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tv   Power Lunch  CNBC  March 10, 2017 1:00pm-3:01pm EST

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up. >> rogers. the demographic is coming into the age bracket where they'll start household formations. >> you don't care about interest rates? >> not yet. you heard me tubing to steve. i'm thinking about it. >> great weekend, everybody. "power" starts now. >> it does. a perfect ten, what the white house is calling today's job report. east german judge found one scary stat inside an overall good report. we'll let you know had an that is, straight ahead. plus, you'll hear exclusively from one of the most powerful men in washington right now, house ways & means committee chairman kevin brady, the man responsible for writing the tax laws, will join us. and we found for you one of the most beautiful market comebacks ever. you want to know more? i'm sure you do. i'm brian sullivan and "power"
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starts right now. >> welcome, everybody. that tech rally is fading a bit. we did get key levels here. google hitting all-time high earlier today is flat right now and the oil crush, that is continuing in today's session. take a look at this and where we stand down 1.8%, capping off a streak. ty? >> melissa, thank you so much. i'm tyler mathisen. here is what else is happening at this hour. transportation department says more than 53 million vehicles were recalled in the u.s. here last year. and that is a record high. massive demonstrations across south korea following a massive
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corruption scandal. nearly 40 million people are under a winter weather advisories, from ohio all the way up to cape cod as very cold weather moves through, bringing snow to these parts. some parts have gotten more than two inches of snow. imagine that. washington, d.c. mostly spared from today's storm. there's another storm brewing. there always is in the nation's capital and michelle is live there for us. hi, michelle. >> especially lately. hi, tyler. yes. all this week about health care reform. never mind democrats versus republicans. it's republicans versus republicans when it comes to repealing obamacare. chairman of house ways & means committee kevin brady just got health care reform marked up through his committee. we'll talk to him about that. are they going to be able to do health care reform? and on to corporate tax reform. the ceo of rio tinto.
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he has been on capitol hill talking to the legislators. why? what's he interested in? your number of the day 235,000. that's how many jobs were added to the u.s. last month. trump's first jobs report crushing expectations. hits, runs and errors inside today's report, steve liesman. >> this job reports belonged to donald trump, economists will say a small portion attributable to him. it's not that far off where job growth was last year. melissa said it, 235, very solid number. up by about 9,000. unemployment rate down. average hourly wages middle, but the labor force participation rising to 63. we're seeing people coming back into the workforce. and let's look where the jobs are. 58,000 and 28,000 construction
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and leisure/hospitality. some of that could be weather related. some of that may come off. a healthy number in manufacturing of 28,000. health care 27,000 and retail taking it on the chin there, down 26,000 especially in the brick and mortar parts of the business. following a hike next week, some beginning to dial in june already. there is some optimism in the gains here. if the president gets his programs passed those policies will impact the jobs during his presidency and the ones upon which donald trump will be graded. >> mr. liesman, thank you very much. stick around if you wouldn't mind and listen to what the white house called today's job report. white house economic adviser gary cohen earlier on cnbc. >> it was a perfect number, right exactly where it needed to be. our jobs plan and jobs creation,
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bringing jobs back to america is going exactly the way we would like to to go. i think this number reaffirms everything we're trying to do. >> let's bring in president and ceo of the national urban league, bill rogers from rutgers university. mark, i thought the president inherited a disaster. >> that's what he said during his campaign but the truth is -- >> and in his acceptance speech. >> gary cohn put on a very good spin today. this is a job economy inherited from potus 44. what i would like to see is a focus on infrastructure. i would like to see a focus on those areas that are rural, urban, suburban, where the unemployment rate remains higher than the national average.
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it's a little bit quick to say our policies have increased jobs or we're responsible for this jobs report. good to trumpet job creation but not so fast. >> i'm willing to agree or believe there's been a trump bump in the stock market. but not on the jobs report. >> businesses are more confident. if businesses are feeling better about the fact that they may be getting out from some regulations, feeling better about taxes, they might hire more, right? >> they must know something more about the legislative policy or process on how long it takes these policies to come to fruition. but one of the big points i have problems with this report in terms of being perfect was labor force participation rate, if we look at education, only degree for people with a ba or more. from the standpoint of providing opportunity to the trump -- >> how much did that number go
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up, labor force participation? >> in general thinking is not a whole lot. you have this huge amount of people holding out of the workforce because, in part, they're retiring. >> we had this conversation before. >> who won last time? i don't remember. >> i did. >> you did? okay. you're the one with the degree, man. i'm just listening. >> but, no, if you look at those who are working between 25, 54 years of age not thinking about retiring, their participation rates fell. and they have -- >> you know the big reason. >> and they have not returned. >> retail got crushed. >> no. >> interesting in this report. 8,000 oil jobs. good for louisiana, right? oil finally adding a few jobs. that's not a trump bump, just crude oil. we'll see what happens next time given what oil has done this week. and retail lost 20,000 jobs. >> because the move to online is
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very aggressive. major retailers facing reinstrustructure restructuring. >> i want to get back to the idea that not all of this is -- doesn't part of this have to be trump? how can we participate a trump bump in the stock market and business confidence, hiring? >> the market is a lagging indicator. it will take some time for those types of gains and also policies to be implemented. the notion that they're bringing jobs back to america -- >> the more important conversation is what does it take to sustain this type of job growth? this has been a long run of continuous job creation. what does the economy need? we need to pump up wages. we need to deal with the pockets of high unemployment that exist in the country.
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>> a nice message out to the economic professors who have fallen off their chair at home. we recognize that, in general, presidents just don't have a lot to do. >> bingo. >> with net job creation. at the margin perhaps. if you guys can get up off your chairs, we're not that dumb here. we understand that. at the margin. i don't know that president obama was the savior for jobs. he sure didn't kill it the way that a lot of people said he did. i don't think donald trump -- maybe at the margin. by the way, maybe it's some of the areas that mr. mario is talking about here. take areas that are disadvantaged and need and can benefit from government assistance and target programs at them and raise participation in that particular sector. >> budget policy, tax policy, policies on investing in people whether it's education, workforce does, in the long run -- >> in the long run. >> it does but --
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>> let's go back to this basic simple equation that my friend talked about a couple of days ago. economic growth is the sum of activity growth. >> how smart they are, how educated. that matters. >> to piggyback on what mark is saying, one of the things i'm concerned about that i'm not seeing in trump economics and trump plan, how are we going to invest in human priorities, human capital, education and training but also social capital? >> mark, i'm not going to take anything away from trump or take anything away from obama. our viewers out there that run businesses know one simple thing. you hire somebody when the cost of employing him or her will be less than the amount of money that person may directly or indirectly bring in. that's it. i think it's doing this in spite of the beltway not because of i
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it. >> there's no doubt, you said it right, the stock market bump is an indication there will be a rate hike. we have to come back six, eight months from now. >> manufacturer services. >> and construction. >> and construction and that may be weather related in part. we have to leave it there, gentlemen. we appreciate your time. >> robust discussion. >> for a robust number. >> thanks, guys. >> thank you. >> you think you had been to louisiana, talking about infrastructure and the need for new roads. mayor, thank you so much. news alert, in a week they're seeing crude drop. >> reporter: they absolutely do, brian. we saw eight more rates added to a total of 617. this is the eight straight week we've been seeing rig counts go up, the highest level we've seen since september 2015. crude oil prices taking another
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1.5% slag today. 20 cent off their session lows. 9% drop. people are worried about their rig counts going up. u.s. producers may sort of out-pump, out-do the cuts that opec has tried to implement. back to you. >> crude oil is sliding again. wti down 9% this week. almost all are down this week. folks, when you invest in these names it makes a difference where the company is operating and how wall street treats them. the average returns this week of companies operating in various regions. some of them cross over, as we know. as a whole, if you are a bakken north dakota operator you are down almost 9%, eagle ford down 4%. p permian down 5%. with tortoise capital, forgive
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my voice. i have airplane air in my head. how do you invest in this drop? is this an opportunity to add to positions? >> absolutely. if oil stays below 50, that increases the probability that the opec production cuts are extended. that said, we think shale is here to stay. shale oil produces and the demand for shale will continue to rise year after year. with this pullback in oil prices this week and corresponding impact, we think it's a great opportunity to be buying oil and gas. >> you're out there buying it. if so, who are you buying? >> as we talked about before, permian basin is the preferred area for us, one of the lowest cost shale basins and one of the lowest cost basins in the world. pioneer natural resources, one of the largest producers in the
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permian basin. pioneer in particular will grow its cash flow 20% a year really every year between now and the next decade. you really can't find that when you look across not just the energy sector but others as well. >> in order to stop the bleeding in the energy equities, what do we need to see? >> that's always a hard question to answer. >> can we go to 45 and it's okay and then we stop the bleeding? at what price -- >> yeah. >> right? there's always a price. >> there's always a price. you know, we've seen this before. we've seen where oil has dropped below 50. that creates some challenges for the market. we've got high oil number notice u.s. they need to come down. in addition to that, if you see oil prices stay below $50 a barrel, you'll see that rig
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count that jackie just talked about, it won't start to rise as much. it will start to slow, maybe even decline again. if oil producers in the u.s. don't continue to see that, they'll start to pull back on their drilling opportunities. naturally, production slows and that brings price back up. >> outside of the direct guise to go in and explore for the oil and get the oil out of the ground are there other operators, frac sand, guys who provide the sfeteel that you li to invest in, in this market? >> one place that always really responds is demand, right? consumption. consumption for oil, natural gas really rises a lot when prices are low, energy prices are low. at 50 to 60, energy costs are going to be low for a long time.
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pipeline. those companies benefit from the fact that energy prices are low, natural gas consumption is rising and they simply charge a fee to transport oil and gas through their pipelines. >> very quickly, very quickly, please, is there any reason to buy one of the large integrated multinational companies? >> from our perspective, no. we like shale plays. it's the best place to be. >> do better elsewhere? >> exactly. and the integrateds don't have those positions in the shale place. >> got it, rob. thanks. rob thummel at tortoise. one scary stat we found that could be a canary in the coal mine for the u.s. economy. we'll explain. first, back to michelle in d.c. with what is coming up. >> don't forget, chairman kevin brady of ways & means is coming up, talking about the progress of health care reform and tax reform so crucial to this
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market. next, president trump he used to sell real estate. now he's going to sell health care reform. how is he doing? his first big task. we'll discuss after this break. so what else is new? how's your mother? she needs more care though. shwants to sta h h.ng good. i don't kn even whe startith at. rst, let's te ok a your finanal plan we'll list. we'll talk. 'll pla. and see what wcan do ok, s. i'm vern, the orange mey tirement rabbit, from voya m the money u save for retireme. who'he?
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we have under invested in our infrastructure for the last 50 or so years. enormous amount of debt, i'm not even sure how much debt we need
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to finance. enormous amount of capital in the system looking for long duration assets in the united states. >> that was national economic council director gary cohn squawk on the street this morning. infrastructure front and center in its agenda this week. let's talk more about that and all the things they're trying to achieve. white house press secretary under george w. bush. economic policy adviser to vice president biden. republican and democrat but neither one was a trump supporter. >> and i'm a tony supporter. there you go. >> i was listening to gary cohn. it was emblematic of something. it rolls off his tongue. looking for long duration assets in the united states. i mean, only -- >> goldman sachs. >> only this cabinet, i think, would understand that in a heartbeat for the novice viewer. what that means is lots of pension funds in the world are looking for really long bonds like 50 to 100 years that
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they're confident of and infrastructure bond would be like that. donald trump promised to bring a different way of governing. we've gotten it. is it a more efficient way? is it going to work? >> it's efficient. we're not in the legislative process yet. that's where things tend to get not so efficient. if we're using executive orders, that's pretty efficient. the budget, the ceiling, all those kinds of things will be put to the test. what will help is if his team is in place. the real urgency, i think, is to get his team in place, treasury and the other agencies so that they can be part of that proces process. >> yeah, i don't think so.
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i don't think it's efficient. at the end of the day his team is his daughter, her husband and whoever else happens to be the last person who talked to him. my fear is that donald trump is a great showman, great campaigner. people underrated him. he doesn't know how to govern. it takes a fair amount of work to get stuff done. really they haven't done anything yet and it's already a couple of months in. >> his job now is to sell health care reform. >> yeah. right. >> he's committed to that. that sounds like it will be his skill set. >> no. i think that's a test case of what i'm saying. it's a hard sell. >> that's kind of a prediction. you're right. he does speak to a certain part of the electorate. that carried in the campaign. we'll see if it carries in this case, where you're talking about specific policies. the partnership with republicans on the hill will be crucially important. they are very tight, talking
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about the right things, thinking about messaging every day and trying to carry that forward. they need the support. they need his support in order to carry the day on the hill. >> do i understand correctly they need it because if it's controversial in any way, they want to be able to go back to their home constituency and know they're on the same side of the guy who still has the most political capital in the country right now, and that's president trump? >> i think that's part of it. the record for republican leadership on the hill will be one of accomplishments also. so, you say it's identifying with his voters. that's a piece of it. they'll be judged way more on competency. are they getting the things done that they intended to get -- republicans on hill had a much more robust policy layout. >> hold on a second. you're both forgetting that the hard right of the republican party, which is big enough to stop anything is, a, ungovernable and, b, doesn't want to go home to their constituents. they want to go home and say, yes, we stopped government in its tracks.
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that's been their goal for a long time. that's why we have a dysfunctional congress. >> guys, back to you. michelle, thank you. still to come, we are talking dockers, dallas and a boatload of debt. the good, the bad and the ugly in today's trade and later an unprecedented multimillion dollar trade in the nfl for a quarterback who may never throw a pass for a company that just -- team company that just acquired him, the cleveland browns. we'll tell you why one of the worst franchises in football is getting kudos for this bold move. power lunch will be right back. whether it's connecting one of the world's most innovative campuses.
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time now for the good, the bad and the ugly. first to the good, genesco. stock is soaring after they beat fourth quarter profit expectations. on to the bad, southwestern airlines. pardon this but investors don't love love the guidance. and downright ugly day for finisar. that stock is plummeting. missed third quarter earnings and revenue expectations. melissa? >> still ahead, one stock that is bubbling with opportunity. plus the most beautiful market comeback ever. we will explain when "power lunch" returns. online u.s. equity trades...
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hi, everybody. i'm sue herera. eu leaders minus british prime minister teresa may met in brussels to discuss the future of the union. tens of thousands of passengers were stranded in berlin as a strike by ground staff led to the cancellation of nearly 700 flights. the ground staff want a pay raise. winter storm could blanket the new york tri-state area with up to six inches of snow. the snow could turn to ice. 300 flights were canceled out of area airports and, unfortunately, there is more on the way next week. dizzy spells caused by rapid drops in blood pressure may increase a person's risk of dementia in old age. johns hopkins university
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researchers found those with the dizzy spells, called head rushes, were 40% more likely to develop dementia than those without the condition. something to keep track of. that's the news update this hour. ty, back to you. >> i don't know what to say about that, sue. >> i don't think there is anything to say. when i stand up abruptly, i get dizzy. >> i'll keep track of you. don't worry. strong jobs report, stocks mixed. maybe that's why there are minor moves in equities the past couple of days, dow industrials off about nine points. s&p 500 up about one point. and the -- excuse me, nasdaq up about one point and s&p 500 up about half a point. russell 2000, relatively speaking, the big mover there, down a big whopping 2.3 points. goldman sachs having the largest effect on the dow today. that bank, and a big pricey one
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at $247 is off about one percent. let's check meantime on what's happening in the bond market and rick santelli is at cme. rick? >> hi, tyler. we're down about five base points on the day. we're up about 8 basis points on the week. we did click off that 262 intra-day. such a significant level. we'll book end it for you. the fall of 2014, the exact date, september 17, 262 close. we may not close there. rates back off a bit. maybe the big action. by the way, the loan today is basically where we had the auction on wednesday for the ten-year note, which was a yield of around 256. that's significant. may be to some extent if we look for a yield drop. talked about it a lot.
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it's big. today, goes to the euro versus the dollar. november 1st, 108, anyone? seems to be post ecb meeting, getting a bit of strength for variety reasons. pay attention. traders say many are short the euro and it could pop more gres you have aggressively. >> adding 235,000 jobs to the economy. barbara rhinehart at voya and chief management officer at pnc. i don't want to read too much into the market that is unchanged. what is interesting that came out of the jobs report and market reaction is that we do have economists on the street increasing their expectations for the number of fed rate hike this is year or moving them up. goldman sachs saying june instead of september and four versus three in 2017.
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the markets aren't doing anything. is that good news, barbara? >> it's not necessarily good news but it's also not bad news. the market had been anticipating that the fed would not raise three times when they said they were going to back in december of 2016. so this is just a digestion. and the data has been relatively good. current activity indicators are hooking up. consumer comfort is at ten-year highs. global trade looks like it's picking up. i don't think that the market is not reacting very strongly today is necessarily bad news. i think everyone is waiting for the fed meeting next week. >> is that what's behind this today? we have had so many sessions where we've not moved -- over 100 sessions where the s&p has not moved up or down 1%. we're coasting along here at this level. why do you think that is? >> a couple of things. people are trying to figure out, is this really a trump rally or
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economic strength driving the stock market higher? another data point that the jobs number could not have been better and that a lot of people knowing that the fed is going to meet next week want to take the wait and see attitude to see if any surprises come out. >> in this quiet time is pnc buying the market overall? are you telling clients to go ahead and buy? tech, for instance, levels not seen since april 2000 in that market where we're not doing much, a market where there's fed uncertainty, policy uncertainty. you say go ahead and buy? >> we do. if you look at something like energy, there's a segment on before us talking about the pull back in oil prices. we think there's room for oil prices to move higher and the integrated companies look cheap. financials will clearly be supported by the moves in the
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fed. by the way, we are one of the banks that also changed our fed funds target from two hikes this year to three hikes, one coming in march and then june and december. there are things to be optimistic about the market as well as higher rates are a headwind for bonds, your alternative to stocks. >> not to blow the segment to smithereens. let's assume they're going to raise a couple of times and apple is up, caterpillar is up 26%, ibm is up 26%. those are not fed-related stocks. what is behind the other part of the market push? is it the president? is it congress? is it just global reflation? zblent. >> don't forget a year ago everyone felt we were sliding off into the edge of the abyss of another recession. it's not surprising that you would see a 30-plus percent gainl gain for the s&p 500 over that time period if it were
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coincidence with improving data. the first quarter was the low earnings recession last year. you'll have another quarter, very easy comps and 4% sales growth in fourth quarter earn g earnings. so, not surprising to see that the markets aren't doing much today. i think on a longer term view you could easily get a little bit of a corrective phase. we've come very far, very fast. about 18 times multiples. but you've got enough strength that a year from now it certainly makes sense to still be invested in equities. and you've got a big thing coming up in april and early may with the french elections and the dutch elections are next week. that causes a lot of uncertainty in the markets. >> thank you. >> it may be the most beautiful market comeback ever. and robert frank is here to explain. so beautiful. >> certainly one of the fastest i've ever seen in the art
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markets. in london breaking in over $800 million, wealthy collectors are feeling confident once again after a year of declines. an especially strong week with 428 million in sales. that's up 64% from last year. their top seller was this gustov that went for $25 million, way up above it's estimate of 45. and this for 21 million way above the 14 expected. christy's did well. this gogan, one of his first tajiti paintings and gerha-- ga painting went for $24 million. and the strong buying will encourage sellers to offer a lot more works for sale in the may auction. coming up for new york, this is
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a really good sign. as always, there were winners and big losers. russian billionaire selling this rothko for $13 million. he bought it for 36. in total he lost $115 million for works he sold through christie's. >> do you know who better new this is is for? >> who? >> gerhard richter. he is still alive. hopefully, he will get some coin. >> and gerhard richter is the wonder boy of the moment. a lot of his paintings, questions of whether it could be absorbed and they're all getting strong sales for an artist who is still painting. it's very much correlated with the stock market and general optimism. >> don't call it a comeback. it's been here for years. >> thanks, guys.
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seema mody. >> caterpillar issuing a statement saying we disagree with the irs's position and have cooperated requests for information. caterpillar says we believe we are compliant with tax laws and stand by our financial reporting. the company was not contacted by the government nor the author prior to the report being obtained by the media. this follows a long-running investigation into caterpillar as well as as high profile search into caterpillar. headquarters, shares up 1% on the day. brian? >> seema, we'll watch cat. still ahead, a big, bullish call on oil. we'll talk to you about that in street talk. first, michelle is in washington, d.c. michelle, what is coming up? >> hey there, brian. still ahead, my exclusive interview with the chair of the house ways & means committee, who just walked in the studio. and rio tinto telling congress too much regulation is holding back america's growth, hurting
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our economic and national security. rio tinto ceo joins us exclusively when "power lunch" returns. today, i am helping people work better... and also feel better. i am helping hospitals personalize treatments using billions of data points. and working with medtronic to predict the highs and lows of diabetes, hours in advance. and i am working with orreco to use biomarker data to boost the performance of athletes. hello, my name is watson. working together, we can help everyone live healthier.
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raising price target from 75 to 60. that's the ticker. 55% gross margins. there's also margin upside potentially.
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partnering with a distributor like dr. pepper, snapple could be mean iingful. monster stock. >> 55% margins? >> i know. >> i'm going to start demanding a discount. >> it's not cheap, la crois. >> water with bubbles in it. joke's on me. >> they've had an outperform rating. permian basin after sales of canadian assets, discount valuation, their term, is too cheap. got a $22 target on mro, about 35% upside. that lacroix like. lulu lemon, impending fashion tra trends that might be negative for lulu. keep that in mind. lulu was on trend with loose
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tops, tight pants like brian likes to wear here but consumer preference for denim is moving to tight tops and roomy bottoms, completely reversal. expecting sales to decelerate in the second half of 2017. >> my closet is hoe happy that the roomy bottoms are back. >> your bottom might be happy. >> thank goodness. your small cap call of the day. louisiana based health care company, from a buy to a hold. analyst says lac has industry leading organic growth and venture with life point is an attractive opportunity that should become more appreciable over time. stocks call it 52. maybe 10% more upside. it was more this morning but the stock is already up on the upgrade. tyler "roomy bottom" mathisen.
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>> don't go anywhere. our interview with the house ways & means chair, kevin brady. michelle will lead the way. stick around. "power lunch" will be right back.
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welcome back to cnbc. i'm michelle caruso-cabrera. on that topic and, of course, corporate tax reform and border adjustment tax. joining us now for an exclusive power lunch interview to discuss this, congressman kevin brady of texas, chairman of ways & means committee, helping to rewrite the health law. good to have you here. >> thanks, michelle. >> so you've handed off health care reform to another committee. that means you get to start focusing once again on tax reform? >> yes, ma'am. >> is health care reform going to slow that up? >> no, i know that's a big fear in the business community. we know the importance of both but this health care needs to get done. it is a big drag on the economy. we do need to resolve it. and put back the market reforms. it's not slowing us down on tax reform. >> corporate tax reform, the most controversial part is the
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border adjustment tax where you're not going to tax exports but you are going to tax imports by 20%. listen to the ceo of jcpenney and what he has been telling our retail reporter, courtney reagan. >> it takes our tax structure, as an example, from roughly a 34% corporate tax to over 170%. so, that gives you an idea of the financial impact to a company like jcpenney. and that's very consistent with other companies. >> jcpenney says it will have a tax rate of 170%. what do you say to him? >> i disagree. i'm a big fan of marv ellison's. all the importers are important to us, but we're not going to have a tax code that favors foreign products over u.s. products and companies like his are struggling the most in the regions that have seen their jobs pour overseas. that's why border adjustment tax is so important. here is our solution on this.
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marvellison doesn't want to see consumer hikes or tax hikes. good news is, neither do we. how we design this, how we phase it in to make sure, as a currency adjusts, economy adjusts, that we make sure it's all about growth, all about jobs. we want jcpenney to grow, as we do the other retailers. >> do you really think you're going to bring back a lot of manufacturing? he makes the point to courtney, 2% of shoes are manufactured in the united states. if we wanted to manufacture shoes in the united states, we don't have the capacity, the factories. it would take us ten years to get to the point where we could actually manufacture -- it's not going to happen. >> shoes and bananas, maybe not. but there's a lot of the supply chain that can be brought back to the united states. not all but a lot when our tax code is right. will we have companies today in the ways & means committee saying we know now how we can
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bring parts of our supply chain back. it can't happen overnight. here is our game plan. changing the tax code just as it's forced not just manufacturing, research, intellectual property headquarters overseas, the reverse is true as well. we need to work closely with them and businesses like jcpenney to get the design and the transition right for them. >> >> we speak to lobbyists. don't tax the first $2 worth of product. exclude commodities. oil. i've got to assume -- you're houston. >> yes, michelle. we get that. >> exclude oil. are you going to have exemptions? >> not if i have my way. once that starts, it never ends. that's why we decide on the business side. we know what our competitors do,
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china, canada, mexico. they beat us on rates. they beat us by not taxing worldwide. they beat us on border adjustment. so, this isn't -- we're not doing this for any frivolous reasons to compete and grow long term. we have to go bold now. >> president trump, this town waits with bated breath to hear whether or not he endorses the border adjustment tax. it's believed that you need his political capital, despite everything you hear, he is still the most popular guy. >> absolutely. >> when you look at the numbers. is he going to come out in favor of a border adjustment tax? >> i'm going to let the president speak for himself. but he gets it. you hear it from everything from the joint session of congress to every speech he gives. we ought to have a level playing field between made in america products and foreign products and i think he will lead it to us to design it the right way. >> we hear he doesn't like the name. >> he does not and he will tell you that pretty clearly. but he gets the principle behind it. he also knows if we don't have
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this, business rates go up and we've kept in place, and the code is dramatically more complex for businesses. and we drive jobs overseas. >> why doesn't he like the name border adjustment tax? >> i don't know but it's the principle he likes and that's the common ground we'll build off of. >> debt ceiling. are we going to have another fight in this congress? are they going to shut down because you guys can't come to some deal when it comes to the debt ceiling? >> yeah. the answer needs to be no, we're not going to have that shutdown. we can think fresh. eight years we've been held hostage. the whole country has over the debt ceiling issue. now a president willing to sign budget reforms. here is my point. if washington were a manufacturing plant, it would manufacturer spending. that's what it does. if we want it to manufacture savings, you have to retool the plan, retool the way washington
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spends and rewards that efficiency in savings. that's where we ought to head on the debt ceiling. >> no cliffhangers here? >> yeah. well, i'm convinced we won't. you look at treasury, the rest of the trump administration. they're already thinking ahead on this. >> i want to button up the conversation on the border adjustment tax. retailers say they'll never have any profitability. they could go bust. can you assure them that they are not going to go bust? >> yes, i can. there's a big difference between a sub 2% economy and 3% and 4% economy, difference between sky-high corporate rates and in the biggest rate cut i think in the history for businesses and when america can compete and win and we have not just more manufacturing but more research in energy and other jobs here in the united states, that's going to help our retailers in a big way. >> chairman brady, thanks for joining us. >> thanks for having me. >> tyler, back to you.
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>> michelle, chairman, thanks very much. up next, the jobs report was strong. there was one stat deeply hidden in it that has some people worried about the economy overall. full details when power lunch continues.
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welcome, everybody. i'm tyler mathisen. two hours for the closing bell for what has been an uneventful week for stocks in the market. what we're watching this hour, retail. the weak spot in the latest employment report. stores are closing. employees getting let go. how many stores and malls do we really need? probably a lot fewer than we have. big decision expected shortly off bitcoin. s.e.c. will decide whether it can be traded. bitcoin in the form of an etf. bitco bitcoin, all-time high right now. thumbs up from the s.e.c. could send it higher. plus the cleveland browns trade for another team's expensive headache. a quarterback. brock osweiler. why it could turn out to be a brilliant move, a, financially, b, businesswise and, c, for the
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team. >> if it's not you will be the cleveland browns 27th quarterback in 20 years, tyler mathisen. overall nasdaq 100. very close to its all-time highs. earlier today, microsoft, google, alphabet, facebook, all leading the way. ulta beauty salon looking good, beating expectations on sales and earnings. and ionis pharmaceuticals, goldman slapping a sell rating on ionis. $25 target, 35% below, melissa, the stock trading down 10% today. tech stocks leading the market today. as they hit a new all-time high, overall, technology in the s&p 500, highest level since april 2000. is this the sector you want to stay invested in, even if there's volatility ahead? let's bring in gene munster of loup ventures. great to have you with us. >> hi, melissa.
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>> why do you think it's fathering well relative to the other sectors so far this year? >> i think it's growth. if you look at fang, they're growing 16% next year, and traded 18 times. investors, what they really want to do is own high-quality companies that still have growth opportunities. even though they're obvious, the fang tends to fit that bill. one small out liar, which is netflix. unfortunately it's been down 2% in the past month. it has more issues around. it three of the four fang are doing just great. >> it's not a matter of wanting to invest in the one that's lagged in order to play catch-up, is this one you sort of leave out? you don't want to touch that one for now? >> this one is more difficult. i don't know about the next one or two quarters but next few years will get more difficult. and how we buy these packages will change, too. >> i know you focus on
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technology, gene but you hit the nail on the head when you said growth and they were looking for financials for growth and gave up the leaders in the market. do you get this feeling it's simply a rotation and this is a short-lived boost of technology? >> i don't know if it's short lived. the growth trajectory by the law of numbers will slow a little bit with tech. some of the changes should lay good groundwork. ebbs and flows. >> we don't talk too much about it c technology in terms of corporate tax rate. tax rates that they companies pay, will some benefit greatly from reduction of big corporate tax? >> i think probably google and apple are two of the biggest tax
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beneficiaries and separately, obviously, repatriation side, which everyone knows apple say huge beneficiary. also a catalyst for some m & a when you think about $100 million coming back. >> we have to talk briefly about snap, gene. is this one you buy here? >> it's going to be a roller coaster. i think you stay away from it now. if you have the luxury of owning something for five years, what they're doing around the camera, it's truly going to be exciting. for those investors it's worth looking at. for other investors look for a better opportunity. >> gene munt schster. >> store closings lead to job losses. it's bad and could get worse. courtney reagan joins us with the happy news. >> i was going to say what a sad intro, tyler. consumers are spending, just
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less on clothing, more on things like home improvement and travel. they're spending less in stores and more online. all these shifts are causing more store closures. retail lost 26,000 jobs, the most since 2012. interesting, the same amount that were gained in hospitality, potentially showing that spending shift. department stores shed 4700 jobs and other swren merchandise stores lost 14,600. macy's is closing 63 stores in early spring, sears 150 in early 2017. so, some of those losses may be starting to be captured here in these numbers. sporting goods, books and music stores lumped together. electronics and appliance stores shed 8200 positions and hh gregg is closing 40% of its close as it's filing for bankruptcy. there is job growth in nonstore retail. some of those online jobs, 3,000
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there, health and personal care added another 3,000 and automobile, motor vehicle dealers gaining over 5,000 when you put those two categories together. the distribution center and warehouse jobs fall under the transportations and logistics grouping. these are the folks that are working to get you your online orders. in february, that group, the housing, warehousing and storage sector lost 1500 jobs. brian? >> courtney, thank you very much. >> joining us now to talk more about this, retail and advisory group, ron insanacnbc contributor joining us as well. brian, is it an industry problem or are they just crumby stores and bad operators? >> probably more the latter than the former. we study retail all the time. the good models, home depots, lowe's, ultas of the world are still doing well both in store
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and online. clear reason for shoppers to destination them, they're getting picked off by other good brick and mortar stores and then amazon. >> home depot and lowe's. real estate guys have done well. ulta. we all wear a lot of makeup up here. >> especially you. >> tons. i'm 78. i look pretty good for 78. >> you're the entirety of the 16% at ulta? >> 15%. don't get crazy. but if you're sell jeans, tupperware, commodity items -- >> jeans would probably not want to be commodity. >> and tupperware would probably kill me, too. >> loose bottoms.
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>> tjx continues to grow like gang busters is changing the way that branded apparel gets sold. you have sectoral dynamics within channels. and overarching threat of amazon to anybody that doesn't really have a clear reason why people would go. >> when you look at our screens, wow, almost every major retailer is down big over the last three months, nine months, 12 months, the american consumer has been counted out many times. they always come roaring back. yes, amazon will take more of that. i don't -- i've got to believe there are probably some spectacular investing in retail opportunities right now that are hidden under the surface by this overall cloud. >> i don't think it's a consumer question. i agree with the other gentleman speaking today where, look, we've had a secular decline to a certain extent in legacy retailers, whether it's some of the big brand names that have been around over 100 years. montgomery ward was a very big retailers that was no longer with us.
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filene's basement was the forever 21 of its period. that one is gone. necessary consolidation, unfortunate for the people who work in the industry. i look at it not so much as an economic story but secular story and secular chain in which we buy goods and services. it's not so much an economic statement about where we stand with respect to gdp or growth. it's one where we're largely over stored as we were with banks, that's going to work itself out overtime. unfortunate to the detriment of those in the industry. >> who is poised to survive? if you think we're overstored, store also go away. does that mean there are companies that go away or just stores that go away? >> i think it's a little bit of both. even really good retailers will rationalize the portfolio and try to figure out which of those stores need to stay open, which ones need to change. you'll see the preponderance of
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brick and moratar. any retailer that has carved out a good purpose, and they understand that. >> who is doing it great? the best performing stock in the s&p 500 the past five years. >> business models we always think outperform the market consistently. home depot has done a wonderful job. tj maxx ds a terrific job. walmart right now is an underrated story in the strategic shifts. there's a model for this. it's what alibaba does. a mall through which smaller retailers sell. walmart doesn't just control walmart stores but surprisingly large number of -- >> they sell under walmart's umbrella? >> walmart acquired them but they're still independent brands. appeal to a different audience
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and, to be honest, to get different suppliers to sell to them as well. >> brian, appreciate it. >> thank you. >> michelle? here's what's coming up on jobs friday, "power lunch" live from washington. mark wayne mullen on the set. president's infrastructure plan, jobs report out today. and could the president's pro-business agenda pay off for mining giant rio tinto? we'll ask that company's ceo. plus no ceo is more front and center than united technologies, greg hayes, joining jim cramer tonight.
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eamon? >> in the past the president has referred to particular job reports as phony or totally fiction. does the president believe that this jobs report was accurate and fairway to measure the economy? >> yeah. i talked to the president prior to this. he said to quote him very clearly. they may have been phony in the past but it's very real now. >> changed his tune. you saw that was cnbc's eamon javers addressing sean spicer, jobs report that was better than expected. let's address the trump economy with mark wayne mullen, republican from oklahoma. >> thanks for having me here, michelle. >> you used to do something for a living.
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>> that's right. >> >> you ran a big plumbing company. >> a plumbing company which most people refer to but we have actually seven other companies besides that, everything from a restaurant to a couple property companies and, obviously, heavy in construction. >> so, what are you doing here? >> in short i got fed up. it's difficult for a small business owner to survive in a regulatory environment that we have to survive in right now. when the president starts talking about one regulation for every one new regulation, two have to come off the books, it's exciting for small business owners like myself we've had economists come on saying the jobs report is very good but you can't give president trump credit. >> it's not the actions but the hope he has given to small business community.
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i call it the backbone of our economy, small business owners. the idea that we know that someone in the white house understands it and gets it is exciting for business owners like myself and small business owners that drive this economy. >> is he going to be able to help deliver the things that need to get done? people come on our air and say health care reform, dead on arrival. the hard right doesn't like health care reform. forget the border adjustment tax. tax reform not happening. >> president trump doesn't know how to lose. if he says he wants to do something, he's going to get it -- that's the business mentality. option of losing isn't an option in business. not when you're an entrepreneur. so, when he says he's going to do it, i believe he's going to deliver it. and i'm net deep right now in the health care fight. i think we're moving in the right direction. we're keeping our promise. president trump has kept his promise with the american people. he said he was going to roll back regulations. he's doing that. he said he's going to create an
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environment for businesses to thrive again. he's doing that. >> the hard right, the far right still doesn't like this health care reform bill. they're calling it obamacare lite. is this going to get to the floor the week of march 20th and is it going to pass? >> i believe both is, yes. we'll be able to bring it to the floor and, yes, it will pass. if it was obamacare like, the left wouldn't be fighting it so badly. i came out of a 27 straight hour mark-up with the left fighting it every step of the way. this is the beginning of the health care reform going through the open process. they can offer amendments. if they can get 218 people to support their amendment, it's about getting it right for the american people. we don't want to make the same mistake that nancy pelosi, harry reid and president obama made.
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anything that will strengthen it, i'm all for t but in the world that we live in on the house floor, it takes 218 people to pass a bill. and it takes 51 underneath this current rule for the senate. so, there is never going to be a perfect bill that ever comes out of washington, d.c. it just isn't going to happen. however, we always talk about what's not in the bill and we should be focusing on what is in the bill. this puts it back in the hands of the american people and out of the hands of the bureaucrats in washington, d.c. >> sir, so good to have you on. >> thank you so much. >> thanks for joining us. >> have a good trip back to oklahoma. >> i appreciate it. michelle, thank you. shares of united. jim cramer talked to the company's ceo. we'll talk to jim next on "power lunch." matters.
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ten on the production right on the cost curve that we indicated to the government, 89% learning
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curve. every time we double production we're coming down in cost by 11%. that's exactly what we committed to when we started the program. we're right on that line. >> that was united technology ceo greg hayes. here with us to talk that and more is mad money's jim cramer. >> this interview, i've known greg hayes for a while, follow this had company forever. this is the most excited, the most bullish he has ever been on every single division. his biggest problem, high quality. can't find enough workers. different greg hayes from even three months ago. he says it's happening right now. >> are you hearing the same thing from other ceo manufacturers? >> yes. yes. it's night and day. >> what's driving it? >> hayes has said we have a good working relationship with the administration. current administration has reached out to business in a way previous administrations never
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have. it's making difference in tone. people want to take more risk. this is heating, ventilation and air conditioning but also otis. numbers are up incredible. when i met with him a year ago, that would have been p preposterous. did you say the elevator business was looking up? i knew you were going to go there. >> a grown in the studio in case you at home couldn't hear it. >> yes. he was wildly bullish. during the interview i had a lot of noes notes and things where you're going. >> threw everything away because of what he was saying. >> maybe i should not read more into this than i am, but every single ceo who has come out of one of these meetings in the white house absolutely is giddy about how positive the tone has been. >> bingo. >> whether it's a community banker, industrialist, a pharma
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person, who he said i want to cut your prices. >> he was saying that washington -- these kind of discussions are happening. they're ongoing. they're good. there will be tax cuts. they will be meaningful. it will be plowed back in to hiring more people if they can find them. also, of course, ongoing buyback, dividend. i'm talking about basic american stuff. it's america, by the way, that's -- much more bullish about america than china. >> i'm going to ask you one more question. >> united technologies should be higher. if this interview were on now, i think you would say what? how can it be? numbers have to move up. >> not exactly comparable but caterpillar, are you worried about caterpillar? >> no. no i'm not. >> not worried about this tax thing? >> it's an irs dispute. they certainly made a determined effort to make caterpillar look as bad as possible. but i think sometimes orders will trump even the kind of -- i don't want to say shenanigans.
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maybe there are things we don't know. caterpillars orders are good. i think the orders we're getting from main -- for moneywell, i think, will surprise. greg hayes is not one of these guys -- greg hayes is a guy -- good, jim. it's fine. yeah. it's coming along. it's all right. no! that was not greg hayes. greg hayes, this was like greg hayes has just said i have seen the future and this is a different time. and, remember, he was the first person who was taken to task by the president. >> exactly. >> we have a great relationship. >> maybe he was lucky he was the first taken to task. improved the relationship and there he is now. is he seeing it in actual orders? >> yes. >> at this moment in time? >> yes. >> it's not just -- >> no! >> we're positive about the future. we're seeing it right now. >> seeing it right now. employment report we saw this morning is typical of what he is seeing. he needs more mechanics.
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can you imagine? needs more mechanics. >> the stock is up. >> it should be up, for heaven's sake. these markets are stupid. >> not to greg hayes but to every ceo that we get -- we had it yesterday. remember that guy, hesh grerb greenberg? train don't complain. instead of waiting for someone else to train them bring them in and train them themselves. >> united technologies have given more scholarships to any entity than the government. >> not utx. all of them. in germany, they create universities around companies. utx u., cramer u. >> what? >> with your mascot the eagles. >> i'm sorry i'm so focused on this. but december, i saw him in december. and he was -- look, i was focused yesterday on the eagles. i had to put my helmet on in the middle of the show.
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in the month of december when i spent time with him, it wasn't like woe is me but it was kind of like, i don't know. no. this is, what, march? something has happened is what i'm saying. something has happened. it is different. it's different. it's not supposed to be different. but it is. >> yeah. >> jim cramer, thanks. you'll see his entire interview with the ut ceo greg hayes tonight on "mad money" at 6:00 eastern time. jim, thank you. >> thank you guys. >> shares of rio tinto up 30% in the past year. could the stock go even higher? some regulatory burdens are eased. bad week for oil, down 8%. closing trades next on "power lunch." . but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence.
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hi, everybody. i'm sue herera. secretary of homeland security john kelly meeting with top canadian officials in ottawa. u.s./canada border issues, traveler screening and visa issues dominating that agenda. volkswagen usa has entered a guilty plea in the diesel emissions scandal.
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federal judge in detroit has asked for more time to study that deal. the automaker has agreed to pay a $2.8 billion criminal final in addition to a civil fine that was negotiated separately. members from native american tribes from around the country diverged on the country's capital to protest the dakota pipeline, kicking off four days of planned protests. >> and some levity at the press meeting. his flag pin was upside down. as you can s a reporter asked if it was a distress call. as you can see, he laughed and tu turned it around. >> lot of levity at the press conference. >> he laughed even after eamon's
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question. another down day for oil. jackie deangelis is at the commodity desk. >> third day of losses for crude oil. clearly shows you where the momentum is, to the down side, finishing under $50 a barrel for the week, just under $48.50, matter of fact, 9% loss in just a few days time. rate counts were up for the eighth week in a row, part of what is spooking the market here. u.s. production is going up. closing under 50 is a psychological level, finally breaking out now to the down side and a lot of people didn't think we would. we conduct those surveys, talk to people all the time. they saw support and they thought we were going to move higher from here. certainly presenting a crimp in the overall oil story for the week. melissa, back over to you. >> jackie, thank you. let's get down to michelle. >> thank you so much. shares of rio tinto on fire up 35%. president trump's plan to increase infrastructure spending, ease regulations, could that lift the stock even
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higher? joining me exclusively on "power lunch" is rio tinto ceo je jean-sebastien jacques. you said i'm to call you js. >> it's around $6 billion stronger every year. and market cap, as you see, as you said, $18 billion of market cap, 24% of our shareholders u.s., u.s. shareholders. spent a full week in the u.s., three days in new york and boston to meet with shareholders and last two days in washington, d.c. as i do three or four times a year. >> president trump wants to increase fran structure spending, decrease regulation. have you been telling these guys that's a good idea. most ceos would like that kind
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of thing, especially a mining company. >> absolutely. trying to understand better what the infrastructure is about. for us, if more is spent in the infrastructure, that could be a good thing for two reasons. we would be able to supply more aluminum, copper, all the product we are producing in the u.s., outside the u.s. first. second point, which is very important, is the u.s. has lots of resources. we would be absolutely delighted to open new minds, create new job, pay taxes as we've been doing for us for four, five years in the country. >> on that note i want to play you a sound bite. here is what he said about the permitting process this morning. >> okay. >> if there were ever a president that's interested in improving the infrastructure in the united states it's president trump. he is a builder. he has concrete in his blood. so that's the subject that he's
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very comfortable with, that he understands and he understands, you know, the necessity for this work to be done. so it's not something that is in the far corner of his mind. it's on his front lobe and i think we will get some good activity in terms of improving infrastructure in the country. >> so that isn't what i thought we were going to play. he also complained about the permitting process. he said it takes forever to -- and it adds to cost because if you're a contractor, you start building in finance, et cetera. and it becomes ridiculous. if you want to build a new mine here, how easy is it in the you state compared to canada or australia? >> all right. so, let's be honest. there are plenty of room for improvement in the u.s. to answer your question is average in the u.s. to build a new mine takes ten years from a
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permitting standpoint. in an da or australia it takes only three years. >> three years. >> so, lots of improvement in that space. and that's some of the discussion in recent days, how we can improve it in a brt way. we have plenty of projects in the usa. we have been exploring in the usa forever. we have a pretty healthy -- not talking copper. minerals, so on, so forth. and plenty of opportunities and anything that can do it in a much more efficient way would be welcomed. >> with less regulation you could hire more people in the united states, you would be investing more in the united states? >> let me put it this way. when you open a mine you create new jobs and then you've got jobs, contractors. yes, for sure. to open new mines, it will create job. pay taxes. we will invest. >> let's talk about copper. price has been volatile over the last year. >> uh-huh.
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>> price has gone up. that's partly helped your stock so much. what do you think is happening with copper prices here on out? >> maybe i'll answer it in two parts. first of all in the short term lots of disruption in the market. there is a big strike, for example, in one of the mines in chile, the copper mine. there are lots of disruptions come i coming out of indonesia as we speak now. if you take a longer perspective, there is no doubt that copper should enjoy a bright future. simply to say i don't know how many iphones you have here. >> i have two. >> that's good. the point is you won't be able to do it without copper. it will remain significant but there is not enough supply including from the ew u.s. i'll give you one thing, which is interesting today.
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the usa could be self sufficient in copper. >> but it's not? >> but it's not. you have to buy copper from mexico, japan, china, when the usa could be self sufficient on copper. >> if we did more mining? my colleague, melissa, has a question. >> i want to ask you about capital return, a topic that many of your shareholders would be interested in. citigroup has an estimate of what the dividend could reach, a record of more than $3 a share. i'm wondering if you think business is that good so far from what you've seen, that it would support north of $3 share dividend. >> well, i cannot give you any guidance on the dividend yet. what we're focusing on with the team is to make as much cash as we can and then the discussion is next year in february. we'll allocate money for dividend, for share buyback and other returns.
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but the focus is to run our business in the best possible way. >> you do business all over the world. they say other countries border adjust their b.a.t. tax. should we be doing the same thing here? >> my view is that it's a difficult question to answer at this point in time. the reason is the following. we need to understand the full picture to understand exactly what the full taxation would look like. the second aspect is the impact on customers. for example, we are supplying lots of aluminum to canada. what it means for the automotive producer, the people we buy for before we draw a conclusion. it's important to understand the full impact. consumers like you and i. we understand the full picture before we draw any conclusion. >> you're selling copper out of canada here in the united states. if we import it from canada, it
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will have an import tax ton. >> i'm going to correct you on this one. i produce copper in the u.s. and sell in the u.s. i produce aluminum in canada but the lonlistics remain same. >> thank you, js. good to have you on. >> guys, back to you. >> he made you call him js because his name is jean-sebastien, dominique francois jacques. he is the most french person ever. >> the more names the more french. >> i thought you were a composer. >> the only person that calls me jean-sebastien is my wife when she's mad at me. >> when you're in the doghouse gochlt. >> merci beaucoup. cleveland browns move may be an ingenious maneuver that other
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gold falling for the ninth straight session. how much more downside or upside might be ahead. time for trading nation. christopher looney at rcb capital. if you're an equity guy but talk about commodities, gold. what are you saying? it's the buying opportunity now or not? >> it's getting close. there's a tremendous amount of expectations, obviously, in today's number. we basically have 100% chance the fed is moving next week. you have a consensus sort of trade right now where people are getting long in it. probably a buy on the news scenario. next week after the fed moves on roo rates, look at gold for a trade here. i would look at the gld. you get more of a pullback around the 113-ish level. you could probably start to pick away closer to 112, you get a full position. trade to 117 and exit that trade. it's not an investment.
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it's totally a trade. >> rates may be up, chris. rates are up. inflation may be up. dollar. is there any reason to own gold? >> yeah. in our view, it's raleigh risk of trade at current levels. we already talked about the things that have happened so far this year. with rate hike expectations, priced in at 1 u.n.%, gold behaving exactly as it should. we look toward the balance of the rest of the year, we see a risk materializing. so many unknowns. not just in the u.s. but in europe. and so many other places that we do think a risk off trade will materialize. >> it sounds like buy it for a trade. >> certainly. we think right now it could be a great entry point for gold given current prices right now. very limited downside because we're essentially at 100% probability for the rate hike. so much little runway left to the downside it's certainly a good entry point in our view.
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if not now, at least next week. >> bullish on both sides there. david said it's a trade not an investment. >> totally a trade. i couldn't imagine a fed getting more hawkish than they have over the past several week or so. there's only risk that they become less hawkish, if you will. gold probably trades up in that environment. get a couple of dollar trade. >> you shave your beard we'll know it's time to sell. >> if i miss this trade i'll shave it, brian. >> that's it. won't have the thing going. more trading nation go to tradingnation.cnbc.com. >> cleveland browns trade for another team's overpaid, underperforming quarterback. and it might just turn out to be a stroke of genius. the change in the business model in the nfl. we'll explain.
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blockbuster trade kicking off the free trading season, first time ever cleveland brown. they may cut him, release him or trade him again. or could this sort of money ball maneuver wind up being the best thing for this eternally challenged nfl franchise and the nfl generally. on the cnbc news line is the sports agent lei steinberg. leigh, welcome. explain this one to me. you have an over priced $16 million a year quarterback who is middling at best and the browns acquire him. they had the cap space to do it. they acquire him for some draft picks, one of which is in this year's draft, but the more attractive one is in next year's draft. what's the logic here? >> so to understand this
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correctly, you need to know that the cleveland browns are a team that was the worst last year in the league so they've got lots of cap space and they have a real need for the ability to aggregate a whole lot of talent, draft picks, any way they can get it. and you've got the houston, texans, who are a team striving to get to the super bowl. so they're at the other end of the spectrum. so the first shocking aspect of this, it's the evaporation of patience. a team signs a franchise quarterback, 37 million guaranteed dollars and after one year with so little patience they decide he's not their player. and to get rid of his huge cap hit they're willing to pay another team a second round draft pick, a sixth round draft
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pick and give the player to them so that cleveland absorbs some of the cap hit and houston saves $10 million in cap money so they can improve their roster. >> so what did the browns give up here? they gave up a pick themselves as i understand it, right? >> so what houston got was a fourth round draft pick. >> right. >> what cleveland got was a second round draft pick, which is much better and a sixth round draft pick. so they got two draft picks to help them aggregate a lot of talent and the second is very similar to a first in terms of impact. >> right. >> so you have two trends here. number one, the death of patience. if a player doesn't perform immediately and he's got a big cap number, good-bye, he's gone. and second of all, the fact that teams are so cap conscious that they're willing to dump a player
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to a team that doesn't have cap problems simply to give themselves more cap space. this is more an nba move. it's more major league baseball move. it is not traditionally an nfl move so it's a stunning new precedent. >> you know, leigh, i know everyone is freaking outs about this. let's go back just a little bit. how did osweiler get the texans contract in the first place? i mean, it seems mike glennonesque, three years, 45 million for an untested formerly backup quarterback. is there that little quarterback talent in the league? are these guys -- you know, listen, they're better than i am, i'm not knocking them, but you understand my point. >> so i've represented more than 100 quarterbacks, and three of them are in the hall of fame. the game has changed to become a quarterback centric game. without a franchise quarterback a team has very little chance of
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getting to and through the playoffs and through the super bowl. you need that quarterback to win in contemporary football. there are a huge group, as many as 1/4 of the league that don't have that player. so what happens is that draftees get pushed up in the draft and players who have a shot at being franchise quarterbacks are now being given amazing deals. and in free agency, remember, it's competitive bidding. so you see b players or b plus players get a plus contracts because they're all that are available. so, yes, i can give you seven teams that need an upgraded quarterback. so it's a seller's market. >> two quick questions if i might, leigh. i am assuming you like practically everybody else who follows this believes the houston texans are going to make a strong run at tony romo because as you point out, the
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texans are a now team. they want to win right now and they think romo can do it for them, right? >> and he would do it for them. tony romo lost his job due to injury. >> right. >> but he's a top flight quarterback who could win now. i'm not saying it would be just like this, but it could be like peyton manning going to denver. >> my second question is one pertaining to the washington redskins which fired their general manager who had had prior problems with alcohol and apparently though not confirmed this was one of the reasons why. if so, it's a very sad story about scot mccloughan. >> i'm someone who struggled with alcohol in my own background, and until someone is -- breaks denial and is willing to get help, you sort of have to hit a bottom to be willing to do the things necessary. so my prayers go out to him if that's the problem. and this is, you know, not about
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effectiveness, it's about saving someone's life. >> absolutely. leigh, thank you so much. we appreciate your time today. >> my pleasure. >> you bet. final thoughts of the day, aka, check please, is next. with e*trade's powerful trading tools, right at your fingertips, you have access to in-depth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. ♪ ♪ it's like having the power of a trading floor, wherever you are. it's your trade. ♪ ♪ e*trade. ♪ ♪ start trading today at etrade.com ♪ ♪ i did active duty 11 years.my in july of '98. and two in the reserves. our 18 year old was in an accident. when i call usaa it was that voice asking me, "is your daughter ok?"
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check please. hey, guys, i thought it was very interesting.
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congressman kevin brady told us that president trump doesn't like the name border adjustment tax. i don't like it either, but it makes sense. a guy who's so into marketing and understands branding wouldn't like a klunky, klunky name like border adjustment. >> i thought that interview was excellent, michelle. what struck me is if you asked them if retailers would go bust because of border adjustment, he said no retailers would go bust. it sounded like he said the strength of the economy would propel them. the acknowledgment that businesses could see an immediate impact, but if the other effects will help lift them. >> and also, michelle, where you started to probe the matter of phasing in any border adjustment tax and maybe having carve outs for certain kinds of businesses and the details there could be something. i was struck by the way, folks, the aboulliance that jim cramer noted in his interview tonight at 6:00. it is something we've seen with lots of other ceos.
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something has changed. mine are a lot lighter. don't be surprised if romo ends in in houston. houston and dallas have a little thing. >> you were just there. >> they are -- >> who's the real texas? you never know. i wouldn't be surprised. >> michelle, awesome. thanks for watching "power lunch", everybody. >> "closing bell" starts now. welcome to the "closing bell", everybody. i'm kelly evans on this friday on the new york stock exchange. >> happy friday. i'm bill griffeth. jobs or tax reform? we're going to look at what's really driving these markets as the dow struggles to hold on to some gains that we saw earlier this morning. new data shows $2 trillion added to house held net worth last quarter. we'll tell you what's behind that move higher. and a new move shows amazon's alexa could eventually add $10 billion to the online retailer's revenue stream.

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