kc, thanks i learned a lot from reading it. an associate editor with fast company. thank you so much for tuning in, everybody. that does it for "the exchange" and we'll see if jj abrams crosses, what, $500 million? a billion dollars? unicorn content producers? i'll join melissa in just a minute for "power lunch" which begins right now >> i'll see you in just a minute, kelly. melissa lee, new at 2:00 earnings season on the clock setting up to be one of the worst in years will it derail this year's big surge? pinterest kicking off the ipo road show and lyft, threatening a major lawsuit against an underwriter over short selling what it means for uber and others preparing to go public. espn's brian winhorse with the new look on the king, lebron james. "power lunch" starts right now >> a check on the markets right

now. biggest one-day drop down by four tenths of a percent boeing feeling the losses on the index, a downgrade from bank of america. s&p s500 in danger of snapping. two away from all time highs oil and drill down how much higher prices could go here later on in the show in the meantime, straight to bob pisani on the floor of the new york stock exchange. hey, bob >> reporter: hello, melissa. it's been a tough day for the industrial stocks. look, bank of america downgrading boeing that's having a cascading effect on boeing suppliers like hexcel and then ray mondmond james and downgraded at j.p. morgan and we've got starbucks downgraded at neutral, but it's positive right now. still some pockets of strength and energy, for example, highest level since november

oil crossing $64 that's helping and bank stocks keep slowly, generally, advancing since yields become a week and a half ago. speaking of the banks, we will quickly turn our attention to earnings with j.p. morgan on friday and this is a very simple game right now, the important thing is, can heearnings go positive r the first quarter? down 2% but remember, the analysts cut their numbers dramatically in december and i think maybe they cut them too far. i think guys, we have a good shot of actually being positive for the quarter. that would be a victory for the bulls. thank you. >> thank you so much, bob pisani the head of the secret service, the next person to exit the trump white house is just happened eamon javers with the details. >> the president has fired his secret service director this afternoon. randolph a retired marine corps general running the secret service, fired today the white house not offering any explanation for this sudden departure but comes a day after kirstjen nielsen head of the department of homeland security

was offered her resignation at the dhs just yesterday so a series of events here related to homeland security that the white house officials here not saying anything about exactly why this took place but one source tells me that ailes was asked to put an exit plan so this may have been in the works for over a week behind the scenes publicly, this all broke just within the past hour and reporters trying to get answers from white house officials some of the officials themselves surprised by this and i can tell you the secret service officials and officers who work here on the complex are also surprised by this news they're just seeing it flash across their phones at the same time that everybody else is. a lot of people scratching their heads trying to figure out what this is about. >> if it's about that mar-a-lago break-in eamon, thanks. eamon javers. the president's prospective nominees to the fed facing a lot about position the flash fed survey. >> thank you, kelly.

some on wall street blasting president trump with the nominating steven moore and board of governors 34%. the survey we took over the last three days confirmed steven moore, "the wall street journal" editorial writer and should approve of herman cain, the former republican presidential candidate and will get the nod market economist at oxford writing in response to the survey, both moore and cain highly unconventional and politically biassed choices and if confirmed, very disruptive. the chief investment officer responds, trump is holding the fed accountable and the man who has governors, entirely appropriate. neither cain nor moore approved, more than 70% said both too political and more than 70% said both are not qualified most think should not be commenting on monetary policy.

83% thought it was inappropriate when we asked the question 61% now. does that tell you we're getting accustomed to comments >> yes, that's the word. >> i think normalizing is another word used. >> same thing. >> eamon, thanks steve ling, thanks j.p. morgan and wells fargo kick things off with the results on friday. it's expected to be one of the worst earnings seasons all year. will it stall the stock market or already priced in andrew is managing director at morgan stanley investment management who said enjoy the rally but then get ready for a correction united capital and with us, welcome. so keira, again, when you're expecting bad news, you know, the bar gets lowered is earnings season going to be able to clear that bar what are you looking for >> i think so. i think they expect a lousy

earnings season. what's more important are companies on the back half of the year if we can start to see some of those earnings revised up then for the back half of the year, i think that's going to be enough for the market to get going again. >> you're more cautious about earnings this year, aren't you >> well, i think, look it's more to do with searching for the reason for the market to sell off i think the market is going to rally here in april, a good month. but as we get up to all time highs, near 3,000, and then you have to start thinking about reasons for a correction and i think, you know, maybe earnings is one of them although, i agree with kara. if you look back to 2016, we had two quarters, first and second quarter of negative earnings growth but because the fed pivoted the market and ignored it and anticipated, recovered in the second half of the year. that's one reason not to worry about earnings the point is as we get higher, you start to think about what could be the risk, and that could be one of them

>> should we be worried about valuations multiple, we're just about at the levels we were at before the big october sell-off began last october and look at individual sectors. we're at all time highs effectively in information, technology as well as communication services on the s&p 500. i mean, do we have to think, are these multiples justified based on the contraction earnings that we are expecting >> so i think valuations overall for the market are relatively in line with historical averages but as you point out, there are certain areas of the market that are looking quite lofty. i would agree. i think technology actually looks a bit overextended here. valuations, you know, they're okay but earnings growth is about in line with the market and then, of course, when you take into account the very long kwo queue of companies looking to go public, two-thirds of those don't have earnings. that's a ratio we saw back in

1999 you throw on top of that, last quarter, technology had the highest proportion of negative earnings guidance. so i think there are pockets in the market where valuations look stretched. >> where do you see on how we're valued going into earnings season >> i really don't think valuation is a reason for concern. not with the alternative of where yields are on bonds right now. so yeah, the market's a little bit above average but i don't think that's a big deal. because of the alternative is just not that good as it pertains to tech, look, technology stocks are a lot not back to their all-time highs of last summer. just certain pockets like cloud and software they're the valuations, so i think there's still opportunities within technology. >> and finally, what about places like energy or financials >> financials, i think that's an area that's very interesting it's lagged significantly last year and has finally started to

cap some wind as yields are going higher companies that are heavily regulated and very, very attractive so i think those can have wind at their backs for the second half of the year. >> thanks. kara murphy and andrew slimmon. wynn resorts rallying with a big up more than 7% this week shrugging off recent regulatory concerns over the gaming hearings in massachusetts. casino stocks in general having a good year. wynn and with us, david, great to have you with us. those hearings last week in massachusetts were certainly salacious but seemed like the markets were looking right through it and say it's all about mccown what stood out to me in your note, the forecast overall for mccown is now double what it had previously been up 10% versus 5.3% what accounts for the major revision hire? >> i think a number of things

have happened since we visited the market, met with our contacts, talked with the companies in early march those include some china stimulus, an expectation of a china trade deal the numbers for march turned out to be way better than anyone expected and as you point out, those massachusetts hearings are drawn to a close and quite frankly, we think there's a number of good outcomes for wynn. that, you know, frankly benefit the company in the long-term and if you've seen the building and where it's located, we have very high expectations for it but to answer your question directly about doubling our ggr expectations for the market, what we found over the years covering mccow is that when we start to raise numbers, the number inflecting, we never seem to quite raise them high enough. same is true in the other direction as well. >> when they come back, they really come back strong. also make the point, because this was an overhang on the sector, concessions on the fear the chinese government would not

extend the concessions that mgm received the concession extension to 2022. does that lift all boats does it increase traffic overall because the properties does that outweigh the competitive force these companies may have on a player like wynn? >> i think what we've seen in mccow over the years with new properties online, the addition of hotel rooms is bringing more visitation and revenue to that market we've not gotten to a point where we see cannibalization from new properties entering that market. we have a bridge from hong kong that's open only to buses but not fully loaded in terms of bringing higher end traffic to the market yet but still to come i think there's a number of other infrastructure issues coming along with the new supply and so, frankly, cannibalization not something we're concerned about. >> the zoo high bridge, how much

more traffic could there be? opening up to general traffic by a certain time >> there is. it's been a gradual opening and again, it's based on a licensing basis and so far, primarily what we've had are large numbers of bussing customers who tend to be lower value. those higher value customers are still not able to use the bridge >> within the sector, overall, david, what's your top pick? >> wynn would jump towards our top couple this morning and happened to like regional gaming as well. el dorado resorts has a bit at the top of jeffrey's franchise pick list for quite some time and performed quite well but wynn and el dorado probably the top two. >> thank you >> pinterest is getting ready to be the next big name to go public in the year of the ipo and lyft pointing the finger for its postipo pick and who it's blaming.

one major analyst downgrading the geto sck months after upgrading it that and much more on "power lunch. moving is hard.

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with pinterest leslie >> reporter: hey, kelly. pinterest going around to underwriters, meeting with their sales team, teaching them how to pitch this deal. we got a nice window into that pitch exactly because the retail road show video that's created for retail investors who can't attend, the in-person road shows learned that pinterest is focusing on explaining their business model which they say is very difficult to categorize with the other businesses that are currently in the public markets. they say it's not quite social media, that it's more about self-improvement than connecting socially with other friends and other people and not quite zesh search but discovery, people who come to their site don't know specifically what they're looking for. that is the message and story they plan to bring and explain to wall street investors as they meet with they will over the course of this week and next week a story like that, plus fundamentals are what investors are really looking for as they

assess whether or not to buy shares in this ipo now, in pinterest's case, the fundamentals are mixed they have top line revenue projections that were released today that showed about $202 million in the first quarter at the high end of the range that they're projecting that would imply an increase of about 54%. compared with the first quarter of 2018, but the company is still posting losses even though narrowed in the first quarter projection number. and their monthly active user growth does appear to be plateauing worldwide now, all of those things combined encourage the company to come out with valuation range today of about $9 billion at the midpoint that is below what they were seeking in their private valuation last in 2017 which valued them at $12 billion, melissa. >> leslie, real quick. i heard you mention they have some version for retail investors of their own show.

>> reporter: the retail road show presentation is one that's posted online. and it's so that those investors who don't get invitations to the invitation only luncheons and meetings they do across the country this week can still see some semblance of that presentation which explains their business model and explains their financials and so forth. but the retail investor who would watch that video does not get the chance to ask questions like an institutional investor would in more of those settings that are invitation only. >> social media, has that become a bad word when it comes to comes to figuring out comps? if they say from out of that regulatory scrutiny other companies have right now >> reporter: it's an interesting distinction, they did not shy away from making that distinction. keep in mind, pinterest is entirely ad-based in terms of revenue. so their entire monetization

model is based on advertising that is posted on their site they collect data. they say this in their prospectus, they collect data that can be used and shared and even sold to other people, so the contours of the company do resemble other social media companies that we're familiar with in the publicly traded marketplace but they go out of their way in this new video that was just posted to really differentiate themselves from a traditional social media company. >> leslie, thank you leslie picker at j.p. morgan >> lyft threatening legal action against morgan stanley blaming it for fueling the drop after weeks ago. deirdre? >> reporter: melissa, this is a story that could have major implications for the banks involved and the other tech ipos in the pipeline. here's what we know so far on the first day of trade, lyft shares fell as much as 12% on its second day there was a lot of chatter about short pressure on the shares from pre-ipo investors despite

lock-up agreements that are meant to block them from betting against the company. the next day, april 2nd, lyft's lawyer sent to morgan stanley, bet against the stock. and copied the j.p. morgan and morgan stanley tech investment banking teams, also the lead lyft and uber underwriters respectively the letter which we did get a hold of asks morgan stanley to stop helping pre-ipo investors short the stock and hand over a list of all shareholders who are doing so, all pre-ipo shareholders threatened legal action morgan stanley, as we're reporting, adamantly denies wrongdoing and a spokesperson telling us any suggestion it engaged in an effort to apply short pressure to lyft is false. some key questions remain though such as are pre-ipo lyft investors circumventing the lock-up agreements and what was morgan stanley's role, if any?

>> how to help the stock if the stock wasn't delivered for some time after the ipo there weren't shares available to borrow or to lend >> our understanding, it would be a sophisticated financial product. a type of swath that would allow they will to do so, getting around the idea of what you're referring to, buying some locates before they were available. as i mentioned, an accusation that now lyft's lawyers are looking into, but the question as well is why did they create this product and market it so aggressively if they did ahead of the lyft ipo, when sources that leslie and i have spoken to haven't seen anything like this before >> interesting stuff deird deirdre, thank you still on the comeback trail with 27% gain. is it just a one day blip or not? we're going to talk about in "trading nation" up next and

lebron james on his way to becoming a billion dollar guy. his income off the court and tell you why this could abe crucial summer for him "power lunch" will be right back a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org

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lunch. i'm michael santoli at the new york stock exchange. general electric fried after underweight but price target is up $5. gina sanchez of global are your trading nation team today to talk about this one. considered on the fundamental side, someone to listen to what are the technicals telling you right now about this messy chart? >> the technicals are saying to sell it. this is a stock we've been bearish on for a while and recommend selling. i think what's notable about today's weakness is that it's occurring below the bearish slope of the stock's 200 day moving average what this is showing is the near term is lining up with the long-term weakness we see this as a resumption of the long down trend. >> gina, obviously, i guess even the bulls on ge would say this is a long process of the company

regaining the trust of investors or the benefit of the doubt. where would you come down in terms of, i guess, trying to assess whether the company has a shot at a real comeback? >> i think this is really what happens when you get a stock that goes down 67% at nearly option value and if you look at the ceo's claims, larry saying he expects to turn it around by 2020 and the power sector in 2021 that's a long time from now and in between now and then, probably going to have an economic slowdown that we're in the middle of having at the moment so if you're really kind of looking at these sort of overall vierp environment, it's not great for a turnaround and that's really what's going to keep this stock from bouncing much higher than the option value bounce. >> economic tail winds didn't seem to help see how they can contend potentially with any head winds that come along. thank you very much. for more "trading nation," head

to our web site or follow us on twitter at @tradingnation. ahead on "power lunch," oil hitting a five month high. closing numbers next, plus, making a billion dollar athlete. sports author brian windhorst on set discussing lebron james and all aboard the ceo of norwegian cruise lines live from the deck to talk about the future of the travel industry stay with us. >> an now the latest from tradingnation.cnbc.com and a word from our sponsor. >> some people say buying, holding investing is dead but nothing wrong as long as you don't buy and forget about it. it's important to make sure that your portfolio doesn't become overly concentrated in one stock or sector due to market appreciation don't forget to rebalance your portfolio every six to 12 months to maintain your target allocation i'm rab di frederick and schwab is the better place for trader

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. welcome back everybody i'm sue herera here's your cnbc news update at this hour. outgoing homeland security kirstjen nielsen says she shares the president's goal of security

of the southern u.s. border. she spoke briefly to reporters as she left her home in virginia >> as you know, dhs is a vast array of missions. i want to make sure that we continue to execute them all with excellence through the transition >> israeli prime minister benny gants urging those to get out and vote before the national elections. appeared at a blue and white event in tel-aviv. nearly 100 new cases of the measles reported 645 cases in 19 states this year it is the second greatest number of cases reported in the country since the disease was reportedly eliminated back in the year 2000 you are up to date that's the news update at this hour back to you. >> thank you, sue herera the oil market is closing for the day. get to eric chemi. >> that's right. oil prices rising to a five month high on monday driven by expectations for tighter global

supply for conflict in libya and opec led supply cuts wti, rising 2% violence threatening to disrupt exports, forces are advancing on the country's capital, disregarding global appeals for a truce. opec supply cuts with their goal of raising prices but should raise their output, meanwhile, the saudi energy minister said it's premature to say whether consensus exists to extend those cuts back to you guys >> thank you very much, eric and as eric mentioned, a lot going on in the oil sector right now. crude oil with a five month high and ethanol and drawing $30 billion worth of demand for bond offerings which would be three times its initial offering here to break this down is john, the founding partner of the gan. great to have you with us. how much higher should we see wti and brent go >> it seems like we're probably

heading up towards $64 area where the next point of resistance and objective is on the chart. i think there's just so much nervousness in this market and kind of on its hair. a couple of weeks ago, a number of refineries and gasoline prices and crude up. also a separate report by another big drawdown, potentially, going to see wednesday's report, weekly report this situation in libya now, interestingly enough, the general leading the insurgency into tripoli controls the eastern part of the country where the oil is flowing quite rapidly. so this shouldn't be much of a concern and right now, we need every barrel if we lose the libyan barrels, we can't afford that and that's why the market is reacting the way it is. >> people we just spoke about this, the gas price is up quite a bit this year and more than this time last year, higher yet but only a little bit? >> we'll have to keep an eye on the situation with the ethanol too. that's also exacerbating the situation but to the extent the crude keeps marching higher, it

will continue to get higher. this ethanol situation is a weird one. it's affecting the coast over $4 a gallon there new york is getting brazilian cargoes of ethanol it's one of those things that can really sort of blow the lid off gasoline just temporarily. i think right now, it's a slower grind, some higher but some of these things you're seeing, just reported on about the potential fraying of the opec led supply cut deal could be a major impetus. >> on the coast, what does a primary driver of the march towards 5 year highs is it ethanol or is it the price of wti >> in california, it's ethanol there's actually shortages there where there's dry gas stations as a result and in new york, a string of refinery outages and issues, also, on the gulf coast. the spectacular fire and oil spill into the eastern channel that disrupted shipping and production we go on a streak like this once in a while where the refineries

are hit by lightning everything you could imagine happen the locusts come and prices push higher we're going to go a bit higher we could see the national average approach $3 a gallon which would be worrisome when consumer's confidence gets hit >> that's pretty shocking there are shortages in california. just a higher proportion of ethanol or literally can't get it there >> they just can't get the supplies from other sources like we can here in brazil. >> we mentioned saudi aramco, that would be three times the reported initial number. what does that indicate to you about demand for the ipo when there is one >> that's gone up to $60 billion. six times, go higher this thing is hotter than hot takes, i guess it means a couple of things. the prospectus was pretty interesting and revealing. okay the fact that the bonds got rated about the second highest for moody's and s&p tells you a

lot. got plenty of money to cover this bond. that's why it's so red hot and, you know, some of the issues within the company, why aren't they worried about with the stock coming public with whatever it does where are these disclosures like the size of the fields, for example andsome issue when thi prospect about the largest field depending about how you read it? you could say it's in massive decline or read it, this is how they get to a certain production level or manipulate that particular field just as an example. i think this really may, and i've been a skeptic of them coming public with the ipo, with the stock and i think the stock could end up trading like a tesla because of the sort of interference you would still be subject to from the government so you'd roll out with a price, say it's $100 a share to use a round number after that, go down the road, they like to play games with taxation they could, you have unbelievable commodity, straight up commodity risk. the earnings from year to year to year really ride the roller coaster on down with oil prices.

when you're talking about ratios, forward looking numbers, earnings, government interference, the stock is a lot more tricky than this $10 billion bond is. plenty to cover. >> the stock just fine depending on how you think the movie is going to end >> went public, because when it went public, it was a good return for investors in the initial, you know, however many years in the investment for right now. >> today's tesla where you have sort of an interesting ceo and interesting governing structure. i'd be scared to think you'd buy the stock and just put it away not happening. >> okay. thank you, john. meanwhile, a new survey out today lists the top restaurant and beverage chains according to teenagers and here to spill the tea, which is apparently what teens now say, is kate >> love it thank you for that that's right so piper jaffray out with the 57th semiannual survey taking

stock and looking at gen z spending trends. food is an important part of the wallet for all teens if you take a look at this and in fact, represents the largest overall spending category for 23% of upper income teens and 20% for average income teens food spending also the top priority, no surprise for male teens. ranks number two for females after clothing for upper income teens, the top preferred brands are chick-fil-a, starbucks and chipotle for average income teens, mcdonald's replaces chipotle as third most preferred brand and the past three surveys held on to mind share levels among teens as has starbucks as the top coffee brand 64% prefer limited service to full service this is in line with last fall but increasingly so in the last few years. the trend was originally fueled by younger generations' prefr s preferences for more social

experiences, less cash, eat better, and engage, go eat it at a table. >> used to say spill the beans now they say spill the tea learn something new every day. thanks. >> to eric chemi with a news alert affecting major league baseball >> that's right. this is according to "the wall street journal." the trump administration is informed major league baseball it may impose a new waiver system making it tougher for cuban players to play professionally in the united states with the dangers of doing business with havana this goes back months and years between the league and the cuban federation trying to find a safe way for cuban players to make it to the united states but the trump administration taking a harsher view than the obama administration in terms of how private organizations like mlb would do business with kubcoup this is the next step in the process. but for now, the white house is saying not so fast it won't be that easy to sign cuban players. back to you>> does it mean we talk about a big change from all

the cuban players now in the mlb? >> not for players that are here now. it's for players still in cuba that teams are trying to get on their rosters and so the way it's worked so far is that you have to basically be a refugee, work your way through in another country like mexico or dominican and then get into the u.s. and trying to set it up, coming directly from cuba with payments to the cuba baseball federation and not 100% certainty whether or not they're part of the cuban federal government that's where a lot of this stems from. >> eric chemi, thank you very much when the nba playoffs start this weekend, they'll not be playing. first time since 2005. this summer, doing something more important for his future. we'll explain what nba writer brian windhorst joins us next.

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welcome back 2019 basketball season sure didn't work out the way lebron james wanted it to on the court. the lakers out of the playoffs and he is for the first time since 2005 but his bank account is doing just fine. forbes stipulatestimated he's te highest paid player in the world with salary and endorsement and throughout career, $270 million he's earned on the court and double that in endorsements. joining us now, brian windhorst of espn, the brand-new book, lebron inc. the making of a billion dollar athlete welcome. >> thank you >> i was struck by the fact one of the quotes in the book is a guy saying lebron knows more about business than i did when i was his age and that guy is warren buffett what is it he has done so in such a savvy way that will become a template? >> i think two things especially one, realizing that he was going to have a long career and he

made decisions not based on the best deal he could make today, would be the best long-term deal unusual for a teenager his deal being the number one kpafrl of that turned down 30 million extra from reebok because he felt nike was the better company that's a decision many 18 years old won't ake. and captured value off the court. learned people want to be in business with him and give him equity for having his name attached to projects and he's been smart not giving those away he's made a few bad choices here and there. but generally, his look to capture value and one of his worst moments of his career, the decision, you remember >> notorious. >> even though poorly executed, the concept was very smart, capturing the value. >> this is just when everyone knows, when he decided and a reporter really kind of off-handed came up with the idea, why don't you when you announce if you stay with the

cavs or leave, do it yourself and control the experience and you were saying even though it went so poorly for him, took him a year and even more for his reputation to recover but still a preview of athletes doing more like that. >> an hour of prime time for free, sold advertising, gave the money to charity and did something that most people just give away for free, saying where he's going to play the execution was bad but the concept was really good and he's more fit and gotten better on that with deals like that in the future. >> does he have advisers, mentors? >> he has a couple of guys business with very smart and one of them is a money manager in southern california named paul who's got a very small practice. his first client was arnold schwarzenegger and works with jimmy who helped lebron get into beats early. traded promotion of beats for a couple of points, sold to apple for $3 billion reaped over $50 million, way

more than he would have gotten just signing the endorsement contract maverick carter, a really good person, being his manager and now gone into the media business and not going to be afraid from taking advice from people like warren buffett went out at age 23 i know it's common place for people, but he was 23 years old when he met him. >> also made inroads in sun valley but since you brought up media, let's talk about that for a second this summer, he has "space jam 2 "and why is no one participating? afraid he's going to make them look bad >> taken out of context. he is in the process of casting as well as warnrener brothers i the process of casting you have demands, first choice a couple of players said i just can't do it for various reasons. doesn't mean they hate him, but certainly, "space jam 2" is a major thing for him.

a lot of media projects but nothing the scope of this one. >> what way? just financially, in terms of future movie projects. why? >> the developmental deal with warner brother or sist eer bros they've done to this point have been building up to this and warner bros. is more operation, new management. several of the people who brought him and have now left the company. if it is a hit, i could see a multi-picture deal that goes on and sets him up for three, four, five pictures doing the rown th. i think it challenges the portion of the media business. filming it this sirm, coummer, r hope by then the lakers have it going again and right from the 2021 finals into the release of "space jam 2". >> i'm going to have to watch one before two to make sure i'm all set. >> how devastated is he to be missing the playoffs >> he went hoping to raise the

lakers brand to be part of a runway tour. huge post-career still can do that. but it's hurt him and not only that, prospects of short-term improvement are a little bit shaky. >> to say the least. congrats on the book brian windhorst from espn. after the break, live from the deck of a norwegian cruise ship where seema mody is sitting down with frank. >> reporter: melissa, we are aboard the norwegian sky recently underwent a massive gut renovation the question, will it pay off? speaking to frank del rio, cup after this break woman: my reputation was trashed online,

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cruise lines are giving their fleets a bit of a makeover norwegian has invested up to $1 million since 2014 sima >> thank you, frank, thanks for joining us today on "power lunch. >> welcome aboard. >> it's been fun to see all 12 decks of the norwegian sky

this ship underwent a huge renovation why put so much money into investing in this fleet, why not retire the old ships and bring on new ones? >> she's not that old. she's less than 20 years old, for less than $100 million we now made her better than new to replace this vessel would cost nearly $700 million and we'd have to sit and wait 5, 6 years before it would be delivered by the yards we think from an roi perspective, it's exactly the right thing to do, it brings relevance to the fleet, it m homogenizes your entire brand. >> despite all the negative headlines, the viking ship or whatever it may be, 30 million passengers are set to cruise in 2019, up 6% from the prior year, these new renovations you're doing, are you going after new cruise passengers or ones that

are staying loyal to the brand >> i think both. 40% of the guests are repeaters with us, so the lifeline of a cruise line, of a brand is a combination of your repeaters and you the guest. what this renovation does, it extends of life of a vessel to a level that continues to allow the ship to generate top yields. this is a fixed cost business. the higher the yield it all drops to the bottom line fp. >> norwegian is not the only one putting money into refurbishments your peers are doing the same. you're bringing on a lot of new ships to market. there's a concern there may be an over supply, too much inventory. is that a concern? >> no. you know why the industry only grew 6% last year? >> why >> because we only added 6% more ships. we are at capacity constraint. my brand is, we only have 16 ships in the norwegian brand

i can reel off a dozen or so unserved or underserved markets we don't participate in, because we don't have enough ships that's why we have 11 ships on order, with the first two coming on core in november of this year, norwegian on core followed by the region splendor in february 2020. we're very excited about those two new editions >> the cruise stocks have done well over the last few years one of the bigger head winds has always been fuel prices. oil is up another 20, 30% this year how do you make the cruise lines or your ships more efficient so you can incorporate that >> fuel expenses are a relatively small amount. so i would tell you that fuel is an irritant rather than lower fuel prices. but it doesn't determine the overall profitability of a company. what determines the profitability of a company of a brand is do we have pricing

power? and we do. partly because of the great value that the industry offers partly because of these fantastic new ships we're bringing online, the renovations of ships like this, and the exciting destinations we go to this vessel tomorrow will be in havana the pent up demand that the american public has had for cuba for the last 60 years is tremendous >> will that continue to be a growth market given the political tensions between washington and havana? >> i certainly hope so and i hope that after 60 years, the two countries would learn how to get along and i encourage both sides to do so but cuba's a great market and we hope to continue participating >> thank you for having us on board. ceo of norwegian cruise holdings back to you. >> what a great backdrop thank you, sima. coming up,he, ea cckplse feel that? that's the beat of global markets, the rhythm of the world.

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welcome back, it's time for "check, please." twitter is going to cap the number of accounts you can follow each day to only 400, up from 1,000 previously. they said this in a tweet about an hour ago. they're specifically targeting spammers whether this goes far enough, but we'll see, it's a step in the right direction. trying to prevent it from being a term of nonendearment. >> spammers and bots >> yes

>> the automated egg you get following you. >> exactly on the markets it seems quiet, but quietly, there are a couple new all time highs today. technology and communications services >> into fast money >> yes thank you for watching "power lunch. >> "closing bell" starts right now. it is the final hour of trade, ipo's in focus as pinterest kicks off its road show in new york plus, two fed recommendations, the president planning to nominate herman cain and steven moore, art lapper is here to weigh-in boeing shares sliding after cutting production of its 737 max planes, why wall street is getting concerned, and retail investors are buying in. closing bell starts right now.