absolutely the door is open and the president has said many times he has a good relationship with president xi. i have a good relationship with the vice remier. just say yes >> larry, the president tweeted this morning, and i wish i'd brought up the actual text of it, but something along the lines of how the tariffs haven't really shown up in prices, at least not on a grand scale yet while you can see it in certain areas, steel and lumber prices, that's true on a grand scale but tariffs are taxes and the more that you ramp up, the more you would expect to see some sort of ripple through our economy. is there a point that you're worried if we're looking at $250 billion in total of tariffs, does that get to the point you think these are taxes on american consume taers will

disrupt what you have been trying to build? >> well, we're looking at it carefully. we're following it carefully i don't think we're near that point. again, i think the singular story here is an economic boom that most folks thought was impossible that's really the big story. with respect to the impact of tariffs, we'll see we're following it i don't see any problem at all >> also, there have been questions about certain companies. we had an analyst we spoke with today who says he watches apple shares as his proxy for how concerning the talks are that apple would be hit pretty hard is there anything you watch as a proxy? is there anything you're watching to say, okay, it's all clear, we can continue >> we try to watch everything. on apple we've spoken to mr. many times a smart guy. he's given us good advice.

sure, we're watching currency markets. we're watching stock markets we're watching as much as we can possibly watch i think right now one issue is the chinese stock market has had a rough time of it this year i think their economy is softening. whether you can relate that to the tariff story or not, i would just say my own personal view, something called state run television doesn't work, never has and never will i don't think the chinese particularly agree with that, but we will see. we try to keep an eye on everything, our data, their data, european data. we have terrific economic advisers the treasury is hard at it we know -- we know that it's not easy to make reforms

the president believes that's the right past i happen to agree. we believe he has a mandate to do that. it's not monolithic. we just signed, congress just passed this 1,700 tariffs, we're willing to do that again, in order to level the playing field, get some reciprocity and what you call the three zeros, going to have to take tough steps. maybe it's a wake-up call. >> what advice did tim cook give you. >> pardon? >> what advice did tim cook give you? >> actually, the only thing i'll say on that with mr. cook, all conversations are private, but he really loved our tax reform really loved our tax reform. he said it to me in my office up on the second floor. i went down to the meeting in the oval office. he said it to the president.

the president liked that >> let's talk about the strong economy and what the implications will be in a lot of different places at some point the federal reserve will continue to raise interest rates and expectations have risen as economic numbers have improved. there was also someone who laid out this theory that if you see additional tariffs that will increase the inflation numbers that in turn could lead to a stronger dollar and how does all that have play in? have you thought about that and where do you think we're headed? the fed rate hikes, is it happening for a good reason or a bad reason >> look, the fed is independent. that's a key point the second point is inflation is a monetary phenomenon. you can have individual or price

increases or price decreases depending on a whole variety of things, supply and demand. inflation is a monetary phenomenon if the dollar were falling rapidly that would be a signal of inflation it's not it's been steady it's great it's a great country it's just my view in general, you've heard this before, more rapid economic growth is not by itself inflationary. more people working and prospering is not inflationary i mean, for heaven's sakes, we haven't had any cap goods increases in almost 20 years we haven't had any real wage increases in almost 20 years we've had some but very little if the workforce which is producing this boom can't get wage increases, when can they?

and how can that be bad? how in the world could that be bad? i say how pleased i am that chairman jay powell has made the same report a number of times and that's good. that's just my view. i think we're on the same track. i think that's great >> we spoke recently with jim bullard from the st. louis fed, the president there, and he raised some concerns about the inverted yield curve and if the fed continues to raise rates whether they will go ahead and invert the yield curve, what that might mean. do you have any concerns >> i follow it and always have the original model at the new york fed, and, pardon me, but i can't -- he was teaching rpi, that model was the yield on

ten-year treasuries relative to the three-month treasury bill. about 90 basis points, something like that. that's fine. that's not a recession signal. i think the recession probability from that model is very low to 12%, something like that, 13%. that's all i'll say. >> let's talk about cbo numbers put out last week. these were the numbers for the first 11 months of the fiscal year through august. they showed that receipts at treasury was up. as a result it indicated that the budget deficit with be targeting $895 billion, that's $222 billion ahead of where it was a year ago do you have any concerns about

the budget deficit and what would your solutionbe? >> actually this is one of the rare moments i will publicly agree with the cbo which is unusual for me the gap is principally spending too much i think by a couple hundred billion increase the revenues, as you noted, are up slightly even with the tax cuts i wish more people would take note of that and i wish the cbo would talk more about that because their own estimates from before the tax cuts and after the tax cuts, in other words roughly mid-2017 and 2018, they revised nominal gdp from which revenues are derived something on the order of $6 trillion higher using an average tax rate of 17.5% really cut the deficit

back as much as a trillion dollars over the ten-year period which is another way of saying we just about paid, not quite, but we paid for about two-thirds of the total tax cut, and my suspicion is we financed through growth and this increase in gdp pretty much financed the business tax cuts. we spend too much. i absolutely agree we're working on it. we're working on it. >> will the trump administration tackle entitlement reform? >> we've already tackled a big part of the newest entitlement, namely obamacare as you know on the tax bill we eliminated the individual mandate. and a lot of other reforms involved with that

and we're still chipping away on a regulatory basis to reduce the burdens and the inefficiencies of that. we're not for state run. we're not for single payer health care. so that was the first tackle we've also tried very hard to deal with a lot of work fair issues very important part of the president's agenda where we had some very good reforms in the '90s, republicans and democrats, gingrich -- >> under clinton >> very good reforms on welfare, for example. work requirements, eligibility requirements unfortunately, much, if not all, of that was undone in the last 20 years i can be bipartisan, republicans and democrats. we're trying to patch that up again. food stamps still near record. unemployment has fallen so much, things like that

smaller entitlements as far as the larger entitlements, everybody will look at that probably next year. i don't want to be specific. i don't want to get ahead of our own budget but we'll get there but i agree we have to be tougher on spending. people are quick to blame deficits on tax cuts well, i don't buy that tax cuts promote growth and wages. revenues come in federal, state, and local revenues come in we're going to run -- we're going to run deficits of about 4% to 5% of gdp the next year or two. i'd rather it were lower, but it's not a catastrophe it's not the biggest thing in the world. going down the road, of course we'd like to slim that down as much as possible and we'll work at it but i will say as i always do the single biggest factor affecting the budget in general and these macro numbers on

deficits and debt is the rate of economic growth. if you grow slowly for long periods of time, you're going to have greater deficits. if you grow rapidly, you're going to have lesser deficits. it's true for federal government and state and local government growth solves a lot of problems. so, glad you asked, our policies are aimed at growth and prosperity >> you mentioned bipartisan efforts, and i say this tongue-in-cheek, but bipartisan efforts seem to be republicans in congress working with this administration what happens if the democrats actually take control of the house and/or the senate? what happens to your plans at that point >> i don't know. i don't want to get too political on this story. i understand that there's a r k risk i'm assuming nothing right now i'm not here to forecast

politically. i would just say this. given the fact we've emerged into this economic boom, if you will, it would be a shame if efforts were made to unrachl the policies or overturn the policies and i think that argument is going to figure very heavily in the november elections the success of the economy and the success of the policies, and i think it would be a great disservice to americans if we overturned those policies. i don't want to go much further than that but not surprisingly we got here, as i said, i still think the boom is the biggest story of 2018. there was a time -- marie cite add bo d a book i did something called jfk, jfk

the democrat, was the first post-war supply side tax cutter. and it worked beautifully. 20 years later got off the rails. ronald reagan came in, a former democrat, and emulated the jfk tax cut. reagan gave him credit for it. now that was a different democratic party i get that doesn't mean it couldn't happen again. maybe there's a role model there. from whatever source -- i don't want to get too political, becky, don't overturn the good work that's been done. don't overturn, for example, the explosion in blue collar jobs. don't overturn the increase in confidence don't overturn the capital that's flowing into the united states it's working it's working >> is that an admission that tax cut 2.0 which would make these tax cuts permanent is not going

to happen before november? >> i don't think so but i think it's making the personal tax cuts permanent is a very good idea there's some assorted savings accounts in there. i think kevin brady is exactly right. i think there may be a vote. i'm not 100% sure. there may be a vote. i don't think it will pass it'll get through the whole congress it's a good message. i think we can do more on tax reform going down the road >> the yoint committee on taxation has looked at tax reform 2.0 and says it will add over ten years, something like $657 billion to the deficit. they also say that the deficit would be $1.8 trillion under that law instead of $1.5 trillion under current law by the year, i think, 2028. do you quibble with those numbers? >> always. >> that was a setup. >> even the $1.5 trillion which

is the agreed upon, as i said, with the new revisions and the nominal gdp baseline, the real gdp baseline, the revenue baseline, we've already paid probably even by cbo's estimates roughly two-thirds of that whole tax cut. one of the wonders of washington are these models, the debate about static versus dynamic scoring and that debate may never be settled when candidate trump spoke to the economic club, i was sitting right behind him that day. as a board member. he declared a 4% national goal for economic growth. i just thought it was wonderful. there was a debate inside the campaign the 4 percenters won

that's a good thing to shoot for. and i say nothing but good if we reach that goal, nothing but good will come of it nothing. you can't grow it fast enough. it's a great thing it helps everybody it helps everything not just these numbers. it helps prosperity and confidence and jobs. every american working, 155 million americans working right now and the number is rising nicely they're all benefiting from prosperity and economic health and paychecks are getting fatter how can that be bad? how can that possibly be bad how can that be bad for budgets? we're getting more revenues. it can't be bad. i'm sorry. i could go on and rant it's not personal. they're professionals. i don't do personal at all i'm just saying, lord help us

from some of these models. >> this room serves as a church on the weekends. so this is all appropriate preaching. i want to end on a philosophical note i'm not sure if you saw the column in "the new york times" on friday. i read it over the weekend he lays out the idea the government statistics that are reported don't necessarily completely report life as it is for many americans, that they fall short particularly when it comes to inequality. he's not blaming this administration he's just saying that for decades the numbers don't reflect things like the 15% of men aged 25 to 54 who are now not working. they don't reflect things like household net wealth even while the dow jones industrial average is up

household net wealth >> just hit a record $100 trillion >> he talked about the numbers have not recovered to the same extent the stock market has, and that many of the gains we've seen in gdp going back to the year 2000 where there was a 28% increase in gdp haven't gone to the lower 90% of americans do you see inequality like that, and do you think there's any way to, a, record that or, b, fix it these are not things that have happened under this administration, just a longer term problem >> the measurements are always an issue the government tries to make them better. distinguished economists much smarter than me will go after that we've had periodic changes measured too high. a lot of numbers would improve with the lower inflation rate. the real numbers would be better i don't know, becky.

that's an ongoing discussion i think it's a fair topic. i want to just -- again, in a philosophical sense -- on the newsroom floor of your station, network, my old one, some referred to me as the happy warrior. i actually have the same in the white house. i believe personally, always have that a strong, healthy economy -- it's not the only factor i get that not the only factor. but i think this country and probably others, but this country is always happier,

friendlier, more confident when the economic winds are blowing warm and the book we wrote almost two years to the day i think was the opening chapter. they were cranky, pointing fingers at each other, not happy campers. i sense it myself. apart from the statistics i think there's an emotional content to a better economy where opportunity is strong, achievement is strong. we do reward success, not punish it, where we help each other and we don't point fingers this is all qualitative stuff, kudlow stuff i'm an optimist and think in

terms of who we are and how we relate to each other, our level of civility, for example, things are always better when the economy is better. i just believe that. it's not the only factor gosh knows, my own life i've learned a lot about faith, for example. things that made my life better. you start with economic prosperity and health, things just get better. i just believe that. we're an optimistic nation i learned that from president reagan and from president trump. we're an optimistic nation as long as we're on the right track and expanding, we will be optimists. we've had a rough patch. i think that rough patch is ending that's my view others may not agree i respect it you know that. i think if this economic boom i

described, like the greatest story never told, if this continues and this continues, and i hope it will and i hope it's not overturned, elections are not, we will be a better country. we will be a better country, a happier country. i just believe that. >> larry, i want to thank you very much for your time today. >> i appreciate it [ applause ] larry kudlow, the president's chief economic adviser in front of the new york economic club with becky quick of cnbc. welcome to "power lunch. assorted people are here as well whom you'll see in just a moment that was, as we mentioned, mr. trump's chief economic policy adviser making an announcement that says, in effect, that a bigger announcement on china tariffs is coming and coming soon he says there's no reason that mr. trump's trade reforms are going to hurt the u.s. economy and so far he sees no evidence

of that. he also thinks tax reform 2.0 will probably not get done before the mid-term election let's drill down now on mr. kudlow's comments with senior economics reporter steve liesman and also austan goolsbee from the counsel of economic advisers under president obama. austan, larry said the biggest story of the year is the boom in the economy that few, if anyone, expected do you agree >> well, he did say that >> he sure did >> larry is an old friend of mine and of steve's, and we all love him he is a growth guy he's going to be prone to find that i mean, the first quarter of this year the growth rate was 2.2% and the growth rate in 2017

2.2% modest we had a good quarter. i hope he's right that that's going to continue. i don't know to call that the biggest story of the year when a lot of people think some component of that was just everyone rushing to get the exports out the door before the tariffs came in i think would be a stretch. >> steve, he said as well that there is a grand strategy on trade and a grand strategy with respect to trade with china. it seems like there are sort of counter veiling impulses that's what larry kudlow said. and on the other hand we want to hit them potentially with up to $200 billion more goods covered by tariffs. >> would youmind if i went bac to the earlier question? and i'll answer. i want to take issue with what larry said about not covering -- we cover it every day here we talk about the economic and the high gdp numbers what we don't say -- by the way, listening to larry, there are

two larrys it's the uncovered story and the one who acknowledges these are early days and that's what we don't do. we don't go to the next step and say, you know what, this is done we have raised the potential gdp level of the economy to 3% or 4% what we're puzzling over, and like austan, i hope larry is right. there's a probability he will be right. i don't think in a six-month time period you change the dna of the u.s. economy. i think there's a lot of debate right now. are we in the middle of a sugar high or in the middle of a changeover in the economy? i want to put that aside and say we're covering this story. it's a big story but it's not a clear story from an investment standpoint you say, oh, the run rate of the u.s. economy is now at 3%. most economists say no and then the counter veiling factor is the trade story which is how all of that pans out. and, again, not two larrys on this but two camps in the administration there's a camp in the administration you listen to and

they want to put tariffs in place permanently. you can see that in some of trump's comments and there is another camp, oh, these tariffs are a means to an end. they're a negotiating tactic and which one is the one that i think investors are kind of pulling with, okay, which one do we want to have here which one do we believe here the one that says it's a temporary fix or permanent >> what does austan think? jump in. >> i think that's right, there are two camps, and, unfortunately, donald trump himself is leading the camp that wants to get in a trade war. you see his advisers and, look, larry kudlow is not -- he's a pro-trade guy and always has been you saw him hemming and hawing and parsing of words trying everything he could to get the topic off of trade war with china in that interview. i think that the president wants to have a big public battle and is not under the impression if we got in a shooting trade war

that it would lead both of us into recession but the market knows that it would and that's why we're counting on, we're hoping that somebody is going in there and pulling the pages off of the president's desk or whatever they've been accused of doing. we don't want them to start a trade war. but every time they take one step toward let's have some trade negotiations, let's try to achieve something, let's try to get some allies onboard with us to collectively go confront china, they then turn around and the mr. jekyll comes out and the president begins tweeting, oh, i'm going to put $500 billion, another $1 trillion, and i think there's a big danger to the markets and a big danger to the economy and larry kudlow knows that >> but larry kudlow knows that, austan steve, larry kudlow told becky quick he sees no reason that trump's trade reforms are going to hurt the u.s. economy austan just said, no, they are going to hurt the economy. so how do we parse the details

out? >> we did an exhaustive study as have others. every time it looks like there will be tariffs imposed the market goes down there has never been a day that it looked like tariffs with china, europe, canada or mex could he were more likely than the market rallied i did a study on 1% moves in the dow, about half of them down were related to imposing tariffs and up were related to the tariffs being less likely to had a -- happen. we're talking again with china what did the market do it rallied it is of one mind on tariffs donald trump and peter navarro could be right my guess larry is in there -- in fact, it's a little more than a guess -- is in there trying to ease the effects of these tariffs and trying to convince the president that it's very difficult on one hand to do all that he's done and you have to

give him the credit to spur capital investment through the tax cuts and then take it away with the tariffs the other thing is it's one thing to say we're moving away from the heavy regulatory environment of the obama years and come back with the heavy regulatory trade environment of the trump years where you have to line up out the white house door for an exemption from the tariffs. >> all right, gentlemen, we have to leave it there. thank you. steve, austan, appreciate it >> thank you guys, we're going to follow up despite the latest trade fears the dow and s&p only slightly lower kind of to steve's point about trade. what could unsettle what seems like the calm waters of wall street the senior equity strategist at ub asset management and the director of growth equity and manager of the firm's large cap growth equity fund grant, lou, let's start with the market impact. steve laid out an excellent case it feels as though, lou, if the

market did not have trade concerns, it would be the path of least resistance higher is that, in fact, the case could we see the markets go gangbusters if these things get resol snfd. >> -- resolved >> i agree i think it does have legs going forward. and if you get these head winds out of the way, you'll see much better economic growth down the road which will be good for the markets. >> now, grant, as we talk about the idea the economy is setting the overall stage for the markets, we are higher because the economy is still good. it's not growing at 7% or 8% but still 2% to 4% or 5% is this, in fact, an environment that the markets can keep on churning higher just because the economy is doing good enough to keep growth sustained? >> i think you have to look at the economy for one point. you have to look at corporate earnings growth. that's one of the things that

hasn't been talked about in this conversation earnings have been phenomenal. it's been 20% year over year growth for the firsttwo quarters that's the expectation for q3. the multiple has come down this year s&p is at 16 1/2 times next year's earnings. if we didn't have the backdrop of this trade back and forth where it's a two step forward, one step back scenario every other week, i think the market would have been higher than it is today because the economy itself as well as the earnings growth picture for u.s. businesses are still very good >> grant, we do have this trade talk as a backdrop it's here. what does that mean for corporate profits and earnings going forward? they've been good so far what if we get this next tariff? >> they're not going to grow year over year >> you look at 2019. the growth rate will come down as the year over year impacts erode. from our perspective, we're not in the camp that you're going to have hundreds of billions of dollars of tariffs put in place.

to steve's point that would be negative for u.s. businesses as a whole. i think the baseline view for us and many other investors it's a negotiating tactic i think cooler heads will prevail in the white house to not employ a lot of the tariffs as they are tweeted about day-to-day >> why do you believe that >> larry puts it very well which is we are an optimistic nation i think most of the folks that run corporate america are optimists by nature. if these trade tariffs are put in place, you're going to have the white house phone ringing off the hook recognizing the negative implication that is it has for u.s.-based businesses. >> i want to call your attention to the fact we are at session lows for the s&p 500 in the wake of those comments from larry kudlow, the chief economic adviser to president trump lew, we want to put a cap on this, a point on this with you as a portfolio manager, does this change the strategy, the

means by which you employ that capital that you have, do you change your overall thinking of how you invest because of these trade issues that are happening? >> from our perspective, no. at the end of the day it would be only a fool would think that a full-blown trade war wouldn't have a big impact on the equity markets. but, again, going forward we think cooler heads will prevail and something will get resolved. now if we look into 2019 where do we see the best opportunities? they still lie within secular growth opportunities i think those are the types of names or companies that you can buy in good times and in bad so you don't have to try to make that big mac row call to find the winners and losers >> thank you for the market comments there well, we have, again, at least some china issues we have to talk about with regard to trade. let's bring in two people, a

professor at columbia and the chief investment officer and an honorary professor at the chinese academy of sciences. patrick, can we begin with you because larry kudlow made a few comments with regard to china. one of the things i want to bring up is the idea kudlow says he would tell the chinese to just say yes on some key issues of trade so, in your mind, patrick, are there any issues on trade that the chinese can just say yes to? >> i think the administration's approach has made it more difficult, actually. there are specific-- the more specific the united states is about exactly what it wants from china and how to get off this escalation path that we're on towards a trade war, the better it will be

the broader the ask, the general statements that china's cheating us and, you know, tariffs are a good thing and will terrify them, what that does is it kind of gets china's back up against the wall i think there are things the united states and china actually have in common there are serious differences. one interesting thing here is this notion that i've heard many people in the administration say that somehow china because of its economic troubles, all it needs is a kick from the united states and it will be down on its knees and asking for mercy and i think that really misinterprets the nature of the problems that china has. china, a lot of the imbalances that develop in china's economy were actually in response to an export shock from the united states back in 2008.

and rather than another export shock actually pushing china in the opposite direction, in the direction we want it to go, i think it would actually push it further down the path of closing its markets and sort of building a wall and i think that's -- the danger is we're pushing china in the wrong direction instead of a direction that we want it to go. >> john, patrick's answer has a lot of meat to chew on there and i invite to you do so. let me tee up the question this way. do you believe the administration and the president specifically wants, above all, to change chinese behavior or, alternatively, to hurt the economy to the benefit of the u.s. economy if it's the former, change china's behavior, is he going about it the right way >> first of all, i agree with patrick on an awful lot of what he said. second, to your question, i think the goal is a third one

which is domestic political impact this really is not a chinese adventure at all let's talk about what we can get from china if you want to negotiate with a foreign government on trade issues, first of all, you have to have a clear objective, as patrick said second of all, you need some people in house that know where everything is buried inside china. long time china hands, they don't have them. we're going after these blunder bust goals our announced goal is to trade the merchandise trade deficit which means stuff that goes on containers, on boats and get shipped. manufactured goods that's not the right measure of trade if you even did want to change it. trade includes services and ironically if you were able to reform intellectual property laws in china in a way that allowed the u.s. to export more services which is where most

patents are attached, exporting more services would drive up the dollar and drive up the merchandise trade deficit. they're shooting up the wrong weapon we would like open markets we would like chinese government not to mess with our companies in china, which is the biggest story. and we would like protection of intellectual property around the world. that's difficult in china because they don't have a court system that's really set up to do that. there are a lot of allies in china rooting for us, alibaba, all those kinds of companies so this is not something you should do with a cleaver trade is a very complicated issue, not a headlines issue >> patrick, do you think the chinese economy is on shaky enough footing, or is fragile enough that they would do a deal with the u.s., or are they much stronger than president trump is potentially giving them credit for here >> i think the chinese economy is on shaky ground

it's been on shaky ground for a while. mainly because of imbalances that have developed because of this credit expansion. it was in response to the slowdown globally. an overreliance on investment, overreliance on credit has definitely put the chinese economy on some shaky ground how that will play out, you know, people have different views. but i don't think it's in the united states interests, in the interests of the u.s. economy, or it would be helpful to the u.s. economy to sort of poke a stick in that and try to make it worse. i actually think it's in our interests to try to help them work through those issues and work through those issues by doing what they said they wanted to do several years ago which is open up their economy more and make it more market based. they sort of have gotten stuck and haven't made progress. and i think this approach of trying -- the u.s. versus china

only one can win actually -- ironically what it does, it makes the chinese more likely to simply blame the united states for whatever troubles they're encountering instead of looking at what they need to fix it's an easy solution to say, well, trump's attacking china and that's why we're having a tough time >> all right patrick with silver crest asset management and to the bond market we go rick santelli doing what he usually does, tracking the action >> reporter: hi, tyler it's just so fascinating not that many years ago we were scrounging the economy for green shoots and now have growth everywhere and scrounging for weeds. the tariffs are an issue but look where equities are resting. look where the ten year is look at the interday chart yes, we failed again at least up to this point at 3%. getting nearly up to 302

and really if you look at friday's settlement it's rounded to 3% but it wasn't at 3%. the real last test of 3% on a close was the early august as you see on the next chart beginning in april with regard to 10s and the dollar index is not having a good day. if you look at the charts over the last 30 years, the median middle price is roughly right around 95 which makes sense. if you open that chart up, what you see since mid-july is we're about to have the lowest close since the end of july. however, that low represents up over 2%. courtney, back to you. thank you very much, rick santelli the dow and the s&p sitting at session lows two tech heavyweights driving down the nasdaq, amazon and apple. kes p tech analyst gives us hi ta on those stocks that's up next on "power lunch."

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apple on pace for its worst day since april. amazon on track for its worst day since late july. let's drill down on amazon first. citi saying the company should split its retail and cloud businesses for a number of reasons including reducing the risk of increased regulations. let's talk more about this joining us is an analyst brian, thanks for joining us i know you also cover amazon this is not necessarily a new idea many folks have i had to with the idea of amazon splitting off some of its businesses citi believes now is the time to do it. what do you think? >> i think it's a bullet you don't need to use today. the stock has been a monster, go back over five years up over 500%, the s&p is up over 72% i also think a lot of amazon's pixie dust sprinkles on aws,

adds a little magic to it, an allure and it's helped the business i just think longer term might make sense near term bad idea >> what about it makes apple bigger and bigger, reaches that market cap and potentially has a target on its back from the likes of certain folks in washington, d.c., when it comes to regulation. >> look at the market share numbers. >> let's switch gears to apple larry kudlow saying tim cook really liked the idea of tax cuts he's said that before. i bet he doesn't like the idea of tariffs they sent a letter to the representative outlining some products that would be hit by the tariffs. iphone wasn't one of them. why not? >> well, i think, you know, tim cook had spoken with donald trump earlier in the year and i think they came to an agreement the iphone wouldn't have an issue, and i think so you saw

things like mac mini or apple watch or air pods, accessories that make up 5%, or 7% of revenue, came through. i think they tried to protect the iphone is my answer. >> you raised your price point to 300 service is the real value? >> last week's event, three new iphones and an apple watch what i see is all the services that this really unlocks so whether it's machine learning, whether it's augmented reality, new games, that's really what all these devices do so when you see this a-12 bionic chip, you see a new chip, i see all these service that is can unlock -- and they showed that at the event >> it is about the data. they also have a privacy premium, some people say apple has been so tight about consumer protection and protecting that data does apple have a premium built in or should it have that

premium given its business structure? >> i think it's starting to. i don't think we're there yet. i look at apple as the robert jordan of tech when you take a look at all these companies selling your data without you knowing it, here is a company that fought the fbi. went head-to-head with the fbi over your data when you try to get into the home, into the car, they're going to be so embedded in your life, if you don't trust that tech company, you're not going to buy their products. >> got it. thank you very much. i appreciate you being here with us today sales force's ceo marc benioff will buy "time" magazine why magazines and newspapers are becoming the new must have accessory for the uber healthy ats xtn ow lchth ine o"perun." i think that she's a very nice girl...

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well, the salesforce co-founder mike benioff and his wife lynn have agreed to acquire

"time magazine" the price 190 million cash he joins the ranks of other titans who have purchased media publications recently. he said he's not going to be involved in the day-to-day operations or editorial decisions. here is walter isaacson, professor at tulane and an alumn of "time magazine" and time, inc., as am i. walter, good to see you. >> hey, tyler, our old company. >> our old company has -- where has it gone? well, part of it -- >> he paid a high price. >> he paid a high price for a property that apparently has an operating profit in the 30 to $40 million range. was the price right? >> well, you talk about what was in that price, with liabilities, subscription, database rights you have, but i trust mark benioff, if anybody knows how to price something, he does he's doing it for the right

reasons. you could have had different private equity funds, others come in to do it, try to break it up or milk its circulation base here's a guy doing it because he believes in it, believes in the brand and i couldn't be happier. >> it -- talk to me a little bit about the advantage of having a sole proprietoproprietor, wheths benioff or luce who started the whole thing about 95 years ago as opposed to having a corporation own it which is better? >> you know, we always argue that back and forth. we can talk about the days when the solsberger and graham family solsberger owned "the new york times" and you can look at "the new york times" when it was run by the newhouse family and the pressures of being more of a public corporation i tend to think that a

well-intentioned, good sole proprietor starting with ben franklin and now going all the way to mark benioff is probably a better way to run a news operation. that's what henry luce did when you start making it a public company that can be bought and sold and activist shareholders, you lose what a media company has to do, which is keep an eye not just on the shareholder interests, although that's part of it, but also the stakeholder interests, the reader interests and the public interests. as you know, tyler, because you passed it on the old 34th floor at the time life building like i did, henry luce's will used to sit on that floor and he said that time, inc. be, had to be operated both in the interests of his shareholders and the public interests that's probably easier to do with a sole proprietor. >> so, walter, if you're a sole proprietor of one of these organizations, these news organizations, is there an expectation of a return on

investment or profitability or is this sort of like owning a sports team? it's a passion project in the end. >> well, clearly there's a mix of both feeling good about doing something that's civic and virtuous, also hoping to be able to take a business that is a profitable business and if you take the "time magazine" brand and the ti"time magazine" journalism, you can see conferences coming out of it, you can see events, you can see great digital and video now being done on time.com so i would think just like bezos with the washington post, i would think mark is trying to make it bigger, better, more profitable but he's also doing it not saying what is the maximum return on investment i could have had for this 190 million? >> investments aside, is there anything that should be read

into the idea that they want news dissemination outlets is there a fear that they will try to influence news flow should america be worried about that it feels as though the trump administration has made jeff bezos that sort of a target. >> hey, we've always had media barons rupert mourdock is a media baron, whether or not he has controlling interests or he is partly publicly owned. we've had media barons throughout the 250 of great media in this country and, yes, there's always a risk that some media baron, william randolph herst, rupert mourdock, henry luce, jeff bezos, there may be a fear that they somehow would use their outlet, their publication both to advance their political goals or to advance their personal and business goals. so you've got to be on the watchout for that. you don't see a hint of that in jeff bezos, and i can promise you, you're not going to see a

hint of that in mark banioff i know him he's going to be purer than the driven snow when it comes to running a media outlet. >> very interesting. let's talk about the three magazines that meredith still has on the block, "fortune" and "money" which could be a parlay and "sports illustrated" which they've voiced an interest in selling. who would the natural buyers be and which of those will get the best price, maybe a bigger price than "time" did? >> you're a veteran of "fortune" magazine >> no, "money. >> it was all under don huey. >> it was. >> i think that's a really good property you might even go off set and ask the people at cnbc do they want a good magazine and media property because it's good to have these things under the umbrella where you have video, where you have a cable outlet, broadcast outlet, you have a

conference division and print and digital online by the way, print has gotten a bad wrap as a technology, but print is not the worst of all technologies it's a wonderful medium for display of information, for conveying it, for showing advertising, for getting people to pay for subscriptions so if you have that mix, i tend to think a parlay of "money" magazine as a business magazine, adding "money" magazine as personal finance with "fortune" as a business magazine is a great opportunity for somebody to do everything from conferences to video to tv shows. >> we've got to leave it there. >> with tyler mathisen as the face of it. >> only if you'll come back. only if you'll come back walter isaacson, thanks a lot. all right. apple announcing a big push into health care. we're going to talk with the head of a small private company who can now count apple as its biggest rival. plus, hurricane florence has passed leaving trillions of

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"power lunch." darker clouds ahead. that's what the imf says for the outlook of the global economy. are they right if so, what does that mean for the markets? commodities, autos, billions of dollars of goods will be hit if the proposed china tariffs go into effect. what it means for the ountry's biggest stores and your wallet and a company that is saving you life and ekgs on the go and how it works, how users and doctors benefit. how they plan to take on apple the second hour of "power lunch" starts right now welcome to "power lunch. i'm dominic chu. the nasdaq is "the biggest loser" so far today. you can see the nasdaq off by 1 full percent so far. amazon, apple, alphabet,

facebook, they're all falling today. amazon "the biggest loser" on reports the company is investigating some internal leaks the stock is nearing a three-week low twitter falling hard after nation analysts lowered the price target on the name macy's, nordstrom and kohl's on the s&p 500. caterpillar moving dow, dupont and 3m moving the dow industrial higher. >> i'm tyler mathisen and bob pisani at the new york stock exchange a lot of pressure on the tech exchange. >> we have problems with tariffs. we have problems with the banks overall. not a lot of energy. take a look at the tech names, apple, netflix, all the fang names. apple is down about 2% you think it's bad here. shanghai hit a 52-week low today.

we're seeing new lows across the board in the big tech stocks over in china, including ones that trade here like alibaba that's a new 52-week low jd.com is a 52-week low. it's pretty tough here social media stocks, you've heard about twitter. that's all the social media again a couple of weeks to the down side are moving down again today. i mentioned the tariff issue mr. kudlow, the white house economic advisor, larry kudlow was on at 12:50 or so. there's that circle where he started talking saying tariffs could be coming soon, more tariffs could be coming soon you see the market take a leg lower. tariffs the marginal mover of the stock market the other problems the markets are having is the banks are doing nothing and haven't for a long time. again today, another 1% down day. many of the stocks, believe it or not, are not far from 52-week lows that's hard to believe with the s&p close to an historic high. citi moving 9%, 10% for pnc,

usbancorp. without banks moving forward it will be hard to keep sustaining highs on the s&p. >> thanks, bob well, as president trump gets ready for another round of tariffs on chinese imports, the head of the international monetary fund says the outlook for global economies has deteriorated due to trade. >> clouds on the horizon has not become lighter but darker. >> that's christine lagarde. is she right let's bring in ben man deli at jpmorgan and james investment research ben, i'm going to start with you. what do you make of ms. lagarde's comments we have larry kudlow saying he doesn't see any impact to the u.s. economy of the tariffs. what does it mean for the rest of the world and emerging markets? what's the ripple effects? >> tariffs are not terrifying, to begin there are a few reasons why you

might expect a sang win media outcome. one is you have to think of tariffs in the product constellation of -- a few months ago we said we have nafta on fire, we have a situation with europe, we have auto tariffs in the pipeline and of course china. now there's been some resolution on those other ones to some extent moving in the right direction. so in line with the view that the medium term outcome is a negotiated solution, the question in terms of china is whether this dispute goes on long enough to cause enough damage to the u.s. economy before you get that medium term bilateral resolution that's where i think the tension lies in this latest round of tariffs. so 200 billion going back to kudlow's comments. there's a reason we haven't seen tariffs affect the economy they've been relatively narrow and relatively small 200 billion is different it's broader and those are products that are not the low hanging fruit of protectionism

those are ones where american companies depend on china quite a bit and so the effects of those tariffs will be broader. >> when you leap from putting tariffs on roughly 1/10 of the chinese exports to the united states or $50 billion and then you quadruple that and you're coming up to close to half subject to tariffs, that's a different -- that's a different thing. >> not just the dollar amount. the share of chinese exports that are in those product groups, and so for the initial $34 billion tranch, only 6% came from china relatively easy. >> where's the off ramp here where's the off ramp do you see one >> this has to stabilize the worst case scenario is that it stabilizes and reverts into the background after this latest tranch the best case scenario is that you do get a bilateral resolution for this trade dispute, but there's no way you can keep on self-inflicting those wounds via escalation and

these types of magnitudes. >> barry james, we want to bring you into the conversation here as we talk about what ben just spoke about, is there any reason to think that the trades playing out the way it has, small caps, domestically focused companies, does that continue to play out or is there hope or optimism that a deal can get done and benefit the entire market cap spectrum >> i don't think there's much hope for that shift until we really see some negotiations that come to fruition. i view this a little bit as the kids on the playground and they're playing keep away and we're saying we're going to keep it for ourselves, maybe even go home you look around the globe. bonds haven't done well. international hasn't done well emerging markets are in a bear market the only thing that's been working has been our stock market and it's been narrow within that as well. what's interesting from an investment standpoint is the change we've seen just recently in the last three months has become a little more defensive

health care and utilities. strange but those have been leading the market so i think the market's starting to take into account some of the possibilities of this and i don't think the long-term result would be very good if it really does come to fruition. >> thank you both. ben mandel and barry james with james investment research. certainly a huge topic to talk about there. right now we've got a market flash on what's happening with apple. let's head out to josh lipton in the bay area. >> headlines are that fitness trackers and smart watches in fact won't be included on that tariffs list, that proposed list of 200 billion of chinese goods, this coming from bloomberg which notes that the u.s. has also set up specifically to spare apple watches from those tariffs the news that would affect both apple and fitbit apple did introduce that new watch, the new version, larger display, center design

remember tim cook in late july actually said his wearables revenue exceeded $10 billion over the last four quarters. that actually pailes in comparison to the iphone reports that fitness trackers and smart watches will not be included on the tariffs list back to you. >> thank you very much, josh lipton on a cloudy day in the bay area. florence may have weakened to a tropical depression but it continues to linger on it continues to dump rain down in the carolinas jackie deangeles is live in soggy wilmington, north carolina, where flash flood warnings remain in place i gather, jackie, stores are starting to reopen >> that's right, tyler let's start with the rain you mentioned. it's been on and off an hour ago a big clap of thunder and then a shower comes down you're right, folks that have weathered the storm, they're up and out and about, shopping,

refueling, they're getting supplies, but the danger from hurricane florence isn't over just yet the problem right now in the region is flash flooding i'm standing in front of the cape fear river here and just west of us in fayetteville is the expectation of this river is it will crest at 62 feet causing more widespread flood. you don't know where the flooding is going to necessarily occur. we've been in places where we've seen it, it's receded, then we'll drive somewhere else and there's water that you didn't expect to see there. what it does is create a labyrinth. almost a maze. very, very difficult to navigate around and very dangerous as well the governor of north carolina saying if you were evacuated from this area, do not try to drive in tonight because some of these roads could be completely washed away. so right now there are lingering frekts this storm and this is a community that's trying to rebuild in some ways but coping with this lingering effect at the same time. also remember that wilmington

right now at this point is sort of becoming landlocked like an island and that's very isolating and it's very difficult to get business back up and running when you're trying to get supplies here and you're trying to get help here to help folks out, guys. >> all right thanks very much jackie deangelis please be safe at the cape fear junction what does now happen with fema what steps do they take? how prepared are they to deal with what could be millions or hundreds of millions of flood insurance claims how will fema handle the impact of hurricane florence? let's bring in john copenhavefavor he's under the clinton administration john, just looking at the images that jackie deangelis showed us, is it safe to say that the worst is over or what else is going to happen now what are they going to have to deal with? >> it's not safe to say that the worst is over. there's going to continue to be areas where the water is going to rise perhaps even for a

period of several days because the water flows down from the land into the rivers and the rivers gradually rise, flow into other rivers so it's going to take some time for this water to make its way out of the entire basin that it's been falling into it's going to take some time, and then once the water starts to recede, then damage assessments can take place and we can start assigning areas that have been hardest hit, areas that have been inundated but even then we're going to have to see what kind of damage was done we know flood damage is in several particular categories, but what kind of contamination might there be in the water that will necessitate some of these areas actually being condemned so there's a lot that we're going to have to find out. >> john, we've learned from recent events, hurricanes in the gulf coast region or what happened with hurricane harvey and irma, it does take a long time to recover. soliai out for us what you

think. you've seen some of the images you've seen the statistics for how big the storm was. what kind of a time line are we thinking about here in terms of what it will take to get this i wouldn't say fully recovered but perhaps on its way to being a better situation >> i think the way to put it is to get it to some new normal because the old normal is gone there have been changes in landscape because of all of the water inundation the new normal will be hard to visualize but progress towards that new normal, we're going to have to get the power back on because when the power comes back on, when it's safe to do so, then people can start to power up some of their appliances, air conditioners and refrigerators, but in the meantime some of those items are going to have to be taken out of the homes, rugs, even siding will have to be taken out and trashed. and some of that trash may even

be considered toxic waste. so a lot is going to have to be done and two points here. we shouldn't be jumping the gun trying to figure out how much this is going to cost us we should be going through the steps that we know we have to take to begin the recovery process from a major flood we've done this before we know what kinds of things that we're going to encounter. we know when it's best for fema to step in under the stafford act and provide assistance to the state and to their local jurisdictions. so this is something that we know something about even though this is -- these are neighborhoods that have been flooded and these are people that live there and stores that have been impacted. >> john, we know that only about 1/3 or maybe slightly more of folks in these high flow zones actually have flood insurance. >> right. >> how much can fema step in if

you're a family that doesn't have flood insurance and you've lost everything? are you -- are we financially secure enough, the fema programs, to be able to cover all of those that need it most >> fema can provide some help. it can provide up to $34,000 per household in a program called individual assistance but sadly $34,000 is not going to begin to cover the losses that a number of these families, a number of these people have experienced. if they had flood insurance, then they're going to be better off. even then they're going to be starting from scratch. they're going to be starting from homes that may have to be raised so they may have to find new home sites if they are able to have some reimbursement from the fema individual assistance program and from flood insurance, then there's a better chance that

they're going to be able to climb back on their feet, but it's going to take a long time even for the people that have insurance. even for the people that understand registering with fema and getting into cue for the individual assistance amounts that may be available, it's still going to take time. >> we got it this is a big storm. it will be a big recovery effort thank you. we hope you'll keep us updated on the progress. >> thank you. new round of tariffs could hit one of america's ports particularly hard. that would be the port of l.a. that's a live shot of it right now. look at the containers on that vessel good luck to the person in charge of it next. plus, an ekg at your fingertips literally a look at what's behind it, competition from, yes, apple ano of alive corp is up next ry serhant will weigh in on a

softening luxury market. "power lunch" back in two. many people living with diabetes

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let's bring in gene seroka executive director of the port of los angeles thanks for being here. we ran through the big numbers for 2017 how much of what we saw last year, what we're going to see this year could be impacted by an additional round of tariffs can you put it into numbers for us for the financial impact and potentially also the volume? >> if we add it all up, coordinated it will be about 25% of our laiden cargo that would be impacted. that would stretch containers from l.a. and back. >> what kind of goods are in this cargo what would happen to those goods? >> three things could happen the types of cargo are those that go into the manufacturing process. about half of all of our imports into the nation in los angeles we also have goods that we buy at the stores, consumer goods. what will happen probably three things. one, higher prices for us as consumers. two, margin cuts for companies, which could impact hiring and, thirdly, shift in trade volumes

making the trade volume murky. >> still playing the what if game we don't know exactly what level this is going to happen if they end up coming but we have had some tariffs instituted. do you have the impact so far? any real world impact? it looks like volumes are up from last july but we also know we have a very strong economy and consumer spending is quite strong as well >> all of that's correct what we did see is orders being pulled forward by some of the nation's major importers so the first half of the year was strong we saw a precipitous dip in cargo volume in the month of august even though for the port of la the month of august was the second busiest under totality of our 111 years of operation. >> but, pete, importing companies have been pulling orders forward, did i hear you say that >> that's correct, tyler. >> so how do you then plan ahead for your business?

if that's happening -- >> we've done a lot -- >> go ahead. sorry. >> we've done a lot of work in the area of digitization with general electric transportation to give us a deeper line of sight of cargo coming towards us that information is shared across our stakeholder groups for assets for cargo. >> what's your biggest concern right now, gene, if this goes into effect? there seem to be some lobbying activities >> number one, negotiated settlement back and forward, it's stress l stressful. getting down to the negotiating table, it's important to us. we back 100% to make sure that we have a rules-based trade and investment system that supports our nation's companies and

workers and the ability for that to move forward so we can start moving the goods again is of greatest importance to us. >> got it. thank you so much. gene seroka from the port of los angeles. coming up, citi is suggesting amazon should be split into two companies to avoid an antitrust investigation. shares are lower but recovering some into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain. that's smart for millions of shipments. in this lab, researchers are working with watson to help them find new treatments.

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welcome back to "power lunch. it is time for trading nation. check out amazon a major drag on the snnasdaq and s&p. it's following up a gigantic runup. amazon shares are up 60% has the amazing rally hit a dead end. harry wall is with on pen behind ner and gina sanchez amazon shares down 6% from when they touched a trillion dollar market cap has it broken the trend? anything to worry about here >> nothing alarming in our work. trend is still higher and on

track. amazon still ranks very highly on our momentum work i think given the macro backdrop, investing continues to do well based on the shape of the yield curve. as mentioned, this is a very minor pull back in amazon. no support levels have been breached level i'm watching is the 50 day moving average coming in at 1880 in general momentum is letting your winners run, cutting your losers quick amazon's a winner, let it run. >> that 50-day, about 40 bucks down from here gina, how do the fundamentals look from here you had this call today that said maybe amazon down the road should think about splitting its businesses between cloud services and retail. >> i actually don't think that if you look at what amazon has been doing, cloud services plays an integral role amazon has been buying up more and more product for a long time amazon was the largest nonprofit company.

now they started to make profits and now they're expanding their margins. obviously aws is trying to get a great piece without having to carry the rest, but amazon has been bag more product lines and basics and is continue to be doing market share i think this is a totally integrated story and there's no need to chop it up. >> well, looks like still a positive story on the technical and fund attal front from you guys ari and gina, thank you very much for more trading nation, head to our website or follow us on twitter. let's head now to sue herera for a news update. >> hi, mike. here's what's happening at this hour speaking before the u.n. security council, u.s. ambassador nikki hailie accusing russia of cheating and undermining the sanction r sanctions against north korea. >> why after voting against

sanctions 11 different times is russia now backing away from them we know the answer it's because russia has been cheating and now they've been caught. amazon introducing a new shopping experience for consumers called amazon storefronts where they can buy specifically from u.s. small and medium-sized usinesses to support that launch amazon is launching the first ever tv commercials featuring stores starving teenagers are using ecigarettes to smoke pot one out of every 11 middle and high school students have used vape pens in this way. the number is higher among those who are already established as ecigarette users you are up to date that's the news update this hour courtney, i'll send it back to you. >> thank you very much, sue. appreciate it.

let's get a look at the market all three major indices are lower. a drop by the s&p today would be the first in six sessions and the first in five sessions for the dow. this is due to the close consumer and tech are your laggards consumer and tech are your winners. >> the fight for control of congress heating up. just 50 days to go until the mid term elections a lot is riding on those results, especially for your money. we will head to the outcomes and the impacts next and now the latest from tradingnation.cnbc.com and a word from our sponsor. short selling can help you profit from a stock's decline, however, because it involves unlimited risk, you must have a plan first, screen for poorly rated stocks showing weakness versus the broad markets. second, look for the stocks with the poorest technicals na that group and incorporate management techniques into your order to

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government let's bring in ben white from politico. the democrats are taking the house and that is the most likely it's a past and moving in their direction. we're not sure that trump has it i don't think that means it. it's not a terrible thing traditionally for markets. >> that's interesting, heather i would think if the democrats do take the house, that the idea of a second version of tax

reform or tax cuts or the making of -- making permanent of those individual tax cuts would probably not proceed, right? >> you're spot on, right that would be absolutely dead. i think what would happen if the likely scenario plays out with the house going to the democrats and the senate stayed in republican hands is trade infrastructure and immigration a lot of people forget that the democrats have actually been some of the strongest supporters of the president and his trade policies, particularly against china. so there may be an emboldening of going after china if the democrats do take back the house or more. similarly, on infrastructure, i sometimes hear people say, wait, but the democrats and the white house are far apart on infrastructure that's actually not true anymore. the key architect for the white house infrastructure plan, gary cohen and d.j. ribbon have left. they were pushing the notion of spending 200 million and trying to leverage it through

public/private partnerships. the president now is a lot closer to the democrats in wanting to potentially spend a lot of money, up to a trillion dollars on an infrastructure plan so we could see some movement there. >> but as heather just mentioned on immigration, that would be a contentious point i would think if the democrats controlled the house. >> it would be very contentious. >> wall funding would be dead. it's troubled now. on infrastructure in theory, heather is right democrats are closer to trump than a lot of people know. trump is ready to spend federal money. democrats do not want to give donald trump any big wins on anything between 2018 and 2020 they're not going to join hands with him and sing coombaya and pass the big infrastructure bill and let him campaign on it forget about it. >> what do we think about the next round of tariffs? are we looking at tear rfs coming in but at a 10% level not 25%? >> that's where we start trump likes 25 he likes big numbers he wants to go to 25 we could get there

that's 25% tariffs on everything the china exports to the united states, consumers will feel it i don't care if he exempts apple watches, he's not going to exempt everything. people are going to spend higher prices right around the holiday season they're not going to like that. >> heather, when we talk about the economy being at risk, we know there will be a big factor going into the mid term elections. what is it that can happen for either republicans or democrats in the 50 days to make the strongest case for why they belong in charge of the legislative branch of our government >> there's probably not a lot on the economy that can happen at this point most research indicates that people formulate their economic views about six months out before an election comes so people are either feeling better or worse as we've shown in the washington post, there is a rise in blue collar jobs. coming back at the fastest rate since 1984 in some communities the job growth may tip the scales a little bit towards the republicans, but as most even

gop strategists admit, this election isn't about economics, it's really about donald trump >> so final question, it's not really about business per se, but the supreme court does rule on business issues and brett kavanaugh's nomination to the supreme court has run into trouble. >> yes. >> what are you hearing and what do you think will happen >> i think it's in significant trouble. i think the white house knows that it knows now that there is an accuser out there publicly willing to testify, her name is out there. the allegations, cavanaugh strongly denying the white house realizes that they are a day or two of news away from having to pull this nomination which means that they probably couldn't get one done by the mid terms there's not enough time to do that it throws that into question and one of the signature things that trump has tried to say is i'm reshaping the judiciary and i'm going to get two picks on the supreme court. that be would a big failure. >> ben white, heather long, thank you. coming up, a tiny ekg that you can take with you wherever

you go that's the technology behind alive core the ceo of the company joins us next

the new apple watch officially goes on sale this friday one thing in addition to the price is the ability to monitor heart activity and instantly receive ekg results. the apple watch isn't the first product and far from the only one to offer such a service. alive corps has been around since 2011 and offer devices to help you monitor your heart on the go and send readouts to a physician for review using your smartphone here to discuss its brand-new product, what it means to the health care sector, what it means to compete with apple and more is the company's ceo v ceo vic condrata welcome. >> thank you very much. >> tell us about your fundamental product which uses a small sensor, you put your fingers on it, and it measures your electrocardiogram so you can see it and so you can send it to a doctor >> yes that's exactly right we've been doing this for about seven years, and we allow people

to take an ekg at home we were kind of a lone voice in the wilderness we were like a restaurant in town and apple opened the biggest restaurant next to us. we have too congratulate apple to bring awareness to this space, that you can take a life saving ekg at home heart disease is the biggest killer of world. it kills more people than all forms of cancer combined to be able to take this life saving test is a very, very big deal. >> i sense by inference that you're grateful to apple for coming into this space. >> yeah, we have a $99 product it turns out that people who often need this device the most are those that can afford it the least. so if you can't afford a 4 or $500 apple watch our $99 product is a pretty compelling way to go. >> but they air marketing cloutd

power, you can't under estimate that >> no. >> it's given you a bump here because they've brought light, a spotlight on to this space, but as you move down the road i've got to think it's going to be a challenge for you. >> no, you're absolutely right i mean, apple just gave every android user a life saving reason to switch to their platform and they've got to be commended for that of course, at alivecor we're not standing still today on cnbc we're introducing our next generation device which is quite an extraordinary leap today's devices like the apple watch, even our device is a single lead device alivecor's next device is a six lead device. it gives you six times the resolution for your cardiologist and you to see really, it goes after the holy grail. today you can detect afib but you cannot detect early signs of a heart attack and with our new six lead product our goal

pending fda approval is we can pick up the earliest signs of a heart attack even before you feel symptoms. many people don't recognize these symptoms and it's critical to get to the hospital quickly it can make all the difference. >> vic, we asked the same question when apple came out with this new series of watches. i'll ask the same to you collecting data could be very powerful but it could be a little dangerous when you're talking about privacy concerns how are you making sure that this information is staying in the hands of those that want it private? >> well, apple has a very good track record of protecting user's privacy and at alivecor, all of our work and servers are hipaa compliant so we take it very seriously as well there's another side to your question the data that it's connecting is enabling breakthroughs you might ask yourself why did they put a ppg sensor and an ekg

sensor we know why. we have a product called cardiogram when you combine these two and you add artificial sensors, you can match the performance of the highest surgical implants like a medtronic link when the analysts say that the existing companies in the monitoring space are going to see a bump in sales, i think that's a super myopic view. >> vic, i was going to say -- not to cut you off here. this idea, you're talking about so much data out there, is it too much i'm a new parent i was struggling with my child looking at all of their -- her pulses, all of the signs out there. is there going to be a point where these things give people too much information will i worry so much -- >> will you become a hypochondriac? >> yeah, i can worry all the time about my pulse and my ekg >> yeah, i think that's the role of ai. they can take these sensors and figure out what's useful it will guard your heart all the time

as i mentioned, our early tests are showing that the ppg sensor combined with ai can match the performance of the gold standard monitoring so i don't think this is a windy day. i think apple is a cat 5 hurricane coming to the monitoring space i wonder if the leadership of some of these monitoring companies even understand what you can do with that lowely ppg sensor and ai. i think by the time apple is done and alivecor is done, people will be able to noninvasively have a product on their wrist that guards their heart all the time very exciting time. >> vic, thank you very much. we appreciate it >> thank you thank you. >> dom coming up here, he's new york's top real estate broker. a star on "million dollar listing" and he has a new book out. this is ryan serhant he joins us to talk about the state of the luxury real estate

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welcome back foreign buyers a new tax law kicking in one area getting hit hard is new york sale prices were down 5% that's the worst since the financial crisis thanks gentlemen for joining us. take it away >> you're right. flashing warning signs how bad is it going to get and what should buyers and sellers do right now ryan has the number one sales team with over 828 million sales last year. he has another show and he has a new book, how the sell more, certain more and become the ultimate sales machine

thanks for joining us. >> thank you >> i was thinking you'll be putting on one of those ekg monitors >> yeah. >> it may seem bleak now but you actually started as a broker on september 15th, 2008 what was that lieng and was it a terrible time to start >> i think it was an amazing time to start. i got into real estate because i had no money i didn't want to paint wooden fences for the rest of my life i was going have rent and pardon me and do what i want to do.

as everyone was getting out of business i picked up the pieces. >> but you weren't a rich kid who had a lot of friends it's all about knowing people and connections. how did you one day become a broker and meet people and get them to buy or sell their houses for them >> so did you walk into a starbucks or something >> yeah. i would try to find people and ask them if they needed more space. i had nothing to lose. >> the answer in new york is always yes, right? >> yeah. or they would tell me to stop talk to go them because it is

weird. >> my sales kind of gained theory, if you will, as most go deal by deal and stay hyper focused on one deal it's not a great way to build a career. i tried to figure out how to control that chaos >> are you better off pricing your property low and hoping to get a bidding war or pricing it for the number you actually want to get >> that's a good question. i love that because i always, if i can, price low to create the market new york city is a very unique place. they want to be able to send their listing with that really high price and say look how much my place is worth. it is a gray line.

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cigna and express scripts announced the u.s. justice department approved their merger they are working to obtain clearance for this merger. they are expecting the merger to close by year end 2018 this is significant because a few years ago anthem was blocked from its merger with cigna due to anti trust concerns there is also a merger pending between cvs and aetna. >> thank you very much appreciate it. >> all right just news here president trump said there could be news from china coming out after the market closes today.

this is again according to reportsment. >> all right still a lot to go. thank you for watching >> closing bell right now. >> it's time for the closing bell a tariff weighing on near the bottom of the nasdaq we'll break it all down coming up on the car line folina borde threat of flooding still looms as this struggles to recover from hurricane florence. i have more details just ahead sales force benioff buying the time media brand it could be a ne