think so if they do, they'll let you know and does it for "the exchange," everyone i'll join tyler and melissa which begins on "power lunch" right now. kelly, thank you very much welcome to "power lunch. i'm tyler mathisen new at 2:00 on this day, the big vote on brexit set to get under way. some preliminaries first major consequences for investors in global markets at stake here. rising prices and raises prices and chill. that's what netflix is doing and it is soaring on its big price hike in a bold new call on the fangs. and it ain't called "power lunch" for nothing the ceo of domino's pizza here live >> good pizza. i'm melissa lee. the netflix nudge. news, the nasdaq getting the biggest pop. all things are up across the board and major averages up for the highest close in over a month. despite today's gains, risks are

rising the big vote on brexit is set to get under way and there's a lot at stake in the global markets live in london the latest round of earnings not doing any favors bob pisani is live at the new york stock exchange and the impact of the government shutdown on the u.s. economy much more damaging than initially thought. steve liesman has got the numbers. outside of the parliament where teresa may is making her last minute pitch >> reporter: that's right, melissa. this is a final gasp by the prime minister not only to persuade her own party that the deal she has on the table, her government spent more than 18 months negotiating not only the best deal but the only deal available. there's a lot of critics in the house of commons behind me likely to vote this deal down. if that happens, a huge range of permutations to follow we could see the opposition party vote no confidence against

the government and trigger a general election and if that's not something they pursue, there's the option of a second referendum on the table and a lot of hard line pro brexit members of teresa may's brexit party and like to see no deal with union whatsoever. spelling out what she thinks is important and what she wants to avoid, that is she does not want to see brexit reversed and a general election thinks that would create more division inside the united kingdom and she is very keen for the plan towards parliament in the next hour or so to go through at the moment and very significant defeat though. >> willem marx, thank you. other than watching the pound to figure out what's happening here, most most important? >> well, i think for the american audience, which must look at this and think, wow, this makes, like, byzantium look

good, what the world thinks about the situation at the moment the pound has not returned to the lows we saw during that brexit vote, right with that 120 and still above that so i think the bigger issue is when you cut through everything w willem said, jeremy corbin could be the prime minister of the united kingdom they're low but the pound would crater on that possibility a hardcore leftist bring back the united kingdom to the days if you could when the uk needed an imf program so that's, i think, the biggest fear that's possibly out there >> a weak pound is actually good for uk companies who are exporters. >> we saw that that will definitely soften any kind of blow if they're concerned about the economy and we saw that after the brexit vote all of these predictions, all economists agree i think it was christine this was going to be bad for the uk

economy. it didn't turn out to be that bad in part because the weakening currency, absolutely helped all the exports >> imported goods more expensive, right i assume they are bigger importer of goods than export. >> given the choice, governments love to weaken the currency. >> oh, yes, they do. and we are no exception. >> absolutely. michelle, thank you. we'll check back in a little bit. michelle caruso-cabrera joining us there. the latest round of results adding to uncertainties about growth bob pisani putting it into context for us >> the bad news is the earnings numbers for 2019 are coming down 2019 is what we care about the good news is the market anticipated this this was what all the turmoil in the fourth quarter was all about. let me show you the first quarter. again, 2019 is what we care about at this point. the numbers have been coming down fast. on october 1st, 8.1% expected for the first quarter. look at this now down with a 3.3% yes, the numbers normally come down but this is a much greater

dow revision than is normal. where are we right now we've rallied on these oversold conditions but stuck in a trading range right now. we've got good news on the fed china trade talks. china's stimulus in overdrive. the bad news is this shutdown, the brexit uncertainty and i think in particular, weak international data from china and europe are the biggest problems for earnings and potential future revisions back to you. >> thank you, bob pisani the big risk is the government shutdown now 25 days into it, pressing in on a month's time. the white house now doubling its original estimate of how much the shutdown will cost the u.s. economy. steve liesman with the new numbers. it's not big on the surface, but it really is big numbers >> it's actually a little bit deeper than it was and then the question is the length of it 0.1 from the economy except

that's every week while on furlough previous estimate, once every two weeks. the increased estimate from bringing in more of the effects from private contractors who will be out of work and a greater impact from the loss of other government functions so the administration now sees a half a percentage point. it accumulates up to a good amount if the shutdown lasts through january. mark zandi estimates a less severe impact. half a point cut if the shutdown lasts through march. okay, one more estimate. the most stooeevere one out the. thinks gdp could go negative you remember the reporting we've done here. first quarter tends to be weaker than the other three, so add on top of that, you could go negative some of the losses could be recovered next quarter when the payback to workers ironically, folks, economists will not necessarily have the data to show the economic impact from the shutdown because of the

shutdown >> because of the shutdown we are not going to get december retail sales we are almost certainly not going to get fourth quarter gdp and see how much that cascades from here. if a shutdown happened in a farce and no one here to see us, did it really happen jobs is cool and the reason jobs is cool because it was in another bill bls was funded so that's okay durable goods, not housing, inventories, not retail sales and then no g dp. >> how will these show up in those numbers, the layoffs and furloughs, do we know? >> we don't have the 45 minutes to explain it to you but some of it will show up and some will not show up because of different things that happens and depends where it ends. >> steve liesman, thank you. >> we've laid out three major risks to the markets the take from those who manage money. chief growth officer with sequoia and then the portfolio management

great to have you with us. michael, i'll start off with you. i hate to say this while steve liesman is on set, as much as i love economists and their forecasting and do a valiant job, when it came to the economists, they came up with a narrow impact and the impact was greater because the impact on business confidence and sentiment and consumer confidence and consumer sentiment, not quantifiable at this point do you think this will have repercussions in the stocks i own? >> it's a consideration, melissa. any forecaster data point is the best guess we don't put too much emphasis one way or the other but encompass or add to the big picture we look at i do think it's something to keep an eye on the longer the shutdown goes on, the bigger negative impact it will be. we're trying to quantify that.

the one by-product is it's likely going to increase the odds the feds stay on the sidelines until they can quantify all this. so that may be a positive. but i think we're still trying to figure it out obviously, if people can't fly because the airports are shut down, that has major ramifications that weren't clearly outlined in the early stages of the shutdown and may be more of these issues, unintended consequences. we've got to keep an eye on it in terms of managing the po portfol portfolio. >> on cnbc earlier today, $25 million impact in the month of january alone. we heard j.p. morgan ceo jamie diamond address this on the conference call. as this gets longer and longer, does it become more of a concern, particularly as a money manager, you also have access to data that is necessary to judge what the health of the economy is >> so we are late cycle and this isn't helping. this becomes exponential as we go through 800,000 jobs furloughed, plus 4 million

contractors, the effect, the economic effect gets exponential. we look at potentially 0.1 gdp drop per week and as we go on, in the winter, we could have winter plus that, plus brexit, give us either an almost recession quarter or negative quarter. for this quarter, so obviously takes two quarters to get to a recession. not saying we're going to have a recession. >> let's just say it lasted, you know, six months and it was two quarters, it's not the same thing as saying we're in recession but a temporary factor that should be reversed. >> a nice recession. the bounce recession where it fixes itself the nice thing about the shutdown is a lot is reversible, like a winter. we have a bad winter storm and something come in, we have reversability. so there's potential reversability to this but we are sitting at a confluence of risks right now between brexit and shutdown >> what does the shutdown do to

the consumer psyche even if you're not involved in the shutdown, does it in a sense reverberate through the consumer economy? >> clearly it does because it affects companies and government contractors with small businesses but the cascade if i'm laid off from the government, i don't go to the nail salon or get my haircut or buy a new car, there's a variety of things. so the cascading effect on the economy, like i said, it's a multiplier effect and, you know, when we see that multiplier effect take place, it works its way through the system faster as it gets worse. >> at the same time, michael, when you look at how j.p. morgan and citigroup responded with how they've traded since they reported the quarterly results, does it tell you the markets examine valuations much more closely than market momentum there seems to be a willingness to look through some hairy results, let's put it that way, and these stocks higher, even in the face of all of these threats and potentially slowing economy? >> melissa, i think a lot of bad

news was sort of already built in, so that's why you're not seeing real negative impacts from some of the disappointing results and while the big money center banks have had negatives in the earnings reports, we all, for example, first with public bank and they had a pretty good quarter net where they exceeded growth expectations on eps, loan growth, deposit growth, et cetera it's not every single company within that sort of broad sector but i think you're right you do have to keep an eye on it going forward and the confidence factor weighs in i'm a consumer, for example, and i cannot believe that both sides can't get together and get this resolved over three or four billion dollars. there's common sense factor to this most consumers probably weigh and say, come on, can we, we're putting the economy at risk here for three or four billion dollars? how much do we spend that on that does impact spending and investment, it impacts consumer spending people worry about their jobs, paying the mortgage.

so yeah, the longer, again, it goes on, the biggest risk that you have longer term effects it is mostly reversible assuming it gets resolved but that could take several months or quarters to play out if it goes on for a long time. >> sure. gentlemen, we have to leave it there. thank you so much. technology leading the market a little bit higher today. citi going all in on the fangs the analyst who called we'll talk to the ceo of domino's how his pizza was served at the white house last night we'll ask him that anducmo on "power lunch. 300 miles an hour, that's where i feel normal. having an annuity tells me my retirement is protected. learn more at retire your risk dot org.

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i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience.

my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. national champion clemson tigers football team at the white house last night the government shutdown forcing him to get creative about the menu fast food, mcdonald's, wendy's, domino's pizza these are college kids i think they appreciate that down there standing by with the ceo of domino's, in fact, kate. >> reporter: that's right, we are right by the domino's ceo. thank you so much for being with us today >> thank you >> reporter: your food was served at the white house last night. did president trump give you a call what did you think when you heard about that >> i'm not surprised we're the number one pizza delivery company in the washington, dc area. we've been delivering to the white house for decades. so not surprised

hope they all had a great experience last night. >> let's talk about your strategy as ceo. you've been in this role for about six months or so now you're expanding here in the u.s. but also part of the strategy is pushing out more globally and a bigger presence internationally. are you concerned at all about what trade tensions might do to that expansion plan? >> we've had a successful run of growth internationally now for several decades and that's spanned many economic cycles and various points of tension between countries over the years. so we're going to keep executing against our steady strategy and i think things will work out just fine for us, kate. >> you're also doing what you're calling fortressing, so building more stores in the u.s. so consumers are closer to a domino's pizza what does that do for the consumer and your franchisees? >> for a consumer, a couple of great things about it, nurmber one, it puts our stores to the customer if we were 8 or 9 minutes away, maybe now 4 or 5 minutes away

and allows us to be more consistent and faster with our delivery for our drivers, it's great because they can get more deliveries per hour and that means more tips and for the franchisee, better retention of the driver than a tight labor market and then finally, for the franchisee, because of the economics of delivery get better, over the long run, it works very well for their profitability. roll that also in with the carry-out business this gives us access to and overall, it's a great way to continue to grow the presence of our brand in a profitable way for our franchisees. >> melissa lee has a question. >> i want to ask you about what analysts are calling your digital. you invested early and deeply in digital which really allowed you to expedite your service, save on costs but at this point, has the low hanging fruit been harvested and how much more can you get for return on investment in a digital dollar? >> you know, we still feel like there's a lot of runway left for

us in digital. you know, our team continues to innovate and look for new ways to serve our customers not only in the u.s. but across the international business as well we keep listening to our customers and they keep telling us to order from different ways and our customers can now do that through more than a dozen and a half different channels. >> i want to ask a similar question here. you were the original delivery service. that's what made ordering pizza or chinese food a ubiquitous experience in the u.s. now you can kind of get food delivered from anywhere. do you guys ultimately partner with the likes of uber eats and door dash or wall it off and say, no, you have to go through the domino's app or the domino's web site or call us to get that pizza delivered. how are you going to deal with those competitors? >> first and foremost, i feel really passionately about the fact we've got to deliver our

own food i want when a customer orders from domino's, i want a domino's uniformed driver to show up and deliver that pizza it helps us to control the customer experience and also the quality of our product so something we feel very passionate about and we've invested in that digital technology that we feel like we've got an opportunity to continue to do this ourselves, to give us not only a service advantage but a cost advantage relative to some of those that are out there using third parties. >> how many locations does the average or the typical franchisee own and what is the typical gross or range so i get an idea of what one of these locations makes, either low end to high end or whatever, but how many does the typical franchisee own and what do they make? >> so if you take the u.s. business typical franchisee in our u.s. business, it's going to have six or seven locations and the level of profitability our

franchisees can drive through those businesses and as we talked about that franchisee profitability at the center of everything that we do, our franchisees average around $136,000 in 2017 and profit for stores and the average franchisee close to a million dollars in the u.s >> in closing, i'd love to get your take on the state of the consumer right now we've had a volatile stock market and the government is shut down. are you concerned at all about a potential slowdown and what are you thinking about the consumer through the domino's lens right now? >> what we see here in the u.s., kate, still a really strong consumer unemployment is still very low we've had good wage growth across the u.s. economy over the course of the last couple of years and haven't seen any slowdown in consumers interested in ordering pizza or ordering it from domino's. >> richard, thank you for joining us. >> pleasure to be with you

>> thank you, rich shares of ge up 24% in one month. is the rebound for real and a crucial vote in the uk parliament on brexit will the deal go through this time or prime minister teresa may facing an hior ls?sticos the voting is taking place right now. stay with us

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j.p. morgan sounding the alarm on ge today after that stock soared more than 30% off the lows analyst steven tieu isusa warnit investors might now be too bullish ahead of this month. matt with miller tayback and rockefeller capital to size this one up matt, this stock obviously up a ton in the short-term. still down some thee quarters from the all-time highs or recent highs where does that leave you with regard to the technical position >> the stock below $7, i thought it would bounce sharply off the 2009 lows and it has indeed done that but with this huge rally, hasn't broke above key resistance levels but the 100

day moving average still above where it's trending now and i don't think it's going to get there on the first try the reason i say that, if you look at the side chart, it's getting overbought to a same degree it has on several different occasions in the last two years including the kind of the key top in late 2016 each time we've reached that level, on the short-term basis so i think we'll see the same thing here i don't think we get back down to the lows we saw back in december but i do think a long-term will be able to buy lower prices for the last year or so. >> alert for a pullback but do we know about the strategy under the new ceo to make a longer term bet on ge >> i think we do the fundamentals shook out and hit hard by itself december and probably tax loss selling. we think this is a classic mispricing of a security just the health care and the aviation businesses at over $10 a share which doing the math,

trading around 880, that would make the rest of the businesses worth a negative $1.20 we're long-term buyers of it and if you look at the valuations and fundamentals, they point to straight up. >> all right, guys, we'll have to watch it later this month those numbers come out we appreciate it more "trading nation." send it back to you. >> thank you, mikeme appreciate it. moving ahead on the price hike, that's now to the stock but for consumers like you and me. citi going all in on the fangs the first time ever, the analysts who made the call will join us, plus, we've heard from the big banks and what about the regionals and sit down with the ceo of a successful one, washington federal, get a pulse on the economy and the big brexit vote is taking place right now over in london we will bring you the latest from west minister, all this when "power lunch" returns >> and now, the latest from

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welcome back i'm sue herera here's your cnbc news update at this hour. william barr's confirmation hearing to the attorney general was nominated in the early going by status of special counsel robert mueller but asked if a memo he sent to the justice department on presidential obstruction of justice was a job application of sorts >> that's ludicrous. if i wanted the job and was going after the job, there are many more direct ways of me bringing myself to the president's attention than writing an 18 page legal memorandum or sending it to the department of justice. hundreds of hondurans setting off from south america in a new caravan it will likely take weeks or months to reach the u.s./mexico

border caravans have become a flash point in the debate over u.s. immigration policy researchers at georgia tech university developed a patch to press on a month or leg an arm a month's worth of birth control it should cost a dollar a dose kelly, back to you >> thank you, sue herera markets closing for the day, over to. >> provided relief for equity markets and oil trading just under the $52 level up 2.8%. a level that actually broke through yesterday. other traders citing an overall improvement in risk appetite the rebound does come ahead of tomorrow's release of data on u.s. stockpiles where we are expecting a drop in supply

sending it back to you >> all right, seema, thank you seema mody a quick check on the markets here dipped just a touch but the nasdaq higher by more than 1.2% netflix up to 6% but a rally across the board in technology particularly in the fang complex. if you can look at that, we've got amazon, facebook as well as alphabet in today's session. rick santelli is tracking the bond market for us >> if we start the bond yields for the 10 year note, a nice glimpse. the market popped up in yields and for the long end, pretty much straight and steady backed off of two and three quarters but the market is holding around 270 something interesting is happening on the yield curve nobody is talking about. if you look at just 30s minus tens, that yield spread

difference is now the widest it's been in 13 months hovering at 36 basis points, 30 year bond yield that's very buoyant against the rest of the curve. dollar index today having a fabulous day maybe it's because the european union aren't having fabulous times, pointing out the need for ongoing stimulus and the fact the economy needs it really gave the dollar boost at the behest of the euro and finally, a lot of attention being paid to the pound today as we get closer to the brexit vote. if you look at the pound versus the dollar, it's taking on the chin but if you open the chart up to a week, we're just back to where we basically started and this is quite important. there's been a lot of volatility but whether it's interest rates or the foreign exchange side, it really hasn't broken out of recent ranges. kelly, back to you >> thank you, rick more on that brexit vote from listen don what do you see? >> reporter: i'm watching some

of the members filing back into the chambers having cast their vote according to some photos tweeted by members of parliament from inside the lobbies, there's an overwhelming number of them cramming into the no lobby it looks likely based on those photographs, shouldn't be taking the photographs but based on the photographs, it does look likely the government will be defeated on this motion we'll have a formal count in just a few minutes for you guys but the consequence of that, of course, for teresa may, pretty significant. ruled out no deal brexit or any taernlts and insi alternatives and says there's no better options where we go from here, unclear >>vil >> is there going to be another vote or is she going to lose her job? >> reporter: these are questions i can't answer just yet, i've got to be honts wiest. she's facing the labor

opposition party with no confidence in her, expeditiously. tonight possibly and if that happens, could turn trigger a fresh election, something teresa argues will cause further division the labor in the united kingdom push for a second referendum and that could be the process by which we see a reversal of brexit, something teresa may said she doesn't want to see. >> that would be just an unbelievable about-face. thank you very much and come back there, some preliminary signs the vote is turning as much against her we'll bring you the results. >> the pound, by the way, the u.s. dollar off the session lows for today. in the meantime, between netflix soaring after announcing the largest ever streaming price hike netflix report results thursday after the bell citi out with a new note saying not only bullish on netflix but all the fang stocks for the first time in six years.

buy ratings on all stocks. joining us to break it down, mark may, great to have you with us you believed this note on monday and in the note, alluded to netflix's pricing power and here we are with the hikes. have you done the back of the envelope calculation on what this could mean for netflix's earnings >> this is not going to have an immediate impact on earnings, certainly not in q4 and likely minimal in q1 the way this is rolled out over stages, but i think the bigger picture is that netflix, we believe does have pricing leverage we saw them raise prices in japan in q3 and saw them raise prices in canada where i am now in q4 and obviously we're seeing this increase in the u.s i think the bigger picture is that netflix is delivering greater and greater value to their consumers every month, every year and that's giving

them this kind of pricing you're seeing i think an important element of this which is still quite new but developing is their greater push into featured films, into movies i'm sure you've all heard if not seen "bird box," later this year, martin scorsese release. there's a big effort at the company to develop big featured films but block busters and smaller indis and as you know, people are used to spending $10, $15 or more going to a movie and this, we think, also is going to give them even greater pricing power than what you're seeing today. >> are any of the streaming services in any sense a real challenge to netflix >> the way that i interpret the announcements you're seeing from those companies releasing is that they are finally getting on board with the new mode in which

video content is being distributed and consumed by consumers and i think that unlike in the music category where these different services are substitutes from one another, they all have the same music and music libraries accessible on them, these are all very unique and exclusive titles and i think what you're going to see, three, five, seven years from now, you and i will basically recreate our own bundles of content where we pay. >> i'm sorry, we have to go live to the results of the vote on brexit >> 202 the ayes to the right. 202. the no's to the left, 432. so the no's have it. the no's have it

point of order the prime minister >> thank you, mr. speaker. mr. speaker, the house has spoken and the government will listen the it is clear that the house does not support this deal but tonight's vote tells us nothing about what it does support nothing about how or even if it intends to honor the decision the british people took in a referendum, parliament decided to hold. and people particularly, citizens who made their home here and living in the eu deserve clarity on these questions as soon as possible. >> order, order. >> people shouting there will be an opportunity, other points of order butthe prime minister must and will be heard. the prime minister >> those whose jobs rely on trade with the eu need that clarity. with your permission, mr. speaker, i like to set out

briefly how the government intends to proceed confirm whether this government still enjoys the confidence of the house. i believe that it does but given the scale and importance of tonight's vote, it's right that others have the chance to test that question if they wish to do so i could therefore confirm if the official opposition table of confidence motion this evening in the form required by the fixed parliaments act, the government will make time to debate that notion tomorrow. if this happened before christmas, the official opposition declined to do so, we will on this occasion consider making time tomorrow to debate any motion in the form required from the other opposition parties should they put one forward. second, if the house confirmls its confidence in this government, i'll hold meetings with senior parliamentarians across the house to see what would be required to secure the backing of the house

the government will approach these meetings in a constructive spirit, but given the urgent need to make progress, we must focus on ideas that are genuinely negotiable and have sufficient support in this house. if these meetings yield such ideas, the government will explore them with the union. i want to end with two reassurances those those who fear the government strategy is to run down the clock to the 29th of march that is not our strategy i've always believed that the best way forward is to leave in an orderly way with a good deal. and have devoted much of the last two years negotiating such a deal as you confirmed mr. speaker, the amendment last week by honorable friend, is not legally binding but the government respects the will of the house and therefore make a statement

about the way forward and table an amendable motion by monday. the second reassurance is to the british people who voted to leave the european union in the referendum 2.5 years ago i became prime minister immediately after that referendum i believe it's my duty to deliver on their instruction and i intend to do so. every day that passes without this issue being resolved means more uncertainty, more bitterness and rancor. the government has heard what the house said tonight but i ask members on all sides of the house to listen to the british people who want this issue settled and to work with the government to do just that >> i will come to other colleagues but first, the leader of the opposition. >> listening to british prime minister teresa may after the brexit vote was defeated

let's go straight >> this is the biggest defeat on record for any government in history. the vote 432-202 and of course, given the importance of the vote, it is massive humiliation and defeat for the prime minister, teresa may during her premiership, her job was to negotiate the brexit deal and unite parliament behind that and she has clearly failed to do that now the interesting development since that defeat is very quickly, she invited, she urged jeremy corbin, the leader of the labor party to table a vote of no confidence in her this is different from the one she won in december which was against what was amongst her own and this would be across the entire house if she lost that, would be looking at the possibility of a general election she said there that she then won it and she would consult all the members of the other parties to see what they wanted to

negotiate in terms of brexit going forward but this is a huge, huge defeat for the prime minister initially reacted lower and come off those lows as we stand here. >> wolf, willem mentioned this but will we have another vote on brexit from the public >> we have statistics from deutsche bank. what would happen next if the prime minister lost the vote they came up with these statistics yesterday and just outlines the possibilities let me run through them. there's six. quite a few. the possibility that may resigns and secondly, may negotiates and pushes it through the second time and 10%, softer brexit deal was 30%. and second referendum at 15% and general election at 15% and no deal hard brexit >> softer brexit deal is the highest probability out of that list. >> softer brexit deal was the highest probability of that and

that would come about if she wins a vote of confidence tomorrow and negotiates with parliament or soft brexit but the scale of this defeat on this vote, i would say, increases the chance that she has to resign or the chance we have a general election that's the slight flexibility from yesterday the chance we lead to new polls and second referendum is still quite a long way off the reason i say that, and didn't hear what jeremy corbin just said now but an hour ago said clearly if may loses this vote, he will urge for a general election and so at the moment, we don't have the leefader of t opposition or teresa wanting a referendum huge defeat for the prime minister. >> what does a soft brexit mean and would the members of teresa may's party go along with it >> it's very hard to know. i mean, the definitions of this are so wide.

the focus really has been on what's happening with the border in ireland ireland is an ireland, part of the united kingdom but the southern part of it. and northern part, right, if they were to have some kind of hard brexit or no deal, the eu wants to put up a border there and uk wants none of that. that's very upsetting to them. and so everything goes back to this core issue. are they able to solve that border issue and i don't see how they get to that if they haven't been able to do that yet part of it was maybe we'll do an extension of the current situation through 2020 a lot of the mps don't like that and maybe be part of the eu forever and an excuse to keep us what happens here, i don't think anybody knows. we saw the pound rise slightly because she did not say she was going to resign.

>> i look through the comments from jeremy corbyn as well how there's not a lot of good options for this administration and leaving the eu as you mentioned but nothing like the worst case scenario right now. >> jeremy corbyn doesn't like the eu either, right he feels they are a neoliberal, too many capitalistic policies he doesn't like the uk would stay part of the european union. he would prefer the ability to leave and do the things he wants that would go against eu rules >> back with us. wille mer erk willem she lost about 230 worse than anticipated, right? >> reporter: yeah, i mean, this compared to history, this is extraordinary. when you look back to 1924 as the last time a government lost in a major vote like this by anything like this kind of

margin and even then, more than 160 votes. almost a century since a government faced a defeat like this jeremy corbyn said he'd table this motion of no confidence and teresa may seems willing to do and the big question, how many conservative mps are willing to vote against a conservative led government when there was a leadership question around teresa may, more than 100 mps voted to oust her as conservative leader that doesn't mean, of course, they're willing to push their own party potentially out of government if she does lose that motion of no confidence. we'd have a two week period where the conservatives have to figure out a new majority inside parliament if they fail to do that, we would see the triggering of a general election what that means we have, a jeremy corbyn government and what that means, of course, for labor's position on brexit and

hugely uncertain because over the last few days, whenever corbyn or senior minister has been asked, what will be your position if there's you're seeking, they've not been able to give a straight answer, guys. >> thank you.guys. >> let's bring in sameer from wells fargo. what are you going to tell clients now? we were talking about this vote of no confidence tomorrow. a 14-day period after that to form a new government. is this going to be a muddle-through situation or if jeremy corbyn becomes the head of the new government, does this take us in a new direction >> that's a great question for some time we've been saying developed market equities of which the uk is a big portion look cheap but a lot has to do with the uncertainty we're facing we don't see a quick solution to this we do think a hard brexit remains a low probability, but the fact this will continue for the coming months despite the

area is slowing, the british economy is slow, it's just not good. >> why do you think the pound has come off the lows of the session? it looks like it's rallying at this point. >> markets tend to discount bad news pretty quickly. there's probably a short-term bounce more than anything. maybe people are covering shorts we do see the dollar declining this year but much of that decline should be versus the euro appear the yen. we don't think the pound can maintain these gains for long. >> kbrus owe cabrera i with us. >> it feels like that's what we're going to get, this move toward a softer brexit and what is it. there are many possibilities of what a softer brexit could be. i could make your eyes glaze over about what the possibility is, but softer versus a chaotic departure. >> a hard brexit. >> exactly. >> which would be very difficult

on trade, very difficult on immigration matters. >> yes, exactly. >> and that scenario is most likely if there is no deal, right? >> right. >> so hard brexit is the we're crashing out without a deal version. this now means there's going to be a new government potentially at the table to negotiate? >> yes some set of new negotiations maybe she has power to go back to the eu and say we need to figure out in advance what's going to happen with the irish border that gets everybody upset. the possibilities, it's almost endi endless. >> would a new government mean you start with square one? we're already two years plus into the process of brexit, so -- >> likely a whole new set of negotiators and whole new set of eyes on it. >> how will british stocks react tomorrow >> they're probably going to

trade along the pound. uk equities in the short term might be oversold. it's going to run into the economic reality of, one, you didn't resolve anything today and, two, the soft data is already softening around the world and especially in the euro area you saw some of the data out of germany and the you aeurozone that's going to be a big impact and this doesn't help with any of that. >> bob, what about american stocks, will they ignore it or is it already in >> well, i think the important thing here is look at two things number one, what if there's another election and labor wins and corbyn wins, for example independent of the whole brexit question, that could be considered negative for stocks in general, so parsing the probability of that happening is number one number two, right to your question, what's the impact on american corporations doing business in the uk and doing business in europe and the answer is it's not clear. i have spoken with the s.e.c. about this and they have told me

they are very concerned about the fact that u.s. corporations have filed very few statements with the s.e.c. on what their contingency plans are, whether brexit happens or not. their response has been we simply don't know. this compounds the problem because now you have the potential for multiple outcomes. i think it increases the probability of near-term uncertainty, which is not what you particularly wanti, since th markets are stabilizing. >> can you connect the dots in terms of the impact and how it could come back to our shores here in the united states? you know, if there is a new government, if we have to go back to the negotiating table on a brexit deal of some sort, this sounds like a very long process, that's more uncertainty. is that a continued drag on the uk gdp, for instance, a drag on eu, does that hurt global growth, does that then impact us can you draw the lines for us? >> sure. so one thing that will be pretty

clear is all this uncertainty will allow the fed to be patient for longer we see two hikes this year, but to the extent that the euro area and british economy slow, the fed could find themselves having to be a little stimulative so it could be good for the u.s. economy. two, i think it puts a little bit under the dollar versus the pound there could be some strength. we also think sectors that are a little more domestically oriented could do better, so think about financials those are cheap. we like those. health care could do well and more emerging market oriented sectors, so think industrials. maybe technology does a little better consumer discretionary in the u.s. does better so we would focus on those stories, especially given the recent uncertainty that are much easier to tell where investors can find cheap bargains. >> the implications of going to sectors more insulated from

business around the world is that this could have a lingering impact not just on uk gdp but eu gdp as well. >> that's a great point. we're very interconnected so there are no areas that won't be impacted >> michelle, you said in a way jeremy corbyn, the far left labor leader, wants brexit as much as this center right conservative government does does that mean there is a path forward between these two that agree on nothing else but on this issue be able to overlap somewhat >> there was talk that theresa may may talk to labor and couldn't get labor to go along behind closed doors, the discussion is that this is what jeremy corbyn would absolutely prefer, right, if you were to become prime minister, it would give him a lot more control. >> does he want an election? is that what he wants? >> if he thinks he can win it. an that's all -- you know, we have fixed elections in the

united states. we always know on what date based on the constitution. there it's always moving, it's always so malleable so you wait. if you're an opposition leader, you wait for the moment you think you can actually win it's not clear to me he could. >> but are they going to ending up with a government that has a mandate just to do brexit? i don't know who's leading and who's following along, but for the sake of convenience to get this done, that it could bring -- >> wasn't that may's government's mandate, though >> i think all options are on the table at this point. like i said, it's byzantine. we had the privilege of speaking to sir richard branson a few weeks ago and i asked him about brexit and whether or not he thought it should be put back up for referendum. is there constitutionally the ability to do that >> reporter: yeah, government can put anything to a vote

nationally that referendum was a very unusual event here in the united kingdom. we hadn't seen that for some four decades or so and it was a nonbinding referendum so it was taken under advisement and converted into government policy which was quite surprising to some people if you had gone back three or four years and looked whether that would happen. in terms of the negotiating period, i think this is very important to point out to some of the u.s. viewers that we have if you look at the period between now and the 29th of march, it's just over two months' time, a lot of people inside the house of commons the last couple of days pointing out if tonight's vote went as it has gone, we would expect to see a potential extension to that negotiating period, which under the european treaty which governs this process was limited to two years the europeans have made it clear that if there is a momentous change in policy, if there is a general election or a chance for a referendum, they'd be willing to extend that two-year period

so that's something to watch as we get closer to the deadline. tomorrow, though, another key moment for theresa may she's going to be putting herself forward in front of the house of commons and saying are you going to back me, are you going to back my government? if you're not, you'll have to figure out what happens next it would in theory be pretty straightforward for her to resign if she loses that motion of no confidence. >> when there was an earlier no confidence vote, i believe mounted by members of her own party about a month and a half ago, there was some stipulation that said once you've done it once and it doesn't carry, you must then wait a certain number of months before you can do it again. would that apply in this case as well >> reporter: no. that was very much within her conservative party that comes under party rules if she's challenged for the leadership there is a 12-month period she is continuing in that position as leader unchallenged this is much more about her being prime minister inside of the lower parliament here in the

uk. >> and the northern ireland said they would support that. it would be odd to go through this and end up with the same coalition that's standing here. >> the eu put out a statement saying they're going to continue preparations for all outcomes, including a no deal scenario but they're hoping there will be some kind of orderly deal. >> we continue our coverage of the vote also, thank you, sameer with "the closing bell. here. >> we're thanking everybody. thanks for watching "power lunch. thank you very much for that as you have been discussing, the biggest defeat on record for any uk government. theresa may's brexit deal defeated by 432-202 votes, losing by 230, sara, but importantly seeing 118 of her own conservative mps vote against her. she'll need their support tomorrow when she no