i didn't go well right now in 90 days they will have another conference at the judge's request and basically decide at that point when to proceed with the sentencing. i'll have more coming up scott? >> okay. thank you so much. see you in a few minutes doc, what do you got >> adp, judge. unusual upside call activity. >> johnson & johnson >> you believe in the fangs, long amazon. >> thank you. >> thank you scott, thank you very much welcome. i'm tyler mathisen stocks are bouncing back from yesterday's big drop so why are we moving higher what exactly does the market want what is it telling us? are we close to the mythical bottom 24 hours now until the fed's maybe most important interest rate decision in at least a year we'll be looking at the clues we can over the next few hours and tomorrow wall street doesn't have a firm grip on which way it could go.

and the president, of course, urging the fed to, quote, feel the markets, before making a move is the fed rethinking its plan a lot of people say maybe it is. plus, how highs. big pharma meets big marijuana tilray shares moving higher, a first of a kind, coming up as we begin right now. ♪ can you feel it ♪ can you feel it ♪ can you feel it ♪ yeah yeah i'm kelly evans. let's get to the rally the dow and the s&p having the best one-day gains in two weeks. the dow on track for the biggest monthly decline since may 2010 get this the worst december performance since 1931 same for the s&p 500 its worst december since the great depression if these trends hold oil falling sharply again today. almost below $47 a barrel. that's the lowest level since

september of 2017. down nearly 5% but the chip stocks are rallying today for the first time in four days, melissa. >> thank you we begin with breaking news on the michael flynn sentencing i believe we got that already but we'll check in with sue herrera with more. >> actually, we have more on that, melissa. at this point, former national security adviser to president trump michael flynn who has pled guilty to lying to the fbi was to be sentenced today. it did not go well for mr. flynn. and as a matter of fact, the judge issued a stinging rebuke of his cooperation, if you will, saying this is a very serious offense. you sold your country out. i am not buying the no jail time and said he is disgusted by flynn. keep in mind, mr. flynn has been cooperating with the mueller investigation for sometime he's met with the mueller team 19 times but the judge suggested and keep in mind he has -- the judge has,

a number of sealed documents we don't have access to and the speculation is that there are details in those documents that have led the judge to believe that mr. flynn has more that he can tell. the justice department and the fbi. he said several times during the proceeding, are you sure you want me to sentence you today? because i cannot guarantee despite your cooperation that you will not get jail time both the prosecution and the defense recommended no jail time basically, at this point, they took a recess. the defense and the prosecution met. and because this hearing was going so poorly for mr. flynn, after the recess, they came in and they said, we have reconsidered we would like to postpone the hearing. mr. flynn would like to continue to cooperate the judge has requested a status conference in 90 days. it will be interesting to see if indeed mr. flynn meets with the justice department and the fbi in that 90-day period. but judge emmett sullivan was

very strongly offended he said, that's his words, by mr. flynn's conduct. keep in mind flynn has also waved the right to appeal so whatever sentence he is given he has no right to appeal which is one of the other reasons why they postponed the hearing today. back to you. >> a couple of interesting things i understood came out during this hearing, of course, a heavily redacted memo that circulated last night. >> yes. >> mr. flynn said he was aware that not telling the truth to the fbi or federal agents was a crime. >> yes. >> and i believe it was his defense said that he was not pressured or in any way induced to not tell the truth. >> that is correct he said several times to the judge i knew that it was wrong to lie to the fbi. and that gets back to the fact that his defense said that when he was first interviewed by the fbi that the fbi did not explicitly say youknow that if you lie to us that is a felony, that is a crime. so the defense tried to use

that but given the fact that this was the white house national security adviser it was -- the defense -- the prosecution said it's implied that he would know that it's a crime to lie to justice department officials or the fbi. >> mr. flynn confirmed that he did know. >> exactly he confirmed that he did know and he continued to do it. he continued to lie to the fbi on several occasions he's accused of lying on three separate issues. >> all right sue, thank you. >> uh-huh. let's get back do the markets now. drill down on the catalyst driving the trading action at this hour. bob pisani joins us from the floor of new york stock exchange you have to wonder if we're pulling forward the gains of the scenario we're expecting tomorrow. >> well, i think part of the reason we're up today is besides oversold condition is we are in the fed drift day. there's a simple phenomenon that happens. the market tends to rise in the 24-hour period before the fed

decision this is very well studied. the fed itself studied this and acknowledged it exist and claim to say we're not sure why it happens but it is and may be a factor of today. i like some things in the market and some i don't sector wise, semiconductors leading. health care doing well banks, again, no participation at all energy, well, they showed you the oil chart. let's show you again middle of the day we sort of collapsed down into what is essentially a 15-month low in oil prices see that big drop there, down $2 we are at $47 and change energy stocks, of course, 52-week lows and a lot of big names and going on for 2 or 3 weeks. 52-week lows and nothing is really improving what does the market want? what we know right now is the market's been seized up by the slowing growth story and the tariffs and the fed around that growth story we have had failed attempts to rally several times including

spectacularly yesterday at 2600. nobody's rewarded for buying dips and why there's a buyers strike going on and the hope is the fed puts the floor under stocks and say, well, we'll do one next year essentially or imply they'll do one next year rather than three expected in september. the problem is the market's not clear on whether that's going to be sufficient because that may be priced into the market and those who are arguing that the fed should not hike on friday, there's debate a lot of people said that would be bad because it would imply the fed was spooked by some things they have been seeing a lot of debate down here on what should be done and no real agreement on that. no real agreement what would make the market go up or down, tyler, on the fed decision we have to wait and see. >> thank you very much and meantime, we do await a press briefing from press secretary sarah sanders at the white house. about 20 minutes from now. this morning she indicated the white house is interested to

make a deal to avoid government shutdown unspecified what the parameters might be and the president with new comments on the fed and they are as often they are quite feisty >> reporter: that's right. we're expecting the briefing at the bottom of the hour mean whil meanwhile, democrats telling reporters up on the hill that they've gotten an offer from mitch mcconnell to accept their $1.6 billion proposal for border security if they'd add $1 billion slush funds which would be repurposing of existing money for the president to use for the immigration agenda doesn't appear that democrats are going to be accepting that offer at least right now but it does indicate that there's some dealing going on up on the hill. we might see that bear some fruit today. as you mentioned, sarah sanders on fox news this morning signaling that the president is prepared to back off of his demand for that $5 billion in border wall funding.

suggesting that she would be and the white house would be willing to take 1.6 on offer and repurposing of other money and saying the white house doesn't want to shut the government down and indicates that the white house is in a deal-making posture, as well we'll see where that lands by the end of the day and then, separately, the president tweeting his displeasure with the fed here's the tweet from this morning saying that he's watching the folks over at the fed saying i hope they read today's "wall street journal" editorial before they make yet another mistake. also, don't let the market become anymore illiquid than it already is stop with the 50 bs. feel the market. don't just go by meaningless numbers. good luck. the president saying to feel the market i presume that means he doesn't want them to be data dependent but something else in terms of their astuteness about what's going on on wall street today,

guys so the president making his views known here no indication from the white house when the last time the president spoke directly to jay powell was i've asked a few times haven't gotten a straight answer to that yet. we'll see if they pin down whether the president's relaying that message directly to jay powell. >> larry lindsey is piling on. we'll talk to him shortly. eamon, thank you very much we'll just over 24 hours from the big fed decision steve liesman is here. >> kelly, by now it should be over all the shouting and everything. but i think it's still going on and i think we'll be arguing over what the fed should be doing until the last minute. let's show you the fed survey. 43 respondents 98% think the fed hikes tomorrow this was done late last week i think we were still in the middle of the market selloff and that's up from the prior survey in november. what has changed, though,

outlook for 2019 we were looking for 2.5. that told you agreed on two and debating three now agreed on one and debating two. we don't think there's even one in 2020. if the fed says yes, do they want them to get rid of the eight and then go with the one and then be happy. let's look at the other information. the fed's next move. this is a new thing. 88% said the next thing the fed's going to do is hike. but look at 12% of our respondents. lower rates and they think that's going to happen if it does happen, average response is october whereas the next hike would come in april. so this is not a big number but when you have a change like this you got to pay attention 12% say there would be a rate hike the other thing that's happened here is take a look at the lower forecast for the fed we were looking at 3%. now it's 2.7% for 2019 and 2020

and the terminal rate has come down by the way, the fed's own forecast tomorrow will i expect to show a decline, as well how about will the fed raise above neutral? take a look at the polling this year 62% back in june thought, yeah, the fed's going above neutral. it will act to slow the economy. november 55% that's now changed about a third now say the fed will act to slow the economy so a big change by the way 57% also by the way, say the pace of the balance sheet reduction is just right. so they don't disagree with that but, tyler, there's been a change in sentiment and perhaps not enough to dissuade the fed to not hike tomorrow and reduce those forecast hikes for 2019. >> yep all right. steve, thank you very much we'll be covering it tomorrow. you will be there. i'll be in d.c. as well. >> good fun. >> it will be fun. sure will be what does the fed's move mean for the markets? is there a bottom or more pain

to come from here? eric friedman with u.s. bank wealth management. jeff crumpleman is here. welcome to both of you eric, you say that this is a wounded but not a broken domestic equity market but equity values with more downside from here. explain and then we'll join the battle with jeff. >> thanks, tyler basically, our view's this this is a fundamental picture that's different where it was three or six months ago and we are starting to see a more coalescence spreading to europe and china and we think there's room for repricing lower pretty much because forward estimates are lofty at this point, both on the sales side and the earnings side so we're not predicting a massive decline from here but we do think there's more downside based on the pace of weakening

data. >> jeff, eric sees a slowing but not a contracting american economy. lower stock prices that will forecast that. you take the oppositing a. -- opposing argument. >> we don't think it's a bad thing to moderate and folks overly pessimistic and suggesting that earnings going from great to bad. we think they're going from great to okay. and that's not a bad formula when you have still a good fundamental backdrop valuation has come in from 19 times earnings the almost 14 at this point and when you have sentiment that is this negative, those three things tend to be a good cocktail. for a decent year next year and i could show you plenty of examples historically where when earnings go from great to okay the stock market does well

so that's where we're at. >> this has not been an indecent year but it's been pretty flat. >> it has. and isn't it amazing that if you stop this thing in september and actually just a couple of weeks ago we were mid single digit positive folks i think are saying we're worried about two things the fed. will they be data dependent? we're worried of trade and we think this earnings thing if they goof up goes to bad we just -- we think they'll be resolved in a sufficient manner. so they're not going to go to bad. that's where we're at. >> eric, what are you buying in a wounded bull market? >> yeah. i'd say a couple of things one we still think the cash flowing business and industries will do well and to be specific a contrarian view we have is to look at midstream energy that's a spot where given what's happened with the spot price of oil, there's been a lot of turmoil, probably overdone

we do still think that health care, technology based on demographics and productivity is where you want to be and utilities, parts of the real estate market, those are interesting and not super bearish. i want to be careful of painting us as a bearish shop we came in with a pro growth stance that was yesterday's battle. our thought on a go forward basis is to be defensive and not too protectionist. >> jeff, it seems like everyone here says to get defensive and the reasons why and a lot of sectors are priced for that right now. priced pretty well would you look at something in the banks or technology that's been beaten down here? >> we sure would we don't think it's the time to run to the defensive 60% of stocks down more than 20%, you have some great valuation unless you think a recession is going to happen in cyclical pockets of technology, consumer discretion anywhere.

>> such as >> las vegas sands is a great example with consumer discretionary. within technology we like the semis in general microchip. >> are you worried about china this seems like a very concentrated play on the health of the consumer as well as a chinese economy. >> isn't it great, you know, when jeff and counter to warren buffett is saying? we have a different view chinos is saying you're not getting good resolution probably in trade and china is weaker than expected. and is also saying that because of the license renewals that come up, it's a wonderful industry with limited competition that perhaps the chinese will be favored in that. we just see it differently he is long the chinese gaming stocks he is short the u.s.

we think the resolution there will be just fine. >> they don't lose possessions no chance of that? >> i'm not going to say there's no chance of that but we think the drivers of that industry overall are very strong. 5% to 10% revenue growth you don't see that in many industries. >> jeff, eric, appreciate your time today thanks a lot, guys. cannabis is going mainstream today. tilray signed a deal today look at shares soaring. the company said $7 billion today. but the company's ceo will join us in an exclusive interview. also, hemp is about to become legal in the united states i think they're related. cannabis, i don't know frank holland can explain it to us kentucky is ready to get growing when this happens, aren't they frank? >> yeah. this is hemp not cannabis coming up, i'll explain how president trump ulcod turn this into a cash crop

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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. shares of tilray surging on news of a deal with novartis joining us now for the exclusive is brendan kennedy, the ceo of tilray great to speak with you. >> thanks for having me today. >> this is an extension of a

deal that you already had with a novartis unit and this buys you global distribution. so, how does this break out in terms of what you gain and what sandos gains >> so, currently our agreement is for canada. however, tilray products are available in 12 countries on 5 continents and so this agreement enables us to partner with sandos, a division of novartis globally to get the products into the hands of more patients around the world. >> does it cover existing jurisdictions where cannabis is legal as well as future jurisdictions? is that written into the agreement? >> that's exactly right. so when i started in this industry eight years ago, there were 15 countries in the world that legalized medical cannabis. today more than 35 it is clear we go from 35 to 40, 50, 60 countries around the world. this agreement enables us to use

the sandos supply chain and sales force and distribution network to ensure that we can enter new markets globally at a much faster pace. >> i would imagine this lets you get off the hook sort to speak from having to invest in those infrastructures around the world, especially as jurisdictions open up. is there an estimate in how much you save and are you giving up a percent of revenue to sandos >> so, it's impossible to calculate how much we'll save. they have an existing pharmaceutical network and an existing supply chain and so it gets us in the new markets faster we also will be able to use their sales force to educate physicians and fapharmacists around the world it's available in pharmacies and a lot of education that has to be done to educate both

pharmacists and physicians when entering a new market. >> i thought that was the most importants part of the release, the aspect of education. how much resistance is there still today to cannabis related treatments for various illnesses? >> there's not a lot of resistance most doctors in most countries around the world recognize the medical properties of cannabis there is a lot of education that needs to be done around formulations, the right conditions, the right dosage for individual patients. and by partnering with a division of novartis of sandoz we're able to co-brand our noncombustible products like in canada where the products say tilray and sandoz and novartis division on the products that brand inspires confidence and trust with physicians around the world. they recognize that brand and that enables us to further

educate those physicians and pharmacists when they see that logo. >> so, there are lots of companies, consumer products companies, spirit wine and spirits companies, tobacco companies interested in the marijuana space. you've chosen to partner up with a medical company, a drug company. what does that say about what you think your mission is as a corporate leader and second what you think the marketplace is going to be for cannabis related products in other words, is this a bet that the medical side of this world is going to be the bigger, more profitable one than the recreational side of the world >> we're betting on both we believe in both like i said, eight years ago there were 15 countries in the world that legalized medical cannabis today 25 i predict 60 or 70

that's a clear, knowable growth path we had two countries in the world that have legalized cannabis for adult use we know that a few other countries are talking about legalizing cannabis for adult use and impossible to predict when those countries legalize and so i can't actually predict the growth of that market. and so, we're betting on this global pharmaceutical market knowing that - >> because that's here and now >> that's here and now knowable. >> knowable. >> at the same time in terms of the unknowable, brendan, there is alot of lobbying done by cannabis companies and sounds like your company is gearing up. you hired howard dean, michael steele and a couple of ministers of australia and germany where are the biggest fights in your view in terms of the legalization of cannabis >> i think europe is where we'll see the most growth over the shortest time period we'll see the number of

countries in europe go from 15 to 28 in terms of legalization of medical cannabis. i think we'll see -- likely see a country like mexico which came very close to legalizing use through the judicial branch of their government a few weeks ago. they could be the third country. new zealand announced yesterday there will be a referendum to legalize cannabis for adult use in 2020. it's hard to predict where the battles take place countries are legalizing united kingd united kingdom legalized while it feels like it's progressing quickly, the velocity of change outside of north america is much faster in my opinion than inside of north america. >> yeah. brendan, always great to speak with you thank you. >> thank you so much for having me. >> brendan kennedy, the ceo of tilray up right now by 18%. >> wow. all right.

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a munhuge boone for agricule likely to happen this week kentucky is ready to take advantage of that and that's where we find frank holland. frank? >> reporter: right good afternoon, tyler. right here bemind me, you see

raw material for $250 million of cbd. it is touted as a treatment for a wide range of conditions and it comes from this hemp flower. take a look at it. it looks like marijuana. it is kind of a cousin except this doesn't have enough thc to get you high right now we are here in lexington, kentucky, where they have the big bags of seed ready for farmers. growing hemp would be legal under federal law. and that's important because here in the u.s. the market for cbd projected do grow up to $22 billion by 2022. last year, sales of products using hemp were nearly $700 million but that all came from $67 million worth of hemp from canada because, again, federal law wouldn't allow it to be grown here and right here in kentucky companies are hoping to cash in on a multi-million dollar business.

>> purposes a lot of tobacco infrastructure into an industrial hemp industry and that's one of the things that gives kentucky an advantage and really why this represents such a great opportunity for the american farmers >> reporter: and hemp is already used by home depot and gnc in consumer products and of course if this farm bill passes the mainstreaming of hemp is expected to continue. >> all right frank, thank you president trump with some last-minute advice for fed chair jay powell should the fed sense a slowdown and tap the brakes or follow the data which is still pretty 'ldiusth nnt wel scs atext.

hello, everyone. i'm sue herera a federal judge agreed to delay former national security adviser michael flynn's sentencing so he can continue kroop rating with the russia probe flynn's attorneys asked the judge to postpone the sentencing after the judge warned flynn

that he might be sentenced to prison, quote, for selling his country out, end quote. surgeon general adams declaring e-cigarette use an epidemic pointing to companies as problematic he says it's clear that the devices are getting a new generation hooked on nicotine. >> we know that nicotine exposure in adolescence can uniquely harm the developing brain, impacting learning, memory and attention we know that exposure during this critical brain period can lead to further addictions. attention procrastinators. amazon is extending the free shipping, no minimum purchase offer and giving shoppers until tomorrow to get the last-minute shopping done. prime members can shop until christmas eve with free same-day and one-day delivery that is the news update this hour melissa, back to you. >> thank you let's get a check on the

markets that the hour. the dow was up more than 330 at the highs of the day we are up 219. good for a gain of just under a percent. the d both did dow and the s&p 500 now on track for their worst december performances since 1931 one stock we're watching today, manchester united shares soaring up almost 6% following the news that the coach is sacked the club languishing in the english premier league table kelly? >> all right thank you. just over 24 hours to go until the fed's latest division on interest rates, toning into a most important meeting in at least a year will powell hike or hold wall street not completely certain. president trump knows which way they should go telling the fed on twitter to feel the market before making a move on rates. joining us now is larry lindsey, a former fed governor himself.

you're feeling the data. more people coming around to your view they shouldn't hike. >> no, i've been of that view for a while. again, i think the fed should be data dependent the data's coming in to show that it would not fulfill their mission if they hike tomorrow. >> you're looking at the data -- i think this is really important. there's a camp thinking because we have a slowdown, the fed shouldn't hike your view is the economy's fine. there's no inflation so they shouldn't hike. >> absolutely. the fed should not raise rates because gdp is growing too fast or because too many people are working. what they need to do is look at inflation. last three quarters, their preferred measure of inflation declined quarter after queearte. core pce is 1.5. market based pce, headline and

core, are at 1.4 we're now below 2 which we -- used to be the fed's target. >> it is not that trump's pushing them around. not that the market's pushing them around. jus on the inflation data themselves even if the economy's strong you're saying they shouldn't hike that's a weird situation to be in we noticed this morning "the wall street journal" op-ed page saying they agree that the fed shouldn't hike but this is an organization that's like the titanic. they can't decide they're right. they have to signal. they have to come to a consensus about this this is a first of a two-day meeting. can they take a hike off the table? >> back in the old days, when i was a fed governor, we didn't issue a statement at the end of the meeting. i don't know what we have to prepare the markets for. i think kane said it right, kelly. when the facts change, i change

my mind. what do you do, sir? and, frankly, the facts have changed since the september and even since the november meetings we're getting more verification of declining inflation and something about the labor market people don't understand. the labor market right now is disinflationary. what economists call the marginal revenue product how much people produce and how much more they sell it for basically inflation plus productivity around 3.8. wages are running at 3.1 whenever wages with running faster than the -- slower than marginal revenue product we are in disinflation. not inflation from the labor market >> larry - >> another reason not to hike. >> you say that you have faith in the rationality of the fed and they'll come to their senses and not raise interest rates tomorrow and that -- and that, yet, there are lots of other people who see

them as, quote, crazy, in the face of data and in the face of things out there how crazy really, really crazy is a quarter-point interest rate hike how meaningful would that be in terms of its impact on the economy? >> well, well, first of all, you're correct a quarter point here and there doesn't matter what matters, though, is the fed's credibility. and if they raise tomorrow, they will be saying we're ignoring the data they'll be saying that, you know, our mission is to carry through with what we said three months ago rather than look at the facts on the ground. i don't think that's something they should be doing at this point. >> something else has -- but something else has come into the picture since that, larry. that is, the president who has very vocally been putting his thumb on the scale in favor of not raising interest rates, and

so, doesn't that have a -- if they fail to raise interest rates, wouldn't that call into question their credibility in the face of the presidential pressure >> well, first of all, you know, just because trump says something doesn't mean it's necessarily false. even a stopped clock is right twice a day. >> not saying he's right or wrong. not taking a side on that but saying when the president comes in and pushes a nominally independent agency to do something, and then that agency which has sort of put stakes in the ground saying we'll do this, and then folds that would call into question their credibility. >> i don't think so at all, tyler. did janet yellen squander the fed's credibility in 2016 when she committed to raise four times and then didn't raise until after the election i didn't hear you saying it

then right? so, again, we have to take things calmly here the fed should not raise i think they will not raise for all the right reasons. as for the president, sure, the president's probably better advised not to do that but we all know where the president's coming from. right? he is the incumbent and grew up as a real estate developer. >> you, larry -- >> i don't think the fed takes him into - >> you were saying that, you know, before you go, that you think the fed will be raising in 2020 and he is really not going to like that >> right i mean, look i happen to agree with what chairman powell said the first time which was we are a significant distance from where long run rates should be but long run is long run an you get there, you know, when you can. when the data supports you i think three to three and a half is the long run fed funds rate but if they make a mistake

tomorrow, what the market is telling them they'll never get there. >> yeah. >> the market is telling them if they raise tomorrow no hikes in 2019 and cuts in 2020. right? that should be a signal that you shouldn't do it. >> pair -- can you add me to your distribution list how much is it >> cnbc is wealthy enough to subscribe. you can give me a call offline it ain't free. we'll put it that way. >> no, it is not the only person who will never give a press comp subscription thank you very much for joining us appreciate it. >> you're very welcome. >> ready to give him e-mail address on the air >> you know what if he would put me on the list i'll give it out on air. oh yeah. >> really? we'll see. to the bond market right now. rick santelli at the cme rick

>> hi, well, if you look at a nine-session chart of 10-year note yields we continue to toy with the low 280s. close all the way back to august 24th is 285 and looks like we may have a point to challenge that today hyg, it is now making lows that we haven't seen since june of 2018 over the same parameter on the chart, some of the better levels, a zone i would say, since about third week in october. and finally, there's the dollar index. fighting to stay close to unchanged. this early november chart shows you one spike there is a high close going all the way back to june of 2017 at 97.54. we have traded above that intraday not a closing basis and what larry lindsey said is absolutely correct. many traders suspect a pause could there be a surprise

tomorrow there's always the potential but many believe it's already baked in tyler, back to you. >> all right thank you very much, rick j. leslie moonves won't get the severance package. we'll have more on this ugly spat i've always looked forward to what's next.

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or abnormal bleeding. while taking eliquis, you may bruise more easily and it may take longer than usual for any bleeding to stop. seek immediate medical care for sudden signs of bleeding, like unusual bruising. eliquis may increase your bleeding risk if you take certain medicines. tell your doctor about all planned medical or dental procedures. eliquis, the number one cardiologist-prescribed blood thinner. ask your doctor if eliquis is what's next for you. two all-new episodes of "the profit" tonight on cnbc. marcus checks on the progress but the store and the owners aren't quite ready for the big day. >> i'm not happy with the fact that you scheduled a grand opening for today when you're not ready. we need to take a next three hours and get it right. >> i don't know that three hours is going to do it. >> why is that >> because we don't have a system at the storage unit boxes are piled on top of each

other over there. >> okay. i'm seeing holes everywhere and tells me there's product in the warehouse and stockroom. what universe did he think this was the right day to do it >> check out two all-new episodes of "the profit" only on cnbc. cbs completing the investigation of les moonves saying they're firing him for cause and therefore not paying him any severance. his lawyer has other ideas julia boorstin is following the story for us. >> reporter: melissa, this battle may not be over les moonves' attorney issuing a statement after the cbs board decision to not give him $120 million in severance his attorneys saying, quote, the conclusions the cbs board were foreordained and are without merit. consistent with the pattern of leaks, the press was informed of these baseless conclusions before mr. moonves further damaging his name, reputation, career and legacy.

mr. moonves denies any non-consensual sexual relations and cooperated fully with investigators. on monday the cbs board including six new members since he was ousted reaching a very different sexual relations and cooperated extensively and fully with investigators. he said the decision to fire him f cause occurred because of his willful and material mi misfeasance, violation of company policies and breach of his employment contract as well as his willful failure to cooperate fully with the company's investigation. cbs' board says it's working to promote a workplace culture of respect and inclusion. back over to you. >> the fcc this week, if they do end the ban on the big fo four networks merging it could be a coda on all of this. stairs of darden restaurants

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shares of darden up more nan 5% following second quarter results that beat expectations our next guest says off-premise sales and higher menu prices were key to darden same-store sales quarter likely going forward for the industry as well let's bring in bob great to have you with us. let's be clear, off-premise means takeout? >> it's not dining inside the restaurant, how's that. >> all right >> it's delivery, carry-out, catering it's all lumped together in off premise. >> and you don't cover darden specifically, i understand, but you're seeing this trend and seeing good trends for november. you actually think this could be sustainable? >> you know, i think there's a by likelihood that it will be because it's clearly one of the drivers for the industry right now. dine-in occasions are down kind of across the board. there are some outliers there,

but broadly speaking one thing that we know, consumers want to dine out and especially they will do that in home using restaurants to satisfy that meal occasion we're seeing a lot more of that with the delivery proliferation across the industry. >> do you think it's delivery? do you think it's really lower fuel costs, for instance i know in the past that's been a huge driver. when fuel costs have gone up, you don't see people eat out at places like darden's chains as much is it the consumer what do you think is the biggest driver i understand all of these may play a role. >> i think it's a combination of a lot of things. one, we're still seeing a tailwind, a benefit from tax reform and take-home pay for consumers. no one has more time than they did last year at this point. everyone is working, employme unemployment is really low and the time is clearly there. whether restaurants can solve

that whether a take-home occasion or in store, they're working really hard to take advantage of that. >> bob, i just ate there yesterday so i like what you're saying about chick-fil-a, which is the best. and you're saying, yes, it is the best and the rest of the restaurant industry is trying to catch up with them are we looking at some of these publicly traded names and being distracted by their struggles relative to a chick-fil-a? >> well, let me tell you, chick-fil-a sets a really high standard for a lot of the larger publicly traded chains it's a private company what they do, they do extremely well the customer service, the speed of service, the quality of the food that they offer and the value they offer so it's a combination of all those things the risk is that they make life very miserable for some of the larger fast food chains. >> i finished the order yesterday and before i even left the counter, i already had it in my hands and it's delicious. >> yeah. >> anyway, i tip my hat to them. >> they do a really good job

i think they're clearly -- it's a pressure point for the industry if the likes of the larger brands, whether it's mcdonald's, wendy's or some of the others can't keep up with the quality of their offering and especially the value, i think they risk losing share i think they're all focused on trying to protect that. >> bob, thanks great to speak with you. bob derrington how about oil down 5% today adding to what was already a big monthly decline. look at this, now it's down 6% we just went below $47 a barrel on oil we'll talk about what's driving this and get some of the closing trades coming up. we're counting down to that big fed decision 24 hours from now. oil and everything else plays into it. one of the most geared-up decisions in a long meti will they raise or not "power lunch" is coming right back

see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable.

i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade i'm melissa lee. the countdown is on. just 24 hours to go before what has been argue blably the most debated fed meeting of the year. we will break down what wall street is pricing in. and the apocalypse, not portfolio. one economist says recession fears are overblown. when they realize it, one set of stocks will outperform. and t-mobile getting ready

to roll out its 5g but experts warn there are new concerns with this new technology we will explain why. "power lunch" starts right now indeed it does, melissa. welcome to "power lunch. i'm tyler mathisen stocks in rally mode ahead of tomorrow's fed decision. the dow is up for the first time in three days, while the s&p and nasdaq are up for the first time in four. despite the rally, the dow remains on pace for its biggest monthly decline since 2015 communications services, materials, they are the leaders. energy the laggard we just noted oil, west texas down in the $46 a barrel area. boeing, nike, dupont, they are the winners, exxon and chevron the worst performers oil falling nearly 6%, briefly below $47 a barrel, now back above it, $47.10 as you see there. lowest level since september of

'17. good day by contrast for the semi stocks. all the members of the etf smh are all in the green, roughly by 2% or so. i'm kelly evans. for more on what's pushed stocks higher, albeit off their high, let's get down to bob pisani on the floor of the new york stock exchange. >> we're up but it's a very mixed picture. banks not doing anything i want to point out one of the reasons we're up other than oversold conditions is the fed drift day. a tendency for the market to move forward before the fed meeting tomorrow a very well-known studied phenomenon kind of interesting that the market is up today and the vix is up. you don't usually get the s&p 500 up notably and the vix is up notably. i think this is a sign about real nervousness about the fed decision because nobody is quite sure how the market will react and what they're going to say

and the different options. there's a lot of confusion on that on sectors, you heard about the semi conductors. they have been strong throughout the day. industrials are doing well, materials are doing well banks are doing nothing and drifting a little lower. energy, you saw that $2.50 move in oil so banks, yeah, you got a little bounce in goldman and a little bounce in bank of america, but all of the regionals are sitting at 52-week lows. zions, huntington, suntrust, key corp all 52-week low same situation with energy stocks modest expansion of new lows today as oil hits 15-month lows. apache, noble and devon among them. the market's recent volatility has fears of recession rising what are the top factors driving that fear? steve liesman is here with the numbers. >> a pretty big change in sentiment as to the outlook for recession in our cnbc fed survey let me just show you why it may or may not matter.

look at this spike we have right over here from 14.4% two surveys ago up to 19%, now at 23%. this is the highest level of the trump presidency and one of the highest levels we've seen since 2016 i guess the good news is we've spiked up before and it did not result in a recession. what do you call that, a lilac, or mauve, what color is that, that pink line, whatever you want to call it. >> pink. >> pink, okay, just call it pink that's what i'm told in my ear 19% is the long run average. but let's take a look at the growth forecast. 3.2 is the number we estimate gdp in 2018. then just flip those numbers, but 2.3 with a 1.8%. but 1.8% is the average forecast for our panel. let's move on to the next screen and i'll show you the

unemployment rate. 3.7%, unchanged, inflation 2.2%, that's cpi, inflation. what are the biggest risks as melissa asked before 31% say protectionism. 19% fed policy and what about that 2-10 spread? isn is it signaling recessiorecessi? >> 2% say it is, 29% say close to that. and 64% say not signalling recession. >> i'm thinking mamagenta, stev >> oh, thank you once you get beyond the basic colors, i am indeed challenged i'm not even sure what color my tie is, teal perhaps >> cerilian blue

what did you think about the larry lindsay point about decelerating inflation >> i have to say i'm in the process of trying to understand larry's numbers. i could give him a call. my read on the pce cord numbers is they're only off a little bit, they're up to 2% in july. they're down to 1.78%. you hear people making a lot of talk about decelerating inflation. yeah, the rate has come down, but it's at or near the fed's 2% target when you take out food and energy so i think it's a case that there's -- there is inflation, there's just not an increase in the rate of inflation. so the fed will look at this, hey, we're at target being at target, i'm below what i consider the long run in unemployment all of that says to them they ought to be at or near a more neutral rate on the fed funds. >> all right, thank you, steve. >> thank you. our next guest isn't so worried. in fact he's put together an

apocalypse not portfolio joining us is jason. what led you to put this together >> well, i think the chances of a recession next year of quite low. one of the ideas we've had at our shop is there's a decent chance we're more towards the middle part of this business cycle than the end if you look at the first principles of what creates recessions most of the time is higher inflation and the fed killing it, a policy error or some event the last one we can't forecast any better than anyone else. you have to essentially be betting on a policy error right now, and i think it's unlikely is my opinion. >> people would say the policy error, if you listen to the rhetoric today, the policy error is if they raise tomorrow. do you agree with that do you think they're in the clear to do that or not? >> personally i think the markets are telling the fed they should take a breather in my opinion inflationary

expectations are very well anchored the markets are telling you that they should take a breather. in our within you're going to get a dovish hike, which you're going to get a hike but the language will soften dramatically and it's very unlikely that you're going to get the three or four tightenings people thought a couple of months ago it's probably going to be zero or one or at the most two but that would be more back endi loaded in the latter part of next year. >> should the fed listen to the markets? >> i think it should i'm of the view, as somebody who has been doing this a long time, i think the markets are better economists than economists you always get into trouble when you don't listen to the markets. i think the markets are telling you now -- to me this is very reminiscent of early 2016. you may remember the fed talked about tightening four times in the early part of 2016 and everything went haywire. credit spreads widened, the stock market got hit and then ultimately the fed only tightened once when all was said

and done in my opinion this is somewhat similar. the fed should give itself a lot of credit for trying to normalize rates, but there's a limit to what you can do in a world in which a lot of rates are still close to zero. >> there was a point that larry lin lindsay made that they said they were going to raise four times and ultimately just rose it once what did that do to their credibility? >> this is a social science. i think the problems come, if i can say so with all due respect to the people at the federal reserve, the problems come when you treat this like a hard science like chemistry or physics. this is social science, it's ever dynamic, the rules change constantly a lot of things going on it seems to me you don't ruin a lot of credibility by factoring in new information as a matter of fact, i think it enhances it. i think the mistake would be to blindly follow a path that you were going on out of ego or out of some desire to maintain credibility. people understand that this is a

pretty fluid process >> jason, i want to talk about this portfolio that you put together, 17 stocks is what i count. you say it can provide the best economic growth in surprises to the upside and multiples expand. about a third of this portfolio is energy stocks why energy >> well, in general -- melissa, what we did is we looked at companies, we looked at places where you had the biggest multiple contraction this year and also where there are expectations of high earnings growth next year so it's really the idea that if the economy doesn't go into recession, if the global economy is stronger than people are expecting, these are places that can give you the biggest bang for your buck. a good portion are in the energy space but there are others in there. u.p.s. is in there, ameriprise is in there. but i'm also of the view and i think china is probably the biggest change in this, in my

opinion china will reflate next year. >> that economy does not sound like it's doing well at all. i wonder if it's that that's behind the slowdown and nervousness in the markets. >> i think it's quite possible this is a somewhat similar path, again, to 2016 where you have a situation where there are limits to how quickly the dollar in particular gives you a pretty good indication of really the speedometer of how quickly the fed can tighten without creating problems in the rest of the world. in the old days the fed would worry about interest rates and the treasury department would worry about the currency in a world where you had synchronized quantitative easing, you can't do that any longer it would be nice to go back to that but in my opinion it's very difficult to do that. >> jason, thank you. apocalypse not you don't see that one in the newspaper headlines but it's a possibility. thank you, jason we've got a news alert out of, where else, washington

>> well, president trump will be attending the world economic forum in davos according to sarah huckabee sanders, who is delivering the white house press briefing she said that treasury secretary steven mnuchin will be leading that delegation. also attending will be secretary pompeo, jared kushner and ivanka trump will also be attending wilbur ross will be there, though there had been some questions about whether or not he would stay on board also important, robert lighthizer will be attending as well so this could be a chance for the administration to make its views on trade and its stance on those negotiations with china known. but again, president trump will be attending davos back over to you. and coming up, it has been a december not to remember, a december to forget for consumer staples and for really stocks generally basically. the sector, though, was down nearly 6% over the past four weeks. will 2019 bring a turn-around for some of america's biggest brands plus fedex running on all

cylinders as shipping's biggest season gets going. all that business may not be helping the stock. we'll tell you why. plus goldman sachs pushing back asth malaysia files criminl charges. those inside the fm irhave doubts about the firm's defense. all of that and more straight ahead on "power lunch. this scientist doesn't believe in luck. she believes in research. it can take more than 10 years to develop a single medication. and only 1 in 10,000 ever make it to market. but what if ai could find connections faster. to help this researcher discover new treatments. that's why she's working with watson. it's a smart way to find new hope, which really can't wait. ♪ ♪

some news on the china/u.s. trade talks coming from steven

mnuchin speaking at a bloomberg roundtable he says the u.s. is working with china to confirm several meetings with china in january so just around the corner there could be some meetings taking place. we'll see how the markets react to this. right now the s&p is up by just 11 points. we're well off of our session highs, up by 0.4 of 1% again, mnuchin saying they are working to confirm u.s./china trade talks in january. >> maybe they can do it at davos. >> maybe, now that he's going. now that they're all going. consumer staples have been struggling this year along with the broader market the group down about 8% this year and on pace to break a nine-year win streak with all the uncertainty in the market will people flock to defensive names like these in 2019 andrea covers consumer staples and a new face to cnbc welcome. we're glad to have you here. >> thank you for having me. >> why have they struggled so much this year what's wrong with this group

>> well, when you look back in basically 2017 and entering 2018, we were afraid of having a dislocation into the sector. they had been -- in the beginning we had the past two years a dislocation away from -- pretty much away from staples into the tech stocks and now we're seeing the reverse so they're now coming back to becoming more neutral. >> so in a defensive-minded market, would you expect this group to outperform next year? >> absolutely. we are very positive with our outlook for 2019 we continue to look into having names like procter & gamble, which is our top pick, along with a name that is more growth, consolation brands and pepsi i've seen investors coming back to look at the sector and size because of the defensiveness, especially with the pricing coming back to, as we see at the

data pricing -- companies being able to price with inflation and on top of improvement in the cost profile with oil prices coming down. >> do you think procter & gamble has got it figured out >> yeah, it has definitely improved with new management recently they had analysts day which they hold every two years. we upgraded the stock back on october 19th intraday with the numbers so they had a very strong quarter i believe they are on a good trending to continue to outperform the market. >> and why pepsi ahead of coke >> that's a very good question i think the coke to be honest hasn't worked in the last 12 months i think as we position into 2019, coke -- coke against pepsi, it has been -- the premium of coke versus pepsi is at all-time highs. when you look valuationwise but also when they're positioning to

pricing into next year, they should be able to mprove and then snacks had a very good performance in improving out of the nielsen data so it should be a good name to own. >> is cannabis a reason why consolation is in your model >> no, it is not it has been more of a drag than a positive, i should say when you look at the stock and they announced the increase from 10% to 38% to canopy growth, just today we came out with a report that we've been overweight because i do believe that they will have at least on the beverage side, on the beer side a very good year and investors are too concerned about how canopy growth will behave i think it's too early to say, it's a new sector. >> i'm just concerned about the

valuations of some of these names. show them relative to tech with the sell-off we've seen. you can get intel far cheaper than you can pick up like pepsi even or procter & gamble does that concern you? >> yeah, definitely that is something -- valuation -- when you look at valuation, it's reaching all-time highs relative to the s&p that's a concern that a lot of investors have but it's about not necessarily the fundamentals of staples. the staples sector continues to be very strong and i think it has positive momentum into 2019 because of pricing but i think it's more about the other sectors underperforming and not necessarily what we're looking into 2019. >> dcannabis a drag. i like that phrase andrea teixeira is with jpmorgan. and fedex is in the middle of one of the busiest holiday seasons in years, so why is the stock having its worst month since 2009 we'll debate that straight ahead.

plus oil plummeting more than 5%. it's back at a 15-month low. it dropped below 48 and briefly $47 a barrel and the u.s. and russia are pumping at record paces. will the planned cut be enough to turn things around? "power lunch" is back in two

white house press secretary sarah sanders wrapping up a press briefing moments ago she spoke about president trump's criticism of the fed >> the president is stating his opinion, which he is perfectly within his right to do so. i think that is one of the reasons people like him is because he does that and he does it regularly he's been very clear about what his position is, while at the same time he understands that the fed is an independent agency that doesn't take away the president's right to state his opinion on a particular matter >> there was sarah huckabee sanders talking about the president's use of twitter to express opinions and not just twitter, express opinions about the fed and its moves on interest rates let's go now to mike santoli with trading nation. hi, mike. >> tyler, hello. let's talk fedex here. those shares a bit higher ahead

of earnings after the bell those earnings bringing some welcome relief to a stock beaten down this month. its shares are down 18% in december so is a bigger bounce possibly coming? matt, it's been a really steep decline in fedex it's taken the stock back to where it was trading more than a year and a half ago actually, april of 2017. so what do you see in the charts right here in terms of the prospects for some relief? >> well, it actually has a lot of potential now we'll have to see what happens with the earnings tonight, but the stock, if you look at the weekly chart, it's broken below its 200-week moving average. usually that's pretty negative for a stock. but it's only done that three times since the financial crisis on all three of those occasions it bounced back very quickly in fact it averaged a rally of 45% over the next six months you look at its weekly rsi it's only been this oversold

five other times and each of those cases it's bounced back strongly the lowest bounce was 25%, so that's very positive and then you look at the sell-off that we've had from its highs of a year and a half ago and the stock has retraced 32.8% of that rally so that should provide good support if we can get some good guidance or in line guidance, this oversold condition should lead to a nice bounce here. >> gina, it does look at least cosmetically like a cheap stock as well and demand seems to be okay, what do you think? >> you read my mind. it's trading at 11 times earnings it's not like it's terribly expensive. if you look at what's been weighing down fedex recently, it's been the concern around china and where trade goes from here obviously that matters to fedex. but also what happens with amazon air there have been some questions raised as to whether amazon can do last mile delivery. so how much that weighs on stock

really depends on the outcome of the trade war, which we should hear that in the shorter term and the longer term as to what happens with amazon. at the end of the day it's definitely been beaten down aggressively and i think it's cheap. >> maybe some of that bad news already baked in thank you very much, appreciate you joining us today for more trading nation head to our website or follow us on twitter. next on "power lunch" goldman sachs saying two rogue employees are responsible for the scandal that has the bank facing criminal charges in malaysia some current and former employees are telling a different story. we'll bring you the latest stay with us here on "power lunch. and now the latest from trading nation and a word from our sponsor. traders short stocks when they think they're going lower the number of shares sold short is called short interest short interest is often used to

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hello, everyone, i'm sue herera here's your cnbc news update at this hour. president trump's charitable foundation has been dissolved. this following a lawsuit by new york's attorney general claiming trump misused the foundation to advance his presidential campaign in 2016 the foundation will give away its assets to other nonprofit organizations within the next 30 days outgoing u.n. ambassador nikki haley delivering her final speech before the security council. she discussed the administration's peace plan for the middle east, prepared by jared kushner, which will be presented in early 2019. >> unlike previous attempts at addressing this conflict, this plan is not just a few pages containing unspecific and unimaginative guidelines it is much longer. it contains much more thoughtful

detail. and penny marshall, who starred in "lavern & shirley" before becoming one of the top grossing female directors in hollywood has died she passed away due to complications from diabetes. she became the first woman to direct a film that grossed more than $100 million with "big" in 1988 penny marshall was 75 years old. you are up to date, that's the news update this hour. kelly, i'll send it back to you. >> i didn't know that about her directing "big." that's impressive, sue thank you very much. the market is closing for the day and it has been a very, very ugly day. dom chu has more. >> just absolutely brutal day for oil prices, kelly. we'll start with those u.s. benchmark wti crude prices they are now down by -- five, ten minutes ago it was 5%, 6%. now we're down 7.5%. $46.29 for the january contract. brent prices down 5% for the

february contracts a barrel. for west texas intermediate we are talking about over 15-month lows at this stage supply concerns still very much in focus as both the u.s. and russia are continuing to pump out oil at record high levels. this of course all comes ahead of the start of opec and partner country production cuts slated for the new year you add concerns over slowing global demand and you get the data that we are seeing here, a really red day a couple of things to note, we are going to get private sector oil inventory data later on from the american petroleum institute. tomorrow is the last day of trading for wti crude january contracts, something to watch. we also get of course, melissa, the official government data on inventories as well tomorrow morning. back over to you. as dom as mentioned, oil prices falling sharply as fears of an oversupply continue to build. a new note from s&p global plat says those fears will not disappear in the new year. in their 2019 outlook the firm

discusses oil's slowing demand, the global hot spots to watch, the slump in natural gas and much more. joining us now is shin kim, the head of energy supply and production analysis at s&p global plats shin, great to have you with us. >> great to be here. >> it's hard to believe that just in early october oil prices wti were in the mid-70s, so it's a typical escalator up, elevator down sort of situation for the price of oil we take a look going forward in terms of macro economics growth in terms of global growth. we are seeing that ratchet down. so do you think that the oversupply problem will be that much more exacerbated by this decline in demand that we're going to see next year >> well, yeah. we do expect demand to slow down next year on the back of the macro economy slowing down as well with that we expect supply to follow suit and growth to slow of course these opec cuts have

been critical to supporting or trying to support global oil prices for brent really the opec cuts were very critical to getting rid of the oversupply that we saw in global oil markets leading up to the announcement of iranian sanctions waivers. once those waivers were announced and opec decided to cut, given the oversupply, we really needed prices -- we really needed to support prices and for balances to come back in line the opec cuts successfully addressed the oversupply situation and we come back to a sort of balanced market for 2019 now, having said that, in the first half of the year we do expect seasonal builds they are seasonably normal and that's part of the seasonality that we see in oil markets so we do spent brent crowd oil prices to be in the low 60s or so the next few months then we watch for the second half of the year when we expect tightness to return.

seas seasonally demand will rise. >> so 60 is only a few dollars from where we are now on brent does that mean wti remains here? and are we going to say any sort of a forced market correction when it comes to oil production here in the united states? in other words, is this low wti price going to force some producers to scale back to force them to face some credit issues, et cetera? things that would make them ratchet down the supply. >> well, listen, currently prices are certainly struggling with the bearish sentiment that's taken over. we're struggling to lift prices and find support through 2019 we expect growth to slow capacity restraints will cap production growth and we expect growth numbers to slow down until the fourth quarter or end of the year when we expect pipelines to come back online -- or, i'm sorry, to newly start up

and that will help move the barrels out and get volumes where they need to go. having said that, that will -- that should help support wti prices, should help support globe crude prices what we do watch for, for the end of the year, is throughout the course of the year we are building wells and we watch for the potential for a surge of production at the ending of the year by 4q '19. as the new pipelines come on, will the surge of completion and production activity lead to another oversupply situation. >> all right, thank you. >> just a crazy move there, 7% in one day shares of goldman sachs, here's also a big faller, down 24% since the doj brought charges against two of the bank's employees for their employment in the sprawling 1mdb scandal. goldman insisted it was just the two employees responsible for it but some at the firm are starting to doubt that joining us is cnbc's banking

reporter who's on set with us with more of the details and what you have learned speaking with employees. >> this has been the bane of goldman's existence. $2.7 billion drained from a $6.5 billion investment fund goldman set up for malaysia back in 2012 what we have -- they have been limited in their discussions lloyd blankfein and his successor have understandably it's a live investigation, but what they have said is that, look, this is the work of some isolated bad guys, some isolated rogue employees who worked to contradict and circumvent the firm's controls. >> but when i read your piece, you're actually suggesting that the cfo and perhaps the current ceo would have been aware of this deal. does aware mean having signed off on it? if they have signed off on it, does this implicate them >> it's a little more nuanced. i present that basically nothing

happens at goldman that's big without really important senior people actually signing off on this perfect example was this case. they had to raise $6.5 billion with three bond issues so we reported that the cfo had to sign off on allocating that capital. so really important people at goldman looks at this deal and decided to still go ahead with it does that implicate them i don't think so i think it just means that the circle of responsibility is far wider than they would have you believe. >> does that mean that the problem for goldenmman is much bigger in terms of financial liability? >> the ultimate expense for this has been limited to potentially $5 billion in a note yesterday that's a lot -- that's a lot of money. there's a big range. it can only be low digit billions what we think is that essentially it looks bad it looks bad if you say everybody who's leading the firm

today had at one point or another green lit this deal. the optics are terrible. >> so what has goldman said to you or to us about the idea that their higher-ups must have been knowledgeable about this >> you know, in background they do not deny it they just say it is still the work of rogue employees, despite the thafact that very important people on very senior committees approved all these deals they're saying they were still deceived by these people so they basically within their heads hold those two facts at the same time. still say both are true and they're still a victim of rogue employees. >> what do you think the biggest concern for shareholders is? some kind of leadership turnover because of this? something happens on the u.s. side because the malaysian exposure itself is a known known to your point. >> when does it end? mayo himself said this could be 12 to 18 months. day by day people looking at their stock and seeing it

decline and they're saying when does this end. >> it's been bad for the withhold banking sector. great reporting. hugh son joining us. to read more on his story, head to our website, cnbc.com. at&t, verizon, sprinting, t-mobile are all planning to roll out their highly anticipated 5g networks in coming days and months a new report from the u.s. government suggests that 5g is more vulnerable certoyb attacks. we'll take a closer look at that straight ahead as someone in witness protection, i can't tell you anything about myself. but believe me... i'm not your average consumer. that's why i switched to liberty mutual. they customized my car insurance, so i only pay for what i need. and as a man... uh... or a woman... with very specific needs that i can't tell you about-

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we just hit session lows on the s&p 500 as we do see the gains for the major averages sort of melt as we head into the final hour of trade. the dow is now higher by 39 points -- excuse me, 68 points that's good for a gain of 0.3 of 1% the nasdaq composite is up by 24 and the s&p 500 again hitting negative territory, down by 2 points. at&t announcing that it will roll out its 5g network later this month, while the technology is seen by many as a big step forward, many are saying it poses a big security risk because it may be more open to more treacherous hacks here to discuss is alex

hammerstone the practice lead for governance risk management and compliance as well as james lewis, director of the technology policy program at the center for strategic and international studies. gentlemen, great to have you both first i want to try to understand what 5g is. i don't want to get too wonky. but from what i've read it difrs in 4g in the role that the towers play. therefore you hack into it, that hack may expose that network to far greater damage can you sort of walk us through in a way we can all understand this >> yes so 5g is fifth generation. a lot of us are used to 4g and now we're moving on to something that's a little faster and more bandwidth. one of the ways it's structured is it's much easier now for an attacker to get in and traverse more of the network. that's one of the concerns that we're hearing from a lot of people. >> james, when i was reading the note that you put out, i

founding it fascinating that the u.s. doesn't actually make any equipment necessary to build out a 5g network that in and of itself seems to be a security vulnerability for this nation. putting that aside, we're dependent on european makers and chinese makers, like huawei and zte. what does that say about when 5g is rolled out around the world how this will sort of divide countries in terms of what they choose to adopt? >> a lot of people will buy from the chinese and particularly from huawei because it's subsidized it's heavily subsidized and you get maybe a 20% discount they'll go out of their way to give you good terms, and that tells you something about the chinese government's intent. so we've got two european carriers who are struggling a little bit because they face this heavily subsidized competition. the problem for us will be how do we connect to these networks that probably won't bow that secure, or not secure enough to

meet dod standards or american standards. >> so what is the solution here, a divided world? >> i think the solution people are hoping for is that we can plus up the two european companies, we can persuade countries to buy their stuff, not to buy huawei, but that we can also figure out a way to connect securely to the many countries that will end up buying chinese equipment we've got two problems, persuading people not to buy in the face of a heavy discounting, and figuring out how to connect to those that do buy because we won't have any choice. >> do you think this is one reason why the sprint /t-mobile merger is being allowed to happen should we adopt this technology or push back or hold off somehow? >> 5g is going to be great you're going to be able to do amazing things with your smartphone the problem is just as now, it will bring additional risk you'll have a lot more devices,

you're not going to be that well protected. opportunities will be there for both private hackers and state hackers. nobody doesn't use the internet now because it's not secure. >> i'm thinking about it. >> people are beginning to say that but 5g will provide a lot of benefits that hopefully we can manage the security risk in a way that will let people enjoy them safely. >> alex, how do you see the rollout of 5 dlg and how it migt create a digital iron curtain around the world a 20% discount on the newest technology would be irresistible. >> absolutely, and that wouldn't be surprising to see those countries choose that. one of the big things is that so many more things are going to be connected. so it's a whole new world out there. you'll have cars connected and everything else. the repercussions are much different. so if you have somebody using 5g to control surgeries, if you

bring that network down, you can cause much larger problems. >> a smart home is great until it's hacked. gentlemen, thank you so much alex and james >> thank you. stocks giving up their big gains. the s&p 500 dipping into negative territory we go to dom chu for a quick market flash. >> tyler, what we have are headlines out of washington that are seen as being some of the cause for that push lower. we've got senate majority leader mitch mcconnell saying that the democrats have rejected a spending bill offer, but there seems to still be bipartisan support for a deal with those particular moves lower right now, the s&p health care sector also dipping into what some traders call correction territory that is down more than 10% from recent highs back on october 1st. it's been a sharp reversal over the course of the past week or so for that sector it's been an outperformer in the s&p 500 during this turbulent year so far. among the names that have pushed

it to the up side, cardinal health and others. kelly, tyler, melissa, those headlines out of washington were one of the primary drivers of the chart moving lower moved lor >> not just stocks on the ten year treasury yield but 2.819% we couldn't hold the balance at all. we'll let them dofr this into 4:00 p.m the world's biggest play maker did boost dividend and said it is buying back more stock. it has been one of the best performers this year is boeing still a smart play for 2019 the dow lost nearly all of the gains. we were up 334 at thhis.e gh lots more power lunch ahead. duncan just protected his family

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leaders among the dow up about 4% the company increasing the buy back let's bring in aerospace and defense analyst. two things happening here. an increase in the difr devidend

a heightened one up to 20 billion. are those the main drivers here? >> yes it is inkreegs up from 18 billion over 2019 and 2020 it is increasing so those are positive in terms of how it is thinking about the free flow >> will they buy all of that or wra does their history tell you? >> they bought 9 billion back this year. it seems it would be the dif dent about 4 billion >> the stock over the past month or so has had some stumbles partly related to that crash of the 737 max. is that a concern of yours that there might be something wrong with that? >> sure. so that's lot of focus ton 737

max. so it is critical. that is one of the key areas of focus. >> what is their trade vulnerability? >> it has an ability that sales to china it is a big exporter it is about one to china that's the risk. really what we are looking at is the demand factors it is up 7% year to date as that continues to be there as the demand is there the supply will come. >> you think it could sell almost a hundred dollars higher by when? >> that is our 12 month price target simply speaking if we put a market dividend yield it implies the stocks should be up. if we put it on it it gets

closer to our price target the stock is trading and market at about 5.5 still a steep discount >> thanks for explaining it. appreciate it. >> thank you very much >> thank you tonight don't miss jim cramer with greg smith rhtig leer on cnbc check please is next put your data to work on the cloud that drives business. the ibm cloud. the cloud for smarter business. and all thro' the house. 'twas the night before christmas, not a creature was stirring, but everywhere else... there are chefs, bakers and food order takers. doctors and surgeons and all the life savers. the world is alive as you can see, this time of the year is so much more than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,250 credit on select models now

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saying that he is sure that lawmakers will avoid a government shutdown at the end of this week nbc news reporting it could take us through february. he will bring back a new deal to democratin democrats. >> it is ugly out there. >> you're seeing that and the price of oil which is down on the january contract below $46 a barrel >> bad news in the market. >> it steps over it.

>> exactly but back to that oil price if you can pull it up it is a decline in the afternoon we have seen the worst of it in the past 20 minutes. it will be a key thing to watch into the final hour of trade thank you for watching power lunch. all right. closing bell starts right now. >> it is time for the closing bell the feds december rate decision less than 24 hours away. we will break down all of the possibilities and what it means for your money coming up is am sazon a friend or foe will micron earnings turn things around? we'll have analysis for you straig