is also falling so if you take 500,000 barrels of iranian oil off the market, it would make a difference >> thank you, jackie well, apple set to report second quarter earnings after the bell as tstreet weighs demad for the iphone x shares right now are trading higher in an overall down market many wall street firms have cut their estimates ahead of the results. and the street getting it right? let's bring in rbc's amet. also with us, rico's editor in

chief. welcome to "power lunch," guys i will start with you with the notion that the bar has been lowered. to be exact, revenue estimates versus three months ago are down by about 7.5%. profit estimates are down 4% and you say apple will miss those lowered estimates. >> yeah. thanks for having us, by the way. you know, i do think what they will do is miss the street numbers because some of the estimates, half of them, are fairly stale but the number is at 35 million units, i think we're going to get north of that and more importantly, once you get past those numbers start to move off, people will start to focus on the cap allocation program, and the services i do think this should be the last set of number kets cuts we out of apple >> what does apple need to do on this call to get investors more excited? the old argument is there that apple itself provides a floor in

the stock because of the massive amounts of capital that it has that it could spend in deploi deployments buybacks and also it's a cheap stock but those are not good argumen arguments to own it. >> look at the big picture this is a company that's going to do $60 billion in revenue this yaerquarter. the iphone is still a hugely popular product. >> and it still trades at a discount to the s&p 500. do you close that gap? >> obviously it need to find the next big thing they're putting a lot of money back to shareholders and r&d could it be a car in a few years? who knows. i'm not even going to make something up right now that's foolish >> maybe they're just give everybody a really big fat dividend or they do that >> buy investors' love >> you know, listen, i do think a big capital allocation program is on deck but you know, what could

fundamentally change the narrative, because it's hard to move a business that's this big and grow it is i think we all need to get past a little bit of talking about the iphone boom/bust. i think that's the ship you need to see for the multiple set to improve in apple over time >> that's something they've argued forever, treat us as a software company, not a hardware company and nobody's bit yet, as melissa highlighted, the multiple is still at a discount to the overall market. >> yeah, i think the services thing is kind of a half story. i think it is a lot of revenue and it's growing fast, but it still depends on selling more iphones and the nice thing is that it's a circle it's a cycle where people who use the services tend to get more iphones and more macs and tvs and apple watches and other things apple sells so that's great. but i'm not one of those people who's marching on services is really the solutions >> or maybe it's the reverse and you know, people have the phones and the computers, et cetera, and they use those

and they buy services. but with an amazon echo in your home, maybe you're less likely to engage in those services because you have another way of accessing the internet without using an apple device. i mean, how important is it that apple gets the voice component of this right in order to preserve that growing services revenue plight >> you know, it's crucially important, i think, for them they can't lose the living room game, which they are behind the curve right now. but i think some of the content and getting back to a leadership position is probably a few more critical things they could try to solve from m&a perspective within the services portfolio that they have >> all right we're going to leave it there, guys thanks for your time amit and dan. >> thank you facebook ceo mark zuckerberg announcing just moments ago that they would be launching a dating app. watch. >> it's going to be in the facebook app but it's totally optional it's opt-in. if you want, you can make a

dating profile and i know a lot of you are going to have questions about this so i want to be clear that we have designed this with privacy and safety in mind from the beginning. >> he sounds excited that news sending shares of match group and iac, the majority owner, plunging midday. joining us now is brent, managing director and tech analyst. covers all three of these stocks, luckily and has a buy on all of them, facebook, match, and iac. is this a potential game-changer to have a competitor in facebook for match? >> yeah, it's the first real meaningful competitor, obviously, match has built a $1.5 billion franchise with mid 30% margins in their business with, you know, mid single digit -- high single digit users, many more free use rs so certainly this is a blow to the story in the short-term. long-term, it will be still unclear whether this is going to have an impact on the actual

usage of match in the tinder application. so, i think we've seen many social look alikes with snap and twitter, facebook and facebook's results recently, so you know, no question a headline are risk. the product is still not available yet and will still have to evaluate i think there's some great features inside the facebook application around dating that make a lot of sense. they mentioned if you're going to a concert or sporting event, to be able to meet up with similar people that have your similar interest level, so there's a clearly 2 billion people on the platform that can unlock this over a period of time that, again, our conversation with match users still, they have a strong affinity to the brand. >> they don't have any -- they haven't seen the product yet so that's to be seen. you point out in your note about match there's 500 million global -- you view the total market as 500 million total potential users, correct 7 million or so paid users for

match. so when you think about facebook entering the market, do you think of -- if you ran the analysis, let's say facebook is able to get 1% of match's users right now, what would that mean to the bottom line >> yeah, i mean, they just announced this as i'm sitting at the conference so we haven't the full numbers >> order of magnitude impact must mean what >> yeah, i think there's a downward pressure at this point, potentially, on users and pricing. depending how well facebook executes on this, is this a global launch, a u.s. launch so there's still a lot of questions that remain. i think clearly the stocks down 18% plus so that's already pricing a lot of this. >> we don't know if they're going to charge for it, right? >> mostly like will not pay for this this will probably be a free service for facebook users and so the question is, tinder has been rolling out for match higher end services which has seen tremendous uptick

we would note through the year, tinder remains in the top five applications on the app store, so you know, right now, we're not really showing the -- any deterioration. the markets obviously pricing in the business and it's going to have a material impact on their business >> brent >> stay tuned, we think. again, the market's big enough to support a couple vendors in the space. >> is it material enough to have an impact on facebook's business the stock has gone positive. itsome to have gone to the lows to the session as mark zuckerberg started to talk and when this news first broke, facebook didn't move all that much, even though it did punish match and iac almost instantly but now the stock has gone into positive territory, barely is this enough to move the needle for facebook? or did you hear something else today? >> i think for facebook, there's a number of positive announcements around -- beyond just dating, right they talked about oculus and virtual reality and messenger and a number of applications they're rolling out. video. what's app messaging there's a lot of things in the

queue. so remember, with the coming schedule, $50 billion in revenue, match's $1.5 billion. clearly there's a multibillion dollar opportunity in dating that facebook hasn't tapped into so i think this is incremental i don't think it's necessarily going to impact everyone materially in the space. so, at this point, i think mark did a good job of talking through the data concerns and i think they've reopened up the app portfolio so that the -- many developers can get back in. many of the developers are pretty happy with what's happening here at the developer conference >> got it. maybe that's what'shelped the sk today. >> i thought facebook for dating already? >> they do it to stalk their ex-boyfriends and their ex-girlfriends >> some people can check how they look. >> what you can check is whether someone is single or married >> status updates. >> when you go on tinder, one of the first rules of accepting a date on tinder is that you have

to have a facebook connection or you should have a first degree connection, a friend of a friend and you can see that on facebook so this just sort of takes out the middle man >> i'm waiting for amazon to launch its dating service. it's got a ton of information on our buying habits. match made in heaven >> for a company like facebook, they know your book preferences, your food preferences, everything i mean, really they know everything about your life >> it's true but facebook is supposed to be trying to get out of taking all your privacy, data, information. >> amazon, though. >> you wait about amazon >> you guys know a lot about this i know nothing coming up, tyson food president and ceo on taxes, tariff, trade and the changing taste of consumers and a new crypto cuen lerlyrrcyital backed by bacon. oscar meyer introducing bacoin m, $0.50 options contracts? $1.50 futures contracts?

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when you think of cryptocurrency, you probably think of bitcoin, not bacon. well, now there's bacoin this is a new crypto for bacon lovers and it is backed by oscar meyer. starting today, meyer is giving away limited amount of bacoin that fans can mine, track the value of, cash out for real packs of oscar meyer bacon

bacoin stands out because bacon lovers can boost the value by spreading the news via e-mail and twitter. the more they share, the greater bacoin is worth. >> what? >> i don't know. >> a i'm not really sure >> i don't know how this works >> it's a security or, i mean, i don't know what. >> who likes bacon that we know? who? >> brian sullivan. let's get over to brian at the milken institute in beverly hills. >> you're not wrong, tyler, but ubs it like, who likes bacon i might have had some recently perhaps. guys, thank you very much. we're here we're going to move from bacon to chicken, i guess, and speak with the ceo of the largest food company in the u.s., ceo of too tyson foods. any plans for a chick coin bit hen? >> no, bacon is one of our great products we have the right brand bacon.

>> you know what brings home the bacon? a shareholder return of 100% three years? >> yes >> total shareholder return more than double investors' money tyson foods. >> yeah. >> what have you done for us lately how strong do you think your company and your stock can be the next three years >> we have a great opportunity, huge tail wind everybody wants more protein protein has grown worldwide, 3% a year, and we are a fantastic protein company, great brands like jimmy dean, hill shire farm, ballpark, so we want to make cash on cash returns for our investors and keep that train running. >> do you worry about a trade war, tariffs on soybeans it goes into feed costs, i'm sure, and you sell a lot of meat to china >> yeah. we want trade to continue to flow so whether it's nafta or china, we want it to continue to flow the sunset provision in nafta, not a huge fan of that because people want certainty. and right now, we have uncertainty. >> what would that do to you what does the sunset provision in nafta -- we think about cars.

we don't think about food. what does it do to you >> it keeps the conversation going on endlessly every five years, you're talking about it again and again, and people want things to calm down. nafta, for us, is huge, because mexico is our third largest trading partner. canada is our fifth. so there's a lot of food that moves around that u.s. is certainly one of the best producers. >> your message to congress, then, or the president would be what >> do no harm. keep it flowing. we need to have open trade, china, as well as north america. >> do you fear -- if we do something more aggressive with nafta, do you think that mexico and/or canada would push back on the food side? we've already seen a bit of a milk battle. i know it sounds weird to say that, but it's true. soybeans, milk, you're kind of coming toward you. >> we're actually already seeing that mexico, because they're nervous about what's going to happen, we've seen some business go to brazil, away from u.s., and we don't want to see that the u.s. is a very strong

producer, agriculture is big for us and i would say for tyson, you know, for our journey, we have to make sure that that trade is flowing we're a $40 billion food company, about 10% of our sales are export, but it creates the room for us to continue to grow and expand the margins that we have >> tax reform. let's switch gears because there's been a pushback by a lot of people who have suggested stock buybacks are starting to creep up and the naysayersare saying, there you go, tax reform, they're going to buy back their own staff, they're not going to invest in capital spending, facilities, or worker pay. what is tyson going to do? >> investing in capital spending, worker pay, and facilities >> are you really? >> absolutely. it's about $300 million for us and for this year, and $100 million, we've plowed right back into our team members, $1,000 bonuses for all full-time employees, $500 for part-time employees. >> how did they react to that? again, there's critics who will say, why don't you raise their

pay long-term? why just do the $1,000 bonus thing? >> it's a bit of a windfall that we weren't expecting to we wanted to make sure we shared that with the team members but also we are investing that their future by investing in capx. the stronger we are, the betterr competition we have for team members and we use that wind to support us >> spending more on growing. >> absolutely. adding jobs, investing in automation and robotics, taking some of the jobs that team members do not want necessarily and moving them up the curve, but we'll be adding jobs for sure >> doubled investors money in three years, all in, appreciate it, guys, sadly, no plans for the chick coin it's not happening >> i'll spend chick coin on his buffalo chicken strips they sell out of the stores. they are so popular. love them. my son's favorite. >> they have trouble getting your buffalo chicken strips. >> they are so good.

we had this discussion last time >> we did. there you go i need a private truck for my son. i mean, he eats them every night, every night if he could good for you >> i speak for us all when i say, been there, done that i know you missed. i know you missed it >> we miss you, baby see you later. >> see you soon. tesla, from chicks to tesla, out with earnings tomorrow the stock in a bear market what investors are hoping to hear that could turn things around, and as we head out, the dow is 30 heat map, stocks making a big comeback from a 350 point drop, tech leading, intel, apple ahead of earnings, microsoft, cisco, the best performers more power to ya after this. every fire department every police department

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gina and matt, what is the chart setup ahead of earnings? >> it's interesting to see what happens. i mean, there's been a lot negative chatter about the stock in terms of cash bern, and, of course, supposed to be a r revolutionary company with their batte battery. they talk about low cost producer of cars, but as our research partners point out, the only way they get close to meeting their production numbers has been to add all this costs, hiring all these people and doubl doubled their work force there's problems you want to watch the 250 level. that was the low in 2017 and the low we saw just last month if we break below that level, that will be a big problem however, on the upside, we have to be careful. when the stock broke up to the upside in 2017, every time it pulled back, that $300 level provided nice support. it dipped below that last week,

but it is holding it again if it breaks -- the reason why i mention it, it's the highest short interest it's had. could get a short covering rally. >> just below 300. gina, how does it look to you? >> the short interest point is really what gives the stock the steel on this to the upside. i think a lot of the negative news is priced in. you have competition and high debt levels and rising costs, none of those are good they have to hit their production numbers if you see them hit their production numbers, you will get a short interest covering rally, but if they disappoint, it's already priced in. >> all about protection numbers, guys, thank you. tesla trading higher ahead of earnings tomorrow, and for m go to tradingnation.cnbc.com. check please is up next. >> and now a word from trading nation and our sponsor >> affecting your trading, look

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stock. >> look at the intraday charts, a bigger leg lower in the last few minutes. facebook went positive for a while, not as meaningful in revenue. >> ones to watch, afterpple hig as well. >> thank you for watching. >> closing bell starts right now. it's been a volatile day for stocks with one big exception, technology, which is on the rise >> i'm bob pisani on the floor of the new york stock exchange, what's to blame for the rally's pause? >> i'm steve leisman, something about stocks we have not seen in a long time. >> i'm josh lipton as apple is set to release its quarterly report, it's likely to move the stock. >> i'm kelly evans, those stories and big news on twitter and facebook and a full slate of earnings as the "closing bell" starts