go. go scientist. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson. good afternoon, everybody, welcome to "power lunch" along with kelly evans i'm tyler mathisen glad you could join us coming up, americans wen shopping in january, out to eat and to the car dealer. retail sales up 3%, well above expectations is that good news for those worried about recession? yes. bad news maybe hoping fed will stop raising interest rates, kelly. plus, trouble at the ftc

a commissioner resigns and blasts the chair on the way out saying lina khan is abusing her pow perp talk about this squabble and what it means for corporate america and dealmaking. first a check on markets. bouncing back. thought market was worried about fed rate hikes everything green. s&p flat nasdaq up as well. >> check in with kristina partsnevelos what's moving in markets today. >> of course yeah stocks making moves. stocks off lows of the day nasdaq only inda si in the green. s&p 500 flat airbnb biggest winner on nasdaq 100. blow outsquare on top of already high expectations and issued a strong q1 guidance clearly benefiting from pent-up travel demands. sharing up 13.5 at this point.

rivian and lucid leading the pack after a deal with tesla allowing widespread access to tesla's charging stations. time to share. on the new york stock exchange, video roblox soaring above almost 25% after revealing a 14 purse percent increase in paying users during q4. sure a lot of parents are small children get that, and call it risk on or short covering. beaten down names getting love today. lending platform, upstart, buy now pay later lender firm and car vendor online used car dealer beat up over the last weeks up 11% kelly? >> wow continuing the theme kristina, thanks very much. turn to the big story driving market aection. retail sales jumping 3% in february food services leading the way. 11% gain home furnishing, electronics

good as well president of sw retail advisers. it this a rebound from weakness end of the year or real strength >> so there's no doubt there's real strength here, kelly. we don't want to get too much ahead of ourselves, because, january, right, a really small month. but a couple things going on obviously everybody's out eating, drinking, but furniture numbers a bit of a surprise. if you listen to companies like williams sonoma, they tell you the whole out of stock issue that's been persistent over the past few years is now getting solved perhaps some orders were filled in january i think the other thing is that retailers were incentivizing the consumer and we saw that to shop into january. hey, you know, buy a gift card in january give you an extra $10. some of that certainly some, a lot of clearance in january as retailers try to normalize and get through those backlogs from the past few months.

you know, it's absolutely good news as we look into the new year. >> was it already priced into the stock stacy? or do they still reflect a decent discount? >> so i think -- this was a surprise obviously today. i guess even more of a surprise, because last week if you listened to somebody like a capri, talking about destocking the wholesale channel for retailers. up to 40%, 50% of their business talking about a de-stock in wholesale business down 25% if you put that in context, even some of the brands super strong, they were talking about why the department stores being really modest about future orders i think this is, definitely a double positive surprise. >> you say some of the weaklings in apparel may actually show some strength. which ones and why >> so, tyler, think about it the numbers okay in january, but really we haven't had a winter

right? we've had a very kind winter in some really nice weather recently i've seen a little bit of the spring apparel getting an early jump-start here. i think as we, the next couple weeks, hear from retailers, might be extra optimism. always worry about the pull-forward situation i think you could see an american eagle, your target, an underdog still i think some of these stocks particularly that are apparel-focused, you could get a pop into the commentary over the next several weeks. >> gap, maybe? >> interesting gap, particularly old navy, has been promotion's more ye oesh o -- ye over year last six weeks, flattish or modestly better. not getting worse there. enough to move the stock probably >> wow if i were to say, wait a minute. capri's got more of a leading read on this and maybe retail

sales report a one-off would that be a plausible interpretation or not >> i think right now, again, january is so small. so many different things going on extra clearance, fulfilling orders backlogged. i think we really need to see particularly the march numbers to understand what does spring look like? we know full employment here, customers are taking on more debt we know that especially at the low end. there are puts and takes in six months the consumer might be a little bit more stretched here, but i think in general, good start to the year, obviously. >> absolutely. great to see you thank you. next guest says the new retail results may impact the fed's timing of reducing the magnitude of future rate hikes, but also says the fed doesn't need to cut rates to sustain the recent rally he's betting on some growth stocks to do well. pring in peter anderson as anderson capital management.

welcome. good to see you always. >> thanks. >> what do you make of the recent data economically, the jobs numbers, the retail numbers today? and the effect that those may have on the pace of fed rate hikes and when the fed might pause? >> tyler, i think the fed has really done, i dare say an artful job at managing its current regime of rate hikes, and blending in -- remember, we started this last march. almost about a year ago. we will start to see those impacts now, march going forward, and i think it's very challenging to blend those past hikes, impact of those past hikes, with his current pace i think he's doing a very, very good job i think he's flexible and i think giving himself a long runway even retail sales numbers we've seen today, he will certainly factor that in, but being quite

artful, i think in terms of anticipating the impacts we're going to have from the past hikes with the current actions he has to take. >> and the one we ran says all the fed has to do stop raising rates. is that to help the stock market or to help the economy or to help in the fight against inflation? in other words, you know, why are you saying that? >> yes. >> and is that what you're urging the fed to do here? >> all of the above. yes. i think, you know, they're hopelessly interconnected, and to isolate one of those questions, i think you can't can not answer it without anticipating the other two questions. so all of these things blend together, and what i would say, probably a very smooth landing against all the negative criticisms that i'm seeing the very sentiment now in markets is extremely negative. i'm quite positive about the way the been going, and also what i think will happen through the rest of this year.

>> and two stocks you like, peter. i smile, because cody and nvidia i feel like you should have a mohawk or something talking about those. why these two? >> well i gave those as almost extremes, and you're right nvidia is a very hard tech company, ai play kind of abstract and the most about sstractions you can be, artificial intelligence and whether or not it has a long runway cody a high-end fragrance and cosmetic company but very, very simple thesis it lost its way a couple years ago. it bought some mass market assets from p & g. the ceo didn't know what was going on levered themselves up 40 times, okay, with leverage, and it's a classic deleveraging story now down to four times leverage. so that extra cash flow will help them return to their basic

knitting which is not mohawk's but close. more like a high-end makeup and fragrances that they've always been known for and lost their way. i think that's a very relieving type of strategy compared to all the other obstructions we talk about with ai and nvidia and those platforms. >> all right >> peter, thank you very much. as always good to see you, sir peter andersen. >> thank you >> a bit more hopeful message. news coming out of washington to bring you. get to kayla tausche for details. >> non-partisan congressional budget office says the federal deficit will average $2 trillion over the next decade dramatic increase from higher baseline projections attributed to increased spending, lower tax revenue and high aer interest rate on government debt seeing the 2023 deficit at $1.4 trillion a $400 billion increase from its prior projections and sees

accumulative debt by 20% due to total $18. trillion by 2033. at that rate deficit represents 6. % of gdp in 2033. nearly double average rate for the last 50 years. cbo expects elevated borrowing costs and muted gdp growth to last several years and sees inflation hitting the long-run goal in 2027 the debt limit, cvs says treasury could exhaust bill paying measures between july and september, or possibly earlier, if the u.s. brings in less in capital gains taxes than prior years. the cbo's reports the government's taxes and spending programs remain unchanged. president biden is set to deliver remarks later in the hour both parties noted the other policies strategies would ldriv the debt wider ar a politically contentious order.

and people always used computers to try to get, or almost also, could this new wave of generative ai change the way trading is done? plus, coinbase shares jumping today. even though the s.e.c. is considering it could threaten part of that company's business. bring you the news and get to the bottom of what's moving the stock when we return. the first time you connected your website and your store was also the first time you realized... we can do anything. cheesecake cookies? [together] the chookie! manage all your sales from one place with a partner that always puts you first.

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welcome back, everybody. the s.e.c. considering new rules regarding crypto, which could be

a threat to companies like coinbase kate rooney has more >> hi, tyler s.e.c. looking to increase requirements for what types of companies can legally hold investors assets, which could affect coinbase and other big crypto firms out there the commission looking to expand the scope of requirements for qualified custodians including banks, brokers, but crypto companies like coinbase started offering the service storing assets for institutional investors. the proposal meant to include other assets, not just crypto, but the s.e.c. chair gary gensler calling out the industry explicitly saying their current practices might not meet some of these new requirements in a statement gensler saying today's rule covers a significant amount of crypto assets and those crypto platforms may claim to custody investors crypto that does not mean that they are qualified cust custodians coinbase responding saying after

today's s.e.c. proposed rulemaking we are confident it will remain a qualified custodian an assets are segregated and secured as well coinbase custodies billions of dollars including sales seen as a key part of its business especially as other revenue streams like trading slow down and the stock is mentioned you mentioned, despite this news an analyst i just talked to said objectively bad news for bitcoin pap bit of a head scratcher. more likely a short squeeze. coinbase among top ten most shorted names not really trading on fundamentals today. up more than 14% back to you. >> great point a few others as well, kate no real catalyst other than that stat kate roone o', thanks. as the s.e.c. reins in one trading fad an even bigger one emerging ai all watching technologies like chatgbt develop in the past weeks or months.

maybe wrote you a love letter for valentine's day or gave your kid an idea for a college essay. those are the tip of a very deep i iceberg. the thing is remember, open to application. considered chatgbt standard model that any programmer can take the frame pand make modifications allowing it to do things previously not felt possible al ga ring up trading. generating $3 billion by 2030 dominated by citadel or morgan stanley. can one person create this on their own? a shift like that could totally democratize stock trading. is it open to manipulation or worse trigger collapses? greg zuckerman a special writer at the "wall street journal. greg, great to have you here as we explore what people are already doing. i follow people on twitter already building ai platforms. what are the implications here >> it's exciting it's challenging

i'm a little wary of people throwing themselves into developing their own ai programs mostly because wall street has been tat for years, even decades. machine learning in particular, a subset of ai, has been the focus. i mean, early on obviously, algorithms, recipes, trading recipes and frankly about 54% of all trading now is automated we're already there when it comes to wall street no longer the traditional kind of trade or pick up the phone and figure things out in terms of execution in terms developing the training ideas frankly hedge funds and others at a it a while and still having problem ace plying machine learning and trying to make a lot of money from their trading ideas. >> what does ai or machine learning do well in a trading context and what does it not do well >> sure. the really good at picking out patterns that's what quads do and other traders do it's good, they're good at eliminating sort of the biases

that you and i might have. emotional, fear, greed, that kind of stuff. so if you hand those decisions over to computers, it's great, a beauty, we should be learning that it can learn. you learn from past mistakes it learns on its own comes up with ideas on its own the problem is when it comes to trading at least, unlike languages, things are always changing data changing, say a ge, general electric once a financial company, no longer is. a spin-off computers don't know that. so it's noisy as we say. not clean, the data. those individuals who are trying to become quads and learning experts have challenges ahead of them. >> that said, even be talked with ron insana about this, greg, and a lot of people will layer in these technologies to do what effectively their employees already do might be look through it charts of past recessions, study

correlations and look at sector ti timing that kind of thing should we expect ai to become an offering, more efficient or maybe that creates more trades seems some will try to build it themselves do it themselves. maybe some 17-year-olds going to solve this and do better than pros from their bedroom, but for others, professionally, feels like this technology will start showing up everywhere. >> i do think so i think first you're going to see it, though, in sales and research those kind of endeavors, where you can't automatically or buzz about people, learning, turning to chatgbt and other kind of ai techniques i want to remind people when it comes to machine learning and quan trading in general, you're competing against minds, ph.d.s as citadel, renaissance, hundreds of ph.d.s and apply a

man-plus approach. difficult to turn all decisions over to theish ins paurtly because they have to explain to clients. not medallion or renaissance but other terms. get in front of a client they want to know why you made a certain move, a buy or sell something and you can't tell them, well, the machine told me to, learning from the past hard to get away when you've had a loss there again, data is really a noise, and obtaining data, hundreds if not thousands it of people in the industry focused on that an individual in there, up there, in their office trying to compete, i caution them to be a little careful. >> yeah. at the same time we've seen even charlie munger today talking how this technology who great promise but hard to separate somebody with a real edge from something that doesn't have it how is anybody ever going to know >> well, we'll see who ends up making some money from this thing and not. yes, machine learning techniques can pick up on all kinds of

trends and patterns that the pu human eye doesn't see. sometimes they're not real therapy efemoral and a reason they shouldn't be bet on, for example. those who turn decisions over to the machines will pick up on patterns that maybe you and i can't figure out correlations we didn't even think about. sometimes valuable other times they're not. just to caution people probably the best edge fund in history, the pioneer when it comes to quantum dusting and algorithm investing only get it right about 50%. they know when to lever up and get it right, know what they're doing, but reason for caution here srnis it bad? as i listen to this people more and more feeding into the data and running -- given our cash-in greg, i put someone with that

institutional memory up against any of these data set which can be so flawed >>ier. i just have to say i'm a big believer in systematic change. systematic approach to any systems. apt to make midtakes as humans if you can turn the decision around or your decisions can be informed by some sort of system and it's a computerized system, that's great i think you can get advantages see it in pilots, in the cockpit. check listed systematic approaches i believe in that, turning it completely over to the computer, it's challenging there. >> thank you fascinating. dawn of a new era, greg zuckerman. ahead on our program today's "working lunch" jon fortt brings his interview with the ceo of the software start-ups.

plus, ftc-ya later resigning. and parting with harsh words for democratic chair lina khan 'lbeig bk thhawel rhtacwi tt story. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson.

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yields rising today after that strong retail sales report 15-year high in fact on a two year rick santelli has the latest rick >> yes let's look at this 462, 10 basis points away from its highest close of the cycle and actually going all the way back to '07 in november. 472. ten basis points away. look at the ten year it's high in october of '23, over 40 basis points above where we're trading's near 4.25. why do i bring that up because as aggressive as ten-year notes have been, high evidence yield now at 23 the fact they haven't been able to cross larger extremes is meaningful especially looking at the spreads. 2s to 10s. a bounce, still within striking distance of four decades inversion, but duelling yield curves the real recession spread, three months to tens, least diverted in nearly six weeks. tyler, back to you. >> thank you. news now out of washington

affecting some of the biggest tech companies in the world, eamon javers has this from our d.c. bureau. >> hi, eamon. >> high ya, tyler. house judiciary fired off a state of subpoenas to biggest tech companies in the world demanding documents and information ritte edrelated to says is big technologies efforts to suppress freedom of speech. here's what jim 1y0rden says in this press release about the issuance this afternoon. sending them to amazon, alphabet, meta, amazon and microsoft asking for documents and communications related to the government's collusion with big tech to suppress free speech saying congress has an important role in protecting and advancing fundamental free speech principles including by examining how private actors coordinate with the government to suppress first amendment protected speech the question whether jordan and his committee, now that they

have subpoena becpower will be e to have evidence backing that premise and to what extent tech companies will fight the subpoenas and to what extent cooperate? reach out to the tech companies and see what their strategy sand how to respond. >> what's he driving at if i heard you correctly, in the assertion that tech companies coordinate with the government to suppress or restrict free speech what's he driving at there. >> the broad concern among conservatives has been a long time big tech companies dominated as they are by liberal programmers based in san francisco largely have taken efforts to suppress search results and things like that on conservative issuesened a amplify them on liberal issues the question jim jordan will want to know, to what extent was there any coordination between the biden administration in the first two years of his presidency and some tech

companies on issues of political significance up know, all the hot-button cultural issues you might imagine. if any of those were done at request or in coordination with any biden administration officials or executives. we saw in a hearing last week on twitter on capitol hill under a different committee. the oversight committee, on capitol hill exploring a similar set of issues whether or not twitter was coordinating with the biden administration in terms of how it handled the hunter biden -- or biden officials in terms of how it handled the hunter biden laptop story this is a similar series of questions, and you know, the big fe what do they get their dragnet as they throw out subpoenas? >> thanks, eamon javers reporting from washington for us. go to bertha coombs for a cnbc news updates. >> what's happening this afternoon. nikki haley formally starting her run against former president donald trump for the gop presidential nomination with a

call for americans to "stop trusting the stale ideaing and faded names of politicians from the 20th century." >> and i have a particular message for my fellow republicans. we lost the popular vote in seven of the last eight presidential elections our cause is right, but we have failed to win the confidence of majority of americans. well, that ends today. >> within the last hour florida gop representative matt gaetz said the justice department has ended its sex trafficking investigation into him with a decision not to charge him with any charges. or crimes. and a ninth grader has reached his goal of delivering 20,000 valentine's to hospitals and nursing homes in the washington, d.c. area. back in september, patrick

kaufman asked school students to start making the cards next year, he hopes to expand his valentine's by kids effort nationwide. that is a great -- great story. >> not for nothing, bertha we didn't leave home with 17 -- so much candy. my kids don't need it. it would make the day of some of those -- that's a great idea. >> yeah. folks who might not get one in a nursing home i was buying valentine's the night before this kid planning six months ago. even more impressive. no need for an emergency back for this stock. generac shares soaring following an earnings beat the company expects weak sales over the next few months but giving investors a rebound in e ckthba half. we'll speak to the ceo directly about this, next. luxury exemplified. innovation electrified. with apple music seamlessly integrated.

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the backup power company generac reporting fourth quarter 2022 results that beat paul street estimates for eps shares a boost up 7% after being down 51% the past year the past few months the company performed nicely in the market, however. joining us for a "power lunch" first on cnbc is generac ceo

aaron jagdfeld mr. jagdfeld, welcome. good to have you with us. >> thanks forhaving me, tyler. >> business is good. eps higher higher than expectations compared with a year ago, but revenue is kind of flattish. am i characterizing that correctly and how can you get that one back in gear and how soon >> yeah. that's exactly what happened we said working through a destocking issue in the field. we shipped a lot of product. really first half of last year and working through the second half of last year and beginning this year reducing inventories we think that destocking will be done here by end of second quarter and second half of this coming year should be back to growth again >> what is the -- segment your business for me between the household market, the commercial market, the institutional market so i get a clearer, and viewers

get a clearer sense w, where mot of your business comes from? >> residential side. 60% of what we do is serving homeowners that's everything from home standby generators to backup storage devices. smart thermostats through ecodivision. about 60%. the other 35% to 40% commercial, industrial type of backup generators for telecommunications providers, wastewater treatment plants, manufacturering, things of that nature. >> how are your input costs affecting your business? in other words, what you have to pay for labor what you have to pay for raw materials, pay for transportation and so forth. so how have those costs been felt by you, and, then, how much of those higher costs, i asam h assume higher, able to pass on to consumers the pricing question >> definitely. our products are durable goods right? a lot of steel, a lot of copper. a lot of aluminum. costs to get them here,

logistics, labor costs to put them together. well documented over the last 18 months and much, much higher passed along quite a bit of that to consumers depending on the product. between 10% and 15% maybe higher in some categories passed that along to homeowners and business owners. you know, obviously they're accepting it don't like it. we don't like to have to do that, but same time seeing input costs level out finally. it's good we're start tock see some costs come down actually. especially logistics costs and certain metals costs we're seeing moderation. labor costs are, they go high, stay high. right? labor costs rarely go the other way. there are some costs which we believe are going to be higher for longer >> aaron, kelly here what'sen been like for your business to go from one of these kind of steady as she goes hum dr humdrum to $500 stock a couple years ago? almost like crypto

like you were dogecoin what was that experience? then people looking for backup generators how complicate dd that make things from a business planning point of view and what's the hangover like now? elon musk famously says, stock doesn't make sense at these levels >> yeah. i think you can make the argument with the stock got ahead of itself. even last year at some points, but the year before certainly. look, our company, we produce backup power, supplies, we're moving ourselves into position more as an energy technology company. so again i mentioned things like smart thermostats, solar plus storage, energy management ev charger launching this year more focusing on the ecosystem of energy around a home or a business i think, where the stock price got to, a reflection of a couple things first and foremost this transition we're going through,

got the market excited i think hopefully we can remain excited about that, and the market can remain excited about that as we think about the future, but also think about the context of some of the larger profile outage events that happened february of 2021. in texas right? you had massive blackout that occurred obviously that's a part of the market that was very hungry for product and for a period after that demand certainly spiked 2021, 2020 even last year, 2022 and now we're starting to normalize a bit which is great again, got ahead of ourselves a little with inventory in the field. >> right. >> as we work through that here first half of the year we'll be back to growth again in the second half. >> back to boring. you know what i'm saying i don't mean boring but not dogecoin thanks for joining us. really appreciate it aaron jagdfeld of generac. and employee resource groups are becoming more important than ever up next, one start-up offering

software solutions and support to companies and groups like that it's our "working lunch. and celebrating black heritage month, contributors and leaders in the business. cnbc's business operations, is with us now. >> having a father from ghana a mother from new york with southern roots, always felt connected to both my african and my american heritage the values of education and perseverance instilled in me at an early age and i take those values with me in my career as a finance and business professional my advice to others is to identify your talents and work to attain the skills in es to succeed in your career also recognize that snuccess in your crease is about so much more than your skills. mentorship is a great way to build the network and understand how to navigate the workplace.

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as companies cut costs and layoff employees pressure is building for ways to measure the effectiveness of diversity

efforts and boost morale with workers who remain today jon fortt brings us up close with a start-up ceo whose had company using software to host employee events and collect data on the results. >> jasmine, co-founder and cpo's five to nine a platform bringing employees together manages guest list, tracks attendance, keeps things private, sends out surveys after when it's over, for example. makes it challenging the last months since hard-hit but good examples in financial management and toughing it out. she was growing up in toledo, ohio, her father went from a lucrative accounting job to starting his own firm and there were some lean years. >> went from having this bmw to, you know, this van i remember that didn't have heat, and, know, had rust on the side, but he took me to school every single morning never missed it. picked me up every single afternoon, and i saw that struggle.

but i also remember my dad was there for every single one of my activities he always encouraged me to go after my dreams, and, you know, now he has -- i saw dedication, how it pays off, but then with entrepreneurship how exposure is key and anything a kid is looking to do, having exposure using others in your life who have done it really matters. >> economic turbulence especially challenging both for early-stage start-ups because capital is hard to come by and for hr departments among the first to get budgets slashed shell is focused on lean operations and achieving benchmark she'll need to raise a series a. after this year and also said founders she knows trying to use the economic uncertainty to boost customer loyalty. >> one thing founders are looking to do is, for current customers focusing on them hey, can we upsell within this account? even if, let's say, procurement

comes back and wants to negotiate the contract well, can we negotiate something where it's multi-year agreement, locks it in two to three years there's really a big focus on customer success, because we do understand that a lot of budgets are being monitored close now and sales cycles a lot of founders seeing 30, 60 days added to what would be a traditional enterprise sales cycle. >> for public market investors to watch remember, amazon and microsoft said with their cloud business they're both making these adjustments, right, to optimize for customers who don't want to spend more on cloud but want more out of it and uber with google and oracle for cloud, where those cloud providers threw in extras creating value during this period that's important if investors can tract whether companies are able to do that without losing margin, could be good. >> right huge yes. >> so a business-to-business

kind of company. >> yes. >> what size are re target companies? who's she going after? >> started off going after smaller technology companies, mid-sized companies and said in this next year really going to reach for larger enterprises as well because -- >> platform is capable has all kinds of lifetime value benefits for it. >> i would think, just from the thumbnail sdrdescription of the bits, where sweets would be, larger enterprises it thanks, jon fortt up next, partisan politics bleeding into bipartisan commissions. the last remaining republican resigning from the federal trade commission and what's being called a "noisy exit." we'll explain the details of this juicy one, next.

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welcome back to "power lunch. the last remaining republican commissioner on the ftc is resigning in what she describes as a, quote, noisy exit. in an op-ed republican commissioner christine wilson claiming ftc chair lina khan's disregard for the rule of law and due process left her no choice but to resign leaving the commission in an unbalanced state with three democratic nominees and zero republican ones what this means for the legitimacy of the ftc and ongoing anti-trust cases we're joined by the former ftc commissioner and chair it's great to have you here.

what were your thoughts as you saw this all playing out the past 24 hours? >> this is going to make the majority much bolder in its program. it's a tremendous relief not to have a well-informed insider who will call out every apparent error that you've madeand invite opponents to shoot at the most vulnerable components of your program it will push the commission in the program of being more aggressive it's also going to give your opponents on the outside, the commission's opponents, more ammunition to shoot at you these are arguments that will be raised in court. you can expect commissioner wilson's closing statement will be quoted in briefs, maybe quoted in judicial opinions, and it will encourage legislators who don't know that the commission should be traveling on this path to resist giving it more power and perhaps to also bear down more on oversight. >> doesn't the president have to appoint two non-democrat members

of the commission? and what is the time line, or is there any time line or deadline, for doing so >> the president must appoint them they cannot be democrats, but there's no time line my guess is that the president might be inclined to take a leisurely approach to filling those slots. and when they are filled, to pick someone who is not going to be aggressive in calling out apparent errors of the majority. >> does commissioner wilson so far as you know have a strong case she's made in this op-ed in "the wall street journal" in which she accuses of chair of failing to follow due process, of violating norms and regulations having to do with previously expressed opinions on cases that are then coming in front of while she was not an ftc commissioner that are now in front of the ftc and she should, according to member wilson, should recuse herself?

>> she raises some legitimate points about the operation of the commission, and these are points worthy of debate. what is strike to go me, she raises them in a particularly harsh way and seems to foreshadow there would be a clear outcome in the resolution of those issues. that's not so clear. but what she has also done here is set out, again for observers on the outside of the agency, a path that they can take. whatever the ultimate disposition of those issues, you can be sure that commissioner wilson's arguments will be cited to the courts, will be raised before the congress. she in many ways has given them the coordinates to shoot at in any future challenges to the agency >> has she undermined or helped her case here or her objectives, bill >> i think that in one sense she has aided her case because she has provided an agenda that the commission's opponents and doubters can use to attack the

agency i would say in another sense, though, she's undermined it. this is bad for the agency's brand. the commission is not selling toothpaste or another commission -- another consumer product. but agencies build reputation that is are vital to their effectiveness to work in court and in intangible ways, this type of broadside undermines that reputation for the commission so even matters where commissioner wilson might support commission intervention, this allows opponents to say why would you ever place your trust in a place that's operating like this >> very sophisticated analysis here, bill thank you for that if i could turn you just for the time we have left to activision microsoft, what about these objections >> i would say two crucial

things to look at and those are the resolution of the reviews in the united kingdom markets authority and by the european commission microsoft must persuade them there are behavioral or structural solutions short of a prohibition that will allow the deal to go ahead without competitive dangers. if either of those institutions chooses to block the deal, that will enable basically the ftc to wait the transaction out so the crucial thing to look at, does microsoft achieve a settlement with the other two authorities or does one of them decide to block it >> do you think they will? what do you expect here, quickly? >> i am skeptical that they will achieve that result because there is almost a competition in the world's competition system

to show that you are at least as tough as the next guy. and i suspect especially in brussels an argument that weighs heavily on the commission is can we afford to allow the united states to appear to be more demanding than we are. >> they're playing our song, bill we have to leave it there. bill kovacic, we appreciate it we appreciate you for watching "power lunch." >> "closing bell" starts right now. another mixed session here on wall street as investors weigh a red-hot retail sales number against stubbornly high inflation this is the make or break hour for your money. i'm sara eisen take a look at where we stand on the markets. lower in the dow 59 minutes left in trading the low of the day down 256 points the s&p is unchanged that's because you have strength in groups like communication services, paramount leading the charge there, berkshire hathaway upping its