higher i like them into earnings. they just bought over two million share equivalent of up side calls i'm in it. i bought it during the show. >> okay. good stuff kevin o'leary. >> i have not owned apple since february i bought it this morning at $190 .10, because i have fear of missing out on a print of 30% plus on services i want to participate. >> thanks for watching "power lunch" starts right now >> i'm michelle caruso cabrera u.s. and china looking to scale back their trade war that's the good news the bad news, major warning from wall street saying the stock market is headed for the biggest sell-off of the year just heard kevin o'leary talking about apple. it's getting ready to report earnings in just a few hours can it stop the tech wreck we'll get caught up in the recent fang meltdown rising risks our cnbc special report on how severe weather is impacting america's real estate. today the growing crisis in one maryland town. "power lunch" starts right now

>> welcome to "tower lunch." i'm tyler matheson the nasdaq the biggest gainer. almost up .9%. trying to snap a four-day losing streak haven't had one of those in several months april, if i recall gains being fuelled by a rebound in the fangz facebook and netflix, which have been battered lately seeing the biggest gains in that group at this hour of course, apple we mentioned at the moment a go if you want to include apple in the fangs illumina, and harris corporation leading the s&p 500 right now. pfizer.

>> we'll have more on that story on chipolte coming up. home prices marching higher. rising 6.5%. that's putting more pressure on potential buyers as you know, sales of existing homes have been falling for the past three straight months finally, uber says it's going to shut down its self-driving trucks unit. >> the nasdaq bouncing back today in all the beaten up fang names in the green for a change. it has been a rough ride as of late for technology. bob pasani joins us now from the new york stock exchange with more hi, bob. >> hello, michelle what's it worth to say that the rumors that the u.s. and china are in private discussions it's worth about ten points on the s&p, and that has powered us forward just prior to the open take a look at the sectors all the stuff that moves on trade and tariffs doing well semis, industrials

consumer discretionary materials. tech, though, also bouncing. mentioning the fang names. these are pretty modest moves for the fang names given the sort of battering some of them have taken in the last five or six sessions let me just show you what they're off from the 52-week highs. facebook and netflix obviously had disappointments in their guidance that was the key alphab alphabet, amazon, and apple, modest declines in the 52-week highs hit a few months ago over all, if you take a look at other sectors, i have been mentioning other tech sectors have had tough times the internet content names, look at the snap and twitter, ebay, they all hit their highs way earlier in the year. they are down significantly. some of the other software names also down 10 % to 20%. and industrials, there's been a price to pay for all these tariffs and higher costs in the steel and aluminum area. american, cummins, illinois tool works, they all hit their highs earlier in the year. those are significant declines it's been tough for those industrial names where are we right now essentially we are range-bound growth and value there's a little bit of rotation it's not clear where that's

going to last at all we're stalled out on that rotation the bulls are insisting the growth pullbacks, not uncommon i get emails bob, it's going to come back don't worry about it second quarter earnings have been great the third quarter consensus has been holding, and that's why the market keeps holding up. people don't just sell tech and get away they sell attorney genertech ano other sectors, and the valuations for the most part are reasonable sideways, bill that's where we're at right now. back to you. >> all right, bob. thank you. we are rallying today. the dow has been up 175 points the uncertainty, though, is still with us wrrks jp morgan, ceo jaime dimon speaking to cnbc about what's worrying him about this market. >> it's trade if the skirmish becomes more of a war. it's -- i would say the reverse of qe, and i don't want to scare the public, but we've never had qe, we've never had the reversal regulations of different monetary transmission of different governments that borrowed too much debt, and people can panic when things change it's changing. we tell you it's changing. we know it's going to change,

but what happens is you might have some affects that people don't expect, and i think it is bad policies you know, bad policy leads to bad outcomes >> so the wall of worry continues to get bigger. and then there's morgan stanley warning that the stock market may be headed for its biggest correction of the year and that it's going to hit the average investor hard. sleep well, everybody. so what should investors do from here bringing in brent, chief investment strategist with northwestern mutual wealth management and jimmy lee, who is ceo with the wealth consulting group. good to see you both brant, you have been looking for this transition anyway from the small caps going back to the big caps again is this a longer term trend that we're beginning, or is this just a pause? what is going on >> i think large caps versus small caps, it is a transition that typically happens towards the end of any economic cycle. i do still think we have time left in the cycle, which to me the morgan stanley report is a correction, but not a bear

market, and that's more important for the average investor i do think you had kind of some trends interrupting the first quarter where small caps outperformed largely based upon shorter term issues such as the trade potential war. i think as that shifts and you have seen a pullback in the tariff talk over the past few wee weeks. >> it's just smart i think what's going on right now is just normal rebalancing to sectors that have been beaten up, and i think what we'll see is potentially as the trade war talk i think will resolve itself, as i know the president wants it to be in a good spot before the midterm elections, i

think that's going to lep the market go even higher. >> what about the fang stocks specifically, though would you see them as having some value here, especially when you see some of the big selling that we've seen, some going into correction territory would you buy in there, jimmy? >> i think you need to be selective. i also think it's very important to be active now and be a stock selector, versus just buying the indexes and buying all the names. i think you have to be selective, and, yes, i think -- >> would you -- are you allowed to say which ones you would select, or is that just not something you would do >> i can't give you any picks, but i do see some value right now. i have seen some of the moves that we've had in the recent weeks. >> so, brent, you heard jaime dimon say that his concerns are trade if it becomes something more than a skirmish, but clearly he seemed more concerned about policy errors that might be monetary policy errors than anything else. what is the biggest brick in the wall of worry for you? >> well, i think it is that. it's that inflation rises faster than what the market expects, and it causes the fed to go back on their promises of staying

longer -- accommodated for longer, but i don't think that's going to occur i think from a societial standpoint we've shifted if you think about the 1980s, post-1980s, the enemy was inflation, and the fed's job was to phyte fight the enemy and keep it at bay at all cost, and they were willing to sacrifice some economic gains for that in the short-term because they thought it led to longer term price stability. i think societially we shifted now the enemy is no longer inflation. it's deflation it's lack of economic growth it's income inequality i think the enemy is no longer inflation, but those things. i do think the fed will continue to act just as they say they will they will let the economy run hotter, and i think you're seeing that with other central banks. the bank of japan took something away last night, but they added something. when the central banks have walked the economy and the markets this far away from what is normal, they're not going to let it all go back at once if there's anything we've learned over the past few years, they're doing a pretty good job of doing that. now, longer term, that may set up for higher inflation, which i don't think anybody else is really calling for, but i think the fed's talks is pretty high,

and the inflation numbers that came in the u.s. today, while i kind of disregard people who say there is no inflation, because i'm not shower sure how 1.9 and 2.2 is zero, but i think the fed has room to react how they want to, and they're going to react very easily. >> all right brent, jimmy, thank you for joining us today a ton of news out of d.c optimism that the u.s. and china may be working to ease trade tensions plus, the trump administration may be considering a controversial tax cut, and the president doubling down on his chief of staff john kelly, even as he keeps his options open a lot to talk aboutwith kayla at the white house kayla. >> john kelly has agreed to stay on at the white house through the 2020 election according to two white house officials. the request is said to have come from the president himself even as he has been canvassing advisors in recent weeks about an expanded short list about potential replacement for kelly. akorkd to three advisor and two

white house officials that list includes treasury secretary steven manuchin, and mark meadows as well as nick mull saudi arab - mu mulvaney and steven airs he is the frontline soldier in the trade war with china, and amid reports that those talks have reoeptd, let's remind you what the treasury secretary said here on cnbc last week. >> that would index sales of assets to inflation creating a wind fall for investors. i'm told by a treasury official

that treasuries currently evaluating the impact on the economy, including on the deficit, and the process of how to potentially go about this whether to involve congress or to do this strictly within the executive branch i'm told that the treasury secretary's preference is to involve congress we'll see whether it comes to pru fruition for now back to you. >> it would be more permanent that way all right. thank you, kayla market is higher today on reports the u.s. and china have resumed back channel talks on trade. this all comes as the state department announces a new set of initiatives backed by federal dollars. to promote the u.s. private sector investment in india and the pacific. many see it as the u.s.'s answer to china's massive overseas infrastructure program called one belt, one road i spoke with u.s. secretary of state mike pompeo about the new economic push by the state department >> is this an answer to one belt one road, what you announced today? >> we're convinced that american engagement and the i understando-pacific relationship, we want it to be

free and open. we're not looking for dominance. we're looking for partnerships others choose to behave differently. we want these to be commercially viable projects led by the american private sector in a way that benefits the entire region and the world. >> there's a reason why some of these countries, though, like to get involved with the one belt one road, right? those contracts are not tra transparent. we've discovered there's a lot of corruption. autocratic countries don't like transparency how do you say that this is a better option, the way the united states does things is a better option? >> i think some of the countries who have engaged in that find themselves in a place that they are not happy about, and i think the others are beginning to see that as well the way you convince them is that you demonstrate that over the course of history, over the

i'm convinced that the vast majority of the countries in the i understa indo-pacific will agree with that >> the state department was relatively small roughly half a billion dollars worth of stuff that would increase foreign aid by $60 billion small, however, compared to what the chinese are spending on foreign aid and that one belt one road, which we don't really know the actual number, guys, but there's some estimates of half a trillion dollars. >> yeah, they're making big inroads in south america right now. in africa. >> yes >> and the secretary of state thinks a lot of these countries are going to regret having done that much business with other countries that behave differently. you'll notice he never once mentioned china, but clearly,

even though it was very much implicit, i think, what he was suggesting there >> great stuff >> thanks. >> we're going to move on here shares of chipolte falling today on new reports of people getting sick after eating at one of their loeks. we'll have details on that and the latest from the company as well this is what you call a deep tease. we are just about 24 hours from the latest fed decision on interest rates i mean, the economy is doing great, but the president is unhappy about the rate hikes so what's a fed to do? help me . 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.

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ed fet's interest rate decision will be due out tomorrow the jobs report comes on friday, but before that we have the latest pulse on the consumer the conference board consumer confidence index rebounding in july the u.s. economy is growing. there you see the growth 127.4 from 127.1 well, the optimism, will it keep growing too? our next guest says that could be less long-lived steve, president and ceo of the conference board and a cnbc contributor. steve, welcome back. good to have you with us >> good to be here, tyler. thank you. >> sum up what the numbers tell you about the consumer state of mind and the economy >> well, the conference board's consumer confidence index hit an all-time high here 17-year high in february it's been rocking along at a very, have i high level since then you know, the july numbers are up a little bit over june, but the numbers say that the consumers don't expect a big

hockey stick from here big huge increases they do expect the economy to rock along at these very high levels for some time to come now, a lot of this is tied to job creation, and we saw some big numbers last month with about 600,000 people re-entering the work force so that's labor supply coming off the sidelines and into the work force, which is why the unemployment rate hit about 4% again last month. this is all very good. they don't expect big changes. they don't expect, you know, upwards or down wards, but they expect this to grow. i think that it's really keyed in to jobs here. you know, some of the things that could derail all of this are what we've been talking about, of course, which is trade. prices, inflation, and so forth, and then, you know, big interest rate hikes which are not expected in any of this, but those are the kinds of things that could derail this, but they're not expected to happen >> do you have any concern that some of that upward momentum that lifted the index of

consumer confidence to the high in february, do you draw any conclusion from the fact that the momentum seems to have levelled off or is that just something you live with? i mean -- >> no, no, no. i think it's really good, tyler, because it's at very, very high levels you know, at some point, you know, you're going to -- you can't just keep going to the moon it's really at a very, very high level. look, the things that could derail it, of course, are if we get into a trade war we heard jaime dimon say that, you know, there's -- it's a trade skirmish, i think, is what he called it, but there's a lot of optimism on that with the discussions in jurp last week and the discussions in mexico last week, and the determination of the u.s. and the e.u., the hold firm against chooirn, but now we're hearing the back door is open with china you know, from a trade perspective, consumers kind of are neutral on it. there's some that say this is an issue. most of them say it's not an issue. >> to the degree that trade has become sog controversial, the news that there's going to be more trade pacts, is that good

or bad for consumer confidence considering the way all these trade pacts have been painted by both parties over the last couple of years? there's so much noise that consumers are immune to it you know, the prices are something that they're keeping an eye on. i think interest rates, because you know, you see housing purchasing starting to decline a little bit i think that interest rates are having a little bit of effect there, but the big impact is jobs, and as long as the jobs keep creating, it's great.

necessity expect it to stay high they don't see anything really happening here in the short run. you know, it's a matter of -- there are no indicators that say that there's going to be a big pop in the economy, but, again, a very, very high level. i think all of this is very positive >> do you think -- do you really think that the trade issues resonate with consumers in the aggregate? they're concerned about their jobs they're concerned about prices, and they're concerned about taxes. if they start to see tariffs coming into the pricing function, which hasn't rein happened yet from a consumer standpoint, you know, then they'll start to worry about it. you know, as they start to put a label on it, but it's not an issue at this point. >> all right, steve. thank you very much. steve with the conference board. >> coming up, new reports of food-borne illnesses at a

chipolte location. this one in ohio what the company is saying about that, and how weather and real estate development are combining to create destructive floods a rising risk series ctiesonnu a rising risk series ctiesonnu willng up on "power lunch. & 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...

skbra our friend marcus is trying to help a husband and wife team who are struggling to keep their children's retail business afloat, but a

devastating medical diagnosis could put everything in jeopardy >> in 2017 it was a really hard year so in 2017 i get a phone call from my doctor he says we need to immediately get you in here. looks like you have testicular cancer >> i'm really sorry about that >> very unexpected i'm sorry. it's the hardest thing to see her hurt >> are you okay? >> i'm fine. >> the doctor is, like, come in immediately. >> that day? >> that day. >> that hour >> so i'm right there. she's trying to comfort me i'm, like, no, i have to comfort you. it was a mess. >> a perfect storm >> oh, man >> it's a whirlwind. >> yeah. >> how long ago was that >> you can tune in for an all new episode of the profit tonight here on cnbc >> tough one >> yeah. important it sounds like >> shares of chipolte are tumble today after another report of possible food-borne illness.

chipolte said it reopened that location today kate rogers has all the details. >> the company told us they plan to reopen that single location in ohio this morning and was expecting business as usual. this after chipolte voluntarily closed the store yesterday on reports of customer illnesses telling cnbc it did so after an abundance of caution the company added that the local health department has two complaints of illness at the restaurant we are waiting for an update from that local health department, which told cnbc yard line it's still in the instant fajz of investigating a possible food-borne outbreak. it's worth noting that chipolte got an upgrade from jeffrey's saying the company is one of the better position plashz to again fit from the shift to dilk tal and off premise. jeffries gives a buy rating with a $550 price target where, this makes sense given that digital sales now account for 10% of their total sales. they expect delivery to hit about 2,000 locations by year's end. i called that analyst back he said this seems to be an isolated incident in ohio. they're work on it, and it doesn't look like it's -- it has

to do with any changes that have been made under the new ceo. they seem to be on top of it, and we'll bring you any updates that we get. >> all kinds of mixed information about this particular outbreak, though, if there was one. >> that's right. chipolte says the local health department has two complaints. they're looking into it. we haven't gotten any confirmation yet we'll bring you any news when we get it >> all right >> okay. thank you. >> pfizer shares are higher today, and up next, we will hear what the ceo had to say about president trump pressuring the company on drug prices and we are awaiting results from apple after the bell everyone watching for the sales numbers on iphones we'll tell you about the other number you need to pay attention to that's next on "power lunch. with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about the details. fine, i obsess over the details. introducing chase ink business unlimited with unlimited 1.5% cash back on every purchase.

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>> heeshz your cnbc news update this hour. the white house confirming that president trump has asked john kelly to remain as white house chief of staff until at least the presidential election in 2020

the news comes as kelly mark his first anniversary on the job and amid rumors of his imminent departure. turkey's state-run media says a court has rejected an american pastor as appeal for his release from house arrest. last week president trump announced possible sanctions against turkey for its treatment of andrew brunson. cummins says it has agreed to recall 500,000 trucks with its diesel engines due to faulty pollution controls it affects 2013 through 2015 model year ram 2500 pickup trucks the epa says it's the largest ever voluntary recall of trucks due to emission problems and take a look at this. a paddle border in massachusetts had a close encounter with a great white shark, and he didn't even know about it it happened sunday when a photographer who was flying his drone over the water took these pictures of that close call. the paddle border found out about it when he got out of the water and back on shore. probably better he didn't know

>> i always thought paddle boarding was overrated >> well, in cape cod at this time of year, it's definitely something you don't want to do >> dah, dah, dah, dah, dah, dah, dah, dah, dah, dah >> i was just going to do the same thing, michelle let's get a check on the rally. stocks are near their session high about 163, 164 points. it's a gain of two-thirds of a percent. the s&p 500 is higher by about 17 points. 3m, caterpillar, and pfizer, those are the biggest gainers at the dow while verizon, walgreens, and jp morgan, they are the biggest -- those are the gainers. they're in positive territory. here are the drags they're in negative territory. jp morgan chase lower by three-quarters of a percent. ver eason. the battered fang stocks, they are rebounding today they're feeling the nasdaq higher you can see almost higher across the board with the exception of amazon facebook and netflix seeing their biggest gains in that entire group tyler. >> thank you very much, michelle three weeks ago president trump slammed pfizer and other drug companies in a tweet, and that

profrped the company to delay some planned price hikes now the ceo speaks out about that decision and did so with meg terrell. >> it was pretty shocking when it happened. you almost never see drug companies actually reverse price hikes under pressure, but that's just what pfizer did at least temporarily after president trump singled the company out in a tweet saying "pfizer and others should be ashamed that they have raised drug prices for no reason. i spoke just now with pfizer ceo ian reed for the first time since then and asked him about what happened next he said after seeing the tweet, even before speaking with the president, pfizer decided the right course was to defer the price hikes "because we wanted to have a positive relationship with the hill and the administration as we go through this blueprint." now, trump introduced his blueprint to lower drug prices in may, and reed said today he thinks it will be positive both for patients in lowering prices and for pfizer in enabling patients to better access its drugs. he focused specifically on changing the drug rebate system. those discounts paid by manufacturers to pharmacy benefit managers like express

scripps, cvs, and united health opt ups saying it's a principle part of the plan, and he thinks drug rebates could be eliminated entirely >> he mentioned the price hikes were delayed temporarily any idea how long that might be? >> when pfizer implemented the deferral, they said until the end of the year or until the drug price blueprint comes into effect many think that it's going to take long enough for these changes to happen that we may see the price hikes come back. >> eliminate rebates completely? that would be a complete disruption of everything everybody goes through now >> that's the pbm's are the bad guys, right? >> right that's a big change if it happens. >> it would be a big change. there are a lot of questions on the call for ian reed. he thinks that might happen. it won't be a big change for the pharmacy benefits managers that we mentioned, but also potentially drug distributors who are paid based on the list price of drugs if that dramatically changes overnight, then the prices they get paid could dramatically change as well >> the times, they are achanging. >> some people -- >> thank you

>> thanks. >> see you later >> so shares of apple picking up as we head into the earnings report that will be coming out after the bell this afternoon. as always, everybody wants to know how many iphones they sold in the last three months but there's also a lot of attention on the company's service business josh lipton is live in cupertino with the very latest josh >> bill, let's dig right into what the street expects from apple after the close here earnings per share, bill, of $2.18 on revenue at $52.3. that would imply growth of about 15% on the top line. iphone units, 41.8 million that's up about 2% from a year ago. investors will also focus on the iphone's average selling price, the expectation at $694. up 15% iphone mix in the quarter. did it rye main an overall mix or a smaller one results actually matter less when it's this late in the

cycle. they expect services results to be the focal point expected to jump 26% to 9. $9.2 billion. morgan stanley thinks services will come in even stronger than that, with the app store remember, that's the big driver of services going strong, and apple music paid subscribers up 70% in the quarter according to morgan stanley finally, with no trade tensions, continuing escalating between the u.s. and china, so investors are going to be very curious ian cook says about that dispute and what it could mean for his company. guys, back to you. >> all right thanks, josh always a lot of buzz when apple reports earnings after broad tech sell-off like we've seen this week, the pressure is high for apple to turn the tide. let's bring in mike olson, piper gentleman ofry senior analyst. good to have you here. >> thank you >> where do you come in on all the numbers that josh put out there. are you higher than those numbers? do you have high expectations for apple? >> for the key number of iphone units, we are a little above we're about a million units above for the quarter. we feel good about the june quarter relative to that metric. we're actually slightly below on services 26% year-over-year growth is a

big number they did 31% last deceleration i wouldn't expect, in other words, much up side to the services number. those will probably be the two key metrics, and then i think obviously the guidance will be key as well. it will give us a little bit of a flavor for what's coming with the next iphone release. >> are you in agreement with the idea that services could be the key number in terms of what could shift the attitude on the stock and get away from focussing so much as a hardware company and now actually being able to cultivate that whole halo system and ecosystem that a lot of analysts have been hoping for for a long time? >> we're going to see a higher unit of iphone sales, and that will create a little bit larger of an ecosystem of iphones that have been recently upgraded, which will be a larger ecosystem

into which to sell services. we do think that's a key focus >> talk about what they have in the pipeline in terms of new upgrades to the iphone and tell me whether i'm right or wrong that the last upgrade cycle didn't seem to have the sort of same amount of juice that some earlier cycles have, and sort of a long way of asking, is the mojo still there when you upgrade the iphone >> yeah, you are absolutely right. the iphone 10 cycle, which was dubbed the super cycle, didn't really turn out to be a super cycle. >> a lot of beam said i'll leave it and see what you come up with next we've been talking more about a super long cycle, which is a multi-year upgrade to the next gen form factor. that is the iphone 10 factor, and he with think that's what's coming this fall is we're going to see an iphone 10 light. we don't know if that's what

they'll call it. something that removes some of the bells and whistles from the iphone ten and brings the price point down, and then we have also expect an iphone ten plus a larger screen for those that want more screen real estate >> so more evolution no more revolution anymore from this company we get a watch we get a new it rags eration ofe ipad minor iteration change for the iphone, and that's about it? that it? >> i think that's the right bet for thenext one to two years, and specifically, you know, we just don't expect any sort of significantly innovative new categories coming from apple, but we do think there's enough juice just within the iphone upgrade cycle this year with the wide array of next gen phones to drive growth, and ultimately that expanding ecosystem to sell services >> all right thanks, mike mike olson, good to have you on. >> we just told you about chipolte we have more, and kate rogers has the details. >> hi, tyler

that's right cnbc.com got a statement from local health officials in delaware county, ohio, saying we've received over 100 calls and climbing today regarding chipolte our team is following up with each one of those callers. we told you earlier that chipolte had said two people reported illnesses to the health department the health department was in the early staejz of investigating that food-borne illness and that the possibility of an outbreak now we have this updated number from the county health department we'll bring you nigs we hear from chipolte, guys. the stock down nearly 7% >> the fact that they've received calls, does that mean that the calls were reporting -- that 100 people have reported that they were sickened are auto just curious about, hey, what's going on >> i would say that this means that they have received calls about people potentially being ill and that they're looking into it. that's what they said to us earlier that they're investigating a potential outbreak they're not calling this an outbreak it doesn't mean 100 people are sick, but that they are investigating it and looking into it. >> one thing we haven't talked about yet, kate, and i did this story for i alocal nbc station this morning here in new york,

that the health department last week cited that restaurant for not maintaining the proper attorney generals on some of the food items there you know, they were sort of on alert anyway going into this week >> bill, i also did see reports of that. again, we asked chipolte about it they said they closed the restaurant out of an abundance of caution yesterday, and they were reopening it this morning so long as the health department had ok'd that. that's all that we have right now. we'll certainly bring you any updates as we get them >> thank you very much kate, to the bond market we go rick santelli tracks the action at cme hi, rick >> hi, tyler the first day of a fed meeting, we look at one week of tens. steady as she goes this year for the long end has been characterized by tight closing ranges and after we jumped into the 290s, you see the chart there. we're holding them basically at three basis point closing range. if we look at what's going on the yield curve, listen, this is the smallest gap on the curve. tens minus sevens. it's three basis points. the difference between 2 the 5

and 292. that's a year-to-date chart. the reason i throw it out there is i'm sure the fed is paying very close attention to the parts of the curve that may invert first if we look at the dollar index since about the third week in may, it explains a lot we are in a range. 94 to 95, and it really doesn't look like it's going to break out any time soon, although it was responsive to the early headline that we were talking to the chinese. finally, another market that has responded that headline. this is a month-to-date of soybeans it did have a positive move based on the headlines today, but it's been moving in a positive fashion for several days nice bounce there. bill, back to you. >> before you go, i know -- i want to ask the santelli gut what -- is it -- are you going to invert any time soon here, do you think? >> i think that the next quarter point we get, no, but i think the quarter point after that parts of the curve possibly

could particularly tens minus sevens where. >> by the end of the year. >> yes >> very good thank you, rick. see you later. >> thanks, bill. >> coming up, the latest installment in our rising risks series remember the devastating flooding in maryland earlier this year? why is it happening, and what can be done to prevent p it from happening again? we'll have that coming up. stay witush well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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are right. caused by a combination of heavier rains and heavy real estate development diana ohlich has her continuing series on the rising risks of extreme weather. diane. >> tyler, horrific scenes from a catastrophic flash flood on main street, usa, over memorial day weekend drew national attention, but now the cameras are gone, and the locals have to figure out what to do next. their problem? their river. a combination of heavy rain and too much real estate development has turned water from an asset to a liability ♪ >> it would have been called 1,000 year flood it's the same destructive deluge that hadn't crashed through ellicott city, maryland, just two years before the first time around in 2016 on the city's nearly 250-year-old main street. shop owners like donna worked tirelessly to rebuild.

>> there was this enthusiasm, let's put on a show, let's bring the town back. >> but this time -- >> this is more like a funeral rincht now they feel like these destructive floods are the new normal because this historic town barely a blip on the map is a blueprint for developing disaster real estate development in the face of increasingly wet weather. joe sexton is a scientist who uses satellite images to map changes in ecosystems. >> you had two 1 ,000 year floods within two years of each other. how did that happen? >> the overwhelming factor was intense rainstorms climate change due to warming oceans, changing atmospheric patterns more water is falling. on top of that, we're intensifying land use, which is clearing the natural vegetation and replacing it with impervious surfaces like concrete, asphalt through which water does not penetrate. >> ellicott city was built north of the river several tributaries above its main street run through the town

to the river those water currents were the energy for this town built around a mill in 1772. since 1991, real estate around the popular main street exploded developers submitted more than 100 plans to build residential and commercial buildings in about three square miles around the city most were approved >> we have flood maps that were drawn based on conditions that are no longer true >> reporter: in the most recent storm nearly eight inches of rain fell in just three hours. intense water with nowhere to go sexton's maps show how development increased the intensity of the flooding by up to 30%, and ellicott city is just one example he mapped close to 8,000 square miles between washington d.c. and baltimore and measured changes since 1984 the amount of land or permeable dirt that has been covered with sidewalks and buildings is about

equal to the size of the entire city of baltimore. when we think of the destructive power of rivers, we tent to focus on the amount of water heavy rains causing tributaries to overflow. it's also the speed of that water. rushing through towns like a bulldozer. how do you control that speed? >> ellen has been the county executive that includes ellicott city, leading the people through both floods. >> we're not going to lose the town, but instead of imposing ourselves on the river, how can we co-exist with the river >> the answer he says may be in a transformative vision, literally. taking down some of the historic buildings by the river to give the water more space >> this is gorgeous historic real estate. you really feel like you have to pull some of it down >> i think we have to look at bhaets best for the town as a whole. we have to figure out what is the best way for us to save this

town and the river runs underneath all these buildings right here >> one of those buildings houses tom shoemaker's family shoe business he and his son barely escaped the floodwaters. >> the water kept coming up, and it started seeping through the doors and then through the doors all of a sudden it just, boom, broke the doors. >> he lived in this area for nearly 50 years. but lease this is space. now he is going to move his business uphill. >> being down in the flood zone is not fun it's difficult. >> on the other hand, and the other side of the street, the change could benefit other businesses like dona sangers. she owns the building and is invested in what the town decides. that's why she rebuilds. >> if we can get through that period of time, then it's a tremendous opportunity too. >> because taking down the opposite building means her property would overlook a valuable new green space, a river walk, mitigating water and attracting business to her and her neighbors.

>> they know that if they hold on they bring buildings back and the county does what we think that in the long run they have valuable real estate >> last friday the county for ellicott city unanimously approved a 1-year perreese on the development in the areas where the storm water runs into the river under the main street. 600 housing units in various stages of permitting would be put on hold according to the county estimates if you want to see that again it's on cnbc.com unbleachable. >> the data point you mention that the flooding was worse by how much of the development was. >> 30% 30% because there is no wherefore the water torg process. no ground for it to seep into. >> we tend to think about beach front property or development along the about big waterways. but livers like that it can happen obviously as well. >> anywhere and there are so many more rivers but rivers run through the entire country not

just big rivers, the small tributaries can cause most damage. >> has there been measurably more rain. >> yes a lot more rain. >> year over year. >> more rain as the climb warms the atmosphere, the atmosphere can actually hold more water so the frequency of rain may not be as puch but the actual amount of water coming down in the rain storms is more than it has been. >> when it rains it pours is what. >> and it can be very localized we had storms this weekend where it was four inches in one place. and two miles away it was .4 of an inch. >> never seen that in hershey park. >> if you miss to do by the way we show it on fightly business report tonight plug, plug thank you. >> see it on pbs coming up ford's big bet on the new version of the icon mustang. phil lebeau life in california hey, phil. >> do muscle cars still matter the ford things so which is why it's rolling out the bullet mustang we look at whether or not the bullet is a silver bullet for

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the ford mustang, the iconic american car brand and now ford making a big bet on the new

version inspired by the classic steve mcqueen movie bullet fill lebeau is live in salts o with the latest. >> i like to say those of us a certain age, can understand the appeal of bullet, the movie and the original bullet mustang. well 50 years after the movie it's back. this is the bullet mustang brought out by ford. and it comes at an interesting time for the company we have detailed over the last several months a number of problems for ford. let's talk about these before we talk about the mustang the bullet mustang and what it means for the company. you have a company ending production of most cars with the exception of the mustang china and europe struggling. and it's said it needs more extensive restructuring. against that back drop yesterday we had a chance to take the bullet mustang out for a drive in sfis. if there is any place you test it out it's here granted we didn't go go the same speed as steve in the movie. this is a vehicle 480 horse

power starting under $47,000 with a top speed of 63-mile-per-hour some people say can it make a difference is it can make a difference snp it adds shine. the muscle car seeing sumit a limited segment. it's not moving the needle a lot but it's important for ford especially at this time in the company. >> phil, clarify one thing they are pulling away from making sedans was cars for the u.s. market. but how about the european market. >> they're in the process of assessing that market. >> yes. >> they ship the mustang we should point out to europe and they make smaller vehicles for europe. >> right. >> as we mentioned with the earnings last week they stlugle there and in china because the market to moving to utility vehicles and slow making that transition. >> what a buchli place you are. >> love the car. >> and a really good looking guy, phil lebeau of a certain age. >> of a certain age. >> nasdaq bouncing back today.

it's a tech wreck recentlily big names getting hit. apple due out after the bell and waiting on interest rates from the fed at should you do process your money? we will tell you after this. you always pay your insurance on time.

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welcome to hour number two p glad you could join us hoop here what's on the menu a trillion dollars worth of advice the ceo of asset management tell us what keeps him up at night. how worried we should about the tech tumble and what's ahead more broadly and when boring is best. the street isn't expecting big surprises in apple tonight that could be good news for wall street we have the preview. and forget a house how about owning a whole mountain an exclusive look at the first billion-dollar property ever to hit the market in l.a. we will take threw process as power lunch resumes right now. ♪ welcome to poufr lunch everybody i'm bill griffeth. stocks in ral mode technology is making a bit of a comeback right now

the nasdaq composite which has been the laggard closing out month of july up .75%. it's the leader to do. the rebounding but some see the gains fading alphabet and amazon are barely positive right now semi conductor stocks also high are. themys on pace for the first upday in three led by kla-tencor lamb research and equal crom the industrials are top performing the etf tracking that sector on pace for its best month since 2016 and chipotle is near session lows as the delaware health management department in ohio says that they have received more than 100 calls related to the store. the company had to close in powell, ohio, north of columbus. all kinds of conflicting stories about that but we are trying to sort it out now michelle. >> stock getting hit in the meantime thank you. i'm michelle caruso cabrera bringing news on facebook julia

boorstin with the details. >> fv hosting a call to explain the identification of a coordinated influence campaign using fake accounts designed to influence the midterm elections. facebook explaining to reporters that its briefed lawmakers about the work detecting and removing 32 pages in accounts saying that whoever sent this them up went to great lengths to obscure identities than the russian internet research agency has in the past. >> we have always known and everyone working in security knows that security is is an arms race. we were glad to find this. we always know that our adversaries are getting better and we have to get better. and we are going to continue to invest heavily to find things and share the information as we find it as we're doing today >> facebook saying they're still reviewing all the content and ads from the pages and working with law enforcement and outside companies as they continue this investigation. guys back to you. >> julia, have they tried -- did they give you any indications as

to whether the advertisements lead in one direction or the other politically speaking. >> you know they said it was all about being divisive and what was interesting is some of the ads were to connect people to events and actually head these sort of manipulative accounts had linked to real legitimate accounts and were working with them they have told everyone, including the legitimate pages and accounts that were contacted by theses -- these fake accounts and now shut down the accounts and there are a lot of questions on this reporter call about what exactly these accounts were trying to do and it sounds like so far all they couldcy is foster division. but it's unclear who was behind them though there are some ties to russia >> they did say some ties to russia. >> yes, although they -- it's -- the model is a a little bit different than what they saw with the previous manipulation some similarities, some

differences and there seems to be some ties to russia but the new manipulative accounts are doing a lot better job at covering tracks. >> what -- to be clear, give us one example of what it is. >> well they're actually -- >> so they're going to publish what the pages are thp they have shone some on fv's blog. but they're working with law enforcement and because they're working with lawmakers they have already briefed folks on capitol hill they have been very cautious about not giving away too much because the investigation is still ongoing. and they're trying to figure out the source of them before the folks who are doing this manipulation have realized they are being blocked. so they're trying to get to the -- trying to get to the bottom of it is it sounds like they've been working this for some time and really shut everything down today. >> got it thank you, julia. >> all right 24 hours away from the fed's decision on interest rates. or non-decision, investors not expecting a hike but they will be looking for includes on the fed's direction in the future. the meeting comes days after a

very strong economic report. the question is, could the economic strength be short lived? steve leastman with the results from the fed survey what does it zbla tyler we look at the growth forecast it's a good one for economic reasons. i don't know about political look here we did 2.2% last year. that's the actual for year over year gchd. expected to be 29.9 this year and 2.7 next year. it comes down a little bit it's not seen as permanent at this level. it's not 3 or 4% but if you tell economists we are going up.7 is a full point over potential they'd say that's pretty good stuff. is it permanent, temporary 63% say it's temporary over the next couple of years they see it trending off as government spending slows down and the effects of the tax cuts perhaps peter out. when we ask -- we did a word association. tell us why you think the growth is stronger. tax cuts were the number one reason deregulation also in there among

the words mentioned. monetary policy, easy monetary policy and government spending were big ones. growth investment and optimism and also oil prices another one. this reflects the magnitude of the answer that is we saved. moving on looking at the recession chances you can see they are up a bit. 16.81. one of the higher in several months let me put it in context recent high was 25%. that's a one in four kmans of recession in the next 12 years 19 is the ample. we are below average up a bit from the bottom. maybe some concerns about you guess to do trade. what are the biggest threats look here. 53% say it's protectionism which is bigger than all of the other concerns combined. so if you think the markets is worried about trade and protectionism you are correct. 10% say it's a fed mistake 8% say inflation over my left shoulder 5% interest rates and 5% which used to be the process perrinle number within. very quick outlook 10 oh say no hike this woke.

four hikes expectsed this year meaning to you two more here two to three about next year and importantly 53 say the fed goes above neutral to slow the economy over time with higher interest rates >> steve we have to go thank you. among other things there word puzzles there. thank you fafrpgt. stocks stopping bleeding today. don chu has the look at the carnage. >> bill if you look at some of the just market value lost over the course of the recent weeks here facebook shares you heard julia talking about it if you look at the chart of facebook that big drop here erased around $134 billion worth of market value. so a big one there in terms of facebook overall check out another one here we look at amazon.com. it's not that far away from the record highs but still that drop right here shaved $25 billion off its market value still bleeding there as well

then you look at netflix that move here for netflix has been big but it made the high earlier in june since then lost around $36 billion in terms of overall market value and then it ends here on the g, the google side of things. off by about $40 billion from the highs we saw last week oh off by $40 billion. you put a tally on that together we are talking around $235 billion total for those stocks of course one thing to watch here guys, apple shares only about $15 billion off the record high levels. we see if the earnings report today does anything for the stock and the fangs back to you. >> dom thank you very much lots for investors to digest this we can. talking about the fed decision friday's job report. already a strong month for the markets overall. the dow and s&p set to finish july with the biggest monthly gains since january. today is the last day of july. >> it is. >> what happened to july. >> i know. >> will the gains continue or a

rocky rest of the summer neil subtle is a asset manager with shh 1.5 tril under management you lived a long-term in hong kong look at the world markets. >> yes. >> where with you put money in the u.s. other overseas. >> if you are taking a longer term perspective, we believe that the performance in the u.s. in terms of economic activity clearly a dfrg js with the u.s. holding up well. we saw that confirmed in the q 2 gdp report last week whereas a moderate attention in growth elsewhere we believe the divergeens starting to chose. we look outside the u.s. at the end of the year for opportunities as some of the outperformance from the u.s. is moderating. >> too early to look at emerging markets? or are you talking about mature markets. >> we would certainly look at

emerging markets not sure we'd move immediately today. we have heard a report today just a headline that u.s. and china reopening talks again on the trade -- trade issues. but we do expect that to continue to be a head wind for emerging markets but for us valuations are now attractive the growth environment is attractive external balances in emerging markets are significantly improved we believe the market has overreacted to the trade issues. >> well that. >> we think unit. >> that leads me to my next and really final question. i'll turn it over to my friends here but is it likely that the trade situation will mean more to the markets than it will mean to the economy? >> we would gragree with that tt certain it has meant more the markets. in our few if you look at the

economic impacts even if you see everything implemented to the full and no benefit from substitution effects, it may have as much as a .6 impact on gdp in the states just under .5 in china but we feel there would be substitution effect. we don't believe everything will be complemented. and there's already been easing of that. we think you are looking at about a .1, .2% impact on gpd in the u.s. and china and markets have reacted much more to that we believe they have included the risk of escalation a lot of the bad news we think is already in the price. >> already. >> what about europe we saw the gdp annapolis out today and looked to pale in comparison to the united states, 4.1%. how do you feel about europe compared to the u.s. >> so our view is that there has been a moderation in europe. that's the data that is -- we are now seeing confirmed

but we believe that divergeens in growth we have seen in the first half of the year is likely to narrow. yes the u.s. has been very restraining and within that 4.1 number of course there was the inventory drawdown that's a positive to come through. but we think u.s. peaked in the second quarter, will moderate still above trend as we were hearing. but we see the rest of the world, europe, japan and emerging markets likely to start to improve and so the gap we think starts to close. the u.s. still ahead but the gap closing. and the markets do like to focus on the second derivative. >> inflation how hot will it become do you think, especially in the united states where we are focused on trying to achieve 2% inflation. >> yes. >> and maybe even let it go higher than that at some point will it? and will it go much high are than that do you think. >> in thinking about the

macroenvironment, the growth looks positive global growth is above trend for us by definition that means rising inflation inflation in our view is rising. it's rises at a slow pace. but we do see that beginning to pick up later this year and next year so we do see inflation moving above the feds target as the fed has already intended and inflation elsewhere in the world starting to pick up. but still at a very slow pace. >> all right neil thank you very much we appreciate your perspective today. very interesting thank you so much. >> thank you. >> coming up les moonves stays in the corner office for now that's the board's decision. is it the right one? a look at what could be in store for moonves and cbs. plus will apple save tech or intensify the selloff we saw over the last couple days. earnings out after the bell. what to expect coming up and then the u.s. churning out more cheese than it knows what to do with

a cheese glut. >> too much cheese. >> how is that possible. >> i know. exactly. the tariffs are threatening exports. that could be a rest fee for disaster. >> i saw what you did there. >> live in the cheese warehouse straight ahead

well, stop that, you guys. welcome back to power lufrm. shares of cbs up more than 2% today following the board's decision not to remove the company's ceo les moonves over the sexual misconduct allegations. julia boorstin in los angeles with the latest. julia. >> reporter: well bill cbs board is selecting outside counsel to conduct independent investigation but is leaving moonves as ceo a surprise following speculation that they could can him to take a leave or moonves could opt to step back. in the wake of the ongoing uncertainty cowens doug slay slashing the price target. saying that's a reflection of the fact gnat added overhang of the investigation of the uncertain length with uncertain outcome will make share outperformance difficult in contrast, jp morgan who has the overweight rating on the

stock and the $75 price target on the long-term potential warn that is allegations create a near-term overhang eefr even the host of the cbs late show weighing in >> i like working for him. but account alkt is meaningless unless it's for everybody. whether it's the leader of a network or the leader of the free world >> all of this conversation about the future of les moonves comes as prosecutors say they decline to pursue claims by a woman made by a woman against moonves. she went to los angeles police in february to report three incidents of sexual abuse. one from 1986 and two others in 1988 prosecutors saying they are declining to follow up because of the statute of limitations. the statute of limitations has expired. separately in the battle for control between les moonves and cbs's controlling shareholder sherri redstone, national amusements filed a motion in delaware court accusing cbs of

destroying evidence. is to a lot of different pieces here in the future that have media giant. we expect to marry hear more from moonves directly when cbs reports earnings thursday afternoon. >> that will be a very listened to call. one heck of a call thank you julia. did cbs board make the right decision to leave moonves at the helm of the company in the wake of the ails and in the midst of the internal investigation let's bring in knowle, a professor at the michigan university and karen brenner from let me start with you karen. did they make an okay decision to leave him there. >> they probably made an okay decision but not he preferred. there is a big cloud over his head and the board is doing the right thing in conducting the investigation. they have to satisfy themselves that indeed wrong doing was done that his leadership is compromised and he shouldn't stand at the helm of the organization anymore the better decision would have been to ask him to step aside while the investigation unfolds.

i don't think that should be a long period of time for them to complete the investigation from the report originally it sounded like they were already pursuing an investigation. that would have been an unsailable decision. >> there is all the scloj that's layered in here because of the battle between viacom and cbs and whether sherri wants to merge the companies and whether she can. if they had pushed les moonves out right away wouldn't that feed into the whole concern that she has about whether or not it appears that she planted the story in the first place to make the deal happen? >> i'm not sure if he can hear me. >> well this is knowle i think they should have moved faster to move him out of the way and get to the bottom of this right away. this shouldn't be hanging over the organization

and there is too many red flags not to deal with it quickly. >> but to the -- the point that michelle was making, noel that this could complicate the efforts by the retireants to want to bring together viacom and cbs it would make it seem as though they were trying to push him out with the timing of the article in the new yorker on friday what about that? >> well, they didn't time his behavior if that behavior is true he deserves to be out so let's -- let's get real what the underlying issues are here you know, i've -- i've written a number of books, including one called the ethical challenge, which says you've got to deal with these things quickly. and judiciously. and as far as i can tell they're not. >> did you -- do you think that by waiting until monday's previously scheduled board meeting they lost an opportunity to move quickly, so even that 48 hours or 72 hours is take a

look, noel. >> i think we'll have to obviously live for the monday meeting. but that's going to be very, very important. >> that was the one yesterday. >> that was the one yesterday that this he did have. i mean the story came out hit on friday. >> yeah. but then they didn't do anything. >> they didn't do anything so karen, let me turn to you there are obviously a variety of constituents here. >> um-hum. >>en a one of the most important it seems to me would be the women working at cbs. >> right. >> what is the message to the women working at cbs in what the board did or didn't do yesterday? >> that's exactly why the better decision would have been to have him step aside during the investigation without necessarily making a permanent decision a crisis is an opportunity to speak to the values of the company that are core to what the company stands for the board should not hesitate to know what the company stands for. to your point the message to the women is, well, you know, there is -- maybe there is a needle we can thread here.

he has done a nice job financially. this is really inconvenient. to your point, there is another parallel path about the memorier that's going omerger going on. this is into the not the time to think about that. >> let me play dechl's advocate you're innocent in court of la. >> you the standards in the court of law are different the duration and kind of investigation would be very different. but leadership of an organization is a privilege and responsibility and your behavior, character, follows you for a long period of time so the message that they're communicating to the men and women of the organization that want a healthy culture in which to work is not necessarily a good one. >> do you understand the point i was trying to make earlier, the question. >> yes. >> let's pretend there was no drama related to viacom and cbs, then if they pushed him out it would look clean, right. >> yes. >> but at this point sherri redstone may be troig to protect her reputation to say gosh if with he do it now it's making me

look like i'm the problem here and i'm the instigator. >> there is a big board. one could argue there is a big board that has to make the decision if she is concerned her thumb on the scale is going to taint or compromise something else that can go on. she can recuse herself from the decision but the board shouldn't hesitate to take appropriate action. >> only three women as i see on the board. the average age of the board is 73 but that's elevated by sum ner's redstone's presence. >> only three. >> only three. >> i got to tell you that's a lot when you look at boards in america. >> three is on average a lot but to your point, also about age, and again, age is not necessarily a predictor of anything. >> no, no. >> either. but in fairness i think there are three people under 65 on the board. so it's a large board, very few people under 65 even

so, yes, there are some governance issues that need to be thought through here. >> thanks. >> noel tichy wsh karen, thank you very much. >> tesla earnings on deck tomorrow the stock up more than 2% but still in bear market territory will they fuel a comeback. >> fuel, tesla. >> i get it. >> charge it >> spark a comeback. we'll be right back.

welcome back to power lunch. i'm sara eisen and this is trading nation today we watch shares of tesla surging more than 2% ahead of the earnings report out tomorrow after the bell the stock still stuck in a bear market which means down 20% from recent highs let's get straight into the trade on earnings. stacey gilbert bill with blue line ventures. what's the options market tellings you has the sentiment shifted around tesla. >> it's more bearish here. we look at the implied move right now the options suggesting a run on 9% implied move let's look in historical context on average it's been closer to

5% move. that's certainly a significant amount more of risk being priced in here. and more interestingly that's one of the biggest moves we have seen on the earnings cycle from tesla. going back past earnings what's interesting is the activity we see longer term in tesla options. instead of investors buying those upside calls where they want to position with the fear of missing out on any pop that's shifted. there is a shift really where investors bying protection not sfr a small pullback but really wasn't to participate if tesla has a crash or a real correction correction here. >> talk to us a bill bit about the levels to sta appoint for those investor was fomo if there is a drop, is there a line where you step in and buy. >> yes, today markets are moved by headlines up to the mil second and no stock grabs more than tesla ultimately we have seen a move about $30 last three reports down this align was trend line dating back to february of 2016

i could love this stock down at 260 for a short period of time i think that's where you need to be looking to buy it down at 260 against the trend line now, additionally, you have a 200-week moving average that align was that which ultimately signals the market is going to continue the uptrend however, to the upside we have seen -- we have a 200-day moving average. i don't know if i want to sell up there but i would like at the landscape at look at 320 as a sell opportunity look at it from both sides. >> all right guys thank you for weighing in on the levels and activities stacey and bill. for more trading nation head to the website or follow us on twitter at trading nation coming up on power lunch, america's growing cheese problem there is too much contessa brower live a a warehouse with more. contessa. >> and how is that possible, sara when this is the 37 pounds of cheese that each american eats each year

there is so much cheese we would need to tack on another 3 pounds to get rid of the excess the economics of extra cheese coming up on power lunch >> announcer: and now the latest from trading nation.cnbc.com

i'm morgan brennan and here is the cnbc news update at this hour facebook says it has uncovered sophisticated efforts possibly linked to russia to influence

u.s. politics on its platforms the company says it removed 32 accounts from facebook and instagram because they were involved in coordinated behavior and appeared to be fake. the highest ranking american at the vatican has denied any involvement in the sex scandal leading to pope francis stripping u.s. cardinal theodore mccharacter of his title kevin farrell says he had no knowledge of the scandal. >> i was focused on running the arch die cease the what the cardinal was doing was all over the world. didn't enter my daily routine of running the afternoon die cease of washington. >> uber is halting the self-driving trucks division focusing on self-driving car research it will, however, maintain uber freight app which helps drivers connect with shipping companies which has grown dramatically the

past year. that's the cnbc news update this hour back to the team at power lunch. >> they said it was inauthentic. >> coordinate the inauthentic. >> and anything inauthentic. >> you can't have that can't do worse than that. >> it's fake. >> the oil market closing for the day. let's gom to dom chu at the commodity desk. >> the real oil christ seeing general weakness in the oil complexes wt crude off ice brinker futures $74.25 off by about a%, 19.5% on the side of things we talk of this about the idea that we have the brent crude prices down about a% it's coming down to really the downside pressure due in priet part to the righter survey iing opec increased protection to the highest level we have seen this year now with we are capping off a month where both oil benchmark

on let wti and brent side had the biggest drops in two years the oilny news isn't over for the day we have private sector inventory data by the american petroleum institute, the api later on this amp. the official government data on weekly oil vrnss by the energies information administration tomorrow morning at 10:30 a.m. eastern time news coming in there. >> thank you dom now now to the problem the u.s. can't eat its way out of i would volunteer to give it a try there is too much cheese and tariffs could make the glut worse. contessa brewer live at a cheese warehouse with more. hi, contessa. >> hi, michelle. if americans are eating more cheese and we are, then why is this the -- the problem? 1.4 billion pounds almost of cheese just sitting in refrigerate the story youhouses. part of the problem is american ouks are producing more milk at a time when american consumption

has lagged for decades the big processors have been intently going after foreign markets sending as much as 20% of u.s. dairy abroad much in the form of cheese which mass a longer shelf life. but two of the biggest importers be mexico and china slapped 25% retaliatory tariffs on u.s. cheeses sending cheese futures lower. and some manufacturers already report the declining sales >> the amount of inventory they have will certainly increase and they can do two things, try to find different markets to go after totry to move some of th products if china and mexico don't buy them or they could sell it domestically here at a lesser price -- lower price as far as local cheese production, they may not be competitive enough to be able to sustain what they are doing. >> that worries artisten cheese makers they say their price can be

undercut by the big guys with lots of cheese to unload now the, the trade groups in some 60 cheese makers pressed the whitehouse to get a trade deal quickly but here is the interesting story about free trade where there are trade agreements with say australia you have australian choice makers campaigning to their government about their u.s. cheese makers undercutting prices. >> cheese dumping. cheese dumping. >> i never knew. wow. >> contessa thank you. >> thank you >>shares ups mgm reports popping this around after the company signs the deal to become the official gaming partner of the nba. the deal lives g mgm the rights to nba data and team logo as and includes a cross promotion deal. joining with us adam silver and mgm resort ceo jim murray. >> that's right in midtown

manhunt wrp the meeting concluded. i want to get right into it. this is the first-time partnership but it may not be the only partnership it's not an exclusive partnership. other casinos they want to get into this. i know tillman freita is an nba guy. what do you tell him if he is not part of this already. >> i tell him to be excited about the deal we just did we talked a lot about sports he betting. he has so much experience as an operator he knows the way to win is not by having exclusive data but it's ultimately with the user interfast and using the data i said earlier he doesn't wants the competitors not to have official data. first of all it puts him in a competitive disadvantage because he would be paying for data feed and others would be using inferior inexpensive data feed feed number two i think all the operators we've been in business with mgm, the win they want to see integrity cross the

business we don't gain a competitive advantage if there is an issue with a referee or official in other league integrity is something we are focused on in the industry. >> jim what do you say to others paying the integrity fee you are at a disadvantage now in my everyone comes onboard and does the same thing you have done. >> first we are paying a fee or data, analytics, for brands, with this official sponsorship with the nba but what i'd say to all the other casino companies is that we needed to increase the fan experience we need to ensure the integrity of the game of the fan experience and we believe at mgm as a leader in the industry we should take the leadership with a leader in commissioner silver in the nba. >> so besides betting on the actual result of the game or a spread, the basic things, what are some innovative bets you see as new ways people can bet on the games. >> i'll begin by saying look

what's happening outside the united states where sports bet something legal. most of the action outside the united states used to in play. it's interesting -- very different story in vegz a small single digit percentage is in play in europe it's 80% and higher that can be anything the amount of points the player scores in a quarter. based on rebounds, it can be based on assists in the third quarter. based op points particular players score in the fourth quarter. that's where you get the engagement people are engaged throughout. winning and lease losing becomes only a small component from a engagement standpoint. from an entertainment standpoint people have a leonard to be engaged throughout the game. >> how many days weeks months or years are we away from seeing like dmat adam sid betting on someone's number of assists in a third quarter at a game at mgm casino. >> well as adam said, europe is very sophisticated and the united states is quite young. we partner with gvc yesterday we

announce ds that the gvc is the largest sports betting company in the world with the ingame betting technology and that proprietiary technology it's going to be very, very quick. we believe this is what the fans want this is what they have proven they want outside the united states and we are moving quickly here in the united states to provide that >> and then final question, i know a lot of people are curious about does this deal mean i can bet on my phone? in an arena? is this part of that or is that a future deal to come. >> it's part of this but contingent on state by state regulations. jim can speak to this. but few states- dsh i mean nevada is one of the few that allows to you bet on an app throughout the state new jersey is discussing it. >> right. >> but ultimately we think of user ability as you can in europe to bet on the smartphone is where the move is as opposed to the need to be in a bricks and mortar casino to place a bet. >> i would say, again, look at europe sports bet something a vehicle

for interactive gaming, providing a vehicle for online casino gaming, social gaming, esports, poker this is what the fans are going to want in the united states and they want to do it mobilely. it's happening in new jersey this week. at borgata which which own more often than not you'll find it throughout the united states. >> have to get you back on cnbc maybe with tillman and we can sort it out. a full-one-hour peshl. this is what people care about the. >> thank you very much eric chemy and the gentlemen. >> still ahead on power lunch, apple on deck with earnings after the bell will it join the tech wreck or break out? a look at what to expect when we come back. today, there are more sensors on our planet than people. we're putting ai into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer.

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mayor darrian anne and lee munson is a portfolio manager. amed you have a outperform rating on this but this seems like the least buzzed about apple earnings report in a while is it. >> i would agree it definitely feels like people are more calm about this than let's say 90 days aig when they were convinced they missed lower numbers. perhaps it's tempers expectation. >> are you more interested in the iphone sales or services business everybody is buzzing about? >> you know, i guess i pick c which is both of them right now. i think that both have a story to tell. services is what apple's future is going to be how they monetize the install base that matters iphones will be relevant because it's a window into what especially on the guide what apple's product gains will be montana in the september quarter

and the kwakt of the trade wars between china and u.s. >> what about you. >>hood the head sets. >> the hand saturday sets. >> the iphone, the because you know that is that is what the risk is the stock is the stock doesn't outperform and blow away expectations just on the services revenue that's only 20% of revenue you know, we have to see both of them at the same time. because it's not enough to say we have a fast growing service revenue, because they don't really have an application killer itunes, apple music, they're fighting against spotify while i'll an apple lover, i love all these things and tied to the their products, i think as far as service revenue if you don't have head sets beat, no matter how fast the services are going up, it's going to be a long way once you see that

headset revenue start to decline. the reason why this is the bellwether of all stocks is simply because their head sets always surprise expectations >> you know, i kept hearing headset instead of hand set, but i'm sure that's exactly what you meant. >> we understood what you meant. >> the heads, the hands. thanks dudes >> thank you why own a house when you can own your own mountain? the asking price, though, is a cool $1 billion. yes, with a "b." we have an exclusive look at this massive property next

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welcome back to "power lunch," everybody. talk about sticker shock arential property hitting the market in beverly hills this week has a billion dollar price tag. that is billions, i'm talking.

robert frank has the details >> a record breaking billion dollar listing is located in beverly hills, and get this it's just land, so there's no house on the property. here's a first look at the priciest piece of dirt in the country. a private drive it's the first ever $1 billion residential listing in america it's called the mountain of pervely hills. the massive 157 acre property is bigger than disneyland, but there's no castle up here. in fact, there's not even a house. this plot of land is being sold by secure capital partners and it's lasted by super broker erin cerman by $1 billion cerman says there are four reasons why the mountain is a record breaker first the property sits on the highest point of one of the most

expensive zip codes in the world, 91210 second, the property is zoned for a compound that means the billionaire who builds this can build the biggest house in the world on top of beverly hills third the views are some of the best in l.a., and fourth privacy. this long private road puts your closest neighbor a half-mile away bottom line here, location, sheer size and views like this are what billionaires love but the truth is no matter how rich you are that billion dollar asking price is a tough sell and the property had been shopped around back in 2014 also for a billion dollars. >> it is aig b price tag thanks, robert check please is next real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity.

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so we've all heard the story that alex trebek is planning to probably retire when his contract is up in 2020 he'll be 80 years old. >> wow, he looks great >> he does look terrific right now. so he's talk about who should replace him. i think, and he didn't mention him, but i think the obvious answer is ken jennings the all-time winning -- >> i think you would be great at it, bill you would be awesome >> i appreciate that but who do you really think should replace him benice about it now.

>> say it. >> i'm telling you i do think bill billy bush would be excellent at it >> i agree he would be awesome at it. thanks for watching "power lunch. >> "closing bell" starts right nowmism. welcome to "the closing bell." hi, everyone stocks are rallying on news that the u.s. and china may have started up trade talks what it means for investors coming up. i'm josh lipton in coopertino one of the most closely watched earnings season is upon us i'll tell you what to watch from apple as the company approaches the $1 trillion market cap ford rolling out a new bullet mustang even as the company makes a dramatic shift away from passenger cars what the new mustang means for ford ahead i'