tomorrow >> yes >> citi, i'm staying with momentum >> royal dutch shell, not sure which way oil is going to go but a 5.8 dividend yield wail wahile waiting. >> apatchy >> that does it for us power lunch starts now welcome. one day until those midterm elections. the stakes really couldn't be higher for investors the scenarios playing out on wall street. what it could mean for the market, for your money and which stocks could get a boost and why. we'll explore that plus apple anxiety another downgrade since reporting earnings last week shares down again today. five straight weeks now. is there more pain to come for this bellwether? should you buy on this dip we'll look at both sides of the coin and the buyback bonanza.

warren buffett making a rare move and others snapping up stock what it is signaling for the markets and investors. "power lunch" starts right now welcome to "power lunch" stocks with modest gains the dow was up more than 170 points earlier chevron, ibm among those leading the gains. apple is the biggest drag on the dow and one of the biggest on the s&p and nasdaq the stock falling below 200 for the fist time since august tyler talked about berkshire class b shares up on pace for their best day since july. oil higher as u.s. sanctions against iran kicked back in copper on crack for the first negative day in three. and mcdonald's and clorox rallying today hitting new 52-week highs.

i am brian sullivan. there's so much to do today. we begin with a story that's front and center, the midterm elections. this is not just a political story. hundreds of billions, if not trillions may move around with a different congress bob is tracking the money flow dominic breaking down the street and looking at what group of stocks could get a lift. john harwood on the state of play right now let's begin with bob on the floor of the nyc with the election money flow. >> lower volumes today but still up despite the concerns with fang earnings are a real issue and will be well after the elections. take a look at sectors energy getting a boost early on. gas prices up. health care doing well consumer staples rallied that's one of the reasons the market did well. amazon consumer discretionary is a problem. amazon, facebook, google, the president implies he might be

looking into anti-trust violations and we've had disappointment with apple on its guidance and the downgrade we talked about big oil, nice day overall. natural gas up strongly. that helps a lot of companies. chevron, a lot of big phones apache all positive today after the elections tomorrow, i think we're going to turn more to the china trade tariff issue and the ten-year yield i say best case on the china tad deal is a truce rather than a deal maybe that will happen toward the end of the year. rising rates are an issue. best case here is the fed remains sensitive to the pace of growth everyone knows december is going to happen. the rest of the year in 2019 more rate hikes? that's still very much up in the air. finally keep an eye on revenues. a little bit slower pace of revenue growth third quarter very good. fourth quarter still strong, but not as strong as it was about a month ago. that's the issue right now going forward. can we get strong revenue growth

in 2019? back to you. >> thank you very much, bob. how will the midterms effect your money dominic is looking at the scenarios and how it could impact stocks and the sectors you're invested in >> we have multiple scenarios. let's break it down by the three that are likely to get a lot more coverage. and that is what happens if the democrats control the house and the senate that is viewed by the markets right now as the most unlikely scenario that could happen so not one to watch. something to be conscious of what about if the gop controls both the house and the senate keeping things the way they are? that is a somewhat likely scenario it's still not statistically out there as the likely one. but still, one to watch. a democratic control of the house and gop control of the senate that is shaping up and has been for weeks now as the most likely scenario that we will likely face so with that in play, what are the sectors that could be impacted the most? well, in scenario one, if we do see the unlikely scenario of the

democrats controlling both, we could see some real impact in bank stocks and health care stocks specifically because democrats controlling congress could mean perhaps negative head winds for the bank and the health care sector watch those guys as we see what's happening the second scenario right now is what happens if the gop gets both houses of congress and that could be one that could be at least beneficial for certain sectors. consumer discretionary why? if there's a tax cut 2.0 245 that happens, more consumer spending that happens, that could be good. also energy is a more highly regulated sector that could be one to watch if republicans control both the most likely scenario, democratic control of the house and gop control of the senate would likely be okay remove some of the head winds for the engineering industry and health care. in a divided congress you're not going to get much action on drug

prices or anything else on that front. just some of the sectors to watch. i would say this, guys way too many scenarios to outline. go to cnbc.com more of that coverage there. back over to you >> dom, thank you. wall street as one eye on the midterm elections. the other focussed on the freed and the economy. we are not expecting moves on interest rates any time soon they will be focussed on fed statement and language when they meet let's put it all into perspective with our guests. obviously quincy, a lot to talk about here omar, in my notes it says the best quarters are behind us as the rise in volatility, lack of liquidity and potential change 234 investor sentiment are signs we're in the last phase of a bull market cycle. explain that and what to do as a result of that declaration from you. >> yeah.

absolutely the keyword in here is decelerati deceleration companies continue to report well, but the outlets continue to be cautious the economy continues to grow but is clearly clear the best gdp growth quarters is behind us go back to a typical late cycle where interest rates continue to go up and you see a pick up in volatility this is a growth market, but it's transitioning to a higher quality market that's, again, typical of the end of the bull market cycle which should expect the fed continues to look for opportunities to grow the economy to try to maintain it, but at the same time worrying about the potential overheating of the economy >> what's the result of that and i do what as a result of that >> i think the big take away is stay diversitied rebalance your portfolio

this is the time where the volatility regime has changed. i think reassessing your risk and understanding diversifying is a recipe for success. >> as they used to say on the midterms in college, discuss quincy, discuss what you just heard from omar. >> well, clearly, you know, we always say don't fight the fed on the way down -- in the lowering rates you don't fight the fed. you're not writing white papers. invest and go with the fed clearly on the way up, you've got to respect the fed on the way up and that means there's going to be more volatility it means that we're in really unchartered territory. remember, we were at zero interest rate policy the fed is taking us out of a mind set that was buy on the dip. buy on the dip and now you see what the market is saying that dip better be much deeper before i even go in. so you've got to respect that until the fed is finished and there's going to be more volatility we're looking at a portfolio

that already has manifested itself in the markets. you're going to have more stocks in the defensive side. but also in a barbell strategy, you're going to be selective in technology you're going to be selective in consumer discretionary you're not going completely defensive. but you've already moved over. now, i want to point something out. that is the credit market. the credit market has actually started to show signs of worry not intense. it's not a red light but that was last week we're keeping our eye on it. if the spreads tighten now, it is constructive for the s&p 500. normally what happens is the credit market gives you the first indication and then the equity market is kind of late to get the memo on it this time it was what's going on in the equity market bothering the credit market. we have to pay attention to that because if those spreads widen, it is going to be more difficult

for this market to gain momentum >> jump in >> what about the fed when -- i want to pick up on the beginning of your thought there. you said don't fight the fed on the way up do you not think that's being too aggressive if we're seeing signs the economy is softening >> this, of course, is incredibly difficult, because today we just got the ism service sector report. that is still above 60 it's very strong yeah it's weakened a bit. the other issue is vehicle sales. the bears have always been pointing to the housing market and vehicle sales. here's an indication that higher rates are turning. vehicle sales are printing a good number, actually, a good number we were down and now we're moving higher. so this is -- if the fed can ar ti articulate they're watching the data and being gradual as opposed to rigid, the market is afraid they have a path that's

rigid, and they're going come hell or high water they need to make clear the data do matter, and i think they're going to i think they're smart enough >> are they, though, omar, going to screw it up as our friend says, old markets don't die of old age they get taken out behind the wood shed and shaken are they going to screw it up? >> i think that's why the investors are anxious. they're worried about the fairway. on one way they're worried about the fed not doing enough and down the continued path as they look at data on the other hand, are they going too aggressive that's going to slow down the economy so badly that we're going to get into a recession so quickly in. >> would you -- if you were fed chief, would you raise rates again this year? there's a meeting this week and a meeting in december. >> well, i think the one in december is the clear path and that's actually based on the data and gdp i would support that and be on the same page. i think going into next year

without clear signs of inflation which right now if you look at the inflation numbers, there's nothing that prevents anybody or the fed to say there is an overheating economy. and with that, i think the path the fed has continued with is actually the right one however, remember, the fed also looks at the yield curve and the fed also looks at the volatility of the market. they lack stability in financial markets. that could easily change their decision process >> all right folks, got to leave it there quincy, thank you. and omar, thank you. to quincy's point, you have to watch the credit markets and bond yields. they have been quietly ticking back higher. and three year notes up for auction. what's the grade >> you know, this wasn't a pretty one as a matter of fact, it was a d plus, dog plus, brian. there wasn't very many good things about this auction. we're talking about 37 million three year notes with the fed

meeting even though no one expects much on the surprise scale from this meeting. the yield at the dutch auction, 2 .983 not much different than the last auction which was 2 .989 the reason i mentioned that, that last one was the highest going all the way back to may of ' 07 this is the second highest since may of '07 one issue market was wide and hardly traded at all we priced roughly in the middle. at 2.54 bid to cover the only good thing 49.1 on indirect that was the best since june of this year. 3% directs the lowest since december of '09. that put the kabash. no way to start a big $83 billion package. tomorrow we'll have ten-year followed by 30-year bonds on thursday thank you, rick.

apple slide continuing today down nearly 10 % since thursday's close tissu the issues taking a bite out of apple. ibm, chevron, mcdonald's boosting the dow jones industrial average mcdonald's at another all-time high much more on the markets, midterms and more coming up on "power lunch". ♪

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you know, when you look at the dow and it's higher, you think wow. look at what's happening with apple. apple as you can see is dpegett bruised again following the second downgrade it's down five straight weeks. iphone demand continuing to be the front and center investor idea reports the company is cancelling production or production boost for the iphone xr on weakening demand a different report from a hong kong based company says iphone sales in india may be set to fall for the first time in four years. and today apple shows the 10 k showing their account. the stock needs to be above $210

to regain the market cap it's below it right now. apple has lost more than 30 billion in the market cap since friday get this big apple investor, warren buffett, lost nearly $4 billion on his apple stake on friday alone. let's talk more about maybe the most important stock in the world. joining us now to digdeeper is tom, analyst at da davidson. tom, the report we referenced about the production boost from the iphone xr is from the nikkei it's a reputable agency. jim cramer called that nonsense. >> what did the company sell us when they reported earnings? they said an early mornimerging, not china, they were seeing softness where does the 10 r sit in the

portfol portfolio? it's the lowest priced device. it's compared to 999 for the others so this would be consistent with the challenges apple is seeing in emerging markets. importantly, not china, and would suggest to us they haven't cracked the code on the value smart phone to penetrate or greater penetrate the existing markets. >> we've talked a lot, and it's wonky. bear with me we talked a lot about how the price of the phone may not matter as much because most people are buying it on a monthly basis. however, when you do that as i think 80 plus percent of buyers now are, you get a monthly payment. does that monthly payment actually hurt the replacement cycle? it's almost like a car it's like well, let me pay it off before i take on new debt to buy the next one >> i don't think it does to the extent you see the wireless carriers offer promotions to really try to get you to upgrade. and that monthly payment, you know, we're seeing strong sales

in accessories which are being sold on monthly payments adds well net net, i would say monthly payments are helping device sales for smart phones, especially apple >> tom, how do you quantity the china risk when you're looking at apple, whether it's potential disruption to the supply chain or as the trade war escalates some january 1st and beyond, if everything that comes out of china is subject to some kind of a tariff how does that work into your model? >> see, that's an excellent question if you think about china, i think it's the single biggest risk to apple's shares first off on revenue, about 20% of their sales come out of china. on a supply chain basis, though, a lot of they're products are manufactured in china. we think that this emphasis on average selling price is incredibly important in today's tariff environment given that it shows to us apple has pricing power. so in the event you see the next round of the administration, a 10% tariff an everything, we

think apple's best position to withstand that to the extent they have pricing power and others may not >> why are people keeping their cell phones longer and what does it imply for an snl. >> they're keeping them longer because sometime ago you had a change to what we're talking about with essentially the wireless carriers subsidizing the twice. the consumers are paying for the device it's the advent of the monthly payment plans. when you had the pivot from supplier subsidized to consumer paying for them even on a monthly basis, it's led to consumers holding onto their phones longer. >> tom, da davidson, we'll leave it there an incredibly important stock for the index. the dow and apple matters a lot. >> thank you from apple we move to amazon that stock also taking a hit today. dragging down the nasdaq up next is amazon ready finally to pick the side of its second head quarters? we'll tell you where it looks

like amazon may head and the latest move by amazon in the battle with target and walmart and why you're going to benet. alth is coming up on "power lunch" each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

welcome back to "power lunch" the online giant is going to pick northern virginia for the

second head quarters scott is live in crystal city, virginia is that the place? >> reporter: well, we don't know yet, and all of those same reports say amazon has not made its final decision yet but the company has said that it would make a decision before the end of this year we have about eight weeks left to go in the year. it stands to reason the speculation is heating up. here are where things stand. "the washington post" reporting over the weekend that amazon is in advanced talks here in virginia a source selling cnbc's brian sullivan the talks include the chance for a generous transportation package "the wall street journal" saying not so fast. dallas and new york are also in play but this area crystal city, the section of arlington in virginia, there's a lot to argue for this it checks off a lot of boxes for amazon they said they want transportation, metropolitan area with more than a million

people they certainly have that they have reagan national airport a hop skip and jump from here the pentagon is near here which is a key amazon customer, and, of course, a big end of intelligence work force. that's key in where amazon is going to put this $5 billion project where they hope to hire some 50,000 workers. a lot of it will rest, of course, probably all of it, with amazon's ceo jeff bezos describing his decision process just last week as you collect as much data as you can you immerse yourself in the data and make the decision with your heart. we know a lot of his heart is already in the d.c. area he owns "the washington post." he's renovating a home in the district as far as that data, virginia was the number four state in america's top state for business this year, and in our amazon race report card where we take that data and measure it against amazon's criteria, a solid b plus with the one weakness being

transportation which may be addressed if those reports about a generous transportation package come to pass we're getting there, but no decision yet >> and scott, i would be careful to watch out for the reporting it's sketchy you never know sketchy out there. >> yeah. >> i want to be clear. my reporting was not they are going there. it was just that they had a long and fruitful conversation on friday they could be having that with all 20 cities. right, scott they're going to dig in and they could be having this same conversation and calls with every single person. we do know one of the amazon key executives, not necessarily directly tied was not so keen on "the washington post" reporting and ours >> that's right. the director of economic development policy is involved in some decisions like this, but he is not part of the hq 2 selection team he said crystal city in virginia, whoever is leaking this information, is not doing

crystal city any favors. he pointed to the nondisclosure agreement that all of these finalists have signed, and so yeah, you've got to be very, very careful at this point from what we've been able to gather, they are not holding these kinds of conversations with all of the cities, but it may not be just this one >> maybe the leaker is on the amazon side. he doesn't know. never know >> that's right. true >> thank you >> my hometown, arlington, virginia the president speaking about his potential meeting with president xi of china. listen to what he said >> reporter: what are you expecting from the meeting? >> we haven't set anything up yet. we don't know that's going to be the right place. i'm going to be in paris for other reasons, but we will be meeting at the g-20, and probably will have meetings after that probably plenty of meetings. getting along with russia, china, and all of them would be a good thing

i've said it for a long time we'll have plenty of meetings. i'm not sure we'll have a meeting in paris probably not >> mr. president -- >> reporter: inaudible question. >> i don't know about it tell me something. i don't know about it. we have a lot of ads, and they certainly are effective based on the numbers we're seeing >> reporter: mr. president, why did you like that ad >> a lot of things are offensive. your questions are offensive a lot of times so, you know. >> reporter: what about the idea that the midterm election is more about your style? >> i don't think so, but i'm willing to accept that i think we're doing well i think the senate we're doing well and i think we're going to do very well in the house if you look over 100 years for whatever reason the party with the president doesn't do very well i think we're going to do pretty well look, you're covering me

the energy that we have, the energy that this whole party has now, it's really incredible. whether it's the great economy or the immigration or strong stand and they're weak stand where they have open borders to me it means nothing but crime. i don't know but i can tell you there's a lot of energy. we'll see what it is we're going to see what happens. and i have a feeling that others will want to get things done, and right now we're before the election, but after the election, i would imagine other people will want to get things done we'll see. >> mr. president, what group do you have that people are intending to go to the midterms? >> just take a look. all you have to do is go around, take a look at what's happened over the years and you'll see. there are a lot of people, a lot of people my opinion and based on proof, that try and get in illegally and actually vote illegally. we just want to let them know that there will be prosecutions

at the highest level >> all right the president taking a variety of questions at the early part about a potential meeting with china's president xi in paris. he said he did not think that meeting would take place, but that they were, indeed, scheduled still to talk on the sidelines and hold a dinner meeting at the g-20 later this month. a lot hanging in the balance on what happens with china trade here it is a big, big issue read the front page article in the wall street journal today about how it is filtering through to company results and if those tariffs ratchet up from today's 10% to 25%, that going to start to pinch. >> and if the product list eventually includes everything out of china that's another big fear as well. >> let's expand on that. it is said that all politics is local. so your view on the tariffs might just depend on where you live up next, we'll look at how tariffs are playing out in various parts of the country

we're also looking at some of the key races in tomorrow's midterm elections that may matter the most to you and your money. "power lunch "is back after this we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement.

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welcome back to "power lunch" here's your news update. the pentagon has declined a preliminary request from the white house to build temporary detention facilities to house detained migrants as part of its new mission on the u.s./mexico border the new disclosure comes as the first members of the caravan arrive in mexico city. severe weather continues to slam parts of the italy causing more flooding after some 30 people died last week due to extreme weather. italy's interior minister promised that $284 million worth of aid will be handed out to all areas hit by that bad weather. a school bus carrying middle school students was involved in a crash with a dump truck in maryland earlier this morning. police say the driver and nine students were taken to the hospital with nine life threatening injuries and a potentially costly

touchdown celebration in new orleans yesterday for saints receiver michael thomas after he pulled a cell phone from underneath the goal post padding following a 72-yard reception from drew brees. the celebration was an homage to former saint joe horn who did the same thing back in 2003. one that flew a flag, and a 30$,000 fine from the league but it was great to watch anyway that's the news update this hour kourtney, back to you. >> i like that they've gotten a little freer letting them celebrate. it's kind of fun they deserve it. just my opinion. let's get a check on the markets. the dow and s&p 500 are higher at this point. the dow was at more than 170 points earlier now more than 126. the nasdaq falling into correction territory down more than a percent here. apple, one of the big drags. the stock falling again below $200 for the first time since august

act vision and amazon weighing on the nasdaq. act vision down by more than 7%. >> kourtney, thank you well, trade and tariffs major issues in the midterm elections. how you feel about them could depend on where you live a new report out this morning showing not just how tariffs are affecting the economy but which states are feeling the most impact let's find out if your state is on that list we have those details for you right now. >> let me walk you through the big picture first. here's how much president trump's tariffs are estimated to cost u.s. businesses in just september alone. drum roll? that number is $1.4 billion. just one month that number comes from a coalition of industry groups they looked at government data and found that overall businesses paid 54 % more in tariffs than they did a year ago. now, that has the potential to sway some of the tossup senate races tomorrow red states where republicans are

taking on democratic incumbents are feeling plenty of pain take a look at indiana the tariffs cost businesses there an extra $30 million in september. nearly four times what they paid last year. in missouri it was $14 million in west virginia they paid an extra $2 million now, on top of that some states are getting hit by retaliatory tariffs as countries strike back against the u.s. one example is north dakota. an important agricultural state normally it sells lots of soybeans to china. exports there have plunged an estimated 94% in just one month. now, the trump administration says that the short-term pain will be worth the long-term gain of better trade deals down the road we'll find out tomorrow if voters are buying that argument. >> all right thank you very much. some key congressional races could tip the balance of power in the house maybe even the senate. here to break down the areas most vulnerable for democrats and republicans, david wasserman

and john wharwood is in the big house here in englewood. welcome. good to have you both here david, your note points out, but i want to turn the question to john, if you wouldn't mind, that 41 gop seats are vacant or open in this election because gop members have chosen not to run most pointedly, the speaker of the house paul ryan. why are so many gop house members leaving when there's a gop guy in the white house and the gop has control of the house? why are they going >> i think a significant number of them aren't comfortable working with president trump he's been a bit of a turbulence presence they all knew they were headed for a difficult election presidents almost always have big setbacks in the house in

their first midterm election and this president, if you take his own unpopularity and add the historical trends, it was not looking good therefore, you have a whole much larger playing field than you otherwise have there were some people saying democrats wouldn't have hopes of taking the house until the next redistricting. it looks promising for them right now. >> comment on what john said you have 41 members of the house stepping away, gop members of the house, and bottom line me here how many seats do you suspect the democrats could pick up here >> our current forecast is a democratic gain of between 30 and 40 seats we think anything from 20 to 50 is well within the realm of possibility, but 30 to 40 is the most likely outcome. there are three drivers. the first is suburban college-educated women women with college degrees give trump a 27% approval rating in

the most recent poll compared to a much higher 60% among men without college degrees. but women with college degrees are the ones who vote. then there's a red exodus of 41 republican seats with no incumbent on the ballot. and democrats have a shot of picking up to 15 of the seats. if they get 12, they're halfway to the majority they need. and they're raising staggering sums of money. even the republicans have narrowed the enthusiasm gap the democrats enjoyed earlier in the year democrats are outstanding incumbents in most of the tight races. >> john is nodding >> i was talking with a republican strategist earlier today who is becoming more pessimistic over the last 48 hours or so. i said why he said it's that money kicking in we hadn't anticipated that it's beginning to effect the races. just as david said, i also want to summarize some of us have been around long enough to cover the 1994 republican sweep.

that was supposed to be the year of the angry white male. this year david wasserman, months ago coined the phrase this is going to be the year of the angry white college educated b woman. >> david, i have to say not to take anything away from what's likely to happen at the white house, but five out of the last federal elections have flipped one of the elections if the democrats take the house, is it this so-called blue wave versus history simply suggesting that americans don't like to keep one party in power for way too long >> yeah. we go back and forth between these surge elections for the party out of power, and then a check and balance election i think independents are the biggest concern for republican pollsters. in my opinion, this is really the year of the fired up female college graduate it's also a year when independents are voting in large numbers for democrats because they want to temper the impact

of president trump and i was talking with a republican member of congress recently about his reelection chances. i asked him how he was doing in his district he said 48% of my voter in my district hate the president. 40 % will never leave him, and 20% are what i describe as normal people. those 20 % are breaking toward democrats at least in a lot of these outer suburban seats >> i'm sitting next to a fired up female college dwraugraduate i want you to get the last question >> she doesn't look angry. >> i'm not angry i'm thinking >> and you're from dayton, ohio. my wife is from there. it's the perfect storm of where things happen. >> it really is. >> all chain restaurants are from there >> no, it is >> chain restaurants. >> it's a good view of the consumer, but we pay close attention to politics national and issue, and we change our

minds. we don't always swing blue or red. i want to ask about the governor's races those are really important we focus a lot on the national level. politics is local, local, local. and governors make a big difference we could see big changes there as well. >> very important, especially with the next redistricting cycle. democrats are in position to gain seats in governor's contests in several states where president trump won four years ago. places like michigan, wisconsin, iowa, strong position. none of these are done, but they're all promising for democrats. the final thing i want to say about our election, we haven't talked about the economy the economy is good. the turbulence you were describing, the swings back and forth, coincide with widening in income inequality. even when the economy is doing well, arverage consumers aren't

feeling it >> we could talk all afternoon thanks, guys >> thanks. wwi bba rhtfter this show my kids the world. ♪ ♪ the one in three dimensions. ♪ ♪ so they can look up and see the place they live. ♪ ♪ and prove that the real world beats a post. ♪ ♪ ambitions live everywhere. synchrony helps make them happen with customized rewards and financing available at over 350,000 locations. synchrony. what are you working forward to?

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and works with tools you already use. that's why it's the best ai for the job. a lot of great games yesterday. it was a big day for nfl ratings julia boston out with the numbers. how good were the numbers? >> well, wribrian, the nfl gave boost to multiple networks sunday night football drawing the highest ratings. the best week 9 ratings in the 13 of year history of sunday night football not including digital. that's according to nbc. then the nfl on cbs yesterday scored a 23% ratings increase for week 9 of the nfl season

over last year with an average of 21 million viewers. with fox's national nfl game up 7% over last year, that game went well into the first hour of prime time giving the simpson the best rating of the season. these gain investigation ratis . last year ratings were down 9% from 2016. also notable in light of president trump's criticism of the league back over to you >> all right julia, thank you consumer confidence at an 18-year high that isn't translating to retailer confidence with just about seven weeks to go until christmas. we're starting to hear warnings. if we're gonna steal christmas,

we're gonna need the element of surprise. go team. [ snow crunching ] [ load crunching ] [ whispers ] this is the loudest snow ever.

i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. shipping price wars are heating up and the shopper will be the winner. amazon will now give everyone free shipping with no minimum on all items between now and christmas. you don't have to be a prime member this time target made a similar move in october wiping away their threshold and walmart which offers free two-day shipping on orders of $35 or more are

holding that minimum for the holiday season amazon also joining apple and go-pro warning holiday sales are lower than expected. what should we expect for retail overall this holiday season? jan is ceo and cnbc contributor and christine is ceo of castle, a company offering rental subscription models for ann taylor, new york and company and express and others thank you for joining us here today. appreciate it. jan, i'll start with you you're pretty perpetially bullish. >> it bothered me for amazon and apple and go pro for that matter >> are they just low balling the estimates? >> i think we're seeing some issues with people buying the next home. shows up pretty clearly with apple. and i think amazon is beginning to mature, dare we say it, on the retail side. i don't think it has anything to do with the rest of retail

i think we will see a strong retail season and record-low unemployment and record raise wages and 5.5% like we did last year unless something dramatic happens. >> christine, jan has talked about the resale model is what you specialize in. do you think either of these are taking a bite, what changes during the holiday season for a rental and resale? >> i would like to say it's making a dent. i don't think we're at that point yet. and from a rental perspective because it is a gift you give itself, it is anticyclical and seasonal which is a point for other retailers. to know why they're pushing out sales in their fourth quarter. how can they use other business models to fuel the rest of the year and rental, in particular, tend to be nonseasonal >> your volumes must tell you

something about the health of the american consumer. >> again, i think you have to get statistically significant in order to really make a comment on the health of the american consumer what we're seeing is we're seeing people sign up for the services and retention be very strong so there's not wage pressure, but like jan said, you're seeing record wage growth from a macro perspective, i think those are the trends that are more important as we look at the holiday season >> can we go back to your amazon i think you and i spoke a couple weeks ago and we coined it as amazon fatigue amazon is an amazing company do you think that people are, you know, they want to look for newer things maybe the rental or subscription business the american shopper is finnicy. >> when the consumer is healthy and feels really good they are more likely to be in the stores and doing thingal experiential i think if we would see the

economy slow -- >> you just called amazon countercyclical. >> i did when the consumer is healthy and amazon is not fun. you get it when you want it, they're good at what they do, but they're not fun. the consumers doing stuff now are fun and i think we'll continue to see it in the fourth quarter. we saw it last year in the fourth quarter and i think we saw in it three and q4 this year but that won't go on forever because online is still taking over and even in the case of when it's not going to amazon, think about it macy's is 25% online and nordstrom is a third online now. so, we're seeing these big retailers grow online. walmart has grown 35% online and so has target. >> but from a small base christine, when you're looking at a retailer's holiday strategy free shipping seems like an easy

grab that costs the retailer. >> this is the thing we're not focusing on. we're chasing top line growth what has been declining for the last five, six, seven, we're coming up on ten years of steady operating income decline because everybody's chasing the high revenue growth and it is coming at an extreme cost i would like to point out even though we're talking about amazon fatigue they're predicting year over year growth they're not negatively comping >> jan, who wins this holiday season in terms of companies and who doesn't? >> strong brands win and retailers who are maximum taxpayers and not highly levered win because they have been reinvesting back in the business and they've been reinvesting in price based on having lower tax rates. walmart wins, macy's wins, nordstrom wins and the old, traditional, strong, not highly levered, maximum paying retailers. >> who doesn't win >> the mall doesn't win because we'll see mall traffic drop 6%

or 7%, just like we did last year in the fourth quarter if you're mall based, it will be much, much tougher the other people who continue to win, if you're off price, you win. even though i think amazon is real >> so we'll wrap it up with that christine, i have a question for you outside of that. are you trying to coin another acronym. clothing as a service. >> that's what her company is based on >> clothing is a service >> yes, it's all come full circle for you >> what happens if you gain weight and not fit in the previous -- that's the benefit, right? >> your closet can match wherever you are >> are you gaining weight? >> thank you so much appreciate you both being here it's not just christmas we're counting down to, we're also watching the midterm elections. the first polls open in 16 hours. of course, the fed, rarely more

in focus what the fed might do and netflix's recent selloff 11% down one month turned one analyst from bearish to bullish. we'll talk to that person who went from underperform straight to buy second hour of "power lunch.

here is what is on your monday menu. one, the election results and, two, the fed meeting later this week we'll get you set up for both. don't call it a comeback we're coming off the best weekly gain for the s&p 500 since march, but is that a sign we're fine or just a total head fake we'll debate doing a big old 180 on netflix one analyst says don't sell, buy the stock. he's here with the 411 on the flip-flop. i'm brian sullivan second hour of "power lunch" begins right now welcome to power lunch i'm courtney reagan. a mixed picture for stocks as the dow rallies and the nasdaq tumbles and back in correction territory. nasdaq down by 0.75% dow jones industrial average higher by 0.6%

real estate, utility, consumer staples are your leading group and apple, though, is the big drag today as an individual stock. it's down nearly 9% and sitting at a three-month low shedding more than 3% during this session. semi stocks under pressure led be shares of amd and an update for energy the etf that tracks that sector is on pace for its fourth positive day led by chez peek and homebuilders kb homes and lennar all jumping up more than 9% in one week. i'm tyler mathisen welcome, everybody we begin this hour with the two events that can move your money and the markets this week. first, the mid-term elections. first polls open at 5:00 a.m. eastern and most voted in early voting and a lot riding on the results. we'll take a look at what wall

street expects second. on thursday the latest rate decision from the federal reserve and break down their number one concern and the key things investors need to watch in light of what the fed is considering. here to break it all down, dom, you first. >> as we talk about your money and your vote, here are some of the comments being made right now by strategists up and down wall street about what the events could lead to in terms of market reaction and the election a handful of them. we can't hit all of them for obvious reasons, not enough time but blackrock's outlook. the best-case scenario for just about everybody out there is, again, democratic control of house and a gop controlled senate with that in mind, they think that leads to policy, a status quo effect of course, that's just another way of saying grid lock. that's the way they're going to look at that grid lock in pay tends to benefit stocks overall. that is a good thing, perhaps. trade tensions and that's what they're keeping an eye on and, of course, the biggest risk to

global expansion is the trade issue. so, we're going to watch for those particular developments. on the other side of things, bank of america. again, base case scenario, democratic house, gop senate grid lock, again, you see that key word until the 2020 elections. again, they say supportive of equities that gridlock is a good thing for stocks that's something that they're keeping an eye on if the democrats take the house and they expect all that to be supportive of their thesis for continued fed tightening and then one last one to kind of highlight this view point of the midterms few legislative gains, say citigroup, based upon that divided congress that's one to watch. tax reform 2.0 a lesser version of fiscal stimulus and possible infrastructure deal, maybe greater oversight of the president. that could be disruptive, we could say that and a nonevent for stocks in the short run. that's something to keep an eye on, as well. long run, perhaps a little different based on deficit

dynamics back over to you >> there is a lot to watch you laid it out clearly, a always thank you very much. back to the other big event this week, yeah, the federal reserve's decision on interest rate no hike is expected at this meeting, of course, anything can happen and three main issues facing the fed that may impact rates going forward and steve liesman joining us with that not just about the election. you have the fed, too. >> issue number one is the job market, brian. the tax cuts and by extension the election sorry to come back to that, but i have to. most important question facing the fed right now, just how hot is the job market? anybody going to ask me? >> how hot is it >> hot, hot, hot one way -- thank you very much the current, broader measure of slack in the job market. this includes, what, work force and the unemployed and those working part-time for economic reasons. it's called the u6 just 7.4%. three points below the longer

run average. which you could see right there. let's break it down and take percentages and turn them into millions 4.5 million and 6.1 unemployed and 1.5 marginally attached to the work force lower than 2006 when there were fewer bodies in the labor force. the fund rate was 5.5% if you don't think the fed thinks it's running hot right now, you have another thing coming goldman sachs with an interesting comment this week. we expect unemployment rate to resume its decline hopefully to 3% by early 2020 this is probably well below the level consusteistent and movingo levels rarely seen in post-war history at the national history. the economy released a slow to avoid a dangerous. so, i don't think folks on the fed have a dog in this fight or a horse in this race or there are other ones we can do like that whatever it is

i do think they would worry about another round of tax cuts. that is more stimulus into an already hot economy. i think that would be -- >> who are these people not working? >> so, 95 or 96. guys, maybe a chart back there called not in the labor force. this number continues to go up you can see there in jagged motion, but it continues to rise despite the hot economy, why is that because there are retirees in there and kids going to college and people, women and men, who decide not to work for various reasons. maybe they have a spouse who makes a lot of money, maybe they have a spouse who they wish made more money that is another story to talk about at another time. that number is going to keep going up the effect of the hot job market is that number is not going up as much as it might given the retirement of the baby boomers we can keep some by bigger

screens and more money actually, you laugh at that. that is some technique they're using. >> bigger screens. >> but they are still going to be moving more people into a -- >> i was looking at researching a story and the number of people on disability costs have declined peaked out at the peak of the recession and then come down since then >> we find that. there are bodies out there the question is, are there enough bodies to keep us going at 200,000 i think the fed would like to see this slow to more of a trend rate like 100,000. just a better, more steady state. >> we will find out on thursday what they do steve, thank you. to bob pisani. >> the markets are holding their breath on the election but not waiting for the outcome. today this market is moving on fundamental concerns and not connected with the elections heartening to see the market up

today even when the fang are down the president said he might be doing some anti-trust investigations of amazon, facebook and google. they have generally been down most of the day. also we have apple another fang name. disappointing guardance from last week. when was the last time you saw ibm up 3% and apple down 4%. folks, that has not happened in the last year. that is interesting. big move up in natural gas and reports in november are going to be colder than have previously been expected. we have all the big names up chevron, apache, marathon, they're all trading up 2, 3, even 4%. vague hopes that things might go well with the meeting between president trump at the end of november in argentina. the industrial names are all trading fractioninally to the upside what i keep an eye on, watch the revenue numbers and the estimates y call them guesstimates for the fourth quarter and the first quarter of 2019 have been coming down a

little bit recently. we've been close to 7% and now starting to come down a little bit and a sign that there are some issues with a somewhat slowing economy, certainly over in china, possibly over in europe, as well. guys, back to you. >> thanks, bob. should you trust this rally or should investors brace for a wild november? chief investment officer and joe durante founding partner with united capital his firm is ranked number two as a top advisory firm. thank you, gentlemen, for joining us peter, i'll start with you this big election day tomorrow and i believe that history shows us for many decades upon decades afterwards, no matter what the outcome is, the market ends up higher so, does that mean you're telling your clients not to make any large changes regardless of the outcomes tomorrow or do you take a different view? is this a different cycle? >> you know, as humans, we are definitely hard wired to try to find patterns in everything from tea leaves to midterm elections,

right? i think you're right you look back at history and really no definite trend about making investment decisions based on mid-term elections. so i advocate process over prediction at this point i tell my clients, if there aren't any abrupt changes personally and their investment outlook and investment horizon to stay the course because these things will play out and we just really can't base investment decisions on predictions i know a lot of history and makes it very interesting to look back and say, what if this were to happen in terms of actual productivity of all that intellectual fire power, i don't think it's worth making investment decision on. >> we don't know exactly how many will turn out the democrats could take the house and we could be looking at a divided government the markets actually like division, tell me why that's the case >> well, the market today

reflects everything we think is going to happen and that means that if we don't have to worry about the tech companies being investigated or more noise with tariff wars, that is less to be concerned about. when you have a standoff in government, republicans on one side, democrats on the other, nothing gets done. which means we don't need to worry about the government passing a lot of new initiatives from health care to anything else they'll just be a stalemate and that is actually the winning combination for investors. it is the best combination, interestingly enough, because then you get both voices and they drone each other out and we can continue on our merry way with everything we know today. so, you really do prefer that outcome even no matter which party you're with. second thing that i'm -- >> joe, are you worried about slowing corporate profit growth and maybe a slowing economy globally and maybe in the u.s.? >> yes

yeah and we clearly are not experiencing it here in the u.s., but our multinationals are. you've seen big corrections in the emerging markets 20% plus being held by the dollar and rising interest rates. that should not be ignored because our u.s. companies here as much as 50% of the earnings comes from the rest of the world. so, we get very affected by what's happening this tariff battle, to me, is the big canary in the mine and i wish they would find a resolution to that because it it puts the fed in a tough spot th when you have a tight labor market and then an administration that is doing things to make inflation more likely it puts the fed in the corner making them raise rates more than they might otherwise have to. it's not to be ignored. >> peter, very quickly, if i could get your thoughts on stocks regardless of what happens tomorrow during the

election. >> i love united rentals ceasars gaming when you strip away all the political aspects and you start looking at fundamentals in terms of earnings potential and the addressable market of these companies, i think they are still very, very strong. i'm advocating for my clients to hold and for new clients to add to those names >> thank you, gentleman. pet peter anderson and joe durant. coming up, our next guest did an about face on netflix giving it a double upgrade and telling his clients to buy why he says the stock is bound to go up 31% from here plus, more downgrades and reports that apple are asking suppliers to halt production lines sending shares lower again today. what will it take for the tech giant to turn things around? the midterms, of course, critical for democrats and republicans. but this is cnbc and here we

look at why it matters to your money. we'll exam that a little bit more as "power lunch" returns in two minutes. so lionel, what does being able to trade 24/5 mean to you? well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light.

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welcome back buckingham research out with a rather bold call making a bit of a 180 degree turn upgrading the streaming giant to a buy from an underperform, that's fancy speak for sell the new price target 406 a share and 30% upside from here is netflix ready to rally? let's find out joining is the analyst behind that call. matthew from buckingham research whenever you change, you'll take some heat. is this call purely based on the fact that netflix's stock has been so weak lately or is it something more -- are you there, matt can you hear me now? i've been wanting to say, can you hear me now, tyler, for a long time. i could work for verizon and sprint we'll try to get matt up

can we put netflix on the wall because what we'll do is we'll look at that price target while they furiously put this thing back in his ear just like that so, if we can get -- maybe not take a look at netflix we go, guys. thank you very much. best team in the business. that netflix drop that we saw from a couple months ago, you can knock the turn and the call all you want even with $7 billion in free cash flow burn but we're down 25% we lost a quarter of the value, tyler, from nextflix's high back on july 12th that is a steep drop matthew, are you there now >> yes, indeed >> can you hear me all right. fantastic. is your turn in rating purely based on that 25% drop that we just showed or something more fundamental? >> well, we try to be agile on the ratings. we did cut it to sell ahead of the q2 earnings. i thought some of the estimates were a little inflated

honestly, we could have used our price target and kept that target even moving to a buy. however, we do think that there is underappreciated long-term pricing power at netflix for a variety of reasons and that's really something that is the upgrade. >> so that pricing power, more than counteracts two things that seem to me to be pretty important. number one, is their high spend on content and it is only expanding and number two, is there slow in growth in the united states. they can raise prices and, therefore, pull themselves up. >> for q4 is very strong domestically and overseas. that is still a vital, you know, building block we certainly feel good about that we certainly sided the free cash flow and you have to put that in the context of the company's market cap, $140 billion or so and they're very confident that

they're getting a good roi given the number of growth and getting more traction in some newer markets overseas, in particular. >> what are the bigger risks to netflix growth as the content wars heat up content is not cheap we talked about this several times already in this segment. >> i really don't think it's going to be a winner take all proposition. netflix is the best position they have the best technology and better ability to monetize the same content as anyone else. but when i look at someone like disney coming in i think that is a very differentiated service it's not going to be as many hours of programming it's going to have some very high-profile disney and marvel properties that is more of a comp mrment than a displacement if you're netflix. i don't think the average household wants five over the top services so a few select winners in netflix and probably disney among them but certainly going to be some

crowding out, as well. >> sure. you cut the cord, you probably don't want to keep buying for subscription, subscription, subscription, you want to pick one or maybe a couple. thank you, matthew price target of $406 and a buy rating on sharesof netflix. coming up, apple shares keep falling down 10% this month and five straight weeks in a row, is this your best chance to get in or more pain ahead for big tech? tackling that next ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach.

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welcome back to "power lunch" this is trading nation. s&p had a little burst to the upside in the last few minutes and doing it without the help of its biggest stock, apple still under pressure nearly 3% lower after getting hit to another downgrade shipped to

iphone and production. apple down 14% from its recent high and on the longest weekly losing streak since 2012 investors best chance to buy or is there possibly even more pain ahead? bks asset management and apple was really hanging tough in there through all the october weakness in the broad market and now given up a lot of it so, as you look at the charts here, has the stock kind of given up the benefit of the doubt here or not? >> i don't think so. a tough week for apple we see this as an opportunity. tough week even over the last month has retraced pretty much all of its gains following its last earnings report in july when it had the positive response. so, levels i'm watching were still above. the big one being $196 the july earnings gap is there typically, you'll fill the gap and that will lend support

the stocks rising two-day average is there and what makes this a compelling story and why this pullback should be bought is looking at the action versus the market that july strength marked a six-year relative breakout for apple versus the s&p 500 aside from some nearterm base building, i think this is a terrific opportunity for long-term investors. >> all right that would be about $5 down side before you get to that critical level at this point. boris, what do you make of the story here it's changed a little bit in terms of what investors are saying about it, but evaluation is back down below 15 times p/e on a forward basis >> it is but what you are seeing is apple which used to be a hardware company which made all this money on hardware and creating a environment is trying to become a software company that transition is not very comfortable for it when you look at the flagship products the iphone and the mac

have all been stagnant and now going forward because of costs and tariffs and inflation are going to go up and marginally going to go down i believe a price earnings compression as we go forward having said this, though, i'm not a bear on apple. trading range right now. $100 billion buyback behind it so, i kind of want to mimic what they're doing. selling against the stock. this way i'll get very good basis cost for long-term improvement position and in the meantime, i don't want to chase the price at this point. >> means you're betting that the stock does not take off to the upside and also does not collapse >> i think a range and pretty much stay stationary for a little bit >> guys, thanks a lot. appreciate your time today for more trading nation head to our website or follow us on twitter and, brian, i'll send it back over to you >> mike, thank you very much. coming up, mickey mouse, marijuana and money. they're all pouring into

political ads on social media, where else about 14 hours to go until the first polls open on the east coast. a closer look at some of the key issues for your money, your vote. as you head to break, dow intra day highs. nasdaq down 1% nus.isacinwo" bk t mite

90 minutes until the closing d bell the dow higher by 0.08%. that is good for 102 points and nasdaq is lower by 0.6 leading the dow right now, ibm, chevron, intel and cisco some names hitting all-time highs include mcdonald's and clorox now, sue herera with our cnbc news update >> thank you so much here's what's happening at this hour, everyone the cause of 26-year-old rapper mac miller's death has been released an accidental overdose an l.a. county coroner's notes reports mixed toxicity, cocaine, alcohol and fentanyl were found in his system. paramedics found miller unresponsive in his l.a. home on

september 7th and declared him dead soon after. amazon is temporarily dropping the minimum order needed to qualify for free shipping just ahead of the holidays typically amazon customers have to spend about $25 to get the free shipping or pay $119 a year for a prime membership prices at the pump are falling. industry data shows the average price of a gallon of regular dropped 8 cents in the past two weeks to $2.85 a gallon. analysts point to the decline in crude oil prices recently as the global markets have been bracing for iranian oil imports which went into effect today and get ready to spice up your life, again the british pop band spice girls announcing they are going to reunite for a uk tour in june. they did not say if victoria be beckham would join in. we'll keep you posted. that's the news update at this hour courtney, back to you. >> what are the spice girls

without posh spice she has to be part of the group. it's what i really want. >> she has the whole empire she's running. >> she's a little busy thanks, sue, appreciate it. turning back to your money and your vote. we're less than 24 hours before the polls open in the big midterm elections. what are some of the key issues that should pea be on your radar a look at marijuana's big moment and julia is watching the social showdown we begin with jane wells in huntington beach, california hi, jane >> the state that brought you richard nixon and ronald reagan is bluer than blue except for certain pockets which could flip the house. one is right here in huntington beach where registered republicans outnumber democrats by 15 points we caught up with him recently as he was visiting a dispensary with seniors

at the same time his republican looks like a republican and talks like a republican on certain issues and even used to be a republican and he isn't now. >> certainly the demographics moving into the district are moving any more moderate direction. second, you have a republican party that doesn't look anything like the republican party under ronald reagan. >> i definitely don't think everyone here is republican. >> i think it's 50/50 where it is majority, conservative opinions >> large influx coming from all over the country and else where throughout the world and changing viewpoints coming in. >> if hillary clinton was president, would you have run? >> good question i don't know >> now, it's gotten ugly the two have only met for one debate we were planning to get a one-on-one with the congressman and that never came together this is now the priciest in the country after michael bloomberg poured in $4 million most public opinion polls call it a toss-up, if you believe

them reports say that early voting is heavy and heavily gop. guys >> oh, jane wells, thank you very much. the beach looks so calm, but the polling areas don't. i can't get my head around it. jane, thank you. now, let's get to san francisco with a look at why this election matters to marijuana >> the cannabis industry is looking at the midterms closer than any election in the past. voters in michigan and north dakota are considering legalizi legalizing michigan is one of the many insiders they're watching most closely because if passed the measure would make the state the first in the midwest to legalize recreational marijuana and it could have a legal effect. passage of the medical marijuana could send a strong signal to washington

monitoring the illinois governor race u.s. cannabis companies i talked to are also closely watching congressional races because there are several marijuana bills locked up in the pipeline. the most notable one is the state's act which would leave legalization up to states and two out of three americans now support legalizing marijuana. there are currently 51 companies on the canadian exchange, securities exchange making up nearly $9.5 trillion in market cap. guys, that's a big argument for legalizing it on a federal level because so many dollars are going over to canada back to you. >> all right, aditi, thank you very much. now to los angeles where she's tracking political ads on social media. julia? >> well, tyler, manipulation on facebook around the presidential election two years ago is not stopping candidates from spending big on social media, especially facebook right now. $354 million was spent on over 2

million political ads. $57 million of that spent in the last week. now, democrats outspent republicans on facebook 3-1 in the last week of october, according to the atlantic's analysis of facebook's ad archive. the top stending since facebook started tracking in may, beto o'rourke spending $7.1 million and make america great again 3.4 million and now o'rourke is the top spend on twitter now, twitter's total ad spending is tiny compared to facebook's with $2.1 million spent by congressional candidates through the end of last week that's according to bloomberg's analysis of twitter's data we have to see how all these investments pay out when we see

the results of the election tomorrow >> a lot to watch for the election and all these top issues thank you, julia. the u.s. reimposing oil and financial sanctions on iran much on the headlines today, but is that about to change. 'lta autt mi up nextring vir because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react...

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welcome back to "power lunch" an investing development on amazon's quest to get a new headquarters to augment or, i guess, complement its seattle headquarters hq2 we call it according to dow jones citing sources amazon is going to split its headquarters hq2 evenly between two cities that's according to a source familiar from dow jones. adding each that amazon will create two equal offices each with around 25,000 employees they cited this particular source, a lack of technology oriented talent in one city that led amazon to this decision to look at two separate second headquarters facilities. also amazon is expected to announce this decision as soon as this week and itplans to, again, evenly split them between

the two. you may recall earlier and, brian, you have been reporting on this, dallas, texas, new york city among some of the finalists, but an interesting development here that this particular source over at dow jones says it will be an even split between two. truly, brian, a tale of two cities >> listen, let's engage this discussion because dow jaeones, they're going after it definitidefi definitively over the weekend. i want to give dow jones credit on that. but my sources, what we're saying, based on the tone of the call that they had on friday, there was some take away for the people i spoke with that amazon may be ready to break it into a couple of different pieces for whatever reason. lack of tech talent, i had no idea but you can't just put 50,000 people in one place in one time.

not in some of the areas that we're talking about. that's why part of our reporting over the weekend, transportation infrastructure, there might have been a quote, very generous package to help get people around >> now this colonize to questal if you think about the geography. favoring northern virginia for quite some time now. if it is, in fact, two different locations, is it diverse midwest and texas and east coast, as well apparently, this week we'll find out. >> lack of tech talent doesan't mean they don't have the talent, but the people virginia's unemployment rate is one of the lowest in the country. maybe not that there are tech people there, but otherwise already employed we don't know. i wasn't saying the cities, but i will say this. they had a good call on friday and we'll see what happens thank you. >> you got it. meantime, the u.s.

reimposing oil and financial sanctions on iran beginning today. iran's president says, so what he's going to break them and continue to sell oil what it might mean for the price of crude with jackie >> the iranians could very quietly sell their oil and that's what the market seems to think is going to happen prices closed down by 4 cents today. the top three supporters china, india, south korea and other importers have been granted waivers. washington has said that it wants to hurt iran, but not at the expense of some of its allies that rely on that oil meantime earlier today the president said it will take time for the impact of the sanctions to hit home. that the goal isn't to spike oil prices, which could hurt american consumers speaking of consumer, the average for a gallon of regular gas $2.76. higher than it was this time last year, but down 15 cents in just a month of course, a night ahead of the midterms in that same time, wti has

fallen 15% what else must we consider watch the stock market for indications on demand. watch production rising here in the united states and watch those seasonal trends. right now, demand tends to slow down, guys >> all right, jackie thank you very much. let's bring out director of the iran observed project at the middle east institute. ahmad, welcome >> glad to be with you >> how tight, iron clad, will these sanctions be if the u.s. gives exemptions to a lot of countries on iran? >> well, these exemptions and waivers are limited in scope and time the trump administration wanted to allow some of its allies and even some rivals like china which is the largest importer of iranian oil to gradually decrease their imports from

iran so, as not to spike the oil prices, particularly just ahead of the midterm elections here. and, also, this is based on the fact that these countries would not be eager to abruptly just reduce their oil imports from iran >> it might be particularly sensitive, might it not, with respect to china, which is you point out is the largest importer of iranian oil and right now, oh, by the way, is involved in a trade dispute with the united states. so, how does that play into our particular posture with respect to china on this >> well, the iranian government certainly counts on the chinese support, u.s. sanctions and also keep the iranian economy afloat. because china is, by far, the largest single importer of iranian oil. we've seen that some of the chinese companies have temporarily frozen their purchase of iranian oil because

they were waiting if the administration here would offer exemptions these stocks could also be part of the broughter talk broader p iran of the u.s. and china might agree on the broader trade talks tehran might become a casualty >> very quickly, what could iran possibly do as far as a ret retaliatory measure. >> they're considering two course of action for now, the government is trying to work with the european powers, as well as russia and china to minimize the impact of sanctions and try to block the u.s. sanctions, if possible, towards the europeans. but if the europeans fail to create some kind of alternative payment mechanism that iran can

continue business with external powers or external economies, then the next course of action that iran has threatened is to leave the deal and resume high-level enrichment. that would be, of course, a major escalation that could potentially even lead to our military confrontation >> thank you for breaking that down for us. we'll continue to follow this story. coming up, earlier in the show we talked to a netflix bull who said now is the time to buy. our next guest disagrees he said you should stay far away he also says don't trust the recent market gains just yet

all of the major averages are trying for a fourlt gain in the last five gains. here is explain is paul, cofounder of the spoke investment group they say you're it not really buying whether or not last week -- because we did end the week higher. >> i think we are still drifting around here. one of the things that, you know, the backdrop, we have strong earnings growth, we have

economy that is doing well there's a number of things that aren't working still seeing lower highs and lower lows. >> sit the greatest we have seen in years and the stock market doesn't care >> they will slow. the profit growth will grow. >> how much better can it get? you also, the backdrop, the fed, they are gradually hiking rates basically every other meeting. they showed no signs of becoming any less but they are also working off the balance sheet which is -- >> it is tighter than these

gradual hikes. >> should they be backing up you're saying they are showing no signs of it should they be >> we are start to go see slower growth >> what about netflix early on in the show to make sort of a hard turn. we had an analyst that moved and upped his price target >> so it was interesting netflix they definitely have pricing power which the analysts suggested. your international markets are going good what is concerning is the u.s. market for the last two years or so we

haven't seen any growth in subscriber numbers usage is also declined 68% had used the numbers in the last week. it has been as high as 80 in the last couple of years people saying they are willing to pay a lot for it. what you're thinking about is if you're using it less often you'll be less likely to pay for it >> what do you think will happen >> i'm trying to figure out what will happen tomorrow you know -- >> some times it's easier to forecast deeper. >> so yeah, that's a great point as well. i think from long-term perspective we talk about all things, how it's most important election of all times. you know, it will always, with roadblocks i think there's a lot of complacency around investors

that things will be good >> is it worrying you? >> you want a wall of worries in the markets. every sell off we have seen has always been okay this could be the beginning of something bigger this most recent selloff, good time to inves in the stock market actually increased. that we don't normally see >> going to wrap it up there always a pleasure. >> thank you >> good to have you. check please is next

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4.5 million retailers could be tapping into the group. all of them have said things are going well so far. >> mine is everybody wants to see the results of midterms tomorrow we may not get them based on mail-in ballots. a lot of key races we may not have a resolution tomorrow >> more and more are voting early. >> a lot of people on social media saying i voted >> huge numbers, by the way. they are accepted days after in some cases if you're looking for a resolution in a tight race you may not get it is it 200 points

the nasdaq including apple is down marginally. thank you for watching power lunch. >> closing bell starts right now. i get to say it? >> you do. time for the closing bell. good to be back. a chap pi day today trade tensions with china today as jack speaks out. >> trade war is the in the war >> we'll look at the cost of tariffs on american companies. >> apple shares dragging the entire tech sector