the united states just surpassed germany as having the most asylum seekers of any nations on earth, can you imagine that? they allow millions of people and by the way their crimes from the time they started is up more than 10% and that's one of the reasons it is at that level is they don't like to report that kind of crime so they put it down different kinds of crimes their crime is up more than 10% since they started taking it i heard somebody said crooked hillary clinton was questioning that statistic she said it is not true. didn't she already have her chance when you read the ig report with dishonest people and i was never a deep state guy let me tell you we got bad

people that are doing bad things when you read the ig report about how she got away with what she got away with. it is a disgrace it is a total disgrace you ought to see the hearings right now on television, folks are going to the mainstream and focus on immigration because they want to keep cameras away from the hearings. those hearings are not good for them in fact they're a disaster for them the whole thing is a scam. we have a house that's getting ready to finalize an immigration package that they're going to brief me on later and i am going to make a chance we have one chance to get it

right. let's keep it going but let's do it right we have a chance we want to solve this problem and we want to solve family separations. i don't want children taken away from parents when you prosecute the parents from coming in illegally which should happen, you have to take the children away. we don't have to prosecute them but then we are not prosecuting them for coming inillegally. that's not good. we want to end the border crisis by giving us the legal authorities and legal resources to detain and remove illegal immigrant families all together and bring them back to their country. we have to bring them back to their country. think of all that aid that we i give to some of these countries and they set them up okay, i am going to go shortly

for authorizations that when countries abuse us by sending their people up, not their best, we are not going to give anymore aid to those countries, why the hell should we this is a responsible common sense of approach, democrats and republicans, remember we need the democrats. people say oh, you have the majority well, in the senate we have one you need six so we'll be i it -- if we get a 100% we'll be at 51. 100% we need nine votes and 10, 12 or 13 votes we have to have democrats support. we need to go not just the majority unfortunately, we need to go to 60 out of 100

we need democrats support. they don't want to give it because democrats love open borders, let the whole wor world come in. ms 13 and gang members from all over the place, come on in, we have open borders they view that as potential voters. they can't win on their policies which are horrible they found that out in the last presidential election. their only policy was donald trump is a bad guy and a bad person voted against they spent hundreds of millions of dollars of negative ads nobody have been hit like that i used to go home and started

disliking myself man, am i that bad true the problem is they never told anybody what they're doing they did not talk about tax cuts, by the way, they want to take away your tax cuts and sub substantially increase your tax cuts they did not talk about crime. all they talked about was trump so when people got to the booth, oh, we'll vote for the democrats. what do they stand for they just said trump and that's what happened. we got tremendous democrats support. it is a beautiful thing. that was a beautiful night that was a beautiful night, do you agree? it was some night. that was some night. you have to say it stands for something. you have to stand for safety and security of our country. we can't let people pour in they

got to go through the process, maybe it is politically correct or maybe it is not we got to stop separations of families politically correct or not, we have a country that needs security and safety and has to be protected we are here today to talk about small business and the incredible progress that we are making as a country. we made unbelievable progress and we make with the help and support with our wonderful friends, nfib. you heard these numbers. if you would have said these numbers during the campaign, fake news would have said this is the most ridiculous who would have known things are kicked in better and

as an example, you saw the polls that was taken small business polls. the most optimistic in the history of the poll. nobody would have believed these numbers if i am doing a big campaign we have created more than 3.4 million new jobs since election day 3.4 million jobs think of what it means by the way, we do need people coming through the border. we do need people. again, we want people -- i have a lot of companies moving in, big companies, you look at foxconn and wisconsin, they're coming in and they need thousands of people and chrysler is moving from mexico back into

michigan many car companies are coming back to our country. many companies are coming back because of all of the things we have done with regulations and tax cutting. we need people we have the lowest unemployment, 3.8% we need people, we want people that can come into help us and help these companies fulfill what they want to fulfill. unemployment claims are at a four-year lows maybe the one that makes me happiest, i remember i have gone around vote for me, the democrats have always been with you. they're bad education and most

unsafe parts of the country. i say to the americans, i would say what you have to do -- what do you have to do? vote for me. what do you have to lose unemployment for african-americans is at the lowest level in history. it is like what do you have to lose i would go around and talk and some people would say don't say that look, it is true so badly treated and now the lowest level of unemployment in history, african-americans and for hispanics. the lowest level of unemployment in history and for women the lowest level of unemployment of 21 years soon it will be history.

just like i promised during the campaign o f our economic policy can be summed up in three beautiful words. words that you know better than anybody in this country. jobs a jobs, jobs, jobs and i should not say this to the people in this room because you will end up not having liked my speech but wages for working people finally after 22 years rising again in our country i am sorry do do that. the only thing you can hold against me but i think you are a you will happy about it actually, i know you will. according to the latest survey, the share of small businesses

raising workers and benefit pay has just set a new all-time record we have broken many records and i can go on and on business optimism is the highest it has ever been in our country. that means more hard work americans are able to support their family and contributes to their community and live the american dream at the center of america's resurges are the massive tax cuts that republicans passed and that i signed into law not one democrat voted for the tax cuts and they are suffering now. they wish they had that vote to do over again. we had numerous states for senate where i think they're going to be in big trouble the the it it is the biggest tax cuts and

reform in america's history. you know the story, not since ronald reagan. cutting taxes should not be hard to sell. is there anything easier we'll cut your taxes and you can't get it through so the leadership came to my beautiful oval office. it is a beautiful office great office they talked about the tax reform what's the word reform what does that mean? does that mean you got to raise taxes? what does it mean? >> no sir, we have the tax reform act of 2017 i said no, i don't want to go reform nobody knows what reform means i look back at all of the times they try to pass tax cuts. they don't use the word tax cuts they use the word tax reform i said nobody knows what reform

means. they want to know about tax reform and we'll take away your business we'll take away your farms they don't want the word reform. they want the word tax cut sir, can you give us a name? i will give you the name i will give you the name it is called the tax cut, cut, cut, cut, cut bill of 2017.

> >> that's a true story, right, steve? everyone i thoug we'll jus cat call it tax cut bl and got rid of some of the cuts. and we got it passed one democratic vote, it is a tremendous relief for working families and small businesses. a family of four will see a tax cut of more than $2,000 slashing their tax bill in half and more. we deliver a historic victory for american small businesses by allowing you to deduct 20% of your business income, people were shocked

capital investment is soaring on small businesses and big businesses because you can now immediately deduct this to me is the greatest of them all every suingle penny spent on new capital equipment. i think that's going to be the star as you know we are also bringing back trillions of dollars from offshore that we could not bring back and companies were unable to do it have a tax standpoint and the amount o they have to pay. it was very hard to do h you had to see the forms that had to be filled out it was virtually impossible. now, it seems as if though we are hitting the higher side, companies are pouring money back into our country and bringing it

back from overseas and apple announced recently they're going to spend $350 billion on a incredible campus and new facility all over the country. they're bringing money back and like nobody ever thought you heard me say when they said $350 billion the $350 billion build a nice plant. i know how to build under budget and ahead of schedule. i can build a beautiful plant for a lot less than $350 billion they said no think of what it is. think of the total amount they're bringing back of $230 billion and the rest they're putting in, tremendous investment of our country. so many other countries are doing the same thing and

different numbers. it is incredible of what's happening. i still say how expensing one year will be the star of what we are doing. we exempted more from business owners from the alternative tax. we know very well it was not an enormous waste of your precious time of your very hard earned mon money. that was a disaster tax. i am so proud of that because i am keeping your businesses the family and farms as a result of all of these taxes and all of these tax cuts. american businesses now are at a level plain field with your competitors from other countries who have so many advantages including subsidies by government

you see what's happening with china. we have no choices this should have been done many years ago. we have no choice. china have been taken out $500 billion a year out of our country and rebuilding china i always say we have rebuilt china. they have taken so much. it is time, folks, we'll get smart and we'll do it right and we are actually getting a lot of support but we have to do something about it now maybe something happens where they come and they say we agreed it has been unfair for the last 25 years but somehow that does not work easily. but we are going and we are going to make it fair with other countries. both our friends and our enemies. i want to say this in many cases, our friends on trade have treated us much worse than our enemies. pretty amazing, is it? we know that when the rules are

fair and you can compete, you will win against anyone in the world, there is nobody like you. you are gouing to win anywhere but you will have to bring it down to a level plain field more than 6 million workers have already received a bonus or a pay raise or a new job thanks to these tax cuts people are able to go around and look for jobs. they're not taking jobs they hate it. they hate to wake up in the morning and they don't want to go to work now they got their choice and they have jobs that they can look and love. if you don't love it, you are not going to be good at it millions of americans are saying that they're saving money on

their monthly utilities bills. saving americans and additional $3 billion a year. hour historic tax cuts also ended one of the most unfair taxes, imaginable. obamacare individual mandate government will no longer punish you if you can't afford obamacare sky high premiums. think of this. you pay a lot of money to the government in order to not have to buy in health insurance, think about that so you are paying money so you don't hit the penalty. incredibly it was allowed but you are paying money so that you don't have to buy healthcare

that was a beauty. it is over and gone and done we thought we had the votes and one man early in the morning went thumbs down we got rid of obamacare without h him. that was a sad day for the republican party when that vote was cast thumbs down, i remember it well. obamacare has been especially brutal for small businesses you know that better than anybody. it caused premiums and deductible to explode and healthcare options to plummet. many small businesses and business employees so priorities have no good or affordable options. now they do because we are

opening up our system. i am proud to announce on truly historic steps and our efforts to rescue americans from obamacare and the obamacare nightmare and provide high quality and affordable healthcare to every american this is low cost and great healthcare before obamacare, there were many people were very happy and had no problem then you got thrown to the wind. alex acosta is here, stand up, alex, this is so important secretary of labor alex and the department of labor are taking a major action that has been worked on for four months now and now it is ready to make it easier for small businesses to ban together to

negotiate lower prices for health insurance and escape some of obamacare's burden mandates through association health plans. you can save massive amounts of money and have better healthcare it is going to cost you much less and it is going to be fantastic and it is comprehensive. i will tell you a lot of people,

big percentages of this country are going to be doing that and in fact while you are in the room together, shake hand for e me, good luck. in theory, the bigger the association, the better the deal i am making. you are going to save a fortune and you will be able to give yourselves and our employees tremendous healthcare. i am really honored by that, believe me -- with this action, businesses in the same states or businesses in the same industry, not just the same state, anywhere in the country remember i used to say during the debate cross state lines so you can negotiate. you can cross state lines so you can negotiate.

you p i cick the meanest and mot vicious manager owner t to -- right? to negotiate your healthcare and i know a few people in here that's going to do very well they are they are wild. you will end up with better insurance for far less money you will end up with so great and alex, that's ready as of when oh, that's not a bad answer. today! today. stand up, alex. i called our secretary of labor because he's really busy

hey, i am president of the united states. they said he's working on healthcare and i said well, department of labor, that's interesting. that's some great plan we love it thank you, alex. he's now working on an expansion of that including larger groups of people that's really something. for the first time ever we'll be able to come together and buy lower cost group insurance instead of getting ripped off by this disaster that we all know as obamacare these actions will result in very low prices much more choices and much more freedom including many cases new opportunities to purchase health insurance, you will be able to do this across state line. that was such a big thing. i would say alex, i want to cross state lines. he said don't worry about it

>> nobody else >> this is something we are able to do within the existing laws it is fantastic. it is all set to go. get going and make your deals. the insurance companies and some are forming their own. the insurance companies are so excited about this let them go in and they make so much money off of obamacare, they got so rich of obamacare. take a look at what's happening with premiums. so they're going to have to give a little bit of that money back, negotiate tough, please. every american who owns a small business plays a vital role in creating a safe and strong and prosperous america my administration will never forget that truth. every day you turn ideas into action you turn vision into creation. i know you well and you turn dreams into reality.

that's what you do you don't even realize that. that's what you do you embody the spirit of independence and adventure that turns america from 13 columns into the most incredible republic of the history of human kinds. see, i don't say mankind anymore. do the women understand that i don't know, they want me to be politically orrect we stand on the shoulders of american patriots who built the great highways and railroads and

dugout the panama canal and who won two world wars and put a man on the face of the moon. if you see what i did yesterdayesterday yesterday with nasa, right you have the air force and now you will soon have the space force because that's where it is at space. we'll be the leader. together there is nothing americans can't do we are saluting one great american flag

thank you, our future has never looked brighter and that's because of the hardworking americans like you and many millions of small business owners who took the chance to do what they love and follow their hearts and chase their beautiful dreams you are the ones who are shaping our industry you are the ones who are shaping and restoring our prosperity we are restoring our prosperity. you have seen gdp, you have seen what projections are and who knows but numbers that nobody ever thought possible. i look so forward to seeing some of those numbers but you see what projections are people are pro jejecting number.

i would not have said on jobs or growth let's see what happens we are doing well as a country you are the ones that's truly making america great again so happy anniversary, god bless you and god bless the united states of america. thank you very much welcome to "power lunch. separating children from parents from the border and taxes and how they benefit small business and constituents or the mfib and

specifically not only on the trade disputes with china but disputes with allies to the north and we can't strive with canada and mexico. the 40 minutes time. man. >> the new policy they are talking about for house insurance availability and making it more affordable for groups to join associations and therefore not to pay the high prices >> they're able to negotiate small businesses and ensuring some people think of a way to keep cost down and maybe the plans are generous or maybe they won't. >> let's take a check of the markets right now. a sell-off all day today s&p is having their worst day of the month and nasdaq is having their worst day in nearly two months today's plunge does wipe out the dow's gain of 2018 this is a tariff story s the the biggest loser in the

dow. 80 points to the dow's losses and caterpillar is down about the same and pressuring the dow. >> so highlighting, because of trade issues, president trump threatening china with another $200 billion with the new tariffs. china is calling blackmail and promising to fire back is the president going too far or the approach needed to get major concession here is jay rutledge, jegentlem, it is good to have you here >> thank you >> one of the goals is to get change to change their industrial policies and open their markets. rob, this methodology of threaten tariffs and poimposing them >> it is an herbessential first

step china has been taken advantage of the united states for far soo long they engaged in massive subsidies and this has allowed them to dominate world trade causing us millions of jobs and most of them have good jobs in manufacturing. >> you said this is a first step, tell me how you gain it out though >> we need to come up with systematic solutions to our global trade and ambulanbalances it is not just a problem we have with china and other countries are gaining a system like japan and korea and the european union. all of them have maintained large and global balances. the best way to solve that is realigning currency. >> most currencies float now, right? it would just be china that's doing that >> yes. >> are you critical of china of manipulating its currencies? >> is that what you are

proposing the united states to do to weaken its currencies? >> we noeed to have the agreemen to realign the currencies. those trade i mbalances were threatened we threatened to impose tariffs and we got to negotiations to realign the currencies >> john, what do you think first step to get -- >> well, you know my view, i think a lot of this, china, this bad guy, it is they and them and you know we are good and they're bad and that's a bunch of baloney. there are many issues in china and i spend a lot of time studying them. i would like them to open all their markets and intellectual

property to be protected anywhere in the world. trade is more complicated than talking about trade as and good. china does not have a trade surplus including goods and services they're of in balance. these trade ambulances are very -- they don't mean what you think they mean. if china did everything you wanted them to do and we had no tariffs either the trade account would not be in balance anyway because when you buy dollar, you buy them either to buy goods on the ship in a container or a service that comes across the internet probably or to buy a security, those security are treasury bonds. those are invested in the u.s. if the president gets what he wants, u.s. and foreign

companies bringing assets back into the u.s. to make jobs they have to buy u.s. security to do that the market has to be in balance everyday that itself will force the trade deficit further into deficit for the u.s. we need somebody to slow down and stop talking about good verses evils and us verses foreigners and look at the numbers and solve it in a sensible way >> rob, john does not dispute what you think the issues are and what a lot of people agreed of what the issues are the methodology, we have a lot of economists going on and saying trade deficits are going to get worse as the u.s. economy getting stronger >> despite all the actions that president trump has taken to date, the trade deficit has in fact gotten bigger and increased by 10% this year and gone up with china this is why we need to take a step back and take a semii cyst

approach which is going to realign the dollar if we are going to be effective of the trade. >> i am trying to understand the methodology of what you are talking about here you are going back to the whole plaza court era and everybody gets in the room and everyone decides where the currencies are going to be and i don't understand in a world of free floating currencies we achieve that alignment you are talking about, rob >> the simplest model is going babb to t back to the court plaza model. they actively intervene together to cause currencies to realign and there are several ways to do it now the united states could buy currencies and china and other countries have done. we can drive the dollar down that way by investing and issue by the chinese government and other countries so that would

work we could tax capital influxes proposed by the economists all those things can work to move foreign exchange markets if we can agree >> john, you got the last word i heard you said that was n nonsense >> those are cheap dollars >> if you want to do something of the currency market, the first thing you have to address is that people in china are not allowed to own foreign assets. it is not a con vivertible currency the idea that you can figure out some floating exchange rates are nonsense that's why we need to press them and allow team people to own asse assets most of people in china paying with hundreds of r&b notes and not with bank cards.

they get reserves buying treasuries the idea that you can manipulate the currency market and somehow get a result that you like is an all idea tried before and it is a terrible idea. >> gentlemen, we got to cut you off. much is appreciated. good to have you let's move on with discussion of the marks with the dow down for six days. will the tension slelead to the start of the summer slump or are we in one already? >> let's talk to our chief investment officers. chris, you heard of going conversations and you heard much of what the president said how worried are you of the trade tensions or if you want to call it a trade war how worry are you that it could

usher in a difficult time of the u.s. >> if under lining company is not doing well and did not have the stimulus of both tax or budget deals, the u.s. economy is going to accelerate as opposed to decelerate. whatever pressure we face on the trades side, we are in a much better position to absorb it yes, am i worried? i am however, i don't think i am so worried that i have to change my outlook me outlook mean fully equities will still do very well in that environment. >> mark, so krishna sees the threat but he sees the over weighing that threat what do you think? >> the fact of today we got an update of atlanta showing 4.7%

growth here this deep in the second quarter we are experiencing some acceleg enertia going into the second half of the year that'll shave a 10 to 1% but the spill over effect, business and consumer confidence is what worries some the concerns for me are how this matastasize going forward. does it walk away claiming some levels of victory or is this something we have to deal with on a day-to-day bases. this allows equity investors of getting enthused of the strong conditions supporting corporate earnings >> then you throw into this big mix here of the fed, krishna, it

seems that it could be on the downside how are we value of given of the spill of this trade and tighten monetary policy. >> on the proverse level, the trade war gives the fed relief a little bit if we believe that the trade wars are anything along those lines can take off a few tenth of a percentage point of gdp growth and it takes off inflation a little bit because of that. i think the fed sees less reasons. it prolongs things rather than cartel things. having said that and having concerns of trade war is required however, i think you have to sort of imagine a scenario where things get negotiated and if you can think of north korea and dictators from north korea and

trump is holding hand. >> on that note, boeing is off 15 bucks today either one of you look at that and go that's ridiculous you can go in there and get it cheap to where it was a few months ago >> yes, again the valuation levels and emerging markets for example has become extraordinary attractive u.s. growth is good. i think as a result of pressure building i think if you put all of it together things are not all bad despite the rhetoric that is here in the marketplace. >> gentlemen, mark and krishna, we appreciate your time. >> thank you >> financials, are they supposed to befenit of high interest rates? what's bothering the banks at all? that's next on "power lunch. etfs are only part of a portfolio. so make it easy to explain. give me a quality fund

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has an out performing rating on many major banks let's bring in our management director, gerald dcassidy, thank you for being with us. >> i would say that the macro outlook is what is changed of the trading position that's going on with the trade wars and the whole markets are down that's what's weighing on the banks. we have two big events coming up this thursday we are going to hear the results of the stress test for the banks and next thursday we'll hear from the feds of how much we are able to give back in dividends and buy backs. we expect big numbers next week and that's going to be positive for the banks. when you look at all of the semii cannily important banks in the world that's defined by the stability board, there are 30 in there. to melissa's point the economy is gooed ad and

supposedly interest rate is going up if they can't go up now. when are they ever going to go up >> certainly a big run since the election as you know the banks have been one of the best performing sectors and recently they have pulled back i would say there would be sideways in terms of the fundamentals real gdp now as of today is calling for 4.7% real gdp growth in the second quarter. if we come in of the real gdp growth number -- >> will we see that in trading volume or will it trans latestr? >> that's the point. since the first of the year, it is starting to pick up and it is currently now and running around it is the second half of the year that people are anticipating stroanticipat

anticipatianticipat anticipating stronger growth if you have among the big banks? >> i would say the favorite is bank of america. it is the one that could benefit the most from the strength s of the economy and wells fargo is under performing rating because of the issues they are wrestling with the regulators right now and that's weighing on the stocks >> that's very true. >> you mentioned the beginning of the binterview of the outlook of the world has changed, at what point do you reflekt what has changed? >> sure, we wecredit quality is number one destroyer of bank earnings we don't see any issues with

credit when we see issues with it, we'll clearly change we are anticipating this credit cycle is the best that we have seen for quite some banks in the next 12 months. >> gerard, thanks for coming in. we are all over the fallout from the escalating trade dispute. two classic american industries are caught in the middle cars and beer. we'll talk to the head of the beer institute next. we had long deployments in iraq. i'm really grateful that usaa was able to take care of my family while i was overseas serving. it was my very first car accident.

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stocks tanking on new tariff threats and while the president cracks down on unfair trade with steel and aluminum tariffs, the beer sfri industry is bushing p saying aluminum tariffs will increase the cost of production partner all brewers. good to have you here. are these tariffs costing the industry >> well, you know, michelle, you all have been talking all day about how tariffs affect american business, and american industries, and i'm here to tell you that for american beer, the 232 aluminum tariffs have been

very bad we estimate $347 million additional cost on american brewers because of these tariffs, which are taxes, and upwards of 20,000 jobs could be lost in industries that are involved in our supply chain, so we're very concerned about these tariffs. >> why can't you just substitute bottles? i know that's a dumb question, but it seems obvious >> well, you know, tyler, american consumers have been moving towards cans for a number of years now brewers large and small have been answering their consumers' call for beer in cans. 60% of the beer manufactured and sold in this country is sold in aluminum bottles and aluminum cans so, it's very difficult for us to sort of just turn on a dime because of these tariffs brewers are having to figure out how to deal with these tariffs there are more than 5,000 breweries in this country today, more than ever in the united

states, and these are 5,000 individual businesses from large brewers to the very smallest brewers, and they're all deciding how they're going to deal with the impact that these aluminum tariffs have had on their bottom lines >> jim, isn't the bigger problem that people aren't drinking as much beer in the united states i mean, wilbur ross, when asked about the impact on a publicly traded company, campbell's soup, which said in their earnings that the higher price of aluminum was basically hurting them, in some way, he said that's just an excuse, there's a bigger trend at play for this business that's just an excuse for them to blame that shortfall when it comes to analysts' estimates on profits. so, isn't the bigger impact there for you? just the fact that people are drinking more wine and spirits >> well, you know, the total beverage alcohol market is a very competitive market, melissa, and it's certainly the case that people make different decisions now than they may have made 10 or 15 or 20 years ago.

that's why these tariffs are so impactful for our businesses last year, american brewers bought 36 billion aluminum cans and aluminum bottles, and we really think secretary ross has been sort of downplaying the effect of these tariffs on our business i can tell you, like i said, it's a very competitive market we have to fight for the -- >> i know there is so much beer. when i walk into the supermarket, i see it. the choices are just unbelievable the choices are -- >> and it's never been better, i'll tell you. american beer has never been better >> and the reason people like aluminum cans, they like the visuals, you can put a much, you know -- >> bring it to the pool. >> but jim, what's the impact on the consumer per can wilbur ross holding up that campbell's soup can saying it's only going to be a penny, less than that. >> there he is with his can. wilbur and his cans. >> iconic photo. what's the cost per can? >> michelle, those pennies add up when you're buying 36 billion

cans and bottles a year in aluminum >> and that's just mine. >> it's really hard to say right now, you know, like i said, there are 5,000 breweries or more in this country every one of those individual businesses is making a decision today whether to lay off workers, not hire the workers they had hoped to hire, not do as much innovation in their brews as they may have wanted to do so, for us, this $350 million tax that came out of nowhere is really difficult >> thanks so much for joining us we'll probably have you back as this all moves through the works. he is with the beer institute. >> cheers for beers. >> cheers. all right. stocks selling off today on fears of an escalating trade war. but what is the true impact to the u.s. economy santa we will talk trade and track this selloff in the second hour ofpor. "we you always pay

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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. i'm michelle caruso-cabrera. here's what's on the menu. trade turmoil playbook where can you go for protection if fears of a true trade war continue to hit the markets? and is it a slippery slope

for crude? oil falls on fears that tensions with china could hit supplies. this is ahead of the crucial opec meeting later this week and driving up prices. could any retaliatory moves from china make cars more expensive we're live at the port of kmarlztkmarl charleston with some answers as "power lunch" starts right now >> and welcome to "power lunch." trade tensions rattling the markets with the dow and s&p 500 having their worst day of june, the nasdaq its worst day in nearly two months. the dow has been down 419 points at the low and right now we're seeing a 1.2% decline. tech, consumer discretionary and energy are the bagging sectors while telecom, up by 1.6% is leading. boeing, caterpillar, 3m, goldman-sachs, they are the biggest losers

chip makers are down today on concerns about their chinese exposure nvidia and mxpi, the worst performers and take a look at netflix, hitting $400 a share for the very first time. we'll have much more on that story straight ahead tyler mathisen here, welcome, everybody, we've got all the angles of this trade turmoil and the market impact covered for you. kayla tausche has the latest am eamon javers with a look at inside the white house and who's ascendant and who isn't. kayla, you first. >> reporter: the white house trade hawk told reporters today that this is a trade dispute, nothing more, nothing less he enunciated the administration's confidence in its position, outlining new tariffs by saying this

the it's clear that china does have have much more to lose what we have at stake is $130 billion in exports to china. what they have sat at stake is $500 billion coming to us. he addressed the market reaction saying first the value of the trade dispute is small compared to the two economies' gdp and that second, the move is ultimately bullish for north america and not to read too much into the move in oil, the u.s. has become a major exporter and can send the commodity elsewhere. n navaro exuded confidence, calling the president visionary and courageous the announcement last night was navarro's idea he presented it in a meeting yesterday at the white house and as for those talks with china, so far, ty, there are none on the calendar back to you guys >> all right, kayla, thank you so what could be going on behind the scenes between the president and his advisers who don't all agree that tariffs are

the right way to go. eamon javers is at the white house with that story. >> reporter: there's been some real infighting in the trump economic team here peter navarro clearly on the asen densy steve mnuchin, not seen as influential right now and larry kudlow, suffering a heart attack last week. i'm told he hasn't been back to the office since then. and he did not participate in this debate on tariffs so, changing personnel picture here at the white house at a time when the president's really focusing on tariffs and also on immigration. we just saw him at the national federation of independent businesses, speaking about immigration, largely extemperature rain usually saying that what he wants is strong imallegatimigration from who can help the economy >> we don't want people pouring into our country we want them to come in through the process, through the legal system, and we want ultimately a merit-based system where people come in based on merit

>> reporter: and another possible split here to today attention to interesting that the president spoke at length about his immigration views at the national federation of independent businesses that's largely a small business group. he got a lot of cheers, a lot of applause from the people who were in the room there for that speech today, including on his comments about children arriving at the border. this coming on the same day that the business round table put out a statement sharply criticizing the president on immigration they're saying here the business round table is, that the practice of separating unaccompanied minors from their parents is cruel and contrary to american values. so, possibly a split here between small business groups where you saw the president getting very positive reaction today and large business groups like the business round table, which are calling his practice cruel and contrary to american values >> yeah, lot of people weighing in thank you. so, those trade tensions we've been talking about hitting the markets with the dow and the s&p having their worst day of the month.

let's head to bob pisani on the floor of the new york stock exchange with more dales >> materials, industrials, tech, they're all getting hit. look at the dow. melissa's right, boeing is 100 points but throw four stocks here boing, caterpillar, 3m and apple, that's almost 200 points in the dow just with those 4 names. elsewhere, aluminum, steel, copper, all the material stocks, they would be affected zeus, free port-mcmoran. the sectors are all down and that sector exactly banks finally going positive a little bit here earnings are under pressure. q3 and q4 numbers are supposed to be outstanding and a lot of analysts are now concerned that once we get more details on the trade numbers, we'll see these kinds of numbers start coming down very quickly. finally, if you want one company to watch, how about federal express. tomorrow, earnings reports there's a big global company and that's the company that will probably comment on the impact of any trade wars.

that's going to be the company tomorrow, guys >> very interesting window to watch there on trade thank you very much, bob pisani. well, the president cheerleading the economy saying that by some mreasures it's better than it's ever been steve liesman here with a closer look >> president trump now going where economies had feared most, escalating the trade disputes to a place where the totals can have a measurable impact on u.s. and global growth along with inflation. >> if you were to have $400 billion of tariffs executed, not just discussed, but actually executed, you're probably talking about 4/10 off global gdp >> previously, the administration argued and most economists agreed the amount as under discussion were not enough to move either the gdp or inflation needles. the primary concern was about sentiment and uncertainty.

oxford economics writing this. china has quickly vowed to retaliate. and it would have significant economic impact. the probability of a full blown trade war between the world's two largest economies is rising. oxford says it can't rule out that cooler heads will prevail and that's been a part of the market trade for quite a while, but oxford says if they don't, the tariffs can receisave 0.3 of chinese growth these subtractions can be little more than a modest, opportunity loss but if the u.s. reverts back to trend, the tariffs then could wipe out those gains from the tax cuts >> steve, hang around for just a minute we're going to now bring in libby, head of public policy for pimco. i want to talk about the way out of this trade collision between the u.s. and china to the president of the united states, appearing strong and being strong and not backing down, says tom petty, is pretty important. and to the chinese, being

publicly pushed and berated is pretty serious offense they do not like to lose face in this way what's the way out >> yeah, i mean, it's a good question i think, you know, at the heart of these issues, there are two, you know, big issues one is obviously the trade deficit, which we know the president is very focused on he believes that sort of the scorecard of success with other countries. the other issue, though, with china is this issue of intellectual property and technology transfer. and that is the much -- i think the bigger issue here and that's an issue that there's a lot of political support on capitol hill for the president to sort of drive hard on china so i think if you're just talking about the trade deficit, there's probably an easier way out >> in other words, the chinese pledged to buy more american manufactured goods >> and you know, back in may, it looked like there was a potential for sort of a mini-deal on the trade deficit however, a big however, if we're talking about the intellectual property issues, these are so integral to the china 2025 industrial growth policy that

china's pursuing that that seemed like it's going to be a much harder to get a deal with china. >> how meddlesome is the zte issue, if at all, in the grander picture of this? >> yeah, i think, obviously, the senate passed the amendment yesterday in terms of sort of reversing course on the administration as it relates to zte. and zte, from a congressional perspective, from a congressional lens, is really viewed as a national security issue and not necessarily a trade issue. i think these have sort of been conflated in some ways >> he's put them together on purpose for leverage >> yes yes, he has. but of course, if congress -- if these, you know, if these amendments actually pass the house, then we could see a reversal on zte, which of course is taking away some of his leverage with china. >> the trade experts that i've been speaking with say if the president continues on the current course, there can be no deal with china. and the reason is because the president has targeted those

2025 goals that libby just talked about and china will never publicly back down on those goals the other person i just talked to today had just recently been in china, said xi's hand is being strengthened by the president and the other concern is that the way to approach china on these issues, which everybody agrees is a big deal, is to do so with allies and we don't seem to have too many of those right now. >> part of the position of the administration and a lot of people in this administration, both democrats and republicans, that we do not want them to achieve vision 2025, right i mean, their vision is they want to control the semiconductor industry of the world. and we do not want them to control the semiconstructor industry of the world. >> i'm not making qualitative judgment on that goal. i'm just saying if that's the goal, if that's the publicly stated goal, from what i understand of internal chinese politics and people who have just been there, they cannot back down on this. >> and you've got a president of the united states who, to my knowledge, has never admitted

he's been wrong and he's not the kind of guy who backs down >> he says, even if i'm wrong, i'm going to pretend i wasn't. >> i would just sort of interject there, and i've said this before, but you just have to take the president seriously on these issues. these are not just political talking points he has been so steadfast in these views that the united states is getting shortchanged on trade since the 1980s, and he has a lot of authority in terms of the executive branch over trade, plus it plays well with his political base so, take the administration seriously on trade >> so within pimco, libby, are owe telegraphing to your team internally that you're concerned about treasuries china's going to run out of goods on which to put tariffs >> and i think that's clearly a possibility. we don't necessarily think it's a high probability at least at this point it just given that it's actually against their own self-interest,

you know, at least at this point. there are other tools that they can and kind of other levers that they can move you know, investment in terms of the u.s. investment in the united states is almost $100 billion they could restrict that very significantly. they can restrict tourism to china so there are other things that they can do, not just, you know, not just necessarily targeting products that we're exporting to china >> michelle, you mentioned this morning, and i've done extensive work on this, that the president can't have it both ways. he can't have strong economic growth and a declining trade deficit. if the president wants to get rid of the trade deficit, the best way is to have a recession. that's the lest several times we've had any improvement at all. >> only the 10,000th person to say that on cnbc i'm going to build a wall with every smeconomist up there and t their face that have made the s same point somebody must have repeated to him a thousand times >> but it's manifestly untrue. >> right and like i said, thousands of people have pointed that out

>> michelle is going to build a wall >> i'm going to build a wall >> michelle's going to build that wall. >> maybe he will pay attention if you build the wall. >> you're brilliant, melissa >> libby, thanks steve,thanks coming up, trade turmoil sending the markets into turmoil. look how you can protect your money in this environment. plus, boycotting u.s. goods, china has done it to other countries in the past. what impact did it have? and u.s. auto makers bracing for impact should you be as well? a look at whether your next car could be more expensive. auto stocks are falling. do not go anywhere "power lunch" is bacinwok t duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually,duncan got his $500,000 for under $28 a month.

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trade tensions are hitting the markets today. the dow is off its lows but still down nearly 300 points had been off more than 400 points will political turmoil continue to pull the markets lower? how should investors deal with the volatility let's bring in the senior market strategist and omar, charles schwab investment management cio of equities. karen, would you do anything differently as a result of what's happening with the discussions about trade? >> i don't think so. you have to remember that the u.s. doesn't trade with china, u.s. businesses do, and when i take a look at u.s. businesses,

i see earnings projections for the second quarter of 20% growth and that's probably going to be low, so we're going to have another blowout quarter. earnings are continuing to get stronger >> i'm sorry to interrupt you, but on this very point, bob pisani has raised a couple of times that we may actually be getting to the point where the tariffs are becoming real and therefore you will start to see an impact in earnings and that could bring down estimates >> right and if i did see that, then i would breaking news becoecome mt i think when you take a look overall, that hasn't happened yet so it's putting the cart before the horse investors are worried about the trade noise, but the meat and potatoes are really the fact that we've had tax cuts, deregulation, and economic backdrop that looks like over 4% for the second quarter, and this trade noise right now, it's still the peas, it's not the meat and potatoes so i think that they should be looking at that and until it's time to really see that drop, if that --

that doesn't materialize, we could see earnings get stronger if we get bigger >> omar, what do you think >> well, i think, you know, the fact that we have more volatility in the market is just a natural -- today is talking about trade wars, you know, we expect that. tornl tomorrow is going to be inflation expectations we're going to see higher volatility, we need to make sure that investors are starting to get used to the fact that the market is morevil volatile. i would agree there's a lot of spe speculation about what the fiscal stimulation could do but it's not -- if the trade wars go into effect, there will be a deceleration of earnings growth going forward. that being said, we're still in discussion nothing is already in place. there's no policy that puts these trades into work yet >> but it's only a matter of a couple weeks, omar, and you know, we're going to look at the first round of tariffs being implemented on july 6th. i'm curious because the market

has basically been range bound this entire year, and so the market has been anticipating higher earnings growth the market has been anticipating a lighter regulatory touch, karyn. the market has been anticipating fiscal stimulus and a lot of good things here and we're still range bound so if you throw in the possibility of the impact of tariffs, why do you want to remain bullish here? >> well, because -- >> karyn, sorry. >> oh, well, it takes time for this to work through the system. but we are seeing -- we are seeing it finally come through we saw small business optimism at all-time highs. so that's -- it is going to take a while. but this is -- we have the economic wind at our back, and it's going to continue to strengthen, and investors are just getting a little impatient, taking a wait and see attitude i don't like uncertainty either and i don't like the fact that all this trade talk is perhaps making businesses put off some plans for expansion, for more capex, but we are seeing a lot

of capital expenditures, we're seeing companies going out there and spending more that's going to increase productivity, and that's good for sustained economic growth. it just takes a little bit of time to work through the system. >> omar, give me a good idea for investing right now. >> well, i think that the biggest component right now is for people to continue to look at their long-term objectives. if anything else, you know, this is the opportunity for people to go back and look at their holdings and rebalance their portfolio. if anything else, you know, this is a perfect opportunity to go back into equities, given the solid backdrop we have on economic, you know, front as well as on the earnings front. i would actually say that the only thing that i have seen changing in the last two weeks, potentially in the next week, is the sentiment factors. you know, people are starting to get more anxious about what these may come into fruition we have midterm elections coming up soon, and that is going to continue to have that anxiety going into this. that's a big part of what i think we have to watch the bigger area of concern to

me, it's emerging market clearly, this is an area that we all have to look for that has potential for a lot of, you know, consequences if that goes bad. >> potential spillover effects thank you, lady and gentleman. good to have you, karyn and omar coming up, netflix hitting $400 for the first time ever it is now up 110% this year. and one analyst thinks the rally's far from over. in fact, he sees a 25% jump. he'll make his case coming up. and as we head to the break, a look at the markets. the dow losing all its 2018 gains, down 1.1% the other major bromtearometers as well but not by as much you're watching "power lunch" on cnbc, first in business worldwide.

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welcome back to "power lunch. if china runs out of goods to put tariffs on, the worry is that it could retaliate by boycotting u.s. products it is a strategy that china has used before. seema is here to tell us more. >> it's often referred to as boycott diplomacy. when the chinese boycott a country's goods to exert economic pressure. at the height of the south china sea conflict, the chinese boycotted mangos and bananas from the philippines, salmon from norway over a human rights

dispute, and most recently a boycott of south korean cosmetics and cars due to a disagreement over the deployment of an anti-missile device, which china saw as a threat to its own security now, china went as far as stopping chinese tourists from visiting south korea, which economists say did result in the decline of south korea's gdp now, as trade tensions between the united states and china escalate, the fear is that american brands could witness a similar backlash and the main way to figure out if this is in the cards is by monitoring social media platforms like waymo and china's unofficial mouthpiece, the people's daily, which is often used to convey a specific message and drum up the support for a campaign like a boycott. >> tourism, south korea too. that was a big one, right? >> huge one. i mean, china knows -- is fully aware how important their market is and how much of a destination it is for big brands and that's why boycotts are often used as a

strategy to retaliate. >> they have so much leverage with their size. thank you. coming up, china has become one of the biggest markets for u.s. crude 25% tariff already in place what happens to u.s. exports if tensions escalate even further plus what happens to the u.s. auto makers as well phil lebeau is live at the port of charleston, south carolina, with more details. >> reporter: michelle, it is shipment day here at the port of charleston, about 1,500 bmw suvs are loading up and they will eventually be headed to china, where they will be sold. what kind of an impact would an escalating trade war he avon these shipments? that story when "power lunch" returns. ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking.

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here's your cnbc news update for this hour. president trump got in front of the national federation of independent business and explained his immigration policy in the way he sees to end child separations from their parents >> what i'm asking congress to do is to give us a third option, which we have been requesting since last year. the legal authority to detain and promptly remove families together as a unit we have to be able to do this.

cvs health is making prescription deliveries nationwide the nation's second largest drugstore chain is also making home deliveries of other items like allergy medicines and vitamins pizza hut is making a move toward serving all antibiotic-free chicken wings. it announced that by 2022 it will no longer serve any chicken raised with antibiotics important to human medicine. previously that commitment applied only to its pizza toppings back to you, michelle. >> thanks so much. so, markets right now still in the red but off session lows. take a look. the dow jones industrial average lower by 289 points, had been down more than 400 earlier in the morning. that's still a decline more than 1% the s&p doing much better in terms of percentage declines, lower by 0.5%, decline of 12 points and the nasdaq lower by about 0.5% as well or 34 points. the dow laggards, boeing, it's a whopper. caterpillar, dow dupont and 3m also in negative territory but

boeing's off by $13 and that's an improvement off the session low. caterpillar is off $5. 3m is lower by $4.55 verizon, johnson & johnson, prol procter & gamble, they are all the best performers at this hour johnson & johnson higher by 1% and p&g higher by 0.5% the oil market closing for the day. jackie following from the km commodity desk >> wti is at $65 and brent is sticking close to that $75 mark. a lot of movement today was based on dollar fluctuations and escalating fears over the trade situation with china as well as some anticipation of that opec meeting on friday. on top of that, an inventory report from the eia tomorrow, markets are expecting a drawdown and an increase in u.s. production those factors are supportive and they've been balancing out the bearish factors that i mentioned before session high and low, they're in

the recent range, not indicating any testing of new levels at this point, guys back to you. >> all right, jackie, thank you. sticking with energy here, just how big a threat would a u.s.-china trade war be to the oil market let's ask jeff curry from goldman-sachs. welcome. how do you think about -- how do you think opec thinks about china putting tariffs on u.s. crude? >> i think there's two ping-pong games going on, one with opec and the russians and novak talking big increases, iraq, iran on the other side -- and you're back and forth on that but the trade war approximapinge is a little bit different in the sense that if china did impose substantial tariffs on u.s. crude, u.s. gas, u.s. soybeans, commodities can be redirected. the flows whistle-blowcan be mo countries in the world so it would have far less of an impact than what the trade impact of china to the u.s., which are things like plastic toys that

really don't have substitutes anywhere else. >> in other words, we just sell our crude to somebody else >> exactly >> are there tariffs already on u.s. crude going into china? >> no, not right now so, by putting them in place, it would just redirect it somewhere else in the world. >> what about the overall idea of if there's a trade war, it leads to lower gdp growth and therefore would lead to less -- >> you really got to escalate it if you look at what they did with this current $50 billion that's trimmed down to $34 billion, it was isolated to companies, not surmconsumers an they picked it such that it will have a very small impact on growth if we were to escalate and go up to the numbers like the $200 billion, you could have a potential impact there right now, even if it gets implemented on july 6th, it's going to be very minimal impact. >> because most of these products are constituent products, they are not end use products, correct? >> correct so, you know, think about it you know, somewhere intermediate in the supply chain.

>> a part that goes into something else >> exactly >> that gets put together here >> right so it has an impact on companies and inflation at the ppi level but not at the cpi level >> can you break down the factions going into this opec meeting? it seems like a very interes division because it's opec plus so you have russia and maybe saudi wanting to increase and some other happy with the status quo. >> well, you know, i think at this point right now, you can think about what novac and the russians are doing are throwing out very large numbers as really more of a negotiating position to get more market share as the final outcome, particularly against non-core opec but the fact of the matter is non-core opec does not have the capacity to increase. this is really a question for core opec as well as russia so it's more who gets market share here more than anything else >> the consensus was the saudis are going to keep the price elevated because they want to have a really strong ipo

we just kiss that thing good-bye is that excuse gone out the door they keep delaying and delaying. does that factor in any more >> the current rhetoric is on attracting investment for non-opec u.s. which is where you have a sharp decline in overall fid. look at their target for inventories. they are at the five-year average, they've rebalanced the market i like to point out that this late in the business cycle, the world needs that oil, but never in the history of the oil market has opec been able to bring off enough supplies this late in the business cycle to rebalance the market before the recession hits >> you're at $77.50 for brent. is that year end >> $82.50 this summer. we think there's more upside during the summer. >> jeff, thank you >> good to see you another industry caught in the cross fire of the escalating trade conflict with china, u.s. auto makers. phil lebeau live at the port of charleston in south carolina with more. hi, phil

>> reporter: hey, tyler, how are you? this is a shipment day here at the port of charleston the bmws, these suvs that are loading up here, there's going to be about 1,500 of them that will finish loading up this afternoon, and then once they are loaded up, they will ship off to china and then they'll head to shanghai, they'll be there in the middle of next month. the sales and the exports to china, the growth has been astounding over the last ten years. take a look going back to 2011 is the data that we're going to show you here. look at the growth it is now up to 267,000 vehicles shipped from the u.s. to china, a good chunk of those coming from the bmw plant here in south carolina up in spartanburg the u.s. has, by the way, nearly $9 billion auto trade surplus with china that's when it comes to completed autos. it's much lower when you look at the auto parts being factored in that said, china is the second largest auto export country for u.s. built autos

when we talk about autos shipped to china, you cannot get around the fact that it's suvs from bmw and mercedes, but tesla, a big destination for vehicles is to china. in fact, when tesla is selling vehicles over there, it is currently telling people who are ordering model s's and model x, you know what, the price is going to change come july 6th due to retaliatory tariffs from china. those retaliatory tariffs are will take the tariff from 10% up to 35% because they're tacking on another 25% so that is a direct example of the trade war as it escalates that could impact sales for one auto maker and again that's tesla, which is planning to build a plant in china that announcement is expected perhaps some time in the next month or two >> let me ask two dumb questions. do the chinese consider a bmw made in spartanburg an american car? >> they consider it american made, absolutely yes. they don't consider it an

american car they call it a german automobile because it's a german brand but it's american made and they know that it's american made. >> so it would be subject to a tariff >> oh, yes it is subject to a tariff. >> put on american manufactured cars >> correct which is -- >> which of the u.s. -- >> stay with me here, tyler. >> go ahead. >> i was going to say, it was 25% -- for years , it's been 25. now it's going to be dropped down to 10% but the concern is that the chinese government has said, we're going to retaliate and where do we retaliate? with the vehicles that you build in the u.s. and send over here that's why teslas are going to be subject to a higher tariff unless things change >> which of the troo taditional three auto makers exports the most to china or builds the most in china >> reporter: oh, well, building the most is general motors, and

in terms of exports to china, it's a relatively small amount compared to the overall production for these auto makers i haven't looked at the final numbers. i want to say it's somewhere around 41,000 vehicles last year and we're talking primarily something like a camaro. specialized vehicles that have been ordered or they can sell in china. but generally speaking, general motors, ford, what they're selling in china, they're building in china. now, what's interesting, tyler is that all of them eventually plan to increase imports from their plants in china, and that's already starting. we see some buick models that are built in china and then sent over here to the united states clearly, if there's a trade war, that game plan could change because they would be subject, perhaps, to a higher tariff. >> all right, phil, thank you very much. phil lebeau in charleston. coming up, apple's also big in china, so how big of a problem could tariffs be for the tech giant that story is next six in the morning.

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we had everyone we needed to get our museum back up and running, and we opened the next day.

welcome back to "power lunch," everybody. apple sells a lot of stuff in china, builds a lot of stuff there as well, so how big of a problem could the tariffs be for apple or will it be spared from the trade troubles josh lipton is in san francisco. josh >> tyler, mainland china, we know, is critical for the iphone maker. accounting for an estimated 15% of annual revenue and apple depends on china as a key part of its supply chain. remember, most iphones are assembled over there the trump administration told tim cook that it would not place tariffs on iphones, according to "the new york times," though today, white house trade adviser peter navarro countered that he had no knowledge of any such exemption regardless aside from tariffs, apple could get caught in the cross fire. they're now reportedly concerned that the chinese government could cause delays in its supply chain in retaliation for these tariffs. tim cook has been talking to the

trump administration and working hard to improve relations with china, making investments in chinese companies, analysts point out one strong advantage for apple, it sells a popular device in china and its assembly employs a lots of people over there, more than 1 million chinese work in some way on apple products guys, back to you. >> josh, thank you, josh lipton. so how worried should apple be about trade tensions hitting their supply chains and the bottom line? let's bring in dan ives. great to have you with us. josh outlined very well the potential impacts. let's just assume that the tariffs imposed by the trump administration, they would be exempt in terms of the supply chain, though, i assume that many components actually come from not just china but outside of china, south korea, taiwan, et cetera. how could that be impacted china could very well decide to levy tariffs on those components coming into those fox com factories. >> the biggest worry is that china, they put a wrench in the

supply chain here, going into apple's biggest product cycle ever with the three phones coming out in the next three to six months this iphone super cycle that it used to be now is just called a strong product cycle, and it depends on that supply chain we've estimated probably $100 million to $150 million of cost could increase which would still be a rounding error for apple so it's not a cost perspective. the worry is from that supply chain perspective. as of now, i think it's more of a scary headline than a reality, but that's when the investors are concerned about. >> about a slowdown in production and supply, hence, not because of squeezed margins because costs are going to go up >> because ultimately, that gets the lead the man gets the lead and ultimately you look at that cycle, you look at the numbers for the street, that gets the lead and i think right now, in terms of that chinese demand called 60 to 70 million chinese iphones coming outs for renewal in the next 12 to 18 months, that is key to this strong product cycle for apple. it's really right now about the supply chain it's a game of poker and does

china start to put a wrench into that food chain. as of now, part of why cook's been a pseudoambassador between this is because apple, as opposed to any of the other faang names, which really have de minimus revenue and what i would say exposure, apple is heavily invested here and needs to make sure there's no issue. >> how much, if they mess with apple, and the supply chain, how much do they end up hurting themselves in their own workers? >> well, that's -- and that's fundamentally our thesis and the man on the street is that there could be talk but they're not going to shoot themselves in the foot, given the foxcon situation, how much that employs within china as well as apple and cook have been the one american company which have had the olive branch out there so i think it would be stepping over the line by many >> is there a sort of drop dead date taking a look at when they want to launch these phones, when the components need to get into the country in order for there to be a ramp in production, is it august is it july >> it's really late july

>> it's one month from now, basically. >> so, really, in a month, you'll start to have, through the supply china and we've been there before with the boy that called wolf on the supply chain, some what i would say in the information that isn't that correct. in the next month, as long as there's no issues, i think it's a coast clear unless you start to see things come out of china, things get delayed, that could really impact apple, especially on the -- >> do you then take down your estimates and start looking at your numbers >> i think if that happens, that's where you start to get a little more cautious, as of right now, everything we've seen from a supply chain, we are not seeing that, which is why we continue to pound the table on apple but that's something to watch out for is an apple bull, any issue, not on the demand side by on the supply chain. >> let's talk netflix, the stock hitting $400 for the first time today, dan you actually raised your price target to $500 what's the next catalyst here? >> in our opinion, this continues to be our top name, table pounder.

really it's because of the international subscriber story 68 million today we believe that's going to 100 million by mid-2020. it's a content arms race obviously you're seeing the consolidation media. they continue to be the top of the heap, and when you look at -- we believe about 90% of customers still willing to pay what i would call at $2 to $3 price increase the average customer is watching double netflix over on amazon or hulu per week, 10 hours versus 5, base on the our survey. so i look at numbers i think its goes up another 10% to 15% in terms of street numbers. multiple continue to grows higher that said, raising to $500, obviously will allow -- the nasty bears are coming out i get a lot of these e-mails you look at the total market, and this stock has a 5 in front of it 12 months from now >> all right a thank you, dan still ahead, what do you buy if the market continues to be hit by escalating trade tensions the "trading nation" team is going to take a look next. greatness of an suv?

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time for "trading nation," a check on the marks, s&p is off the session lows, still, negative on the session, off by

a little more than 10 points dow coming off the day's lows, down 1%, lower by 265 points if trade war tensions continue to hit stocks, what do you do? stacy gilbert is here, and rich ross stacy, how do you protect your portfolio? >> hitting what i like to talk about all the time, and that's options, put options by definition, a foot option is insurance on a portfolio or insurance from a pullback. that's, obviously, the way that i position for some sort of hedging, but put in perspective how much that hedging costs. if you wanted a domestic large cap portfolio, particularly the s&p 500, look to the xpy options. i use this because this is the area that's most impacted by trade given the revenue stream from the s&p 500 in its international exposure if you were to look at the s&p 500, the typical hedge is a three month 5% out of the money support in the spy what's interesting is, yes,

while it is more expensive than it was yesterday, if we look over the last five years, it's still in the bottom 25% of costs of what we've seen, so buying protection outright, you're not paying high relative to the last several years. >> got it. good idea. rich, what would you do? >> yeah, my shell, look, in a world of macro unrest, best defense is technology. i would continue to buy fang and for the purposes of this segment, more spefblcifically, alphabet keep in mind, search engine banned in china since 2010 look at the chart, there's a well-defined eight month trading range, 1,000 on the low end, 1200 high end. that gives us 20% upside on a break to 1400. clearly, by it here. zoom out and look at the weekly, this is google being google. the stock lulls you into sleep, nothing for months, but when it moves, it moves in bunches this is a time to buy the stock here, michelle, below 1200, and sell it at 1400. >> all right

two good ideas thanks, guys good to have you on. for more, go to tradingnation.cnbc.com and follow us on twitte twitter @tradingnation check please is next now the latest from tradingnation.cnbc.com and a word from our sponsor. a good first step at any risk management strategy is determine the amount you're willing to risk on any given trade. some traders use the 2% rule where they try to limit their loss on any given sion tpotio no more than 2% of their total trading capital.

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talking about the impact of china retaliatory tariffs. s&p 500 has the highest percentage of revenue exposure to china, specifically skyworks solutions, 80% of the revenue from china, qualcom at 63%, and broadcom at 52%. we are watching the deals closely. the deals in limbo, look at shares of spi, concerns now that china could revisit what had been considered an approval of steel in china and block the deal again this is a sector that's been flying high on the thought there was consolidation, and now hit very hard. >> interesting is to talk with dan minutes ago about apple in the middle in the thick of whatever the dispute turns out to be and whether they going to

sort of scoot by or not. whether they muck with the supply chain apple depends on to get their goods around the world. >> check please, more sports remitted world cup is on. brazil just played >> yes >> former president of brazil is in prison, has not stopped him, though, from doing analysis of the world cup. >> what? >> writes it up, lawyers see him in prison, hands it over, goes to a local tv station. >> commentary for the matches? >> and someone else reads the commentary out loud on local stations controlled by unions there. so he's active in prison doing soccer commentary or futbol. >> i have not seen you since you got back from singapore. >> yes >> what was the overall impression you had of what went on there >> one thing that struck me was, this was a very serious moment, you know, we talked about trying to avoid nuclear war with the two individuals, and singapore was giddy. i mean, the taxi drivers, everybody, they were excited to

have everybody in town, and, like, oh, my gosh, the president is here and kim jong un. it was much happier than you who would have expected. >> considering the topic at hand >> yes it struck me >> fascinating stuff >> pleasure to be here >> thank you for watching. "closing bell" starts right now. it's time for the "closing bell," and i'm wilfred dprofrost the new york stock exchange. we have a global macro outlook at the nasdaq, markets today is a tech-led selloff. a breakdown of the big movers here at cnbc global headquarters, i'm dom chu. trade worries are portfolio worries. who has the biggest exposure to china. we have the details. i'm kelly evans. in a sea of red, serging after promising drug data.