heads into next week. >> obviously it's a market driven by every headline out there. but volatility is getting sucked out. that's a good thing going into the weekend. buy it at the end of the day. >> guys, you have a great weekend. erin, it's great to see you again. have a great weekend, everybody. that does is for "the halftime report." "power lunch" begins right now. >> i'm melissa lee, the trade war is on. president trump firing the first shot china wasting no time firing back, accusing the u.s. of launching the biggest trade war in history the fallout for american business straight ahead. plus payrolls rise but the unemployment rate back at 4% and wage growth missing the mark are trade fears taking a fight out of the recovery. >> and a must-see mansion. this place in charleston is sure to help you shed the trade war blues you might be having today. a little southern hospitality on a friday here on "power lunch. ♪ i'm gonna live where the gree grass grows ♪ ♪ watching my corn pop up in

rows ♪ >> welcome, everybody, to "power lunch. i'm tyler mathisen upbeat jobs report helping the trade fears. all on track to break weekly losing streaks the dow has been down for the past three weeks wall street's so-called fear index, the vix, hitting a two-week low crude oil erasing an early loss and going higher now over to the rookie who joins us today. >> i thought i was tyler mathisen i guess it makes me bill griffeth and here's what else is coming up this hour. sonos has filed for an ipo the high-end smart speaker maker is on track to make a billion dollars in revenue this year elsewhere, elon musk is offering to send a group of his spacex and boring company engineers to thailand to help in the rescue efforts of those 12 boys and their soccer coach, who as you

know is trapped in a flooded cave there we'll head live to thailand and get the latest. and shares of biogen soaring today. they are announced positive results of a phase two trial of its alzheimer's drug we'll talk to a researcher coming up. much more ahead. we begin with a full-blown trade war between the u.s. and china. this morning 25% tariffs on $34 billion of chinese goods taking effect, and president trump promising even more. diana olick in d.c. with that but let's begin in beijing and the fallout there. >> reporter: well, chinese authorities say that beijing had no choice but to fend off what it has described as the largest trade war in economic history. the foreign ministry confirmed today that china has launched its retaliatory tariffs immediately after the u.s.' move customs officials are already collecting duties on 545 items

worth $34 billion matching the amount subject to u.s. tariffs the targeted products include crops like soybeans and cars tonight the commerce ministry said they're taking it one step further and they have brought the case to the wto. now, the chinese move is just escalating what many people here fear is going to become a protracted trade war president xi jinping doesn't look as though he's backing down and president trump also looked as though he's doubling down on his stance during a visit in montana when he threatened tariffs that could cover all $500 billion of goods imported from china now, people here are worried about what happens next. both countries have tariffs in the pipeline that could cover $16 billion worth of goods, but beyond that companies are asking how long is this trade war going to last? exactly how is it all going to be resolved? that uncertainty has been weighing on the minds of many

companies who say that it's just really difficult to make decisions. earlier tonight i was speaking with the amcham president here and he said that companies are really, really anxious right now about what is going to happen next in particular what's on people's minds is nontariff pabarriers they're worried about getting squeezed by the chinese with other methods that have really absolutely nothing to do with tariffs, but still to them, very, very scary guys. >> we appreciate you staying up late for us. now let's head to diana in washington with more on what tariffs took effect and what could be the next steps in this budding trade war. diana. >> well, both sides are clearly trying to hit each other where it hurts the trump administration's 25% tariffs is aimed at china's biggest exports, much of it in

manufacturing. 818 in all used in industries like aerospace, i.t., robotics and automobiles. the list does not include consumer heavy products like cell phones and tvs. those were actually removed. president trump said yesterday on his way to that rally in montana that there would be another $16 billion in tariffs on 284 additional chinese-made goods in two weeks these products are seen as benefitting from china's industrial policies. mr. trump also said he is considering $500 billion in additional tariffs the u.s. has now imposed tariffs on its top five trading partners and all but japan have launched retaliatory tariffs. back to you guys. >> diana, thank you. well, some of the first places you'll see the impact of this escalating trade war will be u.s. ports nearly no port in the united states sees more shipments from china than the port of long beach in california. let's bring in mario, the executive director of the port of long beach. mario, great to have you with us

you know what's so interesting about the whole progression of how this trade war escalated, trade tiff, trade dispute, whatever you want to call it, is that nobody thought that we would get this far everybody thought something would be done along the way to alleviate it and prevent the tariffs from going into effect here we are and president trump is threatening another $500 billion of goods to be taxed so if this happens, mario, what could the impact be on the port of long beach? >> well, thank you, melissa, and good afternoon well, actually if we go to a maximized implementation of these tariffs, we could have significant impacts. so right now the concern is there's no immediate impacts we certainly have market uncertainty, but long term let's say for the remainder of this year, six months down the line, you could have an impact of 6.2% here at the port of long beach, the nation's largest port complex here. >> when you say 6.2%, you mean

that the trade volume would be down 6.2%. you're having a very good year there this year so far >> well, i think the irony here is as you say we're having a great year we're having historical marks in terms of our cargo movement. we have a great domestic economy and a great global economy to the tune of 4.8% growth for 2017 on the global economy. so it has come at an unfortunate time so in terms of immediate impacts right now because of that growth, we may not feel those impacts in the short term, but certainly in the long term there's great concern. >> what do you do in the meantime then? if you're going to see that kind of a decline, do you change what you to logistically or are you just going to take it? >> well, for the port of long beach, we're going to continue in the same manner that historically we continue when we have challenges. as an example, the 2008, 2009 recession, we're going to move forward with our customer service brand and in terms of the gateway that has the close

proximity of the asia trade route so we're not going to do anything different in terms of moving forward with with our infrastructure projects and customer service. >> you recently announced you closed out the best first quarter in your history this year do you think any of that was a rush to get goods into the united states before any tariffs were put into place? >> good question, melissa. as you indicated, for the first five months we had growth of 14.6%. as to what part was expediting cargo movement, we don't have a clear number on that but certainly that growth corresponds to the type of growth we've been having here the last year and a half. >> at what point would jobs be affected, either people who work at the port or in industries or businesses or allied to the port, at what point? >> well, i would think maybe a year down the line these tariffs continue to be in place in the long term and the impact here

would be, for example, in this port complex for the five adjoining counties, we have jobs indirect and direct, from this port complex of 990,000 just in the five county local regions alone, so we could have significant impacts if this goes on for a prolonged period of time. >> and if it does go on for a prolonged period of time, i'm curious what you think will happen does volume continue to drop or do prices just go up and volume goes back where it was what do you think? >> well, i think that because of the very strong consumer demand that we have, which of course is the major factor for our cargo growth, i think you're going to see prices will go up. now, the jury will be out as to at what point the consumer decides not to buy at these prices, but again, we're talking about a long-term potential impact so for us, we're going to continue with our mindset of moving this cargo as fast as we can in a way that, again, really

gets to the point in terms of where we are as a global economy right here, which is a very good point in terms of post 2008-2009 recession. >> mr. cordero, thank you very much for your insights today, we appreciate it. >> thank you for having me. jackie deangelis is at the commodity desk what's up, jackie? >> u.s. oil drillers added five rigs this week taking the total count to 863, it's up 100 from a year ago adding rigs is generally a bearish sign u.s. drillers taking a cautious approach, even with prices north of $70 a barrel, guys. more than fundamentals at play here in the oil patch. seasonali seasonality, geopolitics crude seeing a 1% move in the session so far. >> jackie, thank you. 213,000 jobs added in june, but the unemployment rate did tick higher. steve liesman joins us now to break down all those numbers

>> bill, thank you to look at the numbers, the trade war is taking a back seat to the jobs report as the strong u.s. economy does the driving. nonfarm payroll is up 213. what he didn't tell you the estimate was 195, so that was better than expectations also we added 40,000 jobs in the past with revisions to the april and may numbers. average hourly wages was modest, 2.3%, but the unemployment rate ticked up. let's look back at previous rising unemployment rate since 2010 every time we've had a rise, it's ticked up and come back down there's an unmistakable downward trend with a bit of flattening just of late people say they're available to work in a single month but don't have a job so they're counted as unemployed over the next few months they have been finding those jobs out there. j.p. morgan says overall the report is good news insofar as as it suggests the economy still

has some capacity to grow at an above-trend pace without generating much inflationary pressure indeed. that's what the market cheered today. will that continue to be the case some economists think the negatives from tariffs could show up in the months ahead. here's some titles and quotes from some of the reports that i read today grant thornton says quiet before the trade storm for unemployment in june. barclays says labor markets shrug off protectionism for now. it may not show up in the jobs report, maybe ever but a further escalation and more retaliation, it will be harder to hide those numbers no matter how strong the job growth is. >> wage still the big question mark here. is it nominally we'll talk about 20 years from now or is econ 101 just wrong. >> i don't think we have repealed the laws of supply and demand i think if supply is down or if demand is up and supply is down

or limited, that wages have to rise eventually. my guess is it's a long, slow process so you kind of say, wait, i can ask that guy for a raise or that woman for a raise and i might actually get it and i'm willing to walk away from this job i think that's a change in mentality that like my parents savingplastic bags from the depression goes away very slowly >> i still save them >> that actually comes from the old country where they came from. >> i didn't know where it came from. >> i think eventually it has to turn around. the thinking right now just to be clear is there are more workers out there than we thought there actually were. >> thanks, steve. the trade war continuing to escalate between the u.s. and china. at least for today, stocks don't seem to care is earnings season earning the tug of war to the market's attention? we'll have more next on "power lunch.

welcome back trade turmoil not zippisinking s today at all bob pisani has the latest. >> the market likes the jobs report let me show you the vix volatility index everything got a lot calmer after 8:30 it just dropped right down there and has been down. that's the lowest level in a couple of weeks and that is the jobs report numbers overall. they liked it. it was just the right kind of number health care is doing well

because the biotechs are up. but the most important thing is the banks and the semis. they have had some trouble recently, but when they're market leaders and outperforming the market, it's hard for the market to be down because they're a big part of the overall business yet still industrials and materials, there's your trade war. they're the ones that are sort of always hanging back let's take a look at where the markets are right now, what's moving stocks. number one, good jobs report, so you've got nice growth and modest wage inflation. that sort of keeps the fed in check, what we call a dovish box for the fed. trade is still a primary mover of sentiment next week we start banks on friday how about trade wars, is it going to hurt capital expenditures that's the big story right now you can see that concern overall in how the industrials are underperforming. we're up 1.5% on the s&p 500 the big industrial names are all lagging, though. guys, back to you. >> robert, thank you very much earnings season kicks off next

week with the banks on tap still most of the market's attention right now seemingly is on the trade war, or maybe not so which one wins out in this tug of war, earnings or trade. let's bring in victoria fernandez and eric friedman, chief investment officer at u.s. bank wealth management you know, miss fernandez, maybe we have it wrong here in saying the market is paying attention to the trade wars. if it was, why wouldn't it be lower? maybe it's paying attention to something completely different. >> well, you know, we saw today the fundamentals were really what was moving the market the jobs report moved it much more so than the tariffs and trade issues did i think a lot of that is what we received as far as the tariffs is what we had expected. there wasn't a large surprise there. when earnings start to come out next week, we may see what we saw during the first quarter we had really strong earnings in the first quarter and it was the guidance that came out, that negative guidance that really

made stocks not appreciate the way that we thought they would we could see that again on this quarter. again, earnings expectations, 18% to 20% but if guidance comes out that employment is going to be an issue for these companies, cap ex is not going to be what they thought, then we could see some concerns moving forward and have tariffs play a more important role. >> and if trade becomes the new weather and excuse for performance. >> exactly. >> so, eric, let me turn to you. as you look to the earnings quarter that will start coming out next week, what do you expect in terms of growth and what do you expect over the next 12 months and are stocks priced to reflect that? >> so, tyler, we see a 28% earnings basically baked in the market for the next 12 months. stocks have to deliver that kind of growth to justify current multiples. so to that end we think next quarter will be important. as victoria mentioned, guidance will be key. so at a 28% growth rate, that puts the s&p at about 16 times

earnings, which is certainly not lofty. but if we start getting into a little bit of a game between $34 billion and start moving up in ink mencrements of 20 or 30 or 0 billion in terms of tariff talk, that's not factored in if you factor in what president trump mentioned which is an upper bound of $550 billion of tariffs, that is nowhere priced in the stocks, the dollar, really anywhere, so those are things we have to keep paying attention to. >> it wasn't priced in and it wasn't priced in when trump mentioned it on his way to montana, victoria. i'm curious at this point what seemed to be very important in the jobs report is that wage inflation wasn't too hot it allows the fed to keep on its track of rate hikes without the worry of an overheating economy. layer on top of that the inflationary impacts of tariffs and then the potential drag on growth from the overall tariffs as a whole on the economy. i mean it was sort of a

goldilocks economy so are you concerned that perhaps going forward we could be in a situation where inflation could pick up and then we have stagflation. if we haven't priced in $550 billion of goods and that's basically every thing we bring in from china, that's a pretty big impact on growth. >> it is a big impact. the fed has a little bit of room to run because we don't have those inflation pressures. even with two more fed hikes, which we anticipate we'll see this year, you're still in that neutral range and there's no need to move above that at this point in time. i know there's concern that wee going to have an inverted curve but people have to remember that an inverted curve is not the causation of a recession there is a correlation there, but we do need to watch the growth numbers if you look at china's exports to the u.s., it's 4% of their gdp but a lot of that is in that supply chain to other emerging markets. you've got malaysia, singapore, taiwan, korea.

if you add all of those together, that's 20% of your total global gdp, so there's definitely some concern that this could feed through and be a much more broader concern on the growth front than what we're seeing right now, but currently the fed has a little bit of room to run because we haven't seen that inflation pull through yet. >> eric, the scouting report is that the industrials and multi nationals are among the hardest hit when we get a trade war. they were born and grown during a time of globalization. but as the pendulum swings the other direction, do you look less at the industrials or do they become a buying opportunity for you here >> tyler, they certainly could be we think that the shift that china may pursue if there is ongoing back and forth could cause some price dislocations in industrials. we also look at technology being a particular bargaining chip that has been a sector that has a ton of rhetoric back and forth between the u.s. and china given a lot of the growth baked

into estimates is really focused in a few technology names and a couple of subsectors, that we think could be the next area of focus. so we pay attention to industrials, absolutely, but we do think the technology is one of the key things to focus on if that tariff mixed shift really happens. >> all right, eric, thank you very much. victoria, thank you as well. every s&p 500 sector moving higher today plus the latest on the efforts to rescue the thai youth soccer team trapped in a cave we'll get a live report from thailand when "power lunch" continues. build and run apps anywhere you like, while keeping your competitors at bay. the ibm cloud. the cloud for smarter business.

the halftime report getting a surprise visit from the mountainous shaquille o'neal he left a smaller market to become a laker but shaq says to be considered a great laker, he has to win an nba title, something that may be difficult considering how good the golden state warriors are >> in my opinion this is probably the most talented starting five i've seen in the history of the game. waters the game down a lot with everybody being on one team, but it is what it is i just hope these guys get back to the competition aspect of it. >> you know what's also interesting about -- in shaquille's interview, he is apparently a pretty good investor he was one of the very early holders of google. >> remember the money management tip he gave the other day?

he ripped the paper in half and says half goes to your savings and half goes to the long-term events listen, i'm the original laker fan. i go back to the 1960s i'm just concerned i know i'm in the minority of this, but i'm not alone in worrying about the trend that we're seeing now with so many teams buying all the talent up all the talent is going to tour three tea -- to two or three teams right now and i have a bad feeling about it. >> the mad dog we had on the other day and he was saying that he wishes that talented players would stay on teams for a long period of time, build a relationship with the community. >> on one team. >> i remember when wilt chamberlain came to the lakers in the late '60s from the sixers and he was injured for a while, but at least he brought the first title to l.a. as we beat the sixers later. >> and it was rare that a player moved between markets at that

time shaquille was also an investor in ring, the doorbell, he said, which just cashed out for more than a billion soshaquille is doing well. he can afford those double size suits. >> he's a smart guy. oh, is this me >> yes, bill. >> i'm the rookie. all is fair in love and trade war. the chinese hitting the u.s. where it hurts with the latest round of retaliatory tariffs up next, we'll take you to two areas caught up in the trade crossfire. and 213,000 jobs added last month, we mentioned that, but the unemployment rate did move a little bit higher. what it really says about the u.s. economy, next on "power lunch. t? that's the beat of t? 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.

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with citi, we see a bright future for our farmers and their families. ♪ hello, everyone, i'm sue herera, here's your cnbc news update for this hour the russian chemist who helped develop the nerve agent that was used to attack a former spy and his daughter and recently put two britons in the hospital, he says it's unlikely that it is from the same batch. he said weather conditions in the area would have degraded the original sample. thousands of palestinians converging along gaza's border

fence with israel burning tires and throwing rocks at israeli troops in the weekly friday protest. the soldiers fired live gunshots and tear gas in retaliation. 86 palestinians were injured. in mexico, investigators are looking at whether first responders may have contributed to the second wave of firework blasts by trying to extinguish the initial blaze with water, which reacts with some chemicals in the fireworks 24 people died and 49 were injured in a series of blasts on thursday and u.s. ratings for the world cup's round of 16 in russia were down 27% from four years ago, leaving the tournament 38% below 2014's level. among the reasons why, the u.s. missing the world cup for the first time since 1986, and all those earlier kickoff times. you're up to date. that's the news update this hour, ty, i'll send it back to you. >> i've been watching. >> the whole newsroom has. >> those are u.s. numbers. >> i bet they're a little higher

in europe and south america. >> i don't know a word of spanish but i've been listening to the spanish language broadcast. >> you know one word, though >> goooaaaalllll!!! >> i want to know that man's lung capacity, he is good. he's anaerobic misfit, i'm telling you. >> they're really enthusiastic it is so much fun to watch that broadcast. now to the latest from tieland as a take a turn on those boys trapped inside a cave heavy rains could send water levels in the cave even higher nbc's janis mackey frayer joins us live from thailand. janis. >> reporter: tyler, there is an hour-by-hour assessment of the conditions to make a decision on how they're going to bring the boys out and when. there's this threat of the rain that is looming and the monsoon rain is expected to hit by sunday, but there are also other factors that they're having to deal with. the environment inside the cave system is deteriorating.

the oxygen levels are going lower because there's been all of these divers going in trying to take in equipment and oxygen tanks, trying to put in oxygen lines, communication lines, all of those people have been breathing all of the air so they're now dealing with a situation where they need to pump more air into the cave system as they continue to pump water out so that they can create a situation where they might be able to attempt an evacuation the issue, of course, remains the fact that these boys don't know how to swim according to the latest update from officials, they still don't know how to dive. >> it is a minute-by-minute situation. thank you very much for the report and our thoughts and prayers of course with those kids and their families. >> absolutely. hurry, hurry on that to the economy again, another solid month of job gains here in the united states. the economy, as you heard, added 213,000 jobs last month beating economists' estimates of 195,000. the unemployment rate did tick up to 4% while economists

predicted it would hold steady at that 3.8% level what does the june jobs report tell us about health of the u.s. economy? joining us, bill rogers from rutgers university and a former chief economist at the u.s. department of labor and joe watkins, gop strategist and former white house aide to president george h.w. bush good to see you both, thanks for joining us here. >> great to be with you. >> bill, either way you look at it, this is a good report, right? >> except for wage growth. >> we'll cut to that chase there. we've been talking about that. it just defies economics to see this low a level of employment, this tight a labor market and yet no real wage inflation. >> i don't think it defies it. i think you have to look beyond just the unemployment rate we have the u-6 unemployment rate that the bureau of statistics publishes and that includes 4.5 million of americans that are working

part-time but want to work full time you have another 1.4 million americans who we call them wanted jobs. they stopped searching because they're discouraged. a fifth of them, they still have unemployment rates above 7%. the other thing that's happened in this recovery compared to the 1990s recovery that richard freeman from harvard and i looked at, we had a whole host of cities that have unemployment rates around 6 to 5% in the 1990s, they were below 4% today they're still in that sort of 6% to 5% range, so this tightening that we saw in the 1990s which really led to upward pressure on wages, we haven't seen it in many communities. >> joe, what do you think about that, especially when you consider the tightness of the labor market in certain sectors. we have more jobs available than workers out there. shouldn't wage inflation be a

bigger factor at this point? what do you think? >> i think bill raises a great point, but i'm really encouraged by the numbers that i see. i think it's a good thing when you see the labor force participation rate tick up as it did from 62.7% to 62.9%. we had something like 600,000 new entrants into the workforce in the last month. that's a good thing, i think there are lots of people out there that want to work, they're finding jobs that's a good thing and shows the strength of the economy. and i like the strength of the business and professional services sectors i also like the strength of health care. those are areas that are doing really well with regards to new jobs so i'm really enencouraged i think it's a good sign the economy is strong and continuing to get stronger. >> isn't there a silver lining in terms of the wage inflation number not being as strong if the trade war becomes more fully developed, let's say, and

inches more towards the $500 billion of goods in addition to what has already been in place, then it allows the fed to say, you know what, maybe that december hike could be off the table. right now the markets are pricing in one and a half hikes for the rest of the year. >> if you look at this report and you blow it up, it does suggest that the fed can really keep -- hold its power on one and a half or two more rate hikes. but there are some other sort of headwinds beyond just the tariff tiff, i will call it a tiff for now, and that is we are pursuing an immigration policy that is anti-growth. i go back to that little basic model that you learn in econ 101. economic growth is the sum of population growth and productivity growth. and so by the way -- the immigration policy we're pursuing, it will have a retarding effect on the population piece the department of justice today or the other day pulled out the

guidance with regards to affirmative action in higher education. why is that important? that's also a potentially anti-growth approach even though it hasn't changed the formal policy that college can use race as many factors to decide admissions, you still have a whole host of individuals who need that boost. and now also the thing about -- what's interesting about affirmative action and creating diverse environments, my daughter jugraduated from columbia, i teach at rutgers i haven't taught a majority white class in ten years not only does diversity provide great opportunities for minorities, because of the way globalization is occurring with the world cup, seeing all the different cultures, globalization occurring and also how you are demography of our country is changing, whites also will benefit from diverse environments. >> joe, if this isn't full

employment and bill doesn't seem to think it is, i'm -- maybe i'm taking words out of your mouth, if this isn't full employment, what is? >> well, it looks pretty close to full employment it's not actually. i agree with bill. i also agree with bill's assessment of the affirmative action policies. any rollback to affirmative action i think is a real -- is a negative in general for the economy and for the society. at the end of the day you don't want any impediments to people of color or anybody to your best and brightest having a chance to move forward and be everything that they can be i'm old enough to remember a time when people in my father's generation no matter how good their scores were just couldn't attend certain colleges and universities thank flfully that changed duri my lifetime but i don't want to see that get rolled back i want to see going forward that the best and brightest without regard to color have a chance to go to the best schools and get the best education so they can help our society move forward. >> amen to that.

always a good discussion, guys thank you. bill rodgers, joe watkins, thanks for joining us today. now to take you to where the jobs are, at the airport kate joins us from newark airport. >> summer holiday travel season is in full swing if you've been to the airport lately, you know the lines behind me are longer than ever that's why the tsa is hiring thousands of workers over the next few months. the tsa is training its next generation of talent the agency tasked with keeping the nation's skies safe is currently looking to add to its ranks. instructors are preparing new officers with mock screenings, image interpretation and even an explosives demonstration >> 3 -- >> 2, 1. >> reporter: at a federal law enforcement training centerin georgia. >> what makes a great officer is a sense of being responsible, making sure you're at work on time, your uniform up to par,

always have professionalism, treat everyone with respect. >> reporter: the mandatory training is extensive. new hires spend two weeks in georgia and a minimum of 60 hours with a coach on site at their local airport. >> it doesn't stop here. when they go back to the airports, they'll have plenty of training and people to help them out. >> reporter: a native new yorker, he remembers 9/11 well and takes his work at the tsa seriously to prevent another incident. >> it just takes one mistake so we've always got to stay on top of our game. thankfully because of the academy and all the training we're getting throughout the airport and working together as a team, we have been successful and continue to be successful. >> reporter: now, like many other employers, the tsa isn't immune to a strong economy and tight labor market they do get a diverse pool of applicants but sometimes finding the right people for the job can be a challenge entry level positions at the tsa are a great first step into joining the federal workforce, especially if you feel a call an mission to serve guys, pack to you. >> whatever they can do to

shorten those lines at the airport, that is a good thing. it says a lobster dinner and a glass of whiskey nothing -- individually that works for me but together it sounds weird, but it would make for a nice summer evening or a power lunch. those two industries are caught in the middle of the trade war we are live on the ground in the heartland and the coastline set to feel the sting from this growing battle when we come back you always pay your insurance on time.

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two traditional u.s. industries getting slapped with retaliatory tariffs by china maine lobsters and kentucky whiskey. contessa brewer is live in louisville, but we begin with vaughn hillyard live from freeport, maine. vaughn. >> reporter: tyler, when you're looking at the scene here, up and down the coast of maine, you've got these port towns with about a thousand people living in them. the industry that they're relying on here are lobsters with that 25% additional tariff being added on today, a lot of these fishermen we've talked to are concerned about the price dropping because 20% of the exports coming out of maine go to china without that market, it's a question of what are the fishermen here to do you've got 12,000 individuals here working on these waters i talked to one of those, a 29-year-old. he is working just down the road his name is cyrus sleeper and he said that impact ultimately, he said about 50,000 pounds of

lobster he produces every year on his boat. if it goes down by a dime, the price, he said that's $5,000 not an insignificant figure for him. this is tom adams, a major distributor in the state and works with hundreds of lobster men like cyrus he said that just here in this last week that the chinese export market has gone silent on him. 20% of his go out there. i asked him, what do you do? where do you go from here? this is what he told us. >> we can't afford to be patient at all we are making whatever moves we have to now and refocusing some of our marketing, some of our sales efforts to places that were not at a tariff disadvantage worldwide we're also looking at do we have to do something in canada? do we have to partner with a canadian company to be able to compete in these worldwide markets in china. >> reporter: tyler, this is a $1.5 billion market here in the state. as you just heard from tom, they

have worked over the last several years to build up those export markets he's been over in china developing those relationships with those customers he said -- he referred to it as a kick in the stomach, because just two weeks ago when it became clear and evident this was what was going to happen, they have had to change the entire way they looked at their business and look for markets beyond what they have expected tyler. >> vaughn, thank you very much u.s. whiskey, why are they giving me this story they're hit with a 25% tariff as well by china and it has already faced retaliation from europe, mexico and canada. so what kind of impact is it having on the industry the aptly named contessa brewer is live in louisville with that. >> well done, sir, well done thank you for that if the lobstermen see the tariffs as a kick to the stomach, in kentucky they see it as a punch to the gut. those are their exact words. look, here's old forester really trying to open up the chinese

markets to the palate and the taste of about yobourbon. the bourbon business is booming. many distillers big and small across the state are making international exports a huge, crucial part of their growth strategy more than 17,000 workers who rely on the whiskey industry have shared in its success coopers and grain farmers and bourbon tourism businesses is just on fire america sent nearly $9 million in whiskey to china alone last year over five years doubled its market share but the distilled spirits council says the 25% tariff will just put the brakes on the success story. >> there's a big fear that when all these tariffs take place, or as these tariffs take place that the larger distillers will withdraw from their foreign efforts and focus on domestic efforts. that will at the end of the day be kind of a price slashing situation. >> and if smaller craft distillers are forced to compete

on price, they worry the problems will really bubble up for them so they're facing not only the tariffs from china but of course also from canada, mexico and the european union the real question now is you have international customers how much are they willing to pay for a bottle of old forrester once you tack on the tare zbliefrs the whisky has to be aged over a certain amount of time what they made last year was dependent on china as the export market so you feel it now and a year from now if the situation changes, right. >> we are in the aging room at old forrester, melissa pch imagine you have to decide what demand is going to be four years from now they had a shortage for a whil because they didn't expect the massive sudden boom especially in the overseas market global exports grew by 23% in a year they had to plan ahead for this. there is no way that four years

aig they planned on 65% of american whisky now being subject to retaliatory tariffs it's thrown a wrench in the works or you might see a bug in the bourbon. >> you might say that. you just did. >> she did and well contessa, thank you. >> melissa. >> southern comfort at its finest the most expensive house listed in charleston, south carolina. we will take you for a tour in today's powerhouse plus which of china's llnaesant miioir wto 11 and where they want to go. that's next.

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he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. time now for this week's powerhouse robert frame joins with us a doze of southern comfort kbl this is the most expensive house for sale in charleston, south carolina it's one of the oldest, 215 years old. and refrpted to former glory you're looking at the most expensive mansion in all of charleston, south carolina >> we are in the most exclusive portion of the peninsula of charleston really the premiere address to have. >> built in the 1800s, the historic $16 million landmark

known as the sword gate house got ifrts name from the iron gates out front which bear two swords every inches of the 17,000 square foot federal style mansion has been restored to original splendid frere the formally dining room to the ballroom with the stunning chandelier there are 13 baths and nine bedrooms, each with their own character and unique style the porch outside has incredible views of the private gardens and not far from the al fresco dining area is a reflecting pool that leads to the estate's conservativery for the record breaking price tag of $16 million for whoever buy this is will make history themselves >> when you come to charleston you fall in love with charleston the history is just a bonus. >> it is one of the most photographed homes in alm of charleston and would be by far the most expensive the record hold ner charleston is 7.7 million this is a whole other level.

>> almost- more than doubles it. >> yes but it's one of the most iconic famous homes when people go by they take photographs. it has the mysterious romantic qualities. 158-year-old magnolia tree in the front yard you can't find those anymore. >> you want a seer sucker suit. >> we have a question about high end real estate a lot of it bought up by the chinese a new report saying the chinese may have eyes back here. >> if you look at the number of wealth chinese moving families and money overseas and the u.s. is the biggest beneficiary more than a third of chinese millionaires plan to move out of the country in the coming years. the top reason for moving by far education. better schools for kids. the other main reasons are environment and food safety. so economic security not at the top of the list. now the favorite country to move

to is the good old usa followed by canada, australia and the uk they need homes so the investment in real estate expected to jump by 50% the next three years. >> wow. >> who benefits there? the favorite city in the world is l.a followed by new york and then boston which is moving up the ranks. toronto and vancouver they had been at the top but new taxes on foreign property buyers so they fell off when asked about what they look for in buying a home, cost effectiveness is number one followed by investment value and then property rights they spend an average of $800,000 per property. they are not the very top of the market like the russians more the bottom they're in that 500 to a million range. >> all right thank you very much. >> thank you guys. china acquiescing the u.s. of starting the biggest trade war potentially in history the fallout for the american business community and the economy, plus this is one red hot stock today. up more than 15% on positive trial data we will tell but it and some of the defensive

sectors hitting new ghhis. should you get in? the second hour of power begins after the short break. with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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trade battle royale the china says the largest trade war in economic history from president trump. the he says he will hit even hairrder if mcdoesn't change their ways and shares of biogen booming positive results in a phase ii alzheimer study could this be a breakthrough for the disease we will go through the results coming up. a new reality for rinaldo the new fame on facebook he has time on his hands now he is out of the world cup. we explain as the second hour of power lunch kicks off right now. >> goal! ♪ ♪ ♪ i play football but i touched down everything. i don't play baseball but i hit a home run everywhere. we welcome to you power lunch. bill griffeth let's check the rally atsz hour.

putting aside fierce about trade wars, focusing on the upbeat jobs report this morning the s&p and nasdaq both the biggest one-day gains since june 1st. the biogen is the biggest gainer dish and baidoo leading the nasdaq gains dmnds. walgreen's and apple driving gains melissa. >> i'm melissa lee this is what else is happening. the crypto craze going strong. the top technology executive is leaching to join the bitcoin owned by the wingle voss twins meantime burl is the first hurricane in the atlantic this season but expected to quickly weaken and samsung says earnings grow at the slowest pace in a year and a half weak smartphone sells is offset the chip earnings. >> we begin with the trail war getting more real today. the u.s. and mcexchanging $34

billion worth of tariffs and president trump warning of at least oh or as much as $500 billion more who wins and luss in the fight the auto industry on the losing side phil lebeau coming that. and looking at industries that could benefit dom, let's start with you. >> we focused a lot about the idea that domestic based smaller mid-cap companies could be the beneficiaries of the trade conflict that escalates to war and the markets are pricing that out. look at the s&p 500 verse versus the russell 2,000 and small caps and mid-caps the s&p 500 the laggard. the multinational are seen as loseners a prolonged trade battle now the folks over at joins trading michael rourk, the market strategist says that next theme will play out with small caps you look at themes he is watching right now he says look at the small caps they will be outperformers if the trade battles persists domestic based manufacturers

could be winners look for made in the usa that's a big theme opinion domestic based overweights in utilities appear telecom stocks are not attacked by the trade-in tariffs. and a couple of the things you want to watch stock wz thp dhek this out lamar of vilry says if you look at certain stocks 3-d printing could be a beneficiary if we don't have as much that can be offshored to china we have to print it ourselves here. they could benefit possibly one more to watch this is an interesting one as well. it's the focus on america theme. look for companies that have the predominant if in the revenue here you may not think issue insurance when it comes to china but since the customer base is here they could be outsize beneficiaries as well. you throw into the mix interest rates and it could be a big wi for domestic companies back to you. >> thank you very much dom to phil in child support .auto tariffs going into effect today and what impact does it have on auto makers and consumers here in the u.s. >> well it's hard to know

exactly how much it might change the pricing of vehicles in the u.s. there is only a you few models impacted told here it's more the impacts in china here is the tariffs that went into effect both in the united states a as well as china. for vehicles we export to china rb, the rate up to 35% from 10%. here in the u.s., those few vehicles exported from china to here go from 2.5% to 25% let's talk about some of the ones sold in china tesla has already told customers in china if they are that custom ordering a car be prepared for higheris prices. we haven't seen it happen yet it appears as though tesla is passing along the cost of tariff to customers there bmw, the largest exporter of vehicles from united states to china is still calculating the price increases it might put on vehicles in china. it hasn't done that yet. but it is likely going to pass along some of the cost of the

higher tariffs to customers in china. it will likely eat the rest as well and then in terms of the united states, the buick envision is the one model to wash watch. only three imported right now from china the cadillac the buick envision as well as a volvo the envision 41,040 were kbrt imported last year general motors is assessing how to handle the tariffs because they have other things to keep in mind in terms of steel tariffs, et cetera whether or not they pass the cost to customers or eat it that remains to be seen and that really is the bottom line when you look at shares of general motors and really all of the auto makers they're in a two to three to four week window the vehicles aren't in show rooms yet but will be in a few weeks. that's when we find out how the auto makers deal with it the costs. >> phil lebeau in china thank you. how will the trade tariffs and uncertainty impact the

markets. as investors set sights on earnings will the earnings be able to keep the rally going or will trade wars dampen that rally? joining sus cnbc contributor ron and sand awe have lindsey ball the strategist and bob pisani joining from us the stock exchange earnings get under way next woke nobody is expecting results affected yet but it will be interesting to hear what forward guidance has to say in industries as they try to anticipate the impact right. >> absolutely guidance is always the most important things on earnings report because the numbers we get are in the past we care about the future so far, though what we have seen is that the numbers that have come out have been very, very good and guidance has actually been good we haven't seen anyone cut numbers because of expected tariffs. but we'll see how it changes as the next few weeks unfold. >> what are you expecting. >> well i think in the short and intermediate terms the markets

fixated on good economic numbers the prospect for decent earnings in the longer run and i rarely say this as you know i think the market is wrong. if you look at nationalism and populism, the world is going in a different direction. i don't think the market is ready to discount that but it may one day be if this were to accelerate from where we are now. >> something we haven't seen bob pisani in literally a generation and two generations in terms of trade, ron wouldn't you agree but we haven't seen rising interest rates to the degree we see now, not that they're high but they are getting higher. >> yes but unfortunately for the banks they're not moving fast enough the banks are going to have a problem. we have been underperforming notably because the spread between the 2 and 10, the interest rate spread that's so important isn't working. only only 30 basis points. becomes to lindsey's point i think she is right the early reporters have not

said anything about concerns about tare ifrts and trade wars. the numbers for the third and fourth quarter are not coming down at all. i think the bad news though is the market is not waiting for the analyst they never do. they've voted. in the last month the s&p is flat and industrial and materials have notably underperform industrials are down 5%. the market is already reflecting the concerns that we have had out there. the good news is the economy is doing fine the bigger request he is it's clear that trade is the mover of sentiment right now. that's what really moves the market one way or another. and i do have -- i'm with ron i do have very legitimate concerns about capital expenditures for example slowing down notably if this goes on much longer. >> that could impact the tech sector and the tech sector arguably that will be the most important sector to watch in that -- the first half of the year for stocks in the steak secretary are accounted for 84% of gains we are so reliant on technology. if we see companies saying we

may not spend as much as we thought, that is going to be on the tech secretarier >> we are late cycle in every conceivable way with small caps outperforming large caps with the market getting narrower. if the president made good on every threat he put forward right now including the $500 billion threat against china which is exactly what they export to us in dollar terms. >> it's everything. >> it's everything you would be back at smooth holly type environment 1930s with that by the way where competitive currency devaluations which haven't happened yet if they did that would be an issue where the dollar might soar other currencies might collapse and you would have real issues on your hand. not only global markets but the global economy as well. >> bob did this the otherdy. the technology, industrial and financials are driving the market right now and most vulnerable on the trade issues high pressure. how do you view them at this point are you more cautious or is it a buying opportunity

>> i think it presents a bying opportunity. we are overweight the industrials materials and energy sectors here we continue to wait it out it's a bumpy ride over the next several months as the trade talks do evolve over time. we are believers that they will evolve and in a positive way and i think the market really is viewing it that way while the sectors have underperformed right here i think once we get through to the other side of the trade talks you could see significant upside you have fedex km out when they reported earnings they reiterated the guidance for both u.s. and global gdp growth so until we start seeing these tariffs take effect, which is starting just today, i don't think we can exactly say what's going to happen from here. >> i would just point out while u.s. economy is doing well look at clues elsewhere for concerns about a slowdown in the global economy partly due to trade wars i've been pointing out the dbb it tracks metal prices around

the world particularly copper and rum number it's at a 52-week low. it's been going straight down a month now. copper has been acting terribly. agricultural commodities acting terribly recently. that's a tis tip off to the concerns. >> platinum is at a decade low. >> and shanghai composite down 22% from the high. down 32 from 2015. the weak markets go first. and the question to lindsey's point is when we get past this trade dispute what if we don't get past the trade dispute that's not remotely factored into stock prices bond prices commodity prices we don't know where it goes. president has shone a willingness to go farther than anyone thinks. and i don't think the market takes him seriously or literally which may turn out to be a mistake. >> we will see we will see. thank you all. ron and lindsey and robert pisani see you later. >> here is what's coming up power lunch. smfrp maker xiaomi guess a reality check.

what des it mean for the company's plan to blaek into the u.s. market. >> could it be the breakthrough and alzheimer digging deeper on the findings the trade war fourth generation grain farmer joins us live how he she braces for the impact all that and more coming up on power lunch. you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

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welcome back to "power lunch" everybody chinese smartphone maker pricing initial public ofrpg at the low end of the expect the rang range. josh lipton with more on the ipo and the company, josh. >> tyler just a fau months aig the company was talked about as a possible $100 billion company. now it looks like that price tag might have been too high the company priced the ipo at 17 hong kong dollars or $2.17 per share raising $5.4 billion recognizance telling that the value of the company is 44 million by their math. with trade tensions heating up large cap chinese stocks are down more than 20% since the peak back in january company also bills itself as an internet company and internet service make up about 10% of sales. but it's smartphones that account for the bulk of total revenue. still hansen tongue of ggp company a former board member is

big believer in the strategy selling high quality smartphones and hooking into the higher internet services. it's the mourgt largest smartphone surrender on the planet the company is also in the fourth place in the home market of china but drawing fast in other markets like india they make their debut on monday in honk con. become to you. >> thank you very much josh. with the trade war between the u.s. and china heating up what does it mean for the smartphone company and the cheyennes ipo pipeline will it hurt investors joining me now is andy rothman with the minimum wagia fund. how much is a weak pricing for the debut? how much of that is what is going on in the markets in china, what's going on with the trade war? or maybe just a dim outlook for the smartphone market? >> i doubt that the trade war which i would say isn't yet a trade war. the skirmish probably didn't have any compact on xiomao

appear this illustrates the mistake a lot of americans and president trump is making when it analyzing ptd it's not dependent on export it's a domestic demand store. export are a small part of the kpee most exporting companies are foreign owned. the daniel done from this trade skirmish at this point is going to be quite small and chinese companies and on the chinese economy. >> why is the shanghai composite down 22% since they leveled tariffs and solar panels and down 9% since june when this started escalating is there no connection. >> i think investors in china the overwhelming majorities of holders in the domestic market there are overestimating the impact the sentiment has clearry been hit. but for me this is a buying opportunity because i think before very long especially now that the tariffs are going into place people will realize that the impact on chinese companies is going to be very small.

>> in terms of taking a look -- there is a lot of comparisons andy people want to make when they see a selloff in china today to the sell off we saw in 2015 the rises roiz was driven by the retail investor and the decline was driven by the pull out of the retail investor in the mechanic some say this decline is driven by institutions. is there anything different from 2015 or any -- any sort of extrapolations we can make about what this sell off is and what it's caused by >> well, i think there are a lot of similarities and differences from 2015. first is the economies and in good form and most importantly corporate earnings are doing well now much stronger than 2015 but this is still a retail dominated mechanic retail investors account for maybe 25% of shareholderings but about 85 perfection of the turnover and retail investors in china are still not very sophisticated. so sentiment is bad now. but i think that as we move into coming months and people realize that the trade conflict is not

having a material impact on most chinese companies i think will that will rebound. >> what do you think the chinese government will do with respect to the currency? will they continue to let it move down? and how does that factor into your investing thesis? >> up until now we have seen i think know change in the way the cheyenne government is managing the currency, they are still following the same practice they followed the last few years which is the direction is being driven by the strength or weakness of the dollar for mid-april the dollar is up about 5% and the chinese currency i do know 5%. i think that will continue i don't see any reason to believe the chinese government will change the practice. and start moving the currency in order to respond to the trade problem. because it's not going to be a big hit to the chinese economy or to chinese companies. >> andy great to see you thanks for your time. >> thanks. >> andy rothman.

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already worried about what to watch when the world cup ends a week from sunday well facebook is working on that the social network is in discussions with soccer star cristiano ronaldo for an reality show and facebook watch. ronaldo is the most popular on facebook he has 120 million followers and facebook if the deal goes through, ronaldo could get around $10 million for the 13 episode show. >> speaking of soccer stars. you may have heard the brazilen superstar, known as neymar has spent almost 14 minutes of the world cup rolling on the ground. kfc put out this ad poking fun showing the player flopping dramatically cameraman chasing after him he pops up ready to

give his order to a smiling casher >> 14 minutes. >> he is. >> who times these things. >> he was on the ground for about 3 minutes in their last game i forget someone stepped on his foot >> he will get the emmy when it's said and done how about ronaldo, 120 million followers. >> $10 million for 13 episode. >> you know who packages this is the -- the production company that is part owned by michael strahan and tom brady and professional athletes that put together reality shows about tom brady for example. and now they want something on ronaldo. >> it shows you serious facebook is about content and programming. >> they want to jump start this facebook watch. >> right. >> their version of television if you do that go with the guy with 120 million follow zbleers built an audience. >> and the best abs in the business. >> you would know i guess. >> soccer will do that. >> farmers feeling the tariff

pain a fourth generation grain farmer joins us live with her story next d eyngares of biogen soari dith hit a breakthrough on alzheimer's? "power lunch" is back in 2.

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hello everyone i'm sue her aire here is the cnbc news update authorities in thailand say conditions have changed and the rescuers cannot wait for months to bring out the youth soccer team members trapped in a watery cave they say that the oxygen levels inside the i have cave are dropping because of all the rescuers inside. and the weather conditions are expected to worsen over the weekend. new research suggests the father of aen frank twice attempted to emigrate to the united states. but the efforts were tragically sh warted by the restrictive immigration policy cumbersome brock ary ant outbreak of world war ii the family went into hiding 76 years aig today. a part of the detroit's inheritic pas. the ss saint clair went up in flames it carried children and families down to the river to the amusement park no word how it got started.

disneyland is not giving away to free tickets to 500 families to celebrate the park's anniversary. ziet the advertisement circulating on social media. a disneyland spokes woman says the offers are false and only buy from a reputable dealer. back to you. fake ads. >> exactly. >> thank you, sue. >> see you later. >> the oil market closing for the day. jackie dee at the commodity desk. >> crude prices reversing from negative to positive territory with about a% of gains a little bit more than that in the close here slightly lower on the week though and still for the month a 14% gain remember we moved far fast briefly touching $75 this week what happens next? nanosecond for oil and gasoline will start to trail off slowly and supplies from libya, canada, saudi arab were coming online. some already railroad that has a cooling effect traders don't think there are big swings the report the 7-day right now

high 60s into the out of the question session high 773.93 not enough to top 74. >> back to you. >> now back to the trade war soybeans impacted the most by chinese tare i was adydy is live with that more on that. >> that's right. soybeans is the agricultural product the chinese have the most leverage with just because of the sheer volume the u.s. sends to china the u.s. exports about $14 billion worth of soybeans to china, the largest agricultural export to chf with the tariffs in place china is expected to cancel most shipments from the u.s. for the rest of the year. some analysts say that could cost hundreds of millions of dollars. as trade tensions heightened soybean tries prices declined. interestingly soybeans are up today analyst tell me because there is less uncertainty in the market over the tariffs. the sell the rumor by the fat scenario we talked to illinois farmer brian duncan who grows soybeans

he says about a quarter of his beans end up in china. >> farmers have worked for years to develop these markets and you know once you lose a market d i di it's hard to get it back. yeah, i think it's a water shed moment. >> to make matters worse, duncan also raises hauges which have also been impacted by tariffs. back to you fwois. >> what are the analyst saying in terms of the long-term impacts of the tare i was does china need the u.s. more than the u.s. needs china. >> a lot of people asking that question some people tell me in long run the demand for soybeans is so huge other top producer can't fill the need and eventually in the long run china has to come back to the u.s. for soybean needs. on the other hand there are others saying that's not the case they think other countries will seize the opportunity to become a lot more efficient at producing the crop and that china has levers to pull they are buying farmland in other parts of the world like africa

and south america to eventually wean off of u.s. imports. >> thanks. as china retaliates against the u.s. tariffs by cracking down on our agricultural products fireman farmers are watching with growing alarm we are joined by michelle erickson jones a fourth generation grain farmer and the president of the grain growers anegotiation in montana. thank you for being with us. we appreciate it. >> thanks for having me. >> in montana, what% -- what are you exporting and to which markets? >> montana exports 73% of the wheat crop we export quite a bit of beef. in terms of the wheat crop, the bulk of it has the pacific rim china is the number 6 customer for our total exports. so exports is a huge part of ouring a culture kpee agree anding a surlt is the montana economy. we are export dependent here.

>> are you more concerned about trade dust ups between the u.s. and china or more concerned about potentials frictions and maybe, you know, the disappearance of nafta affecting trade with canada and mexico in. >> certainly both of them are pretty significant concerns for montana. those three countries make up the topping agricultural export incidence force u.s. agricultural we would like to see nafta a and wrapds up. mexico has been a critical export for barley exports out of montana. it's a critical market for u.s. wheat exports. that is our number one skper for u.s. wheat nationwide. and so there is certainly agreement that we would like to see native aif finalized and to get back to the negotiation table with china and see if we can iron out differences and improve our trade -- trade relationship >> michelle i'm curious -- i

mean i'm astounded you export 76%. is that because you get a better price overseas is nanosecond not that strong in the u.s.? are you able to shift where you send the grain if provides become -- the tariffs become too onerous overseas. >> well we definitely depend on our global markets the domestic demand for wheat has stabilized in recent years but we certainly produce far more wheat than we consume domestically and we have long depended on export markets, ship our high quality grain. we make the quality of grain that is not seen in large amounts on the global market and our export customers have come to depend on the quality that we are able to produce. and we are certainly happy to provide it for them. it often provides us with a premium on the market. >> what would you tell the president if you had the opportunity to speak to him? >> i would say, mr. president,

we are in our agricultural have been pleased with your efforts on tax reform and regulatory rollbacks. those are essential for the ag economy. we would like to get back to the negotiating table, finalize nafta and pursue trade agreements and open up more global markets for ag across the nation and in montana specifically and to back away from some of the tariffs and some of the more risky policies for our agricultural economics. >> michelle, assuming we are in this for a while and maybe escalates, the trade tension, tit-for-tat, whatever you want to call it what are you going to do. >> if we keep farming here and you know and keep playing a long game and you know market when we can, market when there is spikes in the market and try and adapt

our -- adapt our businesses to the current -- current situation, whether it's economics or political or you know trade, how that shakes out, we're a fourth generation farms and a lot of farms are multigenerational farms. we have been able to adopt but there's been rough patches we hope we keep it as short as possible and we can improve our market access on the global stage. >> you know, montana was a heavily trump state. most of the counties went his direction by a significant amount i don't mean to lead you into an area that is overtly political but do you think that his support would be affected by these trade skirmishes >> well, you certainly see that in any -- whether it's this administration or past administration, economics -- economics eventually led to -- you know changes in political support. i can't speak to, you know, any -- anyone else, but i think

right now he maintained support like i said for his -- the great things he has done in tax reform and some of the regulatory rollbacks. and we're just hoping we will be able to finalize the trade -- finalize the trade issues and get back to trading as normal. >> right. >> and as long as the administration is successful, then farmers can be successful so that's all we can hope for. >> michelle thank you very much for being with us. enjoyed talking to you michelle erickson joenls of the montana grain growers association. >> very interesting. shares of biogen soaring on positive results by one of its alzheimers drugs in testing. could it be a breakthrough a lot of fingers crossed on this weave hthe story next ♪ i got that sunshine in my pocket ♪ let's get started. show of who wants customizable options chains? ones that make it fast and easy to analyze and take action?

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♪ ♪ adapt supply chains based on trends, tweets and storms. and make adjustments on the fly. ♪ ♪ the ibm cloud. the cloud for smarter business. . smars of biogen having the best day since 2015. the stocks dibl digits i should say on positive phase ii trial results for alzheimer's treatments and good news are more fls alzheimer's impacts 10% of people 66 appear older and the sixth leading cause of death in the u.s.

what could it mean for the about a battle against alzheimer joining me now is dr. ronald pederson he consultedfare biogen in the past but wasn't involved in this study. thanks for joining us. i'm sure a lot of people. >> my pleasure. >> people know others with alzheimer's and thinking how could this drug possibly treat my loved one what would you tell them right now? >> well, i think the results are early. but encouraging about the possibility of an effective therapy for amaze heimers decease. and when we talk about therapies we are talking about perhaps a disease modifying therapy that gets at the underlying cause of the disease. >> basically this particular drug targets the most toxic form of the beta many amyloid of the brain and it slows the progression of the disease it doesn't cure the disease, correct, just slows the progression. but that i would imagine could be very meaningful for a lot of patients out there.

>> absolutely. that's very important. i mean, i think cure is probably an overrated goal for alzheimer's disease. but if we could delay the on set of the symptoms, slow the progression of the disease, that would be huge for patients. >> does this leads in baby steps to a dpraeter understanding of what may cause the disease >> i think that's a great way to put it baby steps because this is a very complex disorder that has multiple components but clearly treating amyloid is a very essential feature of the disease. and if we are successful at that i think that's a major step forward. >> are the -- are the results of the trial now that's going on? are they positive enough that you would think that they might think about fast tracking this to move it along a little quick err, get it on the market sooner >> well, i think i'm cautiously optimistic here. >> yeah zbra because again we have only seen the top line results. we don't know the specifics of the trial itself

but what they report is in fact a clinical result of the treatment and a biological result, meaning that perhaps it was removing part of the cause of the disease, the amyloid protein. so to the extent it achieved clinical and biological end points that's important. >> dr. pederson thank you for your time today. dr. ronald pederson. let's get the investment side of this story biogen as we mentioned up 19% for the daily performance in 7 years what can it expect as it takes steps towards approval let's bring in ronnie from bernstein great to have you on set. >> thank you. >> total u.s. market is $30 billion or so? how do you think about what the total addressable market is for a drug like this. >> we are talking about something that have magnitude. >> yes. >> we are thinking about 5.7 million patients have alzheimer's today that amount doubles in the next 30 years as we all age.

and live longer. the numbers internationally is at least that large. you know, you want to throw a number off dollars per treatment per year about so to $20,000 you can easily seeing us getting that number. >> 5.7 million patients have alzheimer's i imagine not all qualify for the ban 2401 drug this really attacks the amyloid in the brain at an earlier stage of the zbroipts. >> is binds before they settle into a plaque. the keep point about this drug, it's a break in the front. we were not sure that the amyloid beta hypothesize is correct. if we see the data a presented between july 26 and 27 at the meeting in chicago if that's positive it means in the whole slough of other drugs we are working on which either remove plaque from the brain or does some of the binding could be used maybe something with the basin hibter on top as preventing additional plaque

formation and we suddenly have a way to -- a basis to guess or presume that some of knows could work, so -- so this is not the only drug that will come from the market if we are seeing the results we hope we see. >> we are very cost conscious these days with prices going up as much as they are in the drug industry i know research like this very expensive. i know we're early on this but do you think this will be one of those drugs that will be less accessible to some patients because of the cost or not >> yeah, i mean this will lead to some societile decisions. if our total drug budget is $450 billion. and we are talking about $30 billion more in the united states alone we have to think about this but think about the total cost of patients living with amaze heimers. they require supervision a lot of times into homes. if we think about an early patient with alzheimer's living about 4 years before he needs to go to a home, and this drug is probably around 25% reduction of progression speed you might get an extra year of living

independently. the cost that removes for the system is enormous if you look at total cost of treatment versus having to have someone leave in a home or have an adult child taking care of them that's actuallily a huge benefit from the overall system. >> i believe it was our previous guest who said obviously -- you made the point -- this is not a cure is it more reasonable for us to think of alzheimer's as we tend to think now of some other diseases as treatable chronic diseases, diseases you live with but that can be mitigated if not controlled by medication >> so, the short answer is we don't know yet so clearly the first step is to go out and slow the progression and understand more what causes the disease. and maybe we end up with a chronic condition. but i don't know- dsh i don't think we know enough about the zoo disease to say it's not curable. okay there are some papers coming out suggest attention a virile xenoen process and maybe we can

cure it like hepatitis c pch it's too early to tell this is the first time we actually got the end of the string in terms of being able to do something. >> you mentioned the amyloid thesis was in question and now we have confirmation that perhaps this is actually the root to go. >> some of the evidence shows this. >> right some of the data shows it does that mean that roachenen, lilly can come back in with the drugs they had to end trials on. >> lilly ended a trial that was probably still going to fail. >> okay. >> roach has not ended the main programs smacht roach is the other main horse in addition to biogen attempting to develop drugs that look very much the same to each other. i'm kind of surprised frankly that roach is not up to date. >> up for it, yeah. >> very quickly we highlighted that biogen is having the best day in several years. >> sure. >> is this warranted do you buy this because of. >> oh, yeah. >> because of the developments here. >> i think the results is about right. we thought it would be more than

10%. less than 20%. the high end of that if we get the results to be as positive as we think they would be osh hope then we have another leg up in late july but i think we got the -- the upside we should have gotten from the news of that magnitude. it's about $10 billion or so maybe a little bit more of market cap for biogen >> thank you ronny. the defensor areas like reest. t is hitting the highest level t year. trading nation is next where should you put your money? see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know?

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time now for trading nation, today with a look otreal estate investment trust surging at year to day highs today with yields pulling back a bit good to see you both i know you're both bullish on this sector. gena, for you they've just fallen so far there's only one direction they can go right now, huh? >> yes, and you have to consider

that if you're a reit investor you can now deduct 20% of that dividend income. not every reit is created equally. >> you have to believe i guess that rates have peaked at some point. is that the idea >> yes, i do believe that rates peaked and this started for me in 2015 where the feds have been as hawkish. and even this year when they've been very hawkish rates did not rise that much right now i think we could potentially be in a wave down the ten year of about 2.6% i'm looking alt the data guard real estate etf, and i think there's a lot of upside.

a lot of momentum around it right now, and now it's steadily above the 100 week moving average. >> thank you both for joining us today. and for more market insights you can head to our website, trading nation at cnbc.com and follow us on twitter @trading nation check please, that's next. and now your trading nation stats of day and a word from our sponsor. >> when you own a stock that's going higher, help lock in profits by raising your stalk order. your risk reward ratio may fall out of balance csir raidsing your exit point allowing you to ride the trend as long as possible.

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let's take a check on the markets. and we are pretty much at session highs right now. s&p 500 up, and that big gain in bio shares helping to push the sn nasdaq up. and check out facebook time for check please here and i'm watching what ray dalio has tweeted. he tweeted this a few minutes ago. he said today is the first day of the war with china. he uses the word war, and he had written a linked in post really warning against a war with china

saying that's going to lead to very bad outcomes for both countries when it comes to capital flows and investments. he considers himself as a china expert and so he is using the word war >> we talked about this during the commercial break earlier, but when we had andy rothman, he said we're not at a war -- it is curious to me that the market is up on this day when the war begins with china. >> i think it's already priced in, though >> just the initial round at least. >> it always comes down to how is it going to affect the bottom line if you're going to start a tried war now is the time to do it anyway when the economy is strong you don't want to do it when you're heading into recession. so i think that's the market is reflecting here. i saw this this morning, catnip for golf fans out there we learned tiger woods and phil

nicholson have been talking about putting together an 18-hole mono e mono grudge match. they started talking about this last april during the masters week they played a practice round together, and mickelson saw all the crowds out there and he said, what do you think? they were hoping to have this together by july 3rd it didn't happen >> i'd like to see them put their own money. >> this is sponsorship money, but if it was their own money then you'd see them quaking over those putts. >> we talked today about the world cup and soccer down in the united states partly because the u.s. isn't in it the brilliant broadcaster who was doing a broadcast from the world cup for telemundo, you'll get to see him in an hour or so's time on "the closing bell."

he'll boo on there at 4:45, and this he is a brilliant goal caster. >> thanks for watching "power lunch" >> and "the closing bell" starts right ow it's time for "the closing bell." stocks are shrugging off trade war fears this afternoon following a strong jobs rortd. we've got all the details coming up i'm contetsa brewer on whiskey row in kentucky. i'll have more on the tariff hangover coming up i'll philip lebeau in chicago. buick, tesla, just a few of the brands being hit with costly tariffs. i'm michelle cabrera,