answer them all. final trade time pete, what have you got? >> halliburton i think we talked about energy at the top of the show i think halliburton is one of those names. >> doc >> i'm seeing etp paper meaning call buying. >> josh. >> jpmorgan higher. again, the ceo of caesars coming up in just a few moments on "power lunch" which starts now. >> thank you, scott. the countdown is on. the fed's latest interest rate decision set to drop in just under 60 minutes from now. no news conference, but the statement could be a real market mover and we'll be all over it. amazing apple. the stock hitting $200 for the first time since it split. the market cap in striking distance of $1 trillion. is the iphone becoming a sideshow to what's really driving growth for the company and the race to zero now it's fidelity turning up the heat on vanguard offering the

first-ever, listen to this, no fee index funds to investors what it means for the $19 trillion mutual fund business and your portfolio "power lunch" starts right now hello, everybody, welcome to "power lunch." i'm tyler mathisen a mixed session as you see there, but stocks are steady ahead of the fed decision about an hour from now the dow would be much lower if it wasn't for apple's rally. the nasdaq trying to carve out some gains as well fidelity's plan to shake up the fund business, check out shares of t. rowe price down, blackrock down as well both taking a hit on this no fee index fund the head of fidelity's personal investing business will join us in a few minutes to talk about this breakthrough product. breaking news this hour, casino stocks getting whacked led by caesars the stock plunging during a conference call. contessa brewer is here with

more. >> yeah, we saw trading halted twice on the downside, tyler, and once on the upside at one point the stock down some 20% following marks from mark frissora, the ceo, about softness in the third quarter, especially on bookings he said they expected the growth to be somewhere between flatto 2% but for the year to recover somewhat in the fourth quarter with double-digit growth for the rest of 2018 they're predicting 4% to 6% growth still what we saw in the markets was this major draw and halting for volatility and then mark frissora came out and said, look, we know what booking looks like for the end of the year. we saw weakness in july and august, strengthening in september. what we're seeing here is a knee-jerk reaction and we don't need to panic about this this is a programming issue, people, not a las vegas issue. the stock now down 16% don't forget mark comes on for a first on cnbc interview coming

up in the next hour. you won't want to miss that. >> contessa, thanks so much. all right, we're going to begin now with the meeting at the federal reserve and their decision on interest rates due out in less than an hour from now. steve liesman is live in washington steve. >> the fed statement coming in less than an hour, always a potential market mover no change expected in the rate between 1.75 and 2%. there have been some changes and let's see why there's going to be no change in policy the gdp came in at a strong 4.1% but that was largely baked in probably back in june. unemployment ticking up to 4% even amid strong payroll growth and that's presented the idea maybe there's a little more slack in the economy core pce almost 2% less. the president said the federal reserve tightening now hurts all that we have done. i don't think that will have any effect on policy, at least not

now. let's look at how we're positioned, 91% probability of a hike in september. 65% for december and june, that would be the first hike for 2019, another quarter point, a 63% probability of that. so what are the keys to the statement today? i think the fed will try to keep the market on track for september and a december rate hike, or at least not dissuade them from what they're thinking right now, upgrade the economic outlook just a bit and maybe add a line that says its policy is accommodative for now. that was in the minutes last time whether it makes this statement or the next one is unclear the fed goes in with some solid economic data. adp came in above the estimate and the ism manufacturing remains at a high level. i know you guys are following this and we'll follow it more. those vehicle sales seem a little weak. that's the first piece of data for the third quarter. >> in light of what the president has said lately, do

you think there will be anything in the statement as sort of declaration of independence, to use a pun, to try to reassert what is the general custom here? >> you know, i think you're clever to say that is a tool in the fed's toolbox. i don't think the fed will believe that now is the time to use it i don't think the federal reserve feels especially threatened by what's happened previously, but if it does get to that point, you'll note, by the way, that powell several times has asserted the fed's independence, almost gone out of his way rhetorically and gives a speech and says, oh, by the way, we're very independent it is something he can use in the future but i don't think this time around. in the meantime apple shares rallying on the back of strong earnings, hitting $200 a share for the first time since a stock split a few years ago. of course getting very near the $1 trillion market cap bob pisani is down at the new york stock exchange with more.

hey, bob. >> hey, michele. apple is a stalwart but the rest of the market has been slipping. apple is doing something and everybody else is stable but all the other faang names were much higher two hours ago elsewhere we're just waiting for the update to show you the shares outstanding because we're getting close to $1 trillion let's show you apple's buyback we call them a buyback monster because every year they buy back with 5% of the stock this is a five-year chart of the shares outstanding in apple. down about 25% as i mentioned. elsewhere, let's take a look at some of the software names earlier in the week they were selling off these software companies. not anymore. they made a nice little comeback here so this growth story is back to a certain extent don't want to push it too far. a lot of pockets of weakness out there. energy has been terrible as we have some supply issues. official has been below $70 for

the last few days. retail has been kind of crummy it's held up fairly well most of the department stores, dillard's the exception, kohl's, macy's also down maybe a little hangover from the president's renewed discussions on tariffs with china. guys, back to you. >> bob, thank you very much. it's not all about the stocks today, it is also about the bonds. the 10-year yield getting back up above 3%. rick santelli is tracking the action at the cme. rick, what does that number tell us, if anything? >> well, i think what it tells us is that 3% is definitely a dog whistle. investors pay close attention when we cross that boundary. we've the ten closes at 3% or higher for 2018, a couple really close to 3%. today we traded up close to 3.02 for many it's about the close so it will be interesting to see how it reacts.

2-year eelyields are up 1. about eight basis points of steepening off recent lows of 30 basis points if you look at june 1st, 2017, the dollar versus yuan, the dollar continues to strengthen and the one-week chart, you could never tell that there's any nervousness in the dollar index trade predicated on the fed. no remember in june of this year, the reserve bank of india raised for the first time in four years they did it again today. their current rate is 6.5% bank of canada getting close central banks are moving in a synchronous fashion and it seems to be removing stimulus. tyler, back to you. >> rick, remind me if you don't mind did you say you thought the yield curve would invert later this year yesterday? >> i think if we get the two tightening that seem to be priced in, the last at the end of the year, it could invert

certain very tight points like 7-year versus 10-year, yes. >> we are less than an hour away from that decision on interest rates. the first decision since president trump criticized the fed for raising interest rates what's the market looking for? we have the president of the permanent portfolio funds, michael farr and senior markets commentator michael santoli. michael cogeno, you just heard rick santelli say he thought the yield curve would invert sometime later this year that is usually not a particularly good economic sign, but you think maybe an inverted yield curve doesn't mean as much as it used to. explain. >> yeah, i think with so much quantitative easing with subsidized interest rates, with central banks doing all kinds of

things building their balance sheets, there's too many other factors implicating it at the moment to fully sort of rely on it in the way that you used to be able to rely on it, so i do think it's still important i don't want to discount it. but i don't think it's a de facto reversicession because th curve stwertinverts. so it's worth watching. >> michael farr, i think of you as a bit of an old-school guy. do you agree with michael cuggino or take exception? >> well, he's a very smart guy so you have to be very careful if you disagree. but i'm always scared when anybody says it's going to be different this time. certainly it's a different environment and, yes, we've had all the quantitative easing. but i think the important part is that the fed has changed direction in interest rates. that's the whole story, i think, that you have to pay attention to, underlying all fundamentals.

rates are moving higher. they moved lower a lot of years. it's never been fun during my career in this business when we ever had an inverted yield curve so i take some great concern when i see that happen we haven't had a recession in a long time. we're lined up for those pieces to fall in place. >> you think about reversal to the mean statistically, you start to wonder. mike santoli, the u.s. federal reserve will not have their foot on the pedal also this week we got hints that the bank of japan was actually going to do the same thing i mean barely, and yet it's cited as one of the reasons why our u.s. 10-year yield is climbing so central bank policy around the world is affecting things, isn't it >> without a doubt i think you can characterize the shift as seismic it really is that kind of a long-term turn in policy yes, look, the japanese 10-year

yield released from below zero to something like 0.12% at one point and, yes, it seemed to have an effect on our longer term debt, which is interesting in a sense because i do think maybe in general this whole conversation is a little premature about inverting the treasury curve let's see, we have pretty much a slam dunk that in september the fed will go up 25 basis points let's see how the longer end of the curve does behave at that point. once you get to dead flat, you still have lead time before it necessarily means recession. >> do i understand correctly why it is if japanese yields start to rise, ours would too? they have been so close to zero in japanese for so long that maybe a japanese investor who used to look overseas for a higher yield sees they can get a little bit more at home and, therefore, there's fewer buyers for u.s. treasuries? is it that simple? >> i think strictly at the margin that's one of the dynamics or it's just traders

anticipating that kind of activity right now but yes, in general i do think that that's what you might see happen as sort of a chain reaction in the capital market. >> you know, michael cuggino, usually markets or stock investors like the idea of a little bit of inflation. they don't mind a little bit of rising interest rates because it suggests that the economy is doing pretty well. is that what you see and what do you forecast, therefore, for the rest of this year and into 2019 >> yeah, i think the biggest risk with interest rates is too fast, too quickly and too high if you have growth and it's sustainable, then gradually rising interest rates and gradually rising inflation would be byproducts of that growth so i don't think it's anything to be scared of necessarily the other thing to keep in mind on the curve and interest rates, i would agree with michael farr that it is always risky when you have inversion and the risks of recession go up, et cetera it's a big indicator, no question, regardless of how you feel about the validity of the curve nowadays

one of the things holding down the long end, and this gets back to mike santoli's point is the differential between u.s. rates and the rest of the world's rates are substantial. so you do have a lot of investors buying u.s. debt because the yield differential is so great. if you have global interest rates rising, whether it's japan or the rest of the world, that would take the pressure off u.s. rates and potentially allow the long end to grow in conjunction with growth. so that's why i think the yield curve bears watching but it's not a de facto indicator of recession right now. >> michael farr, do you own apple? >> yes, i own apple in one of my growth and income portfolios i think that the fed too, tyler, will raise rates in september but i think it's a mistake if they do it at year end i think you're seeing weakness in the housing market. so the fed is already on that tight rope you have to watch them closely and hurray for apple, not bad. and tim cook, what a terrific -- people were wondering what was going to happen to the company

after steve jobs answer is, hats off, mr. cook. fabulous. >> thank you, the three michaels, like the three tenors. >> wait until you sing. >> thanks, guys. >> we'll save that for later. president trump threatening to put a tariff on another $200 billion of chinese goods and it could be more than double than previously discussed kayla tausche is live at the white house with the details kayla. >> reporter: hey, michele. we are awaiting a white house press briefing that is set to begin any minute now really where we expect the white house to get questions about a potential crystallization of this new trade policy in addition to the beginning of the trial of paul manafort and the disclosure from facebook yesterday about election interference on this potential trade policy, reuters is reporting that the administration is prepared to increase the level of tariff that it had proposed on $200 billion of chinese imports from

20% to 25% they have declined to comment on whether that is the case china, though, is not mincing words. in a statement, the foreign ministry spokesperson in a briefing earlier today said u.s. pressure and blackmail won't have an effect if the u.s. takes further escalatory steps, china will inevitably take countermeasures and we will resolutely protect our legitimate rights. last night the president referenced chinese retaliation and said he wasn't happy about it. >> china and others, remember this, have targeted our farmers. not good not nice and you know what our farmers are saying it's okay. we can take it. >> reporter: so the farmers might be able to take it but there are questions about the collateral damage to consumers the administration via a briefing with peter navarro back in june had said that that 10% tariff level was the tool that they were using to limit the consumer impact of this $200

billion tariff package so we will see what, if any, additional tools they have to protect consumers and whether in fact we do get that policy today. guys. >> thanks very much. kayla tausche at the white house will be watching that for us. a sell-off of caesars entertainment midsession here, falling over 16% naming down all the gaming stocks across the board but this happened right in the middle of the conference call let's bring in harry curtis. harry, good to have you here. >> thank you. >> contessa said there was an issue with bookings. what did you hear that's pushing the stock lower like this? >> it was during the middle of the call, the company management gave their expectation for third quarter room pricing in vegas of 0% to 2% expectations were up 7 to 8. >> wow, that's a pretty dramatic difference that would explain the sell-off. why do they not have pricing power like the analyst community

expected >> the expectations were high going in because of prior comments being made either on their first quarter earnings call or at conferences that they had great visibility into the third quarter pricing. and they cited a number of what i would say relatively weak, if not lame, comments about how there's been recent deterioration and there was a fair amount of blame on the part of other operators, which i just think is a difficult message to send to investors. >> is this a vegas problem or more global than that >> you know, that's a good question, because it's not a problem that we're seeing in macaw, and that's where -- it's interesting to see the sell-off

in wynn, for example, or melco, companies that operate out of macaw and all of those are being taken down with it and the weakness with caesars has nothing to do with macaw they don't operate in macaw. >> when you say that the company was blaming other competitors out there, it sounds like they're suggesting that we're dealing with some kind of price war or they were going to have to match lower prices from other hotels, and that would suggest it's a vegas problem >> yeah, the implication was that it was -- their biggest competitor, mgm, cutting pricing. i think at the end of the summer it was fairly clear that there wasn't great -- a great deal of pricing power in vegas but based on some of the work that we've done, we haven't seen any significant more than usual

pricing power across the vegas market. >> so you would cut prices because demand isn't there, right? that would be bookings, right? >> yeah. in the summer, remember -- >> it's hot. >> yeah, it's hot. and when you can cook an egg on the sidewalk, generally group meetings and conventions don't go to vegas. it's very seasonal. >> let me ask you this so they seem to blame mgm. mgm had this issue where they were in the headlines for suing some of the victims related to the shooting it was some technical reason that they explained, but it generated a lot of negative coverage is it possible they're seeing slow bookings and that's having a wider effect >> i think that the two issues are completely separate. >> okay. not connected. >> no. >> and i guess if you were still going to go and you weren't going to go to mgm, you would choose a different casino which in theory would help the

competitors. >> harry, thank you. harry curtis, appreciate it. >> okay, you're welcome. >> we'll hear from caesar's ceo in the next hour, first on cnbc. you won't want to miss it. who's going to pay $1,000 for a phone? it looks like a lot of people are and will strong sales of the iphone x just one reason apple is hitting an all-time high today and getting closer to becoming the first trillion dollar company. it's just a few dollars of share price away has apple eased those faang fears and is the apple story now more than just the iphone story? we'll explore that, next the employee of the year, anna. [music playing]

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and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. welcome back apple today getting above $200 a share and it's very close to being the first trillion dollar company. josh lipton joins us now from san francisco. hey, josh. >> morgan, for those doubting the pricing strategy of $1,000 phones, this quarter appeared to prove them wrong the average sales price of iphones surged to a much stronger than expected $724. the street, remember, was looking for $694 tim cook telling me in an interview if you look at the iphones that most recently launched, so that includes the x, the 8 and the 8 plus, they grew very, very nicely in the quarter. we also took channel inventories down on iphone by 3.5 million units, and so the underlying

demand is even stronger than the units imply. companies services business also firing on all cylinders, surging 31% to nearly $10 billion in the quarter. cook saying apple pay expanded with well over 1 billion transactions, more total transactions than square, and that's more mobile transactions than paypal, he said while apple is trading at all-time highs today, apple's cfo says the company still looks relatively cheap, telling cnbc, we trade at a discount to the s&p. we trade at a discount to our tech peers and we trade at a discount to consumer product companies so we continue to believe we are undervalued. he says apple ended the quarter with a net cash position of $129 billion. >> good rundown there of why apple is higher today. thank you very much, josh. so what's the rest of the street saying about apple after its blowout earnings quarter rbc capital telling investors to hit the snooze for 90 days because the company's path to $1

trillion is impact morgan stanley saying it's a clean beat on the path to a trillion bucks and our next guest wise a trillion dollar valuation is now on the near term horizon let's start with what the cfo told josh and jim cramer last night. colgate-palmolive has 21 pepsi at 19. apple 17 it's still getting no respect from the market. yes, we're getting close to a trillion dollars, and yet the market never gives it a bigger multiple are we finally getting to the point where jim cramer says, look, it's got better loyalty than most of these consumer products companies in fact he says if he ran a wall street firm, he'd take out the tech analyst and replace you with a consumer products analyst. what do you think? >> i would say on the sum of the

parts, if you look at the software services piece, we think the valuation of that is about $400 billion the street now is starting from a mull perspective as they have proven on the software services side to expand that multiple going 2019, 2020 in terms on the consumer side, i do think the street is starting to look at apple differently today, given some of the product cycle as well as what they're doing on the ecosystem from a consumer perspective as they get more into content and more into the software services piece. >> psychologically, i mean once you start buying clorox at a certain age, you probably buy it for the rest of your life. to say that you've got to look at this like a consumer products company, like jim is saying, suggests that you've got to believe that it's going to have that kind of feeling for the buyer of the product forever. >> it's a halo effect. the retention that apple has is unique really to any other

technology consumer products company out there. very similar to what amazon has done i think what's starting to happen is what you're seeing is many of the naysayers about the product cycle, you're looking at asps, so all of the bear thesis are getting thrown out the window in terms of the guidance and outlook into fiscal '19, now it's on the path to the elusive trillion market cap. >> when you get into it, is the market undervaluing apple as a brand, which is the spirit of your question? i mean it is a brand that has tremendous brand loyalty. >> we've always believed that. i think what's starting to happen now, many others believe that too, is that now the brand from a software services and the broader ecosystem of apple, you're starting to see it show up in the numbers. before the street wasn't going to give credit to that software services piece now you're starting to see that

multiple expand and that's really what's key here to the valuation, along with generating more cash in some countries and -- >> when i think back to the companies that have led the parade on market value, it often hasn't ended well for them, see ge. >> it's sometimes a peak. >> sometimes a peak. see ge, see exxon, see microsoft at one time. i'm not saying it's going to happen here. >> it's a great point. i think it speaks to some of the bear theses out there. but it's software services that's the key if it was just a hardware company, then ultimately you'd sell it sort of going into it. it's the software services piece that's different some of the parts, the street is starting to realize that plus with the cash return policy and what's happening with the

capital reallocation, that's significant tailwind for the coming years. >> dan, thanks for coming in. >> thanks for having me. >> dan ives. shares of nutrisystem are falling today and down 25% this year weight watchers shares have doubled. coming up nutrisystem's ceo will tell us why she's betting on genetics to reverse that trend. and we are counting do twno the fed decision due out in half an hour. we'll have all the reaction when it happens ablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

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it's been a strong earnings season with companies beating estimates across the board nutrisystem is one of them despite that shares are lower today, down about 3%, the stock is down 20% this year but it's had a nice rally the past three months, up double digits here is the president and ceo of nutrisystem. >> great to be here. >> since you've taken the helm, a multi-year turn-around plan. stocks down 20% for the year weight watchers has doubled meantime what are investors missing >> i think it's a big market and there are a lot of ways people can choose to lose weight. this year weight watchers is having a great year. all the weight loss companies are doing well but the market is very large with many competitors. we're a multi-brand, one of the few companies out there that are

multi-brand and really focusing on innovation and we have some exciting things to talk about. >> i see you have a box here. >> yes dna body blue printinprintbluept this is our latest innovation. >> hold it up. this is a dna kit? >> yes where the world is going is towards personalized nutrition what this does is allows you to take a test that based on the results we'll be able to tailor your program based on what your dna says that's really important because what everybody is looking for is customization as well as personalizati personalization. >> what will this tell me about yourself >> it will tell you about your metabolism, about your eating behaviors, it will tell you about your nutrition, what nutrition concepts are best for you and it will tell you about vitamins it's very simple it's typical to other dna. it's a swab thing, very easy and then what we do, what's unique about what we do is we'll send you back a 30-page report that really tells you about

things that you should do, things that you shouldn't do to help you on your unique individual weight loss journey. >> you're making money on the sales of these or you're making money because you think it attracts users to your product overall and it becomes almost an annuity as a result? what's the pricing mechanism here that helps you out? >> we just launched it it's associated with the overall program but we think it has potential as a stand-alone kit as well. it's not a loss leader >> so you at least break even or profit on these. >> yeah. >> i want to ask you about the broader landscape because certainly you have other companies like weight watchers but you also have this big push into organic, more healthy food. walmart moving into organics and you have these meal delivery kits which are portion controlled, like blue apron and some of the other ones amazon buying whole foods. what does this landscape look like looking out for the future?

how do you compete against some of these other companies >> one of the things that we've done is really change our food portfolio to be products that we deliver into the home, which is very mainstream, and we encourage customers to shop around the perimeters of the store for other elements to augment their program. when you look at the direction, everything is going towards more healthy. i think it's a broad base. what has to be out there is economics that work. i think we're seeing some challenges in the meal kit industry, but i think we have the formula figured out. >> of course have a dna test. >> absolutely. >> thanks for joining us for this exclusive interview. >> thanks for having me. the race to zero we're not talking about weight, we're talking about fidelity launching the first-ever no-cost index funds. good news for investors, but how's fidelity going to make any money when you don't charge anythi ead t company's personal investing business will explain next stay with us kayak searches hundreds of travel and airline sites

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together to make a difference for other people's lives. together, we're building a better california. hello, everyone, i'm sue herera here's your cnbc news update at this hour. president trump is once again calling on attorney general jeff sessions to put an end to the

mueller russia probe this morning he tweeted that sessions should, quote, stop the rigged witch hunt right now, end quote, before it continues to stain the country any further. on capitol hill, the senate intelligence committee hearing testimony about the extent of foreign efforts to undermine american democracy through social media >> 21 months after the 2016 election and only three months before the 2018 elections, russian-backed operatives continue to infiltrate and manipulate social media to hijack the national conversation and set americans against each other. >> molson doors will attempt to sell marijuana-infused drinks in canada its canadian division will partner from the marijuana producer, the hydropothecary corporation to develop that drink. that's the news update this hour back to you.

>> they should buy a munchies company. >> they absolutely should to go right along with that. >> thanks, sue. let's show you what's going on with the markets. it's a mixed picture the dow and suspect are moving lower while the nasdaq is seeing modest gains the dow is down, nasdaq is higher by roughly 21 points. i mentioned apple is sitting an all-time high today. $200.44. we don't know the actual share count but $203 or $204 and it gets to a trillion bucks ferrari is lower following bearish comments and consumer stocks are much lower with caesars. >> fidelity shaking up the $19 million mutual fund industry launching the first-ever no-cost

index fund what this will mean for the industry, for you, for the individual investor. we'll ask kathleen murphy, next. with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you.

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we have an update thoon story kayla was telling us about earlier. news alert sarah sanders said the white house will give an update on china tariffs at 3:30 p.m. eastern time you can be sure that cnbc will be all over that meantime, fidelity one-ups vanguard and it shaishares becog the first company to offer core index funds out any management fee, zero. the move comes at a time when competition in the index fund and etf space is fierce, with discount brokers all vying to be the low fee leader kathy murphy is the president of the fidelity's personal investment business.

overall fidelity has $7 trillion in total client assets kathle kathleen, welcome. good to see you again. >> great to be with you. >> why do this, and how do you make money when you charge nothing for the product or is it a loss leader? >> why do this we do this because we want to continually add value to our clients. that's what fidelity was founded on some 70 years ago how do we make sure we can do investing a better way and so we take advantage of our leadership position and our scale to continually add that value. we know that index fund investing is an important component of people's long-term savings and retirement planning. we wanted to provide the benefits of our scale directly to our investors. >> so the second part of the question is how do you make money on these two fidelity zero total market index fund, which i assume is a total marked u.s. fund. >> yes. >> and fidelity zero international fund which i

gather is a total international market index fund. how do you make money on that? >> you know, we look at our -- the long-term relationships we have with our clients. we benefit with some clients having relationships 30 to 40 years and our goal is to provide long-term value. this isn't the first thing we've made free to investors we have a variety of tools, research, bill paying services that we provide free as well we look at the overall relationship with our clients over a very long term to provide that kind of value. >> so it's not just zero fees, but zero minimum to open an act, zero account fees. there's lots of zeros here is this the idea somebody starts out when they're quite young and give you a couple hundred bucks, couple thousand bucks and you think eventually they move on to stuff that actually costs them money? >> well, that's part of it, right? so with over 30 million clients

overall, fidelity represents the full range of investors from people just starting out to people with millions of dollars. and so we want to make investing easy for everyone. have a clear, straightforward approach to that investing and remove the barriers. to your point, it's important to get millenials invested as well as making sure others stay invested in the market so we want to lead the industry in providing a clear, straightforward approach to investing without barriers or nuisance fees. >> kathy, just to dig in to that a little further, is that who you are targeting here, millenials >> no. this applies for the full range of investors, everyone from millenials to baby boomers to people just starting out to people with tens of millions of dollars. every investor wants more value and a more simple, straightforward approach with their financial provider we're just very pleased that fidelity is the first one that can do that at the scale and bred that we're doing it. >> what do you charge for right

now? if i want to get x, i'd have to pay what >> again, we're a very broad and diversified business so we offer mutual funds to advisory accounts to college savings plans. there's a lot that fidelity provides to investors. with 30 million investors, we provide lots of things to lots of different segments. market, including private wealth management. >> you say in addition to these two funds with zero expense arab yo, 100% of fidelity stock and bond index mutual funds and sector etf will have expenses lower than all of vanguard's comparable funds that are available to individuals i guess you wouldn't think that vanguard is going to take this sitting down, number one number two, are you tacitly saying that vanguard has won >> well, first of all, our focus is on, again, providing value to the investors. we are very pleased that we can lead the industry here we're the second largest

provider of index mutual funds in the country you know, we've grown that a lot over the last several years. and it's all about because we provide value, number one, and if you look at beyond the reduction in prices, the overall investing experience with no account minimums, no fees, that also distinguishes us from our primary competitors. >> kathy, thank you very much for being with us and explaining the product. we appreciate it. >> thank you very much. >> kathy murphy of fidelity. thank you. taking a look at shares of caesars, those are tumbling right now. they're down 12%, 13% right now. near session lows. comments from the company's ceo on the conference call taking that stock down. we'll hear from the ceo himself on the next power of "power. stay with us f turkey. but for cyber criminals it's plenty of time to launch thousands of attacks. luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world.

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>> we are just minutes away from the fed decision on interest rates. let's get to our panel david kelly, meghan green, tim seymour, and of course the "fast money" trader, t-r-a-d-e rermt. >> yes. >> mr. kelly the news today is that the ten year yield is above 3% why is it there? >> i think the thing is that the japanese harkt was setting the floor for this when cruda says you can go up to ten basis points on the ten year jgb that's lifting it. these are not big moves by historic standards. >> 3% is a dog whistle for

investors. it has a feedthrough effect in the market where we are getting to to point where cash might pay you something. dramatic implications for investing, right. >> 3% on some level for investors is a ill level where they feel i will let that fly. ultimately there is a dynamic, we were fighting to stay before 2% on the ten year, custom we were for a while i think people think 3% is a positive thing. >> 3% is the 2%. >> i would agree that it is mainly japan that pushes it up and i don't think it will go up further until europe's rates start to go up. >> can i say how astounding i find it when the bank of japan says we are going to let interest rates move .1%, our ten year yield in the united states gets affected. can someone explain to me why that is. when i look at fed policy we

wonder who is the tail and who is the dog it's always been the fed as the dog and everyone else as the tail think about how distorted the ten year rates are in japan and more so in europe. japan is fighting with inflation. europe is starting to see a reasonable semblance of it no question to me -- i think the boj we are held hostage to jgb right now. >> is it as simple that if i live in japan and suddenly i can get more interest at home why would i buy in the u.s. anymore? >> it's part of the demand question with everybody else has rock bottom rates that suppresses u.s. rates when everyone starts showing they might let them go up it might have implications for us. >> how high can it go. if the trajectory continues to be step up through 2019. >> i think we get four more. september, december, march, and june and then they stop at neutral.

half of that will feed into the ten year from 3% up to 3.5. given low inflation and low yields i would be a buyer at 3.5 of the ten year. i don't think we have that much further to go but a bit further to go. it's recognizing that it's helping push loan rates up. >> i think the ten year will constrain what the fed can do. as much as the fed says they are not worried about inverting the yield curve that this time is different, i think they are. what's more is even if they are right and this time is different investors believe that an inversion of the yield curve equals a recession and it will make it into a self fulfilling prophecy. >> why should it be? it doesn't harm anything it is a symptom without a disease. if you invert the yield curve that puts more money in the hands of savers and holding down mortgage rates i'm not scared of a yield curve inversion. i don't think they should be. >> what about you tim. >> i think the market dynamics are very much at work here

i think we will see steepening, though, because i think either way, we have come to a place where ecb policy, despite all the politics, will give some room and boj, i think we have seen the power in the last week. >> thank you guys. hold on one second we have to go to steven liesman. he is standing by in washington, d.c. with the latest decision from the fed on interest rates, steve. >> unchanged the federal reserve leaving go intrarates unchanged at a rate of 1775 to 2% in a unanimous decision the fed says further gradual rate increases will be needed or are consistent with economic expansion and made some slight upgrades to the economic assessment here. i will give you some examples. economic activity is rising at strong rate. before that it said solid. the labor continues the strengthen that's the same as last time job rates were strong on average in recent months unemployment stayed low. last sooim time they said it

declined and business investment and household investment have quote grown strongly as well inflation remains close to 2%. that's the fed saying we are close to or at our mandate of 2% expectation. the risk to the outlook roughly balanced the monetary policy the fed continues to say remains accommodative. not much change a. slight upgrade to the economy reflecting the better gdp report we had and signaling the rate hikes ahead. >> did you read the part where it said the president should hold his tongue whenever he wants to -- >> hold on. >> did you miss that >> let me see. >> it's not in there. >> i don't see that part there is no mention of the president and his commentary -- no, no, it's not in here, tyler. >> the very lack of any change in wording is a commentary in itself. >> yeah.

>> yeah. >> it's saying we are not changing anything. so if something happened in the last six weeks we are not paying attention to that because we are focusing on our job. >> sticking with our game. >> there is more to that, which is look at the probabilities, i don't have them in front of me right now. i will get them in a second. what the fed is also saying by that is that what you thought about the utlook for rates going into this meeting should remain the same. you shunt change your idea. >> this isn't surprising rate, humphrey hawkins just happened the feds jackson hole conference is come up no surprise they haven't made changes here there is a chance they might say that monetary policy might be neutral. >> they did say economic activity had a strong rate there are folks out there that believe that this 4.1% read on gdp or whatever that final number is around 4% that that could be the best we see this year is that maybe not the case >> no, i think that is absolutely the case.

qtu is as good as it gets. it was driven by exports, tariff driven, trying to get ahead of the tariffs getting stuff to us before they hit. i think q 2 is as good as it gets, i think q 3 and q 4 will be strong. 4.1% growth is extraordinary even if we decelerate from there we are okay. >> the gdp expectations for q 3 are 5%. >> they are always high. >> can i comment on that. >> especially at the beginning of the quarter, right. >> right. >> it includes data as it comes out. always really extraordinarily high at the beginning. >> reaction from the bond market and rick santelliet standing by at the cme. >> there isn't a whole lot of react. pretty much everything on the curve moved one basis point and moved back we were 267 in twos. 286 in fives one basis point lower than the 299 for tens

showed a quick 3%, a high yield for the intraday i trading thus far before the announcement was 301. the 30 year bond hovering around 311. tens minus two, hovering a whisker over 30. of course we continue to monitor how all this fits together that panel was discussing what they discuss on this floor why does the bank of japan have anything to to with us one guy said why did we pay attention to the tariff so much? it's supply issues one says it's capital issues the central banks are going to reflect the flow of capital, where it goes, how it's invested and maybe more than anything else they have garagefuls of securities in the case of the bank of japan etfs and stocks. can markets hold prices and peg prices forever that's the question everybody is asking we don't have an answer yet. it is amazing on how the jgb

captures everybody's attention it isn't the little of change it is the rate of change. >> stocks hitting session lows on the back of the fed statement. the dow is down 10 a points right now. bob pisani is on floor of the new york stks. >> two points on the s&p that's what it cost us let's look at it right now this is a moderate upgrade to the commentary certainly in the first paragraph. we have economic activity at a strong rate, rising to a strong rate rather than solid job gains have stayed low, they said before they just said declined and household spending grown strongly rather than picked up moderate upgrades overall. not big moves. two points in the s&p. the vix is stead audio right now. kbe holding steady, 48 or so right now. not a lot of overall reaction. there were bets down here whether they would be bolder maybe and include some comments for example, on the risk from tariffs and trade. but obviously that would be a

little flil and that obviously would left out i thought perhaps they would make some comment about the recent weakness in the housing data which has been very noticeable and has impacted housing stocks but nothing on that at all i thought that was the most likely inclusion right now so right now, dow is down eight points -- actually now we are down four points on the s&p 500. a slight weakening since the announce in ep. >> bob pisani. let's get back to our panel. steve liesman, we were waiting to hear from you, what you thought about the atlanta fed redakotaing 5% gdp growth for the third quarter. >> we did a good study on that as meghan said, they have this habit of getting it wrong in the first read off of that first ism report and it's wrong by a lot, like a point and a half or something like that. but we are still -- that said, we still have sort of a strong forecast for the nirk in that 3%

remember, potential as far as anybody else is concerned is around 2%, maybe it's 2.25 if you stretch it if we do 3% that's a good number above it and would be a little bit softer from the second quarter. i'm looking by the way, guys at the fed probabilities. and they are just slightly slower i don't think meaningfully still looking at a 90% probability now. the september hike, 63 for december and the next place where you ge a greater than 50% probability is ahead to june, 2019 62%. that's the outlook right now it will be interesting i think that september meeting that's where i expect people to begin to set their expectations in a more meaningful way for what happens in 2019 we don't have a hot of guidance from the federal reserve our survey shows u.n. between two and three rate hikes out there. but the idea that the first one would come in may is late i think or june. that's what's going to be important. >> let's go to your prediction,

four more rate hikes, september, december, march, and june. >> yes. >> what is the potential if you get that that the economy will slow as a result of those rate hikes? >> yes. >> and i may jest of the fed and the president, if that happens, will the president then begin again to jawbone the fed over precisely that he will say i was right they have raised it too much. >> that may happen but i do think it will slow the economy down and slow demand down fiscal fade. you don't have sugar from tax stimulus and i believe that 30 year fixed mortgage rates will go over 5% it will slow down housing which is already soft. but they have no supply. they have got do the unemployment rate will be below 3.5% we are out of workers. we don't have a productivity search there is no point in pouring more demand in the economy if

you can't meet that. a balanced reasonable strategy will be to get back to neutral on the monetary policy. >> david >> yes. >> the availability shows no slow down in the amount of workers. i know this is stupid to stay but 200,000 is seeming more and more like the run rate of the economy rather than some overstretched economy. we keep bringing in that many. i'm surprised. i know what you are saying what the numbers are, but we ain't running out of workers any time soon. >> if you look at the year to year demographic drag with the baby boom it is getting worse. we are seeing declining immigration. four consecutive months the number of people entering the country on immigrant visas has fallen i think the demographic squeeze is getting worse if the unemployment comes down it still means -- you have to be a little forward looking for the fed. if you have below full employment you need to get back to neutral. >> what do you think, 3 or 4 based on what you heard. >> i expect fewer rate hikes

three or four doesn't matter i think the fed will be constrained by the long end of the yield curve. they don't want to invert it and so it has to go more slowly. >> how do you interpret it. >> i don't think we do a whole lot on this news if the fed continues to hike i think the multiple on the s&p should retract that's not what we are trading on we are trading on trade, and trade wars or the impact of them today's ism you heard from every part of the economy talking about the impact of labor, labor costs, and shortage of labor, but also how they are gaming the tariff world that's what the market is trading on that's what we are all trading in the short to medium term. >> how much of you are paying attention to trade when it comes to your economic predictions >> a lot if you model the impact of a trade war you get hardly impact at all i don't trust that i think the impact will actually be pretty significant,

particularly in a drag on competitiveness for the u.s. >> session lows -- go ahead. >> how much more do you think the housing market is going to slow >> i think it will slow a bit. the key thing is here. >> price also come down. >> no, but we won't get advanced in housing starts. getting back to the trade, the question the whether there be enough political pressure on washington to find some sort of trade war truce before the midterm elections. >> no way. it doesn't help the elections. the bottom line, this administration has a lot of trade winds to work with on trade in in the economy. >> bingo. >> on the market if anything i think they dig in deputier i think china 2025 is the evil thing out this that everybody is chasing. i think this administration believes that. >> can i chime in? those tail winds can go away real quickly. >> they can. but does the administration. >> michelle and i had a conversation yesterday she asked me the cnbc fed survey shows a .4 gdp percentage point

decline from trade as forecast she said is that a big deal. .4% of our large economy i will take that any day. but it depends on what you have to work with if we are returning at 4%. .4 is not a big deal if it's 2.5 or 3 that 4% is all of the extra you would have gotten from the tax cuts >> exactly the point this 5 from the atlanta fed i think is wishful thinking. >> yeah. >> if you look at vehicle sales today and you look at housing it's slowing down. i think we are closer to about a 2 on the third quarter if that transpires then yes half a percent matters to growth. >> you are nodding meghan. final thought. >> i would agree in terms of trade everybody has been hoful and now firms are all saying they are delaying and deferring cop ex because of trade policies the two are wiping each other out. >> meghan, tim, steve, thank you. coming up, far worse than we could have imagined.

that's what hedge fund titan died of einhorn is saying about his fund's performance a look at his losses and the mistakes he told investors he has made. plus shares of caesars halted three times today down more than 20% at one point following comments of the ceo mark frissora on the earnings call he joins us live straight ahead. and ferrari stalls, shares there are down more than 10% more "power lunch" after the break. [phone ringing]

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stay welcome back to "power lunch. mea culpa to investigators from the hedge fund manager leslie einhorn. >> that's right. another disappointing quarter for einhorn, with losses of more than 5% for the year his greenlight capital down more than 18% the problem largely stems from thinks short book. in the quarter he closed out the majority of his short netflix. reallocated to his short on athena health and he says tesla's gain made the portfolio the second biggest looser as the company's fundamentals continue to deteriorate. >> manufacturing problems continue if the stock jumped as the ceo promised -- despite short-term

production the company missed all of its material manufacturing targets. losses at the company are mounting. >> in the investor letter einhorn called musk erratic and desperate. said analysts asked boring bone head questions this morning musk fired back on twitter saying tragic. we'll send einhorn a box of short shorts to comfort him through this difficult time. tesla reporting its own numbers after the market closes today, guys what is that. >> that's my ring tone >> bone head quets are not cool. >> it was fantastic, that conference call. >> you wanted to hear it every time you got a phone call. >> it's strange when i am a out in public. continue calling mcc so she can get this as her ring tone as quickly as possible.

>> is money leaving einhorn's fund >> oh, yeah. he point out the redemptions in the letter saying that i understand why you are redeeming, however he does believe that his portfolio as it is currently constructed is poised to profit in the long run. >> you are wrong until you are right. maybe he will be right. >> timing is everything in the hedge fund world. >> meantime, another conference call from tesla after the bell tonight maybe a new ring tone. more signs of weak innocence the housing market let's get to diana olick in washington with the details. that's right the jump in the ten year treasury yield is not good for home buyers. mortgage rates loosely follow that yield and started moving heighter last week already after being pretty much flat for much of the summer. last week the average rate on the the 30 year fix theed increased to 4784 from 4.77 according to the mortgage bankers association that's for loans with 20% down payments that combined with high home prices made for more weak innocence the mortgage business. applications to refinance a home

loan fell 2 force the week and were 29% lower than the same week a year ago ago when rates were lower a bigger deal, applications to buy a home fell to the lowest level in month volume was just 1% higher than a year ago buyer demand has been strong but we have been warning about affordability and the market may be at that tipping point a monthly index from red fin showed demand slipping in june doesn't over 9% annually red fin measures the number of people requesting home tours and the number of offers written and both fell significantly. >> thanks for the run down we were just talking about it with the economists earlier in the panel. still ahead, the race to $1 trillion strong earnings pushing apple closer to that milestone can the company keep delivering? trading nation is next (harmonica interrupts) how they could save 15% or more by... (harmonica interrupts) ...by just calling or going online to geico.com.

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webb to "power lunch." it is time for trading nation, the world's largest company just got even larger. apple surging to all-time highs nearing the coveted $1 trillion market cap frank capillary is with us

frank, what do the charts tell but levels we can hit on apple from here given we are now at historical valuation >> i'm long term bullish on apple. take it back to april of 2017. we can see here that along the way apple has gone through a number of rallies. all those together average 15% also after each advance we have seen declines. all of these together average about 10% to the downside. we take it to currently after the most recent pop from a june low here this is about 10%. so i can see it maybe going a touch higher to maintain the average. again wouldn'ting advised the see another pullback which will be a buying opportunity. >> all right a buying tune when you see a dip. fundamentally, apple beat on every metric and also flashed the average selling price above $700 for every phone do you like the stock for the

long term and the valuation. >> basically, you have to think of apple as an ios ecosystem with very, very sticky customers. the average lifetime of a customer is now around ten years. i think that's the case here the switching costs are so high that people once they become an apple customer stay a hivetime member the company is benefiting from that just from a valuation point of view it has $250 billion of cash on the books it's not overly expensive on a valuation level. if you go forward, just the fact that it is going to be the ecosystem continuously buying, you have to be bullish on it. >> the stock up 3.5% right now for more trading nation, head to our website or follow us on twitter.

tesla, will the company be able to scale its model 3 production. >> will musk go rogue during the conference call again? find out what to expect ahead. plus, ferrari shares dropping on comments by the new ceo. we will tell you what he said. "power lunch" is back in two minutes. i will see you on the closing bell. >> and now the latest from trading nation.cnbc.com. and a word from our sponsor. >> traders short stocks when they think they are going lower. the number of shares sold short is called short interest short interest is often used to gauge market sentiment a rising short interest can mean investors are becoming more bearish on a company however when short interest reaches extreme levels it can often be a contrary indicator because traders are e aroften forced to buy back their short stock. and that can drive the stock much higher.

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let's get a check on the markets. stocks are hitting session lows following the fed decisions but they have come back slightly now. dow industrials are lower by 76 points a decline of a third of a% the s&p 500 lower by three nasdaq is higher by about 30 points, .4%. why? large part because of apple,

intel, jp morgan apple is goating closer to the trillion dollar market cap caterpillar, 3m and cisco are the laggards cat is off nearly 3% cisco off by nearly 2. we are waiting to hear about tariffs by 3:30 today. that may be hurting some of the stocks the creetf on base for its best day. that sector is higher. sue herera has a news update. >> here's what is happening at this hour, everyone. we begin with a warning about some of the images we are going to show you. this is pretty dramatic video that was shot boy a passenger of the aero-mexico plane as it crashed last night all passengers and crew members survived that crash. rescuers took 49 people to hospitals, mostly with minor

injuries. three people associated with the hacking group fin seven have been arrested in europe and are in custody one is in the u.s. while authorities are seeking the extradition of the other two. they were arrested in connection with stealing customer payment card data from more than 120 companies. chipotle has been hit with a lawsuit over its seventh food contamination outbreak in two years. the latest occurred at a chipotle in ohio the local health department is in the early stages of investigating that possible outbreak. the agriculture department has issued a nationwide recall for more than two dozen varieties of salads and wraps due to concerns over contaminated lieutenant lettuce. the items were sold at trader joe's, kroger, walgreen's, and other major stores you are up to date that's the news update this hour. >> sue thank you very much oil market close forth the day it usually does that about this time jackie deangelis is at the commodity desk. >> it does indeed.

prices heading south today edging closer to $67 a i recall about. no coincidence that the kprud and the markets are turning together more fed tightening is not a great sign for oil demand. this time a building this morning of 3 million blls. we see draws shrink this time of year early for a build with another summer month to go low this session, $67.34. >> tesla on deck with earnings after the bell today fill lebeau has what we can expect. >> it is about the liquidity level and how much cash has the company burned through and how much is it expecting to burn through in the third quarter and fourth quarter and where is profitabilities? in terms of cash burn look at the numbers over the last three quarters here. the bottom line is this, you cannot continue to burn 785 million dollars and $1.5 billion and not at some point ask the question do you need to raise

capital. that's going to be a primary purpose of the earning call this evening with elon musk the model 3 will also get a number of questions. what's the production rate has it sustained over 5,000 per week did they pull back can they continue to grow as they indicated they would like to do? you will get a lot of questions about that as well as the average price. the average price is important because that indicates if they will be able to turn a profit in the third quarter. the call is 5:30 eastern time. we are on it we will have it for you tonight on "fast money." >> looking forward to it, phil. >> big time. >> stick around. we want to add jamie albertine to the conversation as well. thank you for joining us today. >> thanks for having me. >> continues to be the most shorted stock in the s&p a number of analyst down grades on tesla in the last couple of weeks. you are still raitted i don't have weight. you have a $385 price target why are you so bullish >> just to follow on to what phil was saying, i don't believe that we are going to hear that

they are stepping back production on model 3. i also don't think that's the main point here on the second quarter call to phil's point it's about sustainable -- can they hit profitability in the third quarter and the sustainability of that profitability trajectory into q 4 and beyond. cap ex is behind us in the model 3. as we see production ramping and deliveries right now, delivery is ramping significantly into the third quarter we think that bodes very well from a cash perspective. you know, there has been some consternation around this idea that the average price point is going to be unsustainbly high. we think that misses the forest for the trees a little bit, too. what they have been spending money on for the last several years has been vertically integrating the production side of the vehicle such that a lot of the traditional components are going to be higher yielding and lower cost components. we think this is a profitable

vehicle even at a lower price point, closer to the 35, $40,000 level. >> jamie, do you expect we will get information or data returns in terms of the model 3. there has been speculation, a lot of reports out there recently that reservations are getting canceled and it could be a bigger issue than is currently being suggested. >> it is a great question. hard for us to know. they have gone backyards and forwards on their transparenty around reservations over the years. when you look at the model s and the model x at the launch, at those times they did give consumers that were willing to pay hefty premiums the opportunity to jump in line. that's the case here we also think, look of the 400-000 thousand orders that were outstanding and by the way before they launched this order the speculation was 10 or 20,000 orders

we had 500,000 at one point. a large number of them might not want the biggest battery pack. the all wheel drive capability and are willing to wait. i don't think it's bad news that the e-mail went out recently suggesting that if you want to pay up you can jump in line. i think the reservation rate is going to be positive coming out of the call. >> phil, last quarter's conference call was inimable is it going to be as interesting this time. if you could ask elon musk a boring bone headed question what would it be. >> the one tony was trying to ask when he called it boring and bone head. cash flow. it's all about the cash flow do i think he is going to have the same performance as he had last quarter no, i don't think so having said that, a lot of times i have said i don't think he lon musk will do x, y and z and he has done the opposite.

sometimes he is on the call and he is sleepy other times he is feisty you never know what you get with him. >> jamie, final question here. what do you make of these stories that tesla has had to basically pull people off the street they have even called phil lebeau to come in and work on their factory line to produce things do you put stock in that >> not really. when we look at employment at tesla, look, i think maybe what you also what you might be referring to tran genttially are announcements they have made over the last months and quarters of downsizing that's been diagnose on away from production we were at the giga factory outside of reno back in may. they have rejuvenated a large part of the economy in that part of nevada. there is upwards of 20,000 people working on that site. there is a vigor that we certainly don't see walking around the halls of some of our

competitors and clients on wall street so there is a very i think palpable buzz at tesla i don't think there is a lack of demand or -- sorry, supply for talented individuals so no, i don't put a lot of stock in that. >> tesla is not the only auto maker in the news today. we have ferrari as well. shares are lower on comments by the new ceo. they are down about 10% last time i checked what's going on there. well he said that the goals that were set out by the previous ceo, the five year target -- they put they targets together for the business plan for the next five years. theist of procht target that sergio put out there for 2022. the new ceo said those are kind of aspirational. that's what happened to the stock. people looked at it and say wait a second you are soft pedaling targets from 2022? he might be right. he might look at those tarts and say they are aspiring aal. but i think a lot of people took that as really trying to dial

back expectations. >> james what do you think about the reaction in the stock today? does it make sense to you? is it warranted? or is this just a new ceo come in and becoming more cautious? >> yeah, look, there is nothing traditional about this when process. first of all still, i think it makes sense and it's right to say our thoughts and prayers are with sergio and his family. this is an unforeseen departure here and very, very sad. the fact that they had the call today, reiterated the capital markets thing was going to happen in september. in fact if you read the release this morning as well i think they were indicating that they were essentially reaffirming the guide. now, that might be a little bit of a squishy analysis. but i think going into the call people were very optimistic considering the circumstances. make no mistake, i believe lewis had an opportunity to walk back his comments on the aspiratio l

nature of the targets. any incoming ceo we would think it's logical, why embrace and inherit somebody else's guidance this is an opportunity i think most incoming ceos would take to reset expectations i would be a buyer on the weakness i think ferrari is going the live well through this period regardless of whether or not there is a reset volume and pricing is improving and they have 30% plus return on capital. >> we will leave it there. thank you phil and james. coming up a volatile day for shares of caesar's stock was halted three times it was down as much as 24% it's coming back, lower by 1%. this comes following comments that the ceo mark if i sora made on the conference call involving earnings he is going to join us live next

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any welcome back to "power lunch," everybody. volatile day for caesar's entertainment. the stock halted three times, it was down as much as 24% earlier in trading today it's down about 12% right now as you see there. this moving, the stock moving is coming after comments from the ceo on the company's earnings conference call and contessa

brewer has been cover the story for us all day and joins us now. >> let's bring in caesar's entertainment ceo mark phares aura good to talk to you today. you are in the middle this earnings call and all of a sudden we start to see your stock plummet, at one point down 24% based on your guidance around the third quarter did wall street get it wrong >> i think so. i think all the analyst headlines would support the fact we had a great quarter and continue to have great prospects. the stock actually opened down right away after they received our earnings announcement. i don't know if there was anything necessarily on the call that actually occurred we had at different intervals people questioning what happen with third quarter because we beat earnings expectations in such a great way i think in the second quarter there was an expectation we would raise it and we didn't we didn't because we had some cautionary comments that you

know we had some softness not due to vegas being soft but due to the event planning in the window of like the third quarter a little softer than it was a year ago this was not any kind of a condition around vegas that is softer than we anticipated it just had to do more with even planning. >> you mentioned event planning last year in august. it was the may weather fight it drew a lot of business to las vegas. it is a you tough comp the analysts pushed back to say efl were in the last months the guidance over the third quarter was much more positive today on the all you said we expect thing to be flat to 2%. then they came back and said look that's a real reversal from a what you had said. and the answer was yes can you elaborate a little bit or more on what has changed for the third quarter. >> again, we didn't give third quarter guidance again, i don't understand some of the analysts' or anyone's comments on this we have given full year guidance

for the rest of the year there was nothing on third quarter. it was just second half. i gave some commentary about the second quarter, and eric did, ourks cfo, we gave that in may and we beat that expectation around the second quarter but we didn't guide to a third quarter or fourth quarter number again i think there is an overreact of the market. if you look at the investor group that we have, we are one year out of bankruptcy not even yet. it's eight months since we have actually been bankrupt n. most companies that come out of bankruptcy you see a lot of volatility in the stock for the first year to year and a half. >> mark, can i just ask something really simple the is third quarter going to be softer than you originallient anded >> i think it shaped up to be softer than what we thought, yes. >> why >> because of events that when you string them all together and you look at everyone's events, all events for all competitors -- when you look at all of them and study them you find out that it is a lot weaker

in the event area unanimous it was a year ago. >> so fewer things for people to attend so not as many people coming that caused you to have to lower prices in order to attract customers? >> no. what we have seen is on the strip in terms of just looking at what your average daily rate is, there have been -- there is pricing obviously that goes on among all the hotels in that whole scenario, you know, it's been weaker than we would have thought and again we think it's driven by the fact there are fewer events across the board among all our competitors. >> mark, how about off the strip? i mean, atlantic city for example. three casinos there. two other properties have just opened up in that market for years now we have been hearing about oversaturation of gaming as more states allow for more casinos to open up. is that something that has been an issue and that you are looking to work through? what does the health of the market lack like overall in the u.s. >> overall we are bullish.

i mean, we still think, you know the dynamics of the consumer and discretionary spending are good. we are very bullish on vegas as well we just demonstrated 7.6% growth in vegas and same store ebitda growth of 16%. we didn't downgrade our earnings at all we kept our guidance, which was actually up from where people expected it to be in the first quarter. i feel bullish overall we are doing an awful lot of great growth initiatives around sports betting opening up locations in new jersey and mississippi in august. in addition we launched our cabo experience which will be a beach front facility we will manage. same in dib you. two beach front facilities in dib you we are going to be opening in the fourth quarter of this year. we have a lot of initiatives including our convention center that we just put the shovel in the ground on a few weeks ago that will drive in a lot of

inente kremtal revenue vegas is still strong. i don't see any weakness i think in terms of the stock reaction today it has to do with the fact that we are eight months out of the bankruptcy and you get a lot of volatility in an equity that is eight months out of bankruptcy. there is a lot of case study on that. >> you have pointed though to softness in the events business, correct? >> no. it was a temporary lull. we actually see a strong fourth quarter from a events standpoint the third quarter -- two months. >> that's the question, whether this is a longer term thing? if so, why. >> no. >> if it is a short thing that the seasonal will explain. >> exactly the way you said it a short-term blip, a couple months that occurred in this third quarter and that it strengthens again in the fourth quarter. we are still very bullish on our fourth quarter confirmance, and on the convention side as well our convention business is going to be growing significantly in

the fourth quarter year over year we haven't given exact guidance but it is growing significantly. and we see events also strengthening in the fourth quarter of the year. this is more of a temporary lull that occurred in the third quarter. >> mark, just this week caesar's launched sports gambling in atlantic city. i know you are looking to launch it in mississippi in the next couple of weeks and have mobile gaming throughout new jersey around football season can you talk a little bit about what your plans are for partnerships in this sports gaming world we just saw the big news yesterday with mgm and the nba is caesar's looking to partner with a professional sports league >> yeah we have talked to all the sports leagues you can cut deals where you pay them money for the privilege of using their logos. that's something everyone has the opportunity to do. we think in terms of partnerships we established quite a few. one of them is nyx, part of scientific games

they have open bet, the largest betting platform in the world. they still do about 80 rz approximate of the volume in the uk, which is the most mature betting market in the world today. that relationship has been announced we have a great technology stack to address the u.s. market. since market. since we are kind of like in 14 jurisdictions and we have a lot of ability to open up sports books as states legalize that. we will start seeing solid growth from that. >> i wanted to ask you about the new convention introduction. $375 million facility in las vegas just at the time when steel prices are up 50% -- in terms of the construction we haven't seen an impact of that construction cost.

it's not to say that it may not change in the future. for us those tariffs have really not impacted -- >> how is that possible? you have this pillarless ball room going in. i can't imagine that you are doing that without these raw materials where the costs have increased so significantly. who is going to eat the cost of the increase >> there is a lot of inventory. a lot of it is contracts are bid on it. there are material cost increases in some cases. a lot of the stuff that we use has already been inventoried and accounted for, if you will. this is obviously on improvement -- it is increases on materials that may be coming in the country or obviously going out of the country. i think that that is why it is really not impacting us. >> asian betters are famous for being the big high rollers with the president's constant attacks on china. are you seeing fewer of them come from asia

>> we have had a really good year with our asian customers year over year. we are up significantly probably in the range of 30% to 40% in terms of visitation from asian customers. for us it is a good year. last year was not so good. this year is much better. we have not seen a contraction so far this year. >> interesting. thank you. thank you, mark. good to have you on what is a tough day for the stock. >> great to see you, mark. >> thank you very much. amazon everything. news about its huge cloud business is putting pressure on shares of one tech giant. we'll give you all the details next. oh, and there's the closing bell. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day,

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welcome back to power lunch. let's get to dominic chu. >> we are looking at shares of oracle near session lows off by almost a percent. not helping matters is a cnbc story citing stories that amazon is looking to transition from oracle products. this has been a process that has been reportedly in works for the past number of years but it will come to a head. we have a timeline on it according to sources familiar. we are watching those shares

pretty closely. oracle shares are up about maybe a half a percent for the year to date period, down five percent for 12 months. we did reach out to both companies and they both declined comment for the story. >> thank you very much. check please is next. you always pay your insurance on time.

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headlines that carl icahn plans to vote against the deal to acquire kpresz scriptexpress sc. more details as they come. that is why the shock is on the move. >> we don't know why he doesn't want that to happen. >> i'm sure there are a plethora of reasons why he wouldn't want a deal like this to happen. we know the headlines are moving those particular shares. whether or not they kind of stay that way over the course of this will depend on whether or not they see shareholders flock to their particular call. time for check please. back by popular demand. by demand. i am so looking forward. >> that is elon musk. >> it's a journalist mantra. >> it's very good.

>> i learned that now parents are hiring tudors at $10 to $20 an hour to teach their kids how to get better at fortnite so they can play like ninja who is apparently da bomb. >> he makes apparently like half a million dollars a month. >> my check please, 20 years for michelle at cnbc. >> thanks for watching "power lunch. >> "closing bell" starts right now. the fed leaves rates on hold for now. we will discuss what it means for equity markets. i'm phil lebeau in chicago. tesla reports earnings in about an hour. wall street will be closely watching every word from elon musk. a full preview of what to expect