we're back, time for final trades >> sisco, almost 18-year high. >> fls. >> twitter still in an uptrend >> i think it will be fine. >> thanks for watching "power" starts now. >> i'm melissa lee a billionaire summit warren buffett, charlie monger, bill gates, their takes on the stock market, apple, bit coin and more we're live in omaha. plus, disney's avengers goes from 0 to $1 billion in just 11 days is now the time for disney to bench espn and focus on the box office we'll debate that. and what a better way to start monday then with coffee and chocolate. starbucks and nestle joining forces the details straight ahead "power lunch" starts right now

welcome. i'm sara eisen stocks starting off the week higher right now, the dow is up about 150 points it's chip stocks leading the way. analysts get optimistic about its earnings due out later this week a couple big deals on this monday elliott management offering to buy athena health. that stock is soaring. more on this hour. and reports saying that could be announced as early as tomorrow >> welcome to "power lunch." here's what else is happening. cbs and charter communications reaching a carriage deal charter will now carry the cbs affiliate, show time, cbs sports network, terms not disclosed here fidelity fires 200 employees for misusing workplace benefits. according to "the wall street journal," the employees were accused of ordering computers or

fit bits and getting a 20% subsidy from the company and then canceling the order and vladimir putin promising economic reform today as he is sworn in now for a new term. he wants russia to be one of the top five economies in the world by the end of his six-year term. >> now to the newsmakers of the day. warren buffett wrapping up a weekend with 40,000 berkshire hathaway shareholders. becky quick spent the morning with him she joins us live from omaha >> it's great to see you guys today. one of the first things people always want to know when we talk to warren buffett is what he thinks about stocks, so we asked him. for months buffett's been signaling he didn't think stocks were a great place to be or at least it wasn't a great pricing for him if he was looking to buy entire companies he's got over $100 billion in cash on hand he's been sitting on this money, wishing he had some place better to put his money alas, he thinks most these big

deals he's been offered have been overprized by 15% to 20%. however, when it comes to individual investor, people who don't do this for a living, he thinks the stock market is actually a great place to be, even now, even given some of these valuations that's because in large part he still thinks that for individual investor, stocks are a much better place to be than it would be to, say, put your money in u.s. treasury bonds. >> now you have the situation, the federal reserve says they want inflation of 2% so they say they're going to try and devalue that bond by 2% a year in dollar terms it's almost always equities have been a better buy. if you're going to put away money over time when you're younger, you can buy stocks over a considerable period of time. you're not going to get the lows but you're not just going to buy at the highs if you want a cross section, well, like i say, it will turn

$10,000 into $51 million and you never have to look at a financial page again. >> just to go into a little more in depth in terms of what this means when he's talking about that 2.9% you get for the treasury if you were to buy a u.s. treasury for ten year, you get 2.9% back. so you are getting less than 1% a year in terms of your money actually growing that's why he says it's been such a bad deal. one of the issues weighing on the stock market recently is the whole idea of a potential trade war with china we know we have just seen our trade team come back from there, waiting to hear exactly what happens with that. a lot of investors think things have been ratcheting up and we could get into tricky territory but don't count buffett into that camp of people who are concerned about it. >> i don't think we will have trade wars because of significance, we will have trade movements, but in terms of the old-fashioned thought about trade war, where you just keep piling it on, i don't think that

happens. it's counter to the interest of us, it's count to the interests of china, it's counter to the interest of every country in the world. nor would china, nor rest of the world would have a well being they have without a lot of trade. >> as you know, we also spoke a little later in the morning with both charlie monger and bill gates. charlie monger agrees with buffett when it comes to this potential trade war. he thinks the two nations will work things out. gates was a little -- he agreed long term the same issues will happen that's in large part because the gates foundation has done so much in terms of building a relationship with china. he thinks that the relationship between china and the u.s. is the most important one all three of them echoed that. what i should point out is when it comes to their individual investment, charlie monger has been very positive about china and the opportunity for investor in stocks there. his own family has invested lots of money in china. and has done very well for him over that period of time he continues to think china's a

great place for investors. bell gates says he has some investment, some of the family money there as well. i'll send it back to you >> becky, i was just interested in the fact that buffett doubled down on iish comments on apple. i was wondering if you got any sense they were going to buy more >> yes, i didn't get a great sense of that this morning but based on some of the things they said over the weekend -- actually, think buffett commented on this as well. what they've said, buffett even said he would love to see people sell shares of apple, but the stocks sell down because he would buy more in that scenario. i don't think looking at the action we've seen in the stock since friday, that they're potentially buying at this point. apple closed at an all-time high, highest level since that stock opened for its ipo back in

1980 it's trading higher this morning. that's the big thing when the stock sells off, that's when i would look for berkshire potentially be buying in they are very positive on the stock. but that's all going to be con tinga contingent on pricing. >> i think of a couple of things -- for a good long time, plenty of time to draw conclusions about what separates him as an investor from others one of them is he really does emphasize value. as you said at the top of your report he's had lots of deals come to him but he didn't like the value. the other thing that stood out is when he said, you just referenced it, i'd love to own all of apple if i could. that's how he buys companies that's how he buys stocks. he buys stocks where he would love to own the entire company if he were to distill his investing philosophy into a few phrases that you've learned over the year what would it be? >> you know, he says this a lot.

but wait for your pitch. both charlie monger and warren buffett will tell you the great part about berkshire hathaway is they don't have to act and they're able to sit back and take their time and wait for the fat pitch. if they don't think they're getting the right price, they're not going to swing the times that they do swing, or when they swing and hit for the fences, it's when they think it is a sure thing. when they think they can't miss. you know, they don't have the situation where you throw three strikes by them and they're out. they have a situation where they can wait and wait and wait and sometimes waiting and doing nothing is the hardest thing to do when it comes to investing. i think that shows off in berkshire's record. >> do you think he's waiting on an airline the last time you talked to him back in january i think it was it really spurred some thought that he would buy an entire airline and that even sur fashioned in a lot of airline analysts notes that perhaps there's a bid underneath some of these airlines because he might be in the market for buying an entire company is that still, you know, out there as a possibility

>> you know, i think it could be but, again, it would all be about price. the other thing i would note with that, you know, i've never talked with warren about whether they'd be interested in buying an entire airline. i don't know what he'd be thinking on it i know they own pretty substantial stakes in all the major airlines i believe -- i think that they probably have to divest in all the other ones so it's a little more complicated not that it couldn't happen. but i think the price on the airline that he did buy would have to be so compelling that it would make it worth selling the other stakes it's a little more complicated than if he were just plowing into one stock i'm kind of making this up on the fly so to speak but that's kind of where -- if i got pinned down on it, that's what i would assume he's thinking, i'm not sure. >> all right, becky, thank you very much. becky quick from omaha the dow currently up more than 130 points. after closing more than 330

points higher on friday. are we seeing a market reboot? what does that mean for investors? let's bring in scott wren, wells fargo investment institute and our guest, the global chief investment strategist at russell investments. good to see you both let me begin by asking, do you think the market is at sort of a reboot point here and that some of the unpleasantness we've had over the past couple of months may be more behind us than in front of us? >> well, it's been a little unpleasant but midpoint of our target range is $28.50 so we think the market has some more upside here. certainly becky talked about the fast pitch and, you know, we certainly had a fat pitch in early 2016 i think the brexit thing went a little too quickly to really be a fat pitch. up here, we have traded off the 200-day moving average literally, tyler, about seven or

eight times here and as we move into the latter portions of this cycle, i mean, those are fat pitches. we've been trying to get our clients to step in here. because retail clients, you know, they still have quite a bit of cash. they really want to invest in the stock market you do have to be patient because you are going to get the fat pitch. we've repeatedly had them here lately at least relative to our year-in target, there's been some big opportunities. >> scott sees another 200 points of gain in the s&p 500 before year end that's maybe a little less than 10% from current levels. how about you? you say that you expect head winds to start to blow a little firmer as we get into the latter part of the year what will the nature of those head winds be? where will they come from? >> well, i think, frankly, i've been a little bemused by the conversation that people have been having around first quarter earnings is why aren't stocks going up more aggressively with great earnings in the first

quarter, and the answer is and was and will be because u.s. stocks are really expensive. when we look outside the united states, we see better valuations we've had some head winds in those markets as well. but you've seen actually europe is off to a really good quarter. companies in europe that are actually beating on the earnings side are getting rewarded. the stock market as whole is up about 5% emerging markets held up very well in the first quarter. going through a little rough patch here because of the dollar bad for emerging markets we think the dollar strengthens largely over so yes, we always thought u.s. markets would offer mediocre returns. we thought the opportunities were better outside the united states and have invested that way. >> when you say the u.s. stocks are expensive, right now, we're trading, what, 16-plus forward p/e, isn't that still below the historical forward p/e of almost 17 at this point so is it relative to the historical average that u.s. stocks are more expensive than

overseas stocks? >> look, we take the cyclically adjusted p/e measurement seriously because we think it's predidictive of five to seven-ya expectations much lower than it is outside the united states, that's one. price to sales ratios, those are very elevated today. of the p/e ratios that are more in line because of their record profitability of corporations, we're not sure that's going to be maintained as one you either get a cyclical rolloff or inflationary pressure builds on the wage side of the equation. >> gentlemen, thank you. scott, we'll give you a bigger bite at the apple next time, we appreciate it. >> i hope so, thanks >> thanks very much. we have a news alert on walmart. courtney raggen has those details. >> walmart taking another step in the fight against opoid abuse. a lining with the recommendations from the center for disease control, within the next 60 days, walmart and sams club pharmacies will restrict

the initial acute opoid s subscriptisu subscriptions with nmore than a seven-day supply beginning by the beginning of 2020, walmart and sam's club will require e-prescriptions for controlled substance because the retailer says those are much harder to alter or copy. plus, they're electronically trackable, sarah, back over to you. >> all right, thank you. bidding under way online for some smaller items in the rockefeller state auction. we'll show you the hot sellers and the price of the rockefeller premium straight ahead but next, athena health soaring. reporting elliott management is making an all cash offer for that company he's got some new details for us now i'm thinking...i'd like to retire early. let's talk about this when we meet next week. edward jones came to manage a trillion dollars in assets under care by focusing our mind on whatever's on yours.

athena health surging following reports of an all cash offer for the health care company. broke the story earlier and joins us now what can you tell us >> we told people about it about 9:15 and about 20 minutes later elliott came out with a long letter detailing its $160 a share all cash offer for athena. it's owned the stock for over a year now it was about a year ago they detailed the 9.2% position they'd hoped things would change with elliott, about activism, perhaps the threat of putting people on the board, trying to get management to see things

their way. they're frustrate add year later. so they have made the bid. now, will it go anywhere well, we'll see. for its part, athena is going to get its board together and give us an indication as to their belief in terms of whether or not it's something they want to pursue, which of course is what elliott was hoping, or will they conceivably put the company up for sale or, well, will they simply say no? very concentrated position you got another six shareholders that owned a combined 50% of the company so they'll be hearing from them. i'm sure elliott's spoken to some of them the decision to a certain extent will be made by them as specific to this bid, as i said, 166.9 billion. represents about a 29% premium elliott, they don't have the financing fully committed, but they basically indicate it's there if they want it. all the banks they've spoken to indicate they'd be willing to provide it they've lined up the equity, not just for themselves but also a

few partners as well to contribute that would be more than a $2 million equity check towards this roughly $7 billion leverage buyout. they want to talk to them. they want board discussions to follow when you look at the price that 160 represents, i mean, 35 times price to earnings, 17 1/2 times ebita, pretty high price, it would seem their frustration, they simply feel like they haven't listened to them at all when it comes to executing in what they believe is an extremely strong potential business they say the stock price under performance is the direct result they say even a cursory review of the company's public track record leads to the conclusion that business and its shareholders have been depriched deprived of significant value. we'll see where it goes from here, but a significant shot

there elliott is taking. they have done these deals in the past they have bought a couple of companies they own significant stakes in. >> i was curious what you think of the price now it's about 145 nowhere near that 160 level. >> i think people are taking a wait and see approach right now. certainly you want to see that there's a level of engagement. once the company were to come out and say we've put ourselves up for sale, we're reviewing strategic alternatives they could conceivably simply say no and it's not clear what other potential bidders may be out there. not to mention, we're in a broader market dealing with brisk arbitrage, where there is not as much capital. so you see larger spreads between the offer price, even though this one is not a deal yet, and where the stock trades. >> all right, david. >> to be continued a pair of diamond cuff links that jake gatsby himself would have envied, they're available

in an online auction bidder beware, they're getting more expensive by the minute we'll show you how the rockefeller name is sending bids soaring. plus, lava continues to spread from a series of volcanic eruptions on the big island of hawaii this scientist doesn't believe in luck. she believes in research. it can take more than 10 years to develop a single medication. and only 1 in 10,000 ever make it to market. but what if ai could find connections faster. to help this researcher discover new treatments. that's why she's working with watson. it's a smart way to find new hope, which really can't wait. ♪ ♪ there's nothing more important than your health. so if you're on medicare or will be soon, you may want more than parts a and b

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items, collectibles from the personal collection of david and peggy rockefeller go under the auctioneer's hammer this week. the online bidding on smaller items like these martini glass diamond cuff links has already gone through the roof. there they are no, that's not the cuff links. that's the salt shaker robert frank has been following this auction since it was announced. i got to go and share his day there. he joins us now. robert, how's it going >> it's going so well. i think you have the midas touch. it's expected to be the single largest. the bidding has started for the online sales the smaller items like jewelry and fine china prices are already going way past the estimates those cuff links we saw a couple weeks ago, they were estimated 400 to 600

they're already at $6,000 with four days to go so those are going to go even higher. this was my favorite remember, the money clip, this was from lawrence rockefeller, they were estimated at 800 to 1,200. they are already at $24,000. for the money clip and finally, you want a deck of cards that the rockefeller played with? well, a deck of cards was estimated at $100. they are already at $4,800 the online sales passed its total estimate already, only day three or four here, at $640,000. we still have a lot to go. they've had 40,000 -- 45,000 people visit the auction site already. bids are coming in from 46 countries. that tells you the value of that rockefeller name the entire collection of the collection expected to fetch over 500 million but many predict it could go to 1 billion, especially if some of

these premiums stay up. >> there's really no other way to describe it, other than a rockefeller premium. when you see the name attached with it and you've got a story where the providence of the item is so clearly and perfectly handled, you realize why it's going up as well as it did we don't find out about the picnic basket set -- >> which is what you had your eye on. >> which is what i loved it was supposed to be, what was it, robert >> 5,000 to 10,000 estimated people have been going nuts over that on social media something like 30,000 people expected to visit this exhibit and the picnic is very popular >> it's very popular >> every single fork and every single knife seems to be there you think over time you'd lose something. >> you'd lose it. >> the staff makes sure it's all in place >> i'm not sure those pictures do it justice. my wife went and visited it and she said, boy, that thing was a lot bigger in person than it

appears to be there. >> it's the size of a park bench basically. >> oh, wow >> is the size of the thing. what a lot of people want here is just owning a piece of the rockefellers, owning something you can have in your house and tell your friends the rockefellers own this, even if it's $10,000, $15,000 -- >> that's a story. >> it's a good story. >> it's a premium for sure the art, the big art sells tomorrow night >> t the pea casio, the art is tomorrow night. up nearly 14% in just the past month what is pushing oil higher what impact could it have? imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com

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hello, everyone, i'm sue here herera approximate lly 8,000 troops frm the u.s. and philippines kicked

off annual military exercises. soldiers from two countries will conduct amphibious landing exercises as well. spain rescuing 476 my grants off its coast this weekend as they were attempting the perilous crossing from african shores the migrants were pulled from 15 small boats. no reported casualties luckily the iconic 70s band from sweden abba reunited recentlyt record new music for the first time in 35 years band member bjorn uvalas spoke about it at the opening of the extension of the abba museum in stockholm today. >> i think we were always close. there are strong bonds between us because of everything we've gone through and especially that you and i are talking about this now, which we never expected back in '82. we thought, you know, we'd sink into on oblivion, but here we a.

when we stood here, the four of us, it was like yesterday. >> lots of people can't wait for that release melissa, back to you. >> all right, thank you very much markets are moving higher across the board at this hour. the dow jones industrials up by 156 points s&p up by 14. energy and tech are your sector leaders. consumer staples, intel, com, are the laggers on the day. gas prices rising around the country. up to $2.81. that is 46 cents higher than last year at this time and up 15 cents this just the past month californians, well, you're paying the most. average there is above $3.60 a gallon >> so that increase is in part due to rising crude prices hitting its highest level in 3 1/2 years. brent crude hitting new highs as well what does $70 oil actually mean

for the u.s. economy and why are energy prices spiking so much? helena croft is back with us, rbc capital markets, welcome. >> thank you for having me. >> tyler went through the gas prices what's the working pain point right now for americans in terms of gas prices and how it could ultimately hurt the economy? >> i think president trump is worried about the $3 a barrel. i think we saw a couple weeks ago president trump was out there with a very strong tweet criticizing opec i think he was concerned by reports opec and potentially saudi arabia was prepared to let oil prices go to $100 a barrel so i think they are concerned about higher prices because of the consumer, negating the effects of the tax cut for a key constituency for president trump. >> also, isn't president trump's threat to withdraw from the iranian nuclear pact was driving prices up? >> i think that's a key contributor to this. opec has been successful in draining inventories but this iran question this week

has some big implications for the market if we pull out of the nuclear deal, we'll probably move higher in prices and in the back half of the year, we'll start to see iranian oil roll off the market. >> so how many dollars per barrel is there in a premium in terms of pulling out of the iran deal and how much can we expect if the president said we are officially out >> i think right now we have several dollars in the premium based on iran. venezuelan production is dropping the terms of how we pull out if we pull out sectionally say on friday we're out. and all the signs are coming back by the end of the year. i think we move higher if he says sanctions are back but we're going to give it a six-month grace period, pushing those reductions, i think it's a neutral event. the key thing to watch though is how will the iranians react. if they say we're going to stay in the deal to keep the europeans happy, it's more neutral. if hard-liners in iran prevail

and say we're going to restart our nuclear program, i think we're in a higher price. >> i think that's a really good question i think that's the biggest underappreciated risk from pulling out. if the iranians resume nuclear activities, the backdrop of what's going on in yemen, in syria, that's when you start to talk about pushing through that $80 a barrel on brent significantly. >> let's talk a little bit about sanctions. we were not the only party to that deal. there were five other major players involved there if we were to reimpose sanction, how toothy would they be how much will those other countries go a long with them. >> i think the u.s. does have a big stick when you look at the sanctions. we can effectively say to a foreign corporate, we can lock you out of u.s. capital markets if you go ahead and or if you don't make reductions. i think that will cause the europeans to slowly reduce what happened in 2012 was there was a european oil embargo so we

lost 600,000 barrels from europe fairly quickly we're not going to lose that volume that fast from europe but i still think iranian barrels will come off the market. >> is there a ceiling on how hoyle prices go? i asked you in the context of is there a pain point here in the u.s. where the president will say we're releasing from the spr? >> that's an issue with the spr. we have bottlenecks in the u.s. system an spr release could bring prices down temporarily but because of these bottlenecks it's not as effective. i think at a certain point if you get past 80, 85, 90, opec may step in. what i think is important is there have been signals the saudis are ready to let the price go higher. >> are we in a new normal now of prices over the next 18 months >> i mean, do we see prices, you know, do we think the 70, 75, for wtis potentially the new normal yes, i do think so what we want to watch on the downside is any talk again of a trade war, think that would be a

very bearish head wind for oil >> would up demand >> that's the big concern. demand has been very strong this year so the trade war is something that is bearish for oil. on the upside, you do want to watch what happens with yemen. you do want to watch any signs the iranians may be restarting their nuclear program. >> gives us a lot to watch thank you. always good to talk to you all right, volcanic eruptions on the big island of hawaii have destroyed 26 homes and forced hundreds to evacuate. this video shows a lava floe moving across a public road in pohoa, hawaii, completely destroying a car they say they're not making any more real estate in the world, well, they are there it is. land being formed. nbc news correspondent steve patterson is in hawaii with more steve. >> tyler, right now, big island remains in a state of emergency and for good reason, as you mentioned, those lava floe,

flowing through the community. they spout out from fissures that open up, literally just splits in the ground where lava shoots up hundreds of feet high. we've seen it several times now. there's been ten of those fis r fissures all clustered together in this residential area called leilani estates. those evacuation orders in place, about 1,800 people pushed out of their homes they were allowed to collect their belongings and medical supplies yesterday some realizing that their home had been destroyed from all that volcanic active. no time line, no indication of when this is going to end. it accompanies earthquakes we've had more than about 500 of them rattle this island including a 6.9 on friday, the large nest in nearly 40 years. there's this toxic gas, sulfur dioxide. crews are really worried about that if you have respiratory issues, lung issues, if you're very young or very old, that can be a

deadly substance so right now the national guard remains in place they're trying to keep people out of that area no telling if another fissure could suddenly open up, spew more lava out and you could have a very bad situation it's what it's been like now for several days it will remain that way as this continues, this state of emergency here on the big island, tyler. >> steve, thank you very much, steve patterson. >> crazy images. all right, to the bond market now rick santelli is tracking the action as always >> if you look at intraday of 10, doesn't look like a whole lot of action. we did dip in yields, rise in price a bit. 295, unchanged the 25th of april is when we set our high yield of the year, 303. same as the last trading day of the year in 2013 you go to 2011 to find above that the neat thing is these long stretches of tight closes. this is going to be the eighth session, eight sessions, that we're going to settle between

295 and 298 since that april 25th high. if you open up to february, you can see, we had that one stretch in the '80s. the reason i bring it up, we're not moving much. when we do move, it's mostly to the upside of yields and we ignore all the other issues like stocks when they get soft that normally used to give us a bid, pushing rates down the dollar index which, by the way, historically, likes firm rates. you can see on the weekly chart, it's not tearing up recordings but it's moving up and it's taking higher highs along with it as we hover at the best levels since the end of december melissa, lee, back to you. >> thank you avengers infinity war is still red hot at the box office. new entries on deck. with so many blockbuster franchises, is it time for disney to spin off underperforming espn we'll debate that straight ahead on "power lunch.

disney is heading into its earnings report with two massive blockbusters one topping global records the other off to a massive start. a look at disney's record run. hi, julia. >> tyler, avengers infinity war didn't just have the biggest opening of all time, it's now topped $1 billion in global ticket sales faster than any other movie. in just 11 days. this is all the more impressive because it doesn't open in china until this coming weekend. and infinity war is one of five minutes to ever hit $100 million in its second weekend. brought in over $112 million in north america alone this past weekend. this follows the record breaking success of another marvel film, black panther, which has now brought in nearly $1.4 billion worldwide. this gives disney 32% of all

tickets sold in north america this year, with only three new releases since january disney is poised to continue its box office reign with "solo. a "star wars" story. its early ticket sales are twice as strong as "black panthers." i'm sure we'll hear more about the potential impact of this blockbusters across disney's divisions when the media giant reports earnings after the bell tomorrow, guys >> all right, julia, thanks. want you to stick with us. disney may be dominating the box office, but with the espn subscribers sinking lower and lower, is now the best time for disney to cut the cord with the network? let's bring in the television and media writer for the "l.a. times. it's easy for us to say that right now, but there are of course certain periods within studio's histories where the pipeline isn't that great, and revenues from other sources, you know, other areas of the business really help smooth things out when there are some

box office misses. right now, we're in a strong period for disney. is it easy to say we're going to lop off espn >> i don't think so at all i don't think that's their intention. espn is still one of the great television brands. and what's really important for it and what positions it better than other television networks for the future is that it's live content. going forward, live content is what's going to thrive on what we call linear television. television that people turn on and just watch scripted tv is something that the public knows we can watch it when we want to watch it, when we feel like watching it, toido have to show up at 8:00 on wednesday. every generation is trained now to understand that they have control of the time period of their favorite drama or comedy you want to watch the big game, you want to hear the discussion, you got to be there, espn still has that >> julia, are we getting a good sense from management what the

road map is for the recovery of espn i ask, i mean, we got some pretty positive data points, disney and twitter tying up. is that going to be enough to stave off investor concerns? >> well, we're going to hear a lot more about this tomorrow, melissa, but i also think it's worth noting that disney has this direct to consumer espn service that it just launched a couple of weeks ago. so it's still a very new service that i don't expect any -- certainly any financial impact from this service. i think we're going to hear a little more about how disney's trying to go direct to consumer and figure out different services and products they can sell so i think that it has a multiplatform approach for espn. and it has a new espn chief in there. his background is really in this interactive space. so it will be interesting to see what we learn from them and as soon as we get those first numbers, the first indication of how the espn direct to consumer app is going, i think that will help us understand the bigger picture. >> will we get any of those

indications tomorrow obviously the cfo will be asked about it. >> if the numbers are good, you'll hear about it. >> it's going to be something they'll certainly be asked about. i think directionally we may get some insight into what they've learned in this process so far i think one thing that's really different about this espn direct to consumer product is that disney has not said they're lunching it as a final product this is an experiment thing where they're going to continue to add to it, they're going to change the pricing, they're going to offer more options over the next few years so disney's open and it will be interesting to see what they're learning from the very early stages of this don't forget that movies such as black panther and avenger, all of that success is going to boost the value of disney's direct to consumer disney branded app that's launching in fall of 2019 that related content is going to be on the app. >> the movie pipeline is for

future is so great for this launch. >> it's down 9% over the last 12 months i wonder why disney is not getting credit for having blockbuster after blockbuster at the office. >> i think the market, in fact, the analysts really overreact to the problems espn has had. >> it could also be, julian, you would know better, the overhang from the potential fox deal. we don't have resolution on that the takeover panel ruled if they want those assets, they have to bid for the entire thing. >> there's a lot of questions about what's going to happen with sky because of course comcast, cnbc's parent company, did go in and put in a higher offer for sky than what fox has alreadied for the rest of sky. what happens next with sky really depends on what disney wants to do, how much more disney's going to pay via fox for the rest of sky. so there are a lot of remaining questions. but we could really, you know, look at what -- disney's likely

to end up with some piece of fox and we can look at what this combine behemoth will look like and imagine sort of how much power disney/fox would have from a negotiating standpoint there are still big questions about the future of that deal. but also with the tv bundle, what it's going to look like. >> thank you for joining us. nice to see you. we've got a news alert here on uber. deirdra debosa >> we have a new statement from uber in response to the deadly accident in march involving one of its autonomous vehicles that struck and killed a pes des train. the preliminary conclusion will be part of a national transportation safety report for now uber says, quote, we're actively cooperating with the ntsb in their investigation. out of respect for that process and the trust we've built with ntsb, we can't comment on the specifics of the incident.

in the meantime, we have initiated a top to bottom safety review of our self-driving vehicles program and we have brought on former ntsb chair christopher hart to advise us on our overall safety culture our review is looking at everything from the processes, for vehicle operators and we hope to have more to say soon now, this statement was included in a report from the information, citing sources that said that uber's preliminary report found that the accident was likely caused by software that was set to ignore objects on the road. something that autonomous vehicles, not just at uber but at waymo and others detect called false positives or objects in their path that wouldn't be a problem for the vehicle, things like plastic bags that float on to the road uber's not commenting beyond that >> thank you very much nestle inking a more than $4 million deal with starbucks today, an agreement that could upend the coffee business around the world. we'll tell you what it means for

both companies because, when you really, really want to be there, but you can't. 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- and see it through-with digital.

mendelez spending $500 billion on cookies. they already own oreo and chips

ahoy, known for its chewy chocolate chip cookies great story behind tate's. it was started by a woman who was only 21at the time and she had begun selling cookies when she was even younger than that tyler, you've got some history and reporting on that. >> we did a story on king and tate's back in 2011 for how i made my millions at the time, what's really interesting here, is that she began selling these cookies and i know who makes really good chocolate chip cookies, by the way, and it will be our next guest in a minute. but she began selling them at her father's farm stand on long island and she literally began as a little girl, doing this, and she is selling this business now for $500 million back in 2011, i believe she said that their run rate was about $10 million in sales it must be a lot bigger than that today, seven years later, given the distribution they have, to command $500 million from mondelez. >> if we put you up to a taste

test, tate's or kate's >> i know that kate rogers makes a really kick ass good chocolate chip cookie. >> that is like the only thing i can make, by the way >> i will tell you, they are really good so i'm going go with this kate, not the other kate. >> mondelez asked me if i wanted to be bought out but i'm focusing on my reporting right now. >> i'd go there. >> on to the next deal swiss food giant nestle inking a massive deal with starbucks, t worth over $7 billion in cash. kate rogers, maker of great chocolate chip cookies, apparently, joins with us a closer look. >> my mom will be so proud of all this for star lucbucks this is about brand recognition. it will allow nestle to sell starbucks products after the initial $7.1 billion, nestle will pay royalties to starbucks and take on 500 starbucks employees who work in consumer packaged goods.

starbucks said this should impact earnings by 2021 and kevin johnson said the deal increases the $15 billion the company has already committed to return to its shareholders to $20 billion over the next three years via dividends and buybacks it will also bring starbucks to nespresso platforms around the world. there are more households in the install base of nespresso than all of keurig >> it addresses one key weakness we've had historically and that is in the u.s., coffee market. we were kind of late and i think this will allow us to catch up in retail and food service >> the deal also comes at a time when starbucks has seen slow sales growth so this could allow them to focus on comps and btid had a note this morning that said dunkin donuts research says when consumers purchase these goods in stores, they're

twice as likely to visit a physical retail store and then buy starbucks or whatever it may be they're like, why are they doing this this could be the reason >> all right, kate, thank you. bring some cookies next time all right, good. warren buffett calls crypto currency rat poison. we'll bring you the read from the brains behind berkshire hathaway that is ahead on "power lunch.

good afternoon, everybody. i'm tyler mathisen and here is what the on the menu for hour number two of "power lunch" for a monday the bulls regaining some control of the market but a lot of technical and emotional damage has been done. what will it take to repair that damage plus, the big bitcoin battle charlie says it's worthless and warren buffett calls it rat poison squared are they right or are they missing something? and sharing the driverless road we're going to speak with a company that's bringing autonomous vehicles to the ride sharing economy. that and more on "power lunch" as hour number two begins right now.

and welcome to "power lunch. i'm melissa lee. stocks in the green but off session highs for the day. the dow and s&p are now up for the third straight day we've got a 0.75% gain for the dow jones industrial average right now. oil crossing $70 for the first time since 2014. range resources, marathon oil, and hess are the leaders there your dow leaders, caterpillar, exxon, and boeing. some names hitting all-time highs today, apple, visa, f 5 and phillips 66 and a pretty good day for the semi stocks, nvidia, and a skpd are rallying. churchill downstairs reporting that wagering on the kentucky derby this week was up 8% from last year to $225.7 million consumer confidence in housing jumping to the highest level on record last month. the six -- of the six components, only the share of those who think it's a good time

to buy actually fell and a new s.e.c. filing, tesla says it will continually evaluate capital expenditure needs and may raise additional capital to fund the growth of the business this, of course, comes after ceo elon musk said last week he had intention of raising capital >> thank you very much, sarah. we begin with the rising markets of this day, at least. bob and mike are at the new york stock exchange and you're saying this correction we've been in, this grinding period, lasting longer than most routine pullbacks and you say this may be now near a make or break moment explain. >> yeah, we could with approaching something like that. this is the 60th day since the market set that low. typically, and a lot of people quoted this research, back when we first fell off a cliff, when you have a sharp drop off an a all-time high, people say it's recouped relatively quickly. it doesn't necessarily work out that way in this case.

i do think because the market is getting pinched, its seems as if it has to make a decision here and what we've seen the last couple weeks is marginally encouraging, which is that we've kind of maintained this floor level on the trading range i think managed to sort of say, look, volatility's been drained away, sentiment is more subdued. i think i hayou have a lot of ingredients to make headway. we're running up against that trend line coming down from the high so we'll see if it can achieve that >> the dow has moved 500 points since the thursday close that's how important the jobs report, because the jobs report changed the conversation the bulls were screaming, wamita minute, we had global economic growth, not global economic slowdown but the bears were winning that argument. they said, look, the fed's keeping inflation within its 2% range and yet everyone was now screaming inflation may be out of control so the bulls have got a lot to prove and the friday numbers, the jobs report, kind of hit them right where they needed to hit, right where they could counter some of the

arguments at this point, and i think you're right, you've got -- you have a chance, if we get into the 2680s, that's when you start to break that trend line where you have the series of lower lows that you saw >> i think, just to build up what bob said, friday's reaction to that exposed the fact that investors are very sensitive to any -- that this cycle, that the sand is falling through the hourglass faster than you want it to see in terms of how long the cycle can last and that number, noninflationary growth, was exactly what the market was willing to welcome at that point. >> all right, gentlemen, thank you. warren buffett joining cnbc earlier today, making his case for why equities are a better bet than bonds >> now you have a situation, the federal reserve says they want inflation of 2%, so they say they're going to try and devalue that bond by 2% a year in the dollar terms, and it's almost

always equities have been a better buy and certainly if you're going to put away money over time, when you're younger, if you buy stocks over a considerable period of time, you're not going to get the lows but you're not going to just buy at the highs and there will be a cross section, well, like i say, it will turn $10,000 into $51 million and you never have had to look at a financial page again. >> is he right let's bring in bill, partner and chief market strategist with bell curve trading and the founder and president of jewel financial. welcome, gentlemen quinn, is there a point at which we're mirroring where the ten-year yield, for instance, crosses crosses above 3% or at some level where that equation changes, where stocks aren't a better bet long-term over bonds? >> i think it's all comes down to time frame, and i think in the current environment, there's no question that stocks are pressured because of that. but i just love warren buffett's philosophy, you know, you buy them, tuck them away, and i got to tell you, this, as our guest

previously was talking about or mike from the floor was talking about, yes, the fed induced numbers and the rally that kind of gained some fire on friday, was great, but this entire move that we're seeing, and we're calling it the buffett bounce because it was tepid and we were on the precipice of decline until becky reported that buffett was buying 75 million shares of apple. when others are panicking, that's when it's time to go in and buy and right now i think there are still some great opportunities. >> you buying into the buffett bounce, bill >> well, i kind of go along with what mike said clearly, there's an intermediate turn in the market i talked about this on the show on february 6 th right when the selling started. i said at a minimum you're going to see the equities fop otop ou at least a couple of months months now this question is, is it

morphing into something bigger, a longer term top, is the whole march 2009 rally beginning to roll over. to me, that's the single most important question in all the markets and i still think it's premature to say that. i think you have to give the trend the benefit of the doubt but on the other side of the coin, the warning signs are getting more and more visible. nasdaq 100, one of the key drivers of the rally, that's basically reached its target from the march 2009 low so you're going to lose that driver moving forward the s&p, just from the january highs, you're starting to see more and more stocks sold at lower and lower levels the dow's ina lbility to get bak above 25,000, i talked about that what's the high been since april 5th? 24858. every time the dow gets close to 25,000, it gets smacked down i think another risk asset is going to begin to put a top in here and that's crude oil. i sat in the same exact seat almost a year ago today, crude

was trading $45, $46 a barrel. i said a fair price is $60, the upper end of the range is $08 to $90. everybody on cnbc futures now said i was crazy fast forward a year, crude is trading over $70 a barrel. the next move is going to be down, not up, that's going to take some of the wind out of the energy sector. you put it all together, i don't think you can be dismissive of what's happened over the last several months you know, i agree with mike. we're at an inflection point but that doesn't mean the market's necessarily going to go higher the resolution to this absolutely could be to the downside >> quint, you want to react to that and make a counterargument if you're so inclined >> yeah. absolutely let me throw my technical hat ochblt y on you just had the biggest stock in the entire market, the most influential stock in definitely the nasdaq market break out to new all-time highs we call that bloue sky territory so i give the bulls the upper

hand to drag the market. s&p gets above that average you're going to have significant reactionary buys pushing this market higher. i think people have gotten too negative and when we did not break those lows last week, the snap back ensued and i think we're going to continue to see that watch apple, though. if apple falls, and gives that breakout back, then yes, i would agree with our other guest, that this market is dangerous but that's the clear signal, in my mind, that the bulls right now have the ball. >> all right, we'll continue to debate it here on cnbc for now, thanks, guys. bill and quint >> thank you here's what's coming up on "power lunch." microsoft's future, a rare and exclusive sitdown with microsoft ceo satya. plus bringing driverless technology to the masses and billionaires blasting bitcoin but one trader says ignore them.

he tells us why. don't do anywhere. "power lunch" is back in two at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

welcome back to "power lunch. shares of microsoft up more than 1% the company kicking off its developers' conference today and ceo satya nadella nadelsitting n for a rare and exclusive interview. what'd you learn >> a lot in context, build is microsoft's chance to really get in front of one of its most important communities, the software developers who are going to be making things on top of various clouds, working with artificial intelligence, but we also talked a bit about the global picture and china in particular. here's what he said. >> i think about the next ten years, next 20 years, next 30 years, how many -- whatever your time horizon is going to be defined by these two countries, china and the united states, creating more interdependence, not less that's what's going to be good for the two countries. that's what's going to be good for the world. so, my hope is that any dialogue

that happens in any capital, in any venue, is all about sort of breaking through i think that there are legitimate issues that need to be discussed, but you need to come up with solutions, because interdependence is probably good for economic growth and stability in the world >> to see full interview, it's about a half an hour, check out cnbc.com it's posted there along with the transcript to hear it, my podcast, fort knox, you can find that all the places you normally find podcasts but right now, he's really focused on putting ai tools in the hands of developers there's a partnership with qualc qual qualcomm around vision imagine a drone and actually recognize what they are on board because the artificial intelligence is built in to the camera and the drone itself.

it's then able to just send, hey, there's a problem here over the internet, you know, that takes less bandwidth to send specific detail rather than to send a stream of a whole image in a remote pipeline saying, can you tell me what i'm seeing here that's the type of technology that microsoft is working on and wanting other developers to build on top because with the internet of everything, microsoft itself can't code everything they need companies to choose to code on their platform >> is there a feeling that the greatest competitive pressure right now is coming from china and is there a concern that the chinese could clamp down and limit access to some of the developers and researchers in china? >> i think there's a sense that it's very broad. actually, he also talked about the fact that they were at an industrial conference in germany where they were able to talk to so many different industries that they're interested in working with on different platforms. we talked about the number of different data centers, data center regions that microsoft has around the world for cloud, there are 50 there are a couple of different

regions within china itself, unlike some other competitors, they actually do have cloud data centers in china i think there's a sense that they are somewhat insulated from geopolitical forces because they've worked so hard to build a local presence and that's what a lot of these countries are demanding. they don't want their citizens' data housed in europe or the u.s. if they're in china and that's what microsoft has worked hard to do we'll see if it ends up differentiating enough to lead to profits so far, so good. >> stay with us, john. we're going to talk more about microsoft. first, apple shares hitting an all-time high after warren buffett raised his stake in the company. charl charlie munger said he thinks they were too restrained paul, you own apple right now but you say that you would be reluctant to add to positions right now based on the recent share price performance. would you have cautioned warren buffett and said, nothing has changed in my thesis, we don't see how adding x billion dollars

in market cap is justified at this point, or is it >> well, my latest price target for apple is $204 a share so there is some upside i don't know how affirm it mplet there is upside and i do agree with comments that have been made by the guru of all time, warren buffett, and also bill gates, it's a great company. it generates $800 million to $900 million of free cash flow per week there's been nothing in business history ever like it, but i would like to buy it on a dip. you've had ever since the announcement of buffett increasing his stake, a pretty big pop so just wait for it to come in. all these tech stocks, in matter how great the companies are or how well positioned they are, they always have is a bad day. i just waited for those. >> you feel the same way about microsoft, paul? where the upside might be a bit limited given the share price performance for the year, it's up, what, 13% or so. >> yeah, no, microsoft, the same kind of thing goes stock, you know, now in the mid

90s and they are doingall the right things under satya nadella. i think he is an absolutely brilliant leader, focusing on cloud, particularly the azure platform and now also on artifici artificial intelligence as john mentioned so there is an opportunity but i would think that you'd ls waalso want to wao microsoft to come in a little bit. you never really want to buy these stocks when they've had back-to-back but several good sessions in a row. >> i agree on nadella. he's done an amazing transformation there that john ford obviously has chronicled along the way. you've given on those two stocks rather faint praise, praise but sort of on the mild side give me ta stock that you are sort of fully behind >> so, i'm a contrarian and the way i look at it is, what is the industry group within the technology sector that has been a lagger not necessarily today but recently, nxpi is a very

interesting story and i also think t-mobile is probably my other favorite idea and nxp is a semiconductor company. t-mobile, everybody knows, is the wireless giant and they both have been tarnished by either deals that are ongoing or acquisitions that have been aborted, but in the meantime, those two stocks are reached down 2% today on a great tech tape and i think those are some great bargains here. >> so, buffett and munger talking very bullishly, john, about apple. buffett saying he missed the opportunity on amazon and google just curious how you interpret some of these comments on the tech stocks. >> on the one hand, warren buffett's track record in being prescient in tech is bad >> ibm >> i'm referring to not getting in on any various names as well. he did explain becky quick told us, he didn't get into microsoft because he's such good friends

with bill gates, it would appear wrong but i think the key issue with apple at this stage is what happens when the iphone is no longer really hot when it comes to growth. in the past, we saw nokia, motorola, paul, blackberry fade so quickly when their phone's moment in the sun was up >> disappeared >> and i think to some extent, investors are afraid something like that would happen to apple. this past quarter seemed to suggest apple is different as the phone itself growth-wise seemed to fade, they made a more expensive phone that is the most popular model and then there's the services business, which i hate calling services because much of it is transactional but it does benefit -- >> it's subscription based >> not all of it >> it's like, do you spend another dollar and you just say, yes, i'm going to spend another dollar on cloud services it's not really a thought, am i going to buy cloud services right now. it's an automatic, rote thing

that you do. >> a lot of apple services, if you dig beneath the service, is really in-app purchases and those are moment by moment decisions. yes, they are driven by phone sales, but it's not as if all of it is recurring. >> guys, we got to leave it there. thank you to jon fortt and to paul meeks as well still ahead, sharing awe ton nus cars phil is live in texas with more. >> we're talking about artificial intelligence, deep learning, is this a new approach to making sure that autonomous drive vehicles are safer on the road the ceo of drive a.i. exclusively on "power lunch" when we return, deep in the heart of texas at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird.

i am an independent financial advisor. for our firm, it's all about trust and transparency. trust that we do what's right for our clients, without the constraints imposed by the traditional brokerage houses. transparency in the way we're compensated. our philosophy is one of service, not sales... that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com no one thought much of itm at all.l people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's

not small at all. energy lives here. welcome back to "power lunch. drive ai announcing plans to launch autonomous ride sharing just outside of dallas why does this company think ride sharing is the answer? phil joys us with tins us with f that company >> i'm joined by the cofounder and ceo of drive a.i. in front of one of their self-driving nissan nv 2 minivans we'll talk about this in just a little bit but why do you believe this is the future for

autonomous drive vehicles, ride sharing like this? >> well, we think that we're solving a real transportation problem here this is going to help make microtransit real. >> and microtransit being? >> to five to seven minute ride. it's a little bit too hot and you don't want to take the car ride or you're, you know, you're feeling guilty that you don't want to take your car there. so this is the type of transit opportunity that self-driving cars can help enable taking you from your start to your destination we're starting from workplaces to places of play, entertainment, and growing to expand this over time. >> you know that right now is a tough time for a lot of people to be thinking about autonomous drive vehicles there was the uber accident in arizona, and i'm not asking you to comment on that, but how do you convince the public the computer is good, the computer is not going to get it wrong, and make a mistake and hit your car or hit you as you're crossing the street. >> so we take a very people-centric safety approach you'll see, like, our vehicles are actually very distinctive in nature and we think that actually all self-driving car

companies have a moral obligation that make their vehicles distinctive by making our car orange, we're able to really set that expectation that this is a self-driving car and as a result, this is, you know, slightly different when you see a school bus, you have slightly different behavior >> sure. but how do you know the computer is right i know you believe deep learning, that it will advance autonomous drive vehicles faster how do you guarantee that the computer is right. >> there's a lot of different things that we do for the a.i. system to know that it's safe. it starts with the vehicle there's a number of sensors on it, radar, cameras, and they're all put in a redundant sort of setting. then we also have a simulator system which we can put out and really test the system the cool part about this entire a. a i. approach is that as this vehicle gets more data and experience, it's going to continue and learn and get better so, we think that the a.i. part in design of it is a huge part but there are a lot of things we do operationally as well

>> you think we're a long ways off from seeing mass adoption of autonomous drive vehicles, correct? and by mass adoption, i'm talking about, we get out of our house. >> i think that is one of the common misconceptions. where it really starts is in geofenced areas. it's going to start off heavily mapped and today with the city of frisco and the partnership that we're going with, this is going to actually help make this even safer than before with these types of approaches, we think that we'll continue to grow the joe geofence today, cell phone coverage is approxima pervasive. wed we think the same thing will happen with autonomous vehicles. >> starting their autonomous vehicle ride hailing service hear in frisco, starting in july guys, back to you. >> orange vehicles got it beyond buybacks, the other thing companies are doing as a result of the new tax law and

billionaires slamming bitcoin, why don't like it and why you should be steering clear "power lunch" will be back in two minute s.

taking a check on the markets right now, dow jones

industrial average up, s&p up, nasdaq really powering higher, up by more than 1% we're seeing great days for f.a.n.g. stocks as well as semiconductors there walmart and united health are your lag erts. range resources and united rentals. let's check in with sue. >> hello once again, everybody here's what's happening at this hour walmart says it will restrict opioid prescriptions to no more than a seven-day supply. this as it tries to curb the opioid epidemic that has plagued the u.s. that supply limit will begin within the next 60 days. the man being hald as a hero for wrestling an assault rifle from a gunman has raised more than $250,000 for the victims. james shaw was dining with a friend at the nashville restaurant when a gunman opened fire, killing four in new orleans, lato latoya cantrell taking the oath

of office today. it comes after winning a mayoral runoff election. she succeeds mitch landry. and some good news for lobster lovers you can expect to see lobster prices go down in price this summer with canada's spring season heating up, the extra supply should force prices to go lower. that's the news update at this hour. ty, there's a lobster roll in your future, baby. >> all right, sue, thank you very much. let's get to courtney reagan for market flash >> hi there. shares of department stores are lower today even though the broader market is higher and this comes ahead of the group's earnings reports in coming weeks and a note to investors, department store valuations have gone too far, his team thinks the fundamental upside for these names is limited he's concerned about an earlier easter, unfavorable weather, further pressuring sales he calls out jcpenney, kohl's

and dillards >> thanks for highlighting that. the oil market is closing for the day, another strong one for oichl. let's go to dom at the commodity desk >> anyone who drives to and from work every day knows what that trend for oil prices has been and it's been up we're seeing more of that today as you can see here with prices for that front month west texas intermediate crude topping $70 for the first time since late 2014 same thing goes for that price that also caught a bed and hit their highest intraday levels in that time span you got geopolitical concerns part of the story, speculation over what happens in the iran nuclear deal, will president trump back out of the deal, you've also got concerns about venezuela slipping more into economic crisis and all of that leading to that bullish oil trade. >> all right, dom, thank you very much. we got four months into the big corporate tax cut, and a big question that many are asking is where is that money going. according to s&p global's howard

silverblatt, cap x spending is up 21.4% year over year for the s&p 500 companies while buybacks are up 46% so is this a sign that the tax cut plan is not having the direct impact on capital spending, among other things, that it was intended to. thoughts from jared bernstein and dan mitchell welcome back to both of you. should we be worried so much if in fact buybacks are growing at a faster pace in either dollar terms or numbers than capital spending is? because ultimately, doesn't -- don't those buyback dollars work their way back into the economy eventually >> first, there's nothing wrong with buybacks. it's a way of giving money back to shareholders and shareholders can then reallocate that capital to more productive uses. in the same way that, yes, it's a one-term thing, sort of like worker bonuses that we've been seeing from companies are a

one-time thing but i would agree, in the long run, the key is not only are we getting higher capital expenditures, but is that translating into higher productivity and higher wages, and i'm confident we're going to get good numbers on that, but that's mostly something that happens in the future. the buybacks and the bonuses are more of a short-term thing because companies are getting somewhat of a windfall of lower tax rates on past profits. >> so, jared, the theory there, i suppose, is the one that if money goes back to shareholders, or to the owners of businesses, either through dividends or buybacks, that ultimately it works its way through the economy in what used to be called a rickle-down fashion s that productivity increases, ultimately worker welfare is better, wages are higher >> well, look, with respect, thymer, we don tyler, we don't need to call that a theory because we have empirical evidence and the evidence shows there's no correlation between accelerated buybacks and investment in

capex. i'm not begrudging the folks who benefit from the buybacks but this is very narrowly concentrated income at the top of the scale and if you want to draw a causal linkage between buybacks, investments, productivity, and then wages, you've got a lot of links in that chain, and i'm here to tell you that empirically, those links have been shown to be broken, especially, by the way, the very last link even if we were to get more productivity for more investment, which, by the way, would be a great outcome, we've seen that median compensation has very much departed from productivity growth over the last 20 years so i don't believe the trickle-down system works, not based on theory, but based on many decades of empirics. >> a big part of that buyback boost has to be apple. but the republicans, including president trump's economics team, promise the average american family will get $4,000 more from the tax cuts do you think that's going to

happen >> i guess it depends on your time frame if you can simply increase the economy's growth rate by, say, 0.2%, by the time you get 20, 25 years down the road, yes, you'll see big multithousand dollar increases in worker compensation now, jared and i can argue, will it be 0.2% growth, 0.1%, the key thing to understand is that in the long run, if you have a sustained increase and economic growth, sooner or later, it's going to mean good news for workers and that's, i think, ultimately the real test that trump and the republicans are going to face, and by the way, i'll be the first to admit there's a lot more going on in the economy than just the corporate tax rate if republicans don't control spending, they're going to sabotage their own tax bill. >> jared, your thoughts there? in other words, do you expect incomes to go up as a result of lower taxes and the repatriation of corporate profits

we've seen some of it in the form of one-time bonuses, typically. >> yeah, so first of all, the bonuses have pealed in comparison to the buybacks it's a trivial -- the bonus has been trivial relative to the buybacks apple, and i'm cherry picking here, so i'm cherry picking an apple so i guess i'm consistent fruit-wise, but apple plans to do something like $30 billion of capex and over the fast six months, they've been $33 billion of buybacks. when you talk about the tax cut and incomes, it's really not relevant to say incomes broadly in some macro sense. sure, some people's incomes are already very much benefitting from the tax cut after all, 80% of the value of the stock market is held by the wealthiest 10% of families so when you do the buybacks, their wealth increases the question is, is it going to reach the middle class and by the way, you know, this

20, 25-year perspective that dan has, that may well be true however, that's not what the middle class was promised. they were promised that $4,000 would show up in their paycheck starting pretty soon, and you know, that's just not going to happen >> all right, gentlemen, we have to leave it there. i'm sure we'll be talking this one more appreciate it. billionaires throwing shade at bitcoin, what they said and whether you should stay clear of it too that's next. >> announcer: the cnbc trend tracker live data board is brought to you by the cne group. let's begin.

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bitcoin is worthless artificial gold, which if it succeeded would -- a lot of illicit activity now, that is not something i think the world needs. bitcoin reminds me of oscar wilde's definition of fox hunting, approximathe pursuit oe uneatable by the unspeakable >> somebody gave me some for my birthday, and then a few years later, i thought, hey, i'm going

to sell that, so no, there's some really good technology in terms of sharing databases and verifying transactions that is talked about as block chain. that is a good thing bitcoin and icos, i agree, completely, it's one of the crazier speculative things >> and when you buy nonproductive assets, all you're counting on is whether the next person is going to pay you more because they're even more excited about another next person coming along. but the asset itself is creating nothing. you can have anything you want to imagine if you just look at something and say, that's magic. you can do it with shark's teeth or seashells or anything, and you know, they did it with tulips in the 17th century in amsterdam and they'll do it again. >> that was warren buffett, charlie munger, and bill gates

on "squawk box" this morning now, as you heard, they had some pretty harsh things to say about the cryptocurrency but our next guest thinks they are all wrong. joining us now is founder of brian kelly capital. good to see you. i first want to start off with what mr. buffett said about bitcoin and that is sort of the greater fools theory, only worth as much as somebody else is going to pay for it. you can do it with shells or shark's teeth. why is that not the case in your view it seems like it could be. >> well, so what's interesting is mr. buffett made the same comment about commodities and he said that there's no use to them, but try to drive your car without gasoline and it, you're going to find out, there's some use to commodities there is use to bitcoin. he's just missing some of the key points >> which is what i mean, if you're going to make the comparison of oil to a car, gasoline to a car, what is the comparison, bitcoin is to what >> cryptocurrency is the fuel for the block chain. that's how the block chain runs.

so, all this really is, we just need to break it down to its simplest, simplest form. all that bitcoin is, is software it's a 100,000 lines of code now, what that 100,000 lines of code does, it gives you the ability to replace the middleman in financial services. if i were microsoft, like bill gates' company, i'd be out there with my business development and sales development people saying, please use my software what the token, and bitcoin is just one of thousands of tokens, what that does is it gives you incentive to run this open source software and that in and of itself is a very unique economic bottle. >> it gives you the incentive because you are rewarded bitcoins, correct, for maintaining this distributed ledger system. so i want to go straight to what mr. gates said he had sold the bitcoin gifted to him on his birthday a while back but he is in favor of the block chain technology is it possible to have block chain technology without having the cryptocurrency, whether it

be bitcoin or ripple or stellar or whatever the other cryptocurrencies you want to name that have an underlying platform or does that just then turn that distributed ledger system to a private distributed ledger, which is more limited in scope. >> so this is very much like the internet where companies said, you know what, we'll never do anything on the internet, but we love this intranet in other words, an internal network. and i think there's some validity to an enterprise block chain application. you can streamline some processes. but just like we saw with the internet, i would expect that you start to see what's happening internally at companies get pushed out to the public block chain, which is then fueled by the token, whether it be bitcoin or etheorem so there's value to this technology and bill gates isn't wrong about that what gives it power, though, and what makes it an incredibly powerful economic model, is having that free floating, free market token giving you the utility to run the software.

>> it looked like we had been on a pretty good run, maybe to 10,000 again on bitcoin. do you think this billionaire bashing bitcoin, is that having an impact on price action, do you think? >> so in my view, more often than not, when billionaires bash it and it's probably the better thing to buy it, right so you look back at some of the stuff that warren buffett bashed, google, amazon, the internet, all these things, i understand it's a very different investment style buffett has said for years he invests in things that don't change see's candy, wrigley's chewing gum, they're not going to change what i invest in is things that are disrupting and for me, bitcoin, digital currencies, cryptocurrencies and blocks chain are one of the biggest opportunities we have in our generation >> we'll see you tonight at 5:00 on fast money. will do. >> bold man to go up against buffett, munger and gates. >> three billionaires of warren buffett, as you heard at the beginning of the segment, slamming bitcoin today but it's not the first time he's talked about it for that, we go back to dominic

and a brand-new cnbc buffett archive. >> this is pretty amazing because if you want to look at anything that warren buffett has said over the last quarter of a century in annual meetings, in his interviews with cnbc, this is now the definitive place to go for it, the biggest collection of video tied to berkshire hathaway and warren buffett. buffett.cnbc.com as you can see, we've got annual meetings cataloged and transcripted we have cnbc interviews. one thing i want to focus on here is this whole bitcoin conversation that you guys have been having because we can actually go back and try to find all the times warren buffett or charlie munger have made comments we've got quite a few times over the last couple of years but you go all the way back to the 2013 annual meeting, and both charlie munger and warren buffett had mentioned ed mentioned bitcoin during that

2013 meeting he says he didn't really know anything about it and charlie munger came out and said it won't be the big universal currency and he has no confidence just some of the great things on this website i implore all of you, go check it out a lot of hard work went into it. >> dom, thanks and a programming note, in case you missed it. cnbc's documentary airs again tonight at 7:00 eastern time we've got some breaking news out of washington. let's go to eamon at the white house. >> hi, tyler the president says he'll be announcing his iran deal decision at 2:00 p.m. here at the white house. he just put out a tweet at the close of the white house press briefing, in fact, the exact minute that the press briefing broke up, he tweeted out he's going to announce that at the white house at 2:00 p.m. tomorrow so some major news there this is an administration that is staffed largely with iran hawks and pessimists of that iran deal, people who have been largely critical of it the president himself has called it one of the worst deals of all time so, not a lot of expectation

here that the president would want to cokeep that deal with t one caveat being that at the same time he's negotiating that deal, he's also trying to negotiate a world historical first treaty with north korea in terms of removing their nuclear weapons. korea, with their nuclear weapons, and that's what message send to north korea if the president pulls from the iran deal that weighs on the president's decision, which he says he'll announce 2:00 p.m. tomorrow. on china, white house press secretary sarah huckabee sanders said they were briefed last week for the economic trade negotiations, saying that the white house is working on something that would be great for everybody, that the president's got a good relationship with president trump xi and also that the vice premier of china will be coming to washington next week to continue those talks, so stay tuned for that >> all right, markets and oil moving just a little lower in recent minutes, eamon, thank you. speaking of oil, energy leading the market today, up 11%

in the past month, so what are your best bets in energy we've got plays for you next

time now for trading nation. let's take a look at the sectors as crude crosses above $70 for the first time since 2014. energy is the best performing sector of the year now best turn around, but will it continue larry and frank are here, larry, we got the news president trump tomorrow at 2:00 p.m. announces the decision on the iran deal. is that part of the reason you're bullish here? >> well, you know, i think so much is built into this iran deal that oil probably sells off on the news, but the equities in the energy space are still

extremely cheap relative to the commodity itself, and m&a in the space, you have a very high probability, very high, of a major m&a swing, capital is still cheap, assets and energy assets produce a lot of cash, in the natural gas space, you have first trust, that etf is coming out of the seven, eight year bear market, and mlp space, those names are coming out in a fair market, so, yes, bullish on the energy space, medium to long term >> frank, how does the eft chart look >> here's one way, right here, actually, you can 18%. there's good gains, but for crude oil, not so much the other thing i look at here is a large potential bottoming information that continues to be in place, so we're getting close to resistance points again, here, and right here and right

here the potential is there for a breakout eventually, but because of all of this, i do think you have to pause a bit. >> pauses a bit then breaks out. got it, thank you very much. frank, larry, good to see you. head to tradingnation.cnbc.com check please is up next. and now, the latest from tradingnation.cnbc.com, and a word from our sponsor. >> a quick way to manage a winning trade is to place the stock at your target price it automatically moves the stock higher as the stock moves up the stock orri wl dengilbe at the highest level keeping you following your dream alerts -- wouldn't you like one from the market

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from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more. a minute to talk tomorrow's news, and that is the iran deal announcement comes tomorrow at 2:00 p.m., that is the president announces the decision as to whether the united states will stay in that six party deal about that governed or reduced ability of iran or delayed the ability of iran to develop nuclear weapons. the markets, including oil, lower on the news. >> thinking, of course, could be buy the rumor, sell the news, p p pree yu premiums could be reflected. >> rbc to the us if they impose

sanctions on iran with us, that could reduce exports by 200,000 to 300,000 barrels per day iran puts 4 million barrels on the market >> we'll watch that. make an appointment. come here at 1:00. we'll have the pre-party then. >> thank you for watching. >> closing bell starts right now. banks are moving today, a keynote from goldman sachs moving the sector. >> on the floor of the new york stock exchange, bulls regained some control of the market, but a lot of red flags remain. >> i'm steve patterson in hawaii where volcanic activity is sending rivers of lava to communities sending toxic gas high in the air. we have the latest coming up >> warren buffet spoke to 42,000 shareholders this weekend, and today, he speaks to us, what he said about wells fargo and apple. i'm kelly