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tv   Power Lunch  CNBC  March 28, 2018 1:00pm-3:00pm EDT

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we have 20 second. >> alexion, a bio tech catching a bid and there is fundamental reasons, good data >> shorts. spring has sprung. >> bristol myers >> the bank. c of a. >> and gold. i'm seeing some stuff. >> "power lunch" starts right now. i'm michelle caruso-cabrera and here is what is on the menu. tech is dominating your portfolio like never before whether you like it or not apple, amazon, alphabet, they make up 10% of the s&p 500 just on their own so if you own the s&p, you own them and tech is whipsawing the markets today we're going to go inside of those eye-popping numbers. facebook is rolling out the first privacy as calls for calls for regulation get louder and louder what is the right type of regulation for big tech. and then tesla
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ed and now there is fears about a cash crunch. their bond is getting hit hard too. we'll go under the hood of tess will you straight ahead. "power lunch" starts right now >> and we do welcome you into "power lunch." i'm bill griffeth. another volatile day stocks between gains an losses and gains and losses and we're all over the map michelle mentioned tesla, the biggest loser in the nasdaq and amazon is getting whacked, and that stock losing about $40 billion in market cap on the reports the president wants to go after the company's tax treatment. but another report said that the white house is not planning any policy changes just yet. and apple was down 1% earlier. it is now trying to turn things around the street is cutting iphone sales he is -- estimates again
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and we'll speak with an analyst. and the bond yield hitting the lowest level since the 6th and the seven-year note option is just moment away. and i'm melissa lee. we're following the u.s. economy growing stronger than expected fourth quarter final gdp growing 2.9% but a key measure of krorpt profits weakening to the tax code the national highway trax administration will hire have gas guzzlers for minimum fuel economy standards. they suspended 2016 obama regulations that more than doubled penalties. automakers said it could increase cost by about a billion dollars a year and after being away for 20 years, the rose ann revival turning and averaging a whopping 18 million viewers >> that means more of those
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remakes are coming n. >> we begin with the market. a violent move for the wild wednesday. what is going on here. bob pisani is at the new york stock exchange it is like the weather in denver, if you don't like it now, just wait. >> and the bottom line is we're more stable now and the reason we're more stable is because what i call the tech big five, they're more stable. they are off the lows. apple, amazon, google, microsoft, facebook, these are the big five in technology they are all off the lows. amazon is not having a good day but it was worse earlier when i say tech is too big for its britches and here is what i mean for the big five and what they do to the market. they have a 2$2.3 trillion markt cap and the s&p 500 is 23 trillion and then you throw in facebook and microsoft and they have another $1.1 trillion so
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you have five stocks part of the s&p 500. and it gets worse, if you look at the total technology and the next screen -- technology is 25% of the s&p 500 financials are 15% and that is mostly banks and the technology is 40% of the s&p 500. here is the problem. without that moving in the markets have a hard time moving so look at the smaller names, nurpg and materials and reits and telecom all together only 15% and it leaves health care and industrials and discretionary as the swing groups they've got a rally. if tech is not rallying, the market doesn't move. something interesting is happening this week. a value has been outperforming growth in this markets it things like johnson&johnson and proctor and gamble and they've been doing better than growth stocks and the volume is heavier in these kind of etfs that means people are switching around into value over the growth names which is
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classically technology key level for the s&p 500, we've been talking about this for a couple of days, the 200 day poving average is 2587 trice this year it hit the ar-- the average and last friday -- and if you break that, that is a big psychological barrier. and in market, do technicals matter, when fundmentals are in question, yes, they do matter. bob laid out how big the impact technology has had on the overall market and check out this front page today in the "wall street journal." sounding the alarm about the huge influence that tech has been having. it is a big reason why the markets are lower not only this month but for the quarter as well mike ryan is chief investment officer with usb and jeff knight from investor solutions at column columbia and didn't hear about influence
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going up but now we hear about an undo influence as we are struggling. >> over the course of the last five years you've had extraordinary run by the stocks and this is a growth led bull market and bolstered by technology i think what you are seeing now is because the valuation is changed, the tech stocks are no longer trade at or below the levels that we've seen and in fact trading now in line or above historical levels and people are reassessing the take on technology. especially i think importantly to this point of the business psyching this is the point where you tend to see people focus more on value stocks and this isn't terribly surprising. we downgraded our positioning last week on tech stocks again not in anticipation of the ongoin ongoing -- headlines but the headwinds on the regulatory front. >> and i don't know if you saw
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bob pisani, he shoed the breadth of the -- breath with a d. in it and it is something you see at the end of the cycle does the narrowing of the breath a -- the breadth does that say something bigger about the broader market. >> it is very important to track. if you think about the history of bull markets turning into bear markets, the damage is done to the leadest sector. so the biggest sector in s&p 500 was financials and then in 1999 and 2000 was technology. so it is always important to watch if you are focused on inflection but i would draw a distinction from technology versus technology in 1999 first of all, those days -- tech was 33% of the s&p today it is 25%. but also the value agsz we -- t valuations were smoke and mooro mooror -- the -- and i don't
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think the value has grown excessively relatively to the market. >> did i just hear you say we're transitioning to a bear market. >> i didn't say that if you are looking for annin frek - an inflection. >> but you say this is bigger than last time tech was big. did i also hear that. >> it is smaller and healthier than in 2000 and while i think we have seen transition from extra order neary sharp ratio of equity investing last year when they went up every single month to a year where you see more volatility, that is very different than saying we've transitioned to a bear market. >> so mike, since you recently trimmed your overweight position in technology, what did you see that perhaps jeff is not seeing right now? >> first of all. >> don't think our views are inconsistent in fact we do think the difference between tech now and back before the tech telecom crash was the fact it was
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largely based on hope to deliver the revenues which would translate into growth and which haven't materialized but this is a healthy earning cycle. >> so then why did you trim your overweight. >> it is not about the fundam t fundament -- fundamentals but you've outperformed for such an expend expended period because we don't think it will outperform in the sext six to 12 months. >> mike, you like emerging markets and everywhere else in the world over developed markets like the united states and inherent is a call on technology versus the other indices around the world. so you stick with that there >> it is but i would be careful to not confuse our geo graphic preferences because the geographic preferences are where
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we are on the business cycle and we see the opportunities earlier in the cycle which means they have more running room and certainly the fed is in the lead in terms of central bank policy. so this isn't necessarily that we think it is tied to technology, it is more about where we think there is potential for additional earnings growth, which is going it be stronger over the cycle in the emerging marks countries. >> gentlemen, thank you. mike ryan and jeff night you didn't ask, but jeff, your company's name should be camel thread needle i think. but nobody asked me that thank you for joining us don't forget to tip the waiter a news alert bond market $29 billion and seven-year notes up for auction rick santelli is studying the desire to lend money to the u.s. government what is the demand like? >> oh, this is not a good way to finish $94 billion in supply i gave this a dog minus -- the
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d-minus but what is strange yields have moved to a zone where maybe there is an air pocket to move lower or maybe it is the holiday week or breaking out of changes, but d-minus. let's go through it. the $29 billion, seven-year noted above the -- the range of the one issued in market and it was a wide one you could tell this wasn't going to be a good auction they had a basis and a half of bid offer spread the entire last hour so 2.34 bid to cover that is the worst since february of '16 average of 2.52. 5e on indirect and the other thing not the worst from february 16 was 12.1 and still 2% below the ten auction average of 14. dealers take a rather large 32.1% of this auction. this is everything you don't want to see in an auction and finishing out the week it makes one wonder if investors are just
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grabbing on to the notion that rates will stay firm despite the movement in the last 36 hours. melissa lee, back to you. >> >> can i ask a question do you think the options will be difficult for the foreseeable future because they might raise rates and i could get a better yield down the road if i wait? >> i think that is a pretty safe bet to go -- with that statement. although i do think there is going to be periods where they'll jump in more but at this point, they're taking it -- a wait and see approach. definitely due to the deficit and the additional supply. >> rick, thanks. rick santelli. facebook is r-- rebounding but still off 10% in a single week today unveiling the first changes in response to the data scandal. diedra has the latest. >> the aim is to create a more centralized or stream line system for users to control
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prief -- privacy and secure and that means a new privacy shortcuts menu in mobile devices and more transparency when it comes to deleting your facebook data. this might be a step toward regaining trust but facebook has promised simpler privacy controls in the past and there is still lots to do and many questions still being asked. for example, what will the audit of app creators and are there others who have abused the data and how does facebook track down the instances of a -- abuses after the download off servers and whether it affects instagram and what's app and if advertises can target you on facebook they can target you on the instagram because they take out advertisements through facebook. i've asked facebook to clarify but i haven't heard back and this is weighting on investor and users and the company is
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pushing back plans to unveil new home products and in due to the fallout and facebook has not responded yet but that is not surprising given everything they are deal with right now. >> i have a quick point in question here four because i think that your point that we don't really know what is used on instagram versus maybe is very important because analysts on wall street were saying if facebook user goes down and they haven't monetized instagram so there is this push-pull and that we saw what happened when kylie jenner questioned snap. the celebrity revolt could be a powerful force in the stock. and you're seeing a lot of articles say what other plat fors you could be using. but i do find it interesting to take out an ad on instagram, i'm told you will go through
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facebook it is all centralized within facebook and it is right, that instagram has an entirely monetized that platform yet. and they are for different uses. put your age and gender into facebook but not for instagram but that could change in the future so these are questions that i think facebook will have to answer in the coming weeks and months ahead >> whether they would lose the leverage of instagram before they ever actually had it and able to use it thanks so to washington where the trump administration is striking trade deals with south korea hoping to help u.s. steel. kayla has all of the details. >> the president said he could focus on security talks with south korea now that trade talks have wrapped up. the changes to this six-year trade pact are relatively minor. it doubles the number of u.s. auto imports from 25,000 to 50,000 and eliminates some regulations and side on
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manipulation and instead of steel, quotas will cut export volume by some 30% the key is what this means for nafta which is the elephant in the trade room the negotiations for the next round of talks have not been confirmed. they are expected to happen in april but normally we get that finalized a few days prior to the round. so we'll see when those are set. in the meantime the top trade official robert lighthizer is trying to strike a deal with his counter ports and today on cnbc he said he's hopeful. >> we have a short window because of elections and things beyond our control but if there is a real effort made to try to close out and to compromise and do some of the things we all know we should do, i'm optimistic we can get something done in principle in the next little bit. >> canada chief nectar told
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reuters that striking a deal by the end of april would be a challenge. and then there is a press briefing here at 2:00 p.m. we were expecting the white house press secretary to make a comment on amazon and any potential feelings by the president that he wants to bea tru d -- to be a trust buster. >> and is quota the answer for tariffs. will that set the precedent for other trade deals. >> that is what they are saying, pointing to this as an example of what they want other allies to emulate and core -- and korea and they have said this is dumpingle steel and they are in a different position but we've seen canada put out a very harsh statement yesterday on trans shipment so you could see more quotas as a by product of the decisions. >> kayla, thank you very much.
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tech in the cross hair this is weekend and especially today. amazon, netflix and facebook dragging it down but first to phil lebeau at the new york auto show. >> auto sales in the u.s. are trending lower but some automakers are buck the trend. one of them is porsche we'll talk with the ceo of porsc porsche north america and why sales are going up that might have something to do with the tax report that is coming up. you know what's awesome? gig-speed internet.
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welcome back to "power lunch. let's get down to phil lebeau at the new york auto show with the head of porsche north america. >> the ceo from porsche here with us, and you are up in the u.s. where sales are down. how much of that is attributed to wealthier customers seeing a notice from the tax cut and saying, now is the time i want to buy that porsche? >> well i wish i could answer that with 100% degree of safety. it is driven by the model line, the model line up and the life cycle of or -- of our product. the eighth consecutive growth year in a row and that gives us confidence and started strong
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into 18 and march looks good i think it is driven by the overall economy and of course that could be driven by the tax reform as well >> you know that a lot of discussion right now primarily with the trump administration is involving what happens in the future potentially with imported vehicles from europe your lineup is imported from europe so you would be directly -- impacted if there is a tariff on a vehicle, at what point is a impact on sales? it it doubles or changes dramatically have you done the calculations yet? >> we are hoping for that measure to be rethought. we very much believe in free and fair and open trade. this is what the prosperity actually sits on of all of us and also the peace of the whole world sits on to exchange freely our goods. if there is something to talk
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about in terms of tariffs different in europe and the u.s. of course, we have to talk about that and we have good explanation or change something. but we shouldn't enter this discussion with pointing guns at each other >> you have a lineup right now that is starting to really get its legs pen -- beneath it as people continue to take pictures behind of you and when it comes to suvs and crossovers so you have just launched a pilot of subscription service what are you noticing in terms of people who are in that service? because i find this interesting. >> to explain what the subscription model is. we have two tiers. and for $3,000 you have 22 modelled to choose from. and you flip them whenever you want it is a month to month subscription we attract a younger target group. we only do that in atlanta and -- well our headquarters as the the moment -- >> younger than you expected.
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>> a lot younger than we expected so we actually engaged people with a brand that usually won't. they spent more so the majority is into the $3,000 per month end. over 50% of those we have not seen before with the brand so we're conquesting a target group and engaging them with a brand that do not want to commit for three year lease and go month by month and are willing to spend for that. >> subscription model. it is the hot topic when it comes to luxury autos. head of porsche north america joining us here. back to you. thank you very much. well big tech is taking a hit. tesla hurt and amazon targeted by the president, facebook targeted by everybody and for a change apple is under the radar. but barely up next, we'll talk to an analyst who is worried about iphone sales street talk is coming up
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i'm really grateful that usaa was able to take care of my family while i was overseas serving. it was my very first car accident. we were hit from behind. i called usaa and the first thing they asked was 'are you ok?' they always thank you for your service, which is nice because as a spouse you serve too. we're the hayles and we're usaa members for life. see how much you could save with usaa by bundling your auto and home insurance. get a quote today. tim cook is making headlines. josh lipton is in chicago with the details. >> bill, so we're here at lane tech high school in chicago. now recode's kara swisher and msnbc chris hayes sat down with an interview with apple ceo tim cook some of the highlights, facebook and the data scandal did come up
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and he said we've never believed such detail profiles of people should exist and regulation could have unexpected consequences but i think we are now beyond that, cook said he called privacy a human right and said, listen, we could make a lot of money if we treated customers like our products but we've elected not to do that and then he was asked pointedly, if you were mark zuckerberg and what you would do. he said i would not be in that situation. apple talking about its new campus apparently it is geared toward technical support for customers. cook saying it is not in california he went on to say we're not doing a beauty contest for where that campus will be. if states want to compete, god bless them but we don't want to create that kind of contest. and they are a not so subtle jab at amazon. back to you. >> it seems like hes would throwing shade at facebook
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during this interview. he was asked what would you do if you were mark zuckerberg and his response was like drop mic moment >> it was one of the bigger moments in the interview we are talking about apple and it makes money selling hardware and not in the business of selling data to advertiser, that is a point that cook feels should be hammered home to traders and investors and business peel. >> i would not be in that position josh lipton. and now time for street talk and it is about apple. goldman sachs slashing estimate and rbs lowering the shipment reducing the target from 2 pot 03 to 2.50 and we have amy. and it was doubting the replacement cycle. it seems like you're saying this is just a reduction in inventory ahead of a new phone launch. are you worried about demand at all? >> listen, you reduce demand is
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not that great so part of this -- by no means i'll deny the fact that we are a more sluggish on the hard iphone x and they will curtail inventory more aggressively into the new product launches so we do think the combination results in softer numbers from margin and from a headline revenue perspective. >> why do you think demand is weak is it the phone itself or -- are people replacing -- remember not too long ago before we were focused on facebook, we were worried about apple -- throttling down the speed for battery life and now there are lawsuits but that could have elongating the cycle and analysts poo-pooed that motion but are we seeing that play out now? >> it is very hard to quantitify that premise but i do think there is a lot to that in all of the surveys over the years, the two people want to buy a new iphone is the battery
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life has gone down or they want a new screen and the battery fiasco addressed that pretty well so that along with the fact that as great as the iphone x is the price point might be high to impede the replacement cycle so between the pricing and the battery issue is causing demand sofness here. >> and i think it is a significant -- that they are going after the education mark they used to own education back in the daand there is a whole generation who grew up on apple and now there is a whole generation that hasn't because they haven't had the education market and they've gotten their heads turn by samsung and other device makers and not the sticky users to the apple eco-system that the previous generation was. how significant that they are getting back to education and what do you think that will do >> it is a great question. it was a hallmark and always the
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part of apple very stable and sticky today -- or half the devices used in classrooms k-8 are chrome books and not apple so they've lost a lot of market share. i do think the new price point is the icloud should help but this is a beach head for them. the kid that -- the apple device grows up to hopefully buy the iphone and macbook and if they have to give up margins, so be it in that space. >> if their increased scrutiny in facebook and -- does that help apple we heard tim docook saying ther should be for regulation privacy and in the end is that a good thing for apple? >> from an investment dollar perspective, stock bases, this is a good thing for apple. they're product is very simplicity the iphone and not to the consumer so i think it makes sense.
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now data privacy, if you go down that rabbit hole it is hard in terms of how do -- is my data out there in america more protected than the person living in china i think you get into a bad rabbit hole if you go down this hole with any of them. >> and i'm surprised it is brought up by apple and so many times because then you obviously have this tough compare on around the world. >> thank you. so on wall street, nasdaq struggling and had to been down more than 100 points and now lower by 38. the rising threat of regulation a factor you just heard us talking about at wh is the right regulation or facebook and google and the represent of the big tech. we'll debate it here next on "power lunch." f the world. but to us, f the world. it's the pace of tomorrow. with ingenuity, technologies, and markets expertise
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hello, i'm sue herrera here is your cnbc news update nbc news reporting that fbi investigators now say they can link suspicious package sent to a mail facility in washington, d.c. to other packages sent to intelligence and military
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installations this week. there were no injuries reported but one person was arrested on monday night. protesters gathering outside of the supreme court as the justices take another look at partisan gerrymandering. this time the challenge is brought by republicans in maryland it is the second redistricting case of this term. poland has agreed to a multi-billion dollar deal to buy missiles from raytheon the deal signed in warsaw. the $4.75 billion agreement is the largest in poland history. and here at home, the cinderella team in the ncaa basketball tournament departing for the final four in san antonio. 11th seat loyola chicago making the first appearance in the tournament since 1985 and for appearance in the final four since 1963 when it won it all. that is the news update this hour bill, i know what you are watching this weekend. >> absolutely. it is going to be a great final four this weekend.
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>> it is. >> looking forward to it >> see you later. another volatile day of trading in the markets a number of big tech stocks on move seema mody is at the nasdaq market site. what is going on there. >> tech is certainly dominating the market discussion here at the nasdaq technology accounts for over 50% of the nasdaq 100 versus the 25% weight in the s&p 500. that largely explains why the nasdaq has been ubd performing the broader market and the nasdaq has moved 2% in four trading sessions, we're down about half a percent right now. led by netflix down another 4% after losing 6% yesterday. it is the worse daily performance. and amazon is down and the white house is evaluating the company including the tax practices. and look at the performance of the stock for the year netflix and amazon are still higher -- that is not the case for apple.
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the tech selloff has gone global treasury department is reportedly developing plans to identify the technology sectors that chinese companies would be banned from investing in it is been cited that semi c conductors and others but chinese tech names that fuel the emerging market last year are down across the board. >> 10 cents off, more than 4% there. thank you. so seema highlighted big tech leaders are facing mounting pressure from the u.s. and lawmakers among -- about allegations of improper data collection with louder cries for more regulatory oversight so what would a crackdown look like how long would it take who would oversee it and answers from tony frado with hamilton places strategies and ron roddy and good to have you here ryan, let me start with you. should there be more regulation on a company like facebook and
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what would it look like? >> well there are already lots of factar yoz th-- factors thatd the companies accountable, from the state attorney general, shareholders, there is a push for regulatory crackdown it could involve new legislation that restricts the data collection practices of big companies. i think that would be a very bad approach it would not only entrench existingin couple ben existing -- incumbents and pay for services that we get for fr free. >> and i see in the notes they are not allowed to deceive the customers and break their agreements, or infringe copyrights or commit crime. >> it sounds like the ten commandments. >> and those have been prohibited but just not enforced. >> it is a question of how y youen -- enforce it.
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those are all principles that are broadly applied to a whole range of businesses, whether they are internet companies or not. and it is good standard for how you do public policy regulation when you are trying to get the best results it is really la-- hard to say wa you want to regulate here. is it the collection of the content, is it how it is shared or who is sharing it and until we get there and decide what is the what that we're trying to -- it is hard to come up with the who. and about a hundred years ago the guys in the building behind me, they regulated commodities and put that under the purview of the agriculture committee in the house and senate and today these are the most enormous multi-trillion dollars derivatives markets that are still stuck in that -- the agriculture committees for over sight. >> there could be mistakes and let's highlight, to the degree of a conflict of interest
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and you represent the internet association and the computer and internet association that are against new regulation. >> and other individual companies too. of course. i wouldn't say against them. they all have different views on what regulation should be. i think -- >> i just wanted to highlight the potential where you might be speaking from. >> of course. >> ryan, aren't we all just a little bit clod reins in classa planka when we say how shocked we are that the information facebook has on us come on, we know that the internet has information and the data hacks and the interventions for retailers are out there and why are we so shocked by what facebook has didn't doing with the data >> it is interesting that some people are surprised this is information that facebook is surreptitiously correcting information that we share. when we click a like button, that is sharing information not just with facebook but with your friends. who plight in attorn-- who mighh
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third parties an this is a business model and popular breeches that you mentioned, we haven't seen any huge ones in the tech sector like equifax and target, it is the older companies that are struggled with data security it is hard to get perfect data security but in general there are a lot of in sentives for tech companies to work hard to keep data secure and there are limits like when they have to hand it over to government which can compel them to do so in some cases. >> and tony is there a will to put regulation in place or is this just a dog and pony situation when they trot out the ceos on the hill in the next few weeks. republicans might not like liberal silicon valley but at same time they are not for increased regulation of any industry, are they >> i think that is -- that is right. i think we always love the political theater of these hearings in washington i expect that we're going to get
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some political theater out of that -- and we'll get the opportunity for a lot of members to express themselves. and in this moment it might be popular to take some shots at these businesses, but at the same time i think these businesses -- as ryan said, at the end of day, they're going to be responsive to their customers. and if their customers are demanding more control over privacy, we saw that with facebook rolling out today and more controls and easier access to controls than before and they are being responsive to customers and so i think you're going to see them deliver that message to the hill. >> we spoke with wilber ross the other day about whether or not to regulate facebook and he was advocating a wait and see. thank very much. meantime, tesla shares hitting the skids. losing nearly a quarter of the value in the past month. is it only the beginning
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and to tyler mathisen at the sta cnbc with the healthy conference coming up. >> i'm here at healthy returns when ch is an exploration of in vestable and actionable ideas in medical science, health care and the like we're learning about some break-through temperatures and we' -- break-through treatments and now the stock is up 1%r erbos over the last year, that and more when "power lunch" returns. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
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medicine that is almost ready for market, right? >> that is correct. >> and it will be the only one to treat postpartum depression. >> that is correct thank you for having me today. so our first drug is called brexanale onto be the treatment for postpartum depression. it is submitted with a new drug application this half of the year and hopefully on the market in 2019. >> it has gone through all of the tests and passed and now you apply to bring it to the market. how does it work simply put >> we had a theory one of the things at our company and like many biotech companies we had an operational theory that we tested in humans and we thought there was evidence that during the postpartum period when women give child birth there is an imbalance of the chemicals of the brain and we believe this corrects that rapidly and acutely and what we saw was after two and a half days of a intravenous therapy,
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70% of the women had a complete remission of the the postpartum depression. >> how much will it cost and pricing an issue and we understand that access to medicine is very important social issue but you have to balance that with the fact that we are funded by private investors and they expect a return and that is a balance to pay attention to we think this drug will be very effective, and think it will make a big difference and price it for a value but price it fairly. >> let's talk about the other medicines that you have in development. not so far from maybe reaching the market and these would be -- your zone is depression. >> that is correct. >> you are a happy guy for a guy who is spending his life -- tell us about those two medication and how far along they are. >> our company was founded on large unmet medical team and we have a great team of people and great scientists so it is a d--a team effort and even though the ceo is out there there is a big team of people
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that do great work when we started the company, we said let's not focus on the low incidence diseases but look at things that might make a difference or change the way medicine is treated. and we were fortunate in developing drugs that looked very active not only in postpartum depression bu partum depression and the oral molecule which have had strong results in the first stages of testing in depressive disorder if that drug replicates fining it could be important. >> if this first drug comes to market -- what is that going to do for you, to the culture you're small, growing. this will be a transformational moment. >> it will be. i think we come to this point rapidly. our first patient was dosed with post partum depression three years ago and we completed our trials ahead of bigger companies operating in this space. there is always animportant inflection point for a company
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as we prepare for commercialization. we brought on a great commercial team for the launch. what this does for the company is really create a platform for further innovation we want to change the way -- >> you're going to plow back into more r & d on more drugs? >> we like the science we're doing. >> jeff, thank you very much >> thank you for having me. >> jeff jonas, sage therapeutics melissa, back to you. >> thank you, ty is tesla going to face a cash crunch? the stock is taking a big hit today down 7.5%. "power lunch" will be back (daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week (malo hutson) growth is good, but when it starts impacting our quality of air and quality of life, that's a problem. so forward-thinking cities like sacramento are investing in streets that are smarter and greener.
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tesla taking a tumble again. the stock has sunk more than 15% since yesterday. the ntsb is investigating a fatal model x crash that occurred and the lead analyst downgraded their credit rating further into junk territory. bruce clark joins us now great to have you with us. >> great >> the significant shortfall in the production rate of the model 3, the latest rate we have is about 24, 25 model threes during the fourth quarter of 2017 when tesla reports deliveries
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next week if there is upside to the number are you poised to upgrade the rating and conversely if there is down side to the number would you downgrade it further >> okay. i don't think there is a lot of upside from the rating right now if they exceed the 2500 by a little bit that 2500 unit run rate is still significantly below where we thought the company was going to be, where they thought they were going to be. conversely, if they are significantly below the 2500, that's a negative sign because the company's got a relatively large cash burn right now. they have to go back to the capital markets whether it's equity, debt or converts they have to go back to the capital markets, raise a significant amount of debt to help cover that and prepare themselves for 1.2 billion dollars in maturities of convertible bonds. not a lot of upside in the near term they've got to hit that number
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but there could be down -- i think that's an important number to hit to show they can make the vehicles also importantly to show the capital markets that they can deliver. >> right. >> i think it will be an important number for the capital markets. >> bruce, maybe this is a question you can't answer, but none of this is surprising, right? i mean, the last time they did a capital raise a lot of people said, well, they have to do another one because the cash burn rate is strong. and in addition you're already in junk territory, right this is just deeper into junk territory. i wonder why you think we see the markets, the equity markets responding so negatively today in particular to this downgrade. is there something new besides this >> well, i've got to be careful. i don't know why the equity market would be doing that you can see there is anxiety -- rising anxiety, i think, about whether or not tesla can actually stand and deliver on
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this point i don't know what specific information or points the equity market might be looking at this is clearly a critical time. we are getting close to the point where they have to make that announcement. as you get closer to these inflection points, the volatility, anxiety obviously could go up. >> sure. bruce, we've got to leave it there. we appreciate your time. bruce clark, moody's investor service. >> recognizing your face, knowing everything you have ever clicked, every ad, a list of every contact in your phone book and that's just the tip of the iceberg. cnbc takes a look at what facebook knows about you you're going to be shocked. >> shocked, i tell you
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with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. if you are just joining us,welcome to "power lunch." i'm melissa lee. apple, amazon and google make up 10% of the s&p 500 just three companies having a huge influence on the markets. what happens if they continue to roll over? facebook fallout we take a deep dive to see how much data and what kind of data facebook collects on users like you. the results will shock you we'll show you how you can change it. fast and furious
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a carbon fiber body, 1500 horsepower and a multi-million dollar price tag inside the new bugati chiron live from the auto show. welcome. a ride in the markets today, especially the nasdaq. the first four hours of trading, it's seen five intraday swings of 1% or more. now it's lower by about 15 points that's a decline of a quarter of a percent. calm at the moment the dow is up by 92 points s&p higher by 3.5. the top performers are verizon, merck and walmart. higher between one and three quarters and two and a half percent. bank stocks in focus amazon and netflix are in the red, lower by 4% but alphabet and facebook are seeing a turnaround intrasession
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tesla continues to fall on its credit concerns. the stock is down 18% in the pastweek in addition -- including the almost 8% today. two big earnings movers today. lululemon and restoration hardware on big results. restoration hardware higher by 22%. bill >> here's what else is happening this hour. ek equifax has a new ceo. mark begor will take over next month. the former ceo stepped down last year after a breach scandal there. tim cook believes the new corporate tax structure will be good for business. he added it is not true the new iphone isn't built in the u.s. mortgage applications rose by 4.8% last week led by refinancings the 30-year fixed rate mortgage is up to 4.69%
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before we get to the markets we are waiting for the white house press briefing reports that sarah huckabee sands may address the president's stance on amazon after reports that he's considering regulation on the retail giant melissa? >> it is another day of temperamental markets. bob pisani and mike santoli are at the new york stock exchange is this technical or fundamental reasons? >> well, in february it was a combination of fundamentals and technicals this is definitely fundamentals. it started with trade wars and tariffs but now it's technology and earnings around technology we have a social media crisis with facebook that's spilling to other social media and potentially even alphabet/google could be affected. you have issues with driverless cars, investigations going on. this is all pretty fundamental.
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>> definitely. it definitely affects what investors will pay for the companies. the companies that by acclimation would be delivering the future very soon i think it's a matter of the valuation premium was significant with large cap tech stocks yesterday it seemed like a slippery, sloppy rotation. today, slightly more orderly it's still apprehensive. >> part of the problem is how big the tech group is. 25% of the s&p is technology stocks one reason this happened is they have the earnings growth this quarter alone 25% earnings growth for the technology group. most of the rest of the s&p sectors are in the low teens if you get some threat, any threat -- and these are threats -- to the earnings growth the momentum guys will get out. we are getting this crazy volatility, sloppy trading everyone is having a hard time figuring how big is the hit to earnings >> barely above friday lows.
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it's a little bit of a tense situation. people aren't sure if there will be that many more sellers pressing the lower end of the range. >> melissa >> well, bill, i said that it certainly doesn't help that it is a short holiday week and it's the end of the quarter that has to play a role, too. >> hard to handicap how that's playing into it. it is an unusual circumstance that the quarter ends ahead of the three-day weekend. you have an early easter and all the rest a lot of activity gets out of the way in the days before the end of the quarter maybe that's why today's market is calmer. i don't know. >> we are down two months. february and march were down we haven't had it in a couple of years. this is the first down quarter in the s&p i think in nine quarters a lot of minor records are falling by the wayside >> let's talk about that thank you, guys. >> santoli and pisani, italian
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contingent volatile today as stocks move between gains and losses one of the concerns is the london interbank offered rate or libor. it's been rising sharply let's bring in ron ansana. good to have you here. allow me to belabor the explanation of libor if we can bring up a chart which i think of as an overnight rate when a bank wants to lend to another. short-term it's been going up and people worry when it goes up because it is seen as worry about bank credit risk. this is a three-month chart. i want to bring up a ten-year chart. yes, it's been rising. when the world was freaked out back in 2008 it was way, way higher still, this chart shows you it's been rising lately ron, are you worried >> i'm worried in the sense that
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these are the indicators you look at when you don't know if something is wrong in the market and someone else does. somewhere out there an inexplicable item they come to our attention in the future. you see it with funding pressures whether it's libor fed rates are 1.7% kathy jones with charles schwab points out fed funds are now above the inflation rate for the first time since the crisis so the fed is tielgtenning monetary policy -- tightening monetary policy. this is when you see the potential for strains in the credit markets when you see the moves that are somewhat sudden and steep it gets your attention. >> we were talking about tesla's credit issues. everybody has known they will need money, but at some point the market just starts to roll over on their thoughts about whether or not this company can do it. are you seeing signs within the credit markets like this libor
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situation or anywhere else that makes you worry about the equity market >> i guess overall if you look at the combination of a variety of indicators, financial conditions are still relatively easy in the u.s. very easy. i'm not sure things are tightening much. certainly they have ticked higher, but in general a ten minus two year treasury spread has been affected by monetary policy central banks tried to push down longer term rates. they did it. now libor is being affected by fiscal policy. you have the effects of the tax reform temporarily pushing libo higher i'm not sure when you take it in the entirety the world is rolling over certainly it's something to watch. in general things around the globe are still very easy. on the last comment about fed funds minus cpi rate if you look historically and maybe this time is different you have 23 points differential between fed funds and cpi to the positive.
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if you look historically, typically it doesn't stop until 3% you still have quite a bit of room before the fed becomes tight. >> there is a key question because what we don't know coming off zero is the level of fed funds rate that puts incremental stress on a system which is now from a fiscal perspective highly levered and when you look at the yield curve flattening or inverting we are 48, 49 ticks now that's the lowest we have seen this year and almost the lowest in 52 weeks. the yield curve is flattening as well another sign the global economy has peaked and begun to slow down. >> are you worried there are so many technical reasons as to why we are seeing libor rise in six months, nine, a year are you worried about $350 trillion in assets >> yeah, of course any time you see -- >> what if there's a technical
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reason libor is going up and that could abate in the coming months. >> that's the question does the fed let up? do a host of things happen that keep u.s. borrowing costs from going up exponentially if you have fed funds to where they were historically the u.s. would have a trillion dollars in annual debt service in a matter of years that becomes an issue if the rates continue to rise or just get spiky based on potential dislocations of the global credit market. >> are we witnessing some -- the unwinding of the great experiment the fed has been going through for the past decade here? an unprecedented experiment. we don't know what the market responses will be as they continue to unwind this thing, right? >> i guess so. on the fed, one important thing to nail home is the ten minus two year treasury fell eight and a half basis points to the positive the fed backed away because they didn't want to cause a recession. we didn't have one for seven
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years. all the while it stayed in the range of 0 to 50 basis points. it's doing what it usually does which is flatten as the fed tightens i don't believe 49 basis points should be causing much alarm yet. i believe we are on the opposite side of trade where central banks around the world are beginning to tighten. >> right. >> i believe the fed put exists. i don't believe they want to cause the cycle to end any time soon if i look at the economy, things still look good. >> they do just one historical note 1994 we had the mexican peso crisis, the bankruptcy of orange county, california on a bad derivative bet it was a flat year but it was still unnerving. >> good to have you. >> thank you >> the pictures out of china confirming the high level meeting between kim jong-un and president xi jinping is this a signal president
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trump's hard line tactics are working against korea and will lead to a deal joining us, the senior fellow and director of the center on peace and liberty at the independent institute, ivan fellow thanks for joining us. we may be going to the white house. excuse me one second we have to go to the press briefing to hear sarah sanders and if she addresses the president's ideas on amazon. >> -- went into effect in 2012 the u.s. trade deficit increased by 70% from 6.3 billion to 10.7 billion. through negotiations the u.s. trade representative secured changes to reduce the trade deficit and ensure chorus is a good deal of prosperity and the security of the american people. this is a big deal for the american automotive industry, a big deal for our parts manufacturers, a big deal for our pharmaceutical companies and a big deal and a major win for american workers and american
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businesses continuing on the economic front, the fourth quarter gdp numbers were up to 2.9%. this reflected strong consumer spending at the end of the year and increased investments from american businesses. according to market watch hiring is strong, unemployment is low recent tax cuts are putting more money in people's pockets. accordingly the u.s. is likely to grow even faster this year than in 2017 the council of economic advisers released a report on the economic benefits of expanded infrastructure investment estimating that the president's plan would deliver employment gains and increased gdp growth with that in mind the president will be traveling tomorrow to richfield, ohio, to deliver remarks on his infrastructure initiative before an audience of local workers. the remarks will be at a training site for members of the international union of operating engineers, local 18, a diversified trade union representing heavy equipment operators, mechanics and
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surveyors in the construction industry and stationary engineers who work in operations and maintenance in building and industrial complexes following on the success of tax reform, infrastructure is the next piece of the president's successful economic agenda these workers represent the hard-working americans across the country who will participate in the rebuilding of our nation's infrastructure sparked from the president's vision and it will definitely be worth tuning in to see the president lay out the vision with that i'll take your questions. >> are pardons on the table for anyone in the russia probe >> i would refer you back to the statement from ty cobb and the report that you are asking about in which he said i have only been asked about pardons by the press and have routinely responded on the record that no pardons are under discussion or consideration at the white house. >> can you say unequivocally no one here has discussed pardons in this case >> i can say ty cobb is the
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person that would be most directly involved in this. he's got a statement on the record saying there is no discussion and no consideration of those at this time at the white house. >> is the white house worried what michael flynn or paul manafort might tell special counsel robert mueller >> as we have said pretty much every day because you guys ask this every day, there was no collusion. >> all right we are going to step aside from there. we were hoping to hear the president's thoughts on amazon it may come up we heard there are reports hes wants to go after the tax benefits amazon enjoys these days we'll get back to it in a little bit. first of all, sarah sanders alluded to the trade deals they are putting together now ivan is back with us we saw pictures of kim jong-un with president xi in china do you see it as real progress in trying to denuclearize the
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korean peninsula or should we be skeptical still? >> this is a major message to both the south koreans and especially president trump that china mended fences with north korea. they had a lot of tension over the north korean nuclear missile programs china was not happy with north korea. apparently they have mended fences in advance of this meeting that trump will have with kim i think there is a telling comment. china is sending a message i think. it said president xi of china said their friendship with north korea was a strategic decision and that we continue under any circumstances. >> right. >> so i think they are worried there will be a war. i think they are giving us a message that they'll back north korea. >> north korea promised to denuclearized in the past but it's not come to anything. do you think that's possible
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this time around and does this event suggest that china is just not going to help us when it comes to north korea as the president has wanted xi jinping to do? >> it seems less likely. china is worried that with bolten in there as national security adviser and he's a hawk, these talks, this is what you need to do or we'll attack you. that's what the chinese are worried about. trump raised the stakes so high with this meeting, if that fails what's the alternative that's what you get when you do things like this i think china is probably saying, well -- and they have already made an explicit statement in the past that if north korea misbehaves china won't back them. if the united states just attacks unilaterally north korea china will back them of course china is a nuclear power. they do have missiles that can
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hit the united states for sure >> the chess game continues. ivan elan, thanks for joining us. >> thank you here's what's coming up on "power lunch." just how much does google and facebook know about you? the answer is probably almost everything we'll tell you what data gets collected and what you can do about it ceo of bugatti joins us with a look at the latest $3 millio chiron aka, the most expensive production car in the world. plus, have the so-called fang stocked lt ostheir bite what does that mean for the market you know what they say about the early bird... he gets the best deal on the perfect hotel by using tripadvisor! that's because tripadvisor lets you start your trip on the
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now you can get it, too. welcome to the party. welcome back to "power lunch. we learned facebook is storing a lot of data about you. do you know how much there is a way to find out exactly how much facebook knows about you. todd hazelton, the tech product editor for cnbc has been digging. what did you find? >> a lot we were able to download an old archive of everything facebook has including facial recognition, where we have been, posts that we once posted more than ten years ago, events, all kinds of things. >> let's walk through. >> i will walk you through three of them. the first is advertisers and the advertisers that have your contact information. this is really important hopefully we can show this this is my personal account. air bnb, spotify, chris stapleton, an american
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singer/songwriter. >> they know where you live. >> they have your profile so they have your e-mail, phone numbers. target, safeway, albertsons. >> canada. >> things that don't make sense. that was surprising here things i have never heard of tom thumb. best crowd funding videos. i don't know who owns that they have my contact information. in a minute i will show you how to find out as well. next we have events. events i aten tentttended or wad to back to 2006. march on lehigh when i was at lehigh university 11 years ago. >> amazing and frightening. >> pages of data in order to get rid of it you have to delete all of this manually one thing i noticed is facebook, you give it a little bit every now and then but the big picture here is scarier.
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once you look at everything it has on me for 11 years it's frightening. >> in terms of locations they know where you have been. >> that's next locations. one day i drove home from the beach. you will see it plotted my course moving from the shore all the way back to my home in jersey city. i wasn't opening facebook the whole time this is location data it collects. >> because you turned on location services within the app? >> exactly it collects the data and has it for years. i think this was 2014. i had forgotten about it. >> if they had events from 2006 they could probably track your whereabouts way back when. >> way back when they started tracking it's all there. really interesting and frightening. turn off those services. in a moment i will tell you more about how to do that. >> how do you find out exactly what you did in terms of finding out what data they have and how do you get rid of it
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>> the second part of the question is difficult. the first part is easy go to facebook.com/settings. here it is this is my page. go to the settings menu. on the bottom, there is an option to download a copy of your facebook data this is what will show you everything that you have posted, all the contacts you have. random phone numbers you may not remember they were uploaded from your phone whether you wanted them to or not a lot of information second, you want to go to the top of the page. there is a drop down menu. select activity log. on the left-hand side of the page click more to find your location history these are maps this is as recent as march 7 i turned it off since realizing that you can zoom in to the map down to street level and see exactly where i was. you can see other things like -- this is a good example
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you can also go and see every video you have watched going back your entire span of facebook. >> if you like cat videos it knows you watched a hundred of them. >> you can see all of them go to facebook.com/settings to go through the data. go to your activity log. >> can you delete this >> that's the problem. you can't. >> you can only know what they know >> you could go through and delete everything manually if you want to delete every picture, every post. now what facebook announced today is soon you can delete everything in a more effective way. that's rolling out over the next couple of weeks. hopefully soon. >> in the meantime this would be a fascinating exercise for people out there todd, thank you very much. >> thank you for having me, melissa. >> i feel closer to you, todd. >> so does america. >> right by the way, the bugatti chiron is the most expensive
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production car in the world. what does the multi-million dollar price tag get you well, for starters how about 0 to 186 in less than 15 seconds robert frank talked to the ceo of bugatti about the super fast super expensive sports car i'll bet you have already tested the 0 to 186 yes? >> reporter: not to the 186. i did test drive the chiron. it's a crazy car it's 1500 horsepower this is the most expensive production car in the world. this is the sport version starting at $3.3 million despite the price demand is so strong that right now the backlog is three years if you order the car today you have to wait for 2021 to get one. one big problem could be tariffs. the cars are made in france. they cost so much that a 20% tariff or 25% tariff could add over $700,000 to the price
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we asked the ceo stephen wingelman about the impact it could have. >> we are for free trade for the car industry in general. we have long lifecycles, investments are high it's important to keep it safe butwe strongly believe that th politicians are going to sort it out. >> we can only hope. a big mystery is how fast this car will go. it is limited by technology to 261 miles per hour it can go faster bugatti originally launched this car saying they would do an official speed test this year. now they are being more coy. let's hear what stephan had to say. >> i have a lot of things on my plate. to set a speed record isn't my priority we have a lot of things to do.
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>> guys, he said the number one market for the car is the u.s. europe also super strong japan is the largest market for the car in asia. interestingly he said, again, despite the price the start price is $3 million. the average sale price is $3.5 and the average bugatti owner owns 84 cars >> what? >> maybe tariffs won't make a big difference >> really? 84 cars. all our jaws dropped that's the average. >> what's the average price of those cars >> of those 84 cars. like a couple chevys in there? >> got a simca >> i don't think he can hear us. >> we lost robert. >> thanks, robert. >> or he doesn't want to play. >> thanks, guys. >> you want more super expensive fast cars, tune in tonight to secret lives of the super rich robert tours the lambo lounge tonight at 10:30 eastern time
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and pacific on cnbc. >> where do you put 84 cars? >> in big garages. >> we have breaking news, too. >> breaking news on amazon they finally talked about it at the white house. >> sarah huckabee sanders pushed back against report that is the white house is considering weighing in on the debate over whether on line retailers like amazon should pay on line sales tax. >> we have no announcements and no specific policies or actions that we are currently pushing for or considering taking. the president said many times before he's always looking to create a level playing field for all businesses this is no different he's going to look at different ways but there aren't specific policies on the table at this time >> nothing specific at this time, but treasury secretary steven mnuchin said in february the president strongly supports an on line sales tax there was an effort on the hill
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to address the issue in that big government spending bill that just passed. that effort didn't go anywhere we'll see if the white house does come out with language on the on line sales tax. back to you. >> there is a lot of suspension that the reason the president is so interested in this issue is because of jeff bezos owning the washington post. >> she says smiling. >> maybe there is a beef there between the president and jeff bezos. at least in this press conference sanders didn't address it >> don't we have a president that's supposed to like business, be promoting business, not trying to rein in business and harness them with more taxes and things what am i missing here >> perhaps a business that doesn't own a newspaper that's been highly critical of the president. >> i understand. >> maybe that's part of it there does appear to be a personal vendetta there. >> time warner announced whether
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or not it's because of the president's beef with cnn. >> right there are many signs -- sides the issue. some say it's not fair, the retailers should be required to pay on line sales tax. there is the issue of the supreme court case coming up next month that could dramatically change the landscape for individual retailers. there is some discussion of trying to solve the problem before the supreme court takes acti action they want to solve it legislatively so you don't have 50 different rules across the country. >> thank you well, the white house was responding to a report that mentioned the president's obsession with amazon. we'll speak to the writer's article ahead. and amazon isn't the only f.a.n.g. stock in trouble. netflix, facebook, google all falling this month one analyst says silicon valley
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hello, everyone. here's your cnbc news update at
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this hour. so mali police say at least three people were wounded after a car bomb exploded near a red cross office in mogadishu. one of the victims is in critical condition while the other two received minor injuries georgia giving its final farewell to zell miller, the former u.s. senator that gave them hope. the state funeral was held in the state capitol rotunda. he's best known for launching the hope scholarship. a proposed bill would make it illegal for employers in new york city to make employees respond to e-mails after work hours. it would fine employers at companies with ten or more employees. the legislation doesn't apply to government workers so any dropping the price of the playstation v.r. $100. it will now be $299.99 it takes effect tomorrow more than 2 million units have been sold. it wants more gamers to get in on the action at a greater value. of course it does.
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that's the news update this hour melissa, back to you. >> thank you, sue. the oil market is closing for the day. let's get to the cnbc commodity desk. >> crude oil dipping under $64 at one point finishing with a loss of 1.25%. over 64. the inventory report having a role in this estimates were looking for unchanged. u.s. production ticking up slightly over 10.4 million barrels a day. the dollar also being called out as a factor. the dollar index bumping over 90 pushing crude lower. >> got it. thank you. white house press secretary sarah sanders weighing in on reports that president trump may be targeting amazon's tax treatment. >> we have no announcements and no specific policies or actions that we are currently pushing for or considering taking. >> the president said many times before he's always looking to create a level playing field for
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all businesses this is no different he'll look at different ways but there aren't specific policies on the table at this time. >> with us now, jonathan swan of axios. welcome to "power lunch." >> thank you. >> what do you think of what sarah sanders said >> what she says is very careful, carefully worded and accurate they do not have any specific policies they are pushing forward with as of this minute what i reported wasn't that. it was that trump is obsessed with amazon. that's in the words of sources who have spoken with him at length about the company and keeps brings it up when they talk anti-trust law or media mergers. we'll bring up amazon. is there a way to use anti-trust law to crack down on amazon? he talks about making amazon pay their fair share of taxes. that's something he brings up. it's not well formed thoughts.
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he has a deep-seated feeling which has been reinforced by his wealthy friends that amazon is being subsidized by the u.s. postal service he believes amazon is killing brick and mortar retail businesses, grocery stores. >> is this related to the fact that jeff bezos owns "the washington post" which is critical of the president? >> he brings up bezos and views the post as his political weapon that's part of it. >> what happens if sarah sanders says nothing is being considered is he just going to complain in private to friends or are we going to see something when you talk about anti-trust and him saying anti-trust legislation could be used -- harkens to time-warner, at&t and the beef with cnn. >> it's not just his friends he brings it up with staff in oval office meetings repeatedly. again, there are no plans that
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exist currently. that doesn't mean there won't be we shouldn't assume he won't do anything and it is all bluster when he gets fixed on something and amazon is an issue he's fixed on it's a feeling he's held for some time and something he keeps repeating. you never know where it could end up. >> he's really not concerned about facebook but the vice president is concerned about facebook and google what does that say about what could happen to facebook and google >> trump doesn't talk about facebook when you talk to people in close touch with him inside the west wing and people who speak to him often he never mentioned facebook, zuckerberg when we spoke to him last year he said facebook helps me reach my people. he's got positive feelings about it he's not tuned in to the debate about information. he thinks the russia investigation is a hoax. it's not on his radar. trump views business in a very old-fashioned way. he views tangible assets
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he understands tangible assets whether they be physical mail delivery, grocery, bricks and mortar stores and amazon is more of a direct threat to those industries he hears from real estate friends that it's killing them it's much more easy for him to grasp the effect amazon is having >> okay. thanks for weighing in on the story. >> thank you as you know amazon isn't the only tech company under pressure its peers like facebook, netflix and alphabet are all down about 10% in a week and the group is coming off its worst day ever. are the so-called f.a.n.g. stocks getting long in the tooth? joining us the chief strategy officer at gbh insights. when you consider talk about taxation, regulation, government investigations and things, you know, there are those who feel the market is sensing that maybe a golden age is coming to an end
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for the companies. >> it feels like two trains about to collide the f.a.n.g. being one train and the bell way being another the big fear for investors is regulation facebook, we put a fence around that in terms of it's facebook, alphabet, twitter in terms of potential effects there. now with the amazon -- which has been building over the past few months it speaks to the risk factors. you're seeing the multiples. it's all about regulation, uncertainty there. right now this is definitely a hand-holding period. it's been a tough ten days for f.a.n.g. names >> this is a market/washington derisking? >> investors are trying to figure out when they wake up tomorrow what's the next news to come out amazon was insulated are
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regulatory issues. we knew the trump u.s. post office issues. now the fact that article further fans the flames whether it's tax structure, anti-trust these f.a.n.g. names continue to be front and center which is a worry for tech investors. >> you wonder if investors are tired of giving companies the benefit of the doubt of eventually delivering -- i mean facebook obviously has delivered on profits, et cetera, et cetera when you look at tesla, i know you don't cover tesla. as it rolls over it feels like one of the big momentum things. >> the promise. >> yes does that tell you about f.a.n.g. >> it takes down the neighborhood it's not just one store. not just on multiples but investors are starting to fear in terms of what you pay for these. one thing that wasn't factored in was a regulatory environment that was going to heighten we said the cambridge situation changed the game. >> does facebook have the same
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data privacy -- i don't know are there the same issues when it comes to the instagram platform i remember you came on "power lunch" the monday after the cambridge story broke. you said it might be noise but they have instagram to monetize. if instagram has the same issues in terms of selling data, users can get smart to that and decide they don't want instagram either there goes that lever, that montization that we never really saw and may not fully see. >> in terms of the instagram -- they are rolling out on facebook now. we think it can be rolled out on instagram. from a data, privacy and content out there to a lesser degree there is no doubt right here these coming weeks and months are going to tell you the fork in the road. do we see advertisers roll off the platform do we see user backlash? if it does it starts to taint
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the instagram platform, that would be the straw that broke the camel's back for facebook. if we start to see that, that's a game changer. >> will we hear about it on the conference call when facebook reports? >> i think that obviously goes into testimony in parliament hill -- in april and may >> a heavily streamed conference call that's for sure. dan, thanks for joining us. >> thank you for having me. >> straight ahead we'll take you to the cnbc healthy returns conference we are sitting down with leonard schleifer to talk about lowering drug prices, increasing access notiatients and the strategy for invaon don't move
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the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ the cnbc healthy returns conference is under way in new york city. it's our first ever health care conference bringing together top officials, and ceos to talk about the future of medical care meg? >> thank you so much len, thanks for being here. >> great to be here. >> you had some data on your big
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cholesterol drug and on the heels of positive data you said you would consider lowering the price. what's happened since then have you seen access open up and how far has the price come down? >> right we said there should be a new bargain made we are willing to say our price has to come down to what was called a fair range for the value we delivered if we did that we needed to have access we didn't need 20-page forms, automatic no's, people going into the charts and pasting values we wanted simple, straightforward access for fair pricing. that's the bargain we want to make i'm optimistic. >> are you starting to strike deals with pharmacy benefit managers >> i don't want to give away too much we are working hard and i'm optimistic. >> one of the main topics we have talked about here has been drug pricing, of course. it's a focus of the trump administration your stock down about 13% in the
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last three months along with other big bio-techs. do you think it is because of focus on drug pricing? what's driving that? >> i never know what causes the stock to go up or down in the short term we are interested if we get drugs that make a difference to patients the stock will catch up at the end that's what we focus on. however, i do think there are some structural issues that we have to deal with in a society the drug companies have to do their side they have to be willing to come up with fair prices. we can't forget we need incentives remember, people talk about the first amendment, second amendment, fourth amendment. in the body of the constitution, congress has the right to grant patents in order to promote useful arts and sciences our founding fathers said we are going to let you benefit from your inventions. if we take away the incentive, we're going to be like russia or any place else we won't develop drugs we need to have the incentive. it's a little bit unfair, to be frank in this discussion about tariffs going on, that the well
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developed, high economies of western europe and elsewhere are getting much, much lower prices and they are not paying for the discoveries and the american consumer is. we have to balance it out. >> this is something the president talked about the prest talked about a lot, america is getting a bad deal and pays so much for the medicines than other countries implying he would look to use trade policies to address that. do you support that idea what do you think he could and should do on that? >> yeah. i'm for fair prices, and i'm not a policy person p, but i can tell you that it's wrong when we go to europe where they have not provided the capital or the entrepreneurs or the researchers or the stock market here, and they are not the consumer paying for this they need to pay more of their fair share they have a single purchaser, and they can price it, that's wrong. >> do you think he should impose
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some kind of tariffs or something like that? can he do something about this >> as i said, i'm not an expert on policy and how to implement that, but end game should be fayer prices across the board. that probably means lower prices in the u.s. and higher prices elsewhere. >> leaving it there for now, thank you for joining us >> thank you >> melissa, myrrh shell, bill, back to you. >> thank you so much >> thank you the semistocks hit over the past week, the etf hitting correction levels today, a buying opportunity or will the semi-slump connutie?
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time for trading nation, look at the semiconductor stocks, etf, falling to a correction amid the selloffs, nvidia and micron all in the red. chad is with the washington crossing advisers. starting with you, are these buys at this point >> well, they've got hit for a couple reasons, because of concerns, obviously, and bitcoin has fallen off the radar they are really a big bitcoin fan as well. but i think when you look at
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fundamentals, the businesses increase by 8% this year, a healthy rise if they come down to 100, that's a strong buy >> you mentioned those factors, but also the self-driving car aspect of it too, i mean, that's why we saw nvidia trade lower yesterday. they increased the total market for autonomous drive chips out to 2035, so they are bullish even though they suspended tests. are there values here and semis thrown out with the bath water >> so let me be very clear here that they do have an exciting future, the exchange trade fund as well as semiconductors. unfortunately, it's fully reflected in the valuation of this group in fact, yesterday, we went overweight value over growth i think that global growth is somewhat going to decelerate and semiconductor group is a great
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barometer for trading global growth, why we hedge the trade in the short run and intermediate run we would be avoiding this. >> all right, boris, chad, thank you for more market insights, go to tradingnation.cnbc.com. check, please is next. and now, the latest from trading nation traders shouldn't let their politics affect their trading. instead, look to the current price trend and build an exit strategy based on where and when the present conditions may change this will help keep your biases at bay as the markets pop and react different than we might expect obvious. sometimes, they just drop in.
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check please is next >> it is >> watching general electric, yesterday fascinating watching it post a gain despite the selloff, and today holding on to the gains surprisingly up by a percent. yesterday, rumors a value invester stepped in. i thought it would fade today. we'll see how it closing interesting one. >> 15-year-old darian owns the snapchat handle carnival cruise, a business decision or something else is going on there, but carnival cruise wants that handle, and they went to his home yesterday and offered him a free cruise worth $5,000 if they give him the snapchat handle first of all, why would he have
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it to begin it, and is $5,000 enough >> i don't know. >> hold out for more, a lot more >> i -- does he own other ones >> i don't know. >> good question >> we'll save that for another check please >> what a tease. thanks for watching, thank you, bill, for joining us >> thank you so much >> "closing bell" starts right now. hi, everybody, live from the new york stock exchange, welcome to the closing bell, i'm kelly evans, and wilfred frost markets still trying to recover from the tech wreck. >> not doing a good job of it. anything happens in the final hour yesterday, of course, a sharp selloff. this is a look where the tech stocks stand now, netflix and amazon, hardest hit, down about 4.5%, and apple weaker by 1%, and facebook and google trying to

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