>> yesterday you saw stock down 6% because of ad pricing. >> and stick with momentum >> and fdx, bought it. >> still in service now. >> everybody have a great weekend. see you yyou monday i'm melissa lee. bracing for a trade war, president trump slapping china with massive tariffs on up to $50 billion worth of goods china says it will retaliate is getting tough on trade the right move plus the president also holding an impromptu news conference waring in on trade, ig report and immigration. and plus another key departure at the white house and sealing the deal for time warner and the ball now in disney's court in its battle with comcast over fox. who will rule the media landscape? "power lunch" starts right now

new trade war worries, and biggest weekly drop in nearly three months and also pushing key 500 into the red. first week will ly decline ther four boeing and caterpillar biggest drag on the dow, but there are notable winners. harley-davidson and discovery communications both rallying canada goose soaring more than 2 25%. revenue there beating estimates. >> and i'm bill griffeth the market is taking its cue from president trump this morning. he not only announced billions in new tariffs against china, he also held that rather free wheeling press conference on the white house driveway we have it all covered for you eamon javers is at the white house. kayla tausche is following the

sheriff story. and eunice yoon staying up late for us on china's reaction so eamon, were you part of the scrum? >> i was just a little bit late getting to the whoutite house, they locked down the entire complex while the president was out here a bunch of us who arrived after 8:30 a.m. were stuck out on pennsylvania avenue unable to get in so we weren't able to hear the president's unusual to be out here at all on the north lawn, i can't remember a president ever doing that at all. so dramatic stuff. and also at the federal courthouse this morning, a federal judge sent paul manafort to prison today. of course the former trump damage pain cha campaign chairman, the judge saying she couldn't overlook allegations that he tried to tamper with witnesses. that means that manafort will be in prison between now and his two trials coming up on separate sets of issues later this year in july and september.

that is some significant jail time for a former presidential campaign chairman. the president at that news conference out here this morning tried to distance himself from paul manafort. here's what he said. >> paul manafort worked for me for a very short period of time. he worked for ronald reagan, bob dole, john mccain or his firm did, he worked for many republicans. he worked for me for, what 49 days or something. very short period of time. >> tin fact it was 144 days that manafort worked for the president of the united states nonetheless, the president clearly trying to put some distance between himself and his former campaign chair on a day in which the campaign chair was heading to jail. now of course it raises the question of whether the president will pardon any of his former associates in all of this he was asked about that as well. >> is there any consideration at any point of a pardon? >> i don't want to talk about that look, i do want to see people

treated fairly >> so there you see the president leaving the option open to pardon some of these aides including paul manafort. we'll wait and see whether he makes any dramatic announcements manafort heading to jail joins john mitchell of the nixon campaign way back in the '70s who went to prison he was sentenced on obstruction of justice and perjury charges back over to you >> an eventful day at the white house. it is too bad you weren't there, because nobody really asked about trade. >> that's right. could have gotten one in >> and speaking of trade, big move, administration announcing a 25% tariff on chinese goods, more than 800 of them. kayla tausche has that story >> the announcement sets up a high stakes july on trade with those new tariffs on $35 billion in chinese imports, taking effect july 6. and a second set on $16 billion in imports potentially taking effect after july 31

on june 30th, the treasury department could unveil new investment restrictions. and that is just with china. meanwhile canada and europe have said they would retaliate for steel and aluminum tariffs on july 1 china's commerce ministry today said it would respond effectively nixing the one month trade truce gosh grenegotiated mnuchin. a senior official says lowering the trade deficit through the purchases remains one of the goals, but the other is making structural reforms to the chinese market and asked about retaliation that could be laufshlged e launched by china in response, this official's take was china started it >> all right thank you. did china start it let's check in with eunice un live from beijing. >> reporter: thanks so much. just shortly after the ustr made its announcement, the ministry of commerce accused the u.s. of

provoking a trade war. saying china would retaliate by implementing tariffs on the same scale and at the same level of strength against the u.s. immediately. china hasn't yet formally put out a list of products that it plans to target, however back in april, the government did actually put out a list that it said that it was going to target in such a circumstance and that includes soybeans, whiskey as well as industrial chemicals. the statement also said that all previously agreed trade negotiation results are no longer valid so in a series of trade talks in recent weeks, the chinese had offered about $70 billion of purchases, and the government now says that that offer is going to be pulled if the trump administration does decide to move forward with these tariffs and the chinese action is almost ensuring that we will see an

escalation of trade tensions in a statement by the white house, the u.s. warned that it would put tariffs on an enlarger amount of chinese exports if china retaliated and previously the president had said that that number could be as high as 100 bui billion worth of chinese goods and the foreign minister continued to advocate dialogue, but one of the sources of mine told me that the folks at the ministry of commerce had felt that they really didn't have any other choice but to fight back and just a couple moments ago, the state media has been reacting a lot including the china daily which is a government-run paper and that paper said that u.s. tariffs would backfire and they also pointed out that it is regrettable they said that u.s. companies and american workers won't benefit from china's growing market >> eunice yoon, thank you you very much. just want to mention a headline that you will see at the bottom of your screens. apple and oprah winfrey are

signing an exclusive content partnership. as everybody races for content i know you were looking at the apple shares not necessarily a weight watchers kind of move. >> what will she do with all that money she got out of weight watchers >> produce content i guess >> we're working to getting josh lipton to tell us more about the back story here as we digest that breaking news sticking with trade, is president trump hoping the china trade or is soming this that the america needs to do to balance the scales john rutledge and steve-o tland is joining us. both cnbc contributors steve, do you see any merit to this policy? >> free and enon trade is very important to all markets and to our country. but we only have 4% of the

world's population and yet 25% of the world gdp in order to grow our economy and grow jobs in this country, we need fair and open trade the problem is the fair part we are the most open market in the world and yet all other nations have tariffs including our allies in china. so the problem is when you go to the negotiating table and you have nothing to trade, the issue is that of course they can say no so i think what the strategy here is to put the tariffs on in order to go back to the table and then hopefully negotiate them all away and have fairer trade. >> a lot of people agree with you, steve, that this is a problem that we have been treated unfairly on trade, that we have seen china steal intake length all property and unfairly put tariffs on u.s. goods. the question though is the president going about it the right way? is this really going to lead to china coming to the negotiating table and making concessions >> it is unconventional for sure and john will say that and has said that. it is not the way typically it is done.

but on the other hand, if you do go to the table and you have no tariffs and you have completely open trade and they have them and you say please open your market, they can say no. so i think that the strategy here, i don't know that it is right, i think the strategy though is to put the tariffs on and say okay now we both have tariffs, why don't we both get rid of them. the question is whether that will work with these negotiations >> john, can you put it in context in terms of where the u.s./china relationship now stands this is an extraordinary week in which we had a summit with north korea, china was left out of that and here we are now with president trump slapping tariffs on china after the two sides have been talking. >> we're trashing our allies this week, we are promoting dictators around the world, and we're in the middle of a trade war. it didn't looesn't look to good. the facts are not correct. we don't have no tariffs we don't have totally free

trade. do you know the chicken tariff it is a 25% tariff on importing pickup trucks that have been on the books for the u.s. since 1965 there are tariffs all over the place. and nontariff trade restrictions too. i'm totally in favor of open and free markets i'm totally in favor of rule of law and protecting property. i've been in china enough to know that there are problems in china that we need to solve. but this is a very bad way to go about it and the truth is, balancing the trade account is a really consudumb policy goal. we sell services as well as things on containers on ships. we also take in investments and we invest in other countries if other countries invest here, that automatically creates a trade deficit in goods that doesn't mean it is bad. trade deficits are things that out to be viewed more broadly.

this year china's trade deficit current account goods and services is 0% of gdp. >> steve, i know you're not a big fan, but you at least understand these tariffs and the needs for them so my question is, and you sort of alluded to this earlier, what is next? what is the next step in let's assume we get past this bluff period and they actually do impose the tariffs on both sides. then what? >> yeah, takes very interesting question because the way that they are going about it, they are playing hardball here. and ifwe do damage to these relationships, and we end up with nothing, we'll end up with further back but sometimes like in the game of soccer, in order to reset the play, you have to actually kick the ball back be wawards and thn forwards again maybe a bad metaphor, but i think that is the strategy it is unconventional and unproven so i think the world is watching to see whether this is just

gamesmanship and the problem with gamesmanship, you can't just say -- you can't whisper to the say and say no, i'm just kidding or watch, this is just a negotiating employ you have to go in with a straight face and try to make it happen.mploy you have to go in with a straight face and try to make it happen.ploy. you have to go in with a straight face and try to make it happen i think all peopbusinesspeople e hoping that it does happen >> and i'm trying to figure out the market implications. clearly the market doesn't like tariffs, but there isn't a major freakout and we talk to a lot of investors and strategists here on cnbc and they say they might not approve of this, but it doesn't look like take it will make a big economic dent in terms of global growth or the u.s. economy when does that change, how far does that have to escalate to change >> trade wars take a while before they actually hit global growth the u.s. has about $20 trillion worth of production a year, goods and services, and other

things and we have $300 trillion quowo of assets that are out there every day. so this is a very rich country and very big economy so that takes a while. but this is not something where people are just bluffing tariffs have already gone into effect on some things and shortly will on other. it is not possible for a world leader to have tariffs slapped on them in this unilateral way without responding in kind as we saw from the g-7 meeting last week or should i say the g-6.5 meetings china will have to retaliate trump has already announced that he will impose more tariffs. what do you think they will do after that this is not a happy story. i would be happy if everybody is just bluffing an playing games, but this is a trade war, this is not a pretends trade war >> trade skirmish, trade war,

family feud. yeah guys, thank you. let's get to josh lipton now with more details on the apple news involving oprah winfrey >> that's right, so apple is formally announcing that they have this unique what they are calling multiyear content partnership with oprwprah winfry together saying that they will create what they are calling original programs that embrace her ability to connect with audiences around the world, that win friday's prop win frid her products will be releas rels originals. maybe show, maybe books. but apple has moved harder into original content taking on the netflixs and amazons of the world. gist had just had a report yesterday that they are close to a deal for the first animated movie so a big push by apple here.

>> to we have any details on on money exchanged? >> no, there are no details right now. no word on financial erm its of this deal. >> does she still have the oprah winfrey network or am i behind the times? >> i haven't followed. >> she runs that >> so i guess takes nonexclusive agreement there. >> we'll see >> that is a lot of content. >> she will probably grant herself an exception >> i guess >> josh, thank you stocks selling off at this hour right now, the s&p is now down 9 points. energy the worst performing sector trade taking stocks down as well as cmoomdities we'll have a check on the markets when "power lunch" comes back kayak searches hundreds of travel and airline sites to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done.

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welcome back trade troubles clearly having an impact on the market soybeans falls once again. steel also tumbling. nearly every component in that etf is trading lower today and check out copper taking a big turn lower today by more than 2%. sock dow down about 200 points feeling the impact from boeing and cat. bob pisani is at the new york stock exchange with more >> and just off the lows, but you're right, trade wars are the issue. and you can see this clearly

the secretary sotors that get ad are the ones that are down and that of course industrial stocks and material stocks. energy hasn't been a big could be rib butscontributor for a lo. take a look at what is going on here if you look at the standard industrials. melissa mentioned caterpillar, these are like proxies for trade wars you see all to the down side the market is not concerned about these tariffs, they are concerned about other tariffs and the whole thing escalating as far as where we are this week, sectors, good news tech still the leader and so on is consumer discretionary. retail is not the leader it was, but media stocks have been leaders this week. energy, i call it one trader said more dull than down and i think that is right. had a big run up, now drifting a bit lower. and then we have of course consumer staple stocks some people are saying they should be the next leader. i think this is a secular problem. but we're over the 50 day moving average.

and banks, regionals were doing better until this week and then they started moving to the down side you take a look at the bb&t, pnc, fifth third, all down notably. and finally whatever happened to the global turmoil helps gold. look at this, we're at a low for the year for gold here and the big problem is gold's price in dollars take a look, when the dollar goes up big, gold goes down look at this mirror image for the quarter here, that is the dollar on the up side, that is gold on the down side. big issue for gold back to you. >> thank you very much let's dig deeper into this slide. joining us ron ansani and david speak. good to see you both ron, as bob just itemized, the usual suspects are dropping today on the tariff talk inevitably we have to ask do they become buying opportunities as a result. >> look, i'm still pretty cautious we've gone around the country

talking about this late cycle behavior that is taking place both in the markets and in the economy. and you see it in the flattening of the yield curve and economically sensitive commodities like copper. you see it in the behavior of the market so i think that we're headingw u.s. we're outperforming the rest of the world. europe and china are both slowing down 3% year over year growth so still very good, but we had four of those during the obama years where we had better than 4% quarterly economic growth annualized and so it doesn't mean that your entire average yearly rate will top 3% or 4% you might get a bounce back from a weaker than expected first quarter. so people need to be prudent >> doesn't it help, to ron's point in terms of u.s. showing growth and other parts of the world showing a slowdown, doesn't that help u.s. stocks? i mean on a relative basis, this

looks like the place to be >> well, it is certainly helping small cap stocks, stocks that have more domestic exposure. it is not helping industrials or global stocks i guess outside of the big tech names wong thing to one thing to reco this is coming in the midst of significant monetary policy tightening we've been through a historic period of significant monetary easing the fed is now tightening. we've never seen this before and i think that underlies everything else. investors say we have potential slowdowns. and we're having the fed tighten monetary policy to an extent that we haven't seen before because we've never been in this period of such stimulus. >> thwhich raises the question f inflation and how bad is it.

i pulled out two areas where we are already starting to see the tariffs drive up the cost of products for american consumers. there is a lot of hammering about this, but it is actually happening if you look at appliances and washing machines. two places where there have been tariffs. you see the chart. these are not big in terms of their weight on the overall consumer price index, they are small pocket, shades of tariff impact, but i just wonder as this thing continues to spiral, as more countries start to retaliate and as we start to retaliate back, how far this can go >> i think it is maybe the single biggest risk out there from a policy perspective and then right behind that is the fed raising rates one too many times in an environment that is pretty late stage. and so yes, those particular areas of inflation are small within the cpi, but rate of change matters and you are also seeing anecdotally wage inflation that the fed will ultimately respond to even if they don't see it in the statistics right now

all talk about 100% bonus and that will show up in the data as we well >> and you had mentioned small caps, but they are also close to record highs is there value there >> i don't think that you bail out of equities. clearly not. there are still reason to say own quit i dids particularly here in the u.s. i think you look at stranlgs th strategies like low ball equity strategies or liquid alternative strategies designed to perform better in volatile environments. this is potentially an inflection point we don't know how long this will last my gosh, look where we've been just since the election. so it is important to be well diversity filed, but look at strategies that can participate in the up side while still mitigating the volatility that is likely -- >> are you talking about risk parity strategies?

>> no, not per se. i think for the average viewer risk parity is probably too sophisticated. but there is a lot of liquid stran strategies that are easy to understand low volatility equity strategies have grown in popularity for good reason. volatility is picking up and there are strategies designed to participate in the up side without capturing all the down side >> i think you should rebalance your portfolio and raise cash without taking the risk of -- with all due respect to david, low vol strategy one quick be thing, i'd also be watching emerging markets because there is contagion risk there as well. >> ron and david, thank you both for joining us when we come on back, who is going to win the bidding war for the fox assets the latest on the medium musical chairs game. and we'll go out to dom chu at

the u.s. open. >> i pulled a tough assignment today, but i'm talking about the game of golf it is trying to grow because the fan base is growing. there are all different kinds of companies trying to take advantage, trying to profit from the trends we'll lloubo a othte y autllf at when "power lunch" returns prepare for your demise, mr. billingsley! do your worst, doctor. i will. but first, a little presentation. hijacking earth's geothermal energy supply. phase 1. choosing the right drill bit. as long as evil villains reveal their plans, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance.

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trying to shed its image at least in what players wear khakis are out bright colors are in and companies are trying to cash in dom chu is live at the u.s. open is that a new golf shirt you're wearing there? >> i am. what i'm wearing right now is a tracksuit jacket from puma golf, one of the companies trying to capitalize on the younger movement going a little bit retro, bringing the youth edge to it. but they are not the only once puma is a big athletic apparel company doinging this kind of thing, other upstart companies are trying to do it as well, trying to take the runway and meet to the fairway. trying to create women's fashion forward type clothing and their attempt is to try to bring more women into the game and give them something fun to wear you also have companies trying to bring a street wear west coast feel to the golf links as

well and then of course puma does their thing. a few companies trying to grow their particular brand base beyond the traditional country club golfer. and you can see a lot of the trends right now playing out at the u.s. open merchandise store which is right across from me here it is 37,000 square feet of all kinds of different clothing, styles and types for women, men, kids all trying to capitalize on what is happening we actually spoke to the usga head of merchandising, she has run it for about 20 years. she told us about what she is seeing in terms of trends. take a listen. >> performance fabric is still trending bright colors, neons is trending fit instead of a big blousy oversized golf shirt, people are wearing more fit pieces. and in-that one big thing we're seeing is a lot of ath lof athl. >> what i got too is a pair of

retro suede shoes built for golf as well. so all kinds of things happening with regard to style at the u.s. open here at shinnecock. >> you look good, dom. >> he's allege styl always stylh >> and i prefer the metallics. it is an interesting story, right, because not a lot of the big players will be competing this weekend but adidas has their marquee player in the game >> yeah, absolutely. the world number one golfer. and that is dustin johnson last i checked, he was still at the top of the leaderboard so you have to figure that they are feeling pretty good about the situation because a lot of the top golfers in the world right now it doesn't look like they will be in con tense for the contention for the weekend i believe the projected cut is a staggering plus 9. it will change this afternoon.

but just tells you how tough it is out here right now. >> and that guy who reps nike isn't going to make this weekend. >> that would be tiger dom, thanks. >> impressed with my knowledge >> i am. >> let's get some cnbc news headlines. >> hello here is it what is it happening. florida officials say that a roller coaster that derailed last night had been inspected just earlier in the day. two people were ejected, eight others on rescued. nine were then taken to the hospital.cause of the accident is under investigation citigroup has agreed to pay $100 million to settle charges that it rigged the libor benchmark interest rate to boost profits. the settlement was announced by new york attorney general barbara underwood.

and michigan legislators calling on the msu interim president to resign for his handling of a campus crisis surrounding dr. larry nassar and the czech president calling a news conference to set a giant pair of underwear on fire there you see it this saga started back in 2015 when members of an artist group climbed to the top of the czech presidential palace and replaced the flag with the boxers they were protesting his campaign for re-election >> so this is sort of a na-na-na sponsor something. >> that would be high interpretation but i don't know the jury is out. >> they were big ones, too >> yes, those were giant boxers. words you never thought you'd say in a news update >> we're so proud.

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the bidding war for fox assets continues comcast making an all cash offer. what is disney's next move randall stephenson speaking on cnbc earlier today hey, julia >> good afternoon. steven s stevenson talking about what is next >> we will run these businesses fairly independently, but there are things we need to do where we create value together as i mentioned, the advertising, making sure that where we're beginning to think about creating content that is curated and formatted for the mobile environment as well. and actually the creative talent

within time warner is excited about that >> when asked about disney and comcast battle, he says he is ambivalent as to which way to goes but he said both of the potential buyers are in line with his strategic approach. >> what they are doing and what they are pursuing reinforces the play that we're running. we want to get there first >> he also warned just because his deal was approved doesn't mean regulatory approval is necessarily transferable to his rivals as for what is next for fox? still no word back from disney on whether it plans to top comcast's offer. no word on from fox to delay or adjourn the july 10 special meeting. back to you. >> thank you, julia. let's talk more about the future of the media industry. ben silverman is with us now ben, thanks so much for joining us >> from the u.s. open. >> from the u.s. open

conveniently looks like a great day out there. given your expertise and knowledge of nbc entertainment and nbc, how do you think about a comcast/fox deal and what this would do for nbc >> well, clearly with at&t now having approval to acquire the time warner assets, we're further accelerating the content wars and obviously also i think part of why the judge ruled in favor of this wasn't just in relationship to even thinking federal government was overreaching, but also to set up these companies to compete against the big tech players and i've got to think comcast knows that is an important part of that strategy and they want content assets that can compete. right now nbc universal has some fantastic content assets but doesn't have as many big brands as disney and some of the other players. and i think them going after fox

will help augment that you think about illumination which nbc universal started. but they don't have as many as some of the other players. so aegd the simpdding the simpsr things could be pretty big >> why haven't we heard from disney yet did they catch them off guard? >> well, i'm obviously not inside the senior strategic table there. >> this was telegraphed long ago. they knew an offer was coming from comcast and it has been very quiet the last couple days >> well, i think they were waiting on this ruling because there was a chance comcast may have kept their powder dry if they thought they weren't going to get approval. but i imagine disney and comcast will both compete to get this asset and my instinct would be disney will go hard to go after it and will try to pursue it and it is interesting because

clearly the murdochs have a big say in it as well. >> and we're all wondering which way rupert would go when it comes to this. and i'm wondering how this is all going to shake out in terms of the consumer. what will it mean? are the big bundles going to get even bigger even though we thought it would go more a la carte? >> well, i think one thing that both companies have, comcast and at&t, is technology. and as randall stephenson pointed out with a mobile strategy to accelerate the opportunity as the younger demographics are all consuming content on their phones, he is trying to position some assets that can exploit to that marketplace. and i think that you are obviously going to see bundling and a desire to sell more services are those going to cost more and then they are going to be losing money by bundling stuff but charging lessor are they going to increase price or arethey going to save money themselves

both for the consumer and for themselves by bringing synergy to these assets. time will tell my concern is the consumer are doesn't necessarily benefit from six giant companies controlling the marketplace. i also have concern about independent voice. if five people at the top of these companies, and we live in an age where the ceo is driving so much decision making, will we have a diversity in content, will we have the ability for independence to still supply these giant players and have voices not just represented from inside these organizations, but come from independent sector >> all right ben, we'll leave it there. great conversation to the bond market, rick santelli tracking the action at the cme group. >> well, let's look at some weekly charts quickly. it sums up the week so perfectly. one week of two year note yields, they are up five basis

points ten year are down four basis points is this unique to the u.s. no look at one week of the two year in europe, up two basis points ten year down five basis points. and nothing sums up the week or the problems with the cb or maybe the issue that if you have a problem as a central bank just weaken your currencurrency, if s to show you one weeskt dollar index it would look like that going straight up. back to you. >> rick, thank you investing in china and its red hot technology sector, we'll check in with a big investment bank in the education ipo soaring in its debut the firm just got a major boost veme china easing foreign instnt rules where they are seeing opportunity, next. hi, i'm joan lunden with a place for mom,

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the ipo of puxin off to a strong start up about 26% joining us is jonathan homent. it is about to go public in hong kong thanks for being with us puxin speaks to the domestic chinese coupler. there is a real value in education. parents like to spend money in education. so that hits all the right notes. >> exactly checks all the boxes interest was very strong >> there are some competitors though in the space. and it is interesting because the demographics are changing greatly with the he'dieasing of blir birth restrictions so your market is bigger so what is your total addressable arket? >> i think for them is the culture of the chinese culture,

tutorial and education is very important. so anything that follows that line would get a great audience. and then with that, the investors sees the appetite and as you mentioned with the multiple child policy, that go s goes up and then consumers go up, they have more to focus on the kids and therefore this whole thing just rolls up, snowballs up. and i think that is why the ipo was so strong. >> and this is on the new york stock exchange and in hong kong there were approval to list depository receipts what was the decision process in terms of choosing hong kong and mainland china because it is a real departure from the other big chinese tech firms in the past. >> i think obviously there is a management decision, but i think obviously this needs to be

exploring different options. so i don't think that it is -- hong kong stock exchange is doing its bid as well, so overall development of the company. >> this was your first ipo in the u.s. will we see more >> yes, we hope so i think that it is something that we are doing okay in hong kong, and so we need to push outside. u.s. is obviously is the key place we are investing into. india, singapore, everywhere, but i think u.s. is something that question awe are pushing hn we are fully licensed here >> and we are thinking of the tariff situation between our two countries. how does that affect if at all the ability to come back to the united states and ipo stocks or any of our economic relationships here or is it so broad that this is such a narrow story on the

tariffs here >> on the tariff thing, i think it is a tricky one let me say this way. my son plays baseball for his school he was running to first base and the guy fumbled the and then my son came back and said, look, he was trying to get brownie points and said, look, i learned from the art of war from school, i got to face first base not because i was better than anybody else but because my competitor fumbled the ball. on the flip side, the kid that fumbled the ball fumbled the ball, lost out, not because my son ran any faster than anybody else but it's just that he fumbled the ball, and then my son came back with a third comment saying, if that kid kept on going, i'm sure the ref or the coach would have had a word with him and then the whole game would have stopped >> so who's fumbling >> that's the second sports metaphor we've heard today on trade. >> really? >> the other was soccer, so we're -- >> baseball now.

>> kenneth, thank you. thanks for coming by kenneth ho of haitong international securities we move on to world cup and panini is cashing in it makes these sticker books featuring all the best players and maybe a couple who are not so good at the same time we'll explain coming up. and we're watching this down day on wall street right now, the dow is down about 222 points "power lunch" back after this.

it's day two of the world cup and melissa was just reminding me we're minutes away from the huge match between portugal and spain >> he says that sarcastically. >> around 3.4 billion people are expected to watch this year's matches and there's big money up for grabs as well with fifa expected to rake in $6 billion in revenue our next guest is one of the companies looking to cash in on the world cup craze. joining us here onset, the ceo of sports memorabilia seller panini america all three of us are just huge world cup fans we're very excited about all this you know, i'm trying to think of another sporting event that has the kind of passion that world cup does and international appeal the olympics, yes, but there's a

lot more passion in world cup, isn't there. >> absolutely. there's no doubt i mean, soccer globally is a phenomenon, and watched in almost every country around the world. >> and the -- the amount of money just continues to grow exponentially each world cup, doesn't it >> i think more and more territories are coming on board. obviously fifa are going to introduce some new teams in 2026 so it goes from strength to strength >> how did you build your business around this >> our business was formed in 1961 when we launched our very first collection, and it was an italian collectible sticker collection and the first world cup collection was launched in 1970, and it's just grown from strength to strength every tournament >> we have the stickers. >> these are the stickers. >> the collectors use. >> how much does this cost >> in the u.s., it's $1 a packet >> and how many stickers >> five stickers >> what do i do with these >> you open the packet and then they're numerical.

>> like a stamp collection >> stick them in >> and you made some special stickers here, didn't you? do we hold them up or do they have them here hold yours up, guys >> sticker >> there you are there's one. >> all-star. >> that's a nice picture and sara had never seen this picture before >> yeah, i'm very serious. >> and here's mine it's coming. there it is. >> there it is >> you look great, bill, in that picture. >> i guarantee there are people -- i guarantee there are people out there who are convinced that tyler's hosting today's show they're always getting us mixed up >> what are you seeing as far as u.s. customers given the fact that the u.s. team is not in the world cup. >> well, obviously, we're bitterly disappointed that the u.s. didn't qualify but actually tournament on tournament, we're actually seeing 40% growth in the north american market, and i think it's just because soccer continues to grow at an alarming rate, so again, had the u.s. qualified, we'd have seen even

more growth but 40% from one tournament to the next is pretty impressive growth. >> who's going to win? >> who's going to win? i like to say my home team, england, but most likely germany or brazil. >> who sells the most stickers >> brazil. >> everybody loves brazil. >> the country of brazil yeah i mean, huge population, soccer fanatics yeah huge >> i choose nigeria because i like their outfits the best. >> she bets the jockey too always on horse races. >> thank you, mark >> you're more than welcome. thank you for having me on apple is used to dominating every area it enters, but so far, no such luck with streaming. can oprah winfrey help apple compete with amazon and netflix? and a fox accepts comcast deal, homu ww chill rupert murdoch owe in taxes all that and much more in the second hour of "power lunch. tool shows you the places you can fly on your budget. so you can be confident you're getting the most bang for your buck. alo-ha. kayak. search one and done.

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i'm sara eisen trump slapping china with new tariffs, china set to slack back, stocks not happy with the latest tit for tat we will go inside the numbers straight ahead the president also making a surprise appearance on the north lawn of the white house this morning, two live interviews, lots of fire and fury, the latest on trump unplugged coming up apple and oprah rah, tech

giant striking a talk. the second hour of "power lunch" starts right now welcome to "power lunch. i'm melissa lee. the major indexes off their lows but in the red at this hour. the dow is down by more than 200 points of 0.9% s&p down by about 0.4% or 1 points nasdaq lower by 24 crude oil in a steep decline ahead of next week's opec meeting, investors nervous as saudi arabia and russia indicate they are prepared to raise output crude oil down right now by about 3% on wti and about 3.4% on brent and take a look at some of the big energy names getting hit hard in today's session. marathon, nandarko on the flip side, consumer staples seeing a nice bounce today, colgate, palm olive, all up 1% or more. i'm bill griffith. as is so often the case lately,

the eyes of the market clearly on washington today. as you heard the president holding court on the white house lawn, weighing in on everything from trade to north korea to that inspector general report that was out this week this as his administration enacts those tariffs on up to $50 billion worth of chinese goods. aminneso eamon javers is at the white house with more on that. kayla tausche with the latest on the rising trade battle between china and the united states as well eamon, you first. >> reporter: the other news today is that the president's former campaign chairman, paul manafort, was sent to jail by a federal judge after allegations that he tried to tamper with witnesses. the president has been tweeting about that within the last half hour, calling it very unfair and saying apparently sarcastically, i didn't know that paul manafort was the head of the mob. so the president clearly voicing his displeasure there in terms of the paul manafort sentence. we also have that wide-ranging i impromptu news conference. i can't tell you how rare that is i can't tell you a previous time

a president has come out here to take free fire questions he was asked about a number of topics, including north korea, and he made a very frank defense here of his stance toward kim jong-un. here's what he said. >> you have spoken so passionately about the circumstances that led to otto warmbier's death in the same breath, you're defending kim jong-un. >> i don't want to see a nuclear weapon destroy you and your family >> stark language from the president of the united states there. he was also asked about this issue of the statement that the president apparently dictated regarding the trump power meeting with the russians back during the campaign. you remember the controversy over this is that the white house said that the president did not dictate that statement, and then later, his legal team sent a memo over to investigators saying, in fact, he did dictate that memo he was asked about that today as well, and here's how he answered the question >> did you dictate the statement

about donald trump jr. >> let's not talk about it you know what that is? it's irrelevant. it's a statement to "the new york times." the phony, failing "new york times. just wait a minute wait a minute. >> to clear it up. >> that's not a statement to a high tribunal of judges. >> reporter: the president there appearing to suggest that even if the statement was misleading or inaccurate, it doesn't really matter in any legal sense because it was just a statement to the media, "the new york times," not in a court of law, therefore not necessarily perjury or anything like that that could be a crime. but just a statement to the media. the president apparently unbothered about whether or not it was inaccurate or not inaccurate and saying, ultimately, he doesn't want to talk about that at all, bill >> eamon, thank you. let's get to kayla tausche with china's reaction to the new round of tariffs here, quick and pretty forceful as well. >> reporter: yeah, well, bill, china said that the two-part tariffs the white house rolled out today are provoking a trade war as the two sides had struck a temporary truce and were negotiating behind the scenes. the u.s. put out a list of

products that it would target first that was trimmed down to $34 billion from an original $50 billion, but the beijing list of u.s. products that it would retaliate against has not been edited yet so it's unclear exactly where china would look but based on the list they put out in may, the peterson institute for international economics said the biggest impact would be felt in transportation after that, soybeans, plastics, rubbers, and other chemicals, but that focus on aircraft and transportation is why boeing and other big multinational stocks are down today boeing putting out a statement saying it was, quote, assessing the impact these tariffs and any reciprocal action could have on our supply chain and commercial business we will continue to engage with leaders in both countries to urge a productive dialogue to resolve trade differences. meantime, just a few moments ago, the "wall street journal" put out an article referencing a meeting between multinational

executives on the ground in china and china's vice president where the vice president told those executives back in march that tensions could escalate with the u.s., and they would be caught in the cross hairs. bill >> i'll take it, kayla thank you. so what impact will these additional tariffs have on u.s. relations with china and trade overall? alan tunnelson is the founder of reality check, a blog covering economics and national security. and joel trachtman with us, a professor of international law at the tufts university. alan, i've been dying to talk to you because it is hard to find people who follow markets and economics closely in favor of president trump's policy, in favor of president trump's attack on the trade deficit, but you seem to be tell us why. >> well, sara, let me tell you what else has been very hard to find lately, and that is folks who have been -- who have been critical of mr. trump's china tariffs, steel tariffs, and broader trade policy moves who have also been right about u.s.

trade policy regarding china in particular for the last 25 years or so. because every prediction made by mainstream economists and washington think tankers, wall street analysts, et cetera, that more trade with china would make china freer economically and more cooperative diplomatically has been disastrously wrong. >> i don't know if it's been disastrously wrong, joel, but i bet you'll take the other side of that. >> well, i think that there is a problem with china, and it has to do with intellectual property and subsidies on steel and aluminum and other products and so the united states needs to engage with china. what i would say is that the way that the trump administration is going about it is the wrong way, by acting unilaterally in a way that is illegal under world trade organization law, inconsistent with the united states' commitments. the united states should work with its allies, should work with those g7 countries that we

offended in canada and find a way to deal with the problem that is china, and i think that if the united states operated in that kind of diplomatic, cooperative context with its allies, that china would listen up and would respond in an appropriate way. >> yeah, i mean, that's the criticism, alan, right, that president trump deserves some credit for calling out china on unfair trade practices, and pointeding out that that is a problem for the way we do business the problem is the way he's going about it these tariffs, this sort of aggressive behavior that doesn't lead them to the negotiating table. it leads them to fire back and hurt american companies. >> but the criticism of u.s. unilateralism completely ignores the fact that all these forms of multilateral engagement and also u.s. unilateral engagement have been tried going back 15, 20 years. the united states has been talking with china in a series of high-level economic dialogues

going back to president george w. bush's administration the united states has been trying to get its allies to cooperate meaningfully on common measures to curb china's trade predation. it's gotten nothing but talk there has been a -- a g7 working group on steel overcapacity since the end of 2016. we have seen absolutely no progress whatever on that score, despite various expressions of criticism for china's state subsidies, so the idea that washington hasn't tried engagement is completely untrue. >> hey, joel, i heard an economist say this week, you know, realistically, trade deficits don't matter, that we're going at it -- >> that's every economist. >> well, okay. i heard one of them say that this week. do you agree with that you know, is balancing a trade relationship really a goal that

we should be going after >> so, trade deficits are caused by the difference between national savings and investment. trade policy doesn't affect trade deficits, and by the way, bilateral trade deficits like the one with china are even more meaningless, because they result from the fact that we happen to buy a lot of goods from china that they don't ask us to send us other goods in return for, and if we addressed the bilateral deficit with china, we would just have a bigger deficit with brazil or canada or some place else so, the deficit problem, the one that president trump has focused on, is a red herring it's a mistake >> all right gentlemen, thank you >> thank you well, the market has -- some of the saber rattling in the past is today's drop due to trade warfare or is there more worrying investors bob pisani is on the floor of

the new york stock exchange. >> there's a secondary problem that's really coming up now and we can see it very clearly let's take alook at i think what matters right now number one, if you take a look at the tariffs, obviously, the trade war rifbs are escalating it's not these tariffs it's the potential for more tariffs down the road, but a lot of chatter today down here about the strong dollar and the potential impact dollar is up 5% so far this quarter and it's starting to attract a lot of attention here. the fed, we talked about, mostly hawkish, but economy is so strong, modest rate hikes, not a big threat to the market and earnings, biggest thing for the market, it's not peaking yet i've said that repeatedly this week if you look at the sectors, multinational companies in commodity-related areas are the ones that traditionally get hurt when the dollar starts going up, noticeably, energy materials, industrials, all down, this is partly on tariff concerns, related issues, consumer staples and defensive stock. these are big industrial names, proxies, of course, for trade wars, but also companies that

would be most hurt if the dollar goes up here, caterpillar, boeing, honey well, and 3m i mentioned gold and i don't usually bring it up, but take a look we're never for the year on gold we're down about 1.5% on gold and since the dollar started going up in april, gold has been hit and it's become an issue so if you show the chart here, gold's up -- down about 4% on the year the dollar is up about 5%. it's an exactly inverse relationship since this is for the quarter and you see that, and that -- when the dollar starts moving rapidly, rapidly, it starts affecting some of these commodities that are priced in the dollar that's the bottom line here, guys it's the dollar that's an issue. >> bob, thanks bob pisani our next guest believes the tariff wars will amount to only chronic headline risk and not become a serious investment issue. jim paulson, chief investment strategist, jim, great to see you. it's not going to be tariffs, it's going to hit the markets but you say -- actually say that

you think we could challenge the february lows and that would bring us about 200 s&p points lower than where we are from here what do you think is a scenario to bring us there? >> well, you know, i'm a little concerned about a combination in the second half of global growth slowing down a little bit, not recessing or anything, but just slowing down after we've elevated everyone's expectations and at the same time maybe slowing down not enough to break inflation sort of slow upward move so, assume that growth, we might get -- i think we're going to get a 4.5% second quarter number in real gdp but let's say it slows to 2.5% or something like that in the second half or a little less. at the same time that global growth also slows. we even then, if we're at a 3.8% unemployment rate, melissa, that -- even a 2.25% or 2.5% real gdp growth is going to be enough to push wages above 3%

and keep inflation in general going higher if that dollar that bob just spoke of breaks in the second half on weaker growth, then you'd also see another spike up in commodity prices. and i think that put us in a difficult position weaker growth may cause some to question their earnings estimates for the year but it won't be enough to stop the fed from maybe having to lift rates or the bond vigilante from having yields going higher and i think that's, to me, is a much bigger challenge than these current headline issues like the trade wars going on right now. >> i'm going to play pollyanna for just a moment. 4.5% growth, the tightest labor market in a generation, inflation started to pick up because we had retail sales that were the best in six months last month. it just keeps getting better and better, it would seem, so are you suggesting that this is as good as it's going to be and the only direction to go from here is down? >> well, i'm kind of suggesting that it is too good and that's kind of the problem. you know, bill, a big part of

this stock market, when it did the best was when main street was not doing the best we had a lot of excess slack and you could grow the economy and not create any cost pressures, any interest rate pressures, any inflation pressures, no need for the fed to tighten now we got a completely different situation. good growth is no longer good for financial assets outright. it's good and bad. it does raise profits, but it also raises the interest rate pressures, the cost pressures, the pressure of profit margins it forces the fed to restrict the money supply and liquidity conditions and we're dealing with all that. here we have this phenomenal profit year and no one really -- no real gain in the stock market and i think it's because of the dichotomy between good conditions on main street, which make more difficult conditions on wall, and that's what we're dealing with >> jim, great talking to you, thanks jim paulsen. here's what's coming up on "power lunch." a sale of fox's assets means a big windfall for rupert murdoch but it also may involve him

writing the biggest check ever written to the irs we'll break down the numbers coming up here also, apple elysee new act is making a major move and oil prices are plunging ahead of next week's opec meeting. what analysts are expecting on that and more when we continue on "power lunch. experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

rupert murdoch is set to cash in big, whether he sells his fox's film and tv assets to disney or to cnbc parent comcast, but that windfall could be offset by a multibillion dollar tax bill. our ewealth editor is here, eye shade and all shl, crunching th numbers for us >> i have never seen a tax bill that could be quite like this. if this deal is done in cash, rupert murdoch could end up writing the largest check ever to the irs, somewhere between $4 billion to $7 billion the murdochs would get around $11 million as their total windfall, and murdoch would have to pay a federal capital gains tax on that and since murdoch lives in new york, he has to pay the city and state income taxes so his total tax bill on the $11 billion could be as much as $4 billion but there's more he could also have to pay a tax on that new company that was hold the remaining fox assets. that would be a dividend tax

that could be anywhere from between $2 billion to $3 million more, so all in all, the murdochs could owe up to $7 billion in taxes on this deal now, he would not pay any tax with the disney deal that would be entirely with stock but if disney did sweeten its deal with even a little bit of cash, the murdochs would still have to pay that $2 billion to $3 billion dividend tax the board will act in the interest of all shareholders, kind of implying that it's not the taxes that will drive his decision it's really what's in the sbes interest of the company but it's hard to ignore a $7 billion tax bill >> that's pretty steep >> that is steep >> where does he hold his money? is it in a trust >> it's in trust, and many people -- i included, thought, well it's in a trust it won't be subject to tax a trust is designed to avoid the estate tax and the death tax it is still subject to capital gain

so, you know, there really isn't any way around this tax if there's any cash involved. >> if he transferred the shares to his children outright >> well, he did transfer many shares to the children in recent years. that does help because the basis, not to get too technical, but the cost basis of those is higher so there's a lower tax on those shares, but they're relatively small number compared to the number that he controls he founded the company he built it, so that's a low to zero basis so most of those shares are going to get the entire tax. >> it explains why that's such a factor in this decision. >> i know that comcast bid is 20% higher but if i'm rupert murdoch's accountant, i know what i'm advocating for. >> to make them equal, it has to be much more than 20% higher to give him what he would take from the disney deal. >> yeah, state and local tax not coming out a good time for him >> not a good year for that. >> thank you very much complicated. apple announcing a new salvo in the content wars, just this

afternoon. a multiyear content partnership with oprah winfrey we'll bring you the latest on that deal, tell you who's winning at the battle for binge watchers and we are watching boeing today, down more than 4% in the last week, on pace for its fourth straight daily loss on all these trade fears. is it time to buy onhe t turbulence "power lunch" will be right back

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apple scoring a major win in the battle for content, the tech giant just striking a multiyear deal with oprah winfrey to create original programming. what does it mean for apple and its content rivals like netflix? joining us now is ed lee at the "new york times" and dan ives. obviously likes apple stock, has a $200 target, dan how competitive was this bid, do you think, for oprah and what does it buy apple? >> i think it was very competitive. there were rumors that netflix was ultimately going to get oprah but it speaks to the point that apple's tiptoed into content. they realize they need to significantly accept up their game i think it's just the tip of the iceberg. ultimately, we believe that they could spend, call it $2.5 billion to $3 billion in consent over the next year versus the reported under

$1 billion that they're spending today. >> netflix already spends what $8 billion so, ed, i mean, it sort of explains why we're seeing things like at&t buy time warner and comcast and disney try to have a bidding war for some of these assets for fox that apple and netflix are the competition. >> right i mean, it's a fight for content and, you know, to get the content, you need food a little land grab for talent these sort of like -- these sort of first look deals and these overall deals mimic what the networks were doing 10, 20 years ago to kind of keep these guys in place the other context, though, is that $1 billion or even $2 billion spent $2 billio $2 billion spent, so even at $1 billion or $2 billion, it's maybe not quite enough it's a big first step for apple and i think it's sort of an outline of the start of the media strategy, but they really want to win, they need to spend

more >> ed, we had ben silverman on last hour, the former head of nbc entertainment, himself a very successful independent producer but he says he was concerned that you're going to see content in the hands of fewer players out there and he worries about the prices paid and what it's going to do to independent producers and different voices that need to be heard as this content just continues to proliferate out there. what do you think? >> that's actually a great point. i think what's interesting is that despite the fact that there's more money in content, we're in the golden age of television as everyone says, the infrastructure around hollywood hasn't changed that much people are getting paid more and people are getting locked down but it hasn't actually sort of spilled over into their independent scene where you might find the next sort of creative talent that you otherwise wouldn't see and i think that's a legitimate concern. at the same time, companies like netflix are trying all different types of content, niched content, that might appeal to a smaller base but that in aggregate makes up for the cost. so, unless we see more of those

specific types of strategies, yeah, it could lock down the infrastructure and just make independence even harder >> when you take a look at what the direction is, dan, in terms of this sort of media landscape and all the deal-making that's getting done, it seems like content is king. but is content plus distribution, is that necessarily what you need to be sort of the dominant player there? or can you be stand alone content? i'm asking because apple is striving to be a little bit of both the distribution is the -- in the form of these guys that we all have in our hands, and then they're trying to build out their content business >> and ultimately, i think that's been disappointing to many on the street, that when you look at content,what could have happened years ago, they have the distribution now, it's about the content. i think it's going to be part of both in terms of that balance and a that's why what we saw this week with at&t and time warner kicking off this content arms race has gone to a next level and you've seen the sony executive hires, they're going to have to significantly step up the game ed hit on it is $3 billion enough is a stand alone service for

content finally on the horizon >> you get more bullish on apple, though, if it does that, if it triples what it spends on content or what it's planning to does that make you more enthusiastic about the stock >> my opinion, if they do that, significantly more bullish, because ultimately, that's sort of the next leg in the stool you talk about software services but now from a market opportunity, apple, given that market share, this could be a game changer and that's why today was that first sort of toe in the water >> well, this is going to be a story we're going to talk about a lot. we didn't even bring up amazon, ed lee next time. >> next time we'll do it >> good to see you and congrats on the move. ed lee at the "new york times" now. and dan ives to sue herera with our cnbc headlines this hour. >> hello, bill hello, everyone. here's what's happening at this hour house democrats marking the sixth anniversary of the daca program by blasting republican policies they accuse the gop of roadblocking any serious attempt at resolving the status of

dreamers >> there's no policy justification for this it's all political the president is throwing red meat to his base when he does that he's using children, whether they're dreamers or whether they're little children at the border now, for political purpose. it's shameful. police believe a shooting that killed a boy and left three others wounded outside a suburban denver dental office stemmed from road rage they said 23-year-old suspect jeremy webster did not know or have a relationship with any of the victims. the slain boy's mother and brother remain in critical condition. retired tennis star boris becker is claiming diplomatic immunity he said his role as a sports aattache for the central african republic gives him that arrangement of immunity. >> you are up to date. that's the news update this hour melissa, back to you >> thank you so much, sue herera and check out the steep drop in oil

oil prices right now we're down by about 3% here for wti as well as brent what is dragging prices down ahead of next week's epeck meeti -- opec meeting take a look at the market. we've cut our losses in a big way. the dow was down by 280 points at its low it's now down by 64. boeing making a huge comeback here it had been down 2% at the top of the show at 1:00. it's now down by 0.5%. more on this market turn around straight ahead help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus

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the comeback in stocks continues. in fact the s&p now positive after being sharply lower earlier. let get to phil lebeau with a market flash on general motors >> bill, let's take a look at shares of gm because they're moving higher on a report that the company is considering the possibility of a listing for its autonomous vehicle subdivision, if you will. its wholly owned subsidiary gm cruise holdings and if that were

to take place, it would basically confirm what a lot of people have suspected for some time, that ultimately, general motors looks at the value within the autonomous vehicle program at cruise holdings and says you know what? let's tap into that. remember they sold 20% -- 19% to be technically correct, of cruise to soft bank and that's a deal they announced a couple of weeks ago, and when that came out, people said, let's look at how soft bank values cruise and now we can extrapolate a valuation, if you will, for cruise, and people have started saying, maybe general motors is best served tapping into that equity, if you will, by considering a listing. so again, that's the reason why shares of gm have been moving higher within the last, oh, 15, 20 minutes guys, back to you. >> all right, phil, thank you. market certainly likes that news let's check in on the broader markets. bill mention add comeback. we are seeing that

major averages come in well off the low. the dow right now is down, well, more than 60 points at t at the low of the session, it was down more than 280 points. s&p 500 hovering around the flatline telecom, super boconsumer stapll estate leading materials and energy are the worst performers, so a lot of hand-wringing earlier this morning, melissa on the trade war after the new round of tariffs on chinese imports looks like things are improving, though, heading into the weekend. the oil market, meantime, is closing for the day. let's get to seema at the commodities desk >> opec is about to make a major market decision next week and prices are dropping a ahead of that announcement. brent on pace for its worst day since april 2nd, down just about 3% the gathering next week is shaping up to be a contentious event with lines drawn between countries that can benefit from output boost and those with little to gain the goal is to increase oil production to compensate for

iran potentially going offline as well as falling production out of venezuela meantime, also want to draw your attention to gold prices which are down about $26 an ounce at the lows of the year, this as the dollar gains ground on the back of these elevated trade tensions worth noting as we head to the close. >> seema, thank you very much. meanwhile, u.s. drillers added one oil rig in the past seven days, marking the fourth straight week of increases now, all this despite crude prices see a decline of 9% over the same period, so what needs to happen for crude to see a turn around of sorts our next guest says the answer could just be offshore we bring in christian brown, president of snc's global oil and gas sector good to see you. thanks for joining us today. what do you expect opec to do? are they going to hold line on production they've got prices about where they want them, maybe theksd y l go higher here, but is it time to increase production and make up for the loss they're going to

see in iran and venezuela? >> i think not i think it would be sort of neutral coming out of the meeting next week. it will be a wait and see and they'll hold the cuts through 2018, i believe. >> now, offshore, you know, everybody's making much of the shale boom that we're seeing in the united states, but you still are here to pound the table for offshore production. why? >> well, i believe it's both i mean, there is no doubt in the near term that u.s. shale will make up most of the supply coming out of the u.s. into the global market, but the next three years, that production needs to double to stay in line with overall global demand and i don't believe the market here in the u.s. can hold with that, and i think that then drives to opportunity for offshore, where the last three or four years, you've seen incredible amounts of amount removed from the sector where a cyclical low. we've now cost the base associated with offshore

development sort of -- the break evens are now below prior and potential future oil prices so i think the offshore sector will bounce back to make up the shortfall that i believe will be left by the growth and the amount that won't be made at u.s. shale >> what do we need to see in terms of oil prices, christian, in order to keep companies willing to spend on projects >> well, that's an interesting question you know, i think many of my -- will talk about $50 oil for break even and less for general convention oil but i think a happy medium actually gives a lot of confidence and we'll start to see more investment across all of the hydrocarbon elements of our industry >> is there a hesitation maybe clearly you have a president in the white house now who is in favor of offshore production where you didn't have it with previous presidents. if he leaves office in 2020 or 2021 and somebody else comes in, i mean, you think companies might hesitate to make long-term

investments in an area that could be taken away again? >> i don't think so. and part of the reason for that being, if you look at the current offshore capacity, so that is assets that are on stream producing or about to come in on stream, even to remain flat, we will -- we will need an incremental amount of investment offshore. the pessimists say that we could lose 5 million to 6 million barrels offshore if we don't invest in the coming years so i think irrespective of what happens in the white house, we will see investment going to the offshore market over the next three to five years, purely to maintain production levels where they are >> i was just going to ask about your customers so you have, it looks like, exxon, shell, bp, and the level of spending, this sort of appetite for spending that they're seeing right now, is a result of political, economic, and pricing environment. >> well, i mean, surely the three mergers you just mentioned

are part of our client base but we've also got a significant amount of our client base are national oil companies and i think the mood really is we've had four years of restricted investment in the industry there's about $1 trillion of capital that has not been deployed and there's a concern that oil prices will increase, there will be shortfalls in supply, and it's pushing our customers to consider now investment decisions so the activity levels we see within our business looking at study work, looking at potential investments is increased exponentially over the last 12 months >> christian brown from snc, thanks for joining us today. appreciate it very much. >> appreciate it switching gears, silicon valley has certainly faced heavy criticism over its lack of diversity and google has been on a mission to highlight its efforts, but it appears diversity at the tech giant hasn't really changed much over the last year. google's latest annual diversity report showing its employees are still mostly white and still mostly male. the percentage of female employees rising slightly

compared to last year. it's about 31% it was 30.8% last year now it's 30.9% the number of black and latino employees remained low, 2.5% and 3.6% respectively, almost 70% of google employees are male. so, first, it's a step that they're putting this out there because i think a lot of companies don't do that. and you're starting to get more and more as companies have been called out for that. nike puts out its representation, for instance google had to do so after it fired that programmer for that memo that was sent and it's probably on par to be fair with a lot of other big silicon valley companies you really have to put them side-by-side, but i think it highlights a big problem >> yeah, a lot of work still to be done. >> yes well, the wharton school holding the wharton global forum. leslie is standing by with more. >> reporter: hey, melissa. that's right we're getting ready to sit down with the guy at black stone who says he's in charge of finding

some of the craziest sounding ideas. he's exploring those, and we're going to discuss it all coming right up after the break >> announcer: the cnbc trend tracker live data board is brought to you by the cme group. we started making wine

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the wharton global forum is under way in new york city, bringing together leaders from business, government, and media to discuss the future of their industries leslie picker is in new york with a cnbc exclusive interview. hi, leslie. >> reporter: hey, melissa, that's right i'm here with david blitzer, otherwise known as blitz, who runs the tactical opportunities group within blackstone. thank you very much for joining me >> pleasure to be here. >> reporter: so kind of in a few words, tach ops means that you look for out of the box areas to invest where are you seeing those opportunities now? >> it's tough out there these days but the fun part is that we literally can invest in just about anything in the alternative space. the only thing we don't do is compete with our own firm. but beyond that, we are open to just about anything that we think, you know, makes sense out there. i'd say today we're spending a lot of time in the telecom

space, so you know, fiber and cellular towers and spectrum, data centers, we just think the mega trends behind that industry really make it a very attractive place to invest. >> what are those mega trends? >> how many phones do you have, how much data do you consume per day, and how much is that not just proliferating per person but if you think about the penetration rates all across the globe, people who couldn't communicate in certain ways before are you getting movies downloaded their phone in areas that they couldn't even get a phone call five, ten years ago so we just see massive data proliferation everywhere we don't see any signs of that slowing at all, and so the ability to be able to invest all across the globe, actually, and in places that we see even higher egrowth rates a lot of times you see economies where they're getting much more going in towards the middle class, and what are those folks doing? they're communicating more they're consuming media differently. and we're very excited to continue to invest in that space. >> now, you've self-described

this job as trying to explore and invest in some of the craziest ideas out there what's the craziest one you've actually put money to work in? >> i made that comment, i don't know, a lot of years ago because i was trying to make the point that we'll invest in anything. we're very open minded the only negative point about that is you can imagine the phone calls i get with the most bizarre investment ideas and i have to politely say, yes, i'm very open minded but i don't think that's going to work for us but i mean, literally, i've been pitched everything from, you know, figuring out how to get sheep to produce their goods in a different way, like literally the wool off the sheep, and i'm like, okay, i don't really understand how to deal with that to people who have invented things and say, can't you back me i've got this great new invention that i've just come up with and i need capital and you seem like the kind of group or person that would listen and back us and we're like, well, we do look at everything, but let's try to bring it into a little

bit more of an investable scenario so, again, we are open-minded. we are looking both from a geographic perspective and industry perspective, a structure perspective at just about everything, but at the same time, actually, when you look at our investments, they're quite rational >> so you're short sheep >> i don't know what i am. i'm just like, i can't really deal with that >> now, this group that you're in was started post-financial crisis >> correct >> so -- >> we started in the summer of, really, 2012 >> so given kind of the lack of liquidity that you operate in and kind of different risk-reward metrics, what do you expect to happen during the next downturn with regard to ops? >> it's really interesting because i say to this, to my own investors, we've been in an environment which for the last five years asset prices have generally gone up, risk premiums have generally gone down we actually look for dislocation. we're looking for things that are dislocated or other people

might not think are particularly interesting, and we have a different angle or a different thought process around them, and it hasn't been an incredible environment for that so in the next downturn, whenever that might be, i actually think that you're going to see, from my team anyway, a level of excitement in the sense of being able to find value in not exist before and real dislocations that we feel like can generate incremental health from all of that said, we have been finding interesting things in a market that's not dislocated over the last few years. you always get pockets it is finance. there is pockets of dislocations all the time right now the energy space is booming. it was not long ago when we had oi oil in the 20s and you have huge dislocation in the back end of '15 and '16. to be ready to jump in, the shorter term dislocation in the

particular markets create real potential for high returns >> putting the opportunity and tackle the opportunities >> david blitzer thank you so much for joining me >> join the conversation, lesley thank you. >> checking shares of boeing, still down 2.5% this week. will the trade fear means more volatility and could boeing get in the crossed hair? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

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time now for "trading nations. the industrial giant is still on track for its worst week of march. the tariffs talk and action and trade war fears. mike binger and mark newton is with newton adviser. a lot of industrials are getting hit right now. some of the components go into the heavy machinery orders from china are going to be taxed when coming into the united states, what do you do with boeing >> yeah, i would not be concerned about all the tariff things going on right now.

what i would be concerned is boeing stock even though they are operating at a high level, the stock mattis up close to 150% in the last year and a half i think consensus and expectations are met but it will be hard for them to smash those consensus. at the end of the day, i believe that boeing is a cyclical stock. wi we own honeywell right now, i think the valuations make a lot more sense here. >> 22% so far this year. kevin o'leary, how does the chart looks? >> i agree with mike a lot of the stocks are in the

aerospace sector weekly divergence have started to show up and the stock moving higher and momentum moving slower at a sense of a time. i think that's a concern when ever you see rsi or the strengthen -- the stock on four of those have been down and 50% or more of the three or four more years to come >> wish to trade at 311. >> we got to leave it there. we got the target. thank you very much, mark and mike you can head to our website on tradingnation.com. >> now the latest from "trading nation" and a word from our sponsor.

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bubba watson is over dustin johnson has a three shot league over the weekend. we are wondering if fox is going to go to usg saying you are making it too hard for these guys >> we'll talk about golf in 20 seconds. >> thank you for watching "power lunch. and we let you >> "closing bell" starts now >> i am wilfred frost. >> i am cayla tausche, the u.s. slapping 25% tariffs of $50 billion worth of goods in china. china is hitting back. is this the beginning of the trade war. >> though in the red today, the nasdaq composite is on pace for its fourth straight week of gains. i will have a run down of the winners and the losers >> i am kelly evans. with bill miller on the markets today an