limited. >> thank you very much >> jon najarian. >> ross stars, courtney gibson's country, loop, just gave them an update today >> i love it i love the stock and options and i think it's going tiger from he here >> upgraded by oppenheim, 50% up i got it back again. >> good stuff. thank you, all >> thanks for watching another new record for the dow "power lunch" begins now >> thank you, scott. i'm melissa lee. the hot and hold stock market, the major averages hitting record highs, but it's weakness in several areas of the market that are getting the most attention. is it simply selective stock picking or something more serious? and the race to the future, gm shares are revving higher. the automaker teaming up with honda to make driverless cars. why investors are giving it the green light. and clouded in smoke, the fda raiding headquarters of juul, seizing thousands of documents from the ecigarette maker. is the company targeting teens and is a crackdown coming? we are live at juul's

headquarters power launch starts right now. >> yes, indeed, it does, everybody. welcome to "power lunch. i'm tyler mathisen the dow hitting a new record high, up for a fifth straight day. the s&p on track record close there. financials, tech, leading the way. this is a hot market and you, i suspect, may be getting a little richer bonds are on the move in the other way. the benchmark ten-year note, highest level for yields since 2011 caterpillar, apple, boeing, they are the leaders. ge, steady, despite reports it may cut its dividend lennar down despite an earnings boat, the company warning of higher costs courtney >> i'm courtney reagan hey, tyler, here's what's happening at this hour the sky falls on aston martin, shares of the luxury carmaker and james bond' choice of transportation hitting the skids on its debut, falling below its ipo price. and new clues about the job market ahead of friday's employment report, the latest

adp data showing private payrolls surging in september, but the highest level in seven months and senator bernie sanders unveiling a new bill to break up the big banks, under his plan, any bank whose exposure is more than 3% of gdp would be in the crosshairs bank stocks unfazed, though, by that latest call melissa? >> courtney, more record highs for stocks today bob pisani is at the new york stock exchange with more bob, they're starting to hand out those 27,000 hats? >> we're just about there. so two parts of this story number one, strong u.s. economy helping again, and number two, an unwind of those trade war fears. there was a number of trades around that, getting unwound in the last couple of weeks, including today. let me show you a full screen of the main things that are happening to the stock market and why we're up number one, we've had strong economic data in the form of adp and particularly ty sm services report, 10:00 a.m., helped ignite the market here number two, yields have been moving up. that's been helping banks, but particularly small cap banks

here and finally, the trade war plays the that we've been talking about go long industrials, go short u.s. small cap stocks, go short china stocks that has been unwinding as trade fear tensions are easing i don't normally show you small cap banks, but let me show you some of the banks that have been moving this morning here so fulton financials, texas capital, we're talking $3 billion to $10 million market cap. they're moving to specialty yields moving up here. and more importantly, this is one of the reasons that the russell 2000 has been moving up. small cap financials are moving the russell 2000 that has, underperforming for quite some time big global industrials sold down on trade war fears recently, as they have lessened, they have been moving up deere up, fedex up, csx industrials associated with that change important thing, china internet stocks, a disaster i mean, just new lows consistently, recently but they have suddenly begun to

stabilize. and again, this is an attempt to reverse that trade, sell the china stocks on the trade war fears. still not complete on this remember, china retail markets still very, very volatile. so this game is not necessarily over i'll say in china, it's quiet for the moment here's the key story on the trade war plays and what's unwinding right now. number one, we have long u.s. small caps again, that is starting to change a little bit here short global industrials here. that has been changing, as well, a little bit short china stocks sk s and emeg markets, that's changed a little bit. long india, that has also begun changing a little bit. india's a little bit of a separate global play from the rest of the markets. guys, back to you. >> robert, thank you very much major averages keep pushing to those record highs, an exciting time if you're long the market but weakness in some areas of the american stock market getting some of the attention right now. take a look at the small caps, the russell 2000 has trailed the s&p 500 by four percentage

points in just the past month. the bank stocks considered a bellwether for the market are off 10% from their 52-week highs. and home builders and auto stocks also struggling so is this just selective stock picking at work or is there something more serious in these diverge divergesies? i love to get that work in wherever i can let's bring in a new face, george siplini gentlemen, welcome divergences. are they worrisome or not >> it is a great word and one to keep using we are seeing financials versus tech we are seeing interest-sensitive industries really struggling here and it's because interest expense is up. it's up a lot. interest rates are up a lot. if you see that, you need to be careful. >> shouldn't higher interest rates help financials, in theory >> it should help financials, in general. >> will it eventually? >> i'm not going to let you answer a question. go ahead >> here's the way we look at it. we look at interest expense as a

potential expense on the -- we look from the bottom up. so we see three big costs coming through with these positive trade policies we see higher labor costs, we are seeing higher energy costs and higher interest costs. and the higher interest costs is the one to keep an eye on, because it's been really, really cheap to get money for a long period of time >> so who's that's going to hurt most financials >> not necessarily financials. it should help, if the yield curve does, you know, becomes less flat, that should help. but again, if you look at home builders, for example, the purchasing power of a consumer is down 10% versus the price they could have paid last year for a house, because interest rates are higher so again, that impacts the consumer on that level >> and you look at labor costs and materials costs and you look at interest costs. >> yes >> home builders >> yes >> all right, jamie cox, jump in here, how worried, if at all are you, that not only are will divergences that are substantial among and between different

sectors, but also, as george points out, there are some things that are moving underneath the surface that could ultimately affect profitability? >> well, i think, that's always the case but i tend to look at it a little differently i look at these types of situations where you have these cross-currents of trade negotiations and things like that is actually helping to separate the best companies from not -- the companies that aren't so good. so you've got all of these multi-national companies around the world that are table to navigate these markets they didn't become the global leaders on accident. so these trade wars or spats or whatever you want to call them actually benefit the companies that are able to navigate them i'll give you an example nike, for example, it's a very good company, but they have this multi-national flavor, but they have a multi-local type sort of strategy, where they will take, for example, in los angeles, they actually stock the stores with shoes based on the sales on their online market.

so the peopeople in l.a. who buy the shoes from nike, you can find them in the stores. that's how they do their inventory. and another example is a swiss-based company that works on financial software for banks. they have this fantastic software that's able to navigate the different regulatory environments for europe and the united states. so you know, you can talk about the cost and all of that kind of things, but in my view, when you're making investments, what you're trying to do is figure out the companies that are able to get through these things with the least amount of damage and the companies i cited before are perfect examples and there's lots of them around the world. >> here's the bigger question, jamie. are you bracing for a more defensive stilt goitilt going i final quarter of the year. actually, we're in the final quarter of the year, excuse me it's october already should we be a little bit more defensive. and in that sort of environment -- >> you're not? you're not looking for anything more defensive >> no, no. >> because i would say that these stocks would be the first for funds to be pulled out of should the times get a little bit tougher. >> i think the times are going to get better.

the united states economy is really rolling and it's probably going to continue for some time. and generally when the u.s. economy is rolling, the world economy comes right behind it. so to sort of jump off the track right now, sort of missing the bigger picture, so i think that people need to be more bullish, not less because as a global leader, both in consumption and manufacturing and just everything that you can think of, when we rise, everyone else should come along but it hasn't quite been that way. and i expect that to happen. and so, we hear all of these cross-currents i believe that more people should get establibullish goingo the fourth quarter, not more defensive. i think that's the wrong strategy >> george, speaking of the fourth quarter, retail becomes the big star at least, we put a lot of focus there. i understand you bought into some names why and what names are you liking >> we did, from a bottom-up basis, one area that was getting hit, it was retailers. we looked at a group of those names, roughly 20 of them. we ended up picking the companies with really, really good blealance sheets or improvg balance sheets all of them were up 50 to 33%

from where we original purchased them that was a great area. so talking about divergences today, we are starting to see value until other areas like adrs, non-u.s. companies are doing a lot worse than u.s. companies, and some other pockets of value >> if you're worrying about borrowing costs going up and hitting the consumer, why would you want to be in retail >> we've pared that position back a heck of a lot ever since -- >> but who would have thought one year ago that macy's would be almost 60% higher than it is today? >> exactly, and that's what we do that's what our investment process identifies pockets of value in the market and then we get in there >> george, you did very well >> and jamie cox, the veteran, thank you, as well >> well, general motors and honda getting together to work on self-driving cars phil lebeau has more on this deal hi, phil >> and courtney, this is one of those deals that people will look at and say, why did honda reach out to general motors?

in part because general motor' subsidiary crews are considered at the forefront to developing autonomous vehicles. here's the del between honda and general motors $2.75 billion from honda over the next dozen years, including 5.7% initially the goal, teaming up and planning to build autonomous vehicles there's a teaser image of what they released today of what that first vehicle might look like. not a whole lot to see here, but this is what we get nowadays in the auto industry. maybe it's a truck, a delivery van of some sort that's what they're going to be working towards. no release date set. meanwhile, general motors and its subsidiary crews are continuing to work on their own developing self-driving vehicles we went out and tested some of these out in san francisco last year they are expected to roll out next year, provide d they continue to develop as planned and meet all the safety guidelines that gm has set out

there. >> that remains the goal the team is working absolutely as fast as it can to improve the technology, to get it to the point where we believe we're at the right level of safety and performance, to begin to deploy the technology in a truly driverless mode. >> while this move is being applauded by many in the auto industry and by investors today, because the stock is moving a little bit higher, look at gm shares, guys, going all the way back to its ipo in 2010. really hasn't done much. in fact, it came in at 33 and right now they're trading at 34.34. back to you. >> that range is still relatively close to where it was about eight years ago. phil, we want to ask you about aston martin, as well. stock going public today in london, but not doing so great on day one >> oh, no, not good at all in fact, it was down basically 4% on the day. and when you look at shares of aston martin, and it's going to be under the symbol aml.gb because it's trading over in london, three issues are on the minds of investors

first of all, what's the impact of brexit. especially because they're doing their manufacturing in the uk. also, there's a lofty valuation that they're looking for they're basically looking for a valuation similar to what investors have given ferrari and haston martin is not ferrari in terms of valuation and then they're going to be expanding into electric vehicles so they're going to be making some hefty investments and speaking of ferrari, i always get this question from people well, tesla is the best-performing auto stock, not since ferrari went public in 2015 since then, and it's almost three years, ferrari is easily outperformed compared to tesla >> that's a very interesting tip there. thanks, phil fed chairman jay powell calling the current u.s. economy extraordinary, but leaving open the possibility that it is too good to be true. eight fed officials speak today. what are they saying about the economy and signaling about interest rates plus, the fda raiding the ulfices of ecigarette company we'll have the latest on that crackdown coming up on "power lunch.

call it a fed blitz. eight members of the federal reserve speaking today a about the state of the american economy. headlines from philly fed's patrick harker and cleveland's loretta messter set to drop at any minute charlie evans says that fundamentals are strong.

todd barken says inflation is on target and add to that another solid read on the jobs front ahead of friday's big employment report so is the u.s. economy in a sweet spot michelle gehrard is a mansioning director with nat west markets great to have you both michelle, i'll start it off with you. are we expecting any clues as to the pace of hikes in 2019? it seems like december is pretty much a foregone conclusion when it comes to a hike >> and i think from the communication we heard from the fed, whether we go back to the fmoc statement, the press conference, the dots, tall the way through all of the fed speakers we've opinion hearing in recent days, the message is still very much that they are comfortable with a continued gradual pace of removing accommodation or raising interest rates i think that, as you said, we've got very strong economic growth. i think everybody continues to even be surprised by the vigor

of the u.s. economy. even with our high expectations, this morning's numbers continued to exceed it but the good news is, inflation is in check and inflation expectations remain in check and that allows the fed to continue to move gradually it allows them to not worry that they're falling behind the curve. they don't have to react to the strong growth numbers, because the inflation threat appears to be relatively limited. >> investors, brooklyn, may be thinking that inflation may pose a bigger threat than what seems, at least, in the headline numbers. we've seen gold move higher. all of a sudden, it has a life, just in recent sessions. maybe a concern about inflation starting to creep into the markets. we've had amazon raise minimum wages to $15 an hour we've had pepsi raising prices are we getting these small indications from corporate america, at least, that perhaps inflation is going to come and could come a little faster than maybe what a lot of the fed members think. >> well, you know, there's a bit of a battle there, which is, you know, the fed is telling you that the economy is doing extraordinary and now, you know,

we're seeing certain signs, you know, whether it be amazon or other effects, hinting that inflation could be a bit higher. but you know, i'm just not sure that the momentum is quite there right now. we'll see if, you know, this kind of wage pressure or things like that start to feed into the real economy most of us the economists that have predicted this in the past have been very wrong, that we've seen that kind of pressure so we're a bit skeptical to put it in our forecast for now >> you know, it's funny, economists are either right until they're wrong or wrong until they're right, right and eventually -- >> a tough life to life. >> so michelle, i mean, but at some point at some point, one would figure, inflation will come -- oil is moving higher. some people think it's going to 100. some of these trade disruptions are going to start to trickle through. practically everybody says that the price of a new car is going to go up and maybe not just by a few hundred dollars result of some of the trade actions.

and then, you know, you will have inflation, and that could kneecap the market >> well, i think there's a couple of things here. you're right, we're watching energy, and that could boost headline inflation, although, of course, the fed is looking more at the underlying inflation trends, because energy goes up and it comes down and it can move the inflation numbers around you're absolutely right that tariffs and the trade consolidati escalation, the trade war, the potential for that, could certainly impose some inflation risk although what we've seen to date i don't think will be enough to noticeably impact the inflation numbers, but that remains a risk i will say, more broadly, this is a theme that i've been harping on i think we hear hints of it from fed chairman paul. it's really important to recognize that the expansion that we're seeing, the growth that we're seeing now is being driven from an expansion in the supply side of the economy business investment, business hiring it's that -- that's what's driving growth, as opposed to, you know, consumer demand. i mean, we're getting strong

consumer demand, but it's being met by more output and more supply, which means the inflationary impact is much reduced. even in the face of faster wage growth, companies, if you get the productivity that should follow in this story, companies don't need to pass those costs on through so you get faster growth, but the environment itself is less inflation prone. >> michelle brought up business hiring and productivity. the adp numbers were quite strong the unemployment level, though, is also pretty low does all of this suggest to you that there is still available labor that companies are actually able to find? >> well, it's a great question i mean, the question is, do we have the right labor for the economy and have we -- it's more than just a people question, it's a, where's the growth going to come from you know, it's, how far are we going to take it the answer is, well, for some industries, we are seeing a bit of labor shortages, but for other industries, there's still some room to grow. we're about to embark on the retail trade season, so the we have the right mix of labor to

fill those spots that's an open question right now, which hopefully, we do. hopefully we have some people bringing to market, but that's certainly some of that pressure we're seeing from folks like amazon, who say, we need to pay people more, bring them onboard, and make sure we have the right momentum >> brooklyn, thank our thanks to michelle, as well. jeff bezos knocking bill gates out of the rank for the top spot on the list for richest americans. we've known that are if a while. we've got all the numbers, we'll explain. plus, how has being president affected donald trump's wealth the answer to that one is coming up on "power lunch" in this hot up on "power lunch" in this hot economy. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story.

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[ding] jeff bezos is the richest man in america it is formalized now he's knocked bill gates out of the top spot on the annual forbes list for the first time in 24 years it's not led by gates. robert frank has the staggering stats. >> yeah, as you and our "power lunch" voters know, he became the richest man in the world a year ago, but the forbes' list is annual, so it is now official the first time in 24 years that gates has not topped the forbes' 400. bezos is also the first person to appear with a fortune of over $100 billion is forbes pegged his net worth at $160 billion. but it's already higher since they closed the list the "forbes'" realtime index puts him at 161 and the bloomberg realtime index putting him at 162

gates second at $97 billion. the minimum net worth to even make the list this year was a record $2.1 million. more than a third of the nation's billionaires were too poor to make the cut now, there were 50 newcomers on the list ripple's chris larson, he's the first cryptobillionaire. drew houston of drop box entered the list and my favorite, the burger heiress, lindsay snyder. she's the youngest person on the "forbes'" 400 at a mere 36 she inherited the in-n-out burger chain, one of my favorites. >> and what happened to donald trump's net worth in the past year >> it stayed the same. he actually slid 11 spots on the list, pause people passed him, but his net worth stayed flat from last year at $3.1 billion it's down from $4.5 billion in 2015 and "the new york times" out with a story today, saying that a lot of that wealth was actually inherited "the times" reporting that trump recovered $400 million from his father over his lifetime, far more than the $1 million loan

that trump often claims he's gotten from his dad. now, if he'd simply invested that inheritance in the s&p, it would be worth more than $2. the president tweeting, quote, the failing "new york times" used the concept of the time, value, and money and doing a very old, boring, and often-told hit piece on me. the new york tax authority viewing it different, saying they are reviewing the accusations vigor rowsly and pursuing all appropriate avenues of investigation >> and the reason the tax authorities are reviewing this is because there were allegations in this story that there were tax irregularities -- >> fraud >> fraud >> some people would say, yeah >> you said it, i didn't it. but that -- and so, we'll wait to see whether that is -- >> right and the two challenges, one is the statute of limitations for the irs is usually six years and it is tough, if not bobb impossible for the irs to investigate a sitting president, especially since the new irs commissioner just takes office now and was appointed by donald trump. so he is unlikely to

investigate. >> all right, robert thank you very much. >> thank you, guys well, another rally on wall street today ca caterpillar, boeing, pushing to a new record high. global trade tensions ease but one group is left behind maybe because those nsnsteio are easing, that's coming up next on "power lunch."

hello, everybody i'm sue herrera. here's your cnbc news update for this hour. the united nations' highest court ordering the u.s. to lift some of its iran sanctions it applies to imports of humanitarian goods and products, as well as services linked to aviation safety. the ruling is legally binding, but no word yet if president trump will comply. the senate granting the federal aviation administration the authority to destroy dangerous drones the decision is considered a big win for the u.s. airline industry the faa also got the rights to speed up new rules to allow package deliveries by drones a new study shows a third of

all americans eat fast food on any given day. the findings were part of a three-year study conducted by the centers for disease control. and a swiss company says it found a new way to combat global warming, by changing what cows eat. the firm has developed a feed that cuts back on methane emissions from livestock the u.n. says livestock farming alone contributes up to 18% of greenhouse gases something to chew on that's the news update this hour melissa, back to you >> methane emissions from livestock. that's a euphemism >> there you go. >> sue, thanks let's get a check on the markets. the dow hitting a new record high the s&p 500 on track for its on record close interest rates are on the right. benchmarks hitting its highest level since 2011, right now 3.15%. the russell 2000 rallying just about a percent right now. putting aside today's big gains,

the small caps have been battered for the past month. bob pisani is tracking them at the new york stock exchange. >> hello, melissa. you're right, the small caps are up today i'll explain why in a minute but the key trade for the trade war story for months now has been go long small caps. go long the russell 2,000, because they are more insulated for these global trade wars. that's worked for a long time, but it hasn't worked in the last months, because fears that a trade war would really hurt the global economy have lessened here's the s&p 500 that's the white line in the last month and there's the russell 2000 wait a minute, the russell 2000 has been going down. this trade has been unwinding, because traders are less concerned about trade wars the s&p is up 1% and you can see this in small cap names, that you talk about every once in a while. the trend has been down here, riteaid, louisiana pacifics, lending tree, this is a broad swath of examples, but you get the drift. this is in the last month. the market in general in small caps have been moving down

one reason we've moved around today. melissa hit it, the ten-year, where we got that ism services number at 10:00 a.m., all of a sudden, yields started moving to the upside we're at multi-year highs, seven-year highs in the yields there. and that has helped bank stocks dramatically, particularly small-cap bank stocks. the ten-year has been up about nine basis points. the two-year has been up about four basis points. so, the curve, the yield curve is steepening. this is dramatically healthy small cap. and this is the reason the russell has been moving up today, because small cap financials, i don't normally cover these kind of names, axios, $3 to $10 billion market caps, but i think you get the drift here, guys important thing is, it's the financials that are moving the russell 2,000 up today back to you. >> thank you very much, bob pisani, should investors ditch the small-cap trade? based on what melissa and bob just said, let's bring in sandy villry, partner and portfolio manager at villry and company,

and eric marshall, president and director of research for hodges capital management gentlemen, welcome to both of you. we're very glad you could be with us. sandy, let's me begin by asking, do you see this pullback as something that is going to be prolonged or is it a buying opportunity to be followed by kind of reversion to more historical performance >> yeah, i think this is a buying opportunity if you look at 2018, it really set up nicely for small caps for -- you got deregulation, lower corporate tax rates, and you've got rising interest rates, which is good for the dollar, which should also be good for small caps. and then, on top of all of that, you get a trade war, where small caps are basically considered almost a safe haven. so what we've seen in the last month, is basically this trade war trade sort of unwinding, right? right when we had the agreement with mexico, all of a sudden, the small caps start to relatively underperform by about 5% so we're seeing that play through. i think now is an opportunity to buy on this weakness and loo

forward to better small cap outperformance for the rest of the year >> e tu, eric? >> yeah, we would have to agree that the pullback we've seen over the last month probably isn't an opportunity it's probably a healthy thing to see profit taking after small caps have really outperformed year-to-date and we're finding some selective opportunities. right now, we're looking at areas of the market that are probably a little less loved and maybe investors have kind of given up on things like materials and energy >> like what energy and materials >> yeah, those are a couple of areas. we also like some areas of the market in technology, where you have secular growth stories that we think are really underrecognized by the street. >> sandy, what do you think about the idea of small-cap financial stocks bob pisani ran through some of those performances that we're seeing as interest rates rise. is that an opportunity >> it absolutely is. as interest rates go up, these banks will be able to get a

wider net interest margin, and we love a bank called first hawaiian that's doing some great things and i think some of the smaller cap regional banks are going to really have an opportunity to outperform, as rates even go higher throughout the rest of the year >> is there going to be consumer demand for loans, sandy, in your view, with interest rates going higher >> i think there always be and i think that's going to be a good opportunity for, you know, we're going to see continued strength in gdp. continued strength in demand for loans. and it should continue to prop up the economy and look forward into a good, you know, back fourth quarter of the year >> eric, apart from the trade argument that sort of favored or put a win behind some of the small caps early in the year, it was the idea that tax reform was going to help them and help their profits greatly. do you expect that after this trade supplement to their prices gets unwound, that the, that the core argument, that the small

companies are going to do well, are going to benefit from tax reform, is going to come back into play and drive them higher? >> well, there's no question that that's been a big help to earnings i think going forward, now we're going to start to see all of this excess cash flow that has been generated by tax reform, by a lot of these small cap companies, start to get reinvested in the business so we think there could be a whole new capital spending cycle, really start toe merge over the next year and that could be good for a lot of domestic companies, but especially the small cap stocks. >> all right eric, sandy. thank you very much. we appreciate your time today. >> thanks for having me. >> thanks, guys. a major move in the bond market today rick santelli is tracking the action at the cme. we were just talking about the two-cent spread, rick. finally, what, 30 now? >> yes, yes. and we're going to get to that in one second, because what's fascinating, melissa lee, is initially, really good curve steepening, which the fed should be very thankful for, to fit in

more tightenings, because certainly the economy seems to be able to handle them the issue is that everything starts to back up. and we're starting to see the shorter maturities catch up. now, let's start out with five-year. we're at the best levels since the fall of 2008, as you see on that chart ten-year, ten-year hovering just right under 315. best level since july of 2011. the 30-year bond really screening, best level since september of '14 let's look at tens minus twos, trading around 29 basis points but right now, twos are definitely the laggard, they're up four basis points but that five year, and even the three-year, to some extent, have been getting more aggressive it was up three, four, with five now it's up seven basis points pretty close to the up eight and up eight basis points that's shared by both tens and 30s. the point of this is, is that the entire curve is somewhat on fire and the spreads reflect

that the issue ultimately will be, as many investors ponder the data and look at the market's response, my guess is, is that you're going to see the twos probably hit some higher yield markers, as well i don't think that the two-year is going to be lazy the entire session, when you consider jay powell and company will have to deal with the strength in the economy, and not in a negative way, by raising rates, which is evident by market right now, is like throwing gasoline on a fire the problem is never raising rates. the issue is when you try to raise them and the economy isn't the reason why courtney back to you. >> thank you very much, rick santelli, really appreciate it well, it's a chilly 75 degrees today in new york city if weather getting colder, just in time for christmas. it's still 82 days away. so you actually have plenty of time but the retailers don't. they're already preparing for a very big season, hiring thousands and thousands of workers. but will it pay off? stgog tk ouabt. ay with us

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retailers are looking for a joyful holiday season. the national retail federation just out with its forecast, looking for retail sales in november and december to increase between 4.3 and 4.8%, reaching up to $420 billion. the prediction, though, is belove the 5% growth rate from 2017 however, above the five-year average. the nrf is optimistic, saying, quote, thanks to a healthy economy and strong consumer confidence, we believe this holiday season will continue to reflect the growth that we've seen over the past year. joining us now to discuss is jan nifen, cnn contributor and ceo of jan nifen rogers worldwide. thanks for being here. we have a range of holiday expectations they're all relatively bullish, even on the low end at about 4%. is this in line with what you're expecting? >> i'm on the high end

i think the consumer's never been healthier i don't see why we don't see the strength interest rates are still low we haven't really done anything to speak of there. the consumer's the healthiest they've been they're at 704 on the fico score. they've got the money to spend and they can borrow it on their credit cards they can do anything they want, as long as they believe they're going to have a job. and at 3.9% unemployment, they believe they're going to have a job. and they think it's going to pay more than last year, now that amazon just said, $15 is the bottom >> does it worry you that consumers aren't buying houses i don't want to say "not," but the rate in which they're buying houses is not as strong as before the rate in which they're buying autos st. as strong as before. does this tell you anything? or are those too big a ticket items to draw any extrapolation from >> do that worry me, yes but if you look at consumer confidence, it's never been better, either it's near the top. so the consumer in the short-term, which is from now until christmas, should be

really willing to buy and able to buy and normally, when those two things are true, they buy for holidays >> who's going to clean up >> macy's is the dgo-to place fo gifts. >> even though they had a really strong last year >> they're going to have a really good number and people like walmart and target are going to turn really good numbers they're going to be up 40% online so the traditional retailers that have always been brick and mortar guys that we thought were dying on the vine as online took over, the healthy ones that have invested in online, they're not overleveraged, they've had the ability to put the money back in the business, they're going to win. >> even saks, that i don't even like is going to win, because the high end is going to be really, really strong. >> jcpenney has a new ceo, just announced yesterday. >> they're not going to win. >> they're not going to win? >> they're not going to win. >> what does she need to turn it around can it be turned around? >> it would be really difficult to turn around a retailer that's highly leveraged in this environment with so much

competition. anything, i suppose, can be done if you have enough store base, you've got plenty of customers, so could it be done, yes but it's really, really tough assignment she's got especially when you're operating at a, pardon the pun, penny stock. what are they trading at, below $2 a share so it's a really tough environment. there's no faith in it, by the investors. they're not -- they're not going to go broke in the near future, because they don't have enough debt due but they've got a tough row to hoe over the next four years >> amazon raising its minimum wage to $15, does that facilitate jcpenney's decline and the decline of other weaker retailers. >> two things facilitate it all retailers are giving it back to the consumer in better pricings, penny's can't do that because they're not a maximum tax plair. and they've got to play in an environment where amazon is now setting a minimum wage of $15. both of those are negatives, if you're a weak retailer >> what happens jan 1st when

that tariff rate increases to 25% and at least a lot of the components of some retail items get much more expensive? >> i'm going to step right out here you're never going to see it if they put that tariff in, there's enough ability to move production, there's enough ability to transfer from one product to another for the consumer, you're going to see maybe a little bit of impact on bottom lines, but it's going to be really small. you're going to have a hard time finding it for major retailers >> clothing, shoes, furniture, baseball gloves, all of the things that come from china? >> who's taking it on the chin >> they're not going to charge you more for it? either the supplier or the retailer will take it on the chin it's not going to be the consumer, and people are going to say, i'll sell a little cheaper product, i'll get something from vietnam instead of china there'll be a lot of things happen, but you as an analyst or me as an analyst will never really see it in the numbers, and you will not see it in retail sales it is not going to be a big deal >> what if there's a perception from consumers that prices are higher they know tariffs are in place, these prices must be higher than

they used to be. >> it's always bad if you do something that makes the consumer think things are more expensive. we saw walmart when they cleaned up their stores years ago, the consumers started walking away saying, i think it's too expensive, even though pricing has not changed a bit, but that's never going to happen on tariffs, because the customer is not paying that much attention to anything other than the inside of the store, the look of the store, the service they get and the price they pay >> the consumer still buys, but the retailer or the supplier will absorb that cost. >> it will be really small >> so we'll never see that in the stock prices >> i've been looking at the filings that the retailers make. guys with $350,000 skus are talking about 595 items are affected there's just no big numbers there. i just don't think it's going to be a really big issue. there's not that much in total anymore coming how far china, as a percentage of the total business it's distributed across so many people and so many groicategoris and there's so much ability to substitute, i don't believe it's

going to be a big deal >> we will keep this tape. >> please keep this tape >> all right >> it is not -- >> i'm willing to live up to this i'll also tell you that when we see these huge refunds come back in people's filings for taxes next year in the fourth quarter, queer going to see one heck of a strong french quarter. nobody else is talking about it. they're all saying, first quarter could be tough because the tax thing is not still there. well, the refunds are going to set a record >> from your lips to the irs' ears and to my mailbox, hopefully. >> it may not be your mailbox, but the average consumer's mailbox. >> thanks, jan appreciate it. all right, the fda raiding the offices of juul, as a crackdown coming for the ecigarette maker we're live at juul's headquarters and the financials are leading the markets higher on this record-setting day the big banks, jpmorgan, goldman sachs, citigroup are higher. and even bigger gains for the regionals. more records being taken out

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i'm ready to crush ap english. i'm ready to do what no one on my block has done before. forget that. what no one in the world has done before. all i need access, tools, connections. high-speed connections. is the world ready for me? through internet essentials, comcast has connected more than six-million low-income people to low-cost, high-speed internet at home. i'm trying to do some homework here. so they're ready for anything. regulators are turning up the heat on juul, e-cigarette

makers >> reporter: fbi officials -- or fda officials arrived here at juul headquarters last week and took thousands of pages' worth of documents the agency is looking into juul's sales and marketing documents and its targeting of youth. the number of high school students who have used juul in the past 30 days has skyrocketed 35%. that's according to people familiar with preliminary data from the cdc kevin burns calls its meet ing with the fda a constructive and transparent dialogue adding it's released more than 50,000 pages of documents to the fda. meanwhile, two senators sent a later to the fda urging the agency to ban kid friendly

flavorings and restrict online sales of nicotine products saying it's clear that tobacco companies are marketing flavors that appeal to and addict children shares of big tobacco companies, by the way, including philip morris rose on the news from yesterday. >> we talked tod the association that represents e-cigarette manufacturers, they seem to be open for regulation in this space. why is the fda taking this route in terms of raiding the offices in a surprise raid when it seems like the company, at least on the surface is willing to aid in drawing regulation and sees a need for regulation? >> reporter: sure. by the way, the company here tells us that it was not a surprise they didn't know the date of when the fda would show up they said since april they have known officials would be showing up here. as far as like where that

friction arises, it goes down to the fact that juul says their products are specifically made for people who are already smokers trying to transition them off smoking and off of the unhealthy stuff in a cigarette, like the tar but the fact of the matter is, is that early on, a lot of their ads were very sleek. they showed young people they have a lot of flavors that people say are addictive to young children or to teens and different colors so the whole point is -- and the devic devices, they look like a usb device it's sleek and appealing to kids according to a lot of regulators they say that the numbers really bear it, that it's an epidemic according to the fda commissioner in high schools and among teens. >> the flavors are maybe what are appealing to young people. isn't it the nicotine that addicts them >> reporter: yeah. i mean, so the folks at juul or

other e-cigarette companies they all say, look, that you get the nicotine fix without getting some of the other harmful chemicals like the tar that nicotine is harmless. there is health officials who say that in young kids nicotine can prove harmful and that at the basic level, i mean, it is -- everyone agrees on this -- it's very addictive, nicotine is. >> thank you very much coming up, in about 20 minutes from now, everyone's cell phone is going to buzz all at the same time we'll tell you why. plus, who buys clothes anymore? once you've taken an instagram photo you never wear it again, right? that's why more people are renting cloethes we'll go inside that trend jo. the dow is just shy of 27,000 there are still areas of the market that may have room to run. the second hour of power is two minutes away

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medicare advantage plan is the right plan for you. pick up the phone, and call the number on your screen. the call is free. and licensed humana sales agents are standing by. so call now. i've been waiting here for you all afternoon. welcome back, everybody. i'm tyler mathson. this is the second hour of power lunch. here is what is on the menu. the unstoppable, unflappable,

the resolute stock market. stocks hit record highs. should investors worry that one market indicator at a seven-year high could derail the rally? from wine to the nfl to whiskey. there are some surprising winners in the newest trade deals that have been worked out this past week we'll break them down for you. too big to fail, too big to exist. senator bernie sanders and congressman brad sherman introducing a bill that aims to break up large financial institutions we'll speak with mr. sherman about what they want and how they would achieve it as power lunch, hour two starts right now. ♪ and breaking up is hard to do ♪ ♪ they say that breaking up is hard to do ♪ >> the dow is hitting an all time high. the s&p 500 is on pace to close at a new record high higher by 12 points and change the nasdaq higher by 47 points leading the dow, caterpillar,

intel, and boeing. treasuries also are on the move. the 10-year yield hitting the highest level since 2011 the two year and five year yields at ten-year highs t j.p. morgan and wells fargo are leading the way. some other names, apple, microsoft, and boeing. melissa? we begin with the markets and some of the stocks that are showing signs of longer term momentum dom is here with more. >> as we take a look at the s&p 500. some of those names are showing real signs of positive strength. if you take a look at the overall s&p 500, we have those stocks, the most that are above their 200 day moving average we actually looked at those of them that have had those trends a and which one have the most above those trend lines. about 33 stocks fit the mold here's a sampling of some of those to give you the ideas of

the themes that emerge there take a look at csx, it's 20% above its 200 day moving average. amazon.com, we mentioned that one there as well. 21% above its level. all time highs for apple 24%. it sits above its 200 day moving average. longer term trend line marathon oil has those rising oil prices playing out there they're also one of the stocks in the s&p very far above its trend line amd is part of the red hot sector which is showing some signs of life. 79% above its long-term average. as we take a look at some of these stocks, they have been leaders overall. whether or not they sustain the momentum could be a big sign of whether this rally can continue. >> thank you very much. u.s. dollar gaining momentum as well. will it continue to outperform in the fourth quarter? what will that do to the

markets? >> so the king dollar will unlikely use its crown anytime soon the strong economy has fueled the dollar's rally a longer term chart will show you the dollar is down from a multiyear high it hit back in late 2016 after president trump was elected. analysts are not taeanticipating the dollar to climb back to those levels the fed rate hike and tax reform have been priced in. it's currently around 95%. as trade tensions calm down, fewer investors will see the dollar as a safe haven the euro which is the biggest weight in the dollar index will be the focus as the central bank is expected to pull away from quai quantitative dollar later this year the number of companies that do

business overseas have cited the dollar's strength and currencies as a big head wind. >> thank you the dow is setting a new today, now up for five straight sessions it's coming as the ten-year yield hit its strongest level. can stocks climb highper joining us are jim key, the president of south texas money management and the chief investment officer at greenwich wealth management. let's talk about the general direction of the market. it doesn't necessarily mean it's going to continue, but it could as well. what do you think? what are you thinking for the direction going into the fourth quarter and beyond >> well, i think given it's a midterm election year, historically you'd expect a little more choppiness into the elections and then a rebound afterwards the stock market trends up over time you should expect to hit highs

all the time valuation levels are lower than they were at the beginning of the year because earnings growth has been so strong. >> that's good news for the folks who want to jump in. at least they're not doing it at the most expensive levels. what do you think about the general direction of the market, do you agree with jim? >> i'm concerned the market is getting a little bit toppy we've gone through a time of strong earnings growth i'm not sure it's going to continue i think earnings' forecasts for next year may be too rosy. i know there's a second tax reform package being considered right now. that's more likely to benefit individuals rather than corporations i'm corporations i'm a bisconcerned that corporate earnings' growth may be lower than expected. >> what do you suggest thatverts shou -- investors should be doing? >> i'm a bit of a contrarian

i'm often right, but i'm also often early. i'm looking to favor things that are out of favor and i'm marginally increasing my exposure to certain areas. in particular, i do like financials i do expect the yield curve to steepen, whether or not the fed continues with rate hikes at the lower end. i'm also marginally increasing my exposure to emerging markets. emerging markets, of course, have been whacked recently most emerging markets funds have a big exposure to china. i think this might be a good time if you're investing for th next five years, it might -- >> also on your list are two unloved and so far unmentioned by you stocks. maybe they're unmentionable. ford and ibm ford first, quickly because i want to get the other guest back in. >> sure.

i do like ford i've been increasing my exposure to ford very recently. the stock has been killed for a number of reasons, including higher raw material costs because of tariffs and their inability to sell cars in places like china because of tariffs. i think these tariff disputes will eventually be settled ford is focusing more on the more profitable areas such as suvs and pickup trucks from long-term perspective, i think it's a good time to start getting in. >> ford and financials are two areas that should do extremely well i want to go back to you, jim. you like citi. that falls into the financials group which has been underperforming the market, even at a time when the economy is very strong. the consumer is strong corporations have great balance sheets should be willing to take on loans, et cetera why do you think citi has had so many headwinds so far in this?

it seems like everything should be going in their favor. >> if you look at the numbers, a lot of things have gone in citi's favor that's where we think the opportunity is it kind of went into the crisis with a lot more of the toxic assets that it's largely cleaned up we think that's an opportunity the bet on financials, if they get r.o.e.s up, it's an upside we're seeing revenue and growth across both the main business segments. >> jim, you also have a pick here in the energy sector, which has had a pretty good week overall. what names do you like there >> well, i like to point out we think you should own names in every sector refiners is a good place to look there.

we like marathon petroleum the largest refinery in the country. there's a lot of new stringent fuel requirements coming down the pike, particularly with global shipping that require a lot more refining capacity so we think marathon is well-positioned. and at a good value right now. >> good names for our viewers to do homework on thank you very much, appreciate it coming up, why amazon raising the minimum wage could spell more trouble for malls plus, now that there's a nafta replacement deal, who stands to gain and lose from it? senator bernie sanders wants to break up the big banks with a new bill one of the co-sponsors of that bill joins us straight aheadthr, instead of just reacting to them. that lets you modernize and move more of your apps without re-writing. that unlocks insights from all your data

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comcast has connected more than six-million low-income people to low-cost, high-speed internet at home. i'm trying to do some homework here. so they're ready for anything. welcome back, everybody. nearly every smartphone user in the america will be hearing from the president shortly. it's not a tweet it's the first test of the presidential alert system. for more, let's go to aman javers. >> reporter: you might want to turn your phone off all together at 2:18 p.m. eastern time, fema is going to be testing the wireless electronic alert system that system is going to broadcast to all cell phones whose carriers are participating in the program who are within

cell tower range it's going to be a test of an emergency alert president designed to allow the president to broadcast to the entire country in a state of emergency. something like a september 11th situation. it will feel a lot like those amber alerts and whether alerts you get on your phone from time to time. this will be the first time they've tested this nationwide for the president of the united states to be able to use two minutes after that, 2:20 p.m., they're going to test the emergency alert system that's cable television, broadcast television and others. they'll also be testing their emergency alert provisions watch for that on the tvs in your office as well. all of that happening in a couple minutes' time the kwowhite house, though, is aware the potential for some criticism. there was a court lawsuit here trying to block this from happening. a federal judge cleared the way for it to happen the white house is aware there is criticism that this is a big brother potential.

also that the president's tweets might mean -- this president or a future president could misuse this for political purposes. this white house, though, suggesting this is being done entirely for emergency management purposes. keep an eye on your phones. >> do we know where exactly the message emanates from? >> this will be fema, they'll be conducting this in conjunction with the federal communications commission both of those agencies will be in charge of it. the president of the united states here will not be pressing the button in just a couple of minutes. it's not even clear whether this alert will go to the president's phone. i've been asking that question today to see if the president is going -- >> you read my mind. it's a message from me >> reporter: exactly we'll ask after the fact and see if they tell us whether president trump gets the alert. >> thank you when amazon make as move, usually there is someone left in the dust

could its recent announcement that it will hike its minimum wage to $15 have unintended consequences for malls joining us is the managing director of research at stanley o'neil when you think about amazon raising minimum wage to $15. you think about the pressure it puts on other retailers to do that then you think about the retailers that might be in trouble and may not be able to compete very well with that minimum wage you think about store vacancies. do you see those dominos falling? >> i really don't. thanks for having me on. you know, if you look at the malls or shopping centers, if you go back to the ipos of companies like simon, you'll see that more than half of their original ipo tenants are bankrupt today what doesn't change is the focus of that mall or that retail center at driving traffic. what you're seeing today are centers like roosevelt field,

king of prussiprussia. retailers go there when you have a mall where they're concerned that a macy's or a sears is going to close, that mall has bigger issues. if you look at the big stores, these are the top mall landlords in the country they're eager to get back a department store box those boxes are not driving traffic. the tenants, the stuff they can't get from amazon are theater, restaurants even if you look at some of the most innovative companies, they open up at the mall. that should be telling. >> this is brilliantly counterintuitive you'd think that when a sachs pulls out of riverside square mall -- i don't know i'm not sure who that is. >> simon >> it's really going to hurt them because they're going to lose that big tenant they did go for a couple of

years. now they've got big theaters in there. who is navigating that transition from the loss of those anchor tenants to a new reimagined mall the best >> think about it this way the department store, the name itself means departments years ago it was a restaurant, hair salon, it was everything. today it's down to three categories, shoes, apparel and cosmetics. guess what all three of those you can go elsewhere. when people think about a department store, it's still in that same 200,000 square box the department store model has to remedy, at the same time look at customers you know, a decade ago no one needed to walk around in yoga pants, today they do no one a decade ago paid for a cell phone today we pay $1,000 for a cell phone. today you can't buy a $2 cheeseberichees cheeseburger, you have to buy an

organic one. people are willing to spend money more and they're doing it at retail centers where they're the center of the community. you've had shopping centers where that target customer has moved away and those centers have suffered. those are the ones you see on the front page of newspapers as the dying mall when you go to king of prussia you'll see packed corridors. >> i know not every mall is the same all of these malls are changing their composition as a big box leaves maybe they bring in a restaurant the latest data does show that the rents are down over quarter for the first time since 2011. i know that we lost sears stores, they're closing. as you change the composition of the mall what happens to rents? financially? what changed are restaurants paying less? >> it's the law of averages,

right. let's take a company like simon. they have 120 or so malls plus a number of outlets. their earnings every year, they generate over a billion dollars of free cash flow after paying their dividend a center like them for roosevelt field, which is over $100 million of cash flow earnings out of that asset alone, that more than dwarfed all these malls that are closing. when you look at a macy's or j.c. penney list and see where those department stores are closing, none of those are the top tier malls those are malls that may have a few million dollars of niy they're insignificant. you're seeing a concentration to a core group of malls. there are a lot of malls that are going to be left out when you look at the law of averages, those malls that are being left out drag it down. >> that's true. >> the top malls tocontinue to increase rent and sales. >> appreciate it thanks for joining us. we got to go

coming up, boeing, caterpillar and exxon mobil the biggest gainers last month are they still worth auy adg tion is next

welcome back to power lunch. i'm mike santelli. this is trading nation with the dow surging to a fresh record high, let's take a look at some of the biggest blue chip winners. they are all surging to lead the dow. the broader index is up a little less than 4% so were any of these names still a buy? should investors look elsewhere? gina sanchez, mark newton are weighing in. m any setups looking attractive to you? >> exxon mobil to me looks very attractive here. the stock is part of the energy sector which has recently sprung back to life this rolling market of sector rotation is a must a lot of these energy stocks have underperformed even as crude has moved higher that seems to be changing dramatically of late

exon just now this week is set to break out above almost a four year down trend coming from the middle part of 2014. so, you know, it's not at all time highs, but it's a better risk/reward in my view we saw today's crude had no effect on energy whatsoever. it looks like the momentum can carry this higher. it's a decent risk/reward because it's up about 8% in the last month it's still about 17% off all time highs that we're seeing back in the earlier part of 2014 so my thinking is the stock has room to run. i like exxon. >> that mix of stocks, got healthcare in there. industrials. energy any of them appeal to you at this point >> you know, it's interesting. energy of all the sectors probably is the one that's set to rise. i think there's still probably going to be hiccups between now and the long run

you know, you do see rates rising in the united states. i think that will be a challenge for them but i would say you know, you really want to go towards defensive stocks of those names i would say walgreen's is probably an interesting pick if you look sort of at where we are likely to shift, we're seeing a company starting to guide down i think this sort of resumption of growth appetite, it's going to be a bit of a dead cat balance. in six months' time we'll be looking more towards value and better valuation so more defensive stocks. >> all right an endorsement of the newest dow stock there. thank you very much for your time today for more trading nation, head to our website, follow us on twitter. melissa, over to you. thanks coming up, touchdown why the nfl and whiskey are some of the surprise winners of the new trade deal a huge ratings win for the

nfl. what's bringing the viewers back that's next. and now the latest from trading nation and a word from our sponsor. so what else is new? how's your mother?

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hi, everybody, i'm sue herrera. here's your cnbc news update the senate passing a bill that provides $1.7 billion to help states recover from natural disasters. and a portion of that money will go to the carolinas, which, of course, were battered by hurricane florence last month. president trump is expected to sign it. new details emerging regarding the two suspicious letters that were intercepted at the pentagon a department of defense spokesperson says the substance found in the envelopes contained caster seeds, not ricin. ricin is derived from castor

seeds. the letters were addressed to jim mattis and admiral john richardson wisconsin is coping with more severe flooding water is submerging highways the flooding prompted one school district to cancel classes today. and international scientists successfully landed a robot on an asteroid. 186 million miles from earth, about twice the distance between the earth and the stoun the animation you're looking at shows how the mission unfolded successfully space stuff is so cool thanks very much let's get a check on the markets. three indices off session highs. the dow jones industrial average is higher, s&p 500 is up .04%. treasuries are on the move the yield on the ten-year hitting its highest level since

2011 the two-year also at levels not seen since 2008. a great stat today, it's been a month since any of the fang stocks hit a 52 week high. in the past month, netflix is the only one in the green. tyler? thank you very much. the oil market closing for the day. jackie deangeles has the numbers. >> well, crude prices are higher despite the inventory of 8 million barrels. the support in this trade is coming from the threat of iran sanctions coming on november 4th the momentum we're seeing in the stock market, is a risk on market oil is moving with the same sentiment. jeff curry this morning saying on our air it's possible to see $90 to $100 a barrel crude is bucking the trend of the stronger dollar as well as the inventory number it's evidence there is conviction in this trade $76.90 was our end of day high. thank you very much. senator bernie sanders along with representative brad sherman

is introducing a new bill that targets the biggest of the banks, the too big to fail, too big to exist act would cap the size of financial institutions to around $584 billion in size this would mean breaking up the likes of jp morgan chase, bank of america, wells fargo, goldman sachs, berkshire hathaway and more joining us is brad sherman of california representative sherman, welcome, good to have you here. >> good to be with you. >> you know, i seem to recall that in the dodd frank act there were provisions there providing for so-called living wills that would kick in if these institutions ran into financial distress would cause them to dissolve basically. if you've got that, why do you need this? >> well, capitalsism calism cal

the growth and death of companies. just because you have plan for bankruptcy, does not mean your demise could not be catastrophic to the economy too big to fail is too big to exist. and when a bank reaches 3% of gdp, it has an unfair advantage over other banks because wall street believes it will be bailed out, that their creditors will be bailed out. bank presidents have called for the breakup of too big to fail institutions. >> is this about the competitiveness of small banks versus large banks the last financial crisis wasn't

caused by the sheer size of banks, it was the leverage of banks. collectively they could have had the same impact on the economy. >> when you have a variety of different companies in an industry, it's far less likely that they'll all go bankrupt but if you have that entire industry in the hands of one company or so much in one company, its exposure allows them to call the white house and say you've got to bail us out. because if we're going down, we're taking the whole economy with us. no one company, no one bank should be able to do that. that's why we need fair competition. also, if you getmore health among the community banks, you're going to have more financing of small business. and that is so important for example, we had jamie diamond testify before our committee that he couldn't find small american businesses to loan money to so he sent his money to london where it was eaten by the whale we'll have a healthier economy

if we do not have institutions so large that one institution going down could take down the entire economy. >> so tell us a little bit about how large is large you say 3% of gdp. measured by what by assets? market size? what >> we have it based on assets but other exposure i think it should be liabilities to u.s. persons. so senator sanders has his bill which he's introducing we had a substantially -- a bill we had worked on with senator sanders for many years and introduced many times. but we'll be refining our bill to focus on liabilities to u.s. persons. if deutsche bank goes under it would be terrible for the world, but not particularly for the united states. >> isn't an asset a loan they

have made to someone else? it's not their liability, it's a liability that someone else has to them. >> exactly obviously, for most banks, liabilities and assets are very closely related y you have owners' equity on the sheet as well. that tends to be a small portion. the system for regulation may focus more on assets and liabilities as a way to measure the size of a bank if you look at what we're trying to accomplish here, it would be looking at liabilities to u.s. persons. >> i don't understand what you're trying to accomplish in this bill in that you're adding on this whole notion of making banking more competitive, leveling the playing field between the big and small banks, but at the same time you're saying the big banks need to be broken up because of the risk to the global economy what is it

what is really the purpose of the bill >> because a bank could call washington and say you have to bail us out. that is a risk to our political system it is a risk to taxpayers. but it's also an unfair advantage for the bank in securing loan capital. they're paying, according to the imf, 80 basis points less for their capital than otherwise because of a belief on wall street that in addition to all the other security that bank has they have a hotline to washington that a medium sized bank or a small bank wouldn't have so the possibility of a bailout gives them an unfair eventually. the possibility of a bailout is a risk to taxpayers. it's also a risk to our political system as well. >> thank you very much for your explanation. we appreciate it >> good to be with you. >> we should note we've reached out to the financial services

round-table for comment on the bill but we have not yet received a response. all right, now that there's a nafta replacement deal between the u.s., mexico andcanada, there are some surprise winners and losers we're live in d.c. with that story. >> reporter: we have talked a lot about what this agreement means for farmers and factory workers. but what does it mean for football tucked inside the u.s. mca is a little something for the nfl gone is the ban on canadian broadcasters selling local ads that air during the super bowl now, the game is one of the biggest tv events in canada. more ad sales the nfl believes will ultimately benefit the football industry. now, commissioner roger goodell said he greatly appreciates president trump's leadership on this issue another surprising winner in this, whiskey. specifically american rye whiskey. it's under consideration as a distinctive product in the new trade deal you couldn't call it american

rye whiskey unless it's made in the u.s., 51% alcohol is distilled in new charred barrels. deep inside the text of this deal is a provision that would allow the u.s. to withdraw if canada or mexico signs a free trade agreement with a non-market country, that would be china this is a very controversial provision. it's clearly an attempt by the white house to box in beijing. guys, this shows how expansive and wide ranging the deal really is it could take years before we fully understand how it will shape our economy in ways large and small. >> two questions i'm going to keep them separate. the first question is, that last provision you were talking about is clearly pointed at china. would it affect any deal that canada struck with any other individual country >> reporter: if fiit's consider a non-market economy, then yes it gives canada and mexico and the u.s. actually the right to

withdraw from the deal it doesn't mean they have to withdraw from the deal, but it gives them the option. >> someone would, obviously, have a definition of what a non-market country is. it would be a command and controlling economy i suppose that's what they're driving at let's talk about something you and i have been talking about offline. that is how foreign branded cars that are made in the united states like many hondas, some toyotas, mercedes, how are they taxed or tariffed under this new propos proposal these obviously support american jobs, but it may consist of foreign sourced parts. >> reporter: what's important is not who owns the factory, whether it's a foreign automaker our one of the big three like three. what's important is what is in the car and where the car is going. so the deal increases the requirement for the amount of products that come from within the tri-country area to 75%.

75% of the car has to be made of products from within the trading zone in order to move freely across the border. that is increased in this deal from 62.5% under nafta the goal is to insure that car companies are not just buying a bunch of parts more cheaply from overseas, let's say from china, and then assembling the cars in either the u.s., mexico or canada and taking advantage of the free trade agreement to move them across the border. >> so just to be tiresome here i'm really good at that. this would affect cars that would be assembled in canada and brought into the united states, cars that would be assembled in the united states and would move to mexico. it would not affect the toyota that's made in kentucky, so an american assembled car that's sold in the united states is never -- even if it didn't have 75% domestic product in it or north american materials in it would not be subject to a

tariff >> because it's not moving anywhere it's made in america and sold in america. right. >> thank you for putting up with me appreciate it. the nfl, not just a winner in the new trade deal, but winning in the ratings as well eric is here with the latest. >> nfl ratings, they're back on track finally. sunday's ratings saw double digit increases from last year those gainswo were strong enoug to bring up the entire season's average. the top 15 most watched shows in september, all of them were nfl games. six had over 20 million viewers. some reasons why, you can look at better matchups, higher scoring, closer games, more comebacks. because of these rules change to focus on offense, we're setting all time records in terms of total points, touchdowns and especially passing touchdowns. everybody loves the qbs here the margin of victory is the closest it's been in 86 years. 38 games have been decided by just one score all that passing offense means we're getting a lot more lead

changes. 21 times this year teams have come back to win or tie the game after trailing in the fourth quarter or overtime. that's the second most in league history through week four. finally, the president has been busy focused on other issues this season, leaving the league alone and the national anthem kneeling issue, that has mostly gone away. for the first time in a long time i can say the nfl looks -- >> all of these numbers about prolific offenses do not apply to the new york giants. >> the giants and the jets, the number one market. they've got these two star rookies. that helps ratings too with these new rules, you could have been a hall of fame qb. you could be throwing four touchdowns. >> he missed his calling. >> my son on the other hand -- >> get your son focused on qb. forget defense. >> he's ready. he's in. >> thanks, appreciate it. renting clothes is nothing new, but more and more major retailers are getting on board they're all using the same technology platform to make it happen the ceo of the company behind the technology joins us. as we head out, take a quick

look at the markets. the down and s&p dropping in the past few minutes we're around session lows. adntould get interesting as we he io the closing bell you want want to stick around with us. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job.

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welcome back to power lunch.

the sharing economy has disrupted your cab ride, hotel s stay and now your retail experience retailers use castle, a technology plat perform that powers a clothing rental program. the platform helps retailers attract new customers an increase their spending. christine, thanks so much for joining us. >> thanks for having me. >> explain what castle does? >> it's a fully managed service that allows any retailer to offer a rental subscription service to their customers using their inventory nobody knows we exist, but we're the people building the front end consumer experience. we're handling the logistics and technology we just take the clothing and the consumer list from the retailer and make it all happen. >> express is the latest

retailer to use your technology. if i'm a consumer, i could rent express' clothing from this platform, inventory that's in the stores instead of buying it. why would express want me to rent instead of buying >> what we found is fundamentally consumers rent very differently than they buy. most of the things you buy -- if you think about your own wardrobe -- will be the basics and staples. things that you can get a lot of wear out of and makes sense. when you rent, you tend to go more towards the fashion and the trend. so for a company like express or like ann taylor or new york and company, they're going to continue to sell just like they always have. what they're doing now is increasing engagement with their brand and that brand loyalty through renting more of the fashion pieces. >> so what you've seen already with ann taylor and new york and company is not it takes away from what's being bought in the store, but it actually does add incremental revenue? >> i think that's one of the big things about this technology

it's not disruptive. it's not a disruptive model that's threatening their businesses right now it's an opportunity for these retailers to jump on board and increase the number of new consumers they have, increase the spend consumers have with them it's a significantly more profitable business. againer again, very high engagement rates. >> i have a beloved neighbor who is always spilling wine. she rents a beautiful white outfit and wine -- what happened do you break it you buy it >> we're not sending the secret service out to her >> i'm in so much trouble now. >> it's every day clothing you can't be concerned that you may snag it or tear it or spill something on it. there's going to be some damage that happens we want the consumers and the retailers want the consumers to be very relaxed and comfortable in the clothing. it's part of the service fee there's no nickeling and diming for extra insurance. it's going to happen

occasionally it comes back damaged. >> how do you get paid are you incentivized to make sure a customer stays within the subscription program does it matter to you? >> absolutely. so we are -- we get paid on a per consumer basis, so we're completely aligned with the retailer to help them grow their base, maintain their base and have very happy consumers. >> yesterday, walmart just announced they purchased eloquy and your other business is for plus-size clothing and now that's 0-32. what do you make of walmart's acquisition to eloquy and is that something you want for gwenny b or castleby >> as far is at eloquy acquisition by walmart they have had the strategy to bring in a bunch of brands and really kind of expand their consumer base, so i think as far

as straight retail goes, you saw it with eloquii and others, this is just another step in that path it's great for the plus-size consumer and great for the eloquii customer they will be able to elevate the supply chain and elevate at a lower cost point when it comes do we want to be acquired we're building this company to take it public we don't want to be acquired by any single player largely because we believe in fragmentation. so if you believe the industry has been fragmented and will remain fragmented. if you want to impact the tremendous part of the economy, you need to be a platform underlying all of the brands and the retailers as opposed to being a singular consumer-facing brand. >> got if. >> kristine, thank you so much it's fascinating even though consumers may not know you exist, thanks for being here. >> thanks for having me. >> apple's tim cook who doesn't believe that tech companies that say they need your data, but that's not all he said his comments are ahead

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francisco with more. hi, josh. >> courtney, privacy is one of the most important issues of the 21st century that's what tim cook had to say during an interview with vice and it's clearly impacting how apple's ceo is now thinking about regulation of his industry >> when the free market doesn't produce the result that's great for society, you have to ask yourself what do we need to do, and i think some level of government regulation is important to come out. >> but how well informed are lawmakers, the people who actually craft such regulation about tech, about privacy, cook saying it's a challenge. he also emphasized that his company when it does collect user information gathered as little as possible now, some do argue that policy actually disadvantages apple that's a claim that cook dismissed. >> the narrative that some companies will try to get you believe is i've got to take all of your data to make my service

better well, don't believe them if whoever is telling you that, it's a bunch of bong. >> finally, what about the privacy and security data in china? cook says the encryption data is the same in every single country. >> now a look at the intraday 500. had a struck us was the moment that the nationwide alert went out, the moment that the markets staged a drop. we lost ten days on the s&p 500 on the back that have alert. it was tweeted out before maybe the algos didn't get the notice that this is a test. we'll see how the market closes in the next urho or so meantime, check, please, is next broker a fiduciary? were you satisfied with the attention you were getting? then i explain that being independent gives our firm

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we talked earlier on the show about how christmas is 82 days away. >> 82 days >> mm-hmm. i got a sneak peek a nugget says that 48% of americans say if prices go up as a result of tariffs by 10% or more, they are willing to switch brands will they notice i don't know but if they do they say they will switch brands and a third more say they will buy american made products. >> exactly. >> yeah. >> let's talk about the markets. they have been losing team a little bit

the dow did hit an all-time high they were on pace to close earlier and the markets are motoring right along despite the recent dip. >> and the ten-year yields are rising >> 3.15. >> how long did that last? >> thanks for watching "power lunch." >> "closing bell" right now. >> tease time for "closing bell." it's shaping up to be another record day on wall street, but what are the red flags out there that you need to be watching out for? we will be explain coming up plus, honda teaming up with gm in a multi-billion dollar bet on driverless cars. former gm chairman bob lutz and former chrysler president jim press tell us what it means for the auto industry. and i'm sarahizen in for kelly evans. eight officials speaking out across the country we'll bring you the key moments from america's economic leaders