on today at 3:00 >> maybe his last visit as ceo >> little damage control >> i agree with weiss on the meaning of 5g and for that reason i like verizon. bought it, own it. >> nice defensive play is in the pharma space >> have a nice weekend "power lunch" starts now >> a wild trade igsession. decent earnings but worrying news about china's economy should investors brace for more volatility ahead and is next week a make-or-break week with a flood of earning tumbling at ford, fear about sales, growth in china stock sitting near nine year loss we have the road ahead report coming up. 20 bold new calls on tech including a new street high price target on apple. analysts who made those calls gives us his best picks and tell us why apple coraly 40% from here "power lunch" starts right now

>> welcome to "power lunch". a very busy one. i'm tyler mathison we're well off the session highs. the dow was up 200 points earlier. all the majors on track for, believe it or noorkts pot, a po week consumer staples best performing sector thanks to proctor and gamble best performer on the dow right now and one of the biggest gainers in the s&p 500 and this is a stock to watch today as scott and the gang were just talking about, shares of cleveland-cliffs falling off a cliff after its ceo goes off on an analyst during a conference call we got much more on this and you got to stick around for this contessa >> i'm contessa brewer the four major u.s. professional

sports leagues could all together rake in more than $4 billion annually from legal sports betting amazon may be getting close to picking which city will be its second headquarters. executives made a fresh visit to new york, new jersey and chicago. sales existing homes falling to the slowest pace in three years. down for a sixth straight month. closer look at the health of the housing market hide and "fast money" trader joins us for the next two hours of power launch guy adami will break down the stocks >> we can always vote him off. >> vote him off the island >> can't vote me off i'm here for two hours >> let's get straight to what's driving our market action. bob pisani is on the floor of the new york stock exchange. mike santoli is looking whether the market is testing or relapsing. we start off with bob.

>> hello, melissa. a lot of cross currents here good earnings continue to come in proctor and gamble was great raising prices there's a lot of cross currents that are showing some are new this week let's run through them very quickly. number one the most important thing is higher rates. increasing the cost of doing business, how far does that go china slow down, how much is it slowing down really hard to figure that out 6.5% gdp growth as they reported, is that a real number? a very important developing story is the industrials and margin pressure. we heard from many industrials about higher raw material costs, higher labor costs, weaker foreign currencies it means pressure on the margins and that's a direct influence on stock prices then this new development, this potential isolation of saudi arabia, a lot of tech analysts feeling this could have a negative effect because it may reduce saudi investment in technology they own many funds including

softbank funds some people hard to figure out but some people are saying this could get worse if we go on. today what's going on, xlk, a lot of movement in and out of technology weakness today due to technology i want to mention netflix. here's a good example. a company reported earnings. nice big pop it's been essentially straight down ever since. no follow through after that initial opening on wednesday for netflix here finally just want to note, certain sectors are drooping fo no reason. retail has been weak you get 4%, 5% declines in the retail group this is important for the christmas season >> is the recent sell off a retest of the lows or is something more sinister going? michael santoli looking on the

sinister will give us the news on that. >> i remain top the possibilities of what happens on the sinister side. it seems as if the market is potentially set up for a so-called retest of those loss from last week s&p 500 those lows around 27, 28 thursday on a closing basis. that's line drawn across this chart. we've not really escaped from the gravitational pull of that level. over the course of the entire year we toggled above and below. that april move or march move down from february low then you had a rally and then pulled back again. that's what we mean by a retest weeks or so later. you have to see if that level will hold. we may be setting up for something like that. nothing really unusual about this would be activity we've seen in the last few days after we had a big shock last week, 5% down in two days you typically have this kind of emotional technical trading.

i think unless we break those lows from last week or go up to the level where we fell off a cliff from which is 3% or 4% up from here it's just noise and people trying to find the levels couple of concerns out there this market was never really able to get great momentum even when it was rallying we still have to be on the alert for possibility we'll have a little bit of a heavy trade for a while, but seasonal factors start to get favorable october 2014 you had a v bottom. looks like this year's chart, guys snake, thank you gdp numbers from china out today showing a slow down in the world's second biggest economy >> china released a gloomy report card on growth. 6.5% year-on-year weakest quarterly growth figures since the depths of the financial crisis the slow down was most visible in industrial output which only grew by 5.8% retail sales were strong

a sign that the consumer in china is still spending money. chinese vice premier blamed trade tensions saying trade frictions have impacted the stock market but the psychological effect is bigger than the actual impact. china and the united states are now in contact with each other the shanghai composite ended the trading session higher on those measures unveiled by beijing to stimulate china's economy and the market that eased investor concern here touchstone said cline slow down will have a limited impact here on the u.s., but if the u.s. administration eventually puts 25% tariff on all chinese exports, the impact could be much worse it has been a tale of the three indices this week with the dow high are, nasdaq lower, s&p in the middle. could next week's earnings and there's a lot of them be the cat

li catalyst that the markets are waiting for? so when we're looking here at the markets, what really is the counter weight to what we're seeing with earnings >> the counter weight to earnings is the risk in the system that are being incorporated into the market for the longest time the u.s. market just didn't think the china risk was real. that's why you had a divergence with europe and divergence with the asian markets. finally in the last two weeks the markets are absorbing that this is real, it can get ugly before it gets better and we have to reprice. >> guy, what are you looking for? next week we're watching for these earnings to come out we've seen positive earnings what could dampen the mood

>> first of all, thanks for having me here great to welcome back you. >> great to have you here. >> see that's melissa lee. at 5:00 she gives me the hum i'll answer the question earnings will be fine. no question earnings for this quarter will be fine it's guidance going forward and all the other ancillary stuff we talk about everybody wants to blame the selloff on the federal reserve i don't think that is it europe is a mess markets are finally catching up to fact that the markets can go down as well and we're in the midst of something that everybody hopes for until it happens. when it happens everybody says oh, my god it's scary for me >> people say we're due for a correction it's going be a good thing then went it happens we freak out. >> people don't like it. we had a great year last year. last year was one of the best years in the market. it was quiet low volatility

>> you sit there today, the markets actually up for the week but sure as hell doesn't feel that way >> doesn't feel that way my guess is in the next three or four weeks we'll have another leg down i feel we'll have another 5% lower. if it turns it will turn around mid-november that's the history of markets at this time of the year when they get that angst and see a turn in november >> mid-term election time, around that time what do you do at that point if that's your entry point now vest in the sectors that have done well this year or rotate? >> you rotate. large cap tech essentially is done and it's done for a bunch of reasons but i think least of which is not the regulatory risk we have democrats and republicans going after large tech that's going to keep a lid on valuations >> are you talking about those fang names or more broadly about large technology companies that would include intel and apple

and microsoft. >> i'm talking about fang and the five names that essentially drove s&p performance this year. i think that's over. i do think you need to rotate. and on top of that there's a lot of value out there in other names that essentially have been 2k0u7 down 20% so far for the year i would wait >> you're the head of global investment strategy. right now china is taking up a lot of spotlight space how are you weighing what's happening in china with your overall investment >> so, we're worried about china and we're worried not just on the growth number. so, there's kind of a wink and a nod coming from china. they tell us a gdp number and essentially it's directional we know it's down. we don't know it's 6.5% or much lower but it's directional they are letting the world know growth is slowing. the real issue with china is the currency issue and that's what we're focused on

china is easing and the fed is tightening and that means a natural devaluation of the chinese yuan. it's clearer the pboc is trying to support the yuan at a certain rate him not to sure that can go on for much longer. we see the chinese currency going much lower and that we're worried about. >> thank you so much for being here and we really appreciate your insight >> thanks for having me. car talk signs of a slow down plus ford is floundering and hoping walter white can help boost sales. elon musk announces the new version of the tesla model 3 on itr. start your engines "power lunch" is coming right back

it's friday. time for the power run down of car stories with phil lebeau first up problems from ford. what are they? >> reporter: the biggest issue today is that you got a couple of noted analysts, analysts who are widely followed who are out saying look we're not really sure what to make of these guys and until we really know, stay clear of this stock. morgan stanley cut this stock to equal rate with price target moving down $10. jpmorgan cut its estimate by 36%. ford reports earnings on wednesday and, guys, if we have this chart to show you here, if you show ford versus general

motors, versus toyota year-to-date, it's not a good chart. an ugly chart as a matter of fact look at ford by itself this is just the last three months people are waiting to see what happens when they not only report earnings but where is the restructuring plan >> i looked at my notethis morning and ford downgraded to equal weight they downgraded it it sounded good me weakness in the global car market daimler lowering its forecast. what's the problem >> reporter: the biggest issue what's going on in europe. they are switching to a tougher emission standard for daimler and all automakers a number of european automakers are wrestling with getting their production up and sales up to meet those tougher targets as a result daimler is cutting its 2018 forecast. this is the second time earnings expectation, i should say, the second time that daimler has warned in the last four months they've also got pressure

building in china, where sales there not just for daimler but a number of automakers putting pressure on them as you take a look at shares of daimler another ugly chart again this, is somewhat specific todaimler but for the group overall not surprising >> elon musk a cheaper model 3. he made the announcement on one of his favorites medium, twitter. >> reporter: this is a mid-range model of the model 3 what you're looking at is a price target starting at $45,000. there will be some people who say this, wait a second they said $30,000 if you factor in the federal tax credit which will be phased out after the fourth quarter of this year then state tax credits the biggest in california. if you don't live there you won't get that as much also if you factor in projected gas savings. guys, the bottom line is this. when people are buying vehicles, almost everybody goes based on monthly payment.

they do not sit there and say it will be $30,000 instead of $45,000. they go based on monthly payment. that's what drives sales we'll see if this sparks greater interest in the model 3. >> phil, thank you phil lebeau in chicago let's talk more about tesla and ford james albertine, good to see you. tesla launching that new mid-range car. a lot of analysts are saying tesla needs to get the volumes up to prove its model and get the cost saves in the end in terms of scale they are doing this. is this a good thing >> first thanks for having me. good afternoon i think it is a good thing ultimately, electric vehicles is really where all oems are investing. by default u see better and more affordable luxury vehicles with the eslarks it's a little bit more of an iphone to

everyone's blackberry. they are updateable. you buy a vehicle today that has lower obsolescence risk. early indications from individuals that have taken delivery of the model 3, quality is quite good. particularly on the interior and with the drive so i think this is, again, more of what we would have expected from tesla and we expect a lot more competitors to come to market so electric vehicles are absolutely coming very quickly >> why do you have an equal weight on tesla. what you say about the model 3 sounds positive. it sounds like you were more positive about the corporate governance of the company with the changes involving removing elon musk and adding some board seats. isn't this a better story theoretically on paper at least? >> we downgraded in particular at the beginning of september

because, you know, calling for more independence and it's good to see the sec settlement helping to pave the way for that we would like to see this play out more and have the board establish itself and independence, you know, in a demonstrable way whether to bring somebody to help elon, alleviate the pressure that's weighing on him, certainly from a time perspective, time management perspective. we'll be watching that very closely. the questions on the third quarter, we can almost anticipate them. average prices for the model 3 will be quite high they will talk about the sustainability or lack thereof of those margins >> let's switch to ford. what do you need to hear part of that morgan stanley downgrade is that there was little transparency that the investor meeting was cancelled in september and that was a real concern. what do you need to hear from

company management at this point? >> we had a preview out earlier this week that said the same things without that detailed sort of road map in terms of their strategy and i think that involves not only strategy around technology narratives, but around restructuring their core business. they talked in big broad terms about getting out of cars, for example. they need to do more how they are going get out of certain markets whether that's south america, peeling back in europe as well. ultimately i think without that clarity and that detail, you know, i think they are perceived to fall further behind their peers and it puts the dividend at risk which is the bigger reason -- >> the dividend is at risk at ford >> potentially i think that's right until they put pen to paper and help us understand the road map here i think potentially -- remember, a lot of cost savings require a lot of investment today. i think from a cash flow

perspective where we get to that question around dividend they need to demonstrate they have a detailed road map in order to protect that. >> thank you i'm going to ask you, guy, since he's gone equal weight on both -- >> i love this game. contessa we play this game at 5:00 >> ford or tesla >> i have to pick one? >> would you rather. >> given the parameters you just set forth -- >> which is one of two companies. >> i would rather ford >> why he just said the dividends aren't there you don't know anything about turn around plan >> i hear you. thank you for that tesla on the other side this $2 billion from this factory in china where is that money coming from historically it's been an opportunity buy tesla. i'm not so sure. when elon said he was going to buy $20 million of stock

it wound up closing lower. tesla has to close significantly above 280 to get interesting ford at least you have some sort of catalyst and earnings on october 24th where maybe people will take a shot given those parameters, ford and with that said, i've been down on ford for years and the argument is valuation is compelling it's been compelling for the last $6 in the stock at a certain point you have to say maybe there's something wrong. >> maybe like community property, you're even more down on tesla than ford we'll be right back after this but elon musk not the only ceo with a distaste for analysts and short sellers. wait until you hear what the ceo of cleveland-cliffs had to say this morning and we'll talk to the biggest apple bull around the analyst who initialed aprille with a $110 price target that individual will join us next on "power lunch".

>> shares of cleveland-cliffs an iron mining company down 6% today after a bizarre performance from company's ceo on the earnings conference call. got to start listening to these things >> i listen to a lot of them for the most part they are prepared the remarks there are. the bullet points are there. legal compliance signed off on it with regard to loren so gonzalez who is the ceo over at cleveland-cliffs he has a history of saying what he wants

and how he feels without regard how others take it in this conference called took offense with some analysts estimates put out about his company, the price targets analysts have and perhaps some of the short-sellers that are involved in his particular company. take a listen to what he said during the conference call just earlier this morning >> you are a disaster. you after an embarrassment to your parents with this being said, we are going to use money to rework the long term shareholders so if the stock continues to gown base opened this, we're going buy back stock we'll screw these guys so badly that i don't believe they will be able to resign. they will have to commit suicide. so we are going to screw this guy so badly it will be fun to watch. that's my first priority other

than the true top priority of paying down debt you're messing with the wrong guy. >> messing with the wrong guy. analysts have been messing or short-sellers have been messing with the wrong guy for a while this is the first time lorenzo gonzalez made comments like this when he took over the company back in summer of two2014, he hd an exchange with an analyst who decided not to address because he didn't like price target on his particular stock as we talk about the idea this particular move happened the language is what was i guess jarring or catching for a lot of folks. even hinting that somebody should commit suicide because they made a wrong call or calling these hedge funds or short-sellers unidentified as kids with their computers playing with other people's money. you get the idea, guys, that this is something where he really takes personal offense to anybody who has any kind of a down side opinion or neutral

opinion about his company. >> has the company put out a statement after that call? >> i have not seen one yet we reached out to them for a statement. >> we're going to get a statement one way or another today. cleveland-cliffs ceo will be on the close bell at 3:00 p.m. eastern right here on cnbc >> 16% of the shares outstanding are short. this is a company that's pretty heavily shorted. in the context of going after short-sellers you have to go back to elon musk going after short-sellers and that was an issue for short-sellers who ended up suing tesla you wonder if this opens up the risk of the company to litigation >> the thing that's maybe nuanced different about this particular instance there was no funding secured aspect he didn't go out there and said this is what we'll do at a certain price and burn people that way what he did say is he's going to buy back their own stock and try

to make sure -- >> crush the guy >> to crush this guy that's not a explicit we have a tender off at this amount for these shares this move highlights an increasing debate over whether or not public company ceos should be in a position to make these kinds of statements or whether they should stick to some of the more cookie cutter or legally acceptable forms of communication with some of their shareholders >> i don't think it's what he said, it's how he said it. his choice of wortds when you say he wants to screw these guys using his term not mine and have these guys commit suicide that's pretty harsh. >> my point being the language that people use these days is under increased scrutiny >> rhetoric has changed whether it is in this kind of a setting or political set >> there's no doubt. >> or any number. >> the chief executive of our country has kind of moved the bar a little bit with regard to that kind of thing something to watch >> thank you

the dow well off the best levels of the session at more than 200 points at the high and right now we're taking a look at a dow which is up by half a percent or 123 points proctor and gamble propping up the dow. taking a look at the company's strong results coming up apple trading just below $220 a share. an analyst will predict a rise $100 a share every investor should ask questions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor.

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. held jobs everybody i'm sue herera here's your cnbc news update secretary of state mike pompeo meeting with his mexican counterpart in mexico city pompeo says a moment much crisis is approaching as a caravan of

central american migrants travel north to the u.s. border >> president trump will be clear about the largest issue that we face today after having negotiated that deal we're quickly reaching a point which appears to be a moment of crisis, a record number of migrants, foreign secretary and i spoke about the importance of stopping this flow before it reaches the u.s. border. >> the university of southern california has agreed to pay $215 million to settle a federal lawsuit brought against it by women who have accuseed a former campus gynecologist of sexual abuse. check out this remarkable goal last night in columbus. the blue jackets scores in what some are saying is a candidate for goalee of the year the goal helped columbus beat the flyers 6-3

you're up to date. that's the news update melissa, back to you let's get a check on the markets. stocks are making up their gains. dow was up 230 honeywell is opening up an investigation into its accounting it's down by .6% proctor and gamble is flying there have been only four other times where the stock has jumped by 5%. it all happened during the wild swings of the financial crisis back 7008. we get a deeper dive on p and g's recent results >> proctor and gamble investors are cheering what was the best sales growth for the company in about five years i did have a chance to speak earlier with proctor and gamble

ceo and i asked him what drove the growth this quarter. listen >> yes a lot did come together in terms of the absolute top line growth. you've seen improvement in china. we now have improvement in our latin america business we're starting to overcome some of the very significant head winds in the middle east we are making very good progress on india but it's really focused on superiority of the brands across the elements we talked and productivity has helped us offset a very difficult external environment. >> a great quarter the takeaway is the second quarter a reflex of a better global economy especially in the u.s. which is p and g's most profitable market and the turn

around strategy that's been going on for years now starting to bear fruit. that explains why the company saw growth in beauty, home care and even grooming which had been under pressure lately. the strategy, shedding brands, stream lining decision make within the organization by geography and by product sections just some of the big moves that taylor has made that toledo this kind of growth despite the momentum, proctor and gamble did keep its guidance intact expecting 2% to 3% it's a conservative bet because of the challenging macro environment. the strong dollar which hurts this global economy and, guys, higher commodity prices which raises input costs two things that did hurt the company and made the big sales growth look even more impressive to investors today >> with respect to cincinnati, right? >> absolutely. cincinnati strong. you know, remember it was about a year ago i twlent for that very heated shareholder meeting

where they fought hard to get nelson not to join the board he did just win by hair. joined the board so now interestingly in october he returned back to cincinnati it was a lot less of a dramatic shareholder meeting, but interesting to see that the company sort of won in that taylor's turn around which they defended so much during that battle is really starting to come through to fruition >> very interesting. guy, what do you think of p and g. >> expensive great quarter. but what kind of eps growth. 6% eps growth. company is trading 17 times next year's earning last year when nelson peltz announced his stake the stock was $93. you might want to take a look at valuation. stock went to $73 within a month and a half it has bounced i get why it's bouncing now. jpmorgan slaps $100 price tag on

it all things will line up for this valuation. >> let's turn to technology. the one call grabbing a lion's share of the attention apple out performing, price target $310 joining us is dan ives great to have you with us. sounds like the longer term driver you think of services >> in our opinion that's the lynch pin. when you look at some of the parts surfaces we think that business alone is about half a trillion i think that's really what the street is starting to reanalyze that and the multiple continues to expand and in our opinion the iphone products continue >> what kind of growth quarter on quarter do we need to see in services to get to that $310 price target >> it's really about can they hit 50 billion in the next year

and a half from a revenue perspective some of the parts as they are able to do that then you can justify that services business we think with some of the parts, the core iphone business is worth a trillion and then half a brooklyn for the service >> talk to me about china and how important it is in your hypothesis here and how important the chinese consumer is i would think that if you get the price point higher, the chinese consumer probably feels it may be more acutely than consumers in other economies >> china is fueling the engine we don't get to a trillion and a half or a stock that goes higher if china is not a significant growth catalyst. what we see, about 60 to 70 million iphones coming for an upgrade cycle in china about 50% to 60% do get upgraded which sfeeks our view the 220 million iphones for this year is about $800 that will translate into what we

think is about 3% to 5% a year for apple. as we move forward the street will re-analyze and put a remultiple on the stock. >> apple will make $13.56. i give you $15 earns that's still a 20 multiple, more than a 2340i7 given your price target which is something they've never been north of that market multiple. they've now deserve of it given everything you just said because that's the math. >> without the services they are not. they are teenager in terms of where they will trade. the service business, reratings of 20 to 22 times. for cook and company it's about not making a bad strategic move. executing on china execute on the iphone strategy but services, that's front and center for us. >> where are the potential

pitfalls >> the pitfalls is china given what we're seeing in terms of trade tariffs. can there be a supply chain disruption really specifically can consumers start to digest at a higher price point with lower competition. >> we've been hearing from companies about higher cost, worries about tariffs and this issue of finding the skilled labor, the skilled talent you need to purity product out are those not issues for april signal >> apple has really been ahead of the curve there in term of what they've done at their facility right now the reason cook is so focused on china, china is the lynch pin not just from an r and d perspective but from a demand perspective. we're seeing all those sort of play out in that yellow brick road to trillion and a half dollars. >> thank you for joining us. dan ives up next trump administration detailing its plan to get investments in needy neighborhoods by offering massive tax breaks america the land of opportunity

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click or visit a retail store today. the treasure adept announced details of its plan to get wealthy people to invest money into poorer areas by offering huge tax breaks. here's more on these opportunity zones. >> reporter: this is a new program created by republicans as part of their tax plan and i want allows investors to avoid capital gains if they put their money in these opportunity zones which are basically low-income regions across the country you get to defer taxes on capital gains that are invested in an opportunity zone for eight years. investors also can discount those capital gains by up to 15% if they stay in the zone for seven years. if you hold on the your stake for ten years any result in gains are completely tax-free. treasury said today that only capital gains are eligible for the special treatment. as for who can invest it's open

to individuals, corporations, and estates. there's more than 8,700 opportunity zones across the country including puerto rico and there has been some controversy over how these places were picked treasury says tanch poverty rate in those areas is 32% compared compared with 17% nationally but critics say that some of the zones were already being redeveloped. now one big question that treasury still has to answer is what are the rums for buying and selling assets within the zone in other words how can funds actually manage their money? investors are still waiting on more guidance from the department, final regulations are expected this spring but guys, there is a lot of early interest in the program. and officials said they wanted to start providing clarity as soon as possible back to you. >> ylan, thank you very much and just -- and just a quick question that i have what role does politics play in all of this,uale >> contessa, this was definitely added to the republican tax plan as a way to sort of soften the

criticism that it primarily helps the wealthy and big corporations however, within the program itself there are two ways the politics could be a at play. the first is that states got to nominate the areas in which they felt deserved to be opportunity zones. there is question base whether or not those areas really are full of low income residents and really need that oop type of financing. and also whether lover is in the governor mappings might pick a place politically advantageous to them. tlps a question about whether treasury has discretion and how much discretion treasury has over the places that the states nominated. so that's a question that we are asking treasury as well to understand, you know, how many places were potentially turned away that states had nominated. >> all right ylan, thank you for that. our next guest says the programs are a great idea and believes it will finally help get money into underserved areas of the economy mark ein, chairman and ceo and of capital investment

corporation. mark, youen where a were were talking about intopic the othe day and you made me smart enough to be dangerous about it i asked a question yesterday to one of the guests about it now that you know at least some of what the rules are, that the treasury intends to apply here, do they -- do they change your opinion? are they pretty much what you expected >> yeah, i think what came out today is pretty much what is expected but this idea, since it came out is a trfrmtive -- potentially trfrmtive potential that will unleash private capital into some of the areas of our country that need it most. it's both investment in real estate where there's been a lot of the focus but there is also an opportunity to invest in companies and create jobs in these areas there still is additional guidance needed on both fronts but especially on the company side i think when you combine those two if it's effective this could

have a transformsle effect. >> you can invest in real estate or in a store or a restaurant in one of the opportunity zones walk us through, because ylan did it a little bit. but walk us through why these are so tax attractive. >> yes, so it's a powerful incentive to unlock private capital to invest in these areas. you can take a capital gain that you have already recognized within the last 180 days, invest it in an opportunity zone, real estate, a piece of real estate or a company and you will defer the tax on the gain that you would have otherwise recognized until 2026. and if you hold it long enough that gain gets reduced by 15%. and then you have a potential to eliminate the tax on the investment you make in the opportunity zone so it's a very powerful incentive. but i think that's what treasury was designing this to do. >> so tax deferral at first, then complete tax-free provided

you hold the investment in the opportunity zone for a period of i think it's something like ten years. but can you correct me on that. >> ten years, yes. >> how do you do this? do you have to set up a fund or if i'm an individual and want to do this will there be funds established that i can put my money in to take advantage of in how is it going to work? >> yes, so there already is a bunch of lawyers and accountants and bankers focused on this. i think it's both. if you have the means and the sophistication you can make the investments directly but there is a lot of capital formation already in the works to pool people's money together and invest it in opportunity zones. i think people have both options. >> mark, history is littered with disastrous outcomes born of the most well intentioned things i don't know how this works out. could you see bad actors getting into this as well. >> the history you cite is accurate and anything with good intentions and even sometimes good results can have the opposite and hopefully because this is

potentially really powerful -- i can't think of the -- anything else that has the power to transform these communities the way this does if it works well but, of course, it does need to be policed carefully the rules need to be made and enforced in a way so that it is positive and the negative is eliminated >> are there zones that you are looking at right now, mark, that seem tractive? because i think it's not just a tax break that makes a zone a god opportunity. it has to have the sound surrounding areas, something around it that would make it a good investment. >> that's a very good point. and the zones have been out there so people have been scouring the maps. and as you can imagine there is a wide range within the zones. there are some that will take longer to attract the investment and some that are nearer term opportunities. but that's also why i think the ultimate power of this is to combine the investment in real estate with the investment in businesses you can put those two together

and that's what's really going to make the investments and the impact that they have the most powerful. >> and mark, how important would the partnerships with local government be then be? because some of the places i travel to off on stories around the country they are hurting so bad. and it's hard to see how even if you have a business and real estate going in, without partnerships with role and state government you're not getting a successful economic zone. >> absolutely. that is the trifecta, real estate, companies businesses and local government all coming together to invest in the areas. but that is the intention. and this is -- as we said it's a very powerful incentive to unlock gigantic amounts of private capital. i think the treasury secretary estimated it could be $100 billion. and we will see. but it's a powerful incentive to do something that would be powerful and positive for our country. >> mark, great to see you the other night. thank you for taking part in net-net number one

number two and for turning me on this to opportunity zone area. >> my pleasure, i think this is going to be interesting to follow. >> mark ein capital investment corporation. appreciate it. a big intraday swing for stocks the dow up 200 points now up about 100 points pch the 23 p.m. hour when markets go crazy and cnbc might be getting new viewers for investment advice. could someone win the billion dollars and still want to go to work the next day. the second hour of power starts after this elligence. wicked seduction. these endeavors will rattle your soul... and challenge the contents of your stomach. if that sounds dramatic... it is.

clrp i'm tyler mathisen here is what's on the menu for power lunch. stop kidding yourself. that's what jim cramer says if you think all the bad news is baked into the market. what worries are still out there and how can you prepare for them we tell thu hour despite china recording the weakest gdp the numbers since the stocks are rallying and could it single a bottom in the markets over there the beleaguered markets. the citizens financial rallying

as profits jumped 27%. we talk to the ceo about what drove the good quarter, rising rates and economic environment and guy adami telling us whether it's time to buy or bail on some of the street's biggest movers that and more on power lunch as we begin a second hour right now. ♪ everybody's working for the weekend ♪ ♪ everybody wants a little -- welcome to power lunch for friday the dow had been up nearly 230 points right now up by 81 the s&p 500 squeaking by with 2 peart 5 process% begin and nasdaq down by 26. staples and utilities leading. consumer skrergs is the laggard. retailers taking a hit let's look at stocks for the week it's crazy iffed gains hold it's the first positive for the dow in four and first up woo weeks for nasdaq in

five the russell and nasdaq are no long in correction staplesen real estate uppraising let head to bob pisani on the floor of the new york stock exchange, hey, bob. >> hello, melissa. we had an indeterminate knit date a little wave of selling in the morning but the selling dried up and buyers came in. markets lifted off the lows. look at the sectors. again bouncing back and forth here, staples just a great week overall even before today. banks down a little bit. some of the regional banks had issues consumer discretionary also a little bit weak. just want to show you the staples. melissa highlighted this but great week overall color ox up 5% for the week. proctor & gamble 4% organ growth that was remarkable. that doing well today. don't see that often let's move on talk about tech ipos we heard rum you are the the palantir going public in the next quarter or two.

rumors about uber and airbnb can i point out this is hurting the ipo business there is a basket of ipos down 10% in the month the s&p only down 4% look at this week. 8 ipos two postponed five priced below the range and most of the five well below the range. not a little, way below the range. what's happening if this volatility continues into the first quarter of 2019 the ipos are not getting the prices then. three choices either lower the price float a smaller number of shares or postpone it further out. i content anticipate we are having this kind of volatility for a long period of time. but you never know and just look what it's done to the ipo business back to you. >> thank you for that and guy adami still with us. >> still with us oh. >> it's so good. >> still with us. >> second hour of power lunch we have a lot to get to including the big market moves

dominic chu atul telestrator getting ready to draw on the screen and illustrate some stuff. >> i like drawing appear illustrating been a tumultuous week so far. intraday well off the session highs. looking at one week chart of dow industrials it points you in the direction of the volatility we have seen. we were down about 89 points -- well this is intraday here but go to the one woke down about 89 points through here. on that monday all the sudden on saturday tuesday you get the rachest higher 845 points there. then down again another 92 points here. and then overall then become down again here and all of a sudden up 50 here. it just gives you the idea of a kind of volatility we have been seeing overall but remember it seems like a long time ago look at where we are two and a half three weeks ago. record highs in the dow jones industrial average if you look at dow in that context perhaps it's a little bit less worrisome

remember just around down here and we have seen a move higher there. with the do you industrials the way we are is stock market volatility as high as it has been, not there just yet over the course of the last week or so over the peak last week. over here we were around 28 on the cboe volatility index. the vix. the early mid-february we got as high as 50 on the intraday basis for the vix. as we talks about theed volatility it's trending down for the better part of the year. a pick up recently fallen back a little bit but no where near the signs of panic. see if that continues in into next week. >> dom chu the market swings we have seen may not be over. here is what jim cramer said last night on media "mad money." he said stop kidding yourself if you think the bad news is baked in he says there is no cause for the fed to tighten four times. this is what all this turmoil is about in the market. let's bring in the senior

portfolio manager at nuveen and the preponderate and ceo of thorn berg investment. bob start with you is this all about the fed? i thought the markets were prepared for four more hikes >> the fed is certainly part of it i think the language in the last press meeting that we're going to go past neutral, we have a long way to go that shook up some people. but look we are normalizing the entire picture, not just interest rates volatility is normalizing. pes are normalizing because we are no longer in the era of financial repressing where we have to fight potential depression that's over and gone thank the good lord. now we are trying to plot a way forward for the cycle. and the economy and the earnings are doing well but we have pe pressure. >> are we being too complacent when we say it's a normalization process, jason or should we be concerned about the fed rate trajectory given the issues brewing such as the

full impact of tariffs, companies have not felt the full impact of tariffs. that's just one thing. not to mention em concerns and china's bear market. >> well, you paint a difficult picture. i think it's not the wrong one we shouldn't be complacent about the process of normalization it's going to be difficult the reality is we had elevated valuations in part because of rates too low and the fed in my view behind when they catch up we have to pay some of it back it doesn't mean that kpk growth in the united states is challenged but it does mean some of the committeeses, whether they be in some parts of the equity markets and certainly in my view of of the private markets, if those come back, then that's consistent with reality. the vix as described by the previous commentator is coming up short and maybe that blocks ipos and if a normal level of volatility is blocking the ipos maybe it shouldn't happen. >> should the fed have an eye on the market or should they be oblivious or turn a blind eye to what's going on in the

marketplace? with that said we are down 4% or 5%. >> how about out of one corner of their eye you are right. in the long-term the 4%, 5% not going to matter. if we end up down double digit numbers they have to ask the questions why. but they have to focus on the economy and the inflation rate and those good things. and the markets will do what they are going to do. >> so let's talk about the fed's -- mr. kaplan, bob who said earlier today in remarks, that he thinks the fed is pretty close to achieving the dual mandate of maximum or full employment and moderate inflation. that would suggest that maybe we are coming closer to the end of the rate tightening cycle than we are to the beginning. and maybe closer than some of the other members of the fed believe. >> well, if -- if they could just stop it magically at that ideal point you are right. but i have never met an

inflation rate that went from very low to low and stopped because the fed wanted it to it usually continues they have some more work probably. >> jason what do you do right now? you know, on a week like this we have had a lot of volatility, a terrible month for what had been leadership groups. how do you regroup >> the question is really how -- how nimble are you if you are able to think about where valuations are relatively and understand with a long time horizon you have the ability to find good investments, one, let's put -- first thing is if higher ratesare great for fixe income investors a part of your investment program that's been getting you negative real returns is giving you something not awful. and two there are plenty of parts of the marketplace with lots of value. frankly some parts of em got cheaper. maybe deservedly but now are at a point where they are more interesting than things in u.s. domestic markets. there is a lot to do with volatility for sure. >> guys we leave it there.

have a great weekend bob and jason. the trade war with the united states is starting to put more pressure on an already slowing chinese economy. one expert says this could prove disastrous for the economy of the country. ourp next guest disagrees. plus how are banks dealing with the rising rates environment? the citizen financial joins us shares rallying on earnings. he is here we might as well take advantage of his bryan it's buy or gail with guy adami whap what a brain it is. maiv we give him three stocks to tell us what to do with. >> troubling place, the xfinity xfi gateway.

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simple. easy. awesome. click or visit a retail store today. >> well back to power lunch. slowdown for the chinese economy. chinese officials releasing new numbers overnight. and yunis has the latest from beijing. >> the numbers were highly anticipated because this is the first time that investors and economists were able to get a sense appears to whether or not the trade war was having an effect on the chinese economy. and there is some evidence to suggest that it already has begun. q 3 gdp expanded by 6.5%, missing expectations but till putting the economy on track for a full-year growth target. exports were surprising bright spot for the quarter but industrial output declined and dropped in september to 5.8% what's happening is manufacturers have been rushing shipments ahead of the tariffs but the weaker factory data

suggests that the jump in exports is temporary despite the slowdown china stock markets really rally at the close. top finance forks had a by big impact opinion the heads of the central bank banking regulator and securities commission announced measure tos to encourage various funds to invest in chinese stocks the officials also emphasized the poor stock performed has little to do with economic fundamentals vice premiere, president's xi's economic czar weighed in and acknowledged that the u.s.-china trade war was having a negative impact on septemberment and said the u.s. and chinay in touch but he said the selloff is a good investment opportunity >> eunice recording there. is this an investment tonight? joining sus david reidl of the reidl research group great soz you today. how much of a tight rope is it for china to walk between dlink

growth to the citizens and being attractive to foreign investment >> it's very important to continue some level of growth. but to put it in context growing at 6.5% is a important accomplishment it was lower than expectations, despite the boost in exports that one might expect when tariffs are being threatened or scheduled. so i think that they will have to continue to monitor the sentiment in both markets as well as on the street in china to make sure they are delivering growth and opportunity for the chinese citizens but not being seen as backing down in the face of international pressure on the trade front. >> we saw that export number go up almost 12% in the third quarter. how much have kbrts been insulated by the american rush to order and get products in before the full impact of the tariffs is felt. >> that's a huge part of it. as your correspondent indicated. what we hear on the ground from

manufacturers across china is that they rushed to get orders on ships and into ports as quickly as possible. watch that export number going forward and watch the beijing response in weeks to come. it's interesting they are pointing people back to the stock market they did this during 2015 with tremendous effect. that can provide a pretty solid rally as it did in the past in domestic stocks. >> it could. i mean they also got the national team quote unquote national team to get in on the action to buy stocks do you think they've been active and we've been seeing the 30% decline from january in spite of oh or has the national team not been dpoid. >> the i think the national team has not been deployed. they've been holding off to wait to see what was happening on the trade front. i think we are getting clarity on that after the mid-terms and a little bit more insight into what the rest of the year looks like once beijing flips the switch of enthusiasm for equities and enthusiasm for growth they do have $4 trillion of foreign reserves at their disposal

and also a very compliant population that's willing to go along with them if certain initiatives need to be focused on to drive economic growth and stability. so beijing has a lot of arrows in the quiver. they've been holding off on them for now. >> david, i hear the rhetoric and rallying cry to buy stocks say if that were the case they could make a deal with the united states and go up the 25% it's down. i read that as they are digging in and they are not inclined to make a deal with president trump. does that make sense >> it does make sense. i think the american perspective forgets about the center of humiliation. i don't think xi with his own domestic political consideration to think about can be afford to be seen as blinking in the face of pressure. they are more likely to extend growth and credit to other the partners and spend down the foreign reserves they have in order to stimulate the economy of which they still control many of the levers, banking 40% of

production, and a very compliant group of citizens and employees that they can turn to when they need to. >> i'm curious, we hear from the white house that they're getting a bunch of nos when they make specific asks on this trade war front. if this isn't the impetus for china to come to the table with true intentions, what would be >> i think if 2019 turned into having a further downgrade of their expectations, the imf just brought down gdp growth for 2019 to the 6.2%. i think that that might turn towards beijing's attention but i'm not sure it would turn to having beijing capitulate on a wide variety of trade measures i think they'll turn more internally and spend more money at home. >> so how -- how good do you think the chinese numbers are? do you believe them? >> i do believe them they are corroborated by numbers that we're getting from you will a the trading partners around

the region around the world. i think the gdp number is one we can believe. there are other sets of data tough to believe in china. but gdp is something so connected with other activities around the world, we can true trying and late that is accurate. >> david, thank you for sharing your pederson. david with reidl research group. >> thank you. consumer staples ralliesing. p&g reporting the best quarter in five years. the secret the best week since 2011 are staples the place to be in trading ti ine naons xt if you're turning 65, you're probably learning

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welcome back to power lunch. i'm mike santelli this is trading nation consumer staples on a hot streak tracking for the best week since 2011 proctor & gamble, phillip morris and color ox surging on the week and leading the s&p. is this traditionally defensive group poised for bigger gains? our guests join us to talk about that mark, obviously the stocks perked up. today proctor & gamble perked up suggesting there is power in household products is this a group staying in knave for a while do you think. >> i don't think so.

i mean volatility has come back to the market in a big way with the big daily swings and shaking investor confidence a little bit. the s&p is about 5% off the all-time high. and you have seen higher multiple growth stocks pull back more than that and consumer staples are a defensive sector i view this mostly as a risk off move let's put things in perspective. consumer staples have a great week but down about 4% there is mean reversion happening a as well. look close at proctor & gamble and the organic sales up 4%, more than double what analysts expecting, that was driven by the beauty products up 7%. but here is our take i mean we certainly would not add to our positions right now these are all multinationals and trade tensions can certainly hurt future earnings the stocks aren't cheap. most sectors trades at around 20 times forward earnings we do not think that there is more gains ahead for the sector.

>> yeah, that is, bill the skeptical case obviously i don't think sentiment is bullish in general toward the group but what do the charts tell you at this point? >> well, the xlp has been constructive for the second half of year. in fact you have you the golden cross recently and now the 100-day moving average moving above the 200. you have the trend line coming in right around 55 from the highs. that's posing a lot of resistance even the move too far 50-day moving average and retracement level is running into a brick wall up there. and ultimately too i'm not bearish through the broader mlkt i think we see a bottom oef the next woke in the broader market. volatility will come out and i'm bullish towards the ended the end the of the year. i would look to the xlp in january if it remains this technically constructive. >> all right maybe a wait and see of course in that xlp not just the consumer products but the food stocks which have been

weak that could be complicating the picture thank you for the time today. appreciate it for more trading nation he had head to the website. follow us on twitter tyler back to you. >> thank you very much coming up citizens financial higher on earnings the ceo joins to us talk about that and the impact of rising rates on his business. and shares of cleveland cliffs down 6% today after a bizarre performance from the company ceo on the earnings conference call. one of the analysts who was on that call will join us neck. s. >> announcer: and now the latest from trading nation.cnbc.com and a word from the responser. >> traders short stock when they think they go lower. the number of shares sold short is short interest. short interest is used to gauge market sent pmt. appear a rising short can indicate

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i'm sue herera here is the cnbc news update. members of the 3,000 strong migrant caravan gathering in a gaulten border town and it's been reported theyer to down the border gate and rushed toward the border into mexico in comes despite the threats to close the u.s./mexico border if mexico let's them advance. >> bernie sanders kulg out the trump administration for the reaction to the disappearance of jamaul khashoggi he accused trump of acting truch etough except on russia and saudi arabia. >> he ain't such a tough guy when he deals with putin he is not such a tough guy when he has to deal with his billionaire friends in saudi arabia who just tortured and murdered a courageous journalist. not such a tough guy on that

one. britain's prince harry and australia as prime minister climbing this bridge to raise a flag the games start in sidney tomorrow founded by harry in 2014 and gives sick and injured military personnel and veterans the opportunity to compete in sports you're up to date that's the news update this hour. >> thank you sue. a check on the markets a volatile day dow up.25% or 67 points. the s&p up by one. and the nasdaq down by 30. leading the dow right now proctor & gamble and american express and disney lagging cart pilar down, dupont and intel. dsw. sig net, lulu lemon down 3%. look at netflix. despite the massive beat this week it's down nearly 3% today and actually negative for the week tyler. >> all righty.

shares of citizens financial rising 5% after reporting better than expected earnings the regional bank posting 93 cents a various share for the third quarter. revenue shares also high he but how will it fair in roycing rates environment? bruce van zan thank you for being with us. >> thank you my pleasure. >> congratulations on a nice quarter. what do you see going forward? how is the economy and the markets where you operate? and what are higher interest rates doing to either help or hurt your customers or you >> sure. so i think the economy remains very strong on a very solid footing. we see good business optimism, good consumer confidence we don't see any real exijt. growth could carry into 2019 and

that bodes well for continued loan demand, which obviously helps our top line the higher interest rates is a benefit. we still are asset sensitive as the fed raises rates that benefits our net interest margin it's a little less so today than it was going back a year ago when we were earlier in the rate hike cycle we now have to catch up a little bit on our deposits. so our deposit betas are going up but still net positive. as long as the fed raises rates gradually, either households or companies have been able to absorb that higher cost of carrying on their debt. >> talk to me a little bit about what you just mentioned, that is raising deposit rates. it's been a long, long time since you had to do that. >> we started tosz see a bit of push for higher deposit rates from the commercial borrowers,

the first avenue because as their loans tied to libra re price and they want to get paid more on the cash leaving with us. the second avenue has been wealthy depositors who have more cash the interest rate matters more they have started to push a little bit for higher rates. the mass consumer, not as concerned about it, because if you have $80 oh in the account, a 1% difference is $8. it's not that big a deal so we're still lagging i'd say in the mass consumer and starting to pick up the rate rises on the other two. >> i guess you could go to starbucks once. >> yeah get a six-pack. >> bruce you are see agonize day today. it's been a tough year for your company as well as a lot of other financials and a lot of that has to do with the spread, the 29s 10s spread one analyst pointed out to us that there is a 80-plus positive correlation between regional banks and how they trade and the

2s 10s spread. somehow should investors thing process that is that the right way to think about that relationship? or should we look at something else. >> that's a little bit of a narrow lens while a flatter curve impacts income most banks have most exposy you are to interest rates' short end of the curve we have about 7 a% exposure at the short end. as the fed raises rates that's still beneficial one of the things that investors should be looking at is how are banks doing in terms of growing their top line, investing in new capabilities, doing more for the customers, building out the fee-based capabilities so that they can grow the revenues faster than expenses. that's something we have xcelled at last year we grew and kept expenses to 3% growth rate this year year to date we are at

7 revenue growth over say, 2.5 on expenses or 3 so about a 4% differential so that if you continue to do that, you are going to continue to drive the earnings per share growth and your improvement in the return on equity >> bruce, excuse me one more. >> no, that's okay. >> thank you very much for being with us, bruce. >> sure. >> citizens financial. >> guy -- bruce makes good points in terms of how investors luke at recentliles. but the reality is they have traded alongs with -- >> yeah and every regional we talk about bank of the ozacrye that was a disaster. clearly not all regional banks are created equal. valuation they are the same. this is not all that expensive but what stuck out provision for credit losses came in 13% lower. maybe they have clarity or some visibility in terms of how the consumer is doing. i happen to think this is just a bounce in a stock that's going down since the beginning of the year when it was $48. >> all right, guy, okay eamon

javers has breaking news out of washington, d.c. what are you watching. >> contessa that's right the department of juts unsealed a criminal complaint against a russian national for her alleged role in a russian conspiracy to interfere in the u.s. political system including the 2018 midterm elections just around the corner the woman's name is elaina, kushiinova of st. peters burg russia chief accountant of project element okta funded by a russian oligarch and two companies he controlled. concord management consulting and concord catering s in all about the russian troll farms you heard about in news. nbc's pete williams did some digging in this. the woman being charged here in st. petersburg russia is the chief financial accounting officer of the umbrella effort

to sew distrut in the political system of the united states. among the topics involved here pete williams says were gun control, gay rights, the women's march and the nfl anthem debate. the trolls trying to stir up divisions on both sides of the aisle. divide americans against each other. among the politicians attacked in the effort include john mcmahon p mitch mcconnell and former president obama pete williams also reporting that the court documents here include photos of the phoney memes planted in social media by in russian effort. the russian effort, again, is called project lokta, a russian umbrella effort. it's funded by russian oligarch. and the woman who has been charged here is elaina kushinova. >> shares of cleveland cliffs an iron mining company down 7%

after earnings and bizarre rant from the company ceo attacking the analysts calling them a disaster. >> you are a disaster. you are an embarrassment to your parents. with this being said, we are going to use money to reward the longtime shareholders. so if the stock continues to go down, based on this kids that play with computers and somebody else's money, we are going to buy back stock we are going to screw this guy so badly that i don't believe they be able to only resign. you'll have to commit suicide. so we are going to screw this guy so badly that it will be fun to watch that's my first priority other than the two top priorities of finishing hbi and paying down debt you are messing with the wrong guy. >> joining us now on the cnbc news lienl is the analyst asking the question leading to the ran. lucas pipes from b. riley f.br

joins us great to have you with us >> melissa, my pleasure. >> we look at the question you asked prior to the rant lucas. it seemed like a normal run of the mill analyst question, congratulations on the initiation of a regular dividend how would you be looking at a special dividend thank you he goes off. what was your reaction >> well, look, i've been very favorable on cliffs. and lawrence o has been complimentary of my work including in this response to my question but i think you have to understand where probably the rant came from this morning. it was an in line quarter but in fact slightly above my numbers the outlook didn't change. guidance was reiterated. cap x was sweekd modestly lower. and lawrenz o turned this company around when he took over at ceo in my opinion the company was in

disarray he delivered the balance sheet, restructured contracts he started a major growth project. then this morning after such a successful tenure he announced the initiation of a regular quarterly dividend and the stock is down. and i think -- in my opinion there is no good -- there was no good reason for that and i'm sure lawrenz o looked at the stock price at the time of the call and was irritated and i assume some of my peers sent out -- sent out research notes this morning, maybe pushing the stock in one direction and then he took offense by that. >> so i'm curious, lucas, because i think that not many people here on this set would say that lawrenz o doesn't have a right to say these things except how he said is it was shocking for the ceo of publicly traded company do you think that this may signal or indicate that perhaps he needs to reevaluate how he

communicates with the public and with wall street >> so i would say -- and i've known the ceo for quite a while. and i think you know we don't have this call here every quarter. we -- i think today was -- was an outliar lawrenz o is outspoken and passion knit about his business. i think it was probably how the stock reacted this morning i think if you go back, as i said last kaurchls or two quarters ago you would find a much more level headed response to analyst questions >> do you find that that kind of color gives you clarity on what a ceo is truly thinking? do you wish more ceos were transparent about emotions number one a and number two would your opinion change if the comments be had been aimed at you rather than specifically excluding lucas. >> that's a very fair question

you know, i -- i cover stocks. that's my job. and management evaluation goes into that. and i try to judge laurenczo first what he does for the business as he said he has done a phenomenal job and i think you can look at the stock price since he became ceo and i think that will underline the point that i made. in my opinion -- and i've said this many times -- the company would probably have been bankrupt without him so first and foremost, i judge him by that performance. i'm not a pr specialist. if laurenczo after today feels he needs to change the message, i leave that to him. >> last question and that is if dlifs used every dollar of cash it hadden oh the balance sheet to buy back stock could sthe crush the shorts?

>> so injury it's part of the story. so cliffs -- on my numbers and i set that on the call, generates a lot of free cash flow. not only do they generate cash but they are able to thread the needle between growing and now returning capital to shareholders and that's i think the tension for all the miners at this time is how do you satisfy the demands of long-term shareholders, which want to see smart growth, prudent growth and then you have a high cost of capital there is a nanosecond to return some of the capital back to shareholders. so i think if cliff threads that needle right i think the stock will continue to do well i have a $15 target price on it. especially op the back of this recent pullback i think it's a pretty attractive entry point. >> thanks for phoning in cigarette to get your commentary >> thank you very much. >> of b riley fbr opinion the

career li yoe will be ob "closing bell" at here on cnbc you won't want to miss that. >> coming up tonight is the night of megamillions drawing that could make you really, really, really rich. the jackpot now sits at $1.0 billion power lunch back in two minutes. >> announcer: the cnbc trend tracker data board is brought to you by the cme group cme group, where the world comes to manage risk

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a billion dollars. that's the current megamillions jackpot drawing tonight opinion let's get in with frank holland live in hackensack, new jersey i know you have a ticket in your pocket, right? >> it's in my hand, contessa every one of the tickets gives you a chance at the billion-dollar jackpot but let's be clear the chance is one in 302 million. but it's not stopping the excitement you see people lining up this store has a history back in may. this lady behind the ticket at augusta sold a ticket for $330 million. a lot of people coming back after megamillions officials

announced the second biggest jackpot in history i don't know if rewriting history becomes. but it's rewriting signs only up to $999 million. i guess when they made it they weren't thinking about a billion. this is what megamillions hoped to happen when he they when they changed the matrix they wanted to entice more people to play and they made bigger jackpots. the result is you have a better chance of winning a small are jackpot but less of a chance of winning that billion-dollars or that that sign hayes the $999 million let's put it in perspective you have a better chance of marrying a millionaire one in 215 chance of wing. you have a better chance of literally getting struck by million than winning the megamillions get this you have a better kmans of being elected the president of the united states, a one in 39.6 million chance than winning the the megamillions people say it's worth it to spend the $2 on the dream.

>> absolutely we did the right thing changing the matrix it was a great decision driving higher jackpots, drives people to play the game and dreyfuss excitement it's tremendous for the state of new jersey. >> again a $1.0 billion jackpot on the line for the drawing tonight at 11:00 new york time if no one wins tonight it rolls over to 1.6 billion on tuesday. >> i'm skeptical now because don't we have $330 million people in the country yet the adds of -- i'm confused by all of this. and also. >> the odds are against you. >> there was a space for an extra digit. why haven't they changed it? there is a space there for the one. i don't understand what would you do with the billion dollars. >> quickly we got to go to break. augusta sold a $330 million if i won that -- she is my good luck charm. i would have paid -- i would have given her 10 million clean.

augusta do your thing. who ever won and didn't give augusta money is is a johnson. >> we are going to breck segment we call buy or bail with guy adami. three stocks, three times the fun. get ready. get ready. power lunc well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step unhl you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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buy our bail with our very special guest. three big calls on disney, amazon and harley. the firm saying disney has a key mix focused on over the top offerings. >> so buy. >> buy means buy >> bail means bail >> we play at 5:00 all of the time >> buy >> why do you say that >> the reason is this. ren when stock was $100 or so? i turned to you and said i'm not that smart but it might be the lifeline espn needs and disney wins by i hi the espn fears and

concerns are sort of in the rear-view mirror they r the entire space has been lifted up. i do think this is a stock that will take the 125 level we saw two years ago. i say buy. i think disney goes higher from here into earnings >> next stock amazon saying the company's online retail revenue should grow 20% this quarter they expect the company to reiterate its $2,100 price target >> some times you send us to the -- >> to the -- >> plasma. >> we do a thing we call power pitch. >> yes >> exactly we go and we pitch a stock and call that power pitch. >> two weeks ago or so i fast pitched amazon i also go back and say a few weeks prior you said what can stop amazon here

it was 2040 i think it closed. i'll tell you what will stop it. it is as overboard as it has ever been. it will probably go back down to 1850 now i think it sets up in earnings the best it has in quite some time. i think this goes higher to answer your original question, buy. >> yes market saying this is not bringing home that bacon and made a bad call. the firm downgrading it dropping the price target saying harley is not seeing the growth expected in earnings or sales. >> they had this all new product line harley-davidson is harley-davidson. i had a marissa tome crush wild hogs, great movie big fan oftravolta

nobody is buying these suckers anymore. >> they are to big >> so big. >> and it is hard to change the demographic. the only thing in my opinion is potential for a double bottom. to answer your original question -- >> buy or bail >> bail. >> check please is next. let's begin. yes or no? 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

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>> today the anniversary of the crash of 1987. stocks dropped 22.6% if it happened today it could equate to 5,500 points ton dow try to imagine that. it is important to note a drop of such magnitude could not happen in one day. circuit breakers in place to prevent such fall. it halts trading after a drop of 7% it was very traumatic for those to remember that back then >> and it had been a cascading crash before that. so this was it

within three months it was going back to where it had been. >> october is a terrible month >> yes >> thank you for watching power lunch. closing bell starts right now. u.s. stocks set to end a roller coast bit of trading. shares up proctor and gamble soaring after posting quarterly sales in five years. what they told me straight ahead. >> and ford stock has fallen more than 40% this year. raising red flags and we'll talk about how ford can regain focus ahead. th