the other, retail in the midwest, buckle. >> we're in the east. >> new highs, but u.s. focused. >> can i adds to that? my daughter is the online model for buckle they is doing amazing things i t to -- alexis, love you, sister >> "power lunch" starts right now. >> thanks, scott i am sara eisen. the historic summit is over. now the hard work begins who got more out of the meeting, president trump or dkim jong-un? and was china a big winner shares are soaring double di ne. a clue, the company was one of the picks in the stock draft and the ce be joining us live. if you own a midsize suv, new crash test revealing major flaws. you'll need to hear about that buckle up, "power lunch" starts

right now. welcome to "power lunch," i'm melissa lee. market reaction to the trump/kim meeting has been muted we are watching at&t/time warner shares a judge will decide today to block or allow their merger. lands' end posting a smaller than expected loss revenue beating estimates. tyler? >> thank you very much, melissa. i'm tyler mathisen historic meeting between president trump and north korea's kim jong-un but now the hard work lies ahead michelle caruso-cabrera is live in singapore >> the events that happened overnight, tyler, while most americans were sleeping were extraordinary. it wasn't that long ago that president trump of the united states was calling the leader of

north korea rocket man and the leader of north korea, kim jong-un, calling president trump a dotard however, today the two came together countries that have been enemies for decades. necessity sat down, signed an agreement in which they promised to forge a new relationship. >> i feel really great we're going to have a great discussion and i think tremendous success >> it was not easy to get here. >> mr. president, how is it going so far >> very good. >> what do you think >> very, very good. >> we will solve this problem or dilemma until this point has been unable to be solved. >> getting the big picture so we look nice and handsome >> beautiful >> translator: today we have historic meeting and decide to leave the past behind and we are about to sign an historic document >> the letter that we're signing

is very comprehensive. and i think both sides are going to be very impressed with the result a goodwill went into this, a lot of work, a lot of preparatioand i wod actually sa worked out for both of us far anybody could have expected >> will you be meeting again, sir? >> will you see each other again? >> we'll meet any time thank you very much, everybody >> reporter: of course, the key question, are the north koreans truly committed to dismantling their nuclear program? there's a lot of criticism of this agreement, that is wasn't strong enough, that people believe it's true. the other point i would add, if you watched the events live, as they unfolded, the singaporeans worked very hard to make trump and kim have parity. they set up everything diplomatically they would walk into the room at the same sometime. they didn't want them to look uneven and yet when you watched what happened, president trump seemed very much in charge he would put his arm on the back

of kim jong-un and direct him to where he was going the minute he walked into the room, president trump started talking to the cameras it was like he was in charge maybe it's because of his age. he could be kim jong-un's father his comfort in front of the camera he's also used to dealing with hostile press and kim jong-un never deals with hostile press in his home country. so, president trump came off very much in command of the situation today, guys. >> michelle, now that you've had some time to reflect on all of it and listen to various experts' take, how would you sum it up? it feels like for the optimist, there's something really that t trump moved the ball forward and started peace negotiations where it used to be just exchanging insults and fire and fury. and for the skeptics and pessimists it's like, he didn't get anything specific, the onus is on the koreans and they probably aren't going to play ball wh iit

>> reporter: it's interesting. joe kernen asked a similar question to one of the experts he said, is this nixon in china or madelieine albright sitting n that stadium in pyongyang and being able to get nowhere? what is itarw right now. nearly impossible. there's this history with the north koreans where they have historically always eated on agreements like. at the same time, kim jong-un is irly new to this job a lot of people look back, cite the very first meeting between reagan and gorbachev they diplomat get very much done and yet it was the beginning of a process. that we heard from the former prime minister rudd fr australia, that we could be at the beginning of a process that ultimately leads to change to your point, sara, we don't know >> and a lot of steps ahead for. elle, thank you very much. president trump believes kim jong-un will make good on his promise to denuclearize,

definition is to come, i suppose, on that our next guest says the u.s. may have gotten played but trump did not. he got what he wanted. here to explain is ian bremer, president of thesia group and author of "us versus them: the failure of globalism." good to have you on. let's get on your overall reaction to what has just taken place, your explanation of the phrase the u.s. may have gotten played and then i'd like to ask you what you think they're thinking, the leaders, that is, in beijing and moscow tonight >> well, first of all, absolutely historic meeting. vastly better summit than what trump had left in canada with the g-7, filled with acrimony and a lot of blame here you have two leaders that had never met before on the global stage, getting along well and saying they want peace let's remember, six months ago

we had people across the spectrum saying they were worried we could end up at wore on the korean peninsula. no one thinks that's going to happen now at t very least we've reduced all ose risks for the market that suddenly we could actually have military conflict on the korean peninsula that's a big deal. trump deserves some credit for it also thet is we're now going to have a process. trump is correct in saying, you know, we haven't taken sanctions off. the united states has said that it's willing to suspend military exercises but they can restart them if the north koreans offer nothing. i do think the north koreans will give something. they will allow an inspections process to begin they will start to negotiate in some way about some reductions maybe of their icbm program, for example. also the north koreans are engaging with all the countries in the region, not just the united states. we see this from an american

perspective but there have been two summits with the chinese, two with the south koreans those are all big deals. i wouldn't minimize this and say, we're going to get played trump clearly gets what he nts more than the united states does because trump wanted to make history. he wanted to do something no other president could do he wants to say, this was about me and i made this happen. trump gets that. and it's proy the biggest thing he's accomplished since he's become president so far in foreign policy ultimately the chinese are more important in the process. >> the degree to which the u.s. may have gotten played is limited or at least constrained because we have sanctions still on north kea we have not removed any of them. that enables us to actually go forth to the next step of the process. how do you think the next step of the process should, in fact, play out and how long do we keep sanctions on that is our leverage >> the way that the u.s. may have gotten played is the fact that trump really wants to show this is a success even if it shows it's want moving in that direction. so, i mean, now we have pompeo

and others going to be working with the north koreans, but, you know, the fact is, they wanted complete verifiable, irreversible denuclearization in the joint statement. that's what bolton wanted. that's what pompeo wanted. they didn't get it they wanted a timeline they didn't get it why not? because trump really wanted to get something done and say, we've got a deal that dynamic isn't going to change in the run-up to the midterm elections or as the investigations continue at home or as we move towards 2020 so, you're absolutely right that the u.s. hasn't reduced sanctions, but you did see trump saying, we're going to suspend exercises which are provocative and cost a lot of money. now, if trumhad actually gotten a lot more briefings or if he had pompeo or bolton handling that, the u.s. never would have said that we didn't need to say that that was a giveaway to the chinese that the americans could have still had suc, but trump is excited about this process. it's a win for him so, i think it's that internal

dynamic that actually creates the potential for -- >> do you think he was willing to be played a little bit with a greater end in m number one. i also want to come back to the tail part of my first question, i'm sorry for asking compound questions. but do you think moscow and beijing can be, will be constructtive in this process or obstructionists in this process? >> they have been constructive in this process so far because it served their interest but i think trump has been right about one thing very clearly we can count on these countries to protect their interests first and the chinese want the american troops out of south korea. the chinese want a reduction in hostilities. the chinese want an end of south korea/u.s. close coordination militarily and so far, those things are moving in their direction. i think there is certainly a great possibility that in five years' time we look back and

china and south korea look dominant in the region the united states has become a marginal player. sort of like russia and iran and syria and the united states is kind of nowhere to be seeny pla. >> what doest mean, if anything, ian, for the negotiations under way between the u.s. and china on trade? going into this meeting we knew they were linked the president said as much now that he would -- he would characterize this as a successful meeting, what does it mean with his ic has been very aggressive when it comes to china on demanding closing that trade deficit >> i think he's been probably more demanding towards the european than chinese because of the link with north korea and he wants that you heard he said to macron on trade the europeans are a bigger problem than the chinese that's subjectively not true but trump is focused on what he can get out of the chinese and north korea and he responds to

so seoul power better you saw the need to protect chinese jobs i haven't seen him tweet anything about the need to protect canadian, european or mexican jobs that's clearly about the linkage on north korea it's not because china is a great friend of the unitedstates atdon't think trump perceives so, i do think this means that we should be less worried ab trade war betweethe u.s. and china. the markets should be more positive about that. but that doesn't mean we're not going to have bigger problems. i mean, trump really wants to work with putin but he's massively constrained. they put more sanctions on them yesterday because of cyber there are plenty of problems on technology, on theft of i.p., on lack of market access. irrespectedtive of how positive trump may be personally disposed to xi jinping because of north korea. over time i think that relationship will deteriorate. >> thank you for joining us as always. news alert in the bond market

30-year bonds up for auction rick santelli tracking the action at the cme group. hi, rick. >> hi, yes 14 billion we just completed 68 did billion in supply. we're adding to what was originally auctioned off on the 10th of may. yield at the dutch auction, 3.10 pretty muc it was li looking at a clock that was broken it didn't move the entire process because we're probably getting a rate hike tomorrow having said that, it was a c-plus auction a little better than average actually, quite impressive let's go through the internals 2.38 bid to cover, smack on. 62.2, darn close to the 63% ten-auction average. the one plus that ended up with a c-plus, 10.3% directs versus a 10 auction average of 9% dealers take 27.5% what's interesting is usually we have a lot more aggressive tendencies leading into a fed

meeting. rye now twos up on basis point the rest of the curve, highly unchanged. melissa lee, back to you. after an historic meeting between president trump and kim jong-un, the markets is there another meeting that happs ento stocks? "power lunch" will be right back alerts -- wouldn'tou like one from the market 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. fidelity. with the lexus is.e thrill of the moment lease the 2018 is 300 and is 300 awd for these terms. experience amazing at your lexus dealer.

welcome back i'm melissa lee. the markets are mixed. dow moving between gains and losses pretty much flat up by five points. the nasdaq is leading of the major three up by 45 points. for more on today's trade, let's get to bob pisani at the new york stock exchange. >> group of seven didn't move the markets. korea didn't either, even though we have less chance of a trade war with china, you'd expect a little more. let's look at the markets. we have the modest fed drift that's the sendty for the market to rise modestly in the 24 hours before the fed announcement. we are getting that. we have big names moving tesla and twitter are up nicely. we have historic highs consumer discretionary at high, russell 2000, historic highs and that extraordinary leadership from the retail group, folks, retail has just gone parabolic again today. nice moves up, jcpenney, kohl's, estee lauder. look at the last month, since

the earnings reports came out. this is the s&p retail sector. straight up. we're talking 9% since the start of the month alone even the online retailers, there's an etf for that, and these are the online guys, so amazon, paypal, etsy, 1-800-flowers, almost the same thing. that's unusual that's up almost 10% on the month. big, big mover one group that lost its mojo, energy stocks. oil stabilized 65 or 66, but these stocks after a nice run have started to drift a little lower here i don't think there's anything big going on i think it just lost a big momentum it had as oil started moving up a month or so ago. >> bob pisani, thank you. he was famous for calling the 1987 crash and he rarely gives interviews but paul tudor

jones did speak out on "squawk box" to andrew ross sorkin and expectedtock market rally aftee novemb midterm elections. >> i think we'll see rates move significantly higher beginning some time late third quarter, early fourth quarter and i think it will be interesting because i think the stock market also has the ability to go a lot higher at the end of the year. >> jones says the market action is u.s.-entered right now but expect a summer lull and heel thinks the fed is behind the curve on raising rates, saying they should be 150 base points let's join our quests. what do you think that stocks will go up with rates rising in the third and fourth quarter >> we've had eight to ten years of very, very aggressive interest rate policy if you look at historical measures, take inflation and add

a spread to it, the fed funds rate should be 3, 3.25 and the ten-year should be under normal circumstances 4 positito 4.5 we're adjusting from the change from free money to more normalized policy. i think the market is strong enough when you look at earnings, wage growth, unemployment, you look at very low inflation, all of that is probably strong enough to carry the market higher going forward. >> even in the face of higher interest rates >> we're not talking about going from 3% to 7% overnight.we're tl increases that really price money at a more reasonable rate given where we are so, i think as long as we don't see an insane increase or interest rates running away -- >> what is a reasonable increase from 3 to 4, which is 33% higher yield. >> i understand it's on a percentage basis it's bigger, but i think when you look at historically where interest rates tend to sit against inflation, we're under that number currently

and i think we have room to move one thing that may force rates not to go higher in a crazy way, when you look at the ten-yea trea compared to other developed markets ten-year paper, we're at the high end of that in terms of yield if we start to spike interest rates up on the ten-year, that will cause buying because people would rather buy u.s. paper than some other developed country -- developed nation's paper and that may tend to suppress interest rates. >> in terms of the view of the market, you agreed with paul tudor jones? is there an upside when it comes to interest rates? he's predicting them to rise in the back half of the year, mainly because of fed action but also stimulus kicking in and we could see that impact greatly later in the year, too >> sure. i don't know what paul is thinking but i think by saying if interest rates and the market

goes up dramatically, the only reason that could work is the economy is, like, super, super strong so that's it otherwise when interest rates -- when interest investors must accept a lower multiple for the stocks. this is why i think he's saying that earnings would have to go up strongly more than forecast looking forward six months ahead because that's really what the market does. >> but is that your view, kim? >> is that my view >> yeah. >> no. i'm not a macro sort of person i like looking at the unloved stocks of the world. but i'm not making that six-month ahead sort of macro call and betting the farm on it. >> even though you're not a macro dude, let me ask you - >> dudette. >> do you think investors, if interest rates do rise, do you think investors, stock

investors, that is, will be in any way comforted by the idea that shawn lays out there that, well, yeah, they're higher but they're really where they ought to be in historical terms orwile idea that, shoot, they're a lot higher than they were? >> i think initially they'll be unnerved and that's just because people hate change. we haven't seen this in a very, very long time you know, it's 2018. you know, the crisis is now ten old. there are investors who have never invested when, you know, interest rates were what they were whenever i started in this business, which is 1999. so, i think it's going to be very, very uncomfortable and, again, unless the underlying economy is so strong and so strong in america specifically, i don't know that, you know, investors are just going to shrug it off and keep putting their money in. >> did i make fake news out of

your quotes there? >> who knows >> stocktorsidends and interest so, i think the underlying economy and earnings and earnings growth are going to drive everything that will keep people engaged in stocks there's small subsection of stock owners today that have been bond replacement investors. at some point rates will go high enough to entice them out but i don't thin enough to get them in the way of the overall momentum of the market i think multiples will be depressed because you'll see 18 to 20% growth going forward. >> kim, i see one ofr picks is at&t. does it stay that way no matter what the judge decides this afternoon? >> yeah, i think it's the way we get information delivered to us both wirelessly and wired. so, they're one of the, you know, very few players in this area and it conti until there's some sort of replacement. >> do you want this deal to go through? >> yeah. >> you do?

>> yeah, absolutely. sure, and, you know, who knows what the judge is going to rule, but i want it just from the basis on it's a vertical merger. what's the big deal? sorry. i'm a simple person. >> well, that is going to be the story of the afternoon expecting that announcement from the judge, the verdict there thank you for joining us on the broader markets. kim forrest and shaun o'hara. shares of gm soaring rately. what can ceo mary bauer do to plus, we have the results of new cra crash-tests you may edo e. ne tse

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shares of general motors up 20% in the past month. the company holding its annual meeting today. phil lebeau joins us from chicago. >> the last week and a half when it's really moved higher, that was addressed today by ceo mary bauer and she says, look, the softbank/cruise deal was welcomed in terms of analysts. >> i think it was very nice recognition of the av work we're doing and the path that we're on, but i can't comment on what that will mean longer term for the stock. we're just going to keep working hard to deliver value and

long-term value for our sha shareholders. >> she was asked today whether or not general motors plans to ultimately spin off cruise automation, which is what softbank took a stake in she said it's too early to predict. right now they're focused on going with the autonomous drive vehicles through cruise automation starting next year. >> we want to ask you about new and potentially concerning crash-tests for midsized suvs. >> yeah. and in particular, there are two popular models that were given a poor rating from the insurance institute for highway safety remember, when you look at their ratings, poor is the weakest of the ratings from the iihs. the jeep grand cherokee, ford explorer, both rated poor. in terms of overall for ford and fiat chrysler, we reached out and said, what are your comments about these crash-tests? they say, look, our vehicles have received good, the best possible on other crash-tests,

particular these suvs have done well in other crash tests therefore, they say, look, these are safe vehicles.this one partn incomplete picture in terms of those vehicles that did the best, and we're looking at midsized suv, the kia sorenta, voelgsst voellkswagen c acadia. >> were these straight head-on tests as opposed to ones that clip you a third of the way across the front >> correct if you look, there is the front passenger corner of the vehicle, what's called an overlap collision at 40 miles an hour. one of the most common collisions out there but, as i mentioned, both fiat chrysler and ford said, look, if you look at the other head-on collisions or roof strength collision tests, we get a good rating this one test should not be indicative of either the grand

jeer i c cherokee or ford explorer. >> the fortnight taking the gaming world by stm.or

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i'm courtney reagan. here's your cnbc news update former nba player and friend of kim jong-un dennis rodman was in singapore watching the summit unfold he told reporters, he hopes the summit o >> kim wants to have trust in america. and if donald trump can stick to those -- to his guns and say, you know, we're going to have a great relationship with north korea, it's going to work out for everyone in the world. that's what i want you know >> 11 people were killed when two boats collided on the vlga river in russia. five others were rescued a state media reports the captain of one of the vessels was drunk. and an illinois police officer rescued a toddler who was running alone on a busy

highway last month the dash cam video recently posted on facebook it shows the sergeant getting out of his vehicle and sprinting after the 1-year-old before catching him luckily, no one was hurt pretty incredible. that's the cnbc news update at this hour. back over to you. >> terrifying. thank you. let's check in on markets at this hour. dow's moving between gains and losses, but as you can see the s&p 500 and nasdaq carving out small gains. the russell 2000 hitting a record intraday high some movers, shares of dave and busters are soaring. the restaurant chain beating earnings estimates their ceo retiring august 5th. the cfo, brian jenkins, will be taking over. the stock is up 15%. talk about a big winner, shares of restoration hardware also soaring on a profit beat revenue fell below forecast but the retailer gave a strong outlook for the current quarter. squeezed all the shorts in the stock. by the way, jim cramer will be speaking to restoration hardware

ceo tomorrow on "mad money" at 6:00 p.m. eastern time up 33% right now melissa? >> staggering. the video game industry is red hot right now but the model is changing. the most popular game fortnight coming from a smaller developer. how are the big dealing wi these challenges? julia boorstin joins us with the ceo of take two. >> thank you for joining us. we really appreciate it. now, melissa mentioned, fortnight, everyone is talking about it in your fourth quarter earnings you missed wall street estimates and you attributedt in part from competitions with the battle royale like fortnight. >> we guided up for the fourth quarter and didn't quite reach where we said but it was a wonderful year and we're proud of our results there is a competitive

landscape. fortnite plays a part in it. other people's successes are good for the industry. we would le to corner the market on hits that's not realistic we think fortnite brings in younplayers, female gamers >> we saw electr arts make changes to its battlefield game intoes a battle royale are you going to make a change >> no, those mature titles are meant for 17 and above we have used battle royale before and we're open to any mode that appeals to consumers and entertains consumers i've said before, though, being derivative isn't the way you win in the entertainment business. you have to be innovativinnovate what we focus on is bringing the highest quality entertainment to consumers and blazing new trails >> another big trend at e3 is subscription services.

microsoft xbox announced they're adding more content, more different ways to play to their subscription service and keeping the price the same is that good for you if your games are available? and a lot of games are available at $10 a month or does that damage your business >> the more engagement consumers have with entinteractive gaming better from us 50% came from current consumer spending which looks like subscription spending. which titles you make available, look, that depends on the title itself our front-line high-quality releases tend to be the best entertainment anyone has in any medium and for that consumers are prepared to pay a premium price. >> electronic arts is launching a subscription service for pc games that will start this summer would you consider doing something similar with your games? >> we're open-minded i think we're always an innovator in reaching consumers in different ways. grand theft auto 4 was the first

game to have down loadable add-on content i'm nosure the subscription model is required to address what consumers want. if it is, we'll be there it's just not in our current plans. >> it's melissa back at cnbc headquarters i want to ask you how you look at the subscription model. a lot of comparisons are being made to netflix. so, in that scenario, who are you? what is most equivalent player in the netflix sort of ecosystem? are you disney of the world? down the road are you going to be saying, i wish we had our own streaming service as well as opposed to going to the third-party platform these are comparisons investors are making so you must be thinking about them yourselves. >> i think we have the opportunity to address consumers directly we certainly do that i think we also will participate with others because aggravation matters to consumers particularly an entertainment consumer doesn't go to each company to buy a company's products the point is we're open-minded and we don't believe anyone can

corner the market on entertainment because each property stands alone. only we can bring consumers grand theft auto and grand theft auto online, and the like. >> just a quick question on nba 2k you recently launched a big e-sportse. how is that going?what's the imm line >> we're expected. we're a month into the season. 117 teams fielding the top nba 2k players on earth. we're excited. we don't expect any meaningful economic impact. certainly it's helping the brand. right now e-sports is about $1 billion market analysts think it will be $1.5 billion in a couple of years we would like a chunk of that. >> thank you so much for joining us back over to you. >> thank you very much mental depression has been in the spotlight recently and now the fda says, it will take steps to get potentially life-saving medications to

people quicker sage therapeutics benefiting the company's ceo will join us to talk about liz company's drug and what it can mean for people with depression. oh, and there's the closing bell. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪

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- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want do. visit learnfuturestoday.com to see what adding futures can do for you. shares of sage therapeuticing soars as the fda may give its depression drug expedited treatment. we'll talk to the company ceo in a few minutes but let's bring in meg to talk about why this drug is popping. >> millions of people in the u.s. are estimated to have depression new drugs for the disorder often have to go through large and lengthy clinical trials before they can get to the market sage therapeutics is getting guidance from the fda suggesting it may have a faster path. its drug sage-217 is a once a day pill results released in december showing 64% of patients taking the drug achieved remission

after two weeks compared with 23% of patients on placebo the company says the fda has asked for just one addition stal clinical trial and that indication, which it expects to begin in the second half of this year and it can us ongoing trial in postpartum depression for approval there a lot of analysts are saying this is best case scenario. >> let's bring in sage therapeutics ceo jeff jonas. great to see you on "power lunch. what analysts are excited is this is episodic dosing. it's taken for a short period of time where most depression medicines are taken chronically. how is that a benefit to getting right to the issue of depression >> thanks again for having me today. depression is a life-threatening disorders. one of our beliefs is we need to treat it like a medical emergency. our model sage-127 is a once daily pill seems to have benefit within days. this offers the possibility of

treating depressn like a medical disorder take the pill when you're sick, stop it when you're better and only resume it if your illness resumes. like an antibiotic. >> that sounds amazing you think about the business angle of that, and even sk saying it's like an antibiotic if you look at the market value of antibiotic companies, they can't charge as much, they're not taken chronically. you have a market value of $8 billion. if you're charging or structuring your product like an antibiotic, do you have enough to support that valuation? >> we're using that as an example to help lay people understand the change in the paradigm is. imagine if you have a broken leg and someone said to you, you know, we have a treatment for you and after six to eight weeks maybe you'll get better. or you cantake a drug after a day or two and after two weeks you are better, so that's why we're trying to instruct the market and physicians and patients, this is a different way of thinking about depression, like a medical disorder the antibiotic model is something we want people to understand as a medical disorder but not necessarily how we'll price it. >> do you think ultimately this

could reduce the rates of suicide? >> there are many, many causes of suicide it's always a tragedy. we are hopeful this could reduce ession is treated.e way the idea you could get better in a number of days and only be treated for two weeks could be -- >> i'm sorry, we have breaking news let's get to phil lebeau in chicago. >> let's take a look at shares of tesla because the company announcing that it is going to be laying off about 9% of its workforce as part of a reorganization at the company. that 9%, by the way, we're talking primarily white-collar salary workforce not blue-collar assem repbly workers. the company has 46,000 employees, you take off 9,000, you'll have close to 41,000, 42,000 employees when this is done but, again, tesla announcing it will be laying off 9% of its salaried workforce or 9% of the company's total employment

primarily just salaried workforce as the company continues a reorganization guys, back to you. >> phil, this is happening during a massive run for tesla i mean, this is the best month since february is thi-- >> right. >> are these job cutpart of a reorganization the company talked about previously? is that your understanding, or no >> they say it's part of that overall restructuring of the company. sort of cleaning up the structure of the company, if you will the important thing here, melissa, and you can bet the bulls for tesla will grab onto this is the fact they're not cutting blue-collar jobs in theory, you should see a continued ramp up in the production rate of both the model 3 as well as other vehicles >> yeah. which is what they are saying, they are seeing right now. phil lebeau on tesla shares which is still higher than 4%. sorry to interrupt pu we were talking about potentially lowering the rate of suicide because of this drug i'm curious because a lot of people who are depressed, they

will be chronically taking some other medication is your drug being taken in conjunction with other drugs >> one of the things we tried to do is make this broadly as applicable for people with depression in all of our trials, with postpartum and oral program, we've allowed patients who are unresponsive to antidepressants to be enrolled what wie see've seen so far, 25o 30% are on antideprosecutopressy have seen no different. >> you're not the only one working on this drug how are you looking at the competitive landscape and how your drug may stack up against those? >> as a biotech company i'm delighted to btalking about as competitor of j&j and allergin our drug is a distinct molecule and unique mechanism of action it calms down hyperactive circuits in the brain. what we think will be differentiating, if we can show

this again, is the ability to treat patients briefly and not have to keep on retreating them. that will be a big differentiator plus what we think will be a very acceptable tolerability profile. >> keep us posted. tyler, over to you. >> thanks very much. you know, golf's u.s. open kicks off this week. but first, let's get a quick update on our stock draft. are we going to do that? no, we're not. u.s. open starts this week a lot of people are wondering what the heck is happening with tiger woods' comeback? will he contend this week on long island? we'll talk about the golf industry, tiger's comeck and more with the ceo of taylormade. the head of the imf talking about dark clouds. i'd rather talk about golf than dark clouds. >> not me. >> all that and much more. stick with "power lunch. you like dark clouds on the economy, you like lagarde, you like taylermade.

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i want to take a check on shares of tesla. the stocher by more than 4% right now the company says it is cutting about 9% of its workforce, mostly focused on salaried positions according to the company, according to our own phil lebeau, this is part of a

larger restructuring that the company has already announced but that stock has pulled back just a touch off the highs of the session, up by 4%. we'll have much more on the story straight ahead taylormade has some of the top athletes competing in this year's u.s. open out on long island, including world number one dustin johnson and dominic chu is here with the ceo, david welcome. welcome to you, dom. kick it off. >> let's talk about the u.s. open, because how important is it for taylormade to have a week like this, a major championship here in the new york area? >> thrilled to be here, guys tyler, great to be back. well, it's a couple of things. one, it's great for golf when you think about the energy that a major championship in a major city like new york brings to the game of golf it's really fantastic. so, it's a big week for golf, and certainly a big week for taylormade i think about our athletes and how they're positioned to compete this week. i'm excited about the positioning of our brand, the athletes that represent our

brand. we currently have five of the top ten athletes in the world that play taylormade and in addition though that, tiger woods, who happens to be trendi trending toward the to >> dustin johnson had an amazing weekend last weekend >> and the walkoff homer at the end, right >> holed out, yeah >> i know you two guys hit 9 iron 170 yards into the hole with great frequency >> in my dreams. >> but d.j. is a phenomenal, what i call a super talent and to regain the number one pla status in the world is fantastic and i expect nothing but great play this week >> what are the different brands that play under the taylormade label? >> we actually own three brands. taylormade golf, adams golf, and ash worth, but our focus really is on the taylormade golf brand. it's where we invest our resources and ensure that the brand is stood up as the world's best performance brand >> what's your hottest product right now? is it a driver >> we got a series of hot products we have launched a technology

called twist face that is in the m-3 and m-4 driver >> what is about it twist face that makes it different and better >> if you want to hit it straighter and further, that's what it does ironicly, tyler, when you think about twist face, we developed the technology for the golfers like the three of us nine of the ten top players in the world have twis face technology right now and only five of them are contracted athletes >> now, how much is it driving sales? because you talk about golfers like us. we're not professionals. is it translating into better sales for you as a consumer brand? >> it is, dom. whether it's twist face or i think about the p 790 iron whic is one of the hottest irons in the game right now, the strength of our spider putter franchise and certainly our tp-5 golf balls. it has a dramatic impact on our

business and our first quarter was terrific for us. our business was up 4 2% globally in the first quarter which is something we're very proud of and we'll cnu keep our foot firmly on the gas to move forward. >> what does it mean to have tiger woods no your stable, number one, and how important is tiger to be contending? >> well, first of all, we're very fortunate to have formed a direct relationship with tiger obviously, his history in the game of golf is undeniable his contributions to the game of golf, his -- what he's done in his profession, his 14 major championships, we can go on and on and on. tiger came to us back in january of 2017, which is where we started our affiliation with tiger, and the rl storbehind tiger, which is very interesting, is when nike left the equipment and golf ball business, they h 25 contracted athletes playing nike equipment and golf ball. 22 of those athletes came to taylormade immediately after nike left that business because of performance tiger was one of them. so wre thrled to have tiger

as part of our portfolio of athletes he's one of many stories and certainly one of the biggest stories and when he plays, ratings go up. we've seen ratings increase by 50% to 100% in every event he's played in this year. >> you get the last question >> what i want to know is, whether or not a strong showing by tyler -- by tiger will translate into better sales at taylormade >> well, if tyler plays well this weekend, that wouldn't be new to us. t no question, we believe that if tiger plays well or jason or dustin or jon rahm, or rory mcilroy, it will translate into bigger business for us and quite candidly, it should. every golfer can benefit from the performance technologies that taylormade brings to market >> david, congratulations. good luck this weekend >> sara? tyler, we are just about 24 hours from the federal reserve decision on interest rates the countdown clock is up, and coming up, what economists are saying about the potential for

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welcome to the second hour of "power lunch. i'm melissa lee. we are 24 hours away from the market moving event of the week, the fed decision followed by a news conference from fed chair jerome powell. investors are expecting a 25 base point rate hike i'm tyler mathisen, welcome to hour number two before we get to that, let's get you caught up on the markets stocks mixed with the dow, the only index that is in the red, and it by 0.001% down day for the index utilities, discretionary, they are your leaders right now, and energy and telecom, the laggards among the top movers, tesla, jumping, and on pace for its best month since 2014. there you see it up almost 4% today. there is news on tesla that we will recap for your weight watchers in the green, up more than 7% after jpmorgan initiates the stock with an overweight how appropriate is that.

michael kors among the top s&p 500 winners and hawaiian holdings in jetblue in the red after lowering their guidance on some keyetrics sara >> i'm sara eisen, and the markets are expecting the federal reserve to hike interests rates tomorrow, but what will the fed say about economic growth and inflation? certainly the president has pushed for 3% growth will he get it our steve liesman joining us now with the results of the cnbc survey >> according to our cnbc fed survey, the president will get close enough for rock and roll he's looking through 3% and the number is, for 2018, 2.93% we going to call that even >> round up? >> round up. 3% to the nearest whole number followed by 2.8%, 2019, that's quite a bit better than we did7. here are the unemployment numbers expected by our panel of 38 economists,trategand

hedge fund managers. about equal with the fed's goal. okay what about the chance of recession? ifs t it is the third lowest in the years we've been tracking this so 13% was the lowest january 2015, so 13.8% several months ago, now 13.8% so very low possibility. this number averages aut 20%, which is actually the real average for a recession, 1 efivo here are the top line results. rate hike in june. then we get disagreements. 3.5% is the number expected in 2018, which s you that half of folks in the survey think there's going to be 4% this yea be 3%. 2019, same debate, 3% versus 2 % with an average of 2.6 that would bring the fed funds a well into 2.5% range >> curious, steve, what your respondents are saying about trade. we did get some comments from

the head of the imf who dark clouds arer the global economy and they are getting darker no surprise. i mean, trade wars and protectionist policies are antithetical to what the imf does >> i can say from this survey, sara, that trade is the darkest cloud that's out there among the potential dark clouds. if you look -- we asked people, what's the biggest threat to the u.s. recovery, 35%, i think, all those numbers to the right don't equal the one on the left. in other words, inflation, the worker shortage, which is a new entrant to our list of worries here, the fed policy mistakes, 8%, all the other ones don't amount to the protonisproblem tg and we asked as we presented yesterday, how do you strview te trump administration's trade policies this is a group that is positive on his economic policies they are decisively negative on his trade polis is exactly whatk of america-merrill lynch fund manager survey cited trade risk as the number one risk to the

markets, basically, for all of these people who are overweight stocks >> this is a self-inflicted wound. there's ways to handle this issue and deal with real problems we have on the global trading system without creating these kinds ofes, and it's a -- there's an otherwise positive view of the president's economic policies, and he doesn't need this. there's no reason for it to create this risk and this concern out there, in my opinion. >> steve, you're going to stay right here paul tudor jones joining cnbc's "squawk box" for an exclusive and rare interview this morning. he told andrew ross sorkin if he were running the fed, rates would be 150 basis points higher here's his take on the market and rates. >> if you go look at what is shut off the stock market historically, it's been real rates on the front end of something the neighborhood of 200, 250 basis points. we're negative right now so, when you've got a lot of tech companies growing at 20% per year, who cares about 100

basis points who cares, right so, i think you'll see rates go up and stocks go up in tandem at the end of the year. >> so, is tudor jones ght? will things be as good as he expects on the upside? let's bring in john, chief investment officer with peoples united, also cnbc's mike santoli and mr. leasemisman staying rig here is it bluekies for stocks through -- to the of the year, even as interest rates move up >> we would agree with his assessment that stocks can do well and if rates ll move up this year, i hope he's not correct on 150 basis points. that might be dramatic what he's talking about is just rates returning to normal. we think that will take time that will take time for the fed to get there we're in the four raise camp this year. but we think financial markets >> four raises this year, steve. >> he's on the oefrther side of

that debate. the 3.5 gives us that some are at 4, some are at 3. first of all i'd like to say that paul tudor jones is almost certainly right because he is a well known fly fisherman and great conservationist, honored recently by the bone fish and trust. >> not to mention a classmate of mine -- is there a macro-link between >> i'm about to make it. no, seriously, the idea that we would have higher interest rates will be fine for the market if it comes along with higher earnings and some of these growth numbers that we have. the growth numbers that are expected are not dissonant with a fed funds rate around 2.5% or 3% with the on being does the fed get concerneand feel it has to break the economy. >> mike, there's historical precedent for this, right? go back to the '90s. >> absolutely.e's no doubt thatn coexist. i do think, though, it's instructive to see how we got to this point in this year. the ten-year yield went from

just or 2% labor day to 2.7% everybody was bullish about the stocks and we were testing the lie stock versus bd valuation that has been in place this cycle, and it broke the market temporarirly we had that correction we're mostly back from it but not entirely so i do think while it makes sense to say this economy can handle appreciably higher rates, the way we g there, how fast you get there and i think the adjustments along the way are also going to matter, with all due respect to paul tudor jones who i have no personal connection with of any sort, investors of his generation all believe this. they all feel that rates are artily low, they should be higher, 2% doesn't look right to them on a lot of these measures as a handle for bond yields and so i do think there's a little bit of a long-term muscle memory at work. we saw what happens to this market and thicycle when you do get people thinking the fed's going to overshoot a little bit. >> john, do yo american stocks more than you like

foreign stocks, specifically emerging market stocks and do you see any are risks in the emerging markets >> we do we were wrong last year. we were underweight on emerging markets, we look smart this year but we were underweight for two reasons. number one, we felt the dollar was not going to be declining. but more so, you talked earlier about that negative fed funds rate we think that's, you know, the global glut of liquidity as that tide goes out, we're going to see a lot of people swimming naked and we think those naked swimmers, those skinny dippers are goin be in the emerging markets. that's where the shoe will drop so we want to be underweight because of the dollar but more significantly because of the -- >> we've already seen that the carnage -- i think, steve, this gets back to our pregaming of the federal are reserve meeting tomorrow the question is, does the fed make policy for the u.s. or for the rest of the world. it's obviously the u.s. but you have to pay attention to what's happening in emerging markets. >> the answer is yes and the fed does pay attention to what's happening in emerging markets and i have a sort of different

feeling about this because if you follow the fed, and comments they've made, they have been out there saying to emerging markets, look what we're going to do. we're going to do this and this is going to affect you you guys should get ready for then they'd say, looat we're doing. this is going to affect you. you guys should get ready for this and now they've done it and it's a little hard to havsyhy afr the number of warnings that have come out if you are a -- are a foreign central banker and you did not plan on the federal reserve raising rates, you should be fired from your job. that is malfeasance, misfeasance, some kind of feasance >> find out who bought that 100-year argentine bond. >> exactly i have sympathy for people who are affected by this, obviously, but the central bankers cog -- i was at these meetings with them, they're hearing the same thing i'm hearing and i'd be on air saying

the fed says it's going to do this on rates. >> mr. feasance, see you tomorrow thnds great. john, thank you, and mike santoli, thank you as well we just got some breaking news on tesla in the last half hour the company announcing job cuts. phil lebeau has more details with the stock on the move, phil >> and sara, the stock is moving lower because these are substantial cuts that tesla is making the company will be laying off about 9% of its workforce. it has about 46,000 employ you're looking at 4,100 or 4,200 workers who will will b let go these workers are almost entirely from the salaried white-collar group of workers. it is not production workers who will be cut, therefore there's no change in the production targets or plans to hit the model 3 production targets that it has set out the company also says that it is going to be ending its sales agreement with home depot. you know you can buy the tesla power wall if you go into a home depot and there's a tesla associate there to walk you through the process. those workers will be offered an

opportunity to move into other tesla positions within the company, but again, the company, tesla, is ending its agreement with home depot. in announcing this agreement, elon musk, ceo of the company, sent out an employee e-mail. we're not going to read all of it, but this paragraph perhaps sums it up best. given that tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us what drives us ir mission to accelerate the world's transition to sustainable clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. that is a valid and fair criticism of tesla's history to date so again, the company cutting 9% of its total workforce and again, almost all of those jobs will be salaried workers guys, there's two ways to look at this. the tesla bulls will say, you're not cutting production jobs or changing production targets, the company is conserving cash and

capital as much as possible. that's good news the bears will look at this and say, if you don't need to raise capital in second half of this year, if you're going to be cash flow positive, why are you cutting 9% of your workforce >> i think also, phil, anothers realization by elon musk that the company needs that profitability somewhere on the horizon, and i would think that would make investors feel a lot better, because if you pair this together with what brad ericson over at key bank put out this morning which was raising his estimates because of the ramp he's saying in model 3, then you really believe that maybe these goals are actually achievable in terms of not having to raise capital because they're able to hit the 5,000 unit number. >> right and remember, elon musk's most recently at the annual meeting, which was, what, over a week ago, said that he expects the company to be gap profitable in the third quarter and then cash flow positive in the second half of this year so, he has made that target, put

it out there, and one that they will be approaching relatiy andw much do they need to conserve cash and is that, at the end of the day, the reason for these cuts >> allight, phil, thank you. phil lebeau. tesla shares, by the way, on track for its beth month since february of 2014 >> but was up much higher earlier, right so is the thinking, even though this won't affect the model 3 production, is the thinking that just things are worse than they appear is that the -- >> 9% is pretty big number in terms of cuts and they do sathen salaried workers so that wouldn't necessarily affect the production line. i think that's why the stock is able to hang on to some gains. here's what else is coming up the landscape of the media world could change drastically with the decision on at&t-time warner deal coming today. we'll break down who wins and who loses in either outcome. plus we're headingk to michelle in singapore. >> hi, sara.

president trump today during his very long news conference to discuss his agreement with north korea, he said something very intruing but little noticed about north korea's economy. we're going to play it for you lle atouhianreak and you c te mwh y tnk we'll be right back, live from singapore, on "power lunch," so don't move

kwelcome back to "power lunch" on this historic day after president trump and kim jong-un meet in singapore, let's get back to michelle caruso-cabrera >> hi there, melissa the reason president trump wanted to sit down with kim jong-un was to try to convince him to give up his nuclear weapons. how to do that there are carrots and there are sticks one of the carrots that he has offered repeatedly is an improved north korean economy. he brought it up again today during his nearly hour-long news conference, but he used a phrase in there that caught my ear. it has been little noticed i'm going to play this sound byte for you and point out why i think it's significant >> there is no limit to what north korea can achieve when it gives up its nuclear weapons and embraces commerce and engagement with the rest of the world that really wants to engage.

chairman kim has before him an opportunity like no other, to be remembered as the leader who ushered in a glorious new era of security and prosperity for his people >> the phrase that caught my ear was,f he embraces commerce it's hard for a lot of people to realize, but north korea, when it was taken over by his grandfather, they became a stalinist socialist regime that literally outlawed commerce. everything was to be provided by the state. now, commerce exist, but it's only because the authorities look the other way because they really had no other choice he has hinted and i'm wondering if kim jong-un has suggested that they are at some point where they are going to make a major transition and move away from a command economy to something that has more market forces, similar to some extent what we've seen from china if that's true, that would be a tremendous difference because

there's a lot of talk about the lack of political freedom in north korea but the lack of economic freedom is just as tough there, and it would be a dramatic change. it would have a much bigger mult effect on the economy if money that was given to north korea went into a more market-driven economy than one that is still so deeply control bid the government, guys >> yeah, it would mark a drastic change michelle, thank you very much from singapore we're going to put that to our the winners and losers of the singapore summit are joining us, john rutledge, also soon-yung lee with truufts university professor lee, let's start with that question that michelle just raised are we contemplating a completely different kind of economy for north korea, and if so, is that going to be the key here for why now is the time that we could finally see them agree to denuclearize?

>> since the mid-'80s, well-meaning outsiders have to pined and ed for north korea to follow the model, the paramount chinese leader who introduced reform and opening and took his great nation on a far more constructive path of gradual reform, economic development, laying the foundation of china's astounding economic rise over the past few decades. when kim jong-il visited the southern province in 2001 after having changed the geopolitical landscape the previous year with successive summit meetings with the chinese leader, south korean leader, vladimir putin, in may, june, july, respectively and having spent a special envoy to president bill clinton in white house in october, everyone hailed kim jong-il's visit to the special economic zones as the arrival, the coming of a

second -- a korean leader. the problem here is that kim jong-un has to contend with a far more legitimate, far more prosperous and far more pleasant korean state across the border, whereas china, when it introduced reforms in the early '80s, china was beyond that systemic contest who was the more legitimate chinese government that contest was over. taiwan was richer per capi-wise, freer, but you did not see chinese people in the tens of millions choosing to relocate from the mainland to taiwan same story with vietnam. there was no south vietnam to speak of in the mid '80s >> so you're saying just don't be fooled. we've been here before, and your take has always been, professor lee, very skeptical of north korea's intentions and you don't see anything different now after the meeting, the historic meeting that we saw last night and this morning >> well, north korea says all

the time that economic reform and the capitalist influence from abroad is a poison, cultural infiltration and ideological indoctrination, the poison that brought down several regimes in the former soviet block in eastern europe, so it's understandable that the north korean regime, which is far less prosperous, far more repressive than seoul, would be rather sensitive about opening up and letting its people know how blighted, how underprivileged their lives are compared to the same koreans south of the border >> john, how do you think this changes the balance of power in that area of the world and i'm thinking more immediately in terms of how the south koreans are reacting to this if the u.s. is making any sort of commitment to suspend military exercises or eventually pull weapons out of the korean peninsula this is directly -- this will directly affect them south koreans.

>> yeah, complete slap south korea and it's because the president of south korea was not in the room when they did that this is mandated to him, not a negotiation with him china's a different story. you know, not good for china in the sense that direct with the u.s. ia positive thing but the truth is, china's still in charge, you know? china has the ability to take this regime out any time they want, and they've chosen not to do that. but you have to realize that in north korea, there's a group of people that i would just think of as the oligarchs from when the soviet union fell that are very, very, very interested in making money, not by opening up d playing nice, but by opening up and then owning the control over the assets they have there. they have huge mineral deposits there and none of the ways that people create wealth here have been executed there. it's a very, very money-driven

top-end culture. i've been there. i've met with them, spent time with them, been cheated, been stolen from, i mean, it's incredible so i d't hold any great opportunity, but i tell you, the only way you're ever going to get anywheith anyone is to sit with them and talk with them i'm glad somebody talked to somebody here. i wish we had taken more serious people with and i'm just sure that kim did, because kim would have had his intelligence agents with him nevertheless, it's better to talk with each other than to just yell at each other from afar >> well, we did have some irly serious people, certainly, at the conference table, the chief of staff, mr. pompeo, who is a former cia director, of course, and others i don't mean to put words into professor lee's mouth, but john, i want to get your reaction to his idea bottom line, in my notes, is that kim is buying time to work on his real agenda, which is

building up his nuclear menacing capabilities do you see it that way do you see that level of insincerity lurk what -- d this is my words -- could be asha raid >> well, as professor lee says, don't look for sincerity when you're talking to kim jong-un. you know, and this is not an ideology issue either. i detected very little ideology in the place, just like is true in china what you detect is desire for power, so it's a totalitarian state. and love of money. those are two things that are more or less universal look, kim went to school in switzerland in bern. he knows all about western society. and he's -- the only asset he's got really to trade is the nuclear ste, and so he'll be wanting to build that up even further. i don't think he's the taking

off his wolf costume and we found a lamb underneath there. but at the same time, you have to understand the other guy if you're ever going to discuss any kind of change with him, and that has to be done in person. >> a pair of skeptics on the outcome. thank you both for joining us y. professor lee and john rutledge. the little birdie that could, twitter on pace for its best day in eight quite a run for twitter. best year on record. account twitt can the twitter rally continue or even trouble with rec i, thankfully, the breakthrough in and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name tmember.

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fidelity. open an account today. i'm courtney reagan. senate minority leader charles scr faulting president trump's agreement with north korean leader kim jong-un as short on details, claiming trump gave up substantial leverage in ongoing talks over pyongyang's nuclear program. >> it is wor, very worrisome, that this joint statement is so imprecise.

what the united states has gained is vague and unverifiable at best. what north korea has gained, however, is tangible and lasting. >> israeli police questioning prime minister netanyahu a s of a probe into a third corruption case. the police car was surrounded by anti-netanyahu protesters as it entered his residence in jerusalem. two pairs of newborn twin pandas are being carefully treated at a chinese rersearch base the first set of twins were born on may 23rd. they remn in good health under careful treatment. that's your update >> i don't think that's cute i think it's going to take another month for it to move into its sweet spot. >> they look a little rodent-like. as we told you, tesla announcing it will cut 9% of its

workforce but saying the cuts will not impact production targets. let's bring in james great to have you with us. >> great, thanks for having me >> do we know what the breakdown is between salaries workers and other workers? 9% is a pretty big number, so how does this fit into the bull narrative? >> sure. we don't know the answer at this point, based on -- even with the e-mail that elon apparently put out here recently. look, i think the good news here is that it's not production-related to the model 3 and they're well on pace to 5,000 units per week production by the end of , which i don't think anybody had on the radar after the slipping past guidance so that was, you know, i think -- that's ch better news on the other side, you k ithe oe is the allusion to home depot. is is more about the solar business in our view, and we always thought the solar city

transaction was somewhat questionable in many respects. that business has really struggled, and the face they were putting forward with their home depot effort was certainly not of tesla's typical quality and branding and so forth. so, this strikes us as more of a view that elon is focused on getting production right and we're well on our way to 5,000 and then secondarily, the guidance for profitability in the back half of this year, those two factors take the stock to $385 a share, in our opinion, so we look at this as a positive in that traj>> it soundsike yout the cuts are more focused on the solar side of the business so is there a concern overall that that tesla will hit those gap profitability targets by cutting on the solar side of the business as opposed to actually being profitable on the car side of the business. >> well, it's hard to unpack them at this point i mean, there'not as much transparent as we would like >> isn't that troubling? not to be able to unpack that. >> i mean, i'd like to unpack a

lot more from a lot of companies. i'd like to know what gm's profit is on the silverado they don't give you everything the reason we like taes on the production side is because they're doing more with less automation is a big benefit here, relative to some traditional oems that are less automated. i think doing more with less on the corporate or salaried side is sort of aligned with what they're trying to do in the production side. so, it's not a lean company. and i think the reason is they've been primarily focused on building the portfolio of products, getting production going, building the brand. i think they're growing where they need to we still expect that overall employment continues to -- and the labor force continues to grow year over year, even with these cuts but they're going to be more focused. service, sales, and asia and so forth.ilding into so, i don't look at this as alarmingly as perhaps the headline comes across. >> jamie, great to speak with

you. thanks for phoning in. and we are counting you down to that expected decision as the government tries to block the merger of at&t and time warner will the deal go through, will it bblocked, will there be conditions, and what will it mean for the broader media industry we'll get you ready for that big breaking news that will come from a judge ler tathis afternoon. we're going to talk about it next on "power lunch." [phone ringing] need a change of scenery? the kayak price forecast tool tells you whether to wait or book your flight now.

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less than two hours left until the court makes its decision regarding time warner's merger with at&t whatever happens, the ruling will have monumental impact and serious implications for the mediindu at large. we're going to hit this from a stock angle with cfra analyst in just a moment, but first, joining us on the phone is former directv chairman and ceo michael white. he told his company, directv, to at&t back in 2014. mike, thanks for phoning in. which way do you think this is going to go? >> you know it's kind of

dangerous to speculate an hour before a judge's decision. i still believe the judge will permit the merger but i believe there will be conditions and from what i can tell, it's going to be a complex decision, maybe over 100 pages, and there will be some things that the government will like and not like and vice versa with at&t would be my guess. >> what sort of conditions >> well, you know, i think -- the interesting thing of this, i think, is the core issue, and it's going to be the case, by the way, i think, with the disney discussions, with fox and comcast and whatever anybody else wants to combine, we'll go back to the question of leverage and negotiations in other words, you know, the whole system has been geared where media companies take huge bundles and then, in effect, force the distributors to give them to all their customers when the typical customer only watches 17 channels and gets 200, and i think the judge is probably going to have a careful writing of the arbitration and

whether you can use hbo negotiations or not, probably not. you know, i don't think it will change the fundamental economics of the media business, but it will change the negotiation process, would be my guess, and i think whatever the judge writes about that, i think will be very relevant to other media transactions that would be contemplated >> you know randall stevenson, obviously. how much do you think he'll go in terms of being flexible when it comes to the conditions that could be put on the deal to get the deal done, given his spotty track record in doing deals? i mean, if you take a look at the track record, he had a failed bid for t-mobile and then he bought directv just when court cutting started to pick up looks like in hindsight it may not have been great timing, so how eager do you think he would be to actually seal the deal at any cost >> well, no, i think, you know, randall's a serious and expert,

you know, in all of these issues in terms of getting reasonable shareholder value out of it. at the end of the day, his test will be what's in his shareholders' best interest and i do believe that as they look at it, they've always said they were more open to certain conditions around similar to what comcast agreed to, but that they were not open to divesting turner, and i certainly believe if you divested turner, you've kind of destroyed the economics of the deal. so you know, if that's what the judge puts forward, and i don't think he will, but if he did, i think that would, you know, that would be so significant that at&t would walk. but randall's going to look at it in a very objecti figure out what's in the best interest of the at&t shareholders and at&t is a huge company. they've gotten significant cost synergies out of their combination with directv yes, the industries continue to evolve, but they've also got a huge bet on 5g and i think 5g

will revolutionize the internet, including potentially home internet >> riding on this decision >> thank you, melissa. >> it's sara >> how will this decision impact media stocks with us, the senior analyst at cfr. we wanted to play a game of choose your own adventure when it comes to this deal, so for the purpose of simplicity, we're going to say there are two scenarios when the deal goes through in its entirety and when the deal does not. so let's say the deal does go through. who wins, who loses? >> great so under that binary scenario that you've laid out, if the deal goes through, i think clearly comcast would be a potential winner in the sense that it would be emboldened to come up with a more compelling offer that could potentially, you know, trump disney's offer for fox. it would provide more regulatory

clarity for comcast to move forward, and i might also add, you know, fox shareholders, you can throw that as potential winners because obviously i think they could get a lot more premium out of comcast on the losing column, potentially netflix comes up coming on the heels of the repeal of the net neutrality regulations, i think more video consolidation as a result of the merger of at&t and time warner, you know, would seem like a one-two punch from the government against the netflix and other proponents of net neutrality, so i think that would be a potential losr netflix, and if the deal doesn't get approved, on the other side, i think it can think about a bidding war, you know, for fox assets being less likely in which case if you're a disney shareholder, you feel a little better that disney might not be forced to overpay, although the

sky bid from comcast still raises a possibility that could be some, you know, issues around negotiation between disney and comcast to som oa agreement, and also, on the losing column, time warner, of course, if the deal doesn't go through, it would limit their choices, their options for potential to be in a takeover candidate, although in the near-term, i think that they could really look to revert to the core business. over time, i think time warner could still be a prospective cand although if party wants to acquire time warner against these regulatory picture of a merger that's not approved, i think you can count on potentially less discount that the company could attract compared to the offer that they have on the table today from at&t >> it appears that no matter what happe lot of media assets are going to be in play one way or another. who are the buyers over the next ten years?

>> i think is fair to say that this decision could open the flood gates of mna as you alluded to, right? er and at&t made to the time court is that the competition now has evolved beyond traditional media to include the so-called faang companies so i think you can look at that from that perspective where these faang names are going to be much more active as potential suitors in a rapidly changing landscape. the big tech -- technology and internet companies are investing aggressively in content. i think that really speaks to how the landscape has continued to evolve, and look to these companies to become a lot more active going forward >> thank you appreciate you there's a really good piece on cnbc.com by alex sherman laying out what it means for every single media company, telecom, from discovery to -- >> we've had so many companies that want to provide content >> yeah. >> and the -- and the companies

that produce it, whether it's fox or warner brothers or viacom, they're l out there. >> they need distribution. >> and they istributio >> the question is, are the telecos going to be allowed. >> well the netflixs aren't telcos, of course. >> there's a lot to chew on later with that decision also coming up on "power lunch," let's go shopping. from indoor furniture to outdoor boots, two big retail movers to t toge we'll have the details next for you on "power lunch.

investors going shopping in the retail sector again today, particularly rh and lands end. check out restoration hardware up more than 30% the company beating on the top line, missing on revenue, issuing very strong second quarter epf and revenue guidance, though gross margins also improved. big short squeeze in that stock.

also check out lands end it's another winner, a big rally there, up more than 22%. the retailer reporting a smaller xpected loss and also beating on revenue same big stores reported its fourth quarter of top line growth, though, and thas certainly enough. double digit moves in retail meantime, twitter has been on an upswing for much of the year, but in june, it's flight path is nearly vertical. why it's up 6% today is the time right to get in? that's straight ahead on "power lunch. i'm very proud of the fact that i served. i was a c130 mechanic in the corps, so i'm not happy unless my hands are dirty. between running a business and four kids, we're busy. auto insurance, homeowner's insurance,

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time for "trading nation," and check out shares of twitter jumping nearly 5%, up right now as jpmorgan upped the price target pointing to ad momentum soaring 80% so far this year is it too late to buy in frank, the chart is pretty bullish. is it too late >> i like twitter long term, it is extended right now. right now, twitter 35% over the

50 day moving average, third highest level we've in its history, 2013, and two other days are more extreme than that happened in february of this year and then there was a pause. now it needs to pause, do it above the breakout point we've seep that many times over the last year or so. break out, pause, break, pause, i hope it does the safe thing here i'm not chasing twitter, but comfortable going forward. >> you're not bullish either you mentiod twitter is the best performer in the s&p because it is now in the s&p, a catalyst for going hher as well >> right look at the valuation of twitter relative to the s&p, it's 80 times pe that's the biggest knock against it fundamentally, look at free cash flow, they burn cash five times current revenue so a little bit of revenue good news may be enough to put it up, but we need

a lot of of good news to justify where it is. >> we'll see what happens on the revenue side of things, guys, thank you. for more, go to tradingnation.cnbc.com, follow us on twitter @tradingnation 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 two important aspects of building a winning trade. you don't want a single position to be too big a percentage of the tradeable assets additionally, you want to make sure there's enough profit potential to justify the risk you' tinreakg. consistently constructing suitable trades and adhering to your exit plan can help you build on trading successes mom and dad got a new car.

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a speedy recovery, in good condition after suffering a mild heart attack yesterday the white house said he's expected to make a full recovery, and our thoughts are with larry check, please. >> i'm michelle caruso-cabrera in singapore check please time. you know, president trump gave a long news conference today mostly talking north koreabut also the fractious g7 meeting was raised by reporters and brought up this photo that's viral on the internet, showing angela merkel, the leader of germany, leaning into president trump staring him down, and said the whole world misinterpreted

that photo president trump says this is what's actually happening in that photo >> the picture with angela merkel, whom i get along with very well, where i sit like this, we're waiting for the final document, i wanted to see it by the changes requested. i know it did not lo friendly, and i know it wareported nasty both ways. i was angry at her, she was -- actually, we were just talking, the whole group about something unrelated to everything. very friendly. >> reporter: so the picture tells one story, the president says something else, guys, but it was interesting to hear his explanati explanation. >> well, he put the speculation to rest there because everybody else had already captioned it. michelle, great stuff out there in singapore safe travels back home great to have you there. you need sleep, probably >> yeah, absolutely. opposite clock we're going to washington. >> washington tomorrow, see you there to cover the fed meeting

>> this is a big one, expecting an interest rate increase, and what do they say about the outlook? financials at session lows, jpmori gag, gold man sachs, so watch that thanks for watching "power lunch," and "closing bell" starts right now welcome to the "closing bell" everybody, that's very jazzy music. we have a lot coming up today. i'm kelly evans. >> i'm wilfred frost, alsot the new york stock exchange. a big show counting down to the closing bell and much anticipated at&t-time warner decision, 59 minutes and 35 seconds. >> this is the big one so here's how it's going to go down the news is expected to come out at 4:00 p.m., but we won't know about it right then. we'll learn the ruling