than the ones every one is ignoring thank you for joining me i'll be looking for closely of what my friends say they like on instagr instagram. appreciate it. that does it for the exchange today. power lunch is next. thank you. see you in a moment. here is what's new at 1:00 the race for records the s&p 500 just points away from all time high mplgt shares of amazon headed for positive territory what has investors buying this dip. charles barkley slamming vice president mike pence for his criticism of the nba's business in china. we have the shocking comments. "power lunch" starts right now

hi, everybody. glad you could be with us. why not? it's a record rally. the dow is up about 200 points the s&p right near its record high and it does briefly cross above its all time closing high. it is a day for the record books. check out some of these housing related stocks they are one of the drivers in this market. i have all the paint you want, kelly. the u.s. and china making headway on a trade deal. >> principals in u.s.-china trade talks held a call this morning. a read out said the call made quote headway on specific issues and the two sides are close to finalizing some sections of the agreement.

discussions will g o on continuously china is asking for those december tariffs to be cancelled in order to move forward >> they like to see some reduks -- reductions in tariffs. they like to see some that are scheduled to go on very soon they'd like to see them not go on china really want to make a deal they will be buying much more product than anybody ever thought possible >> reporter: behind the scenes not ef overy one is sold peter navarro has been fighting the phase one deal urging president trump to make china recommit to language on intellectual property protections that it shelved back in may his effort has been unsuccessful so far they did not comment on that issue but interesting to note

behind the scenes that not every one is happen with this. guys sfwlnl there are other factors sending stocks higher. >> trade optimism is the number one reason we have been moving up number two the u.s. consumer is holding up very well and we saw that with comments from visa, capital one. strong guidance from intel makes a difference texas instruments was an outlier. they are in auto, china heavily, a little industrial space. intel was good land verge guided up taiwan semiconductor asml was good. these are the guys that make the equipment. generally their commentar yy wa excellent making a lot of people feel better.

yes, you have autos weak data centers strong as well. there's visa, capital one. both reported very good numbers. visa gave 2020 revenue guidance for the firsttime. it was strong. i think consumer spending will be strong as well. capital one, a credit card company also said the same thing. tyler, back to you thank you very much. we're just inches away from record highs on the s&p 500. we went into that territory briefly earlier today. it will be the moment of truth for the markets with the busiest earnings week of the season so far and the highly anticipated fed rate cut decision. that's coming up is the market heading for new heights. let's ask jason prides.

jason, back to you after ron interrupts me and corrects me, appropriately. >> you got to get these things right. >> it's the details, jason it's the details that you have to get right i've completely lost what i was going to ask you we're at record highs now. is the market likely to keep moving higher from here and what's the catalyst that pushes it >> tyler, i think the number one catalyst is the ongoing expansion. as long as it's economic, so long as corporations continue to make money, more money year after year after year that should eventually lead to higher numbers. we have a couple of things that back that up we have some decent earnings report we have a fed that's providing stimulus and what on the surface

appears maybe i'm a little bit skeptical of whether they turn tout be correct. on the surface it appears that some of the trade tensions are loosening and we're getting closer and closer to trade deals put in place that's enough sentiment to buoy this upward in what appears to be an ongoing expansion. >> i turn to cnbc investor >> i have a 5% stake >> the market has been stuck for 18 months. >> even longer >> it's been flirting with all time highs >> we have gone above them in the last 20 minute months or so. i think we're going to stay this way for a while. tlp w it's getting easier and easier to cross when expectations keep calling and they are being cut again for 2020 as long as that's a factor, sure

stocks can perform better against weak expectations. i share skepticism it will happen the way the president described it and a fed rate cut is probably priced in. >> jason, you're pretty defensively positioned over weight cash and alternatives why? >> the equities for us is just for recognition of where we are in the cycle we're in the 10th, 11th year of this expansion we are starting to see some breaking in the armor. we don't want to be over the skis equity investment wise. the cash and bonds difference that's basically taking money away from low yielding bond where you have duration that can swing the wrong direction on you and putting in more of a safe

harbor in terms of cash and investments from the perspective of generating that return without that sort of risk of fluctuations >> is this your highest level of cash in a while? >> i wouldn't say it's the highest level of cash we had in a while. we're overweight with alternatives it's not that dramatic of a position yet we can take that far more dramatically but we aren't doing that in this point in time >> what's the catalyst, ron? we asked that a moment ago that could send the market up or down by a significant point >> i think it would have to be a meaningful concrete trade. >> or the failure of such.

>> i'm still a little concerned. i don't see anything in the near term short of that deal that moves the needle the rate cut is priced unless it says we're going to blow quantitative easing out the door, we're going to cut again in december, that will be the catalyst for 5% higher >> jason pride, have a great weekend. thanks we've got breaking news on the size of the federal deficit. >> that is partly because there was a rebound in corporate tax receipts during the second half of the year for 2019 corporate tax revenue was $230 billion. that's a 12% increase over last

year individual income tax revenue was up 2% to $1.7 trillion in addition, the government also collected almost $71 billion in customs duty those are tariffs that is a 70% jump over the previous year. these numbers are a relief to the trump administration that's been criticized for the cost of its taxcut treasury had forecast previously that the deficit would hit a trillion dollars this year but in a statement treasury secretary stephen mnuchin said these numbers are evident that trump's economic agenda is working and to put the nation on a truly sustainable path would cut wasteful and irresponsible spending the government is hitting the trillion dollar mark next year back over to you >> thank you very much the trump organization considering selling the trump international hotel in washington which it opened to much fanfare a couple of years

ago. >> back in 2016 when they had another big party down on pennsylvania avenue. the trump organization exploring the sale of trump international hotel in washington. that's owned by the president. trump organization vice president eric trump saying in a statement that the company is considering a sell because we have received tremendous interest in this hotel since it opened in 2016 he said ethics may have played a role adding people are objecting to us making so much money on the hotel and therefore we may be willing to sell get this, it could also be a very profitable deal the trump organization has a 60-year lease on the old post office building. they pay $180 million for that lease. the company sent millions renovating but asking 500 million so they can make between 100 and $200 million if they get their price which would be the most exensipensive ever paid fo

hotel. d about 40 million in revenue last year. the hotel has been the subject of several lawsuits and congressional inquire riies inte president's conflict of interest the president has visited the hotel 23 times since becoming the president. other members of the white house have made nearly 400 trips >> if they hang onto it, we know the sort of the problems there if he sells it and they make a lot of money on it, it sounds like that's a potential problem. >> they could sell it for a nominal sum to a blind trust or some other vehicle where it doesn't appear they are making so much money or they could temporarily transfer ownership there are probably other ways to do it that wouldn't attract so much attention coming up, shares of amazon recovering after selling off of yesterday's sell off

beyond meat getting grilled. they lost more than half of their value since their peak still at 300% since the ipo. where do they head next? [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

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shopping to cost $1.5 billion during the holiday season. ceo prioritizes growth over profits. should investors stick with the stock? greg, great to have you with us. looks like every analyst said buy the dip today except for maybe one firm why do you think investors should not be concerned about this latest re-investment cycle and what amazon will get when you take a look at metrics like prime subscribers and things like that from this investment >> there's a leap of faith here. at the end of the day amazon saw their retail share gains accelerate but they needed to re-accelerate that there's no better way than going no to next day shipping they are more than willing to invest billions. we saw that in the third

quarter. >> do they lose money on same day shipments of items >> the key if they want is they get more people frequently and they get all the data. hidden in numbers, advertising grew more than 45% that's a business we think could be $10 billion next year at a very high margin >> you talk about spending billions of dollars and losing, if you will, on next day shipping if that gets you the ability to explode your advertising business 45%, it will start to pay off. >> so the return on investment might be household spent even more because of next day shipping and they also get this data which advertising although this data is in the cross hairs.

>> absolutely. >> that's a discounti ined asset >> right that's another discussion. it's like a libertarian rant for me i don't have an alexa if my house because i don't like it. almost 40% of households have a personal device like alexa 14% have used it to buy something. if that looks anything like mobile commerce did, today 75, 80% of people say they shop with their phone every day. alexa is going into cars and everything that's the real prize. >> 40% already is a huge win for them in this place what about the cloud business? does anything there give you concern about the trend there is is it losing out competitively >> i'm glad you brought it up. my partner is all over aws if you look at one of the concerns is that the margins set back that had been the side of the business that continue to power

forward. it probably has to do more with the aws rather than the retail one that started earlier this year >> frank, thank you. s&p 500 within just a handful of points of its all time high. they are all leading the charge today. we got our eyes on that key level. the record here today 3027.98. stay with power lunch. k? tell him we need this merger. it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network

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welcome back to power lunch. time for trading nation. the bears taking a bite out of beyond meat today. the shares fall over 1% dipping below $100 in the process. earlier this session the stock now about 55% off its july highs as the fake meat maker uses earnings

>> we have this stock back down to about $100. that's the level to which it really accelerated higher back in june. >> it's a tad lower. if we look at the history of the chart, it's the first start in july we saw the rise. the stock went from 25 to 240. ran out of buyers at 240 you started the see some profit taking slowly occur. that was relatively calm that's where they have shown up and supported the stocks buyers failed to show up this time as they fail sthhow up, selling starts to accelerate it's at the next support level

should start to pick up. >> right now the company had about a $6 billion market value at the peak. it was close to 15 billion i guess it all depends on what you think the size of the ultimate opportunity is and whether you can capitalize on it >> i don't think anybody is feeling more gleeful because it's almost a round ship besides the overvaluation, the argument is beyond meat and impossible are all essentially kind of genetically modified foods and not that great for you. it completely misses the point that the meat supply is fully antibiotic and also very dangerous. to me the argument isn't going be about chemistry, it's going to be about taste. beyond and impossible have been the first real true reply cay to -- replicators of meat. both products are much easier to

manage from a point of view of spoilage this is why white castle loves it this is why dunkin loves it. the opportunity is probably about 13% of the market. that's the forecast of how much to take over the market. whatever dip you see in beyond meat, the long term is probably much a buy if you don't like the volatility in the stock, i think you should do a long term substitution like a long term leap option to see if you can participate in a trade. i think fundamentally from a long term perspective it's just starting out i think this will be the story to come as this is going to be very much a part of the consumer diet going forward >> i was going to say certainly it's been a lot of excitement about trying it. we'll see if the sales pick up in a more enduring way thank you very much for joining us ahead, johnson and johnson was once the standards for how to deal with problems but with baby powder coming off the

shelve, has the company gotten it all wrong california hit with wildfires as pg&e shuts power to try to prevent them. the nba can't seem to put the china issue behind it. every time it starts to go away, someone else says something else to inflate it. we'll tell you what is talking now.

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welcome back here is your cnbc news update at this hour. president trump telling reporters he did not know what was happening with the justice department probe into the origins of its 2016 investigation into russian interference in the u.s. presidential election. he did have this caveat. >> i think you're going to see a lot of really bad things

a lot of people think that and they know they have problem because they were very dishonest. again, i leave it all up to the attorney general and i leave it all up to the people that are working with the attorney general. >> lebanon's hezbollah leader says that the nationwide protest against the country's political clash are being exploited by politicians. he called on protesters to come together and find a representative to negotiate with the government after his supporters clashed with those protesters the duck and duchess of s s sussex discussing gender equality you are up to date that's the news update this hour back to you. thank you. let's get a check on the markets here markets are on the highs

pushing for some stronger language we're on record watch. the s&p 500 is up almost 11 points that is just about seven points away from record highs the dow is higher by 146 points. really being helped by the results. cvs, walmart and rite aid are pulling 22 ounce of johnson a and johnson baby powder off the shelves. one lot of the baby powder was recalled that equals about 33,000 bottles. they will work with regulators the investigation the issue. the stock of j and j has tumbled more than 5% analysts suggest pulling all the baby powder from the market similar to what they did in the '80s when they were praise ed f removing tylenol from the she e shelves after it caused several

deaths professor, welcome >> welcome to the harr varvard business school. >> the only way i'd get in >> same. we won't talk about melissa. she's waving her harvard degree over here. in this piece with the baby powder, what do they do now? they've already had a voluntary recall of one lot of this. should they pull all of it off the shelves? >> well, that is what happened years ago at time of the tylenol tragedy. i think it's important for viewers to recognize the difference of that situation to the way that this one has developed. briefly when seven people die, it becomes the lead story on television and it becomes page one news in newspapers century people dying at once at

the out set not knowing exactly what problem other than tylenol but not the specifics, that is news when people in now i want to switch to the baby powder, with baby powder nobody dies immediately but claims of cancer are serious. company had to take it seriously. their view was that they did not have asbestos. with the passing of time even that situation has changed now i want to talk in a moment, if you wish, about some of the other things going on now that make it a time of advocacy groups and others to get companies to pay more attention to potential problems and real problems in this particular context, they

are in a bad situation now because their reputation is eroding and their market share is eroding and you always report on what market capitalization is doing and that has been eroding. >> yes, professor they lost $23 billion of market capitalization since october 18th this is a period in which johnson and johnson and its previously stellar reputation when it comes to products and the consumer is coming under fire not just because of the baby powder situation but also because of opioid lawsuits, risperdol, vaginal mesh, doesn't that put the onnous on j and j to act much, much more swiftly and vigorously when it comes to baby powder? >> i think vigorously is a very well chosen adverb not that i'm grading you, but i

think what's important to recognize is that a concept which i developed called reputational contagion is something that's happening within j and j it used to be on the part of consumers and other stake holders, it used to be that the credo which the tylenol situation enhanced and led to much praise for the swiftness and directness of being willing to engage in reverse distribution and pull their products off the shelf that provided that reputational buffer helped j and j a lot even in the early stages of the baby situation. the combination of circumstances here makes it really important

for the company to determine how best to step upnow and it may be taking further action in conjunction with retailer who themselves are taking some of the products off the shelf and not make it look like there's resistance >> at the risk of interrupting, professor, if you were to grade j and j on its 1980s response to that crisis which was visited upon by an outside bad actor tampering with the packages and grade their response with respect to talc and the other cluster of issues that melissa identified, how would you grade them >> i would say that the tylenol situation not only was an a or a plus for those that allow that but helped establish the modis

operandi to which they should be behaving to in troubled times all we have to do is take a look at volkswagen and wells fargo and fifa to see entities and organizations that just didn't get it and they could have learned from j and j now your second question is, how much is j and j learning from it ts own experiences and from an evolving public environment in which advocacy groups and other stake holders are saying we want protection we want action on behalf of the public and so far j and j is working hard i think the public's views of

the credibility of their unwillingness to take vigorous action, those views are beginning to soften and i haven't seen data. they have. i would think that what you described calls for them to be graded a lot lower than a but i'm not prepared to give a final grade yet because they haven't done the rest of what they are likely to be doing under the pressures of right now >> professor, we'll have you back as i continues to play out. thank you so much for your time. >> you're welcome. pg&e getting crushed today as the company continues to face scrutiny as the possible cause of california wildfires. even as it's shutting off power to some customers to try to prevent those wildfires.

>> we just got some information, new information from the l.a. county fire chief. the governor has declared a state of emergency in sonoma county and los angeles county. the biggest fire down here right now is the tick fire, 4300 acres. 5% containment six homes detroyed th -- destroyed that will go up. 13,000 people with their power intentionally turned off that could go up to 380,000. there's some new tech tools that firefighters are using for the first time including a $200,000 pilot program with cams. it pyres appears to be working. >> we had press conferences last night. there was a lull in the fire and things looked calm the projection indicated this would take a turn and jump the 14 freeway it did exactly what it said it

was going to do. >> reporter: 22,000 acres. 49 homes destroyed you have hundreds of thousands of people up there with their power turned off that could balloon over the weekend. why is pg&e doing this look at the photos they say it makes a difference they have shown photos from previous fires where you have tree limbs on power lines that had been turned off. those could have been fires that pg&e hadn't done that. while we don't know the cause of the fire, there is some suspicious it could have been a transmission line that had not been turned off. the fire chief says the power line incidents are responsible for only about 1 to 2% of fires and that's a big deal. when they turn the power off, it makes it very difficult for fire agencies and first responders to communicate with residents about

getting out. perhaps the right balance has not been found back to you. >> thank you jane wells vice president mike pence says the nba should have been tougher on china charles barkley says the vice president should shut the hell up with esri location technology,

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that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information. welcome back the nba is not putting the china controversy to bed the three

weeks after the tweet the league is still struggling. yesterday mike pence blasted the nba. we have response from the league and one of its most visible figures. >> we have vice president pence saying the league should be a wholly owned subsidiary of china and the commissioner had his response to those words last night. here is what he had to say >> i'll just say, once again, we're going to double down on engaging with the people of china and india and throughout africa, around the world, regardless of their governments. we get to a point where the u.s. government tells us we shouldn't be doing business in certain u.s. territories or countries, we won't i'm a firm believer through sports, independent of government, you bring people together >> obviously commissioner silver focusing on the nba's role and still doing business with complexity of how to do business with china when the government

is still doing business with china. charl charles barkley had a different focus. here is what he had to say >> first of all, the vice president pence needs to shut the hell up, number one. all american companies are doing business in china. all american companies are doing business in china. i thought the criticism of commissioner silver and lebron james was unfair >> that's charles barkley's response note adam silver not sure where to look when that happens and the host are sort of looking at each other i don't know what to do with this i think that goes to the real point. there's a complexity he these companies want to do business with china. >> i may be over paraphrasing what he said

we support free speech we're not in the business of censoring the individuals in management or on the teams for what they say when they are speaking on topics of social things it's gone very silent as if a word has gone out. listen, be careful what you say because there's business at stake here which is a responsible response i think he's getting a little too harshly criticized maybe he's tiptoeing around that he's said we're not going to cen censor our people. the key ingredient to magic mushrooms is right up there with heroin and lsd

new research into the effects is feeling a push from legalization we'll take a closer look when "power hundrlunch" returns

medical marijuana, so last year the new trend could be medical magic mushrooms which are now

being studied as a possible depression for depression, anxiety, and ptsd. meg terrell has the details. >> it may sound like a throwback to the 1960s, but there's real research going on looking at the therapeutic effects of magic mushrooms, or their key ingredient called psilocybin ron griffith explained its effects. under sported conditions, psilocybin can occasion mist l-type experiences clinical trials are under, but it's not straightforward to do this type of research as psilocybin is not a legal drug it's a schedule i alongside heroin, lsd and marijuana, characterized as drugs with no medical use and a highly potential for abuse. just as there's a push to change that for cannabis, there is movement behind psilocybin as well the first cannabis-approved

drugs was approved by the fda last year for childhood lep acceptsy former fda commissioner told me while there's a proper way to develop some of these things, some of the hype is outpacing the science we have right now. >> thank you, meg terrell. for more on the business behind science, we're joined by ronan levy, also the cofounder of canvas ls, which he sold to aurora cannabis. ronan, great to have you with us >> thank you >> as meg had mentioned, it's a schedule i narcotic, psilocybin, so how do you do research? >> most of the research is happening with the fda guidance and oversight. fda gave breakthrough treatment status to mda as well as psilocybin there's clinical trials happening right now on both of those substances, actually >> what is the farthest along the research has gone so far, as effective in whatever disorder item. >> so a trial being led by maps, which is the multidisciplinary

association for psychedelic studies is actually starting a phase iii trial, which is the last phase of fda approval, using mdma to treat posttraumatic stress disorder, ptsd, and the effects are very positive i've heard some reports showing that it's showing about an 80% cure rate for ptsd, relative to the standard of care, which is -- >> a cure as opposed to a treatment that would mitigate the symptoms >> that's correct. the standard of care right now is about a 30% improvement in symptoms and some of these studies are showing an 80% cure rate in certain circumstances. >> are -- do you see a path to legalization for psychedelics more broadly, like in cannabis, or do you think that it should remain under the supervision and the guidance of the fda, where there is medical scientific research that will be done for specific disorders >> certainly, the path under fda guidance and through a medical pathway is the most prudent way

to move forward. and that's what you'll likely see some time in the next 12 to 18 months. you'll see that maps trial get across the line. two other trials are underway. that being said, there are other initiatives, grassroots movements in the state of oregon, for example, there's actually a proposal, a valid proposal going forward to create a first regulated market for psilocybin-producing mushrooms in an environment much like medical cannabis >> have you learned from the medical cannabis route because for medical cannabis, the knock has been that there hasn't been the scientific research that needs to be done, as you're doing right now with psychedelics, and that people are dosing themselves. so for any sort of medicine, you don't just go and decide to take whatever dose of drugs your doctor actually prescribes it and that didn't happen in cannabis >> it did happen in cannabis in certain environments in canada, we brought a lot of medical rigor towards the prescription of cannabis for medical purposes so it can happen in the right

environment. and while certainly the evidence isn't the same as, say, a clinical trial for a pharmaceutical that's gone through random control trial and all that kind of stuff, you can definitely speak to all of the physicians who have worked in our clinics that will report that cannabis has certainly been the most effective drug they've ever prescribed. so even though the data isn't on the same level, there is a strong amount of evidence to support its use. and the same thing is happening with psychedelics, as well if you look at the studies that in the 60s and 70s, there's a strong amount of evidence and the current efforts through nyu, johns hopkins and other clinical trials that are happening right now point to a strong case there's great therapeutic circumstances. >> what other things might these drugs help >> so they're being studied for any number of mental health conditions, depression is a big focus. two of the clinical trials are looking at treatment for depression, anxiety, ocd studies next year which will happen in our clinics that we're setting up right now, looking at the use

of mdma for anorexia so there's a wide swath of uses for it there are even some studies that are looking into the anti-inflammatory effects of psychedelics, as well. they're potent anti-inflammatory drugs as well. >> fascinating ronan, hope you'll come back field trip ventures. >> and check, please, is next. [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

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it's time for check, please!. what are we going to talk about? other than the market going up more than 1% for the week. so far, nipping above all-time highs. i guess you can say, who would have thunk there has not been a ton of news flow this wooerng earnings, which have been pretty good. >> and it will get even stronger in terms of the earnings flow next week, along with a fed meeting. very, very busy week i'm watching shares of gen rock. we mentioned it quickly, but new highs on shares of gen rock. people are buying their generators, obviously. >> their ceo was on "squawk box" this morning and he said, this is one thing we didn't anticipate, the intentional power outages. happy for the business there it's also interesting to look at the leadership since we were at the highs in late july last time, it's not technology i mean, i.t. is barely positive during that time it's been real estate, it's been utilities, consumer staples to

some extent driving this higher. >> and is that convincing? where the defensive parts of the market lead you? >> is it all because of low rates, too as we look to the fed next week, hey, there was crazy-low rates in august and the market reaction to that and is it sustainable. >> fascinating week ahead. >> thanks for watching "power. >> "closing bell" starts right now. >> that it does. good afternoon, everyone welcome to the "closing bell." i'm wilfred frost. i'm here at the abi post today that stock sinking some 11%, the worst day of the year so far we'll be diving into those earnings coming up but the broader market looking pretty good, up 155 points on the dow and the s&p could potentially close at an all-time high with 59 minutes left of play i'm contessa brewer. let's take a look at what's driving the action today the trump administration says it's close to finalizing its phase i trade deal with china. intel jumped 7% on strong results, helping lift semis to a new record