>> cisco. >> i'm going to give you two, qualcomm, i think it will continue to do well. i have been buying it, but ual reports on tuesday should be a great quarter. >> it's starting to come back, watch it we'll talk. >> okay. >> good stuff. have a great weekend "the exchange" starts right now. thank you, scott good weekend to you as well. and happy more records friday. welcome to "the exchange," i'm brian sullivan here's what's ahead. alphabet is joining the four comma club but is this kind of top heavy market healthy for the markets? plus, workers needed a lot of them. one area that's spending big to train employees in a tight labor market, so where can we find more than 4 million workers? and facebook, fitbit and a fight, kind of, between nfl owners all that's ahead but we begin with today's markets and once again, seema mody.

it will be seema record modi because every time you're on we're hitting the new reports. >> i'll take it. the stocks are going to historic highs and we typically see a slightly more defensive tone as we head into the long weekend so watch out for that the dow is up 29 points. we should point out that we did see new highs in japan and europe this morning. despite the drag from high profile names the renaissance ipo itf is hitting an all-time high in the last hour. i want to point your attention to phoenix tree holdings, and it went public here at the nyse, pricing at $13.50 a share. that was well below the expected range. the stock down 3%. the fund-raiser plunged last year and the question now is whether the pause in u.s./china trade

tensions will improve the ipo back drop for some of the chinese listed names >> thank you very much. let's begin with the four comma club trillion dollar horsemen, whatever you want to call it alphabet crossed that high water mark let's put this into a wee bit of context. the only time they're consen trayed in one sector, all five biggest companies were in the same group was back in 19880 they were in the oil industry. that year marked the indof what had been a pretty good run here to look at whether this should give you some pause is bill snead and bill, i want to start with you are you comparing this to all the ga back in 1980 when it was exxon and mobil and texaco >> it's worse than you

described. 12 of the 20 largest market caps at the end of 1980 in the fortune 500 were oil companies 12 and at the height of the dotcom bubble end of '99 and 2000, only three of the top ones were tech related. i think exxon and ge were in the top five market caps and microsoft and intel and others took turns being the largest market cap. >> why is that bad, bill why is that wrong? >> because there's only a few things that are guaranteed in the investment business, brian, and the number one thing that's guaranteed is things will change in all of our economics classes, we learn that if something is extremely profitable from a microor macro standpoint, people will keep coming in and providing new competition to that and marginal profit gets

driven to zero in the stock market, the thing that's been the most profitable has been buying revenue growth stories in an era where revenue growth is hard to come by. so our argument is this is the antithesis of 1981 it's exactly the opposite of 1981 because 4.3% of the index is in energy and back then it was 29%. so think about what that means for technology if you want to make above average returns over the next ten years >> yeah, james, what do you think? are you worried about it >> i mean, look, there's nothing magical about the trillion dollar valuations. it's just the fact that the addressable markets are larger than they have been. looking back historicalically o 15% of the time has the market traded 20 times and we're in that time and look at the faangs they're not in that territory but making a call for 2020 that they're at or approaching peak

valuations the question is how sustainable are the trillion dollar plus valuations i think they'll bifurcate into two. on the one side you have the companies that can continue to drive growth levers out of the existing infrastructure and then the other half which will have to rely on third parties to drive that growth. google is in the former camp and apple and amazon are advantaged in the - >> i guess, james, the question -- no one can answer it because we don't know, but take your best guess. if and when investors grow tired of the five or six companies, the apples, the amazons, googles, whatever, they start to sell them because they think they're overvalued, will they put their money into other markets of the market or take their ball and go home if they do that that puts the entire market at risk. >> look, the market is slightly overvalued you know, look at the historical

context, the slim majority of stocks are trading north of that 20 times threshold but i think if you look at the tech sector, you know, i think they are not in nose bleed territory at this time you know, it's really about how do you identify the companies within the sector that can continue to drive growth in new forms versus relying on third parties like advertisers to come on to the platform. >> bill, i see you're itching to jump in here. >> yeah, think about it. in 1980 when energy had all of the top names there was no indexing now 50 to 70% of the large cap money is agnostic indexed. if history is any guide and this is the best of times that faang will ever see, and whether it be a year from now or three years from now or four years from now

when it runs out of gas the index is cursed. the agnostic investor is cursed because the indexes are at the mercy of this massive concentration. the last time this happened is when the dotcom bubble broke tech was about the same part of the s&p and it went down 80% crucified the index for 45% and some money did trickle into the other ones but as rob arnot, research affiliate pointed out, the gap between value and growth has never been this big. and certainly it's gone on longer so you would expect the misery to be more substantial when it finally happens. so the beauty of it is i tell people you can't hold your breath and tell these faang's break. but whatever set of -- by the way, we think it will be underlying economic growth driven by a 90 million millennials wanting the things

that the 65 million gen exers are. we're growing in the driver's license faster than any time in 50 years. >> bill, i have got -- listen, i love the passion i love the context i think it's an important topic. but i have a clock i have to adhere too bill snead, we'll get you on again. market structure maybe the most unknown thing out there. all right, a big surprise in the housing market with home building surging to the 13 year high in december diana olick live with some of the big-time numbers diana? >> yeah, really big-time especially for the big builders stocks today the home construction etf is hitting a more than 18 year high and that's after a big run-up all thanks to the december

housing starts and we're about 41% higher annually. the highest level since 2006 the single family is up and multifamily surged 32% regionally starts were strongest in the midwest and the south now, building permits which are an indicator of future destruction they were down for single and multifamily multifamily about 3% lower now low mortgage rates are driving demand and that's why we're seeing all this demand now. brian? >> all right some big-time housing numbers thank you very much. do not go anywhere, folks. we are just getting started. here's what else is coming up on "the exchange." >> coming up -- the head of the business roundtable tells us

what the corporate america is saying about the big trade deal. and will the historic run of the markets continue and a triple play for facebook a lawsuit, a change in its whatsapp strategy and maybe tv shows aren't a great bet this is "the exchange. so what do you see? i see an unbelievable opportunity. i see best-in-class platforms and education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions. and i see it with zero commissions on online trades. i like what you're seeing. it's beautiful, isn't it? yeah. td ameritrade now offers zero commissions on online trades. ♪

welcome back to "the exchange." has the signing of the phase one trade deal and the new nafta helped boost ceo confidence? yes. says your next guest steve, is it because they're glad that this uncertainty is sort of kind of mostly off the table? or is it that they maybe believe that those two deals signed this week are going to actually help the economy? >> well, i think it's a little bit of both, brian first of all, ceos hate uncertainty and we have had the trade skirmish going on for two years now. and with promises of ever increasing levels of tariffs and, you know, whatever else came lots of threats going on back and forth between the u.s. and china. so too on the usmca. they're very integrated supply chains and that's been sitting

there as well. this past week has been a great week and ceos are very happy with the level of certainty. well, the china deal didn't go far enough, it didn't provide big enough protections, but i think the point is we have some certainty. we have some peace the new tariffs are not going into effect and we have promised to go and talk on phase two. it allows investment north and south. remember, nafta quadrupled the amount of trade north and south. this is all good, brian. >> the there any negatives here, steve? we still have tariffs as we talked about yesterday we don't have phase two. we don't have a lot of cop create -- concrete yet, do we? >> no, we haven't solved global warming and china not a democracy. but remember the first thing with ceos they need some level of terra firma in order to plan

going forward and now we have that if you know what it is, even with the tariffs you know it will go forward. i think most ceos are savvy enough to understand that the tariffs can't be on just china's side we had to create a negotiating platform and now the question is will china abide by this will they start abide by the wto rules and start providing the ip protections and stop demanding the turnover of ip >> what do you think it's all this little matter of actually doing what you say you're going to o -- that's the hard part, right >> that's the hard part. >> do you think they will, steve? >> you know, they have been prickly on this, brian this is the key thing. we have got to watch because if you see any sliding on their part, then it just means they'll ignore the whole thing. and then the confidence will go. you mentioned the ceo confidence it had been going down throughout the course of '19 it's now starting to percolate

back up. so this has -- the trade deal has had a big impact on ceo confidence and remember, consumer confidence globally just came out, the conference board issued it last couple of days and globally we're at all-time record highs it has been very good. you know, for the past couple of years. the u.s. is sitting at a record high so consumers have been ahead of the ceos in confidence for the past couple of years >> well, now that we have the usmca done, do you believe that the people who had been holding out investing in stuff in mexico will now put that capital to work >> i think that's right. i think mexico will be the greatest beneficiary because they're the natural place for manufacturing. remember, wages go up, you know, the amount of content and cars goes up to 75% so i think jobs will be created in all three countries but mexico will be in great shape. this is really good. now, here's the deal, brian. we have china, you know, now

settled a little bit we have usmca. now it's europe and in 2020, it's going to be an interesting situation both with airplanes. you know, you have the whole airbus/boeing situation coming off to 737 max and you have the german automobile industry where, you know, the administration has been making a lot of noise there. those are the two areas to watch in europe in 2020. >> all right steve, thank you very much see you soon why and where does a bit of a growing crisis in the job market and what is being done to sovrl -- solve it? and snapchat is up 230% this year and they're not done. you can watch or listen to us live on the go on the cnbc app. we're back in two minutes. when we started our business

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all right. welcome back you getting -- you can call it a stock rally, deserved. overdone fed induced but whatever you call it it has been a juggernaut and much attention now is being posed to one simple question -- how long can this last bring in some technical analysis and some chart magic

what do you think, steve, a lot gas left in the tank >> yeah, the way you have to look at technicals you have to look at from where we came and where we could possibly go to. so why don't we look back at this chart so what's missing that we -- we didn't want to go so far back, so let's go back to september and december of 2018 we went back to a level basically on the dip to 2350. where did we come from basically was around that 2900 and change level. if you take these two in context and you spit out some overshoot levels you come up with pretty much where we are right here let's call it 3395 all the way up to if you want to talk about real gas left in the tank, 3535

those are two tremendous levels. so we're to lose a lot of bears and a lot of rational people if we spit out this number. so let's forget about the 3535 this is the next logical resistance level for us. it's totally reasonable. about 2% up from here. if we have to dive here that's about 6% up from there but let's be rational. what happens if this doesn't work out the 20 day moving average which is your momentum indicator and where is that level? 3250 let's call it. >> that's the level we have to watch -- if we start to roll over a little bit. 3250 might be some kind of support. that is a very good looking chart. a better looking chart at least in the near term is i think your favorite single stock right now and that's snapchat. >> exactly so for me, so i have been

involved in this trade i have recommended this trade. i have been on "fast money." so for me, i'm long around $14 now when you start to see -- i think you mentioned it the other night on air, brian, $17 mark. that was what the ipo price. of snap. so once a chart -- once a stock hits the ipo price after being below for so long, naturally what you get is a lot of buy through buyers and immediately once you hit that level, what does the analyst community do? they start raising price targets because they don't want to look foolish. it's human nature. now we have a street high today of 24 that ubs put on it that was a matching streak -- there was a 24 on it most of them are clustering around 20, $21 where do i think this goes

i think it goes to 21 to 24. if you start to eclipse that i think you have a real potential here to break out substantially. so everyone gets nervous on snap, brian, because of where it came from. look at this level right here. everyone says oh, my lord, i don't want to be involved in stock like that. these are the only stocks i want to be involved in with charts like this so i think you have the ability rationally, 21 to 24 i'm staying long i think i'll get $30 out of the stock. >> i know you have been right on the mark thank you very much, we appreciate you joining us. see you this weekend take care. let's get a cnbc news update here once again is sue herera. >> hello, everybody. here's what's happening at this hour white house economic adviser kudlow is telling reporters that judy shelton one of president trump's picks to serve on the federal reserve board should have no trouble winning senate confirmation

>> i think she will work very well inside the fed. she's a brilliant woman. she has a lot of experience in top jobs including this top position in the bank of reconstruction she'll be a good addition to the board. the cdc sees that the flu is widespread in every state except for oregon and hawaii. 32 states are reporting a high degree of activity and art experts have confirmed that a painting discovered hidden inside the italian art gallery's walls is indeed gustav clim's portrait of a lady it was stolen nearly 23 years ago. the question still unanswered who took it and whether it ever left the museum's property it's a whodunit. back to you, brian. >> sounds like it's a no one

done it. did they plaster over it >> who knows. >> let's just build a wall sue herera, thank you. here's what's coming up on "the exchange. >> ahead facebook may be scrapping one of the most controversial plans. fitbit may soon be able to monitor your oxygen. one sector can't find the right employees so it's spending big to woo them. it's not the sector you think. it's all coming up on "the exchange."

facebook, fitbit, space and football owners are a bit upset. it's time for what else, rapid fire here is eric and cnbc contributor ed lee, reporter for "the new york times. first up, according to reports facebook is pausing the rollout of ads within whatsapp it could be a long term possibility. remember, facebook bought whatsapp for $24 billion and has yet to monetize it they canceled two of the most heavily marketed tv shows as part of a shift toward

unscripted content ed, i don't know why -- maybe you do, why they cancelled the ads but the idea i guess of an ad is that they track what you do the ad is targeted if whatsapp is supposed to be encrypted they shouldn't know what you're taking ago -- talking about. >> and they're not used to the ad environment if you're used to the regular facebook, okay, i see ads on the time line, that's fine but whatsapp that changes it. >> how does it work? you don't have a feed. it's people -- it's like getting an ad on your text messages. >> like they try to create a section that looks like inside stories where you see different things scrolling at once again, they're trying to shoehorn in one product than another. >> morgan, they spent $22 billion for it and they have to make money. >> and's why investors answer wall street are so bullish on this name. i wonder why they don't go more

of the subscription model maybe is what was in place, 99 cents a year before facebook bought it. >> we're facebook, we bought you. we want you to be us we don't have a monthly fee, we have ads >> but if you're not going to utilize and leverage that data in ads for example - >> because whatsapp is encrypted they shouldn't know the data. >> they could be just ads like - >> yeah. >> okay. so on whatsapp feed, i'll get an ad for something i'm noted in. >> you're not going to pay $22 billion if you're not going to monetize it. >> right payments - >> how much would you pay for total privacy a year on whatsapp or facebook? $100 a year? >> yeah, probably. >> there are some that are near

privacy that aren't owned by facebook. >> and fitbit is bringing blood oxygen monitoring on the devices. it can detect the changes in breathing during sleep google is now going to own facebook. >> fitbit. >> fitbit. >> that would have been a breaking news headline. >> google ever buys facebook you'll come back and apologize. >> exactly breaking news. a slip of the tongue we dis - >> does this bother you? >> yeah, we talked about the whatsapp and the tracking and fitbit if they'll have this extra data but it's owned by google and google as the "wall street journal" reported they have the deals with hospitals they are going big on medical records. health care records. i don't think most consumers want google to have this much information about you as a person so we're already tracking your emails i know everything you're searching on google. i know all of the videos you're watching on youtube now i know

everything about your health data that seems like a lot. >> i think that's why -- >> they were concerned, exactly. sorry to interrupt there it's a move to differentiate themselves from apple. what can we do with this that apple doesn't do it feels incremental but there's a danger there i don't know how smart google ultimately is in trying to combine all of the different things they're a big, smart company but they have a lot of missteps as well i don't think it's as sinister maybe. >> i don't think it's cleared all the hurdles but there's some regulatory review that's happening as well. but there were reports after this acquisition was announced that you had people that were canceling their subscription to fitbit. >> there are people worried about google. >> the other thing is, are you going to like want to sleep with a fitbit on your wrist >> it shows when you're asleep. >> that doesn't sound comfortable to me. >> i used to wear the fitbit

when i was doing the 5:00 a.m. show and i was so depressed by the date on sleep. >> now they'll know in advance that you're depressed. >> i'll get the ads in my feed topic three, out of the world, spacex preparing for the last big test tomorrow it will launch a falcon 9 rocket and then 90 seconds left, it will separate and float down to the ocean with a parachute. if all goes well it will take american astronauts in to space. morgan brennan, this is your beat you forgot more about it than i have ever nope but it feels like 1969 put a guy in the capsule and come down with the parachute. >> that's why they're doing the big test if it goes well tomorrow, next couple of weeks, next couple of months you will see astronauts

get on board this thing and start flying up to the international space station. >> the - >> the stakes have never been higher especially given the boeing test last week. it didn't make its way to the international space center. >> if this works, morgan, what does it mean >> if it works they assess the data nasa gives the green light there's a date the nexstar -- the next crew dragging capsule is shipped down to kennedy and the astronauts get on board and we start being able to for the first time since 2011 put astronauts in space from u.s. soil. >> if this goes well and it looks like it will, this is a time where the private sector and the public sector have worked in harmony? >> this is a quintessential public/private partnership and it is being watched very closely not only by those in agencies like nasa but also the defense department across the board, a new way of

potentially doing things >> this is just for astronauts or are we going to start to see -- >> no. >> individuals start space tours. >> i'm so glad you asked that question, because nasa has said once they're certified they're opening it up for private astronauts to be able to pay for tickets and go - >> private astronauts? >> possibly as soon as the end of this year. >> we go to the international space station. >> absolutely. >> costs hundreds of millions of dollars. >> how much training you're not just showing up. >> race car drivers, pilots, astronauts, all similar. >> i have never slept in zero gravity. maybe fitbit - >> yeah. >> it's all connected. how is your blood oxygen up there. finally, new carolina panthers owner and hedge fund owner david tepper is backing up the truck to hire matt rhule from baylor he's getting a seven year deal,

worth $60 million. the move has some league owners under the collar jabari, welcome. what did tepper do wrong here? >> he did what he's not supposed to do i don't count his much but when you raise the price of pork, you know, these first time head coaches they usually come in on four year deals and what tepper did he gave him a seven year deal. he's never coached in the nfl, never won a super bowl he's a temple guy. so he deserves some of that money. we're temple dudes but never won a super bowl and you have him making about 8 to $10 million a year bill belichick makes $12 million, pete carroll about 11 and mike tomlin is in that range as well. and yet matt rhule makes 8 to $10 million i want a raise. >> like a classic country club

situation. you go to your country club you're tipping your caddie a thousand bucks. >> the guy i golf with is feeling -- >> yeah. >> i think that's right. i don't get what tepper is doing here, really i like the idea you want to give the guy the chance, but a four year deal. but as soon as you raise the price like that, the economics -- >> he had ten years at baylor. >> no, he had like three. >> i think ed's point is very good which is that jabari the risk is that then the assistants -- not just the head. but all of the entire staff says, well, wait a minute, i need to make more because i was making half of the head coach and now -- >> the coaches are interesting because they are employees, they're not management but not part of the union. so players are in the union. owners control that union. but the coaches are just this other thing and that's what makes these -- it's interesting. >> remember, coaching contracts are not a part of the salary

cap. that's why people like to suppress the numbers so they don't have to know. >> i'm going to put you on the spot, i apologize in advance who's the lowest paid coach in football do we have any idea? >> again, the salaries aren't reported >> we don't know. >> who do you think it is? i'd love to know who the lowest paid coach is. >> it's not ruehl and it should be. >> whoever that guy is he'll get a slight raise. >> he has more nfl experience than ruehl coming in. >> but i wonder, mind you, my lowest grade in high school was gym class so i'm not the best sports person. i'm not the best sports person, but you bring somebody like this in tepper sees this as a way to help out for the next few years. maybe he was in the college circuit he has an eye for the up and comers. >> so he's going through the art rooney model which is you bring

a coach in and let him coach no matter what and let him succeed i'm fine with that too it's his money. >> if they go 12-4 for three years that's fine. if they're 4-12 for three years not so good. all right. thank you all very much. rapid fire like seacrest, out. let's get a market flash on boeing sue herera has the details. >> i do, indeed. and boeing has been moving lower on this abc report the reporter tweeting out a short while ago that during testing, a testing audit last weekend, the 737's two flight computers were not talking to each other at start-up unclear how long the start will take but it will be done as the other return to service work is conducted. this is the statement that boeing put out, quote we are making necessary updates and working with the faa on submission of the change and keeping our customers and

suppliers of it. we're making sure we meet all the regulatory requirements before 737 returns to service. but as we mentioned boeing's stock did move to session lows on that abc low and boeing has responded. we'll see if it moves the stock off of the lows of the day. >> big news there. thank you very much, sue herera. i'm sure we'll get more on boeing as the day progresses. presidential candidate and entrepreneur andrew yang is speaking about the economy and huawei we'll have that next when we xom back imagine traveling hassle-free with your golf clubs.

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is the stock market overvalued >> overvalued. >> big tech, regulate or break out? >> you can't oversimplify to that extent. you need to actually dig in and solve the problems you're concerned about. >> recession in 2020, likely or unlikely >> i'd say a slight down nurn 2020 is very likely. >> what would you do >> i would put more economic buying power into people's hands so we have a trickle up. >> frothy or not >> definitely frothshy. >> harder job, zuckerberg or bezos? >> wow, i'm going to say zuckerberg. >> huawei threat overexaggerated or underappreciated? >> it's real so i don't know if that means underappreciated, but it's real. >> now yang said that of all the

media platforms he likes instagram the best well, manufacturers are set to spend big money to fix a persistent industry wide problem. we'll tell you what that is and the measures they're taking next. >> "the exchange" is now a podcast. listen to your favorite parts of the show you might have missed sign up now on apple podcast, spotify, stitcher and google podcasts prepared for the future. surprise! we renovated the guest room, so you can live with us. i'm good at my condo well planned, well invested, well protected. voya. be confident to and through retirement.

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well, the skills gap is impacting industries across the country and manufacturing is no exception with more than half a million open jobs and the shortage of available talent, they're spending big on training this year. kate rogers has more. >> that's right. the inability to attract and retain talent has been the number one challenge for manufacturers over the past nine quarters according to the national association of manufacturers, which cites that skills gap as a major concern for the membership in fact, nearly 79% of manufacturers say they have openings that they're struggling to fill. the new data finds that

companies are projected to spend at least $26.2 billion in 2020 on training initiatives for existing employees known as upskilling as well as training programs for new hires investing in this talent pipeline is really key and it projects 4.6 million manufacturing workers will be needed by the year 2028. but 2.4 million of those jobs might go unfilled. if the skills gap isn't closed manufacturing institute has set a goal of shrinking the skills gap by 25% over the next few years. >> come on over here, because to help us get a better understanding of what kate just talked about is carolyn lee, the educational workforce partner of the national association of manufacturers at so is the industry confident that the training and money will work >> it does we have two problems in the sector we don't have enough people with the right skills and we have a

perception problem so we need to double down on both investing and training and that is what the report that came out today is all about and we need to change the perception of the sector and that's what we'll do throughout 2020. >> are these the perception of the sector? >> are they 18-year-olds, 22-year-olds, 50-year-olds >> all of the above. we've averaged about 500,000 open jobs. we have those today and as kate said, we're going to have 4.6 million jobs we need to fill between now and 2028 >> this is really having a big impact on nams membership. i think about a third of the workforce, the xcompanies, said they're actually turning down job opportunities because they don't have the skilled labor needed in order to complete the work that's coming in. what does this mean if these jobs can't be filled >> if they can't be filled, we're not going to be as competitive. that's why there's no looking at what might happen. we have to dive in and that's

what the sector is doing to change the perception so that's what -- and also training the workers that we have today because the worker you have today is the next job you need to fill. >> one thing that i've been talking about for years here is so-called geographic mobility. when i was 15, my family packed up our staff and moved from san diego to virginia basically to start over you know if you're in flint, michigan and you're underemployed and you'd like to move to huntsville, alabama where there's a new car factory, but you can't sell your house without going into hock, you won't go in a lot of cases what else do we need to do to get the skilled workers to where the jobs are >> we need the tell the story. we need to show people where the jobs are and talk to them about opportunities and about what the future in the sector so they can make that leave and take that opportunity because they know they'll have a growth

trajectory that's what the story is really about. it means your job will be continually evolving you'll be upscaled and rising to new challenges so you'll have an interesting career ahead of you, not just a job >> in covering this, the average manufacturing worker made almost $90,000 last year. so these are very good paying jobs a lot of them have benefits. they're offering a lot of things including 401(k)s along with all of this train iing that's being done a career, a good paying one and we know, there are a lot of open jobs >> but there's a lot of people around the world also looking for a job and if we want to have competitive manufacturing, we'll probably have workers as you said where does immigration fall in this debate? >> we're at historic low unemployment levels and a huge amount of open jobs so we need everybody who is interested and has the capabilities to come to our sector that means part of the solution is immigration and a upscaling, rescaling, attracting more

people in away from other sectors and making sure we're reach iing those high school students who are the next worker and ready to come to the sector very soon. >> also, carolyn and kate, important discussion, big topic. thank you both very much >> thank you so much sx>> shares of southern company, ali l higher today, but got an upgrade say iing despite rocketn last year, this energy and utility company has a lot of room to workful we'll find out why from analysts behind the call, next

been a good week for utility stocks one of the drivers of that move has been southern company who's sitting at lifetime highs, but driving utilities and why is southern in the sweet spot, let's bring in sophie, research analyst at capital retail market, just upgrading from an overweight to a sector weight. welcome to the program

why should anyone bayou tillty, boring old utility, right, regulated growth that's already up 30 plus percent in a year? >> hi. thank for having me. well, i'll tell you why. because southern is a premium name and despite its run that it had in 2019, the it is still trading at a discount. a large regulated peers and we think it should close the discount and trade at the premium over time. people forget that historically, southern upgrade in jurisdictions, dpgeorgia, alabaa mississippi. they are business friendly places they're open for business. we've seen construction treatments there in volvo which has been a major overhang in the last few years and is coming to a close and we think we are ready to pass that and look past those overhangs. especially considering that southern has consistently met all of the important milestones on the project since they took

it over from the south contractors. so actually quite positive on it we think we're going to see a tightening of those milestones this year and more definitive time frames for those and we think the investments will look past that as well as they begin to ebb terrors the service >> how important is it where they operate as their name might implay on breaking news here, southern, they are in the south where the regulatory framework might be a little looser or more friendly versus say a highly regulated state like a california. does that help them? >> well, utilities are regulated everywhere it's just how they regulate it, right. and they operate very efficiently and because of how well run this has been, they build strong relationships the stake holders in their state that includes their custeomers and regulators as well >> how much more room to run do you believe southern has >> southern trades at about two turns discount the average of

the large cap regulated peers and we think it could trade at the multiple two or three times premium on return. what we've seen between volvo and once they can have most of the revenue, this is where it's going. >> key bank capital markets upgrading. who knew the utilities stocks were going to be one of the best performing stocks. sounds like you did. thank you very much. >> thank you zblnc so you hear about environmental social governance. is it just talk? it is not. tonight on fast money, we'll have the chairman to talk about esg investing and it's not just we're going make a loan to buy a windmill have you heard about debt issued by major companies that issues in rates paced on carbon emissions goals. they exist and the industry is booming. we'll talk to him tonight.

i'll sigh you there 5:00 p.m. eastern time tonight with that guy. it's going to be an interesting interview. it will open your eye on a topic that many are skeptical of market, new record highs great week "power lunch" begins right now here's what's new at 2:00 on "power lunch" for friday stocks indeed marching to record highs. wall street's biggest investors. the billionaire bulls. on fire. the number of people building new houses is at a 13-year high. we've got those details and later the ceo of bank disrupter, chime, finalizes a multiyear deal with dallas mavericks the ceo will join us as "power lunch" starts right now.