didn't get for 2018 so far, but also, keep in mind that the 2018 incentive payment was less than 1% of the total that's available to foxconn so we've got a long way to go on this >> that's well put rick, thank you for joining us rick romell. that does it for "the exchange." i'll join tyler on "power lunch" which begins right now. >> indeed it does, kelly we'll see you in just a moment i'm tyler mathisen welcome, everybody new today, fresh fears about trade and global growth. what should investors do now and the biggest financial merger in a decade, $66 billion creating america's sixth largest bank by assets which of the next takeover targets? we'll look at that shares of dunkin sliding missed the mark there. ceo will tell us about that live the dow, the s&p looking at their biggest one-day drop since

the beginning of january "power lunch" starts right now and we do begin this hour with that selloff on wall street. bob pisani tracking the action from the floor of the new york stock exchange and kayla tausche with us in a moment. headlines on today's trade that sparked the drop and steve liesman with new concerns about global growth. bob, you first >> the markets have three problems today that touches on everything you just mentioned. trade, global growth and most importantly, market valuations just take a look today besides the headlines on the trump chief meeting and meeting, or not meeting before that, sizable business and trade talks, he's the optimist in that particular group that didn't help markets europe and england and then european union, talk about lower forecasts, growth forecasts, depressingly lower numbers and

the emphasis of what i've been doing for the last week or so, price these stock markets. the valuation of the stock market, so far, substantial school that believes there will be zero percent eps growth in 2019 if you believe that right now, the market is about 17 times folks, very expensive. historically, the market grows 6% earnings per year 15 times multiple. if you believe a zero percent earnings growth, then you have to believe the market is overpriced right now the bulls have got to convince everybody that those people who think it's going to be zero growth this year are wrong back to you. >> robert, thank you let's get to the headline moving this market president trump probably won't meet president xi. kayla tausche broke that story broke that on the story and the main question people have now is whether this means tariffs are coming or not. >> kelly, i think it's important to focus on how the relationship developed over the next weeks.

we're told by a senior administration official it's highly unlikely the two will meet before that deadline, we should also note that the president, president trump, still remains predisposed towards a deal with china and two leaders still expected to meet that meeting, i'm told, could still happen in the near future as the president tweeted and could be shortly after that march 1st deadline yesterday, ambassador bob lighthizer, the u.s. trade representative was briefing some lawmakers from the senate finance committee. they came out afterwards and said, what lighthizer communicated about what happens on march 1st he said he was not very definitive about that but most likely, the course of action is tariffs stay exactly where they are on $200 billion of chinese goods. >> so most likely, you're reporting indicates tariffs will stay where they are, which is 10%, even if this meeting doesn't happen before march 1st

or doesn't happen at all. >> that is if the negotiations are still happening in good faith. what china is asking for is part of the deal to have all tariffs removed entirely there's no incentive for the u.s. to do that on march 1st if they don't have this deal worked out and some within the administration say there's no incentive for the u.s. to do that, even as part of the deal maybe one option would be to selectively roll back some of the tariffs and if china doesn't follow through, then they could put those tariffs back on. perhaps a small sign of good faith to start rolling back some of these penalties, but that they still are wanting to make sure that there's some enforcement mechanism in place here, but we should note that the way these are structured, without a presidential memorandum, the tariffs would automatically jump to 25% on march 1st but if the president feels they're close to a deal or working toward a deal, with the piece of paper and signature and

could keep everything as status quo right now. >> he would need that paper and signature to make that case. great reporting. thank you so much for joining us kayla tausche with the latest on this story this coming on fears about global growth, another concern that's been weighing on markets today. steve liesman is here with more on that. >> thanks. markets months ago fretted about global ending their monetary policy global policy reversal, dialing back and some cases, even easing interest rates global trade tensions and concerns over brexit half a point to 1.2% some analysts now saying no hikes. u.s. officials still see the u.s. economy on solid footing but global economic weakness is clearly their biggest worry. >> you look at what the risks are and i think global risks are probably the most significant

ones and that will be and i will be looking at over the next six months is how does that e involv volume' evolve >> australia's bank shifted to neutral and india lowered rates. easier for banks to lend you heard right here yesterday at this time, former fed chair janet yellen said that gathering global clouds could prompt the fed to cut rates as the next move >> steve, thank you very much. appreciate it. what do all the headlines about trade talks and global growth mean for your next investment move? let's bring in craig hodges, ceo of hodges capital management and ron temple head of u.s. equities and co-head multi-asset investment with lasard asset management craig, begin with you. you see lots of opportunities pretty much everywhere but especially in small caps and explain your thinking. >> yes, small caps which were

leading the market up until september got blasted down 35% from high to low there in the kind of october, september to year end range we've made about half of that back but that's where the real opportunities lie. the small cap area is, of course, the most inefficient and there was a real lack of buyers, kind of saw some crazy mispriced stocks and at the hodges fund, we've seen more mispriced stocks than we've seen in a while the market may not do a lot from here, but we see a lot of real opportunities out there and stuff that a lot of people just aren't following >> it sounds, craig, quickly please, like you're not particularly concerned about the trade talks and not particularly concerned about the retch atche down of global and u.s. estimates. >> parts of the market are

expensive and so many are inexpensive left for dead and that's where we're trying to focus and, you know, we had a 25% growth rate last year in corporate earnings i mean, what's wrong it going sideways or up 3% or 4%? nothing is wrong with that so we're just looking for opportunities and we see a lot of those opportunities out there right now. >> you, on the other hand, are concerned most particularly with the progress or lack of progress on the trade front and you see the trade friction continuing, not for a matter of weeks but maybe a matter of years. >> absolutely, that's the case i think the trade friction, even if we reach an agreement between now and march 2nd, i would caution investors about not getting too optimistic about this being a permanent solution. instead, i think for a multiyear situation between the u.s. and china where it's no longer just a trade issue but also an issue of thinking about a strategic adversarial relationship and so i am quite concerned that march 2nd is one date that people are

watching for, but should al be conscientious about the bigger picture in terms of the chinese technological advances >> ron, that being the case, as you heard kayla reporting, it's still likely that the u.s. and china are going to come to some kind of agreement to keep the 10% tariff in place and maybe get rid of it if they show progress and the 25% scenario might not necessarily be that likely does that mean investors can look past it >> i think maybe the 25% scenario like less likely in the next four weeks, but i think we should just keep in mind this trade dispute only started the last year or two and i think there have been many years before that that companies have basically endured certain conditions they felt might have been unfair and reached a breaking point u.s. administration reached a breaking point i think it would be premature to think this would be concluded so rapidly. the way i'm thinking about the trade dispute is we might have periods of time with elevated

tensions which are then followed by periods of time with some relaxation intentions. right now, we might be in the relaxation zone, but i don't think the strategic situation will be resolved in the next few weeks, so i think, by the way, if i could tie it back to the comments on stocks, important to think of individual security with this trade tension, it's important to be security specific in terms of focusing on fundamentals. >> finally, let's talk about the dollar for a second. bob has done reporting about the first quarter earnings might not grow at all at this point. the dollar has been strong just the past week an every time we get a headline about slowing growth, does that mean we have this as more of a head wind going into 2019 than we thought? >> i don't even know how to really address that. that's one thing about small caps is they don't have to have your big dollar issues or even your tariff issues because most of what they deal in is domestic and most of what they deal are

u.s. currency. so, you know, the opportunities are there. i think you could find a lot of stocks, commercial medals, a lot of retailers that are trading well below their growth rates. >> banks, craig? especially in the small caps a lot of financials in that index and a big bank merger today. >> yeah, there was which was, everyone was looking for the consolidation and getting a little bit we're not too crazy about the banks. there are a couple of real nichy banks like a triumph bank that has a lot of opportunity but the consumer's strong. the consumer's still about 75% of the economy and, you know, wages are still going up, full employment, the lowest percent of debt on consumers so the backdrop is not all that bad. >> craig, ron, thank you very much we appreciate your time today. >> my pleasure coming up, it is the biggest bank merger since the financial crisis and just the beginning? we'll ask if more bank deals are

coming plus, dunkin brands is tumbling on the back of earnings the ceo will join us to talk about what he's seeing from the global economy and especially in china. plus, all over today's market selloff dupont, pfizer, goldman sachs, onthe worst performers in the dow today. "power lunch" will be right back

we are all facing an increasing set of economic realties to invest more and more in technology. each one of us doing fine today, we both recognize that to go forward, move forward with the best premier financial institution, we needed additional scale so we could make the technological investments necessary to provide the very best digital platform >> that was bb&t's ceo kelly king explaining the reason behind his company's $66 billion merger with suntrust it is the biggest banking deal since the financial crisis and it creates what will now be the nation's sixth largest bank by assets dominic chu with a look now at how regionals have been doing compared with their biggest brethren >> so much, tyler, has been paid attention to yield curb and interest rates if you look at the etfs to attract major parts of the

financial market, the financial sector spider which tracks banks, insurance companies, broker dealers, asset managers, the overall s&p 500, the bank etf has actually underperformed the broader financial side of things so generally speaking, the banks have been doing a little bit worse off. this deal is interesting only because you can see the gap in performance because all three of these charts indicates perhaps maybe a little bit of underperformance is resolving itself now if you take a look at the biggest banks out there, you mentioned this merger between suntrust and bb&t will create the sixth biggest bank in america. so who are the biggest banks in america right now? traditional lending-wise by market cap, j.p. morgan chase, number one and bank of america number two and wells fargo number three and citi nourm four and u.s. bank corp. number five. it will be interesting to see if there's other regional banks that combine they're about the only ones who can.

these guys cannot get bigger than they are. >> dominic chu, thank you. what does the $66 billion merger mean for the banking industry? with us now is tom nicho welcome, tom. >> good afternoon. >> what interestione interestine say bb&t and suntrust are combining, we thought both might be acquirers down the line what do you think the real implications are of this >> i think there's a couple of implications from this if you want to be a bank in the retail sector of the market and compete with the big companies we were just talking about, you really do need to have scale in our industry it's been talked about, but bigger banks are more profitable recently and these are about two good banks trying to take advantage of scale and profitability but it was a surprise because we thought both

were buyers, not necessarily a merger of equal candidates but i think scale is the first point. >> absolutely because especially in the digital age, you need that to compete with the nation's largest bank. u.s. bank, number five, may not have quite as much bandwidth to grow because of the regulatory burden what are the names further down look like they're in the same position to maybe pursue these mergers of equals? >> i think what's been interesting since dodd frank was passed is that there are these regulatory thresholds for where more regulation was going to be imposed on companies because of their size and there's a $250 billion threshold right now. i think banks will cross that 250 carefully and in this particular case, both banks were already above the 250 so they're already doing the stress test, so they have some room to come together i think if you look at it by segments, you'll see the above $250 billion banks that are

already stress testing, being maybe a little bit more friendly towards adding and then there will be other banks below who would prefer not to go over the 250 with consolidation >> so tom. >> i think t goiit's going to hn up and down the whole spectrum. >> that's what i want to talk about. the story of consolidation certainly has been the fact and when you look at the mid sized regional banks, you can see absolutely the reason why because those big guys like chase and bank of america and wells fargo are coming into their markets and have to compete but i'm also very struck by the fact that every few weeks, i seem to notice a brand-new bank popping up on a street corner in my town in northern new jersey wherever it looks like the little guys are actually being able to sprout relatively comfortably. talk about that. >> i think it depends where you are. so you live in new jersey which is a very dense market where there are advantages to having

branches, but the reality is across the nation, branches peaked about the time of the start of the crisis just before it and there's actually been a decline in branches. what's even more interesting you'll see is the biggest banks in the nation are opening branches in metropolitan areas and intend to be closing them in suburban and rural areas so they're reusing structure and technology and features with their digital employees. >> i agree i see branches closing of the big banks. i see chase closing down some branches brand-new banks i've never heard of that seem to sprout up. >> i think the ones you maybe have not heard of, are banks from other areas looking to get into the new york city metropolitan area because there has not been a lot of new bank formation and handful of new banks started each year.

one of the things we're talking about, the two big banks combined, they could be successful in their merger and still could be a great environment for local regional competitors like a pinnacle financial, a union bank share, center state and south state, these are all banks that are in the core markets that could get a short-term boost because of this merger because of the dislocation. >> maybe, tom, i read past it. will they come up with a wholly new invented name? >> it is interesting they've not announced the name and will by the time they close the merger i think that's yet to be determined so still we're all paying attention for that >> tom, thank you very much. tom michaud joining us

twitter tumbling today ttt. abuse on services that hurts user numbers or helping in other ways we'll look at and the nasdaq 100. tech leads lower and stocks, may be a dozen or so in the green. the charts that predicted this pullback the "trading nation" team will take that one own next risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.

president trump addressing trade moments ago in the oval office let's listen in. >> there could be. i hear they're working on something. we'll see what happens but i certainly hear that they're working on something and both sides are moving along we'll see what happens we need border security. we have to have it it's not an option let's see what happens >> testify tomorrow, mr. president? >> he's an outstanding person. i would say, if he did testify, he'd do very well. he's an outstanding person very, very fine man. thank you all very much.

>> that, i don't know. maybe, probably too soon >> well, he didn't really talk about trade, did he? that i heard but that's what it was billed at. he did talk about border security and another item. let's bring in eamon javers now for more you know, eamon, i look at those things i know you've been in them they're loud, they're unruly and i think in part, it feeds into why so many americans have a dislike of media

>> yeah, look, everybody wants to get their question in and there's only a few opportunities around here to do that so that's why you hear all the reporters shouting just as many staffers shouting let's move along, people, let's move along, people it gets to be loud there was a brief exchange there. >> i'm too polite, i'm afraid. >> it's a physical game. >> it's a physical game. >> anything? >> there was a discussion. it was tough to hear because of the wranglers shouting to the press to get out of the room, but we're told by reporters in the room that the president was asked about a meeting scheduled with president xi and he replied, not yet not yet. so that's what you heard at the end, not yet so that's just a little bit of an indication of the president's state of mind. we'll have to press for more here but clearly, this white house doesn't feel like it's ready to go ahead with a xi jinping meeting on trade before

that march 1st deadline. that squares with what we've been hearing behind the scenes with what the president is saying in front of the scenes, in the sense that ultimately, they want to get a deal done and have the president of xi jinping be able to ink something on paper when they finally do meet. if they're not ready too that, it's unlikely they'll have that meeting. >> eamon, thank you very much. eamuaeamon javers at the white . a slump at the desk took down the index for the month and down at 117 points todd gordon with tradinganalysis.com and twwelco to you both. you're watching this nasdaq quickly. >> it's scary this resistance keeping the market down. it seems to define the whole market and come up to test it. traders will look at trace

levels roughly two-thirds and 61% this is a resistance level that should have held it is holding. i'm a little nervous about that. so i think for now, it looks like lower is this long-term? i don't think so but a couple of days of volatility >> okay. so if we're lower for now, mark, you have a name that you think can do well in this. what is it >> when we look in general, we like software more than hardware or semis when you look at a company like sales force, they've got a lot going for them yes, the valuation is high but it's really justified. they have sticky customers it's very expensive to get that platform customized and off the ground they have recurring revenues, worth more than one time revenues and i believe they're essentially recession-proof. i think most companies are going to cut other expenses, whether it's labor or marketing or advertising, far before they decide to cut their crm

programs i think it's a great stock and it's going to stand up over the next few years. >> 40% in one year you think it will keep going guys thank you both for more trading nation, head to our web site or follow on twitter @tradingnation all over the sell-off. 265 right now. 400 at the lows. plus, how all this uncertainty could impact the ipo market. and dunkin brand sinks on mixed results. the ceo will join us next. we'll keep that coffee hot for you. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> volatile markets are a good time for long-term investors to review asset allocation plans on core holding volatility will probably do more damage to your portfolio veifd accounts generally fare far better when volatility increases.

i'm sue herera here's your cnbc news update at this hour. a russian spokesperson said the white house is suggested of using military intervention to ease the political crisis in

venezuela could be a violation of the united nations charter. she called the situation in venezuela alarming rome's champion airport was temporarily closed after three world war ii era german bombs discovered during maintenance work on the tarmac army experts working on safely removing the bombs partially visible. flights diverted to the other airport. woody allen suing amazon studios claiming breach of contract for refusing to distribute "a rainy day in new york" and then terminating a four picture production deal without cause. seeking more than $68 million in damages. in baseball, the double a heart fort say they'll stop selling peanuts to make it safer for allergies. it's the first to forego peanut

sales. you're up to date. that's the news update this hour back to you. >> sue, thank you very much. about 90 minutes left in the trading day. a check on the sell-off this hour dow down 263 points. about 100 points off the lows. s&p down 32 and nasdaq down 99 worst performer with a 1.3% drop and plunging >> markets, we're off the lows but oil prices generally lower with west texas intermediate down for the third time in four days down by about 2.5% $52.74 the last time there brent crude, 1.5% declines worries persist. were not helped by the meeting with president trump and xi likely not take place before march 1st. add that to the growing other things happening the u.s. oil report showing a build in stockpiles and get the makings of this kind of down market we're seeing. still up roughly 23% since

christmas eve. tomorrow, remember, we get the weekly data on rig counts from baker hughes down 4% at one point off the lows back to you. >> thank you very much we appreciate it shares of dunkin brands on pace for the worst day since 2015 reported lower than expected revenue and basically flat store sales. joining us to discuss the growth plans, both in the u.s. and globally is dunkin brand ceo and president david hoffmann welcome. good to have you with us. >> hi, tyler. >> the stock is suffering today. is the market understanding correctly or overreacting to numbers that were a little shy of estimates or on revenue maybe a little more than a little? $319 million versus 330 or so. >> clearly, tyler, i believe it's an overreaction 2018, as i mentioned on the call this morning, was all about a foundational year for dunkin when i came in here, one of the

hallmarks was to put in a blueprint for growth i've been saying that for a while now. the things we did last year, they planted the seeds for real transformation and pay real results in growth for years to come it started in q1 with menu simplification, that was all about short-term pain for long-term gain that opened up q2 for some menu innovation we got into the first ever national value campaign. we purchased the app ip and brought that in house and new agencies, creative agencies in and a 7-year-old brand all leading up to the espresso launch here in q4. look, we feel really good about what we put in place and 2018 and now it's 2019 and looking forward to the results that are going to get thrown off from that. >> i love the frozen hot chocolate, i have to say, david. very, very good. >> thank you >> let's talk about the digital

transformation are you, what percentage of your sales are coming through the digital app and how do you expect that to grow other tivere >> 12% sales come from our loyalty, our perks, and within that, 3% is our mobile order in-pay, what we call our own to go it's a huge piece of our business it's where everyone is trying to get to and like i said, we started it, got into this early five years ago we rented it for a number of years, basically, and then last year, made the decision to purchase the ip, bring it in house, we felt it gave us more flexibility to do things and so bringing that in house was all part of the strategy of the foundation >> has the digital ordering met your expectations at 3%? where would you like to see it and you pick the time frame, three years or five years? >> look, we know that's a big

part of how the consumer wants to use this and it's all part of our unparalleled convenience we haven't made any public statements but we know it's going to go north of that for sure and so we've got a new head of digital in place here and she's excited about what we're laying in terms of the groundwork we look to go into a test on multi-tinder which is just going to open the funnel for us. we're getting into things like guest checkout, the decoupling of perks, loyalty program on the go so we know this is part of our super convenience strategy and excited about what this is going to do for our business for years to come. >> introducing espresso is a big deal is that because your core customers are demanding it or see an opportunity to peel off customers from starbucks >> look, the blueprint for growth was always about a positioning to move as a beverage led on the go brand and, you know, we've always been number one in hot and ice dripped coffee and the natural evolution was to get into

espresso and so we made a big emphasis in quarter four to do installs with new equipment. we needed new equipment to get the right quality extraction from the bean and q4 was about that launch and our campaign was about sipping is believing we've accelerated out of the quarter. seen about 200 basis points growth in the category for us and i think the other headlines is we like what we see in terms of the consumer reaction it skews younger, it skews towards the afternoon, we get new guests and that important switcher we get those switches back we like how that's performed over the first ten weeks we haven't seen any impact in speed and that was really important. like i said, nobody is waking up wondering where they're going to get a latte but a great dunkin latte at a great value in the marketplace at the speed of

dunkin we think that's our killer winning formula. >> i'd love an espresso right now. we'll have to go pick one up china a little bit, how are you tracking there and how tough is the competition and what kind of traction do you have >> yeah, great question, tyler you know, i spent a large part in international i know that part of the world very well. i got back from a two-week trip in january our business had a solid year in 2018 really focused on the store experience delivery and channel those are the three in one strategy we're focused on. in terms of china, we're, we've got about 100 units over there it's not a material part of the business i'm excited. i spent a lot of time in my previous role in china and excited about that marketplace but our business isn't big enough for a material impact at this point. >> david, thank you very much. we appreciate your time today.

>> thank you appreciate that. rates are on the move. rick santelli is tracking the bond action. >> we had a bond auction 19 million of them left the treasury for a total this week, tuesday, wednesday and thursday of $84 billion of various. i gave the auction a "c plus," notable there. the direct going into the treasury to put their calls for how much they'd like to take down of that supply and that was a level we haven't seen. 16% since december 2014. look at month to date of the 10 year note yield and see we've been rounding down much of that pressure from global issues and putting out statements to that effect don't underestimate the pressures put on the yield curve. if you look today, there's your year-to-date 3% is always a stopper and 96.5

is where we're at. many in the bigger picture looks like it wants to go to 100. >> ouch. thank you. 2019 is supposed to be a big year for ipos but does the current economic environment make it a bad time for a unicorn to go public top vc stay with us what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything?

hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

the food delivery company postmates with ipo and fear about global growth, what does uncertainty mean for the pipeline $20 million in asset management. a long list of companies that have or may be looking to go public let's bring in devin pereck. welcome. good to have you with us. >> thank you for having me here. >> 2018, vc firms and others of a similar sort put a lot of money to work across the horizon. do you think 2019 will be

similar? will the pace quicken or what? >> you know, i think we see going into the new year, the pace in q1 probably a similar pace to last year. thought that might have an effect on the private markets and notwithstanding the volatility today, i think stocks are up, software stocks in particular are up pretty significantly from their lows. so i think in general, the private market continues to feel very healthy. >> a lot of companies on the other side came out into the public markets in 2018 and it looks like 2019 may be even bigger. there are lots of big, shall we call them 747s lined up on the runway >> yeah, and i think the markets are likely receptive to them i think there's still a pretty strong desire in the public markets for growth and i think that when you saw the volatility in q4, fundamentally, i think these stocks got rerated because people were afraid the growth

that had been experienced the last three or four years was not going to continue and i think what you're seeing in q1 is a company reporting relatively strong numbers and the stock prices are reflecting that i think if you look at the comp universe, both in the software space and largely the internet space, very healthy. which i think is going to lead to a pretty good market for ipos in 2019. >> and your ipos last year did very, very well. d docusign, that's tough to do >> i think we've invested in great companies and, you know, while i don't talk about the particular performance of our public with shareholders, i think our strategy is if you invest in high quality companies with great management teams and, you know, good markets, market positions continue to increase, they generally do well but i think if you were to look

at the broader index, you see a lot of software businesses perform well and i think the underlying trends, people invest in software. people invest in software, the remedies increase but people buy software, very high ry so i think one of the things we believe and was true in the last, we had economic volatility before, you have don't see the same cyclical impact in markets where there's significant roi associated with that investment. i think there's more economic rezyl yenls in the business model. >> there's a lot of things lined up in the technology area. one of your companies is calm, a meditation app i've got to go find out more about it because i could use a little zen in my life right now but if you wouldn't mind, among the companies that people are talking about going forward is a lot of high value intelligence work why would a company like that want to, i get the obvious

reasons but why would they given what they do, want to be, to open up, lift the kimono in the public markets >> it's a great question we're not an investor. the company has been -- and the reason they have not gone public is to raise private capital at increasingly high valuations. the challenge is when you raise -- i think in this case, a billion dollar or more of options and then you need to provide liquidity for those shareholders and combination of employees or investors that becomes an imperative at some point. private markets have allowed companies the luxury of staying private significantly longer than they did historically. >> thank you for your insight today. >> thank you. >> appreciate it. shares of twitter falling today by nearly 10%. y ll recent moves by the company

paoff in the long run? a top twitter analyst is about to join us ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest.

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit welcome back twitter shares are on pace for the worst day since december down almost 10% but they dropped more than 20% in the month. the company beat on the top and bottom line. monthly active users fell and came in line with expectations the outlook also looked like break it down with anthony, senior managing director and

fundamental research analyst welcome. >> thank you. >> what's the main problem investors have with twitter right now? >> i think there are three parts of the near term metrics decelerating and what investors focus on all day long. number one, the daily active user growth, you know, just that's 9% and, you know, but when you put it in the context of maus decaylee anthonying aele want to know will that continue to be strong and reaccelerate and then the third one, the biggest one is expenses, right >> yes. >> the company is guiding us as analysts to more spending in 2019, on health and security and so that's compressing margins in the near term and what i'm talking about all day. >> there's similar issues with facebook and instagram and trying to basically staff up and

police their content why is this worse for twitter and does it raise questions for them again about needing a buyer? >> i don't think it is worse for twitter. i think that this is an example where expectations of us, analysts, going into this outlook for the year were elevated going into the call i any you take a step back and look at operating expenses are growing about 20% year over year for twitter, it is much lower than operating expense growth for facebook, for example. and so, you know, i don't think it's -- just think it's a little vers versus elevated expectations and the time spent on the platform is much less than for facebook and it is possible that it's more manageable for twitter and that once they kind of puts some new investments in place that they can get back to leveraging in the future. >> is this a case where they

have to get used to a much lower multiple going forward running into the problems to reset expectations >> you asked about does it need to be sold, i disagree i think it's a viable, independent company. it has ebitda and free cash flow and earnings and not a need to raise capital and i wouldn't look to that i think there's long-term value here and asking about valuation. and, you know, i like to say there are riches in niches in a sense that this is a business where it's not facebook or google, not the mainstream for 2.7 billion users but the users that use it, i'm one of them, are very active, are very intense, are very sort of have this need of what's happening now, realtime news, trump, global leaders, sports events, right? it's a very unique use case and the value compounding over time. the market cap isn't as great but hard for stocks in the tech world to work in the near term

when you have decelerating metrics. >> sure. we'll keep that -- yeah. >> if it were to trade down another moderate leg let's just call it 8% to 10% i'd be a buyer. >> okay. >> but it's the kind of stock we're price sensitive. >> riches in niches. anthony, thank you. >> thank you, kelly. check please is right teafr this ♪ ♪ let's go from plans... to full-blown production. ♪ ♪ let's go from being on-call... ♪ ♪ to being on-line. american express can help move your business forward with loans, vendor payments and buying power. chat with one of our 4000 specialists and let's make it happen.

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>> welcome back. villanova leading by 9 last night, creighton scores. villanova wins by 7. here's the shot. clearly too late after the clock expires. who cares? gamblers care. villanova favored by 9 and the incorrect call costing people. they have to police the outcomes better. >> thank you for watching "power lunch. >> "closing bell" starts right now. ♪ ♪ running out of breath ♪ but i got stamina good afternoon and a very warm welcome to the "closing bell." i'm wilfred frost. >> i'm sara eisen. >> just made it. >> trade war fears send stocks lower. whether you should trust any rallies until a deal is timely reached with china. >> i thought i would get through the "a" block on my own. >> i would never let that happen. bb & t buy