. >> look at capex.apex growth wall street exodus for capex spending hasn't changed at all this year. i had a conversation today, investors' september imt on that has changed. >> really, you are not going to make any money on it. >> let's back up, fundamental, are they solid in energy land? i don't think they are. >> that's exactly what can chang change. >> i have global demand 1.5% -- >> hold on. >> what y is that on the balance sheet? >> i think fundamentals look good. >> i think the long-term fundamental also don't look that great. >> look at today -- >> the ricking that occurred based on the position it had on friday, even after positive takes -- >> one at a time. >> stop, stop, stop, i want to know, david, seymour, what you are buying? >> i am very cautious in this environment. i like technology still. i think that trade, financials, i love them. because i think the fundamental backdrop for financials is solid based on cost cutting and the valuation structure in a long-term opportunity. if we get so

capex related to the shell industry and mining industry. related to the industry sector itself. we're seeing a pick up across the bard there. seen it from individual names. talking about global pick up in terms of demand for trust. that's a common theme. also look at the i.t. sector. companiess is capex, having really honkered down over the last few years across europe releasing and feeling more comfortable. starting to see increase in that capital expenditure. lookin looking for other ways to get involved in the market? >> when you look at evaluations level, i wouldn't disagree. markets, you look at absolute level. you look at it relatively around the world, europe looks pretty attractive. when you take into account where europe is in the cycle. relative to the u.s. looking at the -- you seen one of the biggest gaps we've seen ever. term of relative evaluation. looked reallyit attractive. you looking at equity dividend, of come back to europe. all those attractive for investors. right, i think it's also attractive from an america ma perspective. we've seen big deals so far. goe

the capex goal is to sustain cash flow as a result of that.e are very much keen on having a sustainable is missed, sustainable cash flow to support the business. >> where do you see revenue going? in the first quarter, it was about 6% but the vast majority of the prophet was driven by cost-cutting? will revenue be growing soon? ,> we are confident that especially after the transformation program that we saved $3.6 billion over the last years, we will start seeing the benefit. the first quarter result is a reflection of what we have been doing. we are very happy where we are at the moment and very confident we will start seeing the benefit of these programs going forward. we're happy where we are at the moment. >> you confident you can stay profitable even if oil prices do not pick up significantly from the current level? >> we have reviewed the company in a tough environment and where we are at the moment in terms of being lean and efficient is a sustainable goal going forward. >> what about debt refinancing? we've seen you sell some bonds. in

haidi: very interesting, some of those anecdotal conversations as to what we can expect on the capex. have a good weekend. coming up, japan's inflation rate rising for a fourth straight month in april, the fastest pace in two years, but still falling well short of that 2% target. that is next. this is bloomberg. ♪ haidi: japan's core inflation rate has risen .3%, the fastest rate in two years, but still below that 2% target. we look behind those numbers. we are seeing signs of economic revival elsewhere in the economy, but that is not playing out when it comes to reflation. that's right. certainly with regard to the consumer price figure. you could argue that japan's inflation target of 2% is not set quite right. in the 1980's did not sustain a 2% inflation rate. , .3 percent,umber is well 2%. economists are anticipating a pick up towards 1% later this year. consumert aside the price figures and take a look at some of the other data in the japanese economy that we shined a light on in a piece we did this week, it is interesting that the trajectory of the japanese economy appears to h

facebook, google, and amazon, if you just put their capex, combine it, it comprised 70% of the capex the nasdaq index, is they're investing to kind of solidified and extend their respective modes. >> brian, finally if we are -- if you're going to be leery or watchful of the advertising cycle, which names are most vulnerable? >> oh, well, gee, i think if the market turns completely, it's probably going to hit the higher data names the most. triter, although there's a lot of positivity to look at from the company if you ignore their revenue grouchlkt that's probably a name ha would get hurt more than most, i think. you know, facebook and google continue to take the bulk of the share of the center's growth for advertising. so i think that they're okay, but i think that when it comes to a downturn, i'd say that the most exposed to that would probably be, you know, twitter and snap. >> that's good insight, guys. appreciate it as we talk about these names virtually all day every day. jock blackledge and brian wieser. >>> when we come back, the impact on business, but first rick santelli, w

capex downed them, 70%. profitability gains have been pushed through.ost base and in many cases, it is structurally lower. these companies are prepared for any weakness in commodity prices. the balance sheets have been repaired. their messaging has been consistent. even though commodity prices they saidrd in 2016, their priorities remain their production, cost reduction and productivity gain. that is manifested -- has manifested in very strong balance sheets. referenced billy, and you think they are due the sharpest rise in there commodity basket, but the much longer term and -- talk me through that please include your oil call because i think you see $72 a barrel by the end of the decade? alon: that is right. , it does have a decent commodity price outlook that really only starts to play out from 2019 onwards and that is really because of that call on oil. normalization in supply and demand fundamentals, oil rising towards that $72. we expect inventories to be drawn down by that point to support that price increase. manus: alon, thank you so much. matt

capex, we were talking about being an important number.over $2 billion when model 3 starts. the amount of cash burned is perhaps an issue that shareholders will care about. scarlet: when we look at these tesla numbers and the fact they slightlyease capex over $2 billion for investors, is that good news? typically with high-tech stories are growth of stories in general, investors want to see management redeployed the capital back into their businesses. if these businesses can put up these topline growth rates, generally the returns on investor capital over the long-term, would be very strong. at some point, companies need to rein in expenses and bring in the bottom line. but as we have seen, whether they are social media companies or amazon, amazon does not deliver meaningful profits to its shareholders, yet they are willing to bet on jeff bezos and a topline growth story. it is similar with tesla and the early stages of its growth profile. julia: the tesla, the share price is based on the future. the model 3, they say it is coming in july.

capex plans. have we passed the bottom of the capex cycle?e us beyond 2018 in terms of your ambition? >> we still have the same program in place. .t is a very strong portfolio we have brought prices down as well. we are proceeding with the highest-quality projects. forecasting $11 billion for this year and this will give us a projection growth of 45% until this year and around 3% in 2020. anna: let's talk about the oil price. we saw it last year down around $20. it is now $47.70. has the market worked out as you had expected? >> if i had taken a longer time than we expected, but we still see the same dynamics. i think we see volatility and uncertainty ahead of us, but we believe the rebalancing will take place during the second half of this year. but on top of that, we will see volatility uncertainty. been has the oil glut surprisingly resilient for you? >> yeah, i would say it has taken a longer time to get into a more balanced market, but the fundamentals are taking us in that direction. we also see very low investment levels for the third

so that's all cost in capex. long road ahead. >> colin, thank you for joining us. >>> coming up, the countdown to tomorrow's big jobs report is on. we'll get you ready for the april employment data next. >>> and president trump set to meet with the australian prime minister in new york today. we will talk with the former prime minister, kevin rudd, at 7:30 today. before we head to break a look at yesterday's winners and losers. >> the force will be with you. always. it's our little differences, that can make a world of difference. expedia, everything in one place, so you can travel the world better. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. ll 800-983903 for e prosctus containing this information. read it carelly. distributed by invesco distributors inc. ♪ >>> welcome back. you're watching "squawk box" live from the nasdaq market site in times s

let's not forget a huge fiscal stimulus that has just started in march, nearly 6% gdp with a lot of capex. japan will grow, but it is cyclical. we have to look at long-term growth to be less positive about japan, i am afraid. betty: i want to bring up one chart, one bloomberg terminal chart, that shows the five quarters of growth we have seen. it makes people believe in this recovery in japan, however slow it may be. it is really led by the exports we have seen. continuet this may not , where does that leave rates, exactly? everyone wonders -- we are talking about japanese banks and their earnings a few days ago -- everyone wonders, when do we see negative rates bottom out? does this change the picture at all? >> i don't think we will see that anytime soon. however, the impact of higher u.s. rates is affecting japan, if you look at the 10 year yield. the bank of japan will have a hard time keeping that at the level it has promised. movingseeing markets , andr-term yields higher the bank of japan really scrambling to keep that target. the yen, we think it will weaken further, so you have w

. -- capex has been a drag on gdp.t of that is the china story and the pmi week and indicators suggesting it has been as good as it gets when it comes to china and we could face shaky demand. reporter: that is right. and you have to cut during the cycle in march. that will be reflected in the second quarter. second quarter prospects are not looking that great either. so it probably premature, looking at the recession. we skirted close before. we managed to get back up, so is probably premature, but is back on the agenda. haidi: where does that leave rba? reporter: things are appropriate for a sustainable growth path and moving back to inflation targets. positive number, it will not panic. it will take strong numbers for them to raise eyebrows. we are looking at steady interest rates for the rest of the year and the market is pricing in less than a 20% chance of rate cut. unless we get a real negative shock, they are on hold. affordability on ility, that will slow things down. reporter: they don't want to bring the mark

how do you plan your capex, the expenditu expenditure, et cetera, that you have to do if you're a large corporation or a small corporation if you don't know what the government is going to ask of you, take from you, and what they're going to spend. the nice thing is there's an opportunity to go just beyond monetary policy, the fed has been carrying the economy only on its own back, maybe gets some fiscal reform, cut back on regulation or restructure for growth and that's a positive. >> that would be a great recipe to improve that gdp number. we appreciate it. thank you. you, too, steve. >>> let's get to bob pisani tracking the drop, momentary drop, in banks following comments from president trump. bob? >> reporter: we're just about back right now. highs for the day, just off the highs for the day, light volume. take a look at the s&p 500. melissa is referring to that little drop in the middle of the day as the president made a comment he was going to be interested in going back and breaking up the big banks. i do want to point out the big money banks dropped but take a look at citi grou

we have seen countries where capex is picking up, spending more, upping investment levels as confidenceeases, but a long way short of where it should be. even if we do see an ongoing move in the right direction, it is nowhere near the point where the government can step away completely. that's why the deleveraging campaign, they are not taking credit out of the economy. they are targeting risks in the financial system. positionnment is in no to step away with where the economy is at now. not wanting another tantrum, if you will, in the financial markets. thank you so much as always. fed, governor brainard raising doubts about the pace of rate hikes, saying we can inflation may mean policymakers need to rethink their strategy. kathleen hays is all over the speech. june seems like a done deal. take us through what governor brain art said and what it means for policymakers. >> let's start with the fact is agovernor brainard governor at the federal reserve. she has been known as a more dovish person on rates, cautious about raising rates, got fully on board with the march hike. today, she s

there's growing -- that capex has been curtailed.e embark upon the next generation of mobile wireless, 5g, fifth generation of mobile broad band, we're going to need hundreds of billions of dollars invested over the next decade and want to make sure that hangs over the head of internet providers and wireless, in particular, is gone and that this title ii thing has a thousand requirements. we don't know where the fcc could go. i'm an optimist. i think there could be a win/win/win scenario here. >> if it's a matter of encouragement investment by these companies and enable them to seek greater returns down the road, that implicitly means somebody is paying for something that they weren't otherwise going to, right? they see greater profit potential in order to invest now. where does that come from? >> ultimately from consumers. but it also helps to groet economic pie generally. if you think of the emerging internet of things and how there are all sorts of projections to the millions of jobs that could be associated with that and the u.s.

that feeds capex. existing workers get pay raises, that feeds consumers, consumption.hose are positives initially. but you're sewing the seeds of this. >> we heard the same thing from david costan yesterday. what is the level of enthusiasm for many this markthis market n? >> it's better than it has been. it's the bull market everyone loves to hate. that continues, but to a lesser degree. perhaps after today's politics we'll get more people hating it again but they're still putting money to work. >> all right. thank you very much. >> thank you. >>> disney shares under pressure this morning. the company beating on the bottom line but revenues came in lighter than expected, as operating units at its cable unit fell. the company saw big increase at its theme parks. bob iger talking about growth at the parks last night on "the closing bell." >> parks resorts was up 20% from a year ago. we had record numbers in the domestic parks, but we did well in international parks. we had a quarter of profitabilitiprofi profitability in shanghai with great attendance. the studio is up 2

not just consumer led but we're covering more now to exports, to the capex most importantly.a solid and more firm underpinning for growth going forward. >> all right. how about gold? it is on the move. we'll get the trades when "the halftime report" comes right back. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock. chevron jumps 1.28% and transocean historically takes a hit. for more data go to cnbc.com/pro. >>> welcome back to "the halftime report." i'm courtney reagan. gold surging nearly 2% today, solidifying its reputation as a safe haven medal as the u.s. dollar weakens and stocks sell off. on pace for its sixth straight day of gains. jeff, do you see more room to run here in the short term for the price of gold? >> courtney,

the oil major maintained its dividend at 10 cents a share and says it expects organic capex to be 15 to $17 billion. luxottica sales fell in the first quarter hit by a new policy which reduces online discounts. salt sales increased by almost 2% as growth was offset by weak consumer spending in the u.s. >>> bovis has said it will incur a 2.8 million pound hit in relation to the two failed merger proposals from read row and g galliford. they say the company will deliver on its 2017 guidance. aberdeen shares are rising after posting first half results. the british fund manager reported more than a 10% rise in revenues helped by market gains and cost cutting. shares up by a little more than 3%. >>> one of the world's biggest asset managers, alliance bernstein fired its ceo peter krauss and overhauled its board. kraus was terminated from both roles and 9 out of 11 directors were moved. the money manager has come under pressure along with the rest of the asset management industry and has seen tough competition from rivals like blackrock which offer more passive investment products. >>> eur

david: we talk about capex a lot because it can drive productivity.y or demand problem? moneys have been cheap. if they wanted to invest, would they have not done it by now? >> it is a question of what happens with that cash. billion, 100 $87 billion overseas. if repatriation allows the cash to come back in, what where apple do with that cash? if they return it to shareholders, it will drive growth good or will they put it back into the company? people are asking if apple will go on some sort of m&a spree. so it is the key question of what will happen to the cash. the cash has to be spent in a good way. you have to make sure you are generating returns that cover the cost of capital. that is the big question, what companies do it that cash, because it is cheap and if it does not get allocated, there is a question whether it will move the needle or not. jonathan: there is clearly oxygen left in the tax reform story. you said the data is strong. is deep into 2018, but should the market be fading the rate hike odds for june? >> personally i think the mark

jonathan: productivity low and capex a significant issue come up where and the economy will we see seriousconstraints? where will it be? 76%,pacity utilization is so you can make the case you need at that which more capacity. corporations have been operating extremely lean and profitable. today, we are finally starting to see that topline revenue growth, which is a function of global growth accelerating. where everyone is focused on geopolitics and trump policy, but we are seeing a global economy driven by europe and emerging economies. jonathan: what if the fed is wrong? >> our base case is the fed tightens in june in september, but as we talked about, the fed has been tightening conditions since it with qe in october 2013, so the economy and the world has going on just fine. jonathan: do you believe this is tightening? the markets not typing at all. you still think this is tightening? >> it is tightening in the conventional sense. they are raising rates and we are seeing on the margin credit indicators, loan growth on the commercial real estate site or the auto side, they are starting ar

they will not have to spend a ton of capex to maintain that growth for a couple years. think about google. they're in a lot of different place, they have to do something aggressive. >> the sproigs up, which is the beauty. >> it's about higher ad dollars. >> tesla, ceo elon musk sounding modest, telling the "guardian" newspaper that the market cap is quote higher than we have any right to deserve. we we heard from him before. the stock keeps going higher. it's probably one of the few ceos that comment on his own stock price let along market cap. >> guys, i mentioned. didn't he say the market cap for this company will surpass. >> he is pivoting. >> he may not agree with it. >> i love the guy, i think he's great. you know the way i feel about the stock. i think it bounced significantly. i think the path of least resistance is hiring a name. one quick thing, few get married or have a sweet 16 or do something over the next couple weeks, you play celebration, you might want to rethink your entire existence. that's one of the worst songs. >> i mean, you think he got fresh? >>

what is the timeframe between a pop and capex spending, how long does that take?a good question. i did not analyze the typical lags, but what we can see it was november obviously, and here we are in april and they have had plenty of time to hire if they were so enthusiastic that they were sure there would be a boom in the economy. carol: six months, right? >> well, five months. they have not done it. the march jobs growth was under 100,000. i know the numbers bounce around, but even just taking the three-month average, first three months of the year, the average growth was lower than in the previous year before the election. capital spending, if you take out some of the volatile components like defense and aircraft, it was up only up 0.3% in the most recent month over a year earlier. capital spending is what you would do if you were sure this was for real. my article is saying that there is a lot of optimism. there is a lot of hope, but companies, after having been disappointed year after year through the obama years where there were these expectations, yes, now t

obviously, when you look at the energy names, we know how oil and that traded the capex is cutting back, all of that. when you look at something like exxon, when i'm excited, it's holding the 50-day moving average. they have very positive cash flows. they've done great acquisitions in the pervan and other parts of the world. i think it's literally trading on the lows. i think the opportunity for the upside, any turn energy. i've seen more and more paper coming into the energy space. with that turn, i'd actually to have to be exxon. now i'm in the xlg. >> you we heard they keep on working, keep hitting new highs. >> that doesn't phase you? do you then go search the bottom of the barrel? >> my gm did not make the dow. it's almost there. it feels like it's firmly in that kennel, but, the adjustment is the cut. it's not over. i don't want to count them out yet. >> that would fit into it as well. of the names that we, the top five i guess it was, ge is probably the most interesting to me. i do think there's a lot that can be done, just cutting expenses. i think he's a great ceo. he had a lot

the reason is we haven't seen enough capex spending, investing in people, plants, technology, the tax proposals that president trump has put forward can excite that investment and that kind of growth. i think the stock market is properly pricing that in. melissa: gentlemen, thank you, breaking news, former acting attorney general sally yates testifying before the senate subcommittee investigating russian interference in the presidential election. senator ted cruz is asking the questions, let's listen. >> you also testified you are not aware of any intercepted communications of any presidential candidates or campaigns other than the trump campaign that's been discussed here, is that correct? >> yes, but that's to my knowledge, but, you know, prior administrations, prior campaigns wouldn't have been visible to me, so i can't say. >> but in 2016, you're not aware of any other campaigns or candidates? >> no. >> and ms. yates, same question to you. >> i'm not aware of any interceptions of the trump campaign. >> are and you aware of any intercepted communications of any other candidates or

we can in the areas we can control to make sure that this business remains cash neutral, including capexrice environment. nejra: on to one of the worst performers on the stoxx offender hundred this morning. the company said karen trading for 2017 in line with expectations. we have even a -- ebit. the stock has dropped the most in months. the ceo is talking with journalists. we will bring you our interview with the ceo as well. matt. right, thanks very much. let us get the bloomberg first word news. for that, we cross over to hong kong and juliette saly. juliette. juliette: thank you. china's economy back in april as authorities crack down on the financial leverage prudent investor output rose 6.5% last month from one year earlier. retail sales increased. fixed asset investment, including rural areas, expanded 8.9% for the first four months. it missed economist estimates. theresa may will pledge today to broaden employment rights in britain, as the country pulls out of the european union. the prime minister will say that if the conservative party wins, she will introduce measures to get e

debate, clearly they can improve by doing acquisitions and doing more capex and share buybacks. cases they do 20% and have a goodl balance sheet and the investment grade. the pe is assigned to you, eps is only by looking at upward income growth. this is earnings growth in the use of the balance sheet, and reducing share count and doing acquisitions is the way to enhance earnings per share growth. that will get rewarded with a higher multiple. >> how many companies in japan are making the cut? can you give us a percentage of companies that are meeting the standards needed? >> i would say the number is probably 10% or lower at this point. this is an uneducated guess, but the companies we are dealing billion to the $2 $15 billion market cap range. we are seeing in many cases improvement, 70% to 80% of those are starting to make the cut. >> what is needed for greater transparency among japanese companies? >> it comes with outside directors, reporting the results more openly. >> is there a way of expediting the process? towe are forcing management come up with a credible three-year r

is it -- it is a positive sign for capex as well.at topline growth going to go? will they reinvest that back into the business? >> i think is certain to see a come back. it has been driven by energy, but investors are looking for companies to invest back in the business. you are seeing more of the demand, rather than just returning cash to shareholders. there is a potential we could see coming back. if we see repatriation in the ,.s., that could spur buybacks but overall, investors have been looking for companies to invest back in their businesses and that will be rewarded cents with all the share buybacks we have companies thatat had been doing big share buybacks have not been out for arming. jonathan: you know the story, we come into my new year and the analyst estimates are somewhere up there but as the year progresses, they just get dropped lower. not happening this time around. if you are enthusiastic about the earnings, you talked to me about that, relative to the optimism that is already in the price. i think going into this s

called magic box and sort of delivering i think this message that you guys -- despite what's the lowest capexngst your peer group can still deliver improvements in the technology and get to be number one or two in data in most of your markets. why? >> well, it's quite simple. if you look at where we have come from in the last two years we're number one and two in voice in pretty much every mark. that was the weakness we had. jd power had the rankings and we're number one and two. and more importantly, when you're sitting on 204 megahertz a spectrum, you can build out things and masa spoke of magic box. we'll put them in the customers' homes and the advertibusinesses they can see an improvement to their coverage. we can do that and you don't need to plug it into any cable box or any -- all you have to do is plug it in and get power and it will self-adjust. no other carrier in the world can do that because they don't have the spectrum to do that. we don't need to connect, we use the wireless which is a huge technological improvement. think of deploying millions of small cells all over the count

they did spend capex at $1.3 billion. net income is $3.3 billion.nd it's a far cry from apple but not an insignificant sum of money. jim, what is your overall take away in terms of the quarter itself and particularly the guidance which again does seem to have the stock down a bit this morning. at least as we look 20 minutes before the open. >> i mean, this was a time when i felt that -- when they say meaningful, meaningful decline it was picked up by the analysts. yet, everyone did raise their price target. when you do $6.7 billion in mobile up, 58% it's almost impossible to tamp expectations it's so bold. in order to say meaningful, in order to say that spending is ramping what you're really saying is it really possible that we can continue this rate given the size of the company? i think they're being smart saying this. there are people who bought this stock, somehow they thought they might have dropped that language. i mean, i think that's silly. this company is totally consistent. this company moves in the last two quarters between the conferenc

epic buildout, listed oil and capex rose. since 2013, it has collapsed by 14%. you had enough capacity come out of the market, enough investment being counseled to put a floor under some commodity prices. --t was a bounce from they are never going to get very far. there's a huge amount of shadow supply sitting there. any rise triggers supply. you are seeing it in oil and iron ore. we're going to be in a chubby trading range -- choppy trading range. mark: what does this mean for the commodity currencies? valentin: the biggest underperformers will be like the australian dollar, canadian dollar, even the new zealand dollar. i guess you can cast the net wider to include emerging markets. what is important is that the drop in iron ore, in oil prices, is happening despite the overall improving global conditions. if you look at global pmi's, hard data has been pointing at a more sustained recovery. despite that, those prices are coming off, which is highlighting the problem, the oversupply out there. to me, the biggest surprise was how productive or how resilient the s

it is still quite weak overall, so you have imported inflation and if capex is weak, then eventuallyome inflation presser. -- pressure. what we see now is that consumer demand seems to be slowing down are startingwages to get hit. thinkat matter, i don't it is going to be a primary concern for the bank of england. they will look through the near-term inflation pressure. jonathan: a number of months ago, philip hammond talked about it is the reset. other elements in the market that are underestimating the ability of the government to go into this election, get a big majority and do something quite significant to the u.k. economy, away from the likes of cameron and osborne? vince: there are some question marks about the fiscal promises that were made, especially if the economy was to disappoint, maybe there would be some room. aboutare question marks the engagement of the tax, so there are concerns about potential tax increases. outlook on that front. will bethe government reflective more so depending on how the negotiation goes. they have used that threat before. european partners wer

and that could mean that capex is going to pick up. that is a good thing.f that was already in place before donald trump came to office. tom: within the conversation of day yesterday,ed the economic data will see in the next 48 hours, in my conversation with chairman bernanke the linkage of the financial stability into the dollar. let's look at the dollar with his stability. this is the bloomberg dxy index. the green is that surge in dollar strength from two years ago. do you agree with chairman bernanke that the has dairy about the balance sheet, this worry, that worry, that it is all over done, and that janet yellen is driving us towards a good financial stability? s: i think that the financial conditions in the united states are going to stay supported. you just have to go into one exercise. somebody were to come to you on the first of december, you would have predicted a rate hike in december, a rate hike in march. and the fed considering cutting the balance sheet. what would you recommend? they would recommend dollar long, and equity markets declining

reform what i mean most by that is once we see capital investment which is something we haven't seen capexnies all they've done in this century frankly basically since year 2000 is financially engineer buy back their shares pay out dividends, wonderful, by the way, for 1% if you are owner of assets, a terrific decade, for working americans an absolute slob trump was elected largely to change that once we change tax code and incentive companies to invest in people, in plants, in technology, we are going to see kind of productivity gain that we have not seen in this century yet, that we used to have in 80s, 90s that is how we get 3, 4, i think even 5% growth, i really think the american economy -- tomorrow kentucky derby american economy those are weighted down thoroughbred wants to run once we take off washington a wet that horse i are gosing to absolutely take off. >> take off i like that analogy jack your thoughts. >> one i think 4.4% unemployment rate is -- sheds light on that discussion between robert and steve just then, economists say full employment is 5% we are below they are other

some of the ones now curtailing their capex are doing better.which is different from what we are seeing in the rest of the equity market which is now, for the first time in eight years we are seeing companies be rewarded for capital spending. this is a shift in the marketplace where the dividend payers may not work as well going forward with the market watch now in organic growth only being delivered if you spend the money. guy: the aramco ipo is coming. what is the portfolio affect? >> we don't know the timing yet but clearly it is probably going to put pressure on existing wheelchairs in the marketplace to make room for that in the portfolio. said, we don't have timing on this yet and we don't know if it is going to happen, if oil prices are very volatile next year. it is going to drain, probably some ownership from existing equity shares in the marketplace. are tom: going to continue this discussion, continue to monitor the news out of the united kingdom. kevin cirilli in rome as well. on your desk at morgan stanley, i would to just you look

because now they'll be thinking in terms of capex if i can use the term. i think that might be a way to help out. michelle, do you have any thoughts to add? >> one thing i would say is if you're going to move towards a system that puts more emphasis on experimentation, prototyping, you have to have a slightly -- you have to have a somewhat higher tolerance for failure and there will be certain things that you prototype that don't work out, but you learn from the experience and that makes the next thing better. so i actually think in the model that you're trying to create with this new organization you want to have a higher proportion of rnd spending relative to what we've had vis-a-vis procurement and that you don't want to have such an emphasis on ultimate roi that you miss the learning curve that you get out of, you know, a very robust experimentation plan. >> can i ask a quick follow up? >> sure. very quickly, iron dome and israel, that was done in three years from pad of paper to operation, and i just can't see that kind of result here in the u.s. and