for a rate cut in two days but signs that cuts are coming the dow jones industrial average up about 60 points right now that does it for the exchange. i'm going to send it over to "power lunch" a few seconds early. over to "power lunch." >> we owe you four, brian. four seconds thanks very much welcome to "power lunch. i'm tyler mathisen along with melissa lee, and new at 2:00, a big week for the fed and the markets, as brian just mentioned. will powell and company surprise investors with a rate cut? we will debate that, and the trade war continues to be front and center now on capitol hill. hearings today into the plan to tariff $300 billion worth of chinese goods. the sectors at risk. we will enumerate them for you and the chaos factory. known as silicon valley. apple ceo tim cook slamming big tech the fallout ahead as "power lunch" starts right now.

>> and welcome to "power lunch" on this monday i'm melissa lee. wall street in a holding pattern ahead of the fed stocks carrying out modest gains. nasdaq the biggest winner at this hour. communications services specifically, the best performing sector, led by facebook, netflix. we have much more on netflix ahead. it's all about the fed this week policymakers getting ready to meet tomorrow. a decision on interest rates set for wednesday followed by chairman powell's news conference steve liesman is here with more on what investors should be bracing for. >> the period of the fed's patience could be coming to a quick close. the word first appeared in the january statement and was taken as it was on hold. now patience is not long for the fed's statement. we expect the statement to drop the word patient, which implicitly implies a hike, and albeit with noncommittal language here's are the probabilities we

have been following. still something of a bid on a rate cut this month. i guess you guys are going to debate that. it's 20% usually it's zero when we're sure they're not going to cut. 80% for july, and 96% for september. by the way, all these prices will tell you there's a 50% chance of three cuts by december the fed will strive both not to upset a market that has baked in rate cuts, and at the same time, not precommit to one it will acknowledge economic weakness and low inflation, but stall for time until the weakness is confirmed or contradicted by the data >> all right, steve, thank you steve liesman. >> so fed chair powell has a big decision on his hands, to hold or to cut. what's wall street investing and what should investors do from here joining us, jim paulsen, chief strategist with the luthal group. if he had to guess, he thinks the fed will cut rates this week and matt deziac is ceo of fixed income strategist with merarerr

and bank of america. you say the bond market is screaming at the fed to cut because of a risk of deflation, which is certainly incipient in many countries around the world. >> absolutely. the market has been clear. you're seeing strong disinflation across the board. if you look at japan, the forecast from their markets is inflation of a quarter percent for the next ten years europe, germany, they're down at about 70 basis point inflation for the next ten years it's clear the market thinks disinflation is coming that has brought german rates down to negative 25 basis points we have seen the ten year go from 3.25 last year to just under 2.10 right now >> why is disinflation or deflation so worrisome >> well, right now, we're at a place where the fed wants the economy to continue. they want the labor market to stay strong. they want to keep people well employed they want to keep the recovery going. in order to do that, they have to make sure that the economy continues and they want to make sure that if anything, they err

to the side of being conservative we expect a dovish bias coming out of the meeting because they don't have a lot more ammunition right now, so they want to keep the recovery going, and they're going to be careful to make sure they accomplish that >> steve, you want to jump in? >> the question becomes whether or not they use the few bullets they have now, and how they use them there's some discussion right now if you are going to shoot, shoot to kill. which is another way of saying go big or go home, which bill nelson, a former fed staffer out with a piece, saying do 50 in july and go back on hold, which is wow - >> when was the last time we had a 50-basis point drop? >> someone said it, i forget who it was, but i went back and said did i hear you right >> the idea being is when you don't have a lot of ammunition to use what you're going to use very effectively >> use the elephant gun. >> the elephant gun. jim, what would the market reaction be if the fed cut by 50

basis points in one go >> you know, actually, melissa, i think as long as they explain the why and they didn't explain it in a panicky fashion like they thought if we didn't do something here soon, we're going to head right to recession, they're more of, you know, insurance cut, and we're going to insure the sustainability of this recovery, and look, i think they can make a great case if you're the fed and you say which is my biggest risk, is it inflation right now or is it recession? i don't think it's even a debate and they can make that case. and they can say look, we're going to fight the biggest risk in the room. and we're going to fight that. and if it picks up, we get better, we'll take one back. what's the big deal? >> if i could add a caveat to the idea, how to use the elephant gun how to use the elephant gun without scaring everybody. >> right >> that's the question and that's maybe what you might do is say, we're going to do 50 here, going to hold. and then just it's not a series of cuts coming

we feel confident 50 is enough to get us where we need to be. >> right, and one of the issues the fed has created for itself is they haven't given themselves that kind of optionality we saw that the back end of last year where powell said we're not even close to neutral yet. we're getting there, and we're at neutral at that point last month, he's saying transitory about inflation if you look at the last 11 years, the only thing that's been transitory is getting to 2% every time we get close, you go back down. inflation has only averaged 1.6%, and their target is 2% by saying he was patient last month, he's now kind of painted himself into a corner a little bit where it's hard to switch right away we think they're going to use this meeting this week to change the tone to dovish remove patience, and then look to cut later in the year our forecast for september, but there's a risk for july. >> jim, what should i do with my money? is it time to put money back in the stock market aggressively if i haven't done so already or what >> you know, tyler, i think if i look ahead to the end of the

year, i would be looking to add risk i'm a little worried if they don't cut tomorrow that we could have negative reactions where the ten-year yield goes below 2%, and the stock market comes off, because even though i think the stated thing is they're not going to cut until july, the whisper numbers is they're going to cut if it's disappointed - >> the whisper numbers they cut tomorrow, jim? they cut this week >> yeah. >> that's the sort of market expectation? >> i think that's the whisper number that's my guess. i think the official probability is out there, but the whisper number below that is they're going to cut gist what are we waiting for, for another 30 days to cut this? the data is kind of out there. i don't think it's going to change a lot i think if the fed comes out now, we avoid that i would be adding risk in here i wouldn't be buying defensive stocks i would be looking more to those that are being given away. there just seems to be a lot of fear in the market

>> let me close it off, steve, with a question for you. is there a risk if the fed cuts on tomorrow or even in july, that they are then seen as knuckling under to presidential pressure >> huge risk the president has created this risk, and powell is going to have to simply explain it, if that's what they decide to do. what i was going to say in support of jim's argument was, if you're going to -- if you have a few bullets to use, getting back to what we were talking about earlier, one way to use them effectively is to surprise the market. then you get a big pop in the market, and you get the most juice out of your what you have there, your oranges, so to speak, that you possibly can now, there is that bid, and i think it's met entirely, that 20% probability bid. you're the one who owns all the june futures, right? >> mipa. >> we have to leave it there we have traveled so many different metaphors during this segment. >> i mixed a couple of them.

i'm going to hear from my english teacher. >> jim, matt, thank you very much, and steve liesman. thanks to you. >> to washington now, and a trade panel holding a hearing today into the plan to tariff $300 billion worth of chinese goods. kayla tausche is in d.c. >> hundreds of companies and more than 50 hours of testimony are taking place what's unique about this week's hearings are most witnesses plan to say the same thing. that tariffs are bad and shouldn't be applied to the remaining $300 billion in chinese imports, which sweep up most consumer goods. executives from best buy, hp, even irobot are set to make that case over the next week. and to argue that if tariffs do go forward, their companies or products should be exempt. president trump has been unphased by these arguments in the past and he says those businesses should just move else where, but mark carota, president of bra maker leading lady says it's not that easy >> very difficult garment to make, so many operations

there's 25 or 30 operations on this garment sewing so many different places on here that it is just not done easily at any factory, in any part of the world. >> he is one of the witnesses in the hearings they go through next tuesday, seven days of comments will follow by law, so the first date that president trump would be allowed to introduce these tariffs, melissa, is july 2nd. he said there's no deadline. >> thank you kayla tausche. meanwhile, wilbur ross says president trump is ready to proceed with tariffs on the remaining $300 billion in chinese goods if a trade deal is not reached. here's what wilbur ross told phil lebeau at the paris air show this morning. >> very hard to put a time table on things. i think that we will eventually probably make a deal but if we don't, the president is perfectly happy with continuing the tariff movements that we have already announced as well as imposing the new ones that he has temporarily

suspended. >> secretary ross downplayed the prospect of a deal being reached at the g-20 meeting in japan later this month let's bring in stephanie miller, newly formed research and consulting firm based in d.c stephanie, great to have you here on set. it doesn't seem that there are many preparations under way right now for any sort of meeting between president trump and president xi how do you read those tea leaves >> i think a lot of folks are skeptical that that meeting will happen i think that's a reasonable expectation, in my opinion, i think president xi has the complete power here in the dynamic of who gets to choose whether the meeting happens. i think it's the chinese i don't think there is a lot that are compelling them to the table. i think president trump is really emboldened to continue pushing forward aggressively with tariffs in that environment, i'm not sure that president xi wants to sit down with him. >> are these hearings that are going to last seven days just happened to coincide with g-20 in japan, it seems like that was meant to raise the pressure on

the chinese. that's not working at all. >> no, i would have to think that it was intended to do that, and it probably does a little bit. when you think about all the powers china has through its government, it can control monetary policy, it can spike demand for labor, spike demand for products there's not really a lot that folks in washington i have talked to that think that president xi feels like he's in a weakened position in some way, so despite maybe the administration's best efforts at trying to raise the leverage, i don't know if it's going to work >> he may, though, feel in a slightly weakened position given what's been going on in hong kong would you agree to that? >> absolutely. that is quite a level of unrest, right? >> and so my thought process is, how, if at all, does that play into his resoluteness or his willingness to meet with the president, where he really probably now more than ever can't afford to seem to be caving >> absolutely. that's a good point. i mean, i think it was president

trump who says he intends to discuss hong kong with president xi if he does meet with him. president xi has to at least appear he's willing to have this be a transparent negotiation, transparent conversation, whether it's about u.s. trade or whether it's about hong kong and sort of the unrest over there, so maybe that will compel them to come to the table i would not necessarily be surprised if they meet i don't think they'll reach some sort of agreement at the meeting. >> the hearings that the ustr are holding, they're interesting, they're focusing on industries that would be directly impacted, indirectly impacted and there's another way the chinese could exert their power, holding things up in the course of doing business in china and fining companies that operate there. we haveen that with ford that's the belief behind the ford fine. do you think the administration looks too narrowly at the amount of leverage the chinese have >> yeah, i do think that the administration feels probably more confident than they should. but i also think, you know, how

else are they going to feel? in this country, most americans really do not like how china has behaved on an international level. so the president and the administration are given a tremendous amount of latitude to try to be tough. what are they supposed to do just back down it's not in president trump's psyche it's not in america's psyche so it makes a lot of sense what they have done >> it works with his base, as you pointed out. >> and even with moderates >> quickly, the odds of the final tariffs going into effect, in your view are >> i would say probably plus 50. probably not high conviction, but more than likely, in my view >> stephanie, great to have you. >> coming up, two big deals sending stocks higher today. we'll tell you who's buying and what they're getting there's a hint of two of them that are involved here you would have to figure >> tim cook firing shots at silicon valley tech under fire from within. "power lunch" will be right back

soaring today, as you see there, by $20 a share, as the company agrees to be taken private by a french billionaire kate rogers has all the details. >> that's right, so after 31 years as a publicly traded company, suthby's announced it signed an agreement to be acquired in a value of $3.7

billion. it's owned by the french media entrepreneur and altease founder who is also an art collector under the deal, sotheby's share holders will receive $57 per share in cash. that's a 61% premium to the stock price on friday. today, the stock, as you mentioned, up nearly 60% on the news sotheby's chairman of the board said the deal has support from the board and private ownership will help continue the auction house's path of growth and success. in a statement, the ceo said patrick drahi is one of the most well regarded entrepreneurs in the world, and i want to welcome him to the family. this acquisition will provide sotheby's with the ability to accelerate growth initiatives of the past several years in a more flexible and private environment. the deal is expected to close in q4 following shareholder approval >> thank you very much kate rogers. >> and another big deal to tell you about. pfizer buying array biopharma for more than $10 billion. meg has this story

>> array makes targeted cancer drugs. that's a hot yara of cancer research that was in major focus at a conference. it involves identifying the underlying causes of cancer. pfizer is paying $48 a share for array. that's a premium from where the stock closed yesterday the total value is $10.6 billion. for that, pfizer gets an improved array of drugs. array is known for these targeted cancer drugs and has licensed several out, including to loxo oncology, which was acquired by eli lilly earlier this year for $8 billion the news has also generated investment excitement, helping drive up shares of other targeted cancer companies, and helping the xbi get on pace for its best day since the end of february >> you know, this idea that there's going to be a lot of m&a in this broader space had been going on for so long, and there

are a lot of quote/unquote cheap companies in pharma in general, yet it's these very targeted companies that command a huge premium that are getting all the attention at this point. >> it's showing these drugs really do work when you figure out the right patient and the right drug when you can do that, you can cut down on side effects and get better outcomes for patients so that's very attractive to cancer companies. >> meg, thank you. coming up, with most of the attention being paid to the u.s./china trade drama, a major moment coming this week for relations with mexico. that's coming up plus, communications services leading the s&p 500 today. netflix is one of the best performing stocks. trading nation is ready to trade it and chill next on "power lunch. free access to every plat. 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.

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[chanting] it's not just easy. it's geico easy. oh, duncan. stay up. no sleepies. welcome back to "power lunch. i'm mike santoli at the new york stock exchange netflix rallying today, but check out its moves for the year the streaming stock stuck on pause since january, and its tightest trading range ever, according to bestoke trading group. katie and john are your trading nation team to break down netflix today. katie, how does it look? a little bit of a sideways action pretty good distance below its former highs how does it set up for you

>> netflix really needs this oversold bounce because it preserves support at the 200 moving day average that's defined the bottom boundary of its trading range. there's a couple things working for the chart. it's in a long-term up trend we look at reinches in long term up trends as continuation patterns, and of course, strong support and a strong tape. we need to see some kind of breakout, of course, from this range for a positive long-term technical catalyst, but netflix is oversold after having underperformed it's at this proving ground right now in its chart >> john, do you think netflix can prove itself here? obviously, there's been some rush of enthusiasm for disney, as it kind of unveiled its streaming products but nobody says this is a zero sum game, necessarily. >> yeah, that's right. netflix is the most controversial, the fang stocks because the valuation is really excessive, in our standpoint 100 times forward earnings 70 times ebita the market knows that they have

a first mover advantage in streaming, but it's really discounting very high future cash flows we know all the competition coming to market at&t, time warner, disney, apple, amazon. i mean, there are a lot of players. yes, i guess the share is big enough where you could have multiple subscription services, but netflix is the one model there where they have to continue to buy their original content. they don't have the library. so you know, we know that they're burning through $2 billion to $3 billion in free cash flow. the moment that stops is when i think ironically is when the valuation comes flying out of the stock. >> yeah, i mean, obviously, there's a number of subscribers at which the netflix model works. nobody quite knows what that is and what the value of the head start is we'll see the market try to sort that out thank you very much. for more trading nation, head to our website or follow us on twitter at trading nation. >> ahead on "power lunch," america's second front in the trade war. mexico for now, what's next for the

usmca, plus tim cook takes a shot at silicon valley and "power lunch" goes to work this time at mars pet care we have a sneak peek into the company's brand-new pet friendly office all this when "power lunch" returns. and now, the latest from trading nation.cnbc.com, and a word from our sponsor. >> some people say buy and hold investing is dead. but there's nothing wrong with that strategy 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 so don't forget to rebalance your portfolio every six to 12 months to maintain your target allocation i'm randy frederick, and schwab is the better place for traders. at carvana, no matter what car you buy from us,

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welcome back, everyone i'm sue herera here's your cnbc news update at this hour. the supreme court declined to change the double jeopardy rule, preventing someone from being tried for the same crime twice however, the court has said federal and state courts are separate sovereigns, meaning an individual can be tried twice for the same crime, once in

federal court and once in state court. >> sotheby's is being sold to a french israeli businessman for about $3.7 billion the auction house is the oldest company being traded on the new york stock exchange. the buyer, patrick drahi, is the founder and controlling shareholder of altice. the deal still needs approval from regulators and shareholders a voluntary nationwide recall was issued for some ragu pasta sauces the affected products may contain bits of plastic. so far, no injuries have been reported >> and the toronto raptors are champions of the basketball world. and that city is ready to celebrate. a massive crowd assembling in downtown toronto this morning to greet the winners of the 2019 nba championship more than 2 million people were expected to be part of the fun >> congratulations to them that's the news update this hour melissa, back to you >> thank you sue herera 90 minutes until the closing bell rings let's get a check on markets green arrows across the board,

although a fairly muted session. the dow is up by 52. was 52, 50 points now. s&p 500 up by 7, and nasdaq doing the best of the three major averages, up by eight tenths of 3% >> the oil market closing for today. let's go to the cnbc commodity desk >> lower start to the week with the wti closing down about 1.2%. brunt also in negative territory, closing down 1.8% at this point despite continuing concerns about tension in the middle east, it's fears over slow economic growth and softening demand keeping prices lower. merrill lynch lowering its brent forecast by $5 to $63 a barrel now, of course, all of this comes on the heels of the iea report last week that slashed estimates for global crude demand, citing trade war concerns back to you. >> thank you very much a big week in the battle over trade

mexico's senate set to ratify the usmca as the white house tries to push the deal through a democrat-led house with us now to discuss what comes next is arturo sarucan, the former mexican ambassador to the united states. welcome. good to have you with us is the usmca likely to pass through the mexican senate without any substantial changes? >> yeah, i think it will it's likely that it will pass even as early as tomorrow. it's already been approved by the respective committees in the senate and in the case of mexico, it doesn't go to the lower house, so if it does get ratified tomorrow, that's it for mexico's part in insuring that the usmca has cleared all the hurdles. >> how, if at all, did the president's threat of putting tariffs on mexican exports into the u.s. to lever mexico's cooperation on immigration, how did that change the calculus about the usmca in mexico, if at

all? >> i don't think it changed the decision by the mexican government to insure ratification of the usmca. remember one thing here, tyler, that mexico has been behaving like the adult in the relationship, despite trump's ultimatums, mexico understands how important it is to get this revamped usmca across the finish line the impact it will have for the future competitiveness of north america, and how mexico, canada, and the united states compete with the likes of china. what did create some turbulence, though, was that if those tariffs had been imposed, those punitive tariffs on mexico, a, it would have been a violation of the u.s.'s commitments under the wto, under the prevailing nafta, and it would have been very hard with those tariffs slapped on to make the case politically in mexico that the mexican senate needed to proceed despite the u.s. congress not having yet scheduled the ratification process on capitol

hill >> mr. ambassador, would it be a violation if there were punitive tariffs placed on mexico, would it be a violation of usmca if that went into effect? i ask you this because many people - >> absolutely. >> it would be, all right, so punitive tariffs would be off the table once usmca is passed if. >> they're off the table legally. >> legally okay >> as we have seen, the president is prone to doing what he thinks needs to be done to move his agenda forward, but in terms of what is stipulated both under nafta, under usmca, once it gets ratified, and under wto obligations, these would be a violation of those regs. >> you made the point, though, that it would have been in violation of the prevailing nafta. so i guess i am asking you, does this trade agreement, does usmca provide any sort of certainty in terms of the business environment for the united states and mexico when it comes to doing business cross border >> if it gets across the finish line and the canadian

parliament, mexican congress, everything seems to suggest will be done tomorrow, and then eventually, the u.s. congress, which will be -- which won't be a walk in the park, but i think we should see ratification at some point i'm not sure it's going to happen this year because of political electoral calculus, but absolutely, the whole idea of modernizing nafta and creating the new usmca was to continue to provide certainty for investment and for the businesses that have grown on the backs of what is probably the most important success story of north american trade, which is these integrated supply and production chains that have allowed especially the automotive industries and others to compete globally with the likes of china >> what happens if the usmca does not move through the u.s. congress or the u.s. congress decides to do, to pull a merrick garland in the house and not pick up the discussion of the

usmca? is there a risk that the president would then abrogate nafta and that we would be in a much more contentious relationship on trade between the u.s. and mexico? if it doesn't get through congress >> there is a distinct possibility that that happens, tyler. the president has threatened, forget about whether usmca gets kicked down the road until after the presidential elections next november he's threatened to submit the usmca text with the unilateral denunsination of nafta stapled to the back of it as a means of putting pressure on the u.s. congress to get it ratified as quickly as possible, so yes, that is a feasible scenario. that's a scenario that many businesses in the u.s. are fearful of because of the uncertainty it would inject into the north american economy >> ambassador, thank you very much we appreciate your time and insight today. >> to the bond market now. rick santelli is tracking all the action at the cme.

hey, rick. >> hi, melissa lee both the short end and long end are both idling near cycle low yields if you look at a may 1st start to two-year note yields which are up two basis points on the day at 1.86, you see that 1.83 low there. so we're three basis points away go to the farthest end of the curve, the pattern isn't much different. those are 30-year bonds hovering at 2.57. their cycle year close is 2.53 we're getting close. four basis points away that's the point as we get ready for next week's fed meeting. treasury yields aren't bouncing much maybe the data this morning, that weak data with regard to manufacturing and the gotham area could be a reason and finally, an etf that's really soaring and that's the lqd, the investment grade etf. it's at the best level since october of 2016. melissa lee, back to you >> rick santelli, thank you. tim cook speaking at stanford graduation this weekend, but his comments

weren't very collegial to his silicon valley colleagues. that story next on "power lunch. my degree from snhu has helped me tremendously. the flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through.

tim cook taking silicon valley to task over the weekend. the latest in a series of speeching scolding the tech industry for its poor handling of privacy scandals. in a commencement address on sunday, he didn't mention companies by name, but issued a clear warning about responsibility >> it feels a bit crazy that anyone should have to say this but if you built a chaos factory, you can't dodge responsibility for the chaos >> let's break down these comments with ed lee, "new york times" reporter and cnbc contributor, and cnbc.com tech editor steve covetch steve, i'll start off with you i think tim cook makes a lot of good points, but his hands aren't entirely clean in this whole thing, are they? i mean - >> absolutely not. >> these apps exist on the app

store that apple provides to its users. >> you have to look, he calls out these apps for being surveillance apps. google is allowed on the platform facebook is allowed on the platform dozens of third party apps have been found to be slurping up a lot of your data, even when you're sleeping, are allowed on the platform without any warning. they could be doing more they had some announcements a couple weeks ago where they're moving directionally in the right direction, but there's clear there's a lot more they could be doing to let users know this is how your data is used. >> it seems like no one is calling tim cook out on this and he's in the position of moral superiority in the tech industry >> if you want to be cynical, you could say google pays apple billions a year to be the default search engine. he's been asked that and says he thinks it's the best search engine, but there is irony they're setting themselves up to be in this position where if there is a privacy snafu, they literally have commercials to sell you the iphone because of their privacy clout.

>> that's what they're selling right now. ed, let me turn to you and ask you to put yourself in cook's shoes, hearing what steve just said that his hands are not completely clean the app developers, if i'm on a weather app that i have downloaded through the app store, they know where i am at any given minute is his argument that, but apple doesn't do anything with that data we don't import it back, and use it for our auspices, and it's up to you, dear user, to understand what the app is doing with the data you give? >> i think there's a few things going on i think it's, we're not using that data yet. i think that's a key part here it's easier for -- >> says cook >> says cook, right, says apple. >> hardware, primarily >> primarily hardware. it's easier for him to skwlump in to look at the facebooks and googles and fake news problem, because apple isn't really a purveyor of social media, at least not in the way we think of it at the same time, look, he's

talking about certainly, if you look at the business services is where the growth is going to be coming from. a lot of that is actually advertising. now, you know, the advertising runs across different platforms and part of it is apple and part is third party it's still not a big part of their business, but it will be, or at least they want it to be he might have to eat his words at a later date. there's another thing going on which is there's a little bit of misdirection the government is looking at big tech and all the big problems, whether it's fake news or privacy. the other part is are they too big, are they too powerful in other words, as a platform like apple, are they giving it a harder time for people in their eco system, like spotify, for example, has been trying to get its users to pay through their app without having to pay for that 30% tax apple doesn't want that to happen that's an example of the power argument this is what elizabeth warren has been talking about, should we take a closer look at how tech operates. there's a bit of misdirection. all kinds of problems with tech. data privacy is one thing. but things like platform and

their power is another thing, and he certainly skipped that in his speech >> if you follow through to the worst case scenario for the tech companies at least in terms of what can happen from all these investigations that are reportedly under way, a break-up of apple could be in the coming. if apple divides up most simply into services and hardware, what kind of scrutiny will that services business be it's easy right now as a company that's primarily hardware to say, we're tops when it comes to privacy. we're looking good and you guys are doing bad and you're chaos factories, but when you're split up and all of a sudden you have a services focused business, can you still have that moral high ground >> i think it's hard to have the moral high ground without that i think there's another argument to be made, which is breaking up big tech, all these companies say when you talk about breaking them up, they say well, actually, if you're youtube, we rely on google, the parent company, alphabet, to give us the resources to help stem and to root out all these bad actors if you separate us, we'll have

less resources to do that, and i'm sure if you break off services from apple, apple will make a similar argument. so you know, they're already prepared for that kind of narrative, for that kind of discussion we need to stay big so we can clean up our system that we designed in the first place to be big so you know, i think there's a lot of discussions either way on that side of it, but staying big, don't break us up, otherwise you'll have more problems is the way they have been thinking about it, the way they have been talking about it. >> steve >> yeah, i don't really buy their argument that we're so big, and we need the resources that we already have let's just say for example google and youtube got broken up tomorrow google would immediately start their own competing video service, and they would be incentivized to tackle the problems youtube is already going through in order to track those advertisers they're going to need, and they talk about unintended consequences of breaking up. well, look how these platforms are being used now those are unintend eed consequences when you hear sundar pichai say something like that, it's like

he's never been on youtube before there are already unintended consequences we know or have a good idea of what the consequence of breaking up will be >> when he, ed, says chaos factory, who is he really talking about? >> a great phrase, isn't it? clearly, i think facebook is a factor there i think youtube, google is a factor in that i think it's broad enough that you could sort of use that brush to paint a lot of -- a lot of data, and the mess it causes is what he's trying to get at >> guys, thank you ed and steve, we appreciate it >> our tasting menu is coming up next one place where retail sales are really taking off. elon musk's latest tweet that hasn't come through yet, and the bitcoin boom is back it's gotta let new data integrate with data from our existing systems. ♪ ♪ be able to pull from reservation platforms built 20 years ago. and also be able to use apps to book super-personalized trips on shiny new phones from the future. plus, i need freedom to move my workloads wherever, whenever -

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here's a taste of the stories we're watching today plan planes aren't the only thing taking off at airports today luxury brands find fliers are willing to splurge duty free and other travel retail stores rose around 9% in 2018 estee lauder generated more from airports globally than u.s. department stores for the first

time last year you really notice this as newark all the time there's lots of nice outlets. >> extremely high end. malls, the traffic, is dying out and so where is traffic strong >> go where the people are. >> airport mall. you got the time and not paying taxes traveling internationally. could save you a lot of money on a gucci briefcase. >> i'm a backpack guy. elon musk might be done with twitter, tweeting that he deleted the account just after changing the username to daddy preponderate come for father's day. following the notorious funding secured tweet, as of now though, the account is still active. still on there. >> i left twitter sometime ago because i didn't enjoy it. i think he finds it hard. >> i think that this is the ultimate joke by elon musk to tweet that he's deleted his

twitter account. if you deleted your account you won't announce it on twitter. >> you delete it done. >> poof, it is gone. we'll see. >> cryptos, rallying again the price of bitcoin above $9,000 first time in over a year it is outperformed stocks, bonds, gold, oil so far this year and they know. stock picking competition and that move in bitcoin is why he was until recently on top of the pile. >> i have to have if he doesn't win the stock draft i will have severe doubts. but that's an aside. >> everybody knows mars candy brands but what about the booming pet care business? we took a trip to the headquarters we're going to work next ♪

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power slunch going to work in our series exploring the changing workplace we sent frank holland to an office that's gone to the dogs literally. frank is here with that story. >> working like a dog taking a new meaning with mars. the company known for the candy and this is a company with two equal parts. half of the $35 billion in annual revenues from the global sales of pet food and care services and more than 2,000 animal hospitals so with that in mind mars built a new pet friendly and pet focused u.s.

headquarters right outside of nashville where employees can bring their dogs to work, they can bring the dog right to the desk even in meetings with them mars says the carpet, the furniture and the design of the office were all selected with dogs in mind mars also offers a dog care, playgrounds and outside meeting rooms to be outside with your dog. the company says it improves morale and reduces stress and talked to a number of employees saying this canine culture inspires innovation and collaboration. >> the treats we launch and whenever i talk to my buyers can speak from experience that my dog loves them. >> i might talk to somebody in the hallway i talk to because they have a dog and then i recognize later on as a result we have a communication line so i think it also makes us more efficient at the same time. >> largest global share of pet food competing with nestle and

general mills and with did gol of keeping the edge employees are encouraged to bring the dogs to work since 2008 and it's a very happy place >> is it only dogs >> only dogs. >> what about snakes or cats >> ferrets. >> i think the dogs is pushing it sometimes the dogs don't get along. they have red and green and yellow leashes and a stop sign. >> you have a focus group right there to test it out on. >> what if you have allergies? >> we asked them they said in general people don't apply to work there if they don't like dogs or allergies. >> great story, frank. thank you. >> thanks, frank. we want to update you on the babe ruth auction. it is our check please for the day. on saturday, the gray flannel road jersey sold for $5.64 million. there it is. there we were with it. they were expecting it to go --

went for -- expected for 4.5 million and it is the most expensive sports memorabilia one of the bats that was up for auction didn't sell but personal suitcase we showed that to you went for about 33 grand. >> his granddaughter's favorite piece, that suitcase. >> i liked it, too i would have loved to have that. >> the stickers of where he went we asked how it was to part with the items and she said very emotional to let go of the pieces but glad that the money was raised. >> bat didn't go it was interesting, the collection had lots of things that were not really ruth memorabilia or necessarily come from ruth's private collection or family collection letters from mickey mantle to his wife written over the years. there was a wonderful inscribed photograph of lou gehrig written and sent to babe ruth but there

were a lot of things that went beyond that even memorabilia of current yankees on sale saturday. >> i'm watching shares of facebook up about 3.8% right now. a nice rally going in here facebook just last week announcing that it was going to launch a cryptocurrency and suntrust robinson humphrey saying an initiative to expand the soergrowth prospects and pe are bullish on the prospect of this coin and backed by other companies, established companies out there including uber and looked at as a way to trance act on the facebook platform and a huge step and think of people that use facebook on mobile who are unbanked and don't have access to banking. >> this could really expand this market. >> we are watching the fed, fed has come back into focus there was a period where it didn't seem like the fed was the

fed we had grown up watching so avidly this wednesday they'll report whether they raise -- cut interest rates or not after a period of raising them. >> 155 days between the last hike and this cut if they cut. >> things change in a hurry. >> thank you for watching "power lunch. closing bell starts right now. >> good afternoon. welcome to "closing bell." i'm wilfred frost. that is the boeing post. the stock up it tops the dow today. live from the paris market we'll get what's moving on the stock. i'm sara eisen everything an investor needs to know before the market closing let's get to the action. the market is awaiting a fed decision on wednesday. treasury yields near the