patience about 20 second left, you go first. >> i'm going for two the best way to play volatility and as we were talking about volatility and commodities coming up. >> jpm staying long. >> i want low beta, pfizer >> good weekend, everybody "power lunch" begins now >> thank you and welcome to "power lunch" i'm melissa lee along with contessa brewer. president trump talked about wanting a trade deal with china and that more tariffs may not be needed >> stocks are spiking following those comments dow up 174 points and s&p 500 positive by nine and the nasdaq unable to burst into the green it remains lower by about ten points >> so for more on those market-moving headlines from the president, let's get right to eamon javers.

>> i just ducked into the west wing while the comments were playing out and talk eed to a couple senior administration officials about what the president was trying to say there. new tariffs on china may not be necessary. but the officials caution that we shouldn't read into those comments that anything major is imminent or there is a deal coming down the pike any time soon they say that the president was simply being his normal, optimistic selself-he thinks the is the possibility of the deal and he wants to keep that alive. officials here also told us that letter from the chinese was not seen as a major break through here at the white house because it didn't contain any major concessions. you heard the president say something similar to that in reference to that letter that it wasn't acceptable in his view so, officials here cautioning, not to read too much into the president's comments there nothing imminent on the china front. but, they say, he's optimistic and would like to get to a deal and so would the chinese guys >> nothing like street suite

sweepi sweeping when i try to ask you a question >> i can hear you. >> good. are they being clear on what concessions they want to see from the white house to move forward? >> the white house said what they want to see, ultimately, the trade deficit imbalance fixed and the end to interlto intellecttual property and one thing that they have been talk about, additional chinese purchases of lmg and that's something where you could see the chinese taking steps to purchase more products from the united states and sort of rebalance the trade relationship but, ultimately, no. it's not clear what the chinese could offer that would get over that hurdle. also not clear how they would not prove they're not stealing intellectual property any more when you do steal something, you do it in secret. hard to prove a negative >> market reaction to the president's remarks and bob pisani is on the floor of the

new york stock exchange. >> what is it worth when the president says china wants to make a deal? it's worth about 15 to 18 points on the s&p take a look at the s&p 500 2722 just before the president's remarkz were printed out and, look at that straight up. we're off of the hiz we went up 20 points look at sectors. everything went positive basically retail has been a problem all day because of earnings reports from nordstrom and semis are a problem and industrials went positive on the president's comments energy three up days for oil has helped stabilized energy here. but the new low list is a microcosm of what's wrong with the market right here. look facebook new low and nvidia concerns and concerns with the retailers and there's a microcosm of what is going on and that's why defensive stocks are all in new highs

procter & gamble and clorox and merck. where are we what moves the market? over the confusion over what the fed is doing and the global growth outlook on tariffs and brexit causing all this volatility i keep looking out, i don't see a catalyst until g-20 and maybe we will actually see a deal. who knows. that is the next real obvious point that i see guys, back to you. >> bob, thanks bob pisani at the new york stock exchange. will the fed go full speed ahead? the number two at the fed indicating this morning the fed might tap the brakes if the economy slows. steve liesman with the take aways. steve? >> thanks. in the first media interview since becoming vice chairman richard strongly suggesting the fed has more rate hike work to

do but flexibility how far and how fast the fed goes next year. >> i think certainly where the economy is today and my projection and the fed's projection of where it's going, i think being at neutral would make sense >> now, clarida said the kuns sen consens consensus, he said the fed needs to follow the data >> we're at a point now where we really need to be especially data dependent the economy is doing well. we are looking for signals from the labor market and inflation to get a sense of both the pace and the destination for policy so, this is very much in data dependent most right now >> the average fed official has three hikes dialed in for next year he wouldn't say what his number is, but watching to see if productivity picks up and higher wage growth by higher invasion and he's added he's watching markets and the global slow down and these are early days to say the slow down is enough to alter

the u.s. economic or monetary policy outlook guys, one more thing he said when you walk into a dark room, you go more slowly in case you stub your toe he actually said that. >> all right, steve, let me ask you a couple questions if we're 2.2, 2.25 and the neutral rate between 3 and 3.5 that suggests it could be as few as one more rate hike or as many as four more >> to quote a song that some of my grateful dead fans would know, tyler, there really isn't far to go in that regard it's two, maybe three rate hikes from here and then what i hear the fed saying and we heard from powell and others, as well then they stop and take a look around the idea is that wait to see where the economy is clarida not necessarily in our interview but in a previous speech has a pretty strong metric for going further than he would normally would forecast. that's he wants to see wage inflation or wage growth along

with higher invasion if it's just wage growth and the inflation doesn't show up, look, both clarida asclarida and you e the strong growth without the inflation, they are on the look out for that greenspan made a call when his colleagues including janet yellen said you have to raise rates and he saw productivity coming he sees higher productivity from here and that would allow the economy to operate at a higher run rate without raising inflation. >> i don't know if his use of the phrase data dependent or that we're strongly data dependent suggests anything or is that just part of his usual >> he brought it back and i think that's a good thing to point out, tyler look, the market gets a little foamy, i guess, is the best way to put it. right? so, all of a sudden they see the three rate hikes planned for next year. and the market got into this idea that the fed was on auto pilot. i think what clarida is doing

and one thing powell is doing and because powell made that speech the fed was going a long way from here. i think he's trying to rein it back in and say we're not on auto pilot and still following the data and to be critical of the fed here the fed got away from using that data dependence because it was on this mission, remains on this mission to get to neutral. after that is when the data dependence kicks in. >> good. thank you, steve, for that i'm glad i heard the same thing you did there. a phrase that had gone obsolete. >> he made a point of using it absolutely right >> all right, steve, thank you. goldman sachs saying the recent market correction tells them that investors expect a bigger global slow down than what the data are saying right now. this fits in with what our jim cramer has been saying for a while. the economy is not as strong as the fed may think. so, the question is, is the market priced for a coming cooling? let's bring in ben mandel,

global strategist for jpmorgan asset management and senior portfolio manager at washington crossings advisors welcome to both of you >> thank you. >> in just the first eight minutes of this program, the two critical issues that face the market are right there front and center steve just walked us through mr. clarida and interest rates and the president and eamon walked us through trade where do we go from here >> these are the two big potential catalyst for things to get better here in terms of market reactions you know, i think those -- the good news is you get relief on both those fronts on the china front and relief from fed tightening and you're only going to get that next year. i think we have to keep our eye on the big picture we're navigating a picture of slow down. global growth went down to trend very quickly we're navigating a deceleration in the u.s. economy from 4% back down to trend at some point next year and hard to get bullish and

very bullish, in particular, until that's in a rear view mirror >> are you pulling back on risk in the portfolios you run and, if so, how >> you need thiree things caution, carry and good insurance policy caution from a very long equity position at the beginning of the year playing it closer to neutral and carry so far that we don't view this as being over by any means. recession risk is still low, even against the backdrop of that decelerating economy. we reserve the right to become more bullish in the future here. we don't think it's over insurance policy is that you want things that hedge against the key risks right now. you know, you have growth shocks just coming from the data that we're seeing you know, potential inflation shocks you have policy shocks all that suggests a bit more balance of an approach between equities, durations or bonds and cash >> let me turn to you, kevin, if i might. it seems like such a short time

ago weeks, if not months, or months if not weeks, where we were talking about synchronized global growth. everything was coming up roses and u.s. growth was very good. now we're talking about global slow down and a slowing of u.s. growth the roses have turned to mushrooms. how did it happen so fast? >> it's the nature of things if you think about past cycles, late '90s was a fantastic time turn very quickly before the financial crisis things were very good before it turned very quickly and the key to the whole thing has to do with sentiment nine months ago, maybe 12 months ago where all i wanted, all people i talked to wanted to talk about things like do i buy bitcoin, will it go higher et cetera. a real sense of risk taking a year ago we were also looking at the tax policies being changed that was a big impetus to the forward look today things have kind of changed a little bit

we saw it start to slow down in february we have been cutting our equity exposure since then and things are now looking more difficult, particularly overseas. the united states is still fairly good and cross currents may have something to do with trade has really upped the, really dampened risk enthusiasm and created some more risk >> let me squeeze in one more market are we the cleanest shirt in a dirty pile of laundry or are we really a clean shirt >> we're really a clean shirt. i mean, things look very good here if you look at corporate profits, they're very strong if you look at confidence, it's pretty good. when you look at employment is pretty good overall. but in the last month, we've seen some the capital markets start to push back we've seen some flattening of the yield curve and global stocks underperforming and widening of credit spreads and commodity prices come off. month after month after month this year a steady erosion

this last month, though, a sharp, sharp difference and i think that has been what has caught a lot of traders by surprise but you have to really be focused a little more defensively and we've been moving to more defensive postures and portfolios starting back in february, march of this year because of what we're seeing yes. >> gentlemen, thank you very much thank you, both. >> thank you well, it's been a rough ride for the home builders and housing related stocks etf down 30% this year with rates rising and a possible cooling economy. how should you play the sector and nvidia was once one of the hottest stocks in the market it lost a third of its value in the past month so, if you buy today, are you getting a quality stock at a big discount or are you catching a falling knife? much more on "power lunch" coming up.

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breaking news now on google and josh lipton has the details. josh >> tyler, this is a big shakeup at google cloud. diane green hired three years ago to run google cloud is being replaced by thomas kurian.

the google cloud team has accomplished amazing things over the last three years and i'm glad to be part of this transformative work. google used to have two significant customers and a collection of start ups and now fortune thousand enterprises business from the likes of spotify. she had to deal with a lot of heavy competition from giants like amazon and microsoft. she will serve as a director of alphabet's board kurian said in september that he was taking some extended time off and now he has a new job starting officially next year. guys, back to you. >> josh, thank you for that. the housing sector cooling since this spring with home sales down for four straight months and existing home sales down six rising interest rates and a possible economic slow down further erode home sales joining us now is susan, homebuilding and building products analyst at credit suis

suisse good to see you, susan what is behind the decline >> we have seen buyers taking a more wait and see approach we've seen that prices for home have started to come down and inventory is incrementally rising along with risks and buyers digesting all those moves and there is a lack of urgency in the market. >> for the home builders themselves, is there a factor of these rising input costs that materials are more expensive and the trade tension and not knowing how much you'll pay for steel, aluminum and timber >> the builders have been facing inflation. more recently we've seen some of their commodity prices coming off, especially lumber but that being said, wage inflation remains an issue, especially give an lot of the labor constraints we're seeing amongst their subcontractors and that's something we think will continue, actually >> we were just talking with the portfolio managers about the emerging markets but we keep hearing in a lot of different sectors about the damage or the threat from

china's economy slowing. is that part of what we're seeing here? we had an awful lot of asian buyers coming into the housing market in the united states. >> yeah, we're definitely seeing foreign buyers pulling back, especially on the coast. california being one of the really big markets you know, part of that is coming from that slow down that we are seeing internationally they're just not buying at the same clip in the u.s the other thing, too, as u.s. immigration policy tightens, there is less, you know, certainty around visas and things like that being extended. so, that buyer is just not quite as confident on their future and that is coming through in the housing market. >> i was reading the home depot downgrade this morning and they're sending a couple troubling factors for this industry number one that home sales likely peaked in 2017. and home price acceleration will accelerate in 2019 if that's the case, what would the catalyst be for the sector given we've already seen warnings from not just the home builders, but also the building

suppliers? >> i mean, look, we are seeing macro tailwind that come in that remain supportive. you continue to have very tight unemployment numbers you continue to have broader gdp growth so, you know, i think the average consumer out there is feeling pretty good about their forward outlook and consumer confidence certainly remains high that could be something that certainly helps us, especially as we get into the spring selling season i think everybody is sort of waiting until we get past the holidays seasonally, this is a varied time of year for home sales. we'll have to wait until we get to the beginning parts of '19 to see how the consumer is feeling, but certainly broader macro support for housing growth next year >> susan, you may anticipate seeing remodeling activity is that good news for black n decker, for instance >> that is good news for those companies. we think a lot of people are locked into legacy, lower-rate

mortgages. home equity is positive. so, we do think that gives them the support to take on bigger ticket projects. you know, going forward. that will help companies like stanley, black and decker, fortune brands those are two of our preferred names out there just given that fundamental activity we expect >> susan maklari, thank you for joining us >> thank you coming up on "power lunch. the latest on the deadly fires burning across california. we have some amazing images of just how bad the destruction is. be right way. so when we roll out the nation's first 5g network, it'll be because we were the first to install millions of miles of fiber optics. and we'll be the first to upgrade the towers and put up the small cells that will power the smart cities of the future.

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lead with digital. welcome back to "power lunch" everybody as you look at the dow industrials look at this video drone footage from paradise, california you can see that almost every building as the burned down to the ground by the camp fire, a fire storm that one fire has killed at least 63 and more than 600 now are missing. it is the deadliest fire in california history the blaze grew slightly overnight. 142,000 acres now. but california fire officials say it is now 45% contained. and it is just one of several fires burning in california at the moment investigators are looking into whether pacific gas & electric could be responsible for that.

aditi joins us with more >> made a game-changing move for the utility at the heart of this controversy. we learned that in an unusual move, the president of the commission had a call with a group of analysts which was hosted bye-bhost ed by bank of america. the commission did not want to see pg&e to go bankrupt. today the stock is up about 38% right now after being down for six straight days. after that call in a statement, the president telling us he is also launching a wide-ranging review of pg&e examining operation and structure of pg&e to determine the best path forward. moody's rating they remain under review for further downgrades. pg-&e giving us a statement

saying we agree with cpuc president picker's statement that an essential component to providing safe electrical service is long-term and critical to carrying out safety measures and meeting california's bold clean energy goals. pg &e responsible for a dozen fires last year which could end up to a $10 billion liability. >> i have a question for you what is the legal mechanism to actually say that we don't want this company to go bankrupt? does that mean some sort of a back stop? does that mean erasing all liabilities if they're found libel in court >> that's a great question so, they operate under this, there's actually a bill passed last fall. bill 901 that there is a provision in there that includes a thing called inverse and that means even if pg&e operated all the

correct safety protocols and stuff, they could still be held liable but they could cover their cost by going to the commission and asking for rate increases. now, that only applied to the 2017 fires they might try to see if they can push forward legislation that would also cover these current wildfires. again, that's still under investigation whether or not pg&e is liable for the fires that are burning right now but no doubt the next step it appears to be that lawmakers need to step in if they want to prevent, you know a bankruptcy, should it go down that path. we reached out eed out to the gs office and have yet to hear back. >> you're saying in the current structure regarding the 2017 fires and the potential liability there that the customers themselves might end up paying for the utility's responsibility >> exactly and when that bill passed, there was a fair amount of outrage over that.

but the flip side of it that some investors will tell you that should pg&e go bankrupt as it did in 2001, a much worse situation for rate payers down the line either way, they'll be paying for it they'll pay for it far worse if there is a bankruptcy involved >> i can't imagine the rate increases needed to cover this damage aditi in a very smoky san francisco. facebook in full damage control mode the stock continues to fall in reaction to an explosive "new york times" story. the author of the piece that send sandburg and zuckerberg scrambling is about to join us but, first, chip stocks getting wrecked today led by getting wrecked today led by nvidia what do advisors look for in an etf? getting wrecked today led by nvidia i tell clients, etfs can follow an index, mi it's not about quantity. it's about quality. no trendy stuff.

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. welcome back let's get a check on the markets. stocks higher but off the session highs. dow up more than 200 points following comments by president trump by wanting a trade deal

with china and more tariffs may not be needed despite the gains. the s&p on pace and the dow and nasdaq on track for big, weekly declines there you can see the dow industrials hanging on to that gain by 0.25 fueled the dow's drop this week. on pace for the worst week since december 2011. the other one, boeing. that stock on pace for the worst week since february 2016 look at that down to 0.15%. let's get over to sue herera for the latest headlines >> here's what's happening at this hour. in a statement, the white house says it will restore the press credentials of cnn reporter jim acosta and also said it will further develop rules and processes to ensure fair and orderly press conferences in the future here's president trump >> setting up a certain standard, which is what the court is requesting.

and always first amendment, but that's the way it is and we always have the option of just leaving you know, we feel that things aren't being treated properly, that people aren't being treated properly we always have the right to leave. >> fire swept through a passenger bus in zimbabwe killing more than 40 people and injuring at least 20 more. some of whom suffered severe burns. the accident happened 340 miles south of the country's capital and here at home, jenny o turkey recalled 91,000 pounds of ground turkey due to salmonella concerns they were produced on september 11th of this year with used by dates of october 1 and 2nd the concern is that the products could be in home freezers. if you have it in the freezer, check those dates. that's the news update this hour i'll send it back to you. >> sue, thank you. big stock story we're following. nvidia shares are tanking and it is taking down the rest of the

chip names along with it the etf that tracks them and smh sliding into bear territory. joining us now to discuss this is stacy, institutional investors number one semi conductor analyst. stacy, always great to speak with you >> good to be here, thank you. >> do you trust management given the size of the miss, the degree of the miss? >> yeah, so, management credibility is going to take a hit. it's not even the degree of the miss necessarily we knew that there were issues with channel inventory i think the hope was that nvidia more insulated the problem was management said last quarter that they had a good handle on their channel i think the phrase they used they were masters of their channel inventory. apparently, it's not true. not entirely surprised but they'll take a hit right here >> in terms of the weakness we did see. people were latching on to crypto, a very small percentage

of their overall revenues but also misses in data, which is a much bigger part of the center and misses in gaming what was the source of the most concern for you? >> so, let's talk about those misses number one, it wasn't exactly crypto in the sense that it wasn't like crypto's rolling off. the big crypto revenues that they had were actually at the end of last year what happened at the end of last year they filled the channel up. if you were a gamer, you couldn't buy a card. there were none to be had. they filled the channel to bring supply/demand back it fell off when they were building the inventory they have too much in the channel mode they have to sell-off look, it's painful, but at the same time, they're kitchen sinking it they are guiding the segment at risk, which is the midrange desktop parts to zero in q4. so, unless you think they're never going to sell it again, it's okay.

on the data center side, it was a slight miss. the street was maybe 820 at the same time, though, almost no way to model the data center in any given quarter it is literally a number that is picked and it is still growing it grew sequentially grew year over year and the other businesses that people owned are starting to inflict. they're up 20% to 30% year over year data center was fine i would love to see it and have another $20 million in revenue and that has zero impact on how you would read the long-term trajectory >> down 19%, you like it even more >> i mean, look, the issue right now is probably like little catalysts between now and the end of the year. i mean, you're probably waiting for the next earnings report but at the same time, the reasons that it sold off you don't own nvidio for

automotive, they're all performing very well this does feel like an air pocket to me it feels more like an opportunity than a thesis changer. but it will be painful while it works itself out >> stacy, thanks for your time >> thank you and to the bond market we go rick santelli is there hi, rick >> hi, tyler fascinating day. if you believe treasury yields, give you insight into the scale or sustainability of the current growth in the economy, it tells us something today there was virtually no volatility during president trump's statements and, of course, played havoc, mostly to the upside with stock market look for yourself. here's an intra day of two-note yields and realize the drop was around the vice chairman was having an interview with steve liesman. certainly, we would think that mr. clarida and mr. powell would be paying attention to any types of signs of slowing or

divergence in the growing economy and they somewhat acknowledged that. look at the intra day of ten year down 11 on the week, down a dozen on the week on two-year notes. but not a lot of volatility based on trump's statements regarding china and tariffs. if you open up the chart for the end of september, you can see what is moving it. we're looking at that middle point there that closed right around 308 that is in the middle of the double tops and flirting with it now and really means something finally, this is a june all the way back to 2017 pound versus the dollar we're not at the lowest level since then but as you can see on this chart, the pound didn't fair well this week and certainly at a level that wouldn't take much to put it towards lows we haven't seen in about 17 months. contessa, back to you. >> rick, thank you for that. shares of facebook falling to their lowest level after explosive allegations about the company's attempts to deflect blame. all that made in a "new york times" article we'll talk to one of the

reporters of that article. that's next on "power lunch.

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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... shares of facebook down again today. right now off by 3.5% hitting the lowest level in more than a year and a half. if november doesn't turn around, it will be the first time facebook has been down three months in a row in its history today the company is trying to do some damage control after a scathing "new york times" story. we'll talk to one of the authors of that story. but, first, let's get the latest from julia boorstin. >> denied reports of mismanlingment cheryl sandburg saying to suggest that we weren't

interested in knowing the truth or wanted to hide what we knew or we tried to prevent is untrue senator mark warner telling cnbc he is disappointed with facebook's management. >> i think there are ways we can find common ground, but they have to come to the table. so far what they've said is, yeah, we want to work with you and when we get to specifics, there's not been a lot of give on their side. the notion that the wild, wild west days of no regulations at all, no guard rails, just can no longer exist >> and yesterday fellow democratic senators klobuchar bl blumenthol saying disturbing reports that they took steps to undermine efforts to hold them responsible include hiring partisan political consultants to spread information.

the communication firm to which the senators are responding responding that, quote, it was hired by facebook and the main services for facebook were media monitoring and pr around public policy issues. contessa, guys, back over to you. >> all right, julia, thank you. let's dig a little deeper into facebook troubles with jack, who is one of the reporters who wrote the explosive "new york times" investigation. delay, deny, deflect, how facebook's leaders fought through. a couple questions for you why don't i start with the one that ended julia's report and that was the specific denial of by definers that they were engaged in operation research or in trying to tag other tech companies with blame to deflect it from facebook do you find their denials credib credible >> well, what we can say is that we are in possession and we have published many of the documents that criticize their rivals.

and try to undermine their critics. i think those speak for themselves in the same statement in which definers said they did not research, they did research on critics of facebook. take of that what you will >> that sounds like a distinction without much of a difference i will have to say >> correct >> let me back away to 10,000 feet from the discussion about regulation of this company or culpability. that's a strong word i use it nonetheless what ultimately is your take away as you sit at 10,000 feet and look at this company and social media more broadly about the meaning, the ultimate meaning of what you found and what that ultimate meaning is or something called the truth >> sure. so, i think over the past several years many of us in the media and many of us in the

general public and in washington have realized that social media has caused many problems there are many issues with it and the reality is through our reporting and other news organizations reporting, it has been clear that facebook was very slow to act and, in fact, we realized, in some cases, tried to delay and downplay the problems that its services were creating and, so, i think there is now a reckoning over what actually happened, what did facebook know and when and how did they handle it and we're going to now hopefully get to the truth about that and hopefully facebook also will start doing more and be able to solve some of these problems, which are really deeply rooted in the intrinsic platform. >> if there was an electric company that find out foreign trying to hack into the

electrical grid and they sat on the information or didn't disclose it to the proper authorities, there would be real questions, as tyler put it, culpability. are you hearing those kind of questions pop up around facebook how much are they responsible for and whether there could be serious consequences >> i think lawmakers are thinking very hard about this. and i think, you know, the more reporting that comes out around this, the tougher the language gets in washington so, we'll see if washington steps up and tries to do something about this i mean, the other people that would hold a company accountable, of course, are shareholders we heard from some in the hours after we published our report. and one issue here is that mark zuckerberg owns 60% of the voting shares and chairman of the board and ceo. this is a guy who hasn't really been held that accountable because of the enormous power he still holds over facebook, which is a site that has 2 billion users. it is a level of power that is

somewhat unprecedented in modern history. >> jack, you and your fell ow reporters got deep in the story and had amazing stories and anecdotes and from your standpoint and what you know, is there something the company could do structurally to fix or address some of the problems it had because the guess here is that facebook is scrambling to find a way to prevent lawmakers from actually legislating and address the problems themselves. would that include a new coo ceo mark zuckerberzuckerberg, au mentioned, him stepping down wouldn't happen unless of his own volition but structural changes to the company that could actually satisfy lawmakers without hard legislation >> i'm certainly not in the business of recommending changes to a company, but i think that certainly as reporters we always love more transparency and i think, i think the general public would appreciate that and i think the lawmakers would

appreciate that, as well facebook has, to their credit, been more transparent in recent months about what they're doing and they have been pushing to make more changes. i don't know what lawmakers are going to want to satisfy them. i think we also all must understand the nature of washington that there are news cycles and it could be, you know, a presidential tweet that changes, shifts their attention pretty quickly we'll see how long this lasts and see if there's meaningful change from facebook >> thank you for being with us >> thank you. the ceo of the mystery company. the stock has doubled in a year thanks to a big pop this week. we'll reveal the namand owe sh you what the company is doing that sent the stock soaring. stay tuned really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment

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a new medical technology is bringing hope to thousands of americans living with hemio fillia multiple companies are racing to bring gene therapy to the market. meg tirrell has the latest edition of modern medicine. >> reporter: he has lived his whole life with hemo fillia.

>> my left knee wouldn't hold my weight any more so i had that and both hips replaced. >> reporter: early treatment with contaminated blood products left him with hiv. newer treatments help prevent bleeds but must be taken by infusion every few days. >> it is pretty onerous to think about finding a vein and doing this as part of your routine a couple times a week. >> reporter: he got to try something potentially life changing. a critical trial of a gene therapy. the treatment uses a virus to deliver a healthy copy of a gene to make up one for the that causes the bleeding disorder, the goal, fix the problem with just one treatment. addie flew to the university of michigan for the therapy which is being developed. he says his goal is to help more than just himself. >> this is andrew michael and he is two months old. >> reporter: the grandson also has the same disease. his daughter was pregnant when addie joined the trial.

>> daddy, you might actually be the cure for your grandson, you know, so she goes that's pretty cool. >> reporter: a month after his treatment, his level of clotting factor a key measure of the degrees rose to 10% or 20% to normal from 0. it was up to 50%. >> its actually got up to 147 at one point. >> reporter: he knows longer has to have infusion treatment. >> we're just tickled pink. so happy and so happy for him that he didn't have to take shots any more. >> reporter: meg tier rel cnbc business news. with a potential seven figure price tag, there are a lot of competitors vying for dominance. spark they area, they are all working on gene therapy. >> uniqure is soaring yesterday. the ceo of uniqure joins us now.

great to have you with us. >> thank you very much. >> let's be clear, this is a gene therapy so theoretically, the person who has hemio fillia who undergoes this treatment successfully will be cured of this disease >> yes, that's exactly what we're going after the purpose of gene therapy is for one time administration that can have very durable affects. obviously proving that its curative requires time but we have now followed patients for more than eight years and shown durable effects so its looking pretty good. >> i understand that you are currently enrolling patients and are finding great interest in that. when can we expect the first readout of the phase three and also when can we expect possibly for this candidate to hit the market >> yeah. certainly those are the important questions. we haven't provided public guidance on that, but we did announce yesterday some very positive results for phase two

to be studied. we are currently enrolling patients in the pivotal study. we'll be providing guidance on the process of enrollment early next year. our first goal is to complete the enrollment of the study. we'll be looking at factor nine activity which is the bio marker. six months after we treat the last patient and bleeding data after one year of enrolling the last patient as well. >> how big is the market for this drug? >> there's probably around 400,000 people in the world that have this disease, approximately 70,000 of those have the b strain. there's probably more than $10 billion of revenue predominantly going after factor replacement for those patients that require infusions, so the notion of that much revenue a year in factor replacement being replaced by a one time administration is pretty attractive for the patients and certainly the health care economic community. >> 400,000 worldwide, how many

of them are in the united states >> well, there's probably around 5,000, to 7,000 patients in the united states with b and four times that many that have the a. >> the piece that we played profiled a bio marine treatment and meg said that would be seven figures likely, is that what we're looking at in terms of the cost to the patient would be >> well, what i'll tell you is, the cost to for a severe hemophiliac can be some where around 600,000 to 700,000 a year. so the cost of care for their entire life is very significant and if you have a gene therapy that can potentially provide curative benefit, there's no doubt significant economic value

and obviously the price of that will require discussions with the payer community as well. >> all right. matt, thanks so much for your time. hope you keep us posted. >> thank you very much for having me. the markets have been jumping on comments from the president top of the hour on trade, but giving back much of those gains. are markets more focused on the economy and growth amazon picks long island city queens for its new headquarters, but there may be erokserious problem the company ovloed we'll be right back to tell you what it is. i consulted with your grandmother's doctor.

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i'm melissa lee. jim cramer sounding the alarm saying ceos are telling him the economy has quickly cooled. what signs are they seeing that's impacting their outlook the facebook fallout continues from "the new york times" expose sending the stock to more than one year low. is it still a risky bet or buy will amazon's new headquarters be completely underwater by 2050. some experts say yes. we've got a look at the rising risks. "power lunch" starts right now.

welcome to "power lunch." i'm contessa brewer, stocks volatile in today's sessions. we're offsession highs after a big rally on trade comments from the president. the dow as you can see up .35%. on pace for its worst week since late october. a bad day for retail. the etfxrt on straight for hits straight down week. nordstrom, william sonoma and rh leading today's declines. and the fang in the red today led by facebook. >> another frustrating day for those of us who want clarity on trade and tariffs. look at the s&p 500, 2722, you know, about an hour ago. the president comes out with some comments, china wants to make a deal on trade. it immediately went up 15 points

and 20 points on the s&p, that's a huge move but then, officials at the white house telling cnbc immediately after don't read too much into that, guys. there's no sign of a deal coming. and the market goes right back down again. up 20, down 20. that's what makes people crazy down here. no consistency at all. take a look at the sectors today. couple things you'll notice is interest rate sensitive. utilities, real estate doing better here, yields are near a six week low on the ten year. cla rida over at the fed telling liesman this morning they're getting closer to a neutral rate. down. up for oil is stabilizing energy. retail, you heard what a mess that was. its no wonder with all the confusion defense stocks are the only stocks that are holding up, the only stocks making new highs. there's verizon, merck, colloro

and proctor & gamble. we have a cloudy growth outlook. china, tariffs, europe and brexit, we got to know where we are with the stock market. that's the problem. lack of clarity on those two fronts. i'm waiting for that g20 meeting. that will be very interesting. maybe we'll get more concrete news on tariffs. guys, back to you. >> thank you very much. the president says china wants to make a deal on trade and he spoke a short while ago. eamon javers live at the white house with the very latest and when the president speaks, everybody listens. >> reporter: the markets listening too, tyler. you just heard bob say that market participants focusing in on that idea saying that the chinese want to make a deal and also saying that the united states may not have to impose additional tariffs. that was seen initially as a very positive symbol. i want to play for you another piece of what the president had to say in which he indicated that the chinese offer is not good enough just yet. here's what he said.

>> china wants to make a deal, they sent a list of things that they're willing to do, which was a large list, and its just not acceptable to me yet. >> reporter: so there you hear the president saying, its not acceptable to me, the chinese offer. that squares with what we've been told behind the scenes, the chinese letter earlier in the week contained a number of items, but no significant concessions in the white house's view, so it was not viewed as a major breakthrough in terms of the negotiations, just a general positive sign that negotiations are taking place in general and that they are talking and letters are being exchanged back and forth. that's the positive vibe that you can take from that, but i talked to white house officials immediately after the president made these comments and i said, is he indicating to us that there's some kind of deal that's eminent here and they said no. the way to look at this is the president is just expressing general optimism here about the negotiations. he's not signaling that there's any deal eminent or about to happen or anything specifically

coming to date, tyler. >> thank you very much, eamon. our friend jim cramer sounding the alarm on "mad money" about the state of the economy. he says ceos that he's been talking to that things have been slowing down off the record. >> so many ceos have told me about how quickly things have cooled. so many of them are baffled that we could find ourselves in this late cycle dilemma that wasn't supposed to occur so soon. they come on to tell me that. to say something. please warn, like we got yesterday from k.b. holmes where home sales just slowed dramatically. let me go back 11 years for one moment. 11 years ago i began to hear the same kind of talk of how the fed seems to be out of touch with what's happening. my sources was so good back then, sources pretty much everywhere. i grown up with people who are now running the very joints we started at 20 years before. they came to me one after another to say something, to warn. i did. unfortunately, nothing. i was laughed at for being a

lunatic. it was mortifying, but i was right. i did my best and at that time i made a resolution. if i thought we would ever get back into one of these situations again, i promised myself i'd be vocal about what could go wrong even if i knew it wouldn't be as serious as the great recession. afterall, there are degrees of slow downs that can cause an awful lot of havoc and cost a lot of jobs and that's what we're on the verge of here. that's what the markets are saying. that's what the ceos are worried about offline. >> and jim was right 11 years ago. how worried should we be about a coming slowdown? let's bring in bill george and instead of odd llin and also a cnbc contributor. bill, let me start with you. nice to have you in the house. >> thank you, tyler. nice to be here. >> what are your friends in the ceo community telling you about the state of the global and the u.s. economy >> i think it varies tremendously by sector.

the retail ceos, best buy, and target say its never been better. you listen to the folks in the automobile business we're at the end of the cycle. housing seems to be slipping. the health care people are very bullish after the election, because it took all these health care cuts off the table. those are now not on the table any more and they will continue full steam ahead with health care. we are at the end of a very long cycle and i think it could continue for several years, but everyone's concerned about risk, the biggest risks they're concerned about, tyler, is global trade and china trade. they aren't so worried about europe or canada or latin america. they're really concerned about china. >> steve, what is your kitchen cabinet telling you and how did we go from really high growth and globally synchronized growth to a place here 11 months into the year with a big tax cut still playing through the economy that we're talking about

slowing growth and some talking about a recession come 2019, 2020 >> well, you know, the conference board members ceos are diverse as bill suggested and you know, we do see some of our global ceos who have a predominance of their businesses outside of the united states seeing slow down. we don't see that or hear that from our u.s. ceos. if you look at recent numbers, you see some slowdown in germany, japan, there's worry about the brexit situation and what's happening in the uk. the u.s. numbers look very strong. all of the conference board indicators from the consumer confidence index to the expectations index all say that the next six months expect to be very good. our gdp forecast is 3.1%. u.s. forecast for next year is 3.2%. you do see the rest of the world starting to slow down next year except for latin america.

what we have is we have some is slowdowns in some areas of the world but it doesn't look like its in the u.s. yet. >> you think cramer's wrong, he's got it wrong? i mean that's what it boils down to, no, steve? >> he's saying that there are some sectors and some ceos. ten years in to a recovery, you would expect to see some of the leading sectors, some of the leading companies on that cycle to begin to slow down and you would expect to see different geographic issues, china, of course, is a distinct case, but germany and japan also are distinct cases. so i think its a mixed bag. >> so if you're the fed and you hear what jim cramer is saying and you're looking at housing and some of these other areas of concerns, autos, what do you do? at this point can you pull back away from a december rate hike. >> i think they shouldn't pull back. the fed is doing absolutely the right thing. all the bankers i talk to are very satisfied, liquidity and leverage have never been in better shape and i think the fed

is doing the right thing to balance the tremendous amount of economic stimulus late cycle with being concerned about inflation and a trade war could trigger that, so i think that -- the fed is doing just the right thing and the business people i know are not concerned about the fed. the politicians are concerned, not the business people. >> as you, steve, look at the landscape out there and i want to get your perspectives, too, bill, on the trade question, the president feels like the market is being led by the nose. today we hear the president say that he's very hopeful that a deal can be struck, he's not happy with the parameters from beijing, but he's hopeful about that, the next day we hear something else, how concerned are business leaders about trade and in particular, trade with china? >> i think what you hear behind the scenes is there are talks going on. he said that again today. those have been pretty continuous. i think that they have high hopes that there will be a deal,

administration officials have been out saying we don't want a trade war, we don't expect a trade war but we want fairer trade and we need to equill liberate the tariffs. that's what you're seeing today. the u.s. only relies on china for 5% of its exports. if you come back to the u.s., remember, we're going into a record holiday season. it should be the biggest holiday season ever in history, of course, online's going to drive a huge percentage of that growth, but bill is right about the fed. the fed is not only raising rates and tightening in that regard, they're also trying to work on a $4.5 trillion balance sheet, so the big unknown is this double tightening which we've never seen before. >> my numbers may fail me here, the trade deficit with china this year is worse than it was last year. >> yes, it is. >> in part because the chinese are importing much less from the united states and the united states is importing much more

from china, probably to stuff inventory ahead of tariffs. >> this is a big issue for all the global companies i know. if you're at general motors you're concerned you sell more cars in china than the u.s. the last thing you want is a trade war. the same thing with tim cook. they're dependent on this. in terms of imports, those are going to continue until they're tariffs. you're dealing with consumers on a fixed budget. if prices are going to be raised because walmart is based on costs, they'll have to raise. they haven't told me that but that's what you can see happening. >> that's what you normally do when your costs go up. >> i think everyone is nervous. the thing they've learned, though, is the market response to what this president says. the ceos are not listening to that. they're -- they're ignoring it and they're saying we have a strategy, we have to go forward. we're not fulg factories back from overseas to the u.s., we're going to implement our strategy. yes, we're concerned about the

growth overseas, but we will continue to go forward with our strategy. there's no change in that and that's very important. >> gentlemen, thank you very much. appreciate it. good as always to see you and steve oddland as well, good to see you. from the economy to your money, if things are starting to slowdown, will it put a chill on the market if it does, how do you position your portfolio i want to talk to you first, because i know that your enthusiasm for this bull market is tempering somewhat, why >> well, it just starts from the fact that its certainly in the late stages of the game. this bull market's been running for nine and a half years. if you just look -- we've had multiple expansion for several years. right now the s&p 500 is trading in a slight premium to its long-term average, but profit margins remain high and what we

feel is that to generate returns going forward you're probably going to have to rely on earnings growth. we won't have the one-time benefit of the tax cut to the same degree next year and so you should see more muted growth. now that said, things might be more volatile but this is certainly the kind of place where you look to dividend paying stocks, to provide both defense as well as reduce volatility and you look for companies with pricing power and stable earning streams. >> like what >> this is the type of market where health care, as you've seen, some of the technology stocks rollover, a lot of investors have actually moved to the stability of health care where you have positive demographics in your favor, after the election, now that we've to some degree taken a lot of the pricing cuts and the removal of the affordable care act off the table, they offer a little bit of stability and they offer stable dividends. other places investors could look to actually -- to go to place that's are undervalued. industrials is one instance where they may not be as

defensive but because of concerns of trade war, you have lower valuations than you've seen in a couple years. industrial capacity utilization is very high, so eventually companies are going to have to start capital spending because things will start breaking down. you also would benefit there from the recent election, from things like increased infrastructure spending and increased defense spending. you can just rely on low valuations. >> you are actually seeing tech as a real opportunity right now. are there any specific stocks that you like? >> i am. i'm excited about what's going on in the market right now. we've had a pullback in individual stock picking and its way more important than buying the bull market. microsoft is very defensive. with the valuation around 22, 23 times next year's earnings and you're not going to stop porting your business to the cloud because of tariffs, because of fed or taxes. that's a trend that's going to continue for the next few years. microsoft is a great place to hide, a great defensive characteristic as well as some offensive characteristics. >> how do you think about

valvation in this market microsoft it is trading more expansively than it has in the past five years so you're paying for that element of defensiveness that you like. >> what's changed in the microsoft story is you've gone from a company that was seen as a sub-10% grower to now a company that's a mid-teen grower. that's a real change. it should warrant a much higher p.e. going forward. >> any other tech stocks i'm curious if you have a position on or a position in facebook. >> we do own facebook. i think the big thing that everybody's missing and certainly the scandal and all the questions around their business have to be answered, but at the end of the day its all about advertiser effectiviveness and the roi at facebook and google is so much higher -- >> does an article like the one in the times, does it matter to those consumers and i'm including in the consumer class the users and the advertisers? >> at the end of the day i don't think it matters that much.

it matters to us from an efg perspective and we look at those issues. we have some real questions for the management team that we want to address, but at the end of the day you're not going to stop going to facebook or stop going to instagram as a user and if that's where the users are, that's where the advertisers will flock to. >> thank you very much for joining us. >> thank you. coming up, its been a rough couple of months for the financials but our next guest says banks may be down, but not out. what he sees in store for the sector. home depot and lowe's getting hammered. both on track for their worst quarter in a decade? some experts say amazon ck the wrong location. "power lunch" back in two. looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk.

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international airpor . the good times, they are fleeting for financials. the banking related etfs all down 5% or more over the past three months, names like goldman sachs and more showing some pretty big declines. so what is pressuring the financials joining us now to discuss is jason goldberg analyst at bark clay. great to have you with us. >> good afternoon. >> you got an overrate rating on a number of stocks, so when you

field calls from investors saying, you told me to get in the stock in this bullish price target and we're nowhere near that, what do you tell them? >> certainly the stocks have lagged as of late as has the market but they've underperformed a little bit. in third quarter was a soft quarter and tends to be seasonally soft. they're actually improved across a number of metrics. if you look at the weekly data from the fed. loans last week touched an all-time high, cni showing the fastest growth rate we've seen since earlier 2017, volatility is up across all asset classes led by equity so there's certainly some good signs you're seeing so far in the fourth quarter that weren't necessarily prevalent in the third quarter. >> so that's going to be the missing ingredient because some might have argued that going through 2018, you had probably what should have been at least

on paper the best operating environment for the banks that we've seen in many years when it comes to the economy, when it comes to corporate demand for credit and just activity in general, consumer confidence and that really didn't show up in the earnings. >> the earnings are actually pretty good. you'll post record earnings this year. you're seeing record capital returns, record share buybacks, dividend yields in the 3% plus area. i think loan growth lagged a bit and the yield curve flattened and i think that disappointed investors, somewhat, but to the point earlier, loan growth is improving a little bit here. to the extent you can get any clarity on the tariff and trade situation, we think that's something that's damping loan growth that should be beneficial and the group overall is certainly benefiting just from positive operating leverage, as you leverage technologyand in a very benign credit quality in which we think to persist in the near term. >> what is wrong with goldman sachs, jason

>> so goldman sachs certainly created a lot of headlines the last couple weeks as they're exposure to this malaysia fund-raising has come to light. you had two partners charged, one pled guilty and it creates an overhang. the company has basically commented and said there's a chance they have to face a significant fine. until the market gets clarity on how big that could be and the other fallout associated with their association with one mbd it creates an overhang. >> are you worried about maxine waters >> if you look clearly -- there's treasury last year laid out about 200 recommendations they thought would help the regulatory environment for banks. of those we think 80% of them do not require congressional approval. its just the regulators fixing what they've done and you're actually seeing that in process. you've seen, you know, new proposed rules or request for comments, things on the vocal rule and stress testing, they've

already raised siffy thresholds so banks have less stringent requirements. to the extent that you don't need congressional approval to get the regulatory environment in better shape, its not a source of concern. it creates headline noise and its something to be mindful of. >> jason, good to speak with you, thank you. >> thank you. coming up, home depot and lowe's both on track for their worst quarters in a decade. stay clear of the home improvement retailers iors now the time to nibble in? only half the story?

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welcome back to "power lunch." i'm mike santoli and this is trading nation. home depot and lowe's both taking a hit today. this is bank of america down grades home depot sending peak earnings growth in the name both big boxed names having their worst quarter in more than a decade. how should investors trade these beaten down stocks mark temper is with strategic, craig johnson with piper jafery.

a lot of housing related stocks have gotten hit, the home builders most pronounced, but this is now hitting some of the high quality retailers in this area, what do you think? >> yeah, so the knock on them is home depot is experienced peak earnings growth but my question is where haven't we seen peak earnings growth. we've seen 25% year over year growth across the s&p and we're only expecting high single digit growth next year so that sounds like a peak across the board to me. the macro environment looks really good for these home improvement stores. the consumer's still strong, not a lot of inventory as far as existing homes go, mortgage rates are going up and the market is on focusing new home purchases and construction, but what's really lost is the fact that when consumers aren't upgrading homes they're actually doing home improvements and that's really true when we have a strong consumer that has the ability to spend. when it comes to these two names, we do prefer lowe's. home depot has executed over the last few years but lowe's is a

turn around story which gives it much more upside from here. its highly likely that home depot saw their peak comps in 2017 whereas lowe's is going to accelerate into '19 and '20. their executions been strong, they're closing underperforming stores and they're laser focused on better inventory controls so we like lowe's. >> craig, how do the charts look to you for either one of these >> well, i got to be honest with you, the charts still look challenging. i would prefer lowe's over home depot at this point in time and when you look at the chart that i've brought in here today, you can see quarter to date we're down 18%, up 2% for the year, so not a huge return, but lowe's is the least coming back to identifiable support in the low 80s and you hope that the stock holds there. if it doesn't hold there, then you're looking at pullbacks into the mid-70s and low 70s at that point in time. the relative strength is stronger for lowe's versus home depot at this point in time.

i got to give the edge to lowe's at this point. both the charts still both struggling from my perspective. >> all right. 2-0 in favor of lowe's as a comeback story. thank you very much. for more trading nation, head to our website or follow us on twitter. its time for cnbc news update with sue herera. >> hello, everyone. here's what's happening at this hour. an 11th child has died in a new jersey medical center hit by a severe viral outbreak. the child had been a resident for nursing and rehabilitation and was among the 34 pediatric adenovirus cases that health officials had been tracking in connection with the current outbreak. a hand recount in florida is under way to decide two statewide races, votes for the senate race between incumbent democrat bill nelson and gop governor rick scott being counted today. votes for agriculture commissioner will be counted tomorrow. both results are due sunday

afternoon. overseas, thousands of palestinians participating in a hamas organized rally along the gaza/israel border. 40 palestinians were injured by israeli fire and tear gas during that protest. a research team in japan announcing that it has succeeded in making immune cells with greater attacking power against cancer cells. they did it by changing the genes of a patient's specific stem cells. the findings are expected to be applied with other immuno therapies to treat cancer patients. little bit of good news there. that's the news update this hour. contessa back to you. >> thank you, sue. facebook's recent fumbles hitting the shares hard. now down 21% this year. is the stock a bargain or risk that and more ahead on "power lunch." and now the latest from trading nation and a word from our sponsor. >> a double top is a chart

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let's get a check on the markets. it has been a volatile session with president trump making what seemed like optimistic comments. the white house effectively walking them back. the dow had rallied more than 200 points following those comments from the president and we've given up a large portion of those gains. right now we're up 135 points on the dow, up 6.5 or so on the s&p 500, on the nasdaq we are down by 15. some names atta all-time highs today, color ocolorox, hormel fn p and g. the semi-stocks sinking today as nvidia earnings missed estimates. smh just 1% away from bear market territory. >> thank you very much. the oil market closing for the day and what a month it has been in oil. let's go to the commodity desk.

>> crude oil was set for three days of gains but actually we ended flat today. $56.46. the gains we saw over the last two days were pretty slight as well. for the week still down almost 6%. so crude trying to find some support after such a drastic decline like you mentioned but lacking conviction in this trade. let me remind you, the opec monthly report, the iea monthly, the inventories all still supporting that bearish story. there's opec meeting on december 6th. that's probably the next catalyst even a million barrel cut from this inflated base could get this market excited and get it to go higher. today's session low was 56.12. that gives you a sense of the range melissa. >> thank you, jackie. facebook under fire, the company reeling from a story in "the new york times" about its crisis management tactics and renewed attention from lawmakers in washington. the stock is hitting its lowest levels since march 2017. so is now a time to buy at a

bargain or is there more downside to come joining me now is scott deffet, will managing director at stiefel. scott, great to have you with us. >> thanks, melissa. >> what changes are you talking about? >> i'd start by saying i don't anticipate that any changes will actually happen, but any company with traditional corporate governance and a strong board probably would have made changes already at the ceo level or both. i think what you have here is zuckerberg because he controls the vote basically would be making a decision on himself and his mentor and so its highly unlikely that there will be anything that's done. my point in our note was just simply that, given that the company seems to be beginning to lose its employee base, its already lost silicon valley with many prominent members of the valley turning against it, shareholders as represented by

the stock price, some indications of advertisers and politicians and regulators, it gets to the point where fresh faces are a good thing and i think in my opinion, that may be the case here even though its unlikely to happen. >> that seems to me like that underscore the case as to why the stock would not be buy rated as you have it here? if the real problem is that the ceo and the coo are still in place and the other problem is that there's unlikely to be any changes, then how do we know the problem doesn't get worse or that the problem is even addressed if the same people are allowed to remain in their positions? >> that's fair. the onesthat got you here are the ones that are going to get you out and that's the risk is trusting in that. what's supporting a buy rating or what makes a stock interesting at current levels is that facebook, you know, the family owning facebook and instagram and what's app which are the three most dominant social platforms global having 3

billion users, which should still grow in '19 and '20, that would typically suggest fundamentally that the stock is in a good position to appreciate, but the side show which doesn't seem to be going away is definitely a huge headwind against that view. >> you're not the only one calling for management changes. we just heard from jim tierney saying that he thought that the ceo and the chairman job should be separated and has told the company so. what do you think in the meantime all this push and pull over management remains, what do you think the danger is that the scandal deepens into something with real consequences, regulatory fines or something more >> i think that is certainly under way and the more fuel that's added with more information that's provided such as the article in "the new york

times" which was referenced by one of the politicians that you had on early today, i think mark warner, its something they don't like to hear some of the details about, it makes the conversations more difficult and potentially the regulation more stringent when we get to that point. my guess is we'll end up in the u.s. with a gdpr like implementation similar to what happened in europe, which has been pretty manageable. i think regulation will be manageable but i think facebook has now these existential threats in terms of the business model itself and whether the right individuals are running it and that's not just one of the constituencies, its numerous now including the employee base. >> what does gdpr mean just for an idiot like me >> its a data regulation that's been put in place in europe -- >> i see. >> -- to give control of data to

consumers. >> okay. i want to go back to the egg that melissa cracked there about basically asking you to defend a buy rating in what you describe is in the face of heavy headwinds and your price target is what, 186, that would be a $46 a share gain from here. i'd like to hear you talk a little more about how they get there with what you describe as very serious leadership headwinds? >> i think to the extent that it does get there because as much as i'd like to think so, all of my price objectives are not achieved. to the extent it does occur and there's a sensible logic to the approach of getting there to that valuation, i think if you -- if you assumed stable management and the ability to get beyond this crisis, as, you know -- has been seeming to be the case up until just here in the past few dayswith new

revelations, then i think you can very easily get to a low 22, 23 multiple on 20 earnings and still think you have a stock that's pretty fairly valued. >> and what would make you change your rating or lower your price target, quickly? >> lowering price target would just be based on deteriorating fundamentals or something that happens as it relates to this management situation that we're negative and downgrading the stock -- i think would be a further deterioration in user trends which would be damaging to the long-term value of the company. >> scott, thank you for your time today. we appreciate your explanations. >> thanks so much. coming up, did amazon make a mistake in choosing long island city as one of the sites for its new hq2? a new report out suggests that maybe it did. diana olick is live in long island city with more. hi, di. >> reporter: the waterviews are

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welcome back to "power lunch." amazon picked long island city as one of its locations for its hq2 but the site does face risks of rising sea levels and major flooding. so did the company possibly make a mistake in choosing new york and could all the building that's planned for the area make the problem even worse diana olick live in lic with more, di >> reporter: ty, in just the last few days, scores of investors have been rushing into long island city lining up to buy new condos, the rising risk of water. flooding at the proposed four to 8 million square foot amazon office development. >> this is clearly building square in the danger zone for frequent flooding. now amazon can protect their investment very locally by

building seawalls, barriers designing their development in a way that would be robust even if it does flood, even if the water comes high. but then you have to ask how easy will it be to get to and from their headquarters. >> reporter: new research from climate central shows the area could see significant coastal flooding by 2020, by 2050 extreme projections of sea level rise have low level lying buildings under water. developers at the new dock that literally hangs over the water are battling the same problem. it is a collaboration by boston properties and root in management. >> we have a very strong plan in terms of sustainability and dealing with, you know, storms, our lobby is eight feet above the water line. all of our mechanicals are on the second and third floor and so, you know, we are very focused on resiliency.

>> reporter: from 2005 to 2014, queens saw an additional 31 days of coastal flooding due to climate change. if queens saw a six foot flood which scientists expect by the end of this century, that would put $13 billion worth of property at risk of damage, that's about 34,000 homes. now we asked amazon spokesman what the plans are but he said at this point he cannot comment. lots more, of course, on cnbc.com. back to you guys. >> i live in one of those low lying neighborhoods and i got hit by super storm sandy. we're overdue for a category five hurricane. sandy came on storm as a tropical storm. so anybody not taking this seriously and planning for it is just being short sighted. that being said, is there any chance that amazon coming in and these other companies coming in pressure the government in new york city, the state government and the federal government to start making real plans about flood abatement? >> reporter: they already are,

actually. in this area, they got flooded really badly by super storm san sandy. the city the federal government is working to help new york city with flood resilience, but that's going to be several years down the road and so when you talk about amazon coming in, its really a race to how they can get this area resilient enough for that next storm as you say is likely to hit. >> thank you, diana. appreciate that story. good job. it has been a wild week for the dow with the index traveling more than 1,000 points in just four days. so what could be ahead head to the charts for some answers next.

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. >> the s and p on track for the worst. i is 7 of the 11 seconds are trading in corrected territory the nasdaq is in correction territory. dan is president and technical analyst with stock market mentor.com do you hear me >> that's not dan. >> that's not dan.

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she no dan fitzpatrick >> i thought my beard threw you off. >> it is very good a handsome fellow you are. >> you say we are already in a bare market. you say we are only been up 12 of 40 days abdomnd we are due dr rally but you don't see it coming why not? >> there is a third direction and that's sideways. i think from a short term basis, yeah, as you mention, we are down many more days than we are up many days when we are on such heavy decline you're going to get a little bit of a lift i kind of think that's where we

are now. i mentioned short-term relief, long-term grief. i think we are in the relief stage. but when i say bare market i'm not talking about it in the traditional sense. >> i'm looking at cash >> essentially there's no place to go. it plotted against the moving average. what does it tell you? >> i think it's significant because over the last several years the advanced decline never even dropped to the 200 day moving average that's just the number of advancing issues divided by the number of declining issues in the market when we are at the 200 day moving average this tells me that things have actually kind of reverted to the mean which is

different than stocks just continuing to go up. this is kind of the indicators that are kind of a critical juncture to where if we continue to see deterioration in that line, that could really lead to lower prices but in the meantime i don't want to give viewers the wrong impression i'm not saying the market will continue to go lower what i am saying is that i don't think we are going to get much of a lift, maybe a little bit of a lift i think it is absolutely i'll be kind, wrong. >> i was going to ask you about that you gave me the short quick answer we'll leave it there >> thanks for having me. >> you bet let's get to the news alert in the health care space

hi remember rgs stock down about 40% over the last month. it will be a long way to go. moving onto pfizer, raising list prices of about 10% of drug portfolio. it will be 41 drugs in january most of those would be about a 5 pn5% increase. back to you. >> thank you >> check please. >> time for check please it has really brought the stock down take a look. you know who is benefitting possibly twitter. twitter is up 40%. facebook is down 20% >> and they said i don't see this effecting consumer engagement or advertiser engagement >> it is very early. >> yes it happened earlier this year.

>> and really the way they use it is to interact with other people facebook is still good at that >> yeah. >> we'll have to see what happens on the regulatory front. >> thanks for joining us >> good to have you here closing bell starts right now. have a great weekend everybody >> it is time for the closing bell a volatile end to what has been a volatile week. tech is lower yet again as the chip stocks get slammed. we'll explain why that sector is so important for the entire market plus the pound recovering ground today as the u.k. names a new brexit secretary we'll speak with the man who resigned from that very role this summer about what he thinks of theresa may's