bad week but i don't think it's that bad i like the stock, i'd buy it. >> it wasn't funny when doc did it. >> starbucks reported earnings last night the multiple is too low. >> have a great weekend, everybody. thanks for watching. "power lunch" starts now. shares of cbs slammed right now. reports of sexual misconduct allegations against ceo les moonves. the fallout straight ahead president trump saying we are on track for the best economy in more than a decade, but is this as good as it's going to get twitter shares are tanking monthly user numbers keep declining. the stock has had an amazing run, has it hit a top. plus the profit. the economy, jobs and this weekend's nascar race. rev your engines, "power lunch" begins right now

welcome to "power lunch. i'm courtney reagan, what a day to join the team here. stocks near session lows the nasdaq taking the biggest fall both the s&p and nasdaq seeing their biggest declines in a month. still the dow and s&p remain on track to post their fourth straight week of gains but the nasdaq on pace to post a second straight weekly decline hi, tyler. >> all right, courtney, thank you very much. just because not enough people have said welcome to "power lunch," i will add my welcome. i'm tyler mathisen, we're glad you're with us on this very busy friday afternoon we begin with a developing story right now. shares of cbs plunging on reports that long-time ceo leslie moonves will be accused of sexual misconduct in an upcoming "new yorker" article. cbs issuing a statement. julia boorstin is in los angeles with the latest. julia. >> that's right, tyler you see those cbs shares declining ahead of an article from the "new yorker" that's expected to report on allegations of sexual misconduct

against les moonves. the stock down 6.5%. the independent directors issuing a statement saying all allegations of personal misconduct are to be taken seriously. the independent directors of cbs have committed to investigating claims that violate the company's clear policies in that regard upon the conclusion of that investigation, which involves recently reported allegations that go back several decades, the board will promptly review the findings and take appropriate action the timing of this report comes in the midst of the company's very public legal dispute. while that litigation process continues, the cbs management team has the full support of the independent board members. along with that team we will continue to focus on creating value for our shareholders that legal dispute is between moonves and national amusements which controls cbs and viacom and pushed to combine the two companies. viacom shares are about 4% higher on this news. les moonves was asked about leaving a company amid a wave of

me too allegations back on november 29th. take a listen. >> it's a watershed moment, i know that's become a cliche and a lot of people have spoken about it over the last short period of time you know, it's important that companies educate, have an ability to have a dialogue to know what's going on i think we've been surprised by things that we've seen, but i think it's important that a company's culture will not allow for this. >> we're still awaiting that article from the "new yorker." guys, back over to you. joining us now on the cnbc news line is larry haverty what's your take on the shocking news >> well, you have to take a deep breath and analyze what you know

"the new yorker" is a very credible media source. it's like "vanity fair." it occasionally breaks big stories. we'll have to see the story and wait for the individual board investigation. but i think, and i've said it on the network, that les moonves is replaceable. if you look at the stock chart of cbs over the last five years, it's basically flat. moonves has taken out several hundred million dollars and the shareholders have not had any appreciation grant granted, there was a lot of appreciation before that, but none in the last five years. in addition, i think there's a very important issue here in terms of management versus ownership. les is the manager the red stone interests are the owners he has opposed the management's

wishes -- or the owner's wishes and as a consequence, we have court action i think there's a decision expected. >> right. >> somewhere around october. >> you know, larry, that leads me to my next question in terms of the ownership of this company. just to put a fine point on "the new yorker" as a publication, this is not just a piece, this is by ronan farrow who has won the pulitzer prize for his investigation into harvey weinstein so this is perhaps why the stock is falling so sharply in reaction to this. in terms of the ownership, does this open the possibility or raise the probability of perhaps viacom and cbs ultimately combining? >> oh, i think it makes it almost a certainty i think -- and we're involved in both of the companies, so we're not uninterest ed bystanders.

i think here looking at an owner of this business, you probably are going to be better off viacom is going to benefit from an enormous box office for the "mission impossible" movie which has been very well reviewed and opens today. if you look at cbs without moonves, the programming for this year is all set the sports are the sports with or without him so i don't think his leadership is going to have a tremendous effect on the cash flow. and i think this is going to facilitate the combination, which is going to unleash a couple hundred million dollars of synergies and my own view, and i don't really know what sherri redstone's long-term game plan is, my own view is the likelihood of this combined entity being sold in the next few years is very, very high -- >> so larry -- >> and would make a lot of

sense. >> i'm hearing you say that you expect that a combination of viacom and cbs is more likely as a result of what we have been reporting today per ronan farrow and your presumption is that he's going to be gone soon >> i don't -- you know, i don't really know. i'm not looking at any facts i don't have anything other than i'll probably be buying a copy of "the new yorker" when it hits the press. this is going to take a long time but these accusations are serious. the journalism here pending seeing the article is very credible this isn't a sensational tabloid. >> but he's opposed the combination, correct >> i'm sorry >> mr. moonves has opposed the combination of those two companies? >> oh, yes, absolutely absolutely >> so if he's not gone and is still in power, why does it make it more likely that the two would get together that's my question

>> i think if there's fire here rather than smoke, he will probably not be in his current position >> okay. >> i think that it's unlikely that he would -- he would continue these are -- in 2018, these are very serious allegations >> larry, thank you very much. >> i believe you can't judge a case until you've seen all the facts, and there won't be a jury here but i think it's a real problematic situation and i wish everyone the best. but should moonves be forced to lee, i think a combination will and probably an eventual sale and the shareholders and the owner will be net beneficiaries. >> all right, larry, we appreciate it. we're going to take a hard turn to something else that's quite important here at cnbc, that big gdp number. the american economy growing at the best face in four years.

what's fueling it? steve liesman is here to go behind the headlines steve, educate us. >> courtney, this number requires a deep dive here. let's talk about the top line numbers first. gdp 4.1%, exactly in line are the cnbc rapid update. and the second quarter -- first quarter revised up by 0.2 to 2.2% from 2% now let's look at all the components of gdp. the first is exports surging, that's part of the better u.s. economy. also maybe some people exporting stuff to get in front of higher tariff prices. business investment also doing quite well 7.3% the consumer doing very well that 4% number is very good for the consumer maybe that was the tax cut money, the additional money they got from tax cuts. we'll see if they can continue at that pace government spending also doing quite well, driven substantially by defense spending. and housing is down 1.1%, the real laggard in the economy. turn this on its head and we'll look at the contributions to

gdp. you add up those numbers across the top and that's how you get to 4.1 the consumer added 2.7 percentage points. trade also doing quite well. government doing its part. business investment up 0.9 and inventories are down here's what's interesting. on the right-hand side of the screen from government, business investment and inventories, you have the possibility of continuing to add to gdp in the months ahead you'll get more government spending, more business investment and inventories will likely turn around pantheon said looking ahead, the big stories in q3 will be the slowdown in consumption. q3 probably was boosted by the tax cuts hfe says we are forecasting a 3% n pace in q3 and q4. the outlook for the fed pretty much unchanged a quarter point in september, a quarter point in december. what's happened recently is what

was a june 2019 is now may so they moved that up a little bit. >> that's the meeting? >> that's the expectation of the quarter point at the meeting >> thank you very much president trump taking a victory lap soon after the gdp report was released saying the american economy is going to go a lot higher from here kayla tausche is in d.c. with more. >> after days of drumming up expectations for gdp at rallies across the country, president trump took the opportunity after that strong gdp print to tout his overall economic agenda. he chalked up the growth to tax reform, deregulation and trade policy >> we're on track to hit the highest annual average growth rate in over 13 years. and i will say this right now and i'll say it strongly as the trade deals come in one by one, we're going to go a lot higher than these numbers, and these are great numbers. >> trump said the u.s. is poised to do extraordinarily well in the third quarter too, and he

said his chief economic advisers, larry kudlow and kevin hassert told him the growth would be very, very sustainable, that despite the suggestion from economists that the data showed tax cuts may have temporarily boosted business investment and consumer spending and that companies rushed to export goods ahead of trade disputes. asked about that particular dynamic on today's report, larry kudlow told reporters he's not sure exactly what that impact was. because of higher exports, the trade deficit shrunk by $50 billion. that's a number that he said made him feel more honored than the growth number itself, but the administration expects this to continue at least for several quarters tyler, we'll see if it does. >> we shall see. kayla, thank you very much so is the president right and can the economy head even higher from here or is this maybe as good as it gets? joining us is austan goolsbee and lanhee chen.

mr. chen, is there a nit to pick in this report or is it all tulips and roses >> look, i think there are always nits to pick and always ways of looking at these reports and saying on the one hand, on the other hand fundamentally what you saw from the president today was the kind of economic cheerleading this is something that our own friend, larry kudlow, would have been delighted in, probably had a hand in. the notion of cheerleading the economy is something that is meaningful i think it's reasonable to expect the economy will continue to be strong the question, of course, is how strong obviously the president has set himself a very high marker if he doesn't meet it, there may be repercussions but fundamentally, i think there is a lot to cheer in today's report for trump, for the republicans and certainly going into a midterm election, great news for them. >> austan, how about you it would appear that the economy in this second quarter

benefitted from a lot of stimulus government spending on the one hand and lower taxes on the other. >> yeah, i'm not so sure about that part. i think this is a solid report it's not just good for republicans, it's good for the country. if we can grow at 4% for a year, not just for one quarter, we should all be thrilled now, the thing is, it's to take nothing away from that number, it's a solid number. it follows the first quarter, which was a pretty mediocre number if you remember at that time, consumer spending grew less than 1% at an annualized rate and we thought that that was -- probably had a lot to do with the weather and so people said if we have a low number for this first quarter, we'll probably have a high number for the second quarter and then we'll have to see what the sustained number is going into the third and fourth quarter i think that's borne out in the data, so i think it's a little

weird that the president would try to get out in front of just one number when it followed a number that wasn't that good and say it's permanent but, you know, he has the right to be happy with this number and it follows a pattern if the numbers are not good, he just says nothing if the numbers are something, he gets up and says look at what a great number so i anticipate that will continue >> lanhee, back to you the president talked repeatedly about 3% growth. he may hope that it goes to 5%, but even at 3%, which is a percentage point higher than it had been basically, you get a much faster doubling of american -- of the american economy. you get many more billions and trillions of dollars in economic output and many more millions of jobs even at 3%. so my question is, is something between 2% and 4% basically where you see the economy trending over the next 12 to 18 months or do you see it slowing

from a 3% trend rate >> no, i think that's about right. if you look, for example, at the last several quarters, particularly since the election, i think 3% is a very good number i think that's roughly where trend has been i think going forward there's probably still some cap ex out there. this month you had exports and inventories roughly wash each other out. i tend to think there is some optimism in this report going forward. obviously there are some wild cards. we don't know how the trade scenario will play out obviously good news out of the discussions with the european union yesterday. we still have china lurking. we don't know what's going to happen there there's some geopolitical questions with iran and north korea, so there are reasons to have a little bit of doubt going forward, but fundamentally, i think the economy is proceeding along quite well and i think there is great reason for optimism looking ahead. >> final word to you, austan when, if foreseeably, do you see

the economy slowing from its current pace >> well, i hope it doesn't slow. i think we're not on a 4 plus percent sus stantained basis if we could maintain 3% for a couple years, that would be great. i think the actions. f -- actions of the fed, when the fed raises rates, it does slow the economy. so i think the tension between the president publicly attacking the fed and saying he doesn't want them to raise rates, i think we might see a little more of that in the coming years. >> austan, thank you very much, lanhee, thank you very much as well. twitter shares are tanking monthly active users declining last quarter the stock still up 44% this year has twitter hit the top? we'll have a debate when we return are you ready to take your wifi to the next level?

then you need xfinity xfi. a more powerful way to stay connected.

it gives you super fast speeds for all your devices, 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. welcome back to "power lunch. the market took a pretty sharp drop about 20 minutes ago, the dow dropping triple digits, down 116 points it was 157 at the session lows the nasdaq getting hit the hardest, off more than 1.5%. it's the biggest drop since june 25th intel, western digital, electronic arts leegading the nasdaq lower >> also not helping the nasdaq, twitter. shares plunging 20% at this hour the number of monthly active users dropping in the second

quarter, could continue to fall as twitter continues to flush out fake accounts. despite today's big drop, the stock is still up more than 40% this year but has it hit a top let's get a good old bull/bear debate going gentlemen, welcome to you both i'm sure the perception of twitter's problems is influenced by what we saw from facebook and concerns about the facebook model and them sort of cleaning out bad accounts as well dan, why do you maintain faith that twitter can actually continue past growth rates even with this flushout of bad accounts >> there's no doubt this is a gut punch. our view has been it's been a turn-around story. obviously we've seen the stock move accordingly, but ultimately right now it makes the metrics more reliable. ultimately from an advertiser perspective, and we've heard from advertisers, they want more real metrics that ultimately will give them the meat on the bone to know the engagement is

moving on the platform so we view it as a near-term pain for long-term gain in terms of the move but ultimately we continue to believe for twitter this is more of a speed bump rather than the start of a longer term structural issue. >> which is what you think is the case for facebook at this point so you do see the difference there >> i think you see a clear delineation. this has added to the darker clouds in social media, which is why you see facebook down accordingly. it feels like a ripple effect. >> if memory serves me right, i think you downgrade facebook in june, which was a pretty good call. >> yeah, we downgraded facebook in late june and downgraded twitter just a couple weeks ago, but we actually upgraded twitter today. >> you did, okay >> yep. >> why >> so i was going to say so it seems like i'm maybe less bearish than you might have thought as of yesterday not with standing the results and reception to those the reality is these are names

that we thought were somewhat primed for sell-offs for different reasons to some extent i think a lot of people were talking about facebook as being priced to perfection we didn't necessarily see that, but we just thought that the company was going to have to respond to what was going on related to cambridge analytica in terms of twitter, which is obviously what we're supposed to be talking about here, i think the issue is really more of the valuation to a large extent. any kind of issues that the company had in terms of execution, communication, additional spending or the culling of users to restrain growth in that particular area or contribute to, as melissa you indicated, the decline, those are the types of things that might seem minor to some folks but are pretty significant in the context of a stock that had performed so well and was we thought pretty notably overvalued. >> so, dan, take me through this decline in monthly active users. 3 million people fewer in this

quarter. they say that it may be roughly that number or a little more, mid-single digits going forward. is this because of the way they're scrubbing their user rolls or is it because of some organic decline in people's appetite to use twitter? the president isn't going to stop, is he? >> i don't think the president is going to stop. >> he's just one. >> but ultimately, it is true i think you have gdpr privacy and the overall scrubbing of data has had a negative effect. nonetheless. they have structural and secular issues in terms of that growth that's been an issue it's been at monetiization it's going to be an uphill battle but you want to scrub it, get a cleaner metric. >> and the losses that they saw in monthly active users, you don't know exactly how that breaks down in terms of those

scrubbed and those that just left it could be a number that is all just left the platform. >> and the reason the stock is down so much because the worst thing you want is uncertainty. you came away on that call not feeling like management even knows. that's why right now it's in the investor penalty box until they can show what's really scrubbing versus core organic losses. >> and when it gets to the point where you can really believe the number is the number, then you have a foundation from which to either move up or down we've got to leave it there. dan, scott, thank you. stocks taking a leg lower. we are around session lows the nasdaq getting slammed the most we will tell you what's taking the market down. plus, we are halfway through earnings season. i can't believe it halfway? >> it kind of makes you sad. >> christmas is over. >> some interesting trends are beginning to show up at the halfway point. and, the profit will join us

he will weigh in on the gdp number, job growth, the state of american business, right now marcus simonas coming up build your next big thing to run in more places, without recoding. the ibm cloud. the cloud for smarter business. the ibm cloud. [stomach gurgles] ♪when you have nausea, heartburn, indigestion, upset stomach, diarrhea... girl, pepto ultra coating

will treat your stomach right. nausea, heartburn, indigestion, upset stomach, diarrhea.♪ try new pepto with ultra coating.

welcome back to "power lunch" everybody stocks hitting session lows as you see right there. the dow down 113, but nasdaq really taking it down 1.66%. the dow about a half percent lower at this power. bob pisani is tracking it all

for us from the floor of the nyse hi, bob. >> hello, tyler. i'm reluctant to say cbs news took the winds out of the market but it looks that way. taking a look at the s&p 500, we were trending downward a bit going into the noon hour but then that news came out and we drifted lower very quickly all the big momentum names, i'm talking about the faang stocks, they drooped a little bit after noon eastern time. facebook was up. amazon was at 1880 and now 1818. netflix, alphabet, apple, all went into the red. we're halfway through earnings season if you want a good example of problems companies are having, look at colgate. they say our pricing is flat packaging costs are higher and a strong dollar has had a negative impact on our earnings that means profit squeeze. margin squeeze overall colgate is down 11%, 12% on the

year this is a problem a lot of these companies are having with higher costs. some of the big energy companies reported, exxon and chevron. they both missed but chevron announced a big buyback and these guys are real big on the dividends right now. almost 4% for exxon, 3.7% for chevron. so what have we got going here higher costs some can raise prizes, some can't. you saw that with colgate. the strong dollar is an issue for a lot of companies some people are raising the guidance but it's not good enough boeing, northrop grumman and some of the social media concerns are out there, we saw that with netflix and facebook finally, where are we? we're not at peak earnings, folks. third quarter will be good as well these are great numbers. revenue growth is the big, big story. 9, maybe even 10%. tariff impacts so far fairly small. eps, 22.6% it will go to 24% before we're over another second great earnings season guys, back to you.

>> thanks very much, bob, for that scorecard now we've got to head over to the bond market. rick santelli tracking the action at the cme. hi, rick. >> you know, it's been quite a week we had big data points, we had big auctions look at july 1st see how orderly they are, almost straight up virtually a basis point or so every session. they're down one on the day but up nine on the week. look at 10s, they were much flatter and then all of a sudden last week we really did jump up and that really is the story down two on the day, up seven on the week the next chart does show some flattening but the real issue is how we had that dramatic steepening when the long end woke up. we're a long way from our lows but heading back towards that 24 area but in slow motion. the stronger data didn't really impact long rates like it usually does expectations were running quite

high one week of the dollar index, it's not having a stellar week but it's up a fifth of a cent on the week as you see on that chart. the real key to the dollar index seems to be its inability to do a sustained trade above the 95 mark let's get to sue herera with your cnbc headlines at this hour. >> thank you very much, melissa. here's what's happening at this hour, everybody. defense secretary jim mattis telling reporters today the u.s. is not pursuing a regime change or collapse in iran. he says the goal remains changing iran's behavior in the middle east. president donald trump tweeting that he did not have prior knowledge of a meeting between russian lawyer and his eldest son, don junior, and aides. that meeting happened at trump tower back in 2016 in june cnn has been reporting that trump's former lawyer, michael cohen, claims trump did know in advance about that meeting divers are searching for wildfire victims off greece's coast near athens. no word yet on how many people

are still missing. the latest death toll indicates 87 people were killed. authorities suspect arson is the cause. and a blaze destroying a hotel in daytona beach flames broke out in the bayview hotel boiler room shortly before 5:00 a.m no injuries have been reported that's the news update at this hour ty, back to you. >> thank you very much, sue. coming up, the profit, marcus lemonis will check in there he is. we will get his take on the state of the u.s. economy, jobs and this weekend's nascar race president trump has come down hard on big pharma for raising prices the drug makers going along with the president for now. but for how long will they cnbc contributor fred hassen will weigh in. what about him?

let's do it. ♪ come on. this summer, add a new member to the family. at the mercedes-benz summer event. lease the glc300 for $429 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

california had the worst wildfire season on record. scientists say, our weather is becoming more extreme and we all have to be better prepared. that's why pg&e is adopting new and additional safety precautions to help us monitor and respond to dangerous weather. hi, i'm allison bagley, a meteorologist with pg&e's community wildfire safety program.

we're working now, to enhance our weather forecasting capabilities, building a network of new weather stations to identify when and where extreme wildfire conditions may occur, so we can respond faster and better. we're installing cutting edge technology to provide real-time mapping and tracking of weather patterns. and we use this information in partnership with first responders and california's emergency response systems. to learn more about the community wildfire safety program and how you can help keep your home and community safe, visit pge.com/wildfiresafety i'm going to get a check on the markets right now. the dow down 157 points at session lows, now down about 117 points the nasdaq, though, getting hit the hardest of the major averages, off more than 1.5%,

putting it on pace for its worst day and worst week in a month. tech the driver of those declines it's the worst performing sector, down about 2%. twitter, juniper networks and intel leading the declines there. intel is lower by more than 8.5% small cap stocks and the transports are also getting whacked. avis and united airlines leading that group lower back over to you, tyler. the 2018 monster energy nascar cup season, that's a mouthful, continues this sunday with the gander outdoors 400 at nearby pocono raceway. marcus lemonis, the title sponsor of the race, joins us now. marcus, welcome and congratulations on the acquisition of gander and of the race and of having camping world's branding all over the all-star game, as i recall it was very nice to see. you saw the numbers on the economy today. do they line up with what you're seeing in your business,

specifically with consumers? are consumers spending more? more willing to part with their dollars? >> you know, we haven't seen anything, tyler -- by the way, i miss you you didn't even tell me you missed me. >> that goes without saying. >> yeah. so we haven't really seen anything that gives us any indication that consumers are slowing down at all. our rv business not only for the industry but for us is very robust right now you know, you're hearing a little bit of chatter about some things that people are reading in the headlines, but we haven't necessarily seen it translate to less footsteps or less clicks online at all. >> you have some earnings numbers coming out i don't know how constricted you are to talk about it, but how's business how's growth at your business trending >> so growth is pretty decent. i mean we are having a pretty solid year obviously in making investments into growing our rv business, we're doing that through gander

and some other acquisitions. but we feel really good about the fact that our files are up, our customer counts are up, and our staff is feeling really good about where we're going in the future. >> lots of things are up i know you are never a guy who shies away from asking or answering the hard questions a lot of things are up at your company, but one thing that's not is your stock. it's down a lot. why? >> well, you know, the stock went out i think about a little less than two years, it went out at $21, it skyrocketed to $47. i think that part of the reason the stock is down today is i probably in the last quarterly call did a bad job in communicating exactly where our company is going and why we're making investments into certain things usually i don't struggle with my ability to communicate, but in this particular instance i did i think there's a little bit of noise around the industry itself and shipments. there was a lot of noise around

where the industry's inventories were you look at thor, you look at winnebago, they are talking a little bit about a drop in shipments. i'm here to tell you that is a temporary drop we're not seeing any reason that the industry is on pause and i think that analysts and people that buy our stock and other industry stocks are still scratching their head trying to correlate retail data and shipment data. here's the simple answer that i'll give you, tyler this is the most important thing i do we feel very good about where we're going with our business. and it's new for me. being a public company is new. i will get better at communicating where we're going and maybe my old strategy wasn't as good as the one that i'll have going forward. >> marcus, this is courtney. you mentioned it a little bit as you tiptoed around talking about headlines. thor says that tariffs are already having an impact on its business when it pertains to the cost of producing, selling

manufacturing the rv is that not something you're seeing at camping world? >> so i met with a few manufacturers this week and they're starting to see that their suppliers are starting to raise rates. there's no doubt that tariffs could possibly raise prices a little but from our standpoint as we sell to consumers, they finance 180 months to 240 months and so the impact of $500 on a monthly payment is not enough to trip a consumer up i think the manufacturers could potentially feel a little bit of pressure winnebago and thor are really good at taking other costs out of their business to be able to absorb some of that. but we're buyer of rvs in america and unlike the automobile business, it's not regulated. if you're a ford dealer, you pay the same price for a ford whether you have 500 stores or 1

store. that doesn't necessarily apply to us. you can interpret what you want from that. while there may be increases in pricing, you know me well enough to know i'll be the last to want to absorb that increase. >> so a few dollars a month because of the costs of tariffs so that's not too much i would imagine that rising rates are a bigger concern for you in terms of the consumer and what they choose to buy in many terms of the price level are we at a point where we should start worrying about this, about the impact >> i don't think so. really, you know, our industry is really affected by the availability of credit, not the price of credit. and granted, as the interest rates move up, it definitely changes the consumer's payment wefocus on driving an average selling price down so that you're financing $20,000 or $30,000 over 180 months. an interest rate going from 5% to 6%, it's meaningful, but it's not a barrier. gas prices going up, meaningful but not a barrier.

the barrier to our industry is the availability of credit if you go back to 2008 and '09 when the credit marked dried up because of housing, that's a real impedestrianmeiment to our. as long as there is credit available, the consumer wants to do it. that's really the unknown quantity, is credit going to disappear. >> let me go back to another thing that certainly did not help the stock a couple of months ago and that was some accounting-related changes that you made you changed your principal auditor and accounting firm after some findings that were arcane, i think would be one way to put it, regarding internal controls are those issues behind you and need shareholders worry at all about the state of either internal controls or any of the stuff that was associated with the change in accounting firms >> so when we parted ways with

ernst & young, they did provide a letter to the company that said there are no disputes or no issues to speak of and we transitioned to deligodeloitte they will be the audit firm regarding our second quarter at this moment we don't believe that there's anything of any kind that's a problem. there's no dispute with the previous auditors. any time you change an audit firm, it's never going to be good the reality of it is that unlike on "the profit" where i can talk about everything, in this particular case what i can tell you is that no disputes over any accounting, but i want good service and i want a heck of a price. i don't want to overpay for inferior quality, and that sometimes could lead to a change you know me well enough. >> i do indeed let's talk now about something that i think you can talk about and that is the race this weekend. it was a monster truck race up at pocono. i've been there. it's a tri-oval, an interesting place to go see a race. >> yep.

>> why do these races work for you and for gander, and do you see yourself or your company expanding those relationships? >> so about eight years ago, we chose to take on one of three of nascar's biggest series. so there's the monster series, the xfinity series, our parent company at cnbc, and the camping world truck series, three different divisions. we want to make sure that we're getting a good return on investment, as any advertiser in the sports sponsorship space should look for. camping world made sense because if you go to any track, you see camping throughout the infield this weekend we're announcing the transition of the camping world truck series to the gander outdoor series gander outdoors has been a very controversial acquisition strategy for our company i will tell you, tyler, that gander outdoors is nothing more than a competitor to camping world that we control. and i believed that nascar presented a great opportunity to

tell that story. you can see behind me that there are a number of rvs. i happen to be inside of a gander outdoors. we wanted to create an environment where you can do hunting, fishing, camping, hiking, biking, and rvs all inside of one box. where is the future of the consumer going online and what are they expecting from the retail experience? and that's really why we made this huge investment into taking our company into the future. nascar is a great platform to start to tell that story >> marcus, i do miss you >> i miss you too. you haven't invited me back in a while. >> we'll have you back more. thank you so much. have a great weekend, marcus good to see you. >> thanks, tyler. >> and a programming note. nbc sports group's coverage of that 2018 monster energy nascar cup series season continues sunday with the gander outdoors 400. it is at 2:30 p.m. there you see the tri-oval there at pocono raceway.

mario andretti, that was his home track don't forget to catch an all-new episode of "the profit" next week marcus will work with a couple to try to save their struggling retail business. first, he has to try and save their marriage that's on tuesday at 10:00 p.m. eastern time only on cnbc. and let's go to a market flash now with mr. chu. >> if there's some problems here on a possible breakup as well. we're watching shares of charter communications, which are near session lows right now, off by a little over a percent. this is on the heels of the new york state public service commission, the psc here in the state of new york, has voted to revoke its 2016 approval of charter's acquisition of time warner cable you guys remember that big deal. time warner now known as spectrum in the new york market. the commission basically says that charter has failed to comply with the conditions that it set forth in giving its approval two years ago charter has now been ordered to

file a plan to effect an orderly transition to a successor service provider in essence meaning that new york state regulators want charter to sell that spectrum business in new york to somebody else. we're going to follow this kind of story closely here, but it should be a pretty interesting one. a possible corporate divorce. >> can you unscramble that egg at this point? dom chu. the battle over drug prices. the president slamming big pharma for raising prices. is he right or is big pharma justified? 'lasfr hsen. that's next.

shares of america down today despite better than expected earnings he rememberier any slashed pricen on several drugs after president trump criticized the drug maker for soaring costs

it the president right to put on the pressure right now is with us fred chairman, the chairman of carrot group a cnbc contributor fred welcome it's an exciting time we had the secretary of health and human services at a speech talking about a framework for drug pricing we herd am again today to recommit to to not raising prices the rest of the year. we heard from all of them. back can the drug industry do this on their own to avert the government actually doing it formally >> the drug industry has a great privilege in having a free market price system here in this country. and i think it's good for everybody because you have a lot more innovation if you have a free market price system there are always individual companies that push the pricing too hard what we are realizing going forward for this industry is

growth through innovation. it -- in some ways the pressure from society, from the administration, from alex eezar that's good pressure because it tells companies if you want to grow you have to grow through innovation. and this is a great time for innovation it's a fantastic science. >> on the part of the fda they certainly made things like generics and boy similar move faster to market but some people say drug companies need the price increasing to fund innovation, to fund research and development. is that just not true to a certain extent. >> i don't think they should be doing it that which. they should grou through innovation. >> how do you pay for that, fred if you are not raising prices. >> well the drug industry is pretty profitable about 25%, pretty profitable buybacks dividends are healthy. i think they need to manage the capital allocation carefully but most importantly build the

culture inside that really drives the business forward with innovation if you can just grow it through price increasing you can get lazy innovation is the answer. >> let me ask you about -- you mentioned the united states we fundamentally have a-free market for pricing. >> yes. >> that's not the case in many other parts of the world. >> that's correct. >> many people say the result of that is that american consumers and american buyers of drugs are funding all of the innovation that most pharmaceutical companies around the world whether u.s. based or not undertake. is that a legitimate thing and should we put not just pressure on the drug companies to keep prices down but on other major buyers of drugs, other countries to look at how they price drugs? >> yes so first you are absolutely right. the american consumers are paying a lot for the r & d, the majority of it we are all -- although a country where people like innovation, the uptake of innovation among

doctors and consumers is high. people want to see the new stuff come fast. and other countries hold it back as a way to reduce prices. our -- our people are not going to tolerate that now, as far as getting more out of other countries, this is always a problem a lot of wealth countries including the neighbor to the north a lot of the countries in western europe, japan should be paying more. but the u.s. trade representative needs to put in along with the other priorities that they have on their list i don't think the industry has had enough pressure put on some of these countries to loosen up because they do get a free ride to stom extent from all the good work that's done in this country. on the other hand their innovation industries not doing well when it comes to pharmaceuticals there is a free eminent industry there is no other country as god. for this country that's good for our scientists but you are right many countries get a free

ride. >> is there a level of price increase appropriate if you are drug company if you are making sure to invest in innovation. >> i think generally by individual products might go up and down based on new indications, new uses sometimes you may want to move it up overall your inflation should not be more than medical inflation which is 2.2%. a little bit more than general inflation which is 1.9%. one should not be trying to grow the company through price increases. the overall situation is not as bad because some of the list provides, the list prices are not really translating to net prices there is a lot of reebts to the middlemen. but also the generic industry is growing faster thanks to the fda and they are reducing expensive prices by having cheaper generics available. >> how would you feel if you were on the receiving end of the president's criticism, pointed at merk how would you feel and respond as an executive.

>> i would immediately be in touch with alex sezar, a very good leader and troy to explain my point of view but try to understand the point of view coming from the administration, which is we don't like massive price increases. and this is a campaign promise that was made by the president we are coming up to an election season again this is not going to be accepted so ceos have to be listening to what the administration is saying and what society is saying and be very careful with the magnitude of price increases they can't just delegate pricing decisions to the marketing department they have to wind chill over this to make sure there is no excessive behavior occurring and where individual patients are not able to afraid it, be much more aggressive with patient access programs that allow special use. >> fred thank you. fred hassan with the carat

group. >> also keeping a close wind chill on cbs this hour the stock getting slammed on reports of sexual misconduct against the ceo les moonves. plus a strong gdp report the president trump says the american economy is headed higher how much higher could we go process we will asmik ck mulvaney joining us in the other hour of power on the other side of this break.

>> good friday afternoon everyone i'm tyler mathisson here is what's on the menu for hour if you mean in my les moon vest cbs shares falling sharply more on that story stret straight ahead. president trump trumpeting the gdp report and saying we are going higher the omb director mick mulvaney will tell you how the president plans to keep the economy growing and going high ier and making it america, the folks from capital cooking make outdoors grills with oven cook tops here in the usa for the president anticipates tariffs are taking a bite out of the bottom line. we tell you how. the second hour of power right now.

and welcome to power lunch i'm melissa lee. stocks off session lows. dow was down 157 points at the low. now down about 77. the nasdaq taking the biggest fall, fueled by a sell off in technology the declines putting the nasdaq on track for its worst day in a month. and worst week i should say in a month. twitter at word life sciences juniper network and under arm you are dragging lower expedia on earnings biggest gain. >> bob joins from us the floor of the new york stock exchange looks like a little better than an hour agoe. >> we hit a strange air pocket i don't want to pin this on the whole cbs story. i think that's unlikely. but it -- all of a sudden about noon we just droop we saw volume pick up and in some of the big etfs i watch like expired and the russell 2000 which is not doing well before that and in particular momentum names

drooped. of course the fang stocks. it's been a rocky season for the fang names a lot of hedge funds lost money on some of the stocks recently who knows what happened? but you see amundsonen we were 1880 on amundsonen now 1812. we were at low as 1818 you see the drip down after noon look at facebook same situation sort of just dropped down right after that there you see a recovery a little bit but near the lows microsoft, the whole group, all the tech and momentum names all drooped and recovered since then we have been talking about the prospects forrotation from these growth stocks, hypergrowth stocks, and perhaps maybe some day we would see value names doing a little bit better. these names today these are classic value names. have been holding up they're off the highs but holding up as well what's the bottom line don't see any real evidence of a

big rush towards value but at least on a day like today the defensive names holding up better than some of the others back you to you. >> thanks to you i guess we don't get the trillion dollar market cap for amazon to the economy president trump taking a victory lap on the strong gdp number kayla tausche live with more >> president trump heartily endorsing the economic data from the white house south lawn touting the best gdp in four years. annual growth topping 3% and drop in trade deficit that he said made him more honored than the growth trump and top economic advisers expected to be sustained through several quarters though some economists point to temporary trump jump from tax cuts and a rush to export goods before the tariff retaliation larry kudlow said he didn't know the impact the latter issue had on the number. but he called into question any policy that is said to be

hurting earnings. >> there are some companies who came in below. and they chose to blame tariffs rather than their own lack of execution in management. i'll leave it there. all right the good folks, many of them friends of mine, you know, what, stay tuned the next six to 12 months i think you will see the president's effort to reform trade. >> that's the time frame, six to 12 months -- that time frame is important. six to 12 months it suggests the trade disputes are not going to be over in the near term but in the face of that, tyler, the white house still expects this gdp growth to be sustainable over several quarters tyler. >> thank you very much joining us live from the white house is omb director mick mulvaney who was there when the president spoke today. director mulvaney welcome and good to see you. >> good afternoon. thank you as always for having me. >> we are delighted. this was by any stretch a very nice number high pressure.

how sustainable do you think it is and how much do you attribute it to the stimulus in both the budget deal and the tax cut deal. >> we will deal with the second question first which i don't think what you see here as much to do with the taxes or the -- the government spending government spending is part of the calculus but we still believe that most of what you see is actually not related to taxes yet yes interest has been some positive impact on the gdp number of the tax bill but a lot of the benefits of the tax bill haven't flowed through the system we have seen a couple of positive signs on capital investment and so forth but more paradely we haven't seen that yet. we still think you see the residual benefits of what the president did when he got here, the deregulatory apgd put in place, the energy policies put in place we think that as much as anything has driven growth up to this point which is why we are very confident this is a sustainable thing. this was not a sugar high in any -- by any measure. keep in mind what we did in

taxes was lowered rates and that adds the short term punch to the system but fundamentally changed the nature of the way we tax wealth creation and that's sustainable. for a variety of reasons we don't think you're seeing a dramatic drop off. we think we see this growth sustained for several quarters to come. >> and as the president pointed out today, even a -- even something that sounds small, a 1% inincrement to gdp has great long-term effects. i would guess one of the areas you must be happy about is business investment. which seemed to me to be both kind of a cycle althing but part of a level of confidence that business has in the administration and a reaction to -- to the tax law. >> if you watch the press conference you heard i believe larry kudlow talk about this that specifically. we at omb watch that number as much as anything it's that capital investment

that leads to improvements in productivity and future growth in gdp which is which again we think the tax plan was so critical, because it did give that inincentive, a long-term incentive for capital investment also which we believe it's important to get let tax cut 2.0 bill passed so businesses know the depreciation rules on capital investment will be permanent. we're trying to give business incentive for -- forever in a permanent condition to invest in their businesses again instead of paying money to us, reinvest money in the business they have the confidence to do that now the next couple of years they have the tax tools necessary to do that but we need to make it permanent. >> mick in your view with the greatest gains for a tax reform yet to come in terms of business spending or has this supplied back to buybacks and dividends and does it matter to you? >> not really. i think the point was just that i think folks are undervaluing the kbak on these gdp numbers of the stuff the president has done

in the first 18 months on the job. which is a specifically again going back to deregular. deregular by itself is the biggest story. the day donald trump won the election business knew the first time in eight years that the government wasn't out to get them you saw a spike in business confidence and consumer confidence even before our policies were actually hitting the streets so i think that's one of the things you see that's why i think it's so -- so sustainable because when we lessen the regulatory burden we're not talk about getting rid of regulations we are talking about a lighter hand and getting out of the way of american capitalism when you do that it pays benefits again and again. it's not a short-term shock to the system. >> in terms of the forecast of seeing the 4.1% growth rate continue the rest of the year, mick, i mean what role does the fed have i mean the president talked about the fed's path of raising rates. and effectively said that he didn't like the fed rate raising rates because you put so much work into the economy. even at the margin let's say the

fed takes the peddle off the metal, mick do you think the growth rate could be higher? it sounds like in the market that the president thinks rate increases impacts economic growth at the margin. >> a couple of things about that i saw the president's tweets first thing first, let's be clear. the president absolutely respects the independence of federal reserve and their desire to add more tools to the tool box. if they slowly raise rates they have more tools available to them if there is a downturn in the future at the same time as i said i think on your show and a couple of others. we encourage economists at the fed and arndt the country to consider the supply side of what's happening inflation roughly defined too much money chasing too few goods if we are in a supplyside driven expansion right now, that raises the number of goods and takes the pressure off of inflation. we absolutely respect what the fed is doing we respect the independence. we encourage folks all over the spectrum to consider the fact that this is not necessarily a

demand driven expansion as much as it is supply and that might call for a different outlook on how we handle rates. >> consumer spending a very important part of the gdp. and we have seen wage growth pretty stagnant. definitely below the annual rate of inflation so what happens going forward? can the consumer continue to spend even if confidence is high but their wages aren't growing can it help fuel the gdp forward to do better than what we have seen in the quarter. >> we think it's inevitable you are seeing more and more wage growth. you have you have to as the economy continuing to move along. again we are not talking about something not sustainable. if this number had been 5 or 5.5% i saw very high projections i'd have to come out and say look i don't think that's possible again but something in the 3s achb 4s is manageable for a long time opinion. if we get that you see that accrue to wage earners as we see the capital investment

transfer to productivity that leads to wauj growth so as we see things flow through we are confident the consumers will have more money to spend. obviously the tax cuts have an impact there as well yeah, we continue to be concerned about the amount of debt everybody is private debt, public debt. that's an issue. no question. but we are comfortable that with the way things going, the benefits flow to the ordinary hard working americans >> the other day director mufflyny at the capital kpj event my friend john harwood asked you an interesting question that provided insight how the white house works. and he pointed out basically before you came in the administration you were known as a hard deficit hawk. we have bigger deficit right now. you were known as a frohhed trader and known as the kind of person who didn't support aid to agriculture. three critical issues on the table right now. and your answer to his question is sort of how do you square your personal preferences and

economic philosophy with policies you see the administration taking? and your answer was very interesting and revealing. would you replay it. >> sure. here is the brief version of it. which is that i'm absolutely 100% confident -- because i'm sitting in the room with the president of the united states, that he is seeing all sides of all the issues you mentioned all sides of the spending and deficit issue. all sides offed trade. all sides of the various policies that we go through. the president is getting a variety of opinions. larry kudlow and i might take one side of an argument. steve mnuchin might be on that side with us wilbur ross and peter nofr o on the other side but the president makes the decision based upon what i believe to be good evidence from all sides of the equation when do you that and feel like you're part of the process, you know that -- in my particular circumstance, the fiskically conservative argument is being made and being considered and given fair weight. if the president decides to go another way number one that's his prerogative because he is

the president. not me and then number two, i know for a fact that i've been heard. so often republicans on the hill used to complaint -- the bigds complaint complaint was we never had a chance to participate in the conversation that's happening i think the president is making better decisions because of it it's the management style he wanted when he put together a team of me and peter nofr o and wilbur ross and bob lighthizer and steve mnuchin. we are getting good results and decisions. most importantly i think you see the rubber meeting the road on the results which is the economy is up. folks are employed the numbers are good people are better off now than two years aig because donald trump is president. >> mr. mulvaney thank you appreciate it. >> thank you so much. >> thank you so much. >> let's get instant reaction to omb director mulvaney. joining us now a cnbc contributor. ron and sanna.

gentlemen welcome, peter your take. >> i think the economy grew mostly because of the tax cuts, not despite the tax cuts the regulatory relief was certainly a big positive but how to kwunt fie that is difficult. and big energy investment is because oil prices are higher not because of any changes in policy there so the question is sustain ability. the graphics he thinks there is 4% sustain ability i think that's unlikely. ist the rest of the year may be 3. >> but that's better than two. >> it's better than it in the calculations are no taking into account what's the impact on tightening monetary policy which you brought up? we had wages up 2.7% average weekly earnings in june. cpr up 2.9%? can you sustain 4% consumption growth when the wages go union on a real basis. >> ron. >> i take the numbers apart a little bit differently a full 1 percentage point of the

4% came from surge in exports as exporters tried to get a around the retaliatory tariffs. let's subtract 1%. and government spending despite what mr. mulvaney said is part of the stimulus we got from very large budgets that were pass the over the course. >> 2.1% or zblog and the final sales were good. the kpoe is strong can't quibble with the fact thats strong the sustain ability question is key. because once the export gains roll off we will see a reduction in gdp next quarter. the key question is can the consumer keep going? i don't think the tax cuts affect individuals nearly as much as they help profitability and those are wildry different. >> on the business side shouldn't we expect to see -- when companies bring back cash from overseas they don't spend it right away. >> every dollar has gone to buybacks >> how do we know that wasn't carbon the balance seats. >> the cash signature overseas was spoken for through debt. apple has all the cash but $100

billion in debt. they front-loaded the repatriation in a zbleens yes. >> do you think, peter, when you look at this this is what he call a high quality number when you look at gdp through earnings reports and say this is a high quality beat low quality because of the noise with the tax cuts and trade were they not. >> business spending and consumer aspen being being key they were pretty good. we have seen improvement in business spending not because of confidence on the administration but because there is an actual tax inincentive to increase capital spending this year that's we have seen a response to that. now, the issue with trade it was sort of offset by the big decline in inventories though probably reversing in q 3 but balance each other out q 3, q 4 are businessing insiding spendth and are consumers increasing at the pace they are aspen sng i think that's the question at least on the consumer side maybe less on the business side. >> the one thing i would bring up is the market's reaction to

everything we have seen in the last couple of weeks like the first quarter we're not getting a big positive reaction to earnings facebook was a big disappoint in there with other companies and the market tells me that they're baking in something a little bit differently than sustainable 4% growth over time. and corporate share of government revenues is historic low at 1.3% and the deficit is about to hit $1 triple i think markets are more on their mind. >> isn't the dow -- i would say today is the case where they sold the news. >> dow has gone no where. >> the market has been rallying since november 2016 in anticipation of what we got. >> what we got today. >> the end of last year which led to the 20 plus% earnings growth this year. >> 18 months out peter. >> we are skoun being fed rate hikes and we know how they usually end. >> record highs, right record highs. >> or a couple% off of record highs on the s&p 500.

>> it's the tug of where between optimism about the economy and the monetary tightening on the other zblied peter, ron thank you. >> blekly. it sounds dickensian. >> it was some guy back when. >> thanks, guys. the story we have beentology les moonves being accused of sexual misconduct shares falling sharply cbs firing become a response we have the latest when power lunch returns. alerts -- wouldn't you like one from the market

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

fidelity. are you ready to take your then you need xfinity xfi.? a more powerful way to stay connected. it gives you super fast speeds for all your devices, 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.

welcome back to power lurj a developing story we are watching closely this hour cbs shares plunging on reports ceo les moonves will be accused of sexual misconduct julia has the latest from los angeles. >> cbs shares now down over 5% ahead of the article from the new yorker that's expected to report on allegations of sexual misconductens against cbs ceo les moonves. cbs independent directors saying they take the matter seriously and will investigate also saying the timing of the report comes in the midst of the public legal dispute while this litigation process continuing, the cbs management team has the full support of the independent board members along with that team we will continue to focused focus on creating value for the

shareholders the legal dispute in question is between moonves and sheri red stone national amusements which controlled cbs and via come and pushed to combine the companies. cbs led by moonves sued to issue a special dividend, additional shares to dramatically reduce red stone as controlling stake effectively preventing a forced merger red stone sued back saying the company had no rights to eliminate their voting control on today's news of an investigation into moonves which could threaten his leadership via come shares moving higher, now up more than 3% on the news. with cbs shares tanking over 5.5% it's worth noting moonves's track record of running cbs since it split from via come in 2006 since then cbs shares are up 350% versus via come, shares are down about 29% over that same 12 1/2 year period. we are still awaiting the

article from the new yorker. and we will monitor. guys back to you. >> thanks very much. appreciate it a lot to keep track of before we even have the full article. even he though president trump announced $12 billion in relief for farmers hurt by trade and struck a deal with the eu to work towards zero tariffs american businesses are hurting from plunging demand for the exports. our next guest's family has been in the farming business more than 150 years 60% of her exports go to the eu and she says the uncertainty around the tariff time lines is killing her and she has never seen her business this bad she is joining us live from momny, wisconsin, i believe that's where you are and the 7th generation, president of chippewa valley bean the business is as bad as you have seen your family doing this for seven generations. explain to us in dollar terms why this tariff is hurting you and how. >> well, as you started out the conversation we have been exporting a large amount of the

kidney beans to europe in fact it's about 60% of export business and as we look at that we look at $25 million in sales. and as we stand today we just don't have anything going out the door >> and so you can't find another customer to make unthe gap for what you would lose to eu? >> well, not really. because as we look at the whole business side of it, the u.s. produces far more than they will consume. and it's a crop that's grown every year we are getting ready to be at the end of the current crop and start harvesting the 2018 crop momentarily. when europe's your largest market and dries up and becomes too expensive for the buyers you are stuck. >> i understand that and i also understand that part of running a business is investing for the future makes it very hard to do when you are uncertain about what that future looks like what have you done or not done when it comes to planning for

investments as a result of these retaliatory tariffs that may or may not be coming down the line with the eu? >> well, for 2017, we had about 3.5 million of investments that we have stopped. and for 2019 we were looking at putting in a new line which would have been about another $10 to $15 million with the uncertainty out there we can't justify the cost of the new investments. >> how do you feel as you sit there and -- and the retaliatory tariffs from the european union, for example wrb driven by tariffs that the administration put on steel and aluminum. and -- and the retaliation comes not to steel and aluminum but to kidney beans >> well, it seems rather backwards doesn't it as we pay more now for steel and aluminum and we can't ship what we have, it doesn't make any sense. and it was definitely politically pointed, i believe

by the eu in the products that they chose to put the retaliatory tariffs on >> do you -- do you favor or understand the administration's push to open up markets, that that's the ultimate goal, but quarrel with the methods that are being used to do it. is that a fair expression of how you feel or not >> well, really not. because as -- as i see it, the european union in agriculture has not been that big of a problem as far as having unfair tariffs or having free trade kidney beans are not a supported commodity, as other crops in the farm program there is crop insurance that may be available at a discounted price because of the farm bill but we have been trading and being competitive for a long number of years. so it really feels like we are being slapped needlessly over the tariffs. >> cindy, we have to go but can i ask you how do you feel about

the bailout this the $12 billion bailout is that what you want. >> no, no, no. >> trade is better than aid. as we look at $12 billion in payments to farmers -- first of all it's going to be pennies on a dollar for corn or soybeans or pork and in reality, look at our budget deficit how can we afraid after this last tax cut or what i just heard about, tax cut 2.0, how as a country can we afraid that and it's not sustainable that's just this year. what's 2019 going to bring give us back the opportunity to sell our products. >> got it thank you so much. cindy brunn. chippewa valley bean company we appreciate your perspective here with us today. >> thank you coming up apple put the extra a in fang. will it ut put up big earnings next week? we will trade the stock next your healthcare business. paf so that if she has a heart problem & 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... tired of constantly battling lingering smells in your home, like pet, shoe, and body odors? for long-lasting, continuous freshness, try febreze plug. febreze plug provides 45 days of freshness, with a unique dual chamber design that alternates between harmonized scents for a continuous renewal of fragrance. plus, febreze plug is formulated with odorclear technology, which cleans away odors instead of just masking them. for freshness you'll notice week after week, try febreze plug. [sfx: mouse click] tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect.

for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ so, my portfolio did pretthat's great.year. but the market was up nearly twice as much. that's a tough pill to swallow. exactly. so i started trading. but with everything out there, how do you know what to buy? well, i think my friend victor has just the thing for you. check this out, td ameritrade makes it easier to find the investments that might be right for you. like our etf comparison tool it lets you see how etfs measure up to one another. analyst ratings and past performance... nice. td ameritrade also offers access to coaches and a full education curriculum to help you improve your skills. that is cool. and if you still have any questions you can always chat with us on facebook or call our experienced service team, 24/7. yep. just because you're doing it yourself

doesn't mean you're on your own. that's great. you're still up. alright. you're still up. if i knew you were gonna run the table i wouldn't have invited you over. call (866) 296-7451. act now to take advantage of commission-free trades for 90 days, plus get up to an $800 cash bonus when you open and fund a new account. ♪ time for trading nation pl let's look at apple shares ahead of earnings next tuesday down 1% today. with the broad are market after other megacap plunges on injures. bill bar oak is with blue line and larry mcdonald at the bear traps reports. what are the bear traps that

apple could face into the earnings report. >> well 25 years ago today or this year. i should say the peter lynch said the stock i want to avoid is the hottest stock in the hottest secretary. and today that's apple the supply chain risk is the really unimaginable in the next say, two, three, four weeks. you have another 200 billion come out of china for tariffs on the mid-september. then mid-august you are looking at another $16 billion of finality the supply chain risk is very heavy. and then second of all this issue with passive investing is turning into a crisis about $6 trillion is coming into passive management in recent say the last five to ten years and all that money has to go into the fang stocks qqq, 46% of the qs are fangs there are stocks you want to run from

i see potential 30 to 40% downside in the fangs. >> bill, what do you think i understand you might be bullish on apple but maybe not so much right now? >> i don't disagree with larry but i think you are looking at recurring revenue as well as app store purchases maybe highlighting the earnings report coming up. ultimately, though, i wouldn't be a buyer here. where i would buy i have to look at the broad are market. our research this morning we said that there was a lack of value in the market before the bell so i'm looking at the nasdaq 10 futures coming down to 7175 to 7,200. 1% to 2% lower i think apple will be a buy about 189 to 190 and a quarter that's where you look to step 199and by. apple will be higher than this by the enof year. >> got it thank you so much yes. appreciate it 50/50. for more trading nation head to the webt or follow us on twitter. still ahead. cbs ceo les moonves to be

accused of sexual misconduct on the bombshell coming up next. are you ready to take your wifi to the next level?

then you need xfinity xfi. a more powerful way to stay connected. it gives you super fast speeds for all your devices,

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. hello, everybody i'm sue herera here is the news update at this hour evacuations are under way in northern california where firefighters are battling a massive quick-moving wildfire. officials say the blaze has killed at least two people, including a firefighter. a local hospital spokesperson reports 8 people including three firefighters have been treated for fire-related injuries. the flames are burn bag 200 miles north of sacramento. and connecticut is sending firefighter teams out west for support. firefighters responded to nearly 4 million acres of fires so far

this year. maryland is trying to cope with a record high number of drug deaths. the state's health department reports nearly 90% of the fatalities were opioid related the new number fueled by a spike in fentanyl related deaths. and puerto rico seeing a record 1.2 million cruise ship passengers in the latest fiscal year generating roughly $152 million in revenue and of course as you look at that video it comes as the island tries to recover from hurricane maria and an economic crisis tourism represents about 7% of puerto rico's economy. you are up to date that's the news update this hour. melissa back to you. >> thank you very much sue shares of cbs crushed on reports of crow less moonves will be accused of sexual misconduct on the news line is our media analyst with b riley fbr barton great to have you with us. >> great to be here. >> what's your take? let's run the game out here.

let's say les moonves steps down or is forced to leave. how forced to leave the position what happens. >> that's a huge leap i don't want to say i've gone there. i want to make that incredibly clear. obviously you have to think about you know those type of possibilities given just the arc of what's happened in other situations and i think that the important thing to remember is you don't get to be a very strong media organization in this environment i think on the back of just one person you know-like cbs he has a strong bench, with good leaders. you have seen other strong organizations rocked i mean, "the today show," fox news, pixar, you know cbs this morning. >> you brought in -- you look at corporate america we had a high profile ceo departure last month at brian krzanich at intel because of the company policy violated as a stock amounts do you comb through and see what the policies are also are when it comes to relationships in the

workplace. >> it's a horrible thing as an analyst as an investor to have to think of these type of he said/she said situations but that's the world we are in the poibt i'm making is strong media o-s in the sector i cover have been able to withstand these type of transitions because they have multiple people who are executing and i think that's what you have at cbs i think .1, you should assume cbs continuing to perform, whoever is in charge but .2, i think this lawsuit, i wouldn't believe that whatever happens with les is going to affect the lawsuit that cbs has filed. because that suit was supported by all of the director at cbs unanimously. whatever happens to les that goes in discovery. i don't think that's affected. >> if you think, barton there are a number of leaders that are critical and important and could continue to carry out cbs's mission so far, is this stocks reaction an overreaction at this point in.

>> you know, given what we have seen with things like fox news where they clearly had horrible kind of accusations and chugged along, it does look like a bit of overreaction. i think that we'll have to see what the story has and maybe reconsider once we get the details. but it feels like it's gone pretty far pretty fast and it looks like a bit of an overreaction. >> larry halferty at l kbchlt h he said he thought it was a certainty that cbs and viet come ultimately merge what's your take. >> it hinges on this lawsuit you know, it seems that if cbs prevails that then we won't have that if they lose then sheri red stone made the desire clear. and i guess we will see. i think that. >> which want way do you think it liens, barton which way do you think it leans. >> i think that consensus on wall street is that cbs has got kind of a long putt here i think they're better

positioned than maybe you know most people would think. but you know, it's -- it's not impossible but it's definitely kind of a long pass i would say. >> all right barton. thank you. >> thank you. >> one company hopes to change the way health care is provided in america and they are doing it with one real estate investment at a time the company also out with earnings today, the ceo of well tower, an important reit will join us neck what about him? let's do it. ♪ come on. this summer, add a new member to the family. at the mercedes-benz summer event. lease the glc300 for $429 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

10,000 baby boomers turning 65 today and 10,000 more turn 65 every day for the next decade including in a couple of years when i'm one of them. >> put that on my calendar. >> you better. >> as the population ages welltower well positioned as a portfolio of nursing homes, senior housing now they close add $4.4 billion deal that they say will help on the mission to create more low cost, cost effective health care sites outside of hospitals the ceo tom derosa joins us welcome. >> thank you, tyler. >> let me understand what you have done. you and your joint venture

partner which is a health care provider, right, health system provider, have bought man or care which is a major provider of nursing homes, rehabilitation centers centers, nursing care centers and so forth where do your businesses overlap? and will you be closing places or all added. >> that's a great question what this is doing is reimagining the siting in which health care is delivered in the future we are we go with a 13 hospital hospital system. headquartered in toledo, ohio. they have acute care hospitals in three markets, northwest ohio, southern michigan and indiana. this is pro peling pro med ka from a top 50 health system in the u.s. to 15th largest by

revenue and we do that without acquiring a lot of hospital real estate so what this will give pro medica is a 450 sites of care, which might be skilled nursing or post acute care, rehabilitation, as well as memory care, residential memory care the overlap with welltower is that we today take care of over 200,000 frail to dmented elderly every day, keep them in a model of with wellness which is nutrition hydration, movement absocial and cognitive engagement and safety. and we will look to connect our assisted living business with the network of man or care and now pro medica to create really a virtual circle around the

patient. it's really the ability to follow the patient across their health and wellness journey. >> one of the things interesting to me about your business -- and it's been a hypothesis of mine a long time is that there is a corner of your business that is an insurance business, right. >> of pro medica's business. >> of pro medica's business. >> yes they have a company called paramount. >> i can by my health care coverage from them. >> that's correct. >> and also my delivery from them >> that is correct. >> and that is like a kaiser permanente like upmc, university of pittsburgh hopkins and so forth is that the future where i go one place to buy my insurance that is also the place that owns my mccall -- the mccall practice i frequent, the hospital i go to, the rehabilitation arndt center i go to. >> i think that is the future. we call that -- we call those

health systems pay viders. kaiser was really the first of the payviders. in this case, the provider can direct the pathway of health care when they are the insurer or the payer and that's what's been very effective about the kaiser model. and you see that not broadly across the health care industry. but you are starting to see more of it across the health system. >> would that be good for you or bad for you in the sense that right now you get a percentage of the operations of a provider who is operating one of your facilities. >> yes. >> fw it becomes government regulated in some respect does that then cap the amount that you be o can capture with the percentage. >> it's hard to know we don't see this becoming a government reimbursed. >> okay. >> area of health care today it's private pay. >> yes. >> i mean medicare does not pay for assist the living.

what we see is the power of connecting our business to the health system more deeply, because as tyler, asp you said the aging of the population. we have to figure out how to keep this aging population well. not the -- the health systems cannot continue to meet that patient in the emergency room. there needs to be a connection to that patient. that can happen by being a payer. if you are a medicare advantage provider. >> right. >> so we are looking to connect our populations more directly with this pro medica and hcr minnesota monther care population. >> thank you very much congratulations. >> thank you. >> tom derosa of welltower. >> coming up next making it in america in the middle of a trade war. ele u.s. based company that's feing the impact of tariffs.

well, just about a year ago we invited some american manufacturers to join power

lunch. we're checking back in to see how their businesses are being impacted by the recent trade tariffs. they build ranges, barb chis all out of santa fe springs, california the company's executive vice president says trade tariffs have impacted the costs of their finished goo now, here you are making barbecues, ovens, ranges in the u.s. but now you've got to pay higher costs with what's going on with steel and aluminum tariffs. >> it's impacting us significantly, kaucourtney we are a u.s. manufacturer and we plan to stay that way what's impacting us are the met we buy between stainless steel and aluminizedimateal metal have

really upped our cost of manufacturing to about 39% it's extremely difficult for us to make sure we're being competitive with the finished goods. >> how are you >> yes, we have to have obviously a price increase we did have an increase on our indoor products beginning july 1st. we are taking smaller margins, otherwise we'd have to pass along a much more significant price increase to the user >> the issue here it seems to me, tom, at least while there are tariffs on a lot of chinese

goods coming into the country it's not a level playing field at all do you sort of wish that moves into that category of being tariffed >> absolutely. we already were at the disadvantage prior to the tariffs coming into play so those products came into the country at a much lower rate we could actually produce them at and now when you adon the 25% tariff on top of that, it really puts the u.s. manufacturers at a disadvantage it really does >> how much of your product was going overseas >> are you talking about our product going overseas or materials we buy from overseas >> i'm talking about product you might sell overseas, that's number one but you can address the question of how much of your input costs is being subject to tariffs in the u.s. >> sure. first of all, we only sell overseas to the australian market so that's our main force of business overseas there. but the impact that obviously

this tariff had on us is significant, and it's significant to all manufacturers like us that produce in the united states. just to give you an example if this helps you at all, we produce a series of ranges of 30, 46, 48 inch range. our smallest range is 30 inch range that retails for about $40,000. the end user would end up paying about $1,800 just because of the tariffs. reing reciate you joinus he today >> thank you, i appreciate your time >> check please is next. let's get started. show of hands. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees?

are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪

that's confident. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done. what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain.

give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. welcome back to "power lunch. i'm julia boorstin in los angeles with the latest on these expected allegations that are reportedly coming in a new yorker article shari redstone the controlling shareholder of cbs just issued a statement quote, the malicious insinuation or today's reports is false and self-serving. redstone hopes the investigation of these allegations is

thorough, open and transparent the story continuing to develop. we'll be back as we get more >> you're going on vacation. >> i'm going on vacation, two weeks. i'll be watching, though, for sure >> thanks everybody for watching "power lunch." >> "closing bell" starts right now. happy friday, everyone it's time for "the closing bell." i'm wilfred frost at the new york stock exchange. we have a tech wreck on our hands. we'll spin forward and preview apple who report next week i'm julia boorstin in los angeles. reports of sexual misconduct allegations. the stock taking the news. i'll have more on the fall out coming up. in washington, d.c. with the real estate makeover forget the old boring for sale sign i'll show you