growth here. >> jimmy >> qualcomm. you're paying 13 times for a 20% eps grower with 4.5% dividend yield and apple settlements soon. >> brenda will like this, oxy, that's up 5%. >> thank you very much for watching "power lunch" begins right now i'm melissa lee. a volatile day on wall street following yesterday's massive fed-fuelled rally. are investors being led into a bear trap or should you get ready for a santa claus rally. president trump says he and president xi are close to do something, but we will get a trade deal and the president ripping into general motors again over its plan to slash thousands of jobs we'll speak to a key player in gm's bailout and separate fact from fiction and look ahead what is in store for gm "power lunch" starts right now

. welcome to "power lunch," i'm courtney reagan. it's a wild day of trading, stocks under pressure but we were lower when news on michael cohen's guilty plea broke. the dough sank mow sank but thee with news about the u.s. and china. crude rallying after falling below $50 barrel for the first time in over a year. more on that move ahead. and twitter shares on their worst pace for the month abercrombie & fitch soaring 20% on its earnings beat hey, bill. i'm bill griffith. let's get straight to what's driving today's agenda we have bob pisani at the new york stock exchange following where the money is going jackie dean lgelideangelis, yla eamon javers is in buenos aires

with all of the headlines in the g20 summit and the president's meeting with president xi. let's begin with bob at the big boards robert >> good to see you as always, old friend yesterday was about powell, today it's about tariffs let me show you an a&p intraday with significant points. around 10:30 eastern time we were lower the president says he's close to dog somethi doing something with china then the market rallies, then he says he's not sure what he's going to do and the market moves on then the there's a dow jones headline, china is exploring a deal to deescalate trade tensions this is from the china side. now the market rallies again folks, today it's what about's going on with tariffs so let's look at the market macro picture here the fed right now, they're perceived to be more dovish. bond yields are low. below 3% on the ten year probably a good idea oil is lower the marginal move

is tariffs, truce or no truce. that's what serve debating and there's no consensus you see what's going on. some people are saying we'll have a polite exchange at the g20 meeting, others are saying maybe we'll make a deal. ev evercore rates as below 50%. that's either side of maybe we'll have a deal or not how about a breakout where are we are we in an up trend or down trend? we're in the middle. you want to get above that orange line, that top orange line to see a breakout this is the s&p in the last three months or so we're in the middle. i'd say 27.50 or so. you get above that, now we'll get a breakout i want to note the housing numbers here, other terrible numbers on pending home sales in october on the new home sales numbers. we're down but not as dramatically as we were a few weeks ago. maybe starting to stabilize in this very oversold sector. melissa, back to you. >> bob, thank you. bob pisani at the nyse

president trump's former lawyer michael cohen pleading to guilty to lying to congress, plus trade headlines and don't forget about the meeting with putin. ylan mui has the details ylan it's been a whirlwind day so far but the key for investors is that the framework for a deal between the u.s. and china appears to be coming together. the "wall street journal" reporting that washington would suspend further tariffs through the spring if china comes through with big policy changes. in exchange, beijing would lift restrictions on chinese purchases of u.s. farm and energy products. now, a lot of details will have to be hashed out, but now we have a little more meat on the bones. before he left for the g20, the president took questions from reporters on the south lawn of the white house. trump still seemed on the fence on china at that time saying the two sides are close to a deal but he also likes the deal that we have now. what we do know is that the president can change his mind very quickly case in point -- during that

same scrum, trump told reporters he will probably meet with russian president vladimir putin at the g20 but less than an hour later, once he was in the air, the president reversed himself tweeting this, based on the fact that the ships and sailors have not been returned to ukraine from russia, it have decided it would be best for all parties concerned to cancel my previously scheduled meeting with putin the president is grappling with the fallout of his former attorney, michael cohen, pleading guilty to lying to congress about trump's real estate dells in russia trump called cohen weak and accused him of lying now to reduce his sentence. guys, if president trump doesn't have enough on his plate heading into the g20, once he gets back to washington, he is scheduled to meet with tech ceos from google, microsoft, qualcomm and others according to the "wall street journal." that meeting is scheduled to happen on thursday it's going to be a round table on innovation. guys, the swamp doesn't sleep. back over to you. >> i like that line ylan,

appreciate it. oil bouncing back after dipping below $50 for the first time in over a year. jackie deangelis tracking the moves. it's ticking higher intraday. >> this is something he can add to his list because we have an opec meeting next week it was significant because of the break on the 50 market but a rebound on optimism there could be a cut next week and that russia may be compliant here one of my sources saying this is the opec we've seen before same game, a week ahead of a meeting they start the jockeying before the real strategy is revealed we don't know what they'll do. from a production standpoint, even if there is a cut, it would be from an inflated base so how much will it help oversupply that's the question. >> jackie, thank you very much see you later. fed chair powell stoked a huge rally yesterday, as you all know, with his comments about interest rates and the pace of rate increases

are investors falling into a bear trap, though? or is it a santa claus rally coming let's bring in our guests welcome to you both. craig, there's still debate about what jay powell blinked yesterday and changed the strategy of the fed, maybe they only raised rates two more times. for you, is that something of a green light to put more money to work in the equity market at this point or not? >> it is and there's so much you can look into and try to read his comments and slice and dice them, but really the thing that i picked up, forwards, no pre-set policy path. that tells you he's not going to be hard-headed he's going to look at the data as an equity manager looking for disconnects like we do at the hodges funds, that's what i wanted to hear he's going -- it will ebb and flow and as the economy grows

he'll be more aggressive and we're seeing these weak signs out there, homes, home building, energy, industrials and i'm sure he sees that and that's why he's backing off so, yes, that's what i want him to see and those four words made me all clear. >> eric, what about you? not only fed -- we get the meeting minutes for the most recent meeting in an hour or so, you also have the trade deal possibilities with china if they don't put the 25% tariffs on, there's talk that maybe that can spark another rally in the market. what are you watching here to tell you to put more money to work >> those are the two big narratives people are watching and we're calling yesterday the the jay powell is not loco 600 point rally. so we had that yesterday and now i think we're moving on to the next topic, which is the trade deal or the relationships with china and, again, we're feeling sort of cautiously optimistic that

there's not going to be anything terrible out of that so we're bullish going into the santa claus rally. >> jackie was talking about the price of crude oil up 3% during the session but hovering near the psychological $50 a barrel is that something we should think about when we're computing economic global growth we need to worry about that, do we not >> yeah, i think that's somewhat of the demand part of it but that ebbs and flows and we do -- obviously the reason it's come from 82 to this level is because of oversupply. but you know although we make about 3,000 company touches over a thousand different companies at the hodges funds, we're not picking up on any sort of economic weakness, but the stocks are so you have to look into that and you have to say somewhat that that's been discounted. that's why we're bullish because a lot of these things home builders have been cut in half

and energy stocks have gotten clobbered and a lot of areas have factored in the negative news so it's a good area to be picking up stuff that -- >> what's the catalyst for the home builders? spending is strong, mortgage rates have been low. why does a backdrop for home builders get better because they're cheap right now? >> we probably had conversations just this week with three home builders and they're not seeing a big slowdown they are seeing sticker shock. it's like us any time you see something 20% higher, it takes a while to absorb that into your brain but rights are still low if you can get a 4.8% mortgage or a 5% mortgage, that's still very cheap money so i think we're not oversupplied on

housing. the fact that most of them have been cut in half is a good long-term entry point. would i do a whole portfolio of housing stocks no but at some prices they make sense. >> before we go. you have one example we can talk about quickly, douglas dynamics. you go for it just for the dividend >> we think it's a terrific company. they've been growing they make snowplow attachments and ice spreader attachments so it's a great seasonal stock in chicago as well. the stock is cheap companies have gotten inexpensive. they had a challenging quarter and the stock dropped 20%. that was an overreaction so we think this is a great opportunity to buy a high-quality company at a discount price. >> gentlemen, good to see you both thank you for your thoughts. craig hodges of hodges capital management

president trump taking another shot at general motors over its decision to cut jobs and idle plants but a new defense coming from the former government car czar. we'll look at both sides of this battle. and new allegations of the alleged sexual misconduct of les moonves. all the shocking details coming up and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

president trump has been busy, also sounding off on gm once again phil lebeau joining us from

chicago. >> the white house continuing its pressure on general motors this morning president trump issuing a tweet once again targeting gm and saying others are putting factories in the u.s. while you're talking about idling a plant his tweet says general motors is very counter to what other auto and other companies are doing. big steel is opening and renovating plants all over the country. auto companies are pouring into the u.s., including bmw which just announced a major new plant. the usa is booming well, here's a fact check regarding bmw in the u.s it does have a plant in spartanburg, south carolina, its largest in the world but the engines are imported from europe. what bmw's head of north american operations or the head of bmw overall said is that they are studying the possibility of opening an engine plant in the u.s. they did not commit, they said they are looking into that

possibility. obviously it's tied into whether or not there are tariffs on imports from europe. also, when you look at what's going on with general motors, a lot of people are saying why is gm idling these plants in north america? look at its plant efficiency they're only making 76% of the vehicles that they could make at their plants in north america. that's far less efficient than ford and way less efficient than fiat chrysler. so as you look at general motors, keep in mind there is 3.2 million vehicles at unused capacity one million of those are attributable to general motors so, guys, gm is doing the smart thing here in terms of a business saying we have unused capacity let's make ourselves more efficient. >> that's the point that the former ceo of gm made the other day. he said if you're running under 80% capacity, you're not making money on these plants. the fact check on bmw is

appreciated but volkswagen is considering opening a plant in north america, maybe not the u.s., but in north america for north american distribution of cars >> regular is has one in chattanooga and that's not at full efficiency use, either, melissa. what they have said, what they've indicated over the last couple days is that they are looking at the possibility of an all-electric vehicle plant in north america. and this all ties into where regular volkswagen is as a corporation in europe saying we want to make a big push into evs, certainly in europe but it would make sense in the united states as well that's not a commitment. that's not them saying they're going to do it it's them looking into the possibility. >> phil, thank you phil lebeau in chicago for us. well, president obama's car czar during the auto industry bailouts has an op-ed calling out president trump for his statements on general motors he says gm is simply responding to economic realities, some of them caused by the trump

administration let's bring in the former deputy special inspector general for the troubled asset relief program, otherwise known as tarp, part of the federal agency created the oversee the $700 billion bailout program. great to have you with us. >> a pleasure. >> you made sure that the bailout for the auto industry specifically had all the "t"s crossed and the "i"s dotted did you think 10 years later we'd be talking about if we'd bail out gm >> yes everyone knew there would be long-term ramifications. on our very first day that the agency existed the special inspector general and myself were in secretary paulson's office he swore in neil and the first thing out of secretary paulson's mouth was general motors and chrysler will fail by the end of the year this was december 15, 10 years ago, unless we bailed them out so this was a momentous thing. >> but by receiving tarp money,

is there an obligation, then, by general motors to do what the president of the united states wants them do, whether it makes economic sense for them or not >> the answer is it should not surprise us that a corporation is going to make decisions based on the bottom line it's incumbent on the leaders of our country when we're doing things like bailing out a company or giving tax breaks, more recently, to make sure that a corporation is incentivized to take decisions that take into account our community. >> for how long, though? i mean, the u.s. government is out of general motors, it sold its remaining shares >> three or four years ago. >> so how much longer are these strings attached >> i'm not suggesting that the -- any tarp restriction would still be either from an informal perspective or formal perspective would still exist today. but for example in the tax reform package that was passed just earlier this year, gm and

many other corporations like it got a significant tax break with zero strings attached. there is legislation pending introduced by senator brown from ohio that would link some of that tax reform benefit to keeping american jobs in the united states. >> but there are factors playing against gm right now potentially some of their own doing but also macroeconomic factors or government policy now they're laying off 14,000 of their employees, looking at shuttering some of these plants. so are they there because of their own actions or are they they because of external factors, a combination of both what brought them here now ten years later? >> certainly a combination of both general motors has not had a great track record over the last 20 or 30 years of making intelligence strategic decisions. clearly some of the factors that are head winds, to use that term that they used, are very much external some are frankly caused by some of the administration policies. >> the only number i need to

hear about is the percentage of market share that sedans have here in the united states. five years ago they were 50% to 60% of all sales in the united states sedans today 20% to 30% so, you know, you could argue that mary barra's job is to not only make money for general motors, it's also to not lose money for general motors and if they were to keep those jobs and factories open they could lose money and conceivably need tarp money down the road again, right? >> building cars that don't get sold doesn't do anyone any good, workers or the company so i think that's certainly correct. however, a couple of the things that have been driving this is that, for example, the trump administration has significantly cut back on cafe regulations and we can debate that one way or the other but that's certainly disincentivized the building and the purchase of smaller cars as opposed to suvs and trucks. >> let me ask you this

if gm spent money in such a way that it believes it puts its at a competitive advantage and it spent, spent, spent, kept these plants opened that manufactured cars that people don't necessarily want, built more evs, et cetera, and it was on the brink of bankruptcy again, would the government have to bail it out? if the company does everything the administration wants it to do and it goes bankrupt, is there an implicit backstop always to the company then >> listen, that's the question of too big to fail, right? whether it's a financial institution or a large company like general motors. i think that the -- president trump is clearly wrong to suggest that general motors should keep building unprofitable cars at a plant in the united states. there are, however, steps that the government could have taken back ten years ago there are steps that the government could be taking now to incentivize general motors to take into account the interest of communities and workers and,

frankly, you know, through tax incentives, et cetera, have some of the -- whether it's battery manufacturers or electric car manufacturing done here in the united states rather than mexico or china. >> the man who essentially enforced tarp ten years ago. good to see you, thank you for your insights today. president trump leaving the white house earlier, he was heading to the g20 meeting in argentina. he will meet with the presidents of china, xi, but not russia's president putin. we'll get a live report from argentina coming up. and the latest on the allegations made against les moonves. will this affect the giant payout package that he is hopefully going to walk away wi, heth's hoping he would walk away with. "power lunch" is back after this an august to remember,

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for each job exxonmobil creates, many more are created in the community. because energy touches so many industries, it supports 10 million u.s. jobs. new shocking allegations today about the behavior of former cbs ceo les moonves julia boorstin joins with us details. julia? >>. >> bill, a new allegation of sexual assault and an effort to cover it up by les moonves which details moon says are forcing himself on an actress named bobbie phillips in 1995 and then making efforts to prevent phillips from talking to the press by getting her work. this illustrated in the piece with text messages to her talent manager. moonves said his interaction was consensual the question is whether moonves will walk away with $120 million

in severance cbs declined to comment but the board is conducting an independent investigation into earlier allegations against moonves. to determine whether the company has grounds to terminate him for cause, if he is, that would eliminate that $120 million payday when moonves stepped down from the company in september, the board said it would notify moonves of the results of the investigation by the end of january. cbs shares trading up about half a percent. melissa. >> we wanted to ask you about twitter because that stock is tumbling today it's down by about 6% at last check. no obvious reasons, not like an analysts came out and downgraded the stock, so what's behind the move >> well, melissa, you're right, dramatic moves by twitter this morning. now the shares are down 4.5% earlier today they plunged nearly 9%, bringing the stock down to levels not seen since late october you're right there's no fundamental news out about the company but yesterday twitter

suspended a fake account impersonating vladimir putin that had gone undetected for six years and had over a million followers. and a political article notes that fox news has not tweeted since november 8 in an apparent boycott of twitter's handling of protesters posting the address of tucker carlson on the platform we're told the callout of this silent boycott by politico would spook some investors, but a lot of volatility today. courtney >> thank you, julia. we'll get the traders' take on twitter next hour with the trading nation team to talk about that some more but first, we're breaking down on the angles of president trump's crucial trip to argentina, big meeting with china's president xi can a trade deal actually happen, though we know what won't happen. a meeting with vladimir putin. president trump cancelling that today hours after his former lawyer pleads guilty to lying about a trump tower/moscow project. all the details on that story

coming up on "power lunch.

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welcome back to "power lunch," everyone i'm sue herera here's your cnbc news update for this hour. mexico deporting nearly 100 migrants in tijuana back to central america after they rushed towards the country's northern border with the u.s riot police were deployed to contain those who sought to cross the border illegally investigators say the indonesian plane that crashed a month ago was deemed safe to fly when it made its final takeoff from jakarta the statement was aimed at clarifying comments made the day before, that the lion airplane was not airworthy at takeoff all 189 people on board that plane were killed. the only known lunar samples in private hands -- three moon rocks from an unmanned soviet lunar mission in 1970 -- were sold for $855,000 at a sotheby's auction in new york. the buyer is to remain anonymous. and the national institute of health is enrolling more than 400 couples to take part in a

worldwide study testing a male contraceptive gel. men will apply the gel to their back and shoulders daily until their perm count fasperm count enough at that point the women will stop taking their own birth control. >> i'm skeptical of that one, sue, but thank you for bringing us the latest news. >> you're not alone. >> and now a quick market flash. we want to call your attention to shares of jack-in-the-box. the burger chain is exploring options including a potential sale according to reuters citing sources. this after the company sold its qdoba brand earlier this year. jack-in-the-box is up 6% bringing the gains to 12% and puts the stock on pace for its best month since august, 2016. we have reached out to the company for comment, we haven't heard back it's worth noting there have been deals in the restaurant space in the past year, most recently arby's owner inspire

brands acquiring sonic in september. back to you. >> kate rogers president trump's former attorney michael cohen pleading guilty to lying to congress about a trump tower deal in russia robert frank joins with us the details. >> a lot of headlines around this but it centers around businessman donald trump's plan to build a trump tower in moscow he had been trying to build that are for decades. candidate trump repeatedly said he had, quote, no relationship with russia whatsoever, no projects, no deals, no investor. it turns out the trump organization was negotiating with officials to get funding and permits to build the trump tower moscow that would have been the tallest residential tower in all of europe those talks started in 2015, they involve donald trump michael cohen and the russian developer. after the election, cohen revealed the talks to congress saying they ended in early 2016, but now cohen is admitting those talks continued well into 2016

and even perhaps after the election president trump saying today that everyone knew about this tower and that it was all legal. >> there would be nothing wrong if i did i was running my business while i was campaigning. >> the president still owns the trump organization and says he is not pursuing any overseas deals as president something that would have been interesting to know at the time. >> i guess you weren't expecting crickets from us on this. >> that's fine. >> it all speaks for itself. >> it sure does. >> robert frank, thank you very much. sticking with the president and russia, mr. trump called off a planned meeting with vladimir putin at the g20 summit in argentina but dinner with president xi is still on eamon javers is live in buenos aires with that story. eamon? >> as we speak, president trump is on board air force one winging his way here to buenos aires, argentina the schedule, though, of what

he's going to be doing when he lands is very much in flux take a look at who we believe as of now the president is going to meet with while he's here in town he'll talk to prime minister abab of japan, chancellor merkel of germany, xi jinping of china but he announced via twitter that he's canceled a meeting with vladimir putin. two other meetings that were scheduled have been downgraded to pull-asides, which is a diplomatic lower level that is with erdogan and moon of turkey and south korea those are going to be just sort of brief pull-asides now and not formal sit-down meetings so the president's schedule very much in flux just before he got on marine one, the president talked about the idea of cutting a deal with china which all of global finance has been watching for at this g20 but his comments were cryptic. listen to what he said and we'll talk about it on the other side.

>> i think we're close to doing something with china but i don't know that i want to do it. what we have right now is billions and billions of dollars coming into the united states in the form of tariffs or taxes so i really don't know but i will tell you that i think china wants to make a deal i'm open to making a deal. but, frankly, i like the deal we have right now >> so the presidents saying he's close to doing a deal with china, not sure that he wants to and he doesn't know where this is going to go hard to pull out of that any sense of whether we're closer or further away from a deal a lot of experts feel like the best possible outcome could be a sort of trade truce in which the two sides simply agree to stop raising tariffs on each other for some period of time while they can work all of that out. one tea leaf that's worth reading here is that peter navarro, the trade hawk inside this administration i'm told by a white house official is now going to be attending the trump/xi dinner on saturday night. so that gives us a sense that

the chinese might see it as a signal that the trade hawks are somewhat somewhat on the ascendn this administration. >> eamon, thanks very much eamon javers in buenos aires president trump may say he's close to making a deal with china on trade, but what's the likelihood of it happening join us, john rutledge, the chief investment officer and safanad and a cnbc contributor it's a very complicated issue, we've already established that add nauseam so i wonder what the chinese would have to bring to the table that would satisfy the president enough that he wouldn't impose those 2025% tariffs on cars that he's threatening to do? >> trump has probably realized by now that when you raise tariffs the stock market goes down and that's not a good thing. second, what they're looking for a playground solution, bill. they're looking for "i'll stop

pushing you if you stop pushing me and leave things where they are. well, where they are is tariffs on both sides and the chinese government messing with u.s. companies and making life difficult for them there so this is really not such a good spot that we're in right now. both of them need to show some kind of media progress to their troops, to their people back home so i think they might say something nice but peter being at dinner is not a good sign. >> john, why would you say you think president trump now understands that when you raise tariffs or impose tariffs that the stock market goes down i'm not sure he understands that he also thinks tariffs are bringing in billions of dollars. he said it again in the soundbite we just aired in eamon javers' report. >> well, courtney, i take it back he doesn't realize very much of anything but many people in his administration realize that the stock market has been hurt badly. partly because of it's combined with the fed raising interest

rates and the rates going up makes the trade situation even more difficult. >> but the administration has cover now, john, doesn't it? didn't jerome powell give president trump cover to be more hawkish on trade with china and to not make a deal because now the stock market thinks jerome powell is backing off a pre-set path for rate hikes. so he's got wiggle room now, no? >> a little bit. to some extent that's true but, remember, this is happening at a time when we're getting a series of very ugly housing market numbers about the u.s. with prices flattening. capex numbers, capital spending that are very soft and not good signs at all about growth here, europe, japan, uk, or even in china. so the fed backing off isn't a shock. i'm not a favor, however, of open market operations by the fed chairman i think they're very bad policy. but clearly powell doesn't agree. >> what do you think is going to happen i mean, the deadline is december

31 they have to come to some kind of an agreement so satisfy president trump so they don't impose the 25% tariffs what do you think is going to happen >> it's his own deadline so he can move it anywhere he wants. i think that the more we say cohen and impeachment talks in the news, the more we're going to see trump act like a tough guy because that will make his base more excited in trying to defend him and so that's bad for the trade dispute. but i think at the end of the day, that next round of tariffs hits 80% of it on consumers at a time when consumers are slowing spending so this is not a very good time to raise tariffs i think we're going to get a verbal solution, not a tariff solution out of buenos aires >> so let's underscore this. michael cohen is bad for the markets because all that talk is going to make trump tougher on china and less likely to get a

deal done? those are the dots connected, right? >> the dots connected are that the political difficulties here make trump do bad policy, which is more protectionism, absolutely. >> got it. john, thanks john rutledge with safanad. >> my pleasure. it's a sneaker snapback. nike and foot locker up 20% this year and under armour doing better with about 60%. so which is the best buy right now. and retail earnings rolling in a couple big winners to tell you about when "power lunch" continues.

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two very different retailers reporting earnings but both rallying, abercrombie & fitch reiterating its holiday sales forecast ha hollister remains the stronger forecast dollar tree had a disappointing report, a slight revenue and comp sales miss and its fourth-quarter forecast falling below the street's consensus the company working on remodeling and rebanner aing a number of family dollar stores footwear has been a bright spot sales of foot locker and under armour surging nike eking out gains so what's driving the stocks and what are top picks in the sector let's bring in sneaker head sam poser, senior footwear and apparel analyst at susquehanna financial group. thank you for being with us

today. >> thanks for having me. >> we're looking at retailers that sell shoes like nike, so you have foot locker selling a number of brands, nike included but nike also selling direct to consumer in an area they want to push further in into if i'm an investor, am i buying a retailer like foot locker or a brand like nike? >> i would argue they're both brands and that they both have important parts to play in the other's success. nike can't hit everybody they want to and foot locker is working hard to enhance -- foot locker needs nike and is working hard to enhance the nike brand and i think that's important and i like both those stocks a lot right here. >> of course those are really the athletic brands we talk about. but when we see these surveys that come out with the teams like the piper jaffrey survey, vans is still pretty hot and that's part of vf corps and this street wear idea how do you think that trend will

play snout aout? >> i like vf a lot vans is doing exceptionally well we have to see what happens with north face and timberland. i think the overriding story here is how much fashion is being put into athletics, if it's from vans or nike or others and how well the retailers show that product there's a term called at luxe which is taking at leisure to the next level where a lot of brands are starting to use luxury materials and patterns to enhance the brand, sort of making more fashion, giving the consumer more reasons to wear it and mike ski doing that rk and nike is doing that. >> lululemon is one of your top picks. they have a relatively new ceo that's a name that rarely goes on sale when i'm talking about the products in the store for the holiday season does that speak to a higher-end

consumer and strength in spending for the holiday season there? >> i think that -- well, i think that's part of it but more so it speaks to how well lulu is communicating with their customers and how well the product they're carrying reflects their ethos and i think that's what's working there and that's getting stronger and stronger. the new ceo as far as i know understands it, fits into the culture there. but he's only been in the job a couple months so we'll see what happens there. but we really think that lulu is one of the strongest brands out there for many reasons. >> and off $195 price target on lulu, it's sitting just below $129 so way to run. >> thank you very much. >> sam poser from susquehanna. >> happy holidays. dow transport is up more than 8% in the past month with a holiday season, more travel and more deliveries bringing better returns. speaking of packages, a new

contender trying to compete with fedex and u.p.s. frank holland is at a dhl facility frank? >> we're at dhl's multimillion dollar facility outside of newark, new jersey we'll explain the european shipper's strategy when it comes to e-commerce in the u.s. and how they get packages like these to your house. (toni vo) 'twas the night before christmas,

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service working feverishly to deliver millions of packages this holiday season, now a new contender is emerging. frank holland is delivering the goods at a dhl facility in new jersey hey, frank. >> reporter: hey, guys the holiday shipping season is in full swing at dhl's automated facility where they're focusing on midsize online only retailers and of course their shipments like this one. dhl says this automation that you are looking at allows them to process 40,000 shipments per hour to put that in perspective that's 6 o% more than at a nonautomated facility like the one in nearby newark however, dhl is not trying to get into the home delivery e-commerce market. that's already dominated by the usps, ups and fedex, they control about 95%, instead retailers bring their foods here, dhl flies them to a post

office close to the buyer, the mail handlers handles the last mile of delivery that strategy and this automation is about responding to the tightening labor market. >> on monday, cyber monday, we had a forecast for this building that we would have about 200,000 pieces in here what we actually got was 3 300,0 pieces for us to rapidly respond and find additional people to bring them into the building that would have been almost impossible to do. >> they are trying to respond to the tightening labor market. this same unit ten years ago 90% of what they handled was envelopes and catalogs, now 90% are parcels and packages from e-commerce definitely a changing situation for any company in the e-commerce business. >> frank holland at dhl. >> thank you speaking of therefory transportation stocks are having a good run, the sector is up over 8% with names like alaska

air, fedex and csx leading the way. will the holidays provide another boost? with us a donald broughten it seems to make sense to me that during the holidays you have more volume, you have more shipping so that would likely translate into higher prices for the stocks, does this happen every year what's different about this year >> well, what's different about this year is we're seeing an extraordinarily large volume of import containers. you know, you look at long beach, l.a., in october set an all time record, that volume has continued to be extraordinarily strong out of the ports and those containers contain product that is destined to be bought either off a brick and mortar retail shelf or via an e-taylor. >> do you think that that increase in volume is a number of companies trying to bring in the supply ahead of these increased tariffs that as of now

are going into effect on january 1st and then does that mean that we will see a drop in volume after the beginning of the year and what does that then mean for the transport group? >> no, i think that's much more applicable to bulk shipments, moving iron orr, things like that this is directly related to the behavior of the person who is the head buyer of flat screen tvs for best buy or shoes at nordstrom's or the latest tech devices or amazon, pick one. all of those buyers collectively are trying to satisfy the holiday shopping demand, predicting rather accurately as a group what's going to happen and then it's up to the fedexs, the upss, the xpos of the world to actually fulfill, guess it to your door or get it installed. >> don, clearly there is enough demand in shipping these days that there is a lot of shippers out there and they are all beating each other up on price to try to gain more market share.

will there ever come a day when they have have some pricing power, where they're able to raise prices and still keep the same demand going here i'm thinking of the upss, the fed exes and rise of amazon in this whole thing as well. >> that's a great question the bottom line is this is the end of the transportation segment that has pricing power because you're paying for such high levels of execution in service. the historical track record has been this is the end, the high value, low density end of the good spectrum in which you can demand and receive higher rates. consistently they've raised rates. you have to be able to execute, get things delivered without service interruptions. you know, your previous segment on dhl is a great example. they waded into the market in the early part of the 2,000 decade and by 2005 they said no mas, they quit, this he lost $5 billion because they couldn't

execute as well as fedex which outperforms -- executes ups -- who ups who outexecutes the post office. >> all right we have to go at this point. don, good so see you as always did the markets overreact yesterday? reading too much dovishness into jay powell's comments? we are about to find out where e nurest of the fed stands thmites from the last meeting are due out. we will have them for you coming up in a moment stay tuned cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

and then, more jobs robegan to appear.. what started with one job spread all around. because each job in energy creates many more in this town.

fed officials at the november meeting almost all thought another rate hike would be warranted fairly soon, but a few disagreed with the timing, not necessarily the direction, and a couple saw the funds rate near neutral, warning it could unduly slow the expansion. this is important here future statements they discussed might remove the language signaling further gradual increases ahead. they may rework the statement using language to make future rate hikes more data dependent overall they did see a positive committee, had a positive outlook for the committee, but officials worried about tighter

financial conditions, a global slowdown, worried about signs of slowing in interest rate sectors. overall i have to say the discussion at the meeting as revealed in the minutes was much more down beat and full of sort of concerns about down side risk than the statement that it appeared the other things they talked about they were worried about further tightening of the labor market and inflationary pressures. that's from the upside several saw the effects of fiscal stimulus diminishing over time while the effects of monetary policy and the combination of those two were seen slowing the economy on business capital spending they saw higher interest rates, tariff and trade disputes and slowing global growth behind a recent slowdown in business capital spending the agricultural sector was said to be depressed due to tariff. they he thinks mentioned trade and tariff 12 times in these minutes and only seven last time the statement that came out of the november meeting was pretty upboo et with only one negative

comment and they seemed to be a lot more concerned about the outlook at the time they met in november than they revealed in the statement at the time. >> just to put this in context when we were comparing powell's speech with yesterday with a speech given in october, these were the minutes from the early november meeting. >> right. >> this may show a progression to the point we reached with powell's most recent speech. >> i think that's right. i don't want to overemphasize the negativity in here i want to emphasize that it was a more balanced approach if you go back and look at that headlines that we gave off the november statement, the only negative there was the decline in business capital spending everything else was kind of rosy now, remember, powell was shortened down the statement quite a bit, so maybe not as much nuance as there was in the past, but i will tell you this will not be a recurring problem because all future meetings from here on out will have press conferences after them so we will be able to ask powell about the risks that were discussed at the time so this is a fallout, i believe, of the idea that it was simply a

shorter statement but i didn't hear, by the way, almost a couple weeks maybe later some of the expression of concerns over the economy here overall still a positive outlook, guys, but the idea that they were concerned about tariffs and trade, quite a bit more than they were in the past i have to say, the global slowdown, some concern about gyrations in the market and the idea that they did indeed see the slowing in the interest rate sectors and you can see throughout by the way that they're talking in this information from their business contacts out there that they are expressing it, so that did not come through in the statement at the time in november. >> did the minutes reflect who came up with the analogy about the roomful of furniture with the lights off >> no, there was no actual authorship or ownership or repetition, bill, of that particular metaphor. >> that could be a request he at the next press conference. >> i think i won't waste my question on that one. >> steve, stick around let's bring in bill nelson with the bank policy institute and

krishna guha great to have you both krishna, does it sound very different because, remember, october is when we saw the bulk of the market selloff, that's when we saw the connection for the fang stocks, that's when we saw the housing data starting to come in soft, things that happened since the beginning of october when powell first gave that speech effectively saying we are a long way off from neutral. >> so based on what steve has just reported it does look like the discussion was, as he said, i a little bit more balanced, a little let gung-ho on growth that came across from the november statement but i very much subscribe to the view that the fed has been in a gradual process of softening its posture, hinting that maybe they will slow down, certainly after a december rate hike not thinking about stopping, but being more careful, slowing down a bit. it looks like the seeds of that were already there at the november meeting, clearly things have moved on quite a bit since

then. >> bill, what's your take? >> i agree with krishna. given what james just said, it sounds like the fed is positioning itself to perhaps pause after december hike. december hike looks like it's baked in the cake. chairman powell left himself plenty a room to go up a bit or quite a bit further. it's always a mistake to view the fed as having made a decision about a sequence or path of rate hikes or easings. they will make a decision data dependently meeting by meeting, but at this point it does look like they are setting themselves up to pause for a little while and look around. >> yeah, but we're still expecting a rate increase in december, though, right, bill? is that one data dependent or not? >> well, you know, they very rarely historically will deliver a surprise during a tightening cycle. they just don't want to rattle the markets. so at least the next upcoming meeting is generally pretty far, you know, telescoped pretty far in advance and in that sense i think december is baked in the cake. >> krishna, when we are looking

at 2019 it seems there is a bit of a divergence between what perhaps wall street and investors think about happen with the fed and economists think. groups of economists think we are still in for four rate hikes. what's your view >> my best guess right now is we will probably get two or three hikes next year, but i think, you know, in terms of where we get there, it seems to make sense to me right now that given everything else that's going on, powell would lean a bit -- err a bit on the dovish side if the market swings a little too dovish in terms of expectations for next year, no great harm done, it helps stabilize things under the spirit of data dependence if the data does come in solid next year some of these trade and other risks begin to moderate, the fed can always guide the rate path up a bit. >> steve, how many times did you say the words trade or tariff were mentioned >> it was 12 times in the discussion by the policy members, we left out the staff in our count there the language is pretty strong.

melissa, if i might just for a second i want to just throw out this other thing that they are talking about which is changing the language i think that's indicative of a change in policy that languageof further gradua increases i think bill nelson might know the number of times or how far back that language dates, but it's quite a while. the idea of eliminating that it always told us that the direction of policy is going to be further rate hikes. moving to language that talks about data dependence, i don't know if that's going to happen in december or happen sometime after that, but that is going to mean, i think, along with the press conferences maybe a bit more volatility in the game of gaming out what the fed is going to do at the next meeting. >> bill, before we go, look, we all know that they are going to say, no, this had nothing to do with the president's criticisms of the fed and everything, but isn't there going to be some thought inside the fed that they want to do what they can so that they are not perceived as the bad guys if the economy really does slow down or the stock market goes south or whatever

happens? >> is that for bill or for me? >> that's for bill nelson. >> the fed has been very clear that it has given its dual mandate by congress and that it's going to continue to execute that responsibility and that's the best posture that they can maintain. at the same time i'm sure they are aware of the political pressures that are on them and they may be all the more eager to look for other ways to tighten the economy, for example, through continued declines in their balance sheet or other changes that could be made, but even so, they're going to do what they think is the right inning to do. >> at the same time, krishna, though, isn't this sort of an acknowledgment of the markets move in october, what the markets were forecasting was a slow down in the data, what they were reacting to in october was in part this no eggs that growth was going to slow and that they're worried the fed would proceed on a preset path this seems to back off of the notion of a preset path and also say, do you know what, markets, you may have had a point with

your celloff >> so i certainly think that the fed is at pains right now to make it clear that policy is not on a preset path every time you get a fed speaker, data dependent, data dependent, i think that's very helpful, reassures people there are no preset plan, but it is also worth noting as the vice chair said the other day, data dependence itself is not a strategy. >> that's a very good point. our steve liesman in washington, bill nelson of the bank policy institute and krishna guha. >> thank you. let's drill down on the market reaction. michael far the president and ceo of miller in washington and brett schuette we are not seeing a whole lot of response right now, michael. i mean, a lot of this pretty much is known as melissa has been itemizing here, we've been watching this evolution of fed policy as it's being discussed

publicly as the stock market has fallen and the fed has started to back away from the notion that they were on a preset number of fed rate increases down the road, right >> right so, bill, you know, i think for investors this is encouraging because it means that the fed is not in that position and that aggressive position determined to which will this bull market so that strikes me as very encouraging. you know, i think that they do have a strategy going back to what consider i wish in a guha said because he's awesome, by the way, he was saying, you know, that it's not, you know, data dependency isn't a strategy their strategy is clear. their strategy is that they are tightening, they are removing accommodation, but what they're telling us is that they are willing to be flexible about the pace that they are going to pay attention to the data so that they don't kill this bull and don't throw us into recession. it's encouraging at least that they care. >> brent, was yesterday's speech by jerome powell -- i mean, it

seemed to have been seen by wall street as a green light to get back into this market at this point. do you agree with that >> i do agree. i think the two big fears are obviously tariffs and also the federal reserve and which the federal reserve i think that fear has been overplayed quite a bit. i think yesterday was a big green light for the market to move higher in the coming weeks. now we have to get past the g20 meeting this weekend, which i actually think there will be some positive outcomes from that that will allow the market to move higher into the end of the year certainly the big fear and two corrections we have had this year were launched by federal reserve fears. the january in january was launched by a ten year treasury moving higher on the back of inflation, the last one started in august with the ten year treasury which rose to 383 on the back of chairman powell's confusing comments which i think he walked back yesterday i agree the message was confusing, gradual to me meant preset yesterday chair powell said monetary policy is not on a

preset path which i think speaks to the data dependency. >> brent, if you think that we are going to have some kind of a resolution to what going on with tariffs and trade, how are you positioning yourself to the end of the year, couple that with what we now have heard from jerome powell yesterday and the minutes from today. >> i'm not sure it is a resolution i think there is a likely outcome that at least the tariff discussion gets pushed out into the future both of these presidents don't have their best alternative to negotiate an agreement which is the basic minimum that you looked to come out of any negotiation with i don't think either one of them has it be it continued market turbulence based upon no deal. in the u.s. that he is been amplified over the past few weeks with this market fall and perhaps yesterday president trump lost his biggest faux which is the federal reserve so tariffs are front and center i guess to directly answer your question, you know, emerging markets are ground zero for federal reserve rate hike fears and tariff fears if there is some resolution this

weekend or at least some walking back i think you will have an emerging markets rally but i also am balancing that with a larger cap situation rates are moving positive albeit at a slow pace and so i think that's the backdrop >> on the topic of a potential trade deal, michael, should we not fear the possibility of no deal trump in his interview with the "washington post" when criticizing chair powell said that he was working on deals and the federal reserve was not being accommodating. in the most recent minutes steve liesman mentioned tariffs and trade were mentioned about 12 times in those minutes it seems like an acknowledgment that the fed may actually be accommodating in that respect and they are acknowledging that trade and tariffs are an impact on the economy and that they may, you know, let that influence their view on monetary policy. >> melissa, certainly investors agree with him because, you

know, the trade tariffs are a very big deal. this he can have a significant impact i think they're having a significant impact already on china's economy. so this is a big deal and i think the fed is right to pay attention to it. their second message was to pay attention to corporate debt which i think you have to really pay attention to, to take them seriously when they tell you they start to have concerns. if there is no deal over this weekend, i think markets will -- if it's a real no deal, yes, i think markets will probably give some -- up some ground i kind of expect that there will be at least a face saving photo op in here that at least continue the markets moving in kind of more of a flashing yellow light, maybe not a full on green light towards the end of the year. we are up about 4.5%, 5% on the year, that's not bad and maybe we can pick up another few percent in a santa claus rally coming through the end of december. >> gentlemen, thank you.

washington focus on the g20 and trade this week, but the focus shifting back to regulating big tech next week. elon moy is live in d.c. with more. >> big neck is coming back to washington the "wall street journal" regarding top executives are heading to the white house on thursday, also slated to attend, blackstone's steve schwartz man and the president of carnegie mellon university. the format of this meeting is a round table on innovation and it comes aztec companies are under growing pressure in washington over privacy, data collection and antitrust. this is a chance for them to make their case directly to the trump administration google's ceo is spending two days in d.c., he will be testifying before the house judiciary committee on wednesday, that will be focused on potential bias in google searches and the need for more transparency in how it filters results. kevin mccarthy called this

hearing an important step to restoring public trust in google and the companies that shape the internet tech he can ex have been vocal in speaking out against white house policies on immigration, transgender people, tariffs, those issues are not formally on the agenda, but they could still shape the tenor of the talks next week. back over to you. >> thank you >> i always love round table discussions, don't you >> square table, oval table. >> long rectangle ones. tobacco giant altria may be looking at a stake in juul plus oil briefly dips below $50 a barrel before bouncing back, but still down 23% this month. the request he is at what price does it come and what price does the u.s. economy potentially pay. and the one stock the s&p needs in order to rally. it's today's mystery chart the name and why it's so critical take a good look coming up ahead. place, the xfinity xfi gateway.

and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. for their best week since march this as the "wall street journal" reported that they were in talks to pursue a significant minority stake in juul labs. wall street reacting positively to the news with firms like wells fargo saying this could be their crown jewel. hyper jaffray's an overweight

rating we're joined by michael avery. great to have you with us. >> thanks for having me. >> what does this do for altria in that the spotlight has been on juul, there is an fda crack down on how and where they can sell the e-cigarettes, there has been a ban on the flavored tab keys that juul specializes in. what does it get with this if it does get this? >> one of the chief concerns investors have had is what impact an e-cigarette like juul with its popularity could have on the volumes for the cigarette category as you see some of the declines accelerating, there's more and more concern about some of the long-term outlook. altria has an enormous amount of targets, but people worry about how that might shift if they join forces with somebody like juul and have an ability to participate in that shift on the other side of it as well it's a big of a hedge for

al tree a. >> is there a thinking that e-cigarettes are leading to a decline in smokers is it viewed as a hedge that that way, that there is a decline in the use of core product therefore it has to have a hedge in e-cigarettes. >> we have seen the earlier stages of an evolution where the fda's strategic vision if it were to play out is to takethe nicotine and flavors in combustible cigarettes and transfer them to noncombustible alternatives and bring the smoking consumer along with them obviously their hope is that there's not new consumers that enter at the same time but that is what the smoker cares about is the nicotine and the taste. if you can provide those in an alternative form that's noncombustible there is a public health benefit that is fairly significant. the concern that the fda has had is attracting new users, particularly under age this is where regulatory competence at altria is a

potential benefit to juul because they've worked with the fda for a very long time, they have a good relationship there this is something newer to juul that they don't stand out in that way for, the fda has been vocal in its criticism of juul if they could combine to successfully transfer smokers to these noncombustible alternatives and keep the underaged users out of the equation it would be a win for everybody. >> analyst community pretty positive on this potential minority stake at what cost, though if you take a look at what skrul was valued at, up to $15 billion if altria takes up to a 40% stake i assume juul would be worth less than 16 right now you put it in context with what altria had paid for u skchlt t in the past and it got the entire company, i mean, at what cost do you want to see a deal get done at? >> we obviously don't know anything about what negotiations are going on. >> sure. >> if there are, in fact, any and what a deal might look like. i think there are a few

considerations altria does take a long view if this is considered a competitive threat to them and perception importantly because it's not really the eps that is at risk as much as the quality and multiple that gets applied there are a lot of ways to understand this as a benefit from them. they are not price insensitive but they do have a lot of flexibility. >> if they are looking at the dee clear of their core product do you think they should be looking harder at cannabis. >> the problem with can did business is it is still federally illegal. i think there is no question they are at least standing on the sidelines paying attention, how and when they may get involved i think entirely depends on what the u.s. law is and how that may evolve. there's also an analogy number so of the e-cigarette space of several years ago where there were lots of players, they participated after some of the dust started to settle, they've got different ways they could still continue to get more involved, obviously, if this juul deal happens. they don't need to be the first one in i don't think if something

changes because there's still a lot of ways that the category could and would evolve. >> michael, thank you. michael avery from piper jaffry. bill. shares of twitter down 4% right now and 33% from the june highs. is a bottom in sight or will shares fall further from here? we have "trading nation" next. interesting clock. oh, there weren't enough hours in the day to maintain are old data center. so we made a twelve a fifteen. three extra hours. but that really doesn't add hours to the day. yeah it does, look. i'm not sure it works that way, but at cdw we get that time is precious. so we'd access your needs then design a nutanix enterprise cloud. to give you more time to grow your business. yeah that's better. hey we still on for lunch at 15 o'clock? you bet. for private cloud solutions you need nutanix and it orchestration by cdw.

welcome back to "power lunch. i'm mike santoli, it is time for "trading nation. twitter falling to its lowest point in nearly two months, the latest drop in an extended selloff, the stock down 35% since its june highs where is the bottom for twitter? let's bring in mark newton and erin gibbs to talk about that. mark, this stock swings around quite a bit, it's been jumpy in the last year or so. how do you think it's set up at the moment >> mike, i actually am pretty constructive on twitter at current levels the stock is town about 35% since union, however, this followed a time when the stock almost tripled in price last year, so it's actually been consolidating a bit and if you look at daily charts of the stock, it's actually been forming a pretty decent basing

pattern that some might say is a potential beginning of a reverse head and shoulders pattern it requires a move up above 3560 for that to materialize but my thinking is momentum has been improving in the stock since october, i'm a buyer of the stock on pull backs. ideally right down near 28 to 28.5 for me is a good level, but i would start really nibbling on a 4% move and think that it's doubtful the stock hits under 26 anytime soon i like it technically and i'm buying with the expectation it's going to rally back to the mid to high 30s. >> all right erin, you know, on a fundamental basis twitter as a stock has never particularly looked inexpensive and right now there is a lot of noise about some users, some conservative users boycotting the sites, maybe some engagement issues. where do you come down, though, on the business and the stock? >> there's obviously a lot of negative press around it, but the bigger issue is i wouldn't use last year's price action as any expectation of what's going

to happen next year because they basically doubled their profits last year and they are looking at about 8% -- 6% growth for 2019 so they are just going flat. so when you look at these valuations there is a lot of room for them to drop and so they've been dropping for over 18 months on a valuation bases as their profit growth slows further and further, combine that with negative news and i really don't see a stop just yet for the strop in the stock it's trading pretty close to its target price so there's definitely room for it to drop further and in general just growth momentum stocks are out of favor right now so i just say, you know, if you are looking for interactive media, we would prefer something more like a facebook or in an active core versus twitter. >> all right different cuts on social media there. erin, mark, thanks very much appreciate your time today for more "trading nation" head to our website or follow us on

twitter at "trading nation." now over to sue herrera. >> hello, everyone here is what's happening at this hour world leaders arriving in argentina for the g20 summit heads of state from italy, south korea, canada, india and turkey among the first to arrive at the airport in buenos aires. president trump is due to arrive later today. new jersey prosecutors have marked paul caniero with murder and arson for killing the brother keith and keith's entire family and then setting a fire to destroy the evidence. they also claim he set fire to his own home >> the fire at his home served two purposes, one was to destroy evidence that he retained and brought back from the crime scene and the other was to create some type of an appearance that his larger or overall family was somehow targeted on a much lighter note take a look at that guy, that is a five-year-old chech an boy who has entered the guinness book of

reynolds for setting a new push up record he did 3,202 push-ups in 2 hours and 30 minutes. it was attended by a guinness representative as well as numerous relatives of the boy. and it was registered for five year olds, but i don't know anybody who could do that many push-ups. >> at one time i held the pushup record at centerville high school for 67 in a row. >> you did 67 pushups in a row. >> yeah, but what was that, several thousand >> that kid is my hero. >> it's great. >> very cool. >> it's ease. he to push up a five-year-old body, though. >> i guess >> on a relative basis it's still your body. >> i agree. >> right >> 2,000 push-ups, come on. >> i think that's pretty cool. thanks, sue. >> you got it. >> crude oil rallying after falling below 50 bucks a barrel, price is down 30% in just the last two months. at what point will low oil start to hurt? oil sure to be a topic at the g20 but the main focus on u.s.

and china, will we get a trade deal much more on that straight ahead. and now the latest from "trading nation".cnbc.com and a word from our sponsor.

stocks carving out some gains this hour. the dow had been down more than 160 points earlier in the session, the dow is up by 48 points, s&p adding 4.25 points and the nasdaq composite is up by 15 or 0.2 of a perspective. >> the oil market is closing for the day. let's go to jackie d. at the cnbc commodity desk. we will just leave it at that. >> keeping you on your toes, bill we are watching crude oil closely today and the market is going in the opposite direction of crude, not exactly what you would expect but still this shows the power of opec headlines, some reports that russia is amenable to an opec

production cut, that it would cooperate if that is the verdict next thursday so price gaining a little ground but only after it fell under the critical $50 mark to cut, not to not cut, whatever happens is the market is still oversupplied u.s. production held steady at a record this week even if opec and russia take their numbers down it's artificial since they ramped them up ahead of the iranian sanctions. session low today, guys, 49.41 back to you. >> thank you, jackie so john killdoff is joining us to talk about when lower oil prices to become a negative for the u.s. economy jackie ran through a bunch of different factors that are impacting the price of oil right now we are higher, but we had fallen below that $50 level, very psychological here. we have an upcoming opec meeting, oversupply, what is the most important headline for the price of oil at this point or can you single one out

>> it's a bunch of moving parts right now, but certainly opec and russia, saudi arabia and russia, what they do get together to do or not do will make all the difference and they've got a lot of wood to chop, as jackie just talked about, they have both ramped up production massively to over 11 million barrels, both countries, this is a record for saudi arabia, record for russia. we are at 11 isn't it amazing that we are sitting here not being sure what to root for in terms of do we want higher or lower oil prices. that's what we're staring do un. >> help us answer that question. when or why can lower oil prices be a negative and when can then a positive >> it used to be a no-brainer we wanted low oil prices because 70% consumer driven economy, it's a tax cut, lower prices picks up spirits and the oil and gas production in the united states was negligible. it's still small, it's about 5.9% of the economy, there's different ways of measuring that, but it's certainly an amount that is starting to make

a difference at least marginally on the edges to whit, the price break we got from 2014 from 1100 bucks down t 26 in 2016 that gave us a full percent point in gdp, most of that was all erased by a pull back in spending in the exploration and production sector >> you were with us on nightly business report the other night on your local public television station. >> 6:30 in new york. channel 13. >> you said you felt like $48 is the support level. we are holding above that level but now russia is talking about cutting production you don't cut in a vacuum, though if you're cutting production somebody else might want to pick up the slack wouldn't this he? >> no, and here is what to watch. they are talk walking a very fine line. president putin talked about wanting and aspiring towards an agreement and talking about throwing in 166,000 barrels of production cut they are not wanting to go full in like they did the last go around back in november of 2016.

so that's why i think they're going to come up short i still think we have the initial risk down to 48 in terms of pricewise, but if this opec meeting falls apart you could see prices rapidly fall down to potential support down at 42 there is a zone of congestion on the parts, you guys like to talk about that between 45 and 50 so it will be a tough slog but your down side object it i have is 42. >> let's say we go to 42 or 45, at what point are the energy companies, the smaller ones, at what point does their debt come into jeopardy? what price of oil? we've seen the movie before where we had the impact on the high grade complex because the energy producers were under such pressure because the price per barrel went is low >> we're starting to flirt with it i think you still would have to see that sustained and get into the 30s, break evens have come way down over the course of the past several years when this last happened, again, going back down to 26 in to 16 there were a slue of bankruptcies and the industry got reordered.

now, look, there is the miracle of bankruptcy and the mere ralph refinancing which got done a lot more than i thought it would in the last cycle the nuclear option for saudi arabia remains just pumping full out and driving this thing down to those low parameters, the 30s, the 20s potentially to force these guys out of the business. >> that's a nuclear option but at the same time sounds like the president would like that option to be taken. >> he does i think that would cause an unwinding of a lot of the energy dominance that he also aspires to it's a double-edged sword and it's hard to know what to root for almost this is a critical opec meeting, the rhetoric will be flying and stay tuned >> traders are long into this? >> he think you sell into this rally pop today. the 49 was a little overdone, classic overnight force liquidation, but now a reverse and short squeeze, but this is a sale here. >> it is interesting that they started raising production after they canceled or at least laid their amco ipo, too. they wanted $75 going into the

ipo. >> let's get as many barrels out the door as with he can. >> thank you, john. president trump today departing for the highly anticipated g20 meeting in argentina. before he left washington he canceled the previously scheduled talks with russian president putin, said that he's close to doing something with china. more on these comments patrick choef neck is the managing director at silver crest asset management and a long time china watcher. patrick, thanks for joining us. >> good to be with you. >> the president said that he's close to doing a deal with china but he's not sure he wants it. it sounds like somebody has been negotiating something with somebody in china and he is not clear or he's just lowering expectations what are you expecting to come out of g20 this weekend as far as u.s. and china go >> well, first of all, markets have been kind of hopeful over the past couple days about a deal, some kind of trade deal coming out between the u.s. and china. the white house has stirred the pot from time to time suggesting that that may happen

my view is that there are some short-term incentives for both sides to arrive at some kind of a truce or ceasefire, maybe push decision points down the road a bit, but that's very different from a resolution of the issues that are actually on the table i don't see either side really backing down or being close to substantively resolving those issues, but even if we get a ceasefire, you know, the market will like that >> what is a ceasefire in your view i mean, is it the 10% tariffs not going to 25 plus a delay in the second tranche of tariffs? >> right essentially, you know, the thing that's been hanging over the markets, hanging over corporate earnings projections going forward, outlook, has been this idea that you're going from tariffs on a narrow range of goods that are fairly modest to much larger tariffs on a much broader range of goods that's just the u.s. side of the equation that people are concerned about, the economic impact, that's not even talking about the retaliatory measures

that china would take. so anything that sort of pushes that back a bit from being imminent would be welcomed by the market. >> people were trying to game out how this all might unfold, people were saying that the declines in the stock market we saw in october, that might cause the administration to think, do you know what, maybe we need to do some sort of deal with china, the administration, you know, their market to market is the u.s. stock market, they won't like the market continuing to go lower. we are in a period where there are more people who believe that the stock market could go higher into year-end, namely because fed chair powell came out yesterday and said that the path wasn't preset. does that give perhaps cover, then, to the administration to be tough on trade? >> so the thinking in the market is that maybe they might want to strike a deal because that would boost the markets, one of the things that's keeping the market down and that would be good for the president, but i don't necessarily think that the president thinks about it that way, that he sees that his trade

threats have hurt either the u.s. economy or the markets. i think his response to the news coming out from gm about closing pants shows almost the opposite, that he is quite convinced that this is the way to go and that he's more likely to point the finger at the fed if there are any negative outcomes for the economy. on the chinese side of the equation, you know, obviously china might suffer harm from an intensifying trade war, but it seems to me that they are kind of hunkering down, too, and, you know, china -- with or without trade sanctions from the united states, china faces some wrenching economic challenges ahead and in some ways it's almost convenient to be able to blame the united states for those. so i don't necessarily think that china is coming, you know, ready to cave or make a deal, either, on the substantive issues. >> right patrick, thank you always good to speak with you.

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welcome back to "power lunch. mcdonald's hitting a an all time high up 16% in the past three months morgan stanley upgrading the stock to overweight raising the price target to 2.10 citing their modernization efforts. speaking of modernization efforts self--serve kiosks are a part of those efforts. they are designed to enhance and speed up customer service but it turns out some customers in the uk got more than what they ordered when the london metropolitan university tested touch screens at eight locations they found fecal matter on every single one mcdonald's released a statement saying ourself-order screens are cleaned frequently throughout the day with a sanitizer solution all of our restaurants provide facilities for customers to wash their hands before eating. >> imagine if they didn't cleanse them frequently. >> my theory is that you have mothers who go in with small

children, they just changed a diaper. >> okay. that makes me feel a little better. >> use a wipy and clean your hands first. >> when you have three small -- i'm thinking three small children for some reason, but when you have small children it's easier said than done to keep things under control. >> the more germs we are exposed to the less sick we get overtime that's what i think about living in new york city. >> this clearly bothers you. >> well, i don't like going into airports where you go to a restaurant and order everything on a touch screen because you don't know where other people's hands have been and you are eating the food that comes out directly to you after you order from the touch screen. so there's no opportunity to wash your hands in between. >> i don't know how we did this, but we got a picture of you in an airport recently. >> ha, ha, very funny. >> i have brought clorox wipes in a baggy and wiped down my

tray and seat tables. >> you have that traveler. >> i do, too you're jealous when somebody else wipes down their tray, right? >> you're i wish i had a clorox wipe. >> as long as they do it then i'm safe are you one of those that travels with a do it i'm safe >> are you one of those that travels with a mask too? >> no. just the wipes >> thank you so much for suggesting that story today. >> by the way, i know what you're thinking, when are you doing today's mystery chart? why it is so critical to the s and p 500 when we come back.

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world's best inflight entertainment. fly emirates. fly better. welcome back netflix is our mystery stock of the day. steve says this is one of the most critical stocks in the s & p 500. why? steve says as goes netflix so goes the s&p it used to be once upon a time general motors and now it's netflix. >> thank god it's not still general motors >> really. >> if you look back and look at the chart over my shoulder this is it with the s&p kind of hard to deny the

movement that we get here and you just see the similarities in the overall chart. if you go back probably a month or two before the collapse amazon was 35% of the gains for the s&p. netflix 21%. you add up all of the faang stocks, microsoft, throw that in there as well you have 99% of the s&p's gains for the year it makes perfect sense that these names add up what the s&p is going to do netflix in particular looks the most similar to the overall movement of the s&p. >> that's because the s&p have been a growth market it was sort of the poster child. as the s&p turns into a more value oriented market isn't netflix as an indicator less important? >> you nailed it right there i think it's more important

because as we switch from growth to value, growth is what got us here in the first place. you have to live by the sword, die but the sword. if growth got us to these levels kbro growth tarkes away as well >> it cannot >> it adds up. >> there's only a rally if the growth stocks. >> the waiting is too high, right? >> exactly the only way you do this is for growth to come back. if you slap up a chart i'll show you where we are heading here. so bill, you were on the dow the last time we talked about this i will cover this up we thought we had -- >> yeah. >> and remember that day >> yeah. >> that day was right here >> what is funny is -- >> exactly you hoped that >> so you go from here >> yeah. >> we broke this level which was 27 and a dime. that is where we traded to we broke that level. we traded down

i said we were going ahead towards this level which is 2603 or 2532. we got close 2631 we bounced from there. what's our head wind is the moving average 2761 currently 2751 currently 10 handles below that level. this is where you you want to sell the market if you can't breakthrough this is the level to watch if we can't close above 2761 on a three-day rule the market is still short. >> thank you >> thank you check please is next ♪ ♪ what if we could turn trash into money? plastic bank is doing just that, by exchanging plastic for digital credits redeemable for everything from food to education...

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check please i'm fascinated this. sedan sales 50 to 60% of all sales in the united states now it's 20 to 30% ford we linl nated all of theirs ex-septemb e except the mustang now gm is doing the same >> we have oil prices that are how now and fuel efficiency standards are high even if oil prices are higher people aren't paying as much out of their pocket to fill up their taj. >> how rapidly it has changed. >> absolutely.

oo company struggled to find its footing. the shares are up 21%. it is happening. >> wow >> amazing >> thank you for watching power lunch. >> closing bell starts right now. it is a time for the closing bell everyone. i'm wilfred frost. it is wearing off a little as the tension turns to argentina a preview of what to expect coming up. we are live to discuss >> i'm sarah just when you thought earnings season was wrapping up think again. we have a major slew of reports coming up. we'll bring you the numbers from game stop and more