today. >> our favorite call right now is consumer staples. it's cheap the fed is on pause. and it is hated. everyone fights with me. >> thanks for being here as well that does it for us. thanks for watching. "the exchange" with kelly evans starts right now >> thank you, scott. hi, everybody. here's what's ahead this hour. countdown to the fed the street not expecting a rate hike today but investors will be grilled to jerome powell's every word especially on the balance sheet. what they want him to say to keep the rally going boeing is flying high. the aerospace giant delivering blowout results and great guidance the ceo will join us in just a couple of minutes. facebook set to report after the bell today now with yet another social blunder this time it's paying teens to spy on them. we'll explain. we begin with the rally. dom chu with the number. >> that rally in boeing

accounting for a large chunk of the 300-plus points in the dow industrial average boeing shares right now account for 180 points of that rally another 60 coming from apple alone. those two stocks, the bulk of the gains in the dow jones industrial average s&p up by almost a full percent. nasdaq up as well. communications services is key here one of the laggards in this nice rally to the upside. only up 0.25%. at&t earnings a big part of that story. legacy tech, media, communications and facebook reporting after the bell those new economy, new world tech stocks doing pretty well in today's trade and communications services and the best performing stock in the s&p 500 and russell 1 thousand, advance micro devices up after its results for quarterly earnings and profits largely in line but a sales outlook somewhat promising those shares around 50% through the lows between the fall of last year and early part of december into january. and now up around 35% since

then back over to you >> super impressive. dom, thank you welcome to "the exchange." i'm kelly, vans. and markets are worrying after those better than expected reports. plus the adp report shows a healthy gain 213,000 private sector jobs added last month we'll see what the official jobs tally says in a couple days. and stocks shrugging off another weak housing report. pending home sales last month down nearly 10% from a year before a lot less negativity from companies today. bob pisani is at the nyse with more on that bob? >> kelly, what a difference a day makes. earlier this week, we were dealing with poor 2019 guidance from whirlpool and 3m and lo lockheed martin and harley-davidson. now apple's not so bad report and guidance from companies like boeing, amd and chips and anthem in health care, for example.

they've all helped buoy the markets today. it wasn't all perfect. juniper and tupperware provided disappointing guidance and are paying the price overall the problem now is, we are bumping up against the high end of the trading range the markets are pricing in not just okay earnings but also a dovish fed and positive outlook on trade talks and that's making the market rather pricey right now. kelly, back to you >> thank you, bob pisani less than an hour from the fed's decision on interest rates. the chairman speaks. now he's doing that every meeting. what are investors expecting to hear this time around? let's ask the chairman of strtegis research. and greg from "the wall street journal" and steve liesman, our senior economics reporter. great to have you all on board here jason, i'll begin with you a lot of bs talk, balance sheet talk that is today that's the focus, how much they're going to pare that back.

>> certainly the fed since the mistake in communications, maybe hamhanded communications in the fourth quarter of last year, the fed has largely been kind of reading an article, a face of what equity investors have wanted to hear kind of sweet nothings now it's largely about the balance sheet and the pace and i think the main thing investors want to hear is that it's not on auto pilot that they're going to remain flexible i think that's -- >> independent >> that was the thing that really scared people most. certainly we've walked pretty far back from that since christmas eve day, which was pretty frightening but now it's all about the balance sheet. >> and we haven't had the usual economic data for the past six weeks. that typically guides them they don't have any more information than we do does that make the anecdotes from corporate earn,s all the more important the better news from apple and boeing today, could that filter through into a decision here >> i think it does

i think it did before when the market was down, and i think it does now that the market has turned around. i think that's the reason why, by the way, fed policymakers try not to take too much signal from the market because some of it can be noise you had a big fall-off and a snap back and a lot of concern about earnings and then the earnings came in better than expected and a lot of concern about the economy. as you point out, you had that very strong adp number that suggests that maybe at least the labor market isn't rolling over here that's important i do think, though, that if jason wants a formal decree that the balance sheet is off auto pilot, i don't know that that's going to happen. there's a process here, jason. i'm sure you're aware of by which the committee needs to make a statement about how this is going to go and i don't know if today is a day that powell is raid to say we're going from what we said

before to a new policy now other than what he had previously state cd which is we're going t think about this >> investors know this is like a slow-moving ship the fed has to turn here. all they're interested in is, where are we getting to? as jpmorgan said this morning, now they think the balance sheet will be $3.5 trillion in size. that's much bigger than people previously thought >> it's consistent with the way the private sector, the people who communicate with them have been thinking. so the surprising thing here to me is the idea that the balance sheet was shrinking on auto pilot came as a shock to the market it always has been we may not have it is auto pilot but it will be on auto pilot the question mark is when does it come off auto pilot and that's when we'll be looking for guidance from jay powell if you take some of the analysis and have a balance sheet half a

trillion smaller than it is now, that implies the process of run-off ends some time a year from now maybe that cheers up the market but says nothing about monetary policy it will be a decision reached purely for technical reasons >> is that really true the cause and effect to everybody else looks like the market sold off. recession odds went up everyone panicked. they can't shrink the balance sheet and raise rates at the same time. now at the end of all of this, the fed is saying we're not going to shrink it by that much. >> the market didn't even know how much the budget was sclingiscling i shrinking by they did a wonderful -- used google trend data and showed almost no searches at all for fed balance sheet up until some time the middle of december. i think sometimes things like this cause things and sometimes markets sell off and look for causes

greg, go ahead >> also, the fed has been in communications, asking its primary dealers, what are your expectations that process was yielding numbers in the 3 to 3.5 trillion range. tell me whether you're finding the same thing i don't think that number has changed in the last few months we're probably going to end up in a place close to those who were thinking about this probably expected. it's hard to explain why the market suddenly gets excited about one thing one day and something else the next. to my money, despite all the talk about the balance sheet, the single biggest thing that's changed in the last month or two is the fed went from two rate increases to, well, we're going to think about it. that is a message i expect to hear >> and that goes back to whether the sell-off has been warranted because there's a slowing in the economy or as greg also implied there's been a tightening of policy here. this is just a course correction and that's why we've been paying so much attention to thankful signals out of china, even on

corporate earnings to tell us how such that economy slowing and how such that behind the sell-off >> i would just take maybe some issue with greg and steve a little bit and i think the main thing -- i spent a lot of time with institutional equity investors and the one thing most of them know is that the fed doesn't know either how big an impact the balance sheet runoff is having in terms of monetary policy that's what scares them. what scares them is an arrogance the fed knows the impact of their moves because you've never, of course, central bank and the u.s. is only a little more than 100 years old. you've never shrunk the balance sheet by the size they're attempting to do it. so a lot of this is up in the air. a lot of this is improvisation as much as it seems -- >> they try to act like it's not. >> it's really not a hard science. >> i completely agree with everything jason said about the fed not knowing. the thing that is weird when we

get to the tale of the tape, and i don't know if jason has time to comment on this is the idea the fed announces this plan some time in june 2017. it reaffirms it or begins it in october 2017 you do the biggest part of it a half a trillion dollars worth, and nobody says a word and then all of a sudden, everybody is all excited about it in the theory, jason, the information from the market about what's going to happen, should have been incorporated. and it's the failure of that to have happened that is the reason why there is a bit of a mystery or the idea that the balance sheet is to blame is suspect >> if i could just add a point here the fed is absolutely, you know, agnostic on exactly what the effect of this balance sheet reduction is just as they cannot put an exact number on its expansion. what they have said is we don't want to monkey around with the plans on the balance sheet if things turn out to be rockier, our preference is to use the short-term interest rate

as we have for the last century as the primary tool. so if in fact, the balance sheet has a negative effect that jason is hearing about from his clients, the response will not be to suddenly start monkeying around with the run up plans that's more or less the signal >> i just want to hear from dennis muilenburg after this and hear what he says about the global economy and everythin else thank you so much. jason, greg, steve liesman, and that decision is coming in about 50 minutes time. here's what else is coming up on "the exchange. >> ahead on "the exchange," boeing's blowout quarter monster earnings and record revenue. the ceo joins us live with what's going right plus -- trade talks kick off. will the u.s. and china finally hammer out a deal with the deadline fast approaching? and the big chill. record cold temperatures across the country. canceled flights, stores closing. a look at the impact on the economy.

this is "the exchange. amazon prime video is now on xfinity x1.

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hurt the company nearly as much as thought, at least yet phil lebeau is live with the ceo. phil >> thank you very much, kelly. dennis muilenburg, chairman and ceo of boeing. huge day you beat the street by almost 90 cents. this has people saying what did the analysts not appreciate about the execution in the fourth quarter you're blowing away what they were expecting >> thanks, phil. appreciate that and proud of our team's work. what you see is a growth in the aerospace market place as we're ramping up commercial airplane production driving bottomline profitability and cash flow and seeing fundamental strength this is really a star of all three business segments really performing, driving both top and bottom line growth >> you have the execution performing fantastically, especially in the commercial airplane business where you have revenue topping $100 billion on an annual basis. first time ever. yet at the same time as you ramp up production of the 737, up to

57 a month later this month, some questions on the analyst call about the enginemaker and whether it can meet demand and what you have to do to assist that >> our revenue top line is growing fueled by the marketplace. we see a market that needs 43,000 new commercial airplanes over the next 20 years much of that in our 737 production lines we're ramping up 737 production and ramping up the 787 to 14 a month. the 737 line, as we move to 52 a month and now 57 a month this year, we're keeping a close eye on our supply chain. there's been some challenges there as we move up to 52 a month and prepare for the next step really focused in on some key points cfm being one of those probably our most challenging area is just working engines to me, this is all about production system health and synchronizing the supply chain >> working closer with them? >> yeah, and we'll be deploying additional boeing assets and people into their factories that

allows us to share best practices. this is normal work to do. work we still need to do, but we'll be disciplined. >> thank you for your time great to see you on the question of china, one way i heard this framed was, is china more important to boeing right now, or is boeing or important to china >> well, i think we're important to each other. and certainly the relationship between the u.s. and china is pivotal to us. we're very much engaged in the ongoing trade discussions. the world needs 43,000 new airplanes over the next 20 years. about 7,700 of those are in china. china needs the airplanes and continue to grow economically and to fuel their broader economic growth across multiple sectors. here in the u.s., it's also important as we ramp up production and provide airplanes to china it's creating u.s. manufacturing jobs about 90% of our manufacturing jobs are here. and we create about an $80

billion a year trade surplus for the u.s. so both countries are interested mutually in a healthy aerospace industry >> your stock trades often as the tell for how the u.s./china trade talks are going. those talks are ongoing right now. we see boeing with this big a backlog as you're sdroodescribig we see them whipping up or down based on how people think those trade talks are going to play out. why yoare you being used as the whipping boy, if you will? how much hangs on these trade talks? >> those trade talks are certainly important us to but we also maintain a long-term view you've seen some volatility recently and we're going to continue to stay engaged in the trade talks. we think both countries are leaning forward, and we anticipate some successful conclusions to the trade talks we also have to maintain a long-term view we have a backlog of 5,900

commercial airplanes roughly seven years of production now many of those are going to be going to china but we have this long-term view. so while near-term trade talks are important, they would change our long-term perspective here aerospace is a great long-term growth market. >> at the same time, you hear the talk of a global economic slowdown you are not seeing that in terms of demand. let's take a look at a chart that shows global traffic in terms of the number of people who are flying and you can't get caught up in these near-term headlines. look at the longer term trend. >> excellent point and well stated we're seeing traffic grow at 6% to 7% a year as you can see. this is a long-term sustained trend. it's outstripping global gdp while gdp growth may be cyclical in some nature, the fundamental nature of traffic growth we have a rising middle class, especially in the asia-pacific region all of that is fueling long-term sustained growth we have 150 million new averages

in asia every year 80% of the world's population is yet to take its first flight and that rising middle class is fueling long-term growth that outpaces gdp and also creates sustained growth, not cyclical growth >> i want to talk about the autonomous personal air vehicle. you did a test flight of this vehicle last week, which raises the question, realistically, how far into the future do you think it is before we can say, sure, i'm taking an autonomous air taxi from point a to point b in chicago or new york or los angeles, wherever it may be? >> i think we'll see implementation of this technology in the early 2020s. i think it will be in small applications first dedicated routes places we can certify these vehicles i don't think the technology will be the pacer here as we've seen with flight testing the technology is available. we're moving quicker to prototype vehicles the broader regulatory framework, certification,

ensuring safety of the system and adoption by the public but it's going to happen faster than many think. >> you're working with uber air but it's not just uber air there are dozens of companies looking at this? >> literally dozens of companies. different business models, different technologies our goal is to drive this forward and lead in this mobility transformation. not only in terms of producing vehicles but also creating the infrastructure, the network, the control systems. the certification. bottom line is, this has to be safe and as we transform mobility for the future, i expect boeing to be in a leadership position. >> wow that's amazing i look forward to my flying personal private plane guys, thank you so much. phil lebeau. dennis, jim cramer asked about this, this morning would you ever split the stock he said it could go to 500 >> we're not planning on it. we're focused on sustained long-term growth you can see that in our market and business and top and bottom line

>> figured i'd ask thank you both dennis muilenburg, the ceo of boeing with phil lebeau. coming up -- the foxcon fiasco the company reconsidering its plan for the $10 billion wisconsin factory that the president touted plus, mcdonald's serving up good earnings but weaker than expected same-store sales in the u.s. is breakfast to blame? "the exchange" is back in two.

welcome back to xa"the exchange." the current offering direct tv now is losing subscribers. those shares down 5% today rail caribbean shares popping on an earnings and revenue beat and high demand for its caribbean cruises. the company issued strong 2019 guidance the shares are up 6% over to sue herera for a cnbc news update. >> here's what's happening at this hour. secretary of state mike pompeo welcoming the australian foreign minister to the state department the two are set to discuss bilateral issues such as asia-pacific trade former starbucks ceo howard schultz is pushing back against a wave of democratic criticism against his potential run for president. they argue he could cut into the anti-trump vote.

schultz saying the democrats have failed americans. >> i'm not a democrat. i don't affiliate myself with the democratic party who is so far left who basically wants the government to take over health care, which we cannot afford, to give free college to everybody and the government to give everyone a job which is basically $40 trillion on the o. the irobot is rolling out that little guy, tara. it's a robot lawn mower feet aring state of the art mapping and it eliminates the need for boundary wires it goes on sale in the u.s. in 2020 no word on how much it costs kelly, back to you >> melissa says, isn't that why you have children? >> i mowed the lawn. >> we had to mow the lawn. i understand when they were putting this prototype out, they had a problem because it kept going into the flower beds so

they had to -- >> i used to do that, too, when i was little >> thank you, sue herera we want to talk about howard schultz. more talk about how the stores and the brand may suffer as a result of his presidential run >> now a couple days later and people looare looking back at howard schultz's record. remember when he said he was going to hire 10,000 refugees? that started trending on twitter. look at the impact and how starbucks positioned itself in the past and you think these two are linked how can there be no impact on the brand if not the sales >> and if people really want to show -- some of the frustrated democrats take that out on the stores to say we're just going to sit here until you drop out of the race. >> consumer research found that a self-described liberals, 43% were more likely to have visited a starbucks in the last month

than the average person. so are you trying to get those voters that could be the backlash >> we'll talk bhomore about tha tomorrow today it's all about the fed >> the markets think zero chance for any more rate hikes. the fed is not going to signal pause equals end so how will the markets digest all of this >> we'll see you in a couple of minutes. >> here's what's ahead on "the exchange." facebook out with earnings after the bell oh, and they're spying on your teens and paying them for it plus, tupperware tumbling. what spoiled their results temperatures hitting historic lows. a look at how siss abuneesre coping with the cold consider treatments, ask if xeljanz xr is right for you. xeljanz xr is a once daily pill for psoriatic arthritis. taken with methotrexate or similar medicines, it can reduce joint pain...

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welcome back it's time for rapid fire a quick look at more headlines that should be on your radar today. here today, dom chu, courtney reagan first up, shares of mcdonald's are struggling to stay positive after reporting an earnings and revenues beat for q4 kate, didn't we know this was coming what did we talk about on the show bacon. >> that's right.

we can talk about some of the limited time offers and value deals they're offering, but mcdonald's is undergoing this massive renovation of all of its u.s. stores. set to be completed by 2022. they've given them extra time. they are co-investing with them. but their global comps were very good u.s. comps slightly missed and they're still working on renoivating their stores in the u.s. where overseas they've completed many more projects >> it's breakfast all day and the products -- you are saying this has more to do with the remodeling under way why isthat hurting sales >> you have to close down a store to renovate it some lag time when you reopen it that's not to say some of the value competition. steve easterbrook mentioned that on the call. they may be focusing more on regional value doesn't make sense to do the same breakfast value all across the country where prices are different. >> what i find fascinating is we used to talk about this as the

all-day breakfast story. i will say that i go to mcdonald's i frequent it. i love taco bell as well i was -- >> i don't want to know why courtney knows it. >> fast food fans. >> we love fast food >> but this idea of changing the stores to be more self-service, using the app, there are specials on the app you don't get in the store itself. all of those are driving -- this is a paradigm shift for mcdonald's >> i was surprised the delivery is a $3 billion business is that a necessary thing, you need it delivered? maybe they deliver to the white house. i don't know how it got there. that's a big business. >> that uber eats partnership. facebook is out with earnings after the bell today and facing another social blunder. the tech giant has been paying users as young as 13 years old fees to install a research app on their smart phones to gather data on their phone and web activities that means even asking them to screen shot their amazon order history pic and send it in

apple says this violates their policy facebook shares are still up nearly 3%. what's the significance? >> this is a tough story because these people are getting compensated, monetarily, to give them access to their products. this is what facebook stance will be. but this is also about the clear line, the delineation about the people who value privacy remember that big billboard in las vegas. what happens on your iphone stays on your iphone that versus the data collectors. alphabet or facebook throughout who use that and find ways to give monetary value to it. those things are going to be huge but these people were getting paid to do it. >> that was above board in that sense but then everything else about it, especially for younger teens, feels nefarious >> it's a business issue between apple and facebook because it seems that it was a violation of the apple ios policy and it was a violation by facebook but then the teens were opting

in, supposedly getting their parents to sign off on this. getting compensated, $20 gift card per month to give away their data something about it feels wrong i just assume they're getting my data anyways whether i'm getting paid for it or not >> we were just talking about this it's a free platform >> we are the product. >> being tracked all the time. unless you move to a model where you pay for it >> that's why the shares are shrugging this off today how about this foxcann is reportedly reconsidering its plans to manufacture lcd display panels, tv screens, at a $10 million campus in wisconsin. the plans may be pulled back or scrapped altogether. this was praised by president trump signaling the revival of manufacturing in this country. they're trying to go white collar to r&d jobs it's a long back story where corning wasn't also going to get the same perk. so it wasn't going to relocate in order to do the tvs, they needed the glass they are left trying to find a

pivot here if they become more of an r&d. that's a very different thing than was envisioned. >> very different types of jobs and activity that's going on there. i want to know a little more about when they knew this. that's the part that makes me uncomfortable about this did they fully intend when they announced it this was going to be manufacturing and now they're saying it's just much more profitable to do it in china wasn't that the case then? >> yes, we know. that's why it was a big deal so that's what feels a little icky about it. >> also championed a lot by the trump mrgadministration how much did they know about that >> and governor and paul ryan. >> so many criticized the trump administration, this deal saying it was a handout now they've scaled back the number of jobs they were going to create. the types are different. manufacturing talent is also extremely hard to find some of their goals for hiring

could have been lofty in that sector >> the current wisconsin governor is saying they're going to review the project. so it's complete viability is now in question. real quickly, speaking of the midwest, polar vortex sending temperatures plummeting forcing schools to close today dom, citibank is closing branches across illinois >> chase has also tweeted out they're closing select midwest region area banks. they are encouraging people to use the online and mobile platforms. >> is this a publicity stunt to use the mobile banking >> i can't count how many videos of people boiling water and throwing it into the air so this -- >> my nephew did it this morning. >> this polar vortex is a lightning rod for marketing possibilities. >> i can do one better how about banana hammer. roll tape.

>> oh, my goodness that's a frozen banana as a makeshift hammer >> that's great. >> i'll also give my brother a shoutout he lives just outside of minneapolis. is your office closed? he said there's five of us it was my day to bring in doughnuts. he still went to the grocery store and got them when he walked into the grocery store, his iphone immediately turned off and it took a half hour to warm up and turn back on >> productivity has to go down think about how many are staying home even just because their kids are home my nieces and nephews in ohio and illinois are home for three days >> they should be, though. this is smart business you don't want someone to get hurt or freeze on their way to citibank there's no reason. stay home. maybe it's a promo for the app it's a smart move. >> chill >> literally >> dom, kate, courtney, thank you. between that and banana hammer it's the first day of another round of face-to-face talks between the u.s. and china.

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talks resume between trade representatives of the u.s. and china. we're just four weeks from the deadline to raise tariffs to 25% on hundreds of billions of dollars of chinese goods what are both sides willing to put on the table let's ask bill bishop. bill, great to see you again >> thanks for having me. >> let's start with the very latest about how these talks are going. "the wall street journal" article yesterday backed off the idea there's going to be a big breakthrough >> so i think, you know, we don't really have any news today so far, but going into the talks, clearly there was the belief that the chinese side had yet to come up with any satisfactory offer that in fact, they were just using the -- making the same offers made in the past around buying lots of stuff and paying lip service to more of the structural issues the u.s. is demanding.

xi has decided to make concessions and this group is here in d.c. willing to make a much better offer. i've heard that before, though so we'll see if that's the case. >> what would that look like what would those concessions -- are we talking about the kind floated in the past about a trillion dollars worth of imports or something different >> it has to be something beyond just buying stuff. the trump administration rightfully is pushing for things that are more structural in nature around intellectual property protections, more market economy reforms, state-owned enterprise reforms, et cetera. ultimately what the chinese to v to do, they are pushing forward with a new foreign investment law that addresses some of the issues but they need to really do much more on intellectual property and why this is going to be a real problem, they need to make more movement on state-owned enterprise reform and also come up with what is a credible mechanism for letting the u.s., i think, verify and trust that the promises are actually being kept.

there's a lot of promise fatigue here >> if you are a u.s. company who has done business, thinking about expanding in china, especially if you are one with -- frankly, everybody has technology they're protective of should you take this as a sign that you have to get into this market because we're going to continue to invest there or should you back off and back away knowing that things could really sour between these two countries? >> i think you are not at the point yet where you'd back off but you certainly have to be very cautious and factor in a lot more of the risks which ultimately will mean more costs and less up side for you >> and that's what -- no one likes that sound even if they expand, it will be more cost but will that mean more protections >> again, that's the big question ultimately, you know if there isn't a trade deal, the answer is clear, probably no. if there is a deal, then companies might become much more confident, optimistic.

ultimately these trade talks, i don't expect anything material this week. there may be a joint statement that's what the chinese are hoping for but ultimately when they meet with president trump tomorrow, he is likely to basically convey a message from xi jinping that xi would like to meet with trump, maybe before the deadline because ultimately, the chinese believe the only way they'll get a deal is if there's another face-to-face between trump and xi and ultimately they footbabelief they can get face-to-face with trump they can get a more favorable deal for china up next, a big week for tech earnings apple topping estimates and more more on tap. whether the worst is now over for that company and check on key numbers to watch for facebook and microsoft with results after the bell head to cnbc.com at 6:15 p.m. eastern time for a first on cnbc interview with the

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this is it guys. you ready? to have epix? absolutely. woooo! you'd laugh. oh, ow. [ chuckles ] you'd cry. look, look, look, look, look, look, look,. maybe even laugh while crying. what the fertilizer? sounds pretty great, right? riiiiiiiiiiiiiiiight! just say, "add epix" and it can all be yours. it's easy to upgrade. and you don't want to miss out on everything epix. welcome back apple boosting the dow today after reporting an earnings beat that also included its first revenue decline in the holiday

quarter in nearly two decades. still the stock is on pace for its best month since august, bouncing back after ceo tim cook told them to expect lower revenues after the slowdown in china. let's bring in investor paul meeks who does not think the worst is over for apple. the lead portfolio manager for the wireless fund. why not? >> well, you take a look at their biggest business, iphones, which still are going to be moving the needle more than any other business, even the exciting services business that just grew -- or sorry, declined 15% and their most important geography, china, declined almost 30% and so where do you get the growth and i take a look at the value of the hardware oriented businesses the value of their balance sheet, which is pristine and a nice rather generous value for services and i come up with a total figure, fair value of this company at 137

>> per share >> today after their report, the lowest estimate i saw for fair value for the company by wall street was 150 i think -- >> you think it's a value trap >> even their low is too high. >> you think it's a value trap berkshire hathaway probably has a different point view of. it's not a growth stock but it can be an extremely good value investment do you think that's possible or do you think it's a value trap >> you know, that's an excellent question here's what i think they need to do it's no longer a growth company. it can be a growth at a reasonable price or value stock but in the spring, which is when they always announce the long-term plan for the capital allocation, they have to double their dividend right now they pay $2.92 it has a dividend yield less than the s&p if they double the ividend, which i think they need to, do that gets you to about a 3.5% yield. if the company accelerates its growth, which i don't think they will, then it's reasonable right now it's a value stock and could be a good one but they have to increase that dividend

>> you'd want a higher dividend and some signs of growth returning. what about facebook? they are expected to post their lowest revenue growth yet, granted it's still 26% growth, but what would paul meeks do with facebook? >> you know, facebook i'm just watching it. it has had a nice bounce from the bottom what i need to see in today's report, i think they might be ali l bit revenue light. i think the eps will be solid, but thinks this company will earn on an eps basis, $7.38 and again have that type of e p, s flat in '19. >> no growth at all? >> i need to see some signs that the company is going to grow its eps again. >> is that because they need to spend on these people who need to safeguard the content how are they going to mitigate that in the future >> the nice thing is i think they're going to continue to grow the top line, 20% plus so that's nice. even as you said before, for a

company that's slowing down. the problem is, we don't have a handle yet on what is going to be their permanent operating expenditures the permanent model to handle these privacy issues once we get a sense of that, maybe eps can grow again >> so you're not a buyer of apple. facebook and what are you doing with microsoft >> microsoft, same thipg i expect them to be revenue light. will continue to grow top and bottom line at least in the low teens percentages and i don't think it's a value stock i don't think it's actually ooempb reasonably priced, but it's a staple in any tech portfolio and today i want to see them close to make the numbers. close to make the guidance and show me continue ed growth in their business >> squishy sort of lower bar there. what is a stock that gets you excited? >> you know it's going to be interesting that i say this, but

in my portfolio for a while i've had boeing boeing's announcement and boeing's surfaces business is much more interesting to me than apple's services business. >> great stuff thank you so much for your time today. paul meeks with a surprise pick outside of the tech space today. we have breaking news on jamie dimon. what is happening? >> yes, indeed so a statement from the jpmorgan chairman and ceo jamie dimon about income tax levels and context here this comes in part in response to some presidential candidates and another politicians outlining they feel the income tax and capital gains tax on the wealthy should be going up so it's in part of response so that, but also of the fact that jim dimon has been a supporter of the cut here's what he has to say about income tax level he says quote, i believe individuals earning the most can afford to pay more i have no problem paying higher taxes to address some fundamental challenges and

equities in our society. however, we need to ensure our tax dollars are going where they can be most effective like expanding the earned income tax credit and other programs that support the people in communities who really need it i've argue also argued for fair taxes in the u.s. so america will be the best place to invest and create jobs. that statement from jamie dimon on income tax levels and show he's willing and would understand if they had to go up on the wealthy loiike him. >> thank you see you in a bit that's it for the change don't move the fed decision on interest rates is moments away followed we the live briefing by jerome poll i'll be with melissa and bill on the other side of this break see you then first, it doesn't pay for everything. say this pizza... is your part b medical expenses. this much - about 80 percent...

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and welcome to "power lunch. i'm melissa lee along with bill and kelly here and we're waiting for the fed decision just moments away the first fed decision of 2019 that will of course be followed by fed chair powell's news conference in b about a half an hour let's get a check of the markets. we're off the session highs with the dow up 250 points. s&p is higher by 20 points or three quarter of a percent and

nasdaq is up by one and a quarter percent. leets bring in alicia, chief market strategist and david kelly with jpmorgan funds. great to have you here i don't think anybody's expecting movement on rates, but in term of what he will say, i think the markets are jittery about what he could say that could royal the markets. >> so at this point, i feel like the market is like a spoiled child. so the market wanted to hear patience and data depend ens in december, it didn't and we had a terrible sell off many fed officials came out afterwards and did stay that th fed will be patient. now the market b wants to hear something on the balance sheet and it wants to hear there's a tapering of the tightening i do not think they're going to hear that. >> why is that important the interest rate question i think everybody's clued into not try iing to slight the averg investor, but i think the

balance sheet is lost on a loft lot of people. >> it's important because it's tighteningly quidty all over the world and you really first felt it in emerging markets and yoros the market is concerned about the pace and the level at which the fed is going to wind up. it wants to see or hear a signal that the fed is opening to going slower ch i don't think they're going to hear it today >> is there still a disconnect between where the markets are in that the fed is not going to want to signal an end to tightening an end to rate hikes, to balance sheet run on but the markets want to hear that and they expect to hear that. >> i think the market's going to get a good deal of what it wants to do. first of all, a statement itself they're going to have to tone down their language. we think the fed only does one more, probably won't want to do march. so i think they're going to tone that down then on the balance sheet, the real trick is can they say they're easing off the

monetary tighten, but they're applying the brake, but not because they see a crash in front of the highway because they're reaching their destination. they're getting closer to where they want excess reserves to be in the banking system, where they want the long-term interest rate to be there's no real problem in the economy. we're kind of there or almost there in terms of monetary tightening >> it's a tight rope >> it's really a balancing act today. so on with one hand, the fed needs to signal that the economy is good enough but not too strong and the other hand that the economy isn't going into recession because it doesn't want the market to take the signal it's on autopilot it's a tight rope here and i expect jay powell to do a good job with it. >> they want to say we're not doing anything further because we don't need no not because there's a crash. >> he's going to smile a lot we're not scared don't worry. >> and the markets will read

something into that i'm sure >> a piece of paper. that's what the piece of o paper, too does he have it or not the talk about the balance sheet. >> that's when you call on the markets. when he read off the piece of paper. let's head to washington, d.c. for the fed decision on interest rates. s&p 500 up three quarters of a percent. >> federal reserve leaves rates unchanged at 2 tnt 25. the fed says it will be b quote patient in figuring out its next moves when it comes to interest rates and hassal the terr areviy to say it will make changes if negative separate statement on the balance sheet. on the issue being patience, financial developments and muted pressures, reason why it is patient now. the fed removed the stam, quote, some further gradual increases it's no longer in the statement. the fed no longer says the risks are balanced