favorite stock in the universe of that is nike. unbelievable cash and growth >> they initiated overweight >> final trade, doc? >> tahoe resources >> moves higher. >> good stuff, guys. "power lunch" starts right now thank you very much. welcome to "power lunch. trillion dollar value. apple now the first u.s. company ever to hit that historic milestone. who's next does apple and technology go higher from here the trade war rhetoric ramping up china promising to fire back after president trump calls for a more than doubles of tariffs on 2$200 billion of chinese goods. >> u.s. and mexico resume trade talks today. a little more encouraging news there. we'll give you the latest straight ahead a $5 billion apology elon musk saying sorry to analysts on the company's

conference call for his misbehavior maybe during the last call. it gave michelle so much amusement. she wants to see him behave badly again. the stock now on pace for i best d -- its best day in 1 1/2 years. have musk and tesla turned a corner "power lunch" starting right now. ♪ >> welcome to "power lunch." i'm michelle caruso-cabrera. morgan brennan will also join us for the next two hours trade tensions for china are weighing on investor fears again. the dow is under pressure but well off the session lows. it was down more than 200 points earlier. the nasdaq carving out gain thanks in large part to apple. tech, consumer staples and utilities are leading sectors higher we will begin with the breaking news, that is happenal

t -- apple the tech giant hitting $1 trillion in valuation for the first time ever. 2 207.05 was the magic number that got them to 1 trillion where is apple headed to from here joining us now is walter tisak hi, walter >> how is it going >> what does it mean that apple hit a trillion dollars >> it's a reflection of the success they had over the years, particularly with the iphone wave they've been riding since 2007 what's to come next? the iphone is in a bit of a steady state now they have done this with iknown units not really growing for the past three years we'll see what new products they come up with and if these iphones can sustain at these levels. >> you have an interesting point here, the unit volume is not up, but the revenues are that's because of the pricing.

people want the biggest, best, highest quality phone they can get. it seems people are willing to pay for it. >> the upgrade rates are at record lows for the operators. this in the u.s. and around the world. people are holding on to their smartphones longer than ever they're willing to spend $1,000 for it now the question is these upgrade rates have gone down every year the product cycle is lengthening. do they stop going down? maybe they invert up maybe it's easier going into 2019 in terms of sustaining or providing incremental unit growth even if they can't pull another lever on asp and drive that higher. >> can they really not pull that lever? everybody was so skeptical that the $1,000 phone was going to be a hit. i don't know if you would call it a hit but it performed better than skeptics thought. this might embolden apple to go higher they argue price is not what matters, it's the value

propositionsumconsumer >> they do have that product for the high end, but also in recent years they stratified the line, providing price points higher and lower and more diversity that could continue for the new product launches if the price point comes down for the x and they add higher-end products. how much of the base out there still has an iphone 6 that they have not upgraded? units have not grown a lot of people out there have legacy product for something that they stare at all day long that you could see these upgrade rates stop going down. for the first time in many, many quarters, at&t and verizon's churn rate went up it's been going down for years it actually went up this quarter for the first time in a while. >> it's an interesting sort of

sweet spot to be in, i guess you'd say. argue the other side of this they really are dependant on higher upgrades. that at some point that's the way this business grew from a 3$300 billion company a few yeas ago to a trillion dollar company today, but upgrading the phone and creating a new demand every year or two. >> that is true. there are those of us including myself who were wrong years ago saying they should come out with an iphone light or mini to address the broader market they have not done that. aif be they've been able to get price and also broaden the market because they're keeping legacy products on longer or offering lower prices we have calls with american mobile, the largest operator in latin america, they have lte available at a cheaper price

they are seeing growth in what people are willing to pay in latin america, and they're willing to finance phones. >> we're running out of time one final question if apple had not gone into china, would it be worth $1 trillion today >> it's still a global product, but there's only 300 million people that are actively paying subscriptions today. so china was a big component of that there's other emerging markets that are a component this is still a high-end product for developed market customers to continue to upgrade their phones we'll see how much the upgrades go up the last cycle this cycle was not supposed to be the super cycle this cycle coming up is the on-cycle year. this is not a super cycle. there was only one super cycle, but all we need is for the upgrade rates to stop going down, and you turn a three-year headwind for this company into a

tailwind >> what is the market's take on apple hitting $1 trillion? bob pisani has more. >> hello everybody was watching that as it happened. they want more volume. apple, four times more volume than normal. that's good if you're trading apple. the rest of the stocks about average. f.a.n.g. stocks stable, but volume is not going up just because apple evaluation hit new highs. apple's $1 trillion, guess what else florida. >> apple has the same valuation as the gdp of florida. apple is bigger than the entire s&p 500 small cap 600. apple is bigger than the gdp of turkey turkey is the 17th largest country in the world it's bigger than the

netherlands. they have a 2$244 billion cash hoard. that's larger than 97% of the s&p 500 on a market cap basis. only 14 companies have a market capitalization than the cash that apple has enough silly comparisons the important thing is they've done it despite nathey've been lowering the market share count for the last five years. it went from 6.4 to 4.4 billion. look how steady that is. they have been remarkable and consistent in the amount of stock they're buying back. that means all other things being equal, apple's earnings are 25% better than they would have been had they had that higher share count back to you. >> thank you very much what does apple's move mean to technology and the f.a.n.g.s

ands and t and the overall market let's go to our guests all right. how important is apple to the overall market >> well, you know, it's really a tough call i was listening to kevin earlier. got on kevin's side with hey, this could be like hardware getting outdated, our household has four products that go on at once, then i talk to tony in the greenroom and i get excited about the services side. it seems they do have more legs to the company certainly in the services sector so i'm bullish on apple for the shorter term >> phil, we have a lot of very high capitalization stocks whether it's apple, amazon,

facebook, alphabet you work in the etf business, they are a tremendous -- by volume, a constituent of a lot of etfs. is that a worrisome thing? when so much of the market value is tied up in a half dozen stocks >> it can be f.a.n.g. as a trade is highly represented in most portfolios obviously in any index fund. that trade worked out well for the last two years do you want to be in last your's trade next year. that's what people need to start asking themselves now. the market cap of apple is greater than the entire s&p 500. where is the next wave of innovation coming from will it be from apple itself will we start to see smaller companiesmake their mark and take on some of these big guns >> you point out stocks are mostly doing great here. apple at 1 trillion. facebook and netflix fell

recently and twitter as well you point out they're failing in china. why do you point that out? >> we're seeing all of the f.a.n.g.s failing in china apple sells a premium priced product. they sell in the developed markets. they have to come in at a lower price point. when we look at what google is doing, facebook is doing and coop waiting with the chinese government, it shows the privacy advocates who had concerns about some social platforms and tech giants, it shows they were right to be concerned. ultimately these companies will act in the interest of maximizing their shareholder value, which is their mandate. but when you get back to what matters, that's the users, customers. and customer satisfaction, apple got to $1 trillion not based on innovation, they got to 1 trillion based on customer loyalty, brand value and customer satisfaction.

when they start acting against customers interests, that bodes ominously for the long-term. >> eric, let's get your thoughts the dow is down a bit. nasdaq is higher s&p 500 is higher today. the market keeps motoring largely up do you think that continues on a day with rising interest rates and a day when the president is ratcheting up the trade tariff talks? >> you're basically going from 20 billion to 50 billion with the swipe of a pen so we really don't know what the ramifications from that will be or if that will have follow-through the big question is when you deal with a country as large as china that can change fiscal monetary policy so quickly, and has such a growth rate of -- much higher than ours, even if they pull back from some of the

tariffs, it's much greater than ours it's hard to know what will play out. interest rates on the other hand, if we do see an inverted yield curve, we hear 3 to 4 more interest rate increases. we're also seeing some of these tax cuts that are helping the consumer one of the last ones will be the amt tax break that people will get next year. >> i hope i'm one of them. eric and phil, thank you very much. the trade war with china may be escalating. kayla tausche has china's reaction to the president's latest threat. >> china says it has no choice but to retaliate on the latest threat from the president, who wants to propose 25% tariff instead of 10% level senior administration officials declined to point it to any

particular action by china it's hard to keep track of the actions and reactions, as we are multiple stages down the road. there's no talks on the horizon between the countries that could potentially defuse this. goldman sachs put out a note last night that potentially ties this to one action by china, that's the devaluation of its currency which hit a 14-month low against the dollar, which boosted the attractive of chinese exports, and softens the effect of u.s. retaliation goldman says this is a warning to china, stop devaluing your currency if china continues doing it, that makes this higher tariff level more likely. goldman sachs says the fact that the president is willing to up the ente makes the lower tariff levels more realistic. we still have tariffs on $16 billion of imports that has not come to pass that could come to

pass in the next few weeks even as the trade war with china escalates, there are signs of progress with allies take the fact that talks with mexico are happening here in washington in less than an hour's time. mexican officials have been exceedingly bullish about the potential for a deal between the u.s. and mexico to move forward on nafta they say in the coming days. we've reached out to the u.s. trade representative we'll see if we get anything on that front today. >> we'll watch for that. kayla tausche, thank you very much tesla shares are rallying and on track for the best day since november of 2015 the focus is not on the latest numbers but how ceo elon musk behaved on the conference call he actually apologized phil lebeau joins us with more >> his demeanor is one of three big stories that came out of the earnings report and the focus for this company moving into the third and fourth quarter this

year three things are moving this stock higher first, the cash burn liquidity better than expected, and they are still forecasting a profitable third and fourth quarter. and then elon musk apologizing to analysts he was rude to during the first quarter earnings call. >> i feel like i would like to apologize. >> that was one of two apologies elon musk talked about yesterday. he also said he had not received a note from the s.e.c. that would preclude them from raising money. he also said we don't need to raise money right now. shares of tesla having their best day since november of 2015.

we've seen some price target increases from a number of analysts today the current price target is $312 below the 338. i will be curious to see if that moves higher in the next couple of weeks as we see analysts perhaps increasing their price targets. >> the big deal was the cash burn it was lower than people expected >> yep and the liquidity. >> fiat chrysler on the move what's happening >> there are reports that the company is open to a potential deal to sell or spin off its parts unit that is why the stock is moving higher here. following the death of sergio marcionne the stock moved down a bit. >> phil. thank you very much. we have a lot of excitement over apple today. the dow is still lower

the effects of the deepening trade war is one of the reasons figuring in there. are tariffs a big threat to the retail rebound we've seen this year? and apple shares near session highs. it is the first u.s. public company with a trillion dollar valuation. there's a lot of zeros there much more on the apple milestone mi up on "power lunch.

once left for dead, the retail sector is carving out a 9% gain in 2018 so far as president trump threatens to increase tariffs on chinese imports up to 5$500 billion, ou next guest says retailers could see earnings erode by about 15% on average which names are best positioned to withstand this tariff fallout? let's bring in gregory mellick thank you for joining us i realize while we're heavy into earnings season, the retailers have not exactly reported yet. have you quantified or estimated what potential tariffs could mean >> we have we think of the 500 billion of imports that come from china, about 150 billion of that shows up in the cogs of retailers. if we had a 10% tariff across the a 500 billion, it could put

15% earnings risk. we think they can price 50% of that through so on average 5%, 6% hit, but it's a risk people will have to follo follow >> we have tax reform, a strong u.s. economy, you're saying they can do that? >> they have a decent chance to getting the majority through, but all bets are off if you assumed they raised prices to cover all of the margin hit, it could add a point to inflation once you get to inflation of 3.5%, 4%, you could start to see a consumer reaction. >> do you think the buyer who goes to walmart, which we'll talk about in a moment, who is accustomed to buying a $9.99

t-shirt, let's say that goes up to 10.99, do they not buy it >> given the importance of china and the supply chain, it doesn't have to be everybody, but could 1 out of 20 buyers not buy it. >> if the chinese made air conditioning units that goss $5$5 - goes from $500 to $500, that may be a different issue >> on mr. discretionary items it's a challenge >> the retail workers were considered to be one of the greatest beneficiaries of the tax cut. they're domestic, and as a result it almost all went to the bottom line for them is what's happening with tariffs greater than that? will it offset that? is the tax cut still big enough and good enough that it masks it >> that's the perfect way to frame it we think the tax cuts have

helped retail sales by a half point. they have accelerated from 3.5% to 4.5% growth all the benefits of the tax cuts may go into paying more for stuff. >> you're talking about the individual i'm talking about the corporations themselves that also -- they were one of the biggest payers >> from the companies, earnings growth excaccelerated from 9% lt year to about 17% this year. >> as a result of the corporate taxes. >> the tax cut was the bulk of that >> back to my original question. even if they have an impact on their business because of tariffs, has the tax cut offset it enough so that when you look at the bottom line eps, it's still high enough that the stock -- >> what will happen is this year we have the eps going to 17. next year decelerating to 9. what could happen next year, if we have a trade war and tariffs escalate, you could have that 9% growth for next year end up

being 5%, if they can't fully pass this through. >> quickly, before we let you go, coming into earnings and beyond, where does an investor put their money into this sector >> we think if you look at the retailers that have performed so far this year, i would say there are ones that look interesting to us now, those would be home depot, lowe's, sherm whwin-wills amazon and costco are also two names we like. in terms of what this impact is for retail, watch home depot and walmart. they'll determine how much of this passes through. >> most vulnerable to tariffs would be >> bed bath & beyond, best buy, target if they can't pass it through, they do source more from china and so those would be ones to watch, what they have to say as well about how to change >> we'll leave it there. thank you.

>> thanks. how does a lime meringue pie sound to you a sharp increase in lemons is making people change their tastes ade aditi roy has more >> we'll tell you how much pain this is causing on prices coming up or plan for tomorrow? at kpmg, we believe success requires both. with our broad range of services and industry expertise, kpmg can help you anticipate tomorrow and deliver today. kpmg.

. when life hands you lemons, resell them, because the price of lemons is soaring now aditi roy is live at lemon grove in california. come back with some handfuls >> they taste fine the lemon harvest here ended on a sour note at underwood family farms. look at what the heat wave did to the lemons. this one is shriveled up officials say that the heat wave ended up knocking out about 15% of the crop at the end of the harvest. there's also supply shortages from mexico, chile and argentina causing wholesale prices to rise more than 60%. industry watchers say the prices are the highest in a decade. wholesale prices of cartons of fresh lemons were between $36 and $39 at the beginning of june now they're up to 62.50 to $64

it's the consumers who may get squeezed as retailers either pass on the cost to them or simply take lemons off store shelves. some have suggested substituting limes, but lemon farmers say you're better off sticking with the real thing the prices will drop in the fall when the next harvest is scheduled to begin >> all this attention focused on trade with china, but nafta negotiatnsreio a ongoing will there be a deal with mexico we have more on that i'm april kennedy and i'm an arborist

with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

. welcome back to "power lunch. i'm sue herera here's your cnbc news update the south valley fire in northern oregon has grown to 15,000 acres fueled by strong winds. the fire, which started on wednesday, is only 5% contained. several structures have been destroyed, nearly 100 more are

threatened >> we are going to be focused on saving structures that are in the line of the fire, as well as life safety out here at this point we do know we lost structures we don't have an exact number of how many have been dwel i dwelings or outbuildings. trader joes reopening after two weeks after a shootout trader joes executives thanked the community for their cigarete soared in the u.s. since 2012. that's your news update at this hour michelle >> thank you very much trade representatives for the united states and mexico will begin meeting in a half hour mexico's president-elect said he

expected an agreement in the coming days. let's bring in the former mexican ambassador to the u.s. from mexico. antonio m eshg enes also joins s you may be a former ambassador, but you must be clued in do you think we'll get a deal this week? >> i don't know if it will be this week, but everything seems to suggest that we're inching closer to a deal particularly on what has been one of the so-called poison pills, the rules of origin for the out sauo sector i think mexico and the u.s. are squaring the circle, they're very close to reaching a deal. if they can get that piece off the table and announce they finalize d that chapter, some others can be wrapped up then you will still have a couple of those remaining poison pills, particularly the sunset clause which would force the

governments to review and renegotiate every five years, which is a no-go for both canada and mexico then the issue of ag exports, and the issue of government procurement. if this can be wrapped up this week or early next week, i think we're in good shape. >> antonio what are you hearing? this would all be done without canada, right? >> yes i agree there are some pending issues i would add that general dispute mechanism that the u.s. wants to water down and mexico and canada wants it much stronger, there's the issue of canada. i think that canada has a position on auto rules of origin closer to the u.s. than mexico does if mexico and the u.s. can reach an agreement, i think they can bring canada on board.

but for the dispute settlement, you need canada at the table >> ambassador, let's drive down on that point. is nafta nafta if canada is not a part of it or do you think canada will come along one way or another >> it's clear this has to be a t trilateral deal. the current mexican government and the incoming mexican government have to state that the negotiation has to be trilateral i think the fact that canada is not here present today in this particular negotiation over the rules of origin, we should not read too much into it. u.s. and canadian positions on that specific issue are much closer than mexican/u.s. positions. i think it would be relatively easy if there was a agreement between mexico and the u.s. on this particular chapter that canada can be brought in to harmonize and ensure the three parties are on the same page

it's another story on the issue of sunset and dispute resolution >> understood. antonio, if this deal goes the way it seems to be going, with some compromise on rules of origin in the 70% neighborhood or something like that, who wins and who loses here are both sides able to say or all three sides, are all three sides going to say it's a better deal for everybody >> yes the renal nagional content requirements are 62.5% value added. if that content is raised, the three countries could say there will be more regional inputs it will be very important to hear the views from the auto producers. if the auto producers can say we can live with those new rules, we'll keep investing in the region, that's fine. if they're not happy with those rules, we have a big problem

>> gentlemen, thank you very much for weighing in we'll wait to see if anything happens here >> thank you to the bond market rick santelli is tracking the action at cme. >> hello after central bank meetings are in the rearview mirror, markets tend to get a new trend. meetings firm up interest rates and put volatility in equities carney raises rates, the pound versus the dollar. euros getting hit hard post their central bank meeting look at a february 13th start to the dollar index it's at the top of the range if you look at the day the president talked about the dollar, it was around 95.6 5 intraday

traders remember that. we have a 95 handle, we have momentum back in the dollar index. michelle, back to you. >> certainly thank you. coming up, wildfires burning out of control across california and some brave people are willing to jump out of planes into the fires risking their lives. the dangerous job of smokejum r smokejumpers is next alerts -- wouldn't you like one from the market

when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. burning across california today. many of them are still burning out of control despite the best efforts of firefighters. the worst may still be to come as 100 degree temperatures are expected today across the state 17,000 homes are under fire threat. our next dangerous job, the brave men and women who jump into fires like these burning in

california right now >> we're a group of firefighters delivered by airplane. >> reporter: phil land is part of an elite group of firefighters called smokejumpers >> it's something that's part of the job. you take great pride in trying to do it right >> reporter: these brave men and women sky dive from 3,000 feet into hell on earth, fighting wildfires too hard to reach by road >> the most fun of my job is jumping out of the airport it's three minutes of good times. once you hit the ground you are working like every other firefighter. you feel the force of nature i stood on the edge with the wind at my back and looked at 300-foot flames and been in awe to the point where someone is tapping on my shoulder saying

we're getting out here. >> reporter: there's only about 350 smoke jumpers like phil, and they don't have access to the basic fire frighting tools like water and hoses. so how do they fight these infernos >> you use hand saws, chainsaws. you will take everything down to the soil it is ditch digging to its finest. >> reporter: of course with flames spregd it s spreading it against the clock and elements that's why phil and the other smoke jumpers work grueling 16-hour days sometimes weeks at a time. >> this is a very labor intensive job. that's what appeals to so many of us about us it's suffrage. that's how the corps develops, you're there rigwith other peop suffering with you >> phil has had some landings

that have left him with broken bones and been impaled by a tree branch >> i was told by a doctor you won't be back. you won't walk again. >> reporter: then there's the less obvious danger. >> you are in the woods, there's animals to be concerned about. if we have problems with a grazely bear, we'll order a smoke jumper with a rifle and they'll defend camp. >> reporter: and how much do these smoke jumpers make >> about $85,000 a year. >> why does he do it >> it's important we protect the natural resources we have. i love my job because of the people i work with everyone i work with has my back i work hard to have their back >> heck yeah >> coming up next week, we'll profile the dangerous job of ufc

fighter page van zandt you will not want to miss that one. with the political climate so polarizing now, why do companies still give political donations? do they risk alienating after their customers, the work forces we'll discuss that and we're about to be joined by the ceo of royal caribbean. we'll ask him what he said on the conference call that turned the stock around today are you done yet? does it look like i'm done? shouldn't you be at work? [ mockingly ] "shouldn't you be at work?" todd. hold on. [ engine revs ] arcade game: fist pump! your real bike's all fixed. man, you guys are good! well, we are the number-one motorcycle insurer in the country. -wait. you have a real motorcycle? and real insurance, with 24-hour customer support. arcade game: wipeout! oh! well... i retire as champion. game hog! champion.

i know, right. we are seriously ikeeping up with the joneses.. i know, right. we are seriously keeping with the anderson's. we are finally keeping up with the ford's. keeping up with the garcia's. keeping up with the harvey's. keeping up with the wahh-the-wahh

the romeros. carters. patels. the allens. wah... wolanske's. right, them. no one is going to have internet like this. no one is going to have internet like this. gig to more homes than anyone. not just the joneses'. over here. xfinity. the largest gig-speed network. royal caribbean shares are up about 5% now. the stock was lower earlier after earnings were released during the conference call its ceo made positive comments regarding trip bookings. joining me now is seema mody and richard fain of royal caribbean. >> richard, good to see you. let's start with the stock performance. the stock is up 5% based on that 2019 bookings guidance you provided on the conference call. help us understand why you are so optimistic about 2019 you are facing rising competition next year. carnival with one to two new

ships, and richard branson's virgin line kicking off. how are you so sure passengers will stick with royal and not a competitor >> it's been a positive performance to keep improving our product. and our ratings have gone up to levels we have never seen before also, the ratings of our crew members have gone up too their satisfaction with their job, engagement with their job that means we deliver a better product than ever before we have some new ships coming. we have symphony of seas starting next year we have the celebrity edge coming to the end of the year. which i think is the most anticipated trip in the industry and pursuit which just started this week. we have a lot of good momentum going carrying us nicely into 2019. >> you know, wall street wants to know how you plan to manage

costs. because you have rising fuel prices, plus steel tariffs making it expensive to bring on new ships. and then the hurricane season anticipated to pick up in the coming months. >> well, i think costs is one of the big focuses always because of course we are a very active business. and there are a lot of costs you mentioned a couple fuel that is a concern of ours. we do hedge out about 50% of the needs. but also we have really been worked both because of the costs and because of the environment to reduce our energy consumption. so we have the best energy consumption in the industry. that's holding down costs. we work hard to control all of the other costs. and fortunately we have been been very successful at it it's really a nice formula when the people are working so well that they are raising our guests happiness about the cruise and

still keeping costs under control. that's what we are doing this year. >> richard, you mentioned that you have new ships under construction and coming online it takes -- ship building takes a lot of steel are you impacted by the tariffs and some of the trade goings on here in the u.s. >> so so far we have had no impact of it now, our ships that we have on order are all on fixed price contracts. so that's something -- and usually the yard has ordered that steel long in advance i think those costs are all locked in. i think the concern that we have had is that trade war is not good for anybody's business. and there is always a concern that a trade war will have a ramification on our business so far, knock on wood -- i don't have any here but if i did i would say we haven't seen any indication of that. >> talk to us about the $900 million amplified program, a

renovation program that you hope will get more millennials like morgan and i on ship. >> we have a simple formula. we just overwell our guests and make sure they have a marvellous time as brought on new ships we find new things that attract them and new wows to make them even more happy. we are investing in the range of $1.0 billion to upgrade the ships and bring in new features. and constantly improve our ships -- and the result we see is new -- new features attract more customers they pay more. that gives us money to build and enhance our ships. and so this is a very much of a virtual -- sort of a virtuous circle that is driving us this year and next. >> my request ob askd of toast as a millennial until. thank you for joining us richard faurn and seema. >> thanks for having me back.

>> michelle. >> thanks, guys. the midterm elections are around the corner often times at times like this companies donate to politicians to make sure to have a friend in congress but is the political climate to hot right now it's a mistake we are joined by bruce frooid, the center for political accountability the center has a report out saying companies don't realize the risk they face with political doonss. >> good to have you here. >> pleasure to be with you. >> the conclusion is nowadays there are so many unintended consequences from political donations that companies need to rethink them am i articulating it correctly. >> you are, very correctly companies today need to realize the type of risks they face, that companies, contributions they made in the past are like ticking time bombs that can bite them in the future. >> give me an example. >> you had the case in north carolina with hb 2 the transgender bathroom law and

company helped change control of north carolina legislature in 2010 elected a governor in 2012, helped to do this that in 50u you had the transgender bathroom law pass and the companies supporting the elections in 2010 and '12 came under sharp criticism. also on climb change where companies restrainingly reaffirm the support for the paris climate accord helped re-elect attorneys general finally sued against the epa clean power plan and came under sharp criticism for that not putting their money where their mouth is. >> should they do not do political donations what so far? is that the answer what would you recommend. >> i think companies have to approach very carefully. they have to take a longer and deeper look at the consequences of the spending. i mean, today with a hyperpolarized environment with the climate that you have with president trump, they really have to be concerned about how consumers react, how customers react. you know with the spending companies really are focusing on

how they relate to the public, how they are seen by the public. and i think their political spend something becoming part of the calculus. >> what does that mean does that mean the board should require they know it all is there a framework to think about it. >> i think there have to be strong policies by the board on when a company spends, what are the factors that go into the decision making on the spending. companies have to look at how the spending aligns with their values, policies and positions they really have to. >> here is the thing a politician request have a lot you support and yet one or two you don't. does it -- by donating would a -- when a corporation donates does it mean they own every position the politician has. >> they are associated with it that's a risk companies face today. >> got it. all right. mr. freed very interesting. >> thank you pleasure being with you. >> bruce freed. well casino stocks hit again today. win leading the group lower.

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and hear is the power lunch menu the trillion dollar mark apple's former chief evangelist on the big take with the milestone and the lessons he learned from steve jobs. double down or cash out. casino stocks have been under pressure on weak results and mixed guidance is it seasonal or longer term problem? we have billion dollar buyer tillman freiheita buyer if you howard lutnik is the joining us in an exclusive interview. power lunch starts right now welcome to power lunch i'm morgan brennan let's look at the markets right now. the dow has turned positive just a few moments ago. after being down triple digits earlier in the session the s&p is also higher up 13 points and the nasdaq is trying for a is% gain, the third straight day of gains for that index.

apple, the biggest contributor to the dow after hitting a trillion dollar market cap nike and pen g the other big winners. the dow dew point lower despite earnings revenue cigna, higher as membership numbers jump trip adviser, the worst day since 2018 as revenues miss. and tesla scoring after say going expects to be profitable in the second half of the year that's up 14, almost 15% best day since late 2015 tyler. >> thank you i'm tyler mathisson here is what else is happening factory orders rose the second straight month in jun. they were boostered by demand for transportation equipment business spending plans, however, weaker than expected. well, the average 30-year fixed rate mortgage sit hitting a seven-week high preponderates at 4.6% according to s 3 partners

investors best against -- investors who were betting against tesla lost more than $1.0 billion following the surge today. the stock however remains the most shorted in the market michelle >> all right they must be getting squeezed today. another big mover. packing 11:48 a.m. apple hit the trillion dollar mark for the market capitalization bob is on the floor of the nyse what was the reaction when it happened. >> a trillion dollar market cap is a good news story for the market everybody was happy. they would be more happy if there was more volume for the overall market because it's august great volume at apple. four times normal volume apple has been strong on the volume front last week it's not translating into more action and volume for everything else the fang names are stable but not seeing more volume because of the god new around apple. there is the one thing people are missing. but nobody cares because everybody is doing silly valuations let's do some and

show you pl the trillion dollar market cap that's the same arizona florida. florida is the fourth largest state by gdp same as apple. apple has the bigger market cap hand the small cap apple is bigger than the turkey gdp. turkey is the 17th largest country in the world by gdp. apple is bigger and big her than the netherlands which is the 18th largest i'm not done $244 billion in cash they have, what does that mean? you know it's bigger than the market capitalization of 97% of the s&p 500. there is only 14 companies that have a bigger market capitalization than apple's cash horde. final i want to know they have been a buyback monsters for a long time they would have gotten there earlier had they not been buying so much stock back. last five years reduced shares outstanding every year consistently about 5%. apple's shares account is about 25% low are than five years aig.

remember, folks, all other things being equal, it means that apple earnings are in fact 25% higher than they would have been under the old share count guys back to you. >> bob thank you for putting that in perspective for us bob pisani on the floor of the new york stock exchange. sticking with apple after hitting the milestone can apple continue to grow and what lies ahead for the tech behemoth. >> joining us guy kwau sackry, the former evangelicalist at apple. the chief economist at conva. >> it's a historic day. >> as somebody who used work for the company and seen it evolve would you ever think we'd get to this point where it's a trillion dollar company. >> never to affirm that i left apple twice and steve jobs offered me a third job and i turned him down. obviously i never anticipated this day because i would have stayed >> do you still own the stock.

>> just a few shares, nothing that would change my lifestyle let me put it that way. >> how did you miss it what did you miss -- a lot of people missed it, right. >> what happened you left because you didn't see what was going to happen >> well, i thought the internet was going to be so huge and the personal computer industry was, you know, the previous curve, internet is the next curve on the other hand, think of michael dell who famously told steve once that he should close the company, give all the money back to the shareholders and you know pack up his tent and go home the little row boat called apple is a huge ocean liner. two guys in a garage in cupertino without college education create the most valuable company ever. what a great day everybody has a hero >> guy, there is a debate going on on wall street right now, especially as this company has become the largest u.s. publicly

traded company ever, about how you value apple. do you think of it as a tech hardware company do you think of it as a consumer company? and what about the software sales that it's growing and pushing the narrative around right now? >> well, why does it matter? the market has spoken. it's $1 trillion you could say that the mackish tosh is in the slight decline but the ios is kicking butt and the revenue per item is getting higher because of the iphone x bringing the cloud services, the ecommerce. you know, apple has just hit it all. i'm not part of the company anymore so i'm not taking any credit process you have to give credit to receive for the vision and cook for the execution. >> compare the two that was my question. >> yeah. >> how do you compare tim and steve? and has tim in some ways had the tougher job? >> well, you know, steve had the vision for the products, you

know, what market to hit he created the mcen tosh with the team he created the mcen tosh when they were asking for a better cheaper faster apple 22 and when people were zpg for the better cheaper macintosh. he made the iphone, ipad and that has been the brilliance of apple, one stead ahead of the curve. but you need someone to execute. and tim cook may not have the product vision but he certainly has the execution ability. one would hope that the product vision remains in the dna of apple. and you have in great executer called tim cook. and that's a hell of a combination as we have proven this morning >> back in 2014 you wrote on the blog that elon musk is the new steve jobs >> yeah. >> talking about him a lot today. because tesla is doing very well in the wake of the last earnings report. >> yes you know, when you look around

and you say well who has the strangest idea you you look and say -- can you bore tunnels under los angeles? can you make this new car company that competes with everybody? can you fly people into space? those kind of ideas are coming from elon musk i mean you have to give the guy credit. >> guy, thank you great to get taught on this. >> he gave us my favorite sound bite of the day two guys in a garage in a kurp foin. it's a great country. >> hewlett and packrd. >> what's about garages and california. >> a lot of space. >> not big front yards. >> liz myers heads up jp morgan global equity capital market business leading wall street in the number of deals and fees generated nearly 10 years running that's good. including the alibaba blockbuster ipo and the tower. and leslie picker is here as

well lead it off leslie. >> i think a good way to start this goes back to the entrepreneurship discussion we were just talking about, the number of public companies in america has been on the decline for about 20 years now sitting at roughly 3,600 at the end of 2017. it's estimated that twice that number is inventor backed and private equity backed companies. we have seen three iterations of the jobs act trying to make the country more hospitable for ipos what can be done if you were talking to the jay clayton the sec what would you tell him the companies need to get into the public markets. >> we have seen good strides out of the sec so far including more companies in the ability to file confidentially so companies have a little bit more air cover if they are wanting to test the markets before they fully alert the market of their intentions to be public that's giving people more flexibility i think is helpful but i think the other reason is

the private capital markets are very rebust and there is good "access hollywood" to capital for companies before they make the transition to the ipo. but we have seen a number of of large software companies this year that have made that step from the private capital markets into the public. and i think that trend will continue where companies really do start to realize the benefits of that greater liquidity that comes from the ipo both for early investors and employees. >> i'm suspicious that it's related to lower interest rates. interest rates have literally gone down for 20 years right as people get more and more desperate for yield sending money to parts of the market there is a lot of money in venture capital because it was desperate. wouldn't we see more public companies if it wasn't so easy to get private money and wouldn't be easier -- wouldn't there be less private money if there were higher interest rates >> i think of it as the private capital markets have allowed

companies to become more sizable and more mature before any make it to the public market. so they ultimately are more successful as public companies that's not necessarily a bad thing. interest rates rising -- that -- that can be the tale of two cities for the ipo market. if interest rates rise at a predictable pace we the equity markets can absorb that process if that goes to quickly that can be a negative for investoren a kbk the reseptemberesty for ipos. >> you mentioned the internet. it seems that software is the key word for companies going public even looking at so in. os up 25% just started trading a couple hours aig they are selling speaker but pushing the narrative a big part of the businesses is around software and the engineers are tied to software is that sort of thing investors are looking for right now, the internet companies, the software companies? is this the hot area in terms of ipos. >> software has been a big part

of the calendar year to date and will continue to be towards the back half of year. but technology, whether ecommerce, security, search, substantiate wrb there are many flavors that provided great returns for investors. and across that broader swath we have seen multiple ipos this year that priced two and $3 above the range. i had traded up 30, 40, 70% in the after market high, growth kpt are a area of great interest and i would say investors are willing to dig in and not sum assume any one model the choice. >> what are you hearing about saudi aramco >> that's a topic i can't get into in great detail but the energy sector continues to be interesting. less issuance in the u.s. market than we have seen in prior years. but it's great to see the evolution in the saudi yash arabian economy towards a more open and accepting society whether it be women driving and

more freedoms for their individual citizens. but certainly. >> glad i stepped into an area you can't talk about >> the other trillion dollar plus. >> not knowing. >> mgtd to do well. >> well done >> thanks, liz. >> all right liz myers, jm morgan leslie picker thank you as well. and now not jp morgan but morgan reeds >> we have some breaking news from the white house press briefing let's get to sue herera. >> indeed we do. thank you very much morgan basically u.s. top security officials have been briefing reporters on continued efforts by russia to meddle in the elections. the top administration officials briefed reporters saying that the president has directed officials to make the matter a a priority dan coats basically talked about that at length he got the most questions from reporters about russia's efforts. and here is what he had to say >> in regards to russian involvement in the midterm

elections, we continue to see a pervasive messaging campaign by russia to try to weaken and divide the united states >> the head of the department of homeland security kristijan nielsen also said quote, u.s. democracy is in the cross hairs. then mr. coats went on to say that russia isn't the only country that's been trying to meddle however they have been been doing it perhaps the most under this recent surveillance program. we are continuing to monitor that and we'll keep you posted morgan back to you. >> thanks sue. and of course just on the heels of facebook suspending almost three dozen pages that may or may not be tied to russians in terms of misinformation campaigns. google may return to china and causing a lot of controversy. you have to hear more about this casino stocks tumbling again on weak earnings and weak guidance. should vegas be worried or is it just seasonal? billion dla dollar buyer and

casino mogul tillman freiheita weighs np ceo les moonves said to speak oh on the company earning call will he answer questions on the sexual misconducclmsgastt ai ain him. a look at what we expect ahead on power lurj. 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.

a story from new site, the intercept has been making headlines this woke.

according to internal google documents viewed by the publication google in the planning stages of launching a cent censered version of the search engine in china joining us on the cnbc news line is the reporter who broke the story. covering national security and civil liberties for the intercept. thanks for calling in. the product is called dragon fly. tell us more about it. >> thanks for having me on yeah, the dragon fly project is basically a kind of secretive project google has been running the last year to develop an android app specifically for the chinese market that will basically -- just as effectively a chinese version of google search that will be heavily censered in accordance with the regulations in china the ruling communist paerpt in china has strict censership about what information can be accessed on the internet

google has tried to comply with that and tried to get permission from the chinese government to launch the censered app in china. >> how did you find out about this. >> what happened was thankfully a very courageous and brave people within google who have knowledge of this project decided that they were so concerned about it that they wanted to bring it to public attention. and that is how i was able to report it, because there were the people who, you know, wanted the wider public in the united states and indeed the rest of the world to know that google was kind of secretly planning this. >> you know, sergei bryn one of the founders of google made it clear in 2010 because him having born in soviet union because he felt what he saw happening in china bothered him this isn't the kind of business they wanted to do. do you know if they're having internal discussions about that dilemma. they got out for a reason and

now thinking about getting back in despite what are actually even more draconian censership rules in china. >> that's right. i think there have been a lot of discussions inside google about this and i would loved to have been a fly on the wall in the high level meetings the thing is that since 2010 when google was last running it -- as you mentioned they did run the search engine previously in china but then left because they couldn't -- basically couldn't stomach the restrictions anymore. now they are doing a total reversal on that but back then there was a different ceo. eric schmidt in charge and he was replaced by larry page the coveder. but larry page has been replaced opinion. and the new ceo has a complete hi different attitude towards china. he thinks google shouldn't have pulled out in the first place.

and he wants to get back in as quick as pb. they have been launching smaller scale apps like for example a chinese translate app in china they've been incrementally building up to launching the search app, obviously a huge decision and you see now the backlash of it, a lot of people not just inside google but on the outside in the human rights community. >> ryan, we have another question. >> how much is at stake? it has to be about money. >> yeah i think money is a huge factor something like 750 internet useners china, more than the entire population of europe. it's a huge market that google taps into. that's certainly a factor in it. you know, it would be crazy to think it wasn't. there is probably billions of dollars in revenue they can generate through advertising and things like that by having the search engine launched there i'm sure that's a factor but google hasn't said much about it explicit zbla they don't need to

say it explicit. >> thanks for calling in we appreciate it. >> no problem thanks for having me. >> official statement from google we provide a number of mobile apps in china such as google translate and files go. help chinese dwellers and have made significant investments lake jd.com we don't comment about future plans we to this story on the day apple hits v 1 trillion. if google had not pulled out of china would he be talking about google being a trillion. >> possibly. >> quite possibly. >> there is a reason. >> go ahead, pin i'm sorry. >> there is a reason china has been able to draw the very strict deals and take 50% plus ownership of the companies coming in. ip theft all the other type of discussions we are having right now more brewedly. that's because at the end of the day the business opportunity in china is too big to be ignored. >> you made an interesting point. when they pulled out in 2011 it was in the xi jinping running the country. the censership rules are strict

are, harsher. >> yes. >> more draconian even than they were then when brynn took him out. >> i don't take a position it's an interesting dilemma for a company right now. >> absolute. >> what do you do. >> who are you doing business with where do you do it is some money not worth making there you go. >> all right. >> deep thoughts for the afternoon. coming up, the threat of more tariffs sending china's large cap etf down nearly 2% good time to get in? trading nation will explore that

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welcome back to power lunch. time for trading nation. let's look today at chinese stocks the fxi china large cap etf stumbling today down more than 20% from the 2018 highs. is there opportunity in the bear market for mc? larry mcdonald with the bear traps report craig johnson with pieper jaffray. it dropped another 2% overnight. the chines currency weaker again. >> well we are setting up for a sprkt capitulation in the china shares in the early stages. looking at i think we're a week

or two away, we are having a nice washout within two weeks. you have to understand, the federal reserve is going to $50 a a month of balance sheet reduction in september at the same time, they're hiking rates. the dollar made a 7% vicious move higher. china is -- has a -- a $45 wank willing system, three sizes -- three times the size of the united states, heavily leveraged. as the feds tries to unwind it's creating the early stages of recession in china and it's coming into a fantastic opportunity here in the theks 30 days or so. >> that's a big call, craig. what do the charts suggest >> well when you come back and look at the chart. as you ms. henninged earlier the high coralation between the fxietf and the shanghai composite you have to take into consideration the high coralation between the shanghai composite and the s&p 500 index. on a who-week basis it's

like.68. what i would say on the charts is pull up the long-term charts as a technician ab, the longer the chartrand the bigger meaning. you can see we are close to violating the uptrend support line that's been intact since 1996 break below this level is suggesting that the next support could be 27% lower than where we are now. i think that's a little bit of a head wind for u.s. markets tleet in short to intermediate term as larry said. >> that would be quite a drop. thank you for weighing in on how u.s. customers with play china through etfs you can head to the website or follow us on twitter. back to tyler at headquarters. hi, tyler. >> sara thank you so much good to see you. well the stock story of the day of course is apple it became briefly the first u.s. company to hit a trillion dollar in market value. it's close to it right now this is of course good news for investors but what's next for the company and shareholders joining us now on the phone is brian white, the global head of internet and software at miness,

countries. y. i don't see you but i see your picture. you raised the price target in the last day or two to $275 from 235 that's about a $75 move from here what has to happen for that to happen. >> you know when we look at apple here first of all we go in into the strong part of the year with an iphone cycle in the fall new product launches has generally been good for the stock. secondly i think what we start to see is a better appreciation for the company's ecosystem, whether across services, or software, or some of the hardware products. i think the market is starting to give them more credit than a company that just does smartphones. i think that's very, very important. when you look at the stock here, you know 13.5 times x cash very cheap. you can look at the s&p 16 times and sugar water companies at 19 nimes. and apple has been growing

faster than both. >> this company in your view is underappreciated what was vindicated in the most recent report? >> well, i think what we saw is service is significantly outperformed about $9.6 billion in services market was looking for just over $9 billion that's an important part to the story. you know, and again, all of the pieces starting to come together gave a good outlook for the september quarter in what could have been a little bit conservative new iphones coming out in september. there is uncertainty fx head winds. i think people are starting to see the pieces come together i don't think it had to have been the blockbuster quarter and outlook it was to get the stock to move higher on the second half of the year but it was and that's good news. >> brian, i raeltz services grew, wearables grows. but there is a lot to like

iphones still the majority of sales for apple. is a thousand-dollar phone the new norm should we expect this from here on out what does that mean for apple? there is a lot of focuses on average selling price right now. >> when you look at the iphone franchise you have to remember there is only 15% market share you have a global middle class that's expanding out around the world typically outside the u.s., mostly in asia and you know, as the people get wealthier and wealthier they have aspirational goals to own the apple products that's a key point the higher priced iphone is part of that. apple has cemented the market. you don't have to go out and by a $1,000 iphone there are other models available that's nice. but again, i think people enter at a certain provides point and move up over time. and so apple has room to price an iphone at over $1,000 and get some healthy buying process. which they did

it's the number one selling iphone in the quarter and number one selling in china. >> despite a lot of skepticism originally when it came out is thanks for joining us. >> thank you. still ahead howard lutnik on the mngts and more power lunch back in two minutes. >> announcer: and now the latest from trading nation.cnbc.com and a word from the sponsor. >> when markets get volatile it's a good idea to reduce the size of trades and scale in or out of position attention. taking on a position larger than you're comfortable with in order to increase gains only increases risk scaling in and out can enable to you find favorable prices. duncan just protected his family

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let's get a quick check on the markets. the dow hovering near flat line. down about 0 points. the nasdaq the outperformer up 1 percent led higher by apple and tesla. s&p 500 is higher up right now about 12 points. tech, consumer staples, top performing sectors material and energy are lagging amid all the trade headlines. the fang stenographs in the green red high he by facebook up

2% with that we send it to sue herera for the news jupt. >> thank you so much morgan. >> here's what's happening at this hour. the roman catholic church formally change the teach to oppose death penalty cases in all cases. the 1.2 billion member church has lourd the death penalty in some cases but change the stance now to reflect the pope's total opposition to it. sbaeb $about zwab zimbabwe says the death toll has ris ton six. 14 people injured in the chaos there. 18 people arrested israel has stopped fuel shipments to gaza in response to militants launching balloons that set fire to fields in israel the fires cost israel acres of farmland and forests and google glass could be a life changing tool for people with autism. stamford university researchers paired the glasses with a new

smartphone app to improve social skills for ausk children after a few months of regular use parents have reported that their children made more eye contact, and related better to others so that's an optimistic note s that's where we end it back to you michelle. >> thanks, sue. oil market closing for the door let's go to jak at the cnbc commodity desk. >> crowd oil make a bit of a comeback getting out of negative territory into the green despite that the stronger dollar geopolitical tensions in the middle east flairing up on reports that saudi led airstrikes left some dead at a fish port in yemen recall that saudi araby announced last week it suspended shipments through theed red sea after the attack of two ships in the waterway definitely something to watch and something lifting provides should the tensions escalate crude closing around $69 a barrel today. >> thank you very much. with o with the bull market in commercial real estate in the

ninth year curbman and wakefield tests the public water hitting the market today joining a crowded feel with knew mark group helding the own ipo last year. howard lutnic joins us to talk about the state of the business, the economy and more howard welcome good to have you back as always what do you make of the fact that so many companies, including yours, in this business are going public now? what's in the water or the air >> well, the big six players have been raising market share this is a huge business, the international services business in real estate is gigantic and the big six guys really have less than 20% market share and people really want the kind of information, the kind of knock that new mark and our peers deliver. we are consolidates and growing. think about new park put up

earnings of 35% today. you know, things are good in the commercial real estate space because the big guys are gobbling up the little guys hand over for a foot. >> and being public enables you to do that because you have currency to do it in part, right. >> exactly right you're in the mugabe public markets. you can hire and acquire better and grow faster new mark has been growing incredibly well. think about this year we expect revenues to grow between 19 and 30%. these are just sprkt numbers of growth rate that we get at new mark and curbman joins the fray now. and i think there is room for us to grow. >> i saw that you all announced a large deal involving some properties out in california that will be tenanted by facebook what is working in the market? is it mostly office properties what and what's not working as well. >> well the three business that is drive the real estate business is leasing, right, you

help landlords or tenants. and that's like the deal you just talked about. then there is selling buildings with the interest rates so low the building are low negative rates around the world you have the global investors buying u.s. property because it's a great investment. and finally, if landlords don't don't want to sell they surely want to finance it you do tons of financing we are the number four financer of multifamily you know, new mark is really in a great place with all three the of the categories and that's why the numbers have been so spectacular this year. >> back in june another noted real estate investor and private equity investor sam zell said the economy is more fragile than people give credit for and therefore able to absorb less escalation in interest rates than at the moment seems to be a common expectation doesn't sound like you agree. >> i've had had this view that people think the cycle, like

real estate is maybe late in cycle because it's almost nine years on you have to remember this is the easiest monetary policy in the history of monetary policy right, you've got negative. >> but i think the question is about the fact that it's getting less easy, like everywhere, right. >> okay. well certainly that's true and no one is arguing that interest rates could go from 1.75 to 2% about youfy ifland told you the 10-year note was 3% that's such a low rate for ten years that has plenty of room to grow the jobs act, just increased earnings across the economy in the u.s. soy really think this -- this cycle has at least three years to go. -on, in '07 it was clear there were clouds out there. it was a dangerous native guardian place i was scared to death in '07 i'm telling you when i get up in the morning i see really really blue skies out there i think this economy has three years to run. >> okay. >> i like the real estate business new mark does great process opinion. and the parent company bgc up

nicely today doing well. >> thanks, howard thanks for joining us. casino stocks falling however on weak earnings and weak guidance. should vegas be worried? or is this a seasonal slowdown nellion dollar buyer and casino owr tillman gives us his take next at&t provides edge-to-edge intelligence, covering virtually every part of your business. so this won't happen. because you've made sure this sensor and this machine are integrated. atta, boy. & yes, some people assign genders to machines. & with edge-to-edge intelligence, you'll know your customers love this color, & don't love this one. never getting grape again. & you can adjust in near real time. & if someone tries to breach your firewall in london & you start to panic... don't.

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casino stocks are getting crushed this week. sees ars given weak third quarter guidance mgm and what's going on in vegz is there a big are problem. >> with us is billion dollar buyer tillman fertita he has the golden nutting owning locations in vegas all the stocks are whipping it this week because of weaker guidance and misses. >> is something on in traffic. >> traffic is still up but you remember you charge for parking now and the resort fees have gotten so big that you know i'm sure some people are saying it's more expensive to go to vegas. and the reason that really the third quarter is going to be down is the may weather fight

was huge and so many people came and blew out the numbers you bring a bunch of big players in town the casinos win and they had a huge third quarter i think that's the main reason everybody is saying the third quarter is slow. and everybody says the fourth quarter is good. but you got to remember that's we're going up against the mandalay bay incident. if we don't have good fourth quarters we will have issues a lot of people didn't go to vegas. >> morgan brennan here, tillman. you mentioned it's more expensive for vegas. does that make the case for casinos in other parts of the country? you have some casinos in atlantic assistant and other areas. is the case really there do consumers need to get on a plane and go to vegas when they can gocloser

>> my property outside of houston in lake charles, louisiana. you can put it in the middle of the strip. these are all billion dollar properties being built around the country. but there is still the energy of vegas. people still want to go to vegas. you got to remember in the 70 years this has been going on in vegas there's only one recession that hurt vegas. and that was the '08, '09, '0. because we brought on like 50,000 rooms right at that time. but vegas is always going to be good you'll have little blips but the regional will hurt a little but we are making as much money in the vegas than the casino ever made in the 70-year history. >> that's a good -- that's a good sign, tillman when heye we had the ceo of caesars yesterday i'm not sure what the hell he said. but i think he said in the third quarter he expected their events

revenue to be a little bit soft. and i think that was one of the things that people grasped onto in taking the stock down so hard but then he back pedalled and said number one 80s kbarz to may weather. number two it's not a long-term trend. it's what we think is a short-term blip. are you seeing the same things in other words are large events not coming as much is it a blip are conventions not booking as largely? or do you not see it at all. >> i see whatever the strip sees because when they dump their rooms and rates i have to drop mine but you got to understand, you have the major conventions and if you have one that comes every other year or it switches months it has a huge impact i don't think there is any problem in vegas, you know, caesars reported a good second quarter. mgm missed but they always miss.

that's just the way it is. these properties are back to making the dollars that they made pre-recession now. >> okay, tillman. >> but it's in a different place. it's in parking, it's in resort fee. it's not gaming as much. >> sounds like the airlines actually we are showing people the mgm resorts flat today but sold off yesterday. what do you think about the deal with the nba, the gaming deal? >> all it is is a promotional- you know they can put the logo up they're not getting something special that nobody else gets. and if you really read between the lines you can go on -- on the nba app and get all statistics, every rebound, assist right as it happens so you don't have to go to a- any particular property. i think we're basically all -- but they stepped up. they are a sponsor and -- but i don't think they're getting anything different than anybody else they're just -- they're a response reporter. and paid $25 million for it. >> tillman, quickly i'm putting

the same question that michelle caruso cabrera put to the crow crowe of caesar. do you see retiric on tariffs on chinese visitors to the property in vegas. >> not visitor on property and tariffs? >> not at all. i don't think any of us knows yet what the tariffs are going to do to us good or bad. so it's all a wait and see, and all we know is the economy is good, but it's been good for a long time. and remember when things are really good, we forget they're ever going to be bad and when they're really bad we forget they're going to be good again. so it's been good a long time. >> my son all he cares about is the start of the nfl season. this year all he cares about is the start of the nba season. he is so excited which speak tuesday the power of the nba brand. is your deal done with carmelo >> no deal's done until it's

signed and, you know, the nba is flourishing. it's unbelievable. adam silver and the whole team and the new york office has done an unbelievable job. it's just amazing. you watch your sports shows and you talk about the nba all yearlong now and it's not just a seasonal thing things are going extremely well in the nba, and we're all excited about the nfl season but i can tell you i'm a lot more excited about the nba >> i bet you are always good to see you coming up, the cbs board reportedly knew about sexual allegation claims against les moonves months ago we have the latest plus les moonves expected to speak on the earnings call that's expected to take place r e bell today will he address the issue? every fire department every police department

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welcome back to "power lunch. cbs earnings coming up this afternoon following a string of developments in the allegations of sexual misconduct against the ceo chairman les moonves julia, is he going to be on the call is that confirmed? >> we do expect him to be on the call of course, morgan, anything could change this is certainly a fluid situation. but as of now we do expect les moonves to be on the earnings call but this all comes after this morning the l.a. times reported the cbs board members learned several months ago the lapd had investigated an alleged sexual assault by moonves hiring an outside law firm to investigate. prosecutors declined to file charges on this because it claimed it was beyond the statute of limitations cbs declined to comment. this comes after last night cbs

hired two law firms to investigate separate allegations of sexual misconduct made against moonves in the new yorker and that female attorneys will lead both probes. now, these allegations plus cbs' legal battle with controlling shareholder national amusements were sure to overshadow the quarterly results. analysts predicting both revenue and earnings will grow over 6% from the year ago quarter. but of course the big question is what les moonves will say on the earnings call. >> a lot of people will-ll ican for that one don't move because "check please" is next.

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contrarian indicator, and some media have hyped apple is hitting $1 trillion today. >> look at that 12 zeros right there. >> yep i mean, business week doesn't exist