>> yes. >> mr. obvious says. >> netflix up 5%. >> but it is. >> the risk on day. >> even the banks as you talked about across the board, even with that, you know, another negative call on the banks bank of america, 1 point be point 25%. citi is up as well thank you for watching "power lunch" starts now scott, folks, thank you very much welcome to "power lunch. i'm tyler mathisen rally on the bulls are charging on optimism the u.s. and china will make good but can you trust the rally? the two big trade headlines driving the markets. reports that china will allow foreign companies greater access to its economy and president trump saying he might be able to intervene in the huawei cfo arrest to get a trade deal done. wilbur ross will join us for a "power lunch" exclusive. rising rates and soaring prices. what's ahead for houses in 2019? the top trends and the stocks that could benefit "power lunch" begins right now

and welcome to "power lunch", everybody. i'm kelly evans. stocks are trading at session highs. check out the dow, s&p all having the best gains and the s&p pulling itself out of correction territory the dow remains out of it as well but the russell 2000, nasdaq and dow transports down 10% in the recent highs. sectors, health care and energy best performing. real estate is lagging more on that plus, it's the ipo of the day. tencent music getting a decent pop. up 8.5%. tyler will have more straight ahead. >> kelly, thank you very much. let's get to our top story, and today it is all about the rally and the proximate cause of it, which is trade bob pisani on the floor of the new york stock exchange. ylan mui with the trades and let's begin with bob. >> a series of headlines led by

trade. let me give you briefly the four or five major headlines that we're facing now the huawei cfo granted bail. the president might intervene if it would help national security interests or pose a trade deal china reports the made in china 2025 replacement also a positive there are some reports that theresa may survived the brexit confidence vote. that's marginally positive i think positives for the market and italy may seek a deal with the e.u. on the budget did not happen today look at this we're at the highs for the day dow leaders, caterpillars, boeing, 3m dow/dupont banks part of the rally. sectors, fairly broad, too not just trade-related names tech, consumer, discretionary,

health care, utilities and reits. big sigh of relieve on the tencent deal priced at 13, opened $14.10. that's a steady bid that you've got there. a lot of relief. this was a representation for a lot of future speculation on ipos weak market condition, slower china. didn't stop it a lot of demand. by the way, kelly, very strong volume good trading back to you. >> decent test of the markets. back to you. >> are the markets overreacting to the up side today with the small sign of progress on trade? let's bring in ylan mui for more perspective on what's going on in d.c ylan >> reporter: kelly, there are encouraging signs but there are caveats. positive news for investors. first off, soy beans china is preparing to restart purchases and reuters saying that will begin with 500,000 tons of soybeans worth at least $180 million

also as bob mentioned earlier, "the wall street journal" report that china is considering holding back from the made in china 2025 program and that would allow foreign companies more access to its markets but there are also multiple reports that the white house is considering a travel warning on china. now we reached out to the state department and they told us that there are no announcements at this time but that the department has long advised caution when traveling to that country. also, the president telling reuters that the arrest of the huawei executive could come up in future trade talks with china. that came up during a senate hearing on capitol hill here this morning and a top department of justice official said that the agency is not a tool for trade still, some key gop senators like ted cruz said they believe the huawei executive should be fully prosecuted. >> it is not in our interests to have high tech equipment sold to the ayatollah.

if huawei was engaged in that, my understanding is there is significant evidence that there was, then i'm glad we see an administration enforcing that. >> cruz said he does support the administration's tough stance on trade, that he stopped short of linking the two together back to you. >> i don't know what was more interesting in that report, the details of your report or ted cruz's beard ylan, thank you very much. >> reporter: we did remark he said it's only a few weeks old. >> very on trend there very hip thanks, ylan. trade tensions, the huawei cfo drama, the fight to keep things open. a few things on the trump administration agenda. financial leaders meeting at the commerce department today for a space investment summit. news exclusively from the white house is the commerce secretary wilbur ross. morgan bren nin here nen here al >> always good to see you. >> thank you. >> happy to have you here. the report we want to begin with

from the wall street journal that china plans to scale back its made in china 2025 policy to give foreign companies greater access to its economy. there's that there's the idea that they're going to buy more beans. there's the idea that they're going to reduce tariffs on u.s. made automobiles these are all, i assume, encouraging steps in our trade negotiation with them but do they go far enough do they miss critical points about intellectual property, market access, and technology transfer >> well, the first thing i think they do is they prove that president trump was right when he announced his summary of the talks of president xi. you'll remember there was some controversy at that time, what president trump then said about reducing the tariff on auto, and that will help a lot and, in fact, interestingly one of the

big beneficiaries of that is bmw. they are the largest exporter of autos from the united states, period they export about 40% of their vehicles to chien fwha so that's a very direct help to us and probably will be helpful in the talks we've been having with the german auto manufacturers. in the soybeans, same thing. the president had said there would be a relatively immediate resumption of soybean purchases. it now turns out that he's accurate as for the 2025, we don't object to them trying to become more involved in high tech. we do object to using inappropriate methods like stealing secrets, like forced technology transfers, that sort of thing we're perfectly happy to compete with them toe to toe as long as it's a level playing zbleeld so

what can you tell us about this, quote, scaling back of the made in klein na 2025 initiative? what in practice do we -- do we know that they're willing to do or scale back? >> well, it's a very complicated thing. the one thing it encompasses about 11 different industries and they had originally announced it back around 2015 and then it was part of their ten year roadmap and it essentially said they wanted to get 70 to 80% market share and a whole big list of very interesting new technologies that provoked a very big response from the u.s. and from some other countries so since then they've been playing down 2025 if you'll search the recent clips, you'll find they haven't been talking that much about it. that doesn't mean they've dropped it theyclearly are going to move

up the technology value added spectrum they have to because they're no longer the world's cheapest place to manufacture a lot of other parts of southeast asia and even africa that are much lower wage so they have to move up technology. >> mr. secretary, what else can the u.s. do to make sure that china's not stealing intellectual property, that it's not stealing guest lists from marriott and using them to track its own citizens or international citizens what more can the u.s. companies do and the u.s. in that regard, other than tariffs >> well, what we need is enforcement mechanisms part of the error in the way china was admitted to the wto is that the then administration admitted them on the theory that they would play by the western rules of the road. the error was they didn't put in

place a real enforcement mechanism in case they didn't. so what you will see if we did get to a trade agreement with china, there will be verification procedures, there will be enforcement mechanisms because the paper itself is one thing but you really need detailed implementation and a means to correct in many cases it will also take legislative change on the part of the chinese government and in other cases it will have to require the change in practices and the change in the court system so we're talking about some fairly fundamental structural changes that over time will be needed to accomplish at least our end purpose. >> given that they're unlikely to accept those changes, should we expect more announcements from the u.s. such as the travel advisory that reportedly may go out saying, you know, perhaps it's not wise for u.s. citizens to travel to china

are those all tools in the tool kit for effecting those changes? >> well, there are all kinds of tools in the tool kit. i'm not so sure what provoked the rumor about the travel advisory it could be something as simple as the former canadian embassy official that went missing yesterday in china, but we haven't made any announcement and as far as i know haven't made any decision about changing travel advisement. >> should american business people who are in china feel safe >> i think so because after all, their employees are mostly chinese employees so if the chinese did something detrimental to those businesses, they would be hurting their own people most of them also have 50/50 joint venture partnerships with chinese entities and once the chinese took action against

them, i think it's a lot more complicated than that. >> secretary ross, morgan brennen here great to speak with you. this morning you held a space investment summit. >> yes. >> big focus there was this idea of large scale infusion of capital and how you get larger institutions to invest in this emerging sector. i mean, as the old saying goes, space is hard, potentially great reward but also great risk what is the role that government plays in essentially growing and boosting and fortifying space? >> well, originally government was almost the sole funder of space. remember next friday is the 50th anniversary of the apollo 8 mission so it's a long time ago in one sense but a very short time ago in another. in those days it was essentially government funded. now space is a $400 billion industry, 80% of which is

private sector so it started to change a lot from government to private the real good rule for government is to take the adventurous part, the far out scientific research and propel that into a state where someone else can commercialize it and that's what's starting to happen you see this little pin i'm wearing is from the international space station. there are fascinating things and they're testing osteopathic pharmaceuticals on mice and they're being charged 70,000 a pop for doing it there's another one that's using the centrifuge to test other material there's all kinds of stuff going on pushing the outer parameters of science in space that will

lead to more night things. what's really happening in the commercial side is quite a few things first of all, you're getting to reusability of the parts of rockets. think how few people would be able to afford a 747 ride if it could only take one trip and you have to scrap it now you already have the launch mechanism which was 77% of the total cost of the lawn reusable they're working on getting the fairings, that's a big help. the other thing that's a big help is starting to get into repetitive manufacturing of the same unit. when it's science driven, the scientist wants a little curly-q here, curly-q there.

now once you get into these, it drives down human cost it's all there that's important because one of the next big frontiers will be space tourism. richard branson already announced that he's going to take a test run in his plane that has already had 600 people. >> you should take step three but that's another issue. >> let me turn the conversation to a meeting that i believe you're going to go to shortly regarding empowerment or opportunity zones, which was one of the provisions in last year's tax law that has very favorable tax treatment for investments in certain neighborhoods or regions. i'd like you to explain that because it has got a lot of

investors very, very enthusiastic what description of what this event is and how important do you think these tax provisions involving empowerment or opportunity zones will be? >> i don't want to front run the president's announcement, but i can tell you, i addressed a real estate group in florida last weekend. half the questions there were about these zones. there are already some 7,000 communities that have been designated for this factor that's a lot of communities and they're all, needles to say, communities that are somewhat depressed, often the women are employed and they're communities that really need help. directionally it's hey wonderful way to bring up the bottom cover near this country.

you'll have more details about it at around 2:30 this afternoon. >> mr. secretary, before we let you go, just one more question going back to this extraordinary hack of marriott by the chinese. so what is your message to u.s. companies? forget even the ones operating in china what should companies here do knowing that china is targeting this information even after they struck a deal with the obama administration promising they wouldn't do things like that what are u.s. companies supposed to do about this >> well, a couple of things. many companies have been ask rim ping on the cyber security budget they haven't been as protective of their own resources as they should have been the first thing they should be doing is trying to make sure that they've done more to protect themselves than they have been doing before second in terms of the agreement that president obama had, agreements aren't really useful unless you have an enforcement

mechanism and unless you have some sort of a penalty that adheres to a wrongdoing. >> right. >> otherwise, it's just a scrap of paper >> secretary ross, thank you for your time today. always good to see you. >> thank you it's good to be on again. >> wilbur ross, secretary of commerce >> space geek as well? >> yes >> congress has been tasked with regulating space. >> have they picked a logo for the space force? >> no. >> morgan, thank you as well we have a news alert in the bond market right now. about the ten-year note which is up for auction rick santelli, how did it do >> well t didn't do too bad. i gave it a charlie plus c plus let's go through the details 9 years, 11 months it was originally auctioned in november the yield at the dutch auction 2.915, actually the bid side of the issue market priced right 2.35 bid to cover was a little light. lightest since february of this

year all the other metrics, 63.1 on indirect and ten point in on directs. it was improved from the 9%, 10 auction average. dealers take a paultry 21% we've rallied a lot to push yields down. it shouldn't be surprising that the long end doesn't do well tomorrow of course will be 30-year bonds. tyler, back to you. >> rick, thank you stock session highs right now, the dow up more than 400 points. are the markets being a little too optimistic on trade? could this big rally fizzle like yesterday's did? plus, may day in the u.k will theresa may hold on to her impre minister job we will head live to london.

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this is moving day with the best in-home wifi experience 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. welcome back to "power lunch", everybody. the race to get a brexit deal done taking a new turn u.k. prime minister theresa may

facing a no confidence vote right now. her political career and brexit are very much up in the air. wilfred frost is covering it all for us from london hi, wilfred. >> reporter: hi, tyler yes, indeed. her career is up in the air but far less than it was late last night or early this morning. why? because so many of her mps have publicly backed support for her during the course of today she needs 50% or 317 of her mps to -- 317 is the full members. she needs half of them, 159. over 170 have done so during the course of today. that's in part because she has offered them a compromise. she said she'll take the party through brexit but she won't stand for the next scheduled election in june 2022. so what's going on next? well, the mps will begin voting any minute now not in the house

of parliament. they've been asked to make one simple choice of two options, i have confidence of theresa may as leader or i don't have confidence of theresa may and then we wait for what the number is of sir graham brady sterling, the betting markets and consensus here in parliament, around parliament is that she will win. the question is by how much. guys >> wilfred, thank you very much. wilfred frost following the action for us in london. stocks here are in rally mode today we're at session highs on the dow. up 438 points. up a little more than 450 at the highs. are we a bad china headline away from seeing all of the good vibes from fading? let's bring in joe and hugh johnson, chairman and chief inbe vestment officer with hugh johnson advisors hugh, let me just begin with you. the reports this morning out of

the wall street journal are that china may revise its 2025 plan to allow for more u.s. investment or something like that but it doesn't sound like people have that much faith in them carrying through on making real changes will the markets be disappointed again, hugh? >> well, this is -- this is clearly it the implication is it's been an on and off i think it will continue to be a little bit more of the same. we'll have an on and off a deal will be consummated in march. some sort of a deal will be consummated. first of all, trump is focused on 2020. you know we're talking about increased agricultural exports to china soybeans, that could bring the farmers on to his sort of -- trump's rolls when we go towards the election in 2020 the second is china has as an

awful lot to lose. both sides have a very strong impetus to get a deal done and i think they will get a deal done. i think that's why you're seeing progress hopefully the interruptions won't be as much as we've seen and won't be as disruptive to the markets. >> joe, going back to the two tracks in the u.s./china relationship, on the one hand you have the tariffs and on the other hand you have the spying, the hacking, the issue about stealing u.s. company's intellectual property. if the u.s. wants movement on the second front and is using tariffs get there, what happens if we see 25% tariffs slapped on goods? is it worth it to effect change? >> the short answer, no, i don't think it would be worth it unfortunately, it's hard to see how all of these issues aren't interconnected or interrelated you have different pressure

points in different areas where the trump administration is trying to use some form of leverage we've been at the mercy of all of these headlines whether it's china talks, headlines coming out of europe the end result which we can clearly see has been volatility. some days it's been bad. today it's helped us out there have been positive developments at least over the past 24 hours which have helped markets. >> you know, hugh, 2018 has been a hard year to make money in just about anything. will 2019 be, quote, easier? and how can i make money next year what kinds of stocks, what kinds of fixed income, hugh? >> tyler, i think it's going to be easier. let me tell you why. i'm certainly crossing my fingers and hoping we're not getting the disruptions that yes is pointing to i'm hoping we're going to get

fewer of them. one thing that's happened in the correction, not a bear market or a beginning of a bear market the market has gone from being 1 or 2% over valued to being meaningfully undervalued for the first time in a long time. 10% undervalued. that gives us a lot of up side as we look towards 2019 if things play out the way i think they will as far as earnings and interest goes. the kinds of things you should look at, let's face it the markets have said, let's be a little bit on the defensive. keep a high allocation of equities think about things like consumer staples. i hate to say it, but even utilities. i hate to say it, but even health care. companies like cvs companies like walmart companies like detroit edison. they have good dividend yields solid dividend yields and that gives you a little bit of a curb shan just in case things get sloppy in 2019 i'm relatively optimistic. >> those are specific names for

people to check out. joe, i was going to zoom it back out here and say is the recommendation still to remain euro stocks are on track for the second down year in three. the u.s. markets barely had a down year in a decade and this year is unchanged. >> we continue to have more conviction in the u.s. relative to the rest of the world that's really twofold. one from an opportunistic standpoint when you take a look at what's happening with economic growth, this year particularly we're seeing a growing divergence between the u.s. and the rest of the world and you're seeing it in earnings. the second reason is as we near the end of the cycle, and i think there are a lot of signs we are getting closer and closer to the end of the cycle, the u.s. tends to exhibit more stability in times of market stress >> relative stability. >> relative stability. right, relative stability. unfortunately we do believe this choppiness, the back and forth we've experienced probably isn't going to go away if anything, maybe next year is just as choppy

you have earnings growth decelerating you're probably going to see economic growth decelerate as soon as the fiscal stimulus begins to fade and of course you have central bankers tightening monetary policy. >> guys, thank you joe and hugh johnson the last two years the national football league has faced controversy and reports of declining tv ratings, but in the one area that really matters the league is doing just fine and we will explain that a little bit later. when one sports team just isn't enough, is cnbc's billion dollar buyer tillman fertitta about to add another team to his portfolio. we'll tell you about that. a big interview tomorrow, kevin plank joins us at the 10:00 a.m. hour of "squawk" on

the street." "power lunch" will be right back

hello, everybody i'm sue herera here's your cnbc news update for this hour. former trump personal lawyer michael cohen leaving court just a short while ago after being sentenced to three years in prison for campaign finance violations he will report to prison on march 6th. he was also asked to pay nearly

$2 million in fines, forfeitures and restitution. the judge said despite his cooperation it does not wipe the slate clean. physicians with university of miami school of medicine presenting their findings regarding the u.s. diplomatic personnel in havana who experienced neurosensory symptoms they could not confirm what caused the ailments. another pet foot recall to report this involving certain types of 9lives cat food. the fda warning some specific lots may have low levels of thi thiamine and japan east railway giving the media a sneak preview of its next generation bullet train that is currently under development. it has a longer front nose and a distinct blueish silver color. the train will launch in 2030 with speeds surpassing 224 miles

per hour you are up to date that's the news update this hour kelly, back to you. >> if only we could get one in the northeast, sue thank you so much. >> good luck with that hope springs eternal. >> exactly sue herera there let's get a check on the rally at this hour stocks are trading around session highs. the dow is at 442 points it was briefly up more than 450. all three major indexes posting the best gains the s&p moving out of correction territory today. the nasdaq still in it that means it's 10% below the recent highs. >> the ceo of united continental just wrapping up a conference call our phil lebeau is listening in. fuel costs, animals on planes and lots of issues facing airlines and we have the details ahead. a big night on cnbc. two all new episodes of "deal or no deal. they begin at 9:00 p.m. eastern time only here on cnbc california phones offers free specialized phones... like cordless phones,

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit united continental ceo oscar munez holding a conference call. phil lebeau has more. >> this was about expansion.

when you look at what united has planned, it is still increasing its capacity as it laid out earlier this year. much of what they talked about today was international expansion. specifically there's eight new flights they're adding a lot of new flights coming out of san francisco, the hub there. the capacity going up 4 to 6%. for united the big question is can they continue the momentum that we've seen in the last year this was a huge year for the company in terms of growing profits, growing revenue the stock has done fantastic, but on the conference call with reporters the ceo was asked you've added segmentation, greater fees for people picking out certain seats. are you worried about alienating customers? here's what he had to say? >> it is not our intent to alienate customers it's to offer them choice while remaining competitive on an economic basis and more importantly keeping flying and growing to where people want to go all of that goes into the mix but there's certainly not a piss

off the customer factor in anything we do we try not to anyway tough question not a good answer necessarily, but it's just what we do. >> not intent to piss off the customer look, i give him credit for being candid. >> that's candid. >> one of the best performing airline stocks here. real quick about this question of alienating customers. for as much as people complain about not just united, you're nickel and diming me, i'm not going to fly you anymore i don't buy it demand is up as much as ever all of the airlines are doing this in order to help the bottom line they don't do it to alienate customers. they do it to make money and make profits. >> united hasn't lost those customers? >> no. will you occasionally come across somebody who says i'm never going to fly airline x, y, and z? occasionally as much as they may complain, it's a lot like taxes. they will go where they need to go based on flight and airline.

>> they will go to the carrier if it's the dominant out of that airport. you're going out of newark, it's pretty much united. >> taxes and monopoly, that's not a ringing endorsement if you say, i can't avoid it. >> i understand what you're saying this was an industry losing money for a long time. >> true. >> now that they're making money because they're charging for bags, an sill layer rip fees, people aren't happy. what do you want them going back into bankruptcy? >> no. on time is better. >> great to have you in the house. >> great to be here. >> coming up, very interesting way to sell home furnishings switching over here to camera 4. from here to there tv magic diana olick is going to explain about home furnishings and more. di. >> reporter: hi. i'm here home furnishings made in america specifically that is the draw of the new brand of rental suites but when they were outfitting everything made in america, there was one it ty ulemhecod not find

we will tell you what that is coming up next on "power lunch."

have you ever been staying in a hotel or corporate apartment and thought, i really like this lamp, and i'd like to buy it >> have you? >> just take it. just take it, man. what if there was a patriotic twist? a new short-term rental company is banking on both interesting concept. diana olick here to explain it to us now. hi, di. >> reporter: hi, ty. no stealing. let's say that up front. there was a lot of competition in the short-term rental market with airbnb, home away, all the big name corporate brands. the ceo of northeast suites which is based here in fwos stop decided he needed an edge and he launched over the summer the go local suites everything is made in america from your bun coffee maker down to this baking sheet which was actually made in massachusetts all the dishes made in america hershey kisses, you know they're from hershey, pennsylvania, right?

my very favorite item, here it is, here it is, the easy does it can opener made in st. louis, missouri now if you saw while i was walking past all of this that there are these little scan codes everywhere, it's because if you like what you've been living with, yes, you can buy it >> we reimagined this as a showroom space giving guests a chance to actually go around the apartment, read about the items during the course of their stay and actually decide -- make a decision if it's really worth that investment for them >> now there are some higher end items, some lower end items. you can actually look in your go local magazine to see if there are items you want to purchase this is like the in flight sky mall you're considering your rental apartment like the sky mall. i'm talking everything from the vacuum cleaners. you've got all of the appliance here even this toaster was tough to find it was a hatco it's a commercial brand. only toaster made in america

they say they've sold over $10,000 worth of products already, but drumroll to the one product that they could not find made in america. no, it is not the paper towels, it is the paper towel dispenser. so what do you do when you're american and you can't find something? you make it on your own. back to you guys >> which is fascinating, but my totally separate thought was i've never stayed somewhere and a hotel and thought, i want to bring this home. >> some people do. big brands are doing that. some of the big hotels are selling some of their stuff. >> i believe it. you know, there's always -- you're sitting there bored, and especially, hey, it's made in america, a paper towel holder. we knew we needed one. diana, thank you so much let's talk about the health of the housing market. ken leon joins us from cfra. what do you think is going on in terms of stals with prices up, the supply relatively tight, is the housing market going to go on next year?

>> it's stable is a good foundation there it's not speculative as ten years ago. not a financial crisis or housing crisis we have less inventory, less speculation. also we're seeing homeowners be more conservative and the investors month to month has come down forexisting home sales. >> on that point, if that's what you're expecting to happen with the market overall, who does that leave for investors best position >> for investors it's really a pivot away from the home builders and looking at opportunities in home improvement retailers, home fun fishers. the reason for that is 96% of households, they're going to stay in their homes. they're saying we have a 3, 3.5% mortgage, we're not going up to 5% we're going to think about improving our home whether it was like the previous story or actually doing home remodeling oren novation. that's a big up side we didn't

see before. >> lay-z-boy you think is a winner because of that >> lay-z-boy will be a beneficiary. the reason for that is besides what we see in the macro picture for housing, they're pivoting away from china. they're making more of their upholstery in mexico, finishing it in the u.s. case goods are coming from vietnam. so i would say in the last two or three years not only lay-z-boy and ethan allen are being more thoughtful where they get their goods. that's going to help them on the margins. >> if they get it totally made in america, it can show up in one of diana's short-term rentals. coming up, a soccer success story. atlanta united winning the mls trophy in only the team's second year of existence. there is that trophy we've got the remarkable numbers 'ltahis overnight sensation. wel lk to the team's top

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this is moving day with the best in-home wifi experience 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. welcome back to "power lunch. time for the power run down and today a trio of sports business topics first up the nfl salary cap are going up if they're going up are the owners making more >> project next year's salary

cap around $191 million if the owners are making more, the players are making more the league revenues go up together >> that is a pretty big jump, 6% $190 million next up the houston owners rockets is mentioned as buying another team in a different sport. >> tilman met with the nhl commissioner about relocating the coyotes to houston but for a team has been linked to this deal ever since he bought the houston rockets and the previous owner road blocked and insiders, industry sources saying maybe the media is going too far with the speculation. all preliminary discussions right now. >> wants to put whatever makes more funny >> better to have two tenants than one >> finally joined by atlanta

united give us the back story on this business >> this guy is a champ landis major league soccer team would in only its second year of existence. they have taken atlanta by storm leading major league soccer in attendance with an average of 53,000 fans per match. 70,000 people or more come eight different times, kelly they led the league in merchandise sale and the team is focused on younger, unknown talent rather than the european older star imports also the highest tv ratings for the finale in more than 20 years. >> i truly had no idea it was such a big deal in atlanta and beyond thank you very much, eric. all right, here on set is darr darren, you had a big weekend there. how do you explain why soccer

caught on so fast in atlanta where the big sport is sec football >> when i took the jump everyone said you have a great owner in arthur blank but it is a fiscal sports town. and what it is is a city of transports so people may have the american football team and an eagles fan, but no one had a soccer liege aneaguance and the unified. >> you created it from the start. the people who transported from dallas, washington and detroit had all their old allegiances and this is one you built fresh. you have higher average attendance than every nfl tour >> in american sports we're higher than if you take out nfl, highest across all of them >> highest across all of them. >> this year we include the playoffs

55,000 14th in the whole world. bigger than manchester city and these clubs that have been around over 100 years, we are doing better than they are >> in atlanta, tyler i thought maybe seattle, new york, miami. is the success, which, of course, will attract people, is the success sustainable? the coach is leaving are you able with the funds you have or generated by this make sure you can keep this going >> absolutely. we're only in the second season. expansion gets easier each year because you have more chance to sort of show what you got. if i take the coach, for example, when we hired him we had no stadium, and players. and we are the team that just won the champion so it makes it easier to go out and bring the next coach in. we have the world cup coming in 2026 and atlanta is an example of the younger demographic that really loves the game of soccer. it's a 90-minute game and not three and a half hours and the fans are part of the experience. they are the ones that lead the chant. >> why have you, the way that

some of the other teams have gone bringing in the big sort of aging european and the guy in new york who was here, he's just leaving. >> so, my view, i used to work in the premier league before that and in the rest of the world you play trade but if you have a player at the end of their contract who is retiring, no sell-up value the time was right you could attract a young talent from an argentinean league and then possibly sell him to a top club in europe. >> how many of your team members are home-grown american? >> at the moment we probably have 12 players -- >> out of? >> out of our squad of about 25. about half but great, young talent. george belo who scored in the second game ever for the club. young talent coming through.

inspired for a team. >> you have wanderful stadium down there mercedes-benz stadium. >> thank you very much. dell is now up 483 points. will the rally hold into the close today? we will see. the recent marriott breach may be pointing to hackers in china. what does that mean for u.s. company and u.s. national security the energy sector has been slammed for the past three months it is rallying today second hour of "power" begins after this

here's what's on the menus market leadership leading to wild stock swings. so, what should investors focus on and what should they shutout? chinese espionage the recent marriott breach may have been done by hackers in china could they be doing more with our data higher education, lower returns. college endowments trail treasuries we're going to look at why and who is underperforming p "power lunch" starts right now welcome to the second hour of "power lunch" i'm tyler mathisen trade talks between the united

states and china that's today's news. the biggest gains and today's gains the biggest of the month dow and s&p are back in positive territory for the year fundamentally they're kind of flat leaders right now caterpillar, american express, look at that, verizon is a loser on this day the fang stocks having a good day. netflix the point person there up more than 5%. energy seeing a bounce today as oil jumps. halliburton, eog are the leaders there. you see them all right there west texas up at 51.98 always exciting to have a new player in the market kelly? >> it's doing pretty well today like you said. for more on what is moving in these markets overall let's get down to bob pisani >> we closed off to the european

low three daze inys in a row. good volume down here. positive market headlines. mostly on trade. huawei cfo talking a 2025 replacement also a big help. there have been speculation that theresa may may survive the brexit confidence vote marginally confident for the markets and the italy may seek a new deal with the eu on their budget all moderately positive. consumer discretionary, tech, banks, utilities down, but the new high list is mostly utilities. they had a tremendous run and market is more volatile and people bought utilities. all 52-week highs like american electric, duke and banks are bouncing most are up 2% don't kid yourself a lot of 52-week lows and suntrust and huntington banc

10 cent, let's call it the disaster averted this company postponed their ipo back in november but we still have the crazy market conditions and they went with it anyway 13 to 15 was the talk. opened at $14.01 that is exactly where it is right now. $14 and any stretch this would be a successful ipo. a lot of people were concerned that it would price below the range and that would send a bad signal to the bigger ipos. the one thing i would note here is the valuation is lower and today the valution is about $21 billion. so good news, but it does kind of send the message, maybe evaluations are a little too high for some of the tech ipos back to you. >> bob, thank you very much. "wall street journal" reports that china is considering greater access for foreign companies potential breakthrough in its ongoing

trade dispute with the united states ylan is in washington with all the details. >> this is about the 2025 program. increase the amount of domestic context in their product to 70%. this was supposed to roll out early next year right smack dab in the middle of trade talks if china does pull back on this program wilbur ross told cnbc today american companies would have a better shot of competing in china >> their employees are mostly chinese employees. if the chinese did something detrimental to those businesses, they would be hurting their own people most of them, also, have 50/50 joint venture partnerships with chinese entities and, therefore f the chinese took some action against those entities, it would also hurt the chinese partners

o, so, i think, it's a lot more complicated than that. >> the administration is weighing a travel warning on china and called that a rumor and said no decisions have been made u.s. businesses should feel safe traveling. we have breaking news and let's head to sue herera at the breaking news desk >> this is more fallout that michael cohen has been formally sentenced. there are more parts to this moving story and this is one of them federal prosecutors have now given the "national enquirer" publisher immunity over the hush money payment to the purported woman that was, basically saying she was going to go public with the alleged affair she had with then candidate trump this is what they say. ami admitted that it made the $150,000 payment in concert with the candidate's presidential

campaign and in order to ensure the woman did not publicize her damaging allegations about the candidate before the 2016 election ami also admitted that its principal purpose was to keep it from influencing the election. michael cohen has said in cooperating with prosecutors that he was directed by then candidate trump to make those payments to stormy daniels and also this woman karen mcdougal a non pr an agreement is in place >> in concert with the campaign. with the intent to influence the election >> absolutely. those are the key words. and that is what michael cohen had testified to to prosecutors in his cooperation he thought he was going to get

an easier sentence the mueller team said he did cooperate. they thought quite effectively but the southern district of new york disagreed with that and the judge side would the southern district of new york, which notoriously tough. he did not get a lighter sentence than the defense team was expecting because the southern district said he did not sign a cooperation agreement. he did cooperate with mueller but not with us. so they asked for a strict sentence only a couple hours since michael cohen was sentenced and now ami has gone to the southern district and said, we basically want immunity and we will tell you what we know >> so, this was an investigation that may have stemmed from the mueller probe, but was not led by the mueller probe this is totally separate >> yes, it was separate. not led by the mueller probe but kind of parallel to the mueller probe in many ways but it was not necessarily led by the mueller probe

>> the immunity piece of it interesting, as well sue, suggesting they could have more information that is useful otherwise why would they be granted? >> that is part of it and that is part of what michael cohen said in court today. that he would continue to cooperate with the mueller team while he is incarcerated and davis who was his former attorney who resigned this afternoon did so so he could speak publiclyand counsel amits michael cohen with the mueller probe. >> thank you. for investors today it's all china, china, china. or will short attention span pivot us by the end of the week. bill smeed and brad mcmillan, officer at commonwealth financial network. bill and brad, welcome bill, let me start with you. in the intro there we make an interesting point. all about china and what seems

to be rhetorical changes and maybe some progress on that front and next week it will be the fed. are we in a headline-driven market and how long is that likely to persist if we are? >> well, these are always good questions, but i think what we've had happen is the market return to where it normally operates, which is there are good investments to be made, but normally people are afraid to make them because they don't want to look foolish in 6 to 12 months so, over the course of the last four, five, six years, people were fairly consistently being rewarded and, therefore, weren't really asking themselves, will i look foolish six months from now or look foolish a year from now? now we're back to the point where people are scared. the lousy markets move money from weak hands to strong hands. so, there are great bargains out there right now for those that

have five-year outlooks rather than 6 to 12-month outlooks and that's the big story everyone wants to put humpty dumpty back together the way it was and we don't think that's likely to happen in this environment. >> brad, do you see it the way bill does? in other words, people have moved from comfort to fear and that that opens up opportunities? >> i do think there are opportunities out there, ty, but the thing is we've seen this, not so much the confidence has gone away by historical standards because valuations are still quite high valuations are low by recent standards and we are see if they can bounce back with headlines this is not about the fundamentalists but about confidence and what i think is going to happen is we will continue to see the headlines until the earnings reports start to come out and data and fundamentals will take control, again. >> bill, i think we do hear so many people coming out and

talking about volatility next year and they're getting defensive and they're cautious and unlike, i think, last year where it was completely the opposite everyone was bullish and everyone thought they pointed to the improved environment and 2018 would be a great year hasn't been terrible, but maybe 2019 if everyone is so defensive could surprise the upside. >> your point is super, kelly. 2017 was a freak and statistically, it was a freak. this is my 38th year of participating in the stock market as a professional and i would say 80% of the time you buy with trepidation because you know you're going to do well over the long term and 20% of the time, you're in a year like 1995 or 1997 or 2017 where it goes right, the corrections are mild and everybody wraps their arms around each other and

that's very unusual. it's much more usual for you to be afraid of what might happen in the short run if you're going to be wrong. that's why stock picking is going to be so important going forward here there are, if you break the s&p 500 down into five p/e, there are an amazing number of outstanding companies that trade very close to 10 or 11 or 12 times earning. i think leon cooperman said the same thing on your network >> give us a quick such as, bill >> discover communications is the premier reality television company and their stock trades, compared to next year's earnings at a very low price earnings ratio and they rehired chip and joanna, who are america's darlings bank of america, jpmorgan, amgen just raised their dividend and higher than a ten-year treasury

and trades at a very reasonable multiple >> brad, quick question for you. i see you think growth will moderate next year 2, 2.5% inflation will not be a risk stocks often perform well with modest growth and modest inflation. >> i think that's exactly right. i'm actually looking to see maybe 10% gains next year for the s&p 500. we don't have to do a lot there. just see earnings grow about where they're expected to and valuations stay where they are right now. which is pretty close to the lows of the last five years. that's not an aggressive call. that's a very reasonable call. there are some opportunities out there. >> all right, folks, thank you very much. bill smead and brad mcmillan with commonwealth. >> you both gain -- >> my wife is for sure >> i want to see what they do with this channel if they launch this magnolia channel. sources close to the investigation of the marriott

hotel hack said carried out by china. what impact could this have on the latest trade negotiations. control in their endowments but those endowments are seriously underperforming. we'll tell you why. and general electric shares falling to the lows not seen since the depth. can anything stop ge's plunge at this point "power lunch" is back in two from the filmmakers of "the lord of the rings"

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dow well off its highs this afternoon and now to the latest in that massive breach in marriott reports in "new york times" suggest the breach which affected 500 million people may be tied to hackers in china. wilbur ross speaking exclusively on "power lunch" in the last hour saying companies need to step up. >> many companies have been scrimping on their cyber security budgets they haven't been as protective of their own resources as they should have been >> let's bring in kate, a technology reporter with cnbc.com focused on cybersecurity and david kennedy, ceo of a cyberthreat intelligence firm advising fortune 500 clients. what is the significance that china is behind the hack >> very significant with the trade talks going on right now

this dates back to 2015 when the obama administration struck a deal with china over property and data of u.s. citizens. if this is true, then between 2014 and 2018, this marriott hack that took place over four years that would have violated that >> what is trump likely to do with that ammunition what is the responsibility of u.s. companies here? >> companies in general don't put enough protection around what they're trying to do and secure if you look at what china is going after, you have a lot of information where people are staying from an intelligence perspective is a treasure-trove. i think companies are looking at this, especially in the hospitality industry saying we don't think we're a target, but maybe we are now we should really start to look at what we're doing from a security standpoint to make things better. response wise, if they did violate that treaty and what we are seeing out there and with the trade agreements and everything else, we should retaliate with possible countermeasures or sanks or ways

we can try to thwart these kind of attacks organizations on a regular basis and a problem we face all around this country. >> what would retaliation look like >> we have a number of different methods in our arsenal one is we can do cyberin a way where we try to impact infrastructure or put a hurt on them in some way, shape or form. those type of esclapgz esclapga include military attacks and look at any type of sanctions we could do and all of those are at our disposal right now and we have a whole fleet called cybercommand which is to protect and defend our nation and conduct offensive operations in a military fashion, as well. a number of ways we could retaliate against china. >> he's not taking military response off the table, this is why i thought secretary ross' response was so interesting. you know, we said what should u.s. companies do? basically said, they need to step up and spend more

is that fair or is it has it become so serious now between the u.s. and china that it seems to be more of an american military effort. >> i think first of all regarding the sametatements it difficult for any publicly traded company with putting more on the bottle line or increasing the stock price. that is a lot of times where the cost of cyber security falls for a very long time, that has been what a corporation would call a call center just sucking in money and not giving much out in terms of the share price. i think that maybe that attitude needs to change at companies and just in the markets in general to say, look, you could lose a lot of your stock price and lose a lot of money from these attacks and that is very important. >> the government blocked earlier this year the broadcom acquisition on national security grounds.

we don't let into this country for those reasons. so, my question is, are we going to enter as a result, david and kate, this hacking incident enter a period where it is harder for us to allow chinese businesses to do business in this country because we see what they and the government stands behind so many of them are willing to do. >> go ahead, david you take it first and then kate. >> i think that's absolutely how you resonate with nation states. we had a little bit of limited capabilities with russia becaus we don't do substantial amount of business with them. countries like china where what they get as far as revenue is trade. and i have to agree to the point that companies absolutely need to be doing more when it comes to cybersecurity and especially in the hospitality industry and notorious of not doing enough for cybersecurity. at the same time, we could hit other countries in their pocketbooks that don't include

military conflicts that causes them to take a step back and not go on the offense as we have the 2015 meeting with president obama, we saw a substantial reduction in chinese efforts and that didn't stop we saw substantial reduction those are all things we have in our ability and our arsenal to do when it comes to this type of attack we see from different countries. >> okay. >> i think to counter that a little bit, i think you'll see a lot of difficulty in making those moves because we have so many huge multi-national technology companies that have big business in china. and, so, saying that we won't use chinese equipment in the united states and banning lots of different kinds of companies from working here. we're going to see retaliation for companies like apple and companies like amazon and google that do big business in china right now. >> seriously escalated here with the latest news. thank you, both. kate and david. >> thank you, guys energy getting a lift today. down big, though, over the past

couple months. energy etf down 11%. what will it take for the sector to find its footing and are all bargains out there we'll debate that straight ahead on "power lunch. help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

welcome back to "power lunch. i'm mike santoli check out energy stocks today surging on hopes of buy cuts and falling inventories stabilize oil markets at last. marathon, halliburton. can you trust this move here off the lows bill of blue line futures and michael of rockefeller capital join us now. so, bill, obviously, a heavy struck sector and energy sector is down 3% in three months can you sniff out signs that there is a real low here >> for the bad news first, you have multiple failed breakouts out above that late 2016 high. and the market sold off 20% looking at the xle the 50-day moving average moving below the 200 moving average

battling at a psychological $50 mark double bottom right here and a crucial, technical level 61.5 and double bottoming against that mid-2017 low. given that, i have to give it a shot down here that level gets taken out, look out below. look for some recovery through this month but i am worried about the first quarter of next year >> giving it a shot, but it looks a little precarious. energy stocks are showing up on a lot of value screens right or wrong i don't know if that interested you in any of the individual names. >> almost right. almost been a forgotten sector this year. traded negative and a lot of the geo political conversations and headline risk. fundamental value in the sector and u.s. oil production in natural gas and energy and oil hit record levels for history. and we believe it's the first time that they've hit net export status as a country. so, there is value in the names.

couple names we think will benefit from this is eog resources, which is trading at 12 times next year's earnings and exxon mobil which you're getting 4.25 dividend yield to wait we believe fundamentally it's very cheap have to get rid of the headline risks and some of the geopolitical risk and then off to the races >> well, yeah, at least for now, maybe the bright side is it doesn't quite yet seem like a demand issue see if the rest can sort itself out. bill and michael, thank you. appreciate your time today head to our website or follow us on twitter @tradingnation. hello, sue. >> hello, mike here's what's happening at this hour we begin with an address to the u.n. security council. secretary of state mike pompeo blasted iran's activities around the world and asked the counsel to look into the ballistic missile program and withdraw from the nuclear deal with iran.

>> our good will gestures are futile and missile activity and its destructive behaviors. no nation can dispute that iran is open defiance of u.n. security counsel resolution 3231 >> former trump personal lawyer michael cohen sentenced to three years in prison and ordered to pay $2 million in fine for restitution. cohen's attorney and now adviser davis said in a statement that cohen will stay publicly all he knows about mr. trump at the appropriate time in the future mcdonald's plans to reduce the use of antibiotics in its global beef supply comes over concern that overuse of farm animals may diminish the use of antibiotics in humans. the change is expected by the end of the year 2020 you are up to date that is the news update this hour ty, i'll send it back to you tech sector up 2% today. a breakthrough in the china

trade conflict and boost stocks and wild ride for investors. and here's josh with a look at the investment of technology on the state. josh >> notable tech movers include apple which actually came public on this day back in 1980 despite what qualcomm continues the chip giant saying apple is still selling iphones in china breaching a recent court order there but apple trucking higher. in fact, all f.a.n.g. members higher in today's trade including facebook and merrill lynch out with a new note maintained its buy rating saying they're upbeat about the opportunities ahead. still down nearly 20% from its recent high. one key overhang for this group, of course, the u.s./china dispute. nvidia guy guys, back to you. coming up, big schools,

small returns. trail the markets badly and even the treasury markets badly we'll take a look at why and what they should be doing better we'll take you to washington where the president signed executive order federal money to so-called opportunity zones. we'll tell you what those zones are and why they are becoming the hottest new investment for the wealthy when "power lunch" comes right back and now the latest from tradingnation.cnbc.com and a word from our sponsor. a chart is a formation that suggests an uptrend is ending and sometimes called an m formation because the pattern looks like an m. consists of two well-defined peaks at approximately the same price. traders often view a low in the lowest low as a bearish signal

less than 90 minutes to the close. let's get a check of the markets which are well off the highs of the session. now the dow is up 248. the nasdaq up 98 the s&p up 25. some names on the move semi conductors among today's big winners. on pace for its best day since mid-november micron and intel are leading

under armour going the other way. the share is now down more than 10% and lowe's moving higher the oil market is closing for the day. let's go to dom chu at the desk. >> trading off the best levels of the day west texas right now trading at $51.19 off by about a percent or so we had a few key factors in the bull case and drop in oil production in libya and drawdown in u.s. inventories and lingering optimism that an opec deal could be in play but, again, a wave of selling just in the last few minutes into the close has caught a lot of attention. traders are still keeping a close eye on not just the supply side, but also any signs of softening demand around the world but certainly, tyler, a steep move lower and that, of course, is taking energy stocks and perhaps a little bit of the air out of this overall market

>> very close to 52 at the top of this hour don chu, thank you very much. what it could mean for investors, many who are very excited about this eamon. >> created under the tax care act little known as provision at the time and some investors are excited about this prospect. distressed communities around the world or around the country where investors can get tax preferences for putting money in so, here's what we know about these opportunity zones as of now. they're about 8,700 designated zones in what they call distressed communities throughout the country investors pay reduced rate on capital gains and invest it in these zones. the capital gains realized within the zone could qualify for a tax exemption and i talked

to the hud secretary who is here and taking the lead on this. he said that the zones will generate at least $100 billion in investment. he said it could be a lot more money than that. the idea here is that the president is about to sign this executive order and in the executive order create a counsel chaired by ben carson which is going to sort of rawrangle all h different elements to make sure all the different pieces of the government are doing what they can. the white house also excited about this and came to point out it is the state and local governments that are going to be selecting the opportunity zones. i asked ben carson about some of the criticism of jared and ivanka trump here who could stand to benefit from these opportunity zones through their own personal investments, according to some reporting overnight. ben carson said he's not concerned about that what are we going to do? remove anybody who could benefit from this from participating he suggested that just about anybody who owns real estate in

any of these opportunity zones could be a financial winner. >> it's basically a tax deferral system, right, eamon. >> right depending on the amount of investment and all the details, the irs says that you could get preferential tax treatment for those investments in the approved opportunity zones they have a website at irs.gov where they list all these opportunity zones in a map that you can go to and look at to see where those investments might be >> eamon, thank you very much. robert franks is with us and he has more on these which have already taken off and amazon hq is even considered >> look, let's go back to how this started shawn parker that he was the master founder and facebook investor and for all these guys it's about the capital gains tax. here's how it works in the opportunity zone basically once you invest in the zone the latest capital gains

tax until 2026 that tax is reduced, again, by 15% after seven years. if you put it in the zone for ten years, you don't pay any capital gain on any gain that happened in that zone. so, let's say you sold $10 million in stock immediately, you would normally have to pay the $2 million in capital gains. this time you don't have to pay it until 2026. >> if you put that money to work >> exactly >> if it stays in for seven years, that tax bill is reduced by $300,000. if that 2 million doubles, you don't pay any tax on that $2 million gain now, the irs just made it more attractive with some new rules you can put it into a fund and leave it there for up to three years before they even have to invest in a zone these tax extensions go on until 2048 and 30% of the business you invest in can be outside of the zone and you don't have to make any improvements in property so, a lot of this is qualified

opportunity zone fund and determined by the states, not the federal government so, the states are deciding where these zones are. now, kushner and company which, of course, jared kushner's family business, they own 13 properties in opportunity zones in new york and new jersey, including a $9 million hotel they just bought in new branch, new jersey and many more property in brooklyn heights now, i'm not sure the most prominent part of the jersey shore for brooklyn heights are distressed communities and that will be the issue going forward. >> are they making a hurricane sandy argument there or along the shore? >> the state simply said long island city, brooklyn heights -- >> too much discretion are you saying if you leave it at the state level. areas need the improvements or long island city, are some doing okay on their own? >> the clear pattern so far. if you're an investor and you're going to invest in the zone, are you going to do it in a developed city or do it in a truly distressed part of the

country that is going to be a risk so, a lot of the money is going to be towards the shore investment which, in this case, we're already seeing is in the highly developed, already expensive high employment parts of the country. >> so, capital gain. i make the capital gain in 2018. how long do i have to put this money to work? >> it can go into a fund for 31 months almost three years and then -- >> that is designated to be investment >> and then it can go into a zone and defer that tax until 2048 so, it's the most attractive tax program for wealthy investors that i've seen in a long time. >> if it worked properly, could really generate a lot of development and, if not, we'll be talking to you again. >> robert, thank you very much. straight ahead, some of the nation's top colleges are getting a tough lesson in investment endowments are badly trailing the markets. we'll ask what is going wrong when "por welunch" returns in

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welcome back to "power lunch. higher education endowments earning low returns. new nyu study.

check out these findings according to the study the sample of 28,000 endowment funds posted a return of 3.75% in the market and that's less than the u.s. treasury bond which was 4.9% we'll call it let's bring in guest from school of business. were you surprised that performance thperfor performance was that bad >> indeed we were. we were taken aback by how consistent and how across the board this underperformance is as you mentioned the difficult endowment is trading even a ten-year treasury bond investment so, that was definitely surprising >> a lot of people would say they would have done better and done way better in the s&p 500 so, so many universities a decade ago started to copy the

harvard and yale endowment and is that the problem that they overdiversified and paying outside fees to managers >> let me step back a bit. the study looks at the entire university of charities and even charities do a lot of good stuff for a lot of people. but one thing that the nonprofit charities do not seem to do well is how to invest endowments. and colleges and higher education are only a small part of this big universe there is a lot of money in terms of money that are very large part our study looks at the entire universe and you are correct that higher education and the other charities with themselves are not doing that >> which is not surprising but, again, what is the reason is it because they try to go into asset classes like timber that worked out before but don't work as well today because they're trying too many different types of investment or high fees to outside advisors?

what is going on here? >> kelly, we would love to know the answer to that the investments is simply a closed book. we would not get the clarity that allow to say with certainly what it is pointed out some of the reasons that you are mentioning. we are notorious susceptible to salesmen. >> i looked at my own university a year erso ago wondering how it had done a savvy place with access to very talented people and, frankly, it had done very poorly what is the message to these endowments should they start from scratch >> i think number one you're on the money. pay attention to how the end

endowment is doing if the endowment does well donors increase their donation and, yes, something that we would recommend, as well apart from hiring us, no, just kidding. yes, indexing would be very powerful and very effective way. the way i would think about this every endowment should invest in learning 60 years of research has shown that strategy and implement. come up with a profile that you are benchmarking the debt and, lastly, you know, prep and those benchmarks are even. >> a lot risk averse and to underperform the treasuries that is an eye opener thank you for joining us >> thank you >> he's with georgetown

university. spirit and beer companies increasingly making their profits from the top shelf of the bar. premium brands and laying off the cheaper stuff. a lot of research went into this, i hope, frank. >> not necessarily testing but research holding their investor days today and almost simultaneously they're telling investors the same thing they're emphasizing that premium brands is where the growth in the liquor business as opposed to overall value diageo super premium tukeal tuq don julio. best known for jack daniels seen the greatest growth with its other american whiskey super premium woodford reserve higher price sales, not

quantity >> we had a very large less than premium wine portfolio we have cleaned a lot of that out to be premium plus spirits. >> for the year both stocks star depending on your lifestyle if it fits into one of those brown and foreman shares and diageo shares, both up. brown and foreman is having a tasting right now, so that might be an influence. >> all right i think you should leave and head for that right now. >> right. >> thank you very much, frank holland. it's been a long road down for ge today is hit $6.66 it's closing low at the bottom of the financial crisis. where does the badly beaten stock go from here we'll take a look. and tonight on cnbc don't miss "deal or no deal" with howie mandel brand-new episodes tonight at 9:00 and 10:00 p.m. eastern.

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well, the market is moving lower in the halved hour or so we were up more than 450 points. a little bit paf fade here in the 2:00 hour, bob pisani. >> yeah. and i've been calling around checking what you can do if you put up the s&p 500, at about 2:05 there

was a volume spike in all of the big etfs in other words, people came in and started trading them more aggressively right around 2. 05 not a lot of stories in the middle of the day. we did report at that time about that "national enquirer" story where they admitted it was a $150,000 payment to an ex-"playboy" model made in concert with the trump presidential campaign for the purpose of influencing the election we reported that at about that time, and to the extent that may have increased the president's jeopardy, perhaps that was a factor in the selloff that we saw. as you can see, we're stabilizing a little bit right now, but still a lot of -- a lot of "x" factors floating around constantly in the markets. if there's anything else, and i've been inquiring all over, i'll certainly let you know. tyler, back to you. >> robert, thank you very much >> shares of general electric hit a scary number during yesterday's session, $6.66 that's the level will marked the lowest close to the stock during the financial crisis

can anything bring it back to life on the "newsline" with us is christopher glynn, oppenheimer's managing director and senior analyst. chris, you know, we were talking about this earlier a lot of folks, myself included, might have thought hat the beginning of the year ge locked pretty bad before it dropped another 50%. how much more can this stock fall >> you know, i think that's going to be sentiment-driven from other i think people have factor the in as much as they can valuation-wise now it's just a matter of how much capital they need to transfer it to ge capital. what becomes of the power segment and what's the time frame to get profitability back up and -- and, you know, what -- what comes out of the government s.e.c. and d.a. investigation. >> what do you think the ceo can do if nothing else, he's got a stock that has tanked that can

kind of set up a period of performance where in retrospect he can say, look, identify taken all these steps and set this thing back on a path to profitability and growth what does he have to do, chris, to get there >> yeah. well, there is a lot of heavy lifting to be sure and a lot of execution. they are not there yet, and they have to get to a point where they can say, you know, now we are here for smoother sailing and to start to improve. but, you know, there's stuff on the horizon, too there's the 2021 change in accounting standards for long-term care insurance that they said would have a material impact we believe that means to ge capital book value, so it's not like they can plug the capital gap at ge capital right now and then it's done and visibility emerges. so they are liquidating lots of assets right now, both on the industrial side and the ge capital side because of the escalation of the liability, but we see no scenario where they

need to monetize the majority of the businesses so there is a shareholder stake that survives for sure the to bait that that won't is pretty silly, but the amounts of some of the pieces that they are liquidating that are retained for equity owners is very much subject for debate. >> all right well, chris, with a hold on the stock for now, staying clear of it phank you very much, christoer glynn of oppenheimer >> "check, please" is next duncan just protected his family

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well, we have 11 seconds to fill, and the dow has fallen once up 458. now up just, a nice gain, 276. thanks for watching "power lunch," everybody >> "closing bell" right now. >> and welcome to "closing bell." i'm sara eisen. >> and i'm michael stoly >> let's get straight to the markets. as kelly and tyler just mentioned, stocks soars on optimism over trade talks between the u.s. and china off the highs of the day down now trading up a percent, higher by more than 250 points at one point it was higher by almost 500 points. >> 2% across the indices earlier. did get a fade at 2:00 has been a little bit of a habit, that rallies ge