today. down 8% in the last month. love this one here. >> keep your rye on the market the summit, the g7 up in canada. "power lunch" is going to be all over that and clook ahead to next week and what lies ahead for investors as well. that does it for us. "power lunch"ins begins now: let's go caps. that's all i have to say, tyler. >> stanley cup champs. what a night that was. good afternoon, everybody. i'm tyler mathisen have you ever had to be at a family gathering and you kind of didn't want to be there. president trump is facing g7 leaders at this hour and there is a lot of tension right now over tariffs among other thing will they find common ground seems a little unlikely right now. are things about to get really testy? we are live north of the border. plus, before the president left for quebec, he weighed in on a number of other issues, including his upcoming summit with north korea's leader as

well as his support for marijuana legislation. we'll talk about that straight ahead. and we are off to the races. the belmont stakes tomorrow. will justify gallop to that triple crown giddy up "power lunch" starts right here right now. ♪ run your wild horses >> happy friday. welcome to "power lunch" i'm melissa lee. after spending most of the day in the red, the dow posting modest gapes this hour it could post its best weekly gain in three months the nasdaq meantime on track for a second straight down day consumer staples and health care the best performers. s&p tech is the laggards an cell one of the biggest drags on the dow following the nikkei report that they were cutting orders by 20%. the itb, builders rallying, on

pace for a sixth straight day of gains for the first time this year also on pace for its west week since early march. century communities and di horton leading. i'm sarah eisen. general electric shareholders can breathe easy the embattled industrial giant keeping its quarterly dividend despite fears it would be cut. >> verizon names a new ceo effective august 1st vesberg joined a year ago and was previously the ceo of erickson. americans have never been wealthier. u.s. household net worth passing the $100 trillion mark for the first time ever. rising home prices helping to fuel the gain. -high tyler? >> thank you sarah we begin with the world focusing carely on quebec president trump meeting with g7 leaders to discuss their trade tariff spurs

larry kudlow calling it kind of a familitive before he left the president weighed in on a host of other big issues, including his upcoming summit with north korea's leader in singapore. ayman javers is covering it all for us from d.c. first we will go to the location kayla tausche with all the joy and turmoil at the g7 summit >> tyler, blue skies and smiles, and happy hand shakes belying the difficult conversations being had behind closed doors here in quebec city where leaders referenced unprecedented tensions among these allies. a senior uk government source says prime minister theresa may plans to ask president trump for a full and permanent exemption from steel and aluminum tariff this is afternoon and told reporters this morning that the european union will respond if that exemption is not granted. other member countries plan to push for free trade language in a joint communique that the u.s. may or may not be signing off

on and the french official told roid righters that the member countries may also push for language the in that joint statement urging caution toward russia after a surprising overture president trump made this morning about the one-time eighth member this group that was expelled in 2018 for invading crimea. listen >> whether you like it or not, and it may not be politically correct, but we have a world to run. and in the g7, which used to be the g 8, they threw russia out they should let russia come back in because we should have russia at the negotiating table. >> asked about the prepared of that this morning, european council president donned tusk told reporters that america needed to focus on strengthening the format of the existing g7. relationing among whose members tusk called challenging. you reference ared that larry kudlow called this just a family

quarrel. there are going to be multiple family meetings this afternoon we will see whether any of the issues can be smoothed over. >> thank you very much let's go back to washington, where before he headed to canada the president cuffed a host of hot button issues from his upcoming trip to singapore, to his embattled epa chief to his chief on legalizing marijuana. ayman javers joins us with that side of the story. >> reporter: the president clearly in no rush to get up to canada this morning. stopping to talk with reporters for nearly 20 minutes. he gave us a number of insights into his thinking including his approach on preparation for the upcoming summit in singapore next week. here's what he said. >> i always believe in preparation. but i have been preparing all my life you know, these one-week preparations, they don't work. just ask hillary what happened to her in the debate so i have been preparing for this all my life. >> he discussed a whole other range of issues, including the

idea of a potential pardon for muhammad ali he also discussed dennis rodman, lebron james and and other he gave tepid support for scoot pruitt, the embattled epa chief saying he is certainly not blameless but he has been viciously attacked by the media. then he weighed in saying he might sign a bill that would allow the states to go ahead with legalized marijuana this is what the president said on the idea of a presidential self pardon. >> i do have an absolute right to pardon myself but i'll never have to do it because i didn't do anything wrong. >> you heard the president there saying he didn't do anything wrong. he doesn't expect to have to need it but he does have an absolutely right, he contends, to pardon himself. tyler. >> i thought on scott pruitt, his comments were kind of nuanced and reminded me of prior

endorsement/none endorsements of cab net or other officials who he was having some difficulty with, whether it was the former health and human services chief or others where he said okay, yeah, i don't think he has done anything wrong but we'll see time will tell >> we have seen a lot of these officials sort of twisting in the wind so to speak but this is a case where scott pruitt has been twisting in the wind maybe a lot longer and there has been this relentless drip, drip, drip of scandal oriented stories about pruitt and his management in the epa. there was a story this week that he got kicked out of the white house mess because he was lunching there too often all those leaks indicate the long knives are out for scott pruitt but the president has the longest knife of all we will see whether he uses it. >> thanks very much, ayman javers appreciate it. >> is the g7 peting starting with the postponed meeting between president trump and president macron simply the result of a delayed arrival or a

sign of bad things to come let's bring in jillian tett. it seems symbolic that trump walks the long, long, long way at the resort in quebec by him to meet trudeau at the end of the path he is entering this very much alone. do you think anything could change on that front coming out of the meeting >> the president is a man who knows all about the importance of symbolism and drama and pageantry. he really is alone at this sum this is almost entirely unpress tented the g7 was created as something like a steering committee for the western world. for the first time you have this incredible split between donald trump and the rest of the group. the fact that both macron of france and trudeau of canada come out this morning in & the last couple of days with such stinging criticism shows the depth of the anger and unhappiness. it's particularly over the steel tariffs that much of the anger

is currently fell. >> who need friends when you have got friends, right? there are tariffs basically on all of our closest allies. coming out of this idea that the european unity is tremendous going into the early stages this meeting. what are the dangers in terms of polarizing us from the european union? >> i think there is a huge amount of danger of polarization i think donald trump preshts is you can kind of play shadow boxer with china because in a sense the chinese government is in a poi to make a quick decision on what concessions they can or cannot make. the problem with the bullying tactic with a group like the european union is you have lots of voices involved and lots of people watching. the chance of a quick deal or quick reconciliation is going be to be very hard, indeed. inside, i have spoken to people

around the white house and in the white house in recent days about this there is theory that actually by taking a super aggressive stance, donald trump will end up promoting more free trade in the long term because essentially in the short-term he will force the rest of the world to lower their tariffs. the problem, though, is that actually getting from that position is going to be very hard when you have this level of aggression and bullying tactics right now. >> the president is the master of the message, jillian, i think you have to concede. he is also a master at being able to change the conversation when he wants to, with -- like this morning, when he urged the g7 to readmit russia as part of that council taking the attention off of tariffs, which clearly he doesn't want to talk about. so my question for you is, if you are going to readmit russia and you say we have a world to lead here, russia ought to be a part of it why don't you admit china? why don't you admit south korea or south carolina for that matter. >> that's a fantastic question i often say that the president

is like aing a that christie novel. the power of distraction that's what we saw this morning with russia. the g7 has been a steering committee for the western world. that's why china china essentially hasn't been there. if you start saying actually we should insist on having russia in, then you say what about china, you start saying well what is the g7 for suddenly you go from the world of the g7 as a great analyst said to g20 with lots and lots of countries involved, or the g 2, china and the u.s or maybe the g 0, maybe we are moving to a world where there is no steering committee for the recalled would if so, that's a scary prospect for investors and business leaders around the world. >> skiry and serious, jill january. like us at cnbc you at the financial times i'm sure have been trying to figure out the market risks around all of this. yes -- there is a lot of symbolism in the u.s. being

isolationist in some of its trade policies, and the world being mad at us. but what is the practical economic and financial implication? >> well, that is a really great u.s. question, because what you are seeing i think increasingly when i talk to ceos or investors is almost a sense of not quite normalization of this drama. when tweets came out 18 months ago they were incredibly shocked into i the drama and they are almost getting used to this endless reality tv show. i was talking to a number of ceos who were saying actually we are getting used to it we can't factor it into our business plans we are not about to rip up or change our supply changes. we couldn't even if we wanted to when you take on board those sentiments you realize the market slipped this morning but everyone is waiting to see what actually happens in practice

beyond this posturing. >> they are not just waiting they are buying. we are going into the best week we have seen in months >> speaking of how it impacts business the issue of tariffs front and center at this meeting with president trump taking aim at canadian prime minister justin trudeau, specifically his country's steep tariffs on dairy imports tweeting overnight, prime minister trudeau is being indig napt prig up the relationship that the u.s. and canada had over the years and many other things but he doesn't bring up the fact that he charges us 300% on dairy hurting our farmers. pork and pork products, custom the u.s. is shipping south of the border at record numbers mexico, our number one export market, announcing this week it will impose a 20% tariff for more on the u.s. exports let's bring in steve myer an economist at concerns & associates thank you for joining us, steve. >> great to be with you, thanks.

>> now we are seeing increased pork tariffs on u.s. exports from mexico and from china what's the impact on the industry. >> well, we think the impact is going to be a little bit muted i mean it's not a small deal don't get me wrong because this is the first actual tariff -- first two, that it's been placed in this trade spat between the united states and china. you have gone from the level of rhetoric to actual money that's awful eimportant. but in the case of china, they have a much larger pork supplies this year, lower prices. we weren't probably going to be shipping anything much there anyway so i can't say that those tariffs would have an impact we thought they would have an impact on by products, parts of the big that are not part of the carcass. they would be like organ meats and products from the pig's head. >> yum. >> those are delicacies in china. we thought they would have a real big impact on those they haven't had an impact so far. in the case of mexico, the main

thing that we ship will is pork lags or fresh hams, hams before they have been cured they go to mexico. they are processed into lots of different products and as i have done the math, it's very possible that even with the tariff, the united states pork industry can deliver fresh legs to central mexico processors probably for less than anybody else in the world and we are one of only two suppliers that can deliver fresh hams, custom the mexicans prefer canada being the other one i doesn't take much of a geography mexico to know it isser if a they are from canada to mexico than it is from the united states. >> interesting >> i don't think it's going to be a big deal early on >> i was going to ask -- it sounded like you are somewhat supportive of the president's policies here. was the u.s. getting an unfair shake when it comes to pork and agriculture that you follow from some of our trading partners to begin with do you support the fact that's fighting back? >> in the case of china, we have

had large tariffs in china already before this went on. they have been there forever in the case of mexico and canada, we are at zero we have been at zero for many years under the nafta. so this is a serious situation for the pork industry as we export about 23% of our total production and the mexicans take about a third of that. so this is a big deal. no i -- whether i'm supportive of the president is not an issue. >> yet you say that even with the tariffs the u.s. producers can still sell to processors in central mexico at a competitive price? >> in the short run, at 10%. we are going to 20% on july 5th. in the long run, they will probably look for other suppliers as they will probably deem the united states an undependable supplier. this is a big deal in the long run. i don't know if it's going to have any impact next week. >> thank you very much steve, steve myer in des moines.

weekly rig counts just out. >> it is not a big increase but it is an increase. u.s. oil drillers added one new rig this week, taking the total up to 862. up 121 from a year ago it is the third straight week of increases that we have seen according to baker hughes. combine this with a surprise inventory builds here in the united states and product at 10.8 million barrels a day along with opec adding barrels back on line and crude prices are in the red today. actually only slighter lower on the week, guys >> jackie deangelis thank you. now to meg tirrell who has a market flash for news dialogue semiconductor, that company said to be in deal talks with apple supplier sin apartmentics according to bloomberg citing source sin an tech surged on the news we will bring you more on that when we get it another piece of news to draw your attention to.

eu anti-trust reg will iters apparently set to clear without conditions comcast's bid for sky. according to reuter's citing sources. a couple market flashes for you there real quick. the dow is taking an afternoon turnaround it's now on track for its best week in three months where are traders slugging off all the trade tariff fears and all the events next week yet to come. plus, what could add $1 trillion to the american stock market in the next decade? experience the thrill of the moment with the lexus is. lease the 2018 is 300 and is 300 awd for these terms. experience amazing at your lexus dealer.

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the dow on track for its best week in three months. the nasdaq and s&p -- all this ahead of the president's summit with kim jong-un and the fed meeting just days away why are the markets doing so well in the face of uncertainty? cole smead and eric marshal join us cole, let me begin you say that the risk to the market is not trade. what is it >> the risk to the nasht frmark lon term perspective is the fed. rates rising will impact what you pay for stocks from a historical context it's not a nifty fifth but we have

seven of ten stocks that dominate the market. it's not people on the growth side of the world or owning those stocks it's not that their wildest dreams aren't going to come true. it's just what are the forward returns of their wildest dreams. siegel talks about the nifty fiftd stocks for the long run. the problem is the s&p beat those stocks though they were the best companies in terms of the growth engine they had that's the question from the stock market perspective are the prices being paid for the greatest growth names out there worth the money. >> what's your answer to that? >> that's where we have a value fund instead of a growth fund. >> eric, not surprisingly as the manager of a small cap fund you like small caps. why? and which? >> well, you know, we like the fact that we are seeing earnings improvement. i spent a good part of this week traveling throughout the midwest

at the company headquarters of a lot of small cap companies and we are seeing an increase confidence for earnings and cash flow we like companies like eagle materials, integrated device technologies, and brunswick. these are all companies that we think are going to see continued earnings growth this year. and we are seeing increased confidence in consumption trends in the underlying businesses, and we see valuations as very reasonable for those companies. >> cole, you are finding -- you said you like value, and that's why you run the fund the way you do you are finding value in consumer discretionary names like target, nordstrom, and discovery networks why those three in particular? i get the retailhook but why does discovery fit in with them? >> discovery frankly doesn't care about what platform you are on sling tv, comcast, it doesn't matter to discovery.

use hgtv, that plays to directly a female audience. a great constituent for them relative the other tv channels they have to be everywhere, you tube tv, anywhere, they are there. that's a great entry for them not to care what the distribution platform is the cost to acquire customers is low relative to other groups espn, you would have to talk my wife into liking espn. there is a cost to her that's a great thing for discovery. it's cheap john malone there. great thing. john mentioned eagle materials the housing thing is a home run. i say a home run because buffet and diamond said, you know, we are in the sixth inning, and the big hit remembers coming to the plate. and buffett also said to not confuse the economy with the stock market in other words, our economy is going to do incredibly well, housing can make a pile of money off that that could be to the detriment of the average stock price pour what they are paying for the indexes today. we like that

that's quite a great thing if we don't want to pay for what people in the passive world want to. >> cole, you are obliquely referencing the growth stocks. i am assuming you are talking mostly about the big cap tech stocks, technology in the big tech contributed to the jot of the gains in the s&p 500's gains in the past monday or so are you not participating -- there is this trend happening where value managers and growth managers are sort of converging because value managers real that if you are not going to own any of these names, you are probably going to underperform the broader markets. >> that's a great question it is nothing different than dividend growth funds in the late 1990s, owning stocks that pay no dividends that convergence is what you are getting at we see value shops saying they pick stocks at a good discount they are hedging they don't want to fight anymore because the pressure is immense. the only thing about that, when there is light at the end of the

tunnel it's too late people will put themselves in a situation, wake up two years later and damage their business. in other words, what happens in two years could be quite a turn of events just like in '72 coca-cola was part of the nifty fifth. by the end of the 1970s, no one paid above ten times earnings for it for a long time you go from being loved to being hated. one out of the ten largest caps in the world ten years from now will be there. we agree with that statement >> thank you still ahead, the justice department taking aim at people with preexisting health conditions what the department said in court that cldavmar ou he jo ramifications for health care. that's coming up benjamin franklin

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a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab. welcome back to "power lunch. the justice department under president trump saying certain key provisions of obamacare are unconstitutional. >> the trump administration says it will not defend ben carson against a texas lawsuit seeking to invalidate the law, the d.o.j. siding with texas arguing the repeal of the individual mandate means the affordable care act insurance requirements brokes against preexisting conditions and other things are now unconstitutional jeff sessions saying in a letter to congress the department in the past has declined to defend a statute in cases where which the president has decided the

statute is unconstitutional. and that is the case here. 16 state attorneys are fighting the other side of the case any ruling here is likely to go to a higher court. insureser are submitting 20189 rate requests right now. we have seen 12% increases in washington, 36% in maryland. pricing in the losst of the individual mandate 17 to anthem and the biggest exchanges are flat they have come back from the lows of the session. the health insurance industry says they are going to put in an am cuss brief on other side of this case. >> i'm wondering what the political blowback is going to be even republicans who have been against obamacare have sought to protect those with preexisting conditions, the people who need it the most, correct >> it's certainly going to be a big political football the argument here is that the

states individually should be able to decide which parts of the law or what types of law they should have, that it shouldn't be a federal mandate nonetheless you have got to think, taxes and obamacare once again with going to be front and center as we head towards the mid terms. >>. to sue herera now for a cnbc news update. >> hello, everyone here's what is happening at this hour secretary of defense james mattis arriving at nato headquarters in belgium where he supports a new plan in which nato would deploy 30 troop battalions, 30 aircraft squad drons and 30 warships within 30 days of a military crisis. the ue's foreign policy chief also supports that plan. >> a stronger european defense is relevant, more than relevant s fundamental for nato and this is why our cooperation is increasing so much. at the same time, we are increasing our european union work on defense.

>> parkland high school shooting suspect nikolas cruz arriving in court for a hearing. his attorneys want to block public release of some of his statements saying it could cause significant trauma to the community and would violate his constitutional rights to a fair trial. royal caribbean joining a number of other companies, saying they plan to eliminate plastic straws by the end of the year it will give guests paper straws, wooden coffee stirrers and bamboo picks instead the move coincides with world oceans day. sea world entertainment made a similar announcement this morning. that's the news at this hour. coming up, are women the secret weapon in keeping this rally going? our next guest says yes, and she has some stunning statistics to support it "power lunch" is back in two minutes. six in the morning. she thought it was a fire. it was worse.

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together to make a difference for other people's lives. together, we're building a better california. tight range today for the markets after what has been a spectacular week for the markets in general the dow right now is in the green. it is currently on track here to post one of its best weeks in about three months the dow is up right now by .2% s&p up by 5.25

rice futures are down right now. on pace for their sixth straight week of loss force the first time since august of 2014. philip morris is rallying, the tobyio giant raising its different more than 4% docu-sign up 6% after its earnings surprise reporting a profit when the ito street was expecting a loss. forget buy backs, forget tax cuts, the fastest way to extend this aging bull market could be to simply hire more women. a new study from s&p global said adding more women to the u.s. work force would send global stocks soaring to the tune of $6 trillion over the next decade. a bigger female labor force would also drive up u.s. gdp by .2% annually. sounds like a no brainer jody gunsberg is the coauthor of the report well to "power lunch." >> thank you >> explain how you actually can

take data from u.s. female labor participation and translate it into market cap for the stock market. >> that's a good question. what we do is we take an economic scenario that we have that says with the increase in female labor participation rate, if we were to have kept up with other developed countries in the last 20 years, then we would add .2 percentage point on to gdp we know the sensitivity of stock market returns to gdp growth for the s&p 500 foeshs in the u.s. for every 1% rise in rise we have seen an increase of 3.4% >> how much do you have to increase the participation rate to get that .2%? and what is it now versus what that supposedly optimal number would be. >> in the 70s. >> right it's in the 70s range. now compared to 20 years ago it

has fallen from 76.7% to 74.3% what is interesting is that the oec in general has risen we fell from being the 12th highest down to the 29th out of 35 countries. >> why >> because we don't guarantee -- sorry, is it because of the parental leave policies? >> right the united states is the only country in the oecd that doesn't provide income support during maternity and parental leave by law. we think that could be a major driver behind why we have not grown with the rest of the world in this participation from women. >> when you calculate, this i'm curious, i mean, there is an assumption that you can raise that participation rate on the part of females to the same level. does that displace current jobs filled by men and therefore the boost to gdp wouldn't be as great? because you are basically saying we are just going to increase the labor force here, we are just adding jobs of course that would improve gdp

no matter what the jobs are filled by? >> it is a possibility but we model what would happen based on what has happened in other countries like norway, for example. if we were to have kept pace, if our economy were to have grown all else equal like the other countries did then we would have seen this growth and then the stock market value would increase not only in the u.s. but around the world. >> have eseen that in other countries, where the stock market increases along with the economy as a result of more female labor participation >> around the world, the stocks are really heavily influenced by the united states because the u.s. makes up over half the world's stock market and the u.s. economy is largely driven by consumer spending. so the more a country exports to the united states, the more sensitive they get to our gdp growth so for example, korea exports about 4.6% of their output to the united states. and that's a very large amount

as compared to say like japan. >> so to the spirit of sarah's question, am i understanding you correctly, that in countries where you have seen an increase in female. labor for the participation you have or you have not been able to correlate a rise in stock market capitalization? >> well, what we are looking at is how the increase in the u.s. female labor force would increase the other countries. >> but on what do you base that if you have not been able to track a similar empirical result in other countries >> what we base it on is the sensitivity of other countries' stocks as we measure by the s&p global broad market index to the u.s. gdp growth. and we do have the historical data to show that as the u.s. gdp growth increases that their stock market values increase so korea for example, increases on average 9.3% of return for

every 1% of u.s. gdp growth, which is much more than the u.s. even grows alone from our own gp growth. >> you also -- our own gdp growth. >> you look at sector and for example, u.s. technology and what kind of exponential impact that could have on our economy and our market >> what we would estimate is an additional 1.1% return annualized in technology over the next decade we could see that compound into an initial 11.5% return for technology. >> interesting stuff. >> interesting stuff >> jody, thank you for joining us and something that the imf has been focused on as well from s&p. will justify do what only 12 other horses before him have done and win the triple crown. >> we will find out tomorrow on nbc. next we are headed live out to belmont park for the latest on justify's cnc a ahaesnd look at the big business of horse

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the 150th running of the belmont stakes is tomorrow on nbc sports the attention is focus around the favorite, justify. a win would make the colt the 13th horse ever to win the triple crown when i hear this guy's voice i know it is a big event mike tirico is at belmont. mike, great to have you with us. >> thank you for the welcome, tyler. the good news is i think the weather is going to be okafor tomorrow which was not the case for the first two legs of the cripple crown. >> no it was a muddy track at churchill downs and at pimlico two weeks ago. what kind of krounds are they expecting for this obviously when you have a contender for the triple crown the interest in the belmont and in horse racing mushrooms. >> you nailed it

you have the derby, which is always one of those great american sporting events, the first saturday in may. always attracts a huge crowd and a huge tv audience if you get the derby winner to the preakness you know you are going to have a great audience as well. here for the belmont it's usually dependent. do you have a winner of either of those races or one horse that's won both there is a boost like we have here. they expect 80 to 90,000 fans. they have capped it at 90,000 over the last couple of years to make it a good experience for those here at the facilities with a good weather forecast i wouldn't be surprised if ear close to that number here tomorrow. >> i will be watching you because i want to avoid the cross island expressway any way i can tomorrow justify is the favorite, 4/5 who is the competition >> there is a lot of competition. the horses that finished second and third in the preakness will be in. there is a horse named hofburg,

the second choice on the the morning line the odds set earlier this week that horse finished seven in the the kentucky derby those three and vino rowso will be the horse most mentioned to give justify the best run during this mile and a half race. >> vino rowso just on the name alone sounds like a good horse to me. let's pivot to the advent of big sports betting much of which will take place at rags tracks across the country on all kinds of sports. my question is how do you think sports betting, the broadening of it is going to change what you do and the sports broadcaster's role on a host of properties, whether it's major league football, major league baseball, nfl, whatever. >> that's good question. i don't think we have an answer to that yet. let's see how quickly the state legislatures around the country get their gambling operations going if in fact they are going

to go down that road new jersey's legislature has been dealing the last 48 hours trying to get jersey set delaware is already ready to go and printing out gambling tickets n. their first day they took over $300,000 in wagers i think we need to be careful. what percentage of our audience is gambling? what percentage of our audience is interested in it? is there a significant percentage that has no interest in sports gambling then you are talking over their head to speaking to an audience that doesn't give a darn about content at this point. i think we have to take it slowly but clearly now that the supreme court said it can be legalized by state, and it looks like several states are going down this road it becomes a legitimate part of or conversation in covering sports. >> it absolutely does. because i think heretofore jenologically sports casters have been judicious about talking about the labor on any particular contest this is going to change that let me pivot once again back to ish us in the news having to do

with the national anthem protests i want to play a sound byte from earlier today of the president addressing athletes in general regarding their interest in pursuing or bringing forth cases of what are regarded as racial injustice. let's listen >> i am going to ask all of those people to recommend to me -- because that's what they are protesting -- people that they think were unfairly treated by the justice system. and i understand that. and i'm going to ask them to recommend to me people that were unfairly treated, friends of theirs or people that they know about. and i'm going to take a look at those applications if i find -- and my committee finds -- that they were unfairly treated then we will pardon them, or at least let them out >> mike, is this the president extending an olive branch, as it were, to nfl players or other players who have protested

or is he calling their bluffs? or a little of both? >> yeah, i think whichever side of the aisle you are on you can justify -- to use the word of the weekend here at the racetrack each answer. sure it is an olive branch but at the same time it is also a political pardon much of the news earlier this week had a very positive reaction take that to a cause and concern that caused angst with the national anthem conversation is it clear a what the players are protesting in the eyes of the president. they are protesting not one specific incident that could be aided and abetted in some way by a pardon down the line they are really protesting treatment of african-americans or treatment by police, police brutal issues, social injusticish user, larger issues, not one specific case. i don't know if a presidential pardon in this case could be the answer to the national anthem stuff. it was interesting this week that the philadelphia eagles story came up with the visit to

the white house. the eagles, in fact, never kneeled during the national anthem but that turned into what the issue and the conversation became about as is everything in these conversations, it depends how you want to spin the facts and how you want your interpretation. i think we've been talking about a couple of different things under the same umbrella that really don't sync up in my opinion. >> all right, mike, thanks very much we'll look forward to hearing you tomorrow and later in the year on nfl broadcasts mike, thanks >> great to be with y'all. >> be sure to tune into nbc sports coverage of the belmont that begins tomorrow at 4:00 p.m. eastern time get your race on, folks. to the bond market rick santelli tracks the action for us >> you know, tooyler, it's been volatile couple of weeks in treasuries but all maturities are light 'ly up on the week. hoping to chart up to early february and i'll tell you what,

this market's holding. if you look at the middle left side of the chart, there's a lot of technical wood in this 280, 290 area, giving sizable support to these yields. if you switch gears and look at boon yields, a completely different look, kind of dangling so next week's meeting will be important to that particular chart. italian ten-year, you know, 5/29 is a huge year because that's when a ten-year volatility hit everybody said that's over we're back at 3.13 as you look at the chart starting at the beginning of may, it is an unbelievable ride. remember that may high was a four-year high and finally, let's look at the 25th of may for euros versus dollars. on the 29th, they were 1.15-40 it's been a heck of a ride for the euro sara, back to you. >> it will be interesting next week rick, thank you. it is the second high-profile suicide in just one week next, we'll take a look at the

life of chef, author, and television host anthony bourdain

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welcome back to "power lunch. i'm meg tirrell. we've got a news update for you on kia motors. the car is recalling more than 500,000 vehicles in the united states because of a glitch that may keep air bags from deploying in the event of a crash. this recall follows a federal investigation into four deaths and six injuries involving vehicles made by kia and hundred dahundre -- hyundai. >> meg, thank you. chef, author, and television host anthony bourdain found dead in his hotel room in france of an apparent suicide. he was 61 years old. robert frank joins us now with a look at the life of anthony bourdain >> he was called a celebrity chef but like everything else in his life, anthony bourdain defied convention when it came to his brand and his business. after a troubled youth with drug addiction and lots of financial troubles, he worked his way through various new york kitchens and eventually rose to become executive chef, but his big break came when he was 44

and that book "kitchen confidential" was started as an article in the "new yorker," became a best seller in 2000, selling over 1 million copies. he leveraged that into a dozen more books and cook books and four tv shows with his most recent, "parts unknown," in cnn, that was in production for its 11th season when he died and he won 5 emmys for that show. unlike many celebrity chefs, he did not open a chain of restaurants or all the food products he didn't even have a restaurant he did have plans to open bourdain market, a giant food hall in lower manhattan, but that project fell through last year he also invested in a food and travel site called roads and kingdom. but an incredible life, a guy who really got to the bottom of the food world and thought that food really brought people together around the world. >> he was a storyteller, a documentarian, among many other things is there any notion of what will happen now to that franchise

>> they haven't announced it there are other shows that sort of have a similar theme, but no one who did it like he did >> the show was him. >> the show was him. >> remember that episode when he took president obama to some little noodle shop >> in hanoi. and a great tweet from bomb and the restaurant still ahead, who could forget this nato photo op. this was in brussels last year when president trump elbowed his way into the prime position. well, this year's g7 photo op be any less -- watch this get out of here, whoever you are, you -- whatever we're about to find out live, the second hour of "power" starts next. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum-

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and welcome, everybody, to the second hour of "power lunch. i'm tyler mathisen melissa is here, sara here as well michelle on her way to singapore. we begin with breaking news from d.c. and eamon javers joins us with the details. >> reporter: a new indictment here from the special counsel's office this is a superseding indictment, and what that means is that the special counsel is adding either new allegations, new charges, or new defendants

to a preceding indictment that had already taken place. we know that paul manafort had been indicted previously this is a 32-page document that's been filed by the special counsel's office in the courts we're going to go through it and bring you some of the additional charges, but one of the ones that i wanted to highlight for you is count six here, obstruction of justice the special counsel's office is saying that defendants paul manafort and constantine knowingly and intentionally attempted to corruptly persuade another person with attempt to influence, delay, and prevent the testimony of any person in an official proceeding and that's been one of the questions we've seen this week is did paul manafort reach out to potential witnesses in this case, communicating with them by encrypted device cnbc.com reported this week that the special counsel's office had actually gone back and asked a number of witnesses for their phones so that they could obtain any information on encrypted apps that was being used on those phones to communicate among the potential witnesses. so, that's one thing to look at. we also saw the president of the

united states this morning talking about this he was asked if he would pardon any of the people involved in the russian investigation. the president didn't rule it out, explicitly. he said that it's simply too early to say and then he said that they haven't been convicted of any crime yet so there's nothing to pardon them from. i want to just adherd, i'm being handed a piece of paper, the five previous counts against paul manafort remain unchanged, the conspiracy against the united states, unregistered agent of a foreign principle, false and misleading statements and false statements so all those are remain in place. >> thank you another big political story we're watching right now, members of the g7 holding their meeting in quebec and are getting ready for what's known as the family photo. kayla tausche's there. >> reporter: hey, melissa. it is a sunny day with blue skies in this town just north of quebec city. there's expected to be a family photo of this family that is

currently quarreling in the next few minutes' time. they just wrapped up a working lunch. later in the day, there's going to be a working session, followed by some bilateral meetings sprinkled there in between. the schedule is running a little bit late and the president himself was late in arriving and for that reason, a bilateral meeting with french president emmanuel macron had been shelved but the wires are reporting that a french official says that the two did discuss north korea briefly, perhaps on the sidelines of that lunch that just wrapped and we will see what additional details we can get about that conversation that was had. it's been all handshakes and pleasantries so far from the outset but we know that these are going to be contentious discussions behind the scenes. at least one ally, uk prime minister theresa may plans to press the president to offer a full exemption of her and european allies of these steel and aluminum tariffs, and that europe will retaliate if that

exemption is not granted so, that is something that we are watching for in addition to that, it's not just pressure that president trump is getting from these global allies. there are also now statements from influential business lobbies in d.c. saying that the u.s. should be backing down from these tariffs. they should be terminating these steel and aluminum tariffs and instead engaging with allies to focus on the number one issue in trade at hand, which is dealing with china so, the president dealing with some consternation, not only from allies, from the business community, and also congress, members of the republican party pressing to get congress the ability to green light any tariffs under a national security basis but trump is going to have to deal with these heads of state first >> kayla, just crossing the wires, some comments from a french official saying that trump and macron did have about a ten-minute conversation. they talked about trade. they talked about north korea and what is described as a brief, very cordial discussion

at the g7. so, maybe some indication there about that conversation that had been delayed. >> reporter: perhaps an insurance policy in case there is not room in the rest of the schedule to hold a full bilateral meeting as had previously been planned for those two leaders, still showing that they are talking, there are open lines of communication, and there have been some fruitful and potentially cordial discussions between them, sara >> yes we will scrutinize the body language and the family photo as soon as we see it. kayla tausche, thank you in quebec city. let's bring in heather connolly, director of the europe program at the center for strategic and international studies, also with us joel trackman, professor of international law at the fletcher school at tufts university heather, on europe specifically, how much salt did president trump are rub into the trade wound by suggesting that russia should be a part of g7 again >> well, he did throw a spanner into the works

this was not even on the agenda for discussion it does divide the g7 countries. the italians, perhaps even the french and germans, would be a little sympathetic to adding russia in, but of course the eu and others may not be. it just is a distraction, quite frankly, from this very antagonistic conversation that's happening on trade, the tariffs. the second one will be the secondary sanctions on the iran nuclear deal, which is going to hit europe again in august, so it's just going to be one very contentious family photo those smiles are going to look very forced, i think >> even if it is a "family feud," professor, is that a bad thing? >> well, it's a bad thing, and i think it's giving vladimir putin just what he wants in terms of breaking up this family. the united states has been the leader of the west, including in the g7, japan, and now it looks

more like a g6 plus the united states as kind of a rogue state. and so it's a dysfunctional family, and it's good for putin and bad for the united states and for the west >> let's talk about a question that we asked in the last hour, heather, and that is, if you admit russia back to the g7, what's the argument for not admitting china or south korea and one of the earlier guests said, well, this is really the western world, but japan is certainly part of the eastern world or the asian world why not admit china and others >> so, the g7 is not only representative 60% of the global gdp, but it is a community of values-based like-minded countries. that's the difference. that's why russia was ejected. you don't illegally annex, invade other territories that's not part of being the like-minded democratic

structure, which is what president trump's decision or announcement that he would like russia to be included basically erodes or implodes that value-based international liberal order. so, we have the g-20 that's where china is, and that's where the economies are the reason why the g-20 doesn't work so well, they're not like minded they don't have the same democratic, market-oriented approach >> just want to bring another headline crossing the wires as it relates to this conversation. according to a g7 official, it is, quote, highly unlikely that there will be a final communique from the g7 summit in quebec due to lack of consensus professor, what would be the significance if they couldn't come up with a communique they can all agree on >> well, i think that communique that they could agree on would involve something like providing more funds for girls education, which was on the agenda, or protecting elections but given these political difficulties and given the fact

that the united states has turned on its allies, at least in the trade sphere, and done it on the basis of a national security concern at the same time that we're forgiving of putin's russia and zte in china for their national security concerns, i think makes it tough to figure out what you would say that everyone would agree to, and so either the six come up with something that they agree to, although italy seems to be moving in a somewhat different direction, or nothing happens. and it may be that the chair, president trudeau, comes up with a chair statement that tries to specify some ideas and paper over differences >> heather, is this whole fight with the u.s. -- between the u.s. and europe going to bring europe, at least, closer together last week, everyone was wringing their hands in the market over

italy and whether it would be able to stay in the euro are we going to see some sort of cohesion in europe >> well, the tariffs have definitely given the eu a needed jolt of unity. they do all agree that they need to fight back on these tariffs but sara, you're absolutely right. the eu is a deeply divided entity the italian elections is going to, i think, drive a very significant wedge. migration is tearing the eu apart. brexit will continue to be a difficult negotiation and conversation obviously, looking at the future budget of the eu, so, look, the western world, those like-mindeds that are sitting at that table, we're all not in great shape, and that gives our adversaries a lot of room for maneuver this is not a celebration. look, the g7 is the easy summit. that's when we get things done and we help push our agenda. the fact that this is so tense and working -- we're working at odds with each other really,

really portends, i think, a very negative trend in the next few weeks and months remember, president trump goes to europe next month for a nato summit what happens if we don't have a communique after the nato summit this starts to be collateral damage, if you will, for a lot of other very important issues >> it certainly is very different. we'll leave it there thank you both for joining us. coming up, super computer supremacy, the u.s. unveiling the world's fastest computer ever today and ahead, we'll speak with the three big players behind the development. nvidia's ceo, ibm's ceo, and energy secretary rick perry. plus, where's the money heading? a new report shows the one sector of the economy that is seeing the biggest inflows on record so far this year. should you follow or run the atndorahd th a me eaon "power lunch.

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welcome back to "power lunch. here's a look at some of the business headlines at this hour. starbucks raising prices between 10 and 20 cents on all sizes of coffee in the majority of its stores the company has raised by 1% to 2% in the past year. dennis rodman says he will travel to singapore next week

during the north korea summit. the former basketball player has visited north korea in the past, says he will be providing moral support for the president. and according to reports, kfc will begin testing vegetarian fried chicken it will start testing in the uk this year, hopes to launch the product officially in 2019 i don't know how i feel about that, melissa. >> it wouldn't be chicken, would it i mean, that's the thing about vegetarian chicken not chicken at all all right. all the trade talk seems to be just noise for the markets right now. the dow could post its best weekly gain in three months. bob pisani is on the floor of the new york stock exchange. big week next week, the g7 going on, doesn't make a difference for stocks >> and the fed on top of that. so it's slightly defensive, consumer staples are leading but we went positive in the middle of the day and melissa is right, nothing is dropping in the markets right now and there's very good reason we've got the right leadership techs are strong and banks are surging again.

that's 40% of the market you put those two together, nice cherry on the top. retailers have had great commentary since their earnings reports. they're surging. trade, guys, look, it's confusing, but it's not dropping the markets. the fed does not look too squoefr active rig overactive right now and earnings are not peaking look at the numbers. they have been increasing slowly in the second and third quarter. q2, 20%. q1, 26%. that's gone. q3, 23%, that's going to go to 25%, 26%, going to beat q1 shortly. we're not at peak earnings yet and that's the reason the market keeps holding up sectors, i'll show you this. this month, remember, we were talking about tech being strong and it is, it's up almost 3% retail is at a three-year high the regional banks hit a record high yesterday that's the kre, consumer discretionary, a record high as well this is great broad leadership in the overall market. the retailers, ever since the earnings commentary in the middle of may, we've seen nice moves up in kohl's and macys and

gap, amazon, all moving into positive territory finally, let me talk about that 2,800 level because that was the level that we hit in march, about march 3rd, and if we can breakthrough that, that would be a huge uptrend we've already hit an uptrend right now but if we get through that early march high, we'll see if that can happen next week it's going to be a fun week. >> all right, robert, thank you very much. it has been a big week for tech as we have been saying. according to bank of america, this was the second biggest week ever with $2.3 billion of inflows into that equity sector. now on pace for record inflows this year. now, tech is clearly on a tear it's a good sign or a signal of problems for investors because so much money is flowing into just one sector of the market. remember when that happened back in the late '90s joining us now, barry james and washington crossing advisers portfolio manager chad morganlander i'll follow chad across the

river any time, washington crossing barry, let me begin with you you are not all that concerned about technology as a category, but you point out that maybe there are still opportunities in some of the tech stocks that are smaller and less closely tied to this -- we're going to go to the family photo at the g7 summit. let's watch the body language. here we go >> all smiles. >> angela merkel with president trump there in the middle. >> it's a beautiful backdrop >> beautiful scenery and just take a few steps back, everybody. there they go. one big happy family in quebec city >> the dynamic here is interesting because merkel goes into this meeting as the longest-serving head of state or effectively head of state of the

g7 group >> and he's staying back to talk with president trump >> i believe she's been in office now something like 14 years. this is her 13th -- >> this is her fourth term >> fourth term i think this is her 13th g7 summit, so she is clearly, far and away, the veteran of these proceedings. if there's more to talk about or show there, we'll go back to it. barry, let me return to my question are there particular names that have -- that you would isolate in technology as still worth playing in >> yes i kind of look at it as a magic show on the one hand, you know, you've got the big names like amazon and google and so forth, which have been doing so great but there's something hidden behind the other hand that's a surprise coming out. these would be smaller names, more value-oriented. we look at micron technology would be one of those, trading at about a six times earnings.

that's just skraez wicrazy with, really great earnings. western digital, again, in that storage space area and then the company that makes the equipment, makes the semiconductors so there's lots of room in there in the smaller size and we think that's the next wave that will be coming into the market are smaller and more value oriented stocks >> chad, where are you on the question of whether tech has gotten ahead of itself broadly >> some of the tech names have gotten ahead but keep in mind, you've had extreme revenue growth as well as earnings growth within the tech sector, hence the reason why it's 26% of the s&p 500. with that said, we do like several names. we like accenture as one oracle and cisco have not had as great of runs and we think the economic backdrop would bode well for them. >> is the idea that companies have been encouraged to get away from giving quarterly guidance

as we reported yesterday, m mr. buffett and jamie diamond urging companies to do this. only one out of five do it anyway is that going to make your job a lot harder sns going to make it a lot easier as a portfolio manager. we're long-term investors. we do follow the trend of not only earnings growth but cash flow growth. but to get ultramyopic about a quarter by quarter number for me is absolutely insane >> and it's a number that -- not the estimates. >> it's the numbers that count over a longer period of time and what we're looking for are companies that actually are going to invest in their business and get a high return on that investment and actually create sbriintrinsic value. what happens today is that companies get penalized for actually investing in productive projects that perhaps will take three to four years to pay off, and that's hence the reason why you're seeing this outcry. >> let me get a quick thought from barry on that same subject. is this going to make your job

easier or harder or no different. >> it makes it easier in a lot of ways. we don't use those projections we haven't found them to be very good in terms of projecting prices like the other gentleman was talking about. we look at historical, maybe one year to one year comparisons we think that that washes out a lot of the things like that. so, we like them and it wouldn't make any difference to us >> barry james in the woods. thanks chad, thank you. the landscape of the media world could be shaken upside down next week we are expecting the doj to rule on the at&t-time warner deal look at some of the ripple effects atth decision could have that and much more ahead on "power lunch." ofessionals, let'. cfa institute.

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demand a cfa charterholder. cfa institute. let's measure up. just moments ago, we saw leaders from some of the wealthiest countries in the world posing for their traditional family photo g7 tradition in the beautiful quebec city. our kayla tausche has been reporting from the g7 summit and there was a lot of intrigue especially around this family photo, kayla, because this always represents the sense of came camaraderie between the world leaders and going into this one, there was a lot of anger and a lot of resentment at the united

states for some of the recent tariffs. >> reporter: or as you point out, rightly, sara, perhaps the absence of camaraderie this time around you saw the leaders putting on a happy face and relatively happy demeanor as they lined up for that traditional family photo. president trump, who was standing just pretty much in the center of the podium there with the leaders as they all waved on, looking on from beautiful charlevois at the end, you see president trump standing off to the side with german chancellor angela merkel who earlier this week said there would be no papering over divisions with the u.s. at the g7 summit, and certainly many of those very difficult discussions are happening behind the scenes we saw pictures of a very brief encounter that the french president, emmanuel macron, had with trump earlier this afternoon. we expect him to meet with prime minister trudeau as well, and we

will bring you developments from those meetings when we have them >> all right, kayla, thank you well, after six weeks, a trial decision will finally be made regarding the proposed at&t-time warner merger. the result would not only impact this deal but any potential future media mergers like fox-disney joining us now to discuss is brian weezer the analyst at pivotal research who covers the group. great to have you with us. >> thanks for having me. >> let's do a choose your own adventure. let's say the deal goes through. what does that clear the way for? >> yeah, i mean, there's still so much uncertainty and so many different combinations if the deal goes through, you know, we still have to keep in mind what goes on with fox and whether or not comcast will end up with some of those assets and whether or not disney will end up as intended and then parallel, we have, of course, the ongoing drama between viacom and cbs and the reality is that so many different combinations are possible, depending on how each of these play out.

it's not unrealistic to say, if you assumed that the, say, at&t lost, which i don't expect, but if they lost and time warner was out there and meanwhile, say, cbs manages to get the upper hand in their negotiations with viacom and they manage to somehow, i don't expect this, but dilute the redstone stake, then all of a sudden everything is up in the air, absolutely everything is up in the air in terms of what combinations are possible there will be combinations that just seems to be the one certain thing and the biggest question is what are the synergies that different companies think they can realistically get. fundamentals in terms of the operation of the industry almost don't matter right now i think there's a consensus. >> almost don't matter in terms of the prices willing to be paid because our own david faber is already reporting that comcast is likely to put out their bid officially for fox as early as wednesday, which will be the day after this ruling. so are you saying that fundamentals don't matter in terms of what people are willing

to pay in terms of price tag >> that's not what i mean. i just mean, like, getting into the nuances of whether or not the advertising market will grow by 1% or decline by 1% and whether or not affiliate fee revenues are up or down by a percentage point or two percentage points, those sorts of nuances don't really matter because they're dwarfed by the synergy potential for many of these combinations the industry itself is not just a melting ice cube but a multiing imeltin iceberg and i think there's an appreciation of that but i'm saying that's just not where anyone is focused right now because everyone is in the mix here >> brian, thanks for phoning in. to sue herera we go for some cnbc head looinsz. >> ithere's what's happening at this hour, everyone. nato secretary general jenz is calling on the taliban to join an afghan-led peace process. it follows afghanistan's president announcing an unconditional cease fire with

the group. >> fully support the president's proposal for peace talks between the government and the taliban the taliban must understand that they will not win on the battlefield. we urge them to put down their arms and join an afghan-owned and afghan-led peace process the flu killed more children in the past year than during any other regular flu season in recent history officials say they have received reports of 172 pediatric flu deaths since october the average season sees about 110. 250,000 people from around the world taking part in the annual gay pride parade in tel aviv israel has emerged as one of the world's most gay-friendly travel destinations in recent years you are up to date that's the news update this hour sara, i will send it back to you. >> sue, thank you. sue herera

coming up, the latest showdown between the u.s. and china. it's over super computers and turns out ours is now faster than theirs. short while ago, the u.s. announcing it has leapfrogged china. next, an interview with the three big players who made it all happen

let's take a check on the markets right now. stocks are making a comeback in the afternoon. the dow is on pace for its best weekly gain in about three months and right now, the dow, s&p and nasdaq are just up fractionally staples up for three straight days and it's been a rough day for semiconductor stocks, etf, the smh on pace for its worst day since mid april. sara, back to you. >> melissa, the u.s. unveiling the world's fastest super computer today leapfrogging its biggest competitor, which is china dom chu sat down with the three big players behind the development. he joins us now from oak ridge, tennessee, with more this is a big deal, dom. >> reporter: this is a huge deal because it does put america back at the top of super computing, super computing supremacy, if you will, so what you're seeing behind me here are just one of the rows, many here, full of computer banks, and what this

super computer is going to end up doing is doing so many complex calculations that go from health care to everything else we spoke to ginni and energy secretary rick perry for an interview over what this means for american technology. take a listen to what they told us earlier >> this is nothing less than world changing whether it's in the energy sector, whether it's in the cyber security sector, whether it's in materials sector, and importantly, i think, across the board, in the health sector. >> now, ginni, if you were a defense contractor, you'd be primed on this project so what exactly is ibm contributing in the whole process of technology here what is it adding to the super computer and somehow ibm going to benefit as a company from it? >> well, first, i'm very appreciative of the secretary and our ability to work on this project and very proud all of us are. so we not only were, as you call, the prime. we are the one that designed this we have built this

we have brought in partners, and so this is really one of our greatest achievements. this is the fastest. it is the smartest super computer so think of it as two in one and so what secretary -- >> this is watson's grandchild >> that's right. watson's grandchild. people talk about super computers as fast, but when we say smart, think of the a.i. side it's a paradigm that we're able to do both we were with researchers earlier this morning an experiment that might have taken 27 years to 13,000 years, they can do in a day so that unlocks, just as the secretary said you will have new compounds, new cures for cancer, look at new medicines, they're going to do research here on alzheimer's so this to me is one of our proudest moments, for this to be in the world, the fastest and the smartest ever in this purchase ordperiod of time and four years to build. >> jensen, the super computing concept really got accelerated with the addition of technology from companies like yours in the

semiconductor space. so as we talk about the artificial intelligence applications and the other autonomous driving, everything else, all these buzz words we throw out there, how is nvidia kind of defining artificial intelligence, and what exactly does this accomplishment here mean for the world of a.i. >> yeah, summit is a new breed of computers this is the beginning of a new trend of how computers are going to get built in the future artificial intelligence in a simple way is a machine that can learn and it writes software that writes software by itself, and the software is so complex that no humans could possibly write it and what's really exciting about the work that is done here is oak ridge was the world's first super computing center that took a risk on nvidia's gpu accelerated computing. this is ground zero. this new class of computers, this fusion of high performance computing, what ginni said, fastest as well as a.i. computing, which is smartest this fusion of computers is

going to be a new breed of computers. >> you know, dom, jensen makes a very good point, i think, because collectively, four years ago, many of these things didn't exist. so, four years ago, when we started our work, ibm had the power nine processors. jensen, the gpus but we had to invent things, as an example, to take all this data in, we have the fastest ability to interconnect these things together, and think of it as the hose that brings all of the data in. >> reporter: now, secretary, we've tossed around words like fastest, most powerful, most complex. that implies that there is competition, and we know that there is and like the other big thing that's happening right now, this is about us versus china, the two biggest economies in the world and the two most arguably technologically superior out there. so what does the u.s. have to do with this kind of technology that positions us competitively against a country like china how do we win and what does it mean for americans >> american citizens want to see their tax dollars being spent

appropriately. there's not a better example of that in a public-private partnership between the d.o.e. and these two great private sector partners and the product that we're getting here. this competition is real it's not going away. the chinese have the two fastest computers in the world the swiss are next, and i think the japanese and we're in fifth place. but with this opening today, we're going to move back up to the number one spot, but you can bet our friends in china are working very hard to put themselves back in there but competition's a good thing it pushes us to excel. it's not comfortable, but that's what americans want to see their tax dollars used for, and we've got massive amounts of data of which ginni was talking about that historically, we couldn't get all that data pushed through the pipes and because of what jensen's company's done, we're going to be able to give solutions to challenges on the health side not just to veterans but to a soccer mom whose child

has been concussed multiple times, to the alzheimer's victims, we're going to find cures for that because we have the computing capacity now, because of the work that we've done collectively here, and that's exactly what americans want to see their government doing, working efficiently, working with the private sector, making this country great again. >> reporter: what's your philosophy about how you want to position your company going forward, given what you've developed here at summit >> the architecture for summit is going to be the way computers are built in the future. it's a multibillion dollar industry the whole industry, of course, of computing is gigantic, and i think that with this as a first starting point, this is going to be the beginning of some pretty exciting growth ahead. >> what is your view or philosophy or america's energy portfolio going forward, and does that click with president trump's view how are you positioning america for energy supremacy >> there are people that told these two, you're taking a

massive chance putting this computer in, because you don't have the pipeline between them they innovated so, i think the story here, american innovators, american technology, has led through our history, it will continue to, government needs to get out of the way, not be in the way yeah, we got our role to play, to protect, to do the things that we need to do, but don't be in the way so, i'm excited about an all of the above energy strategy that is developing our are renewables, that continue to use ow fossil fuels, looking for new forms of energy that summit is going to be able to deliver. >> reporter: all right, guys, so just to give you an idea, what you're seeing behind me is just a small sliver this room that i'm in is about the size of two tennis courts, and the computing power here throws off so much heat that the pipes above me are carrying around 22,000 gallons of water

just to water cool all of this for reference, that's roughly the size of a residential swimming pool full of water just to cool all these banks, guys. ba back over to you >> the heat is like my brain at work, dom. >> i feel it >> they have to bring a special cooling tower, especially with this forehead of mine. so, dom, why is the department of energy the site and the owner or the sponsor of this computer? what will its principal job be in that role we talked a lot about the computing potential to find cures for disease. that's not the energy department's business, particularly. >> reporter: no, but years ago, the energy department has taken ownership of the super computing projects and infrastructures that we've seen so well from sequoia all the way to titan, which is a super computer based right here in tennessee. the purpose here is because they are using it for research purposes much of the stuff that's going to be done here is going to have energy and industrial

applications they're going to use it to analyze physics data from particle reactors, a lot of the nuclear engineering that's being done here as well. in addition, both ginni rometty and jensen huang highlighted the fact that a lot of other companies, small and large, are able to borrow time or use these facilities to kind of come up with their own computations and aggregations of data and that sort of thing. that's going to be the real key here, not everybody has access to this, but it could be something big if everybody has a chance to look at all these things, guys >> dominic, thank you very much. and meantime, deep in the heart of hog country, major pork producers are hoping that rising trade tensions won't turn up the heat on their industry jane wells is in iowa at the world pork expo with more. hi, jane >> reporter: tyler, don't be fooled by appearances. the pork industry is heating up right now in this trade war, the very latest on developments between u.s. pork trade and mexico and china we'll see if we can get

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some of the pork producers are worried their industry could get burnt. our jane wells is live in des moines with more on the story. jane >> reporter: just a lazy afternoon with a couple of young ladies here. we do have developments. reuters is reporting that mexican authorities will allow american producers to compete for some pork under quotas that are setting up because of high mexican demand it's not a lot but it's something. but as mexico has slapped on these tariffs, china did earlier at a time when pork supplies are up, are people angry well, this is trump country. are you mad at the president >> no. i think, really, when it comes down to it, we just like what we had before you know, we've had that free access trade since japan in 1989 to, you know, we've opened up nafta. i mean, those markets have grown. >> i don't want to -- yeah i'm not -- i'll comment on livestock production because that's what i deal with, and you know, our producers depend on global markets, and we need those global markets to be

successful as an industry. >> i think probably sure it's going to have some effect, but you know, on the other hand, we need fair play in this deal straight across the board. so, i guess i support our president on that policy. >> reporter: all right with me is edward, a missouri hog farmer and also ceo of true line genetics. thanks for stopping by are you mad at the president >> no, i'm not mad at the president. i have a concern about where we are presently with negotiations with some of our trading partners, but i'm not mad. >> reporter: you run an operation that provides seed stock. you provide -- you're sort of early in the chain here. are you seeing any impact yet from the chinese tariffs, at least? >> no, i see nothing currently that would say already that we should have a big concern about where we're at i think this is a process that we're going through. negotiation's always a process, and sometimes we have to wait and see what happens at the end. >> reporter: where would you

start to see an impact how far out? if these tariffs continue. >> it will take a while. it will be a few months before we actually begin to see, i think, reduced trade i've had an opportunity to be on our national pork board trade committee, and spent some time in the trade area. we're very strong, we think, in those areas, and this is a concern to us. >> reporter: all right everett, thank you very much guys >> jane, thank you very much appreciate your time consumer discretionary shares trying to take out tech as the best performing sector of 2018 and we're going to take a page out of fast money's handbook and play a little would you rather between the two sectors. that's next. 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? tures contracts?

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and let's go to eamon many washington with a news alert about a new cyber threat, eamon.

>> this article posted in the last half hour, the post reporting the chinese government hackers compromised computers belonging to a navy contractor, and the hackers from china stole massive amounts of highly sensitive data relating to secret plans to develop a super sonic antiship missile for use on u.s. submarines by the year 2020 the post said this hacking occurred in january and february it was a contractor who works for the naval undersea warfare center they took 1600 gig bit of material relate to this project known as c-drat. there's concerns whether this affects the singapore, concerns in washington how aggressive chinese intelligence will be in terms of espionage against u.s. targets in singapore in terms of bugging hotels, human espionage and cyber and all the rest so u.s. counter intelligence is on

alert next week with the release of this report just now. >> thank you very much appreciate that. time now for "trading nation," playing a little would you rather with the two best performing sectors tech leading the way, consumer discretionary leading a close second if you had to pick which is better right now, craig, it's misleading because netflix and amazon are in consumer discretionary and most of the other big cap tech like microsoft and apple are in technology which do you choose? >> if you go back and look at a simple ratio chart, tech or consumer land, yes, there's discrepancies there with net flick and the others, but right now, the winning horse at this time is still the technology sector, and we would continue to bet on the technology sector looking at the absolute price action of the xlk, broke out to

new highs, a measure that could go up through $80. we remain overweight the sector. >> larry, what about you you can probably find bargains within consumer discretionary with the big retailers and brands, and, also has some of the big media companies as well. >> yeah. you're talking over the last five years 30% outperformancei big tech versus discretionary which is a strong leader in the market you're talking about a leader in the market being outperformed by 30%. that is a real -- you want to run from tech here you don't want to walk away. you also had the popular risk. we're hearing things around the world that big countries, g8 countries that are heavily leveraged looking, we think, in the next 12 months to potentially start taxing or going after the top line of big technology companies, taxing in a different way. that's the bad news for big tech >> all right we'll see.

expect heated rhetoric in the midterms on tech, guys, thanks, craig and larry. for more, go to tradingnation.cnbc.com, follow us on twitter @tradingnation check please is ext. and now the latest from tradin tradingnation.cnbc.com >> when markets are volatile, reduce your size of trade or consider scaling in or out of the position taking on a position larger than you are comfortable with only increases risk scaling in and out scales your position at potentially more favorable prices

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on car insurance. it's been a strong week for u.s. stocks, but not in the emerging market. things deteriorated this week. people are watching brazil ewz tracks brazil, down 3% currency got hammered. you got all sorts of problems that are just getting highlighted by the fact that the dollar is rising, u.s. deals rising, trade tensions rising, and a lot of the countries caught in the cross hairs. argentina announced the biggest ever rescue packages with the imf for $50 billion today. >> next week, u.s. open golf tournament in rhode island, and they stay in private homes, but tiger woods takes his home with him. he travels by yacht.

that is his yacht, which is, as we are told, parked now out on montauk. it's called privacy. i don't know that he'll be staying there during the week, but it would be a nice place >> he should >> he should . >> it's big enough >> this show is going to singapore and we'll have full coverage next week thank you for watching >> "closing bell" starts right now. hi, every, welcome to "the closing bell" on friday, what a week, what a day, g7 meeting squarely in focus. the markets turning positive throughout the day now, dow's adding 46 points here in the final hour, and we have all the major averages, not huge gains, but still, a tenth of 1% the dow, though, still posted the best weekly gain in three months >> a a gogood intraday turn aro. the world'se