i said sales force trading 139 at the time would get above the all-time high at 142 went back yesterday. looked in the mirror and said i know i can let's raise that price target. sales force to 150 >> good stuff. thank you, all all right. just for us. have a great rest of the day power lunch starts right now >> riding the rally. the dow and srp 5 having their strongest four-day win streak in about, get this, five months what's taking us higher and where the money is going in this run. president trump kicking off his european tour ahead of his arrival. he is blasting nato and our allies saying it may be easier meeting putin. we are live on the ground in brussels plus, check out this mystery chart. it is up more than 15% in the past week. it's tanking today on a bit of a downgrade. the analyst who made that call will explain power lunch starts right now

>> welcome to power lunch. stocks building on their recent run.

>> the consequences trags mainly of these stocks in the etf's and index funds that more and more investors, especially retail investors own. what happens if they start to melt >> well, i think it is a concern, but i do agree with kate i think there is more positive news about the stock market in general. i think, tyler, though, what you're pointing to is that i believe that the return to active investing is going to happen it's happening right now you can't just passively invest in market-cap weighted indexes and rely on these big names. i think stock picking is going to become very important, but i do believe that we have a good economy that's going to continue to drive earnings. that will be the story really for this quarter >> if you are telling us, though, jim, that the stock pick -- that technology is going to continue the gains on the broader indexes. all you got to do is buy the s&p 500, right the first half of the year, four stocks in the s&p 500

attribute -- contributing to 84% of the gains, and those four stocks were technology stocks. i mean, it seems like a simple thing to plow money into etf if everyone in the world is telling you that tech is going to lead the way. >> you can, and we're bullish tech too, but i think it's smart that as the stocks continue to hit new highs, start rebalancing your portfolio if you have and take profits i'm not saying get out of tech, and i'm not saying i'm negative on those names, but rebalancing your portfolio is still smart whether you're in technology or not. >> kate, are you at all concerned about what happens to the big multi-national companies? as we look at potential inflation, stronger dollar, supply constraints when you are looking at your picks, does that come into play at all >> it does to a certain extent, but i think overall those are mostly short-term concerns we're seeing supply constraints. those tend to be short-term. companies can fix those. the stronger dollar, we also think was something in the first half we don't expect it to continue it will certainly dampen

earnings even though overall we think the impact -- or the earnings outlook is quite good, and that will support those stocks moving higher i would say concerns, but we think the underlying trend is positive based on stronger economic growth, stronger earnings growth, and also a number of specific catalysts that seem to have gotten investors refocused on the positive rather than the negatives of teariff and trade disruptions. >> thanks very much. we have a new alert in the bond market right now. the three-year notes up for auction. rick tracking all the action for us at the cme. hey, rick. what's the band like for us? >> i'll tell you what, this is really a bad auction i'm hoping that some of the data that was released may have been in error it just is unbelievably weak three-year note auction. threes are wild. $33 billion, three-year notes. the grade i gave d-minus dog minus. the yield at the dutch auction, 2.685. that was spot on

it was a big side of the one issue market that's the only good news. 9.1 on directs the weakest since december of 17 51.3 goes to primaries that is unbelievable looks to be like 51.3 should be the indirect and 39.6 should be the primary dealers. that's the way the data was released not a good way to start off 69 billion in coupon supply tomorrow >> two other exciting things are happening in brussels. many people looking forward to some kind of soccer game might have heard about it. much more excitement actually about all the world leaders coming to town president trump arriving there

shortly, and our amman is already on the ground. beat him to it >> we got a lot of excitement here on the side walk here in brussels we saw some french fans, some belgium fans everybody is pretty pumped for that they're also fascinated to watch what happens when president trump gets here in just a couple of hours time. this is a meeting of the nato allian alliance, but the word for this week really is confrontation the president just within the past five minutes or so tweeting from air force one he says many countries in naturo, which we are expected to defend, are not only short of their current commitment of 2%, which is low, but are also delinquent for many years in payments that have not been made will they reimburse the u.s. that is a striking comment from the president of the united states because many in naturo will point out that, of course, the 2% spending threshold of gdp on defense is a spending threshold that these countries are expected to make and expect themselves to make on their own defense. not to the united states or to nato necessarily

we'll see the reaction to that meanwhile, a lot e.u. leaders are questioning how to respond to this aggress he have tone that we see from president trump here we saw donald tusk, the e.u. council president, address the president much the united states head on today in comments here in brussels earlier. here's what he had to say. >> mr. president, please remember about this tomorrow when we meet at the nato summit. but above all, when you meet president putin. know who is your strategic friend and who is your strategic problem. >> and president trump was asked about those comments just before he got on the airplane to fly here here's what the president said >> we're being taken advantage of by the european union we lost $151 billion last year on trade, and on top of that, we spent at least 70% for nato and,

frankly, it helps them a lot more than it helps us. >> so, guys, you heard the president there deliberately conflating the issues of defense spending and trade the president here making the case that the american taxpayers, the one being disadvantaged overall, by the lack of defense spending here in the e.u. and the trade imbalances that he sees with this continent the president coming here with a set of grievances. he wants a response from these e.u. leaders, and will see tomorrow whether did he --

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>> wack back to biolunch the so being is up more than 14% since friday when the drug maker announced positive results from a phase two trial of its alzheimer's treatment. the next updated the stock saying the market overreacted to the news brian, welcome to the show >> thanks for having me, melissa. >> last week when we were talking about the results from p.a.n. 2401 the term proof of concept was being used is that stretching it in yoo you are view >> i don't think proof of concept is a stretch at all. you know, i would make an argument that we've already demonstrated some level of proof of concept by some assets. one in particular from biogen already. you know, i just take this as kind of a nominally positive data point not a hugely significant data point. doesn't seem to impact the

shares on friday >> called is a seismic move in terms of the stock's gain of $13 billion in market cap. where should the stock be valued right now in your view >> so my price target is at 323. i think this is with a 35% probability of success for -- i saw no reason to really change that meaningfully. it was my price target going into friday. it's my price target going out of friday. i think all i really saw here was a 20% move that i'm taking my one -- my hypothesis on the stock when i upgraded back in april was that it was just a cheap stock. i wasn't pricing in a lot of positive news, and continued to have a good cash flow from its ms franchise and, you know, just played out quicker than i was even hopeful that i was even going to play out. i took the opportunity to see what i feel is an overreaction from the alzheimer's to drive

the stock out where it was to take my money off the table. >> it's really just a tactical move here. zlo that was unfair given the opportunities that it has. you know, it's come back more in line, and, you know, i think people did overreact to this alzheimer's data part of it may have been a sentiment reversal in that the view was so negative two months ago on the company as a whole and at least this is nominally positive look, frankly, i just don't think -- there's not enough meat in the data for me to say this is a $13 billion move for biogen >> or to sustain a $340 price where the stock is right now do you think 323 is more real? >> i think that's more real. i think 340, 320 you know, it's all within a range of reasonable valuation. i downgraded to neutral. i don't think it's a short

i don't think it you shut down collapse on itself by any stretch. i don't really see a reason to kind of push a price target and push investors to buy the stock for additional upside here given how quickly the stock moved so tar. >> what's the next slice of data that we could expect from this company that could cause you to change your mind >> yeah. i think they're going so have have -- they said they are going to have data at a medical conference called aaic on july 25th it's only a couple of weeks ago. one of the things is really all we have is very top line information. we were just told that it hit statistical significance on the certain analysis, but we weren't provided any actual data, and, you know, i think this will give us the opportunity to really see in detail the data, and get some feedback from clinicians and academic researchers in the alzheimer's community to what this data really means is it really as positive as the top line take-away from last

friday was >> our shares of tesla now the electric carmaker striking a major deal in china. all the deals of elon musk ace tr 's abroad coming up.

>> an all new episode of the prophet appears tonight on 10:00 p.m. a simply small slices, but when marcus tries to simplify the

business model, family patriarch gets piping hot. >> this is doug's decision >> doug's decision >> take that camera off me i don't think we should stay >> you didn't want to see -- do you want to talk away from everybody else you want to look at me like you want to threaten me? >> i'm not threatening you, marcus i'm talking to you this is me >> no, i get it. i see the -- >> this ain't an act >> it actually is. >> this isn't a tv show for me >> you've been acting since the day i met you. until when you get upset, then the real deano comes out >> serious stuff let's see what happens next on an all new episode of the profit only on cnbc >> whoa. >> he is spicy >> yeah. >> all right tesla shares moving higher today. elon musk in china right now signing a deal to open a giga factory in shanghai. phil lebeau joins us with the

details. bill >> and, melissa, we should make it clear gigafactory is basically tesla speak for a battery production plant somewhere a final assembly plant. elon musk was in shanghai this morning. he moves on to beijing later this week. he was signing a deal with the mayor of shanghai. they're going to be building a plant in that city it will be wholly owned, and that's an important distinction, because prior to this, if you were an automaker, you had to partner up with a local chinese company. in this case tesla will be able to own the entire facility it will have a capacity for 500,000 vehicle. the first model they say will be two years after they get everything started in terms of construction if they can start this year, you're looking optimistically at 2020 or 2021 don't be surprised if it takes a little bit longer, and that four to five years to hit capacity, that's if they ever do get to a half million in annual vehicle production a lot of companies have capacity to go much higher. they ultimately never reach that when they're manufacturing vehicles the chinese government is

pushing ev growth. that is not a new story, but the growth has accelerated, and i think when people realize the gap between china, the u.s., and the european countries, this is only going to widen. it will increase in the future, and that's the reason why tesla is there there is no cost estimate so far in terms of what this plant will cost, and also, whether or not tesla will have to raise capital in order to fund building this plant. i know they've said they don't need capital they may not need capital, but melissa, you and i have talked about this at length they may want capital to have a little bit of cushion. especially when they put all of the money that's needed into building this plant. >> it would be the safe thing to do phil, in terms of not having a chinese partner on the mainland, how do you think tesla got this deal is it because they are an ev carmaker if bmw said we want to build our ev's in china, do you think they could cut the same kind of deal, do you think >> that was just a change within the last couple of months by the chinese government to say, okay, we're going to get rid of this requirement that you have to

have a local partner because prior to this that was a requirement, so bmw, gm, ford, everybody had to have a local partner. i suspect that you will see some type of a change with the established automakers in the future as they start to expand their facilities there because we're not seeing ahuge slowdow in growth in china you will see expansion by the established automakers in the future >> president trump lands in brussels in the next hour for a big nato meeting we will have a report. plus, great news from thailand everyone rescued from that cave, w?t what happens with these boys noa live report from thailand coming up. with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about mouthfeel. i don't think about the ink card. i think about nitrogen ice cream in supermarkets all over the world. i think about the details.

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peanut allergy please don't eat peanut ifs you brought them on board with you let's get a quick check on the markets this hour. stocks actually carving out some decent gains today marking the strongest four-day win streak for the dow and the s&p 500 since mid february bond yields also moving higher we demand the three-year note auction. or rick santelli giving the auction a grade of d-minus saying he actually hoped there was a mistake with some of data. melissa, back to you >> president trump is due to land in brussels in a little over an hour while there, he will attend the nato summit. this gathering of allies comes as tariffs and trade concerns continue to dominate the headlines. here to talk about what to expect is larry lindsey, president and ceo of the lindsey group. he is also former national economic council director. larry, always great to speak with you >> it's great to be here thank you. >> we're just a couple of few percentage points off the highs in the s&p 500 are you surprised that all this talk about trade and -- it seems

like neither side is backing off at this point, even though nothing has escalated really >> it is last employment report had metal bashing industries, add jobs. >> mash has a lot of confidence in the economy, and there's a hunch that it's all going to work out in the trade front. >> do you think it's just a matter of time before trade hit the economic data, and i'm asking because everybody wants to know what the fed might or might not do in response to trade impacting that data.

i really don't see the fed deviating from its plan to basically raise rates three times a year and continue to run off the balance sheet. the economy would have to get really, really bad for the fed to change from that and unless something huge happens in the trade front. i don't think that's very likely the size of the tariffs really sht that big relative to the size of the economy. had an article where it raised the specter that wage growth is getting a little too fast for comfort, and may start to nibble into corporate margins do you see that as a real threat to corporate profit growth?

zbha does it imply anything about the level of stock prices? >> it depends on multiples i think what's going to happen to profits is i think profits are roughly going to stagnate. they're not going to grow. >> well, i used to work with him, and so i'll just give you a

personal impression. first of all, i work with him back in the -- in 2001 and 2002, and, first of all, i have to say, he is a really, really nice guy. he is a great guy. personality-wise i think that that's going to help him go through what's about to be confirmation hell. it's going to be an asset for it second of all, obviously everyone acknowledged he is very, very smart also, you know, he is really not a wingnut. he is a very solid guy, and so i think the extremist label really doesn't work in his case as far as the effect on business, you know, he is what he says he is going to do. he is a great believer in the constitution he believes that judges should interpret. net-net, i mean, that is a pro business position.

zlo lawsuits and criminal investigations do you think that's going to be important coming down the road here >> separation of powers is something i don't pretend to be an expert on that's why we have courts and judges to make those decisions that's why we have the supreme court, to adjudicate between the congress and the executive i'm just going to steer clear of that >> you know, when it comes to the presidency, we have push and pulls when it comes to the economy. we are just talking about cavanaugh, and he seems to be pro business, as you mentioned, rolling back on the side of rolling back regulation or keeping agencies power in check. that goes right into the category of president trump and his deregulatory stance, which has been good for business we got the tax cuts, but now we have the tariffs when you take a look at the whole, you know, administration

and what they've been doing so far, what is the net effect on growth, do you think are we still on the plus side? >> obviously i mean, growth is accelerated dramatically they had accelerated dramatically certainly both the deregulation and also the tax cuts were very big positives. so far the size of the tariffs has been very, very small. i do think it is a worry that things could escalate. i don't think that's a likely thing to happen. that is a possibility. in the end i think it's in both trump's interest and g's interest to find a way out of this i think, you know, you start with a baby step, and i think there's likely to be at least a cease-fire coming pretty soon.

>> great to speak with you larry lindsey. >> thank you >> all the children, their coach, and all the divers are out of that cave in thailand let's go to matt bradley i thailand for the latest. snoo it wasn't so long ago that people like you and me -- really the tide has turned, and everybody came out alive except for a thai navy seal a former petty officer he died, and he is being remembered here as a hero. the king has come in and paid for his funeral arrangements now these boys and their coach are conval esing in this behind me they're going to be in quarantine for probably the next week, and they're going to be recupera recuperating most of them are doing remarkably well health-wise, but

their parents won't be able to embrace these children not until they're out of this quarantine really they won't be able to see the public until they're out of hospital in about a week's time. egts so dpraet to be reporting on a story like this, one that is so inspiring, and one that just defied the odds and brought so many people together. tyler, i hope that people are watching and hope they're continuing to watch how this unfolds with these boys and their coach here in thailand >> it really has been the story of the summer so far certainly from the interest level. why was it, if you know, matt -- why was it they brought them out in stages? in other words, four

>> these young teenage boys, they had not only no experience diving, not only no experience caving or cave diving, but most of them didn't even know how to swim this was a daunting challenge for everybody, and it was only after the first round that went through that officials were able to realize that they might be able to actually pull this off this was such a difficult operation, and every time they did something, every time they moved one of these children out, they had to after the first set and after the second set they had to go in, replenish the oxygen tanks that they had set into the different cavities within the cave. they had to tighten up and reguide the wires that were used to guide these boys out. everything about this was just such an unprecedented challenge, and it was only until today that they realized that they were able to actually complete the operation and bring it to fruition the way they did.

it was just magnificent. >> prayers answered, matt. thank you very much. we appreciate your reporting and your time. >> more top states for business rankings are in. thanks to the rebound, and oil prices we can't talk business in texas without talking to tillman fertita. we're talking oil, restaurants, and, of course, basketball plus, an excuse to play country music. that's all coming up hello. let's go for a ride on a peloton. let's go grab a couple

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for the fourth time texas has won the top state for business recognition in our annual cnbc rankings the state finishing first in the economy rankings thanks to a rebound in the price of oil. scott cohen is in the winning state. scott, your clues didn't help me one bit yesterday. i was totally wrong. >> you just got to work on that, tyler. maybe next year. you know, every year that we do this we try and talk to business people in the top states for

business, and this year we didn't have to look far. you know the cnbc program billion dollar buyer, the star of that show is tilman fertita, who is a houston native, and more importantly is the owner of fertitta entertainment he owns landry's restaurants, the golden nugget casinos, the houston rockets, which is why he is in las vegas attending the nba owners meeting at the golden nugget in las vegas. when we say that texas is america's top state for business, does that surprise you? >> not at all. i do business in 40 different states, and the strong economy in texas, the extremely friendly regulatory environment, no taxes, no development fees just to do a development, and the politicians understanding tip credit for waiters and not letting cities empower themselves to do crazy things that make you have to lay off employees.

>> there were -- you know, we've never come across a perfect state, and texas had some issues in our study this year it did poorly for education. it did poorly for some areas of quality of life, like health insurance coverage and inclusiveness and things like that are there things that you see that texas should and could be doing doing better from your standpoint doing business? >> well, when you live somewhere, you really don't see the negative sometimes, but that's why you do what you all did, and you are able to see that education-wise or different areas of lifestyle or whatever, that there's better places okay when you still look at it in a whole, texas is one of the great states out there let me tell you something, there's something special about all 50 states in america, and that's why we have thegreat capitalism and the great lifestyle that we all share in america. >> can i interrupt it's tyler you most especially spend a lot of time in houston, and it was

just really ten and a half, 11 months ago that the hurricane moved through there. how has the area come back, and has it provided curiously a boost to the economy of the houston and the coastal areas? >> you know, tyler, you're so right. natural disasters or any kind of disaster always usually cause a building boom after that, but things are extremely back to normal in houston. we did have one of our great floods on the fourth of july it was a wet day, and we get a lot of rain in houston, but everything is back to normal in houston. there was a great building boom. it was great for the hotels. it was great for the restaurants. it was great for all the apartments hopefully great for the citizens that the state and the country helped everybody really build their houses and everybody is in a much, much better place today. >> let me turn the conversation to one of your other businesses,

and that is casino and gambling. how do you -- what are your early reads? i don't know exactly how broadly you have been able to roll out sports gambling outside of las vegas, but how -- what are your impressions of how that business is going to develop, benefit you? what are your fellow owners talking about at the meetings out there in nevada? >> well, let's not mix -- let's not mix gaming and rockets really together, but, you know, says opening up these sports bets and what we can take bets now and atlantic city and in mississippi and being able to follow everywhere. hopefully louisiana will improve it soon. it's totally going to change you are taking something in a so many people did illegally, and i hate to use that word illegal, but it was just making bets. now you are going to be able to do it in the casinos i think you are going to see

sports book change i think you're going to see even bigger, better where there's entertainment in them. there's bars in them this is food in them you know, i know what my plans are, and i think you're just going to see the way the setup is in the casinos a whole lot different. is gambling a topic at the owner's meeting or not, the sports betting >> it hasn't been today. i have a meeting this afternoon, and i don't see it on the agenda, but that doesn't mean that it will come up it's something that the nba has been preparing for for a long time >> they have >> we all kind of had -- we all kind of knew that the supreme court was going to reverse this, so -- it will definitely come up, but, you know, it's just business as usual in the nba, and all 30 teams were out here in the summer league, and it's -- it is a lot of fun the fans really come out and see it >> we're talking to you because, obviously, we love you here at cnbc, but also because you're in

tex texas. you mentioned you do business in 40 states. scott was counting down the best states for business. in your view what are some of the worst states for business? is there a reason why you're not in ten states of this union? >> well, a lot of times it's not necessarily -- some of the worst states to do business in is where the money is you have to do business there. the ten states that you're not in are usually states that there's not the population base for the businesses that i have some of the worst states are the richest and most populous, so you have to do business there. i've said this before. just travel to different states, and you can see where, you know, cities have empowered themselves with crazy minimum wage. look what a drink is just go order a simple mixed cocktail or a beer and look at the price structure between -- in the south where you have tip credit and you don't have crazy minimum wage versus a west coast

state or city where it's crazy you'll see a $5 and $6 differential just for ordering a cocktail or a sandwich or a burger it's -- it is a different economy in different parts of this country, parts of this cou. i don't think everybody realizes that if they don't get out and travel around a lot. >> scott, you have a final question there or shall i ask one more? let me ask you one more. i don't know if it's been a year yet since you bought the rockets tilman if it's close to a year and this is your first big thrust through the free agent sooning season. i know you resigned chris paul, key player there you let go a couple of guys. one person on the market dsh i know a lot of teams are looking at him and a lot of us in new york knew his game well and that's caramel o anthony do you see him as a potential fit for the rockets? >> caramel o anthony is a fit

for all 30 teams and he is- there is a lot of athletic ability left that that tank of carmelo. and i'm sure he will end up somewhere and make a lot of fans and a team very happy. >> well done, tilman >> scott, thank you very much. we appreciate it scott, thank you, tilman, great to have you with us as always. >> thanks guys >> shares of pepsi popping soda sales down. snack sales up is that the right recipe we are trading pepsico next on we are trading pepsico next on "power $50? actually,duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutelunch.ectquote agent son shop nearly a dozen highly-rated life insurance companies,

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provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. it's time for trading nation let's check out shares of pepsi. surging 4 peppers after beating earnings this morning with a consumer staples staging a comeback in the last month is the pepsi move signaling a better staples rally ahead stacey gilbert david is with cowen. what do you think, stacey do you make more of the move today than just what's going on with pepsi story what does it say about the broader consumer staples secretarie >> we had seen a shift more recently to bullish flow within the consumer staples sector that has shifted.

i should highlight the majority of the shift were in names part of the m and a chatter they've been part of that rumor mill in the pastor specifically pepsi i would say as a company we like this our food and bench analyst covers this with a positive rateding upgrading it a up months aig on a.m.s to apples comparison to coke improvement in the fundamentals and food and beverage pacing and interestingly as potential target of m and a we would continue to own pepsi and those who want to ongss expertise which would be my expertise we like bullish spreads because the volatility levels. >> i see you are looking at it from the equity and drier testify side what do you think, david i think you disagree. >> i'm not a bierp of the sector the staples in particular. i think it had its run the downside risk is put in but i don't see the upside i'd own rather own secular growth type names. i would say pepsi in particular

they did a cigarette job in the quarter with cost cutting. and ner seeing challenge with the north american beverage business from my perspective there maybe is more upside but it's not a sexy story for me. i'd prefer to stai away from this entire sector together and alokate money. >> we got a split on consumer staples, appreciate you joining us for por more market insight head to the weblts at trading nation and follow us on twitter at trading nation. >> coming up in the second hour of power lunch president trump about to land in belgium, will he make nice with other nato leaders? or will there be tussles in brussels and there may be off cord hand shakes as big name get together even those who have been going at each other in bidding wars. and what happened to the retail rebound? we talk to one analyst downgrading retail today all that and more on power lunch. now the trading nation stats of the day and word from sponsors

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i'm melissa lee here is what's on meant u. bracing for a showeding president trump landing in bruisele and it could be another uncomfortable series of the meeting. what's at stake when it comes to trade and the security of allies pps we take threw. plus the go-to indicator for wall street when it comes to predicting a recession anis it's raising the alarm. should you be worried? we will reveal and debate straight ahead and off to sun valley where the who whose who of the media wormed are mingling and potentially make deals we take you there live the second hour of power lunch starts now ♪ everybody talks. everybody talks ♪ ♪ everybody talks everybody snoeks ♪ >> i'm courtney regan let's check the markets now montana dow and s&p 500 aiming for the fourth day of gains. the nasdaq has turned lower down

by more than 12 points sitting around session lows here utilities consumer staples telecom and energy among the best performing sectors. industrials and financials though the biggest laggards. pepsi wynn resorts southern company and quest diagnostics leading the snch 50 oh right now. >> i'm tyler mathisen. courtney knew i was tyler math inin case you didn't that's who i am let's tell what you i am right now. j.m smucker we are a name like that it has to be good and this deal may be who knows? it's selling baking business in the u.s. to a private equity firm for $375 million. smuckers move follows other food companies divesting decades old brands because of changing consume tasten bmw and baidoo joining to develop driverless technology in china and job openings in may cooling from a high. but the number of americans quitting is rising with

increased confidence that they can find a new one melissa. >> ty we begin with the markets. bob missen $and mike santelli with the stp dow a keefe level mike has been watching for a long time we have been watching this a long time. >> we are watching this. especially 280 oh on the s&p we made -- this is the fourths near approach to 2800 in the last few months. it's acted as a bit of a barrier to the upside to the previous rallies. maybe it's a logical place for it to start. but in attempt has a better shot than others. >> the chart looks great there is the chart that's a beautiful technical pattern because you have a series of higher highs and higher lows. doesn't want to get to rowe too wongy. but we are at the 280 oh level remember late part of the jan january wsh 2872 what's interesting about this, mike, to me, is we accomplished this 80 point move in the s&p without a lot of obvious

leadership last week we were all complaining it was all defensive names consumer state your names and utilities appear reets and back with the cycle sfams and industry industrials and semi conductors that's a source of strength that roe indication but it's hard to get long time direction. >> and it's hard to know if the leadership that got you to highs is necessary to get you back thereright if you look at the first time we hit 2800 in the s&p january 17th, the nasdaq is up many 6% since then the dow is down 5 from there and the russell 2,000 is up. are they hiding and can he carry us on from high tech. >> it's an interesting point my old producer put out a note internally that the six fang stocks are responsible for the majority of the percentage gains in the s&p 500 because the market cap weighed in and have have had big moves up small group big cap stocks moved forward big can push the index around that's true as we pointed out many times

you can only individual parts of the universe make a lot of money it's not there is only six stocks matter nothing else matters. retail had a great run the russell up 10% so far this year other individual names like boeing industrial space have done well. i don't want anyone to think it's just the fang names and nothing else matters anymore that's not true. >> the majority of stocks have been participating in the rally even if the amounts of market cap there adding can't keep up with the top five. >> all right, gentlemen thank you very much. mike and bob meanwhile, notable wolf moves in the bond market sparking recession fierce but are the fierce justified in steve leishman with the answer. >> that's a bold statement i do have an interesting thought. >> okay. >> the 2/10 spreads. that's the dinner ten the 2-ier and 10-year neats inand it's pinch-inching towards the point where it indicated recession it's one fed rake heit away from zero or the level reliable

predicting recession in the past some fed sbak being they would be unable to support a rate hike for that reason. but they extented a new seashore don't fear the yield curve the paper suggests there are potentials in the 2/10 spread. including central bank purchases arnold the world and deficit financing. a better way to look at it the spread between the current fed funds rate and the expected federal funds rate serve quarters ahead as derived from futures market praises looking at near term spread for the outlook forever the fed funds rate ma zbakter shows less concern than the 2/10. and the indicator is similar to the outlook for the fet rate hike and cuts when the spread is negative they expect weakness and they expect expect fed rate like when it's high. there is no magic in the yield curve it's just expression of the outlook for the federal reserve the economy. they are watching the spread but

some on the fed may feel more at ease after this paper that shows recession is not necessarily nia because of this very tight 2 shaun 10 spread. >> that's the answer. >> it's an answer. >> an answer. >> let's hope it's right. >> it's not an answer. >> what do you mean. >> because they're watching the yield curve but thet won't be frightened by a complete. >> here is the thing i think they're not going to take the same signal from it this time that perhaps they took last time or in times past been they're also never going toness any information. >> right. >> they're may be relying more on the near term spread and the outlook for rate hike. look the market continues to expect the fed to raise rates. it's not necessarily predicting recession if that's the case. >> interesting stuff. >> steve, thank you. >> so as trade fears seem to be getting pushed aside investors set sights on earnings is this another sign the rally still has legs let's bring in nancy inkler chief investment officer with heart ltd officer. and sfr james investment

research barry. i want to start with you barry i don't know if you heard the discussion with steve leastman are you afraid what of yield curve is saying or do you think this is not something to be afraid of like we were last time as steve says the fed is watching but not scared of >> well, what we see is the market does -- des react to monetary issues. it's more the quantitative tightening than i think the fed raising interest rates our study showed you get a little bit lower returns when the fed raises rates but it doesn't wipe then them out quantitative tightening if it does the opposite of quantitative easing is scarey. we have a stage market i schaul to it strawberry short cake diet that's a weird name but things going crazy. ten names account for more than 100% of the return in the s&p. the other 49 oh names lost money. and we're seeing value stocks underperforming the growth stocks good earnings underperforming bad earnings and you know previously strong

performers underperformers the weak performers everything is upside down. what that means in this diet you got die beats, you got to change the diet and it's going to be small and value and that's coming up we think in the second half of the year. >> that's interesting. nancy it sounds like you are change your diet a little bit. even though we have seen the fang names responsible for 70% of the market gain this year you are selling out of those you think you need to change up what your portfolio looks like. >> yes we are selling we are not out but we are selling is a as a relative value manager i'm interested in selling to growth stock investors when they are greedy and any seem to be greedy in in those names right now. we have been selling and redeploying in places we find opportunity that are also in the value space, which to -- i'm sorry the other guests. >> harry. >> harry to barry's point it's not just what he described but also on a valuation basis low pe stocks have underperformed hi high pe high yield have underperformed low yield. >> where are you finding the

value corners names. >> individual names more than sectors we still like some of the old technology companies. >> old technology companies like would be a what. >> microsoft, although they would organize ment sfo siskt of intel. we've been adding to those apple is a name we hold and like very much. even though we were pounding the table two years aig. but also names like home depot and fedex. we added to boeing on the weakness so broadly diversified. >> what do you think now is the time to rotate out of the higher fliers in terms of the tech names? i mean, that argument could have been made a few months aig as well david einhorn shoerted a buffalo county of fang plus stocks because he was so convinced that the time was near where these stocks would turn around and go lower. why now, nancy >> for us it's valuation but we still own facebook and google and apple we don't own netflix or amazon but we own less than they we did

they were our largest but now we run strait concentrate the pafrmts of 3.5 to 5% and but now lower we are finding better valueses there is the whole regression to mean argument that some day value will outperform again this is one of the longest periods since the depression where growth outperformed value. >> what do you think barry when we look at trade war, the benefits from tax cut what's going to win and how long is that going to continue to win if it is >> that's a great question when we look at the trade war, the last time in 2002, the market fell 30% after the trade war started. and i think what we are seeing is the counterbalance to that with the earnings, the first quarter earnings of 23% gain but we're not seeing the market able to really break through the upside even though the earnings have been great. and i think there is you know some rumblings that maybe out in the future this could hurt the overall economy and jobs and the

like so injury they're offsetting each other and we're in kind of in stasis right now. but part of that is the transition that i was talking about, the smaller, the value to maybe just kind of plain and simple companies kind of like a fiat which we like or a louisiana pacific. cheap companies with good earnings that have been doing pretty well but kind of based on the economy and not caught up in the hype of the technology world. >> a lot you guys have given us a lot to chewen. thank you very much barry and nancy. appreciate you joining us here today. coming up, the president going after nato allies on twitter. he is about to come face-to-face with the leaders of the countries. will he change his tune in person we are live in brussels media moguls meeting in idaho. big deals, battles and potentially awkward moments pmt and in order strop dropping on the downgrade. the analyst makes his case poweluh bk 2r ncisacin

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this wi-fi is fast. i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. 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. irchlt welcome bang to power lunch. president trump expected to touch down in bruiseles in the next 30 minutes or so. while there he faces european leaders at the nato summit before continuing the tour amon javers is live in bruisele was more decked out in a belgium scarf. amon i'm glad you're ready for

the events. >> that's right. you know, the nato summit is going to capture the attention of this country tomorrow right now there is a soccer match that's capturing the attention of the country all the belgium fans wearing these. french fans over hereened had me these. this is all the rage and in belgium and france we have seen a war of words, a real battle off the pitch between the eu leaders and the president in the lead up to the nature ofr summit. the is landing here in just over an hour's time you can hear some of the cheering from the publics and caveas behind me but the president has been battling with nato leaders about spending on defense. some nature of leaders decided to take a confrontational tack against him in the lead up to the summit one of the heads of the eu suggesting the president ought to mind hi allies more than strategic rivals maying more attention to the allies than ut opinion who the president visits with in finland next woks. all of in is viewed through the

eyes of the meeting with putin next week. once the soccer game is over they are paying attention to it on the street. >> you know, with the scarf and glasses that makes you switzerland. >> yes that's right are those good. is that a good look. >> you're ready. >> maybe not. >> thank you amon. >> neutral party neutral observer. >> all righty. for more on what to expect from the meetings let's bring in ian bremer president of the urjia group. ian always good of it you with us you know, i'd like to you take us threw this. but let me begin by asking this. a lot of the time the president in his tweets and in his public statements says things that have grains of truth in them and sometimes large buckets of sand of truth in them but in this case what is he right about in criticizing nato? and what is he wrong about >> he is right that the europeans are not paying

anywhere close to the 2% that was committed offed gdp in their budgets back in 2014 she are moving in that direction. some are actually paying over the 2% at this point the united kingdom, poland, for example, five countries in all, estonia and of course the united states. but most are not and the biggest economy aside from the united states, germany, in nato, has no plans to make that number going forward. and of course the antagonism between trump and merkel is probably the greatest among the allies but do you have trump not talking about all of the things that the europeans are doing, the canadians are doing, aufrmtsen was the united states, for example, the fact that there is enormous support for the u.s. led war that goes on in afghanistan. every single nato ally supported the united states in fighting in that war and taking casualties.

support in terms of the fight against isis and the broader war on terror, which continues and the idea that these countries somehow owe the americans money, these are commitments that are made to nato and to collective defense but there is no money that's being owed directly to the u.s the u.s. makes its contributions, meeting the 2% goal other countries do not or do make the contributions but it's not a question that the americans are out of pocket somehow and that some country has to pay america back because they were skin flints over the past year. >> i don't mean to nitpick on this but i want to understand here the 2% goal, if i'm understanding it correctly, has relatively little to do with nato per se. but it reflects the amount of money that the countries have pledged to spend as a percentage of gdp on their own defense budgets. am i right on that >> that's correct. and again, most of the nato

allies are not doing that. and given the fact that the united states has an enormous spend on its defense low pressure almost -- 3.5, 3.6% of the american budget is spend on defense -- that's all over the world. but certainly the u.s. does a lot more lifting in terms of disposition of troops, capacity for logistics. i mean you may remember during the war in libya you had troops from europe stranded unless the united states was capable of getting them back because they didn't have the logistical capability themselves. so certainly many of the europeans are consistently underspending on defers. that's been a problem for obama. it's been a problem for trump. >> is there any hope ian that the president could make headway when the president products them to spend more. the he says the u.s. and won't have a better ally on the eu we spend more than russia and defense and as much as china in

defense. i hope you have no doubt this is confidence in security and ends it with a smiley face. it does sound like they've drawn a line in the sand saying you know, you can't force us to spend more we the spentd plenty. >> you can't force all of them to spend more. merkel is in a weaker position let's realize why it is they're spending more. they are spend more number one because obama and trump have been pushing them to do so that 2014 declaration was under obama. since trump ha has become president they're kinning to do more more. trump deserves credit for that number you two the european economies are doing well they are growing. there is more flexibility to spend more flufrp's bunlt as well increase defense spending tax cuts spending on everything when the economy urn its back it's not as eds also russia, russia becoming more of a threat why is stone us spending up now in why is poland spending up now? that was after the russian annexation of crimea and invasion into southeast ukraine. there are several reasons the

europeans move towards spending more but these are decisions taken by individual european governments. anyone watching europe the past years knows it's like herding cats you are not coordinating these guys in the same direction >> there is a needle to be threaded here in -- i'm sorry to ask you for a quick answer as he moves very quickly from the nato meeting to a meeting next week in hell singy in finland occurs >> there is no needle. there is no thread trump is already made very clear that putin meeting will go better the nature ofr meeting will go worse. he is more agitated coming up to nato than before the g 7 the nato summit is set to be shambolic i'm set for kwauts. >> 80 great to have you with us rchlts from one awkward summit to another media moguls and titans coming face to plais face in idaho as

some fight for the same company others fighting in court lots of amdra. live in sun valley with all of it coming up next.

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welcome back to power lunch. the annual gathering of media

pogueles and tech titans kicking off today in sun valley. consolidation focusing and sheri red stone and fox. how will it play out our julia boorts isn't live in sun valley, idaho. julia. >> well, melissa it will be interesting. because when it comes to the battle over fox as well as that battle between sheri red stone and less over the future of cbs and vooi come. we have bob ieger who made his deal to acquire the fox entertainment assets 'see james rupert and lockland murdoch. the big question is comcast. brian roberts cfo of comcast and and we will see if there are awkward interactions between roberts and ieg are as they try to make polite chitchat and everyone waits to see what comcast does next and we wait to

see what what happened with red stone and less munvez. it was just a year aig they were being introduce bitted one another and now they're on different sides. >> that can make interesting water cooler conversation. so julia, what's the next generation the o of deals that could come out of the conference in that's really what we talk about a lot when we talk about sun valley >> absolutely. injury inl one thing people speculate about and talking about a couple of years but really in focus is the question of what the tech giants do when you look at companies like apple, or amazon or even google, apple and amazon especially investing more in preem upcontent. could see a company like amazon try to buy cbs could we see discovery get snapped up by a tech giants that wants more of a presence more of a stronghold in the original premium content space. we will see what the deep pocket tech giants do we have to note that soft bank is here.

he has a massive fund we'll see if he wants to invest in any of the assets then also group on reportedly up for sale the chairman is here as is the ceo of ic who could be interesting in lets buying group on. >> looks beautiful out there thank you again. still ahead will will the supreme court nominee be good or bad for business we take a closer look at that one next

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hello, everyone, i'm sue her aire here is your news update at this hour. secretary of state mike pompeo meeting with the abu dhabi prince in the capitol. in a sky news arabia interview he said the u.s. and the gulf arab allies want to show iran that its actions have a real and high cost. hospital officials say they have seen an improvement in a man poisoned in a nerve agent attack in england. they say charlie rouly is now conscious, in critical but stable condition his partner dawn sturgess died after being exposed to the poison. a charter plane crashed in south africa killing one person and injuring 20 others occurring near an airport in

preer toia soon after takeoff. smoke seen trailing the plane. norts are investigating the cause of the crash and in australia, wildlife officials say they have trapped a 15-foot salt water crocodile, the largest ever caught. and he was caught in a region popular with tourists. get this they have been hunting the 130 oh pound reptile for ten years you're up to date that's the update this hour back to you can be court. >> nasa stuff of nigh nightmares i'm extremely afraid of crocodiles and armgts i had a hard time watching and listening to that. 90 minutes until the close let's check on the markets at this hour process .. the dow, s&p and nasdaq you can zee the dow jones industrial higher about 26 pount pounds i the nasdaq is slightly lower but off at least the lowest of the session at this point. tyler, back to you. >> thank you very much court, the oil market closing for the day and being jak did

heing and list all over it. >> good afternoon to you while crude prices going bafrgt but etiologies is settling slightly leahier than the flat line and after the closing trades the the support in the trade is coming from concern over the outage in canada and now oil workers in norway are on strike that's an issue for production there. don't forget libya traders who said they expect add price decline after the fourth of july holiday now say they can't fight the geopolitical moment up. one crude trader gifting me a target of 75.40. he sees crude break pastor the recent high. >> thank you jak appreciate that. president trump nominating brett kavanaugh to the supreme court will it be good for bad for the business community in kayla taschia is live with more. >> judge kavanaugh's clearest business stance is on regulationpy which falls under the d.c. court specks. but he is skeptical of federal

agencies and believes fwres should write regulations rebuked the obama era rules bike like the epa greenhouse gas rules opinion the net rultry rules and the structure of the consumer financial protection bureau but with protection low the trump shifted action to deregulate to. which could be a catch 22. lawmakers are trying to gasoline his views on reproductive rights kavanaugh and himself say he liens on precedent >> my judicial philosophy is straightforward. a judge must be independent, and must interpret the law not make the law. a judge must interpret statutes as written and a judge must interpret the constitution as written. informed by history, and tradition and precedent. >> he has already gun meeting the top lawmakers on capitol

hill republicans home hope he is confirmed by the october term. >> how would a justice kavanaugh change the makeup of the court and decisions pertaining to corporate america in let's bring in melanie a staff writer at the hill plus sara feagin cnbc cribber and director under george w. bush also a former coworker with brett kavanaugh the two worked at the white house we'll get to that in a moment. but let me begin, melanie by asking you this. apart from the akridly partisan atmosphere on capitol hill and in the senate and apart from the fact that the democrats would like nothing more than to even the score for the way judge -- judge -- merrick garland -- his appointment was delayed they would like nothing more than to even the score for that. what is the biggest hurdle that judge kavanaugh faces? getting approval >> well, look, the truth here is that democrats content have a

lot of quivers in their boe. there is not a lot they can do than hold the line make sure the democrats don't support the nominee. and then also rally collins and mushingkowski two senate moderates to oppose him. they will look at whether he supports roe versus which had. that's something they've said is important to them. they don't want someone to upset that precedent in the past when he was determined to be a d.c. judge he said he does respect that press den. so that could be key to locking up their support also you heard him in his comments last night and in his speech from the white house. that he -- you know supports women he has had female law clerks he mentioned his wife and daughters. that could be key to locking down cht conservatives who might be concerned about his appointment. >> i hear you say it comes down to the democrats it comes to down to this as thomas jefferson famously saying in the play you don't got the votes. and they don't got the votes if the democrats want to change

courts they better start winning elections sarah whats is he like. >> he was a person of great integrity, great colleague even easily one of the most popular people i worked with dourk my six years in terms of can't think of someone who didn't like him. he was fair honest. >> what was he doing in the bush white house. >> he was a lawyer in the counsel's office during the first term then the president selected him to be a staff secretary which is a important role for a president someone helps prepare the president every day for everything. >> he is a deeply, deeply ingrained part of the washington establishment isn't he. >> well he is certainly somebody with a lot of friends and knows washington i think. >> been around there a long time. >> which is a god thing. it's a good thing when you stop and think about the ability to influence. you know, there is -- as has been reported that many of his circuit court rulings have been adopted by the supreme court it's somebody who has proven that he influences other justices that's what you want in a supreme court justice as a

president. in that regard i think trump hit a home run in selecting brett kavanaugh. >> melanie when you look out at -- i mean we think about and talking about brett kavanaugh right now but a lot of people are thinking about the next justice to be appointed and you look at the spectrum of the supreme court and what trump is able to do during the administration by the end of it let's say he is able to appoint one more justice here what does that court look like >> this could be the most conservative high court that we have seen in decades something that democrats are sure to point to and try to energize the bays around the point. they say look we need to get out here the president has the power to reshape the entire makeup of the high court with not only this pick but a potential second if there is another one in his presidency and that is going to be a huge rallying cry for the democrats but lock you have to look at the other side as well it nrpgizes in re base on the republican side. this is why evangelicals voted for trump in the first place was the prospect of a conservative

justice appointed to the supreme court. you will see both sides trying to dig up that point and rally behind the idea. >> melanie, you know with, we understand that we does believe in the power of the presidency and in 2009 he wrote that the president should be protected from things like lawsuits and criminal investigations. how important do you think this could be coming down the line? and did it play a role in the nomination that he got from president trump? >> look, of course there is speculation this had something to do with the selection it's no secret that this president could be facing litigation whether with the russia investigation, the stormy daniels lawsuit, and so i think wsh certainly it played a foork when he did tap kavanaugh to be the supreme court justice nominee. but i think there are other things at play number one he was thought to have an easier path to confirmation that's important to trump. he knows how high the stakes are right now. and number two this is someone who is ivy league educate, a reliable conservative, pro business these are qualities that he has

said he would fulfill in nominating his supreme court justice. and i think he did deliver on that promise. >> when you think about brett, i think we talked a lot about is he pro business or not pro business i don't think of it in those terms. i think he is pro strict constitution interpretation which generally comes down on less regulation, less intervention from federal government i wouldn't characterize him as somebody who is going to rule with trump on an issue i wouldn't characterize him as pro business or and i business he is somebody who interprets the law. >> contextualist. >> looks at what congress authored and interprets it and rules -- in favor of existing law. and that's what you want in a supreme court justice. regardless -- kevlt or liberal that's what you should want in a justice not somebody who is going to make up legislation which has been part of the problem. >> rules in favor of existing law suggests that he would support roe v wade. >> well i mean certainly roe v wade it's a whole other

conversation that's unlikely to come up in that forum. there is a different precedent now on abortion that judges typically follow plus science moved spoech in that debate. anything that comes before the supreme court is likely not to look like roe vertsds wade. >> it's a different conversation. >> it's discussed in the hearings but it's theorile and not likely to be a vet that any justices ever take. >> thank you sarah good to have you melanie, thank you as well we appreciate it. >> thank you >> still ahead, the trade war with china why our next guest says the president asks for the wrong thing. he will explain next jimmy's gotten used to his whole room smelling like sweaty odors.

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when it comes to the trump trade war the next guest says if the president's kwoel is to reduce the trade deficit he should forget it but that doesn't mean he is totally against mr. trump's tariffs. here to explain, martin felled stein, harvard university professor and former council of economic adviser chairman under president regan. thanks for joining us. >> happy to be with you. >> so not for the trade deficit but for china stealing intellectual property how would that work? >> well it's exactly the problem. i mean the trade deficit is

created by our own desire to spend more to consume more than we produce we can't fix that by getting the chinese to do something different. even if we reduce our trade deficit with china it will just pop up with other countries. but with china we have a serious problem. the chinese say to american companies, you want to do business in china, then you have to find a partner and you have to share the technology with them and that way the chinese are ripping off american technology. so i think the -- i hope the president will make it clear to them that if any don't like these tariffs they have to change that policy >> some would argue who against the tare i was there is a process in place already gnat wto actually would be the ultimate arbiter in these cases. i guess that hasn't worked and you think tare i was could be the exact pressure point that

china could you know submit to >> well, that is exactly right there is a wto process the u.s. participated in that. it filed a 301 as it's called, a 301 complaint. but our experience with the wto is that they just don't deal with the evidence. they just don't find in the u.s. favor in previous cases. so i think here is the ideas to say to the chinese, you don't want tariffs on alm of your exports to the united states, it's a big issue for you and if you will take seriously the technology transfer problem, we could take off those tare i was eliminate those tare i was. >> is it worth it? i mean in your view as an economist when you look at what these -- you mentioned the $500 billion right in tariffs, that would be every single little thing that we bring in from china could actually face some sort of tariff is that worth it in the end?

if we can ensure that sblg intellectual property of u.s. companies is protected in china is it worth the hit or potential hit to the u.s. economy? >> if we could ensure that the u.s. intellectual property is protected without doing this that would be great. but i don't know how we can do that so i think we have to say to the chinese here is the deal come, sit down, and let's talk about this and the chinese have come to recognize that they -- they, the chinese are in violation of wto rules. they've said already that they are they're not going to apply this requirement about u.s. companies having a partner in the auto industry generally. it's not clear exactly how broadly they define that it's not just cars but parts and so on. so they understand that they should be pulling back from this policy that has been hurting

american companies and instead, do what every other country does, allow american companies, foreign companies, to come in and do business. >> so let's go back to the wto, which -- where you just expressed frustration a moment aig, that it's a vexing organization to deal with. it's slow, bureaucratic and generally has not held on the side of the united states. the president in recently days has kind ever hinted, well what the hell good is it? and should we choose to stay in it what do you think? >> i don't know the answer though that. that's a big are more complicated question. >> you don't think we can solve that one in two minutes here on cnbc. >> no. but i think what we can solve is to recognize that the chinese are in violation of the wto rules that they signed onto when they joined -- when they joined the wto. >> so let me. >> they say- >> go ahead finish your thought. >> go ahead -- no, what i was just going to say what the

chinese is going to say we don't make anybody do this the american companies voluntarily choose to come to china knowing they are going to have to have a partner pr. but that's just extorgs. >> volunteer with a gun to your head you do what we tell you or don't come in. would you educate me a little bit because i'm trying to wrap my head around this trade stuff. and it is bloody complex i read in your article in the "journal" that if we were to reduce our trade deficit by -- with the chinese by x billion dollars or $$100 billion, we would per force then increase our trade deficit with other countries. did i understand you right and if i did, why is that true why is -- >> okay. >> if you reduce one you end up going bigger on another? >> well, you understood it perfectly. and the reason is this i'll say it in different ways.

the trade deficit of the united states is the result of the fact that we want to spend more as american consumers -- we want to spend more than we produce so if we want to spend more than we produce we have to import that difference from someplace well, if we're not importing it from the chinese then we're going to have to import it from others so reducing the trade deficit with china will simply shift that trade deficit to some other country. >> professor, always good to see you martin felled stein, thank you. >> good being with us. >> nordstrom dropping on a downgrade. what led to that call? the analyst who made it injos us to explain it. power lunch back in two. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business

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first downgrading nordstrom is urban outfitters to sector weight also while they like nordstrom's recent initiatives it hasn't been enough to drive traffic saying they expect the service to build more market shares. joining me is on the analyst

behind the calls ed, thanks so much for joining us today i understand you're on the phone because you're at fonordstroms you've downgraded the stokes so i guess you're not hearing anything at the investor day despite the targets they've given. >> i think nordstrom is doing the right thing for the business, they're continuing to invest but ultimately this level of investment continues to depress earnings, and i think that's one of the reasons why we've stepped to the side lines. >> they've also mentioned they're look into that local nordstrom concept, adding more to l.a., which is where the current one was and potentially one in new york. i want to make sure we have time to talk about urban. you think sort of the time has come for that run to end for shares of urban outfitters what's your thesis there >> look, urban again has done a great job in transition to

e-com. they've managed not to overexpand but we think it was time to at least take that off the table. we would say they're probably in the sixth or seventh inning of their turn around, and i'm not into the hang around for the last couple. >> and i want to turn into your stitch fix which hit a new high. i'm curious what kind of moat do you think stitch fix has to investors who have plenty of data which i have a history of shopping at? >> i would tell you it data is not only shopping behavior, but they're also collecting data on every component. the size, the sleeve length, the chest size and they're able to take that data, you know, what you purchased and more importantly what you didn't like, and synthesize that for better recommendations going forward. there's a focus and a way they embrace data that we don't see

at many of our traditional retailers. >> if you're a brand do you think you need to pay attention to stitch fix? >> absolutely. and many of our conversations we've heard some very positive things from vendors who really applaud stitch fix for having a very collaborative relationship. so if sizes don't fit, if colors are off, frequently stitch fix will convey that information to the vendor and the vendor can then design against that so i think it's that data and openness to collaborate that really differentiates the company. >> interesting stuff a lot going on in retail we'll let you get back into the that meeting all right, and check please is next why did i want a crest 3d white smile?

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we're going to talk about the tilt in the market, utilities and staples leading the way and so investors seem to be getting a bit cautious -- have a bit of caution going into the final hour of trading with staples up about 100 and utilities up about 0.25% or so >> they'll be able to service new york city shoppers same day particularly for food and grocery, which is something that's very hard to figure out to to do economically and in a way

that makes shoppers happy. >> does that mean wal-mart can do grocery >> potentially remember wal-mart is trying to this order online and pickup in store, that can be same day. and they're expanding online delivery same day, but not yet new york city. that's still a tricky one. >> i'm amazed how many places are delivering same day. you can order in the morning and it comes in time for dinner. our good friend michelle where is she, where in the world is mcc, she's at the world cup in st. petersburg with one of the kovted tickets she is watching the france-belgium game. and right now she's watching a draw it is tied 0-0 or as some say nil nil at halftime.

>> she's been tweeting out a lot of fun pictures at the scenes, a light up beer cup was one but also this trash can which caught my eye but how specific the trash kn in what you should put in the trash can >> it is russia after all. >> thanks for joining us >> good to be here with you. "closing bell" right now it's time for "the closing bell," everyone. a positive earning season expected while trade fears continue to weigh on investors minds. we'll weigh out which one is pli likely to win out the stock market >> president trump is heading to the nato summit to meet with u.s. allies. >> mongering this annual gathering of top media moguls and the deals that could come out of this year's conference. >> small business optimism taking a