outgrown the stroller. >> i think consumers are more aware than ever about the need to see what model they have and pay attention to whether it's safe and using it properly thank you for the story, todd. appreciate you joining me. todd frankel an enterprise reporter for the "washington post." that does it for "the exchange." i'll join melissa in a moment for "power lunch" which begins right now. >> thanks, kelly see you in just a minute i'm melissa lee. here's what's new at 2:00. the president thundering away at the fed, going too far with criticism? crude oil keeps climbing could this be a threat to the economy or crucial for job creation take a check on shares of lyft back above its ipo prices. good sign for the rest of the unicorns or maybe just a head fake "power lunch" starts right now a check on the markets euphoria wearing off with the major averages higher across the board with the dow up 33 points.

the s&p 500 aiming for seven-day winning streak for the first time in a half a year. right now, holding on to an 11.5 point gain kelly? >>. we begin with the criticisms of the fed by the president trump. eamon javers at the white house. eamon? >> reporter: the president on his way to california today. going to be doing a border event and a couple of other events as well but on his way out of the white house this morning, he stopped to talk to reporters and re-upped his criticism of the federal reserve and in fact, asked for an end to quantitative tightening and what he wants is. here's what the president said. >> i personally think the fed should drop rates. i think they really slowed us down there's no inflation i would say in terms of quantitative tightening, it should be quantitative easing. very little, if any inflation, and i think they should drop rates and they should get rid of

quantitative tightening. >> reporter: the president earlier suggested the fed to stop raising interest rates. he got that from the federal reserve. also suggested a while back he wanted them to stop unwinding the balance sheet, ultimately, he got that from the fed as well and now what the president is suggesting is that he wants to see quantitative easing, that he would like to see the fed in a buying posture at this point and one of the questions for the white house would be and if they had daily briefings anymore, you could imagine they'd get asked about this at this point, with the economy where it is right now, kelly, if the president wants quantitative easing, could there ever be quantitative tightening? what conditions could you have quantitative tightening in the white house not likely to respond to that today but we will see the president on the ground and might see more and might stop to talk to reporters. keep an eye on that. >> eamon, stay with us

steve liesman and does seem like the mixed messages out of the administration the best economy we've seen, stock market is going strong and yet eliminate quantitative tightening >> to a lot of people, doesn't make a lot of sense. you're running the mile pretty good but with open heart surgery, you could do it even faster i don't think that's the prescription on the minds of many people. with the way kelly read the opening. a new wrinkle. the president calling for quantitative easing is not a wrinkle. >> i wasn't sure if that was the wrinkle or some of the other stuff. and the last quarter century o so, not the case on the policy i was just looking up and shut

down the second of the united states the evils of the federal reserve and this was a country that did not have a consensus about the bank and was in its dna deeply skeptical of the need for one. you think i'm crazy? >> i'm going to defend my co-anchor kelly because i think it is a wrinkle. >> okay, it's a wrinkle. >> hear me out if you look at what the market is telegraphing, nobody is worried that this is actually going to happen. they can still do what it needs to do. >> until we start a popular move to shut down the fed. >> the best line about the president, his supporters take him seriously but not literally. critics take him literally but not seriously. >> what am i supposed to do? >> i don't know where that

leads. >> eamon >> this is new in recent decades and i had a fascinating conversation with a senior administration official a week or two ago about this and i said, you know, is jay powell out of the woods with the president? what happens with this president, people get in the doghouse for a while and get out or in the doghouse for a while and then get fired where is jay powell in the doghouse this official told me that powell was fine now. the president was over his bit of pique, because he decided not to increase rates and then hold off on quantitative tightening. >> what happened >> reporting, eamon. [ talking over each other >> the senior administration officials say, is powell still fine how serious is that demand and how intense is he going to push it >> let's say the president is right.

that the fed ought to cut rates and quantitative easing. why even have a fed? if policy can and should be dictated from the white house, what's to stop us? no, no, that's not what he's saying i agree. >> so then -- >> follow it through that the president and the executive branch can and should publicly diskoriate the federal reserve and muscle them into public policy >> for a second, why is the fed being muscled? right? if you believe the president can't fire the fed chair, most people believe, why would they listen to him? if they're being jawboned into it, they could simply turn off the tv and not be jawboned that seems to be having an effect or they're agreeing with the president which would suggest the president was maybe right in his criticism at the beginning. >> we create these structures and we call them independent, yet they still only exist with

popular political support. if that support erodes, the institution erodes. >> political support from congress though. >> fair enough, fair enough. >> just because a branch or an organization that is independent doesn't mean that the president cannot criticize it or recommend -- policies. >> the supreme court knows it is a political institution. they try to pretend like they're not. >> the supreme court is in the constitution the federal reserve is an active congress and that, the congress can go away. the constitution go away but takes a lot more, a lot more security than the federal reserve. >> maybe that's why the white house spending so much time going to capitol hill and speaking to the democrats at the retreat next week. >> the white house has been at pains to say that this fed is not capitulating to this president. same senior administration official in that conversation said the fed has not capitulated

to the president i said, what is it then? if not capitulation. they said the fed has heard the president and they say there's a distinction between capitulation and hearing and therefore, the fed remain tatains their indepee right now. >> the powell pivot before, the president was talking, the markets were responding, and the fed was responding to the markets. with this call for the elimination of quantitative tightening, there is not a reaction in the market so far. there isn't that feedback loop that is starting to happen right now where we should be worried that it's being -- >> i'll tell you melissa, i've been worried from day one. the slippery slope, we're in it now. once you start this thing, the president, anything that goes

wrong with the economy, it's the fault of the fed and then suddenly, you have populous support against the fed. maybe that's good. maybe people think that's a good idea >> ten years after the financial crisis and still around. >> very, very different, kelly, in my opinion. >> run against the media, run that play book against the courts, in a lot of places to suggest to his base, look, these institutions aren't doing the right thing. i'm telling you what the right thing to do is and the base has been responding to that in a very powerful way. that's one of the pieces of the bully pulpit the president has been using for his entire presidency >> imagine if we had a recession. >> well, yeah. >> imagine what happens then. >> that's a fair point gentlemen, thank you we're going to continue yelling about this topic with some other people here. eamon javers and steve liesman joining us now, chief economist of the americas with natixis and then wealth advisers for their takes on trump's plan.

the proposal to eliminate quantitative tightening and the nomination, potentially of herm herman cain to the fed great to have you with us. what do you make of this suggestion as to what the fed should do with their interest rate policy? >> cut rates, for certain, melissa. i've argued that for a while it would lower rates quantitative tightening, the fed has said will end in september that's already ending. quantitative easing, i would save that for the next downturn but i would say the general gist and tone of what the president says fundamentally, i agree with and have been seeing this sort of outlook for some time >> equities standpoint, should we be worried about all of this? should we be worried about the president inserting himself into

policy, criticizing the federal reserve saying the quantitative easing should happen right now >> no, i don't think we should worry about it the last thing that the president wants is control over the fed and that way, in that case, he'd be blamed for the direction of the economy keep in mind, four or three years ago, he had president obama as his scapegoat and as we've traversed through the last few years, this has turned into his economy. i think having the fed at sort of a distance here creates that scapegoat narrative. he beat up on the fed at the end of last year and did reverse course so now, he needs to push even further just in case that, you know, as we're moving from that 3% to 4% growth rate down to the 2.5% growth rate >> do you think there's something dangerous and different about the way the president is so openly trying to direct the fed's actions

>> no. not really i mean, the milton friedman famous monetary economist said the fed should be replaced with a computer you should essentially set growths in the monetary base equal to nominal gdp not to say i agree with that, but the fed has always been a focus. they're so important and the one big difference today, kelly, versus a few decades ago, i was listening to an interesting conversation you were having with steve and eamon, the fed's balance sheet now, it was roughly 25% nominal gdp. effectively injected themselves into the political debate like they never have before, so this is something that i was critical of bernanke a while ago because they way overstepped bounds and were going to get thrust into the politics as jack was alluding to. >> would you defend the fed as an institution run by humans with the intervention it made into the economy because of what happened in '08 or no >> yeah, no, i would defend the

fed as an institution to be run by humans. keep in mind, the tailor rule is one that is set to economic conditio conditions right now, if we listen to that, overnight rates would be 4% or 5% not 275. we can't listen to algorithms or from monetary policies, can't listen to the president. need the independent body setting that gauge and we know quantitative easing was an extraordinary measure and right now, we're ten years into the expansion. this is not an extraordinary tile and quite frankly, i do respect the fed trying to put the spare tire back on the car i mean, just think of what steve mentioned. if we do go in a recession, what are we going to do flap our arms and put a cheerleading outfit on we need monetary power to get the economy flowing again. >> they need the very prospect thank you for joining me

70% of registered voters, wall street heavyweights are recognizing the widening gap of income inequality in america oil surging, tell us why next see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

welcome back crude jumping another 4% this week up almost 40% this year the jump is rippling through the entire energy complex. americans feeling the pain at the pump too and the latest climb comes as tensions between the u.s. and opec seem to be rising reports say the saudis are considering selling oil in non-u.s. currencies if they pass the bill to expose them to anti-trust suits head of commodities strategy, welcome. >> thank you >> you think we're going higher. >> if saudis are going on the production cuts and opec doesn't roll this thing over, i think likely higher, yes. >> the saudis are driving it, predominantly? >> this is a saudi story they were the ones last summer because president trump basically said i'm taking iranian barrels off the market a million extra barrels. they rolled it back and then some saudi arabia is 400,000 barrels below their opec massively reversed course on

production and important, they have slashed exports to the united states in the most visible markets. they're sending no barrels out to the refinery in texas. >> how high will oil go? >> i mean, depends on how we think it plays out in terms of geopolitics but could we approach the number that president trump with the wti certainly if we stay the course, could be headed there. brent could be headed to 80 plus situation. >> why, i always thought the saudis would not pull back that much because they need the revenue. why have they been able to >> that's why. because from their standpoint, if you look at their budget break even, it's $88 so they're in a situation before where they maxed out production and crashed with a three handle on it, that was terrible for them what i think they're aiming for is, can you get prices somewhere closer to that $80 brent >> why fall into this cycle where wti will go higher and then shale producers start to really pumping >> that's the cycle we're in

shale producers cap the upside we're not talking about a $90 brent situation. caps to the upside but if the demand stays strong, that sort of 1.3 million barrels a day demand growth, year on year, and opec is pulling back, that's how you can get in this price range. >> when you look at the data so we had positive pmi out of china on sunday and then a negative german manufacturing number more recently where's that demand going to come from? you see an upswing in demand from those areas of the world? >> i mean, europe has always been a softer story but we always have the fear that doesn't play out and one of the things we've been talking about when everyone was concerned about china was we were seeing chinese strong jet fuel demand, for example. so the demand picture looks better than people feared in december but in december, people were fearing a major meltdown in the economy. again, watch the trade war talks because, again, that's something that could affect sentiment but right now, we look like a

constructive place for oil >> thanks. good stuff still to come on "power lunch," are you house rich but cash poor? a new way to tap into your home's equity that won't add debt or additional monthly payment but there is a catch 2019 the year of hot ipos with lyft, peloton, uber to name a few but onanyse alt may throw cold water on all of that. he'll join us straight ahead ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow.

you set it. nasdaq. rewrite tomorrow. onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

welcome back to "power lunch. i'm michael santoli at the new york stock exchange. snap making a comeback the social networking stock racing higher this year, up more than 100% adding nearly $10 billion in market cap over that time your "trading nation" team is craig johnson with piper jeff here at the plasma and then point view wealth management create the picture here. stock is on the run but half the price of the peak a couple of years ago. >> thanks, mike. when i come back to look at the stock, you can see on the charts, we've got a short

interest level that is also starting to fall while there's very few of the fundamental analysts that still like the stock, we see this nice down trend reversal. $14, a buyer of the stock here >> $14 from here is a pretty decent percentage move to the upside john, i guess this company as an investment pretty much an acquired taste is it one you've acquired yet? >> so i'm one of the fundamental analysts that don't like the stock. you know, $15.5 billion market cap trading at nearly 13 times price the sales. not profitable hemorrhaging cash flow and february of 2017, the ceo said the company may never be profitable, yes, it's up 100% but no thank you this has remnants of 1999 where it's being valued on eyeballs and yes, the net worth value is worth something but this is not my cup of tea. >> i was going to say, john, you're right about that. they don't really have a clear path to profitability.

2020 estimates are still for some losses though narrower ones but average revenue per user seems to be going in the right direction so you say the network has value, maybe has value to somebody else? >> yeah, it's true but, you know, the market cap has doubled since the start of the year and when it was 50% lower, how come no one made an offer to buy the stock then? i questioned what the true market value was to take advantage of >> all right yes, definite questions. a little battle between the fundamentals and technicals, at least at this moment thank you very much. for more "trading nation," head to our web site or our twitter, @tradingnation. 190,000 jobs added in march. we'll break down the report and what means for the economy. most americans don't want big tech broken up and 2019 is the year of the unicorn ipo. will these companies hold up in the public market? all this when "power lunch"

returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> when it comes to investing, there are generally two popular methodologies. fundamental analysis, which focuses on things like revenues, earnings and cash flow and technical analysis which focuses on chart patterns, price movement, and momentum i'm joanna payne and schwab is the bett pceorrarserla f tde

welcome back, everyone i'm sue herera here's your cnbc news update at this hour. bill cosby agreed to settle lawsuits by several women who defamed them when accused them of lying about sexual misconduct allegations. the judge overseeing the case must still approve migrants scuffling with police demanding to get the northern border open, lines of riot police force blockades and urge them to rush to their housing settlements or face the consequences a plain red brick building in central london revealed to have been the base of one of the

world's most sophisticated spy services britain's gchq eavesdropping agency only revealed the address of its london home after they moved out. no word on where the agency moved to an israeli athlete becoming the oldest person in history to play a professional soccer match. isaac will turn 74 soon broke the guinness world record after playing with the soccer club that's the news update this hour kelly, sending it back to you. >> of course the spy agency was in a pub >> of course >> i can't believe they didn't figure it out sooner. >> it should be obvious. >> thank you so much here's where we look at the markets right now. dow jones industrial average just slightly higher on the session up about 17 points the better gains today with the

s&p 500, up a third of 1% today and the gain of nearly half a percent. melissa? >> the oil markets closing for the day. let's get to dom chu, the cnbc commodity desk. >> they end the week on a high note with west texas intermediate and brent crude up by a percent and a half. brent crude futures, $70.34. those gains helped along with the better than expected jobs report easing some of the concerns about medium to longer term prospects for the u.s. economy and geopolitical tension in libya and get that bullish case for crude today earlier this afternoon, the baker hughes count showed a gain of 15 active oil rigs in the u.s. by the way, that's the first time in seven weeks we've seen an increase in those active rigs west texas intermediate prices up 37% on a year-to-date basis back to you. >> dom, thanks. a new poll from nbc and the "wall street journal" with surprises about how americans feel about breaking up big tech and the talk about recklati larg

those findings john >> this nbc "wall street journal" poll is not flattering to big tech whch when we asked people, are you comfortable with selling your data to advertisers, three out of four say, we're not fewer than a quarter say, yes, we're comfortable with that. when asked, do big companies like amazon, google, facebook, so do they protect your property do they protect your personal information? overwhelming numbers say the same thing with facebook, it's terrible 6% say, yes, they trust them and 92%, no. satisfied with the amount of tech regulation, 54% majority says no we're not satisfied, however, when you put to the american people, do you want to break up these companies, which is something elizabeth warren, senator from massachusetts has proposed in her presidential campaigns, both ways we asked it in the positive and the negative, we said, yes, they should be broken up because they have too much influence over

american life by 50% to 47% they say, no, don't do that when you state it in the negative, they should not be broken up because this should be left to the free market, stronger majority, 68% yes say, it should be left to the free market, just 28% say they should be broken up the argument is just beginning we'll see whether elizabeth warren can get any traction to this idea as she moves forward in her campaign but from the get-go, at the start of this process, the american people are not sympathetic with that idea and one of the reasons is we see that they regard tech companies and social media firms as more of a positive than a negative for american society and they're hoeful abo fu hopeful about the future, kelly. >> sticking with the jobs report, coming in pretty goldilocks not too hot or cold, just right. appears to dash fears of a recession coming but shows sort of weak wage growth. why is the administration pushing so hard for rates to come down?

here to talk about the broader economic complications of aimpl former white house aide. welcome. what did you think about the jobs report? we were supposed to adjust a few tens of thousands of jobs. we keep almost adding 200,000 a month. >> 100 plus months of job creation, consistently strong job creation with a blip there a blip here. over 80 months on the obama watch, over 20 months on the trump watch. this is a consistent, if you will, period of job growth in communities i've visited, kentucky or wisconsin or texas or louisiana, what i hear is, average americans saying, yes, i may be happy working but that paycheck doesn't go far enough i pay too much for housing i can't pay all my bill on time. the average american is being

stretched. they're not out there celebrating this they're out there taking a deep breath saying that this is tough for us because our paychecks do not go far enough. >> joe, i know you think the jobs report was putting rest the concerns raised from the jobs report but do you think the raes a republicans are mixing the messaging? instead of saying we should cut basis points or go into quantitative easing at this point? >> if what mark moorial says is true, republicans are looking to make the economy even stronger for the average working american and they know that certainly, president trump has said it, he wasn't happy about the fed raising rates. he thought that slowed the economy down somewhat, so calling for some easing now. got the right idea he doesn't control the fed from that standpoint but the appointments of the fed. and going to have a billion dollar ally if he nominates herman cain on the fed but wants

to see them moving in the right direction and wants to make sure the average working person feels the strength of the economy. >> i'm curious what you think, before we move on from this topic. african-american unemployment, 6.7% this past month, can the president use this strong jobs message to make inroads with the african-american community for 2020 joe, i'll ask you first. >> it's going to be hard, i think. the president is going to have challenges, even though the numbers are good, he's going to have a tough time reaching african-americans. i don't see him growing his support base among african-americans by any significant number that doesn't in any way diminish his chances of being reelected in 2020. >> mark, you agree >> i think joe is pretty much on point. it's a broader question than the economy. remember, the black unemployment rate has come down but still twice as high as the white rate. that paradigm in place for a very long time the president that breaks that paradi paradigm, i think, is the kind of president who can really take

credit for improvements in the african-american elements of the economy. >> okay. i want to talk about the other big news lately. ray dalio calling for reforms to the system saying it creates widening wealth gaps that pose an existential threat to the united states. he's not alone j.p. morgan chief jamie diamond weighed in this week saying equal opportunity is not available to all americans and ray dalio just gave $100 million to connecticut schools, guys so joe, are they describing the problem correctly and do they have the right solutions >> besides my business, i pastor a church in economically distressed part of the city where i live i think ray dalio has something here, and he's talking about, he's not talking about socialism. he's not talking about anything like that. he's talking about, how do we fix what isn't working and make it work for more americans so we have a more level playing field and i think that's a very, very

worthy conversation to have and i have high regard for ray dalio. he's a smart guy, knows what he's talking about. >> ten years ago, when i appeared on cnbc in the midst of the recession, i said that capitalism needed to be reformed historically, we've always reformed capitalism, whether it was the create of securities and exchange commission, the cfpb. many steps we've taken over the years, to reform elements and aspects of capitalism. the truth is the capitalistic economy of the united states continues to experience growth and job creation but something is missing if all americans are not benefitting from that. so a discussion about how we change that is important capitalism is not a religion it's not any ideology. it's not an alta worship. it's an economic system. to change it, to reform it, to make it work better, i think is a charge for business leaders, political leaders, and leaders across the board

we want every american to benefit and grow not just some. >> does it mean taxing the rich as jamie dimond said in his shareholder letter >> it may mean the rich pay more but a better tax code with favoritism the tax code that's fair, understandable and transparent and which is progressive the idea of a progressive tax code which is built in to the first tax act in the early 1900s, i think something laudable how can you make it fair rates don't tell the story because loopholes, exceptions and deductions reduce rates in a great way for many people who earn a lot of money in the united states. >> joe, you mentioned churches and i just wondered, as an intermediate institution among capitalism, the way people might experience community or have different role other than government or the private sector in their lives, is there, is the decline of a lot of these

institutions one of the bigger problems that we're dealing with today? i know it's not often talked about. >> no, it is the decline of the institutions certainly has impacted the society and i know this firsthand from my life as a pastor as well as my life as a businessm businessman, but i think dalio makes a good point about the the importance of people who are successful looking at ways to ease the burden for people who are at the bottom and leveling the playing field. that makes a lot of sense. raises taxes on the rich necessarily isn't the way to do it you don't want to bring back the estate tax or punish people who succeeded and disincentives to reinvest or helping people having a hard time but figure out how to make it easier for everybody and ease the pain for the people at the billion and h help those >> thank you to the bond market now, rick

santelli tracking all the action at the cme. >> reporter: you know what happens when you pull that little tab out of a volleyball it starts to get a little smaller. that's kind of what's going on with interest rates as we slide into the weekend post of the number one week of twos hardly moved all day on the week but the long end is certainly slipping a little bit. we are now down a basis point on the day. actually, we're down three on the day but up nine on the week. let's look at tens to twos that's definitely flattening, you see it on that chart one week of the dollar index it's only up a little but holding and that is a huge deal. the opposite side of this, we've talked all day let's look at the euro versus the dollar up above 112. doesn't look like that will go below 112 but dthe dollar break out with the big mark but both quite close. melissa lee, back to you >> rick santelli, thank you. there's a new company looking to help house rich but cash poor people on lock equity with no added debt or monthly

payment. there is, though, one big catch. at nt. cchrit? aat, gh th'sex each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. when yowhat do you see?itical issues facing our world, 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.

are you house rich but cash poor there's a new way to take cash of your house without taking out a mortgage diana olick is in washington to explain. diana? >> reporter: kelly, you can sell the equity in your home to an investor it's all from a new start-up called point and they'll offer you cash up front with no monthly payments here's how it works. let's say the home is appraised at $1 million. point lowers that value, say by 15%, so it's now $850,000. that gives point a $150,000 cushion against risk and then point gives the homeowner, say, $100,000 cash. the owner has up to 10 years to return that cash but can exit the contract at any time when the owner does, point gets the initial $100,000 back, plus a percentage, say, 30% of any appreciation in the home's value. and here's where point can

profit since it lowered the value to begin with, it automatically gets 30% of that $150,000 cushion or $45,000 if the value goes up, point gets more kingsbridge wealth management pledged $100 million to back point's contracts. >> as an investor, we do expect equity-like returns because we take equity-like risks if the home price goes down, we participate in that where your mortgage lender does not >> reporter: now, they've done 300 investments in homes in 15 states and expected to do ten times that in the coming year with all the new cash from king's bridge. kelly? >> i'm just thinking this through for a second so no debt, diana? >> reporter: it's complicated. >> but am i getting any ownership? you know, am i losing any? >> reporter: absolutely no ownership. no ownership, no debt. you're basically selling them the equity in your home for up to 10 years and then they get a

nice profit back so really, it's a way to get cash up front if maybe you don't have the credit score to qualify for the second home loan or want the added monthly payments because you're trying to pay down debt. >> does it have to be ten years? >> reporter: yes. >> what happens if the homeowne does not pay back the money? >> reporter: if they don't pay back the money, they have the ability to foreclose on the home the homeowner has up to ten years. they can pay it back though at any time if they want to get out of this contract, but they have that ten years, if they don't pay back, then point can come after them to foreclose on the home. >> you know, diana, we can see the story now. someone is going to lose their house to an investor and it's going to be an outrage >> reporter: well, it's definitely possible. there's a risk with that and that's why kingsbridge is putting this cushion on the risk

but for sol peopme people, it's only way to get the cash and so much wealth in their home thanks to the rise in home prices but they're unable to tap that cash because they simply don't have the credit. >> diana, interesting story. diana olick in washington for us a new reporting saying 2019 will be a slow burn for the ipo market despite hotly anticipated offerings from the likes of uber, pinterest and slack. 'vgot the analysts behind that note. professionals, let's measure up. cfa institute.

thwho hold themselveshe to a higher standard. they are called "cfa charterholders." demand the best. demand a cfa charterholder. cfa institute.

welcome back we've got a market flash on expedia. seema mody, what's happening >> take a look at shares of expedia, paring gains and dipping into negative territory after a federal judge in manhattan rejected a request by the company that would have acquired united continental to continue providing fare and scheduling data for its flights after the two companies' contract ends. we have reached out to expedia for a comment and we are waiting to hear back meantime, shares of expedia dipping into negative territory just down fractionally on the day. but certainly a story we will continue to watch, melissa >> seema, thank you. seema mody shares of lift rising to $74 a share, higher than its original ipo price is that a good thing as we look forward to

other unicorn ipos around 60% of ipos actually had negative total returns after five years following their first day of trading how should investors play the big ipos this year joining us is jason drayhoe. great to have you with us. >> great to be here. >> i found that the bottom line is very interesting and that is if you can't get in on the allocation don't bother. is that just for this round of unicorns or in general >> that's been historically true, that the best returns are if you can get an allocation afterwards if you're buying on the first day and really the opening price is almost a first full day return. if you're going to buy that day or the day after on average ipos have been average performers over six months and if you take like a multiyear view they've tended to underperform but it's very kind of differentiated there's a number of companies that an underperform have negative returns as you mentioned. there's also a handful that have spectacular returns. so it really comes down to being able to pick and identify those that didn't get to be winners

but there are some things you can look at that differentiate it but on average they're average to below average performers >> i wanted you to home in on that and that is what have been some of the common themes about the companies that did outperform in the longer run >> so generally, companies that are larger when they go public, revenues over a billion dollars, have outperformed. those that have advanced beyond the stage of having venture capital, having kind of growth capital to sustain them while they're growing privately, on average those have outperformed until they're doing better but even relative to the benchmark have done better so we look at some of the companies that could go public this year, they meet those criteria if we compare this potential ipo versus late 1990s these are not dotcom companies going public. they're much more established. which bodes well for the long-term performance. >> you know, jason, i hear people say that and i think it's interesting. they go look, these companies were more established. they're not dotcom companies but i'd rather have an early stage company losing money than one that's been around for five or ten years and still losing

money. >> then it really becomes -- you could have an early stage company losing money but it hasn't even got-tone sort of a late stage so the chance of it succeeding are less maybe you get better returns so then it comes down to what are your sort of risk-reward preferences? maybe the upside isn't quite as great but the probability of success in this case is going to be higher than if you go really early stage. >> does profitability at ipo matter for longer-term performance of the stock >> historically it's been kind of almost no clear correlation size does matter but earnings at the time of the ipo hasn't really been predictive of the first day and even sort of longer-term performance. it's not really predictive i think what you really need to see is companies that are growing. growing their revenue, growing their business, that ultimately is going to lead to profitability. that comes down to analyzing each company on a case-by-case basis and saying is this a viable business model? translate the earnings growing into -- or revenue growth into earnings growth at some point in time >> facebook and google were profitable when they went public, right? >> i can't speak specifically to

them but i think there's examples where even with facebook when they did go public there was uncertainty about their business model, it was only once they transitioned to kind of demonstrating ability to perform on mobile that they really took off. six months after facebook's ipo their price was down 30% so even the first six months doesn't necessarily determine how the company's going to perform long term. so really the first few days and even the first few months it's very much a price discovery process. where analysts covering, it investors have to figure out what is the business model and what do i want to pay for it >> jason, the true bottom line from all this, you know, at least what i'm hearing from you right now, is that the best shot for longer-term performance is to invest in a -- in ipos that are like the unicorns that we are expecting to go public >> if you can get a share allocation in the offering, that's been a pretty good predictor of good long-term performance and these companies compared to past hot market companies probably have a better chance of success. >> all right jason, we're going to leave it there. interesting report

jason draho of ubs >> and don't go anywhere because "check, please" is next. you should be mad at people whos forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated. their app makes trading quick and simple so you can strike when the time is right. don't get mad, get e*trade and start trading today. what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed

around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

we do have the energy sector

up by 1 1/2% really interesting note out from jpmorgan today talking about how oil stocks have been underperforming the actual physical commodity since january and they actually had a chart with wti as well as every sector of the oil subsectors and it showed underperformance since january. >> strange >> they also make the point that short interest on oil is at highs and also asset managers in terms of their coverage and in terms of their allocation at lows so the sentiment on oil is not there yet. they say you know what, for beta exploration and production companies. >> or contrarian buy signal maybe. if everybody's not piling in >> exactly >> here's a buy signal what if we had access to the road shows for the ipos? this is going to become more and more of a thing this year. we already saw the lyft road show being covered we have a whole bunch of other companies still to come. as it's currently structured, the underwriters have access to the road shows mostly. you and i get to hear about them from headlines that come from reporters out of the room. but if this is a public offering, why shouldn't the public be able, especially in this day and age, to live-stream

them directly? >> i think that's an excellent point. i do wonder, though, how many people actually go on to the s.e.c. website and download the s-1 and read that. >> that's true >> that's a question as well do your homework first, right? thanks for watching "power lunch. >> "closing bell" starts right now. yes, it does it's the final hour of trade take off like a rocket ship. that's what president trump says would happen to the economy if the fed followed his advice. also chip stocks posting one of their biggest weeks of the year. we've got to debate on whether investors should hold on for the ride and samsung warns of slowing demand have we officially hit peak smartphone we will debate that. "closing bell" starts right now. ♪