they're doing it right >> all right thanks for being here. >> yeah. my pleasure. >> it's been great having you. have you back soon >> watching the market extend some record highs today. at least on the s&p and the nasdaq dow still has a ways to go power lunch picks up that story the rest of the market action right now. >> that is where we pick it up thanks i'm melissa lee. record highs for the s&p 500 optimism about trade, consumer confidence is soaring. earnings holding up, and they have a strong economy. what could derail this record run? shares jumping on earnings the best getting battered on its results. is the run done for this retailer president trump taking aim at google, saying the internet giant is rigging search results against him. the white house says it is investigating where it goes for google from here power lunch starts right now indeed we do

i'm tyler matheson starks carving out modest gains as scott just mentioned, but off the highs of the day still today's gains enough to send the s&p 500, the nasdaq, and the dow transports to new all-time highs king dollar, though, under a little pressure. the dollar index hitting its lowest level since the end of july and a number of big names at all-time highs amazon, apple, united health among them and yum china spiking on reports it's rejecting a private buy-out offer. contessa >> tyler, thank you. i'm contessa brewer. here's what else is happening right now. if you can't get to it, chipolte will now come to you the mexican fast food chain partners with door dash for delivery service the cost of checking in your bag is taking off. jetblue raising prices for the first and the second checked bags for passengers to buy their cheapest fairs, and home price gains. they are slowing in june the latest kay shiler index shows prices rising 6.2% from a year ago, but that's down 6.4%

annual gain in may mount st. helens kbla. >> contessa, we begin with a rally that just won't quit new highs again today for the nasdaq and the s&p 500 bob pasani at the new york stock exchange hi, bob. zoo hello, melissa you know, the big complaint about this rally was that it's all been centered on technology stocks, like semiconductors and fang names that's changing. the market rally has really begun to broaden out now we have sbeks that measure how the average stock is doing at historic highs. let me show you. equal weighted indexes like the s&p 50000 index and most importantly, the value line geometric composite index. this is an equal weighted index of about 1,600 stocks. that's widely followed as an indicator of the median stock price change that tells you if the rally is broadening you can see this elsewhere in

the debate between cyclicals and defensive names. in the last couple of weeks cyclicals like discretionary technology financials, they've led, but health care has been strong as well it's a consumer name, and even consumer staples have risen. same story in value versus growth debate. growth stocks like technology stocks, they've outperformed for several years. they continue to outperform this year value stocks like energy and financials have had several periods of outperformance this year, and banks have been especially strong in the most recent rally bottom line, contessa, is broadening rally and it's not just fang stocks back to you. >> thank you trade is still a hot topic as canadian prime minister justin trudeau weighs in on the u.s.-mexico trade agreement and quebec, and we await the arrival of canada's foreign minister in washington this afternoon to start the next round of negotiation. well, let's get straight to eamon javers at the white house. >> the big question here is will canada or won't canada jump into

this deal with the united states and mexico that the president announced here at the white house yesterday. a couple of live look-ins to bring to you first in quebec where we expect justin trudeau to speak momentarily. we might get a sense here publicly of where trudeau is on the possibility of this deal the canadians have not given away much. also, a live look outside of the usdr office in washington, just about a block from where i'm standing, and can you see that we are waiting for the canadian delegation to appear there really continue negotiations you can't even say begin negotiations this has been going on for quite some time here earlier this morning on cnbc, treasury secretary steven m manchin was asked whether the united states was prepared to go it alone in terms of a nafta 2.0 if the canadians don't buy in. here's what he said. it's important for them to get this deal, and it's important for us to get this deal.

i think we'll be successful, but, again, if we don't, we'll move forward with mexico and then we'll reach a separate agreement with canada. there is some personal contra-talk between the two men over the past several months, and we'll see if that has any impact here had on the deal that could affect both economies for years to come. back to you. >> all right, says thank you very much. eamon javers can this rally keep marching higher let's bring in jack, founding partner and chief investment officer with crescent wealth advisors, and craig callahan, founder and president with icon advisors let me start with you. my notes tell me you think that the market can go 10% to 12% higher than it is today within a year's time. what will propel it there, and why do you feel that way

>>. >> can the market continue to move that way? >> the only valuation metric that i could look at or anyone could look at to argue that perhaps the market is fairly priced or cheap would be forward earnings that's because we have forward earnings projected at 26% higher than it is today anyone -- investors are somewhat skeptical that 26% is a sustainable. if you look longer term, however, valuation ebida to, say, cash flow or cash flow to ebida trading in the 90th percenti percentile really the only time we've seen levels higher than right now would be the tech bubble

i would argue if the market will go up 12% from here, it's in my view not going to be a valuation. it's going to be something other than valuation >> right craig, respond to what jack just said >> we never used p.e. ratios or simplistic price we compute intrinsic value, and we find the market to be 2 periods below our estimate of fair value it's almost unfair to compare them to what they were back in the bubble considering the health of the economy and the health of the corporate balance sheet. that aside, though, jack, where do you put your money right now? it sounds almost like you're underweight stocks or pulled money out or -- where do you stand? >> no. we're not underweight, but i'm not -- i would say i'm holding

positions that are currently in place. we've got valuations not in my view negative. technicals positive. where are the opportunities right now, i would say the only seconder that we see that could actually make some decent money over the next 12 to 18 months would be master limit partnerships this is an area that got completely tattooed on a valuation basis. they're trading below 25 -- their 25th percent i'll of their historical range fundamentally, they still haven't fully caught up to where oil prices currently are momentum relative to cash is pretty strong. you take all three of those ingredients, and not to mention, of course, the 5% to of% dividend yield that they pay and that could be a good place to be. fujss not fully there with rates higher and technicals as sectors

brokin down. that would be my long-short. in terms of equities, like i said, i steady as she goes >> the only sector you like right now in terms of value are mlp's, quickly, yes? >> yeah. okay >> so, craig, i assume you see it differently what sectors do you think will performer the best given your outlook of 10% to 12% gands? >> over the last nine and a half years the five best performing sectors have been consumer discretionary, financials, and information technology, industrials, says and health care we're still in the same bull market for the next one to two years at least, and it will be that same leadership continuing.

>> what was demand like at the cme? >> the grade for demand i gave the auction was c-plus charlie plus that was $37 billion the second leg of 104 billion in supply the yield at the auction 2.765, which was smack on the bid side of the one issued market 2.49 bid to cover means 2.5 times more bidders than securities for sale. that's roughly average 66.2 indirect. slightly above average 9% direct pretty much smack on ten auction average. tomorrow we'll clean it up with $31 billion seven-year notes, and we'll continue, of course, to monitor the notion that we are creeping back up towards that 2 90 level in ten-year not yields >> thank you very much a big day for retail results best buy among them.

vsw, tiffany they're reporting electronics, shoes, jewelry. something for everybody in look at dsw up 19% that's on my wife's expenditures alone, i believe fao schwartz coming back looking for a few good people that are light on their feet. coming up on poi power lurchl. ♪ there are roadside attractions. and then there's our world-famous on-road attraction. the 2019 glc, starting at $40,700. mercedes-benz. the best or nothing. whenshe was pregnant,ter failed,

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>> some big retail names making some pretty big moves courtney reaganan is following all the retail news for us >> mount st. helens wra can, today's results really do sort of tell us that the retail resurge ebs, that rebound we've been seeing does continue, even though the names that we're looking at, best buy, tiffany, dsw sell dramatically different merchandise. they all beat on earnings, revenues, and their comps. they also all raised guidance. the stocks are diverging just a little bit let's drill down into what we see here tiffany saw a really good number for the u.s. market, and that was driven by sales domestically meaning, not sales to international tourists that's something we actually like to see, that strength in that home shopper there for testify have tiffany

a brand that was maybe sleepy for a while, that becomes reinvigorated with new marketing and product. we'll have to see what happens with the shares at least slightly higher for tiffany there. dsw shares, higher by 20%. on track for the best day since its ipo in 2005. basically strength in every category here. the best comp in seven years onlun growth, that rate is slowing. at least the slowest in about three years. that category for best buy at least is relatively mature it's doubled in the last five years. it now makes up 15% of total sales. perhaps profit taking is here today. that current quarter forecast a little disappointing back to you, guys. >> courtney, thank you stocks on pace for its worst day

since september 2017 it's given up nearly half of its gains for the year after being up nearly 20%. is there an over let's bring in michael, who is the hard line retail tlois analyst at ubs explain to me, if you will, best buy comes out. they beat expectations and offered some optimistic guidance for the rest of the year, but their third quarter guidance pulled back. why all the focus on that third quarter? >> it's done really well for really long, but they did particularly well in the back half inevitably, the rate of growth from this business is going to slow, and that's why there is an inordinate amount of focus on the back half, in particular the third quarter. >> what is best buy doing right to be able to drive these kind of numbers >> best buy is growing on-line

they're growing in store their product availability is really good. they're benefitting from a healthy consumer environment some strong interest in the products that they sell. their customer service is improved they said their net promoter score has gotten a lot better. they're doing a lot of things right. it just so happens that a lot of that is already reflected in the stock. trades at eight times ebida, which is towards the high end of the range. we think the stock takes a breather hoor f er here for a bl they can sustain its rate of growth >> it seems like -- is there something about the third quarter specifically in taking on guidance from third quarter that is, especially troubling. i'm thinking this is a back to school period. we have the potential launch of a bunch of new apple products come in the fall.

>> it's projecting that same-store sales, but the flow-three will not be very good, and that's what the market is in part reacting to >> so you this i this is a reasonable pause it's been at all-time highs lately, obviously. >> yeah, tyler, the consumer electronics is probably a in additionish type growth sector it's not going to grow it won't decline it will be incumbent upon best buy to continue to take shares, so it can achieve some growth.

zbloor all right michael from ubs, it's great to talk to you. thank you. >> thank you >> fao schwartz is making a comeback, planning to open a new store in rockefeller center. how is it going to compete with amazon by making the store an experience wall street journal reporting the company isn't holding job interviews it's holding job auditions magicians, people in costumes, of course, and they need people to be able to play the big piano, like tom hanks and robert in "big. ♪ >> how young is tom hanks there? >> when was that movie wow. >> he was a kid. >> that just tells you how iconic fao schwartz is >> remember how big the store was on fifth avenue. it's where that apple store kind of is now. i'm curious about how they find a space larnl enough to accommodate that sort of

experienceal retail. >> rockefeller center. >> but, also, what are the advantages there over where they have been up on fifth avenue just ten blocks or so. you know -- >> more expensive in rockefeller center >> i would think so. think of the foot traffic near the lego store and see the tree and everything >> christmas time. >> absolutely. >> yeah. all right. president trump is taking on google, saying its search results are rigged and only shows fake news. a closer look at how the search algorithms work. you may soon be able to buy a piece of aston martin instead of a car. the company planning an ipo, but is it a sign that we've hit peak luxury cars? weluh lle ghback we're voya! we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement.

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zmiefrmt another luxury car maker is racing to go public >> tooil, it's aston martin, the favorite ride of james bond. they're about to go public the british press reporting that aston martin will announce tomorrow that it's selling shares on the london stock exchange before the end of the year it's from a money losing also ran into a profitable brand along the likes of ferrari, lambeau, and porsche it sold 5,000 cars last year at the highest since 2008

revenues topped $1 billion, and its profits were around $240 million. the company based in warwickshire, england, hads succeeded with high-powered very high-priced models like the $250,000 and the $300,000 bds super -- just announced plans to make an suv, electric vehicles, and a recreation of my favorite the gold finger car. that was the 1964 db 5 driven by sean connery in the movie and launched aston's long association with "the bond" franchi franchise. they filed for bankruptcy seven times since it was founded in 1913 ford took control in the 1980s and sold it in 2007 to private investors. the current main shareholders include an italian private equity fund and two -- >> a lot of these companies are betting on suvs priced at over $250,000

$200,000 we've never had a market for that product they're all jumping in at the same time. in the next year auto two, especially as china is slowing, europe is slowing for car sales, that's going to be the big bet, and the big risk >> robert, thank you >> thanks, guys. well, does miami have what it takes to win the amazon race? we'll talk to the mayor of miami dade county. plus, the story of one company fighting to get off the hook for millions of dollars in tariffs we're live from grand falls, texas. ♪ adults are just kids with much, much better toys. introducing the 2018 c-class sedan, coupe and cabriolet. the thrills keep getting better. lease the c300 sedan for $399 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

hello, everyone. i'm sue herrera. here's your cnbc news update for this hour. new numbers out of puerto rico following the devastating damage of hurricane maria almost one year ago according to a study ordered by the u.s. territory's government, an estimated 2,975 people died in the six months after the storm. the new findinged sharply contrast the official death toll

of 64, and it is about double the government's previous estimate of 1,400 deaths in wisconsin just one week after a major flash flood swamped the madison area, strong storms and up to six inches of rain last night led to even more flooding and closings of some roadways more rain is expected in the forecast for later today and also over the holiday weekend. the owner of a texas company that makes untraceable 3-d printed guns says he has begun selling the blueprints through his website despite a federal court order banning him from posting the plans on-line. cody wilson believes that selling them instead of posting the plans for anyone to view or download for free will not contradict the judge's order there are new oreo flavors coming to china.

snoi can't get behind either of those. china can keep those sticking with the classic says here thanks let's get a check of the markets says stocks are off their highs the s&p 500, nasdaq, and transports managing to hit new record highs during the session. if the nasdaq holds its gains today, it will have had 1630 trading days during the month of august with only four down days. you see the s&p now in the red down by just about a half a point. small caps are under pressure today, but on pace for six straight positive months and that has not happened since september 2009 check out the movers we're tracking for you twitter down after suspending 770 accounts for policy violations zyl zylinx is higher, and campbell -- the food company will announce this week that it does not plan to sell the entire company. tyler. >> all right, thank you very much, melissa. >> the city of miami has a lot

to offer warm weather, beautiful beaches. is that going to appeal to amazon as the company pick the site for its second headquarters scott cohen has been looking at the contenders, and he joibz us now from miami scott. >> you know, tyler, it has a lot more to offer than just that this is really a transportation mecca if you think about it. if amazon wants to text pand its footprint in latin america, this is a great jumping off point three international airports in south florida. extensive rail network it does very well for that there's another little thing that jeff besos, the ceo, is the 1982 ville dick torian of palmetto high school maybe he wants to recapture some of that. competent maybe he has a home court advantage. here to talk about miami's bid is the seventh mayor of miami dade county, carlos jiminez. we really appreciate your

joining us you feel good about miami's chances, even though it hasn't been in the conversation so to speak. >> i feel very good about it i'm not saying we're going to be, but i feel pretty good because i know what miami has to offer. some of the things you just touched on really a transportation hub. we are a logistics is a really big thing for us we have the number one international airport for cargo. we are only one of three seat boards on the eastern seaboard that's post panamax ready for big ships. we're a number one startup in the nation we're becoming a technology center here, and we're transforming miami great art and culture, and a great place to live. great weather. also, obviously, a really beautiful, beautiful place >> let me ask you as the mayor of miami dade, for your

constituents, how do they know you're not giving away the store? what can you say about what you're offering to amazon and what benefits it may -- >> we're not giving away the store. we know the benefits of having $1 00,000, you know, average salary also, the fact that amazon will be listed hear we are beginning our transformation into a diverse economy. i mean, our economy was based on real estate and tourism. we wanted to diversify that economy, and that's why we're becoming a technology center, and that would give us another push to becoming that technology center i think if amazon comes here, other companies will follow to complete that transformation we're looking for. >> let's talk about kind of this area by the numbers. we've been grading the 20 finalists, and we don't know exactly what amazon is looking for. we know what they've said.

we give miami a b plus overall not bad. on the upper tier. a-plus for population. that's one of the things they want b plus for stability and friendliness that knocks it down, and a b-plus for location. the whole deal of infrastructure incentives and things like that. where you fall short is a c-plus on talent, and you talked about trying to become a tech center of the finalists, this area has the lowest concentration of stem workers. is that a problem? >> that's what we're trying to rectify and bring to amazon here we don't have a shortage of talent i mean, mr. besos came from here we have a lot of people -- >> he came from here, but he left zhoo that's the problem. that's been one of the problems that that we've had here we have really bright people, and then they go out somewhere else to find, you know, their jobs, their fortune like mr

mr. besos, and that's one of the things when i became the mayor, i wanted to reverse. we had a brain drain, and we are slowly reversing that. we are getting more of our young people to stay here. we're one of the top ten college towns in the united states a lot of people don't know that. we would like to get companies like amazon to locate to miami dade, and we are getting more technology companies to stay here we are the number one city for start-ups in the nation, and that just, you know, didn't happen by itself we have been cultivating that for some time. >> amazon says it wants stabltd. this is florida. swing state. today's primary election day in florida. >> right >> are you concerned about a change in leadership and what that would do to the stability would you still be able to meet what amazon wants. obviously,ing -- >> imauto not really concerned about it florida is a purple state.

>> i think you'll find at the end florida will remain in the middle in terms of miami dade, i'm a non-partisan position. i may be republican, but i'm voted upon by all the residents of miami dade county in a nonpartisan way, and even though this county is actually very heavily democrat, you can see that actually, you know, that really doesn't translate much. it's not really that partisan. stability-wise, we're pretty stable we're a low tax state. we've been that way for a long time we expect to remain that way for a long time. >> all right we'll see how it goes. wish you good luck along with the rest much the 20 finalists reminder, that we have all of our report cards for the 20 finalists at top states.cn states.cnbc.com. >> thank you to you, scott, and mayor jiminez.

when the u.s. puts tariffs on foreign steel, lots of companies were hit with the bill even if the order was placed before the tariffs were in effect leslie picker is live in texas with the story of one company -- >> the answer is $40 million contes yarks we're here in the pipe yards for planes all marine these steel pipes you see behind me recently imported from greece they will ultimately go under the ground to help transport crude. these imported pipes, and others like them in the $1.1 billion project were taxed $40 million upon reaching u.s. soil. even though they were order six months prior to the tariffs being enacted. planes all american filed a request for an exemption this is the process that american companies can go through in order to seek relief from aluminum and steel imports that are now subject to tariffs.

tens of thousands of these requests have been filed many are pending this process is said to need to be streamlined or it risks stalling projects like this here at plains. >> it would take a tremendous build-out in the u.s. steel manufacturing industry we have tremendous needs in this industry not only for larger diameter pipe, which is not always manufactured here in the united states, but for the specifications of that steel >>. >> in a statement to cnbc, the commerce department said the exclusion process has been fair, open, and transparent. the administration adds that the policy does not allow for grandfathering of preexisting orders like the ones that plains had, and said that the request for an exemption received five objections from u.s. manufacturers who basically said

that they did have the capacity to make and produce this steel that was ordered from applaud. guys >> leslie, plains says, no, we can't get our hands on enough steel to get these pipes done, right? >> they basically say it's not up to the government to specify exactly what types of steel requirements we need for these pipelines. they have certain qualifications that they look for, certain safety procedures they look for, and they're a broad steel manufacturer that are the ones that were able to meet this particular project's needs now, not to get too technical here, but a lot of it has to do with the size of the pipes that were required. they're about 26 inches. of course in a six to nine month lag, and that's why after ordering them, they were tariffed upon arriving in the u.s. >> leslie picker there in texas. thank you for bringing us the

story. coming up, two messy battles. first, the president versus google he says its searches are wrig every rigged it will be addressed is he planning regulation? and john schneider versus papa john's the company's founder with bombshell accusations about the current management thdeilcongl e tas mi up great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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auto google is firing back after rigging search results against him. julia borestein has all the back and forth for us julia. >> tyler, president trump lobbing another attack at google and its peers. this morning the president tweeting "google search results for trump news shows only the viewing reporting of fake news media. in other words, they have it rigged for me and others so that almost all stories in news is bahhed fake cnn is prominent.

republican conservative does fair media is shut out illegal? 96% of results on trump news are from national left wing media. very dangerous google and others are suppressing voices of conservatives and hiding information in news that is good they're controlling what we can and cannot see google just this morning issuing a statement in response saying when users type queries into the google search bar, our goal is to make sure they receive the most relevant answers in a matter of seconds. search is not used to search a political agenda, and we don't bias results towards any political ideology every year we issue hundreds of improvements to our algorithms to insure they serve as high quality content in response to user's queries we continually work to improve google search, and we never rank search results to manipulate political sentiment. on friday plump lashed out at facebook and twitter as well social media giants are silencing millions of people and, of course, this all comes as google, facebook, and twitter

prepare to testify on capitol hill next wednesday. melissa. >> thank you some people, ed, might say that an algorithm is an algorithm, but it is programmed by human beings. is there a possibility that perhaps in the numerous updates that google publishes to its algorithm each year that things could slip in that might advance political agendas? >> it's something that news organizations for years have complained about not that it's biassed, but we don't know how it works. that it's a block box. so that's the thing. because they kept it secret for so long and they keep adjusting it and changing it, as you point out, they just leave themselves open to these charges whether they're justified or not.

one thing we know about the google algorithm is that he this tend to favor news article that is get links from looch other news articles. a company like cnn, you know, is a pretty big organization. probably gets a lot of traffic to begin with. that's part of how that algorithm has always worked, and i think there's a built-in system whether or not it's biassed, i don't think google has err exhibited either way it's more of the fact that it's always been a black box that sort of makes them liable for these charges. >>. >> what you do see are main

stream media articles. certainly not the less well read media that might be more represented in conservative circles. the main stream media that the president seems to think liens left i also turned up ten best erect i'll dysfunction pills in my search for trump news. go igure at any rate, that is what i saw. you can't really look at it any other way. >> you can't look at it any other way. the other thing, too, i don't want to reveal too much for you, but, like, the google search is often based on a lot of times your prior searches or other sort of contextual sites you have visited your result looks different from everyone else's. i did the same thing >> maybe that's why i got the ere ere erectile dysfunction i get your reference there >> one of the first things that came up was a fox news story fox news.com actually does get a lot of traffic you know, i think the charges,

you know, they're hard to reconcile, right, with what you always see engo, it's going to come back to the algorithm constantly changes. we don't know how it really works. it's different for everybody it's not a universal thing >> big picture here, though, is there any danger for google in becoming the target for the president? i mean, does this encourage a whole portion of the nation to go to binge or some other search >> i think it's -- that's less likely though it certainly is a concern. we have to live with google and facebook that -- they're the duopoly for on-line advertising and on-line traffic. if you are in the news business, you can't live without either one of them. you got to do your best to make sure that you show up. you know, conservative news outlets have claimed bias. they don't slow up as readily, so there is some fair criticism there. at the same time is it a function of being conservative or is it a function that they're just a smaller site to begin with you know, the conservative well of opinion and blogs out there

are rising, but, again, they're still relatively small compared to these established news outlets. >> just for the record, i don't use my work computer to look up the electile dysfunction ads, but -- >> we don't really need to know. >> you don't need to know what i'm searching here >> it's enough that we know -- >> right now i'm on delta airlines, by the way >> i can attest to that. ed, thanks so much not really, ed >> the economy's economic advisor larry kudlow says the white house is taking a look at whether google search should be regulated. what kind of regulation, if any, could investors expect from government let's bring in james, economic policy analyst at the american enterprise institute jim, great to have you with us you know, i'm going to key off what ed said the search algorithm is basically a black box. we're not saying that google necessarily does anything to alter its search results or what they might yield, but the fact that nobody could really understand them, doesn't that sort of open them up to criticism and to potential

regulation had you a lot of republican pop tigss and pundits worried that, again, these were these, you know, silicon valley left-leaning companies that they were bias against conservatives and conservative sites whether it's, you know, dropping alex jones from facebook, whether it's suppressing sites on youtube this was already out there the president had not packed into that. it called google one of our great companies. he is pretty much focused on his ayre on amazon up until now that feeling was already out there. the president i think is really fuelled it i think those raise the odds of there being more criticism among republicans and potentially some regulation there's already a movement to strip a lot of these web sites of their section 230

in the top 100 searches, 50 have to come from republican or conservative sources and 50% from left or democratic i don'tt through exactly how you regulate the severance. how do. >> are they alphabetical are info wars and zero hedge and breitbart should they rank as highly as "the new york times," routers and cnbc i doubt you find too many search engines doing well if that was the case as far as regulating the search engines not thought through at all. but what they have talked about is stripping the companies of immunity, the section 230 immunity from being sued for outside content on their site. that's already been talked about tp it doesn't directly go to the search engine issue. but it's a regulation they've been talking about. >> jimmy, i think this underscores a bigger issue

that is the role of social media and these social platforms and technology companies and potentially shaping political discourse. there are the allegations, right that conservative voices are being silenced on twitter and on facebook the allegations that you know facebook had an influence on the elections. and so this is sort of a bigger -- this is just the latest iteration of somebody saying big tech is having a huge impact how we think about politics in the united states. >> sure. of course what's funny here is that -- you have the president who is using twitter all the time to get his message out. you have a president who very ably used facebook to help win the election republicans are -- and conserve voices are very highly represented on facebook. so you can point to this or that episode. but overall, it's really hard to make the case that the voices are being systemically

suppressed a lot is tribalism a lot of is the president trying to gin up into into the mid-terms. but the companies will remain at the center of controversy. that's not going away. they are too big and powerful and to too sbrusive into lives for it to happen. >> maybe that's why shares of alphabet are basically unchanged. thank you. >> thank you. >> before social media was stenograph strong and important part of society. the research shows that people tuned into news outlets reflected back what they believe about the world. the same it true on social media. we tend to pay more attention to the posts we agree with as opposed to those who with we disagree with. the latest in the nasty food fight between papa johns and what john schnatter is saying his replacement and the new management it's a doozy

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kate rogers this is worse that war of the roses >> something new every day john schnatter speaking out on the new website called save papaa john asp piz aifr chain founder making accusations against new ceo steve richie saying the poor performance is rot at the pop he blames richie for bad financial decisions insufficient management skills to correct them a toxic culture and. he communicated with the board he says about ousting richie in john and asked john to become executive chairman the claim the company defied schnatter says he made a list of senior management he wanted replaced but alleges that steve richl got that list through a password knit having an affair with something in the it department papa john claims the are unfounded and schnatter supported the appointment last year in the company the says it's that schnatter is making tis

barjing statements in an attempt to distract from the impact his words and actions had on the company. this latest battle ufltding after schnatter admitted to using a racial slur on the conference call in may he still sits on the board and he owns stock. we will find out about the potential rot at the top they are doing it at every level. results to come on that. >> fascinating story thank you very much. >> thank you. >> bitcoin losing nearly half the value so far this year but that hasn't stopped the appetite of those wanting to invest the new which to play the cryptos. and rumors starting to fly about the new iphones. bigger is one rumor. we will tell what you we know, what we can surmise as the seconds hour of power starts right after this ♪

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or are they stretched. >> triple play says apple will launch three new iphones this year with the stock up already will that push the shares new highs or by the rumor and sell the new sns fizzling, maybe not so much but the housing mechanic is starting to show some cracks of slowing down and those for sale signs in the neighborhood may be out longer than they have been. a deep dive where we standen on housing and what could be next as power lunch, hour number two starts right now ♪ in the middle of our streets ♪ ♪ our house in the middle of ou street. >> welcome to power lunch i'm melissa lee stocks off session highs right now but the nasdaq s&p and transports did hit all-time highs earlier the dow touching the highest level since february higher about .1% the russell 2000, the only one in the red right now

among your lagrds today, telecom and materials and also checking on two retail stock telling two different stories. dsw scoring on a earnings beat best buy meantime falling down about 5% as the outlook disappointing specifically for the third quarter. some transport names hitting all-time highs including union pacific, csx and united airlines. >> thanks melissa. i'm contessa brewer beginning with the markets bob pisani and mike santelli at the new york stock exchange. you say the market is at a now what moment. >> yeah, contessa, not necessarily bad way. we got through earnings season the summer coming to an end. the fed has cards on the table right here of course the markets hit a new high it's been a hard-earned break out to new high i would say. under for seven months which means it's not a fluke we all know it's not a fluke you're supported by earnings but the market seems in search of the next story line

a little bit of the day tant and trade don't hurt the dollar coming down is okay i guess we are iging out the next act. >> it's funny to watch everybody grasp at straws about what could go wrong at this point it's checking off the right brokss historic highs in the markets. check. advance decline line, historic high that's a important continued barometer of health and the s&p 500 equal weight index, average stock advancing, check. earnings record highs by backway's record highs what could go wrong. you see people grasping at straw. maybe a global recession i don't think so but people talking about the slow down and the underperformance for me looking at average stock hitting new highs, the s&p 500 equal weight index, the value line index, that are designed to measure the average stock moving up, not just fang names, that's a very important sign. to me i think the market's very healthy right now. days like today not doing much

consolidation days that's healthy. >> basically the market is telling you it's constructive. the question to me going out is as we get further into the fall, 2019 becomes almost the whole story. >> yeah. >> how much of a fall off will you have in the rate of earnings growth will it be significant has the market priced it in will the market remain hard to dazzle with regard to the earnings? because you are up 8% in the s&p. today earning up over 20%. >> next year 10% earnings growth expecting. gee were we expecting 20, 22 this year? that's expect the tax cuts absorbed by then 10% earnings growth still well above the historic norm. the historic norm the s&p last 50 years 7%, around there. with all the great earnings we have had even next year we still above bo average earnings growth that's the expectation. >> bob, mike we have to see whether the expectations become unrealist. is 10% enough or do we want more thank you guys. >> the stocks continue to hit new highs vasts are they

becoming stretched or bargains left in the in joining us our guests. good to have you both. kate starting with you, you like sectors outside of technology. what's wrong with tech right now? it's been the market leader. >> well there is wrong with technology we just think that any time you get a sector that's up to 26% of the s&p 500 it's a sign that it's runway ahead of the other sectors that's an indication you may need to pull back. we recommend no more than 5% of the equity portfolio in any individual stock, including other sectors as well as tech, but more importantly no more than 20% of the portfolio be in technology that's why we think you need to look at smaller companies as well as other sector. >> announcer: from the beginning of the year to now kate, have you pared the tech position because the outperformance of technology. >> we recommended that investors pull become to no more than 20%.

that would be repeatedly pulling back and the reason is not because we don't like technology. in fact, the valuations are actually still very reasonable. >> it's portfolio management. >> compared to how fast earnings are growings you want to be prudent about portfolio. >> matt, do you agree with that in terms of, you know, spreading your eggs out, making sure you are not overweighted in technology or is there such a thing with a secretary that's the clear leader this year. >> i 100% agree with that, we eelk weight our sectors at rockland trust we have 10% in each ekter well underweight in technology the valuations are stretched in technology process if you three amazon and netflix in that bakt that's more stretched. the index is 20% more than the market consumer discretionary 10 to 15% on top of that you can pick up telecom and 10 oh 120 times earnings i know they are growing but

there is defensiveness you get in some of of the other names with dividends and so forth. we are more defense every than we have been at any time in the last couple years. >> did i hear you say roughly 10% of the portfolio in each of the ten or 11 sectors of the s&p. >> yes, that is correct. that is correct. we actually take -- the other 10% from are real estate we do through a separately managed account. >> by definition, then, you are underweight the most highly weighted sectors of the market and overweight -- dsh sometimes by a lot, the -- the least weighted market sectors, right >> correct correct. and that weighting structure actually has proven to be a better defensive poging. we don't believe you can time the markets. for our clients we fiduciary duty in the telecom stocks gets us

through the storms when they arise and no one knows when that's going to be. >> it's been tough sledding during the bull market. >> yeah, no we've been holding up well but not beating the indexes when tech leads and 2.5 times our weighting but certainly our individual names we have selected have done well relative and that's helped us. >> kate your, your highest conviction picks right now. >> i'd be look at sectors outside of technology and as i mentioned, i'm a definitely look at small and mid-cap stocks. but if you are looking for alternative large cap stock i'd be looking at companies like united technology and med tronic both have solid earnings growth. they have good prospects, good dividends, which in our view makes them more defensive. and in our view they're ones that lagged behind a bit but still have reported above expected earnings growth that to us says they are poised to continue higher we actually think the stock market as a whole is going to continue higher probably led by technology

so that's why we are saying make sure you are better diversified than the s&p 500 as a whole. >> thank you both. appreciate it kate warne and matt with rockland trust. >> apple's strong run seems to keep going shares up 15% in a month another all-time high today at 220.32 up another 1% could reports of three new iphones coming and strong shipments provide a further boost to the stock joining us to discuss that rob sira analyst with guggenheim rob good to have you with us one topic is sort of your overall view on apple in light of the expectation of more iphones and then the possibility of the apple tesla tie-up of some sort. let's talk about apple and its product lineup what are you expecting to come there? and how do you think it will affect the stock and drive earnings >> yeah, so i mean i think in terms of the iphone refresh that's coming late september, i mean, i think most people are

pretty much in agreement, as they might as many i at this stage. three new larger screen iphones. the screen size is going to be really the focus you're getting a iphone x plus which will be like 6 pft 5 inches, which is huge. that's the one that's meaningful because i think a plus size much the iphone x was meaningfully missing last time. and then you get a refresh of the -- the iphone x and then you get a larnger screen again over 6.1 inch lcd iphone which would be the main stream but larger screens will be the driver i think the -- if you look at basically calendar '18, the big driver through the year has been higher asp's iphoness have rarelily grown it's the price that's riff gone we'll anniversary the price increases but the unit growth could picket up and we could still have good iphone revenue growth coming off of really -- that had

been the best iphone revenue growth of the last three or four years. >> is there a point the screens get sort of too big and maybe people just won't want to carry them i got a bigger phone doesn't happen to be an iphone and it's fine. but there is a point at which they get sort of unhand holdable. >> you have to call them an ipad then. >> yeah, you do. >> yeah, well the ipads up -- personally i'm not a fan of the huge screens but i'm in the minority, i think. >> um-hum. >> as i said, i mean actually from surveys people last year the biggest disappointment over the iphone x was there wasn't a larger screen. clearly there are a lot of people wanting bigger screens. think of it this way people live on their phones at this stage. social media and conducting business having basically a- dsh a computer. >> exactly. >> on hand is what. >> the amount of time people spend actually using the iphone or any of the phones as phones

compared with the amount of time they spend using them on instagram or sending messages or browsing pages is a -- i'll bet it's 10 to one in favor of latter not the former. let's turn to apple and tesla is the possibility of a acquisition by apple a in the radar. >> i'm not flanning on it -- want be planning on it but i think apple -- i believe that apple is much more serious in investing a lot more in automotive than people generally think. i think people in fact if anything, the common wisdom has been that apple has been pulling back from a car but i think it's likely apple launch as car at one point. mostly because of market size. apple is approaching $300 billion in revenue if you want to keep growing that big a top line you need huge new

markets in automotive is one the reason, to, for example acquire tesla would be if you look at what apple would need to do, tesla has already been doing a good job of it the last several years. so you would basically would be buying what tesla has been doing to date to catch you up in the market. >> all right rob thank you very much. rob sira guggenheim thank you. >> thanks. >> you bet. the coming up the u.s. and mexico make up on trade leaching canada the odd man out is a tri lateral deal doable plus can goods have stood the test of time but are time changesing look at the old versus new the takeout on campbells verpsz grub hub if you are in the market for a home wait. the new report says it's not a buyers market yet. but it's coming. we'll tell you when. all that and more when power lunch returns.

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welcome back to power lunch. with the trade deal in place between the united states and mexico, the focus now shifts to canada and is a trilateral deal still possible for more on this let's go to

eamon javers petition white house. >> yeah, there is a lot of waiting on canada going on in washington, d.c. first of all, we had justin trudeau speaking at 1:00 he didn't say anything related to the nafta strategy in the 1:00 but he has a briefing expected to begin very, very soon up in quebec we are waiting on the colleagues in quebec in the media there to ask him about canada's strategy. meanwhile here at the white house they are saying they are hopeful. it's sort of a fingers crossed moment at the white house. hopeful the canadians will join the deal the president announced between the united states and mexico yesterday treasury secretary steven mnuchin was on cnbc earlier this morning and asked about that here is what he said >> i don't anticipate there is going to be a lot of sticking points i think ambassador lighthizer has done a terrific job over the last year working on details we've made progress with canada coming along on those. and hopefully they come onboard but if not we move forward with

mexico this is a great move forward for trade. >> you heard the treasury secretary there saying hopefully they come onboard in terms of the canadians. the u.s. side would like that to happen by the end of this week and then remember, none of this is a done deal on the u.s. side until congress has an up or down vote on the new deal i asked the u.s. trade eppive robert lighthizer yesterday about this and what the vote strategy is. he said they haven't begun to count the votes. but he says he hopes they can pass it overwhelmingly in congress because it brings labor and business interests together. bowing of which he says he believes and the white house will be in favor of the deal tyler. >> thank you very much eamon >> you bet. will the u.s. mexico trade agreement drive canada to make a deal in let's bring in guy herb. on the interagency policy committee and the former head of goemds mexico. good to talk to you today. how important is it for canada to be part of the deal with mexico and the united states,

guy? >> very, very important. it's always been a trilateral deal from the very beginning and mexico and canada have been working very closely together in in run up to the agreement yesterday. so they are a very important part on economic and political grounds, entirely north american, nafta or whatever we decide to call it is clearly the objective for all the three parties. >> when we are talking about what's at stake for canada, i've been out there on the dairy farms in upstate new york and they see this as a very unlevel playing field because of the supply management system in canada with regards to dairy is there any chance that justin trudeau can go back to his dairy farmers and say we have to overhaul the system. >> i certainly hope so because that will be an important part of what canada will be expected to put on the table. they did reach agreement with mexico on another important issue regarding the shipment of small packages and a compromise

was made there on an issue that's been -- did disagreements over this issue for years. i'm hopeful that some move by the canadians on supply management and dairy in particular will indeed be part of the final deal. >> so you're saying that the issues interest traditionally have been sticking points might be resolved here on the mexico side, is this deal in any way better than what they had in nafta or what the united states had with our deal with mexico in nafta. >> in some ways, yes, they have improvements in agriculture and ip, the small shipment issue i just mentioned but on automotive they're at best at a stand -- the same way they were before or slightly disadvantaged. but in the big picture i think it's better for mexico and the united states. >> what do you expect to happen, sir, with respect to the steel and aluminum tariffs that were sort of kept out of this mexico-u.s. deal and seem to be in place with respect to the

u.s. and canada? what do you figure is happening there? >> nas the elephant in the room. i was surprised there was no mention of that. in fact they went out of their way to say that steel barriers and aluminum barriers were not in this deal i think that will have to be part of a final arrangement. i've always felt that it was not the case that mexico and canada are national security risks. even more so once you have a new nafta agreement in place so i would think those have to go >> guy herb thank you for joining us today and shedding a little insight on the issue. >> thanks for having me. coming up, no soup for investors today. shares of campbell down 2% shares of grub hub on track for the best year ever with the. company surpassing in market capitalization is this a battle of old versus new or will we see the comeback. canned goods trading nation takes a look

next ♪ ♪ get yourself and egg and beat it ♪

it is time for trading nation and check out campbell soup, shall you. it's an epic food fight.

campbell soup taking a hit on the third points dan lobe could engage in a proxy fight for all the soup he can eat. meanwhile grub hub eat going for breakfast. overtaking on market cap for the best year ever matt and matt you go first. what dawning about the food fight, campbell or grub hub who do you like more. >> i like to be a bit of contrarien i'm psiing my neck out and call for campbell to do better it really has not -- doesn't have anything to do with the fundamentals more than a multimonth call rather than long term look the campbell first. the chart has broken above the trend line back to the beginning of the year. if it can stay above that will be positive. i have to admit on proxy battles technical analysis isn't very helpful. however, i think, you know, consensus seems to think the worst-case scenario was a breakup of the company and jp

morgan is taking about a sum of the parts value of $45 the downside should be limited that's not case for grub hub process. looking at that monthly chart, very, very overbought. the stock basically doubled this year rsi monthly rsi up near 90, 89 very overbought. and the stock is trying to make a higher high. if it can't i think of a lot of the momentum iers will take profits near term could be a pullback. >> matt a hungry man he likes cam bls what do you like. >> i agree with matt this is a typical example of high momentum stocks versus low momentum grub hub has sales to enterprise value of roughly 14.5 times. that's sales to enterprise value. pe multiples over 40 next year look at campbells soup and all the other staples companies and you see real value there so we would actually go with campbells soup a couple of other safe companies

to buy that have quality rising dividends, pepsy, hormel, smucker's as well as proctor and a gamble we buy those and put them away for several years. can you get hurt with companies with high moment up and multiples at this point. >> soup for two. thank you very much, gentlemen appreciate it. >> thank you. >> for trading nation head to the website or follow us on twitter at trade attention nation soup will be served. coming up the housing market showing some cracks. what does that mean for you if you are a buyer? what does it mean if you're a seller look at housing ahead.

get a quick check on the markets. the s&p, nasdaq, transports all hit all-time highs before pulling back a bit right now the dow up 40 points

s&p up about 2 points. roughly flat nasdaq up 16 points on the day some of the names on the move amazon hitting the all-time. lam research and amd in the red hitting a done grade .bank of america. restoration hardware up 4% on an upgrade. let's get to sue herera for the update. >> thanks contessa here is this hour. responding to president trump google says its search is not used to set a political agenda and the results are are not buyed towards a political ideology google says when users search for content, quote our goal is to make sure they receive the most relevant answers in seconds, end quote adding quote we never rank search results to manipulate political sentiment. a federal judge delays the opening arguments in paul manafort's second trial moving it to september 24th to allow the defense time to prepare. manafort, convicted last week on eight criminal counts, faces charges of money laundering,

failing to register as a foreign agent and witness tampering. firefighters in northern ireland have been battling a major blaze that broke out at a clothing story in the center of bell fast. no reports luckily of injuries and preparations are under way for the annual great spanish totman of fight tomorrow in the town of bunol. although the town has a small population, the festival attracts more than 20,000 people from across all bordering taking part in the most famous food fight in the world you're up to date that's the news update this hour. back to you. >> thanks sue. the oil market closing for the day let's get to jack at the cnbc commodity desk. >> crude prices slightly lower but holding over $68 a barrel. a weaker dollar had all the commodity in the green this morning along with the new records for stocks but that momentum fade add bit now the session high was $69 over that threshold. that's a significant level a continued push closer to 70.

but what's happening after labor day when the seasonal weakness kicks in or will it kick in meaning are there other factors supporting the crude trade that might give greater weight to the prices for example iran sanctions, somewhat ifs on the table whether at the comes to oil prices but closing at $68.50 about there guys back to you. >> thank you very much. lots of suns emerging that the red hot housing market we've seen in the past years may, may, may be cooling down. u.s. housing starts plunged 12% in june as you see behind me there. that is the 9-month low. july new home sales dropped 1.7% there you see that one right there. also a 9-month low and today's snch case schiller data showing a slowdown in home price growth what's ahead in the market as we leave the hot summer selling season let's bring in susan wachter abprofessor. erin terazis at zillow

susan, how bad is the slowdown if the decline in one month issious .2 of one% and number two, the actual price gains are higher year over year this year than last year. >> exactly not that bad 6.4 was last month this month, the month of june, the latest data for the month of june is 6. downtown .2 but year over year still substantially than the year over year last year was 5.7 while we see some signs of particularly at the high end it's still a pretty high growth market in terms of prices. and still showing scarcity. >> erin, you did a study or economists including susan there. indicating that- that while this trend seems to be small right now, it may gather steam aband that by the year 2020 we may have moved from this pro longed

seller's market that housing has been in for nearly a decade into something approaching a buyer's market how awhy do you see that happening? >> that's right. i think we've been in such a strong sellers market the past few years, the slightest news of a slowdown has prompted a lot of wishful thinking, perhaps among buyers out there hoping this is more than it actually is. it's important to keep in mine the housing market home valet appreciation slowed but still triple the historic pace, three times the weight of -- rate of waej growth. it's a sellers market and continues unless there is dramatic shifts in inventory or a rapid increase in mortgage rates. our -- our panelled of economists including susan on acigarette a year and a half out at best. >> what happens in 2020, susan does the inventory picture improve? what changes it? >> i think the consensus

forecast that aaron pointed to is a recession and recession from the business cycle. but from the housing market if there were a substantial increase in mortgage rates the housing market itself could cause the downturn and that would do it with a substantial rise in mortgage rate driven >> it's a mortgage rate driven or interest rate driven slowdown in-housing or interest-rate driven slowdown in the overall economy that brings housing down with it. am i understanding it right, aaron? >> that's -- that's actually a typical. >> aaron. >> for my experience typical what we see historically. >> aaron you're nodding. >> that's right. i think mortgage rates are gradually rising, slow to increase particularly or the longer term interest rates they would have to increase sharply hitting afford ability hard the other elephant in the room is inventory inventory is gradually perking up but it's been slow to recover

during the economic could recovery new home building is slow. that sector faces head winds. >> what about the wonderful millennials? what are they doing, aaron. >> millennials have actually been, despite expectations, despite stereotypes about them living the hip sister urban life they have been driving the housing mechanic the past year 1/2 out there bying their first home and starting families you know be right now we see home valet appreciation in the suburbing grow faster than urban areas. they're moving out of the urban apartment and buying the classic suburban home now. >> that's definitely susan happening where i live in new jersey god bless the people coming from williamsburg, brooklyn and elsewhere in brooklyn coming out and buying houses in my town it's -- it is those millennialless are you seeing the same thing. >> absolutely. but there is room to go there. because we still see very low rates of ownership among the millennials. 32% almost 10% below the historic norms there is a ways to go there as

we >> susan, do you see a role for tariffs and taxes, the new adjustments that don't allow the same sort of mortgage deductions playing in a role in where we see housing going. >> i think that the overall income fundamentals is far stronger than that except for some markets and they may be the high priced markets which is where the pressure -- the slight slowdown in price growth is at the high end that may be a role there. >> susan from wharton and aaron from zillow. thank you, guys. >> thank you. >> thank you. well bitcoin cracking 7,000 today. maybe good time for morgan creek launch agnew cryptoasset fund to give access to the market. we have a guest from morgan cryptostraight ahead ♪ adults are just kids with much, much better toys.

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welcome back to power lunch. it's been rough for cryptocurrency recently. but that's not stopping a hedge fund from launch agnew

cryptoasset fund seem an mody joins you now with details. >> despite the down trend we have seen in bitcoin and other digital currency the growing assets managers are betting that the institutional investors will put money to work in this space. that's why morgan creek capitol hill an index provider bitwise are launching an digital assets fund offering exposure to the top ten largest cryptocurrencies big zit boyne ether, bitcoin cash though not ripple the fund will have a minimum buy in of $50,000 and follows a slr similar move by gray scale lawmakering a similar product earlier this year designed to attract institutional investors. morgan creek cio mark yustko sees strong interest in do you mts and family offices viewing the selloffs as an opportunity to better evaluate investment opportunities. to calm investors concerns arndt safety reorganize morgan creek will store it olave line and

cold storage and conduct annual audits plus using a third party custody to alleviate worries still critics say the rise of crypt of hacks in 2018 and warnings from the s.e.c. may keep large investors to the side lines. weather noting, bitcoin of course has been a challenging year but on track for the fourth straight day of gains. it's currently trading above $7,000 yusko says it'sed headed to 50,000 in six years. >> quite a prediction. seema thank you. >> ink joining to us discuss further is morgan cream. mark yusko thanks for being with us. >> thanks for having me on. >> what kind of investors are interested so far. >> it's been a great transition. we started off investing in picks and shovels, in venture capital, companies laying the groundwork for cryptocurrencies to function better, security

tokens to emerge we started to have incoming inquires from hospitals and do you mts, foundations, pension funds. we webt went out and looked for a world class provider of a solution in crypto and partnered with bitwise to create the first dj index fund. >> was it the custodian issue that kept you on the sidelines you have been at this for some time but not in the crypt of assets specifically. >> really important point. thanks for bringing that up. we started wherewe felt secure where we with o could own the equity of businesses we went in in to see how custody, which is the issue the people are focused on today would have evolve. we think there are institutional quality custody solutions out there and being developed by firms like coin base and northern trust and others. we are excited about the direction. we think we are early. and we really want to be the trusted adviser to institutions in the crypto world.

>> to be expected, i mean the portfolio if we can show what the allocation is about 69% bitcoin. 15% ethereum 5.5% bitcoin cash. of note you have excluded xrp and excluded stellar and that's for specific reasons. you don't want to own premined coins. you don't want premined coins in which a big proportion of the coins are owned by one party is that fear of manipulation >> no, really it's about risk management right? institutions don't care so much about big returns. they want to manage risk you know, howard marks who has been a friend and mentor 25 years that is this great line if you want to be in the top five% of all funds like all the crypt of hedge funds last year, you have to take an inordinate amount of risk and could end up in the bottom five%. we are not interested in that we are. >> sorry, mark. >> go ahead. >> but if risk is a concern for

you i'm curious, what are you telling investors? yesterday we had on jordan bell fortunate, the wolf of wall street, a guy who knows how to get investors onboard and run a scam here is what he told us about the crypt of currencies. >> you're seeing massive fraud manipulation issues with tether linked to bitcoin. the huge problems i believe regulatoriwise just seeing the tip of the iceberg there is no good reason it should exist other than pure speculation getting more people involved make make money on the early investors theres no reason for it. >> jamie dimon bill gates are skeptics why should institutional investors consider this safe? >> look all of what you just shared is called fud. >> from fear uncertainty and doubt. it's a revolutionary technology, akin to the internet or the android and ios mobile operating

systems for phones this is the next platform. and we are creating something called the trust net it will allow transactions of value to occur without a trusted intermediary, without a rent seeking middleman. all the big financial institutions, of course they don't like it because it has the -- the ability to replace them we don't need -- if i want to transfer money to you we don't need a bank to take a cut of that we can do it on the blockchain openly, public, secure the bitcoin blockchain has never had one issue of fraud, not one. how many times have you or had to change the visa or master card number because of fraud it's the most secure network on the planet, the largest computer network on the planet. 7500 times more powerful than the next most powerful supercomputer. >> a couple of important points when jordan bell fortunate was talk about icos and the pace that is had scammers not talking about bitcoin, in terms of the

security of the network itself, this network itself is secure. the hacks have happened when against the exchanges which is completely two different things. the security of the blockchain itself versus the security of the exchanges. mark i'm curious, in terms of your very bullish outlook for the price of bitcoin over the next six years, what -- what in your view does the price of bitcoin reflect now? does it reflect usage? does it reflect the vibrancy of the blockchain we're -- i'm trying to understand how you view it in terms of how you are seeing the price fluctuation. >> yes, really important question and the key is like any assets there is price, which is simply the level at which two previous individuals trkt -- or two previous institutions trkted process. then the value, the underlying intrinsic or inherent value. the value of a network is determined by the number of participants, the amount of capital that foes into the network. think about this five of the largest ten

companies in the world are networks, not really corporations they don't own assets they provide services through a network. that's the same thing with these cryptonetworks is the network value is determined by participants, transactions and that growth is reflected in a very complex, log linear regression model and the value we think is somewhere around 10,000 to 11,000 per unit per bit skin when the price is below that as it is today we i think it's a buy. last december when the price was above that value we put out notice to all of the investors that they shall go to the sidelines and take a timeout. >> okay. mark thanks for joining us appreciate it hope you'll come back. >> yes. >> mark yusko. for more on bitcoin and crypto current i check out our show bitcoin boom or bust or watch it online or on demand. >> still ahead the trade deal with mexico what it mean for the

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auto stocks rallied big yesterday, although falling back a bit today following news that the u.s. and mexico had reached a trade deal the agreement outlines a couple of major changes that would affect the industry. 40% to 45% of the car must be made by workers earning at least $16 an hour to avoid tariffs it also requires that 75% of a car's parts have to come from north america to avoid tariffs let's bring in the senior auto analyst with consumer edge research it's good to talk to you today so first of all, jamie, when we're looking at this deal, what's your overall sense of how it affects the auto industry >> well, good afternoon and thanks for having me i think first of all if you compartmentalize the auto industry in term of core business, the building and selling of vehicles, but i think

as it relates to the core business there's sort of this wall of worry. we're very late in the auto cycle. we start to see sales plateau, and i think what we saw yesterday is sort of derisking of part of the trade issues. there's a broader trade issue with china, but significant production investments have been made into mexico via vehicle assembly and third party parts suppliers. to see a resolution is positive, but we're a long way away from sort of overall resolution canada is a much bigger impact for ford and gm specifically so we think stocks remain range bound here until we can see what canada's impact is here. >> does a trade deal, global trade deal, figuring out the issues with china and such, does that spark a reswrucumption in e

global buying of cars or does it slow down the decline? >> it work tuesday derisk -- the industry we already see is in a bit of cyclical decline, in some areas of the auto industry particularly among compact cars we're seeing some secular decline. at the end of the day this is about managing through some of the imposed risk as it relates to ongoing trade disputes. >> i'm just guessing james, but my guess is these two key goals, in other words 75% of north american content in cars and 40% to 45% of parts of workers making $16 would not have been entered into if they were not achievable so are they achievable and where do those relative numbers stand today if you know? >> i want to be a little careful because we're not 100% sure

where they are on an hour basis. certainly i think the bigger risk was for companies like volkswagen and other global manufacturers, not just the domestics here, ford, gm and christler, they had made big investments in facilities in mexico the risk if you were to transfer those investments was a much bigger negative. even if there were some offsetting additional costs going forward, making production a bit more expensive than anticipated, it's a lot more modest than if they would have had to transfer to a different country. >> james, thank you for bringing your expertise to the table. check please is next are you done yet?

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