every room in my house i have nine receivers across my house. >> we've got to go, ben. monthly cost, real quickly >> it's upwards of 250 there $2h so it will be less, but all i want to say, we're happy and i believe everyone is going to continue just growing their consumption because there's better stuff on. >> ben silverman, appreciate your time. that does it for "the exchange." "power lunch" starts right now kelly, thank you very much we'll see you in just a minute welcome, everybody i'm tyler mathisen with melissa lee. new at 2:00, the markets have a new fear it's the fear of missing out fomo we'll explain. plus the passing of american icon, the future of indexing jack vogl pioneered. count down to the netflix earnings "power lunch" starts now >> welcome to "power lunch."

i'm melissa lee. stocks trying to carve out some gains. dow, the data on the american economy. offsetting nervine nervousness highest close in more than a month. materials and industrials are the best performing sectors. forget the government shutdown forget the trade war even brexit, there is a whole new fear in this market. bob pisani is here at the nyse to explain, bob? >> i'm calling it fear of missing out. i know it's overused but fomo is back in a big way and you're right, china is taking a bit of a backseat to this let me explain here. we've seen it drift up in the last few days. earnings releases come out managers behind the benchmark and up almost 5% you can't underperform in 2019 as the market down and then underperform in 2019 when the markets are up that's bad for managers. financials have been oversold, making it easier to buy as the earnings that have come out okay

and the markets cheaper in general. 15 times forward earnings. 17 times, just six months ago. earnings expectations are much lower and first quarter earnings every day, october 1st, expecting up 8% and now it's just 3%. the market has moved down to reflect the lower earnings expectations melissa, you want to a number to watch? 26, 26 that's the 200 day moving average for the s&p 500. if we drop bel when we drop below that, the market took a nosedive back to you. >> bob pisani there for us now the longest government shutdown in history and shows no sign of ending may be in part because the stock market doesn't seem to care. eamon javers with that one. >> reporter: no way out from the cul-de-s cul-de-sac republicans blaming democrats and vice versa

here's the president earlier today at the pentagon talking about exactly where this shutdown is likely to go take a listen. >> the federal government remains shut down because congressional democrats refuse to approve border security we're going to have border security it's going to be tight it's going to be strong. >> reporter: the president continuing to insist on funding for a border wall along the mexican border as a condition here, nancy pelosi, says she does not favor a border wall and blames the president and ultimately saying that the economy itself might be at risk. here's what she said earlier today as well. >> the president's own people are saying that gdp will not grow as long as this shutdown is there. the president's insistence is a

luxury the country can no longer afford >> no response here at the white house from nancy pelosi's letter to the president earlier this week suggesting that he postpone the state of the union address coming up later this month because of the government shutdown she cited security rationale for that, given a lot of security officers are not getting paid right now for the state of the union. the white house not responding at all we haven't heard from the president as to whether he'll take that suggestion on or whether he intends to go ahead and give the state of the union. maybe not in the house of representatives but some other venue. we'll see how that plays out as well, kelly. >> eamon, thank you. eamon javers despite the government shutdown, and global risks, stocks on track for the fourth straight positive week. next guest is expecting a pretty good year but a retest of the december lows. chief investment strategist. great to speak to you as always. >> you too, melissa. >> why do we need a retest of the december lows and i ask you this because the market on so many occasions, it wasn't just

one bout of volatility but sustained volatility with many legs to that eventual december low. so why is there a need for a retest of those lows >> i think you make an excellent point. this correction started a year ago in january we had a 10% correction and then we had another one in september and finally, kind of a capitulation in december and in some regards, we might have been through some of the necessary retest, if you will. i'm not convinced we will get one. the only reason is that there's strong historical precedent, melissa, when you have a collapse of the magnitude and speed by which we had in december you generally go back at least to some degree to test the temperature of sentiment and buying power or lack thereof that will exist. i'm getting less convinced we go all the way down to the lows but i think we're going to hit some period, maybe with the news flow that's just enough to scare

people again to check some of the optimism that's starting to emerge and, you know, bring back sort of the bearish chatter, if you will i think we're going to survive it and move on higher this year but i still wonder if there's that opportunity maybe to commit some cash again on some panic days >> how do you feel about the market going into earnings and data points that seem to play into the bullish case, jim, and that is, when you take a look at taiwan earnings warning, stocks in that complex are not selling off, continuing to sell off on that same news which is what we saw for a period of time since, you know, all of those manufacturers started preannouncing, starting last fall and continuing all the way through apple's preannouncement in january and then morgan stanley. morgan stanley isn't the reason why people are taking profits in the bank sector after what had been a strong week for them.

>> i think, you know, melissa, i expect that the data economic reports, earnings reports, ceo forecast are all going to analyst downward revisions, all going to be bad here as we go through this year for the most part the markets that collapsed here in the latter part of last year are telling you that, not just stocks but commodities collapsing, bond spreads blowing out. we're going to have a fairly significant slowdown to the economy in earnings and attitudes, everything. so i fully believe that's going to be the case the challenge last year was to stay appropriately cautious in the face of chronic good news. and the challenge this year, i think, or maybe what you'll need for investment success is to remain fairly bullish in the face in a stream of bad news and really is, we went from over

heat a year ago and under heat under heat is a lot better situation. >> you see a dramatically slowing economy in terms of earnings and sentiment do you see it in terms of the ultimate gdp number and how much of that slowing, if it does materialize, is traceable back to the government shutdown if any >> yeah. i think at this point, the government slowdown is not a huge event if it drags on here through quarter end, i think it does start to have some meaningful impact, not only directly but also sediment-wise i don't know i look direct impact might be a quarter of 1% or something in that ballpark, but tyler, i think we're slowing the sub 2% growth this year so if it really dragged on, you know, through much of this year or something, that would be a serious event but i think politically, once it really

starts to show itself, i think both sides will have to find some way to move on. so i'm not betting a lot of the investment strategy on the government shutdown. >> jim great to speak with you. thank you for your time. jim paulson. investing legend vann guard's jack vogl >> i think the best advice is not to trade the the market, which will do whatever it wants to do but hang in and be an investor, not a specklator for the long run i am a family man.

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we're working to make things simple, easy and awesome. there's one more person i would like to introduce to today and i'm sure he's here haven't seen him but i understood he was coming there is a, i believe, made it today and that is jack bogle, who i talked about in the annual report jack bogle has probably done more for the american investor than any man in the country. jack, would you stand up there he is. >> that was warren buffett

praising vanguard's jack bogle mr. bogle's 88th birthday. he passed away yesterday and an outpouring for the man known as the father of index investing. another titan and really a disrdi disrupter in the financial community. jack was a pioneer who brought the wisdom of low cost long-term investing to millions of people since founding vanguard and extolling the power of index investing. we're all better because of it a look at bogle's legacy and the lasting impact he started is jason swi of the "wall street journal. old friends. you know a lot of sort of financial history and one of the things i read in your article was that bogle at least publicly was not always at a pro

proponent of indexing. there was a time he was anything but. >> he kind of madea virtue out of necessity when he was fired from wellington company in 1974, he had to become a proponent of indexing because there was little else that was available to this fledgling company he just founded vankwaguard for thm to do. he kind of plunged in with both feet it took a little while but a long time for indexing to catch on and it was well over a decade before index funds really became popular. >> we mentioned an hour ago with kelly it was ten years before another competitor came into the market >> yep >> there are new more i think index products and etf products than there are publicly traded stocks in the united states. i doubt that even as brave a guy as jack bogle thought ever happened, has indexing and the etf surge gone too far

is it a danger >> jack bogle himself was very ambivalent about his own creation and sometimes people joked within that he was like, you know, frankenstein and the monster. he was really concerned that etfs would become a trading vehicle rather than an investing vehicle and never really got on board with vanguard's adoption of etfs. he rejected them when they invented the idea and first brought it to vanguard in the 1990s and competitors might say that jack bogle's biggest business mistake he stood by it until the end and said, you know, he was uncomfortable with what etf had brought to the market. >> the etfs have in fact been sliced thinner than prosciutto and i wonder about whether the hesitance of etfs had something

to do with a bit of a rift or a falling out with his successor and ultimately, with his departure from the board of vanguard >> that's never really been publicly discussed we don't know exactly what went on in the boardroom, but certainly, vanguard did go on to embrace etfs much more strongly than jack hobokbogle ever did and it must be a source of tension in the firm. >> do you think etfs pose any type of systemic risk? i don't know what bogle would say. >> well, he would certainly say that like any good thing, they had been taken too far i regard etfs like a tool. like any other tool. with a hammer, you can build a house or you can kill somebody

same with etfs you can kill yourself with brokerage costs and taxes or use them to be a prudent investor or diversi diversify. they're a tool that could be good or bad depending on how you use them >> i'll ask you this anyway. he certainly revolutionized the investment industry as we know it is there another revolution that is coming in your view or was this the major seat change we'll witness in our lifetimes >> certainly, what we don't see is another jack bogle on the horizon. it's really hard to point to anybody who can fill his shoes as sort of the crusader for a low cost and sensible approach to investing i'm sure there will be other important innovations that come down the road, but on the horizon, i don't see anything nearly the scope of what jack bogle did. >> jason, one other risk that

bogle himself wrote about just a couple of months back in the "wall street journal," in fact, is the concentration of index funds in the s&p 500 and the corporate governance issues that raises it was fascinating, he went through a number of different ways maybe we could address this but couldn't come up with any major conclusions and at the end said, i don't think they should be banned but. and then that's quite a statement. are we getting to a point where the herd mentality, even for the right reason, if it just goes too far, opposes a threat either to people in s&p 500 index funds or poses a threat to how, you know, america's best companies are running the future >> it's a great question but my feeling is that ultimately, it will be self-correcting. index funds, as a percentage of the total stock market still are, you know, under a third of total stock market assets. they're much larger proportion of mutual fund assets and we have a long way to go before index funds dominate the market to a dangerous extent and i

think before we get there, we probably see some kind of resurgence of active management and the system would sort of self-correct >> jason, great as always to see you. of the "wall street journal. good to see you. home depot and lowe's both sliding after sherwin williams warn, are there signs of trouble for the home improvement stocks and washington federal on business and the economy erun" lle ghrit back hey, darryl. would you choose the network rated #1 in the nation by the experts, or the one awarded by the people? uh... correct! you don't have to choose, 'cause, uh... oh! (vo) switch to the network awarded by rootmetrics and j.d. power. buy one of our best phones, get one on us.

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check out home depot and lowe's today breaking down after home depot got a price target cut from j.p. morgan weather sensitive stocks with the storms sweeping across the u.s. this weekend. mark stepper, strategic wealth partners let's talk about this one. todd, obviously, housing market sensitive these stocks are and retail is a now is a sector. >> with the chart, you can see we're contained in a parallel channel. i see fundamental analysts the

markets don't show patterns. lowe's is right on the low of this three year uptrend here we see a boost in real estate. yields dropping and lowe's isn't seeing any benefit from that so far. if we break the 90 level, that's a problem. >> mark, on a fundamental side do you think these guys can do okay in this environment >> i do, the big story is the strong consumer. near all-time highs and when consumers are strong, the housing can benefit. there's not a lot of existing home inventory home prices still going up and when housing prices go up, that's good for home improvement stocks because it gives the consumer the confidence they need that they can put money into their homes and get something in return. so of these two stocks, i think lowe's is more of a turnaround story. i think more upside.

a new ceo in place who's revamped the management team and really focusing now on improving execution and streamlining the business and beyond there, doing a great job strengthening their digital presence which is up 20% annually i like lowe's. i think it's a pretty good buy >> they've also shown themselves to be sensitive to treasury yields which are up off their lows as well see how all of that develops thank you very much for your time today more "trading nation" head to our web site or follow us on twitter @tradingnation kelly, back to you. >> thank you ahead on "power lunch. banking coast to coast the ceos of bb&t and washington federal bank with us and how much is the student debt crisis hurting the housing crisis netflix earnings after the bell. expectations are high. we'll get you set up when "power lunch" returns >> and now, the latest from tradingnati tradingnation.cnbc.com and a word from our sponsor.

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welcome back, everyone i'm sue herera here's your cnbc news update at this hour. president trump sending a letter to house speaker nancy pelosi informing her that her seven-day trip brussels has been postponed. it will rescheduled when the government shutdown is over. it comes in response to earlier when pelosi explained her request to delay president trump's state of the union address on january 29th. she accused him of being okay with not paying people who worked during the shutdown and then asked what she would do if the president ignored her request and went ahead with the state of the union anyway. >> we'll cross that bridge when we come to it but very silent more than 24 hours to that

question, every time i step out of the office. have you heard no, haven't heard yet. >> a new report shows americans in rural counties 90% more likely to be prescribed an opioid than those in more urban areas. of the 15 counties with the highest opioid prescriptions in 2017, only one was not rural you are up to date that's the news update this hour >> thank you, sue herera the oil market closing for the day. let's get to dom chu >> we are off the lows of the day so far crude oil, we are now settling around $52 and change for wti crude. brent crude is $61.16. both off by half a percent they were down much more earlier on the session and supply concerns as the u.s. continues to pump out oil in large quantities so those supply issues weighing on the markets, as are the ongoing discussions between the u.s. and china in terms of trade. all of these things have been at

least a weight on oil prices and although they rallied tremendously off the lows we saw earlier in december and watch the oil trade play off wti crude, back to you, kelly. >> just above the level right now, dom thank you. a big week for bank earnings the ceo of washington federal. they're based in seattle with branches mainly out west and the ceo of bb&t, most banks east of the mississippi. thank you for joining us we'll start with bb&t talking about shares of 1%, kelly, the profit misestimates and the revenue in line but we want to ask you if you can tell us, reminded recently by the weakness in sherwin williams and home depot, what is going on in the home right now >> slower, as you know, from a year or so ago consumers have been trying to adjust to the increased

intertrades. we're seeing a huge increase in refinancing again. believe it or not. refinancing, about 45% of our volume versus 90 days ago, about 20%. so that's helping the consumers by being able to refinance and get their payments down to a lower level. there's certainly more skepticism in terms of taking on housing acquisitions at this point. we think they're somewhat temporary this time of the year. there's some nervousness in what's going on in the marketplace but it is slower we personally think it will be picking back up in the spring. >> just in the last, younlz ssoe days or weeks, you're seeing more from refize we don't have a ton of data from the government right now, so we're really relying on you guys

to tell us what's happening out there. >> it's interesting. i said this morning on our earnings call that the real economy, in terms of what consumers are actually doing versus all that people speculate about, existential events, et cetera the real economy is solid in the consumer space and business space. particularly, where we do most of our business on main street and optimism is high people are still spending. our pipelines are still good very strong growth in the fourth quarter. 3.6% i would say right now, it is good there is certain chatter about what's going on with the shutdown and trade talks, et cetera there is not yet stymied business activity. at some point, you know, i guess we can talk ourselves into our reducti

reduction. >> in terms of the trends in the fourth quarter, in the month of december specifically, that's when the most volatility happened it seemed like a lot of businesses and various sectors said that the consumer sort of slowed down, businesses slow down a little bit. what did you see in the month of december and what have you seen coming out of december into january? has it picked up significantly i mean, you did see the 2014 forecast backin november >> we did because, you know, our fourth quarter volumes were good kind of across the board you always have some seasonality. we have some businesses slower in the winter months and so forth but when you wash through all of that, our business activity was strong in the fourth everything we see now, we suggest it will be strong. a basis through the first. so there's no real reason today to be concerned about business

activity that will only happen, i think, in a dramatic existential events that cause real interruption or we continue such negative rhetoric out of washington or other places that causes people to get depressed >> maxine waters already said in her speech she'll be going after big banks. or be giving them a hard time. you aren't that big but what tung do you think is coming at you regulator regulatory-wise? >> we hope to spend some time with ms. waters that small or big banks are not the enemies. we are trying to help the economy grow and do exactly what she wants us to do which is to provide a better way for her constituents and the citizens to

be happy and do well economically and financially we want to spend time helping her see that the vast majority of financial misteachings in this country really didn't do anything for the crisis or doing anything wrong today but really are productive in terms of helping the economy grow and we think we'll be successful at that. >> good luck thank you for joining us today. out west now seattle's washington federal someone of the weis one of the west's largest. the president and ceo, brent i was going to start somewhere else but here in light of what kelly just said about the economy. are you seeing the same kind of economy and economic strength that he is in his part of the country? >> first of all, thank you for having me. >> you bet >> indeed, unbelievably here and located in seattle washington, one of the strongest economies in the united states we've had the good fortune of

having amazon, microsoft, starbucks lead the economy here and it's all about jobs and we're seeing it continue which is great news. >> kelly mentioned his loan growth close to 4%, 3.5% your loan growth in the fourth quarter was? >> 5% and more importantly, from my perspective, 5% deposit growth so we're seeing robust growth. the demand is there. i think we underestimate the impact of the tax cuts on business and the economy >> let me get to that. >> it's making a difference. >> the tax reform and cuts have helped your company this year or i should say in 2018 how much do you think the lower rates are going to continue to help you into 2019. >> i think it would be a continued tailwind for us. not just take us all to the bottom line and use that and give back, not only to our

employees. we gave a 5% increase, a permanent increase when the tax act was enacted, but to also get back to the communities. so one of the things that we announced with the government shutdown is a quick relief loan for government workers and government workers are going without paychecks now, whether they're current customer of washington federal now or not, they can come to us for a loan up to 90 days and six paychecks to help them bridge this gap in their earnings >> this is something you just announced earlier this week and interest-free loan for those furloughed or i guess furloughed federal workers, right >> that is correct interest-free for 90 days to help them get through what is a very difficult time. you think about it, they are caught in the middle and we feel for them we're having record earnings and we are the beneficiaries of the tax reform so we said, why not give a little bit back? >> have a checking account to have this loan, correct? >> yes.

>> hope you gain some customers in all of this what are the potential impacts gain customers but at the same time, there's some risk, even if it is small, that those furloughed employees may not get the full backpay and you guys will be on the hook. >> that is certainly true, but that's what we're in business to do we are a bank and underwrite our customers and believe these are good credit risks and happy to take this credit risk. our experience has always been when you bet on individuals to do the right things, if you take a little risk, they'll step up and do the right thing if i could, during the great recession, one of the things that's unusual with washington federal is we're a portfolio lender every single loan we make, we keep and during the great recession, we modified some 3,000 mortgages and we didn't have to follow any government program and 96% of those are performing so really happy with the fact that we trusted our customers and they have rewarded us and i believe the same will be true here >> let me close it off

earnings earlier this week from the same quarter a year ago. you increased the dividend very quickly, you mentioned at the top of the segment how strong the economy is in the immediate seattle area i think a lot of us are not surprised to hear that, but you do business through a large swath of the intermountain west. are you seeing that same level of strength in say, arizona, idaho, nevada, other states you do business in >> maybe not as strong as seattle. we are disproportionately blessed but boise, idaho, doing really well. >> thank you president and ceo of washington federal. still to come on "power lunch," microsoft announcing a $500 million project and nothing to do with computers we will explain. and just how much has the burden of student loan debt scared people out of buying homes we'll tell you and netflix after

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some headlines on trade sending the markets higher you see the spike in the dow jones industrial average up by half a percent treasury secretary steven mnuchin is suggesting a gambit to break the stalemate between the u.s. and china the u.s. lifting tariffs, koush -- could be an arrow in the quiver and reporting that u.s. trade representative robert. look at this now we've crossed above the 50 day moving average a lot of market watchers were watching this level very carefully today and with these headlines, we have easily surpassed that level at this point. so this is something we're certainly going to be atching. >> this is a big, big move and

whether there's a little good cop/bad cop played here with mr. mnuchin and people inclined to compromise and lighthusbandaweso see basically flat to up 140 on the dow and up 4 or something on the nasdaq >> real quickly on that, president trump, it says in the article, this time is making it clear that he wants a deal and is pressing lighthizer to deliver one. looking to the markets and seeing the impact it's had pressing for a deal, that could break the tie. >> you bet he notices this news. >> if they had crossed six months ago, it would be much more on the s&p 500 compared to now after the markets. let's get to bob pisani at the new york stork exchange who have

watched the markets respond to every trade headline over the past nine months plus. >> reporter: oh, boy and this was good for 12 points and we saw trade names like boeing move up cat pillar move up, the usual groups if you think about the worries out there for the markets, which we've been talking about the chinese government is actively now stimulating number two, fear of an earnings recession which was a major problem at the end of december, going negative on earnings or flat on earnings. that has receded somewhat as the commentary general is supportive of lower but still positive earnings growth in 2019 and the final issue was the china tariff story. so to the extent earnings have gotten better, china is stimulating. the tariff is the one big x factor still floating out there and if there can be some kind of resolution for that, it certainly is not an all clear but three major issues are a little less of a concern for the

market and that would definitely be a positive overall. melissa? >> you were talking about the 50 day moving average so we crossed above it for the first time in six weeks. what does it mean from the technical standpoint, bob? >> 26.22 was the 50 day moving average for the s&p 500 and when we cross below that and also, early part of december, december 4th or so, the moving average. the markets started moving down aggressively it wasn't obviously the sole reason but you have a lot of programs out there that are set for technical, important technical limits like the 50 day moving average or the 200 day moving average and several instances in december when critical levels were breached, the market volumes did in fact pick up. >> thank you one thing to mention in this article. they say bob has shown some signs of easing his position including raising the possibility that sometariffs could be eliminated if the u.s. strikes a strong deal on march

1. so obviously, probably fair to say they're watching his position most closely. we know manuchin and the president may be leaning towards something palatable to the markets and if showing signs of softening there, a nice rally. >> a comment from navarro to say that now that will be good for another 15 points. >> for the hawk to turn into a dove, bob. >> happens at the fed. all sorts of crazy things happening now. >> bob was highlighting some of the industrials turning around the poster children of the so-called trade war like a caterpillar as well as boeing but apple specifically cited china one reason why it preannounced its results and that stock is sharply higher up by 1.3 higher andrew sorkin the

smartphone history and the downturn in that region. so much of the business is focused. so we are seeing the philadelphia semiconductor index to pop to a session high of 1.5% a cyclical area of the economy and the markets getting a nice lift on the back of this >> one thing to watch. january 30 raised the possibility of offering to eliminate during the january 30 meeting the trade envoy lou while we were talking about xi and lou, heading here a couple of weeks to go but this is the date to watch now, that this is being priced into the market and more pressure on seeing some kind of outcome there. >> any movement in the agricultural stocks at all or the commodities that we know of? i wonder because they had been subject to some of the tariffs and it would be interesting to see that >> up about 2.3% >> john deere. >> the caterpillar

>> even homeowners turned. >> you've got to wonder, this is what we do we jump forward and think about the extrapolation. what would be the outlook for the fed if these tariffs were lifted or eased? good for the economy, enough for the fed to actually go ahead of what is expected to be two rate hikes earlier this year? it has many implications on this we'll continue to monitor all of them and of course, in case you're just tuning in. the markets are moving sharply higher the headlines that the u.s. is weighing lifting the china tariffs. much more on the other side.

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welcome back we're watching a sharp market rebound this hour. dow is up 200 points s&p is up 22 nasdaq is up 62 now. and take a quick look at the yield on the ten-year, now back above 2.75%. this as the wall street journal is reporting that the u.s. is weighing -- lifting tariffs on china in order to hasten a bigger deal on trade steve liesman is here, taking a look at the fallout of this headline, steve. >> i think it is worth talking about the internal politics in

this story, right? you have mnuchin who, how do i say this, maybe he heads the free trade wing inside the white house, which would include our friend larry kudlow. and maybe kevin haset in there against the peter navarro and lighthizer and you have to say that the instincts of the president have leaned that way, right so you have these two camps and now you have a story which is not exactly a story, but says mnuchin has brought this up in the white house and does not appear to be policy at this point. but the idea that you can just see how sensitive the market is, the one thing that might make this more of a true story is all the things weighing on the market and the renewed concern about the economic effects of the shutdown you have to think that's arm

tria arbitrage against let's lighten up on the trade side if i lop a quarter or half off global economic weakness, lop another quarter off, pretty soon you lop off ought the quarters. >> the cynic in you think that we're going to get one or the other. that easing off on china means the government shutdown may be actually prolonged or that that's the thinking within the administration we know this -- this dispute will last a longer time, we got to lighten up somewhere else. >> there could be that interpretation the other way to think about this, melissa, not exclusive is, you've already done the damage on the shutdown. you're losing this amount of gdp every week, at least according to the white house, and more accumulates from here. but you don't undo necessarily what is already been done perhaps in the second quarter. i will tell you, the president, when he guaranteed the payment of the workers of the federal government, he stopped that

payroll in january from going negative it would have otherwise been a big negative number. there is a lot of bad stuff. >> let's go to eamon javers at the white house with the statement. >> that's right. i just spoke to the treasury secretary, steven mnuchin, in the west wing at the white house. he was on his way in toward the oval office. i can't tell you if he was meeting with the president, but this was about a minute and a half ago, i said, mr. secretary, do you have any response to this wall street journal story suggesting that you and others are advocating ratcheting down some of the tariffs on the chinese? the treasury secretary said he's not going to make any statements at this time but i did get from a treasury spokesperson this statement, they say neither secretary mnuchin, nor ambassador lighthizer, made any recommendations to anyone with respect to tariffs or other parts of the negotiation with china. this is an ongoing process, with the chinese, that is nowhere near completion. the treasury spokesperson here very much insistent this is

ongoing, nothing is final, that nobody has made any final recommendations to anyone here the treasury secretary himself telling me a few minutes ago he's not going to make any statements on this. >> no recommendation is something different than saying no discussion, right >> that's exactly right. that's the nuance here what is being discussed behind the scenes versus what is finally decided upon and i can tell you that the treasury secretary just two minutes ago now was headed in toward the oval office. these discussions may be ongoing as we're standing here. >> little bit off the highs as some of that helium comes out of the balloon. art cashin on the floor of the new york stock exchange. your reaction to what we have been hearing >> i think there are two reactions. number one in the market they grabbed at it and a lot of short covering, took us up through some critical resistance, several moving averages we punched through. the so-called top of the box, which was 24350 in the dow they got above that. now they're coming back.

we don't know whether there really is a deal or what the deal looks like. one hesitation is the floor would like to know a little bit more about the detail, they're hoping that the president didn't just grab at whatever was on the table. that we get intellectual property rights and a variety of other key things done. >> isn't the concern here, art, that as eamon said, this is complicated, more than just let's waive the tariffs. seems premature to say some deal has come to fruition. >> that's why i said there is concern that may mean that for political and other reasons that the president grabbed at first thing on the table we need more detail about this until the market can settle in and decide how valuable it is. >> it is not even the quality of the deal, though i'll pose this to you, steve what does it mean to lift some of the tariffs on a permanent basis or temporary basis? a temporary business can't make their plans based on a temporary

unknown length of time for which the tariffs are waived that's not -- >> you're right. i think that's been something that is confounded a lot of executives a lot of executives support the president, which is to understand the real aim of these tariffs. i will say, i think speaking for kelly, we both know the authors of this article. and there is no doubt that it is 100% correct when the guy like bob davis who has been covering trade for, i think, older than i am, no offense to bob, i think i -- we waon a pulitzer prize together in the '90s, a terrific reporter, bob and ling are both great reporters, that exists i will say, that said, there have been a series of positive stories in the journal on trade that have not necessarily panned out in the future. so -- >> trial balloons? is this a trial balloon? >> that's what i'm trying to set up here. there is no doubt this information presented is

accurate it is highly in doubt as to whether or not this represents a change in policy i think art cashin's skepticism of a kind of missouri show me on this stuff is well warranted i can go back and find several trade stories in the journal that were, i'm sure, 100% correctly sourced. but, you know, zero to 50% when it came to actually happening. >> the story said, one of the little feeds i saw said this is not been presented to the president yet. these alternatives >> right. >> what that's worth. >> maybe that's where mnuchin was heading. >> to present to the president. >> to present to the president >> the president is very aware of the effect of these trade announcements. if you read bob woodward's book, he bemoans to a reporter this information i'm giving you is not coming out on monday, because the market would go crazy. >> we also know in the case of the shutdown that he's very sensitive to what his base wants as well. i'm sure the markets are applauding this in the moment right now. if this turns into a -- the idea

that the president is capitulating, we're not going to get real reform, he's not being hawkish on trade, that's the -- why i worry about it being a trial balloon. >> 13 points off the highs of the s&p 500. we'll continue monitoring this thank you for watching "power". >> "closing bell" starts right now. ♪ >> good afternoon. welcome "the closing bell. i'm wilfred frost. >> we'll tell you what you need to know ahead of the results >> we'll talk to john calamos. he'll lay out his latest market strategies for this environment. >> and microsoft announcing it is making a $500 million investment in affordable housing. president and chief legal officer of microsoft brad smith will join us on cnbc first up, though, check out the intraday action in the