electronics, it's below everything so we don't make sense to be acquired to make sense to stand alone. >> this is a fascinating opportunity. thank you for coming. >> thanks a lot. >> co-founder of ginkgo bioworks i'll join bill griffeth and contessa brewer for "power lunch" which begins right now. >> thanks very much, kelly we'll see you in a few minutes contessa does join us this hour. the bulls charging again is the worst over or time to get defensive? flip or flop's hgtv, he'll join us this hour "power lunch" starts right now >> welcome to "power lunch." i'm contessa brewer.

stocks rallying for a third straight day pushing the s&p and nasdaq back into positive territory for the week and stock up more than 50% since then more on that just ahead. first, let's get right to kelly. >> thank you, contessa straight to bob pisani down at the new york stock exchange with what's fueling the rally, bob? >> 9:00 a.m. yesterday morning and 600 dow points in about 24 hours. all hopes of trade fronts, all hopes the progress could be made maybe a delay in auto tariffs or nafta progress or the aluminum steel tariffs and maybe suckered

in to that trade deal here and nice expansion and new highs nearly 200 at the new york stock exchange and all doing really well. big names and mx, costco, mcdonald's, and on the first day. and up to you. bad headline on trades any optimism on the horizon? >> there is, contessa. u.s. and china have been trading barbs despite being committed to talking. a ban on huawei products in the u.s. the commerce department given the authority to ban any telecom

deals by so-called foreign adversaries here and putting huawei on a business blacklist the action the death penalty for chinese telecoms saying there's no way in hell i'll be using huawei, despite the white house saying it's not meant to target any company in particular but taking the news sitting down saying they're using to praise national security as a catch-all. the legitment rights and interests of our companies and this could be a wholesale strategy and the creation of a new bargains chip. the white house put a similar policy in place last year on zte and rolled it back for china's help on north korea. bill >> kayla, thank you very much.

so despite all these trade fears, the s&p and the nasdaq are positive for the week. should investors still stay the course david kelly is chief global market strategist with j.p. morgan, and says it could push the u.s. into recession and allie at ubs financial services, a little more optimistic and thinks the u.s. and china will reach a deal what leads you to believe that >> i think that we all knew that this was not a single issue and combatting or dealing with years and years of a relationship and turmoil on both sides. there are reasons why each administration wants to get the success and put it behind us and we think that the escalat n escalation, and that's what it is and we're going through

negotiating and bargaining tactics on both sides and we see some, a deal coming. >> for how long? how long before that deal happens? that's the thing >> that's the issue. i think it's weighing on the market every day that's what we've seen but i think you continue to get a back and forth in the market looking at what's happening and levels of concern and i think some progress for sure >> david, is that not knowing how long this could take what leads you to believe we could end up in a recession if it goes long enough, is that the idea? >> if we make a miscalculation here, we could be in for some trouble. what worries me a little bit is that there's pretty strident nationalism on both sides here i think the administration, the president in particular, is believing the u.s. economy is strong and as we can increase leverage on china and be combative with china, and i also

think the administration may be looking forward to 2020 and saying, do we really want a deal right now or do we want to sort of stay tough with china or tough against china all the way through the 2020 election. so i can see why the administration might want to fight here and meanwhile on the chinese side, i think it's important to recognize that right in the core of chinese nationalism is the idea they'll not be humiliated by the west particularly with trade. it's deep in our history not just more rhetoric out of beijing but both sides, while definitely in our economic interests to come to a deal, i see politics on both sides pushing us away from one. >> we've seen wild swings in sentiment with individual investors this week. what do you think they're thinking about where this trade war goes or as you said, the ratcheting up of rhetoric >> i think people had sort of discounted the fact that this was going to continue, right

we had moved on earlier in this year to focus on the fed and how dovish they were going to be and put this behind us in a certain w way. i think there's now heightened on this but what the numbers are telling us in terms of the data we've seen en masse and also a survey we had put out recently, where we interviewed 3700 high net worth investors and business people globally and consumer sentiment is very high people are putting money to work there is a little bit of a conflict in that, the same people are saying that they are concerned about downside in the market as a result of this volatility but also saying they feel wonderful about their own positioning and investing more in the market. >> the emerging market investors, especially were optimistic >> i think the one sort of fascinating thing about this strategy, around that conflict is that the pull of investors that seemed most bullish on the

global economy, not just the u.s. were emerging market investors. i don't know whether you say that's a group of investors who are used to not having a home country bias and to experience not only volatility, but consistent volatility of volatility u.s. investors but also shows they're out there, they're spending they're investing and that's consistent with the institutional. >> the u.s. can't go into recession. because it sounds like we're the only game in town. >> i don't necessarily agree with that. i'm not saying we're headed for recession. i can see a scenario with an escalating trade war and the u.s. economy is slowing down and housing this morning, a build-up in inventories because of the trading, building up later

so i do think there's weakness in the u.s. economy and suspicious of investors where they say, we're worried about these around the world but fine with our own portfolio terrible drivers out on the road but i'm not one of them. people usually feel better about their own positioning. i think there are reasons to be concerned. don't get too caught up with exuberance >> hate congress but love their own congress. >> precisely david kelly, allie mccartney, thank you for joining us. walmart one of the best performing stocks in the dow today. the retail giant beating earnings estimates and bullish about outlook. cfo told cnbc that tariffs increase prices for consumers. two-thirds are sourced domestically so is walmart a good safety play if worried

$120 price target and you just upped that why? >> walmart delivered tea well. know about their delivery of food and they delivered on an acceleration of dollar growth in the u.s. business and they certainly delivered with that higher return on investment today. >> so if they're saying though that higher tariffs lead to increased prices and known as the low price leader, how does that trickle down to the same store sales that we've seen for so many quarters >> i think tariffs are a risk across all of retail there's definitely risk ahead and see if we move to the fourth and i think the company said

today, clearly mitigate to the extent you can stay at a low price for them if they can and in the government's hands, not in the retailers, especially not walmart's. >> we highlighted how little exposure walmart has >> there are potential increases if we move forward on the tariff front. >> thank you so much for sharing your insight into walmart with us nice to see you today.

blacklisting huawei. how this could affect the global supply chain and these particular stocks. meanwhile, the fangs are back in favor on wall street daey're all moving higher toy. the name worth buying right now after this measure up? 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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the chip stocks getting hit today on the trump administration's move to ban china's huawei from selling communications equipment in the united states. deirdre bosa has more on the fallout. deirdre? >> reporter: contessa, this is not so much about huawei selling equipment in the u.s. because it only has a tiny share of the market to begin with this is more about the ability to source components from the u.s. to continue selling elsewhere and that has major ramifications for the chip makers huawei now the world's largest telecom equipment maker and the number two smartphone vendor it gets many parts from u.s. chip makers, so its ability or inability to source themhas ramifications for the chip makers and global supply chain qualcomm down more than 3% today and a final license agreement with the chinese company supply communication chips to huawei, they are down near 6% last we checked. the move, of course, could up the stakes in the trade war as kayla was outlining, a similar move against zte last year, nearly forced the company to

shut down before the president intervened back to you. sorry, let me mention that way way much larger but it could disrupt the 5g networks around the world. >> for sure. deirdre, thank you very much with us to dive into the impact of trade tensions on chip stocks and big tech in general is jay jacobs, head of research at global x funds >> thank you. >> let's start with the moves. 6% decline does that fully price in the ramifications? >> i think it does i mean, this is obviously a big deal because we live in this globally integrated economy where these chip stocks sell to these chinese manufacturers that assemble these things to phone answered computers that get sold back to the united states. u.s. chip makers and final assemblers is huge for these companies. >> isn't it bigger than 6% smi question or so, for people who are invested, do they say it's down today and it will continue to drop until we can figure out, you know, what that supply chain looks like now or have they priced that all in

>> i think the challenge is one, how permanent is this? is this forever, get resolved in the next couple of months? how does this reorient itself? now maybe doesn't go through china or another southeast asian country or not that big of an impact on the chip companies. >> although, i was reading that huawei and zte were already trying to lessen their reliance on american suppliers. if you put this break in the supply chain, the fact they were looking to find other suppliers, could this be permanent? >> it's possible they want to not be as reliant on the u.s. but the u.s. is really good at designing chips does a great job with 5g and one of the leaders in the space. there aren't a lot of alternatives with not that many companies with these high powered really impressive technology equipment >> does this serve to slow down the rollout of 5g, do you think?

>> i think it absolutely does. anything that increases the cost is going to make it much harder for 5g to roll out you look at something like verizon and at&t, it's hundreds of billions of dollars they're going to spend on 5g the estimates show $400 billion is spent on 5g and they all have to make that up by financing it today and getting subscription costs in the future and if that cost goes from $400 billion to $500 billion, it becomes difficult. >> last hour, was telling us they don't use huawei equipment. what was the series that makes that more offenses >> they have to go to nokia and eriksson they have no incentive to discount prices but manufacturing constraints with how quickly they can roll it out. even if you don't buy from huawei, this impacts the eco-system. >> quickly, what do you make of this rebound let's call it the ownership as we get these disclosures, all the hedge funds piling back?

>> i thought it was really interesting these hedge funds again. we see a lot more interesting names beneath the faangs there's interesting second tier companies. >> fintech >> even warren buffett. >> faang stocks. why not alphabet >> people are interested in areas of future growth 20% revenue growth >> thanks very much. sheryl sandberg tomorrow on "squawk on the street. don't miss it. disrupter companies with a mission, to make more than just money. we take a look at social

conscience of these emerging companies as well. and a major shareholder cuts way back and wall street seems to be falling out of love with the tt any as well. ishaa buy signal "power lunch" is back right after this ♪ ♪ memories. what we deliver by delivering.

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systems could remove 8% of global carbon emissions in the next five to ten years >> we spend almost 15 years off the technology to make it. so selling the ethanol will actually pay the capital investment in a period of three to four years. >> reporter: the fuel from lanzatech's china plant used by the virgin atlantic airplanes flying right now so already in use and if you're wondering, this right here is not a microphone but a carbon monoxide detector to make sure i'm safe even when this in high-tech lab. >> i was wondering what they were monitoring. i was hoping whatever it is, it's at zero right now >> it looks like the old fashioned beeper >> my carbon monoxide levels at zero. >> breathe easy. thank you, julia now over to michael santoli for

"trading nation. >> thank you, bill tesla, sinking today with wall street turning its back on the electric auto maker, stock with 12 price cuts unloading the majority of the and joining me now to talk about this one this stock for a very long time traded in a wide range between 250 to $350 a share. it has broken below that range >> that's pretty bad any time you have major support that breaks, the next key is to look for when's the next downside level the next downside level for us, some support at 215 but really, there's not major support until $125 big downside here. we think that downside risks, far outweigh any sort of

oversold bounds because, again, broken support turns new resistan resistance major at 250 with the next support on the downside on 185 for us, this is a chart that we want to avoid all together >> all right seems precarious >> i think the stock is finally coming down from ridiculously high levels. the company has been unable to show cash flow generation and balance sheet issues and the board members that are not seeking reelection team members leaving, elon musk is a wild card competition in the e-car market is on board. you have the factory, freezing expansion. a stock that's coming in, evaluation is still ridiculously high

i think the stock could fallower jc and john, thank you very much follow us on twitter at @tradingnation. back to you, contessa. awaiting comments from president trump on his new immigration plan headlines when we have them and plus, try not to flip out. the star of hgtv's flip or flop, joins us live to talk housing. >> can't wait. pinterest after the bell we'll tell you what to expect from the company's first report after going public all this when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> for entries into breakouts,

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. hello everyone i'm sue herera here's the update at this hour syrian taking control at northwest syria after heavy shelling and air raids the village known as a strategic and rebel stronghold on the edge of the hama country side kerstin gillibrand said republicans, overwhelmingly men, leading an assault on abortion she traveled to alabama, where they would outlaw abortion after six weeks of pregnancy. >> we need to call this what it is a nationwide assault on women's constitutional rights by ideological extremists who have no right to be making the most

personal decisions >> pet food trade. invited to have cat food with artificial ingredients for free food and offering free nutrition counselling for your pet >> thank you about 90 minutes until the closing bell a check on the markets now another rally on wall street the dow up more than a percent so is the quarter. and the dow and the best performing sectors led by the faang names. >> cisco's systems is rallying after better than expected earnings and revenue farfetched, a luxury online retail lost more money than expected even though total merchandise volume was higher

than expected. those shares down nearly 11% and finally, biotherapeutics meg tirrell told us this stock could have a big move on the data and the stock soaring today by 34% oil market is closing um eric >> you can see all this green behind me. crude prices rallying again today extending gains for the week with sharp sell-off on monday big story, the ongoing tensions in the middle east that's what's keeping prices higher the saudi led coalition launching air strikes in retaliation for recent attacks on the oil infrastructure. the escalation of tensions added to fears of supply disruption. political turmoil already hit exports there. international brent crude, you can see in green, touching their highest level in three weeks that happened earlier today, so that 1% to 2% move in the markets. back to you guys. >> thanks very much.

president trump about to unveil more details about immigration plan eamon javers is live at the white house for those remarks that will be made shortly. eamon? >> reporter: that's right. we're expecting the president here any moment and what he's going to lay out here is an entirely new approach in the united states to immigration aides have been working on for a couple of months, they briefed us yesterday the president wants to move away in terms of legal immigration to a family-based system in which it really matters if you as an immigrant have family members already in the united states to what they call an education and merit based system in which, citizenship applicants would really get points for different levels of education attainment, career opportunities, education, english proficiency and the like they'd like the immigrants who are applying for citizenship to have, for example, a job offer inside the united states they want, they say, to push the population of imdwranmigrants u educational and income ladder, so a higher educated, higher

income group of people this is silent about those far down that spectrum with service industry workers and the others who are coming in to take jobs at the bottom of the income spectrum the plan doesn't really address that at all but we'll hear from the president here about an approach most acknowledge doesn't have a chance on capitol hill but ultimately, they say, it will be the starting point for negotiations >> eamon, thank you, and we'll monitoring these comments as they occur and let you know when headlines come out of them thanks >> likely, the business community will be eager to hear what he has to say because so many people have been talking about the skills app with good immigration reform to deal with that but in the meantime, the president is likely to take questions afterwards and much about the trade war and today, the chinese furious with president trump's treatment of telecom giant huawei labeled it a national security risk and put extreme

restrictions on its business with the united states china called it an abuse of export measures and vowed to take further necessary measures to protect companies did this make a trade deal more difficult? head of research strategy and operations at the eurasia group. good to talk to you today. you in fact call this a grave escalation with china. what do you think the president is hoping to accomplish with this in terms of the trade escalations we've seen the last couple of weeks? >> thanks so much for having me. to be sure, the white house actually talks about the move against huawei since placing huawei as a separate track from the trade negotiations but that is not how beijing is viewing this latest move and already, eurasia downgraded our call for a u.s. china trade deal by the

g-20 in june when trump and xi scheduled to meet. we downgraded the probability both sides reach a trade deal to just 15% that happened before the latest move against huawei we can expect a further hardening on the part of beijing that will make progress on that more challenging to come by. >> would this kind of approach work differently if the country on the other side was not china where culturally, this idea of saving face, of having pride when you approach negotiations were not so important? >> certainly saving face in the chinese context is part and parcel of what xi jinping is having to deal with here but more broadly, it's more so about how beijing views this move against huawei they don't see it as the u.s.

side does as a means of answering to the behavior by the company. and a purely political move designed to contain china to keep china down, including high-tech sectors of which most important technology company they see this as politically link linked, not in good faith but keep u.s. on top of the strategic sectors in the future. >> the phrase that stood out to me from the chinese last week is when they said what they want was a balanced deal. meeting him up too much and not much retaliation in return so i'm wondering how much more retaliation can we expect and what would it look like from the chinese do you think

they have to be careful and assume it takes careful consideration before we see the way beijing will decide to respond. why is that and in order for it to succeed and its long-term struggle against the united states, it has to retain economic resiliency. >> so long as his economy can withstand the additional pressure, he will not need to capitulate to u.s. demands and that is why beijing may choose to retaliate but it will be careful not to overly respond in a way to scare off u.s. company investment and further fdi from companies from other foreign companies as well and more of a balanced view and move in its efforts to retaliate. >> not great odds.

thank you so much for laying it out for us appreciate that. >> thank you they're pulling back rick santelli is tracking the action for us at the cme rick >> reporter: in the bond market, kelly, it's not having a huge effect and all the nervousness of the chinese hitting the nuclear button with respect to selling treasury pushes yields up if that was going to occur, an opportune time and the verge of the lowest level since december 2017 u.s. treasuries since 2013 and you can see, it peaked about 1.3 trillion or so in the fall of 2013 since mid 2017 and next chart is really

fascinating. and mid february for today real flat part, that's the month of march usually to support their currency, like selling dollars their currency was flat. that makes some think about their action and how it's moved. but selling would be crazy because it would definitely strengthen at a time when they wouldn't want it >> before you go, they're going to kill me in the booth, but talking about how it would be crazy to sell the treasuries we all know why they wouldn't, so why are they selling the treasuries and threatening to sell more or reminding us they hold so much treasuries? why bother them? >> i think global trade and a lot of issues with global growth, japan's been selling europe to some extent. i don't think the intent is anywhere in the zip code we're

discussing but more for conditions of the global economy. >> good to see you thank you very much. just for the record in the booth, con tes issa made me ask that question. house sog many produing so m china. what is that doing hgtv star, tre hhee is, musa, joining us to talk about that coming up oh, sir. that was my grandma's. don't worry, ma'am. all of your stuff is in ok hands. just ok? they don't give two and a half stars to just anybody. here you go. what's this? it's your piano.

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. welcome back home construction gaining momentum last month after a two month dip and the builders sound a little more bullish. taylor told diana olick at the capital exchange conference. >> i am bullish because of this and when you look at 80 million millennials and i said 40 million of them are getting to household or house ownership over the next 7 to 10 years, i think household growth in that cohort is anticipated to be 3.3

million. when i look at the boomers, about 80 million of them too and household expected to be 10 million over the next eight years. those are huge numbers >> joining us now, someone who knows a thing or two about the housing market hgtv's flip or flop. good to see you again. >> good to see ewe again >> what's it like out there what do you see on the ground the same woman said the end of last year was atrocious. are we seeing a sharp rebound? a gradual one? >> i wouldn't call it a rebound per se but definitely seeing some improvement in the market the interest rates are low right now, lower than they've been in a while and a drop from the future we've been at a very strong market for a long time so we are at the tail end of this thing and dropping interest rates is trying to slow down the effect of what happened to the market and decreasing so trying to

minimum damage but selling more properties faster than i have in a long time. >> selling more properties you sound so cautious, but you're, the day-to-day sounds pretty good. >> it's doing pretty good but i am very cautious and heavily into this and a lot of rental properties out of state. so i'm studying real estate all day every day and in tune with the market >> you could really take advantage of that and hasn't that cooled off quite a bit in the last few years >> you know, i'm just looking at different locations. last time i told you, a bunch of rental properties and close to 90 houses. more since i was here last and 11 in oklahoma and 18 in atlanta and i think i bought 14 or 15 in north carolina so different markets around the u.s. have different, you know, housing opportunities. >> here's my question.

i flipped a house a year and a half ago >> you're very handy. >> i am. a guest house, i'm willing to pick up a hammer and join you. but he's the thing, you have to buy the house really low because those kick in and the materials and aren't you seeing generally the profit margins shrinking >> very good points. when i started flipping houses to today, i'm not kidding, probably spending twice as much money on the total construction than when i first started in the business gone up a lot. so all the costs increased but the profit margins still there but less as an investor, i run my numbers and the end of the day, simple math how much will i spend? how much will i sell for and how much will i make

>> how close are you watching the trade wrangling? with the expectation some of the materials will go even higher in price? >> it will affect new construction and remodelling it's going to affect the economy in many different ways and just as a developer or house flipper, more money to fix up houses. it doesn't mean i can charge more for the houses. i don't see the consumer getting hurt by it but i see the builder or developer going to take the hit. >> thanks. >> contessa and el musa. we'll talk about it. from flip or flop. pinterest reports after the

bell and shares soared more than 50%. are investors pinning their hopes to keep those gains going? we'll lay out what you need to owight after the break what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

pinterest roshtsz earnings after the bell it will be its first report as a publicly traded company. it's had a very good run since its april debut especially compared to some other big recent ipos that shall go nameless but we will show you the graphics anyway. what should investors expect with us mow the analyst with rosenblatt securities. you have a neutral rating on a stock that's been up 50% since its ipo. is that because of valuations or what >> yeah. thanks, bill, for the question it largely is a valuation call here the stock is trading at -- if you look at revenues close to 13x.

>> i think there's a couple things on the report that we need to see from management. win the reft pinterest is a relatively mature company. it's been around for nine years. however, it really just has a fraction of a becauser base that the big guys have. we're talking about facebook, instagram, snapchat, twitter we talk to direct marketers, that's the biggest sort of hang-up that they have they need to see a better scale in terms of users. and frankly, they're very satisfied with the returns they're getting on instagram and other platforms right now. scale is a big question. we're looking for roughly 91 million in terms of m.a.u.s this calendar year. we're coming off relatively flat m.a.u. numbers in 2018 and that plateau they saw in '18

sort of speaks to the competitive challenges they have right now. >> what do you think about monthly average users, that there's no more room to grow or that they're going to have to take it from social media when to me pinterest is really a shopable outlet, not so much a standing and spending time on social media outlet. >> yeah, no, that's a great point. i would say if you look at social media today they're all sort of merging into commerce. whether that's facebook, instagram, google, amazon. they're all sort of merging into this commerce engine, if you will i think that's a competitive challenge in the future for pinterest as sort of a shopping or an influence application for shopping, if you will. but in terms of whether we define it as social media or self-media, it's going out to the same budgets that the social

media guys really command. again, talking with direct marketers, that's the bucket of dollars that they're going after in terms of driving consumers to a sale or to a downloaded app. or what have you it doesn't necessarily have to be considered social networking, if you will. >> mark zgutowitz from rosemont securities thank you. we'll wait for those numbers from pinterest then the ceo of the company ben sill bermann will be joining jim cramer on "mad money" tomorrow night at 6:00 p.m. eastern time right here on bccn credit card interest rates all rising and so is the rate of people behind on their payments. "power lunch" will connect those dots when we come right back what's a target date fund?

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the fed is keeping rates low, but credit card interest rates are soaring to the highest levels in more than 20 years rahel solomon joins us with the story. what are you seeing? >> the average rate on a credit card in america is now around 17%. that's the steepest they've been since 1994 so what's behind the rise? the higher rates began after a law passed in congress in 1999 that limited a bank asability to raise rates on current customers. the consequence being that many banks just started new customers off at a higher initial rate the federal reserve hiking rates nine times since 2015. that's also a factor and finally flashy reward programs that credit card

companies offer. the highest rates we have seen in 25 years. and that is not all. because according to new data from the new york fed credit card delinquency rates are also rising with young people between 18 and 29 being the most impacted all of those who might be reflected in the stock prices of companies like visa, mastercard, and american express all up 25% or more year to date outperforming the broader market. >> thanks rahel. that does it for frch prch >> "closing bell" starts now earnings season back in focus. >> quarterly earnings beats. people are starting to look at these numbers again and saying you know, what we're going back and we're looking at the last quarter, it sure looks good. >> i just think this walmart number is just spectacular >> and ahead we'll get results from nvidia, baidu, and pinterest's first report since going public it's the most important hour of the trading day.