o'shea thank you for joining me "the exchange." i'll join tyler and melissa on "power lunch" which begins right now. >> see you shortly, kelly. i'm melissa lee on "power lunch. trouble at tesla a rough outlook. how investors navigate the road ahead and netflix says fortnite is a bigger threat than hbo and hulu will gain that out. "power lunch" starts right now >> indeed it downside, melissa, welcome to "power lunch," everybody. wall street's win streak in tact, keep going the s&p 500 now out of correction territory all pretty major averages on track for the fourth straight week of gains. all 11 of the s&p 500 sectors, they are higher. led by industrials and materials. in the meantime, the dow and the s&p are on pace for their best week of the year and this month

is stacking up pretty well is the market resetting? bob o'brien will take a closer look now from the nyse robert >> i love all the happy talk about trade. it's helping the markets but i'm getting a little worried we've come very fast on the assumption of a deal look at what's happened. 500, better than 500 points in the last 24 hours since the journal reported progress on trade talks. that's a big issue so the good news, it's given us another leg up in the rally. and that's helped, of course here's the bad news, the one i'm worried about. the market is pricing in a favorable trade deal that's a problem the downside risk. the risk of the no trade deal and definitely go down on that and even once a trade deal is announced, it's already priced in maybe nothing happens or they sell on the news again, we should have these problems, but also remember, better trade talk and less aggressive fed maybe not happening both at the same time. maybe the fed will get more aggressive and the economy improves on better trade talks so there's some risks here as well and the chicken stocks.

the the market to poultry exports. moving up nicely today and the chinese stocks, all gone at a perfect v. bottoms at the end of december and rallying so far in january guys, back to you. >> i thought that was fascinating. apparently we haven't exported to china since the avian flu maybe it's a sign of thawing, no pun intended bob pisani new headlines on trade china said willing to make concessions to even the trade balance. kayla tausche has the latest from washington. >> reporter: new tune to an old song that china would make massive purchases to narrow the trade deficit but this time would go through president trump's reelection campaign and potentially through a second term the next trade head to head between the two countries in two weeks but the white house had rejected previous chinese overtures to buy more u.s. products that were made in july

2017 and also june 2018 because chinese wouldn't budge on intellectual property violations that was the whole core of the strategy with these tariffs. the proposal now reported to be a trillion dollars hoping to appeal to the love of large round numbers and desire to boost the economy into the 2020 campaign, but what we don't know, guys, is where the u.s. stands on this package and whether the shutdown, the q4 sell-off and the dynamics make this offer at this time from china any more viable than before ty >> thank you very much, kayla. the bulls getting a boost from the china headlines earlier today. three averages up about 10% from the december lows. is the rally back on let's bring in tony roth cnbc contributor ron, $600 billion global asset manager let me begin with you. >> good to see you. >> you as well

has the market bottomed or you suspect it's still vulnerable to testing those christmas eve lows >> i'd be more inclined to believe the latter but you are getting a headline, a series of headline breaks. >> a lot of headlines. more friendly. trillion dollars of purchases. nothing about the key issues as kayla was suggesting but we're getting favorable headlines and it takes the pressure off the market here at the start of the year last year, we started out very strong as well and ran into head winds and probably some that are distill still out there. not the least of which is a slowing global economy and potentially slower growth here at home. >> for the president, that key issue is the trade deficit with china. he hits that every single time if he can declare victory there. >> sure, the headlines are favorable, right i mean, usually you don't bounce straight off a bear market bottom and go right back into a full on bull you retest the lows but it depends.

if the news gets better and the earnings solidify going forward, that could add upside to the market. >> tony, what do you see >> well, let's take a step back from today's headlines and look at the overall market situation. we have two very clear factors laying on the markets. you have china, which we had good news today perhaps and the the government shutdown. stepping back from today's headlines, the market may be reading this wrong because the market can't really handle both of these at once probably one or the other. clearly, right now, as we are getting a lot of negative forecasts on the economy for the first quarter, the government shutdown is more pressing issue. so the administration may be looking to try to resolve the china situation earlier and in turn, double down on the government closure if that's what's really happening here, that's not good for the markets or the economy >> i don't really understand, tony because right now, we are dealing both with a shutdown and a china trade wars and the market seems to be just fine off

of the december bottoms. are you also saying this is the shutdown to have much more of a negative impact object economy than trade >> in the short-term, absolutely so the trade over the coming years and decades, it's more important issue. the government is not going to stay closed forever. but thinking of that possible gdp growth which is a real possibility if the government stays shut, that's the bigger issue right here what's happening in the administration is they may be looking for a victory on the china front in order to double down on trade because the trade, excuse me, in order to double down on the shutdown because the border walsh l issue is bigger the president. >> the china deal is more important than the shutdown even if it does push gdp this quarter, a huge problem for the longer run. >> we've seen, obviously, now the longest shutdown in history by a couple of days. the market effectively discounted in the past without

nary a move lower. china separately as a weakening global economy and engine of global growth. see interest rate reductions and fiscal stimulus. that's been helpful. i don't think the shutdown, it has go to ten weeks to knock a full percentage point off of gdp. we could see a flat first quarter but there is a payback on the other side. we've seen that with natural disasters and other events where you're halted for a period of time >> the estimates on the impact of things because they're very narrow what you don't include is a knock-on effect on sentiment, for instance, tony we didn't capture that when economists came out with the forecast on how trade and the trade war, tariffs specifically would impact the economy, they didn't take into account slowdown and cap spendings. if you don't capture that either with these estimates. >> that's absolutely right look at earnings season, for example, the forward guidance has been absent and that means that companies are not going to be investing in capital

expenditures the one area strong this year was the consumer and got the bank earnings this quarter which were mixed, the one common denominator was the consumer was in good health positive activity and lending activity was strong. but consumer sentiment numbers today, which was a big wake-up call on the potential shutdown impact on the economy. >> the president got hit with a damning story yesterday. if it turns out that buzzfeed is right, he directed michael cohen to lie before congress on his behalf, that's a bigger story than any of this and up 300 points >> i was going to say, the market >> the shutdown is not a non-issue for real people missing checks we know that there's a small knock-on effect for the overall economy if this were to persist but when you look at europe with brexit and france in recession and germany heading towards recession, there's bigger issues than the market is fundamentally focused on and now, granted,

opportunities may arise from these declines but having said that, i think -- >> go ahead. >> i think the global issue of the china issue is much bigger. >> last word to you, tony. >> in the long-term, i absolutely agree and the short-term, it's all about the shutdown and whether or not they get the government opened. the effects of the economy are turning out to be much greater than anybody realized and with respect to the story yesterday on trump, absolutely, but the government doesn't, excuse me, the markets don't care whether trump has problems but whether or not we have a stable policy maker in the white house and if trump is replaced with pence, that's probably just fine as long as it happens in an expeditious manner we'll have much more on the big gains for the markets but next closer look at two high fliers not participating netflix, subscribers, a look at eye popping stats but tesla tumbling what it means for the stock. stay with us

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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. big market rally today but not for tesla. shares on pace for the first day in nearly a month. the electric car maker slashing workforce by 7% and ceo elon musk warning about a tough road ahead. dan ives, and paul grassia, gentlemen, great to have you with us. dan, i'll start off with you it seems like something a

responsible ceo would want to do if he wants to increase efficiency while trying to ramp up production of a new product >> responsible in terms of 7% head count cut i think it's just more the tea leaves that investors are reading into around profitability in 2019. the big focus here is will they have to raise capital and we think there's a 35% chance they ripped the band-aid off they needed to do this it's a knee jerk reaction but the thesis has not changed with how we view tesla over the next. >> i feel like it's a rorshach test but also building out a plant in china or saying it's a sign of desperation, this is a company who's running out of money. >> i think it's a sign of

normality, actually. the headline here is not even, he can't afford to not make profits anymore. the model 3 production up to a meaningful level now, job one this year is keeping that meaningful level while also posting profits hire too many people last year trimming back some this year so they've got to make profits the issue really then becomes, can they really make this and sell it at a mid price point there's no successful ev on the market today that's a mid price vehicle. there just isn't and in fact, general motors just took evs away from chevrolet and said we'll put them with cadillac because the cadillac price points, they believe will accept it more. >> that was critical in what he said, cutting these jobs in part because we've got to make these cars cheaper

right, paul? >> yeah, exactly, i mean, that's it the model 3, the initial goal was to sell it at a base price of $35,000 and then get some government incentives which are now by the way being reduced, as planned, but the typical price for a model 3 is about $55,000 that is not a mid priced vehicle. >> to paul's point and as we just saw with cadillac being the brand they're going to go, electric for gm, should tesla say we're not going to try to get the price point lower. some would say, it is a $55,000 mass market car? >> to the contrary i mean, investors need to see success on the 35 k and mid range in terms of 42 to 44 k because that's sort of the masses from a consumer demand, especially in the u.s. >> my point, dan, and i should have said it more clearly. would it be better to take a higher price point with fewer

vehicles sold than to spend all this effort getting the price point way down to sell more units? >> that would be the wrong decision because from profitability perspective, if you look ahead, that's where ultimately they really would be a fork in the road situation in terms of needing to raise capital. i think right now, they need to focus on that mid range. specifically in the u.s. and in europe comes on in the high end this quarter little white knuckles on tesla, given what you saw in the e-mail blog post. >> if i can read between the lines, is it your belief that tesla needs to sell x number of model 3s, mass market vehicle to become more profitable than it is today it's got to increase volumes >> it's a volume game and, you know, to your guess earlier, it was more of a production standpoint but now it's more delivery, but if you go forward,

the way that you get to $25 of earnings power, you look out that's 8 to 10 years, it's on the mid range success. without that, the whole thesis changed. >> why can somebody like a gm say we're going to make cadillac the brand and go higher and it's okay with us, is it because it's got more profitable vehicles like a pickup truck and suvs, sort of bankroll the ev experiment >> it's partly a unique circumstance to general motors evs do not work well at the chevy price point. the bolt were not successes and cadillac needs a new shot in the arm. a jolt, shall we say, because cadillac has not been doing that well, so perhaps putting the evs in there will give it more pizazz and more technology, a bit of an edge, et cetera. and didn't have much elsewhere to turn, to be honest with you. >> thank you both for your time.

dan and paul ingrassia as we see tesla close to session lows. china's stock market down but if we get a trade deal with china and the u.s., are these stocks prime to rally? and what does the new activist on mgm's board want and what does the company need? all the angles on "power lunch." [knocking]

♪ ♪ memories. what we deliver by delivering.

chinese stocks in rally mode today. the china large camp etf and tech stocks baidu, alba baa and tenecenn more opportunity for gains in the east gina sanchez and piper to talk about that and gina, a lot of talk last year that the chinese stock market had actually been hit harder on trade war concerns than the u.s. market if this is being resolved, is there potentially more upside in the chinese market >> actually, there could be. the fact of the matter is that even though the outlook for china is one of a slowing economy, the reality is that chinese stocks have been

extremely cheap and even with this rally, they're still actually fairly cheap and you look at a lot of these big names, baidu, tenecent, they can make tremendous amounts of growth just within the chinese economy. meaning that the sort of trade outlook has an impact, but some of these stocks are just not trading. they have been beaten down for no good reason i think there's more room to go. >> a sentiment drag on the chinese markets. how does this market size up from a chart perspective at this point? >> thanks, mike, i agree with gina certainly opportunities to trade here and if i look at the chart of ten cent, a stock that traded meaningfully

30 days later, up almost 13% so clearly some trading opportunities here and this would be one we'd be buying, mike >> overall chinese market or a unique case? >> i think it's more of a unique case in this particular stock. you'd see the overall shanghai rally move higher. that index sold off meaningfully but had a large technical break on the composite, breaking the uptrend on the 1996 highs. >> we'll watch that. for more trading nation, head to our web site or follow on twitter at trading nation. kelly, over to you. thank you, mike, ahead on sh "power lunch," one thing that's a bigger risk to nearly every streaming service. guess what it is plus, game on. the biggest changes coming for video game stocks in 2019 and the dow rallying more than 300 points right now the stocks driving us higher when "power lunch" returns

>> sometimes called a w formation because it looks like a double a double bottom occurs when crisis forms two distinct lows around the same level. traders often view a break at the highest high in the formation as a bullish signal. hey, darryl. would you choose the network rated #1 in the nation by the experts, or the one awarded by the people?

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hello, everyone. i'm sue herera here's your cnbc news update at this hour. the cdc said flu activity remains elevated around the country. three more pediatric deaths have been reported in the last week, bringing that total to 19. between 95 and 114,000 people have been hospitalized nissan will cut 700 workers at its mississippi plant titan pickup trucks but the move fo follows the december announcement it's cutting at two mexican factories. perdue recalling more than 68,000 pounds of ready to eat

chicken nuggets products they may be contaminated with possible extraneous material, specifically, wood particles they were produced on october 25th with the best buy date of october 25th, 2019 prince phillip went to the hospital this morning for a precautionary checkup after involved in a car crash on thursday he was at the wheel of his land rover when collided with another car on a road close to the royal estate you are up to date that's the news hour but luckily, the doctor said he was fine, ty >> he apparently walked away from the accident, i read last night. you don't want wood in your chicken nuggets. >> no, you do not. >> wood in the nuggets is not good >> just chicken. >> you just want chicken in your chicken nuggets. not too much to ask. >> i wouldn't think so >> i tell you, 90 minutes until the closing bell a check on the rally right now the dow and the s&p, very nice gains. on pace for their best week of the year

now, the year is young but so we'll tell you, major averages, in the meantime, on track for the fourth straight week of gains. the dow right now higher by 1.25%. 24,664 home depot, caterpillar, chevron, leading stocks and vf corp. leading the s&p 500. lots of news discussed in the last hour. oil markets, crude soaring up more than 3% and price up 16% in the past month you see west texas at nearly $54. a 3% gain today. melissa? shares are moving higher a new board member keith meister, what is he looking for and what could it mean for the casino giant? contessa brewer, they cover each of the hedge fund side of it who is myseeister has he had success in the past >> i've spoken to a couple of

sources. keith has a long history in the casino industry. known most for working as a protege for carl icon. of course, owned a variety of casinos, reported to be even taking a stake in caesar's at this time. meister also has experience with these asset dropdown type of companies which are williams, for example, which is a master limited partnership pipelines for oil and gas. as well as young brands which has a big business in china, of course, very important for the casino industry, for mgm resorts. >> i don't see it as being asset like >> and contessa can probably speak to this more than i can, they've been spinning off of real estate, to be a much more streamlined less cap x focused type business. >> what could they get after a lot of investors get, what are they after >> we could see them manage their costs better mgm is hiring a lot of head h

honchos. brought him the head of global gaming development and getting that license in japan. they could save money and mgm announced they're going to launch this cost savings program and increase efficiency. was it to get ahead of the activist hedge funds maybe. two, they could be more aggressive in the rate strategy. for instance, they outline own bellagio and gm grand and they could sell those and growth properties. >> might be. >> got some background on that front, right >> mm-hmm. >> the other thing, gm owns 70% of mgp and jim is both chairman of mgp and the ceo could they split those entities also so it's not just a pocket? do they want to see some movement from mgm? and the ceo? i don't know, i've heard some rumors that maybe this is the year that he leaves, but i think right now, it could be that more they'd like to see some more independence from that and then finally, i think you could look

at others to make that money >> took a position publicly in june of 2018 and they've been in discussions for a while about what they could do to maximize value for shareholders and the board saw it as an opportunity and unintended consequence of this is that other shareholders will likely be happier that they have one of theirs on the board that can speak to what a shareholder would want to see at that company. >> i wonder what they're going to do with china do they have to take a macro view of it and talk about jim.

>> and here you have a big decision to make, which sounds like they already made about sticking with mccow but -- >> intent on seeing these long-term projects through to fruition record setting fine against facebook for some of the privacy violations the federal trade commission began probing facebook last year, this would be the first major punishment levied against facebook in the united states since that scandal first reported back in march remember, cambridge an lalytica. it would be a meaningful penalty

and the $22 million fine in 2012 facebook has not reached out with any comment yet and we'll be back to you as soon as we hear more from the companies >> what can the record fine be i think probably an ftc cap on what the fine would be. >> there might be a cap but if you look at sort of the way they do these things, based on the number of people whose data has been inappropriately shared and there's a certain cost per user. we've heard estimates from different analysts that facebook could be fined as much as in the billions of dollars. so unclear what this fine would be but it would be record setting, certainly because in the united states, facebook has not been fined that much yet, so i'm going to reach out to some folks and see what kind of comment we can get both from the ftc as well as from facebook but the estimates from analysts in the billions of dollars >> refresh my memory on what kind of fines facebook either has faced or is facing in

europe >> a lot of questions about what kinds of fines they could face from the eu and also, under greater scrutiny in germany in particular but, you know, a lot of questions, both on facebook and google about privacy so the united states has been more in terms of penalizing facebook in terms of these things but the ftc had an agreement with facebook about the privacy violations back in 2012 and really checking up on that and enforcing the agreement what's called a consent with the ftc earlier. >> thank you still not a lot of movement in the shares bringing that to us. stocks broadly are rallying on trade optimism with u.s. and china. dow is up 278 and 100 points off the highs and day 28 of the longest government shutdown on record and this weekend marks two years since president trump took office. let's break down the road ahead. joining us from mike allen, co-founder of axios and then

american enterprise institute, named a new president and then cnbc contributor thank you to you both. let me begin with you. on this offer by china for a trillion dollars of u.s. imports over six years, are you at axios learning anything? >> our reporting is nothing big and structural decided by the white house but seeing in the market an optimism that trump's distraction is actually going to work against any bigger aggressive action against china. axios jonathan learned steve mnuchin, the treasury secretary and others are making a market based argument to president trump for a more moderate response to china than where he'd headed and seeing from the markets, just a bet that the president is not going to want to ignite something brand-new

with the record shutdown on his hand >> a lot of milestones to go around today >> smart brevity >> there you go. try to be smart and brief too, but what do you think in terms of the trade, you know, talks themselves when we look ahead to the next two years with the president's agenda, are we going to say, look, he was able to half our deficit with china >> he believes he's, sorry, he definitely believes he's winning on this. the president, if you listen to his private conversations behind the scenes, believes that the chinese economy is as bad as one of the external signs and indicators have been, he thinks that does give him leverage and that's why for a long time, this had been a feeling he might go all the way and might call a full navarro, taking the most aggressive advice he might get and as your viewers note, he's getting back-up on this on the hill like republicans on the hill don't want a trade war with europe or mexico, but on china, they're willing to go all in

so it's the full plate of this president that might head him in the more moderate direction, along with that advice coming from his own treasury department. >> what were you going to say on that >> he's outlined his own metric for success and that's the trade deficit. we very well might alter the bilateral trade deficit with china and still have a massive trade deficit. this isn't going to change much. i have a hard time believing that any kind of trade delegation where robert lighthizer has any influence is going to accept some six year deal to eliminate the trade deficit between the two countries and where we have a lot of big purchases in the o out years when trump might not even be president. if there's a deal, don't even look like this. >> let's look to the next two years under president trump. what are the top things beyond trade that are on the agenda and does he have, what are the odds

of success there >> so listen, we had the thing the market liked was the corporate tax cuts and these things detracts from the tax cuts, the trade, i'll call the three uncertainty taxes. trade, that's uncertainty, more recently had the government shutdown and the mueller investigation. that may be a bigger uncertainty tax in the next two years. we'll see what happens with trade. i think the trade issue isn't going away no matter what this deal is because of skepticism on china on both sides of the aisle and one thing to pay attention to was the news break we had about the potential fine against facebook the tech issue isn't going away and a lot of unhappiness on both sides and it would not shock me if you saw legislation come out of that. >> i just see in my inbox from axios white house, second trump/kim summit to take place in february. >> that is an announcement that the white house is very optimistic is going to give them

some lift at a time when they really need good news. you can talk behind the scenes with people at the white house they will tell you that no solution to the shutdown is close. there is not a path, to the degree they're going to try to change things, by trying to change the narrative to convince people that this is the democrat's problem so for the president to be able to be in a place on the world stage where he can look in command is a great break for them because at home, it's all bad. you talk about the thing about the uncertainty tax, you add the the big three, media, mueller and the democrats now both hearings and subpoenas, all of that is much more of a head winds and the news cycle, as much as we thought everybody's bandwidth was stretched.

it is just cranking up take the big tleehree and a divd government here. >> thank you both. appreciate i have tt. eamon javers at the white house with breaking news. >> you just gave the news. the white house is saying there's going to be a second summit between president trump and kim jong-un of north korea remember, the president just wrapped up a meeting here at the white house with a top negotiator for north korea and sarah sanders, the press secretary now put out a statement. she says president donald j. trump met with kim yong chol for an hour and a half to discuss denuclearization and take place at the end of february the president looks forward to meeting with chairman kim at a place to be announced at a later date it's unclear exactly where or when this is going to take place, but the white house suggesting that the second summit between the leaders likely to happen near the end of february, guys, so a major diplomatic announcement here from the white house in the wake

of that meeting with north korean official. >> eamon javers at the white house. to the bond market we go and rick santelli as always tracks >> three open trading sessions thus far and all maturities on the treasury curve are trading at the highest yield level in those 13 sessions. one week of two year note yields mid 2016, whether it's brexit vote or the last of the double bottoms in 10 year is important. if you look at a mid 16 chart of 10 year, you see the double bottom, the second aspect of that at 136 on the left. the double top at 324 on the right. basically moved down 69 basis points and now moving up the point of that chart, looks like a fifth wave pattern for you. i think it's quite important if you look at what 10 year guilts are doing, mid 16 obviously important because brexit vote. whether it's their gilt yields or the next pound versus the

dollar, certainly neither extremes and that should be something to give hope to the brexiteers especially those fearful of a hard brexit back to you. >> rick santelli netflix has 10% of all the time spent watching tv is now on netflix. what does the company think the biggest threat to the dominance? we'll tell you the trade optimism continue today. a good rally on wall street. home depot, chevron, united health, teilr l adg e way.laallein we're back in two.

shares of netflix down nearly 4% right now off the lows we saw after the earnings report last night there was also one surprising bombshell in that report it wasn't the tons of money on content. the streaming giant telling investors their biggest competition, drum roll please, is fortnite. not hbo. not hulu or streaming competitor not sleep like we've heard in the past netflix saying, kwoequote, we compete with fortnite more than hbo. >> the fortnite phenomenon still

a powerful force but how much longer will it last? jeffrey staying the battle royale genre and fortnite grows stronger in 2019 the top predictions for video game sector. timothy, welcome good to have you with us i talk to my 13-year-old son who was a massive, as i think you know, fortnite player. he said in his crowd, we've passed peak fortnite >> what we're seeing for 2019 is fortnite remains very strong we think that the battle royale genre took the world by storm. it was the biggest revenue generator of any game in history at $2.4 billion. free content, always something new to play. the 14 days of fortnite.

new challenges it's fun to play with your friends. we think in 2019, we put out ten big predictions and fortnite remains strong in the battle royale genre for this year. >> you make a point of saying these free to play games will get bigger and bigger and some of the companies that have eschewed those types of games may get into them. not that you don't pay money just extras. >> it's one of the big paradoxes of video games the free games tend to be the biggest and most profitable. and so one of our, actually, our number one prediction for 2019 is that activision announces the free to play game. just to put it in some perspective, a big game like call of duty or fifa sells over 20 million units a year.

those are enormous numbers fortnite in august had over 78 million people play that game. 200 million downloads. it's very hard to compete against free and what we see in 2018 are stock view is actually becoming more selective and we do think that free games like fortnite will pressure microtransaction growth for existing full fledged games like fifa. >> fortnite has been a thorn in the side of publicly traded video game players and netflix if some of the publicly traded ones were able to release a freemium model, maybe actually provide some competition, will that beg the question, shouldn't these guys have a better valuation? >> we've seen multiples completely rerate. like when you go to sell your house, if the neighbor's house just sold at $100 a foot, it's hard to ask for $300 a foot for

yours. i can't argue with where the multiples are, but one of the things we think is that in a world where games are free, there's going to be fewer of them and the winners will be much bigger. we think getting into free games does look inevitable for big publishers big publishers one of the other predictions we're making is 2019 will be the biggest m&a year for the video game sector. it's clear that video games is taking market share away from every other form of media. >> are the buyers the amazons, the netflixs, the apples, the googles outside of the sector? >> it's big tech you see microsoft and google all rolling out new streaming services kind of designed to stream from the cloud. it's media you think a traditional media company will be interested and it's, maybe some other tech companies. there's been a lot of

acquisitions out of china. >> tim, always great to see you. >> thanks, guys. >> stay warm the post-christmas rally continuing today the dow rising 13% in the past three weeks. today it is the industrials and materials leading the way higher caterpillar, boeing, 3m, and dupont a trader's take on the markets coming up next

as netflix goes, so goes the market it's the mantra given to us by steve grasso as we mentioned this hour, netflix is trading lower so what does this mean for the market here? steve grasso joins us now to break it all down. >> hey, melissa. >> is it working are you proven right are you proven wrong >> yeah, you know, it's always too early, you know, when you look at these things on the daily level or a minute by minute when you look at the market as a whole, i think that netflix has been indicative of where the market is going. it's been more of a leading aspect of it right now the market is listening to china headlines versus what the overall fundamentals are whether it be soft or global growth. it's myopic on china you don't get that aspect with

netflix. >> you're looking at levels now, right? >> yeah. let's look at the chart real quick right here so anyone who does the fibs they know me as the fib guy now this is the 100%, your 0%. your sell zone, you want to look at that weakness between the 50 and the 618. now it's back below. it's in your range of that sell zone you want to lighten up in this this could be leading the overall market the overall market could rally further from here, but i think you're going to get a bounce both in the s&p and in netflix eventually netflix is for sale early, that's a leading indicator for the overall market. >> this seems to be an indicator of a market that has more forgiveness for imperfect earnings you would have thought given a 50% runoff of the december 24th lows, netflix would have every reason down 2% or 3% or 4% even. and yet it held in effectively

and it moved less than what the ten quarter average had been for any earnings report. >> i think that's a fair point you know whatthat means to me? the market is a little bit confused did we hear the other day? all stocks, the average stock is up 13% from that december low. that means confusion that means they're buying everything so to your point, tremendous forgiveness in the market. but those forgiveness days are short numbered once the market starts to turn and it is unforgiving to the downside as well. >> all right still cautious good to see you. steve grasso check please is next you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated.

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why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. check please >> watching shares of facebook here take a look at the intraday. we have learned from julia boorstin that facebook -- what did the stock do it went down fractionally and is still now up by 0.8% not much of a reaction here. that's key to see how it reacts to bad news. >> sticking with the social media theme, i went last night to w my son to a local high school basketball. a rivalry game between our town and its closest rival. when i was a kid, a night like that, the gym would have been packed this one was half full i was thinking i wonder if most of them are at home on social

need ya or playing games like fortnite >> probably. my dad would have been in the crowd. never misses a high school game. ever show up to work without your shorts on that's what mr. beasley did last night. those are his warm-up shorts beasley was recruited by lebron then he had to put the shorts on. >> he had shorts on though thanks for watching "power." >> and "closing bell" right now. ♪ welcome to "the closing bell." i'm sara eisen >> and i'm wilfred frost i want to know who won in tyler's game he didn't tell us. drop me an e-mail, i want to know now shares of tesla tanking after announcing big job cuts. we have the details of that coming up. >> plus ufc starting a new deal with a sports powerhouse we'll talk to ufc co