lane >> that's right. >> jason and courtney, as always, thank you. that does it for the exchange for this tuesday. kelly is back again tomorrow in the meantime, "power lunch" starts about right now i'll give you eight extra seconds here, gang >> i'm melissa lee along with scott wapner new at 2:00, recession risks rising, where are central banks and investors ready? larry kudlow weighs in on the fed and american economy >> mexican made autos streaming across the border at a report rate what it means for trump's trade war, and going public in three, two, one virgin galactic's ipo set for blast-off. is this a game changing moment for the race to space? "power lunch" starts right now >> welcome to "power lunch." i'm scott wapner stocks down again. investors gearing up for chairman powell tomorrow the s&p 500 on pace for a third

straight day of declines the nasdaq trying to snap a two-day losing streak. industrials the worst performing sector following a downgrade of 3m, and for more on all of this and what is sending the dow lower today, let's go to bob pisani at the new york stock exchange >> an important thing, scotty, here is we're down three days in a row, and this is not so much i would call searching for direction as i would say that we really need to figure out where the market is going. we're waiting for news, essentially here we're waiting to see if the fed really decides they needed to cut rates aggressively, we really need to see if there is any progress on trade. and we really need to find out if the earnings estimates are too high going into the second half of the year take a look at some stocks moving here. the good news, the low print was at the open. i see semi-conductors like advanced mike row are doing well, all the metals have had a terrible year. they have no traction at all amazon has a new breakout that's a new high for the year, that's 23% of consumer discretionary. that's another sector. historic high today. and 3m, look at that sinking

there. third day in a row, and of course, a downgrade there from rbc citing macro pressures for them that stock hasn't had traction since april when they lowered their guidance back to you. >> appreciate it, bob. >> the big new s the market is waiting for comes tomorrow when jay powell talks to congress but before that, we heard from larry kudlow today weighing in on powell's job security and central bank independence among other things steve liesman is here with those details. >> melissa, the firing of tur y turkey's central bank chief and president trump's consistent throats to fire or demote the chairman of the fed sparked a controversy over whether the central bank is and should remain independent larry kudlow weighed in, saying he believes the fed should be independent. >> that word independent, i mean, it doesn't mean they operate from another planet. the fed reports to congress. and that's in the constitution

and the fed is appointed or the governors are appointed by the president. so i think that in a day-to-day sense certainly they're independent, but that doesn't mean that they shouldn't listen to advice from their elders. >> that advice from their elders, from the president, also from kudlow, was for the fed to cut interest rates to accelerate growth, with both going further than their predecessors and the clinton, bush, and obama administrations in offering advice to the fed. leading them to write in a recent piece, the heyday of central bank independence now lies behind us in a world of rising populism, low interest rates, and bloated central bank balance sheets, independent monetary policy increasingly looks outdated. for now, kudlow said, i believe, end quote, that chairman powell's job is safe, but he added, quote, at the present time >> at the present time we feel better now, at the present time >> at the present time >> that could change

is there really a debate on this issue of fed unless? i feel like those who are saying it shouldn't be independent are on an island, and the majority, the great majority, suggest the fed should be independent? >> i think the evidence comes from like the firing of the central bank chief in turkey not that he was fired, but that there was no cry around the world to this, that the united states did not speak out you think about what you might call, and we'll talk about this next month - >> erdogan, too. and people are like okay >> and you think about the jackson hole consensus for at least several decades. it was an independent central bank and that led to better interest rates policy, better inflation, and better growth outcomes now you have a president of the united states who routinely criticizes the fed, threatens to demote him, essentially, if he doesn't lower interest rates, and that's part of the process so i think maybe they're on an island, but it's part of the big process going on right now, and you do have people like, you were there, art lauffer

you were there, and he won the presidential medal of freedom, so we have to take these ideas seriously. >> he wrote a book on trumponomics >> right >> steve >> i mean, look, if you think it's not a real threat, we won't take it seriously, but it seems like it's an issue out there >> it's out there. people are talking about it more because the president and the president's men, so to speak, are talking about it but do people really take that seriously? really take it seriously is there going to be a day when the fed is really not independent? >> are we injecting -- are we politicizing by talking about it - >> in a way that has never happened in the two decades that i have been covering the central bank, yes. >> if jay powell cuts rates by 25 basis points later this month or 50, let's throw 50 in the mix, would you say that was a political pressured move >> i think part of the reason he might cut has to do with politics i think part of the reason -

>> there's no inflation, there's no cover >> there's cover for that, how do you create, well, if not for what the president is saying, it's out there maybe he hiked in part in december because of what the president was saying >> so poor jay powell. a lose/lose situation. >> there was an interesting story in the "wall street journal" that's worth noting where they talked to leaders of gres, and they support him, and that's ultimately what matters if you're going to change the federal reserve act, congress is going to do it >> the whole reason you want to keep the fed independent is to keep politics as much out of the process as you can possibly do >> right it's even more brass tacks than that, scott. you think about a creditor to the nation i'm going to lend you money. are you going to depreciate my money or not if the history, and i mean going back 5,000 years of civilization, is that despots and monarchs depreciate currencies that's the where word debase

comes from, where you add base metal to gold, right so the idea of an independent central bank is in part the sanctity of the currency, and you pay lower rates because of that >> thought the last we have heard of that. >> despite the uncertainty over the fed and the economy, some are still bullish on where we're going. let's bring in scott, expecting the first rally to head much higher from hereof, also with us is michael, the chief investment strategist with state street global advisers. great to have you both on set. tom, i'll start with you because you raised your price target in may, $31.25, which i imagine is on the upper end on the street there. what is the catalyst here at this point >> i think there's actually quite a number of catalysts in the second half that are much more bullish than consensus thinks about one is, i think it is actually very positive if the fed does cut rates, i think it's a real affirmation to markets about the friendliness of the fed. i think that ism and pmis which

have been tanking and probably weaken into third quarter look like they're going to rebound into 2020, and i think the yield curve has been telling us that for 16 months. and third is that there's still this tina issue. u.s. bonds are yielding 2% versus negative rates. equity cash return in the u.s. is around 5% it's higher than any other country in the world i think stocks are a real bargain. >> tina being there is no alternative for those playing along. to be clear, you raised your price target in may. and even today, you say i think i'm too conservative, because you suggested it could go higher than $31.fwoiv >> that's right. $31.25 is only 5% upside from here when you look at fed first cuts in the last 50 years when either the ism is above 50, which is where it is, or the leis are positive, which it is, or we're not in a recession, the median six-month gain is 12%. it's talking adding another 300 points from here, which means --

>> 3200 to 3300. >> by year end way above 3125 >> can you see the path to that number, michael? >> i think if tom's thesis comes through, what's interesting is if you get a u.s./china trade agreement, better than expected earnings and fed rate cuts, that's constructive for the markets. my only challenge with that is i think a lot of that is already priced into the market if you look at kind of fair value for stocks, given if we just tack on a few percentage points for earnings per share growth on the s&p, which seems about right, we put a higher than normal multiple on that because interest rates are low and inflation is pretty benign, you're getting in the 3 houn area as dom said, we're kind of already there, so kind of you need a lot to go right and a lot is already priced into the stock prices in terms of really good news so what that next catalyst beyond is, is really hard to determine. my opinion is that most of the risks are skewed to the downside similar to the conversation you

were having with steve, what happen physiced if the fed flexs muscles and doesn't deliver the rate cuts. then there's a risk to the downside >> unless, like tom said, you essentially have people being forced into the market the fed, there is no alternative, the fed is going to cut rates. ia don't want to miss out on a possible trade deal with china so you have nowhere else to go, so you're going to bid the market up, even if you feel a lot of if is already in. >> we would agree with that. we continue to suggest investors stay toward cyclical growth stocks in the u.s. you have to. you have no other choice $13 trillion now trades with a negative interest rate so those bonds, if held to maturity, guarantee losses for investors. it's amazing so investors do have little choice bought to own risk assets in this environment, and i think that sports tom's thesis where you're likely to see markets continue to rally. we would suggest you think about quality growth companies that have a cyclical bent and not try

to get too defensivo too value oriented at this point >> i want to ask you about bitt kaine because bitcoin while we have you. >> i'll say the same thing i said six years ago when it was at $80 a coin, which is it is the single best hedge against the traditional financial infrastructure whether you support fiscal and monetary policy or not, it doesn't matter this is the schmuck insurance you have under your mattress >> but that's kind of a default. >> so where do we go from here, and this whole debate about fed and monetary independence, i mean, does that sort of feed into this rally that we have seen in bitcoin? >> i think he's making a great point that there's a macro argument to own some bitcoin whether if you owned 2% this year, it would have added 400 basis points to your fund's performance. that's caviar for a hedge fund but you know, increasingly, bitcoin is a macro story because

we saw it with china and some risks. people buying local bitcoin, chinese bitcoin. it happened in turkey. now people are responding to that idea, if you have a little insurance, it's great, and it's tiny the fact that facebook and likely other fang companies are going to create their own digital currencies is really validating the idea that digital money is here to stay. >> this is almost a suggestion that bitcoin is a bit of a safety trade you have seen bonds go up, bitcoin go up, gold go up. does that dynamic have to break for the market to truly break out to the upside, michael >> i think it's a total manifestation of easing central bank policy. all of these things rallied when the fed pivoted. stocks are up, bonds are up, gold is up, crypto is up why? because the fed and other central banks are pursuing very aggressive, very easy monetary policy to me, if you want an asset

that's really uncorlated with anything else, something like cold has proven to have that property so the kind of negative interest rate environment, the very accommodative monetary policy has inflated all assets. and to me, that just doesn't feel right from that perspective. so i think crypto is another manifestation of just very easy monetary policy. >> something has to give then, eventually, maybe. >> thank you michael and tom. >> all right, coming up, several analysts initiated coverage on chewy today. that stock is up 50% since its ipo, so should you buy it or is it a dog will it roll over? got any more >> no. >> okay. we'll chew all over it guess they did have more >> tailwind. >> the world will be watching jay powell tomorrow, how the fed's moves could impact global l atndth alth a much more coming up on "power lunch.

wall street weighing in on chewy today. several firms initiating coverage, but some aren't biting despite the 50% rally in the stock since it went public on june 13th. jeffries setting a hold rating saying with competition from big players like amazon, it might be better to keep this one in the kennel joining us on the news line, maybe he has cliches of his own, the analyst behind the call, brent thill. good to talk to you. >> thanks for having me. >> is this as much a call about what the stock has done already as much as where you think it

could go from here >> yeah, as you mentioned earlier, stocks up over 50% since the ipo came at a reasonable valuation we're bullish about chewy's prospects, but i think there are a couple things we're concerned about. one is the move in the stock two, when you do a price comparison against amazon, prices are literally right on top. third, having worked in technology for 20 years and taken over 50 companies publiceripublic, there's very little differentiation between technology they sell other people's products, and target, walmart, the rest of the industry, wants to be in this business as well chewy definitely has incredible customer service and effectively this autoship capability, you know your dog is going to eat, your cat is going to eat, so that autoship gives you great visibility, but in terms of a price differential, the proprietary analysis we do

suggests other retailers are right on top of their pricing. >> sure, but as long as the other retailers aren't undercutting the prices by anything of magnitude, you just described a pretty reliable subscription based business, no? >> that's right. that's why, you know, again, we're not sell rated, not buy rated, right in the middle because we also note the stock is up, and from a competitive perspective, we have just seen a lot of other models that have been disruptive that had much higher motes this is not quite as big as most think. >> in your note, which you titled keep this in the kennel, so one of those puns because in fact yours. nicely done. you note that just 14% of u.s. pet food and supply spending is done online, which is staggering to me. that tells me that at amazon, which has the autoship sort of feature when you run out of something at the end of the month, it automatically ships to you, amazon could easily step in, walmart could easily step in

and snatch that business away from chewy i don't really understand what mote if any chewy really does have >> it's a good point even on amazon, if you add more than five items to your basket, you even get a larger discount on the return revenue model. so i think, you know, amazon cares. obviously, chewy's ceo came out of amazon, i think it waw strategically a smart decision by the board to bring on an ex-amazon executive. he knows the playbook. this market is big there's plenty of runway for multiple vendors in this market, and i think, again, consumerization of pets is happening, but again, i agree. i do think there's a moat. when you look at the net promoter scores, you look at the customers that i speak to, my friends that use this product love it. and they have no reason to switch they're also doing things to differentiate the model. they're getting the pharmacy we think over time they could

create digital marketplaces, as much as you spend for your bird food, how much time and money does it take to actually watch the bird, the cat, or the dog when you're on vacation? it's a lot more expensive than the food there's other things you can do around pet care, around long-term care there's other digital pieces to this model they can introduce that would effectively be higher margin that aren't in the model today. they could also ship more of their own product sales versus selling other that's are at a lower margin it's hard to negative, but it's also hard for us to be really positive given the magnitude of the move since the ip oo. >> i appreciate urtime >> giant leap forward today in the race to space. will it be a game changer, and where's all the money coming from >> plus, one read on how boeing is holding up at the 737 max situation drags on and how you should play the stock. and what a federal court said the president cannot do on

twitter. l atnducmo cinupalth a mh reomg on "power lunch. read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

>> let's get to kayla tausche about latest on trade talks with

china. >> we were waiting to hear next steps between the u.s. and china, and a u.s. official confirms that the u.s. trade representative, robert lighthizer and the treasury secretary spoke with the vice premier and commerce minister and providing information that the two sides continue negotiations at resolving the outstanding trade disputes between the two countries and both sides will continue negotiations as appropriate. but no firm information about when a next in-person round would potentially take place in beijing or what the content of the call was, but confirming that call did in fact take place today. melissa. >> thank you kayla tausche in washington with the latest on the u.s./china trade talks. >> now over to mike santoli for trading nation mike >> scott, thank you very much. more bad news for boeing after it reported a sharp drop in first half deliveries. but the stock is proving resilience, recovering from earlier losses to move slightly higher on the day.

is the worst over for boeing todd gordon and steve chevron of federated investors, our trading nation today todd, a long kind of sideways period for boeing shares does it retain the benefit of the doubt at this point, do you think, or not? . it's hanging on by a thread. before we go into boeing, let's look at the xli, the industrial. boeing happens to be the largest holding in xli we have some concern here. xli barely holding on to the 2en-day moving arg xli, into the s&p, that is declining indicating industrials are significantly underperforming and being that boeing is the largest holding, that's problematic looking at boeing specifically, there is hope. without getting too much into the math here, if we look at each of the declines over the last four years, they're roughly 25% to 30% we're right at a 25% decline right now, holding on to that 200 moving average we need to hold $310 in that

area, if we can, it's been a symmetrical pullback and we could recover. below that and it is an issue. >> a little bit of a buffer between here and $310. steve, part of the bull case on boeing for years has been the predictability of its long-term order book and the cash that's associated with it has anything changed on there? how would you view the stock fundamentally? >> we come to a similar place as todd from a different angle. what you look at is the name screens well on some of the fundamentals not the least of how much short interest is out on the name, and it's being resilient, holding in at this $350 level right now our view is you certainly need to get past this max issue, but once you do, demand looks relatively good. you think you can get a return of profitability, cash flows start to improve it's not overly expensive at this point from a value perspective. it may be worth jumping in we own it in global out. >> all right well, we'll see. still some headline risk out there, but it's absorbed a whole

lot of tough news. we'll see how it goes. todd and steve, thank you. for more trading nation, go to our website or follow us on twitter. >> scott, back over to you >> ahead on "power lunch," mexican made autos coming across the border at a record rate. what it means for the auto industry and the trade war >> plus, the race to space richard branson launching virgin galactic to the stars and wall street >> and cnbc top states for business how will the fox condeal weigh on wisconsin >> now, the latest from tradingnation.cnbc.com >> a double top is a chart pattern that suggests an up trend might be ending and ready to reverse sometimes called an m formation because of the way it looks on a chart, a double top consists of two well defined peaks at approximately the same price traders often view a break of the lowest low as a bearish

signal m e bohl, and schwab is the better place for traders xfinity mobile is a wireless network

designed to save you money. whether you use your phone to get fit or to find the perfect gift, you'll use less data with a network that automatically connects to millions of wifi hotspots and the best lte everywhere else. so you save hundreds of dollars a year on your wireless bill. xfinity mobile has the best network. best devices. best value. simple. easy. awesome. click, call or visit a store today. welcome back, everyone here's your cnbc news update at this hour. senate minority leader chuck schumer calling on labor

secretary alex acosta to resign because of acosta's role in a 2008 plea deal that let jeffrey epstein escape prison time for allegedly molesting dozens of teenage girls. >> i am calling on secretary acosta to resign it is now impossible for anyone to have confidence in secretary acosta's ability to lead the department of labor. if he refuses to resign, president trump should fire him. >> prime minister netanyahu warning iran it is within range of israeli air strikes, on a visit to an israeli air base, netanyahu cited recent statements by iran that he called threats to destroy israel >> and france will introduce an eco tax for airlines flying out of that country which is expected to raise about $200 million in 2020. the french transport minister said france will gradually introduce that tax you're up to date.

that's the news umidate this hour back to you. >> thanks so much. >> cars were imported to the u.s. from mexico at a record pace in 2019 >> remember about a month ago when the president was threatening a series of escalating tariffs for anything coming out of mexico, but really everybody knew it would hurt the auto industry most they're going to stop buildish cars down there. that hasn't happened look at the latest data released by the mexico automobile association. it's clear that auto imports, they continue at a strong pace up 13% in the first half you see how many were brought in from mexico last year, 2.7 million. we're going to blow by that at the rate we're going right now by the way, mexico, now responsible for 16% of the vehicles that are sold here in the united states. so because we're on that record pace, let's look at three stocks that stand out in terms of automakers gm and fiat chrysler, they both have large operations down there. what do they build down there? pickup trucks. high hft profit, highly valuable

vehicles, and there's strong demand right now that's going to continue for the remainder of this year you also have to look at nissan. they were one of the first to get into mexico in terms of auto production in a big way. now the third largest auto exporter out of mexico the bottom line is this, we will not see a slowdown in auto imports coming from mexico just not going to happen, especially with usmca, essentially agreed to, now it has to be ratified by all the parties. >> thanks. before i let you go, i want to switch to the other beat you cover, airlines. you told us in the halftime report, we showed the president talking about orders from qatar for boeing jets. which the president described, i think he used the words a very large order, but we didn't have numbers. now apparently we do >> what's your definition of large? they're ordering five 777 cargo planes now, that's nice you'll take any orders you can get if you're boeing there's also going to be engines orders from ge raytheon is getting orders and a

few other aviation companies as well any business is worthwhile, but this would not be something that's going to move the needle. >> maybe he meant very large planes >> must be >> yeah. the 777 cargo would be a very large plane. >> exactly, phil, thanks we're counting down to fed chair powell's testimony before house lawmakers. stocks are down for a third day on fears the fed may scale back rate cuts after the jobs report. and across the pond, outgoing ecb president mario draghi signaling he's ready to start easing all this comes under the cloud of trade uncertainty and the global slowdown fears. we've got vilim, the special economic adviser with citi a pleasure to have you with us what do you make of what the ecb is doing and powell has to maneuver himself while not getting too far away from what's happening across the pond, so to speak. >> ecb is central bank of a

region that is stagnating at best, and maybe sliding into recession or growth recession. so they are going to be looser, they're going to cut rates they're going to resume asset purchases, the lot this is a very different position from what powell is in where the economy still, despite slowing down a bit, still has a lot of oomph i mean, consumer spending was 68% of gdp is healthy. $224k payroll, that's not a long time, so they are in very different boxes. >> at the same time, powell doesn't want to let himself or our bank get too far away from the rest of the world, which is still so easy. >> absolutely. i think there will be due consideration given to the need to act in a more sort of elusive

way, either by ending asset purchases, asset sales earlier or by cutting rates. they are of the view that it is still early days for the u.s., this month of july, getting closer to the moment of truth will be the moment >> is there any question in your mind that independent federal reserve policy is the way to go? that that is the preferred way, or can there in fact be a case to be made that perhaps monetary policy should become a little more political >> well, it should be operationally independent, clearly. the objective of monetary policy is politics by the federal reserve act. that's political but given these objectives, the implementation should be basically a technocratic exercise there's a division of labor, and i very much hope and expect you will stay there in this country

too. >> what do you make of the whole argument, you said it yourself, our economy is good. the stock market is at an all-time high. access to capital is incredibly easy, as it's been for the last handfuls of years. why in the world should you cut interest rates in that kind of environment? >> this is an excellent question, which is why we believe that it is unlikely that we will see a cut as early as july but the economy is slowing down. there are external risks and you have to not just look at where the economy is but expected to be going so a long view taken into account, the negative impulses from trade wars and related issues abroad could drive you to cut rates even when the domestic economy is still humming along pretty reasonably well but we don't think it's the time this month >> in this world, though, of such low interest rates around the world, we're in an environment where more than a quarter of the world's sovereign debt is negative yielding and we're in a situation in europe

now where there are now, if you can believe, 14 european corporate junk issues that have negative yields. negative yields right now, and that's up from zero at the beginning of this year what does it tell you about investors' trust in banks, and the need to put their money into a negative yielding junk issue >> this is crazy times, right? >> yeah. >> and to -- we have to get used to it, unfortunately, because it's not going to go away. in europe, certainly, and in japan, yields close to zero or negative territory are going to be the norm for at least several more years to come fortunately, the u.s. doesn't suffer from that particular malfunction. rates are low here, but not negative but be prepared for the idiocy of the liquidity trap. >> well, we'll leave it with that

good to see you today. thanks for being here. >> joining us from citi, the special economic adviser >> let's get to the bond market. rick santelli is tracking the action at the cme. hi, rick >> hi, melissa lee tomorrow, jay powell speaking has a very large reach in the marketplace. we had a three-year note option today kicking off 3s, 10s, and 30s, and it was not a particularly pretty market i gave it a c-minus. 38 billion three-year notes at 1.843%, and it shouldn't be shocking to anybody, that's the lowest note since 2017 the bid to cover 2.39 was the lowest bid to cover since march of 2009. basically ten years. all the other metrics were fine, indirects were above average, directs were above average it had priced a little dirty, but not too bad. ultima ultimately, the notion of what jay powell may say tomorrow is

making short-end investors take pause. it might be causing all investors to take pause, but at the end of the day, after jay powell testifies tomorrow or deals with one side of the aisle, my guess is the ten-year note option will go a bit better >> thank you space has become the new battlefield for billionaires richard branson, elon musk, jeff bezos all trying to become the winner branson making a big move today. we'll tell you all about it when "power lunch" returns. it all started under this buttonwood tree. twenty-four people came together to sign an agreement that created the stock exchange. just the right elements coming together. it started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created.

it started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. it started with the markets, bringing together steel and buildings and silicon and medicine and rockets. we believe the possibilities of life and investing are greater when we come together. it's why for eighty years we've connected ideas with technology, data with inspiration, investors with solutions. so that every day together, it all starts again. ♪

it's a very, very, very exciting time for space, with virgin galactic, with what elon is doing, with what jeff bezos is doing, what boeing are doing, and the investment community beginning to take a lot of interest in it and beginning to

do analyst reports on the space industry, and you know, obviously, we believe it will be one of the big new industries of the future >> this thing looks like a software business under the hood, even though it's flying people to space. so this is, i think, actually a really compelling risk/reward. >> that was sir richard branson earlier today on "squawk box" talking about ipo plans for virgin galactic, it would be the first space tourism company to go public. could this be a game changing moment in the race to space? joining us now is michael sheets great to have you with us. >> great to be on. >> it is the first does it mean we're expecting the others, blue origin from jeff bezos and spacex from elon musk to follow? >> we're not expecting those two particularly because spacex has said they're not going to go public until they reach mars that's a little bit of a ways off. blue origin is wholly owned by bez bezos, so they don't have a need to go public

there are other companies like rocket lab that could come public in the new generation of private space companies. >> wondering, making it all profitable, how you do that if it's simply flying civilians into space for a price or if you have to do deals with governments and other areas to draw enough revenue in >> well, with virgin galactic, their business model is solely focused on the revenue of those tourists i mean, it's not cheap $250,000 per ticket, and there's over 600 people already signed up, and both branson and chamath today were talking about another 2500 since their test flights have expressed interest. the revenue is their main source from those tickets itself, but over time, ubs has estimated they expect within ten years space tourism could be a $dl3 billion market the potential is there he said they're aiming for profitable in two years which seems astounding 2021 could be

the day, but sir richard, what was so interesting about how he talks about the business is the optionality they have to go into other businesses along the way because their spacecraft, unlike elon musk and blue origin, which rely on huge rockets to catapult them into space, more like an airplane so he was talking about hypersonic travel to destinations on earth. >> bringing back the concord, but almost on steroids is the idea they're thinking about. and spacex talks about this a lot as well. this idea is probably more five to ten years away for virgin galactic they're going to focus on the space tourism right now, but hypersonic would be a bigger market because in that same ubs report, they estimated it in the same timeframe that point to point space travel or hypersonics, would be a $20 billion market compared to space tourism's 3 billion market >> i think of total addressable market how many people are really willing to pay that much to get into space and mow much if any is a recurring business

transaction. once you have gone, you're done. >> there are always new people to do that >> that's a great point because on top of that, i mean, 600 people, and they haven't even begun business, have signed on for this that's a pretty amazing demand already, and if they actually prove this out and start flying people regularly, i mean, talking thousands of people willing to pay that very, very large price tag. >> so where is all this money going to come from to fuel the space race let's bring leslie pickner to the conversation >> hey, guys so i think you bring up a good point about the total addressable market here, although they say mt. everest is quite crowded so maybe people will add a new thing to their buckest list >> does it cost $250,000 to go up mt. everest >> to hire a sherpa, training. >> and everest is quite dangerous. but you bring up a good question in where the money is coming from looking at three of the most well known orbiters to space, blue origin, spacex, and virgin

galactic are all funded by vastly different funding models which i think is interesting you have the virgin galactic trying this spac method, which has never been dry tried before. that was what was so revolutionary, this back door way of getting public and access to a new group of investors. spacex, much more traditional venture funding model. spacex valued at $33 billion with a whole host of investors they're on to seriesjerk in their funding round. they raised $3.2 billion among the most highly valued venture backed companies in the u.s., and then blue origin, which is almost entirely backed by its billionaire founder, jeff bezos, except for some grants to the tune of about $26 million from 2011 and $13 million in 2017 from nasa so you've got three different

fundal models and that partly speaking to the unconventional aspects that we see in space travel and the difficulty in really valuing them. >> ipo is when >> second half of the year, we should expect to see their merger documents which should be very interesting, in the next six to eight weeks, which will really explain how this deal came together. >> good stuff. guys, thanks good to have you both here >> coming up, today's tasting menu trump's twitter. tsee school studen nd financial aid, and burger king taking on taco bell. stay us.

welcome back to power lunch. here's a taste of some of the stories we're watching today president trump cannot block out hater oshis twitter account. a court says trump is not allowed to use the blocking function to limit access to his account. this came after the knight first amendment institute and several other twitter users trump blocked challenge for action i think that's fair. >> um-hum. >> if he's going to use this as a way of disseminating information. >> free and open public square >> yes student loan debt is at an

all-time high but college students don't know how to pay it more than half of current 11th and 12th graders are unaware of repayment programs or the government will subsidize their interest on certain loans while they're in college that's not surprising. >> but people should understand where their money is coming from perhaps there should be an exam given to the students prior to them getting the financial aid prior to receiving the financial aid. >> okay. >> they should learn these things hello acorns that's the first thing i thought of when i read this. >> yes. >> this is why that exists, right? >> yes so people can understand. >> because people don't have enough understanding of financial literacy -- >> exactly. >> -- at any level. >> even 11th and 12th grade. it's taco tuesday and burger king is getting in on the action they're bringing back the crispy

tacos after nearly a decade. i wonder why they went away in the first place. the tacos are available for $1, will be available for a limited time today we have some samples of the tacos that cost only $1. >> dig in. >> most of them are wrapped. you can see one is not wrapped and you can see precisely what you get. it's probably a get what you pay for. let's leave it at that >> do they have a mote >> in terms of the taco mote dollar taco mote >> taco bell, del taco i'm trying to think of the taco places i visited i don't think burger king jumps up to the top of my list. >> probably not. but if you're in there, wow, i'll try a dollar taco. the latest on the fox con wisconsin deal, plus, check

please t i'm command central. it's so important to us that verizon is supporting military families. when i have a child deployed, having a reliable network means everything. so, when i get a video chat, and i get to see their face, it's the best thing in the world. and i've earned every one of these gray hairs. military moms, we serve too. (vo) the network more people rely on, gives you more. like military plans with a special price on unlimited, $100 per line, and big savings on our best phones when you switch. that's verizon.

at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. welcome back to "power lunch. tomorrow on cnbc we will reveal our top state for business the battle for business between the states took center stage with amazon's h2q drama. allot of attention paid to

wisconsin's com deal he joins us from a secret location. >> i'm in the top state for business every year for 13 years with top states for business, it's that the h2q situation in virginia and new york and also this the most expensive deal ever offered to a foreign company to locate in the u.s., that is the deal in wisconsin for foxconn. we're talking about a plant where they broke ground last year president trump said it was going to be state of the art ultimately supposed to have 13,000 employees where are we at now? not even close >> they're looking at, i think it was, 1,500 employees, which is less than the original thought, although i believe that foxconn is of theopinion that at some point in time they will

have larger numbers of employees there. for wisconsin 1500 employees is important. >> his first national interview on the topic he spoke with us exclusively. and that 1500 number, it's important to wisconsin and foxconn, which to collect on $4 billion in incentive, it has to hit targets for hiring next year when they're supposed to start production on the plant. it's supposed to be 1800, 1500 is short of that, a lot of concern and controversy in the state of wisconsin and incentives are one of the things we look at in america's top states for business in our cost of doing business category where is america's top state for business here's another hint, surfin' usa. what does that mean? you can read more, including the

foxconn deal tell us what you think >> your first clue was keep your lips sealed or something like that, now it's this. i don't know we can't wait until tomorrow thank you, scott cohn. thank you for watching "power lunch," thank you scott for boin joining us today welcome to the closing bell, i'm will frost 3m is down 2.5%. where they got a downgrade from an analyst we have everything you need to know that call and all the other broader action movements with 59 minutes left of trade. >> let's get to what is driving the action in the final hour, lower for the market mainly, investors are await powell's testimony tomorrow fang strengths and transports ar