play electric cars jim is going to be right. the competition is just going to be ubiquitous, endless everywhere, so i think that playing the battery side might be better than picking any one particular oem especially the most indebted ones i think alb is a long term play for me. >> gentlemen it's been a pleasure jj thank you for joining us. that does it for the halftime report happy july 4th weekend -- "power lunch" starts right now. >> i'm michelle caruso-cabrera president trump taking a victory lap on the six month anniversary of the tax bill. is it having the effect that businesses investors had hoped we will go inside the numbers. the first half of the year end on high note. it's been a volatile year so far what's the next six months going to bring. rising risks our cnbc special report on how severe weather is impacting america's real estate. today a look at the challenges

in louisiana "power lunch" starts right now indeed it does welcome, everybody, to "power lunch. i'm tyler mathisen a nice rally on this final trading day of the month, the second quarter, and the first half of the year the dow and the s&p 500 posting their biggest one-day gains in more than three weeks putting the dow back into positive territory for june that means it joins the s&p 500 and nasdaq, all three on track now for their third straight monthly gains. nike driving those winnings. the stock hitting new all-time highs on the back of strong earnings adding more than 50 points to that dow all by itself more on nike straight ahead. plus oil up again. prices up 8% this week the latest rig counts are straight ahead michelle >> tyler the trump administration today celebrating the six month anniversary of the tax cuts eamon javers at the white house

with more. >> it was a celebratory mood here at the white house in the east room. celebrating the six month anniversary of the tax cuts. just before that, we saw the treasury department releasing a new 1040 form. this is going to be a postcard-sized tax form for a lot of taxpayers if you itemize, you might not get to use it. if you have anything complicated you might not get to use it. for those who used the 1040ez, you will be using this postcard sized firm it's double side you may have to fill out a couple extra schedules the point the president is making today, it's simplifying america's taxes and that's good for the economy. an increase in the federal deficit is consequence of the tax cuts i asked mark short about the increase in the federal deficit. short said look we are very concerned here at the white house about the federal deficit.

he said they will need congress to partner with them on cutting federal spending in order the eat into the deficit in the years coming forward he said they are going to continue to push spending cuts up on capitol hill to get that deficit under control. michelle in. >> yeah. i'll wait to see that when it comes to any members of congress, regardless of what side of the aisle they are on, eamon. >> they like to spend. >> how the markets reacted to those tax cuts seema mody is at the new york stock exchange and has been pouring over some of the numbers. >> a big driver of u.s. stocks and why a number of wall street's strategists are still bullish on this market is the reduction in the corporate tax rate look at this chart the stock market climbed about 16% in anticipation of the tax cut. then consolidated a bit once we got the final announce men overall, s&p 500 has gained 28% since president trump was elected. the tax cut seen as a big driver behind the acceleration in

buybacks a record 2.5 trillion dollars in share buybacks, dividends and m&a leading. the nasdaq up by over 8% in 2018 small businesses more domestically oriented given a boost by the lower tax rate and also boosted by the stronger dollar check out the consumer discretionary stocks led by netflix up 100%. trip adviser, under armour higher by 20% in 2018. big risk out there, how this trade dispute develops >> should main street and wall street be cheering or jeering thes president's tax cuts six months in? let's bring in two experts

dan, let me begin with you i assume you think that on balance, the tax cuts so far have been positive but im let me twist the question just a little bit to ask how much in percentage terms of the ultimate impact of the tax cuts have already filtered into the economy? is it 10%? is it 70%? i really don't know. >> i think it's just a tiny amount the immediate effect of the tax cut were things like bonuses and stock buybacks that was just a way of sort of distributing some of the gains to workers and to shareholders far more important in my mind for the long term health of the economy is to what extent would the lower corporate tax rate bleed to higher investment, higher productivity, wage growth in the future? i'm reasonably omt mystic on that and to what extent, this is underappreciated will it stop states like new

york and california and new jersey and illinois from imposing a burden on the national economy because of higher taxes in those states depressing economic activity i think it's good news but your earlier report about the dangers of higher federal spending, i think that worries me a lot and makes me concerned that the tax cut won't be very sustainable. >> i know you are also worried about the effects of trade policies that could undo some of those. >> exactly. >> austin, let me ask you a somewhat similar question. by the metrics that the president has been citing in terms of unemployment, economic growth, historic levels of employment in certain corners of the economy, how much of that good report card is traceable to the tax cuts that were put into place just six months ago? >> i don't -- virtually none, i think. i mean, i think i agree with our previous discussion that most of the impact of the tax cut has

yet to come. it's clear that the trend of employment and the trend in the unemployment raid has been going since 2011, 2012 so i don't think that part is from the taxes for sure, the one shot dividend payouts, share repurchases, brings some of the money back from overseas, some of those things are due to the tax cut. but you know, i think there are some good things in this tax bill there are a number of problematic things it's going to increase the deficit by -- and the debt by some trillion dollars. >> have the tax cuts helped growth or were we going to get 3%, 3.2% growth whether the tax cuts had been passed or not >> i mean. >> did the very fact that they were passed encourage businesses to invest more and consumers to spend more >> maybe i would just be a little

careful. the capital investment which would be the part to actually increase growth is up modestly most of what that money has gone to, share repurchases and payouts. what we want is for the investment to go up. i think the jury is still out on that the first quarter of gdp was measly, 2% growth. hopefully this next quarter gdp growth will be something higher. it's all in the context that it did blow up the deficit. >> we'll get to that. >> we are going to have to pay for it. >> don't you worry i think one of the big advantages a lot of people argued was that it made the united states more competitive against the rest of the world, dan, right. >> yeah, and that's the best part. >> dan, i want to pick up. normally this is where i seau tin austin austin, but now i'm going to say dan, dan, dan, republicans control three arms of government, and what are we getting? piles and piles of spending. it is a not supposed to go that way.

you are supposed to cut taxes and cut spending, reduce the size of government in the economy. look at these guys they can't control themselves. >> that's the very depressing part about all this. we had spending caps going back to the debt limit legislation in 2011 and those spending caps were broken in 2013 they were broken again in 2015 but then oh, republicans control everything so now we are going to finally get some spending restraints and fiscal discipline, tom entitlement reform. >> oh, yeah. >> we got none of that not only did we get no entitlement reform, the republicans in the house, the republicans in the senate, and the republicans in the white house all agreed to bust the spending caps not only to do more defense spending. okay, republicans like a big pentagon they also busted the spending caps to do more domestic spending to me this is an depressing in effect indicator whether or not the tax cuts as i said before can be sustained >> are you happy, austin i'm

finally complaining about the df sit spending >> look, i want the economy to grow faster. i think if you would look at the polling of what americans think about the tax bill, it's remarkably bad you have only 30, 35% of people have a positive view of the tax bill and i kind of think that's because they read it they know what's in it. >> i disagree. i think they haven't gotten there yet. they haven't filed taxes yet, they are going to get that postcard it's going to be easier. >> people in big corporations that they told us would increase wages and it absolutely has not. >> what are you talking about? look where unemployment is at this point >> i am talking about 2% of the money has gone to higher wages 98% has gone to share repurchases and dividend pay outs. >> don't a lot more people have jobs now as a result >> the job numbers are looking

better but i agree with austin. we had a positive trajectory to some extent before trump took office that positive trajectory has continued. i'm still worried about labor force participation both pre and post-trump entering the white house. in my mind it is the long term potential growth if this tax cut only increases our growth rate by .2 of 1% over time that means a lot. small tirchss in economic growth if sustained can make a big difference i don't worry about the class warfare stuff. by the way i will point out this tax bill is not a deficit increaser in the long run. starting in year ten it's actually a slight revenue increaser. that doesn't eliminate the fact we need to control spending. >> it's only true because of the accounting gimmick that it's scheduled the phase out. >> the reason it would be a revenue raiser and a lot of the

tax cuts do disappear. lets a see if that actually happens, correct austin. >> and they changed the definition of inflation. that's the big revenue raiser in the long run. >> they changed the definition of what is a revenue loser >> let's leave it there, gentlemen. we will come back and talk about this and other topics like social and medicare on another indication dan mitchell, us a tan goolsby. >> i'm sure we will get them solved >> easy. >> the you auto forria over the tax cuts has worn out and trade turmoil has sunk stocks in june. but a big rally is going on right now. the dow higher by 252 points what happens to stocks in the second half of the year? plus check out this mystery chart. it's up a 1,000% in the last o.ght years under its current ce but he's leaving can the new ceo keep the can the new ceo keep the momentumarch.

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bank of america merrill lynch releasing a report showing the second biggest equities outflow ever says we are close to a buy signal but echos of 1998 stocks rallying strong in the last trading day of june what's ahead for the second half let's bring in david cats and eric marshal gentlemen, good to have you here david, what do you think by the end of the second half of this year, are stocks gobbing to higher or lower? >> they are going to be higher

we think they can get up to the high single digits, low double digits we think the corporate tax cut is a windfall for companies and for the economy. the windfall we are concerned about is this tariff and the possible trade war that would be a lose/lose proposition. if that goes away and we come up with a resolution we think it's going to be a good market. >> when you say single digits to low double digits, you are talking about percentage gains. >> percentage gains, 9, 10, 11 pores. >> for the s&p 500. >> for the s&p 500 if we are right, obviously small caps are up about that already they would drift higher. but we think it's going to be a level playing field by the end of this year. >> eric, where are the major afternoons at the end of the year >> we think they will be higher. we think what's behind that is

the backdrop for corporate earnings we see continued improvement especially along enema of the small cap don't stick companies. we have had a pullback over the last couple of weeks we think that creates opportunities. if you know what you own and you focus in on individual company fundamentals for example, we follow hundreds of industrial companies. and of the ones that we follow, about a third of them have seen about 20% declines from their highs earlier this year. so among that group we think you can go in there right now and did some stock picking and find companies that really do have an opportunity to see meaningful fundamental improvement in earnings. >> i want specific names in a moment. >> in the second half of the year. >> do you put an asterisk on everything that if the trade situation worsens that that is going to dent your outlook >> no, i think one key principle that we have is know what you own. i think we can find opportunities where companies

are going to do well regardless of what happens with trade tensions, regardless of the shape of the yield curve but you can go out there and really find some values out there in this market >> you know, david, bank of america merrill lynch says in the recent week they had the second largest weekly outfloor from equities of all time. does that trouble you? i note at the same time, though, that the overall portion of people's portfolios, at least according to this bank of america story is near an all-time high. it's 61% how risque verse are investors really >> well, you have all-time dollar outflows but the market is also at all-time high levels. money is flowing out people are worried about the trade war. we think if the trade war dialogue pulls back or quiets down we think the fundamentals are good dividends are being increased, companies are buying back a lot

of stock and stocks are at 15.5 times earnings that's reasonable. to the other guest's comment there are good companies that are at 12 and 13 times earnings. all of those thing are bullish if you have a change in sentiment that money that's going kout of the market could flow back. it's not going out because there are structural problems with the mark or that there are better places to put money. >> are we going to look back and think this was the turning point for banks in terms of how they performed in 2018 that finally the bull case, all the factors that people were outlining at the beginning of the year, lighter regulation better economy, c car results, all of that is footbally coming to fruition? >> we hope so. we like the group. we think the valuations are great. we had a few false starts where they have done better and pulled back jp morgan is upping difficult denied by 40%. many others upping dividends to

competitive rates. it is one of the best environments in decades. yet they are selling at reasonable valuations. we think that six to 12 months from now we think this group is going to be a leader. >> eric, you promised specific names. what are they? >> one stock that we think has a lot of hidden value is brunswick. they are going to spin off their fitness business in the first part of next year which we think will unlock some value they also have -- they are in the marine business. they own boats they also have an outboard mercury engine, a new design that has come out that we think allows them to gain market share and continue to see margin expansion regardless of what happens in the macro economy we also like eagle materials, which we see a very strong backdrop for comment demand over the next couple of years we are seeing good pricing power in that business and we see strong earnings

outlook over the next 12 to 18 months and both of those stocks trade well below the market's multiple right here. >> guys thank you. thank you for the ideas. >> thanks a lot. >> david cats, and eric marshal. tensions are high between the u.s. and mexico right now. and this man could be the next ulthident of mexico. ulthident of mexico. wod at improve relations firs. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, o helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital. strain them even more? "power lunch" will be right back

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when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. mexicans vote for a new president on sunday.

and the likely winner is someone in the past is compared to hugo chavez his name is manuel lopez obrador. he goes by a nickname you saw on the left this is the third time he is running for president. this time around he softened his leftist rhetoric promised not to blow out the budget he wants to stop foreign investment in the oil sector the biggest campaign issue for him that's been very kufl, corruption the current president of mexico suffered a decline in his reputation when it was repealed his soap opera wife had a home built for her and financed by a contractor that received many government contracts the other major issue is lack of law and order. the number of murders has gone up year after year in dramatic fashion. the numbers we are showing you there are threw may.

2018 will be another record year for homicides. political violence, of particular note, from september of last year until now, there have been 120 political assassinations if you don't think you can bet your opponent, you kill them. >> staggering. >> and journalists have been killed there >> what does this halloween for the nafta negotiations >> when there were more globalists in the trump administration they would whisper in the journalist's ear that we need to get nafta done before the new president comes into power et cetera, et cetera now they are thinking it may work better. he is a nationalist. he is a strong man maybe he will appeal to trump more than the current mexican president does also, the u.s. wants mexico to raise its minimum wage to make it less competitive to so not as many jobs go south. >> and he would favor that >> he would favor that exactly. not understanding that of course it would make his workers less competitive and likely the lose

jobs as a result >> is he a sure bet? >> i mean, the polls would have to be so wrong -- >> we have heard that before >> but most polls have been close. >> this guy is ahead by 17 points, 20 points, 25 points, depending on which poll you look at. >> it's possible, but it's not probable, by any -- >> is it believed he will be different in terms of not being corrupt and cleaning up corruption from the top, as he says. >> she asks retorically. no >> i know. >> who -- i think what markets are more focused on is -- i think there is doubts about that i think the markets is focus on is he chavez or da silva citi group took a hit to earnings as a result of da silva's rise to power. he didn't seem to be as leftist as he appeared. >> and now is in jail. >> he was corrupt. that was a different issue.

>> separate those two. june let's talk about it. it's been a huge month for ipos. 28 of them, including domo today. what is behind the -- i have el domo the ipo surge, the dow in a rally. nike leading it. nike leading it. is the market focusing o with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. sneake nasdaq. rewrite tomorrow.

"power lunch" will be right back

hello, everyone. i'm sue herera here's your cnbc news update for in hour. president trump touting the economy at a white house event celebrating the six month anniversary of his tax cuts. before he started, though, he commented on the maryland newspaper attack that killed five >> this attack shocked the conscience of our nation and filled our hearts with grief journalists, like all americans, should be free from the fear of being violently attacked while doing their job. >> the end of an era for toys r

us the company officially closing its last remaining stores across the country after 70 years in business toys r us announced back in march that they would close after filing for bankruptcy last year a source telling cnbc that barrage has told the cleveland cavaliers he is declining his $35.6 million contract for next season to become a free agent. he will now decide if he is going to leave the cavs for the second time in eight years we'll keep you posted. that's the news update this hour back to you. >> thank you sue sue herera let's get a check on the rally stocks on track to end the monday, the quarter and the first half of the year on a high note the dow and s&p 500 seeing their biggest one day gains in more than three week. the dow up almost 1% right now s&p 500 up by 20 nasdaq higher by 43. transports are up by more than a% rider systems, norfolk southern, and union pacific lieding the way. nike stock hitting all-time highs on the back of its strong

earnings report adding 50 points to the dow by itself. >> let's drill down more on nike's big result. sira eisen joins us from the nyse. >> nike is the story today it is a competitor for the last two years the story has been adedoes dominating with the retro styles nike is now showing it has fought back and turned the tables nike posting growth in north america of 3%. first time we have seen growth in this market in a year showed that it's growing like crazy in china up 35% there keeping prices high, helping margins, average selling prices and in overallout look and nike raised its sales outlook to high single digits for the year that was a surprise. it says the slowdown it is seeing in the jordan brand this year is ending here's the key i think this.

executives sounding bull ib on the early signs of growth here in the u.s listen. >> much of what you saw in terms of q 4 in terms of the momentum that has been building, we will see that continue throughout the fiscal year. and i will put an exclamation point on the product as being a driving force beyond just executing some of the basics better across the board. >> just as a bonus, nike announced it is buying back $15 billion worth of stock the question how much higher can the stock go with a valuation like this? it's the highest it has been in years, 30 times next year's earnings analysts raising their price targets to 80, where the stock is trading right now about analysts making it clear this growth, this spurt we saw is just the beginning new products like the react -- this was the first sales period for that sneaker

the momentum is certainly there. >> did we know where nike is gaining sales from adidas had been hot on nike's trail for a long time and gaining market share is that reversing? >> that is reversing all indications are that it reversed over this quarter now, even though adidas had been adding share over the past year or so nike is still the dominant player in confused wear. interestingly there is also a battle playing out for apparel, which is growing faster than footwear in north america you saw that in nike that's one of the reasons, guys under armour shares have rebounded so strongly this year. a lot of people asked me, well, they are the big winner, up 60%. yes, they were a bigger loser though as well with the apparel trade coming back when everyone was calling the end of theately sewer market it bounced back strong and proven to be resilient and fashionable. louganis kpomping 19%. that helps under armour. they have had a number of hits

on its own the landscape is competitive both for confused wear and apparel. that's why investors were so encouraged by nike because some of their new innovation on higher priced sneakers were selling faster they expected this to be an inflection point but i guess it's happening faster than most were exempting given this 12% rise in the stock. >> sarah eisen we'll see you on the "closing bell." meantime on this last trading day of the month and quarter we want to take a closer look at the surge in ipos. 1 5 so far this year 28 in the month of june. now the last time we had that many in a month was three years ago. here to talk about what is driving it, cathy smith, principal of rent cans capital great to have you with us. >> thank you. >> what is behind this the markets have been in a sideways pattern this year >> ipos are on fire. these returns are the best for the first half that we have seen -- you have to go back to

2014 when alibaba win public we think a lot of the reason is that there is some pricing discipline in the market the average ipo is priced at 15% first-day pop. back in the internet double days the first day pops were 50 to 70%. the average ipo is being priced at the midpoint of the range it is all about the returns. returns are the fuel that drive the ipo issuance. >> what does this tell but the risk appetite in the market? in the s&p 500 we have seen technology leading the way the risk appetite seems to be there in the markets even if the mark are going sideways. does that bode well for the ipo market >> i think you have to look at yes the risk appetite certainly helps ipos then ipos generally are technology, health care kinds of growth companies and those have been a favored sector of this market as investors are looking for real growth, and sectors that maybe can withstand some of the turbulence that's happening with the tariff issues and things

labor that. >> when you hear ceos of young companies say i don't want to go public, it's not part of my plans, what is your reaction to that do you think they are being naive and ultimately they will come around? are they sincere about it or what >> i think a lot of that narrative relates to the amount of capital that's in the private markets. and these companies have been able to delay going public we know that doesn't always continue another thing is, these companies are afraid to take a discount for on their ipo down round from a private round now today we saw a company come public called domo it had a valuation of 5 hollywood. a year ago its private valuation was over $2 billion. the company priced last night is trading today up 23% or so-called domo i would like to rename it major

domo >> $2 billion in the private market, so they said and then when the rubber meets the road, in the public market, it is worth a quarter of that? >> a quarter of that. >> the total value >> the total value. >> what happened >> we have a lot of private companies that are disconnected in valuation from the public market and that is -- basically, when the public market doing what it's doing right now. >> there is no much money in the private market interest rates are low, they can't get a return think they they are going to get something better they are praying for unicorns. >> we are getting unicorns, maybe not the ubers but there are unicorns companies the ipo market is doing so well we would say that if you are a company -- look at this market, if you are delaying going public because you are trying to adjust for valuation take the hit, come on out and get public while the getting is good. >> the other way to ask tyler's question, the norwegian

sovereign wealth fund. ier this year asked for permission to buy private equity their finance minister said no they are only allowed to buy public equities. they said from when they started the fund to today the number of public equities in the entire world is down 50%. there were just fewer public equities in the world. why is that? >> but the returns on public equities have been phenomenal. >> yeah, but the question -- >> why wouldn't there be more? >> why aren't there more >> we are starting to see that it takes time for markets to adjust interest rates go up the amount of money that's in the private market is going to end upcontracting over time. we are in a cycle. >> are private equity companies that are taking businesses public a part of this phenomenon or not in other words they are trying to cash out? >> certainly what we are finding is that in the private equity area, which consists of reason isture and the leveraged buyout types of companies, they are invested in portfolios that have not been

fully liquidated in their normal time we are seeing companies that have been sitting in their portfolios for ten, 11, 12 years. we know that they have to get liquid and return money to their limited partners. >> right. >> what we are seeing is an acceptance of the reality that what the liquid market requires in terms of valuation compared to the i will liquid market which may have a much larger time frame and not seeing real liquid valuations. >> thank you. let's go to sue herera for a news alert on comcast. >> yes, comcast and some of its users reporting an outage of internet voice and video services the comcast cares line is saying they are currently experiencing a service interruption they are working to have this resolved as quickly as possible. a reminder, comcast is the parent company of cnbc back to you. >> thank you sue. let's get to the bond market rick santelli tracking the action at the cme.

>> ten year note yields did have a spat of buying but theyet flood back up in price, yield down in price. look at one week on tens down a basis point on the day, down five on theeck would. the way we came into the session. the tens minus two, everybody is talking about it you see the day chart. flattest going back to '07 hovering above 30 basis points i don't think it means what you used it. doesn't matter it's what investors think it means. the index doesn't look good. down quarter of a cent it's up on the week. the euro versus the dollar the euro is up on the week as well the eu summit gave it a tail wind as they came up with a quick agreement on immigration policy we have to see if it lasts but it's up a bit on the week as well coming up, our series on the threats to real estate from extreme weather. continues with a look at the impact a major storm had on

baton rouge. baton rouge. that is coming up on punchhing. that moving out of the friend zone, moving in together and getting two of everything thing. those fur babies preparing you for real babies thing. that one f buy one iphone 8 and get one iphone 8 on us. more for your thing. that's our thing. "power lunch."

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act now to take advantage of commission-free trades for 90 days, plus get up to an $800 cash bonus when you open and fund a new account. ♪ welcome back to "power lunch," time for your series rising risks which looks at the threats to real estate from extreme weather. today we look at baton rouge, louisiana. diana olick joins us. >> a storm flooded the area and caused billions of dollars in damage to both residential and commercial real estate baton rouge on the edge of the mississippi is now becoming a research hub for the study of rising water >> it was a freak storm. dumping over two feet of rain on the baton rouge area

rivers swelled flooding more than 100,000 homes. nearly $4 billion of residential property damage alone, according to louisiana economic development. justin aaron worth is ceo of the water institute of the gulf. >> what we are doing now is to be better prepared using science to better prepare ourselves for the next flood. >> ironically as the rain came down in 2016 a $60 million project in downtown barrage was going up a water research center called the water campus home to the just opened water institute of the gulf? there are ways to use the best available science to better prepare, to better respond, and to be able to get assets and people out of harm's way >> there is better build. >> and to better build. >> this as baton rouge is in the midst of a building boom the number of construction permits nearly doubled in the last five years according to the downtown development district. john davies is a local developer and ceo of baton rouge area

foundation, which is helping to fund the water campus. >> if we don't teal with the issue of water rise and the loss of land in south louisiana there will be no south louisiana. >> he claims the institute is already paying off not just for baton rouge, but for communities, infrastructure, and economies up and down the mississippi river. >> what we didn't realize would happen as a result of the floods that the water institute developed a methodology to be able to predict inland flooding. and they have the sole model to do that in the country. >> just next door, another unique weapon in the battle with water. a giant mississippi river simulator, the size of two basketball courts. >> we harnessed the power of science to figure out how can we build structures, build new wedlands and now barrier island that will help protect properties and infrastructure alone the coast so that when the next storm comes you have got

buffer. >> jeff was the chief resilience officer in new orleans before joining the water institute. >> the flooding that happened in baton rouge happened in areas that are more newly developed and areas that were built on what is probably what you would call the natural danage system of a community. >> it is a risk repeating itself in growing herb an centers anywhere near water. >> i think with hurricane harvey in houston and all the destruction you saw in puerto rico, and the threats that florida faced, and had near misses every time last summer, i think that really we can people up and you see more discussion about what we can do to prepare for what is happeninged to. >> in may the campus hosted its first international conference on water, drawing more than 200 experts. >> the science is taking place in baton rouge and we are exporting it around this state, across the gulf of mexico and all over the world. >> do you expect to see more of what we saw in baton rouge two years ago? >> we are preparing ourselves for the worst.

>> the plan for the water campus over the next decade is to rise across 35 acres and employ more than 4,000 researchers and scientists really it's to act as a global water cooler to not just rethink how we rebuild from storms but to reimagine how we live it is a fascinating place. >> this model, can they extrapolate it to other parts of the word. >> absolutely. the mississippi river is the heart of the u.s. economy. take it to another river in another part of the world and you can extrapolate that data we have learned here to over there, to paris, amsterdam, anywhere else. >> coming up we will reveal our mystery chart. up 50% this year ki a lot of dough for a lot of investors can the company keep delivering?

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time now to reveal this mystery chart. we told you stock is up nearly 2,000% in the eight-year tenure of its current ceo that come is, da, da, da, dominoes pizza the ceo is patrick doyle can the run continue without him? kate rogers is more. >> patrick doyle will step down from his role july 1st, being

replaced by rich allison the company has outside of the u.s. he leaves behind a lasting legacy some refer to him as a legend for the way he turned the pizza chain around he'll be remembered for expanding market share in the delivers based with digital and mobile ordering. analysts point out since 2010, the overall market share has increased from 9.7% to 16.4% in 2017 and 30% in 2017 where it was 20% in 2008 for delivery share he took over in march 2010 apple, amazon, netflix, google, it out performed all except for netflix. it goes for facebook once it

went public in 2012. allison has big shoes the fill >> there is an obvious question between that and netflix, right? >> yeah. >> we can see it there >> thank you >> so what's in store for dominoes as a new ceo takes the helm matt, great to have you with us. >> thank you >> you know, a lot of that stock performance under patrick doyle is not just doyle but the company's use of technology and the savings they really wrung out from that. i'm wondering are we at a point of diminishing returns for the amount the company can get out of further investments and technology >> they're committed to investing in technology still. they are combining the digital investment with value proposition and tremendous menu innovation 85% of their menu has come on since 2010 so they have done a tremendous amount of under the umbrella of

the 599 offering in that price point. they have combined that with the connectivity that digital allows them to have with their customer base so the personalized marketing i think is the key >> what's your favorite menu innovation >> the cinnamon twisted breadsticks. >> wicked high margin. >> they go well with pepperoni >> when you order from dominoes, if you have young kids, you always get the cinnamon sticks >> yes >> you always get them. >> i do have young kids, and i have those e-mails all over my personal e-mail. >> a lot of information being exchanged. >> it's a personal thing pizza is personal, man >> what is personalized market something what is dominoes doing that others don't do >> $20 in transactions people are getting the sodas and breadsticks and adding onto that. >> it is hard to get to a $20 price point.

>> $5.99 is the menu >> my very first job i was a waitress at pizza hut. i think pizza was more expensive then than now. >> i think you're right. >> it has gotten cheaper and cheaper. >> they have expanded the experience if you have drinks in your home, it is too enticing not to press yes when they offer you the two liter coca-cola as well. >> is this a star-driven company? when doyle leaves, is the new guy going to be as good? >> he certainly set the play book in motion and i think he's built a great team around him. you do invest in management. and i think the team is in place to continue this they have definitely have made the commitment to investing in digital, staying with the value proposition. and the analytics. they constantly revert back to an lit his that's what told they they could take that check further.

they will open 8,000 stores in the u.s. so the next leg is they think they can do more takeout and grow their store base in the u.s., which they haven't done for some time. >> if rich called you and said, hey, what should i do, what would be top of the list >> i think they're doing a lot of it. >> nothing bad everything is coming up roses for them >> you are seeing growth in the quick casual pizza segment it is a new avenue that could elevate the brand further and help the health aspects of the foods? >> who is in second place? >> it is pizza hut certainly other guys, papa john's, quizno's >> for $5.99 a regular piece

what is a personal size, a dollar >> you pick more than just two topping toppings it would be a higher demographic. coming up, two big anniversaries. the president celebrating six months since the tax cuts passed the company still doesn't turn a llof wi it soon we will celebrate the second hour of power lunch. greatness of an suv?

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here's what's on the menu. wall street ending second quarter with a bang. is in setup to a summer surge? we'll debate plus, crying in their beer constellation sales slumping have we stopped drinking wine, beer, and booze? details straight ahead. oil up 8% this week, up 20% this year. will the rebound put the economy over the barrel in the second half stick around to find out "power lunch" starts right now. welcome, everybody, to hour two of "power lunch," this last day of trading for june.

two hours until the "closing bell". we closed out the month. dow and s&p having their biggest one-day gain in three weeks. all three major averages back in the green for the month. but today's big gains are not enough to wipe out losses for this week. the dow on track for a third week of declines s&p and nasdaq down for the second consecutive week despite the gains that you see to my left nike, just doing it. all-time highs strong earnings there. financials, energy, materials, those are the leading s&p 500 sectors. michel michelle >> thank you, taylor i'm michelle caruso-cabrera. our parent comcast hit with a nationwide outage impacting internet and voice it is working to restore services as soon as possible bitcoin falling below 6,000.

cryptocurrency now down 50% this year california passing the nation's data privacy law. takes even in 2020 gives consumers the right to know what information companies like facebook and google are collecting, why they're collecting it, and who they are sharing it with. consumers will have the option of barring tech companies from selling their data melissa? straight to the rally. tracking the action at the new york stock exchange. >> dow 240 all major sectors higher on this last day of the quarter led by foremans results of the fed stress test allowed banks to put their record 13-day losing streak behind them. but can the banks continue to rally in a flattening curve? that's what traders here want to know you were talking about energy? crude at a three and a half year high, close to breaking $80 a barrel earnings a big story as well

nike surging to an all-time high but the exact opposite for constellation brands process disappointed on sales. down 4.5%. for the year, nasdaq still a big winner, another sign of tech's dominant role. the dow is down 1% turning overseas, significant weakness in emerging markets which was poised to be a winning trade. the stronger dollar changing that story in a big way. let's also come under pressure bitcoin, we were just talking about it now breaking below 6,000 the cme futures contract expiration as the main catalyst. back to you. >> thank you very much financials rallying on the back of the latest stress test. how effective are these tests? and are regulators maybe missing something? leslie joins us. >> hey, tyler. we have come a long way since the financial crisis with almost

all the banks passing the fed stress test yesterday even though this year's exams were widely known to be the toughest yet. does that make us any safer, more protected from another financial crisis what about the institutions that are not under the supervision of the federal reserve like the shadow banking industry or large asset managers like vanguard and black rock on "squawk box" today they said they aren't focusing enough on nonbanking products like etfs. >> they promise you instantaneo instantaneously. there is a sphaeupblg shock to the market they find that they cannot get liquidity. what do they do? they sell something else i have seen it over and over again. as financial contagions spread, you get the risk of economic contagion. >> so far the trump administration has taken a deregulatory tone when it comes to nonbanks. the treasury changed its process in november for designating

non-bank institutions as systemically important it's a label that a lot of firms have been fighting and of course what he was talking about is something that comes up again and again following the xiv blowout, tracking a short volatility trade, a small example of what could happen on a larger scale if we start to see some rumblings in the etf, etm world. >> thank you very much less than two hours before we wrap up trading for the first half a wild ride for investors so far this year. what will the second half look like earnings season just around the corner will keep fueling the bulls. welcome, everybody let me begin with you. what do you see in the next orders that we begin on monday basically and what do you see for the rest of the year in

bumpy short-term but ending on a high what >> if you like at the s&p 500 it is still below where it was on an average price in january. we have had pd compression due to the rise of fed funds and crossing over to a positive real rate, offsetting this strong tax-fueled earnings growth as we look at the back half, i expect the dollar where it is now to actually impact second half estimates we are seeing a tightening of global dollar liquidity affecting the markets. china could continue trade is going to be more volatile issue in all scenarios than it was before and then i am concerned that these financials relative to utilities have plunged it drags the 10-year down. you wonder how long it can stay

up when central banks have no appetite for tightening. >> it sounds like you agree a little bit you say while e at the end of the last year you had glass half full maybe you tphreuptd and now it's half empty why? >> i wouldn't say bearish but cautious is a good way to talk about it barry hit some of the issues the first is the fed we think jerome powell has been a little bit more resolute than some of his predecessors doesn't seem like he's backing off. draghi didn't sound like he was backing off in the face of volatility in italy. central banks will continue the pressure and trade and tariffs in this interim period we've had since first quarter earnings as we wait for second quarter earnings, the market will get battered by trade and tariffs

talks. i don't think we have seen the highest for the year we are not expecting a ton of upset. i think we might get back to where we ended i would describe the market as two steps forward, one step back there is good underlying fundamental support but still a lot of weight sitting on top of the market >> market alert for you, barry the yield curve now at a new low back to 2007, 31 basis points between the two-and ten-year notes. you talked about that a little bit. is that what is the problem with the foremans what is that telling us about the overall economy and potentially the market >> certainly it affects financials and cost of funds has gone up. it is an overcapitalized industry they are going to return a lot of cap will tal. that should provide some support for them staples, health care, utility

trade which benefits from the current flattening and inverting is back to the lows you had in 2000 and the '80s when we maxed out the ten-year yield to me that's where there might be out-of-favor value where you assume the fed will continue to phiten and eventufigh tighten and make a mistake. >> do you see the potential of a bear market on the horizon 2019 or 2020, just in time for the election >> is that question for me >> david, go ahead and take it barry, i'll come back to you >> i think we see the potential for a recession if we look out to 2020 or 2021. things have been so strong naturally as the fed and other central banks begin to pull back, that's going to happen the real question for investors, we know the stock market is a discounting instrument what is the window, the horizon when the stock market actually

starts pricing that in i don't know about a bear market, but we are much more worried about the stock market the later we get into 2019 and 2020 >> quick final thought, barry, if we could. >> i don't disagree. i think 2020 is the earliest possible recession you could have a bear market by early 2020 as the fed proceeds in raising real rates and there's shock value to that. >> thank you very much we appreciate that clear talk. thanks again, guys >> phil has a look at general motors >> michelle, g.m., like all the automakers, comments with the commerce department as it conducts its investigation into whether or not tariffs by foreign countries are detrimental to the national security of the united states because it hurts the auto industry well, g.m. in a filing with the commerce department a few minutes ago weighing in with its belief that overly broads and

steep import tariffs undermine our ability to compete we're not going to read all the statement. but like other automakers, g.m. is saying if you put on these 20 or 25% tariffs, which the president said he is considering, that it will hurt not only general motors but the industry overall and lead to higher prices in the showroom. back to you. >> thanks very much, phil la bow. a six-month anniversary of the president's tax cuts, something he says will create economic benefits for years to come. >> every single democrat in the house and senate, that's right, every single one voted against lower taxes for the hard working americans. and you see what's happened. it's turned out to be something very special the tax cuts and jobs act slashed income taxes all across the board. >> so will the tax cuts and new supreme court pick for the president help the republicans as they gear up for the midterm

elections and what role trade? joining us is hugh hewitt on msnbc. hi, hugh >> hello how are you? >> good. what do you think about the tax cuts and whether or not they are going to be good for republicans? we had a guest on earlier who says they're very unpopular. consider this card they put out, much smaller card they put out, to be much smaller and a gimmick. >> the proof is in the pudding it had its 17-year high. it's dipped a little bit in june i think we will see 4% in the second quarter maybe a little bit under or a little bit over. the unemployment dropping to 3.8% headed down to 3.6% labor shortage leads to rising wages. you can't trick people on what they actually get in their paycheck you can't fool people to believe

times are rough when times are great. the boom is real i think it's going to last as the deregulatory effects of the first year of the trump administration kick in even more and more broadly, that economy is going to accelerate then you motivate the base with the supreme court justice making a solid majority of five for the first time in my lifetime who are originalists that is exciting for a political analyst like me. i teach econ law >> are things so good, hugh, that the base will be willing to pay more for their chevy blazer than before? i mean, we were just reporting on g.m. said it would impact prices they said prices will go out g.m.'s presence in the u.s. and abroad will be smaller will that go over well at some point even if you're getting more mope in your paycheck, you don't want to pay more for your car. >> i worry that some of the

trade policies are misguided in economic terms i worry about soybean producers in iowa and north dakota we ought to have kevin cramer become a senator and heidi heitcamp ought to lose that. that is six, ten months down the road, maybe a year and a half out. supreme court vacancy is right here, right now. the hearings will be in august, maybe september at the latest. if he nominates, say, for example, raymond kethledge from michigan, fisherman, 51 years old, michigan university law grad, that's my alma mater if he nominates someone from the center of the country and originalist, his base, his evangelical base, his economic base, his deregulatory base, his anti-government bureaucracy base will march to the polls. president trump is delivering what he promised. >> hugh hewitt, good to have you on thank you. >> thank you. >> coming up, it's been eight

years since tesla's ipo. a lot has changed, but one critical thing has not what it means for investors going forward. plus, he has until midnight to decide. where will lebron james go or will he stay what's all the noise in the hamptons about helicopter companies trying to helicopta bachelor.s trying to and that's how he intended to keep it. then he met the love of his life. who came with a three foot, two inch bonus. airborne every way we look out for those we love is an act of mutuality. we can help with the financial ones. learn more or find an advisor at massmutual.com

welcome back to "power lunch. today marks the eight-year anniversary of tesla's ipo a lot has changed since then, but one thing has not. the company still hasn't turned a profit >> we have just an incredibly positive outcome from some of the smartest investors in the world. ♪ >> welcome, everyone to model 3

unveil we have an amazing product to show you don't >> the key to tesla's program here in kauai, this huge solar farm generating electricity that will be stored in 272 tesla power packs. >> what goes into making model 3. frankly, we're going to be in production hell. >> welcome. >> welcome >> going to tell you about everything that this truck can do it blows my mind i think it will blow yours >> where we are right now, that will ultimately produce a half million model 3s and 100,000 combined vehicles. >> so with shares of tesla trading in the $350 range, where are the hurdles to go even higher elon musk said it will happen.

and again the question is can it be sustained adding gigafactories triading china and elsewhere around the world and expanding the product line guys, the level of complexity that will be coming at elon musk and his team the next several years is immense, adding factories, new products. all the time people will be saying, yes, but are you profitable and are you hitting the profit margins you have forecast >> like we have been asking for a long time now. for more on tesla and the power of disruption over profits, head over to cnbc.com so what will the next eight years bring for the stock? we have jamie from consumer edge research thank you for being with us. when we are thinking about the next eight years and sustained profitability, achieving scale in the model 3 reuters came out with an article

today having interviews line workers at the fremont factory saying according to calculations, 4,200 cars that, would be the run rate per week what are you seeing? what are your data points? >> yeah. well, first of all, thanks for having me. good afternoon we were at the gigafactory about a month ago, six weeks ago when we were looking at what they were doing, the biggest bottleneck we could understand from management is with respect to zone 2 of their module assembly without getting into the minutia, the bottom line is they were making significant progress at that point in time, faster than we had thought they would be at that point and that's really when we first started thinking about 5,000 as possible i think prior to elon tweeting and being more public at the shareholders meeting, many investors thought 5,000 was more of an end of third quarter type of event the fact that we are within striking distance is notable, getting them back on pace.

the biggest point is not so much 5,000. it is the pathway to profitability. so we think that is the preimminent catalyst between the two. >> 5,000 or not is like who shot j.r. ewing of the modern day is it going to do it or not? we are waiting and waiting and waiting. if they do not make this number, what will happen with the stock? >> i think -- look, i don't think if they make the number, by the way, all of a sudden the bulls have been vindicated and the bears are going to go away if they miss it, it will be a turbulent month or so until we get more details from the second quarter results in early august. we will get a lot more clarity on the progression from a margin and cash flow progression. and i think it will be more positive than the bears are anticipating so, you know, it will live to fight another day. i don't think this puts the story to bed either from the bear versus bull debate but profitability sometime in the next quarter or two is what

they've said at 5,000 plus vehicles produced per week, if they're not getting close to that profitability guidance, that's a bigger issue. we'll have to deal with it at that point >> what's your price card? see if they are 385. how soon >> look, i think based on what we're seeing in the trajectory, we think they will be profitable later this year in a nongap basis, we think he will be testing the high of 389 within the next two quarters. so it is awe next 12 months price target given the performance we have had the last few weeks with anticipation around 5,000, we think there is enough momentum >> do you think, jamie, that profitability target the next couple of quarters, that that will be a sustained one, that the company will remain profitable as musk was tweeting what features do you want to see on a pickup truck. they are rapidly looking to expand the number of vehicles they will produce which presumably will take a lot more money to build out lines, maybe

even start a new factory. >> interesting question. what you are also getting at is the need for capital raised. this year, early next year is predicated on the success of the model 3. taking a step back, many smart investors that have a much longer term view than the next six months love that elon is an innovator and loves to invest in that innovation. look, we are achieving profitability, we have significant -- in fact, significantly more demand than any other auto manufacturer has ever unearthed in terms of reservations for a vehicle, i think they would be more than willing to support him in his endeavors on the model y, if it be a pickup truck, certainly continued innovation on the semi truck, factories we think he will probably have to build in and around china to support that market over time so make no mistake, i think there will be a capital raised moment there depending how the cadence goes,

you're right what they will have to show at some point is they are profitable at 5,000 plus per week and i think we will get that glimpse in the next couple of quarters. >> jamie, thank you, consumer edge bottoms not up shares of stoconstellation brans falling 5% is there a lager problem -- larger problem in the industry we take a look

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nice rally to close out the month, the quarter, and the first half the dow up 1%. energy, material, industrials, the best performing sector financials rallying on the back of the latest stress test we have been telling you about. wells fargo leading the way. it's up 4% right now over to you. all righty, thank you. crude keeps climbing up 20% this year could it reach $80 a barrel? that one is next come hell or high water, hamptons residence are fed up ge. helicopter nois weo out to the hamptons. weo out to the hamptons. that's the way

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annapolis, jarrod ramos, the 38-year-old accused of killing five people at the "capital gazette" newspaper, is being held without bail. >> in assessing the evidence in this case, we brought to the judge's attention the evidence that suggested a coordinated attack, the barricading of a back door, and the use of a tactical approach in hunting down and shooting the innocent victims in this case >> the israeli army said it delivered close to 60 tons of aid to displaced syrians fleeing violence in their country. it included food, clothes, medicine and medical equipment. pope francis presiding over mass with 14 new cardinals from around the world the group of newly appointed cardinals were elevated in a formal ceremony last night you are up to date that's the news update this hour melissa, i will send it back to you. >> thank you, sue herrera. right now we are seeing a rally

in the markets dow is up more than 200 points that's nearly 1% there nasdaq up 10.6%. nike, hitting an all time high financials up for the second day in a row starting a winning streak after 13 straight down days after the bank stress tests released after the close in yesterday's session. tyler? crude oil up about 1% trading above $70 a barrel at $74.09. >> it's continue to go rise after the opec meeting this week it's up 20% this year. 80 bucks is that a possibility per barrel let's bring in rvc capital markets and contributor. hello. >> hello. >> we have the opec meeting. >> yes >> and then the state department says we are going to try to equips everybody in the world to buy zero barrels of iranian crude. meaning all of that oil would

come off the market. >> it is the announcement they want to take iran out of the market and saudis coming out before saying we will you potentially a million barrels in the market. the concern is if saudi puts a million barrels on the market and we take 2 million off iran, is there a gap that can't be filled. >> i can do the math they still close short. >> the saudis will say we have 2 million spare capacity we have never seen the saudis produce above 11 given the potential call on saudi barrels, there is question marks how fast they can ramp up production to those levels. >> if we straoeu to take all iranian production off the market, how successful do you think that will be >> obama was looking to take them down by about a million it got to 1.2 million. they were never aiming to take iran out of the market i think you will exceed what obama got in the end

you are probably looking at well over a million you may not get 2.5 million but a 1.5 but it would make the market tight. >> how high do you go? >> there are a couple key factors. the thing to watch is what are the other supplied disruptions venezuela continues to drop very fast that's why it is a very risky strategy venezuela, year in, year out, a million barrels. you have 450,000 off of libya. we can't afford any more supply disruptions if we are going to be that disruptive >> at the same time, the u.s. keeps producing like gang busters, right i keep seeing the numbers go up and up and up. >> here's the question how much can we export >> can we move it. >> it is a victim of its own success. we have pipelines full at this point. we have a shortage of truck drivers. so a couple of years ago, no one would have thought the u.s. government would have to be

calling saudi arabia and say give us a million barrels. now we are having to go to the saudis the russians are helping us with putting more barrels on the market is there really a question of can traditional producers pony up enough barrels? >> $80 is a layup in your view >> if we're going to go through with this strategy if we are clearly intent on taking a million and a half, 2 million barrels off the market, that's what we have to reconcile. >> are we hearing 100 anywhere >> is there another shoot off in terms of supply? if we have more supply problems, we have to watch what the iranian response is. they're not happy with the sanctions or with the saudis saying they will put a million perils on the market i think it is a political geo story that could move the stories higher if they potentially pull out of the nonproliferation treaty, they may not necessarily impact

barrels but could add to the market price because of fear factor. >> back to sue herrera now details on the outage involving television and internet comcast >> comcast has just put a statement and it says, quote, one of comcast's large backbone network providers had a fiber cut that we believe is also impacting other providers. it is currently affecting our business and residential internet, video, and voice customers. we apologize and we are working to get services restored as soon as possible. a reminder that comcast is indeed the parent company of this network obviously it's an ongoing situation, michelle, and we will continue to update you as we get more information. >> a cut fiber you have to wonder -- >> we have no more details on how that happened. >> i'm not sure they know yet how it happened. but they are certainly investigating it it could be any number of

things a construction accident, something along those lines, but we don't know yet. we are awaiting that information. >> there were guys out in front of my house today. it could have been them. >> you never know. >> i'm a customer. >> only supposed to be the green wire, not the red wire >> thanks, sue. >> you got it. the helicopter wars in the hamptons are already in full swing. robert frank, who else, is live at the east hampton airport with more robert, can you hear me with all of that noise? >> reporter: i can, michelle luckily, it's in the aircraft not a helicopter it is famous for its pristine beaches and peace and quiet. but now the boom in air taxis from helicopters has made it a virtual battle zone from manhattan. last year there were 6,000 takeoffs and landings from this little airport it worked out to be in a busy

day in august about 100 per day. for the people who paid $700 to $800 per seat, that means two or three extra hours on the beach instead of sitting in traffic. for people all throughout long island, they say they have had enough of the noise. >> it's very loud. it's stressful it's distracting you could be on the phone, you could be reading, you could be having a meal with friends, you could be sitting on the deck just trying to relax oren joy the peace and quiet of your home, which you should be entitled to do and it's constantly disrupted. and sometimes they're only separated by a minute or two >> now, blade, the leader in this industry says, look, they're solving the problem. they're getting quieter aircraft and diversifying so they don't just rely on one airport they are land something montauk

and blanc island many of the residents complain that bringing these people on the air taxis which are costing less and less, has brought a new type of crowd that are just here for the day, here to party, and they don't have the same respect for the community. and then you have the super rich who have their own helicopters and jets, and they worry if this airport shuts down, which they are threatening to do in three years unless this gets solved, their own private helicopters and their own private flights could be in jeopardy this could be one of the busiest afternoons of the year once markets close, i'm told we could have 20 choppers landing per hour so every three minutes there will be a chopper coming in and taking off and you can imagine if you're out here and you live near here and you're trying to enjoy your friday afternoon, that could get pretty loud. guys, back to you. >> i'll bet it can amazing stuff. thanks, robert. coming up, battered beer

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brands swimming downward 5% following an earnings miss our next guess, $255 price target carolyn leafy is a beverage analyst. welcome back we just saw you a couple days ago, didn't we >> indeed. we were talking about carbon dioxide. >> for sure. goodness gracious. it's nice to have you back to talk about beverages as opposed to just carbon dioxide, a constituent. >> exactly. >> so they missed, and they missed rather significantly. what went wrong? >> mostly what went wrong is their marketing spending was way up and there were other costs coming from transports which we have been talking about quite a long time. year over year is up a lot wine, they had great cross pressure that's a third of their sales. overall, i think the cost of growth is going up, and that has to do with fragmentation of

demand and consumers wanting to try lots of different things it is costing more and more to support the big brands >> is the marketing spend something that endures, or was it seasonal? was it mostly related to the corona ads that i see? what >> right so year over year they increased beer marketing 100 basis points as a percent of beer sales they had guided to doing that. they planned to do it again in the second quarter first quarter, going into the second and they say they can drop it off substantially in the back half i think the challenge is to see what happens to sales in the back half if they're not spending at this increasing level. up as a percent of sales year over year. that's going to be the challenge. but they are the best beer company in america right now no question about it >> your most recent note, caroline, one of your sources said there could be a 2% to 3% price hike coming. is that a wise thing to do given

the sort of flat sales >> it's interesting because today they made a strong point of saying they're only looking to do one to two points of pricing. they did have 2.4% price mix in the quarter but one time excise relief and i agree with the question in the sense that, no, this would not be the best time to take pricing. the problem is there is input cost pressure. so that's the balance they have to maintain. >> where is that coming from, input pressure >> there is aluminum, transport. which is not exactly input but a cost of doing business and it had negative foreign exchange head winds from the peso because they do everything in mexico. that will reverse on the back half, which is helpful there is input cost pressure in wine as well and grapes. it is the first time we heard them talk about higher grape costs in a long time

>> what is their hottest product right now? >> the hottest product actually is corona familiar, which is a more authentic version of corona it is flying off the shelves because of new packaging their corona premium, the one which is a low carb beer is doing extremely well and corona extra, very strong. and the basic modelo very strong up 10% in sales. still guiding that growth for the full year. >> all right let's go have a beer, caroline how about that >> let's do it i'm ready. >> i can tell. me too have a good weekends. >> taou. you too. turning to the world of basketball what will lebron james do? will he stay with the cavs or go to a different team? he has until midnight to decide. eric so midnight. let's clarify two different deadlines. one was tonight at midnight

where he had to tell cleveland whether he would stay in the current contract for next year cnbc has learned he has decided not to do that deal. he will enter free agency. so he has another deadline now that is the beginning starting midnight sunday night into monday after that point he can say here's where i'm going to go two different things it gets complicated. now that he can side with any team, it includes the cavaliers. in fact, it's more likely he will sign with cleveland because he opted out of this contract. so it is very complicated the way the nba -- they make their rules difficult for a normal fan to understand. if he had re-upped with cleveland directly, it would have been easier to trade him to a team he wanted to go basically this means he is not going to get traded. he will sign directly with the team with which he wants to stay. >> what is the financial impact if he does one versus the other? >> short-term, no impact he will basically get $34

million one way or the other he has made a billion dollars in endorsements guaranteed already and with his nike deal going forward. he has made $200 million in his career so far. despate all of this stress, if you were you or me and we have to make this decision, you might be jumping off a cliff. >> it is not to walk away from a $35 million contract. >> he's not walking away from it without knowing where he's going. >> but it is great to be in that decision >> he's literally jumping off a cliff. that's a billion dollar body he is putting at risk. >> is the presumption that he or his agency -- >> he has a whole team of guys. >> he had a whole team they have already done whatever deal is going to be done >> it's possible but nobody is aware of that. it has not been reported anywhere no one seems to know. >> this has been a pretty leak-proof process until today when it starts to come out

>> he told the cavs i'm going to tell you right now but he is staying in anguila they are all huddling, jumping off cliffs and making their decision presumably we will know monday morning or tuesday what that decision tuesday what that decision is he controls the fate >> do we assume, also, that he is talking to other players if he has another destination in mind he's talking to other players to say, can we all go to l.a. together >> let's all go to wherever. >> like "power lunch," you can't do the show yourself >> we collude. >> the super team. >> thank you, exciting weekend can't wait coming up, stocks to watch for the second let's begin.

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time for the final trading nation of the first half of the year >> getting misty >> i can't wait.

>> the market gearing up for the second half of 2018, and with asking, what stocks will break out in the second half let's get picks. dina sanchez, and michael with the baptist group and hightower advisers great to have you here exciting on a friday in the summer michael, what stocks are you watching for the second half >> we're watching intel. we believe this recent pullback caused by trade war fears, caused by talks between the u.s. and china, but we'll get back to fundamentals on the company. they have a deep product pipeline driving earnings growth let's face it. every product in every technological aspect of our world that we all own, semiconductors drive it. we believe until someone figures out something that's beginning to change that, intel is a leader of the semiconductor space, and we think it's going to continue for a long time. >> you're not worried about the change in ceo? >> i'm not worried >> okay. >> they figured it out before and will again >> okay. what are you looking for in the second half?

>> looking for rotation into defensive sectors like staples and utilities. they are particularly cheap given the fact there's strong fundamentals, strong revenues, and the pause in interest rates makes them look attractive right now. when you are looking into a space like that that's beaten down, absolutely destroyed in this most recent rally, you got to look for the better performers, looking at epselon with great revenues and a mix of regulated and nonregulated utilities. it's a good attractive, but they have been strong throughout this weakness in eutilitieutilities. poised to do better as the swing goes in their favor. >> a lot pay nice yields, ladies and gentlemen, thank you so much >> thank you >> for more, go to tradingnation.cnbc.com and follow us on twitter at tradingnation. don't move because "check please" is next. and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> traders shouldn't let their

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and iot sensors down here, for precise monitoring of irrigation. it's a smart way to help increase yields, all before the rest of us get out of bed. feel that? that's the beat of 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. final day of the quarter, final day of the first half of 2018, we're watching the financials, particularly going into the close after, we saw the

financials surge in the session, trading higher today, almost at the intraday session lows, but performing in line with the markets which, you nknow, for people who are looking for some sort of catalyst, doesn't seem like this is it. we'll watch how they close important to see if they are able to close not on the session lows and actually hold on to the gains today. >> yield curve is at the flattest since 2007. >> yeah. >> and we departmeidn't mentionu the peso hammered today as the government tried to support it it's gotten pummelled. weeks ago, there was optimism they got the imf deal, et cetera, et cetera, and now there's questions whether the money is there to defend the peso and whether or not the new president really has the fortitude to stick with what he needs to do. >> there is financial skuand thn there's financial security

one form is you don't have to work anymore lebron james has security of another type, walking away from a $35 million contract knowing that there's another one right around the corner at that level, maybe even more. he is not going to opt into his deal with the cleveland cavaliers. we'll wait to see what happens >> that's right. thank you for watching "power," and "closing bell" starts next happy friday, everyone, time for the closing bell, i'm wilfred frost. the ceo of deutsche bank, only bank to fail the fed stress test speaks out in a rare and exclusive interview. >> i'm phil lebeau in chicago, eight years since tesla's ipo, the stock rocketed higher, there's still a question on the mind of investors. >> reporter: we're in berkley, california, marijuana retailers in the state are scrambling to offload inventory after a law change over the weekend. the winners and losers over th