this is a new high, higher than the ipo price. i think ifyou're trading it short term you really want to look at something like a ten-day ema and decide how much risk you want to take in the name i am still long and have no plans to sell it. >> farmer jim. >> pety was optimistic on activision, i'm optimistic on ea >> thanks, everybody "power" starts now. >> i'm tyler mathisen, welcome everybody. a trump nato trifecta. first at nato, the president slamming allies, especially germany, on everything from trade to energy. is he right to say that germany is being held captive by russia? next, the president targeting china, announcing $200 billion more in tariffs with the world's second largest economy china saying they'll retaliate are we now in a full-scale trade war? and then he moved on to drugs. president trump hammering big pharma yet again pfizer now putting price hikes on hold after trump ripped the

company and threatened action. we'll have those stories and more straight ahead as "power lunch" starts right now. welcome to "power lunch," everybody, i'm bill griffeth the president's latest trade salvo and themajor averages ar seeing their first loss in five sessions the dow having its biggest decline of the month so far. utilities with the best performing s&p sector today. materials and energy have been the weakest. transports, one of the biggest losers in today's trading. the group on pace for its worst session in two weeks and as they were mentioning on "the halftime report" the airlines having their worst day since the month of may american, alaska air, united, all leading the declines in that sector. >> and i'm contessa brewer tesla ditching its reservation system and opening up model 3

car sales to everybody in the united states and canada before this move potential buyers had to plunk down a $1,000 deposit just to secure a place in line to buy the car the battle for the uk broadcaster sky is heating up. 21st century fox raising its offer. our parent company, comcast, is expected to counter. mcdonald's and starbucks are added to the list of those planning to get rid of plastic straws this will eliminate more than 70,000 pounds of plastic every year tyler. we begin with the latest from brussels where president trump met earlier with german chancellor angela merkel right after he slammed germany for, among other things, quote, being totally controlled by russia eamon javers is live. >> reporter: we've got a new tweet and new demand from the president. he's saying what good is nato if

germany is paying russia billions of dollars for gas and energy why are there only 5 out of 29 countries that have met their commitments? the u.s. is paying for europe's protection, then loses billions on trade must pay 2% of gdp immediately, not by 2025. so that is a new demand from the president of the united states just within the past half hour white house press secretary sarah huckabee sanders had confirmed that the president asked those nato allies to beef up defense spending for 4% of gdp. now he's saying in this tweet he wants 2% immediately, not by an out year deadline. earlier today we saw the president side by side with angela merkel making nice after those sharply critical comments in the morning here's what he said. >> we have a very, very good relationship with the chancellor we have a tremendous relationship with germany. they have been tremendous -- you have tremendous success and i congratulate you, tremendous success.

and i believe that our trade will increase and lots of other things will increase, but we'll see what happens over the next period of a few months. >> reporter: now, reporters were able to ask the general secretary of nato what his reaction was to the president pressing those countries to spend more money, up to 40% of gdp. he was not entirely enthusiastic here's what he said. >> well, i will focus on on what we have agreed, and we have agreed to be committed to the pledge increasing defense spending to 2% let's start with that. so we have a way to go but the good news is that we have really started to deliver. >> reporter: so from that reaction it doesn't appear that the nato countries are going to meet the president's goal there, either in the 4% number or in this new tweet, immediately raising spending to 2%, not waiting until an out year. so the president sort of moving the goal posts a little bit in terms of what he wants, pressing those allies very intently now to increase their defense spending

from here, the president will leave, go to london, he's traveling in europe and then he'll meet with vladimir putin in helsinki next week. all eyes will be on that meeting as well. >> there's a lot of news coming out of brussels. thank you for keeping on top of it. stocks are pulling back as the markets react to the nato tension and latest round of tariffs. bob pisani is at the new york stock exchange bob, what are we seeing for the markets here it looks like we're still soft for the day. >> take a look at the s&p 500. we did drop down to the lows during the european close about an hour and a half ago essentially not far from that. but this is not a big decline considering this is a big number, the $200 billion look at the usual suspects in trade wars, they're the ones getting hit. usually semi conductors, materials and industrials weaken immediately. that's what we're seeing, sort of in line with the expectations energy down a little bit saudis are ramping up production so oil is down a little bit.

the list of goods impacted by chaina, 200 pages long took me an hour to go through the whole thing this morning the most important one, it looks like all the furniture companies will be affected restoration hardware import a lot of furniture from china. apparel and footwear was not on the list and yet i saw handbags on the list so that's not going to make tapestry very happy, the old coach. michael kors also to the downside a lot of people have said it's been two months and the s&p is up 5% in the midst of all these trade wars some people are saying let's just look at some of the numbers. here's the numbers on the china trade wars we have 25% of $34 billion there's $8.5 billion 25% of $16 billion and 10% of $200 billion $32.5 billion is still not that big. now, china, the other side, the

eu auto tariffs, the steel, so there's more than just this number involved but a lot of people are starting to figure out exactly what the is. we'll talk more in the next hour about thepositive impact of th tax cuts as well back to you. >> bob, thank you very much. in the open of the broadcast, we called it a trumpnado at nato. the president blasting the allies at breakfast and turning the meeting into what some have called the tension prevention. is it his approach uncalled for or a needed change from the usual polite diplomatic dance that usually takes place at such events here is debra lee james and former nato allied commander, wesley clark general clark, let me begin with you. his one quote today is germany is totally controlled by russia. they will be getting between 60% and 70% of their energy from russia in a new pipeline you tell me if that is appropriate, because i think

it's not what is your reaction to that? >> well, i think that we've had a long series of discussions through the state department and in nato with germany about its energy policy. certainly it would be better if they weren't as dependent on russia for energy. but every country in nato is a sovereign country. each one has its own challenges, including ours, with energy and other matters. to say that they're controlled by russia is like saying that the united states is controlled by china, because china buys american bonds and holds alot of american debt so it's a way, way overstatement. it plays well to president trump's domestic base and it alienates allies in europe who understand what the real situation is. >> general, you anticipated my follow-up question with regard to chinese bond purchases of american securities. ms. james or secretary james,

what do you think about the president's insistence that the nato partners raise their general level of defense spending not only to 2% but today to 4%? is that a plausible thing? hasn't he got a point here on the baseline that these countries are not putting in what they agreed to put in >> his point is well taken, but his tactics, as general clark said, are way, way over the top. and weaponizing the burden-sharing theme i think is going to backfire on the united states regrettably look, ever since at least the time of ronald reagan, presidents of the united states, u.s. congresses, many, many people have been urging the allies to do more for the common defense. they each will do what they decide to do within their sovereign authorities, based on their own domestic circumstances, as well as on the perceived threat and because the nato countries

are now perceiving the russian threat to be much larger, after the annexation of crimea, they have been marching to higher levels but they're all at different paths and this constant using them as punching bags is likely to backfire because their own domestic audiences will expect them to more and more stand up to our president trump. >> you know, general clark, i was in europe studying at the council of europe when these eastern european nations were applying for membership at the council of europe. they wanted to be part of nato and they wanted to join the western european nations encountering that russian threat what does it do now that there is discord and division within nato for condoning some of the behavior we've seen from russia? >> so the discord and confusion really inside nato, it undercuts the most pro western of the political leaders in each of these east european countries.

it encourages leaders to stand up and say, look, the united states is not as reliable, what are we going to do we're going to have to find our own way. and that opens the way for russia's corruption and other russian influences in these countries that are harmful to the countries, harmful to good business practices, undercut the european union as well, and really it undercuts the whole transatlantic security we're setting up so as debra james just explained, when u.s. presidents put this kind of harsh rhetoric out, especially in public on our allie allies, it's not -- it's just not very productive. nato has a process and nato will get to greater defense spending. the united states has always spent more than the allies because we have worldwide interests that they don't have and so we've got to work these

issues in the most effective means if what we're looking for is an effective coordinated nato response if we're just looking to raise the political heat at home and get some more points on the board in partisan politics in the united states, then president trump's rhetoric makes a lot of sense and if you're looking to show president putin that you're bigger than the alliance and you're willing to carve out a different path, then fine, then that rhetoric also makes sense but from the long-standing efforts of the united states really since the end of the second world war, nato has been so useful in providing security and stability in europe and security foundations for economic growth. it's benefited us just as much if not more so than the europeans. i think americans really have to understand that. it's not a matter of transactions, it's not a matter of dollar for dollar, it's a matter of building an atlantic

community in which everybody can trust and work together and grow that's what nato does. >> all right and we are looking at live pictures there in brussels as the trumps emerge from their limo for the next round of meetings to come here, probably a luncheon of some kind or a dinner this time of day, as they continue the meetings there. before we go, secretary james, it's the chess player in me, but i'm always trying to think two moves ahead here you know, general clark sort of addressed this, but what do you think comes next or even beyond this after this kind of harsh rhetoric at a nato summit? what's the response and where do we go from here? >> well, i think the key factors that lie ahead are what happens next at the nato summit. it's not over yet. so will there be any other blockbuster action, i'll say so there's words and there's action we've had some blockbuster words. what might the action be that would further upset the apple cart so that remains to be seen

even assuming that the communique, which has largely all been worked out, assuming president trump does sign that, remember, he refused to sign the communique coming out of the g-7 so that could be an action that will speak loudly if that happens. but within just a few short days, he'll be meeting with vladimir putin and my great fear is that in contrast to this very, very tense combative summit with our closest allies on earth, our president may go into a discussion which turns out to be very chummy with vladimir putin, who is -- russia, of course, is one of the top threats that we see to our security interests. i think the juxtaposition of those two things is going to happen and i think it's most regrettable. >> all right secretary, thank you very much general clark, thank you as well a news alert in the bond market right now ten-year notes are up for auction. rick santelli is tracking the

action at the cme. rick, what's the demand like >> you know, the demand was a lot better than yesterday's very week three-year option b as in boy. we're adding to a may auction, it was a very solid auction. the yield, 2.859 the one market was 2.86 but everything else solid. 65% indirects a bit better and 10.5 on directs. really a solid number. if you take out the last auction, 10.5 would be the best since march of '17 14 billion reopen 30s will complete 60% of coupon supply. by the way, they are getting ready for the group photo there at nato, which ought to be very interesting. >> the body language should be interesting to read.

>> we'll see what -- we'll see who chooses to stand next to the president in this one, although i know that that's already preassigned. so stocks are pulling back after this four-day rally we've been in. no surprise, companies with exposure to china, boeing, caterpillar, which was so strong earlier this week, they're dragging the dow lower today but earnings season is here. will it be strong enou tgho overshadow the trade turmoil "power lunch" is back after this whoooo.

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the leaders of the various nato member countries are gathering there in brussels to get ready for the taking of the traditional family photo, which i guess now we would have to consider it a dysfunctional family photo with what's been going on so far there at the nato summit. investors rattled once again by president trump's latest threat of an all-out trade war with china. he's called into question the relationship between russia and germany, so, yes, we will wait for that photo to be taken and we'll all watch and see the body language very carefully. back here the dow, the nasdaq, the s&p on track for their first down day in five trade certainly winning the tug of war with earnings today the dow having its worst day of july so far. so will earnings season be able to put tariffs in the rear-view mirror for investors when we get under way in earnest on friday

with some of the big banks jeff is with charles schwab, mike is with qs investors. good to see you both thanks for joining us today. >> good to be here. >> jeff, we think that the markets are ignoring trade problems until they don't -- stop ignoring them what did you make of the sell-off not just today but overseas and overnight, huh? >> well, we've certainly seen trade headlines affect sentiment measures and the markets we've seen the pmi surveys and of course in stocks. what we haven't seen is it affect any hard economic data. this would be the first week we would start to see that. the steel and aluminum tariffs went into place for june some prior tariffs implemented would affect things as well. how is this week shaping up? monday we got the china's fx reserves and they didn't seem to be impacted. yesterday we got some news on, oh gosh, what was yesterday's news, can't think of it at the moment. >> there's so much, isn't there?

>> there is so much. so bank of canada today moved on interest rates not much of an impact there. friday we'll get china's trade data tomorrow we get the crops report none of this actually affecting hard economic data i know what it was on tuesday. pepsico. we're getting some global companies reporting earnings pepsi didn't indicate much of an impact from the tariffs so far if that's what we hear through the rest of the earnings season, that may mute the impact to these sort of daily swings based on headlines. >> we were just noting there, the president was talking with angiela merkel would love to have heard what was being said as they get ready for the family photo mike, we've asked the question all week, what will be more important to the markets, trade, which clearly is the top story today for wall street, but earnings get under way in earnest on friday. the big banks very important to this market as well. will that put trade in the back seat, if you will, when those reports come out, do you think

>> well, it's been very clear in the recent period that the market has certainly been putting earnings over trade. and if you look at it, it's really been putting that down because the economic fundamentals in the u.s. continue to be extremely strong. the problem is there is sky-high expectations on earnings even a slight disappointment can have significant market complications. just when we were thinking about the impacts of these current tariffs and the back-and-forth between china and the u.s., of course those have an impact on the numbers. but what we do know now is president trump is dead serious about protectionism and tariffs. this is not going to be a political sideshow bring in an additional $200 billion in potential tariffs can escalate to over $1 trillion of trade-related tariffs that hit china, the u.s. and the european union. this is a major issue that the market up until today has been

completely neglecting. >> so what should i do with my money, jeff? >> you know, i think the most important thing to do with your money is to make sure your portfolio is rebalanced. one of the things people haven't done is they have let that portfolio ride maybe they're even overweight equities given the moves in recent years in the stock market growth versus value which could be internationally exposed to trade. rebalancing back to the strategic allocation is probably the smartest thing investors can do today. >> mike, as we're watching these pictures of the first lady melania trump and the president talking with other world leaders there in europe, how do you manage what may be coming down the pike in 2019 in terms of the possibility of recession or bear market and rebalancing in a way that still takes advantage of the growth that is still to come >> that's a great question and the fact of the matter is just because there's uncertainty, it doesn't mean go

run for cash but what we do have to pay close attention to is we're nine years into this expansion. we're less than 30 basis points away from an inverted yield curve. we have to pay very close attention to what potential uncertainty is going to do and what that's going to impact on your potential portfolio take a look at your portfolio. you have more than double the tech exposure than you did a decade ago at the same time you have a record low exposure to more defensive sectors, utilities, staples, pharma. you need to rebalance into those sectors of the market that will be able to weather more volatility and also have a much lower exposure to china. things like utilities, it actually has the least exposure to china in the market technology has the most. >> jeff, mike, good to see you both thank you. we ponder the markets here. >> good to be here. >> contessa wins the contest for best question in this segment. >> that's the way to win me over every time a compliment will do.

president trump declaring victory on drug prices he said he spoke to pfizer's ceo and the company will roll back price hikes. we have more details. check out a 20-year chart of pfizer the stock actually down 5% will a breakup wake up that stock? that's next on "power lunch. duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him?

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president trump declaring victory, saying he talked pfizer into rolling back price increases. meg terrell has the details. >> this really isn't something you see often for drug makers. typically they try to hunker down and wait out criticism of their prices and nothing changes. not so this time president trump criticized pfizer earlier this week in a tweet after they raised the price of fo40 of their medicine. investors have largely become inured to these type of threats. last night trump tweeted again saying he'd spoken with the ceo and pfizer had agreed to roll back its increases he applauded pfizer and said he hopes other companies will do the same pfizer said it will delay the increases until the end of the year or until trump's drug pricing plan takes effect. the thing is will trump do the same to other companies?

one that could be in the crosshairs if he does is celgene who raised on two of their medicines this week. pfizer announcing a plan to split into three units what's behind that and how would that work? >> well, pfizer has been operating as two units up until now. its innovative medicines on one side and essential or older drugs on another the reason for that is it was considering a split-up of the company. more recently the major consideration has been what to do with its consumer health unit which has been split into its own entity the company has been evaluating strategic options for that consumer health business since late last year and has since set it hasn't received high enough offers to consider a sale of that business. that come prices advil and chapstick and is thought to be worth $15 billion and a sale is still potentially on the table pfizer said it's still evaluating strategic alternatives for that unit and expects to make a decision this

year. >> ian reed made it clear that they are delaying these price increases while they wait for the president's blueprint for bringing prices lower to kick in, but we don't know what's in that blueprint at this point >> it really is a blue printing. we don't know how that would get enacted. many think it would take a lot longer than the rest of the time we have in the year to come into effect so most people think these price increases come back. >> some of these companies have been inured to the tweets coming from the white house these days. are you hearing when you're talking to other big pharmaceuticals that there's some concern about being a bull's-eye on the president's target >> that's why this is such a surprise here pfizer really changed its tune there is some concern that drug companies may be losing some of their leverage when it comes to their pricing. we'll see if he calls up somebody else and tries to do the same thing. president trump taking jabs at nato allies, slapping billions more in tariffs on china, and the stock market is falling. the dow's winning streak in

major jeopardy now boeing, caterpillar among those dragging the dow lower on trade fears. first, to london where everyone is very excited for the big event. president trump's visit. wilfred frost is there. >> that was the event, right >> hey, contessa, yes, indeed. unity, good will, optimism, three emotions very much on show for england's soccer player. somewhat act when it comes to the uk government. will they be on show for the president of the united states he arrives here tomorrow a preview of his visit coming up when "power lunch" returns

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hello, everyone, i'm sue herera here's your cnbc news update for this power president trump and french president macron meeting at the nato summit. mr. trump telling reporters that he and macron have a tremendous

relationship and that it was, quote, an honor to be with a friend of mine, end quote. this comes, though, as mr. trump hammers france and other allies over their defense spending and trade practices. ohio congressman jim jordan is fighting back against charges that he turned a blind eye to alleged sexual abuse at ohio state university when he was an assistant wrestling coach there. >> still denying that you had any knowledge of what happened >> i'm telling the truth look, i -- i stood up to the speaker of the house from my home state, stood up to the irs and have stood up to the fbi to think that i would not stand up for my athletes is ridiculous. >> the toys "r" us mascot, geoff rethe giraffe, has a new home. the fiberglass statue is now at bristol-myers squibb children's hospital in new brunswick. he will greet sick children and their families as they enter the

facility and hopefully put a little smile on their face that's the news update at this hour contessa, pack to you. >> that's odd they can't go to toys "r" us anymore. the dow jones under pressure as are the other exchanges today following president trump's latest trade tariff threat you can see the dow jones industrials off by 0.7%. s&p off by half a percent. the nasdaq off by 0.4% the dow in fact was down more than 200 points at its lows. caterpillar, chevron, dow, dupont and boeing leading the declines utilities the bright spot here aes and dte leading the gains. markets are reacting in part -- oh, we are getting the -- apparently they're about to take the family photo there in brussels so we'll look at a live shot to see the various leaders of the member nation as they stand on their marks. we were joking earlier about who was willing to stand next to the

president, but that's already preassigned. they're kind of far apart, though, tyler. >> yeah, they are. >> usually they're closer, aren't they? it's tough to get the full family photo in with what we have. >> that doesn't leave any room for elbows. >> i'm going to bring ben white in what do you think the body language is going to tell us here watching this family photo taken here >> the body language doesn't look especially warm and it's not. you know, i don't know the actual distance they usually stand from each other, but this is a summit where president trump has attacked nato allies, he's attacked germany directly, so obviously they're going to stand for this photo and hopefully look happy in it but this is a nato summit unlike any we've seen in a long time where the united states is directly at odds with some of its closest, longest time allies. >> robert costa is with us as well, the national political director for "the washington post." we've seen a lot of speculation

here about whether the president actually intends his words to drive such a wedge into nato that nato as the institution that we've known it for 70 plus years goes away. what do you think is going to happen as a result of this summit >> it's going to stir a lot of internal political debate in many of the nato countries with the president's request to up their own military spending from the 2% threshold to the 4% threshold. that's a big ask for a lot of these smaller nations to commit that kind of spending to the military but president trump, if you look at "the art of the deal" he takes an extreme position. he wants to push and prod to see how people react that's what he's doing today on foreign policy. >> did you think it was interesting that the secretary of state, mike pompeo, tweeted out that nato is the most successful alliance in history all nato allies have committed to extending this through increased defense spending, deterrents and defense

this remains our bedrock belief. that's from the secretary of state. and so as we see the president now front and center of this photo op, his secretary of state is making it clear that there is value in nato. >> of course you've seen this before, where members of the administration are forced to clean up things that the president has said and done you did notice president trump walk back his initial attacks on angela e merkel and germany and pompeo is doing that in this tweet. it should be noted as bob said that he's calling on nation to spend 4% of gdp. we don't spend 4%, i think we're at 3.5%. the nato countries have agreed to up it to 2% by 2024 apparently that's not good enough for president trump. >> do you think there's a reason for the president to point out that they are not keeping their commitments? germany is not even on track to keep its commitment when it comes to spending and it's got to be a little bit embarrassing when you've got companies like

italy or greece spending more of their gdp as a percentage than germany is >> what's jarring for many european leaders in having spoken to diplomats in recent days, you get the sense that the president of the united states sees foreign policy as a transactional enterprise and they really see it as something more grounded in values that were forged in the aftermath of world war ii, fighting the soviet union through the cold war, at least through economic and political means. they think those bonds are what really sustain nato and create the idea of the west the presidencies -- presiden president sees it as more of a business. >> we see the first lady and the spouses of these world leaders joining in we are seeing a first gentleman from luxembourg.

>> it is the 21st century. >> so you're seeing them fill in for this family photo. >> i think it's interesting talking about the body language. president trump is clearly front and center in this photograph. he is not on the periphery of it he is number one among equals if you would read the placement of the individuals. >> who decided that, i wonder? >> i don't know. i guess we pay the most for nato, so maybe we get to choose where we want to sit. >> you pay the most, you get the best pew. >> that's right. >> and the secretary general was going out of his way to compliment trump on his messaging, saying one of the reasons we've seen increased defense spending from these countries is because of your leadership. >> i think they want to appease him to a certain degree and say, yes, we get it, we need to spend more you guys spend a lot on defense. it is interesting symbolically that he is in the front of that

photo. the united states has been at the front of nato. an attack on one is an attack on all of us. the worry is that the united states is moving back from that role and does not see the importance of nato and taking positions slightly more aligned with russia and president putin. >> robert costa, you mentioned the president is the great negotiator, he's the master negotiator, but i was always taught that a deal is successful when both sides feel good about the deal, that they feel like they got something out of it i don't feel like you're going to get that from the allies with the way the president is negotiating right now. do you >> well, there are so many fronts to these ongoing negotiations it's not only about military spending and gdp and about whether the president is saying enough to embrace the traditional role of nato you have ongoing trade skirmishes with the u.s. and many of its allies western europe about different products so that hovers over this entire meeting. this is not just about security

and safety, it's also about the economic position that each of these nations brings to the table. >> robert costa, ben white, thank you. >> the photo is over they have broken for dinner i would expect. president trump now will head to london, that is tomorrow, for a meeting with prime minister theresa may wilfred frost is live in london where a lot is happening this week wilf >> reporter: hey, tyler, yes, indeed as you said, the president goes from brussels to the united kingdom tomorrow what reception will he get here? two perspectives starting here with the former conservative foreign secretary, william haig >> any president to the united states should have a close and warm relationship with the united kingdom, because our interests as countries in every field, not only in defense and security but in so many commercial fields as well is so

strong so a president should always be welcome here but people have the right to protest. this is a free country people have their opinions and president trump i imagine would be the first to acknowledge that he is a very controversial figure internationally with the policies he has on climate change, on trade that we've just discussed, so it wouldn't be surprising if there's opposition and protests. >> reporter: now, as for opposition and protests, here is alster campbell, formerly head of communications for tony blair. >> i don't think anybody can possibly overestimate just how despised he is he really is i know he'll probably think because of his scottish heritage and the rest of it -- i mean i don't think i've ever known -- and he might think it's unfair because we've had chinese leaders, we've had putin, and you haven't had necessarily the level of protests.

but i think people feel that america is a special country and, therefore, the leadership in america should be something that british people can look up to and respect i'm afraid that there is very, very little respect for him. so, no, i suspect that you'll finding the protests will be big. that people will not want him to feel welcome at all. i think that goes -- i think that goes very, very far across the board. >> reporter: now, here in london, which does vote labor, it's likely to be the epicenter of those protests. over 50,000 protesters expected friday morning in trafalgar square that's why the president's agenda keeps him outside of the central london area. for a bigger perspective on this, tomorrow we do have the first u.s. tv interview with the new foreign secretary, who took over for boris johnson, that's jeremy hunt, tomorrow on "squawk alley. guys. >> good luck >> good luck to england this

afternoon. >> i see a red jersey bleeding through that shirt he's wearing. stocks falling today after a four-day winning streak. so what are the key levels that you need to tcwah on the s&p 500? the trading nation team is about to tell us problem t if she has a heart & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when your patient's tests come back...

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just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. it is time for trading nation, a rare treat i get to do it let's check on the markets the s&p getting whacked today as president trump slings the latest salvo in an escalating trade feud with china. so what are the next key levels to watch matt maley and boris schlossberg. matt, how do the technicals look and which way does this market look like it's going to move to you. up to 2,800 or somewhere where it is now. >> 2,800 is the key level, the level we've bumped up against several times in the last four or five months the 2,700 level is the level we've bounced off of the last

two months the 200-day moving average which is 2675, that's kind of the line in the sand. to be honest with you, which way will it go i'm a little more concerned about the downside if it was only trade i'd be a little more constructive but we have a fed that is being more aggressive now that we moved into the third quarter we have european bank stocks within a whisker of bear market territory and global growth is not as strong as it used to be so i'm a little more cautious here. >> boris, where are you on this? one thing matt didn't mention there is corporate earnings, which begin in earnest next week i will guarantee you that everybody is going to be picking the nits out of these. >> i actually think that's exactly the problem. investors are focusing on earnings which i think is the wrong element here when you look at stock prices, basically 65% of it comes from multiple expansion and that's due to easing monetary conditions right now we're seeing tightening monetary conditions so i think it's going to take a tremendous amount of gains and earnings in order to stocks to

go much higher and that's why i think it is stalling like matt is saying. if you overlay the balance sheet of all the g-3 central banks against the equity market, what you see is the exact same correlation. although correlation is not causation. >> bor causation. we'll leave it there >> head to our website tradingnation.cnbc.com and follow us on twitter at tradingnation. tech was dominated by a few stocks was basically everyone in the same trades or are there other opportunities there? plus, you get a private equity investment and a private equity investment. we'll tell you what oprah is doing with her cash now. "power lunch" returns after this and now your trading nation stance of the day and a word from our sponsor >> in rising volatility markets, short-term pull-backs can represent great buying

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netflix, microsoft so what does that mean for the second half of this year we'll bring in jason ware, chief investment at the avian finance group. we'll point out at the start, jason, you own facebook, amazon, microsoft and google kim, it's not that you don't like tech but you prefer others in the group microsoft, intel, texas instruments, i guess it is zylinks and others but jason, it's the percent of gains that four or five stocks account for in both the s&p 500's gains and the nasdaq's gain this is year. isn't that often the case that a very small number of stocks drive the market >> yes, that is often the case if you look back at the last 20 years or so of data, what we see is oftentimes about 4% of the stocks in the s&p 500 account for about 70% of any year's

annual gains so to look at that -- >> so 4% account for 70% of the gains? >> correct yes, that's what the data bears out. so looking at what we're seeing now in the market, i think one could infer if you are to infer anything from market breath is that this is not something to be terribly worried about. >> how about you, kim? do you see, obviously, facebook, apple, amazon, microsoft, google, that's not 4%. but this quintet of stocks, if you throw in netflix, is responsible for something like 71% or 90% of the gains. does that worry you? and then why are you not in those but are in others? >> right well, it doesn't necessarily worry me because we, again, have seen this before but the thing is, when i'm buying stocks, i'm looking forward in time. i'm a valuing investor i don't have to own today's hot stocks so what am i looking at? i'm looking at rising wages.

and i think that's going to drive how companies finally invest in technology that's going to make them more productive i don't know what the software is, but i know it's going to be delivered on semiconductors. and it's probably going to be via the internet so your telecoms benefit as well so those are the areas i'm looking in to invest in the next three to five years. so that's kind of my answer is, yeah, these are hot today, but how about tomorrow >> okay, so jason, when i -- before i buy a stock back when i could buy a stock, i wanted to know what makes it go up but i also want to know what makes it go down what is going to make the giants go down at some point do you think? >> that would be more sellers and less buyers, right so the key question -- >> you're the analyst. they pay you for that. come on. >> right that's hot stuff right there hot take so, no, i mean, the big question is, what is going to create an environment where people want to own less of these? and in our view right now, we don't see anything that shapes

out that will suggest that that's going to happen when we think about these companies in fang, we think about them being the intersection of the consumer and tech not these are names that people understand, they are names you know most people are connecting and connecting on facebook properties they are buying from amazon. they are streaming with netflix and searching with google. they are doing all this on an apple device or microsoft-powered device so these are fundamentals that people get and understand and understand why there's growth and why they matter so they continue to buy the names. >> jason, kim, we have to leave it there thanks very much appreciate it. >> thank you president trump meeting with angela merkel shortly after blasting that country for being what he said was controlled by russia how much of this energy really does come from russia in we'll talk about that. plus, twitter wiping out millions of fake accounts in the last few months. but that means users aren't losing millions of followers we'll ask the company's former ceo for the real doneal bank accounts coming up in the second

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welcome back i'm bill griffin donald trump is slamming germany on energy deals with russia, pounding the alliance for not

spending enough on defense and sparing no ally when it comes to trade. we have a live report from brussels straight ahead. also, it's tech in the valley no, not silicon valley, sun valley we'll go live there with -- and go one-on-one with a former attorney, dick costa, with the future of media. and then oprah goes food shopping investing millions in a health-driven restaurant chain based in arizona the lucky ceo of true food kitchen takes a seat at our table to take us inside that deal the second hour of "power lunch" starts right now and welcome to "power lunch. i'm contessa brewer. president trump's latest tariff threat pushing the brakes on the latest rally we are around session lows as we speak. the transport is taking a big

hit today on track for their worst someday in two weeks look at that, the dow transports down by 2% and american airlines down by 8% the worst day for may since the dow transports and you can see american leading that decline tyler? contessa, thank you. i'm tyler mathisen we begin with early fireworks at the nato summit. president trump coming out swinging, germany taking the biggest hit so far but the family photo went off without a hitch, or an elbow shove. eamon javers is live in brussels with all the latest. hi, eamon. >> reporter: that's right, tyler, it's cocktail hour in brussels meaning they had time to do the family photo that you're talking about the famous vision of all the nato leaders gathered together and, of course, we saw the president and first lady arriving at nato headquarters earlier today for that cocktail party. some shots came out over the media of the president and angela merkel talking with the first lady so it would be interesting to see what they said to each other

privately. the president has been pressing germany all day long, beginning at breakfast, when he said that germany was really held captive by russia because of their energy deals with russia and the oil pipeline from russia to germany the president also tweeting this afternoon his criticism of germany and nato what good is nato if germany is paying russia billions of dollars for gas and energy why are there only 5 out of 29 countries that have paid their commitment they must pay 2% of gdp immediately, not by 2025 the white house tells us the president pushed the nato leaders privately to ramp up their spending to 4% not just the agreed upon 2% figure that met with, i guess you would call it a tepid response from the nato secoretary general. >> well, we will focus on what we have agreed and we have agreed to be committed to the pledge,

increasing the fed spending to 2% let's start with that. so we have a way to go but the good news is that we are really starting to deliver >> reporter: so he's suggesting there's not going to be a whole lot of give here on the nato side of this they have agreed to 2% and will try to get there for all the countries over the coming years, but that 4% idea of the president seems to be dead in the water, at least in terms of the initial reaction here in brussels now, of course, the president is going to participate in a few more events tomorrow it's on to england tomorrow and then later in the week and early next week we'll see the president in finland where he's going to meet with vladimir putin. and that is sort of the shadow hanging over the nato meeting in brussels throughout the day today. and we can imagine that we'll see more discussion of the role of russia here tomorrow in the sessions that begin early in the morning. tyler? >> thank you very much eamon javers in brussels the recent stock rally is coming to an abrupt halt today following news that the u.s. is

preparing new tariffs on $200 billion in chinese goods bob and mike are live at the new york stock exchange. bob, is this more about the tariff news, do you think? >> reporter: as soon as the headlines hit after the close yesterday, you saw the stock futures sell-off immediately clearly, that's a trigger. but i do think the context matters. the market was up 3% in four days you were at just about a five-month high in the s&p 500 maybe giving back a quarter of that or a fifth of that after a four-day with sprint wouldn't be unusual. i also don't think that trades is a stand-in for lots of things people think things could go wrong, whether the dollar goes too high, all that stuff gets to the foreground with the trade deadlines. >> and you are just hearing this, england just scored a goal, it is 0-1 nothing. >> i have no idea what you're talking about, bob i have no idea what you're talking about. what about the stock market,

bob? >> thank you, bill i'll go right back to the stock market people are approaching the stock exchange saying, bob, now it's finally real the trade war is real now, $200 billion is a bigger number than we talked about before and yet we're only down 180 points pre-open. that was it. the s&p is up 5% in the last two months because either a lot of people don't think anything is really going to happen or a lot of people think the impact is going to be minimal. so golden has widely distributed a report this week that the impact of all of the tariffs so far would be 0.1% of gdp i have a different viewpoint but i don't believe all the numbers. i don't we can assess the impact, i don't think we know what the final numbers are i think the markets have a lot more risk than a lot of people think. >> you can be right about that, a very small effect on gdp, but not know what the secondary effects are. again, if you get some huge run in the dollar, if the fed looks like it's going to be, you know,

getting too aggressive for the conditions, if you have emerging markets, you are going to melt down that creates instability and that isn't about the cost of tariffs and the direct impact. that's the what ifs. >> very good mike santoli, mike pasola, i'll let you get back to the wild new york stock exchange. can the market go back to ignoring trade troubles and will earnings be enough to push the market back up higher? we'll bring in cnbc contributor ron asana and jack abbott from wealth advisers. as i sit here with you, i think of three cnbc services. >> how does this feel? >> i feel young. >> jack, you have been with us almost as long you get honorary engagement in this party, okay you are part of the team as well so let me begin with my friend

ron. >> yes, sir. >> how worrisome does the trade squabble seem to you and do you see a way out >> well, listen, if somebody came to the table and ek no lon wanted to buy u.s. bonds, scuttling the negotiations between the united states and north korea, they have tools at their disposal to create problems down the run. i see the experience as the trade front, the geopolitical front, the political front around the world is a slow-moving train wreck. i don't think the markets will discount it in a way that in other situations would be more obvious. you know, would it be near-term impact that immediately affects the market to me this looks like it will play out over a period of time and may restrain stocks if not drive them down. >> jack, whats your response to what ron just said

and does that color the fact that you seem to favor smaller cap stocks over large multinationals right now >> yeah, ron is a very smart man. i tend to agree with him most of the time and i agree with him here. >> which makes him a very smart man. >> i think that this trade thing does have legs, unfortunately. we were worried about it earlier in the year. it has come to pass. and keep in mind, this is an issue, it's certainly not about steel and soybeans, this is about intellectual property in technology and this is an issue that both democrats and republicans can agree. so the key here, is this short-term pain for long-term gain first of all, how severe is the pain and how short-term will it actually be? so the good news is, as you mentioned, we're coming into earnings season with the running head start we got 20% earnings growth this quarter. we are likely to get 20%

earnings growth next quarter and could get over 20% earnings growth beyond that and the interesting thing is, the stock market is not moving very bhumuch i would call what we're in is a stealth correction that's probably one of the best corrections we could possibly have where we just tread water sideways and let fundamentals catch up. >> it is interesting, you called this a slow-moving train crash, but i was in kentucky last week talking to the bourbon industry about what tariffs will do to them they see it as a much faster process. and i happened to meet a manufacturer of steel fasteners from cleveland there and he told me his costs have already gone way up. and also, he says, this is going to send jobs to china because already my customers are telling me that he said, if the costs go up, why don't we just buy from china? we don't have to buy it from a manufacturer in cleveland. >> and we shouldn't -- i have a friend in the steel fabrication

business as well and his costs upon the imposition of the first round of tariffs went up 30%. and it immediately impacted his business the business was passed directly to his customers it is having an impact on the industries targeted. and you are hearing companies like tesla saying, okay, if we have to do tariff avoid dance, we'll open a factory in china and build factory cars there that's the primary effect. the secondary effect is consumer prices going up and taking time to work through the economy. mike santoli said, we don't know the secondary effects of this. so it doesn't always directly hit the stock market maybe in this days, it will work backwards to stocks from the economy. >> although it is directly hitting the stock market right now because the dow and s&p are hitting lows for the session as you see the industrial average now down 1%. as you well know, i like to simplify things because that's how i think. for me, it seems lately it's the computers that are doing the selling. it's the humans that are doing the buying here. i mean, last night we saw the

futures get slammed when the word got out that they were going to impose these tariffs. all the algos need to see is the tariffs and $200 billion and down the market goes. >> that's partial with the environment we're in with respect to market structure. and there are people who like to buy the industrials having been down and having rallied, so we take advantage of these opportunities. on a trading basis, this is a trader's market. i don't think this is necessarily an investor's market, particularly with this many head winds in front of us economically, politically and geopolitically. >> we have to go at this point thank you, always appreciate your contributions see you later. coming up, the gas deal with russia makes it a puppet of putin. does he have a point a lot of p's and we look at how dependent germany is on russia for its energy plus, between the jabs at germany and the nato allieallieh president ups the ante on trade.

what his new round of tariffs against china really could matter to the u.s. economy and more food for thought, this time from oprah organic food for thought the media mogul investing in a healthy restaurant chain the ceo of that chain joins us live ahead d ow lchisack in two minutes. [phone ringing]

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welcome back to "power lunch. private equity has been increasingly looking to asia for opportunities. why now? leslie picker is here with this story. leslie, why now? >> what trade war, contessa? the trade war is not stopping private equities biggest players from looking to put capital to work in asia of all places carlyle raised a $6.6 asian dedicated fund blackstone raised more than $9 billion for buyouts and real estate in the region bain is targeting a $4 billion fund there as well a record $62 billion flowed into asia-dedicated private funds last year. that's up 62% from 2016. but with the trade war looming in the background, the question among many investors and many in the media is, why now?

well, for one, it's opportunistic with sources of the acknowledge say the industry sees asia as a maturing market more and more family-owned businesses have grown to scale and looking for willing buyers like private equity to take them out. initially, the growth profile and evaluations can provide greaterpotential for gains than similar assets in the u.s. where we see valuations rise to record highs. of course, the challenge now remains with the trade war is that it could provide a regulatory and financial challenge to these deals, at least in the short-term. but a lot of the sources i speak with say this is more of a long-term play anyway. so we'll hear from blackstone's president, john gray, and parlow's founder a week from today where this will be a key part of the conversation. >> that will be a fascinating conversation leslie, thank you for that the nato summit kicking off on a contentious note with president trump starting a fight with germany on energy the president criticizing germany for striking a gas deal

with russia. now, according to eurostate, the statistic agency, russia is responsible for between 50% to 75% of germany's total gas imports. so does president trump have a point? bob mcnally is founder and president of the rapid energy group. and also served as senior director for international energy on the national security counsel under president george w. bush. it's good to see you today bob, when we're talking about germany's relicense on russia and europe's reliance overall, do they have a problem on their hands? >> they do in raises nordstrom today, president trump tapped in deep and broad currency of discontent with germany's dependence on russia germany gets about half of its gas, 55%, in 2017 from russia. in nordstream 2 is built and doubled, just about all the gas

comes from russia. the eu has a whole gets 38% from russia this has been an issue going back to the 1980s. the united states was concerned when germany was first becoming dependent on soviet gas. the germans see it differently and see it as a calming kind of a factor, but it has always been a strong and bipartisan concern. president obama, president george w. bush, this administration has opposed the deepening gas connection between germany and europe and within europe, there's a lot of discontent about nordstream 2. the eu is concerned about the monopoly power and will fool with pricing and ruin market forces there the danes are concerned about security and the seabed being used for the pipeline. and the baltic countries and poland are concerned that nordstream 2 would enable russia to cut them off to use political pressure so president trump has picked a pretty interesting and clever, frankly, issue to both continue

his feud with chancellor merkel from germany and also to tap into this broad sense of discontent with this deepening relationship on gas between europe and germany, especially in russia. >> how likely is it that they can continue to enforce eu sanctions against russia if they're growing their relicense on russian energy? >> yeah, it makes -- so germany is sort of come to terms with having a gas dependence. a mutual dependence with russia. and that makes germany somewhat more reluctant to pressure russia however, germany has joined in some sanctions when russia steps over the line. particularly recently with the attempt to kill folks in the u.k. so germany can go -- germany will act if russia goes too far and the ukraine as well. however, were this relationship to deepen and germany to become pretty much wholly dependent on russian gas, clearly there could be a concern that germany would be less willing to stand up to

russia when it acted inappropriately. >> so i was going to ask you, and we just put up a graphic there, if we can put it up again, indicating that if all of germany's energy sources, 7.4% comes from gas, if indeed germany is, as the statistics say, dependent on russia for its gas, what are the at terntives for germany and other european nations should there be some disruption or hanky-panky with the supplies what are the alternatives? >> the alternatives are lng. they don't have regas terminals but other countries do lithuania has those. they could depend more on lng, gas from the ocean, if you will. and they could also reconsider their determination to end nuclear. one of the reasons germany's getting deeper into dependence on russian gas is they are shutting down their own domestic nuclear fleet. and in addition to coal.

so they have other options, unlike transportation, with electricity, you have other options. they are not pleasant. they may not be the cheapest they have their own down sides but there are options if germany wants to sort of stop from going all-in on dependence in russian gas. >> bob, you used the word clever when characterizing the president bringing up nordstream 2 at this point, what makes it clever and what is his objective in doing it do you think >> if you look at the commentary today, you see even from the president's adversaries a grudging acknowledgment that while he may have mischaracterized how much energy germany gets from russia, et cetera, that he has a point when it comes to nordstream 2 again as i say, there have been long and deep and broad concerns in europe and in this country. >> is he trying to undercut angela merkel? >> certainly this, i think, is a great brick he's using against angela merkel and as part of their running feud, which is just intensified here absolutely it's also a signal to president

putin who he will meet with shortly in helsinki to say, this is on the table but i'm going to raise the cost for dealing on this i think this is on the table with president putin among the other things so this is a signal to chancellor merkel that he's escalating with her in that feud and it's also a signal to the united states and the public saying, look, how ridiculous is it that we're protecting these countries when they're buying all this gas and energy from russia becoming dependent? we are making those arguments since the 1980s. the president is freshening them up now for his own purposes. >> bob, thank you. good to see you. appreciate it. >> you bet, thanks coming up, the incredible new video from the rescue of the thai soccer team the team is recovering in the hospital now we'll go live to thailand for the latest on that and stocks headed lower. we hit session lows a moment ago. caterpillar and chevron leading the dow decliners at thohis ur "power" is back in two

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hello everyone i'm sue herrera. here's your cnbc news update at this hour.

a group of student survivors of the shooting at the margery stoneman douglas high school are now taking legal action. the attorney representing 15 students announcing they are suing individual law enforcement officials who failed to act during the february shooting >> this lawsuit is two ensure that this never happens again. that law enforcement is aware that we're expecting them to be heroes that's their job and if they choke and they cause people to die, they will have to face the music an e. coli outbreak at a zipline park in tennessee is the cause of hundreds of people becoming sick. the tennessee department of health performing a water test confirming there was e. coli contamination in the well system and three men were injured during the fifth day of the running of the bulls in pam low -- pamplona only one person has been gored

but many have been hurt. today's run lasted two minutes, 55 seconds >> those people all have mothers who would have presumably told them -- >> many of them have children and spouses, et cetera whatever >> to each his own yep. sue, thanks. markets right now lower heading for the first loss in five sessions. the dow is off by .75% at this point. looking like it's a tough day here, down 185 points. the s&p off by 16. the nasdaq is off by 34. those trade fears are hurting stocks boeing, caterpillar, 3m and apple. the china-exposed companies are leading us lower tyler? thank you very much, contessa oil tanking today and closing prices now we'll go to jackie deangelis and not a second later for the commodity desk update. >> crude prices are dropping

today along with stocks on the trade fears. two issues here, first, demand could be impacted. and second, china could impose duties on crude imports. so it's a reasonable threat people are considering and you can tell that the downside sentiment is down today with more than a 12-million barrel draw-down in crude inventories. that's a significant number that should have supported prices more or even turn them positive. obviously it didn't. oil dropping 5% today. the worst day in more than a year session lows are $70.02. that's a test of the critical level. speaking from a technical standpoint, it's a sign it will violate it guys. thank you, jackie. economists sounding the warning signal about the next round of tariffs threatened by the trump administration senior economics reporter steve liesman here with the impact on the economy and how it's expected to grow steve? >> the latest threat of tariffs from the trump administration are sounding a new and much louder alarm bell among many economists they worry that $200 billion of new tariffs against china, which could include retaliation from china, could have a meaningful

negative impact on prices and u.s. economic growth morgan stanley saying, quote, we are now testing the idea that trade disputes are a contained economic event tariffs are creating earnings noise and eroding fis sal stcal stimulus we got to look this morning at the consumer price index about the price impact from tariffs. the wholesale numbers are up 23% compared to a year ago following tariffs imposed last year. spread that across the economy in the chinese imports the government reporting washing machines and metal prices higher and with the national retail federation, which is a strong opponent of the tariffs, the trump tax. the tariffs are a negative for economic growth but also inflationary now, one trouble for forecasting tariff impacts is economists don't know what trump wants from all this if they are negotiating tactics, they could go away and have little impact. but he and some advisers have

also said they are designed to protect u.s. industries for production if that's the case, they need to be around for a long time to work so this is as many as we have heard both from the targets of the tariffs as well as critics here at home, if they don't understand the end game here the end game here the to revive the industries you don't get rid of them quickly. if it's to negotiate, they sit down at the table and are gone like that. >> we were sitting down with martin feltstein and i asked him a question, if you reduce the trade definite with china, by definition you increase it with other countries. and i said, isn't there a third way here in other words, why can't some of the production be moved into the u.s. and that is the end game that you were describing that trump may ultimately want. which is to have more domestic production of the stuff that is now made in and by china >> i'm sorry i didn't see the interview with my good friend marty who is a smart gentleman but not only that, but the idea that it could go from china to vietnam or thailand or india in

a big way. the other thing is, we're going to have the money that we get -- we have to deal with the deficit, and we have to go elsewhere no matter what to save more if we don't, we have to get it someplace else. >> it is all very complicated. we'll bring in dan mitchell, co-founder from the freedom of prosperity with the american enterprise institute and a cnbc contributor. dan, i know, of the two, you sort of understand why he's doing this more than others, but what about what steve is talking about here we're just -- what the end game is going to be we'll have to do this for a long time if the objection is to bring production back to the united states here >> that's the great unknown question what does trump really think and my concern is that he

actually believes that a trade deficit is de facto bad. and if he thinks every country has to have a zero trade balance with each other, then that's sort of a giant green lake to do ultra protectionism, ultra intervention so i'm not in the optimist camp. i don't think trump is just doing this to negotiate. i think he generally, genuinely, have a misunderstanding of how trade works. and uh think some of his trade advisers are contributing to that ignorance >> jimmy, what do you think? >> well, i'm very confused about the end game because at times trump will talk about the end game, just how advanced it is, it's all about reducing or getting rid of the trade deficit. that's one kind of end game. which, of course, i think is an impossible end game. then there's the idea that the goal is to change how china operates change in the economic model the i.p. theft, the poor technology transfer, the

subsidize industry the made in china 2025 plan. also extraordinary difficult trump has yet to define if that's the goal, then what does it mean to win so we have a lot of uncertainty here and let me tell you something, if wall street is waiting for congress to ride to the rescue here and limit trump's power, there is very little evidence, and we had a vote today on a purely symbolic vote to rein in trump and use national security as a reason for tariffs, and a good chunk of republicans voted against it, even on a non-binding resolution they are on their own. >> and the questions about whether that will have repercussions come midterm elections or down the road in the next presidential election, we're in a wait-and-see mode but the trade representative is saying, rather than addressing legitimate concerns, china is beginning to retaliate there's no justification for such action. what did they think was going to happen when you slapped them with all the tariffs >> it's almost as if they don't realize that other countries have their own political

considerations as well so if trump is playing to some of the special interest groups by waving the flag of protectionism, does he really not think -- not just china, the canadians, the europeans, everyone, the mexicans, everyone is retaliating against us. so when you start adding up the casualties, yes, american importers are hurt, american consumers are hurt, and american taxpayers are hurt, because what are these in trade taxes but manufacturerers are hurt because of the cost of inputs like steel and aluminum going up lumber is going up as you just pointed out. so everyone gets hurt by this. and here's what concerns me. when you're talking a few tariffs here and there, that's like being one month pregnant. now trump just announced a big new wave of tariffs against china. now we are three months pregnant when we are nine months pregnant, it's the great depression again with horrible tit for tat profectionism. >> final thought, gdp, as dan points out, these are rising input rate costs how soon do you expect to see

these things show up in inflation? and could that, indeed, trigger the fed to move highering and faster with rates to stop inflation? >> the administration sort of has ignored the fact that the fed has a vote in this whether it is the tax cuts or the stimulus the fed can raise rates faster and quicker than they expect or they need to start to take the fed into account also, the president is giving a national speech. if we are going to dismantle the post-world war ii economic and national security trustructure, what comes next? >> dan mitchell, thank you to you. it's the feel-good story of the year if not longer incredible video revealed by the navy s.e.a.l.s to show how the divers pulled off the miracle rescue of the thai soccer teams. the team members are recovering in a neighborhood hospital matt bradley is live in thailand with the very latest there matt >> reporter: hi there, yes, this was a rescue operation that

really defied the odds it wasn't so long ago that all of us really believe that there was a possibility that these 12 kids and their soccer coach could have perished in that cave but this was a huge rescue operation. we're talking about more than a thousand rescuers, divers from across the world, an international team of more than a dozen divers who were actually leading the people who were getting them out of the cave and i want to draw attention to the hospital behind me this is where these 12 boys and their coach are now con have convolessing they are in isolation to protect themselves from pathogens in the air that could affect all of us and to protect the rest of us from what they may have contracted in the cave some scientists are worried there could have been fungal or bacterial pathogens that could have infected them and could infect the rest of us if they came into contact with bats or rats in the cave but right now, everything we're

hearing from doctors is that this is going remarkably well considering the circumstances. they are starting to eat solid food and that is big progress there were at least two of the boys who were afflicted with signs of pneumonia they have been up given antibiotics and seem to have their symptoms diminishing everything here seems to be on the up-and-up. so this story that just a few days ago seemed like it was going to be a miracle, as far as we know, it turns out it looks like it is going to be a miracle in the end back to you. >> are you getting any sense of when the families are going to be able to be reunited with them in an embrace, not just through a glass window >> reporter: yep, that's really one of the most wrenching questions of all this. you can even imagine what it would be like to think that your child was going to be killed two weeks ago, and now to not be able to embrace them but to see them and that is really the drama that is unfolding right behind me we understand that just today the second batch of boys were

able to see their parents and their family members in person but those family members weren't allowed to advance more than two meters toward them and when they did go into the room with them, they had to wear hospital scrubs, they had to wear boots and mittens and that kind of thing in order to protect themselves and protect the children from any bacterial pathogens that may be in the air. so again, this is -- it's becoming more and more normal as the days go on, but the batch that was released yesterday that was rescued yesterday, they still have to wait until they're actually able to see their parents. and the batch released on sunday, they may actually be able to finally embrace their family members in the coming days but that's up to the doctors, not to us. >> matt bradley reporting from thailand, thank you, matt. still ahead, media moguls and tech titans meeting in sun valley right now, including the former head of twitter he is joining us live next but first we check on the markets, the s&p sectors are lower except for utilities

uray linets are about to snap a fo-dosg streak "power lunch" will be right back

welcome back to "power lunch.

the media moguls and tech titans are meeting at sun valley lodge. and there's where julia boborstn is >> sorry about the sunglasses. if i took them off, i would look like mr. magoo >> headlines out of your company today, they are shutting down tens of millions of locked accounts to impact user follower numbers. is this bad news is this going to annoy and alienate users >> no, this is just another step in the health of the platform initiative that jack announced a while ago. all that is going to happen is there will be a, i think, my guess is there will be a short-term drop in the number of followers that you have, but those were accounts locked and inactive because they were suspicious of abuse anyway so it will give people a more realistic perspective on what the real follower account is, the accounts active and on the

platform and engaged and that is a good thing and just another step in the process of making twitter a healthier platform >> and now twitter recently talked about the fact that it's shut down about 80 million different accounts, spam accounts between may and june alone. you said back when you were running the company, quote, we suck at dealing with abuse >> i said so many more eloquent things about it. but that's the quote >> are these the latest accounts to be shut down? is this too little, too late you said that back in 2015 >> no, i don't think it is too little, too late i think what jack and the general counsel have said and have stuck to is, we're going to have a real focus on the health of the platform and healthy conversations. and that's going to mean a number of initiatives. it's going to mean removing abusive accounts it's going to mean removing locked accounts from the follower numbers it will mean prioritizing high authority conversations in the

reply chain instead of what might be nonsense or abusive replies in the conversation chain. all of those things will come together, i think, to make twitter a healthier platform and a platform for healthier conversation and that is good and i expect to see more of this >> i have to ask you about the m&a chat we are fox valley comcast expected to counter. >> it's not just chatter, it is real offers and counter bids and the like. >> so what's next? what are the next big deals you're hearing about >> well, i mean, the short answer is, who knows there seems to be one in the last couple months around every corner i think when amazon and apple and netflix can bring so much capital to bare to invest in content, netflix investing millions of dollars a year in content, it necessitates some consolidation in certain areas of the industry. and i expect you'll siee, i expect you'll see a lot more

who knows when that will happen. >> we have not seen netflix or amazon or google make serious acquisitions, will this be the year when the big companies make the pig purchase and what types of companies do they want to buy >> amazon is doing so well with the organic growth of subscribers. in amazon, it is prime subscribers. it is not clear they need to do much else. i would say that i am surprised that google hasn't been more ainquisiti ainquisitive you see the chinese companies being extremely inquisitive to increase their subscriber bases in other areas of business and i have kind of thought all along that google could get more inquisitive and am surprised we have not seen it today. >> and apple will put the cash to work? >> always hard to know with apple. historically, the company is

very much we're going to build it here internally rarely makes big acquisitions. they did beats, but it doesn't really step forward and do that a lot. but google has in the past and they have been silent recently so i expect a little more from them. >> dick costolo, thank you appr >> thank you. coming up, food for thought from oprah. >> here is to a great future together, fresh ingredients, true food for the true you, yea team. >> the media mogul taking a stake in true food kchiten, the very happy ceo joins us live next. duncan just protected his family

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oprah getting into the restaurant business, taking a big equity stake in true food kitchen. what's in their secret sauce that convinced oprah to invest let's ask the very happy ceo of true food. welcome. congratulations. thanks for joining us. >> thank you so much for having us. >> as i understand it, oprah had lunch there one day and loved it so much, the service, the food

that she picked up the phone and asked you to have lunch. did you believe that that was oprah calling asking to have lunch with you >> we were quite surprised and thrilled and i was really proud of my team. >> what was itb about true food >> absolutely. i think like many of us, myself included we fell in love with true food when we walked in. we saw the bright atmosphere and the menu. we enjoyed some of the delicious food that also happens to be healthy for you. i think very much like the way that i fell in love with true food and all that it can be that she fell in love with the concept herself. >> how many locations are there? how much do you expect to expand over the next few years? give me a sense of what you serve there. >> absolutely. when i joined true food kitchen we had 12 locations. we now have 23. we expect to double in the next three years.

we are growing quickly looking for places across the country to expand. as far as our menu goes, we just launched our summer menu today. so we will have the first taste of summer. we have a lot of water melon on our menu. we have a lovely new korean noodle salad with sweet potato noodles and cucumbers that is absolutely delicious. >> i'm curious because i have seen shark tank and how when people take equity stakes they say we have to change this. how active a role does oprah have in what your business plan is >> absolutely. we are thrilled that she is joining our board of directors. i look forward to sitting down with her again and further sharing our strategy with her and understanding what else she would add to it and what she feels that we are doing a nice job at today. >> she calls her ms. winfrey. we call her oprah.

>> how much does she invest? >> i can't share details on the investment. we are thrilled to have her on the team. >> i tried. we look forward to seeing what comes next for true food kitchen. thank you for joining us today. >> thank you. check please is next. jimmy's gotten used to his whole room smelling like sweaty odors. yup, he's gone noseblind. he thinks it smells fine, but his mom smells this... luckily for all your hard-to-wash fabrics... ...there's febreze fabric refresher. febreze doesn't just mask, it eliminates odors you've...

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a rough day for soybean prices today. a ten year low. 13% decline since the beginning of the year because of new announcements about tariffs.

the president must have been notified because he tweeted out that he is in brussels but thinking about our farmers. soybeans fell 50% from 2012. other countries have been destroying businesses, i will open. soybeans are one of the biggest exports. at wimbledon roger federer lost today. we have a very imbalanced bracket because novak and rafa are on one side and maybe john isner and somebody else. also i'm told that they have relaxed the cell phone ban at wimbledon today so that they could watch another sporting event going on. let's take a look at oil. energy the weakest performing sector in the s&p complex. crude down nearly 4.25%.

a draw down in inventories and the saudis reacting perhaps to president trump's calls to pump more oil, that driving crude down to below $71. thanks for watching "power lunch" and thanks to bill and contessa. see you on friday. it is time for the closing bell. another shot fired in the trade war with china and stocks are taking a hit. we've got the latest. the number one analyst in the payment space joins us live with her top picks and what she calls the one disruptive to the sector. a huge week for the united kingdom. the government in turmoil, a world cup semi final and the arrival of the president of the united states of america. full update from london coming up as "the closing bell" starts right now.