and how they had to deal with the investment bankers lawyers saying they have to do x, y and z. >> final trade >> construction. $26.25 78 million shares. bingo. >> that's the way we started and how we ended, as well. there it is. thank you for being here. >> thank you for watching. "power lunch" starts now i'm melissa lee, aiming to end on a high note it's been a great week for the rally, but there is a massive event coming monday that's going to change the way you invest in tech and ets it'll impact your portfolio. gone for good? despite the strong job market, americans who dropped out aren't coming back to work. is the booming u.s. economy in danger of running out of workers? high expectations. canada set to legalize recreational marijuana next month. with stocks and border concerns, is this a bubble waiting to burst? "power lunch" starts right now

♪ do you remember ♪ love was changing my mind >> welcome to "power lunch." ready to dance i'm contessa brewer. capping off a stellar week for the bulls. the dow and s&p 500 hitting records earlier. the nasdaq has been struggling all day. the dow on track for the biggest weekly gain in more than two months check these out. well-known names hitting well-time highs, nike, lowe's and clorox among them. duke energy says a dam is flooding we have more on that ahead tyler? >> thank you very much welcome. i'm tyler matheson let's go to the new york stock exchange hi, bertha >> hi, tyler you see the nasdaq sitting it out here yesterday's leaders, today, they are the lacque lackers

materials and tech, all negative some of that selling could accelerate into the close. we've got the expiration of stock and inindex, options and futures. on top of that, the s&p sector is re-waiting, which dom will tell you about that will likely see a lot of volume it could well be a record volume event this afternoon brace yourselves going into the close. meantime, micron is one of the issues in tech today it is weighing down on the sector, particularly on chips. despite an earnings and revenue beat, the chip maker is warning that those tariffs that are going into effect on monday are going to hit gross margins looking at other tech names, usual suspects are all lower today, as well, apple's iphone debuted, providing a lift. apple negative for the week and the month. as is amazon, despite that debut of alexa-enabled devices

both weighing on the nasdaq. interestingly, facebook reportedly will launch an alexa-enabled device next week few names in the dow tech names that are higher, all-time highs for microsoft, visa, and sysco at a -- cisco a an all-time high. >> thank you very much. the, ma et changing the wa about big tech and the funds you buy. dom has more >> so like bertha was saying, this could be one of the biggest, if not the biggest, sector reclassification for the s&p 500 in the better part of two decades at this point. the reason why is because the technology sector is going to get smaller, but communication services, which is the old telecom sector, is going to get bigger here are some of the examples. telecom is now communication services, and the reason why it is important is because many of the names we've come to know and love and talk about all the time

are moving to this new sector. take, for instance, old technology names facebook, the social media giant, alphabet, parent company of google, even twitter. a handful of sampling of the names that were once technology but now will be communication services on the consumer discretionary side, netflix, cbs, disney many are now part of the communication services sector. as we take a look, wall street may be a little more prepared already for this move here going back to june, we've heard about these moves for months now. the sector spider that tracks communication services, the new sector, is actually going to be -- or already is in existence and has been since june. if you look at that versus other spiders that track technology and consumer discretionary, they're going to change based upon what's happening overall with this re-waiting tyler? >> thank you very much, dom. it'll add some spark into the telecom sector, which was the

smallest of them what do all these changes mean for your investment gam plae pln will the rally keep going on carol murphy, chief investment officer with united capital. gary, i want to tall y-- call yo terry bradshaw, but i won't do it welcome to both of you what are your thoughts on the market and its staying power >> so overall, we're moderately bullish. i mean, it is always great to have headlines of where we're hitting new highs all the time we don't see any reason why that should turn around any time soon corporate profits up 17% really healthy that'll slow going into next year we think margins are still constructive with a lot more cash in their pockets, companies are looking at increased buybacks. we think it'll be about $1 trillion in 2018, increasing dividends. overall, we're constructive. we're looking for signs of rising risk in the market. >> gary, you are particularly

enamored with small cap stocks why? >> well, tyler, primarily because earnings have been fabulous just this quarter that we're in, earnings in the small cap space have been up 48% we think in the next quarter, they'll be up 36%. small caps have done well this year a lot of m&a activity. margins continue to improve. revenue has been up strong we're optimistic at the hodges small cap on the market, and small caps in particular >> a lot of optimism here from both of you. kara, where do you see the headwinds? what are you paying attention to when it looks like pitfalls ahead? >> everyone is talking about trade wars, right? when you have trade wars, tariffs increasing, those are all sand in the gears of the economy. it's definitely a headwind so far, we've only seen it really manifest itself in individual companies when we look at the broad

economic measures, we still see companies hiring ceos say they're confident capex is going up. companies, with what they're doing, are saying trade wars are not going to be an impact on their overall plans. that's something we're watching closely. >> at the same time, reuters obtained a letter that walmart wrote to senators saying that they're going to have to pass on price increases because of the tariffs from china gary, let's say that consumers who walked into walmart had to pay 10% more on a host of goods, from food to personal care items. what sand would that be in the gear of the economy at that point? >> well, if prices are going up, more inflation, it is going to hurt the economy it will impact earnings to a small degree, in our opinion the fact that these small caps are domestic, we don't think it will have quite the impact as it would the multi-nationals. that's what keeps us attractive to the small cap space at the moment >> kara, same question to you.

>> so, i think more than just the trade wars, we're really looking at inflation so far, one of the big drivers of inflation, not just on a ppi side, but on the consumer side, is wages wages have been very slow to increase throughout the cycle. they're starting to pick up, and could be a concern inflation levels are bumping along the bottom of an acceptable range for the fed we're watching where potentially increased tariffs or higher wages could feed into broader inflation. we haven't seen it, but it is something we're aware of. >> kara murphy and gary bradshaw, thank you very much. appreciate your time. >> thank you. >> thank you for having me. let's go to jackie at the commodity desk. >> oil drilling was down to 866. it is up 122 from a year ago this is, of course, according to baker hughes it is the second week in three that the numbers are lower it is not a big drop but, still,

the story is what's happening here in the u.s. but mostly what's happening with opec and iran the unofficial meeting taking place this weekend crude prices are popping ahead of that, 1.25%. the newest iphones hitting store shelves today. tim cook was at the company's palo alto store to welcome intrepid souls who lined up to be the first to buy one. we go live to palo alto with more josh, looked like a good time. >> reporter: we were at the store here in palo alto, california we caught up with the guy who was first in line here he got here on tuesday night how is that for dedication what is he in line for was he hoping to buy take a listen. >> i'm going to get a xs max, the 6.58 inch screen phone in gold, and i may get a watch. i hadn't planned on getting a watch, but since tuesday night, my mind has been changed >> reporter: apple introducing a

lot of new hardware today. you have the new xs, a 5.8 inch display. starting at $999 you have the xs max with the 10.5 inch display. that's apple's biggest ever for an iphone. it starts at $1,099. both the phones, remember, are powered by the new, faster a12 processor. you have improved camera technology apple is saying your photos, videos are going to look better. apple also mentions that improved water resistance and stronger battery life, they say. we do have the third iphone coming, too, the xr, hitting next month, starting at $749 key question for investors, what is the mix of these iphones and the quarters ahead obviously, it'll have an impact on margins and average selling prices just the phone though, we also have the watch thinner design, larger display also new health features in the

watch. this can detect whether you fall hard it can administer an ecg it'll start at $999. >> back to you >> when it can teach my kid to ride a bicycle, i'll be impressed. josh, thanks markets once again rising to new all-time highs today we're a couple hundred points away from dow 27,000 what is one of the biggest investment firms in the world doing with its money we'll ask blackstone president and coo jon gray that's next on "power lunch.

welcome back to "power lunch. markets at record highs, shaking all tifears of a trade war and rising interest rates. why aren't the markets more concerned? let's ask a person who oversees over $400 billion worth op invei -- of investments david joins us now. >> thank you usually when i sit down with jon gray, we talk about all the macro kinds of things, given blackstone's reach around all geographies and into all asset classes. we'll get to that today. we're at the plaza hotel because you've finished your first investment meeting in four years. is that a typical thing? >> we've been busy. >> busy. the stock is up, so you clearly did a decent job today what are the messages that you sort of wanted to try to impart four years from your last meeting, given the increases you've had in so many of the

important metrics, but the lack of increase, frankly, in your stock price? >> yeah. the message was that the firm is in terrific shape, driven by great performance. that's the real foundation of our business delivering great returns we've done that across real estate and private equity and credit and hedge funds because of that, we've had big in flow. we had $120 billion capital come in just over the last year, a record we've got a record pipeline of $150 billion of assets going forward. when we look out, that's translating into strong financial results. we told folks earnings were going to be accelerating going forward. not only will they be accelerating, the nature of those earnings is changing the way they're changing is, as we move more and more to longer duration vehicles, what we call perpetual capital, we get more predictable earnings we think the combination of faster earnings growth, more predictable earnings, steadier

earnings, will give the opportunity for a re-rating of our stock. which, as you said, has been a bit of a source of frustration for us. >> it is something we've discussed a bit in the past. you have one great slide in the many you presented today, which shows this very significant percentage increase over the last four years, a number of important metrics. only a 9% increase i mean, today, you're practically up 50% from the 9% increase that you had over the last four years. i know it is a frustration do you feel like you've done enough to address it >> i think this is a process today was a really important part of that educate our investors, the research community, about the way the firm is changing yes, i think we got the message out there, that growth is picking up i also think we got an important message out that the firm has fundamentally changed. if you look back a decade ago, you'd say, this is a firm just really in private equity, real estate private equity, and it's expanded, broadened in the way of serving investors do it in all areas

the broadening makes this a more robust firm. yes, from a valuation standpoint, when you look out and say we have the highest dividend yield of any of the 150 biggest companies out there, we traded a market multiple that's a third lower than the rest of the market, we do say this is a heck of an opportunity as insiders, we own 50% of this stock. we're totally focused on maximizing value. >> right some will say, well, one of the reasons you traded the discount is you're not a c-corp kkr decided to move that way you continue to study it, but it is not something -- coming to this meeting, there were people who expected that would be the major news item. why not say, we're going to do that, as well, given what has been a positive market response to kkr's move? >> we've seen what's happened to their stock and others, and we've been impressed we're looking at it closely. we said, i think, on the board, actively considering this is an important decision. we want to be thoughtful we'd like to see sustained stock price performance.

we'd like to see what happens in index inclusion. we'd like to see in terms of mutual fund ownership. it is something we're open to, but we're still studying. >> asset flows are so important, and it is something you, of course, focused on today per pepetual or otherwise, what you've had versus your competitors. what gives you the confidence those flows can increase or continue at the rate they currently are? >> i would say the key thing, again, is performance. what we showed today was it didn't matter if it was private equi equity, real estate, credit, or hedge funds. in all those areas, we've out performed the benchmarks, and in the last 12 months that drives flows. if you deliver for investors, they give you more capital the second thing i'd say about this is, the markets we serve are enormous the institutional market with pension funds and sovereign wealth funds, the influence market, the retail market,

there's -- add up those three, $150 trillion. it sounds like a lot, that we have $440 billion of capital it is still a tiny percentage of the markets. that gives us a lot of confidence. >> you are talking about $1 trillion eight years out, if i remember from the slides. >> eight plus. >> eight plus. life sciences. i mean, i mentioned that because, of course, you've moved into other areas you tried to innovate in terms of asset classes infrastructure is one area we've talked about in the past with the new fund you mentioned life sciences. what will that actually be >> i think it starts with the idea that we look at all sorts of private asset classes we want to find great people where there is an interesting market opportunity, build a great investment process that's what we want to do. when we think about life sciences, we say, here's a market that needs a lot of capital. big pharma, there's some capital there, but i think there's a need for more. approval process is very expensive. there's a royalty market that's also very large. traditionally, private capital

hasn't operated in scale here. we think it may be changing. we're looking hard at it. >> are you going to launch something? >> i don't want to tip our hat, but i think we are going to do something here over time i think we've signalled enough that it is a space we're going into by the way, in our other areas, in private equity, we've made life science investments real estate, we're the second largest landlord with bio med in the life science office space. >> in the brief time we have left, let's hit the larger macro things, given your view. you were in china recently i think the financial roundtable there a week or so ago has there been any change in your viewpoint in terms of the chinese response and/or sense as to the seriousness of the situation with this ongoing war? really feels like it at this point, kpebetween the countriesn trade. >> what i'd say, i think the financial roundtable is a good sign of some positive things they brought us in the chinese today have the largest pool of consumer savings

in the world they have the second largest economy. they've got a less developed financial market american companies are great in capital markets, in asset management, in retail banking. they were asking the leaders of a bunch of financial firms to come in and make concrete proposals about how the market in china could open up how they can give us more access it was a very productive discussion i think it is a good sign, that below the big headlines, where there is tension, there are good things on the ground there's an openness to reform, an openness to the u.s. moving into that market in a bigger way. i continue to believe -- >> you're still optimistic. >> still optimistic. >> it keeps getting worse. >> yeah. >> it is not getting better. >> yeah. my optimism comes from the fact that it is in the party's interest, that if we stop trading investment between the country, it wouldn't be good there is a recognition on both sides that a rebalancing has to happen the question, is the degree and

the pace of that rebalancing look at nafta as an example. there was a lot of tough, you know, headlines, three, four months ago today, that seems to be moving closer to resolution i think china will take longer i do not think it'll be a straight line. in the fullness of time, yes, i think these things will be resolved. >> you don't see it impacting your ability to do business at the point? >> not at this point despite the headlines and tension, u.s. companies have continued to operate in china. that's our hope going forward. >> we talked not that long ago about the strength of the u.s. economy. let me leave it at this, broadly speaking the emerging markets have been suffering. so have some of the markets outside the u.s. in fact, there is a significant divergence in terms of the performance of our stock markets, for example is that a concern to you does it reflect, perhaps, larger concerns about the overall global economy >> i think the emerging markets are a bit of a particular case, in the sense that their dollar denominated debt, since the

crisis, has gone up three-fold to $3 trillion as the u.s. economy strengthened, their currencies come under pressure, making it harder for those borrowers to repay. then their central banks to strengthen currencieies raise rates, putting pressure on the economies. it is a tough cycle they're facing today i don't think that necessarily signals we're going to have a major challenge in the u.s could create banking issues for some of the more exposed financial institutions i don't see a domino effect from that, causing u.s. growth to, you know, go down sharply. we still see incredibly strong signs in the u.s consumer confidence, 18-year high, claims, 50-year low, small business confidence, the highest it's ever been all the signs seem to point to more investment. it still may mean challenges for values, given what may happen to rates, but in terms of economic activity, we're pretty positive in the u.s. >> finally, out there, if you want your kids to work at blackstone, forget about it. they don't, basically, accept

anybody. i thought this was the most fascinating slide you had. 14,900 people apply to be analysts, and you take 86. >> i said, thank goodness it's not the case when i applied 27 years ago. it really speaks to the power of the firm, its brand, the quality and the talent we're bringing in the doors. when i look over 10, 15, 20 years, it makes me positive about our company. >> all the friends of yours who call and want to get their kids in the door, forget about it jon, thank you, as always. >> thank you. >> president of blackstone back to you guys >> david, thank you. shares come down after a huge jump following another 20% today for tilray canada's marijuana industry prepares for legalization. kate rogers is live in ontario, canada. kate, where are you? >> that's right. hey there. we are just a few weeks out from recreational cannabis

legalization in canada we'll tell you all about the growth efforts underway after the break on "power lunch. your muscles look good, but we should be seeing

more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh...am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies lead with digital. get ready, because we're helping leading companies ♪ introducing the all-new corolla hatchback.

toyota. let's go places. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered...

hello, everyone. i'm sue herera with your cnbc news update. senate majority leader mitch mcconnell predicting brett kavanaugh will be confirmed to the supreme court in the very near future. he drew cheers as he defended kavanaugh at the values voter summit of conservative activists. >> you've watched the fight. you watched the tactics. here's what i want to tell you,

in the very near future, judge kavanaugh will be on the united states supreme court duke energy says a dam containing a large lake at a wilmington power plant has been breached by floodwaters from florence as a result, it is possible the coal ash from an adjacent jump is flowing into the river. the federal trade commission allowing consumers to freeze and unfreeze their credit at the major credit bureaus an unlimited number of times without being charged. previously, it'd cost consumers $3 to $12 to do it every time. you're up to date. that's the news at this hour back to you. >> thank you very much the strong u.s. economy has led to a big drop in unemployment, which currently, the rate sits at 3.9%. the bad news is companies, some at least, are having a hard time finding workers.

we have more on this job dilemma. it is kind of a good problem to have, i suppose. >> it is a high-class problem, but it is a problem, tyler let me just show you from the graphics here, really interesting. the tightness of the labor wark ne drk ma market, which you can see, that's the unemployment rate, but it is not bringing more people off the sidelines those not in the labor force back into the labor force. let's go back to before the recession. you see the percentage of the population raise tharg hand aind and saying, i'm available for work, was coming down. the recession accelerated the low unemployment rate kept people from leaving the work force, but they're not coming back in. that's true overall. two demographics are interesting and explains the dynamic going on the first are those ages 25 to 54 beginning in 2015, their

participation rate did rise, coming back into the work force. unfortunately, the 55 and older group, they were working a little bit more during the crisis, probably because their pensions weren't doing so good, then they started leveling off here this orange group is growing demographically, more people are in the lower participation rate than these folks here, which are 81% more of these folks working. only 40% of this group this group is growing in size. what do you have here? look at the next chart those not in the labor force those moving from not in the labor force to into the labor force, it is going the other way. you would think that low unemployment rates, some better wages would bring them back in it is not happening. melissa, i'm not saying we're going to run out of workers, but when employers say it is tight to find folks, i think they're right about that >> what are the people doing, that they're dropping out of the labor force, not collecting a paycheck, and they're still relatively young >> well, right some of the folks there, as we

had allen krueger on this morning, the labor expert, said some people are involved in the opioid crisis. that's one issue some are living on disability. some are maybe living with relatives. he says nobody is living well this way, but they're living that way what it takes -- by the way, they may feel they can't find a job and are discouraged and have gotten to a point where it is like, i'm not looking anymore. i'm not trying if you go back to the other one, you'd see that we're about seven or eight points below on the men and six points overall of the 95 million people not in thelabor force, there are wome who stay at home and men who stay at home to take care of kids there are students and retirees. it is only about, say, 5 million to 10 million of the population we're working with here. >> steve, stick around we want to dig deeper into this with megan green, chief economist with asset life management great to have you with us. what point does the constraints in terms of availability of labor constrain the growth of the economy?

>> well, i think steve makes a good point you can draw people into the labor force by running the labor force a little hot we saw it in the 1980s through the 2000s, when wage growth was pretty strong. there has been a precedent out of it. when you look at the number of unemployed plus the people out of the labor force, including people who are in school or who are disabled, actually, there's a lot of slack left in the labor market it does suggest we should be able to draw some of the people into the work force. i think what we would need to do is higher wages. i'm reminded of something that kashkari said at one point if you're complaining about not being able to find workers and not raising wages, you're whining. it is probably true. there's been hesitance to raise wages. some companies said, we could, but everybody else would do it, so what is the point it is a collectible action problem. i do think there is some solution to this, and it comes in the form of higher wages. >> do the workers who might be lured back by higher wages

necessarily, because they've been out of the work force, maybe voluntarily and maybe not, do they have the skills that the employers want >> that's a question that would depend on the sector there is a significant skills mismatch the number of regional fed presidents are looking into how to fix that. the philadelphia fed, dallas fed, they're trying to implement local programs as a test pilot to be rolled out nationwide, to figure out how to re-tool and re-skill people. the problem with that is, it is fine for a central bank to look into it, but in terms of politicians adopting these policies, they're slow burners and don't work right away. they don't work within an election cycle, so no one is really incentivized to do it. >> i hear this more on the conservative side, i think because they want to give the policies of the trump administration a chance to run here, but to let it run. i hear this more and more, especially from conservative economists

let the unemployment rate fall don't worry about inflation. stop hiking the funds rate let's see if we can get wages up and, for lack of a better term, wages up and people off the couch. what do you think of that idea >> this was janet yellen's plan. if we run the economy hot, we might get people to join the work force it worked for a few months, but it seems to have petered out jay powell, now the chairman, also supported the idea. allen krueger, your previous guest, supported it, too, saying it is a way to great bargaining power when it comes to wages, just run the economy hot. >> i'm sorry we're talking about a radical idea that the fed would sort of ignore the incipient or theoretical inflation concerns and just let it go see how far we can drive down the unemployment rate. see if there is a response by the way, for the record, i

looked back 50 years there is no response ever of the participation rate to the unemployment rate. what there are are vast demographic trends of women coming back into the work force, enough deciding they're working so some leaving the work force there were big trends. this would be a radical experience megan, i think you're signing on for it, right? >> yeah. i mean, you said it right, the theoretical inflation. i think there are a bunch of structural factors, including demographics, the gig economy, the fact we consume so many services which are low-wage sectors, means we're not facing a surge in inflation we don't need to worry about it quite as much as we have in the past, when we've been in the late stage of the business cycle. i think that it is worth trying to run the economy a little bit hot, see how many people we can get into the work force without worrying about a surge in inflation. >> well, i'm sure this will be a continuing conversation.

thank you. steve and megan. canada is set to make recreational marijuana next month. those in the industry have high hopes for what it will do to their business and what it might mean for the u.s. market kate rogers is in ontario with more kate >> reporter: hi, melissa canada will legalize marijuana for recreational use come october 17th, becoming the second country in the entire world to do so industry insiders say it could put pressure on the united states to take action in some form, now that our neighbors to the north have become so progressive. >> hopefully, we can show america and the rest of the world that legalization is the right thing to do. it is very important, i think, to put the money back into the people's hands government will generate a lot of revenue, a lot of taxes it will add a tremendous amount of jobs, especially to small town america i think it is really important that the world gets to see this. hopefully follows canada's lead

as a g-7 country. >> reporter: this also comes at a time when major companies, like consolation brands and coca-cola, are either making deals in the space or watching legalization as it unfolds especially cbd, which has pain relieving properties and doesn't get you high here, they're focusing on the me discal ma -- medicinal market they say as more of the product moves to the rec product, we could have a shortage in the first few years. >> one of the things i wanted to ask you about, when you're fo s focusing on medical marijuana, you're against companies, big pharma, that have been treating these illnesses for decades or generations even how do they think they're going to break into that and make theirs the go-to product >> reporter: well, canada has been way ahead of the curve with their medicinal market it's been in place since 2001. they have already been working on this. all of the growth that's happening right now has to take

place under the medicinal umbrella because recreation is not yet legal. all the provinces are handling the rollout themselves much like the states do in america, guys. >> kate rogers, thank you. let's get to the bond market rick santelli is tracking the action at the cme. >> hi. a two-day chart, a lot of consolidation around where we settled yesterday at 3.06% if you look at the barkley's charts, starting may 1st, and may is when we had the high yields of the year thus far, especially in the long maturities, you can see that the barclay's investment grade you're look at there has really nar b narrowed that means no real pressure. the barometer is falling high yield is even tightening faster this is a guy sign, that higher rates shouldn'tadversely affec the markets. the dollar index since may, it looks nervous, but it is holding around $94 back to you. >> thank you very much

jamie dimon warning that a cyber attack is the biggest threat to the u.s. financial system how worried should we be google has become a popular target for president trump he has new ammunition today. we'll tell you what its d ian bring you the details when "power lunch" continues.

♪ ♪ ♪ ♪

what if we could turn trash into money? plastic bank is doing just that, by exchanging plastic for digital credits redeemable for everything from food to education... powered by ibm blockchain. when you understand the potential of new technology, you can put smart to work. on wednesday, jamie dimon raised awill rememblarm of the system's biggest vulnerability, the threat from cyber attacks. >> do you believe we find ourselves most vulnerable today, if you believe the banking system is much more secure in comparison -- >> the biggest vulnerability is cyber for everybody. i think we have to focus on it the united states government has to focus on it i think we have to make sure cyber terrorists and cyber, you

know, countries, they can cause real damage. we're already spending a lot of money. jpmorgan is quite secure we should really worry about that. >> john is a partner at morrison and forester, and the author of "dawn of the code war. it is interesting because when jamie dimon is talking about the threat the our financial system, you had a billion euros stolen from 40 banks across 40 countries in march they busted the plot of all these hackers. if hackers can get into banks, what makes our election system safe >> it is a great question. i couldn't agree more with the idea that it is the greatest threat that we face right now, or threats from nation states, terrorists, organized criminal groups they're coming in because everything we rely on is through digital internet-connected systems. we need to worry about our election. >> some of the experts i've interviewed say that the criminals are using artificial intelligence to their advantage. they're doing things like

cyberattacks that have doubled in the first half of this year the system doesn't even catch these because it is looking for corrupt files, not fileless attacks. how do we beat them if we're not using the new tools? >> we have to innovate in this space. you're seeing companies and cybersecurity that are innovating in this space, and they get the reward. every one of my clients, major corporations, they are looking to see how they can improve their defenses against what is essentially an arms race we're seeing a blended threat, that the nation state tools that used to reside just in the hands of russia, china, north korea, and make no mistake, they're still using them, but we're also seeing them in the hands of these sophisticated, organized criminal groups that look more and more like a segmented, legitimate bismarusiness market one group develops the tools, and another rents it. >> are the good guys ahead of the bad guys that's number one. number two, that are the odds in your view that someday, i'll go to an atm or log onto my banking

website, and find zeros? >> number one, no. this is an area where the bad guys are out stripping the defenses of the good guys. we may have weapons as powerful, but it doesn't matter because there's no one for us to hit >> because we don't know who they are >> or if it is a criminal group, right, they're not at risk they're not putting everything they value into cyberspace the way they are or north korea, for an example we're responding to a north korean attack on sony. what if you knock them offline they have fewer ip addresses than cnbc alone. the whole country. if you knock them offline, it's not a big deal we're more vulnerable than they are. >> does it help the trump administration has relaxed the counter cyberattack rules coming from the government? >> we'll see >> just learned about this this is new this week. >> yeah. what they said is that they had

repealed a directive that essentially required coordination before you did one of those attacks whether this piece of paper or that piece of paper makes a big difference, the bottom line is, we need to do more to deter. we'll have to see whether they execute and cause consequences bringing pain to the adversary. >> any desire on the side of the government to retaliate, or use our weapons in what they could deem as an act of war, i mean, we've never crossed eed the li. maybe we should be thinking that way these days. >> or have we? >> we don't know about it. >> yeah. we have taken and are starting to take more deterrence actions. in order to do that you have to, number one, figure out whether did it number two, make it public you're starting to see that more that's why you're able to talk about it and see the degree of the threat we were seeing in a classified space number three is then, how do you impose pain to the adversary that causes them to change their behavior that might not be through cyber means. to go back to the question,

knocking north korea offline may not be the most effective way to change their behavior. in posing serious sanctions that hurt, that cause the regime to lose money, that's hurting that's why they're trying to do bank heists through cyber means. the incredible case you referenced, where the largest bank heist in history. they were trying to pull off a $1 billion bank heist as a nation state, to raise capital they got away with nearly $100 million. >> yeah. it is something that those who work in this industry are very well aware of. feel like they're trying to bring a knife to a gunfight. john, thank you for joining us appreciate that. >> thank you >> good to see you, john well, a big day on monday. two big interviews with jpmorgan ceo jamie dimon. twice as nice with jamie dimon, monday on cnbc it's been a couple of months since sports betting was legalized outside of nevada. up next, we'll tell you how much is being bet and where the money

is going plus, cleveland browns fans celebrating their team's first win since christmas 2016 we will tell you which company is right in the middle of the party, next on "wepor lunch. ♪ celebrate good times, come on ♪

the cleveland browns won a game yes. they only beat the jets but it still counts baker mayfield came in when the browns starter got injured and led the browns back from a 14-0 deficit to win 21-17 the browns had not won the previous 19 games. in fact, their last win was christmas eve 2016 and that means it is time to celebrate. crack open the beer fridges. bud light putting locked beer fridges in several bars the cleveland only to be opened when the browns won bingo. you got it. >> all right plane betters around the country may be celebrating the browns four-point win. why? because they covered the spread which was three points five states have legalized sports betting one of them is nevada. the biggest. nearly $250 million wager ped i

july new jersey's august tally nearly $100 million delaware and mississippi, smaller, west virginia, only recently came on-line. you see the numbers there. how do these compare with what the experts were expecting let's bring in one of the experts now, chad millner head of the action network. >> it's a relatively new media company focused entirely on sports betting, information and analytics. >> okay. so has the expansion of sports betting outside of nevada grown as fast as you would have expected, slower, about what you expect >> i think about what we expected the supreme court in may overturned the federal law that banned sports betting and gave the states, each one their own right to decide if they want to legalize sports betting. new jersey has done it i think what's most interesting about that, how much money new jersey had bet in that first month. that was largely due to the fact that they're one of the few states that recently legalized it that is allowing mobile

betting. i think that number is encouraging. >> they were ready for it. it was their case, it was governor christie who believed he was going to win the case. >> yes. >> and so they were ready and ready to jump at the moment. ultimately, how many states do you believe will have legalized sports betting and will california, which is the biggest money pot of all, be one of the last to do it? >> i don't think they will be one of the last. i thinkyou're going to see ove the next two to three years a majority of states i think a preponder rance of the states by the time we get to 2012, you will see 25 to 30 states that have it. does the federal government decide, all right, it's big enough everywhere, we will legalize it and make it a federal law. >> does enthusiasm around sports betting, does that make people more likely to watch an entire game more tightly or change the way we watch in that we're only going to be watching for certain periods of time, watching for, i don't know, certain -- whatever you're betting on, actions that

happen within the game >> the answer to both is 100% yes. >> both ways, okay. >> people are more inclined, plenty of studies show people are more inclined to watch games for longer if they have action on the game. >> as it comes in right now, you have all of these leagues that want different things, different piece of the pot you have all of these concerns that are different how do the states individually go and negotiate with the pga, the nba, the nfl, nascar, about betting in this complicated scenario >> that's the right question because there's only one concern, how do the leagues get paid all the leagues can say we're worried about integrity but betting has been going on 70 years. >> it can mean an extra $2.5 billion for the nfl. >> that's what each state is figuring out and working with the leagues individually and conveniently a lot of states will want a federal law to make this uniform. >> what determines what the point spread is going to be on a given let's say football game?

i noticed that my washington redskins, my team, are underdogs against the packers. >> my team. >> 70% of the tickets are on the packers, but 63% of the money is being bet on the redskins. so more -- so that money i assume influences the point spread and brings it down? >> the money and tickets is what moves the points spread. the money more, when more money is coming in on one side and the opposite side of where the tickets are, this is a great example of that, that means professional money, professional betters are betting on that side so what you saw was the green bay packers, they opened as three-point favorites in this game and even though all the fans are betting on the packers, all the wise guys, the professional betters are betting on the redskins. the line moved the direction -- >> both want the line to be positioned for maximum betting, don't they >> they do book makers like to be on a side you make more money when you win a bet.

book makers are gamblers too and they want to increase their holds against every handle. >> the redskins are 2.5 underdogs and i will take the skins in the points. >> i will too. >> all right chad, thank you very much. >> you bet. >> the action network. all right. go packs the dow once again hitting a record high today. mcdonald's and bogeing and the question is will higher rates derail the rally teenagers vaping is this a health epidemic. second hour of power - our markets are currently experiencing

the longest bull run in history. so, now's the perfect time to ask yourself, "do you have wealth insurance?". you know, i made a good living playing games on television, but my financial future, well, that's something i don't like to leave to chance. (door shuts quietly) i decided years ago that i would protect my financial future by putting a portion of my money in precious metals and well, i'm glad i did. the last couple of times the market has taken a significant downturn, millions were caught unprepared. (balls clank) fortunately for me and my family, i had a portion of my portfolio protected by gold. now, many economists agree that we're in for some significant changes which is one of the reasons many experts are predicting another solid run for the gold market. if you're interested in wealth insurance for your portfolio and you don't know where to start, ask yourself these three simple, but important questions. who should i do business with?

there's only one precious metal company that has a former director of the united states mint as its president. number two: when is the right time to get started protecting my hard earned money? well, as we've seen, market volatility can happen with no notice, so now is the time to get the education and information you need to be prepared. and three: how do i get started on my wealth insurance program? pick up the phone right now and call america's gold authority. - [man] today, u.s. money reserve is releasing official gold american eagle coins at cost for the incredible price of only $129 each. these government issued gold coins are official u.s. legal tender made from solid gold mined here in america and fully backed by the united states government for their gold weight, purity and content. do not delay. call now to purchase your gold american eagles for the amazing price of only $129 each. so don't play games with your money, make your call today.

i'm tyler mathisen welcome to hour number two of "power lunch." brian is on the steady cam and he's a jets fan and not happy because the browns won we are riding the rally, ladies and gentlemen. that makes everybody -- listen to brian laughing. we're on track for the biggest weekly gain in more than two months and next week two market moving events on taps. we will count you down to those events straight ahead. one is a fed meeting an alarming report showing e-cig ret use among teens is exploding

or is it we will debate whether a crackdown is coming to the booming business of vaping and tim cook welcoming apple fans the new iphones and watches hitting stores today comes as apple drops a bomb -- amazon drops a bomb on apple in the battle for your home the second hour of " power" begins right now ♪ i'm coming home coming home ♪ i'm coming home welcome to "power lunch. i'm contessa brewer. a check on the markets this hour the dow jones industrials up a third of a percent and the s&p up 0.1% and the dow or the nasdaq just off by 0.2%. the dow and the s&p 500 hit record levels earlier, but we're now off session highs. the nasdaq has been under pressure all day my kron tech, the biggest drag in the nasdaq 100 the stock down more than 10% in the past month. more on mycon just ahead

what's working today check out the airlines, american, delta, southwest, all rallies. american up more than 4% melissa? >> i'm melissa lee we begin with breaking news out of d.c eamon javers is at the white house with the latest. >> that is right "the new york times" posted a new story, here's the essence of the reporting from the "new york times" they are suggesting that the deputy attorney general rod rosenstein discussed with officials back in 2017 the possibility of wearing a wire to record president trump and get a sense of what was going on inside the administration and rosenstein discussed the possibility with other officials of recruiting senior administration officials for an effort to invoke the 25th amendment to be used under the constitution to remove the president of the united states it appears from the "new york times" reporting that neither of these things actually happened these were discussions that were considered and according to the

"times" did not go forward "the new york times" posted a statement from rod rosenstein -- remember rosenstein is the official leading the russia investigation because the attorney general jeff sessions hasrecused himself take a look here at the statement from rod rosenstein who says that "new york times" story is inaccurate and factually incorrect and i will not further comment on a story based on anonymous sources who are, obviously, biased against the department and are, rosenstein goes on to say, at advancing their own personal agenda let me be clear about this, based on my personal dealings with the president, there is no basic to invoke the 25th amendment. this story is getting immediate attention at the white house no comment from white house officials. the president is traveling, he's away from the white house right now, but aides here not offering any response whatsoever in the first minutes since the story broke, but an extraordinary thing to contemplate a deputy attorney general even discussing the possibility of wearing a wire against the president of

the united states and officials even discussing the possibility of invoking the 25th amendment, although neither of those apparently moved forward beyond a discussion stage and although rod rosenstein now issuing a statement saying this story in "the new york times" is incorrect. >> all right thank you. eman javers at the white house. back to the rally, steve joins us from the nyse floor what do you make of the rally? we saw financials and technology go off together. that seems like a good sign here >> you know, you reach for everything when the market breaks to new highs, the market participants have to reach for things that haven't rallied. so you had financials that have definitely lagged, you've had technology that's recently lagged, so they reach for everything even utilities, even things like that in the last couple days have been bought spradsly during the day. whatever they can buy they buy. >> the crazy whipsaw movements we've seen in the cannabis stocks does this tell you anything about the nature of the

market at this point in time when people are reaching for things that are so volatile but perhaps offer a lot of data? >> absolutely. that is definitely the risk on consensus to this marketplace where they bought so many things already, they own so many things already, where can they get that exponential growth to search for alpha going into year end. that's what you're seeing with the overall market you see cannabis, you see -- it was bitcoin and now cannabis and they reach for things where they can get that explosive growth to beat the other funds you're not going to see every fund but a healthy amount of funds do it as well. >> is that a good or bad sign? >> i think it's a sign i think it doesn't matter whether it's good or bad i think it's just a product of the overall market when they feel that things have been exhausted to a certain extent they've been exhausted so it could be seen as sideways to flat in an overall market, tyler, but i would say that the

thing that is different about this time and be wary when someone says it ends we're going into year end. when we had the run up and sell-off in february i don't think is going to happen this time because you're running out of daylight to match that performance, whatever your benchmark is, or to outperform your peers, so you only have a couple handful of months to get that done. >> steve, thanks see you tonight on "fast money." steve from the nyse. >> the countdown is on to next week's big fed decision. despite growing fears of a slowdown in the committeconomy n gray is optimistic here's what he told david faber earlier. >> we see incredibly strong signs in the u.s., consumer confidence, 18-year high, unemployment claims, 50-year low, small business confidence, the highest it's ever been. >> well, is he right or should there be more fear in the market bring in contributor ron insana and quint the founder and

managing editor of jewel financial. i was beside you while we were listening to eamon talking about the sector of wire tapping the president and removing him from office do the political implications of a report like that at all spook you and should they spook the market >> they have over the last year and a half and i have been 1,000% wrong how they -- >> in my notes you said 10,000%. >> i have been listen, i mean, under any other set of circumstances this seems like the type of thing even if you go back to the 1998 impeachment where there were disruptions to the financial markets, even though the economy was in good shape, and here you see markets have shrugged off everything from the trade wars to revelations from the anonymous op-ed piece in the times a couple weeks ago i don't know you have a strong economy, no doubt about that, you have very strong earnings, no doubt about that, and those two things are taking precedence over absolutely everything else. >> what makes you think the

market is past the graveyard. >> i thought the market has been underpricing political and geopolitical risk since march of last year and have been wrong. granted from january of this year until now we have not made new highs. we did move sideways i think it is under pricing risk, but it's up to the market here the market knows collectively more than i do and they're looking through these things as not being fatal to the fate of financial markets here in the u.s. anyway. >> when you're taking a look at the things that should be supporting the optimism or things that should be sparking more concern and pulling back, where do you come out on the signs and signals? >> i definitely like what i'm seeing lately. the breadth has broaden. sectors that were not participating, financials, industrials, the emerging markets, you know, china, they have really started to garner some attention over the last couple of weeks and that's got

us much more optimistic and putting some cash that's been sitting on the sidelines to work in those areas. >> what are you buying >> well, we've been buying the financials across the board, buying basically the entire sector the industrials and we specifically think that boeing is probably the most important stock to watch for the character of the market. that stock has been moving sideways all year, now just starting to break out and gain exposure through the stock itself, but also through the industrial sector, the largest component. we've been a buyer of china and that's a contrarian play, but if you look at the character of the chinese market, what was very fascinating was when the $200 billion in new tariffs was announced, initially sold off, by the end of the day, while we were trading, the fxi was green. that told us that investor confidence in this being overblown was a potential and then, obviously, a few trading days later, we found out it was a 10% and not a 25%. it was off to the races.

i think there's a great risk/reward for the china trade here and now. >> do you discard the warning from walmart that the consumers will pay the price that they're going to have to raise prices or eat up their profit margins moving forward >> that's very interesting i was thinking a lot about that today because that's the message that we're going to hear from the corporate world. that's their job is to maximize profits and if they have to increase their prices to keep their profits in line, that's what they're going to have to do. >> that's a tax on the consumer, right? >> sure. >> inflationary pulse that the federal reserve may or may not respond to we know they will raise rates but if they will do it in december either because prices are going up faster as a result of the tariffs or because the economy is slowing down, will they have to take their foot off the brake here because it has a contraction -- >> or because they want to wait and see what effect of the tariffs is. >> yes.

>> and not prejudge. >> the market is pricing in a december hike. >> yes. >> which is pretty strong. strong enough for a december move, yeah. >> do you expect to see any near term impact on consumer confidence >> i don't know consumer confidence hit an 18 year e high household net worth $107 trillion i've been wrong about the trump trade probably because of how i felt about the president and his fitness for office, something i've wrote and spoken about here and on cnbc.com for over 2 1/2 years. i've been dead wrong on it. >> wow >> all right quint and ron, thank you >> thank you a shocking new report on the rapid rise of e-cigarettes and vaping among teens the fda commissioner calling it an epidemic. how bad is it? we have the startling numbers and we'll debate it for both sides. >> the biggest threat to the global marketses what you need to know before putting your market overseas and picking up the pieces in north carolina live at a tobacco farm

"power lunch" is back in two really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital. ♪ i don't care where we go get ready, because we're helping leading companies ♪ and i don't care what we do ♪ just take me with you there are roadside attractions. and then there's our world-famous on-road attraction. the 2019 glc. lease the glc300 for just $469 a month

at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

welcome back to "power lunch. we've got a statement now with regard to paypal and reports that it has ended its relationship with info wars. in it their statement from a paypal spokesman said we have undertaken an extensive review of the infowars site and found

instances that promoted hate or discriminatory intolerance against communities and religions which run counter to our core values of inclusion for that reason they have ended of infowars making a claim that paypal had banned them we have confirmed it with the company themselves this is, of course, coming at a time when many at least reports out there of possible censorship of voices and other in the media has come to light. certainly a story we're following closely. paypal shares up by half a percent on the day over to you. >> thank you if there wasn't enough to wor worry about, some new reports show the number of high school students who have used e-cigarettes in the past 30 days has risen. about 75% from a year ago. the data comes as the fda announces it will start cracking down on e-cig ret brands here is our medical correspondent. john, good to see you today.

can you break through for us what the numbers mean in terms of how many kids are getting nicotine or other substances through vaping or e-cig ga rets? >> you bet i don't think this is something overly dramatic by the fda but they're saying it's an epidemic. a few years ago we didn't see much in a vaping area especially for teenagers. last year around 1.7 million teenagers were actually using vaping products. this year the numbers are out and people that have seen them say that has increased 75% to where now around 3 million teenagers, high schoolers, are using vaping products. in another survey, 30%, one in three, said that they're vaping of high schoolers, these are 13 to 18-year-olds. this has huge health implications and the medical community, health community, fda very concerned about what's going to happen with the teenagers because, again, it has severe health implications and

addiction potential to lead them to smoking >> talk about the health implications vaping is seen as a far healthier alternative to smoking. >> and if you talk to most experts and i agree with them, the question is vaping better than smoking, yes, but is vaping safe no those are two distinct questions. vaping absolutely is not safe. one of the products, the most popular one, is called jewel and i'm not picking on them. they happen to be the most popular one. if you look at the pods they use that have products, the chemical, each has nicotine. it's extremely addictive for the teen brain that's developing on top of that there's a lot of chemicals in there when the product burns they get put into the lungs and one thing we learned in medical school, a basic thing we learned year one, you don't want to put anything into your lungs because it's going to cause problems somewhere down the road. the problem with these products are we don't know what's going to happen because they're new and especially the fact that teenagers are using them on top of that, other surveys

have come out showing that teenagers are actually substituting cannabis or marijuana liquid into the pods and using it at alarming amounts. you do not just have the vaping products which can cause a nicotine addiction which can lead to smoking, the chemicals that cause lung problems and the mare i >> i have a '90s question to ask, and that is how do you obtain marijuana oils when it's not federally legal in the united states? >> it's not legal for these children -- these teenagers to have vaping products either. this is one of the things that teenagers have ways to get these things and that's why they're -- >> do you think that with the rise, you know, across canada, it's legal now for medical use and will be very shortly for recreational use, does it make it that much easier for teens in the united states to obtain these products >> i think if you look at the states that have legalized marijuana, that's one of the big issues they have i come from colorado and i've been there back when legalization first took hold

one of the issues is how to control that from getting into teenagers' hands it's like anything else, i know when i was a teenager, if you wanted to get alcohol, you could get an adult to buy it for you at some stage. the same with marijuana now, that they're getting adults to buy it for them and there's also the illegal market where they can buy it on the street corner. that combination is where they get the cannabis and the cannabis oils from, they can put into the vaping products oftentimes they will do it at the school itself. again not only talking tobacco type products, nicotine and the vape -- e-cigarettes, but the marijuana for develop brains can cause long-term issues. >> what a problem. john, thank you so much. dr. john torres, medical correspondent. let's debate this further and to do that we're joined by tony, the executive director of the vapor technology association and dave robbins is the coo of the truth initiative that is an anti-smoking

organization mr. aboud i will begin with you and dave with apologies to you, i think because of the segment preceding, i want to give tony a little bit of an extended time to respond here, is vaping among teens, tony, an epidemic >> well, words like that are very impactful and used for a certain reason what we do know is that we have had two years of declines, according to the cdc in terms of the number of teens that are vaping and those are important to recognize we don't know what the 75% figure represents yet because the data has not been put out. let's assume that they have data that suggests this what we have to realize is what we are dealing with is not unlike any other problems we deal with as parents i am a father and have three children and deal with these issues and we have to be working together to come up with strategies to reduce the usage of these products. these are not products that were designed for use by youth or

kids they were designed for adult smokers to help them quit. that is the primary concern and primary focus of our industry and that's what we are going to continue -- >> you are correct some of the numbers in the study that dr. torres cite ready not publicly available yet but according to the people who have seen those numbers, the vaping by teens is up 75% just year over year. do you quarrel with that number? do you really believe that vaping is declining moppiamong ? >> what we do know is smoking is declining among teens. >> that's not what i asked. >> i'm sorry >> yeah. >> no, i appreciate the question i just don't know what the answer is. i think the point is that we have to continue to attack the problem. even if -- as the number goes up or as the number goes down, we don't take our eye off the ball and the ball is making sure that these products stay out of the hands of kids. you know, we have to continue to pursue our marketing standards that we gave to the fda back in

january. we have to continue to push for changes within the industry and seek more and more enforcement we are 100% in favor of increased penalties, of increased efforts to enforce both at the retail level, but let's not forget, the retail sales of these products, their acquisition at that point is dealing with only 15% of the problem. most kids who use the products get them from social sources and there has been no focus by our government on how to crimp or slow down the access from those social sources. >> dave, you are -- >> is that -- >> excuse me let me turn to dave and bring him into the conversation and get back to you or one of my associates will in a second. you have been critical of the fda in basically asking some of the major manufacturers of vape products to work with the fda to come up with regulations you characterize that as asking the fox to recommend plans for guarding the henhouse. isn't it smart policy in a way

to ask -- to get industries involvement in the policy making process one way or another not to design the recommendations necessarily, but to have input into what is ultimate ultimately determined? >> i don't disagree that they will have input in the final product. i just think what you have to be aware of is an approach that leads to self-regulation presents a couple problems one, there will always be a segment of the market that doesn't comply with the self-regulation. look at the market right now you can go to the internet and find many, many products that are directly appealing to kids second of all, if you allow complete self-regulation, what you allow is really a pr stunt what we want is universal, uniform rules, that keep these products out of the hands of kids. >> what does that look like to you, products marketed to kids >> looks like a website that features teen models using the product in lifestyle situation,

using them at parties, using sex appeal, candy colored flavors. >> isn't that the -- aren't they using that to market to young adults as well isn't that how you would market to young adults? >> in many states using tobacco products is 21 if you appeal to a 21-year-old or 18-year-old what you're trying to get is the first day that person is legal to use the product. now, of course, it spills over massively into younger people. a responsible approach would be to go for 25, 30, and smokers, people who will actually get health benefits from switching, not new, naive users who are to build a market and an addictive drug. >> i watched a lot of videos on youtube today about vaping and e-cigarettes and i was spiced to find in the -- surprised to find in the comment section much of it was being grateful for helping people get off cigarettes i didn't see a lot of hey, i just want to smoke because the fruit flavors seem so fun.

i'm just wondering, if you were to describe, dave, a program that would keep teens from vaping, how would you do that? >> there's a program that's in place put in place by the 2009 family prevention and tobacco control act. that is the fda looks at each individual product, how it's designed, how it is to be marketed, and looks at the totality of that evidence and makes a decision whether that product will benefit public health or hurt it before they allow it on the market now the fda hasn't done that yet for e-cigarettes they were going to do it starting in 2016, and that's been delayed until 2022. we believe if that process is in place, you regulate a product like jewel before it's in every high school in the united states, not after. >> yeah. >> so tony, last word to you, do you think that teens ought to be allowed to vape, number one, and would -- is there a regulatory regime that you could support

that would -- if you think that teens shouldn't be allowed to vape that would keep these products out of their hands? do you have any common ground with dave, basically >> well the short answer is we agree, teens should not be allowed to vape. that's the law and we've been pushing for that law long before the deeming regulation went into effect we also are in favor of stricter standards or stricter penalties that relate to punishment so that enforcement can be supported. to the regulatory scheme, absolutely that's why we developed marketing standards that should be in place and should have been adopted. that's why we've advocated in congress for changes to marketing and labeling restrictions that would enhance and protect teens and youth access as well as limit the types of advertising that can be used but at the end of the day the key is innovation. this is the united states. this is the core of this country. we have innovative tools that are at our disposal such as bluetooth technology that can keep kids from vaping in school. because of the regulatory scheme

that dave was referring to and it is an old tobacco scheme on a new 21st century technology we cannot bring new products to market, new innovations to market in the united states, including ones that would improve safety and protect children. >> we have to leave it there gentlemen, i'm sure this debate will continue. tony vapor tech association, and dave robbins, of the truth initiative thank you, guys. >> thank you the chips taking a dip micron tumblinging 10% in the last month what's fueling the fear and if this is a good buying opportunity. that's next. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

hey, what are you guys doing here? we've been helping you prepare and invest for retirement since day one. why would we leave now? because i'm retired now. so? we're voya. we stay with you to and through retirement... with solutions to help provide income throughout. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that, uh, tie. or the suit. or the shirt. voya. helping you to and through retirement.

ythen you turn 40 ande everything goes. tell me about it. you know, it's made me think, i'm closer to my retirement days than i am my college days. hm. i'm thinking... will i have enough? should i change something? well, you're asking the right questions. i just want to know, am i gonna be okay? i know people who specialize in "am i going to be okay." i like that. you may need glasses though. yeah.

schedule a complimentary goal planning session today with td ameritrade. regarding the chip shortages impacting some of our sales in the fiscal first quarter, relates to certain c pu shortages. by no means do we see that as a long-term trend. it's affecting our q1 here if you look at our growth margin guidance and revenue guidance for f q1 this is a solid guidance here. >> that was the ceo of micron

trying to ease investors worries on "squawk alley" earlier today. i'm mike santoli with trading nation micron stock trying to make a comeback after the comments but shares down more than 3% after the company reported weak guidance and warned about trade on its earnings call the move dragging on the semi space today. let's trade it mark newton and larry mcdonald guys, good to see you. mark, micron now about down about 30% off its high i imagine that does damage to the charts but are you seeing any signs that maybe a recovery is in sight? >> hi, mike. you really don't see any evidence this far of stabilization of micron and that's the real concern. the stock has been trending down since the latter part of may, down substantially, but yet shows a pattern of lower highs, lower lows my thinking it gets down between really near 37 to $40 which would be right around a 50% retracement of the move we've

seen since 2016. also decent support near the former highs for 2014. as the old saying goes in technical analysisformer resistance becomes support the people that embrace the stock say that the demand drivers are diversified, however, you know, even the company it itself said that tariffs could hurt profitability and it's a lot of uncertainty. it's difficult to know, you know, when this end game for tariffs is going to materialize. looking at the stock, it just seems like a lot of uncertainty and technically it's not really all that oversold on a weekly basis. until we see evidence of that and that would take a move over 51 to break the downturn and move down a little lower in that buy zone for me which starts near 40, it's just difficult to embrace this no matter how cheap it seems >> all right that would mean about at least 10% for the downside risk. larry, at least on the surface, you look at the numbers, it's one of the cheapest looking stocks in the market, right. it's like four times forecast earnings or something like that.

that can either mean it's cheap or a value trap. where do you come down on that >> well, spent the week in washington and most of the day on wednesday on capitol hill with clients and the feeling i get from leadership in d.c. is the situation with china has deteriorated to really atrocious levels china has even in areas like intellectual property where the u.s. has china, that's an area where they should at least admit they can move toward the u.s., toward an agreement, and they're not moving on anything so i think that $267 billion of tariffs we're going to get that probably in the next ten days and many of those new tariffs affect technology, the supply chain for many of the semiconductor stocks there's more pain to come. president trump i think views the market as dry powder we're making new highs here. he's going to push china harder and harder and that's a problem

for micron >> yeah, got you good correction. appreciate that. maybe the market is not quite priced in all potential trade outcomes larry, mark, thanks for your time for more trading nation head to our website or follow us on twitter at trading nation. to sue herera for a news update. >> thank you so much here's what's happening at this hour, everyone "the new york times" repast year that he secretly record president trump in the white house to expose the chaos consuming the administration he then discussed recruiting cabinet officers to invoke the 25th amendment to remove trump office and called the report inaccurate and incorrect cnn reporting that senate republicans are likely to propose moving a senate judiciary committee hearing against brett kavanaugh to wednesday. christine blasey ford would testify first and then

kavanaugh. republicans are not willing to subpoena any outside witnesses according once again to cnn. former vice president joe biden is calling on the country to join together and fight cancer he and his wife jill are hosting the biden cancer summit in washington as part of the biden cancer initiative. >> today jill and i are calling for the entire nation to come together and take on cancer as part of the biden cancer summit. >> you are up to date. that's the news update at this hour i'm going to send it back to you guys contessa >> sue, thank you. still ahead, global trade tensions, turmoil in turkey, uncertainty in latin america there's a lot to think about if you're putting money to work overseas the risk, the rewards and the unseen opportunities a woman who helped lay out blackrock's strategy weighs in and now the latest from trading nation.cnbc.com. and a word from our sponsor.

>> position size and risk/reward ratio are two important aspects of building a winning trade. you don't want a single position to be too big a percentage of your tradeable assets. additionally you want to make sure there's enough profit potential to justify the risk you're taking. consistently constructing suitable tradedhering to your exit plan can help you build on trading successes imagine traveling hassle-free with your golf clubs.

now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.

the bulls keep marching on despite the risks of a trade war between china and u.s. and fears over rising rates how should they manage risks going global joining us is isabelle, black rock chief multiasset strategist great to have you with us. i want to key in on a portion of the notes that i read. these perceived safe havens tend to rally ahead of known unknowns such as elections and lag after the event. is that what's behind the rally to record highs when you look globally within the u.s. and then within the u.s. markets in the sectors that had been sort of value plays within the market the ones that lag? >> well, i mean, i guess yes, the general statement that you alluded to that safe havens rallied before risk event is correct. i think if we look at the most recent period, there's been a

conjunction of things and perhaps the, frankly, the most important driver in -- since the summer has been less market concern around global trade risks and increasing concern around the u.s./china relationship and we measure that, we are able to measure that through our blackrock geopolitical risk indicator that measures references to tweets and broker reports and financial news and you see this shift very, very clearly. now, is this the only driver behind, you know, higher dollar and suffering em no, they were in conjunction of other things and primarily in our view general tightening of global financial conditions, but this rally and safe haven assets was a determinant until recently probably the sigh of relief after the u.s. tariffs were

announced at a lower level than anticipated by market, is behind this weakening of the dollar recently and rally that we've seen in recent days. >> when we take a look at a rally we've seen in recent days, in china let's say, do you think a rally like that is premature given tariffs expected to be ratcheted up by the end of the year, this is far from over? >> i would agree with that, absolutely we do expect the tensions between the u.s. and china to keep escalating before we get any relief what's important to note is that markets were very concerned already up until last week the level of concern is about over three standard deviations above the long-term average. when the news came you had a bit of a relief rally. i would agree with you there's no reason for the relief to be very protracted. >> you've also predicted that the democrats will take the house in the fall and the senate will keep the gop in power there. how do the american elections factor into what you're

predicting for the markets in general? >> yeah. so i would say first of all we don't have any specific expertise in predicting which way elections are going to go and secondly, this is not the result of this midterm elections is not in our view going to be a major geopolitical risk driver for global markets our expectation is really based on the consensus of opinion polls that indeed the democrats are going to take the house and we think that this is largely priced in by the market. the surprise would be if either they sweep both the house and senate or conversely the republicans manage to retain the house. in either case this would be a surprise and we would expect perhaps a market move but in the alternative where we just have at most pollsters predict the democrats taking the house, we don't necessarily expect this to have meaningful market implications >> we will leave it there. thank you so much for your time. >> thank you for having me.

>> coming up, farmers in north carolina assessing the damage done by hurricane florence seema moody is live in north carolina with more hi, seema. >> hey, contessa the pain is being felt across the state. agriculturor cola. ntharin we're live from one of the largest farms to tell you about the fallout and crops being impacted by hurricane florence when "power lunch" returns that would eventually become verizon's. back then, the idea of a nationwide wireless network was completely unreasonable. but think about how important that first call was to our lives. it opened the door to the billions of mobile calls that we've all made in the last 34 years. sometimes being first means being unreasonable. i'm proud i was part of that first call, and i'm proud that i'm here now as we build america's first and only

5g ultra wideband network with unprecedented wireless capacity that will not only allow for phones to be connected, but almost everything-- transforming how we all live, once again. (bob barnett) as you know, this call today is the first call that we've made on the cellular system. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

whai tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

as north carolina homeowners and businesses pick up the pieces from hurricane florence the agriculture industry is trying to do the same. for many farmers the financial impact could be big. seema moody is in north carolina with us with more. what are you seeing as far as damage here? >> this is scott farms that sits on 14,000 acres and makes most of its sales in sweet potatoes there is still moisture on the frown ground because of the flooding from the hurricane and they can't harvest until the ground dries up the longer they wait the bigger the risk of the crop they're expected to lose about 20% of the sweet potato crop. >> we have a narrow window we need to get things harvested

before frost hits and it gets cold so when an event like this comes and we're out for a week and can't harvest it narrows the amount of time we have to get the crop into the house. so that's -- so it's a problem that you deal with up front and a problem you deal with down the road >> the tobacco crop is impacted about 25% loss because of florence and workers here are working around the clock to harvest what it can salvage of the remaining crop and get what they can out to market poultry producers are feeling the pain farms warning bird losses will affect the fourth quarter. 5500 hogs have died from florence almost double the amount lost during hurricane matthew in 2016 due to excessive flooding a number of lagoons containing pig waste are overflowing in north carolina raising the risk of contamination. all this happening during the very precarious trade environment with tariffs on the rise from china. in fact, china's latest tariffs in july took aim at tobacco,

soybeans, as well as pork. those are some of the main exports coming out of north carolina they are really feeling the pain in multiple ways. >> have you learned anything about this breach of the dam and how it's affecting duke energy >> yeah. we've been traveling across north carolina ever since tuesday. that dam that has breached is about two hours away from where we are here today and apparently there is this risk now that coal ash can pollute some of the floodwater in general, contamination of water is a really big risk here as i was just saying it's also the pig waste that is slowly flowing into some of the floodwater as well clearly something that regulators and environmentalists will clearly be paying very close attention to in the coming weeks. >> thank you they're going to be watching that in the cape fear river. tim cook hits the store as apple's new products hit the shelves. this as az spsamonte up its game with products to dominate your

home who will win in the end. power lunch is back in two [ giggling ] introducing the 2018 c-class sedan, coupe and cabriolet. the thrills keep getting better. lease the c300 sedan for $399 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery,

how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity. and i am a certified arborist for pg&e.ughes i oversee the patrolling of trees near power lines

and roots near pipes and underground infrastructure. at pg&e wherever we work, we work hard to protect the environment. getting the job done safely, so we can keep the lights on for everybody. because i live here i have a deeper connection to the community. and i want to see the community grow and thrive. every year we work with cities and schools to plant trees in our communities. so the environment is there for my kids and future generations. together, we're building a better california. will they give the company a sales boost and will they help boost the stock? let's bring in rob

great to have you with us. perhaps on purpose they launch the more expensive phones first and they have the xr coming out in about amonth. >> we did not get a plus size version of the x last year that's $1,100 to begin with home if you add them all up it will push apple's up next year. i think the increase will be less than the increase we saw

last year. >> how do you do the watch and model? it was 4% or so of revenues? what will that be this coming year do you think. >> if we wound back the clock or iwatch there was some skepticism people would be willing to pay $900 f $900 for a cell phone. i would like to get your

thoughts on whether you have seen that. >> you mentioned the watch the watch added $100 to the price. they increased the price of the watch as well. if you look at the iphone, if you go back over the last ten years the price of the iphone is $200 higher now. it is what one would have expected at the time >> beautiful point, exactly. >> it is because it does more and more things too, right it consumed your computer and your phone and your ipod and everything else. you get more for your money than you did back then. >> it consumes my day is what it does >> if you're a teenaged girl it

would consume more of your day >> thanks. >> thanks very much. >> thanks very much. >> check please is next. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

with a range of suv's perfect for any adventure. lease the 2019 nx 300 for $339 a month for just 36 months. experience amazing at your lexus dealer. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms and swimming pools, public cafes, bars and bistros even pet care services. and there's never been an easier way to get great advice. a place for mom is a free service

that pairs you with a local advisor to help you sort through your options and find a perfect place. a place for mom. you know your family we know senior living. together we'll make the right choice. >> it could have shared users

private messages with software developers outside of the company. they are estimated to have of the total users base this comes as next week attorney general is meeting with state attorney generals to talk about these companies and whether or not they are too big and whether or not there should be action taken. reminds me in the stories we have covered it requires partnerships so soybean farmers say it is a big problem. it requires assistance of the federal government they are starting to recruit apprentices in high school and in massachusetts we have been covering wind resorts it is

not a casino debate. >> it is the coop are ration of local colleges >> if the market can climbs a wall keep the worries coming >> thanks for watching >> closing bell right now. it's friday. welcome to closing bell. the dow on pace for another record close details are coming up. i'll have all of the details the state trying to recover from florence as it faces trade head winds. i'll have more o