pete. >> wells fargo lagged for a lot of the right season i'm with warren buffett, the stock goes higher. >> vips, discount shopping in china. >> i bought adidas, both the ordinaries and local it's growing faster than nike. >> joe. >> toronto dominion, financial institution. >> great stuff, everybody. "power lunch" starts right now. thank you very much. welcome, i'm tyler mathisen. the bulls firmly in charge right now. the rally hitting record highs investors are brushing off the three major headwinds and those would be tariffs, rising interest rates and the fed the question is why is this market so doggone confident? well, amazon kicking off its big event right now. a host of new alexa products expected to be unveiled. she woke me up this morning, alexa. we have all the headlines as they cross and shares of pot stock, tilray, going up in smoke today. will shares of this high flyer prove to be a one-hit wonder or

something else "power lunch" starts right now welcome to "power lunch. i'm melissa lee. the rally rolling on stocks at around session highs, the s&p 500 hitting a new record high the dow posting its first intra day record high. rates a big part of this market story. the 10-year note hitting their highest level since mid-may but backing off session highs. check out four sectors on the move here, health care, consumer discretionary on pace to close at new records chip stocks on track for their best day of the month ahead of micron's earnings ahead of the bell region banks breaking above their 200-day moving average contessa. >> and i'm contessa brewer as the markets hit record highs, we're joined by tom farley, farpoint acquisition ceo and a

new cnbc contributor it's so great to have you. welcome to the family. welcome to this side of the desk we're really glad to have you. you've got a lot to talk about this first day sitting here. what do you think? >> it's great to be here it's an interesting news day so i'm excited to be here for the next two hours, contessa. >> we're really lucky to have you. we want to go to bertha coombs where she is following this record rally. >> ubs -- talking about last week's highs in the transport and that is unleashing a broad-based rally with new highs in health care and consumer discretionaries this morning tech back in the driver's seat leading today's rally. we saw that turn-around beginning in the faang names yesterday. they're continuing here today. the nasdaq also getting a lift from microsoft, which is among

five dow components hitting all-time highs, today contributing to the dow's new record in terms of point impact over the last eight months, apple, boeing, visa, microsoft and united health were the top five stocks contributing to that return to all-time highs on the bottom, 3m, goldman sachs and mcdonald's guys, back over to you >> all right, bertha, thank you for that we can't have market records without looking at the possible threats to the rally and that's where steve liesman comes in so what are you eyeballing here, steve? >> it's very interesting little doubt the market seems to be looking past some of the threats that in the very recent past would cause it to sell off, tariffs, higher rates, more fed rate hikes back in june we found almost half were linked to possible or actual tariffs now after the president imposed 10% tariffs on $200 billion of chinese goods, the mark has shrugged and rallied to all-time highs. some splapd explained it as thef

levels below what the market priced in or the market decided tariffs don't matter as much as they thought the 10-year treasury yield now convincingly, this is not kansas anymore, trading over 3% with most of the increase happening by the way, right around the time the new tariff threats became news, which prompted many economists to raise their inflation forecasts. finally along with higher rates, yep, here it comes, better probabilities of fed rate hikes. we're call this full speed afed. i've got a laugh, thanks, guys now looking for a 100% chance of a rate hike in september compare that where they were in the last fed meeting 76% chance of a hike in september. these are both higher compared to august. a 52% chance of a rate hike in march. that's the first one for 2019. the majority was betting that first one would come in march, so three headwinds, tariffs, higher rates and quicker fed

hikes, perhaps just being ignored for another day. >> is the exuberance rational or irrational, steve? >> i would not be the one to be able to judge whether or not anybody is rational. >> you're a businessman, you're not a market forecaster, i know that but when you look at the sort of exuberant consensus that basically obtains on wall street today, what do you think >> you know, i listen to those three threats and you say maybe people are overlooking them. i think they're overlooking them because they're not huge threats. what you didn't mention, the fact that markets all around the world are going down u.s. markets are going up. if you look at shanghai, emenching markets, they're going down >> aren't they telling us there is a slowdown in growth overseas, one that the u.s. could be caught up in? >> markets are a very good proxy for future economic growth that to me is the big risk and threat to the u.s. economy. >> i would have mentioned it but my producers only gave me a

minute 24. and we like to do things in three in tv. >> which one do you think is the biggest? >> i think that the tariffs are a bigger threat than the market is making it out to be, but i think that the market may have priced it in and i think what's interesting is we had a comment the other day that the pe ratio of the market is lower. >> than what >> from 19 to 16 was the numbers i heard on our air >> the es have come up. >> but the p has not reacted so what may have happened is the market already reacted to this, already priced it in and the question becomes, goldman sachs now estimating a 60% probability that the additional $276 billion of chinese goods become subject to tariffs. i don't know if the market has priced that in i think it's a big disruption. but look, i'm not going to second-guess the market. just as long as they're aware of it and pricing it in, it seems like it's the right thing to do.

>> on the one hand you say they priced it in, but you seem to be suggesting -- but you also said you think it's a bigger risk than it's being credited for. >> yeah. >> so that would suggest that you don't think it's been priced in enough. >> i don't think it's been fully priced in. i think it wakes up one morning and it will take account of this but look, i don't know what the street feels about the outlook for earnings we've had very strong earnings we have these tax cuts, these are very ood and the gdp numbers, i have to say, tyler, have held up enormously well. we started off the month -- the rapid update, which we've created here at cnbc used to be a really volatile thing. incredibly, we started off the quarter at 3.2 third quarter running at 3.2 and now it's 3.3. >> but tom makes a very interesting point here what the foreign markets are telling us is that growth may be slowing in those foreign markets. >> yeah, there's problems all over the world. >> and the u.s. market is telling us we don't see growth slowing here yet.

>> we don't care >> or we don't care. but at some point growth will slow and the u.s. market will tell us that. >> i think that's the biggest threat i think the tariffs are less of a threat people see the chinese markets are the lowest they have been in five years and the chinese will cave to some extent and we'll end up in a decent place in trade. the bigger risk is that the global economy does not look healthy outside of the u.s. >> we will talk more about whom is going to cave more regarding china. >> do you think the market is overly exuberant because it's not pricing in the global threat >> yeah, i'm not long the market at this moment with dow near 27,000 and the s&p at all-time high i think we could have a long kind of sideways period in the market now as the rest of the world drags us down. >> do you see what i did i put him on the spot the way you put me on the spot. >> i wish i were more optimistic. >> thank you, steve. let's get to alex shoreman with

breaking news on adobe. >> sources telling me that adobe is closing in on buying marketing software company marketo. reports surfaced that they were in talks with adobe on a potential sale this could be announced as soon as this afternoon i am told. it should be about a $5 billion deal that's quite a return for private equity term vista equity partners that owns marketo, bought marketo two years ago for $1.8 billion, now turning around and selling it for close to 5, so that's a validation of vista's extras gstrategy to buys marketing software company that runs in the same world as salesforce and workday and so forth. this would be the biggest deal of all time for adobe and it is now over a $100 billion company.

>> alex, thank you let's go back and dig deeper into what is fueling the rally and why investors for now seem to be putting aside all the risk let's bring in chris zacharelli and ernie cicillia ernie, let me begin with you my note says the market is pretty complacent with the risks of an escalating and prolonged trade war with china why do you think that is >> well, i think you've touched on a lot of the topics already the fact that tariffs came in at 10% instead of 25% was viewed positively by the market and you're seeing the market rally on that. i think the market is a little complacent because i think a lot of the actions that have taken place, both words and actions by china show they're digging in for the long haul. they're lowering tariffs on all the rest of their trading partners, they're easing credit whereas beforethey were

tightening credit, i think they're digging their heels in i think this may go on for longer than we expect. i think that dovetails nicely into the idea that the big risk is that the rest of the world goes into a further slowdown i think the tariffs going into full effect next year and lasting for longer than people expect, that can be a real risk to the market globally, which will come back to the u.s. as well >> the end result is an ever-growing threat to the world economy and markets that may be ignored until it is too late that suggests that it is time to move out of equities or at least derisk my portfolio. is that what you're proposing here, chris? >> i'm definitely not saying that you need to go to cash or do something radical, but you need to be more concerned about where we are as markets move higher, you definitely want to be more cautious i'd buy more quality companies and make sure the company you have -- i'd be wary of the

stocks taking off right now. you may regret having them later when and if this correction does come. >> ernie, chris has thrown an egg into the picnic. maybe it's a prudent egg what do you think? >> it's a good egg we look at a number of indicators and the indicators that concern us the most and we'll categorize as neutral are in the interest rate inflation side of the picture. we were talking about strong growth, talking about the fed. we look at wage growth which was 2.9% through august. when it gets to 4%, that usually is a signal that there could be recession in the offing. the other issue is the fed the fed takes a look and steve talked about the fed the fed looks at inflation, inflation rising they tend to accelerate, if you will, their rate increases and that yield curve, which is -- has a slightly positive slope to it right now, starts to invert usually 12 to 24 months after an inversion we see a recession

so most of our concerns are not so much on the growth side but that the growth side if you will over time raise inflation concerns and become a headwind for equities so as chris said, we would concur that interest rates will become at least a headwind and derisking makes sense. >> does that concern you, the potential inversion of the yield curve? right now we're about 27 basis points, the spread between 2s and 10s. with one fed rate hike we could be practically there with two fed rate hikes we could be inverted. should investors prepare their portfolio for the eventuality of a recession now? >> two things. one is i absolutely think an inversion of the yield curve is an ominous signal and if that were to happen, you need to prepare for potentially a recession coming soon after that what i would say is i don't look at the 2-10 spread, i like more of the three month, 10-year spread that's what a lot of fed

watchers will look at and i think that's been a better indicator of when an inverted yield curve will lead to a recession. if you look at the 2-10s, it doesn't pretickdict a recession so it depends on which yield curve you look at. i don't think we're there yet on the 3 month to 10 year but we absolutely are a lot closer on the 2 to 10 year spread. >> all right, chris, ernie, thank you very much. happening this hour, amazon holding a big product event in seattle. aditi roy is there are you seeing anything yet? >> yeah, what we can tell you is that the room is packed. it's standing room only, only about 150 people in there. it is being led by vice president dave limp and they have been talking about alexa and her expanding skill set. they have talked about alexa being more conversational, more

natural in her language, more intuitive. even being able to whisper a lullaby to your told talking about her skill set going from more general to pivoted information, much more targeted information we should say. for instance, a skill by tide to help you remove a stap frin fro shirt. they talked about her skill set with parents and parental controls what we are waiting to hear on is any sort of confirmation of cnbc reports earlier in the week that amazon plans on releasing eight new alexa-powered devices ranging from a microwave oven to an in-car gadget jeff bezos, of course, has said he wants all customers to be able to use alexa everywhere, so a product expansion really goes hand in hand with that goal with alexa moving into your kitchen or car they would be in competition with people like sonos and ge

and it would mean getting more customers into the ecosystem we'll continue to monitor the event and bring the highlights back to you. >> what's it feel like, are people excited >> yeah, there's definitely a lot of anticipation in the room. we really don't know what's coming, so people are definitely waiting to see not just the skill set but really what are the new devices going to be and what is this going to mean for my life. >> okay,aditi, looking forward to seeing it. tilray is mostly based in canada but could that soon change plus eric dickerson makes a bold move in an effort to get health insurance for retired players, but he's also created a huge controversy we'll talk to him about that coming up on "power lunch.

shares of tilray tanking right now after yesterday's whip saw session. trading was halted several times yesterday because of volatility. but it is up 910% since it's july ipo and other pot stocks are up sharply too in the past month. dominic chu taking a closer look at the valuations. >> they are sky high, to say the very least, tyler. as we take a look at some of the trading action that we've seen, for tilray you mentioned the post ipo moves it was a $17 ipo obviously the price at $171.

again, a ten times ipo price move is maybe something people are a little skeptical of. as you look at the two-day and the course of the one, like the week span, it is still very high up there multi billion dollar valuations. as you take a look at some of the other pot stocks, ironically enough many of the pot stocks are actually up today even though tilray is down. this is the etfmg alternative harvest fund about a 600 to $700 million etf which tracks pot-related stocks in canada and elsewhere. those stocks are up by about 2%. as you look at some of the stocks that make up the biggest part of these big etfs, those names are still higher as well names like cronos, canopy growth, all of them moving to the upside so perhaps just a little indication that much of the trading we saw in tilray was technical in nature. take a look at some of these price-to-sales ratios.

tilray trades at 971 times sales. aurora cannabis, 120, cronos, 512. canopy growth 143 times sales. we put gw pharma up there, and even that one trades at 251 times sales. just something to put some perspective into how these things trade relative to other companies just in the overall market back over to you. >> dom, thanks dom chu with the lowdown on cannabis stocks. tom, when you were watching the action yet in tilray, what were you thinking five trading halts in the afternoon. almost one after the other after the other. >> it was a video game your viewers should not trade tilray if they're concerned about losing all their money if they have some leftover money in their budget and they want to invest because they think it's fun and they want to trade because it's fun, go ahead but this is not an investment at this point, it's a mania. >> this is the case in the space overall because i've got to tell you my 86-year-old grandmother

just took $4,000 and put it in -- she's like i want to invest it in marijuana i'm ready to invest in marijuana. i think it's going to explode. but i'm concerned for her that a lot of this is speculation and to dom's point, when you're seeing that kind of lack of sales to support the -- >> price of the stock. >> just the investment it's earning, i'm concerned. >> we've seen lack of profits plenty of times. take me inside the room. when a pot company comes to the nyse or to an exchange and says we want to list, what is the -- what is the nature of the moral discussion that you have around it >> it's actually really unfortunate. one of the reasons why tilray and canopy are trading so crazy is they're the only two stocks listed here in the u.s some of the investors are restricted by their charter to only invest in u.s. stocks i wish there were more marijuana stocks listed in the u.s

to continue the bad puns, i was very high on that idea and when attorney general holder was in office, i was willing at the new york stock exchange to approve those marijuana-based stocks because we have a requirement obviously, we had a requirement that you be in compliance with state and federal laws but holder had put out a letter saying it may be against federal law but i'm not going to come after it so that was enough that i could say, okay, it's a responsible decision sessions came in he's very much against marijuana, has been for many, many years he rescinded that letter and so we said no the one that i said yes to when i was there at the new york stock exchange was canopy because all of their operations are in canada. so they don't violate a federal law here in the united states. but in canada, they have a whole lot of marijuana stocks that are listed there that wish they could be listed in america i wish they could be listed here in america. >> but since that sessions letter, tilray has gone public on the nasdaq. >> so tilray fixed -- >> go ahead. >> tilray fits that canopy

definition, which is they didn't have u.s. operations, weren't violating a federal law. yesterday they received approval from the u.s. federal government for some limited operations here that was the dea approval. but they can't do anything in the u.s. or i guarantee you nasdaq would have a tough conversation with them or the nyc would have a tough conversation with canopy. >> that's interesting to me. if you follow it through, i guess the -- i don't mean this pejoratively, the legalistic argument is if you're not doing business in the united states, even though the business you're doing outside of the united states would be illegal in the united states, we welcome you in that's a dangerous -- that's a dangerous area. >> but you're abiding all laws in the region you're in and you're abiding all laws in the united states. and to me that was cut and dry i had no moral or ethical issue with that whatsoever. >> interesting okay >> thank you. >> that's why we have you here interesting stuff. coming up, from north

carolina, residents are coming back to their homes in a lot of cases and they're just flooded we'll have the latest on recovery efforts. and we are all over the markets as well. the dow hitting a record for the first time since january the s&p hit a nehi awew ghs ll the s&p hit a nehi awew ghs ll stay with "power lunch." looks like you hooked it. and if that's not enough, we'll help your kid prepare for the future. don't hook it kid. and if that's still not enough, we'll help your kd prepare for the future. looks like he hooked it. we'll do anything... takes after his grandad. seriously anything, to help you invest for the future. ally. do it right.

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hello, everybody, i'm sue here herera here's your cnbc news update at this hour. three people were killed during

a shooting at a rite-aid distribution center in aberdeen, maryland, this morning a female suspect was taken into custody in critical condition. no word on how many people were injured. >> the lone suspect in this incident is in custody and is in critical condition at a local hospital it appears to be a single weapon that was used, a handgun, and there were no shots fired by any of the law enforcement officers responding to the scene. a massive landslide kill at least 15 people near a central philippine mountain today, burying dozens of homes. rescuers are scrambling to find survivors after some people actually trapped sent text messages pleading for help 64 people are missing. 48-year-old valentino dixon walked free on wednesday after spending 27 years in prison for a murder he did not commit while in prison, he became an accomplished artist, drawing hundreds of detailed golf scapes

and that was noticed by golf digest and golf channel which led to a reexamination of his case you are up to date that's the news update this hour contessa, back to you. >> wow, golf and justice, who knew. residents of north carolina today are returning home in many cases they find their homes completely flooded seema mody is live in kinson, north carolina give me a sense of what you're seeing now that you're on the ground, seema. >> reporter: well, contessa, we are 60 miles inland from the coast and yet a number of houses here are seeing massive floodwaters that is wreaking havoc on homeowners. now, we spent much of the morning with north carolina's insurance commissioner, and he says inland flooding and a number of uninsured residents is the biggest task at hand. >> unfortunately, the vast majority of people have no flood insurance. you know, we have a population here of more than 10.5 million people, but less than 135,000

people have flood insurance. >> reporter: the state has set up an insurance camp to facilitate and process claims, but even a number of uninsured residents are showing up saying they are desperate for help. >> i'm not insured, that's why i'm out here talking with fema that's -- you know, i heard about this right here and so i came out here to see what help can i get. >> how much damage do you think you have at home >> well, a few thousand. that's all i can say. >> reporter: florence has caused widespread flood damage, but only 335,000 residents across north and south carolina have flood damage, meaning a majority of residents will have to pay for the damages by that flood damage in their houses a lot of low-income families can't afford the capital that they need to fix their houses. some of them telling us that they may simply move and find another place to build a house or to rent the number of insured costs is

up to $4.7 billion but that is an early estimate and will likely increase over time. >> what are you seeing in terms of the flooding and getting supplies and people to the areas where they need it were you having trouble navigating around? >> reporter: yeah, i'm sure you saw a lot of this as well, contessa, but transportation is a big challenge because we're seeing so much inland flooding right now the river behind us is expected to crest in the coming days so that's spilling over some of the main highways and that's slowing down transportation and the transportation of key supplies to residents as well as to big home improvement retailers and even walmart, so that is definitely a big issue here and just tells you that this recovery is still in its early stages. >> yeah, it's just a real problem. if you can't get to a working gas station because the roads are flooded and you can't get to walmart or home depot to buy a generator to get your house pump working, the water just sits there, the damage increases, the costs to the homeowner or insurer increase as well.

>> did you see snakes while you were there down there? >> i did i was standing in the floodwater of the cape fear river when i saw the snakes. >> were they water moccasins >> listen, i'm not scared of anything i had on wellies and i was ready to do some battle. under armour cutting jobs and the stock market jumps. also today nike holding its annual shareholder meeting amid concerns about the company's culture and the controversy over the colin kaepernick ad. we'll talk to a top analyst coming up on "power lunch. ♪ just take me with you there are roadside attractions. and then there's our world-famous on-road attraction. the 2019 glc. lease the glc300 for just $469 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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shares of under armour rising 4% as the company announces 400 job cuts nike also higher as it holds its annual meeting our athletic wear correspondent, sara eisen, standing by at the new york stock exchange. hey, sara, you're more on that. >> i'll take that. thank you, tyler. >> your much more than that. >> queen of athleisure maybe nike's shareholder meeting is under way and ceo mark parker has been just been giving an opening pep talk noting the strong results and shareholder value. parker also saying his most important job is making nike the kind of place we all want it to be noting that they are implementing new employee training and leadership development programs

so this all comes against the backdrop of some drama you've got that recent controversial call to make colin kaepernick the voice and face of the new "just do it" campaign and also to that point, the internal corporate culture scandal that led to the departure of 11 corporate executives including the number two and widely believed successor to mr. parker. that was all a lot of noise but not likely to create any major shareholder uprising why? just check out the stock price nike's shares up 37% this year, up 60% over the last 12 months, outperforming the rest of the dow jones industrial average most other retailers and its competitors. shareholders are happy investors have largely shrugged off the changes internally and the noise because the company has repeatedly put out strong results, globally and even a recent turn-around in north america. now, as for the colin kaepernick scandal, i do have some new data i can share with you online sales jumped 27% sunday

through wednesday of labor day weekend just after the ad was released online. big increase from last year. but since then, they actually have leveled off to around the same rate they were at before the campaign and interestingly, the jumps occurred in maryland, new jersey, alaska, delaware and massachusetts, mostly left-leaning states politically. all of this according to high frequency data at edison trends. one issue we are watching that shareholders will get a chance to vote on, a proposal requiring more disclosure around political spending, but it's not expected to pass and it's been voted against five other times you mentioned under armor, other mover and winner today announcing restructuring, laying off 3% of its workforce on top of the 280 workers they cut about a year ago add it all up and they raise the low end of its profits guidance for the year put them together and you've got two big winners in the market, thanks in large part to the fact that consumers are spending on

athletic apparel and footwear again, just at a time when investors thought it had peaked out, and both companies are really on their game when it comes to innovation. >> sara, thank you for that. let's get more on these two stocks with simien siegel. good to talk to you today. let's talk nike first. when we're talking about the fact that they got such a great return on their kaepernick investment, is this likely to be the wave of the future for them? >> so the interesting thing is it was the wave of the past, the presenting, the future we're still talking about kaep and how long ago was that. what you have to do in this market at their size is you have to make noise. noise is loud. some people like noise and some people don't when we think about the athletic business, the core advantage is their willingness to spend. >> and nike received proposals to increase their political spending disclosures nike really doesn't want to do that there's been five of these in

the past last year it garnered 30% from shareholders they don't want to disclose this from shareholders. what's the tug of war about? >> at the end of the stay sustainability and doing what's right and doing what's right by your shareholders is becoming an evolving process there is an element of running a business that will always take precedence and be making sure you maintain control over what you're giving out so that other people don't see the same thing. i think this will be an evolution. i think ultimately we'll see nike and under armour do it as well honestly i think others are following their example. we're hearing from pbh, ralph lauren, nonathletic companies that are spending. where that goes will be upward. >> i'm curious which one of those you like better. i'm looking at under armour and it looks like an incredibly focused company. the new president is doing a great job. they're reducing the number of

people and it looks like a really good company again. >> so i love the word used, company. maybe company is different than stock. if we're thinking about the delta there. what under armour is doing is they had an awakening to the point that profits matter. kevin plank has been very vocal about building a better company and healthier business and you're doing that. the issue that i would have in my seat, i assume you're asking me which i like better as a stock. from a stock perspective, under armour is expensive on everything other than sales. if at some point it can reach the level nike is at, then sales is an appropriate measure. what we're seeing is a healthy focus on building a strong company and profits. that should come at a cap to how big the sales opportunity can be we like nike better. >> do your checks indicate sales are actually higher? we're getting all these data points from various online marketing people people who track trends, et cetera just because some outfit tells me there were 61% more

merchandise that sold out in ten days, i don't know if that's true nike is not coming out and saying anything about it. >> it's such a great point i talk to investors all the time and people have different numbers. i can't speak to the quality of that report. we don't know until nike says that and amazon is a big topic of conversation. we create our own numbers around them >> is it at an all-time high it says right there. i ask and there's the answer. >> if the market is at an all-time high, nike kind of has to be. >> under armour has doubled in the past year as well. >> but it's fallen, obviously, a lot. >> and your price target is much lower for under armour. >> yes. >> i would merely opine that i think there are multiple audiences that nike touched. some were offended i think older people generally but hey listen, when i look at my 12-year-old and all of the kids he plays with, that didn't matter to them at all. they are fine buying nike. they will always buy nike if it is the best performance and the

best-looking gear. >> not to belittle the issue, but i am not unconvinced that the same people that burned their shoes aren't going to buy another pair next year what i am convinced about, we'll have a conversation about a totally different controversy nike puts themselves in the middle because that's what allows them to become at their all-time highs. to the bond market right now. rick santelli is tracking the action at the cme. hey, rick. >> hi. an enter day at 10s, it looks like this thing petered out but it didn't. sure, we're unchanged on the day but still up 6 on the week look at one week of 10s. it looks pretty solid. it's jumped over 3% and of course with the fed meeting coming up, everybody is watching that yield curve it's steepened a bit but the real key is can we fit more tightenings in without inverting it it's been all about foreign exchange there's been central banking activity let's look at some april charts. if you look at the dollar index, you can tell that it is hovering at a level that is so

significant, 94, and traders are very cognizant of that now, the good news is against the yen, as you see on this chart, it's ready to test those july highs, not far away at 11211 112.88 that would put the comp back at the beginning of the year. but the euro versus the dollar the euro at the best level since about the second week of june and it looks as though the dollar index isn't finding much support today either tyler, back to you. thank you very much. coming up an effort to get health insurance for nfl retirees has kaugsdcaused a bith controversy. up next we'll talk to the man at the center of it, eric ocdrerson, and a member of our stk aft as well. "power lunch" will be right back obvious.

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experience amazing at your lexus dealer. welcome back to "power lunch. tom farley is with us. he's also the ceo of far point

acquisition, which is a special purpose acquisition company sometimes known as blink check company. tom, why a spac? >> it's such an unfortunate name. >> special purpose acquisition sounds much more special. >> he was the president at the new york stock -- and now he's into spak licklinspackling. >> it's an invest fund the hard part was leaving the new york stock exchange. i'm seeing these pictures here of sara reporting from the new york stock exchange and they had a big day down there, and it was hard to leave. that was amazing i spent five years there and felt like it was a privilege every single day but it is an all-in job. early mornings, late nights, kissing babies it has a retail politician angle to it. and we had a woman, stacy cunningham, in the wings who i knew could be amazing. at some point in your career,

it's better to exit stage right and let other people take over. >> if all goes as planned, though, you will be listed -- >> actually i am listed. i listed two weeks after the day i left so quickly that the stock certificate is signed by me. >> really? >> it's signed by me, the stock certificate for my company >> that's bizarre. >> and stacy was the first woman to ever run the stock exchange so that was a good moment. i really just wanted to get out and be able to invest and build a financial technology company financial technology is on fire. >> why this kind of vehicle? at one point this sort of vehicle was associated with, i don't want to say not reputable but there were question marks surrounding this sort of vehicle simply because there's a lot less disclosure than with other kinds of companies when you list. >> you're absolutely right that's completely changed. there's protection for investors. dave cody just did a spac with goldman, tpg has done three. there's lots and lots of reputable spacs. i partnered with dan lobe and

third point in my spac so i have a great stock picker and it's a really good vehicle to be able to quickly and cleanly get capital to a business in need where you can turbocharge growth. >> you made a couple of references to the females in charge why are there so few women leading the charge >> i'm glad you brought that up. there is a ceo named julia who is awesome i thought to myself and even said to my wife, it's a shame there aren't more julias it's embarrassing actually around 3% of ceos are women and that's down. >> what does it change >> i'd like to see a rooney rule of sorts, because quality is not the issue. i meet these women ceos, honest to god every single one i've ever met was very impressive now, they didn't all produce great stock market returns and they ultimately moved on, like

denise morrison of campbell, but the male ceos by and large are great. but then you meet some and think how did this person get that job? there's none of that with women. i'd like to see a rooney rule. one, they'll interview a woman when hiring somebody from the outside. and two, not one of two things, two things, two, our succession strategy will include a woman. doesn't mean a woman will take over the role but of the ten we identify, one of them will be a woman. otherwise, i just don't think that boards that are by and large men, we all have inherent biases, i certainly do too, i'd like to see that change because that will force the sort of change we'd like to see. >> interesting thoughts. >> tom, thank you. coming up, the controversy surrounding a push to get health insurance for nfl retirees we will talk next to hall of fame running back eric dickerson. "power lunch" will be right back there he is. ♪

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eric dickerson this week coming out for benefits and compensation for nfl hall of famers with a letter addressed to the nfl commissioner, the nfl players association executive director, and the hall of fame president. but the move has not been without some controversy joining us now is former nfl running back and 1999 inductee into the pro football hall of

fame eric dickerson. eric, welcome back good to have you with us you have called in your letter to those three or four mentioned for lifetime health insurance for hall of famers for an annual salary for hall of famers which some reports say you are looking for a $300,000 a year stipend for the members of the hall of fame why not extend this kind of request to all players and not just hall of famers? >> thank you for saying that because it is extended for all players. we started with the hall of famers because we started at the hall of fame, and that was one of the things we started with, let's go with the hall of fame first because the name recognition is big, but we want health care and benefits for every player even pre-'93 guys. we're not trying to leave any of our brothers behind. i played pro football. do you think i want to leave my offensive lineman behind, my quarterback, my other players? no i want it for every player who ever played in the national

football league, even pre '93 guys that's what we're fighting for sxwlp am i not correct that the initial request was really only extended to hall of fame members and that you hope to then expand it to all players? >> exactly correct. we started with hall of famers right. >> i go to a fair number of nfl games and i am struck when i see former nfl players, and i will not name names here. their bodies show what they do they do not walk well. and obviously some of them have injuries that you can't detect visually so it's a noble cause. but i'm curious. some of the controversy that has arisen out of this worthy cause and worthy effort is that several of the original signatories of the letter you sent have seemingly distanced themselves from it, particularly because you call for a boycott of the hall of fame induction ceremonies the ones who we're aware of who

have distanced themselves include john randall, who said, "i never authorized anyone to associate me with this letter. jerry rice also the same and kurt warner, fundamentally the same response. what happened there? did you have -- thought you had understandings that you didn't >> well, i say with respect to jerry rice and kurt warner, they were on the letter as supporting it we had seven drafts going out. and i didn't read all the way down to all the names. that's my fault. i take responsibility for that they support it. they said they support it. but they're not board members. now, john was a board member he didn't like the letter. and that's what it is. but like i said before, every guy that we're trying to get health benefits for pre '93 and all players -- this is not just about the hall of fame this is why we just started with the hall of fame we started with the big name guys but we want health care for every player that's ever played in the national football league. that's not my goal

that is our goal and that's what we've been preaching for the last three days i just talked to a guy today he said i'm 74 years old, hall of famer and the only reason i still work is because i don't have health care or insurance. that's why i still work. i have a list of 51 guys right here that support this 51 guys. marcus allen lawrence taylor. jim brown. i have a long list of guys you know how hard it is to get in touch with 181 hall of famers very difficult >> i don't want to lose the forest for the trees here. the broader point is a really important one. and that is furnishing nfl veterans with appropriate benefits as they move on in their lives and face health concerns the board you reference, was that a board that was elected or appointed by all of the living members of the hall? >> this is how we appoint the board. we ask guys, do you want to be on the board or you don't want

to be on the board i want to be on the board. some guys said no, i don't want to be on the board, i just want to represent the guys. i'm for the guys but i don't want to be on the board. >> i see so the board are sort of self-nominated people who associate with the cause and approve of the initiatives that you're taking. let me turn to this issue. the nfl does have a pension. i don't know how lucrative it is you tell me what the average pension is but the core of my question is is the fact that nfl players don't have these benefits of failure of the nfl players association most especially? -- >> most definitely -- >> why isn't the union negotiating to get these things? because every current player is eventually going to become a former player. >> exactly one of the problems is that the older guys, hall of famers or retired players don't have a seat on the cba.

that's where the problem is. the younger players, they're just thinking about being young. they're thinking about playing football they really don't think about one day they're going to be sitting here at 65 years old you have health insurance for five years, but what happens after that 15th year, that 20th year you don't think about that you don't think about the older players. that's why the problem has come in with maurice smith, with roger goodell -- i mean, look, roger goodell makes $40 million a year that's fine. but take care of the guys who have made this game as great as it is. >> quick question on the stock draft. you were a part of it. your stocks all in the oil area. they haven't developed i assume you're holding in there thinking i'm going to come back like the patriots. >> let me tell you something it's a long football season. my stocks are going to do fine i picked them for a reason it's like a slow train so i'm not worried but thank you. >> you were never a slow train, eric dickerson thank you very much. appreciate it. coming up, the latest from amazon's private event as it unveils new alasex teacher.

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i'm melissa lee. it's amazon's world and we're all just living in it. amazon announcing a slew of new products just moments ago including a microwave.

will consumers buy in and will it even the stock's run going? jamie dimon says there's one thing that's the biggest threat to the financial markets right now and it's not what you think it is. and trouble in toy land for manufacturers after the latest tariffs. could hit them hard ahead of the holiday shopping season. we'll talk tariffs and toys. "power lunch" starts right now welcome to "power lunch. i'm contessa brewer. a record day on wall street with the s&p and the dow hitting all-time highs it's the first record high for the dow since january. right now on the day the s&p up .79% all the 11 s&p sectors are higher led by tech materials, staples and financials and within the dow walgreen's, dow dupont are leading the 10-year yield hitting the highest level since 2008 in

earlier trading. the etf smh on pace for its best day of the month leaders include micron, analog devices and skyworks >> contessa, thank you i'm tyler mathisen welcome, everybody along with our guest host for the hour tom farley, former nyse president, current far point acquisition ceo and a cnbc contributor. delighted to have you with us, tom. we'll talk with you throughout the hour we begin the second hour with the markets. the s&p and the dow hitting new all-time highs as technology and materials lead the gains kenny pockari is at the new york stock exchange if you want to chest bump mr. farley, go right ahead virtually. >> tom, how are you? congratulations. this is great. >> i miss you, buddy what's my recipe today >> today you know what the recipe is? i gave you cannabis brownies actually because i wrote this whole piece on toray after the action yesterday just made perfect sense i should serve up cannabis brownies that's what i sent you >> can't do that in my house, kenny. >> i know you can't.

>> but it could be a good "power lunch. i think we should do that. let's do that. >> i thought it made perfect sense considering the mood around toray and all that discussion yesterday >> what does the floor and the market feel like you to as we started the last hour with a discussion of the level of exuberance and sort of credulity that is palpable to me in the market what does it feel like >> you know what listen, there is this sense of excitement but it's a different sense today, tyler, than you remember what it used to be just because there's less energy in the room. right? there's less people, so there's less energy. yet you can still feel it when i'm talking to clients on the phone, when i'm talking to other brokers on the phone there is this sense of almost euphoria not the way you see but certainly people are up, they feel good about it, they feel good about where the market is, they feel good about kind of what's happening in the economy. they're feeling better about their own situation, whether it's people on the floor or people you're talking to on the

phone. so there is this better feeling, this better sense for sure >> so let's talk about what might be in the way of that better feeling it was your word, euphoria what are the things you're looking for? >> we're looking at midterm elections. i'm not worried about the all about earnings i think earnings are going to once again blow the doors off the place. right? i think it's going to be really cool those earnings are going to be really good, and any one of them that are concerned about their earnings are going to take that time ahead of time to readjust those earnings, take the pain before they actually announce them, and then we'll move on with it. but i think overall earnings are not going to be an issue i think what's potentially going to be the next issue is the midterm elections. as we move into that, kind of volatility that might be around for day to day, who's in, who's out, what are we thinking, what are the polls saying, what's it mean for trum, what's it mean for the policy, what's it mean for tax reform 2.0 so i think that's going to be kind of the next headwind although once again i don't

necessarily think it's going to be a disaster but i think it's going to be a little bit of a headwind >> we have threatened to do this for years, kenny, actually have you come up here and cook power lunch for us kenny is a great chef who ends his daily notes with the best recipes you'll ever see. >> you've got a kitchen, i'm there. >> we'll find one. kenny polcari. >> thanks. >> let's get to aditi roy with a news alert from the amazon event in seattle hey, aditi >> hey, melissa. amazon is entering your kitchen because they just announced a microwave that is alexa enabled. we've been talking about this for a bit now. basically, they demonstrated it using a potato they made the wi-fi work inside. they set the potato lid and after that everything else was hands-free they told the microwave to cook it for 6:30. added on 30 seconds. and then told alexa to stop and it did and it was all done. it will retail for $59.99 and will ship later this year.

pretty neat stuff. there was a lot of laughter in the audience >> sounds delicious. there's a baked potato >> we need alexa to bring the potato to us, though >> i was going to say, so we could be true couch potatoes no, that's the last -- >> amazon's world just keeps on getting bigger there's microwaves, smart plugs, new echoes and more. joining us to break down all the announcements, paul meeks, ceo of roy dahl and the hopes. good to see you both today here's the echo, and it's going to rule your world is this what consumers want, brent? >> i think this is part of a broader strategy to help the on-ramp for commerce and powering their cloud it's not exciting for investors onned hardware side, but all the services that they can pump through the system so we see a world where commerce, music, video, all

these different mediums can be pushed through these devices yes, we think consumers want these devices, but it's not just the device it's to get you hooked into a subscription, into power a.w.s. and these other initiatives which are much higher margin businesses than hardware this is clearly negative for sonos. >> well, i can see that. i can see how putting out these new products could do some danger there but my question is according to the information, maybe you remember this report, paul, they said only 2% of echo owners have made a purchase through the device itself. is amazon putting more eggs in this basket than is worthwhile at this point? >> no, i don't think so. i think it will end up being a material driver for the company. and i agree with everything that the other contributor just mentioned. but the way i look at this particular stock is you have a 66% year-to-date return and a

double in the last 12 months and so a lot of the good tidings are already priced into these shares i'm just a holder of the stock here and i would only buy it unless it successfully tests the 50-day moving average which is about 1890 plus. >> when you hear amazon make inroads into different places in your home like the kitchen, when you hear about more and more people buying these devices getting hooked into its services, et cetera, are you more concerned does the concern grow that the u.s. government will target amazon >> i don't think the risk grows. the risk for amazon in our opinion is do they have just too many oars in too many waters and the risk of getting defocused. but as jeff bezos said yesterday, the multiple things that go through innovation if these don't work, they'll bail and cut ties with these initiatives and go somewhere else we've seen this in multiple occasions where they've shut

down businesses. we think they're obviously very good at doing this and we think it's the right strategy again to provide the on-ramp. we do think there will be a lot more commerce that flows through these systems. the other analogy is if you look at what google's doing, google's copying their playbook everything amazon's doing on these devices, google's doing the same thing we expect it's going to be a race for the home among two large vendors right now there's obviously a premium sound experience with sonos who recently went public but you know, again, i think amazon's got the lead just like they have the lead in commerce at 50-plus percent share on the home device market >> tom farley here you were quick to dismiss the threat of government intervention there's already some government intervention in europe margaret vestager is not to be trifled with, the european antitrust head you're not concerned about that latest development or a spillover into the u.s. as amazon grows ever more powerful

and gathers ever more data >> let me be clear the alexa announcement today doesn't increase the likelihood. just answer that we do believe obviously the ongoing regulation is a concern. it's a concern across the entire internet coverage covering facebook, amazon, google it's the number one question we get from investors, what's regulatory going to do to the multiple lz? clearly it's had no impact on amazon sflp should there be a regulatory discount -- >> i think there's a growing discount that's happening and you've seen it already in facebook stock peaked out at 215 back almost at the low -- next to the cambridge analytica scandal. yes, we think there should be some discount embedded, but we still see north of 10% upside and if you do the what ifs on the 2021 we're still getting to materially more upside going forward based on the sum of the

parts across all six of their major businesses >> gentlemen, thank you for your time we've got to leave it there. paul meeks and brent thill oil prices rallying recently up 3% just this week alone. the president tweeting about higher oil prices today saying the opec monopoly must bring prices down. our next guest is a long-time commodity bear but just turned bullish on the space for the first time in two years. john laforge is head of real asset strategy at wells fargo investment institute great to have you with us. >> good afternoon. >> what is almost ironic is the last time the president tweeted was back in april when oil prices at least on brent were about 20 bucks lower from where they are now do you think opec will in fact take action when it meets in nigeria? >> no. i don't think they do much they're one part of the talking head and then you have trump on the other side and you have in essence the saudis want to keep prices relatively high 80's good, 70's good and then

you have trump trying to talk it down i think finding a good equilibrium here >> where do you see oil prices going? >> down. i'm expecting within the next 12 months to be back toward 60 on the wti. >> what's the driver of going down 20 bucks? >> supply. we still have lots of supply out there in the world there's been discussion this year that demand is matching supply that has happened. but really going forward, there is a substantial amount of supply in the world that no one really wants to talk about the u.s. is producing close to 18 million barrels of petroleum a day. it's really kind of crazy. the saudis, for example, are only 12 million. a lot of people think saudis are bigger but it's the u.s. that's the major issue out there. >> do you see anything chip away at the demand side of the equation we are seeing around the world data points that indicate slowing growth >> we have seen that and frankly one of the reasons i think oil is held in there is

china is still buying oil. they have a strategic reserve just like the u.s. does. and they're in the process of building that. so even though demand has in the world, china is picking up a lot of the slack out there once they stop doing that, i fully expect commodity prices particularly oil to go down. >> john, it's tom farley i went to saudi arabia last year with the president and i can tell you from my observation if he really wanted saudi arabia to help us out here and it was an important issue for him they would help him out. that was my observation of the relationship what isn't clear to me, though, is this one tweet -- your mother had a different tone of talking to you when she wanted you to do something versus you better darn do it. it's unclear what tone this tweet really has because i'm kind of lost is lower oil better for america now or is 80 actually a better price than 70 given that we're such a large producer? >> yeah, i don't think it matters as much to the u.s. consumer as it used to, tom. so if you take just energy

generally, today it's about 5% of our disposable income for the average american you go back to the 1970s, closer to 8%, 9%. so as time has gone on, frankly, our wages have outpaced dm commodity prices and particularly oil prices. they don't matter as much as they used to it still does matter politically. if you track the price of oil it tracks approval ratings for the president. so i think the president cares about it but not necessarily the average american like we used to >> john, we've got to leave it there. but appreciate your time john laforge, wells fargo investment institute cfos planning for a full-blown trade war how they are running their companies amid the uncertainty plus tariffs and toys. we're live at -- yes have you ever been to a party factory in pennsylvania? i haven't. we're going to take a look at the challenges facing pennsylvania putty makers. and he spent years interviewing ceos on their private jets and going to their parties

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welcome back to "power lunch," everybody. the cfos have spoken, and they're worried about trade. jackie deangelis has the results from the cnbc global cfo

counsel. hi, jackie >> good afternoon, tyler fears of a trade war are certainly concerning global cfos 75% of those asked feel that trade is going to have some negative impact on their business that's up significantly from last year. and the results were tallied before this last round of back and forth between the u.s. and china. what we know right now, cfos are actually planning ahead for a full-blown trade war more than half say they've developed contingency plans as these tensions escalate. interesting, though. the u.s. was the only place where the cfos thought economic conditions are improving despite what they're worried about turning to their markets, the majority last quarter thought the markets would go higher first before lower now the results say people didn't know what was going to happen but still they see a total of three rate hikes this year and they also think that yields are going to be on the rise, over 3% by december 31st most cfos do not support the president's proposal for earnings reports every six months they said they're going stick to quarterly reports.

and most also still believe that the democrats will win back control of the house while the senate is going to stay with the republicans. guys >> all right thank you very much. what do you think of this, tom the trade and how it may affect business >> if you're not making contingency plans, you should probably find a new job. it's like if you're a european executive and you're not making brexit plans so i completely agree with that. i also agree with jamie dimon that what's going on now is a skirmish it's not a full-blown war. it will escalate but china has too much incentive not to back down their economy's slowing down their fixed asset investment is slowing down their stock market is down significantly. the high-flying stocks are down huge and people can say they're digging in, it's a communist country, the politburo has a lot of power there's a lot of people underneath that politburo who care deeply about what their economy does so i actually think that the risks to trade are there it could go wrong.

but the high probability outcome is that everything ends up okay and we're in a better place a year from now than we are now with respect to our trade relationship with china. >> all right speaking of china, coming up, electric car maker neo, a chinese company, made its debut on the nyse last week. some have called it's tesla of china. what dot first days of trading tell us about the ocstk? "trading nation" is next hi i'm joan lunden.

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welcome back to "power lunch. i'm mike santoli and this is "trading nation. shares of neo, the so-called tesla of china-r revving up after going public last week moving higher again today. mark tepper is with strategic wealth partners. craig with piper jaffray i guess it's always hard to get a technical reading on a stock when it's brand new. how would you view this trading of the past week or so >> i think the best thing to do is go back in history. and it tends to rhyme. it may not always perfectly repeat but when you look up a stacked up chart of tesla and nio here you can see your traditional

trading really happens is where you get the pop you get the pullback now, tesla pulled back over -- so far nio's pulled back about 50%. tesla actually pulled back below the ipo price. right now for this stock you're going to have some further backing and stabilization as both buyers and sellers really start to understand the story here with the stock. so look for more of this kind of sideways consolidation but ultimately for it to move higher >> as far as the business goes, i guess being called the tesla of china can be a good or a bad thing depending on how you think of tesla but it's an early stage business with a huge potential market what do you think of the opportunity? >> well, there's incredible up side for both the company and also the entire electric vehicle industry i think if you have speculative capital that you want to play with there's enough investor hype around this space and investor hype k. lead to big profits. now, china, which is actually the largest electric vehicle marketer in the world, provides subsidies to both manufacturers

and consumers of these vehicles. and that's really the main driver of growth for nio nio's got a nice niven carved out with their suv line as well. here are the problems. they have an unproven management team, they have no experience in the actual manufacturing of cars, so they're currently outsourcing all their assembly and they have to compensate and subsidize their manufacturers. they won't actually own production until 2020 and their backlog has been disappointing they've been 7 million of sales with a 9 billion market cap. not for us at this time. >> all right so you point out speculative hype but big opportunity all things good to keep in mind. mark, craig, thanks very much for your time. for more trading nation head to our website or follow us on twitter @tradingnation back to you, contessa. >> all right, mike, thanks coming up, tariffs taking a toll on toymakers live in norristown, pennsylvania with more. ilan >> reporter: i'm at crazy aaron's putty world.

and i'll tell you why toymakers are feeling the squeeze, coming up next. >> announcer: and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> one way to manage a winning trade is to place a trailing stock order when your target price has been reached a trailing stop order is an order type that automatically moves your stop loss higher as a stock moves up but when the stock starts moving down the stop order remains at the highest level it was dragged to. keeping you in control of your trade.

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hello, everyone. i'm sue herera here's your cnbc update at this hour the archbishop of new york announcing a new initiative in response to the catholic church's sexual abuse scandal. cardinal timothy dolan naming former federal prosecutor barbara jones as special counsel for the archdiocese. >> here's what i've asked her to do an exhaustive study of our policies, procedures, and protocols on how we deal with any accusation that comes to us about an alleged abuse of a young person by a priest, deacon

or bishop. i promised her complete access to our records, personnel, and to me personally >> women over 40 who eat a mediterranean style diet may have a decreased chance of suffering a stroke that's according to a new report by the american heart association. that study found women who consumed a diet high in fish, fruit, vegetables, nuts, and beans have a 22% reduced risk of having a stroke. and meghan markle launching a new cookbook for charity the book includes recipes from people that were impacted by that disastrous london high-rise apartment fire back in 2017 in which 72% people died. she attended the event with mer mother, doria ragland, and her husband, prince harry. i bet that one's going to be a best-seller. that's the news update contessa, back to you. >> sue, thank you. checking on the markets, record day the s&p and the dow at all-time highs. let's take a look right now. the dow industrials are up almost a full percent.

the s&p is up 3/4 of a percent, and the nasdaq is up a percent as well. some names are moving on the new amazon products just announced sonos at session lows on the release of the new speakers from amazon with improved sound adt meanwhile rising to session highs on a home monitoring service partnership with amazon. and look at shares avenue cadia pharmaceuticals. on pace for its best day in five years. the stock soaring as the fda review finds no new unexpected safety concerns with its parkinson's drug melissa? >> well, konta, the oil market is closing for the day let's get to jackie deangelis on the cnbc commodity desk. >> crude prices falling today, still holding over the $70 mark this after the president tweeted about opec's meeting the president calling for the opec monopoly to get prices down now. but still all this hinges on iran really. there's only so much the saudis and the russians can do right now. if the iranian barrels come off prices are going to rise at least for the short term everyone keeps asking what about

the united states? production numbers are high. the answer there, we are still working on that infrastructure to get oil around. it doesn't matter if we can pump it if we can't move, it guys >> all right, jackie thank you. my compadre in hurricane coverage president trump is toying with the idea of more tariffs against china. toymakers don't think it's a laughing matter. putty manufacturers are already feeling stretched. ilan lui joins us from a toy manufacturer in norristown, pennsylvania with more how did you like that? >> very nice this is crazy aaron's putty world. they make a sort of high-end version of silly putty they call it thinking putty. you can see this lovely vat of neon green putty here. they call this color limelight it's one of their new products for this year. and this is really a small business they only have about 85 employees. it's locally here in norristown, pennsylvania and the company sources all of its materials from right here in america. but the company's owner says

that it's still getting caught in the crosshairs of the global trade war. >> it's a global market that prices really the same everywhere it's not a price where it's cheaper in china and it's more expensive in the united states but by throwing up that barrier it's going to add restriction and constraint to the ability of that global supply to move around the prices are going up. >> reporter: first came the steel and aluminum tariffs which increased the cost of these metal tins they use to package the putty by six figures this year then came silicone tariffs silicone is the main ingredient in the putty it as slapped with a 25% tariff earlier this summer. now the pigments and the colorings they use to give the putty that neon green color, that's on the latest list of tariffs that was released this week >> this year we've already seen kind of a one two three. it's absolutely impacting our margins. the sort of profit number that we're going to see at the end of the year >> now, the company is hoping that a strong christmas season will help it recoup some of

those costs. but guys, this company has already entered into pricing commitments with major retailers for next holiday season and the owner isn't sure how he's going to make good on those promises back over to you >> so what you're saying is that the option of passing along his higher cost to the consumer is not really an option is that right? >> not until at least 2020 because again, he's already set his prices for christmas 2019. so for the time being he's going to have to eat some of those costs. >> and what about keeping -- >> the costs, not the putty. >> and his staff, is he looking at trying to keep everybody on board? >> he's hoping that he can do that one of the things that he said was some manufacturers will maybe decrease the amount of putty that comes in these tints, maybe they move to smaller packaging sizes altogether he doesn't want to do that because he feels that the kids are expecting a certain amount of putty and they're going to be upset if they don't get it >> ylan, thank you for that. appreciate it. what is the long-term impact of tariffs on the u.s. and can president trump emerge a winner in joining us is dennis onkovic,

a prior at meyer onkovic and scott. a dealmaker there, advising an inbound and outbound foreign investments. he has a new book "asia ascending" which explains why asian countries will dominate the world economy over the next 50 years why don't we start there, dennis, and welcome back one of things that the united states seems to feel somewhat threatened by is a slogan in china called "made in china 2025" that expresses a desire for that country to dominate in some of the leading technology innovations of the next generation, whether it's artificial intelligence or robotics we seem to be concerned about that why should we be when our animating slogan these days is make america great again >> tyler, thanks for having me back on your show again. >> you bet >> i am not concerned about the made in china 2025 really what it is is a reflection of what's going on in china today. china's no longer making cheap toys that go in mcdonald's happy

meals. they're becoming more and more sophisticated. and frankly all they're trying to do is become what the united states is. so if we see that as a threat we're really just looking at i think the second most powerful country in the world wanting to become us. certainly the president in his own way is trying to make america greater, as he says, but this is just a reflection of what's going on today. >> do you think that our trade moves are a reaction to what you just said, which is that china wants to be us and we don't want that >> well, twhoino things first of all, china has run an enormous deficit with us for the last 20 years. $376 billion last year that can't continue. sought fact that the u.s. wants the trade deficit to be reversed or at least dealt with better makes sense. but the second thing is we as a country have especially had free

reign on world trade over the last 30 to 40 years. china is now coming into our space and being much more aggressive i think this is more u.s. versus china than it is necessarily just, you know, we're unhappy with the chinese >> dennis, there are two significant issues one is the giant trade deficit and the second is the whole basket of issues around intellectual property. when i try to look into the future and understand what a deal would look like, it me like we'll more on the trade zit side and less on more i.p. protections for american companies because that's so critically important for china and it's a little bit harder for the u.s. electorate to understand the intellectual property issues. and so president china will go for the easier win what do you see the eventual outcome being here >> well, if you look in the short run, i think china will

really be hurt by the tariffs. in the longer run i think the u.s. is going to be hurt as much or more than china our economies are so intertwined at this point it's impossible to pull them apart. whether you look at an iphone or you look at any other technology-based product, all of these things have parts that come from china and the united states i think it's unreal estatestiish president to think in the next two, three months he can correct a trade deficit that's been going on really for the last 30 or 40 years. i don't mind him trying. but i think president trump big mistake. when we had the tpp that the u.s. had essentially adopted, president trump in the first two or three weeks of becoming president abrogated it we walked away from an agreement which was essentially 12 countries including the u.s. and not china. where they could essentially act as a counterweight to china's

military and economic presence around the world it's sort of like at this point we're trying to impose tariffs with one hand tied behind our back >> a lot of the farmers that i've talked to were bourbon manufacturers who are already feeling the squeeze from these tariffs, dennis, say they're not only concerned with the actual tariff but the qualitative measures, for instance, chinese inspectors holding their stuff up at the port so the soybeans are rotting in port rather than getting to the buyers. how instrumental can those qualitative measures be in putting pressure on the united states in coming to the table and come up with some deal that's acceptable to china and acceptable to the united states as well? >> that's a great question because in the long run china has a $376 billion deficit in other words, they can only put so many tariffs to counter the trump tariffs on what's going there. the only thing they're really left with is the ability to say all right, if you're bringing

into port in shanghai a shipment of televisions we can inspect it in a day or we can inspect it in a week or we can take a month to do it. and these kind of non-tariff barriers, which the chinese can impose -- there's another thing. there are a lot of joint ventures between american companies and chinese companies. oftentimes you will find that the chinese entity in a joint venture will be influenced by the chinese government to make it more difficult on their partner. so it's where i think china really has the upper hand over us >> need a five-word answer, dennis who blinks first, trump or xi? >> i think trump blinks first. the reason is the chinese, if they are patient, can wait for a long time. up to two or three years when president trump has to rerun. i think the u.s. will get a few concessions but i think trump blinks first and i know we're running out of time i want to have dennis back for i

point-counterpoint because i disagree with nearly every conclusion he drew we will do that. dennis unkovic >> thank you coming up actor ben stiller makes a commercial for your book, it's probably a compelling read >> do you want to learn more about hedge funds or how to get one of these vests then check out gary's novel, "lake skut." "lake success. >> the author of "lake success" joins us live next so when we roll out the nation's first 5g network, it'll be because we were the first to install millions of miles of fiber optics. and we'll be the first to upgrade the towers and put up the small cells that will power the smart cities of the future. when i started at verizon, i knew i was joining a team that was pushing the industry forward. now, with the launch of the only 5g ultra wideband network, we're doing it again. this time, changing the way we learn,

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you might be wondering how do hedge funds work. well, you might be wondering what is a hedge fund >> hedge funds take money from accredited investors >> like your moms. >> and then transfer that money to me and ben. >> and then we like invest that money into stuff >> sometimes really weird stuff. >> that's a clip from a viral video making its way around the desks of wall street it promotes a new book some call the bonfire of the vanities for the hedge fund age robert frank joins us with more. robert >> hey, contessa gary shteyngart's new novel "lake success" chronicles the fall of a wealthy hedge funder who loses everything and takes a greyhound bus across the country as he writes "like your first

ankle monitor bracelet or your fourth divorce the occasional break with reality is an important part of any hedge fund's biography." gary, thank you for being here so you've written some great novels about different subjects. your previous one was about silicon valley why did you choose hedge funders for your next book >> well, a lot of my novels are about manhattan and i looked around my neighborhood where i live in manhattan, i realized i didn't know anyone all my friends are priced out a long time ago. so i said who are these people >> who's left? >> who's left? so i started talking to them and realized they were working in hedge funds or private equity or if they were really poor a private investment bank. and i said i'm going to be your friend now >> and you spent four years. >> four years. >> hanging ow out with these people on their private jets, partying with them, drinking a lot. >> oh, my god. the drinking i thought they were supposed to be healthy there were nights i'd come home at 5:00 in the morning and my wife would have to unbutton my shirt for me, my fingers wouldn't work. >> what was the biggest surprise in thattar four years of being embedded with hedge funders that

we might not know? >> one thing i was re surprised at is how i became real friends with them. they remind med -- i went to stuyvesant high school, which is a math and science nerd school in manhattan, and there we were obsessed about our gpa i still remember mine, 88.694. and these guys were obsessed about the basis points on their bloomberg monitor. for me it felt almost like a complete reconciliation of that. >> all the alphas in high school had got on to run hedge funds. the story in this book traces a lot of what is parallel to valiant. this guy has a big hedge fund. he invest nad company called value prorks which is like veilant. who is the main character gary cohn based on? >> where's my legal team i put a bunch of influences in a meat grinder and we chop it all down i would say that there aring obviously influences of valiant but also someone like skreli pops up. inn who wants to make a really

quick quick buck -- >> you spent a little of time separately with mike novogratz but that's after you'd done the book so he's not -- >> he's not. barry went to princeton. novogratz, i like him. he's not a schmuck he's -- >> that's high praise. that should be on his next book jacket all right. >> in terms of the next sort of area that you would focus in on, what would it be i mean, silicon valley was a topic. right? hedge funds. what's the next target >> well, i was born in russia. so i think russia's current liaison with our own government is something i really want to look into. i'm not even allowed back, i don't think. but i really want to research that because i think that's the future -- >> and as you talk to these guys as an investor, someone with investable assets, did you learn anything about how to invest better, how to become a better investor >> well, after -- >> do you invest in hedge funds after this

>> after a volley of drinks many people to say to me, look, let me give you some advice. don't invest with me just go with index funds all the way. >> that's a good takeaway. >> that's one good takeaway. >> gary, it's a terrific book. thank you for joining us >> thank you >> coming up, short-term auto subscription plans we'll look at one company that says business is booming and how toke are getting in on the action that story is next see that's funny, i thought you traded options. i'm not really a wall street guy.

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technology materials as well as staples two years after several auto makers started testing out auto subscription plans that's when customers rent a vehicle far short period of time the idea bmay be catching on >> i get this question from w people from time to time they want a car for six months or a year or year and a half that's where autooh subscriptions come in. they are get ago little more popular. there are a number of autothough makers running trial programs.

most of those tend to be with the high end vehicles. there are used car programs starting up. there is a forecast that 10% of all auto sales will actually leave people with some type of autosubscription the average car loan is approaching 7 years. the idea you would be committed to something for seven years is in a modern life is about as ridiculous as it gets. >> the reason she likes this service, she is an event planner who some times has to go the a different city to work on a particular project who want to pay far car you are

not going to be driving? it allows her to pause the subscription and when she comes back she can move back into her car. >> you're dealing with used dealers. it's easy to move in and out of these vehicles and say we are going to sell the vehicle you're in you want a different vehicle the price may change but it's easy to get that through used market >> appreciate it >> final thoughts from our guest host next.

>> all right he got you there when he said i think trump blinks first that's what triggered you to say i disagree with a lot of what he said >> his points were reasoned and logical and backed up by good research and study it was the comment immediately prior to that when he said china has all of the leverage. the u.s. has a great amount of leverage right now the s&p is up about a thousand points since the day donald trump was elected

you said you're not sure what the administration's real objective is you don't quarrel with holding to account and you would focus on ip theft and it feels as though the administration's objective is to make manufactured goods you would rather see china deal with and deal with access to markets, right? >> absolutely. i'm glad we are taking a tough stand on trade i think we end up with a better outcome. i'm a believer and it feels like

we are try to go fight that. it's okay if klichina is doing nonhigh value added task. did you ever ask them why do do you that i think that's billion and a half reasons why i didn't even have to ask the

question so who has leverage? >> china has leverage. we have more leverage. their number will shrink and shrink >> thanks for watching power >> and the closing bell starts right now. >> we'll discuss which stocks still have room to run >> i'm in seattle. amazon announcing new alexa powered devices today. i'll have that on the full product line up. >> marijuana stocks after a record day yesterday i'll take a look at how high the evaluations have gotten and how popular it has become. nike just wrapping u