president xi at the g20 and these the next development the market wants a development out of that. >> like pete, i put it on some trades, you know, as we started to hear the speech now i'm taking them off. it's not a market where you stay in trades. >> joe, quick. >> financials, joon-pyo morgan get long. >> guys, good stuff. steve more of you in the next hour which begins now. >> indeed it does, scott thank you very much, folks welcome everybody to power lunch i'm tyler mathisen melissa is here dominic chew federal reserve chairman jay powell wrapped up his speech. >> and rates near neutral and that's what fueling the rally we see. the fed forecasting solid growth and low unemployment his comments come on the back of president trump's latest attack on powell and the rate hikes. >> we are all over the fed headlines from chair powell and of course the market moves on

the heels of them are senior economics reporter steve liesman on the heels of the comments but let's start with bob pisani on the sfloor of the new york stock exchange and bob it feels like happy holidays courtesy of the fed >> it was a remarkable speech, a real tour deforce by chairman powell he said they were close to neutral. a brilliant comment. the whole market lifted, doesn't matter what you look at, 1.5% roughly. look at technology stocks, a little bit better than others, of course. microsoft now the most valuable company in the united states that lifted along with all the other tech stocks. one group i emphasize earlier today that's having a difficult time is the material stocks. there you see the tech spdr moving to the upside material stocks had a tough time on slower growth, stronger dollar, trade concerns we saw all the material names outperform the rest of the market that's significant given how

badly they have underperform there is an example. free port mcmoran. consumer discretionary all the retail stocks also moved about 1.5% again, the whole market lifted here look at virtually anything here and i'll look at some of the industrials caterpillar, another good example of global industrials moving upside. again, very important not only did he talk about being close to neutral, about but about financial stability rings lower than expected here a important point for us here. the financial stability perspective today we do not dangerous excesses in the stock market a lot of people underline this that >> roblt let's go to steve liesman with the highlights of the powell's prepared remarks and what he answered in the q and a session. steve. >> what he said is that rates are low by historical standards. that told you he had more work to do. but then he said how much more work well he said we are just below

the range of neutral estimates unfortunately i have to unpack a bit. let's begin with the range of neutral estimates. we know that is, 2.5 to 3.5% what is just below, a quarter, half but where are we going, the 2.5% part of it we got three hikes to go or high end of it? we don't know that he said on a path on gradual rate increases and we do that balance the risks. what are the risks between going too fast and too slow? and i think the market liked this comment on any preset policy path. they are paying close attention to the data which i know is what kevin o'leary wanted to hear let me show you there are a lot of things that reacted the stocks reacted bonds reacted. let's go a couple of derivatives away from that look at fed prblts interesting reaction you guys are great in the back there. a slight increase in the december probability where did we get that, dom

from the idea that he is saying we need to get carb desh desh we have more rate likes to go a slight decline in june all we have on the horizon is a single hike baked in for next year now we debate to do one in october. what does that mean? let's call that 1.5 for next year what did the fed survey show a couple weeks ago 2 and 3. the number was 2.5 we baked out one quarter-point increase bee still my beating heart if that's worth the 500 points on the dow appear and let's listen to the chairman about neutral here. >> interest rates are still low by historical standards and remain just below the range of estimates of that level that would be neutral for the economy. that is neither speeding up nor slowing down growth. >> there is bill dudley next to the chairman, the former head of the new york fed remember, the thing that got everybody excited back in

october was we're a long way from neutral now just below -- it's like saying the same thing. >> no it's not -- how -- how is that -- how is that almost the same thing a long way from neutral versus just below neutral, there is a vast difference there. >> let's do counting. >> okay. >> let's do counting when he said we're a long way from neutral and you knew at that point in time the fed's mid-range for neutral was 3 and he was at 2.259. well that was the long way np. now we're at 2, 29.25 now he said we are just wloe the range of estimates either one quarter, two or three below. >> it's all relative throe or four quarter points. >> nothing to get excited about. and i think the right way to go. i'm i think the right way to go was to have done nothing. >> said nothing? >> done nothing previously with the outlook for the fed, right. >> let's bring in some other

folks. here are who aren the table with us and remotely as well as we talk about chairman powell's minnesota mark zandy julia coronado is the founder of macropolicy perspectives mr. o'leary. is oshare's chairman and ask mr. wonderful podcast and mr. liesman mr. wonderful as well certainly is here also mark zandy, i start with you because you said today, i believe that you still expect four rate hikes in 2019. you didn't hear that. >> yeah. >> anything that changes that point of view? >> no. no, no i think steve got it spot on he said -- if you read the text of the speech, which he -- actually the way he said it was a little different than the text in the text he said just below the broad range of estimates of the neutral rate steve is right, that broad rage is 2.5 to 3.5. the midpoint is 3. we're at 2.25.

i don't think he changes his mind at all. i think he just presented the language a little differently. and probably did it right because he didn't want to spook investors because investors are already- >> well he did the opposite of spooking he did the opposite of spooking because they are hearing -- they are hearing a much more -- it seems to me a much more gradualized approach, an approach that means that we are closer to what he thinks neutral is i guess we are because we had a rate hike in february -- excuse me in september. but anyway, julie, let me turn to you. >> can i say one thing. >> sure, please. >> just one thing about next year in the four rate hikes. look we're in the 3.7% unemployment rate. if we are growing at 3 and powell said wraer we're at three and the neutral is 2 a year from now the unemployment rate is near 3%. that's going to be very difficult to ignore and not raise hikes in a more aggressive way. >> but he said -- didn't he say he liked where unemployment was.

he liked -- inflation is roughly where the target is. >> yes. >> and we are seeing leading indicators of moderation in growth interest rate sensitive sectors like housing cap x moderating a bit. nothing worrisome. when i i hear when i talks about getting close to the broad range and he emphasized lags in monetary policy. remember he a couple weeks ago he talked about feeling your way through the dark room. what the fed wants to communicates is we might take longer pausing between rate hikes not to signal we are worried about the outlook or at the end of the rate hiking. >> i think the tonic for the market was no preset policy. >> that goes hand in hand with the longer pauses. >> how do we interpret the difference between jerome powell's comments in the beginning of october, his comments now which steve argues may not have been that different. >> they're not. >> just framed different.

>> that is there anything -- is there anything in the data perspective that has changed for jerome powell between then and now. >> that's a great question first of all the comment he made was off the cuff in a conversation in response to a question this was a prepared remark this is more intentional, right. but there have been a few things that have changed. as i noted the interest sensitive sectors have moderated. housing has been weak. or at least. >> oil prices are way down. >> yeah, inflation -- >> market volatility, the correction in equity markets, tightening in financial conditions, widening credit spreads. these are an indication. >> two negative quarters in europe. >> two negative quarters in europe. >> something i never thought i'd have to say, kevin, jump in here. >> i looked at it a tircht way i like the no predetermined course because to me that is the old school way of saying data dependent. >> right. >> i think powell is playing a different card actually. when i listen to that i read he is trying to gauge how to play the trade tariff risk. so with this new direction,

which was well received. and i liked what he said if it's a disaster in january, if we actually impose 25% tariffs across the entire economy which steve and i have been at the time debating of late about the impact of that, it gives him plenty of time to stretch out the next rate hike to wait to see the impact. i argue it's going to take a lot of quarters before the 25% hurts free cash flow so far the 10% tariffs are irrelevant in domestic earnings. i nope the ceos are job owning but i think they are completely absorbed. >> or maybe pull forward on inventories. >> could be. all of these things --way i like about this fed i there is a huge cliff is coming. i will frequent you out if i say this but now i give myself the plenty of room on the rate tab hike. >> he is playing for time a little bit here.

and he needs to. what julia said is things are shifting housing is taking it hard. the other side of that is we expect good jobs and wages to bring back housing or at least help and buffer the -- anybody want to jump in. >> mark let me come back to you with further thoughts. but if i hear your interpretation correctly, the that band of neutrality goes somewhere from 2.5 to 3.5%. >> yeah. >> that means from here. >> you can drive a truck through that. >> you can get 5 quarter point hikes between now and the top end. you think we goto the top end. >> absolutely. i mean, i -- if we are going to a 3% unemployment rate and labor markets are tight as a drum now and wage growth accelerating now. can you imagine 6, 12 months from now the wage pressuring are developing significantly he is doing exactly what he should he says look, i don't know what

neutral is nobody knows for him to say this is data dependent and who he nos i may slow down that's what the fed chairman is supposed to say. >> let me drop this big steaming dumpling in the middle of the table. and that is this if the president is unhappy now with what his chairman of the fed is doing, how much more unhappier will he be if he goes where you think he will, mark to 3.5%, five countpeople five rate hikes between now and this time next year. >> the president is totally irrelevant in this debate. >> really? >> this argument. >> really? >> you can say -- you can say he is irrelevant but the notion -- the notion that the markets are signaling something was not lost on the fed i don't think you can go out and say -- i don't know if you groi or not -- dsh that powell is completely -- has belindaers on on the what the markets are signaling. >> the talking about financial stability and asset prices

>> markets have transmitted the changes. >> we have what kevin and zandy are saying which is this, i think the fed may have gotten out in front of the markets, and even the culture so to speak, in it's the certainty about the need to raise rates. if mark is right, that the economy develops the way he expects. >> right. >> there will not be a question and a doubt as to why the fed is doing what it's doing. >> right. >> if it raises three or four times next year. >> absolutely. >> i think what happened is you have the president saying this stuff and that's where the president mattered was -- you never -- even when you say you are immune from from the politics you don't want to be lamb bassed in the paper or by the president process. wait until you have the 3% unemployment. >> that's what data dependence means. mark has an optimistic outlook with no impact from higher inflation. >> no, i don't. >> twice a day now -- we get it fwis are twois a day. >> you like it.

>> it's very entertaining. he is getting his head squeezed by the president how unique. >> we are watching the twitter feed i wouldn't surprised if there was another tweet, saying finally jay powell licensed. mark i want to bring you back in, sounded like you wanted to respond. >> no, look, i think the president is irrelevant, because, one powell is not paying attention to him because the key elixir to the american economy and all market economies is at independent fed appear and powell is making sure everyone knows he is independent. the second thing is what is the president doing if powell keeps the rates too low that does more damage so it's totally -- what he is saying is wrong on substance and wrong on the message it's just plain wrong. and i don't think powell is going to pay any attention to it. >> it's counterproductive because i think while the fed is immune from politics it's not immune from the question of its independence which it covets

carefully. and the idea you have a president out ut there really raises the bar the president is pushing the fed the wrong way. >> he felt to me extraordinary will i uncle base rating comments he was calibrating here. >> calibrate snood. >> >> yeah. >> calibrated. >> yeah. >> not the president i'm saying -- >> not the. >> nothing can calibrated. >> very deliberate. >> calibration and president trump does not really -- don't work in the same sentence. >> got it. >> but powell's comments felt very calculated to me and calibrated and i can't help but think that somewhere, somewhere in there the president's rhetoric is influential. >> the question is ask after this speech is, does it change anybody's decision on asset allocation because that's when the fed does some credible things. >> yes. >> it has people back feeling better about putting risk on in equities it hasn't changed the rates on credits at all and it doesn't make me want to go out and buy long-term

government debt at this point becausis see bad value there what's happened here is nothing. what's happened here is i stay long equities. and i think. >> you were before. >> i was. >> you weren't spooked by the fed before and not now. >> julia, is there anything out there the market is underappreciating about the outlook going forward and whether the fed has to pay more attention to certain things than others what is that risk that's on the horizon that the markets are not paying as much attention to right now. >> the hardest risk to calibrate in the outlook is the trade situation, not just the chinese tariffs but the whole area of uncertainty that makes it hard to plan cap x. we have had earnings calls talking about localizing supply chains, a longer term replanning of global supply chains. that would be more material from a macroeconomic standpoint in terms of profit margins and cost structures so it's certainly something to watch. >> so dream a dream for me dream a dream.

what if on saturday at the g20 the trade thing is lifted, i got the fed in the rear view mirror i got trade they make a better -- what do you do then. >> then you are happy you stayed long into the weekend because if you take off risk now and there is any inkling of decision we're not putting the 25% tariff in place this market goes up 10 to 15%. if they came to an agreement which is kbop appear that's 20% up zblood it doesn't need a deal just an idea there is a deal. >> you are eat getting skeptical. >> i'm skeptical i think you're right the market would react to a signal but have to be very cautious because we have had lots of signals both directions only to see things turn around. >> i think kevin told us to take a long weekend. >> i think the biggest challenge if you manage institutional capital this friday, in risk on risk off into the weekend is tough. because what happens in markets if you're an institution you get 80% of the returns on five days

of the year. if you more the there, if you are no the there for the move and if this moves ends up a handshake with a lot of good vibes coming out, the market is going up and you're going to miss it. you won't put the trade back in. >> here is the irony in this the irony in this is if the stock market -- if the stock market keeps going up. >> yeah. >> then much less likely we get the trade deal this is the trade war is going to escalate so appear and you're getting a hike. >> finish yrp thought, mark. >> no i'm saying i think the president is actually focused on the equity market to decide how much he is pushing on the trade war. i mean at the end of the day if the stock market goes down he is going to call it quits he is going to figure out a way to save face and declare victory and move on. until that day, until the market is down and stays down he continues to push on the trade war. >> never in my life did i think i could spend 19 minutes talking about the fed this which

weious did mr. o'leary, mr. liesman, julia, mark thank you very much, kevin we will see you later i'm told. >> thank you >> all right well, apple rallying today the stock on pace for its worst minute month in a decade fierce about iphone sales fueling declines what you do with the stock at these levels plus trouble at tiffany shares losing luster on pace for the worst day in five years. investors worried about the sales of the little blue box but not everyone is concerned. we are speaking with one analyst who thinks the stock is going to $150 a share and president trump ripping into general motors again, this time over the bailout, shares under pressure again the fallout straight ahead and we are all over this fed fueled rally this hour the dow having the best gains in three weeks at this point. trading back above the long-term 200 day vi aramongvege with we have more keep it right here on "power lunch."

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and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. >> apple is bouncing back today along with the broader markets this despite facing the possibility of new tariffs on chinese imports. this would be the latest headache for apple the stock son pace for the worst month since 2008 down nearly 20% in november. how worried should investors be about the headwinds? let's bring in our analyst who is lowering his price target and daniel at newberger berman the firm owns apple shares

amid i start off with you. we start off with the g20 this weekend. the outcome of this could directly face apple. if the president decides to go ahead with the neck round of tariffs. going into the weekend how would you handicap the risk reward in terms of being long apple. >> boy, into the weekend that's way above my pay grade to figure that out. >> whatever problems -- whatever problems apple emerges with on monday morning will be the problems they face the next few months you can look at that way too. >> yes, no, listen, if there are tariffs going forward, let's say it's 10%, it would impact apple eps 507 cents to a dollar. that's the the financial impact. i would argue it's broad impact for a lot of other companies but financially it's another negative for apple from a data

point perspective if the president goes forward with the discussions he had the "wall street journal" about tariffs on iphones. >> dan, you have a longer time frame in that your firm owns the shares you are looking down the road here but in terms of recent data points we have gotten for apple warning on the fourth quarter, moving away from unit sales reporting. and facing tariffs what are some of the catalysts you see for the company given the really -- really given it's given investors things to digest in terms of the way the investors look at the business and changing the way they low back at demand for products. >> first and foremost, melissa that the products are well-regarded. we acknowledge the concern about nunts in the near-term stepping back, though, really is the magic about apple is the ecosystem. if we think about the company historically, creating the ipad, then the iphone and empowering others to build on top of them

can you see that from the development community. apple has paid out over $100 billion over the past ten years to developers. and the services opportunity we think is underappreciated. the services is growing over 20%. newer areas like wearable, the apple watch is growing over 50%. so if you put everything together this is a company we see kinning to innovate, continuing to bring customers into newer areas we see things like augmented reality changing the experience and so we see a lot that we like. >> i get the longer term picture and the notion apple wants to be viewed as a services company but i'm curious in your model when you try to forecast forward the services revenue and trying to determine how cigarette and rebust the ecosystem is, isn't a key part of that the number of units apple has sold, i mean the number of units that underpin the ecosystem if you saw the big

decline in units wouldn't that make you question the revenue they bring in via services it does make us question it. >> i mean wsh first amin then to daniel. >> sure. >> you know, you are right listen what i would say the argument for apple is not about the units. the install. if units decline dramatically, call it 5, 10% then the install base starts to shrink. that has negative effect to the variables to the services side but as long as the install base is stable then the increased monetization of the ios ecosystem remains a good bold perspective on the name. but what to watch for does the install base decline which i don't think you have data points of that happening yet. >> daniel, one of the things i didn't think i would see this soon microsoft in terms of market capitalization nipping at the heels of apple you follow or own both stocks. which would you buy today for a

long-term hold >> today, tyler we would buy apple. we like both stocks as we talked about in the past. microsoft is bringing customers into the cloud with key platforms like azure. but we think in the nearer term apple has been overly punished due to concerns about units. and as we think about the the apple story given the broadening of the revenue drivers we think for investors and for your viewers prepared to take a longer term, a one to two-year outlook that apple remains attractive at current levels. >> thanks, both of you and president trump kinning his attacks on jerami medical certainty today after threatening to cut subsidies to the company. we will fact check the tweets and explain what could really happen and we check the markets as the dow sprints higher thanks to the comments from the fed chair. boeing, united health leading the way.

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continuing his attacks on general motors this time via twitter processle ylan mu y is in washington with a look at the comments. >> dom, the president venting frustration in a series of

tweets and hinting the long rumored auto tariffs are closer to reality start going this tweet if fwm doesn't want to keep jobs in the united states they should pay back the $11.2 billion bailout that appears to be a reference to the bailout during the financial crisis that began under president bush and continued under president obama. the government plowed $50 billion into the kpp and 11.29 billion was the eventual loss the and president trump tweeted about the tariff on the small trucks called the chicken tax dating back to the 19 sixth europe wouldn't grant access to u.s. chicken producerers we retaliated. and that tariff on trucks stands today. trump said if the same tariff applied to imported cars and trucks just trucks gm wouldn't close the plants he tweeted the president has great power because of the gm

event it's studied now that breathes new life into speculation that auto tariffs are not far off. the white house appeared to be preparing to move forward before thanksgiving but held off amid the holiday week the escalating tensions with mcand the upcoming g20 summit. trump is scheduled to meet with the japan prime minister and angela merkel during the summit. perhaps the conversations will tilt the scale >> back to you. >> ylan, thank you. >> coming up what are consumers spending on? from tiffany results doesn't seem to be expensive jewelry we will get the view on travel we will get the view from intercontinental hotels. on with homes, with mortgage tites high are we a renovation naon are we on the road or at home? following the money on "power lunch" next. so i think about mouthfeel. i don't think about the ink card. i think about nitrogen ice cream in supermarkets all over the world.

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( ♪ ) we even have live sports and news channels. ( ♪ ) and your free wi-fi will start shortly. enjoy your flight mr. jones. world's best inflight entertainment. fly emirates. fly better. let's get a check on markets. stocks surge following the comments by jay powell earlier he says rates are close to neutral, just under is what he said that's fueled the rally. we see the dow having the best gains in three weeks trafg back above the 200 dap

moving average right now up by 500 points ing boeing united health and caterpillar leading .salesforce and adobe leading the s&p 500. transports on the move trading above the 50-day moving average for the first time since october. alaska air fueling gains let's get to sue herera for an update. >> thank you so much melissa here's what's happening. the justice department dieting two iranian man for exporting hospitals. acre the charges the two would enter malware in computer system and demand ran some money in bitcoin to get rid of it the claims to have edited a baby's genes face questions and criticism as he spoke about work at a conference in hong kong the scientist is at the center of an ethical storm about his

work >> those people they need help for millions of families with a inherited disease or infection decease we should show compassion to them. and here at home starting today burger king is offering a bone shaped treat for your dog with a flame grilled taste for your dog available for free, exclusively through door dash when you order a whopper sandwich i think he would rather have the whopper. that's the news update this hour ty, back to you. >> all right, sue thank you. >> two big retailers reporting today. tiffany tanking on results shares of dick's sporting goods. two companies about as far away from each other as you could get. dicks staging a comeback courtney reagan joins with us

more. >> different results dick's sporting goods turned in a good report. but shares have been both negative and reaction in the session. sporting good retailer turning in stronger than expected profit, driven by better expense management, a weak earnings boat not strong sales comparable sales fell short and largely negative margins did improve as dick's sporting goods sold more private label goods. but ecommerce growth slowed to 16%. the retailer raising the full-year forecast with a quarter to go. shares of tiffany sharply lower. on pace for the worst daily performance in four years after a tepp i had quarter with in line earnings and lower than expected revenue the luxury goods noted asian tourist spending globally though sales in the americas asia-pacific and japan grew. domestic sales were strong everywhere but europe. that was flat. tiffany strategies showing

forward traction they like that now the jeweler reiterated the prior full year earnings forecast but fell below analyst's estimates. tiffany gaining some traction. >> where are the the tiffany shoppers spending. >> local aspen something strong in all of these -- in most of the markets. europe flat. but when asian tourists travel they don't spend they were talking about how in general tourist numbers were down in hong kong. if you have lower tourist they spend less they can't quite figure it out it was the first quarter they saw a change a lot of questions doesn't seem like they have a lot of answers and don't know if the trend continues. >> thank you courtney. joining sus dana tellcy from tellcy advicery group. let's bring back kevin oleeria dana, we start with you because the news of the day, tiffanys, is it a situation where the

luxury side of the market really is as weak as the tiffany results and the subsequent stock move would bakt. >> >> i think what's happening with the luxury sector it's for the just tiffany but many luxury goods names have seen a deceleration in the chinese consumer spending a i broad. you see them spend more on mainland china and increases there. but local haves to make up for the weakness of the luxury chinese consumer not shopping abroad that's what you see. and we're seeing it almost across the board. >> so dana, if that is the case, then where is the strength from a relative standpoint in the retail spectrum and what types of stocks and companies should investors be looking at more. >> i think a couple of things. i think obviously luxury always has the pushes and pulls you want to low back at these names when the stocks are down i think we are kinning to see good growth in the off price sector look at burlington results up 4.4%

that was a solid number. and frankly a good number. tink you have seen other names out there where we see certainly in the apparel world a revival of apparel good numbers there and acceleration of comps. urban outfitters have acceleration of same store sales gain tomorrow night pvh with tommy and calvin klein doing well. we had a good black friday weekend. i think the holiday season, it's on track for the 5% plus type of season sales gain. >> kevin, let's bring you into the conversation dana has set up the bottom's up conversation we are having talking about specific stocks and companies within the retail environment. you have a very unique perspective on small businesses and the consumer, consumer products companies on the small business side. how many companies are you now involved in through shark tank are you invested in and what exactly are you seeing from a

consumer standpoint with regard to the health and overall picture for the spending path. >> i have 36 companies with multiyear data that are defect small companies particularly the dealings on shark tank and have been doing a decade now are primarily 99% sellers of services and goods in the u.s. they don't do business abroad. to me here a fantastic index to determine what the consumer is thinking they are so diverse in terms of the service and products everything from cupcakes to high-tech back office wedding registry business. you can't get more diversity we are having the best quarter we have ever had in ten years right now. better than last quarter and so i see no evidence wh whatsoever with a slowdown of the american consumer. i get why tiffany rolls over when half of the items come from chinese and russian and asian buyers who are checked out of town you see that in real estate cities like boston and new york.

but for the average consumer in america they don't care about tariffs or trade wars or china they are having a fantastic outcome. >> they haven't felt the impact. the merchandise in the store in large part is not merchandise brought in under current tariffs. it was merchandise brought in prior to when the tariffs went into effect. >> it's a fair comment. >> dana i want to go back to you if that's the case let's say the 10% tariffs exist on the first round of goods and we get out of g20 and detente. what does that mean for the next round of vrnd brought in under tariffs. >> bun of the things kevin pointed to is right. companies are in stocks and stocks in companies. companies are based off and on the future, the future growth rates. i'm concerned about the growth rates in the first half of '19 and 2019 given the third quarter being reported kfb a high water

mark, given we are having tougher comparisons with wage benefits that came through tax reform that came through and a perfect weather that was out there. so when we look to 2019 there could be more margin pressures, including freight than what we had in '1. the skourm will have a healthy holiday season it's all about next. with 10% tariffs, that increase could it be a 3 to 4% increases on prices that goods compacted that's what i hear. >> dana thank you for that dana tellcy of the tellcy advisory group kevin o'leary of the oshare as etfs. >> coming up the health of the economy and consumer through the travel industry. intercontinental hotels gives us the report and stocks are soaring right now. we are all over this powell rally. don't go anywhere.

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fed chairman jay powell is forecasting continued solid growth for the u.s. kpee that sounds like good news for the travel industry usually first to feel the pain during a economic downturn backup but our next guest isn't worry let's bring in the ceo for the americas intercontinental hotels group. great to have you with us. >> thank you melissa. >> where are you seeing the most demand in terms of the kind of the traveler you are accommodating this these days. >> melissa, if you look at

rising gdp in the u.s. and globally, low unemployment, rising wages, these are really good tailwinds for the travel industry and hotel business especially at intercontinental hotel group in the u.s., europe and asia and china we see rising demand look, in this benign economy we are executing our strategy growing our business we are over 5,500 hotels open around the world today, another 1,800 under development. over 7 now hotels welcoming travelers around the world and i think that that's exactly how we are going to continue to scout our traeg. >> are you seeing demand for business travel paying high are rack rates than the consumer >> yes, when you have low unemployment business is hiring, they're putting people on the road we have high business travel good leisure travel. in the united states we have set records at labor day, memoryual day, thanksgiving, fourth of the july on travel substantial internationally we have had mid-to single digit

growth of international travel and that is really a good foundation for going into the close of the year into nextier for global travel patterns. >> what sort of hotels are you expanding? i'm trying to get at what does the consumer want these days from the hotel do they want something lower cost, fewer frills kind of travel or the luxury at this point in time in the economy. >> great question, melissa we cover the full range of travel from luxury to mainstream our luxury brand intercontinental hotels is the largest luckry brand in the world. over 200 hotels. we just opened the 200th in shanghai earlier this year we have another 60 under development around the world our hotels and restaurants which we ainquired in the united states a few years ago where i think you people like to stay, it was the largest and best boutique lifestyle hotel brand in the united states we have taken it global. we have 22 hotels. >> are you adding to higher

end -- when you are log at how many rooms are added, right, within the intercontinental family, what sort of rooms are they >> it's -- it's the full range and our mainstream brands, holiday inn, halladay inn those are our largest brands we have the largest pipeline of development of brands in that world. it's the full gamut from luxury to mainstream. >> thanks a lot for sharing what it's like in the hotel industry right now. all right. with rising mortgage rates making houses harder to afford, will more people just decide to renovate instead if show, which stocks could be the beneficiaries? we'll get names coming up next after the break here on power lunch. this isn't just any moving day.

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product sectors? is it really people doing what i'm doing, renovating my kitchen? >> sure, so i think there's some of that certainly. but i think on the stocks, keep in mind there's been a lot of pain this year a lot of stocks are still down 30%, 40% plus. what you're seeing is a little bit of a relief rally. certainly the home improvement side is more stable, more resilient than the new construction side. >> what is whirlpool reflecting? is it reflecting tariffs that were put on foreign made appliances >> it is with whirlpool specifically you had some of the safeguard provisions that were put in place to protect them against the korean manufacturers which would have helped, but then most recently some of the newer tariffs are offsetting that. i think people -- >> one is on steel >> one is onsteel, one is on components. >> where does this go from here? >> i think you need to tread

carefully. some of the concerns around housing, a lot of investors feel like there could be bleed into the home improvement side. as long as home prices remain positive, that's key you have to be wary of the risks you're seeing develop in the existing home market and the slowing prices. >> do you have favorite stock or two? >> we do the two we're most positive on right now on core building products, fortune brands, which produces plumbing, cabinets, doors. actually on the heavy side, you mentioned summit, but i'd also say vulcan materials >> aggregates company? >> real sweet spot for them. public sector spend kicking in good place to be. >> should we be seeing an upgrade cycle of some sorts? if the housing boom, if the peak in housing was ten years or ago or so, 11 years ago, should we see a replacement cycle when it comes to appliances and things around the house all those new homes that were

built around that time i would imagine need fixing up about now? >> that's a great point. we certainly think that there's room to go on home improvement. part of it it's the replacement cycle. part of it is look at the incredible amount of home equity that's been built. >> we've been told we're sitting on record amounts of home equity right now. how confident are you? >> it's a good question. what we're seeing is the cash out portion is actually starting to slow. it is rate sensitive that's not the only avenue to tap into it's become more expensive, but it is true that we are at record home equity levels you can pull out a home equity loan it might be a little more expensive to do it through a cash out refi, but you could end up saving if you're not fully

drawing down and trading up to that much higher rate. so i think it's something that could moderate the growth a bit, but it should still -- the home equity should be a powerful tailwind. >> thank you very much, mike, we appreciate it. >> thank you >> mike is with rbc capital markets. stocks are soaring following comments from fed chair about interest rates we're at session highs an intended consequence, how trump's tariffs are leading to rotting crops across the country. the second hour of power lunch starts right after this break.

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i'm melissa lee. a massive powell induced rally, 500 points on the dow right now. now trade becomes front and center as president trump and chinese president xi get ready for their big showdown at the g 20 what's at stake for the markets. new calls for regulating tech once again on capitol hill. what could regulation look like? the trade war forcing soybean farmers to leave their crops rotting in the ground. the president is ramping up

the rhetoric on general motors, the automaker is caught between a rock and a hard place. the road ahead for gm, power lunch starts right now and welcome to power lunch stocks in full rally mode after fed chair powell says the current interest level is just below neutral and the dow and s&p have gone positive for the month. the dow is now up 1,000 points in just three sessions it lost a little over 1,100 last week right now you can see those dow industrials up by 531 points ten of the 11 sectors right now on the s&p 500 are higher. leading the dow higher, united health, caterpillar and microsoft shares, a good day as well for some of the tech players. look at apple, netflix, amazon, alphabet all up more than 2%.

tiffany, bucking the trend, sinking a sales missed estimates. burlington and wayfair are soaring after reporting positive sales numbers. we begin with the event investors were listening to very closely today. boy, did they hear something jay powell speaking just an hour another. steve leishman is here with the headline. >> a little interpretation if you don't mind fed chairman jerome powell igniting this market rally, but saying that the fed is not on a preset course to raise rates the fed is just below the range of neutral estimates listen closely to what he actually said. >> interest rates are still low by historical standards and they remain just below the range of estimates of that level that would be neutral for the economy. that is neither speeding up nor slowing down growth. >> okay. first a fun commentary here, trump 1, powell 0.

what's a trump tweet worth 300 points on the dow. apparently as powell leaned in closer to the president's view on interest rates. more serious commentary, pantheon writes, not as dovish as the markets think so the top of the target range is only one hike away from the bottom end, but it remains three hikes from the middle and five from the top powell affirmed the fed's plans to eventually raise rates. here's what happened to the futures market, take a look, 82% probability right now of a rate hike in december that actually went up. and a couple percentage points down for june, which is still seen as the first hike of 2019 the market is getting more pessimistic or i get optimistic in this case, that there will be a second hike and maybe as late as october powell also said, no major asset

cl cl class valuations are in excess of benchmarks. he doesn't see dangerous excesses in the stock market. >> are those differences in that polling, do you view them as statistically significant? >> they're actually pr probabiliti probabilities. sorry i wasn't more clear. when it was a survey, we tell you that i do two different things and i understand -- >> here's my question, why was the second tweet more serious than the first tweet even though the first tweet said trump 1, powell 0? the markets are telling you that powell is coming around to the way the markets are thinking. >> melissa -- >> and that was the line of thinking that the president had as well. >> he also said, it gave stocks a badly needed confidence boost and might get the president of his, jay powell's back, that's what chris also said. >> he added that. i thought it was more fun to talk about the political side of things about what he said about

rates. you and i argued about this, i think we'll continue to argue, was it a real difference of policy or was it difference of presentation of the same policy? >> directional difference in policy it may not be an actual big difference in terms of the empirical -- in terms of the actual numbers directionally his tone seemed to be different from just a month ago. >> let me find a way to agree with you this is fine i go into something thinking the chairman is either going to uphold or lean against the market's view. let's be clear that the market had already priced out a march rate hike and had already gone to june as the first hike, and had already baked out almost a third one. so what he did today was at least affirmed this more dovi dovish -- >> come around to the markets thinking. >> he's come around to the

markets thinking i guess i could have said jimmy 1, powell 0, as in jimmy graham. >> there you go. investors seem to like what they heard from the fed chair as stocks soar. for more reaction let's get to bob at the new york stock exchange. >> except for defensive groups, the whole market lifted 1.5% two sectors, particularly strong on powell's speech i'm talking about big global technology stocks, boeing, caterpillar, everything up 2% to 4% utx, that was the lone exception. tech was strong at the outset, even before powell's speech. salesforce had a terrific earnings report. everything else lifted another 2% or so on powell adobe, juniper, microsoft, apple on top of that i mentioned not participating in the defensive groups consumer staples were not part of the rally

they were part of the defensive rally we saw a couple weeks ago. i thought this was a remarkable speech not only did he comment on being close to neutral on the fed funds rate, but he also talked about very moderate stability risks. four he headlined excessive leverage in the markets that was not a broad buildup. the funding risk, when banks rely on funding that can rapidly withdrawn. he said that was low household and business debt was not a systematic threat to the markets. he specifically highlighted no dangerous excesses in the stock market that was rather remarkable pretty moderate commentary on the risks out there. remember the two big risks that we are dealing with, aggressive fed tightening that risk is lower today the other one still out the we haven't resolve, trade wars. everyone is hoping something might happen over the weekend. look at the s&p. we bottomed out a short while ago and we had a series now --

they're trying to start moving this up a little bit maybe a couple more days we'll get a series of higher high and lower lows that's what people are looking for. they're looking for the bottom a couple weeks ago in the market to be the real bottom. back to you. >> thanks very much. so did jerome powell put the bottom in for the market is that jay powell put in, is the speech the start of the santa clause rally let's bring in the managing director of capital markets at direction investments, and also the managing director with w webbush securities some traders have said it's positioning, some traders got caught short ahead of these powell comments. are you seeing that kind of activity in the funds that you guys manage that take either directional views or leveraged views on the market? >> i tell you what, i saw some performance in funds like consumer staples and utilities this morning

and santa claus came to town a couple hours ago with some of the slightly more dovish talk. now we're seeing a rally in some of our bull tech etfs and some of the growth sectors are taking off after some of these announcements. i think that the information that jay powell came out with that seemed to suggest that we're closing to neutral really helped buoy the markets up it's one less bit of uncertainty that traders are looking for. >> does that echo with what you're seeing on your end of things are we in fact poised to resume what is seasonably a strong time for the equity markets it didn't feel that way over the course of the last six to eight weeks? >> it's been bubbling up for the last few days. there were a couple of articles earlier this week talking about how the fed might be changing course there was comments from the st. louis fed yesterday or the day before, once again echoing this sort of well, you know, maybe we're not going to continue this pace much further. you know, they've got a bit of a

problem. the bank of japan is still pedal tool the metal the ecb is still pedal to the medal. you've got interest rates a fraction of a percent elsewhere in the world you've got central banks that have significantly larger balance sheets than the fed who are still very, very aggressive by their own hand is the fed going to invert the yield curve? you've got the ten year at three, a little over three because there's rampant buying from people who live in a world where their interest rates are .3% or .2% 3% is a very good rate if you live in that world i don't see the fed actually inverting the yield curve on their own and creating a problem that way so this, to me, is something that's been in the works for a while. yes, it's good news and yes, it probably leads to some kind of santa claus rally. >> sylvia, the fed chair is a subtle and smart man

he clearly was signaling something today. maybe he didn't intend to signal the stock market to go up 600 points if there is a signal that comes out at the xi/trump dinner, what would you expect the market to do and for how long? >> the two major forces that have been sort of pulling the market back and instilling feel in investors and, you know, giving us some risk this month have really been the fed and the second thing has been trade wars and trade tariffs. i would expect that if we get positive views from president xi and president trump coming to some sort of conclusion, you know, it ends up being good for both china and for the u.s i think the market continues to rally into year end. then i think we go back to slightly slower growth into next year, but positive earnings. maybe high single digit growth in equities versus a potential faster fapace pull back if we gt

bad news and increased tariffs on the $200 million and then perhaps additional tariffs pass at the end of the year i think that would set the markets back. >> in terms of sectors you might want to be in, it sounds like you think financials and housing could be protected sectors in the fed in that you think that the 10 year yield is grounded because of what's going on around the world so that could protect mortgage rates you think the fed is not going to allow the curve to invert, which is good for financials >> it would be good for financials you know, the screens we've been running recently show some really inexpensive small cap stocks there are a lot of sort of russell 2000 populated companies that are trading at 52 week lows i mean, everything has gotten the focus back on big tech, on fang again if you look around at some of these small cap $200 million market cap companies that are trading literally at five year

lows right now there's a lot of value if you go shopping for it. that's a smart place to look right now. i would stay away from these big popular growth stocks that are trading at triple digit earnings you could find things that aren't growing as fast pretty darn cheap stocks out there. i don't see a lot of excesses in the market either if you look at all cap levels in the market there's a lot of very cheap stocks out there. >> thank you both. all right. coming up, the la auto show in full swing as the president kicks into another gear with his attacks on general motors. we're live in la with how it's playing out out there. we've fwagot a look at hot new wheels. investors are hoping for a trade truce between the u.s. and china. president trump and president xi come face to face in two days.

speaking of trade, the ongoing dispute putting one group between a soybean and a hard place take a look at the dow 30 heat map boeing, caterpillar, united health are leading and only four stocks, proctor gamble, utx, depont ad dupont and verizon are in the red. i am a family man.

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welcome back to power lunch. amid all the controversy over general motors' job cuts, automakers are converging at the los angeles auto show. we're live there right now phil, we're going to get to you, to what's behind you over there in just a minute we have to start with the latest on general motors. i would point out, shares are right now at their session highs. they were in the red but are now fractionally higher in this market rally as well. >> reporter: they're under pressure because of one of the tweets that was sent out by the president. we're not going to read all of it, but the part that really stands out is he writes the countries that send us cars have taken advantage of the u.s. for decades. the president has great power on this issue because of the gm event it is being studied now.

just from point of reference here, people ask me where are we getting our vehicles from? take out mexico and canada because of the new trade agreement there, take out south korea because of the trade agreement. just japan and europe, which are really the two areas where we could see the president try to invoke some type of tariffs. you're looking at 15% of the u.s. auto sales. here is the ceo of volvo talking with us earlier this morning about how devastating new tariffs would be from europe. >> that would really hit the volvo business and the whole automobile business. i think the losers will be the consumers because long term cars will be more expensive and of course employment. >> reporter: and as you take a look at shares of general motors, we can't stress this enough stick to a trade policy. once you have that, then we can adjust and don't add anymore tariffs. as we know, the president often has his own ideas on this. guys back to you.

>> gm faces another tariff industry the threat of taking the subsidies away i couldn't find an actual numbers had gets for electric vehicles manufacturing do you have a sense of what that could be >> reporter: the manufacturers don't get subsidies. what they do get to use are federal tax credits, $7,500 per vehicle. that goes to the buyer in other words if you go in to buy a new chevy bolt you are allowed to write $7,500, it's a tax credit when you file your federal tax return that helps the automakers say look, the actual price is going to be $35,000 instead of $42,000. so that's the difference that you see there in terms of incentives. >> that would apply to any company, wouldn't it, not just general motors >> reporter: correct gm's incentives are phasing out next year. >> yeah. as are all the automakers.

phil, thank you. actually, we're going to bring in jessica caldwell, who is also at the auto show along with phil. hopefully the tent will lighten up and there won't be as much noise. but jessica, thanks a lot for joining us i was just asking phil about the subsidies. gm does say that the incentives could be eliminated or exhausted which may negatively affect our ability to sell electric vehicles at high enough prices to be profitable it doesn't sound like they're talking about the federal tax credit, which is going to phase out anyway and gm for its part, has almost reached the magical number of 200,000 to be sold under the tax credit anyway. that's definitely going away so what are we talking about when we talk about subsidies >> i think that's where a lot of questions really surround. what are these threats that he is talking about is he talking about -- you know, he mentioned briefly about the electric vehicles. is he -- he made reference to a

chicken tax, which was going to affect midsized trucks it's not clear as to what -- when he's threatening about the subsidies, what is he referring to if there are these subsidies, how is it going to affect the other automakers is he going to punish ford which i would imagine falls in the same boat as general motors being an american automaker. >> that's the thing. when we're talking about potential tariffs, that's going to affect every automaker, right? it's almost impossible to just single out general motors in terms of the impact, the negative impact. >> right that would be impossible there is not just something that's going to affect general motors and nobody else i think as an industry, they're just going to have to think of a policy that's fair to everybody or not fair to everybody to single out general motors would be nearly impossible. >> we want to switch gears and talk about jeep and its big

unveil what are you going to show us? >> reporter: well, we'll show you the new jeep gladiator as they tear down the tent here they showed it about 45 minutes ago. they unveiled it if you're looking and saying is that a pickup truck? it's a combination of an suv and pickup truck think of an suv with a flatbed jeep has done this before going back to the late 40s all the way through the early 1990s they had a gladiator version of a pickup truck. look, they believe they've got a hot brand with jeep and trucks put it together and they expect it to do well. >> i don't know. >> we're all looking at it like what is that >> the suvs keep getting bigger and bigger i hear honda is coming out with a bigger one than the pilot, is that true? >> yeah, a little bit smaller than a pilot. >> reporter: smaller than the pilot, it's not as big. >> something between the crv.

>> is it a crossover or what why would you need that? >> reporter: well, it's a difference between a crosover and an suv we're to the point where we're saying it's bigger than a bread basket and you'll have to guess what the size is all these categories, it's hard to say one is a suv these days versus a crossover. >> thank you very much, we appreciate it. we'll leave the light on for you. coming up, the transport is having a good month, up more than 5%. a look at what that says about the strength of the broader market and whether now is a good time to buy that group trading nation comes up next as we head to the break, a look at financials that are rallying in today's session morgan stanley, citi, american express leading. more power to you. coming up. ou offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee?

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and three: these are the only medicare supplement plans endorsed by aarp. learn more about why you should choose an aarp medicare supplement plan. call today for a free guide. welcome back to power lunch. it's time for trading nation transports soaring, up more than 2% and extending their rally over the past month. check out names like alaska air, jetblue united and csx could this be signaling a broader market rally

first of all, do you think this move into transports is sustainable on some level? would that be kind of a -- work in the favor of the overall market continuing higher >> i think it does we all know about the dow theory whenever they're both falling, the dow jones industrial average and the dow transports are falling in tandem. that can be very concerning. we saw that in october they're falling very hard. they both bounced back a little bit earlier this month if you look at the chart on this, however, the dow jones rolled back over and made a key lower low, but the transportation index did not it made a much higher low, led by a nice bounce in the airlines and the railroad stocks. if they can follow the lower low with a higher high, that's going to tell us although the economy may slow down in 2019, it may not be as bad as people were worrying about in october. it should be very bullish for the market remember, the auto stocks are

not part of the transportation index. so just to make sure people know that. >> oh, yeah. just airlines, railroads and truckers for the most part and air freight, things like that. chad, maybe it's a good signal for the market what about the actual investment merits of some of the names inside the transport >> we're still optimistic about the transports there's one that came down quite a bit over the short run union pacific. we like this company a whole lot over the next 18-24 months it has very low debt it's consistently grown, consistently profitable. we think the dividends are going to continue to increase. the united states is growing in a quite vibrant manner over 3% plus gdp handle. that should sustain our performance for the transports >> all right yeah, i guess this growth scare, if it's actually past, it should be good for the railroads. thank you for joining us for more trading nation head to

our website or follow us on twitter @tradingnation now to sue herrera for a news update. hello, everyone, here's what's happening at this hour. afghan officials say at least ten people have been killed and 19 wounded in a coordinated attack by the taliban that targeted a security firm in kabul. a suicide bomber detonated his explosives before other insurgents started a gun battle. first lady melania trump taking her message about america's opioid crisis to college students in lynchburg, virginia she called it the worst drug crisis in american history >> opiate addiction is an illness that has truly taken hold of our country. according to the centers of disease control and prevention, more than 130 people in the united states die each day and on a much lighter note and a bigger note, take a look

at this guy. it's australia's biggest steer he's named knickers and stand around 6'4" and weighs over a ton. he obviously towers over his fellow members of the herd not only is knickers gaining popularity on social media, he's pretty much a star, he will also get to live an elongated life because his owner says knickers is too heavy to be put through a processing facility. guys i'll send it back to you. apparently he's a role model for the herd. >> it was one of the first stories i tweeted out this morning. i saw the pictures of knickers the cow, and melissa didn't believe how big knickers was. >> he's huge. >> i can't believe he's going to live an elongated -- i immediately thought how many steaks could knickers make he's huge. >> look at the size of him. >> he's quite -- >> a lot of hamburgers. >> should we go full brian sullivan

he's udderly huge. should we hoof itout of here. >> you're really milking it. >> i hope you're watching this right now. >> keep going. brian is on line one anyway, he's a cutie pie he's got an enormous following on social media and his owner was unaware of it. he doesn't use social media, so he kept getting random calls and e-mails. >> knickers is big. >> big knickers. >> thank you very much. >> see you, sue, you better get out of here. coming up on the show, t minus two days until the g 20 meeting. will the u.s. and china finally reach a deal on trade? a look at what's at stake and what investors and businesses are ehoping to hear power lunch is back in two minutes.

welcome back to power lunch. a big rally on wall street following comments from fed chair jerome powell suggesting that interest rates are near their neutral level. the major averages are having their best day enthrin three wes the dow is up by 520 points, up 2% the nasdaq is also up. technology stocks, one of the etfs that watches those names, the ticker xlk, on pace for its second best day of this month. you've got salesforce.com, juniper networks up by 4% or more melissa, a big day for

technology. the g 20 summit kicking off this friday, investors are hoping for positive news on trade between the u.s. and china. >> going into g 20, expectations have already been brought down due to recent comments from president trump and larry cudlow these comments are posturing and expects a high level of agreements to be carved out between the two leaders, setting up for a potential market rebound. the shanghai composite has dramatically underperformed the s&p 500 in 2018. down 20% an agreement could push chinese stocks up 4% to 5% hsbc says it's difficult to see a deal being struck that would put all tensions to a rest a tariff increase could provide a little more time for negotiation, though experts do not expect clarity to emerge for

many more months, which means the trade dispute will likely be an overhang for the market well into 2019. the trade dispute has resurrected fears of a global slow down. the imf expects china's growth to slow in 2019 and u.s. growth to go from 2.9 % to 2.5%. let's bring in christopher smart and dan dimico welcome back. >> nice to be here. >> great to have you both here dan, let me start with you i mean, chris let me start with you, i'm sorry do you expect the rhetorical

riastat? is that what it will take to get the market out from under this cloud? >> meetings like the g 20 are highly planned events. when you get that many egos in a room, nobody wants anything to be spontaneous but -- >> or a failure. >> usually. >> but i was about to say we've learned i think from president trump that he likes a little spontaneity. i think it's not clear what he plans to do until he gets in the room i think the personal chemistry is important to him. as we learned before he likes to have a good meeting with some of his counterparts it's entirely possible that we could come out of this meeting, inspi in spite of the rhetoric you've seen going into it, with a truce. it's not going to solve the problem as you pointed out fundamentally structural differences between the u.s. and chinese companies will take years to overcome. there could be a cease fire. >> before i turn to dan, let me

ask what the elements of that cease fire could be. the chinese might like to see us postpone raising tariffs on $250 billion of goods from 10% to 25% that might be one thing. not putting an additional tariff on $267 billion of additional goods. that might be another thing. what would the u.s. like to get in return for a ratcheting down of the rhetoric? what could china say. >> our list of demands to china has been consistent through president trump, president obama, president bush, all along the way. no more subsidies to certain parts of the economy an end to forced technology transfer, an end to the theft -- >> lower -- >> nobody's going to commit to that what could happen is an agreement to set up a commission to study the issue that would lead to, you know, a delay in our raising our tariffs. >> dan, you've been very steadfast on this issue and clear. what would you like to see come out of this weekend?

>> listen, what i would like to see and what we will see may be two different things my opinion is that president trump will stay strong he is definitely committed to this issue it's a much bigger thing than trade. i think people are beginning to understand that. the issue with china is way past just a trade issue trade is just one area that has got the ball rolling to hold them accountable for their actions, their predatory economic aggression against the world and the united states. it would not surprise me that the 25% tariffs go in place. it would not surprise me that maybe if there is any kind of slow down in the rhetoric that maybe they agree not to put tariffs on the final $250 billion i don't see where the president is going to get anything that's going to cause him to not go forward with the 25% tariffs on the middle $250 billion that he

talked about. >> it sounds like you'd be disappointed if the president came out of g 20 with some sort of interim deal, it sounds like you want him to go all the way and get what we went in there for, which is in part the prevention of the forced transfer of technology. >> listen, does that surprise you i would feel that way? >> but i want cost, dan. i want cost. you know, how many points to gdp. >> the stock market is not the issue. >> the u.s. economy is an issue too, no? >> the stock market is not the issue here. >> the u.s. economy could be an issue. >> the issue is much bigger than that the chinese issue is much bigger than today's economy, today p'ss gdp. the policy that the united states, the things they want to try to do differently over the last three administrations has not changed. the big thing that's changed is we finally have a president that's going to say enough's enough we're going to hold you

accountable. you've been stonewalling us for 20 plus years with rhetoric and that's ending now. there's no more stonewalling and at the end of the day, it's china who has to make the moves, china who has to reverse its predatory practices. has to abide by its original obligations to the wto that they were allowed to join the community and have totally ignored them china's 2025 announcement by the chairman was nothing but a declaration of world dominance in future technologies that's not going to happen trump's not going to back off. yes, i'd be very disappointed, and so would over half of the american people, if he did not follow through with his tough position on china so that china does finally do what it said it would do and become a reasonable player, a fair reciprocal player in the global trading community and its state owned economic

dominance which is getting bigger instead of smaller. >> thank you for your time and your opinions. rotting away, the china trade war is heating up right now, soybean farmers are getting hit hard we're live on a farm in louisiana with that story. hi, there, that's right we're in louisiana and this is a pretty familiar sight around here soybeans left to rot in the fields farmers are forced to do so because they can't afford to rvt e op we'll show you why coming up as . why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level.

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welcome back to power lunch, everybody. as the trade war between the u.s. and china continues seemingly to heat up, soybean farmers are starting to feel some pain. many are being forced to make tough decisions. we're down on the farm in louisiana with more. hi, adidi. >> reporter: i am standing in a field that is filled with rotting soybean crops. it's a familiar sight here the leaves are so brittle they just crumble to the touch here this is a pretty common sight here the reason for it is there's horrible weather really unrelenting rains smack in the middle of the harvest. such a critical time

it damaged a lot of the crop and put a lot of farmers in a big bind one of those farmers, we spoke to him, he's a fourth generation farmer in this area. he lost about 60% of his soybean harvest. to make matters worse, farmers who can't afford to harvest their crop are not eligible for trade aid offered by the trump administration because the aid doesn't go to unharvested crops. louisiana representative ralph abraham has introduced a bill that would allow the aid to apply to farmers. >> they're making strides in work ing with the secretary of agriculture and the administration to try to get those unharvested acres a seat at the table we were planted, we were impacted by market derivatives that previoented us from harvesting. >> reporter: shipments are down 98% compared to this time last year currently a bushel of soybeans,

the price is around $8.60. that's down from $9.22 this time last year. a lot of farmers in this area are barely able to break even, if that. back to you guys. >> thank you the calls for regulating big tech getting louder on capitol hill what could regulation look like? could it be a good thing for investors? as we head to break, take a look at some of the big tech names that are on the move today look at alphabet, up 3.5% dow and s&arp e all rallying, power lunch is back in two to buy or sell? it me with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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welcome back to "power lunch. the threat of tech regulation looming larger than ever following yesterday's senate hearing on that topic. julia boorstin is live in los angeles with the latest. julia. >> reporter: facebook shares fell more than 2% earlier today, now half a percent higher after an oversight hearing highlighted the growing specter of both antitrust and privacy regulation senators called out the ftc for not adequately enforcing privacy protections with the ftc responding that the commission lacks sufficient resources democratic senator richard blumenthal warning facebook and

google that it's not just privacy regulation that they should be watching but also antitrust scrutiny. >> big tech maybe is no longer entitled to be as big as misuse of bigness can be in violation of antitrust laws. >> reporter: blumenthal along with republican senator jerry moran are working to get federal privacy legislation passed ahead of california's strict privacy laws which go into effect in 2020 there was no update from the ftc on its investigation into how facebook's handling of cambridge analytica violated its consent decree that's the company's commitment to the ftc, but there has been a lot of speculation that facebook could face fines well over $1 billion. guys, back over to you. >> julia, thank you. it's not just facebook, google and twit remember also in the hot seat google's ceo will testify next week on capitol hill and a senator-elect from missouri is calling for an investigation of twitter. how does all of this impact tech

investors? good to see both of you. tony, i'll start with you. this is the first sort of time that capitol hill will have their chance with sundar patch yea -- sundar pachai. >> a few monies ago senate lawmakers tried to have him testify and google said no there's a lot of angst with google on capitol hill among democrats and republicans. the primary reason for the hearing are allegations from republicans that google is biased against conservatives which is something that google denies, but you can expect to hear a lot of questions on privacy, on antitrust, on its ambitions in china it's about to be a full review of google's business practices >> will this be a cloud over

google, gene >> it will be, melissa, and i want to try to illum nail the why it -- illuminate why it's a cloud. this is the first time they are facing capitol hill and the house judiciary committee. second is what they are going to be digging at is really a lot of data that google collects. i want to recommend to your viewers to just simply google the phrase download my data. download my data, and you'll see that there are 45 products that google captures data from, and there are ways that google can use that to make the products better, but there are ways that they can use it to optimize some of their monetization. both of those are generally good, but when it comes to privacy, they will be looked at under a microscope so i think, to answer your question, this is something that will weigh on google's shares next week. >> in terms of what sorts of regulation could be proposed, you know, tony, the investors will say each business model is

very different won't be one size fits all but take a look at gdp in europe, it is one size fits all is that sort of the blueprint that lawmakers are operating on? >> for some lawmakers, yes they would like to see the united states pass privacy legislation akin to what europe put in place and ultimately at the end of the day whatever congress decides to do will regulate companies evenly. a lot has to do with the fact that there's just frustration with the whole of silicon valley it's google that's testifying next week, but there are lots of lawmakers who question how facebook collects data and how twitter makes decisions on its algorithm and there's general inching towards regulation in 2019 things haven't gotten any better for tech companies recently. >> gene, give me a thought only facebook and not just its vulnerability to regulation but the vulnerability of its audience to -- to slowing

growth. >> so facebook is going through a transformation in terms of how people view the platform i was recently with a large group of college students and asked them how do they feel about the use of instagram and facebook and almost everyone raised their hand and said that they don't feel better using those products so i think this idea about tech well-being and our screen time, facebook has a critical place within that, within instagram and facebook proper. and so i expect that that trend to continue. we'll never get rid of facebook and instagram, but i think that that will weigh this slow rising opinion that this isn't necessarily good for us, to always be comparing ourselves to other people's trumped up lives, i think that that will be a problem for facebook. >> very interesting. to be continued. gene and tony, we thank you very much. >> thank you. coming up, more on the big market rally up now 167 on the daze knacnasdq

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ephemeral neutral point. >> was it that spring-like catalyst brian belski on this show yesterday that said it could be one little thing that sets the markets higher? in this case it was fed commentary. >> and the change in language. all important. thanks, dom, good to see you again. >> great to have you here. >> thanks for watching "power lunch." >> "closing bell" is right now interest rates are still low by historical standards, and they remain just below the range of estimates of that level that would be neutral for the economy. >> those words from fed chair jerome powell sent stocks ripping higher welcome to the "closing bell," everyone the next big question on everyone's lips, will it mean fewer rate hikes than previously expected we will debate that with our panel of experts. and we're also closely watching the next market-moving event this week, the trump/xi meeting at the g-20 summit we'll discuss which stocks are most at risk if a china deal doesn't get done. >> i'm sara eisen in for kelly evans. the l.a. auto show is kick off