with "power lunch. >> and welcome to "power lunch." we begin with the beige book s&p down by 13 points. nasdaq down by 51 points as for the ten year treasury yield, we are at 2.69% here. let's get to ylan mui in d.c >> only 10 of the 12 federal reserve directs reported that their economy is growing and then the pace was just slight to moderate two districts, philadelphia and st. louis, said economic activity was flat and half of districts said that government shutdown slowed down growth. overall the fed said consumer spending was mixed with bad weather and the higher cost of credit weighing on retail and on auto sales on real estate, the fed said that residential construction was steady or higher, but home sales generally lower. manufacturing strengthened, but a number of companies said that they were worried about tariffs.

weaker global tee hand ademand broadly. one firm says sales in china dropped 40%, the biggest decline since the financial crisis employment gains were modest to moderate, but some businesses said labor shortages were starting to curtail sales. wages are rising across all skill levels several districts said that input prices are rising faster than sale prices and the ability of businesses to pass that on to consumers varied the beige book also made a reference to amazon. the fed said that canceling hq2 in queens had reportedly little effect on the region's housing market >> thank you very much elylan mui in washington let's get reaction on the beige book report from found he were of macro policy perspectives and also alisha levine with bny mellon and also steve liesman

steve, let's start with you because you're senior. >> in what way do you mean senior >> just senior >> i think he she gave us the headline in the first five words and the reason is that you have ten districts reporting slight to moderate xwloegrowth let's go back to many prior surveys in which they describe growth as modest to moderate you have to think that slight is a linguistic downgrade from the word modest. so we see a down shift in growth the next sentencehowever raise the question is it aempg it tem permanent. because what i see is that half of the districts noted that the government shutdown had led to slower economic activity t government shutdown being gone, so can we get back to moderate to modest. i don't think it changes the outlook. and john williams said that we'll go from 3% to somewhere closer to 2% growth, that is the

expectation of the fed it is the expectation of most on wall street. though i don't know and this is why we do this every day if that is the expectation inside of stock prices >> 2% for the year or quarter? >> for the year. we're running our cnbc rapid update 1% for the first quarter with some 03s and on 4s in there. some folks a little more operates mystic. but right now that is the lower rapid bullp rapid up dates we've had.mystic. but right now that is the lower rapid up dates we've had >> the economy is definitely slowing and 2% feels like the right number the first quarter is the kitchen sink quarter so you have the weather problem, you have the shutdown problem, and you have the effects of the selloff in the equity market from the fourth quarter coming into the economic spending in the first quarter. so that is the throwaway quarter. the question is what really happens in the second quarter and how much a bounce back >> and what doyou expect

>> we think that the second quarter is much better from the way we see the markets and asset classes, we really need to see a trade deal come it fruition at the end of march not so much because we think that we'll get a huge bump from it, but because we think that we have to get rid of the uncertainty. so we still have uncertainty that whether or not there is going to be a deal and what the deal looks like. that's what we need to see >> and julia pick up on that thought. with trade, we saw earlier that the trade deficit has never been higher i assume that was because the economy was strong throughout most of last year. >> yes >> and because companies were buying goods in anticipation perhaps that they wanted to get the goods in before more tariffs were put on. >> there is a number of things that were driving the deficit wider. one as you mentioned, we had strong growth last year. and the global economy had weak growth so exports were slowing down too. so those both were driving a wedge wider.

and as you say opportunistic activity ahead of tariffs. so that said, i think that that relative picture stays with us so the trade deficit should still be a drag on growth in 2019 because we still are outperforming the global economy. >> and what stood out to me is this one semiconductor firm in boston which saw a 40% drop in sales because of tariffs so we've been through earnings season already so does that simply confirm what we've already heard or is that another worry for you when it comes to this very highly cyclical sector? >> so we already know that there has been a mitt to certain businesses through tariffs in the end the u.s. cooperates are going to import the weakness from overseas. and they will import the effects of the policy choices from overseas so while we have this nice divergence with the u.s. continuing to grow and the rest of the world slowing down at a faster pace than expected, at some point we will import it and

import it throughout the corporate sector, through the earnings because as you know, 40% of s&p revenues come from overseas. so it is a land effect, but there is an effect and the question is can we stop the trade conflict with china and can we get confidence boosted on the business side. >> melissa, i wonder though if companies have the worst of both worlds while the u.s. economy has the best and i mean that going from the beige book, we have rising wage costs, but not rising inflation. which tells you -- by the way i need another finger here for the tariffs. so anyway, you have the tariffs going up, you have wages going up you don't have prices going up the only way that gives is through corporate profits. or i guess added efficiencies as well is one other way do it. so while the u.s. economy enjoys low unemployment, modest

inflation, a fed on hold, it is companies that are the wedge between that and that is why you have to watch profits. >> but the influx prices start to roll over again look at gasoline i don't know if oil is the best example, but some of the earlier stuff we've seen is moderating, isn't it >> certainly on the industrial and commodity side but i want to say too that the weakness reflected in some of the earnings reports goes beyond the tariffs. this is demand overseas. ing it it is slowing substantially. so you do get margin compression on the weaker side >> and so they talk about pricing pressure, not pricing power. what -- and the only way that you get that out of is corporate profits. are we going to see a corporate profit slowdown or recession

>> it looks like that you will see a definite negative earnings growth for the first quarter and my guess is that you will see it the second quarter as well and just to go back to the price input, you really see the squeeze on the consumer staple side because you have commodity price inflation on the input side and the staples companies cannot pass it end because of the expect tags expectation of e lower prices that is where the problem is >> so the fed can do nothing >> the fed has to watch this play out and i mean the fed is not responsible for companies being profitable i think they want companies to be profitable, but that is not going to be their overall concern. what they want to watch, unemployment, inflation and overall growth if companies had to take it on the chin -- by the way we should point out we're talking about profit margins being a relatively high percentage of total gdp historically

so to get back down to norms, there are those enjoying very strong profits >> all right thank you. let's get to julia boorstin with a news alert on facebook. >> mark zuckerberg announcing it in a facebook post that just went up that the company will integrate all of its messaging across platforms so its users can message each other on facebook's different apps including whatsapp and instragram this is a move away from the public sharing that facebook has traditionally focused on zuckerberg saying that they will start by making it possible to send messages to your contacts using any of its services and extend that to sms text messages this will be opt in and you can keep your accounts separate if you prefer zuckerberg bearing in news in a post proceed claiming his privacy focused vision for social networking.

committing end to end encryption, reducing how long the company holds on to data and also ensuring that user data is secure this is after reports that this integration was in works, and it raised concern about privacy especially people who want to keep their identities on different apps separate. >> and i'm surprised he is going forward with this quickly. any sign -- i guess people at whatsapp and to some extent the others were not pleased, not thrilled about this, but has that ship already sailed >> i think it is notable that he says that you will be able to opt to keep these things separate if you so wish. so if you want to use whatsapp and not integrate it with your other services, you can. but he's saying private messaging is important and they want to make sure that you can message from messenger to instragram, you shouldn't have to keep four different messaging services separate and juggle those. you should be able to combine all those if that convenience is valuable to you.

it is also worth noting that this isn't happening instantaneous instantaneously. it will roll out slowly over time but this is his intention to do this and it will be up to people whether they want to opt in or not. >> julia, thanks let's get to bob pisani watching the stock market action for us >> this beige book report confirms that the market focus is correct so the market is not that worried about the fed because they think the fed won't hike anymore and it is a bit of a go goldilocks what is worrying the market is slower global growth and the references here in the report, home sales lower, worry about weaker global demand overall you see that playing out in the stock market today take a look at the sectors that led us out of the december 24th rut that we're in, they have all been lower for the last several days the russell 2000, energy, bank stocks, these are the leadership groups and nothing has been happening because we've reached

the limit of how far we can take it without more clarity on global growth and where we are in the united states growth situation. one final point, we have an additional problem, ever since the house of representatives started talking about medicare for all, the health care stocks have just gone south the last two weeks, all the hmo stocks, hospital stocks like hca, all of them have been down 7%, 8%, 9%, 10%. down again today >> bob, thank you. let's get to chicago where rick santelli is tracking the bond are markmarket action. >> there wasn't a lot of action to track yes, we gained a basis pioint o the two year but the real story is just the down trend in a spongy stock market and bob brings up a great point nobody is talking about. medicare for all is a political issue. it is a potential policy and it is affecting markets.

ponder that. especially that type of policy are just going to get more frequent as we get closer to elections. and if you look at the 30 year, it also responded with one basis point, but the real story is how much grand it has lost finally the dollar index basically went from up changed to up a couple cents but the fact that it is only a dime away from 97 and holding basically solid is really a good scenario for the dollar index. and keepin mind if you are a multinational company, really since july of 2017, the dollar index really hasn't moved that much it just remains at a rather strong level tyler, back toyou. >> rick, thank you very much and coming up, even with a two day selloff, shares of general electric are still up believeitt or not 20% so far this year. did investors get ahead of themselves on betting on a quick turnaround and is elon musk becoming more trouble for tesla than he's

worth? a top investor suggests that the m mpany could get along without hijust fine. that and much more coming up

shares of general electric down again today after a big drop yesterday on comments from the ceo. it seems like investors are realizing that the turnaround could take not months, years morgan brennan is joining us with more. >> hey tyler that's right, so shares are down another 7.5% right now

the biggest focus is really cash flow and yesterday larry culp said that that would be negative for 2019 just for some context here, as rough as last year was, and it was rough for ge, industrial free cash flow adjusted was still about $4.5 billion power continues to be one of the biggest pain points. so this year will bring higher restructuring cost and culp warning that the turnaround will take years also questions around ge capital which culp says will need another $4 billion this year as it continues to work through liabilities including that legacy insurance business that investors are going to learn more about tomorrow morning. now, those comments throwing cold water on a rally ahead of yesterday. saw ge stock jump more than 45% from the december low. and ge has been buying time including that $20 on billion sale that it announced of its biopharma business last week that is cash that will go toward

paying down debt but really this news giving investors pause right now because we didn because we don't have lot of details. we're expecting to get more next thursday and of course what it all means longer term. multiyear turnaround, the bears saying they expect a lot more pain from this company yet to come and a lot of question marks that have been raised by those comments whereas the folks that are more bullish say okay, negative free cash flow this year, if you are investing, you are investing for the longer term and a longer turnaround as well so you should be thinking out in the future. >> morgan, thank you despite the sharp drop over the past two days, the stock is still up 20% this year have investors gotten ahead of themselves joining us is senior analyst with a buy rating on ge. and also with us, you also a

have ba buy rating and your buy rating is for the next 12 months >> yes, i have a buy recommendation looking out the next 12 months and also medium term 3 to 5 years. >> how comfortable codo you fee with what the go is telling us given in january culp said free cash flow would be weakening and it seemed to be a big surprise to much of the street in terms of the dramatic sort of difference in the description of free cash flow and where it was heading. >> sure. thank you, melissa and it is impossible to say that yesterday's news was not a negative survive for ge's stock. with that said, i think the investor needs to pause and take a deep breath. if you look at the drivers of neglect industrial free cash flow as articulated for 2019 and we'll get more detail next week most likely, a number of those drivers such as moving working capital arrangements out of ge capital, legal settlements for

alstom, the reversal of progress collections for wind and renewabilities, those are temporary in nature. obviously the remaining piece power execution and restructuring is the wild card which could be the largest piece of those four versus what me and others were forecasting. that remains to be seen. but i think that investors do need it look out past the negative power period into 2020, 2021 you're be lookilooking at a sto better free cash flow and that is how we look at it high teens per share >> and justin has a fairly sanguine outlook here it would seem how about you and what do you place the odds that this company exists as a standalone company three years from now >> yeah, if i thought there was any question that ge wasn't going to be in existence in

three years, we wouldn't have a buy recommendation on the stock. >> but does that include the possibility that it might be bought by somebody >> if it was going to be bought by somebody, it would be at a sharply higher price than where the stock is right now >> come you think th do you think that is a possibility? >> until they work through some of their businesses with kapts, i don't think anybody will step in here. as justin properly i will lose dated, there are too much wild card options ge needs to fix its cash flow problems but when the stock hit its lows last year, there was some question as to whether ge was an ongoing entity that could service its debt and get enough liquidity. i think with the asset sales they have announced, under the leadership of mr. culp, they have shown progress towards that nobody should expect ge to be cash flow positive this year nobody should expect a quick turnaround it didn't take them one year to get them into the mess, it won't take them one year to get out.

>> and you said nobody will step in and buy ge with the mess on its hands, but yet you're telling investors to buy shares. so what is the difference here >> the difference is that ge has a path forward they have assets that do have value. they have issues to work through, but they have a leader who has shown that he is willing to make tough decisions, kiting the dividend to one cent token was a strong indicator that the company will do whatever it needs to survive sell being off some of the portions of health care that was not a big driver of earnings, but maybe for the future i think they are moving in a direction that is positive for the company. certainly we'll find out more next week. what the earnings outlook is but it is not a 2019 story you shouldn't be buying the stock today if you are worried about 2019 >> and justin, final question to you. jpmorgan saying that he thinks earnings per share will be minus 50 cents and he was on the

conservative side of things to begin with what do you think happens after yesterday's news >> i think that he was referring to free cash flow. the company did say that industrial margins will expand this year and that is within our forecast for our 70 cent 2019 number i think in terms of this year, what investors need to focus on is that the cash flow drag is temporary, that you own this stock for the next few years and now that they have announced a $21 billion sale at bio far pha, investors can look out a few years and we see over $12 per share of value after debt and other liabilities just in high quality aviation health care, $16 at the end of 2019 from and i will the assets. and we think that if you focus on 2019, you will be missing the trees for the -- you will miss the forest for the trees

coming up, take a look at this mystery stock this is the best performing stock up 7,000%. can you name it? plus we're going live to the white house where some big name ceos are meeting on workplace issues we'll tell you more about that ahead. every year, our analysts visit thousands of companies, in a multitude of countries, where we get to know the people that drive a company's growth and gain new perspectives. that's why we go beyond the numbers. t. rowe price. invest with confidence.

welcome back to "power lunch. i'm mike santoli it is time for trading nation. ten years since the s&p hit a bottom during the financial crisis and while the index has rallied a lot since then, one of its names has especially soared, ulta beauty rocketing more than 7,000% higher, that is more than 20 times the overall market returns. let's bring in buiin bill and so handicap it from here. stacy, obviously the stock has had a wonderful run, but did have about a 30% drop high to low back a couple years. so obviously it has not been a perfectly smooth path. what do you see for this name right now? >> you're right, the start of the year has been really impressive in this name and what is interesting is when you look

to the sentiment within the options, there is nothing to suggest that the run won't continue there is nothing to suggest that pullback is coming either. it is really interesting that there is just not a ton of activity out there right now suggesting that investors are kind of taking a pause here. what i do think this presents is an opportunity for investors as we head into earnings who want to protect position, want to protect this recent rally. right now the market is implying around a 7% move for the upcoming earnings. and that is in line, but i would say three of the last four earnings reports have seen at least a 6% remove with last quarter seeing a 13% move. so i do think that there is an opportunity here for investors who are concerned heading into earnings that there could be a pullback that the risk/reward for those puts is attractive >> and bill, taking the broad view, obviously up 7,000%, maybe a lot of people say how can i buy it up here, but still putting up the fundamental numbers and it is an expensive stock, but nottaegregiously so

so how do you see it >> you can't ignore the large swings, but the chart has been extremely constructive you have a trend line going back to 2014, it is tested at four times and it has held. we're right back up to the highs. so it is not all perfect there is a ceiling of resistance there. however it has developed in a bullish pattern. look for a clear close out above 325 for a breakout and you can see another 15% to 30% up side. there is a lot of up side here given the force upon a breakout. >> all right so maybe the good luck will continue for ulta. 7,000% and more since 2009 bill and stacy, thanks on for more trading nation, head to our website or follow us on twitter. and ahead on "power lunch," ceos from some of america's biggest companies meeting with president trump at the white house. we will bring you the very

latest plus our rising risk series. is it possible to build a fireproof house? and should elon musk take a back seat at tesla. now the latest from trading nation.cnbc.and a word from our spoken or. >> a double top is a chart pattern that suggests an up trend might be ending and ready to reverse sometimes called an m formation because of the way it looks on a chart, a double top consists of who two well defined peaks that are approximately the same price. traders often view a break of the lowest low as a bearish signal i'm lee bohl and swab chwab is e better place for traders

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president trump taking questions from reporters moments ago about trade and north korea. le let's listen to what happened. >> we're moving along. they are move along well we'll see what happens it will either be a good deal or it won't be a deal but i think that they are moving along very nicely. >> -- by rebuilding a key missile launch site? >> we're going to see.

it is too early to see but we have to solve a problem we have a very nasty problem there. the relationship is good i would be very disappointed if that were happening. it is a very early report. we're the ones that put it out but i would be very, very disappointed in chairman kim and i don't think that i will be but we'll see what happens we'll take a look. it will ultimately get solved. thank you all very much. appreciate it. thank you. >> president trump addressing north korea just moments ago now sue herera with your headlines. >> hello everyone. here is what is happening. the chief financial officer of huawei meng wanzhou arriving in a vancouver court to be assigned a date for a hearing and to a u.s. extradition request her arrest infuriated china. the next court date is may 8

aaron schock has agreed to repay tens of thousands in taxes in exchange for prosecutors dismissing his felony corruption case he also agreed to repay his three campaign committees nearly $68,000. iran's president says there is no chance of negotiation or xr compromise with the united states rouhani says this is because the u.s. is seeking to topple the government in tehran and a new study superintendents eating s sugge- suggests eating a low carb diet may be bad for your health they were more likely to develop a i tr afib and you are now up-to-date kelly, back to you >> it makes sense that it may be bad for your heart, because not for afib >> yeah, and they studied it over a long period of time

so that is why it is given quite a bit of play. so we'll see >> sue, thanks ceos of some of america's biggest companies are at the white house for the first meeting of the president's advisory board on workforce issues eamon javers is there watching the situation for you. >> reporter: yeah, that's right. the ceos are here in the white house now taking part in a multihour program here designed to get to some answers on workforce issues related to job training and apprenticeship. this is one of the hot-button issues for ivanka trump, but the president will also be in the session. you see a list there some of the top ceos in the room including tim cook and a host of others. also some university officials here some union officials in the room as well for this event tim cook of apple has been speaking in the audio portion that we can hear but not see of this event he's been talking a little bit about how apple approaches workforce training issues and

suggesting that art fibl intelligeninte official intelligence is in tee hand and they have an internal training program to train people up on the sets of skills that they need and he is looking forward with talking to everybody else in the room to get their ideas as well. what should we expect from this meeting of washington, wall street and silicon valley? let's bring in president and ceo of the conference board and also tony fratto at hamilton place strategies and welcome to you both. tony, what is the point of these things >> first of all, it is a critically important issue there are parents, workers trying to figure out where is the job of the future going to be for me. we saw a plant closing in ohio recently >> but do people in that room really know? >> they do they deal with it every day. every one of my clients is dealing with it. everything from finance and banking to heavy industry are trying to sort out what to do with their workforces, where to

source talent for the future so that they could be as productive as possible. they are having trouble finding people for a lot of these jobs and even in this economy with super low unploichlemployment, l have gaps with skill that needs to be fixed >> so is this about workforce development and if so, i go back to the notion that four out of the top six fastest growing jobs don't require much more than a high school diploma. so are we developing the workforce for specific parts of the market or are we concerned about this in terms of getting the participation rate up overall? >> the labor participation rate has improved a little bit, but look, you've got 7 million job openings here that can't be filled that is an historic high if you look at the number of working age people, men and women sitting on the sidelines, it is over 22 million people there are a lot of reasons

some don't want to work, some are disabled but clearly the biggest issue is this skill development they have 7 million positions that they don't have qualified people for so the issue is how are we going to close that skills gap i think this workforce task force is really important because you can't do it strictly with business. you can't do it strictly with government you have to come together and come up with a program that trains these people and gives them the right skills so that these jobs can be filled and we can start growing this economy, keep it growing at a high rate >> and i would agree with that personally, but there have been these board advisory groups with with the president within the administration and ceos have left for political reasons and so i'm wondering is the environment different, are we just a headline away from some of these ceos -- >> that is a great question. it really is an important question for they'se ceos. some of these was leaving after

charlottesville. ginni rometty famously was early in leaving so there is some political and reputational risk for them i do think that they think this issue is so important that they should fgo and try to participat and contribute to solutions. >> and you've been in sessions like these is what is the outcome, what happens next, what do they do? >> well, typically there is a working group, there are follow-on sessions i was very disappointed a few years ago when those task forces wrapped up for political reasons. this is policy and i think it is really important that ceos and business leaders stay involved with the policy side so this will be the kickoff. it will get the issues on the table. there will be working groups, companies will come back with reports. they will work with ivanka trump and the commerce secretary and others as part of in whole thing. but hopefully there will be a

plan put togetherthat says here's what individual corporations will do and here is what the government needs to do in order to close the skill gaps >> i don't mean to be belligerent here, but it feels like a soft cell to describe them as dissolving over political reasons. there was serious moral outrage on behalf of ken frazier from merck and others, steve schwartzman, over the president's comments >> yeah, but i've sat in these sessions in the last two administrations. they are very important sessions they are policy discussions that need to happen we have a form of democracy that is interrelated to our form of capitalism you can't do one without the other. these groups need to interact. i understand there is always something going on in every administration but this is required in order to

get back to growth >> you have this look on your face >> it was one of those unique moments. i mean, you had people from the employees in these firms saying we don't want you associated with that white house at that time in the wake of charlottesville. you don't know what the president will tweet out tomorrow so that is why there is risk for these guys to get back involved again. >> they better work fast thank you both appreciate it. devastating wildfires in california last year causing billions of dollars in property damage with increased risk of fire comes increased effort to prevent the consequences diana olick is live with the story. >> reporter: that's right, the insurance institute shot burning embers at both of these homes for half an hour one went up in flames, the other not a scratch. we'll explain why coming up next

massive wildfires in california last year doing billions in damage destroying thousands of homes and with climate change making fires more likely, there are new efforts to protect homes

dia diana olick has that story in her series rising risks. >> reporter: wildfires destroyed more u.s. homes and buildings last year than any other time in recorded history and the eight most destructive years of have been in the last 13 years >> there is no reason to think that they are going to get better so as you look at this impact on the variations in the climate have had, where he mfar we are susceptible. >> reporter: and the institute is on the front lines of fire research wright is a former fema official and native californian his parents lost their home in the campfi fire last year. roughly 14,000 homes there burned to the ground wildfire damage to property just in california last year totalled

nearly 19 build according to core logic >> there are steps that we can take so that the impact of that fire is narrowed, it doesn't spread as far and impacts far fewer structures in terms of that kind of over and over fire begetting fire begetting fire. >> reporter: so the institute built this test home >> we have a 6 inch ghap heap h from the top of the rock mulch to the start of the the siding and this 6 inch gap just like our 5 foot zone gives us a noncombustible area. >> reporter: the wall of flames may look dramatic, but the flying embers can be more tee structure difference satellites have captured embers flying up to 7 miles these start secondary files, siding, roof and landscaping on this home protected from those embers >> there is no such thing as a

prior pro fireproof home, but there is a wild fire resistant home >> reporter: and the cost to build a fire resistant home like this one is actually the same or even less than a typical home. the savings is in the cement siding, cheaper than wood materials. that offsets cost increases in gutters and vents. all of it far less than the cost of total loss. now, while we focus on california because of what happened there last year, experts say that they are seeing increasingly intense wildfires in states like colorado, florida, texas, tennessee, even here in south carolina all of these major home building industry states and that is why the risk is rising for home builders back to you. >> a lot more expensive? i mean is it way off the market still to get a fireproof house >> reporter: no, actually to get a fireproof house, it could be

the same or less expensive to build as we said the siding is cheaper. while you may see increased costs in the double pane windows and maybe get tergutters, it als out. >> great stuff, diana olick. one of the biggest ras tracks is suspending racing while it tries to figure out why so many horses are getting injured. more on that straight ahead.

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a puzzling and sad story at santa anita racetrack in california 4 horses have died after suffering injuries on the track. >> the track is canceling its authori thoroughbred racing schedule indefinitely following the death

of the 24 horse at the track since the winter season began december 26th. why is this happening? some experts point to bad weather, with the park getting a foot of rain in february, along with unusually cold temperatures but horse racing experts tell me fatality spikes happen from time to time at various tracks around the country and it's usually not because of the surface conditions the santa anita derby is supposed to run next month the $1 million race is one of the most important preps for the kentucky derby and helps to set the qualifying field they may have to find other prep races for their horses santa anita derby, champion of that race was justified, who went on to win the triple crown the same year. 21 deaths does seem like a lot last year they had 20 death, 2.36 per 1,000 starts, higher than the national average of 1.6 deaths there are more questions than answers. when i talk to a lot of horse experts around the country. >> imagine if it happened to justify. he went on to win the derby.

>> reporter:. >> something about the track condition and weather has to be. musk gave up day-to-day control. we'll talk that one next we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. uh, well, this will be the kitchen. and we'd like to put a fire pit out there, and a dock with a boat, maybe. why haven't you started building? well, tyler's off to college... and mom's getting older... and eventually we would like to retire. yeah, it's a lot. but td ameritrade can help you build a plan for today and tomorrow. great. can you help us pour the foundation too?

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tesla's largest outside holder says it does not think that elon musk needs to be ceo every year in the past five so should musk maybe take a

backseat joining us is ed lee of "the new york times" and jed dorsheimer ed, i'll start it off with you i almost feel like this is semantics, about a 20% stake that effectively makes him in charge here anyway, right? >> basically. >> even if he weren't ceo and he were some other chief ideologue which the shareholder had suggested, he would still be in charge. >> he would still be in charge and also he would be privy to a lot of the operational information. so you don't really sort of deal with the possibility of him running afoul of the sncht e.c. by tweeting out about the company's process. it doesn't take away the issue you want to solve for the liability of elon musk saying too much, you know 20% of the company, that's the real issue i don't think investors want that either. they want him in charge in the sense that the quick ramp-up, a

lot of it comes from him, sbert worse. he has done a remarkable job getting it from zero to where it is now they're facing different growing pains which is can they build these cars in time >> disclosure, as the ed had suggested, jed the names rhyme. after that media-specific call that tesla had about the model three, that they had a follow-up other call with only deutsch bank, jed. that seems, at first blush, seems to be in violation of reg fd do you find this a problem why is the company caught up in issues that are questionable from an s.e.c. point of view >> yeah. first of all, i didn't hear that -- my understanding is that they had a call with reporters and so again i'm not a securities lawyer. from a reg fd, if that was the case, it would not violate deutsch bank would be news to me

at this point. and i would also, you know, agree with ed in terms of the position of elon is -- the inability or that we would not want to remove him or investors would not want to see him removed sbeert go further. really, when you look at the inspiration that he brings to the employees, that is a lot of power that is intangible within that company, too. >> you seemed to indicate you called the company and confirmed this actually happened. >> no. i actually knew that there was a call with reporters. >> okay. >> i did not know there was a call with deutsch bank if it's a media call i don't think that violates any reg fd that's my understanding at this point. >> gentlemen, we'll leave it there. thank you so much. ed lee of "the new york times," jed dorsheimer there on tesla. big question for tesla shares.

they put up good numbers and questions go away. when there's faults in the story, that's when -- >> we haven't talked about faults in the demand story until recently that feels new. >> right. >> exactly. >> thank you for watching "power lunch. >> "closing bell" starts right now. >> good afternoon. welcome to "closing bell." i'm sara eisen. >> and i'm wifred frost. good afternoon. >> president trump holding a meeting with top business leaders. latest from the white house. >> markets, under an hour left of trade not too far from the lows of the session, down 120 points on the dow, low down