18% roe. >> cbpo. china bilogic. got a very large position down here >> starbucks is nicely recovering it had a downgrade two days ago but it's recovering. >> have a great weekend. "power lunch" starts now we'll see you in a moment as you join us. welcome. here is what is on the menu. a steady diet of interest rates hikes. a sneak peek at cnbc ploding th bitcoin. the most expensive car ever to sell at auction a look at the vehicle that's

called the holy grail of classic cars buckle up. "power hundrlunch" starts right. welcome. record setting day on wall street nasdaq the leader today and the highest for the sixth time in seven days all three indices on pace to close in the green chip stocks seen games led by amd. big gains for the year nvidi aa and micron. we begin with comments for jay powell he says he expects further

gradu gradual interest rate hikes. the markets seem to like it. the nasdaq and the russell 200 hitting all time highs bob is at his perch at the new york stock exchange. hey, bob >> hello i want to emphasize we're at records across the board s&p 600. the small cap. right across the board mid cap, small cap, large cap. nasdaq composite we don't have a lot of individual stock break outs. that will happen if we stay here long enough. there's two things that are moving markets the weak dollar trend has resumed. this is associated with china tariff and trade tensionsless tensionslessening. we're seeing that as well.tensis lessening. we're seeing that as well. metal stocks, mining stocks

doing better emerging markets doing better. energy stocks do better. we've had additional help. semiconductors that were the trouble a week or so ago they have started reviving mr. powell gave a long speech and is generally received. the gradual rate hikes remain appropriate. he's not doing anything uncertain. not at risk for overheating for the economy. mr. caplan from dallas saying we sought to go to the neutral rate

the fed is not going to do anything that's uncertain or quick. >> the market just wants know what to expect we don't like uncertainty. loretta is saying there's a number of tail winds for the economy right now. >> i think that the fiscal policy, the stimulus and the tax cuts has been a positive for the economy in terms of demand growth there's been more momentum than i might have anticipated businesses are still very upbeat small businesses especially seem very upbeat. that's one of the reasons that i've upped my forecast >> st. louis fed president speaking to cnbc today

addressing the concern that some have basexpressed about the low unemployment rate. >> i don't think it's a threat it's an opportunity to do a lot of good things in the labor market you can get people in jobs who have been marginally attached to the work force i think there's a lot of good things that can happen they can develop human capital if we can get them into the game >> mr. bullard saying he's not concerned about inflation right now. to a lot happening in washington today, time slipping away to reach a trade deal with mexico new developments in the various i vest ga investigations involving the president. >> reporter: the long time chief financial officer for the trump organization has been granted immunity by federal prosecutors according to nbc news. becoming the latest cooperating witness in the investigation into president trump's former

attorney michael kcohen. he referenced him. cohen entered a guilty plea. we'll see what happens from here the white house is moving to protect attention to the economic agenda. looking to advance this week with a potential nafta deal. for weeks mexico and the u.s. have been negotiating bilateral issues that looks like it could be extended into next week. >> as you know, unfortunately, even if you're extremely engaged it's always a last moment thing that come come between you and your goals >> sources say the u.s. may rescind its demand ta the deal

be renewed every five years. mexican officials say it's a trilateral issue we may see canada come back to the table as early as next week. the market shrugging off the d.c. drama that kayla went through. is fed statement that the economy is strong the main driver of the surge? hopefully you were able to follow along with what mr. powell was saying. he's not concerned with inflation. he said moved above 2%, no clear sign of acceleration above the target

>> if you look at what we have seen from the fed, if you look at where we should be and on top of a fiscal stimulus package that, we should be seeing inflation higher than it is now. we're down to 60% possibility for a december rate hike that's incredible. we've been feeling like if you look at the wage numbers, we're not seeing it in wages which is what it's going to impact. most companies in the united states more directly for us, this is was a great statement and indicative of what we have seen him do over the last couple of statements he's made

believes we should continue these rate hikes in a measured tone the market likes that. what did you make of what mr. powell had to say? do you believe the economy is strong >> i think so. that's one of the main concerns is how long is this business cycle going to last, this expansion. there's a lot of concern about people thinking we're in the latest of the late innings of this we've got to be nearing some kind of recession. also concerns about the yield curve inverting. i think what the fed said was reassuring to the market in they know the fed is not going to rush to go invert the yield curve. if it inverts, it will probably be the market doing it rather than the fed i think they are saying they don't want to fall behind inflation either it is at a low, a relatively low point historically if we go back in the 20s, the

average has been about 20% it's not high. i think it's indicative of the low and slow inflation we've had over the last decade i think it's going to make the markets feel much better if it does back up the very bullish news in numbers we have seen released for the last several months >> i'm interested in my notes, it said that you say pairing gains and reducing market exposure may be a good move assuming you time reentry right or it may miss out on another 25 to 50% move higher before a downturn occurs. is that your betting that we might go 25 to 50% higher? that would put the dow at 37,000 and the s&p at 4200. >> that would be on the high end of what we might expect. going back to where are we in the cycle, if you're looking at

your portfolio, i don't think it's a bad idea to take gains especially from the areas that markets have done best that are in the u.s. large companies, make technology. take some of those gains and have money set aside that you can use as dry powder if the market pulls back. based on these good numbers we're seeing and we have seen people push their forecast for recession and the end of this business cycle again and again you don't want to miss that. >> i think you would probably agree with the idea if you're going to use some of that money it's probably prudent to set some of that money aside and not have it exposed to risk. agree, disagree? nod or shake your head >> agreed. >> agreed.

>> shannon, how would you put capital to work here >> we're still very optimistic on equities here we've seen weaker dollar trend it's short just the last week or so we're happy to see that. we still very much like international markets and i would say we've been hesitant given the strength we have seen in the dollar. we still like charge cap u.s. companies. we have seen some of the defensive names so maybe we're entering a new trend where some of the defensives and the dividend yield stocks could have a bit of a run we're still heavily exposed to equities and will remain so during the end of year >> thank you for joining us on this friday. weekly rekoucounts just out. >> u.s. oil drillers decrease count down this week taking nine

rigs offline this is the biggest cut since may of 2016. that's very significant. remember, the pack drop here supply issues are back on investors mine here at the states production was back up to 11 million barrels day. that is high all those still in the process of delicately trying to balance through the end of year. we are trading over 69 right now. back to you. >> thank you very much massive floods inny hawaii some areas have seen 30 inches of rain. the storm will be downgraded to a category 2 storm later today fema warns hawaii residents to get out of the storm's path if they can big tech firms are meeting behind closed doors at twitter

headquarters today the goal, share tips to avoid having their services used to manipulate the midterm elections. more on that, coming up. many residents of high-tech states are feeling salty about losing the deduction for state and local taxes. the i.r.s. is trying to close loophole around that rule. we'll talk to a governor in one of the states most affected. dan malloy will join us. ou have? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. everything was so fresh in the beginning... but that plug quickly faded.

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the treasury department promulgating a rule to block plans to bypass state and local tax deductions to making con tri bu -- contributions to state funds. that helps to offset higher federal taxes because the state and local deduction has been limb limited. 33 states offer a tax credit joining us is the governor of connecticut that has the second highest local tax in the country and one of the top ten property tax burdens in the country welcome. good to have you with us >> great to be with you. >> why do you think this is bad idea for the treasury to step in here and it would not nearly

affect states like connecticut or like new jersey, where i live, that have set up these special purpose ways to get around the loss of the state and local tax deduction but affect other such funds in other lower tax states as well, wouldn't it? >> a sales tax as well you go out and buy a car and pay some income tax and property taxes and you don't get a write off because the trump administration, the republicans, in the congress of the united states have decided that they're going to tear up our constitution the income tax in the united states came about in 1861 as a result of the civil war. it has -- from that day forward been sancrisac. the republicans came along they won some leelections and decided to tear that up.

what they are going to do is raise the taxes on the middle class in america very significantly. almost 200,000 families in connecticut will pay additional taxes as result of these changes. that's true in state after state. it's not what you would call high tax states. it's 33 states many of them having republican leadership have figured this is horrendous for people living in their jurisdictions. i will go one step further it's a punishment of some states that are protected a strong public educational system. in connecticut, 60 to 80% of all property taxes, which is what they are in connecticut, go to support education. in this very same bill that limited the deductability of that tax that people in connecticut are paying, they passed rules that allow people to write off costs associated with private education

it makes no sense. connecticut has the best readers. we protected that system because we funded that system and now we're going to be punished for it >> the counter argument that some would make, i suppose, is by setting up a charitable donation to a state, they are still covered and you can deduct them is really kind of an artful tax dodgery. how do you respond to that counter argument this is a way to avoid the federal law. >> that's why i tell you the little tale about what property taxes are in many states they are the tax that supports education. i understand what you're saying and you understand what i'm saying if we don't want educational

expenses to be deductible, why did we create a deduction for private education? it makes no sense. i don't know what they were thinking about what's very interesting in the current climate, the president wants republicans to talk about the tax change they don't want to talk about this because as this particularly mess becomes understood in local community after community, people are saying, wait a minute. you promised me i was going to get a tax reduction. guess what, folks, 83%, 83% of the republicans tax proposal goes to 1% of the population that reduction 83%. we're talking about trillions of dollars. we're talking about trillions of dollars, a whole in our entire budget they do it by punishing people in the middle class in state of state. >> i think republicans would answer in part or the people who

supported this would answer in part that the disappearance or the limiting of the state and local tax deduction and other things is counter acted by offset in some cases 100% by the fact that the standard deduction is raised, number one. number two, that tax rates and the bracket step up points are lower than they would have been. in fact, in my case, my accountant told me and i'm in the highest property tax state in the country that they will rise in something of $2,000. i was prepared for much more damage than that how do you answer the idea that the damage may be mitigated by the fact brackets will be lore and rates will be lower? >> how did it make you feel when president trump decided he was going to raise your taxes

$2,000 you're asking me a very interesting question it's a very fair one most people would say, look, i guess the president was lying to us because he told us he would cut our taxes. he cut taxes but he cut them for his friends, the top 1%. you're not one of the top 1% i'm sorry for that reality but you're being lied to and have been lied to by the national republican infrastructure that's now running away as fast as they can from this particularly problem. not just in new jersey or new york or washington state or california but state after state. 33 states have taken the steps that we're trying to take. >> let's go to the cold hard facts. ha what have you seen in terms of the impact of your state property values, people move in the state or out of the state?

what can you tell us >> i don't know people understand the implications. people understand taxes when they have to write out the check. it's only starting to sink in. it's also sinking in that republicans don't want to talk about it >> is there an impact in your state so far >> almost 175, 200,000 families will receive a tax increase as a result of this change. yes, there's impact. >> why not -- if you're feeling this impact, why not cut taxes in connecticut >> i think some communities cut taxes on a basis when they do valuations why are we attacking education i'll go back to this point that i've made. we have the second or third best educational system in the nation our 12th graders read better than anyone else in the country.

we have invested money on a local basis to make sure we have quality schools in most districts in the state of connecticut. why should i be -- if i send my children to public school, why should i be penalized in the very same bill that's now allowing people to write off tuition for our private schools. >> thank you very mump fch for making the case. >> thank you our trade war tour continuing in south carolina with the story of a plant that may have to close down because of terrorists. that's where we find kate rogers >> reporter: that's right pop we'll tell you why this plant may close anhomud w ch jobs are at stake after the break on "power lunch." ♪ and i don't care what we do ♪ just take me with you there are roadside attractions. and then there's our world-famous on-road attraction.

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our trade war tour takes us to south carolina today. kate rogers is at a plant that assembles televisions but maybe not for much longer if it doesn't end soon kate rogers joins us now. >> reporter: element electronics that you can see behind me assembles televisions here made out of products imported from china. it says it will have to close its doors on october 5th laying off 126 workers if it's not granted a lifeline in this trade war. element declined to participate in this story. the kpacompany says the closure are a result of the new tariffs that were imposed on many goods

including the key television components democratic state senator says he's been working with state lawmakers, really putting politics aside here in order to keep this factory opened he says the company is pushing back and fighting thoeds tarifftariff -- those tariffs. >> this is not the way to do tariffs. make sure you're taxing people that are competing against americans. this could be a blow not just to manufacturing jobs in our county but retail and basic quality of life issues for the folks in the company. >> reporter: element has also gotten some push back from the alliance for american manufacturing that says the company shouldn't be exempt from tariffs because they are importing those products from china and assembling them. they are not truly a made in america company. back over to you >> i think i noticed a walmart truck there in the background. very interesting

nasdaq hitting all time, lifetime highs the dow jones is higher by 138 points s&p 500 up by 16 points. nasdaq high by three quarters of a percent. if health care closes at a new record, it will be the first since january. let's head over to sue she's got our update >> hello, everyone here's what's happening at this hour senator john mccain has chosen to discontinue medical treatment for an aggressive form of brain cancer a state from the family read the progress of the disease and advance of age rendered their verdict. the family thanked the thousands of people who are keeping the senator in their prayers hurricane lane may have been

downgraded to a category 2 storm with winds of 1110 miles per hor but it's taking a big toll on hawaii that's been pounded with more than 30 inches of rain. new york city police say a former director for the centers for disease control has been arrested for allegedly groping a woman in his brooklyn home he once served as new york city's health commissioner has been charged with forcible touching, sexual abuse and harassment next week's funeral for aretha franklin, bill clinton, and cicely tyson will be among the guests you're up to date. i'll send it back to you >> will be quite an event. >> yes, it is. >> really good stuff for a woman

that deserves. shares of amd, stock up 125% so far this year we'll talk to an analyst who is still bullish on the stock bitcoin lost half its value this year. there's still a lot of bitcoin believers. we'll give you a new sneak peek. that's coming up next on power lunch. machin

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. former nfl star kicker nick lowry is leading the pack. three stock picks up 46% second place, tim semore of 20%. amd has more than doubled since the draft. look at the 2018 prncomparison

our next guest has just raised to 30 bucks a share. before we get to how amd is getting share, i'm wonder who is it gains share from. >> it's going to be intel. i think they have 1% of the market today probably get that 25% and then some over the next several years. >> what are the advantages of the amd over intel at this point in your view and how sticky is that newly gained customer kucur >> it's very sticky. it took four to six years to hit and it's starting to pay off they have a better processer they are engaged with the hyper skilled players today and will

over the next several years. they are taking advantage of what appears to be a glitch in intel's road map >> is this a permanent set back for intel in your view or does it have gains that could help offset the loss to amd >> it's going be tough intel is trying to go after non-cts technology intel will have to fix this and it will take many, many years. their process technology disadvantage, which i think is broken, will take five, six, seven years. i don't think that business model works by them behind by a year or two. >> you hinted at how impressed you are with it >> yes, i think we had it in the midwest and canada the number one issue that comes up with is lisa going to stay. there's a tremendous amount of

respect for this woman and what she has done something no one has been able to do put together a road map several years into the future. big plus for her job >> is she going to stay? is that one of the top reasons why you like the stock, we want to know is she going to be around >> yes, she's going to be around she's at the early stages of this plan. she's not motivated just by money. she's a winner they are at the early stages that's unprecedented >> thanks so much for joining us appreciate it. a religion, revolution, a revolt those are some of the words bitcoin believers use to describe the crypto currency movement take a look at this rapidly growing industry and why so many

are so devoted to it >> bitcoin is a religion >> i value this above my life. >> this is one of the most inventions in the entire history of human kind. >> do you believe in god he architected it that way because it had to be that way. >> the way you speak about it is very adamant like you're talking about religion >> more like revolution. >> yes, revolution because bitcoin isn't tied to any banks or governments, crypto purist see it has a way to revoluti revolutioni revolutionize. >> you're talking about taking governments, displacing governments. >> block chain is economic freedom on steroids. i think it will topple empires and create a new empire. >> reporter: if you think that's radical, well. >> government is organized -- >> you haven't met roger

>> i'm not here to be popular. >> reporter: ver was one of the first major investors. earning him the nickname bitcoin jesus. >> it allows money to be telle ported around the world. >> you sound anti-government >> i'm pro-peace the difference between working for a living or being a slave. when government goes around and forces everybody to buy their health care and they use the money to fund wars people just turn a blind eye to it i want nothing to do with it i see bitcoin to bring that sort of thing to an end. >> reporter: a push toward centralizati centralization it's no wonder it's been compared compar comparcompar compared to occupy wall street there's a plot twist >> the top 1% controls 99% of it that they decide to liquidate,

it would drop the value of bitcoin. there's no regulation stopping them from doing that. >> reporter: are you ready for another twist. guess who is believed to be one of the biggest players controlling it >> we got a lot of hate tweets. >> reporter: none other than mr. decentralization himself roger ver. >> they call you a fraud you manipulate language for unsavory personal profit >> i suppose you could say i'm the original pumper of bitcoin i was the first person to get involved in it all those other allocations are baseless i've never done anything of the sort if you have ed of that, i invite it to be made publicly >> that's a small sneak preview. >> no shortage of confidence there. >> there's so many characters in this corner. >> one question i have is if

bitcoin because as you pointed out, currencies are issued by governments or by central banks. will governments allow bitcoin to flourish and thrive and rival their control of money >> that's ultimately the big question that's going to determine the success and or failure of these crypto currencies. some people say they can exist without the government but really the government can do whatever it wants you've seen the crackdown in china. this will determine the fate it's all sort of being decided and determined as we speak >> when ever is government steps up and questions any of this, you do it. s exactly >> they do need the support of government >> they do

>> lots of tools if they feel threatened >> full hour bitcoin boom or boost premieres monday s&p restaurant sector up 3% in the past month. restaurant spending is on the rise one place that money is going is privately held jersey mike's subs now doing a billion dollars a year in sales. the ceo and founder is about to join us and we're about to eat lunch. stay with us who would have thought,

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welcome back restaurant spending in the united states surging over the past three months by the most on record our next guest runs jersey mikes subs one of the fastest growing franchises according to qsr. i guess that's quick service restaurant magazine. it starts as a mom and pop store in 1956. there's about 150 locations around the country bringing in 150 billion dollar in sales. you're the founder of jersey mikes but not of mike's which is the predecessor where you went to work as a 14-year-old boy >> 1956, mike's started by a guy named mike >> shocking. >> i became like the fourth owner in 1975. 43 years later, over night success. >> how many states are you >> 47. >> you've been expanding as subway has been contracting the number of stores what's the difference?

>> we are kind of go after the communities open up. no one is really doing what we're doing. the quantity and quality of the product. it's very different than what everybody is doing we open up and kind of get entren ched in the community. we're 6% up last year. this year right now about 5.5% kind of one of leaders in the industry with that >> have you benefitted from subway's contraction >> nobody benefits for it. there's enough room for everybody. we really look at all food competitors that's competitors as long as people keep coming in to buy our product, we'll be okay i don't think it really makes that much of a difference for us because we are so different. >> you have 1500 lolocations

what about labor is that getting hard to find good labor and the fight for $15 an hour. >> that's a key point for me in the '70s they said these kids today the '80, the '90s and still today. if you look at it, kids are great. we have nine or ten people that run a store, total it's hitting everybody we sort of side track that >> what is the secret? not the secret sauce but the secret of success in your business business is it the product, customer relations, corporate culture talk to me about that. >> years ago people said where do you get these people. unbelievable service they share their life and oh yeah, your subs are good >> what are you looking for? >> we're looking for the energy in the people. you three, i think you're all

in >> great >> this tv thing doesn't work out. >> we like to say lateral movement through the cones, outside. >> how do you pick a location for a new location what do you look for >> you have to see it. you have to be able to get to it >> do you own each location you have >> we lease. that's the way we go we want to be next to starbucks and chipotle >> you do want to be >> next to panera bread. the top franchise groups >> because of the traffic. >> the exposure, identity. we kind of blend well with them. >> the target ceo said the economy, the strongest he's seen in his time working the consumer in retail. do you're think you're seeing the siame thing and how is that helping your sales >> it's amazing what we have seen up and down times, '80,

'90, 2002. we're growing by number of units. billion dollar sales number came up we think by the end of this year maybe 1.3, 19.3, 1.5 billion. and we are starting to to agree. >> you have done a lot with charity. >> yeah. >> a big part of what you're about, giving back. >> so what, in high school who was it bob hoffman of hoffman ice cream. jack of the lobster shanty gave unconditionally to the kids. and when i got in business i said that's what we are requesting to do. >> i wish this was smell a vision because it smells so good. and these look very good. >> yeah. >> congratulations on your success. on the good work thank you for joining us >> thank you. >> the pebble beach car auction happening this weekend and robert franke will show us the most expensive car ever sold at auction, another really tough assignment

hi, robert. >> it's 56 years old it's got no heat, no air-conditioning, no speedometer and no windows but we'll tell you why this car is about to become the most expensive ever auctioned coming up after the break np ♪ it's inspected by mercedes-benz factory-trained technicians, or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event, now through august 31st. only at your authorized mercedes-benz dealer.

this wi-fi is fast. i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's.

big tech companies meeting today to share plans for preventing election manipulation ahead of the november big votes. who is going to be there in julia boorstin has story >>hey, melissa facebook is organizing the meeting taking place it's happening at twitter headquarters in san francisco. there is a live shot of where the meeting is taking place. now, the goals for tech companies to discuss how they are working to secure the platforms ahead of the midterm elections. on the agenda sources tell us the companies will present work to count wlaer they call information operations they will discuss particular challenges ands are what's next in terms of sharing information and future meetings. now, the gathering is scheduled for three hours. while participants use the information exchanged they can't identify the participants that shared it. now, beyond facebook and twitter source tell us google, microsoft, amazon, linked in snap and pint treys were nfrpted

though we hear linked in nap and pint treys are not attending they hoefted the gather more nine companies from the department of homeland security and fbi influence task force and we start to see impact from the collaboration. just this week facebook twitter and youtube took down profiles and pages tied to iran and russia that they say were engaged in coordinated inauthentic behavior so tyler hopefully there will be more benefits from this collaboration. back to you. >> julia, thank you very much. you know thousands of classic cars will be on the block this weekend at the annual pebble beach classic car auction and several will sell for more than $1 million. but one stands out among them all. and robert franke has the story. robert >> hey, tyler, we are here in pebble beach tomorrow night the record will be broken. the most expensive car ever sold at auction the only question is by how much it's a 1962 ferrari 250 gto, expected to fetch between $45

million to sp 60 million at sothebys tomorrow night. the gto, ferrari gto is the holy grail of classic cars proized for raising history and scarcity they only made 36. this particular gto sold by greg whitten one cht first employees of microsoft and he bought this car back in 2000 for less than one tenth of the current value he said the soaring prices and values are being driven by collectors >> it's very hard to fathom. but, you know, you're in a -- you're in a space where you have collectors and car collectors. and ferraris are the most collectible car. the gto is the pinnacle ferrari. it's an amazing car to have. >> now, whitten told me he is selling because he loved to race this car and it's gotten harder

to race it against newer more powerful cars. he says he doesn't buy cars for investment purposes but when i asked him which appreciated more since he bought it, the gt or microsoft stock, he said no question, the gto. and plus a lot more fun to own and we shouldn't feel sorry for him he loses one ferrari but he has 12 more. including two of these, the la ferrari valued at a mere $3.5 million back to you. >> thank you very much robert. what a beautiful car but wow, a lot of money. up to $60 million, shh 65 million. too much for me. sea of green on the index today. the nasdaq and russell 2000, are they signals green for the markets to move higher and the new uniform on wall street and silken valley and many points in between everyone is wearing vests. inside the craze on the second hour of power.

♪ ♪ keep your most valuable insights hidden from your competitors. the ibm cloud. the cloud for smarter business. . i'm melissa lee. on the mane ewe the rally that won't quit what's driving us higher and how should you play it in plus after a tumultuous week for the president will we see him fine

tune the emergency and focus on the positive could the rough week make progress on trade as the administration looks for a win and the investment of a lifetime or maybe a passing fad a look at the growing business of vests and why it's becoming the new uniform of choice for millions across america. the second hour of power lunch starts right now ♪ every girl crazy about a shar dressed man ♪ ♪ >> all right we have got vested interests all afternoon on power lunch. i'm tyler mathisen record day and wall street russell nasdaq, snch, the do you up nearly 170 points now up 134. that's a .5% all 11 of the snch 500 sectors higher which is the highest, materials and technology and energy in third place as you see there within the materials sector, numt and free peter leading. and big movers in tech

include auto desk, active vision, blizrd and take 2 interview v interi have it court. >> the major indexes up between 4 and 14% year to date if you are in the broader markets you probably did well. who is not feeling great stock pickers. bob is on the floor of the exchange with what's giving active managers a bit of anxiety. >> called underperformance stock pickers another dismal year morning star public publishes a report measuring performances of active vertsz passive. the latest conclusion. same as before stock pickers losing out against the passive brethren just 36% of active u.s. stock fund managers outperformed the passive peers the last 12 months according to the report. and it wasn't much better a year ago. 43% outperformed in 2017 getting worse. but it's been like this for years. why can't active managers

outperform several reasons. they have carbon the sidelines that hinders performance number two, they may have the wrong mix of investments underweighting winners a an issue. if you underweight apple for example in the last year you go to underperform and third, most important they charge fees the highest hurdle active managers face is their own fees. active funds that charge the lowest fees were able to outperform their passive peers more than those that charge the highest fees this makes sense look, you charge 1.5% and your competition charges only .5% you underperform in the long term. ben johnson who did the report concluded investors would greatly improve odds of success by favoring low-cost funds scheduled far more often than high-cost funds over the long term and they include passive as well as active low cost funds i think the key take away guys, is not that stock pickers are terrible at picking stocks

some are very good structural issues like too much carbon the sidelines, or for example, the high fees they charge, that causes a lot of the underperformance back to you. >> thank you very much, bob. from wall street to washington where it's another busy day. the president tweeting out an announcement by the way on north korea. and kayla tausche covers it for us from dc hi, kayla. >> the president tweeting moments ago he asked secretary of state mike pompeo not to return to north korea because the country hasn't made sufficient progress in denuclearizing and also because china hasn't been helping enough the trading relationship with china he says has deteriorated that comes just a day after trade talks that were reopened between the u.s. and china, closed with no breakthrough despite the two sides revisiting demands from several months ago. so certainly something the market had been watching there meanwhile as the investigations into activities around the 2016 campaign escalate with the new

york probe now securing a trump organization cfo as a cooperating witness, the president is again taking out his frustration on his attorney general jeff sessions, tweeting this morning that sessions should look into trump's opponents from the fbi and the special counsel's office listing them out in two separate tweets urging come on, jeff, you can do it, the country is waiting. meanwhile, what is the future of sessions' job. would the president consider this serious enough though fire session sns gop leaders have reminded president trump that confirming a replacement for sessions would not be feasible before the mid-terms, according to a source. were trump to fire sessions gop leaders reminded the president deputy attorney general rod rosenstein, another frequent target of the president's would become the acting ag for the foreseeable future firing both of those leaders according to the sources would be politically unpalatable, though they made the warnings to the president before, melissa.

and we have seen the president make his own decision. back to you. >> certainly have. kayla, thank you s&p 500 nasdaq and russell 2000 all hitting record highs this as the fed chairman expressed confidence in the kme in a speech in jackson hole. is there room for the rally to run. let's bring in our guests. welcome to you both. neil, starting with you, how does powell's speech inform how you view the markets the rest of the year. >> we weren't expecting a lot from powell's speech this is not the forum where the fed breaks news he confirmed the path that the market expects slow, gradual rate increases we know a rate hike is likely in september. the markets haven't priced in completely that hike in december and future out years but if you believe powell you believe the rates rice slowly and steadily as the economy can

support. >> jeff, that seems to be like all system are go at least at the fed when it comes to the rally. barring escalation of the trade war barring some of the other outside events that we can't control what so far, when you look at the market itself, does it look good to you? >> looks pretty good to us but it's not exactly all systems go because we still have some head winds, right i mean, we have strong u.s. dollar we have stocks that have really rallied this year. and looking overseas we don't have the global synchronized recovery we talked about at the beginning of the year. there are a few head winds gichg us caution but overall, you know, very good report by powell today and that does give some lift to the market and there still is gas left in the tank but we have the caution flag out. >> stocks rallying are only a problem if you believe valuations are too high. but we have earnings growth doesn't that offset that >> that's correct.

that's correct we had sprkt earnings growth for the second quarter and we should have good earnings growth for the back half of the year but if you look at where stocks are they're priced for very good news any stumble in earnings, any issues with trade could really put investors off kilter and provide some short-term volatility a good story but we are not completely all in on the mechanic heading higher. there will be volatility. >> nela what is the bond market telling you and what is it saying about risk globally. >> you know i think what it's saying is that globally we still see growth we are still seeing a u.s. economy that's set to increase the biggest risk we see is that rates would rise too quickly and the fed would tighten too quickly. these are the same risks that powell noted in his speech that there. >> there we were looking at the

10-year. 2.82 everybody thinks it's going to 3. it's come back down. that would suggest to me as usual bond investors are more sober than stock investors. >> right that's true. and you know, we are seeing that flatter yield curve, in which a lot of people read as are we dipping into the inverted yield curve? and is that the first signal that a recession is under way? what with he caution is that just because the yield curve inconverts doesn't mean we see a recession the next day or an end to the bull market what benefits investors is to stay invested, to have that mix of stocks and equities we know the market is getting more volatile. have the mix of stocks, mix of fixed incomes, probably at the shorter duration given the flatness of the yield curve. but make sure you have a portfolio that can addressny volatility fixed income is an important part of that. >> jeff what do you think what are your recommendations for investors knowing we have

unknowns be with things we can't control, particularly things out of the political realm. >> our recommendation for investors is definitely stay in the game but we -- we favor the u.s i mean the u.s. is the best game in town. and if you look at emerging markets they sold off pretty significantly this year, getting a lift today with the dollar weakening. but we are not ready to go back into emerging markets. we want to see the fundamentals improve there. we are cautious overseas and in in emerging markets and europe where we have slower growth. the sectors we like technology and consumer discretionary. >> our thanks to you both. >> let's look at amazing video just into the numerous in helo in hawaii as hurricane lane bears down torrential rains hitting the big island this hour a dozens of residents told to evacuate to skap the rush of

water. a live shot in honolulu where winds pick up, expected to hit 110-mile-per-hour. nbc news's steve paterson is in maui, hawaii, with more. steve. >> and tyler, the winds here in maui have really started to pick up you can feel the pressure of the wind right now you can see behind me the surf coming in crashing against the shoreline. it's risen as hurricane lane is now upon us. in the meantime, though, we are still a little ahead of the significant rainfall which is expected here as well. but it is whipping the big island as you mentioned, torrential rain, some major flooding in certain pockets, 10 to 20 even beyond 30 inches of rain in certain places there as drivers, residents deal with that heavy flooding and the high rains. meanwhile, the wind is coming. this is a capturing 2 storm. it has decreased it's still a major significant storm and moving extremely slow. that's good news for people

getting prepared it's good news for emergency workers who want to get the word out. it's bad news for the tail of this storm because it's going to last a whole lot longer which means those torrential rains will be here longer, which means that flash flooding, storm surge, landslides, mudslides, all much more possible because of how much rain we are expected to get in the mean we are well ahead of the rain in maui but the significant winds have started to pick up a wildfire, which is in the area just a few miles out. firefighters are dealing with that along with crews who canada blocked road access that fire at 300 acres, at least 100 homes evacuated. and more people again have to deal with now the constant threat of fire and that threat of rain which is following close behind a lot to deal with here in hawaii back so you. >> steve, thank you very much. steve paterson nbc news in mauio. >> and power lunch, a tough week

for president trump. could a rally on trade help the republics ahead of mid-terms plus netflix shares jumping after a week and it's been no downward dog for lieu lieu lemon as the stock surges 75% but one analysts bets the rally is far from over why is that in she joins us to tell us that and much more on power lunch. 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. you've got allies on the outside, & security algorithms on the inside.

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let's get to dominic chu for the market hi, dom. >> courtney one sector from the s&p 500 in negative territory, the consumer staples but the one to focus on today has been health care it hasn't been one of the leader leaders. but it hit a record high from earlier this year back in january opinion the snch 500 expired car hit a record high. up by a third of a%. look at these names. they have been upside standouts. illumina up side. cycle forward to some other names. united health care and others as well some names, tyler, big moves in upside trade today. >> back to you. >> thank you very much it has been of course ulysses been sleeping a busy week in washington

long time trump attorney michael cohen pleading guilty while paul manafort was found guilty by a jury on various charges. the president also lashing out against his attorney general and the media. and as we get closer to november, will the president shift his focus to the kmie and trade as he looks for a win ahead of the midterm elections joining us to discuss all this and more is nbc news and msnbc political analyst hue hewitt so much to talk about. we've been talking about the economy going great by virtually every measure. but obviously the focus in washington this week has been on anything but the economy i've been looking back at the clinton impeachment. and i am struck by the parallels in one sense and that is that what began as an investigation by kenneth starr of white water and then morphed into a look at the white house travel office ended up in impeachment proceedings for

obstruction of justice and perjury surrounding sex. the parallels are eerie here and the rice of the investigations took place. >> very per september disbelieve before the mid-terms. >> very per septemberive our colleague at nbc has a book out called the red and blue examining the 90s versus the decade in and the era of trump opinion appear the slow building impeachment proceedings are. they will move to impeach the president immediately if they gain control of the house in the november election. what you said at the start, tyler, i think the president in the tweets this morning started out on the economy, ended up beating up on jeff sessions. but if he sticks with one fact the one i use most of the time talking to republican groups, youth unemployment was the lowest it was in july of 2018 since july of 1966 so that when mom and dad say get a job you have to get a job if

you are a teenager because you can. unemployment drives elections. economies drive elections. and even though there is all this drama and it was a bad week for the president, we're so far removed from impeachment we're so far removed from any kind of a political crisis it was just a bad week and all the breathlessness on cable, no matter how much it is, it isn't changing the fundamental economic good picture. >> and the markets agree with you. and i would add one other thing there. so long as the american people feel prosperous and protected they tend to vote happy, right. >> yes protected is the key word. now it's not good news the president directed secretary pompeo not to go to north korea today. we had a bad news day all day long senator mccain announcing discontinuing treatment. sad news but we have a $716 billion defense budget, new technologies coming online opinion the friends in silicon valley

fighting the disinformation campaign as well as the russians it seems the country is coming together around some basic agreements protecting our elections. the president's biggest vulnerability tyler i don't know if you agree is not political not the russia investigation there isn't any evidence of collusion or conspiracy. and i've been told that by three senators on the intel committee with, cotton and burr and lankford his problems are are financial i remind you of 1937 out of no where spiroing a knew had to resign. >> i couldn't agree with you more i could not agree more the issues here -- and the fact that today the chief financial officer of the trump organization was given some sort of immunity suggests to me that the real jeopardy here has to do with financial issues, money laundering, something that is out there that we don't know about yet. let me ask you as a lawyer this question because it's perplexed me. there is a great legal

discussion over whether a sitting president can be indicted or not. why not? >> the answer is very simple he can't be. there is a federalist paper, '69 by alexander hamilton that makes it clear at the time of the framing impeachment is the only way to remove the president. the moment he leaves office he can be indicted for crimes occurred before and during and after his time in office he is not immune he just can't be indicted while in office. that's not a debate. i see people on tv that don't study it haven't talked about it i go with professor emir at yale he is the best equipped to opine on this. you can't diet a sitting president. however it's nevertheless bad to be named an unindicted coconspiratorer richard nixon was named that and you can walk into the oval office with a list of particulars like they did with vice presidenting a knew saying

you can go equitily and led you plead to the myren deal and wrap our hands and you'll be done or wait to leave via impeachment or the end of your term and we will come at you with hammers and 100 year sentences. >> fascinating times we live in hue. thanks. >> thanks, tyler. buy the dip on netflix the stock up more than 40% over 11% this week time to get in we debate that ahead on power lunch. [music playing] (vo) progress is in the pursuit. audi will cover your first month's lease payment on select models during summer of audi sales event.

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welcome back to power lunch. time for trading nation. and i'm sarah eisen. check out netflix. soaring today on track for the best week since january. the streaming giant surge driving the nasdaq to record highs. first time in a month. craig johnson with piperafter. and morgan lander with washington advisers. craig, nice week but the stock is down double digits since the earnings disappointment. what do you did with netflix right now. >> sarah we would be a buyer of this stock i remind everybody this stock is up 857% year to date off 15.5% from the recent highs. and no technical damage has been

done the primary trend is up. this is just what i would define as a correction within the context of a longer term uptrend. and i would note the next two resistance levels coming in around 37 oh 0 and more at 380 before getting back to the highs but we would be buying the dip. >> chad, i know you don't want to talk about the stock specifically but broader tech and the fang group as a whole. is it back in demand as a market leader >> great companies and revenue growth is quite robust unfortunately, valuation always matters. and when you look at what investors are paying per unit of growth, we think that you may want to look towards value stocks at this point so it doesn't mean you have to sell all tech. in fact, there are seams of value there. go it the with the syscos or oracles or for example microsoft. but you want to be somewhat more circumexpect recording growth stocks at this juncture. >> yes, value over growth.

got it chad, thank you. craig, nice to see you as well for more trading nation follow us on twitter at trading nation. coming up all about fashion on power lunch. lieu lieu lemon soaring in the past year. up 130%. one analyst says the ralowe rally far from over. and men may be the key she will join power lunch. and sleeveless is in vests are the hottest trend across the country from new york to l.a should you be betting on the sleeveless trend power lunch back in two minutes. >> announcer: and now the latest from trading nation .cnbc.com and a word from the sponsor. >> daily price flukt wakes can offer trading opportunities. however if you you are unhappy with returns while trading actively consider taking smaller positions over a greater investment time frame. evaluating trends over multiple weeks rather than hours can help

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hello, everyone, i'm sue herera here is the cnbc news update at this hour. senator john mccain has chosen to discontinue medical treatment for a aggressive brain cancer. the family statement says the advance of age render their verdict. the family thank the thousands of people keeping the senator in their prayers. a man suspected of taking aim on an upper east side apartment building from across the east river has now turned himself in to police 22-year-old ferris coroma arrived with a lawyer at the precinct at 2:00 this morning. he is charged with reckless endangerment and criminal ms. chev no injuries were reported. a freight train struck by a truck this morning in deerfield

this morning closing a major road with cleanup taking several hours and further protests took place today at the italian harbor where 150 migrants are stuck on a rescue ship blocked by the government from disembarking they did allow a number of minors to leave the ship yesterday. and this tape that you are seeing right now just into us, the former head of the cdc thomas frieden is awaiting a court hearing in new york after being charged with sexual abuse. he says the charges do not reflect who he is and he denies all of the allegations against him. you are up to date the news update this hour ly send it back to you. >> sue herera. a check on the markets right now. s&p 500 nasdaq and russell 2000 ht hitting fresh record highs. the right now the dow up 142 orp over half a% s&p 500 up by 17 or .6 processors nasdaq higher by 65 nple 8% and materials technology and energy

are the secret leaders here is names at all time highs costco auto desk and visa. well the oil market closing for the day. let's get to jackie deangelis at the commodity desk. >> crude and stocks moving higher today that's why energy was outperformer oil breaking out over $69 a barrel the upside moment up was strong. a more than 1% move today. and rigs we saw reduction. the biggest weekly drop since may of 2016 that's supportive considering that production hit 11 million barrels a day again this woke. the iran sanctions, worries reappearing in the headlines today. there could be an upset in the fourth quarter as a result of that but the question right now, how much much this is already priced in the short term the range is 65 to 72 smack in montana the middle now. >> the federal reserve symposium and fly fishing tournament is in full swing at jackson hole

wyoming. let's get out to the noted fisherman steve liesman live from jackson hole with a special guest. >> you're making that up, tyler. there is no fly fishing tournament and if there was i would have won anyway but anyway, i am here with a foremost economic thinker of our day. former governor of the bank of india. former chief economist at the imf professor at booth school. right. >> right. >> i got all three let me begin by asking but the chairman's speech. he said no sign of overheating and footnote to people you were one of the thinkers saw the 2008 crisis coming. so when you look at the u.s. economy, do you see potentials dangerous of overheating >> i thought he said as a side that we are watching for things beyond inflation such as financial fragility. he did mention the fed was on the lookout for that i do worry in the period of accommodation we have had an increase in leverage, not in the

same places as before, in new places of course the emerging markets but also the correspondent sector in the united states. and leverage plus asset prices plus rising interest rates, that's not a great combination >> given all of that, would you be steering the fed the way chairman powell is steering it with gradual rate hikes? or do you think there is a need to remove accommodation and liquidity faster >> no, i think, as he said, sort of steering between two pitfalls one is going too fast and tanking the economy. and the other is going too slow and raising questions about whether you were at the right pace and suddenly people think you you are going faster which is equally problematic i think they are doing a reasonably job of advertise attention what they are doing and also doing and not backing off as a result of market volatility and so on if it gets big and he hinted at that they may reconsider, but at

this point they are moving at this pace. >> one of the fallouts from higher interest rates has been disruption maybe that's too kind of a term but trouble in emerging markets. turkey is one example that's been out there is that a unique case? or is that the sign of things to come in some of the emerging market countries as a result of pressuring dollar and a higher fed funds rate. >> i don't think it's unique but i do think it's an outliar that turkey has had significant build up in corporate debt, especially foreign exchange denominated. and also bad policies, including the idea that inflation is controlled by keeping interest rates low rather than raising them i think as a result that has upset markets. and turkey has suffered some of the consequences of course argentina was before turkey argentina did many right things but did them slowly and the markets lost patience. i think there are other countries which have problems of

large current account deficits, large finkle deficits and possibly political change. and they will have to react when the time limit comes in away to reassure markets but in some sense i think we hope that these two countries are outlie ares. >> how about india does inia create concern in this context. >> broadly india has had reasonably macropolicy the last few years. there have been some aberrations like the demontization which slowed growth. growth is picking up right now and you know, india has reserves, 400 billion plus so it's in a better position than in 2013. >> it sounds to me to borrow a bad local metaphor you see a lot of individual fires out there but not one large conflag ration and really it takes the market to see them as a single. and there is every chance that

could happen. >> it is possible. it is possible that's why i go back to my earlier point, there has been a lot of debt build up in the emerging markets as we are aware also it's something to be concerned about. we have to watch out for it. but i don't think we are there yet. and hopefully if this process of normalization takes place in a reasonable way but also global growth keeps up. that's where i think the biggest risk is. >> we have to wrap but i want to sneak in one more question which are what are the risks to global growth from a trade standpoint when it comes to tariffs. >> i think larger than we think. because trade essentially connects a lot of countries together it's not just china. it's everybody who exports to china and borrow china to the rest of the world. and my sense is whenever we think about pieces of the global economy and we think it's insulated from everything else we find out it's more connected. my guess is this is not just about china and the united

states it will be bigger if it gets worse. >> it's okay right here but further escalation would make it worse. >> absolutely i would be very worried. >> thank you for joining us. >> thank you very much. >> tyler back to you, the round two of the tournament is this afternoon of course. >> get your flies ready. >> he was born ready i think. >> he was. he is good vests becoming a staple. look at steve liesman and the fashion world taking notice. straight ahead we talk to one ceo about the return on his investment power lunch back in two. traded . i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

it's become the work uniform for the tech geeks and finance bros we talk to well vested men who wore it vest >> you guys all have -- your vest is different. >> shade of gray and brand aside, the fleece zip vest has cemented its place in finance and tech offices from new york to san francisco >> it's the style. it's a casual look but also a nice professional feel to it as well. >> dubbed the new corporate ufrmt, retailers like moose jaw.com say sales stand by the trend. >> best sales in this haves

exploded the last three years. up almost 70 oh%. >> with patagonia the top seller followed by the north face retail tracking firm the nbd group says june ended with 13% increase year over year in vest sales totalling $76.5 million. >> somebody gave that you vest. >> first day. >> new york is the number one market for vests we saw that market explode. >> new york, moose jaw's top state? vest sales is followed by texas, california, then massachusetts appear north carolina. where it says it's seen the biggest growth recently. dick's sporting goods says new york, connecticut and california are in its top ten. >> my business meetings on the go when at home. >> it's a nice shell protects me. >> it's never left the office. >> never left the office. >> this is it. >> this is it. >> very interesting stuff. so our next guest says his company has seen a boost in sales thanks for the vest craze. joining sus scott jordan ceo and

founder of scott e vest. i think we are both appropriately dressed. scott appreciate you being here. tell us a little bit about your business and how vests in particular have really seen a big boost. >> well which, i formed scotty vest in 2000 18 years ago on the premises of the vest was the best way to carry all your electronic devices among other things and it's only recently that we have seen an explosion in our vest sales it's been incredible it's clearly our best selling item, especially this new fleece vest which is a fireside fleece vest, introduced last october. sold out almost immediately. and our factories can't keep up with the demand. we are really enjoying the fruits of our labor after all these years. >> what is it that people like so much about vests? i like vests as you can see here in fact i'm wearing several of them i'm going to strip here as we go >> you know, i think the most

versatile garment you can have rather than a jacket when you walk in you have to take it off. you can constantly wear it without having to take it off every time you sit down at a table. because without the sleeves obviously. we take it one step further by offering 15 hidden pockets and personal area network. >> let me show you the hidden pockets. hidden here in vest two. >> what can you find. >> look what i found probably a six-month-old reeses king cup you are right about that. >> the same problem as women with pocketbooks men and vests >> one of my favorites by the way, scott. >> scott, i'm curious, you probably look at fashion trends and what is you know taking hold in the world of men's fashion. if we see an uptick for instance or a demand for man purses, do you think vest tales would go down i know from various men wearing vests tell me that they wear

vests specifically because they need somewhere to hold stuff they don't have the pockets to hold stuff. >> that's exactly right. >> and they're not carrying a man purse. but if man purses become popular, i don't know, could you see business go down >> no, no i don't think man puts are becoming popular any day soon and they are never reaching the level of the vest business and that was my inspiration for scotty vest. i was a lawyer commuting back and forth from princeton, new jersey, and chicago. and carrying a bunch of devices. and a typical sport jacket doesn't have adequate number of pockets. and you know other things don't. so my solution was a vest. and therefore the scott evest if you will well and women by the way. >> that's right we don't want to be left out. you sell online. you are looking at retail stores are you selling to individuals do you have corporate clients? a lot of guys we talked to on the streets of new york and san francisco got vests as sort of a gift from a first day of work,

or a performance-based bonus hoop is it buying individualsing, corporations a combination of the two. >> a combination of the two. we were first clothing company to start direct to consumer online as the primary distribution method 18 years ago. since that time although most sales are direct to consumer we do sell through brookstone -- i meant sharper image and a variety of other stores and catalogs and in addition corporate events i'm not sure you cover owl and company extensively. we provided the vests there a a number of years. it was highly successful people enjoy getting a scott evest as a corporate gift rather than just a random polo shirt. >> we have our power lunch vests right here. >> thanks to the executive producer. >> the executive producer. i like the vest you can wear it under the jacket on a chilly

day. looks geeky but whatever this is vest number three, scott. and i guess on that note we are leaving you. i'm sh vitsing. >> scott evest.com. >> thank you very much. >> thank you >> i like sleeves personally. >> i like. >> you can push them up. but some guys said they are too restrictive. >> all unvest in. >> not just vests men's fashion is driving lieu lieu lemon strong growth. we tell you how they got men comfortable with at isleure for the next segment. >> i think we should keep these on the digital divide is splitting this country. we have parents who are trying to get their kids off of too much social media and computers, and then we have parents who would only hope

their children have access. middle school is a really key transition point, right. the stakes start changing. students begin to really start thinking about their futures. what i like about verizon's approach is that it's not limited to just giving kids new tools, it's really about empowering educators to teach in different ways, and exposing kids to more active forms of learning. giving technology is not a total solution. teaching technology, now that is.

welcome back to "power lunch. earning season is winding down, but we're still waiting on several retailers reports next week one of those names, lululemon, the stock is up more than 75% so far this year, and our next guest thinks this rally isn't over yet roxanne meyer raised her

forecasts. where's the real growth, is it on any one gender growth in apparel or clothing line >> i think it's a general view of the assortment that seems to be getting better and better when they really push the needle on innovation. clearly men's is one of nar growth vehicles, but now what our survey work has shown is that women are incrementally stepping up as well. >> we were talking about vests and the other sort of trend we're antidotally seeing is men wearing these lulu pants in lieu of regular pants to the office they're completely embracing the athleisure trend how long do you think this could keep up, or are we at a point

now where every guy has got four pants of lulu and that's it in. >> it's interesting. i think i've absolutely seen it whether it's colleagues, clients, men wearing it on planes the same way women are wearing their lulu bottoms it's very much an emerging trend. it's just barely scratched the surface. and i also think it's more much prominent on the coast than it is in the middle of the country. so i think this brand has a lot of tremendous in roads to go when it comes to building the business >> 15% of lululemon shoppers actually made their first purchase just in this recent quarter. is that a lot stronger than you've been see, is there a brand pickup, are people trying it out for the first time? what does that indicate about the future for lululemon >> i think that's really the

key. and what we learned and it began last quarter when they announced the streak that 28% of customers were new to the brand. when you think about that, you're lucky if you get the best of breed retailers like ross that get driven new customers. this is 28%. and when you talk about the ability to capitalize on the sales gains, 15% is certainly a solid number, and i think it's sustainable. so new customers are a really important part of the story. >> i've been a customer. i like the product i like the trousers. they're very versatile you can wear them and crush them into the a suitcase and they come out basically unwrinkled. several years ago the then founder of the company was

certainly concerned. where does the founder stand now? >> i haven't had any contact with him or really gotten any update as you know he's exited some of his position and has been relatively quiet i think, you know, a lot has changed since, you know, again we had a couple of key management leaders, and now there's new management to take lulu to the next chapter international has really changed in its ability to take off and start growing in markets like europe and asia. when i think about my long-term model and how i get to $4 billion in sales by 2020 it's about the dpc business, and that's really where all the excitement is. >> and the new ceo mcdonald just officially starting this week. so it'll be interesting to see if he has any real big changes to lululemon, of course director to consumer, mens, those things

we need to continue to see get stronger for lululemon >> roxanne, we're going to leave anyore thk u. check please is next let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? 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. pah! thano, no, no, nah.k. a bulb of light?!? aha ha ha! a flying machine? impossible! a personal' computer?! ha!

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airport there is a vending machine. it's operated by zoom systems and it's a uniglobe system, and now distributes vests. how perfect is that for san francisco? and it earns $10,000 a month it's in the top 12% of zoom system machines in the country >> $10,000 of vests a month dispensed by this vending machine. >> it's chilly on the plane. >> and comfortable very comfortable, ladies and gentlemen. very nice. i'm still wearing my vest. i like it a great deal >> i i think it's interesting it doesn't matter for the vest. whether it's sum, winter, there's utilities we heard, you can put your electronics in it >> it's a substitute for a purse, ladies and gentlemen. >> it's also another sign of how healthy retail is. there's these little corners if you've got a good product like lululemon clearly has, like scotty vest has, you're going to

succeed in retail. you've got to be multichannel to do it, it seems to me. but the stores don't hurt. >> gray is the most popular for finance, black is the most popular color overall. >> check it out. >> man in black. "closing bell" right now it is time for "the closing bell." i'm sara eisen in for kelly evans. a record setting day for stock chairman j. powell says gradual interest hikes are still appropriate. josh lipton in san francisco. apple ceo tim cook getting a $120 million payday. we'll tell you why coming up i'm robert frank at the pebble beach car auction this is one of the most famous movie cars ever coming up for sale can you guess which movie it was in anyone anyone anyone i'm michae