total iphone revenues and try to impute average price from there. >> still going to try to cobble it together. >> absolutely. >> thank you both. stick around tonight for full coverage of apple's earnings report and conference call on "closing bell" and "fast money." that does it for "the exchange." i'll join melissa and bill on "power lunch" beginning now. >> i'm melissa lee with bill griffith just 24 hours from the first rate decision of 2019, plus the fed chair's news conference while the chances of recession are rising an earnings avalanche ahead, apple reporting after the bell, but the attention turning to its outlook. what the street is watching. and the range against the rich why howard schulz's potential 202 run is creating a big headache for business and the wealthy. "power lunch" starts right now

>> and we do welcome you to "power lunch." i'm griffith griffitbill griffi. stocks are up higher 3m giving the biggest boost to the dow on the back of its latest results and check out two movers this hour, ge sinking following a negative analyst note ahead of earnings, but lumber prices, are they rallying or what today, up about 20% just this month and on pace for their best month since march of 2016. reports have been blaming a cutback in production plus the dreaded kind beetle. well, we are less than 24 hours from the dreaded pine beetle >> i dread it. dread all beetles. >> we are 24 hours from the next big fed decision and the fear of recession apparently is rising steve liesman here with the results of our latest fed survey do we blame the pine beetle on this as well that was not one of our options but next time i'll consult with

you, bill, when i put the options together thank you for your assistance on that we did ask people what's going to happen in the january meeting, what's going to happen in 2019 and 2020 100% say no rate hike in january. not a big surprise what is interesting is what's happening. first of all, we have added a second column there. we didn't have that cut percentage column before but, you know, new times require new graphics 78% say a hike this year, but 17% say a cut. and look, much more divided over 2020 48% expect a hike in 2020, 37% say a cut. of those expecting a hike, june is the median month for that hike as bill mentioned, the chance of a recession not a chance of beetle infestation but recession, up for the third straight month to the highest since january 2016 26% the long run vrge a, 22% this does not often presage a recession but a change in fed

fol pol s policy, and that's what people are counting on. 29% are peg progress teging prot trade policies i'm bringing up this political chart because it is so interesting. for longest time, this group of respondents, not this group, but those we polled were strong supporters of the president's handling of the economy, and now you can see it's down tied with the lowest level this follows -- this survey was conducted during the shutdown and all the other issues that are out there. just quickly, let's look at gd dpd. we estimate 2018 will end around 3.2%, and there is the slowdown, 2.4%, 2019, and back to trend in 202, 2.05%, unless administration, larry kudlow, kevin are right -- >> why does that have to be trend, 2.05% >> that's potential thought to be to the economy, kelly, and one of the big questions of our time right now is can we change potential, can we change the

destiny of demographics and productivity such as it was or not, and there is the forecast for unemployment, down to 3.8% by year end and inflation remains unchanged. if you think we can change potential -- >> we can change productivity. >> that is correct >> unless there's immigration and on policy matters that doesn't seem to be in the offing >> and those two things go together, melissa, which we have more immigration and more training of an education of immigrants, we could handle both >> or higher birthrate. >> is the potential only 2% because of the bottleneck that exists in the labor market right now? we can't hire more people, necessarily? >> yes that is an expression of the potential of the economy in other words, we are growing the economy at 1.8% is the actual potential and it's about 0.6% for demographic growth and 1.3% for productivity growth we can change all those numbers. >> a key question, in your own hit, you said the chances of

recession don't actually presage a recession but they presage a change in fed policy so what happened the last time those chance of recession spiked in terms of fed policy >> if paul is okay, i'll give you the full answer. >> i've gone down the oad. >> we're there already >> i'm sorry we're out of time. >> the last time we had a spike, 38% there, qe-3. the second time, which is the one that was on the chart there, the 29%, the fed was supposed to hike in 2016, remember that, on hold the entire year and so this spike also as a result -- by the way, the 2016 one came after market volatility, all kinds of concerns about the economy from overseas this is very similar and you can see here they've already -- the market has made that change, which is to go down to one hike and maybe none and we'll see tomorrow if the fed makes that change. so tune in at 2:00 >> very good thank you, steve check, please, is next >> actually, it's the busiest week of earnings season. about a quarter of the way through, and dominic chu is

watching trends emerging >> i didn't get to do my segment on earnings season and the show is over. all kidding aside, guys, we have so many numbers that steve just threw at you, so leapt's throw more numbers on top of that from the micro perspective or the company side of things because like you mentioned about 27% of stocks in the s&p 500 companies have reported numbers so far, the quarter mark at this point, 74% of those companies have beaten average analyst estimates according to refinitive. 24% have missed estimates. so this is still generally a good season. if you look at the earnings growth rates, of all the companies that have reported and all that are left to report, if everything goes as planned, we will see around 14.2% earnings growth that's pretty decent for the fourth quarter the blended revenue growth rate that everything goes as expected, we're going to see about 5.6% growth rate there so big numbers as well, and then i searched for all the earnings

conference calls going back to about the early part of december, and look for mentions of key words like china. 65 companies in the s&p 500 have reported or said something to the extent of china this or china that in their conference calls. on the shutdown side of things, 42 companies have mentioned shutdown in some way, shape, or form in their calls. and 57 companies have mentioned a slowdown in some way, shape, or fom so if you're talking about themes, guys, some of the big wungs emerging in the conference calls are those. we'll sew e if they play to the outlooks for 2019. >> dom, thank you. here we are in the middle of the busiest week for earnings in this cycle and just about 24 hours away from that big fed decision, but trade talks are still a major overhang on the markets as well. let's bring in an analyst to kick all of this around. welcome back how are you? >> i'm good. how are you? >> good. earnings first hope springs eternal before

earnings season, then we ratchet down expectations, especially after yesterday with caterpillar and nvidia apple has already lowered expectations what are you looking for this week especially on earnings? >> i think that there is a shift in the fourth quarter relative to the first three quarters of the year, not just the fact that the earnings growth rate will be quite a bit lower than it was in the first three quarters of the year, but to your point about the typical tendency of analysts to maybe be too optimistic at the outset, then lower numbers too much, then you get that significant beat, but it's look ing a little different in the fourth quarter we are seeing the deceleration and more important are the expectations for 2019 with q-1 consensus,est mapts down 1.8%, which puts that below the rate of inflation, so if we're around that number you're talking about a negative ral earnings growth rate i think the commentary around earnings this time for the fourth quarter is more important

than the actual numbers. i think from a market perspective, the percentages that mat rer the growter are ths for 2019 >> are you look at our economy per se i'm leading the question here, but are you looking at our own economy or the economy overseas especially with china? >> all of it in fact, part of the reason why you've seen such a dramatic falloff in estimates for 2019 since october when they first started getting published for 2019 is there was a three-step process in analysts adjusting expected growth rates. they were very late in the game in making the adjustment to the energy and energy-related sectors for the collapse in oil prices last year secondarily, they made a quick adjustment for those companies exposed to china when we were in the heart of the trade war that was the natural place to cut. only more recently have cuts come stied to europe, which is a bigger impact on top line and bottom line for the s&p 500. every day you see a ratchetting down still of estimates, and i

think there is a risk, even if an economic recession is still less of a possibility in 2019, i think at least in the first half of the year there's some chance we could get an earnings recession. >> all right so earnings expectations might be ratcheted down. consumer confidence isn't looking to great either. you tweeted about that today, the fact we're at 42, below a key rescission nary level, 43, the third straight drop. what do you make of the state we're operating at least in the first half i know many investors out there are longer-term investors, but in terms of girding for volatility, it seems like there are a lot of potential land mines in the first half of the year as analysts are getting to more realistic expectations and the consumer is dealing with a lot of the uncertainty in the economy. >> our view is that volatility is going to persist this year and that 2018 was sort of a sign of what is to come versus 2017, which was actually the exception, not rule, from a volatility perspective so i think when we think about

the earnings progress for 2019 and the fact that you still have double-digit expectations for fourth quarter, that probably still has to be ramptcheted dow but i'm put an optimistic twis on it. 2018 was a strong earnings year but we saw valuation compression, not because the market looks ahead, but also we had strength in the dollar and tightening financial conditions, both which historically tend to put downward pressure on multiples. the interesting thing that could happen this year is even in the face of more earnings news and moving into negative territory, if you see a continued weakening in the dollar and financial conditions, that might take some of the pressure off. >> always good to see you. thanks >> thanks. chips getting chopped again after the big warning by nvidia

yesterday. amd is reporting after the bell today. ou ie regaining nearly all the grndt lost earlier this month. where does it head next? really the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today. ♪ ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest. when it might be time to buy or sell? with fidelity's real-time analytics,

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rough week following nvidia's big warning and our next guest expects amd to miss the mark chris rollin has a hold rating on the stock, an 18 price target on amd great to have you with us. >> hi, melissa >> even with the decline, the story has not been derisked enough >> it's a little unclear so there are a couple of things going on first, the numbers i think if you look at street estimates particularly for 1-q, they're just too high, and some of the thoughts from thnvidia ti week could indicate the crypto hangover is perhaps not done for amd yet. so i do think that the numbers are going to have to be cut again, but the real tough part to discern right now is investor sentiment and has that bottomed, is there a scenario in which they missed the numbers and the stock can still hang in there or even perhaps go up >> you know, when people think

about amd and others, they think about the overlapping markets but the products are pretty different in terms of how they compete with price points, particularly the gpu market. could there be enough differences it could give amd some cushion if we are to believe nvidia's slowed down, their average price point is a full three times to that of amd's average price point on their gpus. >> that's right. and as a percentage of sales as well it's much smaller for amd as they have this big cpu part of their business as well. but i don't think we can rule out crypto entirely. you know, there are videos online on youtube of data centers full of amd radion 580 cards, can the crypto miner's card of choice i don't see them necessarily being immune here despite the fact they trade at lower price points >> you each sort of anticipated my question here on the crypto hangover, because this is what

has plagued nvidia as well as that stock price came down would you invest these companies right now, anticipating a resumption of the crypto craze >> absolutely not. but i think stand-alone gpus for gaming, for artificial intelligence, this is a new and growing platform that has a long-term future, and so what i'm looking for in these names is the opposite, for crypto to be entirely washed out of these names so i can find the true core of that company, what that business looks like, and the growth we can layer on top of it. >> what about intel and its disappointing quarter? what is that telling you about amd? >> yeah. i think it tells us a lot. first of all, it tells us more broadly that data center is likely slowing down here i think that was the big delta there. but also what it tells us is that they're having a hard time keeping up with moore's law,

moving to meter, and this is going to open the door for amd that's going to have seven nanometer, equivalent to intel's products out this year in mid-2019 so they're going to take some share from intel part of this is the broad macro for intel, but part of this is their own doing and their own fault. >> chris, great to have you. thanks so much chris rolland from susquehanna amd helping out nick lowery, aka nick the kick's pick shares are up 75% since april and we will announce the winner of the 2018 cnbc stock draft next monday. >> already >> after the super bowl. time flies when you're having fun. >> i learned something from chris right now. neg pre. >> why is it negative preannouncement? >> well, there's a pos pre and neg pre. also, we're looking ahead to

results due from tesla out tomorrow what numbers do we watch for we'll talk about that. and as democratic contenders merge for the 2020 presidential race, calls to tax the rich seem to be gains traction is there a war on wealth, again? we'll discuss that coming up on "powerun." lch

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we're watching tesla ahead of earnings tomorrow it's been a rough year so far, shares down about 11%, and here's a staggering stat out there. if shares don't rally more than 20%, the company could owe $920 million in convertible bonds, this by march 1st. here to break it down is collin rush, the senior analyst at oppenheimer. great to have you with us. you know, it's interesting that the change in tesla and how the street is viewing tesla now compared to even two months ago, right now there are eight sells, eight holds, and ten buys on the stock and a lot has happened in the month of january have expectations come down enough going into the quarter tomorrow >> we think so you know, really attend of the day, what the company needs to do is clarify what their cash flow situation is going to be through the first quarter and through the balance of the year. there are a couple key metrics we're look for additional guidance on, one, how they pay

this debt, which will be on a cash off the balance sheet, which we kind of digested and the street has, but more importantly, how they play for the china capacity ramp, which it looks like they're bidding out financing on that right now. we should get clarity on that, hopefully in the next couple of days after they report on what they're going to do there. then the third thing is working capital. they've brought down the inventory and process and works in process in the fourth quarter. we think they can free up about $300 million of cash exiting the year and we'll look at how they finance that working capital through the balance of 2019. >> how are you modeling out the cash, given the convertible bond that's triggered march 1st even if the stock rallies that much to meet that price, the expectation is that tesla will have to pay out those shareholders who opt to convert in cash in some way. so how are you thinking about that, given the end of the third quarter with about $3 billion in cash and cash equivalents? >> we've been looking at them generating $400 million to $500 million of free cash in thing

fourth quarter we've modeled touch a touch below, and maybe a touch of upside to that we have them paying cash on that convertible note, making an assumption around the stock price in this sort of market is a fool's errand, so we haven't been assuming that we think they have enough cash cushion and other sources of financing they can bring to the table to work through this without too much difficulty. >> for a long time, elon musk just scrambled to ramp up production enough to meet demand for his cars, but with the demise of the tax credits, does it go the other way around now does demand go down? do they have to bring prices down to increase some demand to some degree, and does that go to the profit margins then? >> i think it's a great question you know, i think there's a couple things that we're going to hear a bit more about first, i want to mention the competitive response from the oems, has not been tremendous here, so we don't think there are serious competitor or thes on the ev side production has been delayed far

lot of these competitors so i don't think that story gets enough credit. we also think tesla has been phenomenal at promoting products and generating demand. so we wouldn't be surprised to see a lot more information about the model y and potentially the pickup truck as we hear them talk through their plans on wednesday. >> should be a great call tomorrow collin, thank you. collin rush of oppenheimer ahead on "power lunch," apple's earnings are after the bell today it's the forecast that's front and center what to expect plus assault on the wealthy. is howard schulz's potential presidential run creating a headache for the rich? and a big week for biotech thstkse oc that could move big all this when we return. life insurance policy.,000 how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies,

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hello. i'm sue herrera. here's your cnbc news update at this hour. the fbi says it found no single factor motivating the 2017 las vegas mass shooting, but they believe the gunman, steven paddock, wanted to die in infamy, in part inspired by his father's reputation as a bank robber paddock killed 58 people and injured nearly 900 at a country music festival acting defense secretary pat shanahan would not rule out sending u.s. military forces to colombia in connection with the

ongoing political upheaval if venezuela. yesterday john bolton had written 5,000 troops to colombia on his notepad during a white house news conference. >> i was just hoping to get some clarity on the answer about colombia are you saying that is not an option on the table? >> i said that i was going to speak with secretary bolton about it. >> did you speak with someone else about it? >> you're ruling it out? >> i'm not commenting on it. >> and the climber known as the french superman climbing a 47-story building in manila. he climbs without safety equipment. he got the nickname after climbing the sears tower in chicago back in 1999 you're up to date. that's the news update this hour kel kelly, back to you >> sue, thank you. the oil market is closing for the day. dom chu is at the commodity desk >> prices closing up by about 2.5%, brent crude futures,

$61.25, about 2.25% to the upside yesterday's losses were tied to concerns about the chinese economy. they're largely being made up today by that oil story that includes the newly minted u.s. sanctions as sue mentioned on venezuela and possibly some of the action there, which may put a damper on oil exports out of the country, helping to reduce supply in the market the u.s. is the biggest market for venezuelan oil exports now, trader attention turns to private sector inventory data from the american petroleum institute later this afternoon, and the official u.s. government weekly data on inventories tomorrow >> the countdown is on to apple's earnings report after the bell this afternoon. shares have been down over the past year as you know. apple already preannounced q-1 results at the beginning of this year and the attention is turning to its outlook for the second quarter there's also news today about that major bug in its facetime app. chris queso is an analyst with raymond james and has a hold

rating on the stock. and ford ford joins us at the desk as well we think we know what they're going to say about the last quarter, but we care about the current quarter. what do you think they'll say? >> absolutely. i think people recognize there's some risk as we go into the march quarter just because of the presence of vortd. i think there's probably more of a focus on gross margins now we know some discounting is going on so, you know, that has to be a counter for street on gross margins for march. there are other things as well like what's happening with services we're estimating services to desl rate as we go through the year, and that's been an element. in addition, you know, just as you go into the next cycle, we're a little cautious on the next cycle as well we think all of those things, the expectations for all those things need to be reset. >> john, for years, apple has been notorious for underpromising and overdelivering but this time it feels different, doesn't it? >> it's very different this was a big miss, the first really big miss of the iphone era, but we don't know how big

it was because we don't know what the inventory picture looks like we know overall what revenue was, but how many iphones are lined up ready to sell that haven't sold yet the should give us some sense of that if it's weaker than expected, they probably have more inventory. on the services issue, i think it's unclear what metrics to watch in services. there's talk about services gross margin, but i don't know how apple calculates that. what are the costs they're counting plus, i don't think that total active devices is necessarily the best barometer for services, and that's what apple's been talking about. i think it will be apple accounts how many new apple accounts are out there. it's not justhours on netflix. you want to know viewers >> for services revenue and gross margin, do you feed into that model your own unit assumptions? >> yeah, and -- >> you do. >> well, and apple gives you

pretty limited disclosure in terms of, you know, what's behind that number, which frankly as an analyst that's good, and we can do some work and put them in there. one of the areas we're a little different from the street is we're assuming that actually apple care, the part of the services business tied to units, is bigger than a lot of the street has we have it about 30% of the services business, and of course that is tied to the amount of phones that get sold >> that's the warranty >> the warranty. so what's happened with that, that's actually been a big driver of growth over the last two years because the cost for apple care has increased it used to be went from 99 to 129, now 199 -- >> i mean, i don't know if apple really -- if the consumer catches on to that, you don't think there will be some pushback it's more than apple care, right? >> i think it's endemic of what's happened in general the price of iphones has gone up so the price of the warranty has gone up as well. i think we're seeing how there's

probably a limit to how much you can push pricing higher, whether it's the warranty or the phone so from here on out, and again, this is one of the reasons why we think services decelerates, because you've exhausted that ability to raise price now it just comes down to units. and, listen, they just have to come up with a phone which more people want to buy. >> then there's a matter of the iphone's price how much of this china issue was really about china how much was it apple specific we've had micron, intel, nvidia all say it's china problems so it's not just apple. but did they go too far in price? how much is about about emerging markets outside of china, which tim cook alluded to in that warning? >> would you care if they sold 15% more iphones at a lower gross margin >> yeah, at the end of the day, it's about, you know, gross profit dollars and net profit dollars, and i know that's the way that apple manages the

business so, you know, that's decision they're going to have to make. apple misor theally has not been willing to do that, however. they've seen themselves as premium brand and they price i cord i accordingly. >> do you expect the after-hours reaction to be much more volatile because we don't know what to compare what against >> i think that's fair it ta it's the first time we won't get full dhoisclosure on unit numbe and that's big concern, but we'll get more on margin ps. >> all will be clear this afternoon when the numbers come out. thanks and of course stick around tonight for full coverage of apple's earnings report on "conference call" and "closing bell" and "fast money. to the bond markets now, rick santelli at the cme what do you see, rick? >> we had a seven-year note auction, $32 billion, dutch exhaustion yielded 6.265 for

that i gave it a b-minus. what was strong in the option, direct bidders contributed and purchased almost 25% of the option, that's the second highest percentage in almost four years as you look at a chart going back to the 17th of the ten-year maturity, we've eased back, at some of the lowest yields of the day. as you can see on that chart, we always seem to pull back to around 270, resistance to around 2.75 this is the 16th day we look to be closing in the 270s finally, let's check out that dollar index we see it's basically holding on this first day of a fed meeting. finally, one week of boom deals, they closed at 19 basis points, and you can see it's not even the low on that one-week chart but once again, mario draghi is going to figure into the minds of the many of the fomc members as they backtrack on the aaggressivens of the fed in lieu of the weakness of other central

banks predicated on the weakness of their economies back to you. >> rick santelli, thank you. starbucks says the company does not get involved in political campaigns but with the former ceo possibly running for president, good luck staying out of it. and howard schulz hasn't even announced yet and he bng'sei heckled by early protesters. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

as you no doubt know by know, starbucks founder howard schulz announced he's preparing to run for president he's already facing down some angry protesters here's what happened last night at an event with our andrew ross sorkin >> don't help elect trump, you to go technical analyst cal billionaire [ bleep ]. >> sit down. >> go back to getting erased on twitter. go back with the other billionaire elite who think they

know how to run the world. that's not what democracy needs. >> we're going to get to that idea, and that sentiment in just a minute the author of "winner takes all" sent in a question and said do you agree that billionaires have too much power in american public life? and it gets at the issue that aoc has been talking about, that elizabeth warren has been talking atalk ing about. >> the monarch or billionaire now has become the catchphrase i would rephrase that and i would say that people of means have been able to leverage their wealth and their interest in ways that are unfair and i think that speaks to the inequality but it also directly speaks to the special interests that are paid for by people of wealth and

corporations who are looking for influence, and they have such unbelievable influence on the politicians who are steeped in the ideology of both parties and once again, i go back to this -- if i should run for president, i am not in bed with any party. i am not in bed with any special interest all i'm trying to do is one thing -- walk in the shoes of the american people. >> so that turned out to be quite the event last night schultz's possible run increasing the backlash against the wealthy and business here to discuss that is our wealth editor -- you don't want that title -- robert frank and dan joins us, out with a new piece called "starbucks has a 202 problem. what does being ratioed mean >> you are xet getting more comments on your tweet than getting retweeted. it's never because people say hey, great tweet

>> you kicked up a lot of dust so to speak. robert, what do you think about the backlash here? >> so i think that power has two problems one is starbucks specific, which is that he owns $2.5 billion of the stock. to separate yourself if that company or the company to separate itself from him is difficult when he owns 3% of the company. most of his wealth is in the stock. the bigger irk shoe is americans have a conflicted attitude toward wealth and the bad side comes out during elections i call it pom-poms and pitch forbes during election seasons, the pitch forks come out and the democrats seem to be in a race against each other to have the most progressive policy against the wealthy. >> how do we explain the results of the 2016 election where we elected a billionaire? >> well, trump has a lot of specific things that were going for him including the messaging, his popularity as a person people in that case assumed the argument that howard is making, which is because i'm wealthy, i'm immune to the influence of wealth in washington

>> we have two more billionaires now, howard schultz and michael bloomberg, who might be able to self-finance a campaign. >> in a surprising way you had a billionaire become to populist because he was seen as an everyman and the way he spoke and the things he represented, the policies, but also because he could sort of say i'm not going to be in the pockets of lobbyists. >> the problem, though, is, dan, as robert had mentioned, separating howard shultz from starbucks is virtually impossib impossible, at least in the minds of potential voters out there. and so people are going to be looking at starbucks scrutinizing their every action. i mean it's not like starbucks stays out of the news or out of political issues that incident in philadelphia when the police were called against some black men who were in starbucks, i mean, that became a political issue everything is going to be through a political prism now. >> by the way, i think it probably should be in the following sense. if you look at howard shultz, all of his wealth -- you know, robert was talking about, but to be honest, his entire career or

the important part of his career has been tied to starbucks these things are inextricably linked he wasn't a senator in between he didn't do a tv show in between. starbucks policy, what starbucks has done well, done badly and potential skeltons in the closet, that speaks to howard shultz's whole reasons for running or whole resume. >> what he did with scheduling workers, how he pays his workers that will come into the public spotlight, not just where he stands on an issue >> because of the partisan debate we're in now, this next election will more than ever be a referendum on wealth and democrats through elizabeth warren and ocasio cortez have staked out the position saying i'll tax them even more, and that's where we're going to go >> there's a lot of handwringing going on with the democrats saying he'll suck a lot of votes away from whoever the democratic candidate is but he doesn't want to be a part of it because they've gone too far left.

all the criticism sort of proves his point, doesn't it? they're criticizing him mainly because he is a wealthy man. >> i don't think they are. i think -- and there are certain people who are i think a lot of this criticism, this billionaire, the guy screaming at him last night, i think the billionaire thing is being used as an excuse, but it's because he wants to run as an independent and there is a huge fear from democrats he'll pull votes to re-elect trump if he was running as a democrat, like if bloomberg runs as democrat, there would be people who don't want him to win, but this animosity and vitriol wouldn't be there. >> if i'm an investor, dan, should i be worried? not only do you have potential backlash from the democrats but backlash of the republicans as well >> yeah. look, i think so and, you know, i said the other day, political staffer said to me the other day, if they were right now either at the rnc or the dnc, they would be sending people to every starbucks in america trying to find the very, you know, beleaguered employee, disgruntled employee, maybe someone who sent an e-mail to him saying this horrible thing

is happening and he didn't reply, maybe a mom and pop shop forced out of business because of starbucks those folks will be temperature stars, on ads, cable news. >> stay tuned. that's to come >> i was going to ask about the idea of a wealth tax will it work even if we make it to a candidate's platform and a candidate gets elected >> there's a reason why 20 years ago 12 countries in europe had it and there's only four coming down to two in the next few years. it's really hard to enforce and hard to value things, everything from your car to your art to your private business. how do you but a value on those things really hard to implement that's why a lot of the rational people in the democratic party today are saying if you want to raise taxes go towards some kind of income tax or capital gains tax. >> some more kind of income or -- >> xactly. always more. >> robert, thank you dan, thank you very much for joining us today appreciate it. the ibb biotech index is flat today after a big decline yesterday. a big earnings report is out this morning

another due out after the bell this afternoon when can we come back, an analyst gives us his top picks in that sector stay with us what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the numbers to examine investment opportunities firsthand. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story. t. rowe price. invest with confidence.

shares of biogen up after a fourth quarter beat. joining us to break down the big week is brian scorney and out with a best ideas for 2019 great to speak with you. >> hey, great to speak with you, as well. >> what are you looking for? it's under pressure already today. ever core lowered the ratings on the stock ahead of earnings. and there are certain concerns with drugs given, you know, nulasta. >> that's absolutely right investors are really looking to amgen for this year. 2019 is a pretty pivotal year for the company in terms of where the legacy products are going. an uncertainty is what sort of impact do they have? nulasta is a hallmark drugs under a similar competition.

two out right now. people will be looking to amgen for guidance on how much of a decline we could see for nulasta. i think people are expecting some decline but when a company's signature product sees declines in sales in the sector it's impactful results to the downside i think that's what people are focused on as you brought up abvi last week guided down enbril is a similar drug so what amgen has to say whether or not they'll need to make similar guidance downwards for 2019 will be a bit of a focus here as far as fourth quarter numbers, i don't expect anything too impactful. i think the impact is for the year. >> how much of a concern of bio similar of enbrill but that was at the heart of the ever core downgrade today and of course as you mentioned that's a

big part of or what will be the nulasta story. >> yeah. so i think the class of drugs enbrill and of nulasta separate in terms of what potential bio similars can have and there's a tendency in the u.s. of a long-term use of a single drug it's more of a temporary therapeutic. but we are certainly seeing, again, very significant impact to humera and bleeds into the concerns i don't think it's as acute focus as nulsata is. >> there's a rush to cancer treatments and companies of making cancer treatments s. that the growth area to look at most? >> it is sort of a mixed bag certainly there's money into cancer treatments.

bristol and merck had a battle with pd-1s i think it's hard to predict the next area. it's not the area that i think is most favorable for investment right now because it's a little opaque as to what the next therapy to kind of match the others is going to be and there's a number of disappointments in companies looking for that sort of therapeutic area. >> brian, what about the dialogue on drug pricing how does that overhang the sector if it does? >> i think it's just a -- it's been kind of a permanent overhang since 2015. it has periods of getting ramped up and down. certainly we have seen the federal government go back to work and there was a senate committee this morning on drug pricing. there was a congressional committee later in the day on drug pricing so certainly remains a key area of focus and whether it's trump, the trump administration with populist

rhetoric or someone on the dnc side i wouldn't be surprised to see a movement as it seems to be the only place where maybe the executive branch and the democrats find some common ground. >> brian, we have to leave it there. thank you for your time. >> thank you. back to dom chu with a market flash on the retail name. >> bill, those retail stocks are moving lower today led by gamestop that stock on pace for the worst day since 2002 after that company ended the plans to sell itself this after being in talks with prospective buyers over the course of the several months and worth noting that the group of stocks is up more than 7% on pace for the best month of a start of the year since 2017 and the first positive month out of the last 4 and retail stocks very much in focus and still though, kelly, a good start to the year. >> we'll take it thank you. check please is next

check please. >> and i call your attention to a chart today of pg&e. pacific gas and electric which right now is up 14%. at $13.78. i would remind everybody, that is company that filed for chapter 11 this morning. what am i missing? >> should be zero equity value.

>> worthless now i get it when companies file chapter 11 you get the day trader that is trade the stock hourly. >> i think it might be more than that. >> which i understand. it's $13 usually it's at a dollar or 50 cents or something what am i missing, melissa you're the harvard grad. >> that doesn't have anything to do with anything i'm not sure it's a short squeeze here could be a belief to have a rescue from chapter 11 may not go through i'm not sure i'm not sure >> could wind up - >> be careful out there. >> absolutely. >> who replaces? they have -- what are they going to -- if they stay there and enough money empty pin the pot o around, they're the grid. >> i get it. >> speaking of the grid, let's talk about the weather check out the images across the midwest on the frigid, frigid days there's a live shot on the left

of minneapolis my brother, stay warm. >> everybody out there >> it's fargo. >> be careful of frostbite. >> they're used to it. >> i guess. >> of course watching apple. the first time company management able to discuss the pre-announcement and the severity of the slow down in china. >> and nightly business report, too. >> thank you for watching "power." ♪ good afternoon very warm welcome to the "closing bell. i'm wilfred frost. >> i'm morgan brennan in for sara eisen apple earnings on deck set to release at 4:30 p.m. eastern sharp. >> i'm excited few more exciting earnings releases huge implications for other stocks and of course - >> new metrics. plus, some investors blaming th