>> -- you made sewer trades so fast >> i will go with royal cap shell. >> that does it for us here on the halftimeort. i'm sah eisen. now ratcheting down the rhetoric, president trump taking a huge step to defuse an allout trade war with china markets are up on the news what the movans for trade talks and stocks straight ahead. home sales sliding to lows we will get a read on housing plus tell you where americans are making the most money selling their homes. world cup soccer every, but no beer to drink we will tell you which beer stocks will be impacted most pour a cold one whe you stil can. "power lunch" starts right now

♪ around here we save water drink beer ♪ >> welcome to "power lunch." i'm tyler mathisen investors don't like what they are hearing today about president trump's move to scale back his tariff fit wi china and other trading allies but we are off session highs as you see right there. the dow up about 76 right now. the s&p were having their best day in three weeks those gains faded just a bit the dow was up 285 points earlier. boeing helping to drive the gains, adding 40 point to the dow all by itself. and ude oil rallying highest level since november of 2014 and that is fuelling energy stocks best performing s&p sector this hour as you see right there. you see some of the energy stocks up as much as 4.5, almost 50 5%. financials on track to break their record 12-session losing streak maybe they will finally turn around right now they are not on truck.

let's get more on the trading action at this hour. bob pisani is live at the stock exchange. >> we are 200 points off of the high force the dow i think there are two things going on number one, the receivious news is good news but it doesn't eliminate tariffs as a problem number two, end of the quarter machination about selling some of the winners look at the russel 2000. here's your big winner for the quarter, up 9% on a day when trade is positive you would expect to see it weak. this is notably weak remember, people tend to sell their winners into the end of the quarter. particularly insurance companies. semis have been underperforming for a number of days even this relatively good news doesn't make a dent. big names down 1%. fangs and other groups that have

been underperforming mixed today. but all of these stocks were in the green at the top they too are selling off this was a big gain on the quarter. some of the names up 20% on the quarter. some people may be selling some of the winners finally not g in the early rally are any of the bank , particularly some of the regional names here. it's simple. we have 30 basis points suede separating the two year and the ten year yield if the federal raises two more times the yield curve could invert if the ten year doesn't go up a little bit that's major issue weighing on everybody's head the hope, good growth numbers, good gdp numbers and maybe we will move up. now to president trump's major step to ease off his trade threats to china

treasury secretary steven you mnuchin explaining >> they aban on theed its push to restrict chinese -- it is a significant move to deescalate the trade fight with beijing, and less than two weeks after the president suggested the u.s. tart $400 billion in new chinese ims wi tarifen the t today said thathe s. and g to the >> we are working with china now. and i think hopefully that will get straightened out but that was anywhere from 375, depending on the way you want to count it 375 to $500 billion a year loss. it's time for us to get smart. >> there is a similar change in tone from the treasury secretary who said that the administration wants china to lower the trade deficit and be fairer to u.s. companies but it won't be tougher on china than it is on other countries. >> we are going to treat china

the way we are going to treat other people, and to the extent that we were worried about transactions, we will block them but we are not going to on a wholesale basis discriminate against china as part of the negotiation. >> mooun mnuchin had been among the advocates for a softer deficit approach for months but was met dissension from counter-parts. today mnuchin said there was an unanimous vote >> how has all the trade turmoil over the past number of months played out in the markets? steve liesman has taken a closer look at that. >> the administration has created head spinning turns inspect market we looked at all the 1% moves. let's look at the negative ones. these are moves of 1% or more to the downside in the dow. there have been 17 this year

i'm hiding it -- i'm goingo reveal it now. eight ha been because of trade according to most major news sources. about half of related to trade moves. that cost the dow 258 points i'm sure the administration knows about the effects. what about the upside, the 1% or more moves to the upside 19 this year 5 have been related to trade, according to major news sources adding become 2 ab 122s. not quite even today may not en in our universe that we look up because it is not a 1% move. it's intng sarah because more and more you hear people say these are not negotiating tactics these moves by the president this is what the president wants to have happen at some point you are going to lose the ability to bounce back at least to gain the losses from the day before we may be seeing that. >> a mark to mark business

will the president's latest move actually help ease the simmering trade tensions >> let's bring in the former undeecretary of commerce for commercial trade and the residentolar at the american enter pry i gentlemen, you thank you for joining us stephan, even folks on other side, we talked to larry somers, former treasury secretary from the obama administration, economic official. we are pretty much okay with this decision to expand the hours of cfius, which decides on foreign investment deals in the united states. >> yep. >> inset of doing something more confroand i guess more powerful from the president himself. do you agree >> yeah, i mean look cfius is a bit of a black box anyway because it's very vague in how those deliberations are considered what i would say in the experience that i have had, having sat on cfius is it was in need of reform generally because transactions that could be

structured that were outside of the review of cfius. the question is is it going to be more than just the review now of minority investments and they are going to think more broadly than cfius's original mandate around security concerns and have it around economic security concerns and economic competitiveness as the administration has done with the current automobile tariff ts >> derek, i assume you support this seeming tacit change in approach is there any way -- secretary mnuchin might demure, is this directed at anybody but china, really >> it's clearly directed at china. we of course have other countries that we don't want buying our technology. but they don't have any money. it's obviously directed at china. it is atic statement that we e not going to single out the chinese because it will makehem angry.

but i do think i agree with both your intro and the other guest that there was a multiyear congressional proceshere it's good that the administration is respecting that the congressional process is aimed at china but it's aimed at china in a long term thoughtful way with a lot of contributors, groups that -- firms that do business and china and so fan. that's what you want you don't want a sharp federal government executive branch intervention into the market you want something that was signaled, the cfius reformas centraled. it is a good target, but we all know it was aimed at china >> that's not political, right i mean, that is because of national security concerns concerns about technology transfers, and stealing information. >> yes the question really is going to be, as i said earlier, is thatfd what sort of uncertainty does that create in the environment

what i would argue, which is somewhat different than what steve said about decreasing volume it the, is this going to do that? i would argue the opposite because we still haven't seen a clearly defined strategy by the administration that the market can look to in terms of determining what we expect the future moves to be on the trade agenda. >> does cfius work well now? i remember famous cases involving middle eastern countries that wanted to buy port facilities getting whacked by cfius has it worked reasonably well to protect vital national security interests and businesses >> i think it has. i mean there is definitely a transparency issue which has been referred to which is you can get su decisnd there is no rexplanation but the goal of cfius is not to coddle the market. it's to prevent technology that could be used to harm the u.s. military and u.s. civilians from falling into the wrong hands init has done that the current concern is really

about the china in silicon valley there are these $1 million, $2 million companies with eerge inning technology we don't really understand. those transactions are made without anyone seeing it including cfius. cfius needs more resources and a different mandate to intervene in those technology transactions on a low scale i disagree a little bit on volatility yes, the administration lack as strategy and we are still head hadded towards trade tariffs and battles over the trade deficit i think this step does reduce volatility and does reduce risk. >> i'm not sure because i think we still don't know how the reforms are actually going to play out >> the reforms to cfius? >> reforms to cfius, and subsequent moves what we are seeing is lots of news on this topic on a repeated basis without really having a long term game plan that i think is well understood by the market. >> finally, stephan, how do you think the china are going to take this decision do you think they will see this as some sort of olive branch,

coming to the table and talk trade? >> first of all they were very focused not just on the tariff issues but on foreign direct investment in the u.s. and export controls, which are two things that have always been at the top of tt in terms of our bilateral commercial relationship why it is a bit of a yawn is in fact chinese companies largely scaled back their investments around the world including the united states in part becae of the uncertain trade agenda of the united states and in part because of capital controls. >> they don't want the money going out of the country. >> that's the point. to some degree it's going to be less of an issue for them and it's more about optics. >> gentlemen, thank you. we have a news alert in bond market five year nodes are up for auction. rick santelli is covering it at the cme. >> 36 billion five year notes hit the street five minutes ago. their yield at the dutch auction 2.719. that is spot on to when the one

issue market was trading before it was couponed. it wasn't a bad auction. gave it a c plus a, it priced right, you want it within the bid offer spread of the one issue market more importantly the bid to cover a 2.55 was the best since august of 2017 62% indirects close to ten auction average. 9.5 direct lits, 11% ten auction average. which means dealers take 28% of the auction. it wasn't bad. we haven't had a dynamite auction in a while and tomorrow we will complete a really big package. the sevens will make it 100 billion between all three issuances. tomorrow's duty will be 7 billion. >> volatile day for the stock market the dow now giving up nearly awful its gains on the day. at the highs it was up almost 300. s&p turning lower just moments

ago. is there something beyond trade fueling these moves? we will take a closer look at the stock trend when we come back

welcome back to blunch just wanted to mention, stocks pretuch losing all of their gains from the morning the s&p turning lower. dow is u it did turn negative moments ago. you have still got winners like energy, chevron and exxon are

leading the way. but some of the big names in the industrials disappeared. what to did. are we in a holding pattern ahead ofarnings and the next wave of reports on the economy nice to see you. jamie, what do you think is fuelling the market action, sid trade dominating every headline from washington that's changing sentiment. >> it seems so this morning you have headlines from secretary mnuchin market spikes up but there is no follow through i think we lack communication, lack information we are going tosee this back and forth for however long it takes for the trade situation to resolve itself we are going to be in this lange. we have been in a range for a couple of months it's going to continue, unfortunately for investors you are probably better off to ignore it all, not pay attention to it, and just wait for it to be over before you make any portfolio moves at this time >> i just noticed michael, technology is now the worst

performing group in the s&p. that's a turn around from what we saw earlier people are look at this group, which is caught in the cross hairs here of strayed. semistocks have been hit, chip makers of course and even the fang names recentle what does that tell you. >> it tells me as approach quarter enthink folks are doing some portfolio window dressing certainly what we finding is that they are selling some of their winners ahead of the quarter's end. it also say has the stocks have done well from a momentum perspective. and they have protbly gotten a little bit ahead of themselves as it relates to their prices. naturally as we approach quarter's enwe see folks taking profits, doing window dressing and it's put downward pressure earlier this week when the discussion was around that the trade conflict was finally going to impact technology i think it hurt the stocks as well. >> is that a reason to stay out

of tech? >> no. >> this is typically used as the atm whenever there is a market downdraft. >> i don't know there is any reason to get away from tech because of trade it is a leadership group honestly's where the money is every piece of investment everything is tech everything is tech now i don't think you can separate technology from almost any other industry it permeates everything that we do i think if you are going away from tech for trade-related reasons that's a wrong choice. you should stay for a while. >> michael, where can i find a winner or two? >> they are loaded up on growth, loaded up on technology, loaded up on moment up. i think there are classic signs we are entering the later stages of this is higher super rates, tighter monetary policy, inflationary measures building, so many things, yield curve flattening tyler, i think what folks should begin to do is take some profits

from the growth momentum era and think of thing that benefit from higher rates of inflation. higher input costs energy, materials, commodities and natural resources. >> jamie, how do you read the flattening curve financials dipped into the red again. they have been underperforming for weeks now. looking at this flatter yield curve, is that ominous >> i don't know if it's ominous. when you have people that are buying tress because they are afraid that the yield curve will flat it's odd to me the yield curve is flattening given that the fed is -- we are ready to hit $40 billion of runoff on the balance sheet. there is selling in there. 50 bl in october the fed'nce sheet, you have natural selling monthly from the feds. i would have thought it would have had a more negative impact on the yield of the longer

treasuries but it's not because of fears with potential recession or potentially with trade running off the rails. once that's over, it's going to pick up and the yield curve is going to snap back higher. if i was evident having in financials i would think it was a good idea to pick some up while they are being sold off. it might be housing and other things worrying investors. in addition, goldman sachs and morgan stanley's compont is in there as well as well as the financial institutions i think there is more to it than the yield curve. >> for investors betting on the notion in a the yield curve was going to snap back and have a steeper curve they haven't been greeted with much success, michael. is there any -- why have you avoided -- it sound like you have been avoiding financials.

they are not among your top picks. do you see that changing >> i wouldn't say we are avoiding them. i think the thesis is sound in terms of better valuations relating to the market as interest rates rise they should see bigger profitability and deregulation helps financials what you are saying, as folks have been cooled off by financials and the fact we can't get the yield curve to steepen from my perspective, i think as we get later in the year a couple of things are likely to happen i think the fed is going to begin to signal they are getting near the end of their tightening cycle as early as 2019, which should have a plateau on two year rates and short-term rates. k what you will see is long i term rates will reflect better growth, higher inflation expectations and as banks unwine their balance sheets you should she return coming in and help the financials as well they are likely to struggle for

a while long but i think it is a good trade headed into the end of the year and 2018. >> jamie cox and michael arony. pinnacle and connecticut ago re merger has thbo stocks up. and why they can't beer in russia. until exxonmobil scientists put it to the test. they thought someday it cou become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all. energy lives here. with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75?

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acquire pinnacle foods the on conagra is down is this was a buy the rumor sell the news the deal had been widely telegraphed, including by our own team at cnbc.com which broke the news yesterday there was a question how much it would add to the profit forecast they didn't love the forecast on the synergies. how much cost cuts it would get. it kpins two freezen fast-food giants healthy choice >> they brought this the bowls healthy choice the bowls were a huge. >> healthy bowls >> yeah. >> millennial are buying frozen food it is combining with bird's eye, the big brand from pinnacle. they will have 40% combined market share of the frozen food

aisle according to jp morgan it's all about getting scale as the food business continues to training and be under pressure and miss the trend by millennials and get squeezed from retail grocery wars. >> one of our guests the other day was talking about pinnacle and ended up picking kellogg. >> ben goldman >> i think he anticipated this exact deal. >> some primaries held yesterday, some surprising results that could have a big impact on the midterm elections. plus it's the getting harder and harder tafrd ao fo home. how expensive is it to buy a house right now. >> welget the latest numbers "power lunch" we'll be right back this is a financial transaction secure from hacks and threats others can't see. this is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. this is not the cloud you know. this is the ibm cloud.

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and i am a senior public safety my namspecialist for pg&e. my job is to help educate our first responders on how to deal with natural gas and electric emergencies.

everyday when we go to work we want everyone to work safely and come home safely. i live right here in auburn, i absolutely love this community. once i moved here i didn't want to live anywhere else. i love that people in this community are willing to come together to make a difference for other people's lives. togewe're building a better california. hello everyone i'm sue herera here's your cnbc news update at this hour. federal hate crime charges have been filed against a man accused of plowing a car into a crowd of people protesting a white nationalist rally in charlottesville killing a woman and injuring dozens more 21-year-old james alek fields already faces state charges of

first-degree murder. the fbi agent whose anti-trump text exchanges made him a frequent target of the president is on capitol hill today. peter strzok is being interviewed behind closed doors by the house judiciary committee. track to nearly doub as the share of the economy over the next 30 years. the congressional budget office says the debt is currently equivalent to 78% of the country's gdit is expected to ry 2048 primarily because of rising health care costs and entitlement spending. a study ofadults signs the 1970s says getting exercise during middle age might protect against disease. they are a lower rate of depression and heart disease after age 65

i'm not sure why they needed a study to determine that but they did. >> let's check in on the markets right now. stocks wiping to out the big gains this the past hour dow was up 285 points at its high it's now down 30 points. same for the s&p and the nasdaq, which is down almost 1%. energy and materials are the best performing sectors in the s&p 500 today. energy still holding that rally. oil big part of the story. crude hitting its highest level since november of 2014 up more than 3%. g.e. is also a bright spot, rallying again today one of the biggest gainers in the s&p 500. and the russel 1000 at this hour back to back gains for g.e no longer helping out the dow. tyler. surprises in yesterday's primaries, lug including a big upset in new york state. former bernie sanders campaign organizer cortez defeated high-ranking democrat joe crowley who some might challenge

for the leadership in the democratic wing of the house how will this impact business and the potential balance of wer in congress, we are joined by ben white >> ben, it feels to me like it was a good evening for the extremes in other words the gop candidates who mr. trump backed against more moderate candidates tended to do well. and the left-leaning candidates on the democratic side seemed to knock out the more moderates there. >> indeed. we do see the continued polarization of the american electorate particularly in the democratic party it's clearly on the left, for the younger candidates, me fail candidates, those how run on health care for all, and free education. this is a district in the bronx and queens that is incredibly

progressive. 50% hispanic joe crowley did not match that district particularly well yes, the democratic party is moving to the left, becoming more progressive that's where the energy is. but let's noextrap lot the bronx and queens district to a countrywide move for the party. >> what does it presage foe fall >> i think it presages for the fall that if the democrats are to retake the house, there are still numbers in their favor they are going to do it with candidates like cortez who are female, who are younger, who are energetic and support many of these progressive causes if they do that and retake the house you can say good-bye to at love president trump's aggressive moves on tax cuts, on deregulation if you are in business, if you are watc from a financial perspective. it means a democratic house is going to be liberal, more inclined to block the president and talk about impeachment more. >> basically, moderates are not going to have a good time in the

mid terms here. >> that's going to make it harder to get consensus. >> there will be harder to have consensus in washington in 2018 to 2020. and you will see democrats moving to the left towards 2020. moderates will have a harter time but that doesn't mean that democrats aren't nominating more moderate candidates in swing states in this district, the vote fits a very poggive candidate in others it doesn't. >> what does this say about the odds that the democrats -- not that we should believe polls. >> we have had problems with that. >> had some problems what do the polls, what do the odds say about the democrats taking the house or the senate. >> it's narrowed somewhat for democrats in the house as president trump's approval rating has ticked up and when you think about what the president is doing on trade and immigration a lot of that is aimed at energizing the republican electorate. it doesn't mean there won't be dispositions or trade or in the market that are negative on

them but republicans are i had fired up to the point where they haven't been since 1994 in the mid terms. they have a good map in front of them in the house f. everything falls right d thergy is there, democrats could retake the house bus not as much of as advantage as you thought a few months ago. >> the economy is doing very strong that's good for republicans. do the democrats have a coherent message. i think their message is still on wages, yes they are going up, but not going up enough. r message is very much an anti-donald trump message. it is you people, democrats do not like what the president is doing. if you look at ballot questions among democrats, do you want to see a congress that is a check on the president a lot of them are saying yes they are saying we want somebody who will check the president's power. you are right, economic of maybe 4% in the second quarter and tax cuts kicking in that's good for

republicans. but president trump is not running on, that he is running on immigration and trade >> out of scotus on unions today on thee of it it would appear to damage unions and the fund that unions typically put into democratic races. on the other hand it could energize them. >> you will see democrats saying this is an attack on organized labor in america republicans stole the security seat from us it must have been merrick garland. it will reenergy democrats in that regard. it is a nationwide trend in right to work states in the private sector and in the public sector it is a blow to how organized labor can spend and raise. but yes it will energize democrats to say you have to elect us because these people are trying to kill organized labor. >> housing data out today, contracts to buy existing homes

slipping in may. the national association of realtors blaming affordability and supply short ans resear highlighting the affordability issue finding that buying a home is less affordable now than it has been in nearly a deca joining us now aaron, the chief economist at zillow. the numbers are staggering when you look at the median price was homes in certain markets particularly in san jose i mean, is this right, this is the median cost of a home, 96,000. >> that's the immediate profit that sellers made. >> the price is even higher. >> the home value in san jose is almost $1.3 million. that's the median in san jose right now. >> so at what point -- there has to be a tipping point where people say we can't afford to buy these homes and then prices come down. are we anywhere near that point. >> certainly, it has been a golden moment for sellers over the past year. supply has been very tight

we have seen this cyclical rebound in young adult home buying the home ownership rate among young adults is up almost two percentage points over the past year but the head winds are increasing to sellers. mortgage rates are shifting. affordability is stretched in places like the bay area, l.a., the pricey west coast markets. i do expect the housing market to calm down over the next year. >> when we talk about the housing market potentially coming down and people potentially locking in their gains at this point, where are they going if you have a job? silicon valley and you live in san jose or san francisco or another place where a lot of people made a lot of money in the past year selling their home what are the communities that are seeing people from there. that's a great point n. most of the markets where sellers sold last year, they didn't make enough on their house to afford a 20% down payment

now, if you are gainfully employed, maybe you have stock options in the bay area, that's fine but if you are a retiree on a fixed income your options are limited. you stay put or move away. >> what does $1.3 million get you in san jose? an acre and a half six bedroom? what >> no. no your median kind of suburbansin. certainly nothing extravagant. not a mcmansion. this is, a three bedroom, two bathroom house with a small yard it's not a mcmansion or a park avenue apartment >> what's going to happen to those prices when the state and local income tax really starts to kick in in places like california and new york? are the markets going to soften further because prices are going to dip on demand how do you see that influencing these dynamics. >> the state and local income tax is certainly going to affect high earners in a place like california, new york, connecticut, new jersey. what i suspect is going to happen it may pushdown

in the price point we will see softening at the top of the market but strengthening at the bottom of the market. there is going to be competition for the affordable homes that are available. >> how much is the lag time before you see that born in and out the data >> most taxpayers, including high earners this year received a tax cut. it's going to be at least six to 12 months before buyers begin to feel the pinch >> aaron great to have you with us i'm still getting over $296,000 is the median profit in san jose. >> a lot of zeros. >> thank you world cup fever sweeping the globe right now but not so much here apparently in the u you would never know it by the eruptions in the newsroom here ratings though, they are down. but that doesn't mean we don't like soccer. up next we will talk to the head of a major leae soccer team that is getting major league support from its fans. it is a hit in atlanta we'll be right back.

plenty of cheers tears here at "power lunch. 's germany's uninspected ouster from the world cup, the reigning champions, crushing the dreams of our producer chris a i can hear it when she speaks to me in my ear it's sad meanwhile, mexico and argentina's advance is bringing joy to a jrksz and maria despite our intense cheering -- and it has been loud here, viewership so far in the united states is down sharply from 2014, off 44%. the u.s. not being a part of it is a reason for the drop-off still, the soccer buzz is building here in america atlanta united of the mls averaging nearly 50,000 fans at their home games here to talk about the foot of football in the states is the

president of atlanta united and former executive director at to then ham in the epl. welcome, good to have you with us. >> you are welcome, thanks for having me on. >> why do you think ratings are down as much as they are is it as simple as we a o root for. a couple of reasons firstly, the u.s. onal team not qualifying is a blow to the ratings. the other thing is the time zone 2014 in brazil that was the perfect time zone for north marrying this year, in russia, you have mornings games of it's less desirable in terms of viewing figures. >> it is an amazing suspectcal to see and people get energized it like they get energied about no other sport that i can imagine. >> i have got a big smile on my face because germany was knocked off and england usually loses to germany in every tournament. s that good for the englishmen

the game that germany played against sweden was the hiest non-u.s. group cup i think there is a rising interest now with mexico rising to knockout levels. >> a dramatic finish to the germany/sweden game. i want to get to atlanta and your successes there in just a minute you are just back from the world cup in russia. how are they pulling it off? well. >> they are. i was out there with to then ham on champion's league games i wasn't sure how it was going to be having the world coming to visit. but it was a good atmosphere i was based in moscow. went to two games. the atmosphere is crazy. everyone travelled to get out there. the world cup is unlike any other tournament it brings the world together it is a great eent for doing that. >> turning your team, attendance has been off the charts for 2019, after the first nine games average attendance is over

48,000 that ihigher than any other team in the league how do you do it >> it's been amazing you think atlanta, they were skeptical about it being a sports city and soccer working here we think we are going to average 53,000 by the end of the season. we would be the 15th largest clup in the world, even among clubs that have been around for over 100 years it is remarkable. >> how do you prepare for 2026 this is going to be a big deal the uss going to be here because we are now one of the hosts along with canada and mexico how do you ramp up and get the smort ready and get the fans ready and invest. >> it is a great opportunity for socker in north america. we have now got an eight-year run in that we know we are going to have the world cup. as you mention we know america will be playing in it because they qualify as the host soccer has been growing in strength but now to have a world cup in eight year's time is

going to add rocket fuel growth to the world of soccer. >> what is it that explains why the team hasaken move atlaa? it may be, darren, your brilliant marketing? what explains it why did it click so fast. >> one of the interesting things, everyone said it wasn't a city of soccer, they are all transplants. if you are from philadelphia you might be an eagles fan but you haven't built up an allegiance in soccer. i think we have been able to make atlanta united atlanta's team you may have green bay fans and she had heads in the cupboard that you bring out when they come to play the falcons but atlanta united is the city's team you see it everywhere. the flags, the magnetic stickers on their cars. >> it is a wonderful new stadium. and the success this the stan

has been matched on the field. you have a great record, and a great coach. darren, congratulations. >> thank you, guys >> appreciate it. germany fans may want to cry in their beers of a today's game more bad news. europe is remarking beer we will tell you about the shortage tt hais threatening to deprive thirsty europeans next on "power lunch. ...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. tripadvisor. the latest reviews. the lowest prices.

we're firmly in the red. the dow is down and nasdaq is really taking it the hardest, down by nine tenths of 1%. we were just a moment ago, look at the smh that's taking it hard if you look within the components we're seeing some of these tech names under pressure and also financials and instead of loing at the broader xlf look at the kre, t regional bas taking it hard the regionals are down by more than 1%, 1.4% at last check. 6% here. this of course ahead of thursday, shareholders will find out how much the banks can return in terms of dividends and buybacks to shareholders. >> seen as a catalyst. as a positive for banks.

>> thought it could be. >> and it feels like we're in this trade war on, trade war off kind of mood in the markets. but the rebounds this week have been tepid and unconvincing and slipping away. >> fadish the rebounds. >> absolutely. >> all right, soccer fever is everywhere in europe right now but europeans could be facing a big buzz kill this summer because of beer rationing. get this, a shortage of c 02 is forcing one company to ration beer and cider supplies, one describes it as the worst to hit europe in decades. we'll have more on this after this break stay tuned global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow.

you set it. nasdaq. rewrite tomorrow.

europeans could be facing beer rationing as a shortage of ce 2, how big will the impact be caroline, great to have you with us >> great to be here, thanks. >> i don't think i ever thought of co2plies in my life but they matter and number of planned shutdowns in europe. what's the situation now >> it's interesting i checked in with a few beverage companies before coming here and don't think it's anywhere near a

crisis, being well managed i never thought we thought we need to exhale co2 to keep businesses going. >> tell us about the other rationing and i imagine it's managed because people can't buy as much as maybe they could at a time when the world cup is going on i don't know if that's bad timing as well restricting to ten cases of beer and five of cider or soft drinks >> i'm not sure this is coming from the producers, because again, in touching base with coke, stopped touching base with anheuser-busch, both are managing the supplies quite well co 2 is largely coming from recycling of their own waste coke is also to store supplies for the uk for other bottler regioni think that maybe it's -e rif them possibly running out, that's driving the caution on restrictions there, rather

than any real risk -- any actual event of that happening at this point. also, bear in mind that new production plans are coming on stream as we speak we were down to one out of five, up to two out of five co2 production within a couple of weeks we should have better production of kre co2. >> for those companies that manage the supplby creating their co2 from waste, is there opportunity to take say little bit of share from the others who may not be in as good co2 position. >> exactly the question i ask. people are being very tight lipped and again, i don't really think -- certainly in the take home channel, it's a little less clear on premise and you need the co2 for the draft beer again, ithink if this were to persist for several more weeks, there is share opportunity foroo deal with it but at this point i don't see any major damage to any

particular brands. >> sporting events are typically good times for some of these beverage makers which may see an uptick in consumption. we were talking about world cup ratings which are down because we don't have a team to play in the world cup. are we going to see anything whatsoever in terms of beverage earnings >> anheuser-busch is a huge respon sponsor, globally it's got tremendous following, particularly throughout europe, south africa where they just bot bought sab and russia, i think they should see a lift to business hot weather in europe is helping people celebrate any wins for world cup. i'm expecting a little lift. as long as they don't run out of product. >> right, exactly. we'll be watching. caroline, thank you. >> tyler >> so let's have a beer. here's what's on the menu this

hour beer the bull losinsteam despite the president's somewhat softer tone on china. what doeit mean for the trade battle and is there something beyond trade that is worrying wall street right now? oil rallying energy, the best performing sector this quarter and a slew of names up 20% do you stick with the trade? your second half play book on energy is ahead. and sticker shock, the auto tariff threats could be bad news for consumers in the showrooms we'll tell you how much you might have to pay for a new imported car the second hour of power begins right now. >> and welcome back to power lunch, i'm sara icen, markets are struggling and stocks wiping out the big gains, dow up 285 points at the hi now firmly in the red, down a tenth of a percent s and p down a third as well oil is a big story today,

hitting the highest level since november 2014. driving up the energy stocks to the top of the market. oil and gas etf, on track for the third positive day california resources, both leading the gains in the oil patch. >> here's what's else is happening. the supreme court ruling that states cannot force government workers to contribute to labor unions that represent them in llecti bargaining, a 5-4 vote durable goods fell and drop mainly atribt buted to a decline in orders for new cars and trucks kohl's started hiring seasonal workers for back to school fall and holiday shopping it has begun at 300 stores so far. let's start off with the markets and go to bob pisani. >> what an up and down day the dow jones industrial average, we have swung in a greater than point range just all of the major averages

entered negative territory what's going on? i'm calling this the yo yo market, 340, maybe 345 point move in the dow jones industrial average here take a look here there's two things going on. very important, does not solve all of t tariff issues and youcr of number of stocks. this is a little harder to figure out because a lot of end of the quarter machinations when you have big movements in things like tech stocks on the quarter and sector rotation, and fund managers become overweight in some sectors and might have to rebalance and sell things. let's look at the russell 2 thousand dramatically outperformed and now suddenly underperforming down 2%. so far this week, fang stocks fabulous quarter overall, up 20%. and nyse fang index down about 3% so far this week.

semiconductors have done great throughout the quarter but in the last two weeks been drifting downward now,hat may be partly due to concerns in tariff issues but they were doing great into march and sold off into march too. this end of quarter machinations out there and separately a wild card in the whole situation in the banks here the flattening yield curve is killing ths down 13 days that's historic. haven't seen that ever bottom line is this, if you get two more tightenings from the fed and the 10-year yield doesn't go up, the yield curve is going to invert and that's got everybody worried here that's a separate issue from the whole trade concerns out there a lot of issues weighing on the markets. back to you. >> bob pisani, thank you big breaking news on the supreme court. let's go to eamon javerse, anthony kennedy decided to retire this will be a major opportunity for president trump to appoint a new justice to the supreme court.

you remember that justice kennedy was appointed to the court, nominated for the court by president ronald reagan although he's come under criticism for many conservatives who feel he has in effect become a swing justice between the liberal and consecutive factions on the supremeourt thident here will have an opportunity to nominate a very traditional conservative who might not fall in that swing mentality on the supreme court and all of those decisions that we've seen that have been 5-4 in recent years and countless 5-4 decisions on this court. kennedy was the person on the court making the deciding vote it will be a case of the president having an opportunity to nominate someone in line request neil go such a big opportunity with the departure and big opportunity for the trump white house, guys.

>> one of the tab ticks that paid off for leader mcconnell was not having hearings on garland during the election year and put off that which then resulted in mr. gorsuch's elevation to the court is there a way the democrats could postpone hearings on a nomination until after the midterms when they would hope they would control the senate and have more leverage >> that's an interesting question it comes right at a time when these things typically take months to go from a nomination, presidents take quite a bit of time to choose a nominee for the supreme court and then you have a month-long period where there's buildup to hearings and then a confirmation vote in this case though, that whole process could be expedited by the fact that the president, president trump, has said he'll pick generally justices from a list that he's already put

together of approved conservative judges around the country who sort of meet with a stamp of approval from the federal society and other conservative groups. a really short list of people he had to choose from here. the question becomes how quickly could the senate move under the republican control between now and the mid-term elections to approve any presidential nomination it would be very, very fast. just off the top of my head, i don't think it's necessarily impossible in case the democrats were to take the senate. >> as you point out, he has been a swing vote on a lot of socially important decisions including on abortion. this will bring that issue particularly would seem to me to the floor. >> sure, absolutely. >> roe v wade and swing vote in legalizing same-sex marriage whoever president trump decides to appoint, it's likely to be to the right of him

is that true >> absolutely the case, that the president whoever he picks will be to the right of justice kennedy and therefore not a swing vote as often as we've seen kennedy all of the justices have surprise it does come with the capacity to surprise. and you think most off the top of your head in terms of the obamacare issue and chief justice roberts siding with the idea that the obamacare law was in fact a tax and was constitutional that was a surprising decision a lot of people thought that john roberts, the chief justice would go along with sort of conservative political thought on obamacare but ultimately he decided that obamacare should be the law of the land you never know what you're going to get as president of the united states. this list the president developed of justices or judges that he might nominate has been pretty thoroughly vetted by a lot of conservative groups and they feel comfortable whoever is picked here would be to the right of kennedy and not a swing

vote on supreme court. >> you've been reporting on the major block buster decisions we've gotten from the court in the past few days, the conservative majority of the court is showing we've got that for the unions today and so many others. >> i mean just in the past 24 hours, right we've had the supreme court upholding the president's travel ban, which was a dramatic decision by the court and then this morning's decision, which is a real blow to public employee unions and unions generally, that's something that's been roundly applauded by conservatives. it robs the unions of the ability to charge nonunion members union dues under the argument that you're benefitting from the union so you have to pay the dues anyway, even if you don't want to be a member as an individual employee. that will rob the public employee unions of a lot of money and the public employee unions asked financial clout in recent years to back democrats that was a big win for republicans and conservatives

this morning as you point out, this is a con serve tif court and it's about -- to think about to get a lot more conservative. >> it anyone else retire there are a few on the bench. >> justice ginsburg has had bouts of bad health. i believe in her 80s. >> that would be hard to believe she would step down in a trump administration. >> 85 years old and previously said she wants to serve until justice steven did until she was 90 she's giving herself a five-year window she was under pressure from liberals to retire during the end of the obama administration and she decided she was going to stick it out she said after the death of her husband, that ultimately being on the court gave her a feeling of real merit, something she was really focused on and helped her get past the tragic death of her husband in i believe 2010. so she said is he wants to stick it out and thought ultimately the politics were not such at the end of the obama era that the president could appoint a

justice in her mold, that is as liberal as she was politics are different in this country and extremely unlikely that anybody that she would see in her mold would get selected by the trump administration. >> eamon javers, thanks so much. president trump and conservatives must be celebrating right now. >> think of how many supporters of trump we interviewed about the eye leks, they didn't like trump but wanted that supreme court seat they wanted him to have the influence. >> he's got that when he appoint appointed goresuch. >> they may not have liked trump and what he stood for but wanted him to appoint the conservative to the bench. >> the dow lost 300 point rally interday nasdaq down less than one full percent. global chief investment strategist with $122 billion under management on behalf of inconstitution area investors. are you as cautious as investors

appear to be this week even the rallies like 300 points this morning seem short lived. >> sure, in the short run markets are volatile and it's hard to know what moves them we like to look for the longer term and the longer term we think is positive for economics and economic growth, largely on the crest and regulatory reform we've seen over the last year and a half we're pretty upbeat even though a day like this could give you some pause. >> you're not worried about escalating trade tensions and tariffs new rounds selt t to ki in against china first week of july. >> certainly things would be better without those tensions but even with them, we don't think that they are enough to derail the very positive momentum we have from those other policy forces. three of the four major policy drivers are either bee nine or positive there's fiscal and monetary policy rather than regulatory policy trade policy is the one negative

and we think largely there's negotiating tactics going on we don't know what the ultimate outcome will be but long run, we still think growth dominates. >> which is good for our business. >> are you buying? are your clients taking this opportunity and buying these dips >> we are buying when we have positive cashflow, which most of our clients do we have to be invested against their obligations. most of our clients are con strained opentymization like pension schemes and insurance companies and ldi and things like that. we always want to be invested against those liabilities so they are supported but we really would like to see good assets to buy and we think as rates rise along with growth we'll be able to buy risk at the better price yes, we're buying for long run. >> how are you filtering trade into your thinking >> as i said, trade is the one negative on policy front but again, don't think it derails the overall -- the long

run picture. from a sector standpoint though, that's something to think about. certain sectors will be differentially damaged by adverse trade conditions like say agriculture, that's one of the sectors that certainly could be hit pretty hard retail, apparel sales, most apparel is manufactured offshore, bringing that in would be expensive for those kinds of businesses. >> what are you -- which sectors are safe >> what we like are sectors that have weathered through some parts of the credit cycle? we're primarily fixed income buyer and two sectors that have had some of their problems washed out in the last couple of years, energy and basic materials, we like those sectors but like opportunities in all sectors across the board and it's a matter of fundamental analysis to pick out the right issuers and right bonds to buy. >> energy is working today thank you for joining us o

melissa? >> chinese markets are feeling the trade from troubles in a bear market down more than 20% from the 52-week high and the fxi, china large cap etf in the red on pace for the 14th day of losses in the past 15 days it is down more than 9% so far this month on track for a third straight negative month. a streak the etf has not seen since february 2016 for the quarter. it is down more than 10% headed towards its worst quarter since 2016 let's dig deeper to china and ems. joining us fast money trader and cio and managing partner tim, certainly the numbers don't speak well, particularly when you look at the shanghai composite, a 13-month low, more of the tech heavy index here are there any opportunities in your view or too ugly? >> first of all, you need to be talking about this in the context of all of emerging markets and it's kind of us meaning u.s. and the rest.

us and them. the rest of the world is basically at the levels we were in august of last year, emerging markets sold off 15% against the s&p since april 1. that in relative terms is extraordinary. even for a guy that's been in emerging markets for 20 years. what's happening, the terms of trade are things that of concern. they actually have weakened somewhat but the real economic impact of what we're talking about that's on the table is -- one tenth to three tenths of a percent in china people watching the yuan i think people should be watching that because if you start to see it decelerate that much more, china may start to impose capitol controls. when sigh alibaba ten cents off, 21% in line with the local chinese market i think this is one of the great global tech companies of the world and this is actually an opportunity but i tell you, the trade ranker is not going to get better on july 6th you'll have another announcement and begin bilateral negotiations i'm glad you mentioned alalibaba, even young

china. these stocks with this exposure, the trade as well, they are getting hit hard are there opportunities in your view >> i do. and if you look at what the trade was in 2017, it was u.s. tech and it was actually china tech some of the biggest tech companies in the world despite the fact the trade tension is focused zeroing in on tech i don't think alibaba's core commercial business is changing on the basis of that it's really -- they are geared towards a domestic constituency and pan asian platform in addition to all of the other parts, gaming online, they are social these things are growing very, very faflt and arguably faster than the companies here at better valuations. >> while you're here, want to let you know you're actually winging in our cnbc stock draft. your picks were amgen and dropbox and chesapeake congratulations, 29%. >> it's a long season and i fumbled on the goal line last year, no fun being the pace car all season so i'm going to play this

quarter by quarter but it's good to be here and i do think energy and chesapeake my pick last year, which was valiant, this is a balance sheet reparation story. >> mr. wonderful is in third i know you're wondering. >> always have to watch where he is know your enemies and know where they sit. >> good to see you >> tim see more. >> the president pulling punches in the trade battle with china but could a left hook still be coming a bold call on amazon. one analysts raises the price target to $1900 a share. he will join s to make his case ahead. what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term?

my reputation depends on it. 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 containing this information. read it carefully. i wok(harmonica interrupts)ld... ...and told people about geico... (harmonica interrupts) how they could save 15% or more by... (harmonica interrupts) ...by just calling or going online to geico.com. (harmonica interrupts) (sighs and chuckles) sorry, are you gonna... (harmonica interrupts) everytime. geico. 15 minutes could save you 15% or more on car insurance.

president trump weighs in on the retirement of supreme court justice anthony kennedy. eamon javers has that reaction the prtd is speaking in and out and we'll see that on tape momently, saying he'll select somebody outstanding as justice kennedy. the pld pouring the praise on justice kennedy, a terrific person, met him and also saying he's going to pick someone from

that list of preselected judges that the president has talked about publicly on a couple of occasions, most recently you might remember during the neil gorsuch nomination, he's going to pick somebody they really like and justice kennedy is a man he has great respect for and man the president has known for a long time and great justice of the supreme court with great vision the president does -- that we'll begin our search for a new justice immediately and he thanks kennedy for years of tremendous service and calls him a spectacular man. the key news is that the president is confirming he will select somebody from the pre-vetted conservative list of judges that will make folks at the federal society and conservative judicial groups very happy they'll be getting somebody not likely to be a swing vote on the supreme court in the way that anthony kennedy had become over the years. that's the news here from the white house. we'll tell you as soon as we get any more from the president here

who continues to speak as we talk. >> eamon, thank you very much. the trump administration announcing a new set of restrictions on chinese restrictions the new restrictions not as far reaching as many expected. >> instead of slopping a new set of rules on investments from china, which would have taken time to crest and implement and heighten tensions with beijing, the administration is endorsing an expanded sieve yus process, inbound foreign transactions that may pose a security risk. the move is a sigh of relief on capitol hill where the senate and house both passed the bills with overwhelming bipartisan support. gop lawmakers have regularly visiting the white house to warn of the impact on business of tariffs and potential investment restrictions, treasury secretary steven mnuchin said today's decision limits that. >> i don't expect this to have any significant economic impact on the overalleconomy

we have a very large open investment policy. again, passive investments are welcome. weaver talking about a small part of the economy that's critical technology, critical infrastructure that we intend to protect. >> we now wait for word on what happens next friday when tariffs on $34 billion in chinese imports was set to take effect the president today said we're working with china now tyler? thanks very much let's dig deeper with our panel of experts, phillip swagle from 2006 to 2009 john carlin is a former doj security attorney. what do you think of this seeming adjustment at least based on where we thought this might be going earlier in the week >> i mean, i was pleased with secretary mnuchin's announcement, i think it's good news, the process is well

understood and works well and importantly it balances between economic and national security concerns we need foreign investment we need capital flows in the u.s. and this assures markets that those will continue. >> john, your thoughts >> the cfius process is not about trade and it is about national security. so it means that they are going to look closely at those investments that might result in the transfer of technology and critical sectors to china or might allow china too increase theft of intellectual property or trade secrets the other part that my clients have been concerned about in the big or want to see what's going to happen next has to do with u.s. companies though. and that is under the commerce department, coming -- it will probably take six months to a year there will be a new set of regulations that govern when u.s. businesses seek to transfer through licenses intellectual property or do joint ventures in china. more to come to see how they

craft those rules. >> it's going to sound like a stupid question. i'm going to ask it anyway when we talk about the u.s. company doing a joint venture in china as we've seen so many do what exactly constitutes a view of transfer of technology? presumably you build a plan together and they see your manufacturing processes and see how things are manufactured, that might be considered a transfer >> that's actually a great question on there was a problem with jurisdiction, only applied when there was a foreign change of control. it would be low as low as 3% if it had certain rights, like board rights what it did not cover is u.s. companies going out bound doing either joint ventures or doing ip transfer licenses so it may be the same harm you were trying to prevent with the change of control and investment

would occur because of that joint venture or license agreement. under the new legislation, the commerce department is tasked working with the national security community to come up with new license requirements around critical technology to address just the issue you raised what happened with the joint ventures and when do companies need to be particularly careful. >> assuming this passes and we do get those new super powers for cfius, what sort of industries within technology, i assume semiconductor is a big one. who will this affect the most? >> sure, it's got to be computer hardware one can imagine software as well, a lot of software gets embedded into products our cars even are base he canally computers on wheels these days i think it's hard to predict exactly where the new rules will hit. but given what's going on with the spread of technology into all manufacturing, i think we

can expect it to be a pretty broad expansion of the cfius process as john said i think that's good. these -- we're really concerned about china stealing u.s. technology and this is a bipartisan effort that i think will address that. >> john, last question, do you think there's a possibility they could review joint ventures already inked, for instance, if you have automakers over there and they are developing autonomous driving technology, could cfius insert itself and say this is something we need to review once again. >> it won't be through cfius but a change in the licensing rules in which case yes they could they could say technology that you're using is now export controlled and you need a license if you're going to share it then you'd have to work that through. in terms of where it will effect, peetder is exactly right. they've telegraphed what they are interested in in terms of national security which is artificial intelligence,

internet of things, the collection of bulk data, including personally identifiable information and cyber security and those are identified and flagged in the new bill. >> all right, gentlemen, thank you for your time. phillip and john, great discussion >> thank you. >> amazon shares are up more than 40% so far this year. new bullish call says the stock is headed muchigr. hhe analysts who made it lays out his case next. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not?

your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

i'm sue her rar ra, here's your cnbc update a 301-21 vote the republican led house failed to pass a broad gop immigration bill the rejection was expected because of republican divisions and heavy democratic opposition. president trump had tweeted his 11th hour support. national security adviser john bolton confirming a kremlin report that details of a summit between russian president putin and president trump will be announced tomorrow this after he met with putin in

moscow >> the fact is that it's important for the leaders of these two countries to meet. there are wide range of issues despite the differences between us, where both president trump and president putin think they may be able to find constructive solutions. i'd like to hear someone say that's a bad idea. >> joseph jackson, the pat tree arc of the jackson family has died the stage dad of michael and janet jackson and talented siblings launched a musical dynasty. joe jackson was 89 years old you're up to date. that's the news update i'll send it back to you. >> coming up, oil at the highest level since november of '14. energy the best performing sector this quarter will that rally continue we will look at top energy picks for the second half. comingig u rhtp.

oil rallying today, prices closing up for the day

let's go to jackie deank list. >> rally indeed. crude prices seeing about a 3% pop on the session after inventories fell steeply wti has seen almost 11% in gains in one week's time part of it attributable to opec, part of it pressure on iran's exports and part of it stronger demand for the summer driving season what happens next? technical levels have been triggered here and momentum to the upside short covering could continue to take the prigss hire prices reaching a session high of $73.06, guys. >> thank you very much, jackie crude prices hitting the highest level pushing commodity toward the fourth straight quarter since 2010 how do you take advantage of the surge as we enter the second half of the year welcome and we warn you, mike, i may have to interrupt you, we're expecting a playback of presidential remarks from the white house. you like what you -- >> i know how it goes.

>> you'll only be busted by the president. that's a badge of honor, folks, you like the big names in this area, including whiting petroleum which you see as kind of a turnaround play. >> yeah, absolutely. you already hit on it first of all, the macro back drop is awesome. hugely important for the space in general, great draws this afternoon and we've had opec last week. came out of that unscathed and trump with pressure on iran. relentless pressure there. and then you have venezuela imploding, this a great back drop what i tell you -- the names we favor right now are the nonperm onnames, it's going to be a massively important theme for earnings season coming up. that is that the permeon production ramped so hard that you're going to exceed pipeline capacity with your production there. so the names we like are actually outside of permeon,

guys could be getting $20 more per barrel whiting under new management, brad holly, they picked off from anadarco -- >> president trump, let's go to the white house. >> justice anthony, you know who i'm talking, about justice kennedy will be retiring and he's a man that i've known for a long time and man that i've respected for a long time. he's been a great justice of the supreme court. he is a man who is displaying great vision and displayed tremendous vision and tremendous heart and he will be missed. but he will be retiring and we will begin our search for a new justice of the united states supreme court that will begin

immediately. and hopefully we're going to pick somebody who will be as outstanding. so i just want to thank justice kennedy for the years of tremendous service and he's a very spectacular man really a spectacular man i know that he will be around hopefully for a long time to advise and i believe he's going to be teaching and doing other things, thank you to justice kennedy. >> >> who will you pick to replace him, sir >> we have obviously numerous people we have a list of 25 people that i actually had during my election i had to -- i added five little while ago. we have a very excellent list of great talented highly educated and highly intelligent, hopefully tremendous people. i think the list is very

outstanding. when i was running, i put down a list of 20 people because not being a politician, i think people wanted to hear what some of my choices may be it was pretty effective. and i think you see the kind of quality that we're looking at when you look at that list but i did add -- i added five additional people to the list. so it will be somebody from that list we have now boiled it down to about 25 people. >> sir, when did you find out? >> president, is it final? >> i will tell you we fought very hard to get it here i think they are doing a fantastic job with the world cup right now. it's in russia and i will tell you that it's exciting and my son loves soccer and loves watching the world cup they have really done a fantastic job with the world cup. it's exciting, even if you're a

nonsoccer fan. i'm a soccer fan a little bit but don't have much -- >> who are you rooting for >> i'm rooting for everybody to do well. but i think the venue has been fantastic. they really have shown something very special i fought very hard to get it for the united states, mexico and canada as you probably have heard. and we we were honored to be chosen and this is a great gentleman and soccer fan too but we were very honored to be chosen for the world cup we look forward to that. >> mr. president, will you meet with president putin and where >> john bolton is over there now. he's over in russia right now. i just saw watching media that he's -- he's met with president putin. i haven't gotten the full report yet but it would look like we would probably be meeting sometime in the not to disstant future getting along with russia and china and with everybody is a

very good thing. it's good for world and good for us and good for everybody. so we'll probably be meeting sometime around my trip to europe. >> do you know where >> hasn't been determined yet. probably i will know within an hour >> and what about the injunction on immigration will you fight that the california judge reunited families -- >> we believe families should be together also. there's not a lot to fight. >> how do you guarantee that >> we believe families have to be together. we believe in very strong borders, no crime and the democrats believe in open borders and plenty of crime because that's what you get with the open borders i would like to introduce however the president of portugal i'm sorry to bother you but in our country, the selection of a justice of the united states supreme court is considered -- i think we can all say one of the -- one of the most important events, one of the most important things for our country. you see the decisions that just

came down how big and how vital they are they can swing different ways depending on whom there might be in the court it's always been considered a tremendously important thing some people think outside of obviously war and peace, the most important thing that you can have but another very important thing is introducing the president, the highly respected i must say president of portugal. thank you. >> thank you, constitutional law professor, i know how important it is when the justice in your supreme court retires. because it's a key institution so i just heard the news and i imagine how important it is for you. and for any in the united states anyway, i'd like to tell you that we have a very long lasting

friendship and partnership. >> yes. >> that started -- we recognize you. we were the first neutral country to recognize the united states of america's independence we had as our oldest ally england. so it was -- at that time. and i don't know if you know it, but your founding fathers celebrated independence with our wine they made a toast -- >> good toast. >> but our wine. it's a long, long story this one about friendship and partnership. based on common values and democracy and freedom and rule of law and human rights, but also of a very strong community. a fellow sit zen both american portuguese and love the united states america and love portugal they are around 1,500,000

portuguese americans living here they are very important. so it's not just a military, political and economic alliance, it's more than that. it's something very human. we're speak gs of that 1 and 400,000 people that live their love for two countries at the same time. well, make you a suggestion. >> go ahead. >> if you're going to meet mr. putin, i was with him last week. >> good. >> and he asked me to greet you. so of course he was expecting your visit but anyway, don't forget that portugal has the best in the world, that is called christiane rinaldo. don't forget, if you ever go to the russia during the championship, don't forget portugal is still there wanting to win. >> that's right. >> they are doing very well.

>> yes, they say he's doing very well. >> doing very well. >> very good. >> tell me how good a player is he are you impressed? >> very much impressed the best player in the world in a sense, well, i think has been a success, would you, the championship. >> i think -- >> no doubt about it for the world. >> so will christiane ever run for president against you? he wouldn't win. >> mr. president, you know something, i must tell you, not just united states, a little different. >> go ahead. >> when did you learn justice kennedy was retiring >> a half hour ago. >> were you surprised? >> he came to the white house and we had a wonderful discussion just prior to meeting the president and really had a very deep discussion i got his ideas on things and including i asked him if he had certain people that he had great respect for that potentially

could take his seat, which is a very hard seat to fill so we talked about different things and he was here for about a half hour. i don't think you folks saw him coming in and out, did you i was shocked. great job. that's a shocker that's a shocker we had a -- just left a little while ago -- i won't do that but he -- he has -- you know, there are certain names that are just outstanding and names you already know to be honest with you and names that you know that are outstanding highly respected and names that you would know, president. and we'll be looking at them and looking at some others, but they will come from the list of 25 people. >> and mr. president, it's an election year. would you give consideration to holding that spot open until the makeup of congress is determined come november? >> i haven't thought about that. i think you want to go as quickly as poblg it's a process but haven't really thought of that we had a big day yesterday, very

big, we had a great decision today. and in terms of what was just released by the supreme court yesterday with the travel ban was extremely big. we had some tremendous elections, south carolina from my own standpoint, south carolina governor, mcmaster a big win and as you know i was very much involved in new york with the congressman donovan so we're very happy. this was a good few days and now i get to cap it off by meeting with the president of portugal and portugal has been actually very important to our nation and you're right, we have about a 1,500,000 here that's very important. >> do you have a message -- >> no, i want them to do what they want. the problem we have -- and i told them this morning, pass it if you can, but i also want them to do what they want we have a big immigration bill like everybody does, everybody talks about immigration. now i think more than ever

before i told them a few hours ago i said look, pass something or come back with something that would be a derivation but get something you want the problem is we need democrat being votes in the senate and that's why i don't get overly excited with the house bill right now because it's not going to pass in the senate. you're not going to get the democrats to vote for anything if we gave them 100% of what they wanted and then doubled it, they still wouldn't pass it because they think it's a good election point i think it's good for us because i think strong borders -- i don't even know how you feel about that but i think strong borders and no crime is -- that's us. and i think that's going to be a great election point for us. so i told them two hours ago, i said do what you want. and ultimately we'll come to something and perhaps it will be after the election, maybe before, but as of this moment, democrats are not going to vote for anything because they really are resistding or obstructing. thank you -- >> what about the progressive --

do you expect an outcome >> i think we'll be talking about syria. we'll be talking about ukraine we'll be talking about many other subjects and we'll see what happens -- you never know about meetings what happens, me, what happens right? i think a lot of good things can happen with meetings with people we've had great meetings with president xi of china. every place i've been, we have had great meetings so maybe something positive will come out of it >> mr. president, what about the progressive challenger that beat crowley from new york? >> that was a shocker. for crowley to lose that, that was a shocker. i was surprised. everybody was surprised. we've had somebody that was in there many years, mr. president, and i think he probably took it for granted. i can't say i'm disappointed because i was never a big fan. but he lost his election probably shouldn't have lost his election maybe you get a little complacent, you know, that does happen

you get complacent that's a big loss. that was a shocking loss but it is what it is thank you very much. they're doing great. by the way, the steel industry is absolutely doing great. the tariffs have been incredible and the steel industry is doing great. and our country's doing great. you're seeing the results. the numbers coming out from the companies are far beyond what anybody ever thought possible. we're doing really good. but we have to have fair trade deals. and we're working on really fair trade deals. we're working with your representatives on fair trade deals. >> that's good news. >> thank you, everybody. >> it's going to be very good. mr. president, as far as when you might meet with them will it be after nato? >> probably after that >> all right thank you, sir >> thank you, everybody. thank you very much.

>> yeah. he's the president we should ask. >> all right there is the president wrapping up a sort of press scramble with the president of portugal to his right talking extensively about the retirement of justice anthony kennedy from the supreme court and the process that will begin immediately to choose his successor. eamon javers is at the white house and is following the story for us there he says he will pick from a list of 25 jurists. that dates back to the campaign when he had 20 and then added 5 more. >> that's right, tyler that will be a solace to conservatives. the president saying there he's going to stick with that list. he's also answering hallie jackson's question in the oval office about how quickly he wants to proceed

this is a politically loaded question the president says he hasn't thought that much about it but that he does want to move as quickly as possible. the reason that topic is politically loaded is because democrats on capitol hill are still smarting over mitch mcconnell's decision to slow walk the replacement for justice antonin scalia who died in office the republicans then controlled the senate did not hold the confirmation hearing and did not allow president obama during the last year of his term to select a supreme court justice. that has huge ramifications. democrats still extraordinarily frustrated about that. the president here now saying he'd like to move as quickly as possible while that was happening, we also got some word from capitol hill that mitch mcconnell, the senate republican leader, has said he'd like to have these hearings and vote on the president's nominee some time this fall. that is presumably before the midterm elections before the democrats have the chance of taking over the senate

so it looks like republicans are going to push forward as quickly as they can to get this done the president's going to pick off of his list he's already got out there. republicans on the hill are signaling they're going to move quickly for a confirmation vote. republicans are sure to make the case that this is just a midterm election and not a presidential election so their argument against confirming a supreme court justice in a presidential election year would still hold, presumably >> you know the president was in a good mood, guys, because he was sitting with the president of portugal daen not mention that portugal has a trade deficit with this country. we buy a lot more from them than they buy from us it's a $2.3 billion deficit. >> we have a deficit with them or they have a deficit with us >> we import $3.5 billion. we export $1.1 million he did mention tariffs he says they're working quite well. >> he said they're working quite well you point it out exactly right

there's this witty banter particularly in a world cup week, the president talking about cristiano ronaldo, praising him and talking about his son -- presumably his son barron loving soccer his son plays on a soccer team for a local school here in the washington area. so they're getting in some friendly banter and not a lot of the tense moments we've seen between the president and other foreign leaders. >> yes despite the trade deficit which the president always goes after. eamon javers, thank you very much new development to tell you about in the battle between apple and samsung. that's coming up next.

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josh lipton in san francisco has a news alert on apple. hi, josh >> some new developments here on apple and samsung. they have agreed to drop and settle remaining claims related to this patent infringement suit you'll recall it was just last month a jury said samsung should pay $539 million to apple for copying smartphone features. according to this new filing here, they have agreed to drop and settle their remaining claims and counterclaims this was a long standing fight between these two. went back to 2011 when apple said samsung devices copied its products back to you. >> all right thanks so much, josh lipton. we want to take a check on is the markets it looks we're taking a close lower. down by about 1.07% or 80 point. the s&p 500 down by 0.6%

take a look at some of the components of the nasdaq semiconductors down by almost 2% right now. >> if not for energy, the market would be lower energy has remained strong those stocks are higher. you got a few things going on here including the fact we're heading toward the end of the quarter and second half of the year which some say lead to rebounds. >> financials flagging as well >> again >> again >> absolutely. >> 13th straight down day, i believe. >> exactly we mentioned the regionals before being really week we've got the larger participating in the selloff the yield curve has been narrowing throughout the past hour, day, days. it's now at about -- it's sub32 basis points, the spread >> it's hurt the financials the most but everybody needs to pay attention. if the fed keeps raising interest rates, what do they do if the long end doesn't go up? >> control over the short end

but not control on the long end. that's been the problem with the yield curve. >> and what are bond investors seeing on the horizon making them worried >> inflation inflation, i think, is what they're seeing >> yeah. >> recession maybe >> maybe maybe. >> we'll see thanks for watchi ining "power". >> "closing bell" starts right now. it's time for "the closing bell." i'm wilfred frost. analysts trying to understand the president's latest announcement on trade. i'm leslie picker in washington is corporate america being held hostage? congress is looking into that issue. we'll have all the details i'm bob pisani at the new york stock exchange. eight ipos expected after the bell i'll drill down the names you need to watch. and i'm kelly evans, automakers saying trump's tariff plans could raise car prices by $6 million the trade balance need