earlier. the sentiment clearly has changed or at least is changing that maybe china is loosening up and going to let the nxpi deal go through in the one monday chart, josh, it's breaking out. >> oh, my god. that's it from us. >> that does it for halftime have a great weekend "power lunch" starts right now stereo see you in a minute, melissa lee. i'm michelle caruso-cabrera. here on "power lunch" we discuss the disaster du jour campbell's soup crushed like a weak continue can, sinking 10% who is to blame? millennials? commerce secretary wilbur ross plus banking on blockchain, wall street coming around to the kript craze. a new start-up's ceo joins us. and royal fever is in full effect less than 24 hours in what promises to be the most watched news event of the year what is the economic effect.

>> we will head live across the pond as "power lunch" starts right now. ♪ you are addicted to love >> good day, everybody, and welcome to plunch. i'm tyler mathisen glad you to join us. your money is kind of holding steady right now the dow trying to carve out modest gains michelle mentioned consumer staples, one of the worst performing groups right now. we will talk more on that coming up and small caps they are a bright spot the russel 2000 etd hitting a record high for the third day. rates are moving yield on the ten year tressy above 3.1% but they backed off from that just now. >> it's get right to the disaster du jour campbell's soup. down 10% nearly 40% in the past year striking down the entire packaged goods sector. general mills, kellogg, kraft,

heinz, they are all lower. bob pisani joins us from the nyse with more. >> it is a not too great an exaggeration to say that the package food companies, consumer staples are facing an existential crisis meaning what exactly are they around for. that's the issue let me show you what we have been dealing with for a number of years ballots over pricing, over shelf space. brand name erosion going on as people switch to generic food products higher raw material costs. that's a recent development but that's squeezing margins because they don't have pricing power. most importantly, consumers moved from processed foods to fresh foods. campbell's soup has been noting that as well look at their numbers. campbell's u.s. soup sales down 1% that's what we think of the old canned company campbell fresh is up 1%. the fresher products obviously

doing better than the canned products overall food companies not just this year, but they are in a decline that's been long term for the last essentially year and a half to two years they have been declining. these are nottypos dean foods, hersheys, campbell's now down 50% from its highs. kraft, general mills also down about 40%. on the general market we are basically flat on the week that is a very good sign here. remember early whier in the week inflation was a major issue with higher gasoline prices and the prices paid index. we had a scare there ten year treasury has been up, seven basis points the dollar has been up trade talks move stalled doesn't seem to be progress in talks about nafta. head win for the stock market. yet we are flat. sideways in that kind of a market with that data, sideway is a victory for the bulls. >> for more on campbell's soups rough day and more problems in the packaged food space let's

bring in john baumgardner. and on the newsline is alexia howard, u.s. foods senior analyst with bernstein john, welcome. good to have you with us. >> thanks. >>ities let's start narrow on campbell's and broaden out from there. what was so wrong in campbell's report today >> the issue is commodity inflation creeping up in the food space you are seeing pricing power being challenged and the commodity inflation offsetting internal cost savings. the ability to stem the pressure there. you are seeing guidance down in 18 and softer for 19. >> costs are going up, margins are going down thing are getting squeezed can anyone turn this company around the ceo of campbell's is leaving immediately. >> i think this is going to be a very difficult challenge for anybody to step into

the other angle is i think one of governance. recently campbell's soup paid up a hefty price to by schneider's a snack company. their debt levels are high right now. the question is how can they start to pay down that debt when their core soup and fresh business doing so poorly. >> did the schneider's lance deal work? is the jury still out? did it not work. >> it's very early days. they have only owned the company eight weeks. it stretched them financially with the core business in such disarray they are going to have a hard time handling that level of debt. >> got you. >> barren's report 20 pores of their floating rates every time interest rates go up that's a problem for them. john, on the issue of tariffs. on the conference call the cfo said the higher costs because of

tariffs. so much so that wilbur ross countered. what prompted that ross said it's going to be a maximum one or two cents per can. >> i think it is a couple hundred million dollar exposure, 3 or 4% of cost of goods sold. the bigger issue is the the wheatcos going higher from drought, packaging costs going up, cardboard. and the inability to price the cost is the pig problem.

>> all of the packaged food companies are basically down in the stock market over the past year, in a big way what does this say about that business of packaged foods and the changing marketplace is it millennials who just don't want to patronize those brand or what >> i think there is major disruption going on in the sector right now it used to be a safe, stable industry, very, very solid and consistent over time but that world has now changed consumers, as you rightly say, are no longer embracing the heavily processed packaged foods. they have become more diss trustful of a lot of the ingredients they have read about in the press over the last several years. there is a movement away from the product. then the other problem that bubbled up over the last 18 months or so is that the he radio tailer environment has gotten more hostile. you have got walmart and other retailers debt prattly worried

about the arrival of the likes of aldi. those markets are giving them a run for their money in terms of pricing pressure then we hard her about the amazon/whole foods deal last summer that put pressure on the retail environment. the retailers are pushing back on the suppliers it is a downward spiral. >> john, it is a very tough environment, as alexia points out. is there anything contrarian in you that says, too much is priced in? is there any reason to buy the stock? i'm looking at the multiple, it's trading at 11 times next year's earnings? >> for cam pels it is a wait and see story. it is more structural-- we haved

companies in europe maintain gross margins despite private label and discoupers because we have seen more response to the consumer higher price innovation which offsets the outright pricing power even in the u.s. the smaller brands are taking value share but it is price premiums i think they have to embrace the consumer and being respondive to trend. and focusing one to one on the consumer, which is what millennials are looking for now adays. >> john, thank you very much, alexia, thank you as well. alexia, forgive me for asking, but are you going watch the wedding tomorrow >> i certainly will be. >> wonderful we love it weekly rig counts are just out. jackie deangelis. >> it is the highlight of my week u.s. oil drilling rig count is unchanged. 844. according the baker hughes the total number of rigs is up 124 from a year ago.

now as prizes have risen we have seen rigs added week after week. this pause could signal the harkt is taking a breath to see what is next in terms of the price of oil if higher prices suppress demand overadding rigs isn't going to help the farm bill in the house ayman javers has the details. >> this one is usually fairly non-controversial. the farm bill is one of those things that people on both sides of the aisle really like this one fell victim to in-fighting. the final vote count republicans by and large voted this down. the final vote was 213-198 republicans voting no, 30. republicans not voting at all, ten. that was the difference maker. that got cat up in a battle between republican conservatives and their own leadership over immigration. they wanted to vote on a hardline immigration matter. they weren't convinced they were getting what they have been promised from their leadership, so they voted this bill down

that's end of that for now meanwhile we have got this disagreement here inside the white house complex over trade remember, those negotiations with the chinese are ongoing today and yesterday. we have been told by sources familiar that peter navarro, who is at sort of an ideological impasse with the secretary of the treasury, steven mnuchin over chinese trade, peter navarro didn't go to the formal dinner last night. didn't attend of the negotiating sessions he was invited to yesterday. that represents a split hero the issue of how far to go to negotiate with the chinese, what's on the table, and what's not on the table i am told that there was a $200 billion proposal on the table last night from the china in terms of lowering the trade deficit with the united states it didn't go anywhere, though. the chinese side in beijing overnight denied that that was going to be a concession that they were going to be offering so we will wait and see how

these negotiations develop through the rest of the day today, guys and see whether they can resurrect that proposal and others and also what the u.s. side is willing to trade away. guys, back over to you >> ayman, thank you very much. let's go now the sue sue with the latest on the deadly shooting at a high school in text. >> here's what we have between eight and ten people are dead now in the mass school shooting at santa fe high school it occurred just after the students got into their home rooms between 7:30 and 8:00 a.m. central time this morning. nbc news reporting one person is in custody that is a 17-year-old male, reportedly a student at the school they have detained a sect second person, also reportedly a student. certainly a person of interest he is being questioned they have said the word he, so we assume that he is obviously a male the big question now is why the difference between eight and ten.

one of the reasons for that is they are trying to figure out whether or not there are still students who may be wounded or dead inside the high school. they have to go very slowly because explosive devices have been found according to nbc news inside the high school in addition they have found explosive devices adjacent to campus, but off campus n the community. so they are warning people, if you see a package that you don't recognize, don't touch it. call 911 that is slowing down, however, their efforts to go through the building and clear it. so they do not know whether there are more victims inside that building. the harris county sheriff says as far as he has been informed most of the victims are students we have had people transported to the hospital. they just had a hospital presser a few moments ago. they are expecting more injured to come in that was from the spokesperson for the lead hospital. he would not specify how many

people he has been told might be come to the hospital that are injured. but we are monitoring that situation as well. president trump called it a horrific attack this morning and offered his prayers and condolences to those who have lost loved ones. so it is still very much a fluid situation although they have said it is not an active shooter situation in any way, shape, or form at this point two people detained. one is the alleged shooter and the other is a suspect that they want to question. possibly in relation to not only the shooting, but the explosive devices. you are up to date, guys, i'll send it back to you. >> thank you very much sue sue. coming up, the latest on the batt fleor control of cbs. "power lunch" will be right back

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the ballot for cbs getting nastier and more heated and not showing signs of letting up any time soon, the company postponing its annualet mooing also trying to dilute the voting power of their biggest shareholder from to to from 79%. cbs management cannot wish away the reality that cbs has a controlling share holer. where should we go should shareholders plan for a long and drawn out battle? let's bring in an exert who has followed these players and these companies for many years thank you for joining us.

>> good to be here. >> we were asking the question, reforically, where do we go from here it's going to go to court. can there be any winners. >> here comes carl eye can and the other active investors because cbs and losmundos opened the box on the minority shareholders and that is probably going to evaporate over the long term because it is so unfair to shareholders to investors, and it is a actually very delete earious to the value of the market companies that have the two class shareholders this is significant because look at the two class sharing companies, google, facebook, the murdoch interests, the "new york times. hundreds of companies are going to be decimated by activist investors who are going to come in and challenge the two class

system. >> decimated -- this is a tangent, but this is an interesting thought. there is an art to be made that the stocks trade at a discount because of the structure activist structures may go in and say get rid of this structure because it's not share. >> it may not happen in the next week or two. cbs and viacom have to fight it out. los mundos has lifted the lid. that two class sharing is history. >> but the decision this week suggested it was not, right? >> no. the judge negated a restraining order which cbs had asked for immediately, hours before their board meeting yesterday. that whole matter is now has to

go to full trial, moonves. meanwhile, cbs and viacom are shooting ooch other in the foot and soon will be shooting each other in the head. together they have significantly greater value than they do as stand alones and neither of them has a scale to compete effectively in this market moonves is the best media manager left on the face of this earth and should be running both companies. >> all of that may be true but going back to the idea that the court case to undo the dual class structure. i think it is unfair to the minority shareholder but the stock trades at discount all right, mark zuckerberg gets to do what he does and i know that going in. if the courts were to undo it it would seem to be an undoing of the rule of law at this point. delete earious to the markets.

>> it is not a rule of law it is a corporate governance regulation that was created 25 or 35 years ago. it has no real legal substance it was something that favored basically some very powerful family owners of companies who needed to raise capital but didn't want to dilute their interests. their equity got diluted boo their control of the company did not. and i mean one of the early advocates of the two class share holding was the "new york times" company. and the saltsberger company retined control even though they had a very small share of equity. >> we want to switch gears the networks have showcased new shows and lineups for the false. the '80s are back in a big way a number of reboots, magnum pi, murphy brown, abc's roseanne why can't they think of new

premises for new shows >> a lot of this is predicated on the rather unexpected success of roseanne. but roseanne had the original cast, and roseanne actually has startsed to really slip in the ratings. it started off gang busters and everybody said oh, that's all we have to do is recreate the old hit shows, bring them back and we will keep the viewers there is nothing the networks can do to stop the erosion of viewership on legacy television. it's all going away. and they will continue to lose viewers and advertisers and have to come up with a business model that moves them off of the pay tv model into the internet and they will. but programming and content is not going to save the day. >> porter, thank for your thoughts media tech capital partners. oil prices are on the rise gas prices going along with

them how bad is the pain at the pump? we have numbers for you. in less than 24 hours, prince harry and mmmm will be a duke and a duchess we have all the excitement and the big money involved in at weexonoyal wedding nt por. .

oil prizes raising sharply this year. they are up 18%. this is trickling down to what we pay at the pump jackie deangelis has those numbers. >> gas prices are certainly on the rise as the oil prices have

climbed as well. year to date, a you mentioned, wti and brent are both up about 18%. or bob gasoline is up 20%. $2791, up 57 cents from this same time last year. and think about it we are still aweek away from memorial day the countdown is on. more than a month away from july 4th, the peak of the season. $3 gas isn't out of the question and pretty much guaranteed if oil prices keep going up prices could continue to rise analysts say there are more reasons they are likely to climb than take a breather how high several are taking it to 80 for wti, 90 for brent. the supply and demand is ruling it the iranian barrels potentially coming off line combined with anticipated declines in venezuelan production and opec's cut, that doesn't create a

rebalance situation. it may tip the scales the other way. excitement is building over the royal wedding tomorrow up next a live report from england. but not everyone is dieing to talk about it. listen to actress emma thompson. >> stop it, stop talking about the royal wedding. >> a party pooper. >> what a hater. >> come on >> emma, if you are watching, turn off thev ca tbeuse we are going to talk royal wedding next mr. stevens? this is your new name. this is your new house. and a perfectly inconspicuous suv. you must become invisible. [hero] i'll take my chances.

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hello, everyone. i am sue herera president trump speaking out on the high school shooting in santa fe texas during a meeting at the white house on prison reform he offed his thoughts and prayers to the victims and their families >> we are closely monitoring the situation and federal authorities are coordinating with local officials this has been going on too long in our country too many years too many decades now we grieve for the terrible loss of life and send our support and love to everyone affected. >> thousands of iranian worshippers chanting

anti-american and israeli slogans condemning the move by the u.s. to move its embassy to jerusalem. they also burned the two countries' flags. michael's is recalling more than 100,000 creatology spin art kits and more than 260,000 create olo creatology clay art kits >> thank you sue herera. >> let's get a check on the markets. stocks are holding steady. the dow trying to scratch out gains. up by 15 points. boeing, caterpillar and home depot leading the way. boei . >> in less than 24 hours, prince harry and meghan markle will get married. the excitement is reaching a fever here and across the pond for at least some.

will fred frost joins us now from england hi, how are you? >> i'm very well thanks very much we have been discussing the expectations ahead of tomorrow let's talk about the finances. expected to cost $45 million the vast majority will be on security because this is not a state occasion unlike 2011, much more of the costs will fall on the queen. this time as compared to william and kate's wedding seven years ago. but she should be able to afford it here's a look at the royal finances the queen's total personal wealth is estimated at $490 million. that stems from an investment portfolio of around $150 million and large amounts of property, including an estate in norfolk and scotland she doesn't own windsor castle or buckingham palace they sit in a charity along with the crown jewels the queen can use them but not

sell them. the queen's income comes from the crown estate which she also does not own it has a value of $16 billion stemming from large amounts of property in london and 2 million acres outside of it. she receives the sovereign grab each year, which is roughly 15% of total income generated by the crown estate last year, that came to $58 million. the remaining 85% goes to the uk government she also gets around $20 million per year from the duchy of lancaster a private pool of capital that existed for the sovereign since the 1300s. charles gets his own source of income of $20 million from the duchy of korm more it's up to the queen and the prince of wales how they disperse that income among their children. >> prince william will inherit those sources of income when he becomes prince of wales and then king prince harry will have to make sure he is always on good terms with his brothers. >> the duchy of lancaster, money

that goes back to 1300 the magic of compounding interest, will fred, it is amazing what could happen there. thank you so much. >> my pleasure. the firm, as the royal family is known, is definitely a big business tomorrow's big wedding is no exception. providing an estimated billion dollar boost the tourism, retail and fashion sales, that's thanks to the powerful megan effect with us, jim fallon, of women's wear daily, and "vanity fair" senior writer josh due above good to have you here. has anybody seen the portfolio of what they own and those investment products that generates all that cash. buckingham palace publishes accounts each year, they break down more or less what they have spent not necessarily what we have distributed to each member of the royal family. >> a lot of the money comes from ronts, radio it. >> represents. >> on the land and the

properties that they own. >> but we don't know if they own thousands of shares of apple or anything. >> we don't know they could >> right the megan effect what is that >> we have seen it again and again. anything she has worn sells out within hours brands have noted immediate effects in terms of the influence she has, in terms of her bags, her clothes, her fashion. sunglasses she wears they can't keep them in stock. >> you have seen the same thing? >> same. >> like what like what? >> a lot of the canadian labels earlier on, kent leer, the coat. >> the white coat is a handsome ceo i like that. >> it sold out within hours. >> won't be able to get it. >> she's an american but favors canadian designers and non-american designers >> a little bit of both. the canadian ones are the ones she has worn because of suits. >> do you know who is doing her gown. >> ravel and rauso's favorite. >> get my bookie on the line sports betting and fashion

betting. >> you are too late. they closed the books. >> they closed the books >> we are showing everybody this greta constantine skirt. there is your coat the coat that sold out instantly. tell me about the skirt here what is so special about this? >> to josh's point, anything she wears people want. it's not inexpensive, they don't produce that many of them. they go on line, click and buy it right away. >> there is an industry of bloggers that as soon as she goes out they price it immediately and you can click to buy it >> who has more power at this point, kate or meghan markle. >> megan. >> because she is new. >> she is not going to be queen. >> she is new. she is an actress, she knows how to wear the clothes. they are different labels. and the instagram effect >> she had had to put her

instagram away, right. >> the bloggers following her, et cetera. when william is kate were married instagram was barely six months old. >> i think she is a plot twist for the royal family. >> that's what i want to get to, is a question of broadly speaking how welcome is she within the royal family? she is obviously not british she is of mixed heritage her family has at least over the past couple of her -- her extended family has been a bit of a reality show. >> right >> mixed religion, right >> mixed religion. she converted, i believe. >> but the checklist goes on and on of all the things that have never happened to the royal family before. >> there is a lot that's happened to the royal family. >> you are right i saw "the crown" you are right. >> she does come in as an extreme outsider and she is definitely shaking thing up and the british press especially has been a little bit tough on her. >> but that's part of the

fascinate, isn't it, that she is ditch and shaking thing up there she is in the whitity coat. >> are you going to get that for your wife? you really like it. >> i love the white coat she wears it beautifully she has a incredibly laughing face to he moo a happy open face. >> maybe that's the actress part. >> you made that point she knows how to -- >> are they going to make it? >> everyone in my office is split. we have some cynics -- >> split is a bad choice of words. difference of opinion. >> they look to be very in love. their body language seems to be saying they are happy together. >> she is an actress to your point again. >> shouldn't take that so seriously. >> also, it's not in a the royal family has had a great track record of marriages lately. >> she has been compared in some ways to princess diana. >> yeah. >> is she going to have the same impact >> in the long term probably

not. you have george, caroline and li louis coming up. they are going to be the next fascination. as harry and megan get older their effect will kminish. >> harry is sixed in line. charles is one then william, and then william and kate's children. >> yes >> apparently we have fresh video coming of of meghan markle arriving a of the a hotels in london let's look at this what is she wearing? can we tell. >> is that her mother with her >> that's her mother. >> what a pretty dress. >> she looks great. >> the speculation around dooria is high. when she arrived in london she came with a burberry bag >> this is them arriving a of the the hotel where they are going to stay for the night. >> right >> when you have somebody like meghan markle show up what does this do in terms of the media complex around the royal family? will it get bigger

is it getting bigger because of her arrival. >> oh, yeah. i think the media coverage declined a little bit because they knew william and came but this is going to kick it into a whole other level and this will sell papers. >> william and kate are so behaved. >> they are. >> boring could be another word. >> they are. this could be more fergie like, right? >> well, i mean -- yes >> i don't mean all the negative but just the elevation of a lot of chatter, right. >> people legitimately like prince harry he has a sparkle, to our point, megan has a smiley face. harry has a twinkle in his eye he has the little wild streak that everybody likes to see. i think there is that fascination that you don't get from william who has object proper because he is heir of the throne. >> thank you, guys, that was fun. you can watch full coverage of the royal wedding starting tomorrow on nbc at -- we know you are going to get up early for this -- 4:30 a.m

live coverage begins. >> wow that's early >> how are we going to go to the bond market? how are we doing to do that. >> rick santelli is tracking act at the cme. >> a lot of times fridays are mean reverting meaning whatever dynamic was big in the market reverses to machine for weekend risk very true with treasuries. we have had a curve flattening event that was then followed by a couple of weeks of steepening. today a light flat you look at the bonds, they are down about five basis points they are toying with 321 open the chart up to early february 322, the previous high close for the yield on year. we closed into it yesterday. today we may not ten years are three basis points above their critical 303 dollar index not to be mean reverting. it is a one of the few markets

holding. even though it's not moving in a large way it's holding on to a large batch of gains if you open the chart up to 2004 i want you to pay attention to the left side. all the tig can't tops and bottoms that we have right around 90. that's where the market held traders called it a buildable rally. the big picture and the little picture, at least for the moment seep to be bullish for the dollar index tyler, back to you. >> thank you very much you are royal, baby. look at the price of bitcoin today. just above $8,000. as we are often reminded contribution and blockchain they are different and don't you confuse them pi next we will talk to a woman hong to capitalize on blockchain's potential "power lunch" coming right back. ♪

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when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. when people think of blockchain they tend to think of cryptocurrency, as

the start-up space is becoming a space for entrepreneurs to launch their own ventures. >> the woman who started clover aims to help people explore the technology to develop apps and services here to tell us more is amber bell day, cofounder and ceo of clover great to have you on "power lunch." >> thanks for having me. >> what's the objective of this new company. >> i built the ethereum alliance and working at jp morgan on a project called quorum that was aimed at creating an entry prized service for a blockchain. it's just hard it's hard to build these applications in working with people that are trying to get their use cases to out there, there are so many choices. they don't know what to choose there is an entire middle wear layer of services that need to

exist. >> you played a critical role at jp morgan developing its blockchain practice understanding how a traditional bank can embrace the new technology how did those discussions go and the product core that you developed at jp morgan can it be applicable the other banks. >> it is an open source project. it is agnostic as well genentech and pfizer were exploring it for drug providence tracking wall street market was looking at it for cash on transfer, several other products are ongoing. it is not a jp morgan product at al it is a give away the operating system for the apps model. what we created at jp morgan was an operating system. >> a decentralizedance store what sorts of apps will be on this store can you break it down for a person who is familiar with the apps store but not the decentralized app. >> it's not just about having an

app store alone. there is no way to scuff what's out there. there is no google for finding applications we don't have that yet for this internet of value. the ability to discover apps is helpful. but the ability to build them is also encompassed in there. a lot of the apps are developer focused. you put those together and you can put those apps into that app store. >> wall street has been slow to embrace blockchain announcements this wake week with hsbc and others but what's the main way blockchain can be used by some of the big banks? >> right now it's about information sharing and mutualization of work flows. it's not about disintermediation and it's not necessarily about decentralization. >> that could take them down, threaten their business model. that's what a lot of proponents of blockchain say, they love the fact that they could diss intermediatiate everything

basically. >> there is a lot of intermediaries and perhaps some market competition amongst them wouldn't be a bad thing. mostly it's about the ability to see the same thin in real time that's why you see most of the experiments thus far focussed more on post trade and information sharing rather than up front trading. >> what was it like at jp morgan to hear jamie dimon say bitcoin is a fraud when you were work og an blockchain component. >> there is a difference but we were working with a z cash company on releasing a zero knowledge settlement with quorum and ethereum quorum. there is a difference between the asset and the technology. >> it seems like cryptocurrency is one reason banks have been slow to embrace blockchain given its tie to crypto. on that note, how long will it take for bank to unveil their crypto desk? six months or 12 months. >> i think it's coming sooner than people probably think even where the will is the legal

and regulatory framework is challenging and custody is a huge challenge >> amber, thanks for coming in it's fascinating to hear about clover we have got breaking news here from phil lebeau. >> we are tracking reports of an airplane crash in havana cuba. according to the reports out of the cuban state media, it is a blue panorama airlines boeing 737. but it's not a blue panorama flight the plane is blue panoramas but it's being lease by cue bannos one of the state airlines for the country of a we are told that according to the reports there are more than 100 people on board, 104 or 107. it was flying to the eastern part of the country. it was a domestic flight within a. again the reports are this was a boeing 737 operated by cue banna that has crashed just outside of

havana after takeoff no indication yet in terms of fatalities, injuries, et cetera. obviously we are tracking these reports. as soon as we get more, we will let you know melissa back to you. >> thank you phil lebeau thank you, fill phil lebeauh the latest on that crash in cuba michelle, over to you. everyone is piling into the screening business nowadays. how much higher can netflix go he's betting on double-digit growth from here

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in a market where more and more media companies are looking to stream directly to consumers, one analyst still believes netflix is king. the price target is raised to $400 are forces to be reckoned with dan, good to have you here >> good to be here >> what's the primary looking like >> for us, it's really content we are seeing the spending content. that competitive mode continues to expand on sub talent. domestically, but really international, it pays 68 million subs, we leave that to 100 million by 2020. we are starting to see with m&a

and improving in other areas that we are continuing to see hours spent. netflix is ten hours per week versus hulu and amazon, which is five hours based on the survey we have seen the competitive edge in my opinion, we have 10% to 15% upside to current street numbers. >> but the hours per week watching anyone's dream just tells you how much and sticky that person is because they are not actually monetizing each hour so it almost doesn't make a difference they are still getting the same monthly fee. >> it speaks to the stickiness and the price increase where you saw really no impact and based on our survey work, about 87% would actually continue to pay up to another $2 to $3 price increase, especially with 4k, which could be a driver coming forward. >> how many of netflix's subscribers are in multiple screening services >> right now that's minimal. that's 10% to 15% that are multiple now, if you start -- >> you both have a user?

>> i have all of them. >> i have amazon video prime >> no, that's really more than three. if you look at two, give or take, 30% to 35% that's where amazon and netflix really come in but it all comes down to the positives. you look at today, they will have 85 films that they will produce this year. that's up 40% from a year ago. amazon's spending $4 billion on content. netflix is spending $8 billion that's really the advantage here. >> so that much good content out there, though? >> that -- content is the scarcity, but it speaks to why just the battle royal for 21st century assets, whether it is disney or comcast, that speaks to someone becoming a competitor. >> the comp to acquisition costs are what used to be the big hangover on the stock. look how much they have to spend on content now they are brandishing it as power instead. it's okay. and it's better that they are

spending that much on content. >> it's a driver and investors really want to see that ultimately, they are giving them the next one to two years for the margin to expand >> we saw in the latest report that it paid off but they are going to have to spend more when disney starts pulling its titles, right? at some point, investors say this is enough, right? >> well, that's right. i'm thinking 2000, as you get to 2019, the rubber meets the road in terms of the marginal error over the next few years. it speaks why the disney situation is the potential black cloud if you book out on the horizon. >> look, at this point, it's obviously a goldilocks scenario. but it's about 21st century assets, if disney gets it or potentially comcast, that's a game-changer for netflix disney is the biggest

competitive threat to netflix. >> thank you >> thank you for having me coming up, stocks have been on a nice tear lately, but i have morninsome for you to knowt and the second hour of "power" begins after this short break. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point.

that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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i'm melissa lee. could legalizing sports betting take a toll on the economy why one author thinks so and says, don't bet on it. not so pretty picture. steve nguyen is suing christy's over a ripped picasso. all the details in this brewing battle straight ahead. "power lunch" starts right now i don't want want a ripped picasso, come on the russell is hitting another all-time high. you can see it is higher slightly industrials and materials are leadi leading, staples and financials are falling.

boeing is leading the dow. jpmorgan is lacking. applied materials are falling after giving a weak outlook. and nordstrom is sinking as sales miss paypal is moving higher after buy buying another company and here's what is happening at this hour, mattel rejected an offer from mga entertainment for a americmerger deal. mga made the approach in april average pay for those under age 24 are up. construction workers are seeing the biggest wage hikes and apple made the first tax payment to ireland of $1.8 billion. it's the first of disputed taxes that apple will pay after the eu decided that ireland gave the company unfair tax advantages. melissa? well, tyler, we begin with

the market starting to flash warning signs. dom chu is joining us to tell what you say to look out for. >> we are looking at the first, number one most important risks in the marketplace right now we put them as bricks in our wall of worry. we'll start with bigger pictures on the broader picture macro level. are there going to be rising prices and will it affect the markets well, this is a currency strategist over at wells fargo who says rising prices could contribute to the re-pricing in the fed expectations over and above what is already priced in. it's our sense that there is only limited room for further repricing, meaning we could see volatility start to pick up. we'll move on to another thing here with rising interest rates. matt maley says every time we see a meaningful rise in rates it exposing a malalignment in the system it doesn't mean it will cost a major issue, but we could see the downdraft we saw in

february let's move on to the overall weakness in the emerging markets straight from the u.s. dollar. here we got blake gwinn saying, it's the top of the list because it could have a spillover into other emerge markets and impact development markets here and in europe then move on to how it affects our companies and earnings lori over at rbc capital market says we have seen historically when the dollar strengthens too much, corporate profits revisions take a hit the expectation for a weaker dollar has been consensus. so it goes higher. that could be a bad thing. and to sum it all up, over at tigris financial, ivan says this, it's all about revenue and earnings growth. anything that would derail that train would be the biggest risk to the marketplace we have to keep an eye on all those things some of the highlights from the poll from experts. back over to you guys. so how worried should investors like you be about

rising threats and rates? we'll bring in rob hayward, senior advantage strategist with u.s. bank wealth and management. rob, with interest rates moving up as they have, there is some advantage now to having some cash, isn't there? you can make a little money in cash. >> yeah, for the first time in quite some time, you're getting paid more to own two-year treasury notes than you are in the dividend yield in the s&p 500. we are seeing the competition is probably going to start for asset all locators between do ied a more money to bonds or do i stay with stocks and some of the income-oriented investors may be starting to re-think the previous allocations when it was better to take on more risk they can probably start reducing that risk profile. >> are interest rates at these levels and at this pace of increase a risk to equities? and if not, when would they be >> well, certainly since we hit 290 the first time earlier in

the year we have seen this kind of wall that the stock market can't get through from 310, 311, where we are today. the interest levels coming off the levels we are off has an effect the price multiples could be infinite when we thought inflation would never pick up again and we thought rates wouldn't be a problem. the five and ten-year rate wouldn't be a problem with a couple base points between them. it's a problem as was everything else that dom mentioned. the extent that the dollar and interest rate rises, that poses a risk for the u.s. economy but for emerging markets as well. >> we are seeing it a lot already, right look at the brazilian etf down 3.5% rob, to your point, if you can get what you can get right now on a ten-year, why are you going to put your money in a place that you worry about rule of law? you worry about, you know, all kinds of things, and instead it can be safe? the thing is, aren't those emerging markets an early tell of what could happen to other

parts of the u.s. market if interest rates keep rising >> yeah, i think -- you know, emerging markets are probably a little more early cycle, but it's a very diverse place, right? we have countries with current account surpluses, so they're kind of in more trouble than maybe the exporter who is are probably a little more worried about something else for us, we're seeing the u.s. later in the cycle, what we're launching is something dom mentioned earlier, which is earnings growth. the market is well priced for the benefits of the tax cuts the question is do we get follow effects from capital spending and increasing capital expenditure to lift earnings a little further and that is a little more uncertain for us then you have the evaluation pressure if we do see rates rise more in inflation expectations really starting to climb >> you know, rob, let me turn the conversation a little bit. i sense that over the past couple of months one of the things that has calmed the markets from where they were in

that very volatile face in february and early march is that the fear of a trade war with china seems to have moderated just a bit let me get around to it. nafta, there was some hope in nafta and north korea. there was some hope there. but this week, even this morning, very far apart on nafta says one of the top white house officials. the china business is still as unsettled as ever and may not be going as smoothly as we thought. so maybe it is a negotiating question >> we hear that a lot. >> north korea, there may or may not be a summit, says the president. >> yet the market is -- >> yet the market is fine, but if things -- if all three of those cherries on the slot machine don't turn up and go the other way -- >> i think largely what i have been worrying about all year, i much prefer cash, with the exception of certain notable stocks that you can probably own for quite a long time, whether it is a microsoft or mcdonald's,

something along those lines. we are looking at peak profit margins, not just peak profits necessarily. and if one of those things or all three of those things head south, we'll have to deal with the issue of rising prices that could come from a trade war, an outright trade war with china that effects things like agriculture and industrial companies and things like that so i think all the issues are extremely important. and against the backdrop of rising rates they are certainly more important now than otherwise. >> thank you so much rob, really appreciate it. before you go, i want to talk about pope francis he released a major document today on the vatican press -- you are a lapsed catholic, right? so the pope has another homily out. i read it, you read it as well, i understand, that was an hour of my life i can't get back. cnbc broke the story the first time when his first homily came out to criticize capitalism. he had trouble raising money for st. patrick's can thee dlal

because a lot of the capitalists were saying, if you don't like capitalists, what do you think is paying for this but it was an issue. so the pope's got this big -- he's clearly spent a lot of time understanding what happened with the financial crisis and now he's giving all kinds of advice among the morally questionable activities, the financial advisers and the management of savings, the following are to be taken into account an excessive movement of the investment portfolio commonly aimed at increasing the -- the revenues deriving from the commission that would suit better the needs of the clients >> the judiciary role. >> remember that jesus, when he was on earth, spoke very similarly, although maybe not in

modern financial terms there is the question of the money changers, the question of how a rich man can enter heaven. that passage is misinterpreted in this translation. but having said that, chris hayes and i were talking earlier off camera, he is on message this is his job. jesus talked quite a bit about income inequality and whether or not you pay more to your state than to the people who need assistance and jesus said that on many occasions as we know, particularly of us who spent way too many years in catholic school, the pope isn't far off in that message, whether or not you agree with it, and whether or not you feel it's appropriate to involve himself in conversation about capitalism is another question. >> it's very much an evolution when you read the first one, it's handicapped -- this time he says money itself isn't bad, it's just if it's the -- there's all kinds of -- he's clearly got talked to a lot about the importance of capitalism and now he's really trying to

come up with structure. >> if you would have been able to sit down and have a conversation with jesus about capital i feel, i suspect you probably would adhere to another economic discipline. >> i don't think think that at all. absolutely not >> no, i think it's about freedom. capitalism is about freedom. >> it's about income inequality. he did pay ceasar what is due. i don't think he said anything about comparing the damage or who gets to make more. >> if you had to decide, what is the best distribution of resources in the country to do the most good for the most people, do you come up with capitalism or something else >> well, we certainly do but the pope may also see there are inefficiencies in the modern system, which he argues in this case, require more interveng and more regulation. one could make that argument that income is unfairly distributed and accrues to the top 1% to 10%, however you want to characterize it that's the point he was making today. >> can you imagine what will happen in confessionals across

new york city when a financial broker goes in there forgive me, father >> the confession, although this is not my experience in catholic school, is supposed to be casually anonymous you eventually did hear the father say, you get five hail mar marys. the catholic church could give away a lot of material wealth and help the people suffering from income inequality they are the single largest landowner on the planet, a wealthy enterprise to that end, the pope may want to look inwardly before addressing the systems. >> we'll ask jesus tonight how he feels. >> at dinner >> at your house, yeah thank you, rob coming up, amgen is getting fda approval to treat migraines. what it means for the industry and steve nguyen has 99 problems and a damaged picasso is one of

them we'll get the latest on the battle with christy's. plus, don't bet on sports gambling being good for the economy. one person says it is a risk to society. he'll join us straight ahead first, we'll get to sue herrera with the latest on the shooting in texas. >> thank you very much we now know that the suspect, the 17-year-old suspect that was taken into custody, he is the alleged shooter. he has been named by police at dimetrios pagourtzis he was heavily armed according to reports interviewed by police what we know is this morning, between 7:30 and 8:00 a.m., this suspect allegedly went into the school, heavily armed. we now know ten people have been killed nine of them are students. one of them is a teacher apparently there are also explosive devices still in the school they are trying to clear those and diffuse those so they can see whether or not there are still students sheltered in

place in the school or whether or not we have additional victims. s.w.a.t. teams went to the neighboring areas presumably one source telling nbc news that this may be the house of dimitrios pagourtzis, we don't know that for sure, but those are the s.w.a.t. teams you're looking at a very traumatic experience for the students and parents here's what one eyewitness told us >> as soon as we heard the alarms, everybody just, you know, started leaving, following the same procedure as we did because nobody thought it would be this. nobody thought it was at shooing. everybody just thought it was a, you know, normal procedure practice fire drill. and next thing we know, we just hear so many -- three gunshots, loud explosions. and a lot of teachers are telling us to run, run go, run! >> there are also a number of injuries we know of at least three people

who were transported to the local hospital there are several hospitals that are waiting for possible additional victims there were confusing reports earlier as to whether or not they were expecting multiple injured or not that is still kind of a fluid situation there. but we are monitoring the situation. governor abbott is holding a news conference shortly and we'll be monitoring that conference shortly to bring you details as they are available. and i'll have the latest on the news update at the bottom of the hour you're utoatp--de. "power lunch" is back in a moment ♪ you can be sure ♪ that it will only get better ♪ you and me together ♪ through the days and nights. ♪ i don't worry 'cause ♪ everything's gonna be all right. ♪

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one more way comcast is working to fit into your life, not the other way around. welcome back to "power lunch. the fda was getting approval for a drug to help with migraines. >> amgen said the market for the new drug could be 10 million people in the united states. the drug is approved for migraine prevention given once a month with a self-administering shot with a price like an insulin pen. the price is $575 a month or less than $7,000 a year. many analysts are saying amgen is seeking to avoid what happened with a recent approval

of cholesterol drugs priced higher than expected and rejected for coverage by insurers amgen and novartis on the first in the market with this drug other medicines in the same grouping are in development. some see a price war on the horizon as more medicines get approved but for now, amgen has the market we'll talk more about this with michael yee we were just talking about the competition coming into this hour how long is amgen going to have the market to run with this? >> good question both first in the market, lily and teva could have similar drugs near the end of this year. and another smaller company alder could have a much less frequently administered drug later next year. so there are other players coming in.

but so far angen has it -- amgen has it >> how much does this move the needle for amgen in terms of profit and stock prices? >> you know, i think that this is a start of important product cycle for amgen. obviously, this drug, i think, could do well north of $1 to $2 billion over the next five years. that's a 10% move to amgen's revenues and the cholesterol drug that meg mentioned to that we have revenue and earnings growthing over the next couple of years to move back up to 200 by the end of next year. >> how do you get to $1 to $2 billion a year presumably, the total market is fixed in terms of the number of people suffering who may be treated by this particular drug. and with competition coming on, the price is going to come down. so where does that growth come from >> yeah. well, you know, meg mentioned the numbers, 10 million, even a

fraction of the numbers, call it 200,000 people, which is a fraction of that, times a $5,000 drug gets you to at least a billion. and the key is that, i think this is a huge unmet need. and because amgen priced low, opening up access, i think that's really going to be a big key test for how big these drugs can be because the payers want people to be responsible. so this is a good test for the market and i think that multiple players in this market could make the market quite big. >> mike, what do you think about what the price says about the sort of drug pricing environment right now? we have seen a price like this two years ago, would we have seen this price two years ago? and in the past, the same experience with cholesterol drugs? >> i think the takeaway of why the stock is up today, meg, is there is the investor fear that people want the high prices, access is a problem, and then nobody wins. i think the responsible

perceived price is with a lower gross price means that both the payers will be happier, patients are happier, everyone is happier with access and sets a responsible tone so i think that wall street feels like the drug companies are responsible and everyone wins so whether they did that for political reasons or did that for better access, i think it sets a good first tone and a good piece of information today. >> michael, thank you very much. we appreciate it michael, meg, appreciate it. thank you. coming up, between elbows and paint poles, steve nguyen has had fast luck with picassos. the mogul is furious with kristy's we have the latest coming up next this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands.

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we have been hearing for a few months now that lloyd blankfein is expected to step down by the end of the year or early next year. and now the departure is

expected in december david solomon is likely to take over and kate is on the news line about the retirement and the team mr. salomon might assemble. hey, kate, what can you tell us? >> hey, michelle, how are you? there's a lot of uncertainty about exactly when lloyd was leave. people say he's engaged as ever doing public interviews as he did with will flash month. and might want to stay around through parts of or all of 2019 is what i was hearing originally but more recently i'm told, there is a plan for him to step down before the end of the year or at the end of the year. and one event that may take place in conjunction with his stepping down is an annual dinner for retired goldman partners that occurs in mid-december typically so that is something that may happen on or around his retirement meanwhile, of course, david solomon, who is the heir-apparent and will be named ceo when all this is put together, is putting together his own organizational chart. >> and what do you hear about

that >> so i think the first and foremost question, probably, is who replaces him as president? that number two person or people are often the most likely to be successors, eventually, as is the case here. they often have had co-heads and i understand that may very well happen again. i have heard three names of people who are apparently on the short list short list is fluid and not finaliz finalized. but john waldren, eric lane and steve scher. >> and depending on the direction of the bank and what it wants to take, is that how they decide at this point? or what is going to drive that decision ultimately do you think? >> i think there are a few factors that go into it. obviously, having a repoire with david and the experience necessary, less likely, they

probably want a mix of capabilities it probably would be obvious that he would nominate someone with investment banking experience he knows well from running the department himself and you have john waldren. but steve scher has that experience as well eric lean hails from a different part of the firm that would be a nice compliment. lane plus compliment or lane versus scher then the rocky era recently, the most senior person there, pablo solomay is retiring in june. and isabel may is also retiring. one head of the division right now. it's not clear if david will be looking from the outside to bring some new leadership to the trading division. >> very quickly, kate, lloyd if you wanted to, he could go do stand-up he could write if he wanted to but a lot of former goldman

chairmen have moved on to positions in the government. do you think that's in the cards for him? >> you're right. goldman does have that tradition and something they are proud of. i have not heard that but that doesn't rule it out. he's 63 and will be 64 in september. he's on a number of boards you know, he's interested, i think n philanthropy and education. whether he may want to write a book or think about public service, i really haven't heard any particularly youthful rumors on that yet but i'll keep you posted. >> lloyd and i are going to turn 64 in the same month in september. we'll celebrate our birthdays together. >> yeah, you should send him a card. >> i will! i will now that i know, thanks to you kate kelly >> thanks, guys, bye disgraced casino mogul steve nguyen has a lot of problems these days including a feud over a damaged picasso. robert has the latest. what happened?

>> steve nguyen was planning to sell one of the most famous paintings at kristy's last weekend but now he's battling over it. a workman was nearby painting a wall his paint roller fell over and ripped the corner of the painting and it was estimated to sell for around $70 million now, insurance is going to cover the cost of repairing and destroying the work, but nguyen is entitled to a lot more. he says the piece could have sold for over $100 million and is a lot less because of damages. now, wynn damaged another picasso back in 2006 when showing it to friends and punctured it with his elbow. that was repaired and ended up selling to steve cohen for $155 million. so that didn't suffer from the damage clearly, now, in a statement christie's says two outside conservatives made recommendations for successful restoration to the painting and

it's working to remedy the matter in partnership with our client christie's processesmore than 20,000 works of art this year. this is the first time i've ever heard of something like this coming public. >> which is so weird that it happens to steve wynn again. >> to a picasso. >> he was selling the paintings because he's starting a new career as an art adviser and his new company -- >> is this a joke? >> no, i'm serious. >> really? >> and he was going to sell this -- this was launching his new year steve wynn has a new online gallery where you can go online and look at paintings. this was going to fund that expansion. >> so it would be terrible for the poor painter whose brush slipped. >> yes, he's probably had a bad week. >> and i would make the case, we don't have painters anywhere near where we keep our goods that could be a selling point. >> it happens. it happens at both of the places and all the places but this is going to take a lot

to sort out with the insurance companies i'm sure. >> thank you, robert let's go to see herrera for a news update. sue? >> melissa, thank you very much. here's what is happening at this hour, everyone the suspect in the santa fe high school shootings has been identified as 17-year-old student dmitrios pagourtzis. nine students and one teacher were killed. "the houston chronicle" citing senior law enforcement officials reported pagourtzis was armed with a rifle, a pistol and pipe bombs. president trump is choosing active veterans affairs secretary robert wilkie to permanently lead the department. he's led for two months since david sultan was fired amid the ethics scandal and by a 213-198 vote, the house failed to pass the $867,000 farm bill all house democrats along with 38 conservative republicans voted against the measure.

afterwards, paul ryan took steps to call for a re-vote in the future and there you see him, in less than 24 hours, prince harry and meghan markle will be married. harry and his brother prince william left windsor capital to greet royal fans and well-wishers meghan's mother met with the queen at windsor castle reportedly earlier this afternoon. nice to end on a happy note. that's the news update this hour melissa, back to you thank you very much, sue herrera. still ahead, why sports betting could be bad for the economy and bad for society. our next guest has written a book about it and is joining us straight ahead plus, a report from hawaii following the latest kilauea eruption don't go anywhere. ow lchisacinwo mom you called?

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why is residents dealing with the fallout from the eruption of kilauea, the volcano, thursday morning? miguel almaguer is in hawaii with the latest. >> reporter: tyler, after kilauea's crater blew, a plume of ash traveled 30,000 feet. and today they are worried about

ash fall in several communities. they handed out more than 18,000 masks to locals after warning them to stay inside, close their windows and try to avoid breathing outdoor air. the officials today say that could continue to be a threat. meantime, in the leilani estates, the massive fissures, the lava-oozing cracks continue to breakout throughout the region there are at least 21 that have devoured more than 25 homes. that number could grow in the coming days here some 2,000 people are evacuated and spurting lava and toxic gases throughout the community officials say there could be more explosions through the day. and they are also saying kilauea's crater could blow again. tyler, back to you >> miguel almaguer in hawaii amazing photographs. we have and update now on plane crash in cuba and phil lebeau has the evolving details. >> tyler, we are just getting video from the accident scene outside of havana's airport.

there's not a whole lot we can tell from the video aside from the fact whenever there's a plane crash, there's the big plume of dark mosmoke. and that is what we are seeing in the distant here. this is a cubana flight operated by the italian flight blue panorama 107 people were on board according to cuban state media i have seen reports out of both the cuba state media suffice it to say, a little over 100 people on board. it is unclear if there are survivors or if everybody parished these are the first images we are getting from there a boeing 737, obviously, there at the scene, they are investigating what happened. we're trying to at least begin the investigation into what happened guys, back to you. >> thank you very much, phil lebeau, for that update. while many state officials are applauding the supreme court decision to legalize sports gambling, not everyone is sold on the idea that it will boost local economies. joining us with the contraryian view is the senior editor of the

public manhattan institute here in new york. steve, good to to have you here. you know the argument, people bet on sports anyway there's a lot of money, they're going to do it no matter what, why don't you legalize it, tax it and then the states gain some revenue. what is wrong with that? >> first of all, we have had legalized gambling rolled out in the united states for 50 years now. and there have been a lot of things about it and it's been studied. as a fiscal tool of states, it never measures up. what the ad have to cats say it will generate rarely comes true. and the key point is that people are just doing it anyway there's been a lot of economic research that shows that's not the case when you legalize gambling, you get more of it not only do you get more of it, but several studies have shown that you get less spending in other areas of the economy, including entertainment. it syphons money from other areas of the economy so as a policy tool, first of all, the states that have the most gambling are some of the

states like new jersey and new york with the highest taxes. it hasn't held down taxes. new jersey has persistent budget problems and they have more gambling than just about anybody that hasn't helped the budget. so this almost sends t triumphalism about it. and it doesn't have the benefits that many proponents have said and we have been watching this for 50 years now. >> do you point to california and what happened with pot tax revenue as proof of your argument >> well, well -- california's anecdotal evidence when they actually legalized the lottery years ago, the california association said in the first year their sales went down 5%. and some big california grocery chains stopped selling lottery tickets because they thought it was affecting their business now, that's in addition to actual studies that suggest the consumer spending goes down. remember one thing, we have a natural experiment here. because in the united states, we have states that have gambling

and right next door states that don't have gambling. this is a perfect environment for economists to study this and there's lots of data out there. nobody in today's environment seems to want to discuss that data >> in the argument you wrote for the manhattan institute, you said the dirty secret of legal betting is that much of it is targeted at persistent problem users. what percentage do they make up? >> this is something else that really bothers me that is now part of the discussion the thing about gambling is what a number of studies have thosho is 20% of the lottery users to up to 35% to 40% of casino gamblers are problem or pathological gamblers. this is a legal industry that is really supported largely by people who have a problem. and that is something that aught to be part of the discussion. >> in terms of the cost that we talk so much about, the benefits. >> there's an economic cost to this i'll give you an example

pathological gamblers on average, 25% of them will file for bankruptcy sometime in their lifetime that's a staggering number compared to bankruptcy in the general population, which is much lower. >> interesting viewpoint considering what we have heard this week. steve, thanks so much. coming up, it doesn't matter who votes or how many people vote when venezuela holds the presidential election this sunday we all know who is going to win. there he is. the latest on the election and the poteiantl fallout on the oil markets, next.

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there is an election on sunday in venezuela. when it is over, no one doubts that nicholas mardura will win many participants believe the u.s. government will respond with sanctions on venezuela's oil industry with the possibility of a full embargo on their gas and oil. we are joined now to talk about this did i describe that correctly? any disagreements there? >> on sunday we have the chronicles foretold. >> what about the possibility of

the sanctions on venezuela would the u.s. government do it? or would it implode on its own >> when they came into power 19 years ago, they produced 3.5 million barrels a day and now it is lower one of the options the u.s. has to impose financial sanctions and the sanctions on the individuals in the regime are oil sector sanctions i suspect that after this quote/unquote election on sunday, they are going to stagger those sanctions. by that i mean, the u.s. will stop selling diesel to venezuela. they are going to not allow for insurance companies to insure venezuela cargo ships. and then the last one, the last lever that could be pulled is the u.s. not buy any more venezuelan oil from what i'm hearing, the u.s. big oil lobbyists in washington who can be quite convincing at times have asked for this lever

not to be pulled just yet and to wait. >> how much oil do we buy? >> it used to be a million barrels a day. >> this is most of the current production. >> right, now it is down to 400,000 to 500,000 barrels. >> do we need to buy it? >> with the heavy crude produced in canada and columbia and mexico and some in this country, no >> why >> there are still major refineries they own. and the viscosity of venezuela crude is such that you can't flip it around and bring in other oil that quickly it would take work and money. >> have we seen the full extent of the contagent risk when it comes to default and exposure of u.s. bond funds? as interest rates got really low here, bond fund managers went out on the risk spectrum and bought the emerging market debt. we have seen the debt do

terribly recently. venezuela saw the bonds default already, but there's a lot of corporates as well is there great exposure there? >> i think the meet of the venezuela risk has been the $32 billion worth of debt, defaulted to last year and another $30 billion worth of debt but there's been minimal payments made in the last nine months so those bonds are trading around 28, 39 ce29 cents on the dollar there's still pain to be felt considering the election coming and the sanctions that could be coming >> one of the most influential people in sovereign debt is in restructuring. their worth is zero. >> i would counter that with whenever the next regime does come in, venezuela has 300 billion barrels of crude oil. >> you led me to the next question they have the longest reserves in the world more than canada and saudi arabia the next regime, the population

there is suffering terribly. >> terribly, yes >> terribly. >> 30 million people in venezuela, 2 million people have left in the last 18 months and there's an immigration flow into colombia and brazil >> what would it take for there to be an arab spring in caracas? >> one thought we were on the verge of that in the spring of last year, but the regime met it with such ruthless action that those protesters were stopped. >> there are -- crossing the wire, excuse me, u.s. issues fresh venezuelan sanctions coming from the treasury department do we have the release, guys this targets three florida-based companies in the latest sanctions move so they have already started, even ahead of it they have widely -- they had widely telegraphed the administration, to say, if you hold the false election, we're going to sanction you. and venezuela delayed it, but still, it's going to happen. so, obviously, they are throwing

down the gauntlet right now to say, here's what we're going to start with and probably to your point, the staggered process that we might see. >> the big difference is that these treasury sanctions make life uncomfortable for certain individuals. it's individuals. the oil sector sanctions that really cut off the flow of dollars into the regime, and that's where big changes could happen >> thank you, danny. much appreciated it. >> thank you >> good to see you campbell soup crushed today. consumer staples lost their luster rangatn"ak aook. let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes?

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time for "trading nation," and campbell's plunged to the worst day in 19 years, the move took the staples space with it craig johnson and mike and, mike, where do you stand on campbells and staples in general with the two-year note yielding what it's yielding right now >> yeah. this is, you know, classic defensive sector has been a land mine for investors lately, food,

beer, cigarettes, cleaning products, none of these companies can generate any volume growth. they certainly don't have any pricing power, and so the way they have been getting earnings growth is to acquire each other, cut costs, take on debt, buy back stock this financial engineering hit a wall lately, and investors are really just -- they are de -- they are derating the stocks, taking what's been a premium to the market to a discount in the market as long as we have general mi s mills, coors, kraft-heinz, we'll pass >> you'll pass on staples. craig, what do you think >> i think the chart says it all. look at the chart of the xlp this is a space we are underweight for 112 weeks now. we're not a day trader strength rolled over in mid-'16.

price broke the support line in march. trade still down here. any sort of relief rallies, sell relief valleys and lightening up on the xlp shares. now, if there's a name we buy, look at hormel the stock is interesting it showed a big interesting looking base, reversing a down trend, put in a higher low fundamental outlook thinks this is a $39 stock, so 9% upside on the charts, there's more towards the low 40s, so 12% upside, that is a name we find of interest in the space if we had to be there for exposure purposes >> pass on the soup, but pass the spam >> yes >> you can follow us on twitter on trading nation. check please is next and now the latest from tradingnation.cnbc.com and a word from our sponsor. position size and risk-reward ratio are important

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having a piece of money, 1300 for the royal family, something or another, amazing. >> cornwall i think it's called throwing off their incomes and prince charles still gets $20 million a year poor baby. i wanted to go back and look at some of the hawaii volcano video because when you are feeling how significant you are or humans are, this can make you feel insignificant and small when you see how the earth is making new earth even as we speak just fantastic video, of course, our hearts out to those who lost homes and are in the danger zone there because it's damaging at the same time, but it's really stunning >> yep >> my check please is a quick one. deutsche bank, shares under performing again, down 2.4%. we spoke to steve eisman, a big short fame, earlier this week on

"squawk box," shorts deutsche bank, the problem child of the global financial sector for some time now and continues to be something to watch deutsche bank, db. thank you for watching >> "closing bell" starts right now. >> and our best to harry and meg meghan >> welcome to "closing bell," a record breaking day for the russell. what's it mean for the rest of the market at cnbc global headquarters, i'm dom chu where walls of worry and caution flags are lining up against the rally. what's the risks for investors right now? >> reporter: we are reporting a major breakthrough in migraine medication shareholders and parents set to benefit big time >> reporter: i'm wilfred frost in windsor, less than 24 hours left until the royal wedding a look at the money behind the big event. i'm kelly