tv Power Lunch CNBC August 9, 2019 2:00pm-3:01pm EDT
denuclearization we will see continued testing. north korea will push the envelope we'll continue to see the white house downplay it. >> reeva, admiral, thank you for joining us on "the exchange. that does it for the show. "power lunch" begins right now i'm courtney reagan. here is what to do at 2:00 on power lunch. trade world whiplash as markets close in on finishing a wild week, president trump fanning the flames saying he's not ready to make a deal with china just yet. should we brace for more summer swoons as trade tensions heat up, semis get slammed. there are a number of traders buying on this dip only 138 days until christmas. wall street already thinks it could be a sober holiday for the major retailers. we've got those details. power lunch starts right now
welcome to "power lunch. scott walker the dow off the lows of the day when it was down nearly 300 points on the trump comments we just mentioned the s&p 500 coming back a bit. the nasdaq the big loser down more than a percent. check out the small caps in the transports, goth groups rebounding yesterday, but sinking deeper into correction territory. more on those moves a little later. as scott mentioned, stocks in the red as president trump told reporters no deal is coming with tauschh china. >> reporter: the comment by president trump calling into question whether talks with china would even happen next month is what moved the market because it raised expectations those new tariffs september 1st could go into place. listen >> we're doing very well with china. we're talking to china we're not ready to make a deal,
but we'll see what happens we have an open dialogue we'll see whether or not we keep our meeting in september if we do, that's fine. if we don't, that's fine but it's time that somebody does what we're doing >> reporter: president trump says the u.s. is in aed goo place with regard to china candidates and farm representatives say the financial reality here on the ground is actually getting increasingly dire. >> causing a lot more than a little financial pain. it's going to cause a lot of them to go bankrupt. >> soon our bankers are going to say you need to liquidate some of your assets to continue >> when a sixth generation farmer says i hope my son doesn't become the seventh, you know we have an issue. >> reporter: it's unclear just how much president trump's support among farm voters deteriorated because of that financial pain, but many farmers here say they want trade certainty before that iowa
cauc caucus >> kayla tausche in iowa shaping up to be a wild end to a wild week. bob passisani watching all the g moves. >> what a wild ride. s&p 500500 closed friday, 2932 a week ago dropped to 2,785 on monday before coming almost completely back late in the week. it's shy of that right now it's been tough since the start of the month perceptions of the two issues moving stocks, central bank dovishness and tariffs number two. the perceptions changed about them the fed is initiating a global round of surprisingly strong interest rate cuts around several banks around the world and new potentials for tariffs for china. no surprise the two sectors turned into no-go, energy and financials a complete bust down over 5%. so is retail
very exposed to china tariffs. down about 5% as a group this month as well. the market has been held up overall this week in particular by the consumer names. coca-cola, kimberly clark, hershey, all up this week. also held up by a small group of utilities, and a few, a few health care stocks like johnson & johnson. one sector benefiting from the volatility, stocks and future and options exchangers cboe, new highs as the volume ramps up investor sentiment has been horrible this week we see new lows for the year, bearish of the aaia survey that's normally 30%, scott you know as well as i do, when these get into extreme positions, that's kwrd a built on the bullish side. maybe sentiment starting to get washed out. >> bob, thanks so much. how should investors digest the head on on trade, the economy and the markets.
libby cantrell the head of public policy at pimco ron insana, nice to see you both libby, good to have a head of public policy on a day and a week and months when everything is being drink ven by policy. what do you do this week >> our view as it relates to china, things are likely to get worse before it gets better. our base case is you will see the president move forward with the 10% of tariffs then it's a question of do things similar her at that point or escalate. you can't rule out escalation. >> ron, if that, in fact, happens, what is the market going to look like >> i don't know. it's funny, in the pre interview i shared with your producer, i said the world is lousy and the stock markets don't care that much the bond markets do. >> they do. >> the u.s. is not lousy. >> the uk just had a contraction in growth and they're going to crash out of the eu on october
31st hong kong is having a political and economic crisis. venezuela we have an embargo and a blockade around. we have north korea which someone said in the prior show is low on the list of worries and yet there are provocations then there's china, italy, with the government there falling apart. a lot of stuff going on. >> i'll see your risks and i'll raise you, libby, a fet put, a trump put, all that stuff people talk about. >> look, i think the fed has certainly indicated especially around trade policy, that they will be accommodative of any market dislocation that's based on trade policy uncertainty. it's a question of whether the feds can keep up with what president trump is doing i don't think people should expect that the president at this point is going to reverse on china look, the president believes that tariffs work. he believes tariffs brought china to the negotiating table he believes tariffs got a better usmca, a nafta 2.0 deal.
>> which has yet to pass. >> i don't think speaker pelosi has incentive to bring that up. >> don't let the facts get in the way of a god story >> i think the point here, there's been a narrative that president trump puts out a lot of threats and doesn't follow through. if you look at china, he has followed through with them i think we should expect him to continue to ratchet up pressure on china. >> libby, do you think a fight is just as good as a deal for president trump? or is the deal very necessary for him? >> that's another thing that i think in the market, we're maerg from clients, this expectation, of course he needs a deal going into 2020. i'm actually not sure that's the case if you look politically, even among the farmers, he still has a lot of support, especially on china. he may not have support for nafta withdrawal or for auto trifrs which are the other sources of trade policy uncertainty. china is a different beast democrats support him in rectifying this relationship with china defense hawks support him. i think there's a lot of
political runway that he has in order to go hard on china. in some ways, no deal could be better than a weak deal. >> i would say runway stops at a recession. if you get a global recession that takes the u.s. with it, that certainly historically has never been good for an incumbent president. on top of that, you could start to see some disruptions that are not yet priced in. competitive currency devaluations worse than what we've seen so far. that creates dislocations in financial markets around the world. >> it's funny, libby, to your point about the farmers, just yesterday we had a rm faer from ohio saying i voted for trump but what he's doing is all wrong, this is putting me out of business, i can't succeed. kayla's story, we're not going to have a seventh generation of farmers because we can't sustain going through the policies he's implementing at what point does he push the farmers too far? >> consider the source on that that is governor steve bullock running on the democratic side he has an incentive to say that.
purdue university came out with a survey earlier this week that showed almost 75% of farmers think that this china escalation will result in a better deal for them he still has their support of course, he has given almost $30 billion in subsidies to farmers. they can actually give them more -- he has more latitude to give more. at least as of now, it looks like this very important constituent base is holding firm with them. >> you don't think volatility is going anywhere any time soon today is a perfect example the president makes a comment about huawei and the market didn't like it the white house comes out and clarifies what the president meant, stocks recovered a bit. volatility is here to stay with these looming tariffs. >> always has been and always will be. i look at volatility in a different way than most people periods of low volatilery are unusual, periods of normal are the norm
as long as you stick with quality, you'll ride out whatever storm comes it's very hard now to play the stock market from a policy perspective. >> good stuff. guys, have a good weekend. roib by and ron, thanks for being here. shares of uber falling after a posting a huge net loss. the company ceo was on cnbc this morning to explain the results deirdre bosa has the results. >> reporter: so he reiterated he expects the business to be profitable at maturity he didn't tell us when that would be he was vague and he said the thinks 2019 will be a year of peak investment. today he clarified >> i think our spending declients as a percentage of revenue. when you're growing trips 35% year on year, your spending is going to increase. we're going to get leverage we believe on the marketing line and get fixed cost leverage
going forward. i think this quarter proved that out. i think we have to keep hitting our markets in the next couple quarters it's a super competitive marketplace. we're confident and we like what we saw operationally in this quarter. >> now, he may like what he saw operationally. clearly the markets are seeing something else, likely it is that big glaring 5.2 billion loss even when you take out ipo costs and even if you go with their preferred metric, losses are expected to be $3.2 billion this year the top line number, that's not pretty either. total revenue grew 14% this is supposed to be a high growth company ride sharing revenue, their core business, grew just 2% so guys, shares continue to trade well below their ipo price, down more than 6% in today's session. certainly well below that $45 ipo price.
goldman sachs and apple teaming up on a new credit card. it could mean trouble for goldman's brand. there are still -- oh, my goodness -- 138 shopping days until christmas. retailers are worried about a weak holiday season. those stories and more coming up on "power lunch. ♪ what do advisors look for in an etf? don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
everyone uses their phone differently. that's why xfinity mobile created a different kind of wireless network, with a different way to do data. one designed to save you money. now you can share data between lines, mix with unlimited and switch it up at anytime. design your own data with xfinity mobile. it's wireless reimagined. simple. easy. awesome.
welcome back, goldman sachs is seen as a white shoe firm that caters only to the rich and powerful in a story from our banking reporter hugh song, we found out they're about to dip into the subprime lending market. here so explain the move is the writer of today's piece, the person who broke that story. what is goldman looking to do. >> casting an unexpectedly wide n net. people with fico stores in the low 600, even the 500s are getting the card it only takes two minutes to get an application in and get a response a z those answers are coming in, people are posting their results online it's pretty interesting to watch. >> it sounds to me, if you say why is goldman doing this, they probably want a lot of customers and want a lot of customers as quickly as possible.
>> this is a mass market product for them up to this day, they have markets, somewhere like 4 million customers, and the fact that there's about 100 million iphone users in this country, this could be an order of magnitude larger product for them they're looking the scale, scale up fast and change the narrative. this is not just an new york investment bank that's tethered to trading and the slowdown in trading. this is a fast growing bank with exposure to some big, big retail markets. >> let's be clear and careful, too based on your reporting. it's not like goldman is giving $25,000 or $35 or $credit limits to people with subprime credit scores >> goldman guys say reknow risk, done it for decades. so if you look at some of the people who are sort of more morning nall credits, they're
getting something like $750 credit limits, $250 credit limits you can't even buy an iphone with that, at least a new one. they have the highest aprs are they'll get compensated for the risk a little bit. basically, if you believe this is a financial product that is -- that leads to better financial outcomes for their users, you should want some of these people to have this card >> if you're apple, we put up a graphic that shows there's 100 million-plus u.s. iphone users you want as many of them to have access to the card as possible >> the mandate from early on, regardless of who is the bank partner, they wanted as many of their user base, iphone user install base to be using this card and have it as their default, their primary card. so in that population of $100 million, there's going to be people who are in the whole spectrum of credit range i think basically it shows they -- this, by the way, goes back to even during the steve jobs era i talked to someone at capital
one in the late '90s he said steve jobs in the early talks of the apple card back then, he didn't want to say no to any of his clients, any of the customers at the time. >> hugh, good reporting. our own hughson reporting for us. after the break, why retail could be facing a very unhappy holiday and how tariffs could be to blame kwhip sfoks getting crushed in the trade war. down 5% in august so far could there be value in that space? trading nation is next the key question that seems to be driving all the market action are we headed for recession or are we not we'll talk it all overcoming up on power lunch let's do it. [ sniffing ]
retail stocks getting crushed since trump announced an additional round of tariffs on china, down another 2% today, sinking deeper to a bear market. a credit suisse note this morning saying it could lead to a sober holiday for the retail stores former toys "r" us ceo said last week zblg the department stores
are in trouble big time. the last few monthly retail reports that have come up have looked terrible for department stores apparel in general, particularly any mall-based apparel is really on the rocks. >> all this comes as we're gearing up for macy's and walmart earnings joining us, liz dunn, founder and ceo of pro forma i feel there's so much going on. we're having big problems in the department sector in general because the format doesn't resonate as much as it once used to now we have the idea of the tariffs coming on september 1st. put it altogether and look at a retailer like macy's i think being the devil's advocate and macy's has a few national brands that could help absorb some of the pain, if not all of it. you're not going to see price increases on every single item, and likely not in time for christmas. aren't those goods already here? >> a lot of them aren't here yet. i do think we'll see some price increases for christmas.
i do think, you're right there are several people that will feel this pain and spread it out the factory owners will take some of it, the manufacturers, if it's a wholesale brand will take some of it. the retailer in the case of macy's some of it might be the consumer. >> going into an earnings like a macy's earnings, is this too dangerous to wade into because of the uncertainty, or is there a possibility of an opportunity here >> i think macy's is already in a difficult position i think there have been attempts to turn things around. we had a bit of a head fake last year where things looked a little better. performance so far has been weak this year. i think there's some concern that guidance needs to come down we're seeing across the retail sector there's weakness, the second quarter wasn't great foot traffic is down there are these rising costs, not just tariffs but rising cost pressures from wage increases. and so i think there are a number of things, a number of
cracks in the armor and it was an armor that already sustained some damage. >> you still think the consumer is going to hold up in the face of everything that's been going on it's been a real pillar this par? >> the challenge for the u.s. consumer is we buy too much discretionary stuff. when there are these external hits, we can pull back we'll buy fewer units. i think the consumer is fine and in some cases, obviously record low unemployment, wages rising will we buy less things if prices go up i think absolutely. >> in terms of stocks that you like, i find this interesting, you like target over walmart walmart has pulled back a little bit from its high, but it's still been a great story, both fundamental fundamentally, the charts look good why target over that >> i think target is a cleaner story. there's a real tension right now between the growth and profitability for a lot of retailers. i think none more so than
walmart and target with some of the investments walmart has made, they're scratching their head. seems like they're facing a bit of an existential crisis about whether or not all of this was actually a good idea now they're selling off some of the assets they've acquired and pulling back on some of the growth initiatives so while some of the things they're doing are pretty interesting, i think target is a little cleaner story both companies are driving top line with some of their investments. i think target is maybe a little bit less confused. >> you don't have high hopes for walmart's e in the coming week >> earnings could be fine. i think they've gone out and spent billions and billions of buying things. unclear whether that's a good strategy. >> unclear, that's a good word for what's going on in a lot of retail liz dunn, thank you. over to mikes santoli for trading nation >> thank you, scott. semi stocks sliding today as trade fears resurface once again.
a handful of the names leading the market this year, kla, lam research, texas instruments, analog devices and qualcomm, all of them up a good deal more than 20% in 2019. with rates plummeting, all of them offering a yield above the ten-year yield do you buy these high-yield dividend paying chip makers? matt, it's been an eventful group, obviously as semis often are. had a tough rode the last few weeks after the market peaked, down almost 10% as a sector. do you see technical value in any of these >> i do. i see it in two stocks it's interesting, many of these stocks made new -- broke key resistance and made new highs in july those old resistance levels became new support a lot of them rolled back over and broke below the new support levels including the semi conductor etf. two did not.
both came down, tested the new support levels and bounced nicely the first one is kla corp, the symbol is klac not only did it bounce, it's bounced strongly up 6%, 7% off the old support level. it gives it a lot of wiggle room in case the market sees another leg lower any time soon. the sect is texas instruments. that was stuck sideways for 18, 19 months and it broke that range in july. whenever you break from a sideways range, you get upside movement if we get a little camming in this trade war, these are two stocks that should lead the way higher on the group. >> all right and steve, do you need common trade wars is that what's going to determine how these stocks perform? how would you position with regard to this sector? >> i think it's a real mistake to focus on the short-term with this particular sector i think it's akin to trying to pick up pennies in front of a
tractor-trailer. historically it's been a tick cal south korea tore when recessions bubble up, you'll get sold off. obviously there's trade exposure the real underlying story is we're essentially digitizing the entire fiscal economy. there's an industrial revolution that is built on the semi conductor chip that's a secular theme that turns any pullbacks in a long-term buying opportunities in short, of course you want to own this group sometimes you want them at a little better value. you want to look at these as real buying opportunities. this is really well positioned. >> are there any particular types of semi plays that seem to fit better for that long-term thesis >> when you look at the manufacturing equipment, it doesn't matter what kind of use you're having for that semi conductor, these guys will be building it and it sets at the center of this we like the semi companies in particular. >> the new industrials, some people like to think of them
matt and steve, thanks a lot for more trading nation, head to our website or follow us on twitter. scott back over to you. >> mike san toll any a wild end to a wild week for the markets. was the volatility in stocks and bonds a warning sign that a recession could be closer than we think we'll discuss that plus today's mystery stock, this company is betting on self-driving cars. winning and dining -- wining and dining some dining apps are more popular than others. we'll tell you where politicians spend the most campaign cash all that when we return. let me ask you something.
from the 5am wakers, to the 6am sleepers. everyone uses their phone differently and in different places. that's why xfinity mobile created a wireless network that auto connects you to millions of secure wifi hot spots. and the best lte everywhere else. xfinity mobile is a different kind of wireless network designed to save you money. save up to $400 a year on your wireless bill. plus get $250 back when you buy an eligible phone. click, call or visit a store today. welcome back i'm sue herera, here is your
cnbc news update at this hour. a moment of silence for michael brown near the spot where he was shot and killed by a police officer five years ago today the officer was never charged, sparking nationwide protests brown's father calling on the prosecutor to reexamine the facts of the shooting. >> no answers, no apology, no justice. so i stand here today to discuss the unsatisfied with the way my son's death was handled. >> the government of malaysia filing criminal charges against 17 more current and former directors at goldman sachs the charges are connected to the alleged multi billion dollar theft of a malaysian state investment fund. if your last name is green or greene, you are in luck frontier airlines will let you fly for free on august 13th. it's all part of the airline's
green week promotion you're up to date. that's the news update this hour courtney, back to you. >> i like that that's very creative but we are nowhere close, we're paying for those flights thank you very much. let's see where we stand with the markets we're making another comeback, the dow now only down about 31 points look at that, after being down nearly 300 points earlier today. all the major averages still on track to end the week in the red. the s&p 500500 down by .4% the oil market also closing for the day. let's get over to contessa brewer at the cnbc commodity desk. >> speaking of being in the red, i got the memo today as did you. what's not in the red, oil prices rising because of an unexpected drop in european inventories and expectations of opec out put drops wti posting its best day in nearly a month you've got brent now up 2% as
well it was a grim forecast from the international energy agency. the organization lowered its global oil demand forecast for this year and next saying the outlook is fragile amid growing evidence of an economic slowdown world demand increased by just 520,000 barrels per day from january through may. that's half the rate we saw last year and the slowest pace since 2008 scott? >> contessa, thank you dow trance ports seeking further correction in the week ahead. morgan brennan joining us with more pain. >> i think so. this is the 12-month chart versus the dow industrials this is over the past year industrials up 3%, transports down 8%. never actually confirming the broader market rally as the dow hit record highs in case you're a dow theory wonk
there. freight has been weakening, air fraft growth negative, total u.s. rail traffic is down 27 of the 28 weeks think agriculture, coal especially hard hit. so have class five through eight truck orders, the net orders were down 64% last month year on year so what is all of this signaling right now? that the global economy continues to weaken. there's also sector specific stories playing out, too like overcapacity and trucking pockets of weakness on the u.s. as well, particularly on the industrial side when you look at rail numbers, for example. since then fedex has been under pressure, down a whopping 37% from the 52-week high. a number of ceos i've spoken with, says the u.s. economy specifically is still growing
but more slowly. the question now is can all of that continue as this trade war continues to ratchet up. i think that's going to be the key thing that investors are watching the other thing i would point out is totally separate story. one to watch in transports and on the freight side, the parcel side as well you have earnings numbers this morning as well from the u.s. postal service for the first time in a decade, volumes of packages delivered for the quarter dropped. the reason is because ups, fedex, amazon, some of their biggest customers have been pulling packages out of that network and finding other ways to deliver them to people's home that's another slow-moving, potentially much more painful story to keep an eye on. >> that's a good one thank you, morgan, for that. the uncertainty of additional tariffs does have wall street trying to price in the recession risk -- the rising risk of a recession here in the u.s. j.p morgan is out with a note saying the odds of that happening are increasing let's bring in the man behind
the note joseph lupeton and steve lits who says the economy is reeling from the trade tensions. i'll start with you, joseph, since you put out this note here we go back and forth between feeling like everything is fine to, oh, my gosh, we are on the verge of having a recession. which one is it? >> i think you characterize it well there's a real tension in some sense that there are fundamentals to make you think there are more legs left balance sheets are healthy profit margins have come in. that's a concern they're still relatively elevated service sector seems to be doing better than what the goods producing sector is doing. put all that together and you have a relatively healthy economy there. against that you have the trade war that keeps getting worse and worse. ups and downs, tweets to tweets. that's taking a toll on business sentiment. that's the big concern we have which is that the business
center has been deteriorating sharply over the past year, plumbing the seven-year lows we've seen that's weighing in on business equipment spending so far it hasn't bled through to the material market. although the labor market slowed a little from the pace we saw earlier, last few months, 140,000 to 150,000 a good reading but a bit of a slowdown we continue to think there's going to be resilience based on the fundamentals i spoke of earlier. there's these uncertainties out there that have raised recession probabilities largely stemming from this business sentiment shock. that is coming from largely the trade war. >> steve, this is really industrial economy, manufacturing economy versus consumer-driven economy. how concerned should we be about one side that's sputtering while the other side seems to be doing quite well >> i would argue the other side you're talking about, the
service sector side isn't necessarily doing all that great. when you look at employment, the numbers, when you look at it without health -- health care has gone up -- goes up every month, even during the reception it goes up every month when you look at employment growth without it, it was less than 100,000 last month. employment is generally slowing down the new orders index for non-manufacturers, it's percent up minus percent saying it's worse. it's worse than it's been for the last five years. >> the consumer has been strong. i think you'd admit that sentiment numbers are high, remain high. everything suggests that the consumer has been strong and has been hanging in there. hard to deny that. >> it's hard to deny it. but the second quarter growth was a little overstated because there was a bit of an overshoot because of delayed consumption from the market. that drives right to the point of recession risk.
so the real recession risk is sitting here with the equity market and the consumer. the equitymarket because households are much more over invested in equities than any prior cycle. and as a result a true bear market in equities will collapse consumer spending very quickly we saw that in december. so the fed's job here is to keep the equity market up as long as the equity market stays relatively buoyant which really means the fed has to confirm the cuts it has -- the market is anticipating by actually doing them. then the consumer will be okay and you get slow growth but avoid recession. >> joseph, if you think the possibility of a recession is rising but we're not quite as panic levels yet, what do you think is the most appropriate move for the federal reserve to make we know the president thinks they should cut significantly more than what they have already. >> yeah. i think the path they're on is
one towards at least another cut in september and then they'll wait and see. if we're right and there is a bit of resilience here, and that's the debatable issue that's the conversation we're having if there is resilience here, i think it would be right for the fed to pause a little bit and wait and see and characterize this as a mid-cycle adjustment maybe one more cut after that. 75 is what you typically see in the mid-cycle adjustments. that's the way powell characterized it i we're looking for a september move i think that's baked in at this point. beyond that it will be much more data dependent obviously if the trade war continues to escalate the way we've seen in the past week, that view could change right now, if you kind of -- get a little more status quo and things steady down, one more cut seems like it would be sufficient. >> are you calling, steve, for a recession? if so, when? >> i'm not calling for a recession if the fed is as proactive. back in december, january, the
fed was going to be proactive and cut in july and they did i think there's a good chance if the markets are as negatively volatile as they are now, they'll cut 15 in september. we'll see. they'll certainly cut the 25, and i think by being proactive they're going to vent recession. i will add this, 30% of the u.s. economy is tied to global trade. if the whole world is sinking, it's going to be very hard for the u.s. to stay above, at least to have a negative quarter at some point down the line. >> 70% tied to the consumer as we were talking before joseph and steve, thank you for being with us today. to the bond market we go now. rick santelli is tracking the action at the cme. >> hi, scott everybody seems fascinated with ten-year note yields i always have been but it's with good cause it's an important fundamental these days as you look at a chart that starts on fed day of a quarter point drop, that's when
everything started to happen certainly the issue with tariffs was maybe the straw that broke this market's camel's back the reality was it was a sick camel to begin with. if you look at the ten-year going back to january of 2016, you can really see we've come down aggressively. finally, ten-year minus two-year spread, i know three months to ten-wreer is what most look at for a recession indicator which i think personally is kind of silly. tens minus twos, is getting flatter. this one does disturb me we're not at the lows. yesterday was 9 close, hovering at ten today just in july, precipitous drop, precipitous flattening courtney, back to you. >> precipitous flattening. thank you, rick. the boeing 737 max still grounded airlines had to take unusual steps to make sure they have enough planes. we'll have that story next take another look at this mystery chart. this is a chart that could help drive your portfolio
the prolonged grounding of the 737 max planes is creating a worldwide scramble as airlines try to find alternate planes to meet the demand. phil lebeau has more. >> we lolinor has seven of these, they're in demand we were here as one of the 737 200s arrived they're leasing these planes to airlines, particularly in canada that need replacement aircraft because the 737 max has hurt their schedule when you talk to executives at nolinor, they understand what the airline industry is going through. they don't have a whole lot of good options. >> i think they're struggling for solution because basically they already sold the capacity -- full capacity of those aircraft it's hard to find aircraft that
are the same seating capacity as the 737 max. >> reporter: these aircraft from lolinor will be in demand. boeing expects to submit the fix to the faa and other regulators by the end of september. they will likely take -- the regulators will likely take 30 to 45 days to say whether or not they approve it. then the plan from boeing at this point is that the 737 max is back in service by the end of the year but in reality, guys, you've got so many airlines that have had to modify their schedules, as you take a look at shares of boeing, it's not just that the max gets recertified, it's when that schedule is built up again. in the meantime for companies like nolinor they have these 737s that are ready to substitute fleets around the world. >> phil, thank you that's phil lebeau have a good weekend. last chance to guest our mystery chart. you may not know the name now,
but it could be a key company in a big future trend we're going to explain we're going to talk to the company's ceo. we'll do it next on "power lunch. n of intelligence? in crossing harsh terrain... or breaking new ground? this is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedes-benz summer event, going on now. lease the gla 250 suv for just $329 a month at the mercedes-benz summer event. mercedes-benz. the best or nothing. they give us excellent customer otservice, every time.e. our 18 year old was in an accident. usaa took care of her car rental, and getting her car towed. all i had to take care of was making sure that my daughter was ok. if i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. we're the gomez family... we're the rivera family...
mystery chart. it's an under the radar tech name that is up nearly 50% this year the company makes simulation and engineering software for companies to test vehicles, planes, rockets, and more. recently, they've made a big push into the self-driving vehicle market with us now is the ceo tell us what you do in the big push you're making into a business that everybody seems to be placing a huge bet on. >> so what we at ansys help customers around the world ranging from computer chips to rocket ships and everything in between. and we do this by helping our customers use our technology to design and test their products completely in the computer without having to build an expensive physical prototype or going through experimentation. this helps our customers get their products to market faster and lower costs. >> we talk about how much your
stock is up. it seems people are making a bet you can grow organically whereas in the past you've grown through acquisition. is that fair to say? how do you make the transition >> we have grown organically and through acquisition. >> you've done a lot of deals. >> we have over the years and grown through a combination in organic and through acquisitions is what happened organic growth rates significantly increased. if you look at q2, for example, we announced 23% year revenue growth year over year. we beat consensus by over $30 million. >> you have a lot of clients bmw, ford, baker hughes all using your products and software i mean, is there one type of testing that most of them are doing? >> well, it's all different because of the nature of these products are different let's take, bmw, for example bmw, obviously, is an international brand at the automotive space we're working with bmw to help them bring antonymous cars to
the vehicle. we're, with them to create a simulation chain to test the antonymous vehicles. you can't release an antonymous car on the market without testing it the industry will tell you it requires billions of road testing. you can't do this physically driving. you have to rely on simulation and that's where we come in. we can work with bmw to help them simulate the miles. >> no tesla? >> i can't talk about all the customers we work with, of course. >> oh! okay i'll take that nonanswer as an answer the reality of self-driving cars how far off is it truly? >> well, there are different levels of autonomy the ultimate dream you're sitting in your car, you know, get in, you kick back, district a cocktail and the car drives you to where we need to go we may be a few years from there. there are all kinds of safety and features and all kinds of
capabilities of being created on that route which will benefit customers today. even as we get there over a number of years. >> appreciate you being here good to see you. >> that's the ceo ansys joining us where do power players in washington go for their power lunches? we've got the answer coming up next ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. ♪ i want it that way... i can't believe it. that karl brought his karaoke machine?
♪ ain't nothing but a heartache... ♪ no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. ♪ i never wanna hear you say... ♪ no, kevin... no, kevin! believe it! geico could save you fifteen percent or more on car insurance. geico could save you fifteen percent on a scale of one to five? wait... one to five? when it comes to feelings, it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry, clive! actually, really angry. thank you. and seat 36b angry. you're clive owen. and you're barefoot. yeah... there's also apprehension... ...regret... ...relief. oh and there's empathy... ah, i got this in zurich! actually, what's the opposite of empathy? but what if your business could understand what your customers are feeling... and then do something about it.
where do power players in washington take their power lunches. depends which side of the aisle they're on we have the story from a d.c. hot spot hi >> reporter: hi. we know there's a lot of big money in washington but there are also a lot of big appetite put the two together and you've got a $12 million tab. that's how much politicians and their committees spend on eating out here in washington during the 2018 campaign cycle. according to new data from open secrets, republicans spent $8.8 million on wining and dining democrats that bill was $3.4 million now, apparently both parties like to party right here at charlie palmers behind me. it's a bipartisan hot spot they spent nearly $700,000 here. and my sources say, the steak salad is delicious the top spot for republicans is the capitol hill club. it got $3.6 million in campaign cash it's an old-school private dining establishment that holds
lots of fundraisers are held there. it's got competition from a new hot spot the trump international hotel. it's number three on the gop list with just over $1 million democrats like to eat at their own private club, too. they spent almost $700,000 there. but the next favorite spot is bistro b senator debby stabenow's campaign alone running up a $26,000 tab. guys, i checked and those numbers include food and booze because sometimes you need a drink to survive in the swamp. back to you. >> i totally get that. thank you. thank you for watching "power lunch." >> "closing bell" is next. welcome to "the closing bell." i'm willfred frost here. a crazy week the zou down 300 at midday it's only just lower we remain in the red for a week as whole but well off monday's lows where will it end? we'll have the