caring and i think that people can see the difference if doing a great job becomes a core part of wells fargo business, i would be so happy. >> kai, thank you for joining me built company for his own grandmother. i'll join ty on "power lunch." thank you. >> kelly, thank you. i'm tyler mathisen welcome to "power lunch. new at 2:00 today -- trade talks. the american economy and taxing wealth president trump's key economic adviser kevin hassett just moments away walmart with the best holiday quarters in years. retail right now and what's in your plain vanilla index fund? much more than you might know. the dow, in the meantime, the green and the nasdaq trying for a seventh straight day fof gains "power lunch" begins right now

we begin this afternoon in washington where new trade talks with china are under way back on the home court now kayla tausche is in dc with the very latest. hi, kayla. >> reporter: hi, tyler good afternoon deputies from the two countries were meeting this morning beginning around 9:00 a.m. at the office of the u.s. trade representative joined later in the week to wrap up these talks by the principles of both countries. lighthizer and china hawk peter navarro as well as the commerce secretary and nec director larry kudlow this is the last round of trade talks with china before the president, president trump heads to vietnam for his second summit with north korea's kim jong-un and before that march 1st exploration of the temporary trade truce, trump said multiple times, be willing to extend that if talks are going well.

as for what's on the agenda this week and what is left to essentially cross off the list before a memorandum of agreement could be notched, well, a ustr spokesperson said we have until march 1st for negotiations for a constructive process, not discuss specifics or negotiate publicly so far, the u.s. approach though has been focused on making these permanent structural changes that are enforceable to the chinese economy. they've also talked about cyber security as well as currency stabilization while china's focus has been on making a pledge to close the u.s. trade deficit and also getting the u.s. to roll back those tariffs. we'll see if any of those can be agreed upon by the end of this week guys >> we'll be tuned for every headline on this, any developments kayla, thank you kayla tausche. president trump starts pushing for raising tariffs on european auto imports. philip lebeau with a closer look at that for us phil >> the commerce department finished its lengthy

investigation into whether or not european auto parts imported into the united states are a threat to the country's national security remember, that is the justification that would be needed by the president in order to say, yeah, let's put an x tariff, 20, 25% on the imports the president now has three months to act. so he's got it right now unclear when he'll release it publicly but then could make a decision at some point you know what? we think it's wrong and here's the reasons why. therefore, there should be a 25% tariff on autos imported from europe as you look at these numbers, in 2017, just under 7% of the vehicles sold in the united states came from europe and we should point out, the current tariff for those vehicles, 2.5%. it would be 10 times higher if the trump administration moved it all the way up to 25% the eu has a $35 billion auto trade surplus with the united states that is something they want to

protect very much and the reason they want to protect it, because they've got their own plans. over in europethat they want t continue moving at the current level and with the economies in europe, not in the best shape, that's a key focus for the european lawmakers take a look at shares of daimler. one of the reasons the stocks under pressure is the threat of tariffs but also, when you have the global economy and especially china slowing down, not a good time for investors and in particular, the german automakers down more than 25% this year. guys, back to you. >> phil, thank you very much philip lebeau in chicago and joined by kevin hassett. the chairman of the council of economic advisers. great to see you, sir. >> thank you, great to be here >> as you look back at 2018, what do you think the final growth number will be and as you look at the current year, 2019, do you think the economy is slowing and if so, by how much

>> well, first, for last year, beginning of the year, about a year ago, we took a lot of flak for saying we thought economic growth would be about 3.1% in 2018 but if fourth quarter comes in, what we expect, about 2.5, 3.1 for last year will look spot on, so the question going forward is if some reason why we would change our models and i know there was some disappointing numbers in january and the retail sales disappointing, but smoothing through the ups and downs has rebounded and stick to our guns to say we're going to have another 3% year and the way to think about it is we started the year with a 300 jobs number and most quarts that start with the 300 jobs end up with growth north of 3%. even the slowing in some of the indicators i don't think is a serious thing. >> still another 3%, year back-to-back 3% years would be something to crow about.

we hear often enough it seems a little bit like it stands out and we hear some analysts say they wouldn't be surprised to see the country dip toward a recession toward the end of this year or in 2020. what would you say to them is that a reasonable fear? >> there's people who say that all the time there's an enormous amount of momentum, as you said. we've got a 3% year in the bag pretty much for last year. this year, we started with a 300 jobs number and a lot of momentum forward and don't forget the capital spending will produce output this year factories last year and flip the factories this year and get growth from that so i really have a hard time seeing a recession developing this year. the fact is that unconditionally, which means if you don't know what year it is, the odds are about 18% for this year, the odds got to be way below that 1% or 2%, something like that. >> it does appear if tthe consur is in great shape but not happy

over the tax refund issue. what mistakes were made in retrospect that could have corrected this and is it just a one off and will things be better next year what's your thoughts on how this played out >> first, we can talk about consumer sentiment that rebounded in february but i don't think it's a mistake, right, to make people withhold the right amount and so, what secretary mnuchin and the team did in february and really should get gold stars for this, they revised withholding so the tax cuts go right into people's checks right away. so people got their tax cuts and visible in their checks last february and that's one reason why we had a 3% year last year >> feel like they've spent it along the way and the usual amount that's available to pay some bills maybe piled up or trips this time of year, that number is not there. i understand what you're saying but doesn't help the people feel like they weren't prepare for this >> the technical staff is

disputing these stories. i haven't dug into the weeds in the fullness of time >> one guy's refund half of what it used to be. >> so the question is would you rather have your money now or a year from now? >> they're not furious but it's an inconvenience and for some people, a pretty big one. >> sure, and we'll follow it closely but really early in the season and we have to see. most people are filing in april and the treasury staff, i think, they've disputed to me some of the accounts we've seen out there with that issue. >> we want to get to trade we want to get to the possibility of auto tariffs on europe but i want to come back to something you said a moment ago and that was that the capital spending that went into the economy in the form of factories built and expanded last year will produce output this year. give me the numbers because i think there's some suspicion that some of the money is that derived from corporate tax cuts

really didn't go as much as we would have wanted into capital spending but rather went into buybacks and that's been a criticism of the 2017 tax law. take us through the numbers on capital spending versus buybacks. >> thanks for that question. i love the numbers the fact is if we go back to the fourth quarter when the tax cuts were passed, then the cost to capital, which is the key number people look at when they're deciding whether to build factories or buy machines, at about 9% in 2018 which we said would make capital spending go up at 9% a 1-1 response with the numbers through the third quarter, counting the fourth quarter equipment was retroactive and then total capital spending up 80% last year it's almost exactly what they said and 8% increase output this year. >> i'm sorry, just to follow on what tyler was saying, that goes a long way towards help explain some of the benefits at the same time, look, 2020 is

approaching. you've heard a lot of proposals as ways of raising revenue to say, we're going to increase the capital gains tax rate and dividends tax rate so on, so forth and they point to the deficit, in part caused by tax code and jobs act is there an efficient way to raise more revenue >> it's to grow at 3% instead of 2% but we were looking at the numbers last week and for goods producing workers. people that president trump, a heck of lot of goods producing jobs, went up $48 a week and $2500 a year and that's going to be poured back into the economy. it's going to create consumption for those folks and they'll have to pay more tax too because of the higher income. that's how we get the books balanced in the end with growth and not higher tax rates you saw a proposal for a wealth tax and for cnbc viewers, imagine if there's a 3% wealth

tax. the way ewe figuyou figure it os compare it to the income from the wealth the risk-free income for wealth is less than 3%. so a 3% wealth tax is more than 100% tax on capital income i don't know any economist who thinks a tax rate greater than 100% on any kind of income is going to produce a positive outcome but that's the kind of proposal we see in washington right now sadly. >> the latest cbo numbers gave you credit gdp growth $750 billion a year relative to the previous projection, a huge increase. cost a little bit too, but still thinks we'll have trillion dollar deficits by 2022. is it possible they'll be proven too cautious based on growth because even this year, we're starting off a little bit weaker than last year. >> if you go back about a year, a little more than a year, summer before the tax cuts passed, say 2018 would be in the low twos and then got the low threes, so pretty much they keep going back to this fact that

we've got a two or one percent growth rate atraktitracting the economy but i think that view going forward, economists around the world accepted we have a new normal of low growth that was almost given to us by martians and just bad policies, if we fix them, go back to just normal and really, almost for two years of the trump administration, we have gone back to normal and think that will continue and as it does, we expect the cbo will recognize that as well. >> has the tax cut paid for itself or will it? >> it certainly hasn't paid for itself yet this year the thing you have to think about, there's lots of different components of the tax cuts like, so, for example, the child credit the way that the corporate income tax could pay for itself is all the investment and outout and hi -- output, and child care credit, a much lower growth but

1% a year more than cbo said, then absolutely. >> let's switch to trade and tariffs, if we might and try to get a two for one here give us the latest news on the status of the trade talks with china, which resume this week in the united states. do you think it is likely, unlikely, somewhere in between that those tariffs will go up from 10% to 25% on the $200 billion worth of goods and then walk us through what's happening with europe. does europe need to be worried that the administration is going to slap tariffs on their auto imports? >> you know, the president and the rest of the economic team, we were briefed by the folks from china over the weekend. that's been covered in the news and, you know, my job right now is to not get in the middle of the negotiations and comment on them i know the president tweeted something about progress, so i think that could go as the statement of the administration as far as the progress on

chinese. they're still going on and a lot of progress to make, but i think they're still going on and that's a positive sign they've made progress in the past. so the president has tweeted about that and i know there's still a lot of work to do. with regard to europe, one of the things you've seen is the president's really serious about reforming our trade deals and willing to use tariffs, people have tariffs on us, to make sure they play fair with u.s. companies. there's a lot of exporters not treated well by europe and president trump's serious they need to reform that and if they don't, he's going to think about ways to reciprocate it and the secretary of commerce to report this week and other things considered by the president at this time. >> kevin hassett, always great to see you of the cea coming up, stocks are higher again. market internals look strong but investors are getting nervous and we'll tell you why walmart is giving the boost. a closer look at earnings beat

accused of being digital gangsters. fallout ahead. ♪ tear up ticket. he cat. [ meowing ] mittens! make it rain. [ cheering ] [ singing opera ] change the music. ♪ when i move, you move beep. beep. use the rocket. [ sputtering ] if only everything in life listened to you like your new a-class. hey mercedes. [mercedes-benz voice assistant] how can i help you? change color. make it cooler. play my music. the a-class... ♪

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impressive moves here. the market internals are just terrific just take a look stocks advancing versus declining. the single most important indicator. near historic highs. new highs expanding. buying interest high and selling pressure is low and the dow, we're at an 8 week win streak and this is not just the u.s. rally, really, it's a global rally here europe's at four month highs and shanghai and korea at four month highs and japan at two month highs. see what's going on here by the way, don't forget the fed. you see this rally we had late in the morning loretta said she favors slower balance sheet trimming there that's important we've got a little rally out of that so the fed's not done either here everything seems to be working right now for stocks back to you. >> bob, i have a quick question about that she also said that we might need to raise rates this year because unemployment rate is so low. i am interested that the market was more paying attention to her

balance sheet comments and do you think she's intentionally trying to signal even if they raised rates, it would slow the process? >> the market is looking for reasons to stay up at this point. so normally, those interest rate comments would drop the market but the market is trying to focus on anything that will keep things positive here and obviously, anything about balance sheet gets people going. i think it's overblown the evidence i see is that the balance sheet is not nearly as important as what's being done with interest rates but the market obviously believes that's going to be positive >> we'll talk to our guests about it, bob. thank you. bob pisani laid out the groundwork for the internals being strong stocks edge higher with the s&p up 11% so far this year and up 15% from the december lows bespoke. let's bring in oppenheimer funds and jason drejo.

are we overplaying the significance of earlier today or how important is the fed for this market? >> i think it's important. there's two things one, fed pause for that, not that important there are enough doves who can kind of overrule but from a balance sheet standpoint, if a hawk says they're willing to engage in the balance sheet discussion, that's new information. i think that's a very material piece of information. >> got it. that, we have on the one hand and the issue about stocks being overbroug overbought but they themselves said we don't need to necessarily see a pullback in fact, a lot of times, the stocks just go sideways at overbought condition can relieve itself, right? >> absolutely. >> sorry, jason, go ahead. >> i think also in terms of the overbought, when we look at different investor positioning data, institutional and retail, it's hard to see and kind of a

conundrum. do they keep adding or just buying at the wrong time or are they, do they fear missing out so from technical market flow perspective, it seems like people's stock sheet under risk and a positive for market going forward. >> let's say i'm part of a couple nearing retirement, between 55 and 65, i want to invest for a time horizon of 30 more years so that i outlive my money. as you look forward over the next two to three to five years, how would you draw the pie chart of u.s. equities, foreign equities, bonds, cash, et cetera >> asking for a friend >> the starting point for us on that count is the fact that we believe the current expansion will last a long time.

the cash phrase we're using is five more years. if that is the case, i think the allocation into equities in the current environment should be significant, for somebody like the person you just described, that resembles me in a lot of ways, the equities have to be almost 70%, let's say and valuations overseas are higher 30% or 40% of the 70% allocation, if i were them, i would probably put international equities. >> so 70% in equities, 30% of which is international equities and the rest divided between cash and bonds >> so yes. the residual 30% 70% of equities, 30 to 40% in international. the other 30% or 40% in domestic equities and the rest in bonds and cash cash today is a good allocation because you're earning significant amount of income out

of cash you didn't before. >> jason, you want to respond to that >> generally, i agree with that. if you're looking for long-term, it's like 20 or 30 years for investors to 2 or 3 year horizon or long-term, definitely of like a cycle from 5 to 10 years and in general, european equities and cheaper than u.s. and kind of relative to long-term discounts. and kind of favors international and the 6:00 a.m. side, more attractive appeal. we like some long duration, more tactically, because if we are wrong on the optimistic view on

the cycle, rates fall because the starting of rates, so more defensive in the fixing of portfolio overall. >> i'm taking notes. thank you both appreciate it very much. many people invested funds because they know exactly what they're getting or maybe they don't. a closer look at what's really in your index fund the "trading nation" team will tackle this chart higher year and ten years since this memorable moment in cnbc history. rick santelli's rant the one credited with starting cke tea party movement ri looks back. next on power.

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don't get it on the fundamentals or technicals but the market tries to put the most paint on the most people and does it point to freeport going higher >> yeah, i think for us, doesn't necessarily screen well for us on a bottom up basis either but we wouldn't bet against it it's a trading stock looks like it will work higher here's what traders have to know break out about 12:50. typically prior, resistance becomes support. i think as long as that's the case, upside to $15 resistance that's the next upside test. the fact it's below falling 200 day moving average suggests there's longer term trend needed that's why it doesn't work for us. >> does it make sense to you, gina >> the fundamentals story. they've cleaned up ownership issues they've set them up for sale, so ripe for a takeover. from the internal perspective, it's a lot better than it did before

so that would be good. externally, we see copper prices rising because of supply shortages and we see support for gold both of those things actually benefit freeport mcmorccmormcmo. >> ari, gina thank you. for more information, head to the web site trading nation. walmart on a big earnings beat is it the best bet in retail right now and is a damning new report on facebook calling the company a digital gangster the fallout is ahead you know what's in your index fund you might be surprised to learn. all this and more on "power lunch" returns >> and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> short selling can help you profit from a stock's decline. however, because it involves unlimited risk, you must have a plan

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i'm bill griffeth. roger stone ordered to appear in court on thursday. the judge hearing his case wants to talk to him about a post he made on instagram yesterday showing the judge with a cross hair in a background image next to her head. stone has since apologized for that post. senator kamala harris in new hampshire speaking at the politics in eggs event there's a lot of distrust in government >> the thing about a relationship of trust, which i think we all know in our personal and professional lives is that the very nature of a relationship of trust is such that it is reciprocal relationship you give and you receive trust and one of the most important ingredients in trust is truth. meanwhile, harvard researchers say eating nuts may lower the risk of heart disease in people with type 2 diabetes

those who ate five servings of nuts per week had a lower risk compared to those who ate less than an ounce per month. this in a study of 16,000 people i don't know, i'm a big fan of salted, roasted cashews. i hope that qualifies. i'm not diabetic, thankfully >> i like almonds. that's my thing. thanks, bill >> thank you so much that's your cnbc news update. walmart soaring today. beating estimates having the best holiday quarter in years. let's dig deeper into what's fueling the growth with paul trussel and niffin worldwide january, i'll look at you since you're sitting here. if i had a retailer that i wanted to be a core holding in my portfolio, i couldn't go wrong with walmart.

>> i have been saying that as long as i can remember and walmart has just delivered this quarter, great store for store sales, great into the bottom line, 34% growth. >> you would agree you raised the price target. the store sales good $125 billion, a few million is kind of a rounding error >> absolutely agree. we really believe that walmart's executing quarter by quarter, still with a long-term focus, delivering goods on the same-day basis. meaningful investments that do impact overall earnings growth, but this is one of our top picks. >> what are they doing right is it their online sales growth?

groceries, grocery delivery? is it store refresh, a little bit of everything? >> we think it's all of the above. the company has taken the time to invest in the stores, improved customer service. they've absolutely improved their inventory position obviously, online growth is strong 43% this year and forecast 35% growth for next year they have a strong global strategy as well we do think they're checking all the boxes. >> there have been a couple of odd reports about the consumer to end out the year. last week, the theme was the nrf report up 7% and the terrible retail sales report. consumers weren't using as much credit card, borrowing as they do for this holiday season is it the shutdown, the polar vortex does walmart tell you in some ways, this is a more reliable read on what's happening in the u.s. than all of those reports >> all the other stuff is

nonsense mastercard said it was up 5% and mastercard never wrong in their lives. target, as you recall, gave us great numbers. the consumer is fine the consumer is strong we're not seeing any problems with the consumer. if those numbers from the government are good, they're a blip. >> and bad, also a blip. >> either way. >> retail sales report are down but not just the fact that walmart is seeing online sales growth because some could argue, this is a walmart specific story. it tells us about strength across the board >> yeah, walmart strong and target strong and amazon strong, that's the retailer. that's the consumer. if the consumer is strong in the states, the states are strong, right? we are seeing strong performance in the economy because the consumer is really strong and everybody's working and wages are rising and going to $15 an hour and gas prices are low. what else do you need to know? the government is wrong on whatever they told us happened

in january and september >> is walmart a beneficiary directly or indirectly from the closings of for example toys r us or store closings at sears or kmart and the rest are they picking up share in business because these others lost it? >> absolutely. we're seeing walmart take substantial share across a number of categories they did outline this morning that toys was one of their better performing categories, especially from a general merchandise standpoint so very strong throughout the holiday and we think they're taking market share from other retailers as well, not just those who are closing stores but walmart is benefitting from having lower prices, benefitting from having more convenient shopping offering and we think they're benefitting from obviously their breadth of their assortment and another really important factor we haven't mentioned in the conversation today, walmart's had a consistent strength here of

strong and record top line performance. they're really at an inflection point of expanding profitability. we've seen them turn the corner and leverage sg&a and meaningful with how we think about this stock and how the valuation can expand from here. >> interesting point to leave it on paul and januar, appreciate it. rick santelli is tracking action at the sne. hi, rick. >> if you see the treasury, it's in a tight range tens there we've been trading down two basis points, but two years down three and the long end, 30 year bonds are unchanged. look at the 10 year boon in europe a year-to-date chart there is one theme for sovereign rates in 2019. it's pretty much lower if you look at what's going on, 30s, minus tens, one part of the curve that's steepening. it's widened out the 35 basis

points, steepest since december of 2017 and finally, year-to-date, dollar one, during negotiations, dollar is losing a little ground. chinese currency basically at two week high and dollar index as a hole, also taking a bit of a hit today, which seems very normal it rejected the 97 level again kelly? >> rick, i can't believe it's been ten years since the tea party movement and you know what? i knew about that moment on air but it wasn't, i think i've told you about this i was reading some sort of scholarly journal article about the tea party and the opening anecdote was all about, i'm going to play for this moment. watch. >> how about this president new administration why don't you put up a web site to have people vote on the internet as a referendum to see if we really want to subsidize the losers mortgages or like to at least buy cars and buy houses in foreclosure and give them to

people who might have a chance to prosper down the road and reward people to carry the water instead of drink the water >> rick, that's a novel idea >> they're like putty in your hands. >> they're not like putty in our hands. this is america. how many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills? raise their hand president obama, are you listening? >> i was going to ask, kind of what happened to the tea party was that an early sign of trump and all that, but i also, watching that, what happened to the sme? where did everybody go >> well, people have definitely been draining out of this building it's all computer trade now but the people that are here, unlike that moment ten years ago, they're still pretty busy but in general, the tea party and how

it evolved, maybe i was a catalyst in that, the country was like a tinderbox to someextent, still is. the difference is there's a lot more to speak to with regard to all the different factions in the country. you know what? at the end of the day, this country is unique. it's about individual liberty and many things are challenging that i think what started ten years ago is still ongoing in many countries. at the end of the day, what role do people want from their government andwhy does it seem that the governments of all nations seem to be taking more control and listening less to the people these are all the issues of the tea party and i think they're still all very active issues today. >> i think about it a lot with brexit and every headline we get about that and maybe a new referendum and are they going to do it? rick, thank you so much. >> thanks, kelly >> the man who lit a match to eamon javers at the white house with breaking news. >> tyler, that's right the president just making a few comments in the oval office. asked by reporters about those

negotiations that are ongoing with the chinese he said they're complex negotiations but they've been going very well and one comment to flag for you here, the president saying when asked about that march 1st deadline for new tariffs imposed, he said i can't tell you about timing. the date is not magical date because a lot of things are happening. we'll see what happens the talks have gone well the president thereby saying the march 1st deadline he himself imposed in the first place is not a magical date it seems to be telegraphing he's willing at least to consider the idea of sliding that back a little bit, as something he said last week here at the white house as well that if talks are going well, that date may push back no word here at the white house on where it might push back to and whether we're in the month of march or april or may or when but the president seems to indicate flexibility there. >> thank you, eamon javers at the white house. uk parliament labeling mark

zuckerberg and facebook, quote, digital gangsters. some tough regulation ahead over there. imagine traveling hassle-free with your golf clubs.

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facebook under fire again. uk lawmakers accusing the giant of intentionally and knowingly violating laws calling facebook digital gangsters. here to break it down is tony rom, technology reporter for the "washington post" and kevin delaney, editor in chief and co-ceo i'm for facebook how big of a problem is this >> the report itself not in itself a huge problem because i think this committee doesn't have direct law making authority. long and kpused report with privacy violations to addictive enabling addictive behavior to hurting the media, to becoming a platform for election manipulation it is a useful, perhaps, summary

for the critics of facebook and part of the growing movement to regulate facebook, which is already proceeding in europe and shortly will proceed here in the u.s. >> tony, what about the policy implications as kevin said, this lays it all out. what policy follows up on this and by the way, does it matter for facebook which has all the money in the world to comply as opposed to someone who might want to start up and disrupt it? >> i mean, i think one of the most telling aspects of the report is where lawmakers in the uk conclude that facebook had knowingly and willfully violated laws in the country to respect to anti-competition rules and doing so, lawmakers there requested that other uk agencies open their own sweeping investigations of facebook and that's the sort of thing that could yield punishments including sky high fines but the fact this does lay a road map for regulators around the world to continue to scrutinize this company and sum total of the global scrutiny could be a huge

threat for facebook and its business model and lead to more regulation, with respect to privacy and data security. the very sorts of things that the company for a long time has tried to avoid. >> where is facebook's greatest vulnerability today? is it in europe? is it in the united states where? where is their greatest weak spot >> i think it's internationally and i think the european union is a great place to start. remember, we had tough data privacy rules that lawmakers there began enacting just last year these carry sky high fines and we've already seen e-regulators express a willingness to go after a company like facebook. a multimillion dollar fine to google months after what's called the gdpr went into effect europe certainly not backing down but here in the united states, interest in appetite as well remember, facebook under investigation from the federal trade commission and as i reported in recent weeks, the fine there could be a multibillion dollar fine, a record setting fine. it's too soon to count out the

u.s. but europe definitely a place to watch. >> kevin, what would you say is the greatest vulnerability and what happens if it's on the news side and they're forced to behave more like a real news operation? >> yeah, i think one of the interesting points that is made in this report is that facebook should take more responsibility, should be legally responsible for illegal and harmful speech on its platform and facebook like other technology platforms argued for years and had some protections in u.s. law that the things that people post on facebook are actually not -- they're lot liable for them and what we have seen is facebook's negligence in some areas has been pretty costly for example, the clearest example is in myanmar where posts on facebook incited violence that contributed to the genocide of the rohingya and facebook acknowledged that it was deficient in taking down the posts inciting violence against people so among the vulnerabilities,

the liabilities of facebook is that governments hold them legally liable for things that people post on their platform. we're already seeing that in germany and if more broadly put into effect that would be a big change for facebook. >> all right and that does make sense we'll see if it goes that direction. kevin, thank you tony, thank you, as well. well, that plain index fund may not be so plain after all. we'll explain. stay with us was ahead of its time.

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when you buy an index fund you think you know what you're getting, a fund that tracks a specific index like it says in the name but might not be always case leslie pickard is doing digging and joins us with more. >> that's right. passive investing, the idea being for little cost investors park their money in funds that track a specific market. well, a new op-ed today over the weekend in "the new york times" takes aim at the passive nature of index funds arguing there's a

lot of discretion as to what's added in some of these funds and written by a law professor and commissioner the piece highlights something called customizable indexes which don't track indexes like the s&p but give the creators more of a say in the stocks added. more and more asset managers are creating indexes and index funds and by doing so they can offer funds cheaper because they don't need to pay licensing fees to, say, s&p but they're also adding back an element of stock selection in the process. and the basis of an index fund is to not really have active management, at least in the traditional passive sense. now, the op-ed goes on to say it's possible that many investors don't actually realize they're getting special indexes. the two point out the need for

additional transparency and oversight. >> basically if i see something something 500 or something something 1,000 it might have nothing to do with the s&p 500. >> might have everything to do with it. it's very difficult to ascertain the difference and another difficulty here is a lot of asset managers will have previously tracked a certain index -- >> oh geez. >> and then change it over time and make the index fund less expensive and also may kind of tweak the stocks in it so it doesn't exactly mirror the s&p 500 and outperform or underperform. >> they're still passive in other words, not active managed once the initial selections have been made? >> not traded per se >> okay. >> but just as any index fund, just as the s&p 500 is certain stocks and excludes certain stocks over time, these index funds can do the same thing. it's not traded like you would see a hedge fund or an actively

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san diego padres it's a big market but they're not one of the teams that has been out there. >> apparently never won a world series >> i think they have been in one maybe. >> what is it in poker when you put all the chips -- all in. >> all in on manny. >> how old is he in year ten of this >> 36 or 35. >> okay. >> manny good for manny. >> good for manny. thank you for watching, everybody. >> "closing bell" right now. ♪ good afternoon welcome to the "closing bell." i'm wilfred frost. >> i'm sara eisen. president trump considering auto tariffs on foreign made cars bob lutz and jim press both here with what that could mean for the industry. plus, an interview of paypal ceo dan schulman what he told me about competition in the payment space and comments obo