tv Power Lunch CNBC May 30, 2018 1:00pm-3:00pm EDT
buy that one. >> palo alto continues to move higher and higher. stay long. >> we will appreciate it very much. all right. that does it for us. mike mayo, thank you again for being here big day for the dow. up 281 that does it for us. "power lunch" starts now i'm sarah eisen. well, that didn't last long, the pan over italy's political and debt crisis subsiding. was the fear overblown the trillion dollar race, microsoft hitting a new all-time high that stock up 15% this year, overtaking alphabet in terms of market cap for the first time in three years. what is fuelling the forgotten name. and president trump weighing in on the controversial debate over experimental drugs. also tweeting about roseanne getting the ax for the first time, firing back at disney ceo bob iger all the details straight ahead "power lunch" starts now welcome back to punch. >> i'm melissa lee your money making a comeback
from yesterday's big losses. the dow and s&p 500 up for the first time in four days. all three major afternoons on track for their best monthly gain since january take a check on small cap stocks this rallying. russel 2000 hitting a new intraday high. banks boci back. all up about 1% right now. oil rebounding from its recent big losses crude is up about 2% today that is fuelling the energy stocks higher. the etf that tracks them, the xle positive new field, baker hughes, conoco phillips all leading the charge. >>well, everybody i'm tyler mathisen let's tell you about other headlines right now. walmart unveiling a new perk for employees at its annual shareholder meeting. the retail giant subsidizing the cost of cole ebt in an effort to hold on to talent in today's tight labor market.
tesla now says it will recommend the model 3 afterall after tesla made some improvements to meddlesome braking issues. and airline customer satisfaction hitting an all-time high up for a seventh straight year this according to jd power alaska airlines continues to get the best marks among the traditional carriers southwest ranks highest among low cost carriers? >> i'm michelle caruso-cabrera u.s. markets are calmer todayist because italian markets are quieter today. yesterday the debt market cold sold move a cataclysmic way. investors were worried about who will one the government. the worst case scenario out there, italy could have a government that wants to leave the euro wehall see. in the meantime italian markets are calmer because aleast one key politician said they would
work to holding yet another election in july or august still the worst may not be over. the italian treasury borrowed several billion dollars today. good news, they had no trouble doing it bad news, it was higher interest rates compared the just a few weeks ago. >> you know, everybody is watching current sees. here we go again euro the focus of the markets around the world bouncing back on relief from a ten month low hit yesterday. the currency is down 4% for the month. that's huge move in currency land what now analysts say this is more pain here the euro won't recover until the threat of italy leaving the currency is removed. that was a direct quote. meaning if there is no government there is always a
threat of new elections as michelle said could mean a vote in and out or the euro remember greece? the market is betting on the euro here's the positioning up to the beginning of the week. they are long to they are bullish they expect it to get stronger what does that tell us this isn't greece. this isn't a euro crisis yet it also tells us, guys, there is not a lot of love for the u.s. dollar right now people are bearish on our currency haas as president trump slaps tariffs on chinese imports and there is questions about how long the u.s. recovery can last. i thought it was interesting to note >> does it tell us that a lot of people are on the wrong side of the trade at the moment. >> because there have been weeks of euro weakness right now and that short position on dollar has been trimmed as the dollar has been strengthening
with you it also tells us there is not an all out capitulation and there is still a big bet on the euro. >> we are going to look back on yesterday as a day that either made or broke a lot of hedge funds on the street. guaranteed there was a lot of people offsides on the trade, whether it be currencies or interest rates. >> right. >> in fact, let's bring in legendary global investor mark moabious he joins us now. he recently launched his own investment boutique after three decades at franklin tellelton. nice to have you mark? >> thank you. >> i don't want to pick on bill gross but he is one example. we just learned his fund was hit very hard yesterday because he was on the wrong side of a bet where german yields were going, and to sarah's point how many people were long the euro. we don't want to getnto what's going on in the itian government but it raises the question, are we going to see contagion in the markets because
so many people were betting one way and the market is going the other way. what do you think? >> the volatility of all these markets is increasing. not long ago everybody was about itting on a very low volume it the. that's not happening anymore that's going to affect all markets, including emerging market no question about that. >> in terms of the fear that everybody has, is this europe 2011 is this greece 2015? do we know yet are you ready to make that call? >> during the greece crisis everyone said they were going the leave the euro and i said no way. it's just -- the euro is just so beneficial to these countries. that's true of italy as well i don't see that happening the italian voters will not go for it. >> can i ask you a market structure question the move in the italian debt yesterday was so enormous you would have to go back to the earliest days when rutders kept records to see a move like that. and some people are saying do you know what's to blame there
the volker rule, lack of liquidity, that's somebody on your trading desk calling up trying to buy or sell and there isn't somebody out there, there are not as many people making mark out there do you have insight whether or not you think that's true or whether market structure is exacerbating moves. >> the problem now is e etf situation. more and more money is going into exchange traded funds and these funds move in the same direction at the same time so if everybody is heading for the exit, it's getting to be very, very complicated and crowded. i think that's what is happening. >> is that the next looming crisis >> i think it is that's going to be the next big crisis i think a 30% correction in the markets is not unforeseen. i don't think that's going to be a problem. >> a 30% correction in what markets, mark? >> in the u.s. market. >> the u.s. markets? >> i think this is quite possible i'm not predicting it tomorrow or next week
what i'm saying is that the way the structure of the market has now developed, with etfs, when they decide to sell or their computers decide to sell, you are going to see big uks corrections. so we have to be ready for the volatility. >> what does that mean for emerging markets we usually turn to you on that, your area of expertise you said there were potentially opportunities as a result of the selloff we saw sparked by italy? >> no question since the beginning of '16 we have a bull market in emerging markets. now there has been a correction. i believe with the u.s. vulnerable then of course emerging markets will be hit if you look at individual markets there is tremendous growth india is growing at 6%, 7% china is growing at about the same rate. this is tremendous fast growth in these markets and i believe that we are going to see lots of opportunities going down the road. >> are you concerned at all or not concerned at all by the rise of authoritarian governments in many -- many countries in the
emerging market? >> you know, it's interesting, things are going in different directions in different place. malaysia now has had a huge revolution in throwing out the incumbent government that was in power since the beginning of their nation. >> yes a triumph of democracy some would indicate. >> exactly i think you are going to see more and more of that around the world because of the internet. there are 1 billion smart phones being sold every year and people are getting the information. and this is having a tremendous impact. >> mark, in term of the danger of etfs and market structure, do you see this being worse or maybe not an issue in the emerging markets i mean you could see it from either side because the emerging markets' etfs may be limited in the basket of stocks they hold they may not necessarily reflect an entire country but also the liquidity of that country's exchange might not be as deep as the u.s. is it worse? is it the same how would you stack that up? >> i would say it would be
probably a little bit worse because as you mentioned liquidity is not as great as it is in the u.s. market. with lot of etfs in emerging markets you could have a big impact of course that presents opportunities because when you see a big correction then there is a chance to buy so i'm not afraid of it. but i'm saying to people, be ready for that kind of volatility. >> what's your singest best idea, ma, on a particular trade, what would you recommend >> for small markets, i would say vietnam some of the state owned companies that are going to be listed that would be interesting. for the big markets i have to look at india. it has tremendous opportunities. >> ma, thank you for joining us. much appreciates mark moabious, moabious capital partners. how much of an impact will international markets have on u.s. stocks. let's bring in nancy tangler can i get you to react to what mark just said about emerging markets and the risks that he
sees particularly in the etfs in the united states and their ability to move as lemmings. >> one of my biggest concerns, tyler. i believe obviously in active management i am an active manager what krns me is the overweight in particular stocks and then the quick movements. you see these distorted gabs es and losses but more often in the selloffs driven by the algos, which don't think. they are just programmed to move and people move out of the etfs, and then you see outsized moves in large size stocks that you shouldn't, it has no explanation. i'm concerned. two augusts ago we had a huge move and a big distortion where the etfs sold off more than the underlying holdings. i'll concerned about it. >> craig, you are a small cap person are you worried, too, about the power of etfs to distort markets and maybe spawn -- i don't want to say a panic but maybe i do.
>> i am. it's gone to basically where compute remembers running things 80% of the trades on the markets is an algorithm or mindless trade. that's frightening the good news is there are a lot of values in the market. if we ever did see a 30% correction, which is possible -- i don't think that will happen, but there would be some tremendous money made, you know, on the downside. but yeah, active management, i mean it's -- you are a leech if you are in active management these days it's staging a comeback. since october active management has been outperforming and you see -- especially in volatile times. that's when active management pays for itself, if you will >> i think the indexers would say, time will tell. nancy let's turn to technology and what you are doing there with respect to some of the big
names. what are you buying? what are you selling or trimming >> so, we have two strategies. one requires a dividend. one doesn't. i have been talking about old tech for three years >> who is old tech >> cisco, microsoft used to be old tech not anymore. >> hot right now. >> pretty hot. intel. we own aics in we are lightening up on the social media platforms and have been google, facebook, we were early in we are always going to be early out. and i think that the near term head winds are such that there are better places to be. >> what is driving you out of the social media names the headlines that you read? or fear of regulation or what? >> it's valuation first and foremost then those things come into play for sure we have been worried about regulation for a year and a half or so in the space we have taken that money and redeployed it into companies that make stuff, technology companies. >> craig, whether it is a trade war fears or a stronger u.s. dollar, small caps are at record highs for the index.
you have been recommending this group. do you still think there is room fortunate? >> i do. they have lagged for years and the market is trading around 16 -- we make about 3,000 company touches a year here at the hodges funds we are getting great backdrop. we feel like we are in a great environment. tax cuts really haven't even kicked in. repatriation is a big deal lower regulations. we are finding more ideas than we have ever seen. so yh we are very optimistic out sml cap stocks i thinall caps are up around 6 or 7%. and the rest of the market is kind of flat they are really outperforming and they are due, if you will. >> nancy and craig, thank you very much. good the see you both. we are keeping our eye on drug stocks as well today pulling the president trump's comments on the use of experimental drugs dom chu tracking them. >> as we talk about those health care stocks, up just like the rest of the market but we did see some modest reaction to. so of those names as president
trump made remarks during that bill signing allowing terminally ill patients the right to experimental drugs during which he said that you doesn't care about the drug companies, doesn't care about the insurance companies, he just cares about the people, adding that there will be another exciting announcement in the coming weeks on health care, possibly drug companies voluntarily lowering prices we are sparse on details for right now. it wasn't enough to derail the entire rally but the ibb did move a little bit lower on the news as did the xvi. certainly ones to watch there. >> dom chu, thank you. coming up much more from the code conference. there has been a lot of facebook bashing and a lot of talk about the media scandals >> you look at all of this crazy stuff in the news industry -- news and entertainment industry but it look like nobody can keep their pants on it's unbelievable. >> and now the president weighing ion rn oseall ann you have got to hear this. keep your pants on "power lunch" right back
webb to "power lunch." the dow is up more than 300 points right now, this as president trump is responding to the firing of roseanne ayman javers is at the white house with the latest. >> yesterday, sarah sanders the white house press secretary suggested the president was too focused on the military and the economy and other issues of importance of the nation to focus on the firing of roseanne when she was asked about it last night on the way to an event if tennessee. the president didn't touch the
subject in tennessee last night. today he apparently had a wipe of time on his schedule to address it he took the twitter and said bob iger of abc called vallerie jarrett to let her know that abc does not tolerate comments like those made by roseanne bar he never called donald trump to apologize about the horrible statements made and said about me on abc. maybe i just didn't get the call the president seeming to suggest that he wants a call from bob iger to apologize for criticism of him made on abc white house aides not available this afternoon to walk us through exactly what it is that the president wants an apology for, whether he has talked to bob iger about any of this one interesting point of subtext is that bob iger is somebody who flirted with idea of running for president himself this 2020. he recently made public comments suggesting that is no longer on his mind but it was speculated about widely about a year ago. today we will wait and see whether the white house has any
response to this tweet, sarah sanders is briefing the press here this afternoon. we should get a little bit more explanation of what the president's thinking here is what specific statements he wants an apology for >> to joolia boorstin at the code conference where a lot of people are talking about roseanne >> melissa, we reached out to abc and disney about the president's tweet referencing abc. we have not gotten a response back yet 21st century fox ceo james murdoch saying that disney and abc did the right thing by immediately cancelling roseanne. >> i didn't follow the roseanne thing closely. clearly she cross adeline and they decided to be done with it. it is not just about keeping an audience going it's about what is the right thing to do, what's the right thing for your expect, your brand, for your customers and also your colleagues inside the business do you believe in things and do
you not. >> and he noted fox fired billow riley following allegations of sexual harass men. murdoch also talked about the risk whenever anyone tweets. and that they do include guidelines for tweets in contracts. >> one more thing we should point out during roseanne's tweet storm. she made comments toward am beian who responded people of all races religion s work here. racism is not a result of any of our medications. a cheeky remark but well stated. >> i think it was a good marketing move there has been a lot of facebook bashing at code and a lot of talk of regulation what are you hearing >> well, sarah, facebook has certainly been under fire here
at code. james murdoch in that same interview saying that facebook is a platform for manipulation, also taking a dig at facebook's ads saying they mocks myself profitable around their customer's privacy s&p's ceo hammering facebook copying s&p's popular features and for failing to protect users data listen. >> we would appreciate it if they copied our data protection practices also because -- you so, you know. >> speigle saying while facebook has changed its products and its mission that the company is having a hard time changing its dna saying facebook is all about people competing with each other on line. but it's interesting watching how cheryl seasonedberg responded saying they have made big chains >> we have heard that from them. coming up, bill browder is
about to join us he was arrested today in spain we will hear about that incident plus the market is staging a rebound right now after yesterday's big losses dow is higher by 332 points. oil stocks are heeding the way crude is up more than 2% "power lunch" will be right ck welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com
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photo from the back of a police car saying he was there due to a russian warrant. he was released and tweeted a photo of that warrant. he then said that the detainment was the result of russia manipulating interpol channels, the international criminal police organization that helps with arrests in foreign countries. he is safely now back in the united kingdom and joins us on the newsline bill, thanks for calling in. tell us what happened, and explain because the times of london says interpol says there is not and never has been a notice for your arrest et cetera a unclear what's going on here. >> what happened was that at 9:40 a.m., two police officers from the spanish nabl police came to my hotel room in madrid. they asked me for identification i presented the identification they then compared it to the documents they had, and they said, we have a warrant for your arrest from interpol based on a russian request. please follow me, sir. i took my suit cases, followed
them to their police car they put the suit cases in the police car and they asked me for my wallet and my mobile phone. they said you are under arrest, please get in. they put me in the police car. from there, they took me to the station. at that point, they -- i sat at the police station while they contacted interpol and then interpol then called them back and said that they were cancelling the warrant. and so i don't know where -- i mean, i was arrested, and i was released there was no question that i was arrested i couldn't have gone anywhere. and it was all based on a russian warrant. >> you obviously prospect in handcuffs, right, because you were able to tweet out photos? how did you manage that? >> no, i wasn't in handcuffs >> okay. this has happened before, correct? you have been -- there have been a couple of times where there have been issues with russia notifying interpol, you were not able to get a visa to the u.s.
temporarily correct? >> yeah, so the last time in happened was in october of last year shortly after an act was passed in canada which i was responsible for. the russians put me on the interpol list in october that automatically led to a cancellation of my u.s. visa because i am a british citizen it was reinstated by the department of homeland security and a week later interpol took me off their list. i have been on an interpol system six times as a result of russian requests since 2013. and this was the last time it happened. >> you see this purely as retribution for your activities to bring down people around or impede people around mr. putin where are you now? did you have any trouble leaving spain? >> i'm no london, where i live the reason for this is because last week the british government passed the british magnitsky
act. in doing it it creates a hostile environment for putin and his cronies in london. and i'm sure that they are very mad about that i don't know how they found out but they knew i was going to be in spain and they somehow track immediate down in spain and got this organized. >> for shoers who around familiar with that act it is named after your lawyer who died in prison in russia and as a result of it being passed here in the united states by the u.s. congress there are a lot of russians who can no longer get visas to the united states you have been active trying to get that spread the other countries as well. hence why there would be a desired retribution on the part of the leadership of russia against you correct? >> correct. >> is that a good explanation? >> a great explanation you left out one crucial point which is that the magnitsky act is the reason why the russian lawyer veselnitskaya went to trump tower in june of 2016 to
try to repeal the act. it's front and center in putin's mind he hates the act he stated it as the single largest foreign policy priority to repeal it he has been going after me in every different way, trying to have me arrested, sued, doing all sorts of crazy stuff today was an example of that. >> it certainly had ripple effects. bill browder thanks for calling in >> thank you >> check out bitcoin down about -- down today off 40% this year. down 2% right now. rip arel is even worse, losing two thirds of its value this year we will talk to the ceo of relaonip, ittishelco be the next coin to be listed on coin base that's next on "power lunch. whoooo.
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pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. hello, everyone. i'm sue herera here's your cnbc news update for this hr. roseanne bar is part blaming ambien for the racist tweet that led to her show's cancellation but the drug maker pushing back saying racism is not a side
effect of any of our medications. doctors without borders launched an ebola vaccination program in congo where an outbreak there killed 25 people. the charity set up a treatment center in one of the epicenters of the outbreak. greece's largest labor union is staging a general strike against plans to extend austerity measures of it is a 24-hour protest which has halted ferry service to the islands and affected flights and public transplant. president trump's personal lawyer michael cohen leaving his new york city hotel for a courtroom hearing in u.s. district court the judge wood ordering attorneys the finish reviewing the 3.7 million files that were seized from cohen. you are up to day. that's the news update this hour i will send it back to you guys. >> we appreciate that, sue let's check on the rally right now. stocks near or at session highs right now. triple digit gains for the dow as you see, higher by more than
300 points all of the major averages remain on track for believe it or not their best monthly gains since january. small caps higher, too the russel 20 0 hitting new all-time highs three movers right now are kick's sporting goods, soaring on its earnings beat michael kors moving the other way on concerns about struggling ales is a. and exxon shareholders rejecting the idea of splitting the chairman and ceo roles today's move in exxon has more to to about oil's rebound than that it is up 3% right now. >> it has been a volatile year for cryptocurrencies as they face scrutiny from regulators. what does the future look like for the space? let's go to john and the ceo of ripple >> thank you melissa brad, thanks for being here with us i want to start off -- your approach at ripple is different from a lot of the other concludes out there. you are trying to enable
transactions between banks, movement of large amounts of money in a short period of time. what is the latest as far as ripple being able to sign up bank for that vision. >> it's been an incredible 2018 for us we are now signing up more than one bank to a production contract per week. so it's accelerated our 2017 we announced this morning that we signed the largest bank in kuwait, the national bank of kuwait momentum continues to build. the dynamic there is there are network effects. the more participants, the more value in joining we are seeing that momentum build. >> at the same time, a lot of people when they think of cryptocurrencies, they think of bitcoin. you staked out, arguably a different tack on that you are trying to be useful and practical. is the line that you are saying. as i look at the charts, xrp, your currency and bitcoin are moving tightly correlated to one another. what does that do to your story and the ability to sign up institutions like banks for
using this for what they hope will be a stable platform? >> i think that's an important question i think from the earliest days ripple staked out a space that said we are not anti-government. we are not working against the banks. we are not trying to circumstance up vent regulation. instead we are working with the system blockchain can happen from within the system it is not attacking the system there is a lot of correlation between the entire crypto asset mark i think over time as people better understand the different use cases and the utility and the problem that's being solved with these digital assets. there has been a lot of noise and a lot of hype. i think it's important that we stay grounded, what's the real problem? who is the customer? what's the value being created by solving that rob for the customers. >> brad, it's melissa in new jersey does this prove you can be a believer in the blockchain but not the cryptocurrency you signed up a lot of partners
in the financial services industry people are using your platform in order to do transactions, et cetera and yet your cryptocurrency is moving along with bitcoin. over the past two years. xrp is down 19%. so should we look at these two things differently can they be separatible. >> i think over time markets get more and more rational and they understand how things are happening. you are 100% right today there is a high correlation between the price of xrp and the price of bitcoin ultimately, these are independent open source technologies how these trade is different than necessarily how the performance of ripple the company may behave we had a record q 1. we signed up more than 20 production contracts we made a lot of progress yet as you pointed out the price of xrp was down 70% in q 1. i think over time as the utility of the edit assets is better understood you will see markets
understand here's the real problem, here's the demand created by the velocity and usage of the digital assets. i think there is going to be, you know, a bit of a correction along the way here where i think a lot of the players in the space that don't actually solve a real problem are going to get washed out. >> is it clear that xrp has a utility? if you can build your partner and sign up all these partners, and the currency itself is going down is there a circuit de barcelona-catalunya for xrp? i assume you are building a robust business. >> for sure. not surprisingly the utility that we are driving with xrp we are seeing customers like western union, monogram, they are leaning in and using our tools to solve a payments problem this payments problem is measured truly in the trillions of dollars. so -- [ no audio ] -- trading activity.
again, i think that's because it's early over time i think you will see a more and more rational market and behaviors that reflect that. >> how many concludes or platforms of these digital assets will survive in ten years? how would they be distinguished from one another what will your distinguishing trait be. >> i'm going to go back to the utility point and solve -- how is it being used i think say order of magnitude 99% of the different digital assets out thereoday will exist in five years -- they won't exist. they will -- they have been launched -- look, the sec is getting involved, as they should, because there have been frauds committed i think we have been an advocate that the government should get involved and protect investors and companies. but there are examples where there is real utility. the way we are using xrp to solve a payments problem where we are making payments instant, we are making payments certain
today it is amazing i'm leaving for europe later today and the fastest way for me to get money to europe is to fly it there our global financial infrastructure is fundamentally still living in the kind of 40 years ago. ripple is focused on brings these technologies into the modern sendly? as detailed as you can be what needs to happen so that ripple's currency, xrp, and bitcoin get decoupled? it seems like when investors, when institutions came in, they independent could of made almost like the etf effect of putting these things together. and it's being led by bitcoin because it's the bran everybody knows. how do you get to get yourselves valued, your own currency valued separately from that >> i'm going to answer that by going a little bit back in time. not many years ago, two years ago when people thought about bitcoin they thought about digital assets they thought about things like silk road, thought about circumstance up
venting regulators enabling anonymous transactions today we are not talking about those bad actors and we are talking more about the speculative dynamics that is what you are talking about today, the speculators are treating these all as one bucket as we look forward the more demand and velocity we drive into the usage of xrp to solve a multimillion problem that drives the ecosystem. the utility. and we are seeing things doing more and more thing on top of the xrp ecosystem. we think that growth will create a healthy ecosystem and it's good for all participants. >> i have got to ask you the million dollar question, is xrp a commodity or an equity the regulatory uncertainty over whether something is a security or a commodity is the one thing preventing it from being listed
on the coin based platform what are you >> i think it's very clear that xrp is not a security. >> why you sell -- you have been selling tokens, you generate a lot of tokens, xrps and you sold a lot of them to support the business that sound like an ico to me. >> xrp was created before the incorporation of ripple, the company. and a large percentage of those were gifted by those founders to ripple to build out anniko system so xrp today exists independently of ripple the company. if ripple shut down tomorrow the xrp ecosystem would still exist. if you own xrp you don't have rights to the dividends or profits of the company i think of it as a utility 100 years ago the commodity oil had little value along comes the combustion engine that drove demand and product of oil now we have a large and robust
ecosystem around oil as a commodity. what ripple and other companies are doing on the xrp ecosystem, because it is a digital assets it is 1,000 times cheaper than bitcoin, 1,000 times faster than bitcoin per transaction. you are seeing more and more people getting on board to use that to solve various problems. >> when will regulators tell what you their decision is >> i think you have to ask the regulators that question into we are also good at predicting what regulators are going to do we will see how you do at outrunning the hype. brad from ripple, thank you for joining us. gentlemen, thank you it is the beginning of summer a time when a lot of people think maybe i should buy a boat. not me, but i in the general sense. our next guest took that one step further and bought a boat company. the ceo of polaris joins us next on "power lunch.
welcome back to "power lunch" a. deal to tell but the consumer discretionary space, polaris the maker of motorcycles, a, the vs and snow mobiles is buying boat holding an indiana based manufacturer of pontoon boats. shares of polaris are down today but they are up more than 30% over the past year here for a cnbc exclusive is scott wines, ceo and chairman of polaris. congratulations, you are now the market share leader in pontoons. >> we are certainly excited about it it is a great company with a great future. >> are investors excited about it some of the analysts are noting
skepticism around the strategic rationale behind the deal, the price you paid what are you hearing >> you know, i think the analysts and basically anyone other other than those of us at poe layeris and boat holdings haven't had much time to digest it but we have really gotten to know the management team gotten to know the space and how they have grown the business. it is an innovation driven opportunity. they really created the pontoon space and the performance aspects of it. they the customers design the products for themselves. ey tly a great busines thy have expanded the category and we feel like it has a long way to run but they manage their capital so well that even in a downturn they bring in strong financials for us >> how does it make sense in terms of your portfolio. and how is the business doing? camping world has battered, down 50 rz approximate over the last few months r vrks, recreational vehicles. i know it's not apple to apples
but how is that impact you >> it's strongly not apples to apples our performance over the last decade shows how quickly we came out of the downturn and performed. that's one of the other thing we liked about boat holdings. they don't perform as cyclical as the rest are of the both or rv industry. our business is in great shape april weather wasn't awesome but getting into may we are pleased with the momentum and expect that to continue >> yeah, a lot of people see this business as hyper cyclical. really it is a discretionary purchase, all of your products, including the latest acquisition. what do you see going forward in terms of what we can expect from consumers in this economy? >> we are seeing surprising strength in the economy in our consumers for sure consumer sentiment was up this week we are seeing traffic at dealerships at a higher level than it had been previously. that's encouraging if you think about the tax cuts
they didn't benefit those of us on the coast or high tax states but they did benefit most of our consumers. and lower burden regulations is affecting our about where our consumers are. >> scott, thank you for joining us today. >> thank you >> to talk about the acquisitions >> up next, back to the conference to find out what kind of companies google's venture ldn,is investing in. goma jpmorgan bank of america all higher
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gv has 3 $1/2 billion under management more than 350 companies in its portfolio, what areas are they watching that could be the next big thing. jessica, great to are have you with us on power lunch >> thank you for having me >> we are just talking to the ceo of ripple. i have to ask you whether or not crypto currencies either as a payment mechanism is an
interesting area for gv. >> yes, crypto is an area i'm concerned about. part of what is drawing my excitement about the space is the technical minds that are drawn to innovate in that area about. >>are you finding that the bes talent is not only going straight to google or facebook but they may be going to crypto start-ups? >> yes, i think that's right, there's an incredible amount of enthusiasm for start-ups in general, and a boundariless set of possibilities in the industry you're seeing talent both technical and people with other backgrounds. really in a very wide set of spaces from transportation to
agriculture and reimagining different ways to create and produce food to space and machine learning and a.i that is very broad >> you also made some investments in medical technology can you tell us one investment about which you're particularly interested something we could see to market within our lifetimes >> yes, so gv, the venture capitol firm has a set of investors across a wide number of disciplines life science and health care is one of those they invested in flat iron health which has promised innovations, a company acquired by roche very recently it's one of the aspects i'm most excited about. having both entrepreneurs, technologists, but also
physicians and scientists to bring an inninger disciplinary perspective. >> given the environment about data privacy, is it more difficult. how do you look at start-ups that involve collecting people's data is there an inherent discount to the evaluation >> i think generally if you zoom out and look at our sector there's a general maturation going on in the way we think about building companies, funding companies and the responsibility that comes with that i'm here at code and mary just spoke about the unprecedented amount of change, opportunity and responsibility that really comes to our industry right now. data is one of many different dimensions by which i think those of us like myself that fund start-ups and build start-ups have to think more broadly and holistically about how we do that >> thanks for taking time to
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welcome to the second hour of power lunch the fed is set to release the beige book in a few moments. we're at session highs. >> the latest federal reserve snapshot finds economic activity expanded moderately in late april and early may. dallas was the exception, economic activities sped up, manufacturing shifting into high gear with more than half the districts reporting a pickup one third declaring activity strong overall, consumer spending was characterized -- in banking, loan demand ticked higher with increased competition leading to higher deposit rates home building and home sales
increased modestly near term growth outlooks remain upbeat employment and wages employment at a modest to moderate rate in most districts. labor markets tight across the country. filling jobs across a wide spec strum of skill levels. truck drivers, carpenters, electricians many firms responding to all of that overall, the fed is saying that web pressures remain modest prices rising moderately some districts also saying their retail contacts were more able to pass along price increases to
customers than the past. a couple overall anecdotes, bankers in cleveland are reporting that many consumers have yet to spend their tax refund checks. and finally back to that tight labor market a couple anecdotes the shortage of truck drivers, led to fwirms turning away business and increased demand for rail services. listen to this, in st. louis, some firms are relaxing drug testing standards and restrictions on hiring felons to ease labor shortages >> that is quite a statement and a special thank you to hampton pearson on his last bathe book with us let's get some reaction to the beige book cnbc contributor also with us.
i heard a lot of moderate, ron >> the first quarter for 12 years has been weaker than expected that's a throw away number you see pockets of strength, they talk about the labor shortages, companies trying to pay more to get truck drivers, to get others to come to work. relaxing restrictions on employees. you also see some weakness in consumer spending, which is surprising, although that has shown up in some of the data as well it's a mixed economy, it's generally pretty strong. there are the uncertainties they talked about with respect to trade. those are increasingly important. >> also with us, oppenheimer management asset bill stone joins us as well. >> what did you hear in terms of implications for the federal reserve, and the markets, prices rising moderately. anything to change the game and the forecast. >> no, but i think it's generally good news, they talked
about the economy getting better we've seen that in the pmi data. the good news is, the fed probably doesn't have to move super fast to raise rates, now they're going to almost suredly raise rates in june, if they go too fast, that's when the market gets nervous, in the end it seems like a py good pla obviously we'd all -- those of us that work would like better wages or those of us looking for work, i think on the whole it's definitely market friendly you. >> may have missed this part of hampton's report as you were getting settled there, at the end he said there's some areas that were relaxing their drug testing standards and hiring convicted felons, because the labor market is so tight we're seeing consumer spending is weak. at what point. do you get concerned we're not seeing wage growth and in turn we're not seeing the spending we
should be seeing >> wage growth has been extremely modest relative to other times when we've had economic expansion prices and recovery period. we think a lot of that is ail gore inch ums in the offices and companies that are very much aware of the lower barriers to competition. which has caused companies to be very cost focused. and reducing cause keeping them in check not being stingy with wages, but not chasing candidates we have seen when we speak with companies, recently at the industrial's conference that oppenheimer hosted a few weeks ago, we're talking to employers, and they were saying they were having trouble -- not so much trouble finding people who were capable, but finding people who were capable of passing the drug test >> we heard that a little bit. this talks about the skill
levels, this labor shortage is becoming a real issue. >> yes, it's exacerbated by trade policy if they were replacing humans withproductivity saving devices, whether they be robots or software, we wouldn't be looking for workers. i think that there's a little cognitive dissidence in the way that people view the situation in the labor markets we do have a skills gap. >> there's a big skills gap. >> that's another public policy issue. >> one of the things i picked up on is certain commodity input costs are going up what do you make of that and how worry some is it >> you're seeing oil move up as well you know, at least on the longer term here. you know, certainly, it's part of the -- what i always think of is, the economy is growing
you're likely to see some pressure on commodity prices, turns out in the end once you do added value on top in the end at these kind of levels, i don't worry that much. we've seen the added value, the labor edition to the commodities on top of it to produce our products, really are the major part of it, i guess it's not to a point where i would have independent guest onabout it fp. >> let's get to the market upshot here, that is what it means for fed policy there's expectation that the federal reserve is going to hike interest rates three times this year has anything changed >> we think there's a real good chance it will be three times this year, regardless of what is occurring in europe. >> we would expect a total of
three hikes this year would make sense. two more likely, one in june this coming month we're about to enter, and the one in december we think the fed remains committed to interest rate normalization at this point, and as a result of that, we think it's unwise to expect that the fed will back off. it's committed, but very sensitive as to pace and the levels of which it increases rates. >> ron's taking the other side you don't think they can get to it >> '94, '98, 2011, the fed had to complaining policy. >> we'll see what happens with the latest international crisis. >> thanks for joining us >> the big banks got hammered yesterday. the financials rebounding today. despite the situation in italy our next guest remains bullish on u.s. banks. always good to see you, fred >> great to be on, thanks for having me.
>> give me the bull side for the big banks. >> we saw the sell on italy, the fundamentals of banking in the u.s. are strong. and the big universal groups got down to 10 times compelling earnings >> what is the down side if yields go down and stay down as they have moved lower in recent days, from 310 on the 10-year to 285 now. >> sure, there's actually two down sides to what happened yesterday. number one is, everything is connected in the world of global banking. when we start to see these banks e together it's a detriment for longer valuation. we saw the ten-year come back down below three that sentiment is very important. the fact is, where we are at
rates today. it's not going to get a lot better for most of the banks, we've seen the big improechmentes already it's not great for the big banks to flatten you. >> point out that the direct exposure of a lot of the banks is relatively small, a guest earlier said 1% or something like that, the exposure more broadly to the european banking system is somewhat higher. what are the risks of some sort of contagion or spreading virus here >> the real issue is outside of italy, one of the big players that is globally systemic. when you're talking about tens of truls of exposure if you see a bump in one of those big global banks it will play itself out. >> when you take a look at some
of the big banks, people are coming in today buying, unlike the broader markets. we haven't recouped yesterday's losses they're still down on the week why do you think that there are so many fundamentally bullish reasons to be in financials and yet they can't get a break >> well, i think that's been true for the big banks this year, the smaller banks are getting better i think we were just talking about a reminder to investors, there are global risks in these banks. i think it starts to make people think, banks aren't the place to be relative sectors. fred, thank you. >> here's what's coming up on power lunch.
heating up, microsoft takes over alphabet the stock hitting an all time high today joining us is senior analyst at griffin securities great to have you with us. >> how does microsoft stack up not only to its peers, but to itself >> there's good fundament reasons for that the company has had very strong growth in its cloud services business, we expect that to continue. they have been for the last five quarters, the largest in their peer group in terms of cloud services revenue, approaching $21 billion. we expect that to get to over 30 billion. all of that, i think is one important part of their valuation. last month we raised our price objective to $119 a share.
that would translate into a market cap >> do you see this as a story of leadership it's hard to ignore the fact that this has been -- the comeback is driven by the shift toward cloud after he took over from a struggling microsoft >> yeah, i think he had a remarkable impact on the company. of course, he inherited some good fundamentals, i think he's made some very significant focused changes at the company, not only on cloud, which is a very important part of the strategy on sharing the intellectual property and technology in ways that are think are highly valuable and unique to the story. and i think this is what's going to continue to drive the growth and competitiveness. >> you're a bold, jay. give me the one thing that might be the hole in your bull case. >> we've already had that, and i think that was behind us
their mobil strategy, they're not foregoing mobil, but now in terms of their own ownership of that business, in other respects, perhaps the hull if you will, might be more macro economic related rather than their own strategy or competitiveness. that would be true in terms of macro economic risk for all companies in tech. in terms of their own strategy, own differentiation and unique attributes, it's a pretty compelling story >> are you getting any sense that there's a pickup in spending of software because of an improving u.s. economy? >> we've seen benefits to the economy already capx will most certainly improve. under him, they have been focus on a half a dozen critical markets. manufacturing, life sciences, retail, transportation, that is a really important part of the
story that may be overlooked by a lot of investors those markets are going to be changing the way they use technology and software the term de jour for all of that is digitization. that is something microsoft is going to supply and enable, and that's going to help certainly buy more liquidity in the economy, this is going to be a major growth drive are for them. >> jay, thanks the philadelphia 76ers launching an investigation into their own general manager for his use of twitter this is a weird story rocking the world of basketball we'll have it for you next polk county is one of the counties
that you don't think about very much. it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable for yourself. when we got the tablets, it changed everything. by giving them that technology and then marrying it with a curriculum that's designed to have technology at the heart of it, we are really changinghe way that students learn. and i can't wait for ten years from now when i get to talk to them again and see, like, who they are. ♪
notion of subscription services, this differs from the app store? which is the bulk of the services revenue currently >> correct, absolutely >> i believe run rate for the quarter about $12 billion annualized run rate. we see this as a growth business, it's going to get more growth as time guys on what is the proper profitability we should be assessing we had some great survey date that that allows us to give a great guess as to those long term attached rates. attach rate of maps to an iphone user is around 32% the percent of iphone users are also around 32%. you do have safari up to 77 attach rate. you have i work which is a
productivity suite. >> when you say attach rate, those are people who are signing up, so they're going to pay apple a recurring fee, correct a subscription fee as opposed to one off they pay for the download of an app this becomes a problem if you see that app related revenue dry up or sort of dwindle. is that what you're seeing, is that what you're forecasting, as long as that high margin app store revenue continues, it almost doesn't matter that the smaller piece of revenue isn't growing as fast. >> no, so the theory out there, you have there large recurring revenue business that's going to grow into a $50 billion business over time. that's going to be driven by apple music, potential video content that's going to be offered shortly. news streaming that's going to be offered shortly you have icloud, you have apple pay that you can -- you have the app store that's out there too but the question is, what is
going to be at tach rate for these high drivers over time attach rate to the iphone users? and again we have. we're fortunate to have good survey data on free applications it's really based on what is the competitive nature of those particular apps. in the case of i work, which is a productivity suite where microsoft absolutely dome natures, it's only 9%. safari, where it's not still we lk at our range of freeate. applications that we can see and think that 30% attach rate is where it's going to be we run that through our numbers and we can get to the revenue run rate five years out from now. what's the possibility associated with that we look at the comps for drop box, netflix, spotify.
it doesn't get to your 25% operating margin when we put that all together. the overall revenue growth in the context that the smart phone market is in decline we think that apple is going to be maybe a 4% revenue kegger we are going to have a downcycle. >> got it. thanks so much for your time, appreciate it. >> thank you big scandal rocking the world of professional basketball the philadelphia 76ers have launched an independent investigation into whether the general manager used multiple burner twitter accounts to criticize players and reveal nonpublic medical information about them eric joins us now with the details, eric? >> this is a bonkers story, everyone in the nba world right now has been freaking out for almost 24 hours, overnight it started with an anonymous tip from an artificial intelligence
expert it all started from ai guys that connected the writing patterns and the follower overlaps. all that stuff from five different twitter accounts that all seem uniquely bizarre to the tipster, a reporter at the ringer website, which is owned by bill simmons. this reporter dug in more, and they asked the sixers about only two of those accounts. but then mysteriously all five went private the sixers announced they have launched an interest investigation into coangelo. if they are his, this would be a big deal he ripped sam hinke, the previous gm of the sixers. markelle foulgts who was the number one draft pick last year. he called nerlens noel a selfish punk before trading him. he also -- the accounts let me say, gave out medical information about people's
physicals being failed that hadn't been reported in the press, and reporters prodded real reporters to ask the team about these failed physicals, and he even -- not he, but the accounts foreshadowed a real trade they made to get foulkes in the draft last year we were in philly last month, one of the things he told me is how much he values high character people in his organization, listen to this >> we have elite level talent, but we have elite level character. i'm looking for people that fit the culture of the organization. one thing he went after one twitter user about, his high colors one of the burner accounts said move on, his collar is normal, find another slant >> brian co angelo comes from nba royalty.
>> liz father was the general manager and owner of the phoenix suns, now people are saying, one of the burner accounts may not be brians but maybe his fathers. >> how did this person start to investigate these connections? was he tipped? >> the ringer reporter was tipped by an anonymous source. even the reporter doesn't know who it was >> but then went and did the diagnostics and found where there was smoke there was fire >> it was probably a philly fan that have realized all the overlap had a lot to do with coangelo's high schoolkids the sun that plays on college basketball it seemed like, this has to be coming from him. >> they have two of the best 10 players in the league. >> what's he doing bashing his players if it is him >> maybe he doesn't talk to the
media in his normal way. >> twitter is a dangerous device >> i wonder how many fake twitter accounts there are >> i'm sorry >> i wonder how many others there are. >> kevin durant had an issue witht, steve kerr got busted for usinsomething he sid was a dm thould be beyond the scope of a gm saying these things. >> wild story, eric. >> there's going to be more, it's not over. >> we'll be sure to get anup date >> lots of big retail movers to point out for you today. michael cores hitting the lowest level since february the yearly forecast came in below wall street consensus, shoe retailer dsw is sinking, despite reporting an earnings and sales beat the company left its full year forecast unchanged and movado hitting an all time high the company also raising its full year outlook. the big story of the day, and the winner is dick sporting
goods on pace for its second best day ever. same store sales fell more than expected the retailer did raise its four year guidance. there was a big short squeeze in this name. it was a relief, during the quart quarter. dikz announced all sorts of new rules on gun sales, they raised the minimum age, they've been in this fight with the gun manufacturer's industry, investors were relieved to see it didn't have such a bad mark on overall sales and traffic and profit >> the ceo said, yeah, we don't have very good relationships right now with the gun manufacturer's in the u.s. >> no, they were not happy with that move. >> let's get to sue herera with your cnbc headlines. >> here's what's lapping at this hour in washington, president trump signing a right to try law making it easier for seriously ill people to try experimental treatments a bit earlier he said he expects major drug companies to cut prices on their products
>> i think we're going to have some of the big drug companies in two weeks, they're going to announce -- because of what we did, they're going to announce voluntary massive drops in prices >> prosecutors agreeing to drop one of two criminal felony cases against the outgoing missouri govern governor the st. louis circuit attorney kim gardiner says she's dropping a computer tampering charge. the eiffel tower was struck by lightning monday night if was all caught on a paris webcam nearly 12 inches of rain fell on one of the districts in paris. pretty dramatic stuff. that is the news update at this hour, guys i'll send it back to you >> no metal in that building whatsoever >> none whatsoever, it's like a magnet oil market closing for the day, and jackie is covering for
us. >> crude prices bouncing back today. after such extreme moves lower, it's not surprising this might be a buying opportunity for some investors, the thing to remember about oil's moves right now, nothing's happened either way. venezuela's production hasn't taken that half a million barrel hit that some people think it will the energy ministers will meet this weekend probably won't do anything until the opec meeting next month exxon and chevron are leading the dow lower today. >> coming up -- from the competition to original content to pulling roseanne from the platform, there's a lot ttoalk about. the interview is coming up in a few minutes. >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings
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>> let's head back to the code conference in california many julia borstyn is there with the ceo of hulu. >> this is your first tv interview since becoming ceo it's been a big year for hulu. just over a year ago, you launched your first live tv service. can you tell us how it's doing >> we announced about a month ago there were over 20 million subscribers, we're happy to say we surpassed 800,000, we had one of our best months ever in april, and it continues to grow, the good news there, not only are we growing, but they're watching a tremendous amount of hulu as we see in april, it's over 100 hours a month and it looks like may is going to surpass that significantly. >> you're up against a bunch of competitors. you have youtube tv, sling tv,
and the direct tv service. 800,000 is meaningful, but you're up against a lot of competition. >> i think that's part of the fun of being at hulu, you are up against some pretty big companies. we're fighting by ourselves and driving it, i think what people lose sight of for us, in the 39.99 package, you get live tv plus the entire hulu package that's 75,000 episodes current television as well you look at that package, and we do a better job of promoting and getting out there. i think we're going to see that tick up and do great against others in the marketplace. >> i believe hulu is spending 2 1/2 billion on original programming. then have you netflix. they're spending about $8 billion in original programming. how can you compete when you're
spending so much less. >> i don't think we announced how much we spend on original programming. you look at our entire portfolio. we've rebundled well over $40 billion of content this year it's not about how much you spend, but how you tell the stories, give them time to breathe and make them work we've been blessed and lucky to have hand maid's tail that was there before i was we're excited about castlerock which is j.j. abrams and steven king coming up. >> right now you have four parent companies assuming the acquisition of fox by disney -- if not by disney, by comcast, you will have a controlling owner, do you think that will be an advantage, they'll invest more, allow you
to grow faster >> i think right now, we don't think that much about who's going to own or? a controlling shareholder, all of our ownership has been supportive, they've given us resources to drive and invest. they've been super helpful in that process, they're the largest creators of content across the board >> both disney and comcast have talked about how valuable hulu is you've got to think be thinking about that, which would be a better owner for hulu. which would be a better owner? >> look, we don't really think about it that way, we think about, if we do everything we can do, each and every day to make hulu better for our customers. when all of this shakes out, however it all shakes out, we'll be in a great position to help that majority owner drive their business as well we're focused on making sure hulu is the best product possible >> i have to ask you about
rosean roseanne. >> you're pulling all roseanne episodes from hulu >> it's not a consequential at all. we only have the current season programming. there's not much to say, abc cancelled it, for obvious reasons we support that, and pulled it. it wasn't a huge performer for us, recently, but it is what it is >> do you see yourself making similar decisions if there are other content creators who do or say offensive things i think you have to look at each one as an scid investment. for the values of your company, and for your customers across the board. but these are hard decisions and sometimes they're hard decisions and sometimes i think they're pretty straightforward i think abc and disney, this was pretty straightforward, they
acted swiftly, and we're sporting that process. >> thank you for joining us. >> thank you for having me >> we hope you'll come back again soon >>uys,ack over to you. we have a news alert from the fed. let's check in with steve. >> thanks melissa, the federal reserve issues a proposal to ease and modify the so called vocal rule named after the former federal reserve chairman, the rule was passed as part of dodd frank, it limits proprietary trading by banks they would streamline the rule without diminishing safety and soundness. the strictest voccer rule requirements -- the proposal is faithful to the text and spirit of dodd frank. randy quarrels, the trump appointee who is the vice
chairman for bank supervision, says it's an important milestone, but not the completion of the reform more to come in terms of easing some of these rules. there are now three categories created based on the firm's trading activity, with progressive requirements the bigger the firm, the harsher the requirements proprietary trading is no longer assumed for short term assets or those assets held less than 70 days compliance is assume d rules ar eased and underwriting we'll talk to randy tomorrow on this show at 2:10 pchl the rule is 210 pages. i asked how much pages the new rule would be. >> shorter than what, shorter than 900 >> shorter than 950 pages and
somebody joked on the background briefing, they'd use a smaller font if they had to. >> we look forward to that interview. >> the upshot is this is what president trump promised the federal reserve is independent this sort of vibe in washington to make it easier after the big bang this gives them some reprieve when it comes to limits they had. >> he's been out on that, saying he's a less regulatory oriented. >> is it already in the share price of the banks >> the u.s. dollar retreating a bit today. one of our next guests say a pull back is coming, and he tells us why and how you should trade the greenback. whoooo.
>> air bnb ceo on stage just moments ago. he weighed in about the question when air bnb will go public. they'll be ready to ipo next year, but he doesn't know if they will. they will appoint at least one woman to the board of directors this year, would like to appoint two. he also weighed in on what he called a political standstill. air bnb has a responsibility not to pull out of the new york city market and to maintain air bnb's running in new york city >> thank you very much >> let's switch over to the currency market right now. for trading nation the dollar index slightly lower today. up 6% since the february low one of our next guests is calling the dollar extremely over bought.
matt, you see the chart here, showing over bought conditions, does that mean that's it, that was the dollar rally for the year >> not at all. i think it's more of a short term call, the dow has become very overbout, you look at it, yesterday when it was sky high it got up to it's 200 week moving average you look at the weekly isi chart. you look at e daily sentiment index. it shows the bullishness got 94%, that's really really high these kind of short term indicators tell me we're going to see a pull back on the dollar over the near term and that should allow short term traders to take advantage. and longer guy term guys can
readjust >> does that make sense given all the problems right now >>. >> i think dollar is grossly over bought, but is temporary. basically, dollar is simply the best currency in a world full of trouble. especially against the euro and the pound where you have a very toxic political situation. and a slow down in the economy the only two central banks in the world that are raising rates is going to be the fed and the bank of canada the yield is going to get larger and larger to me, any dip in the dollar right now is a buy for the time being. >> thanks, guys for weighing in. long term bullish for both of you on the dollar. >> for more go to our website, follow us on twitter at trading nation >> the president signing a controversial bill that could have a big impact on terminally ill patients across the country. we have the details on that next
the present conditions may change this will help keep your biases at bay as the markets often react differently than we might expect we had long deployments in iraq. 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.
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welcome back to "power lunch. president trump signing the controversial right to try bill just a short while ago allowing patients with life-threatening conditions to use experimental medicines not yet approved by the fda. meg tirrell joins us with this >> in signing the bill this afternoon, president trump said right to try will give dying patients hope. critics say instead it will give them false hope. the ability to take experimental drugs. often patients will be too sick or otherwise won't qualify for clinical trials. in yeerz we've seen public shaming campaigns of drug companies. the law stipulates the medicines must have completed phase 1 safety testing and adverse
reactions won't affect clinical review what do critics say is wrong with it? they say it doesn't fix anything the fda approved 99% of requests for drugs in this setting which is known as compassionate use. the problem comes from drug companies that may not have supply or other reasons. >> one of the issues is actual supply of drugs. you're dealing with companies that are often venture financed. they don't have the money to do extra gmp runs of their drug many time it's bilogics where you can't just produce more drug you're producing lots of drugs that you're using for clinical trial purposes and don't have any extra drug that's the thing we run into the most which is they just -- they have to lottery it off or just don't have a lot of excess drug available to provide it to patients and so there are still going to be significant supply constraints to getting access.
>> for that reason, guys, art kaplan who has criticized this law a lot calls it instead of right to try, it's going to be right to beg patients will be begging drug companies to give them drugs. >> who pays for the experimental treatment? >> that's a great question the drug companies sometimes will pay for it. patients might pay out of their own pocket or foundations. they can ask their insurance companies but that's a toss up >> my understanding is this law gives those patients the right to access those drugs where before they had to petition? >> well, before they had to ask the fda for permission to get the ability to try these things. then they also had to convince the company to give them the drug this takes out the fda step of it before it already said it approved 99% of the applations and this doesn't do anything about getting the company to give -- >> it's the time factor, rig patients don't have to wait for an approval -- >> for permission to come
through. >> i guess so. but i'm not sure the fda approval is really that time consuming. i think it could be a lot of paperwork for doctors, but the fda has worked to fix that over the last years as well >> it's opening a can of worms who can afford to pay for the drug and do poor patients say we have a right to try also. why is it only the rich who have access to the right to try >> the law does nothing to make companies give these drugs to patients so that hurdle still exists. >> meg, thank you. check pleases xt ine
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i want to talk about the fact that kpuconsumer reports dd what they said they would do and that is place a recommended stamp on the tesla model 3 if the company solved a braking issue which apparently they were amazingly able to do remotely by sending some firmware update to the cars and now that model 3 which did not get that rating has it >> i remember when we talked to the analyst. >> the guy, the tester himself yeah >> i'm watching monster beverage it's the biggest gainer right now on the s&p 500 big mover up 6%. announcing a new authorization of a $500 million share buyback taking advantage of what it saw as a lower stock price monster had underperformed over the last year or so to buy back stocks i guess that's still a popular one for investors. >> and i'm taking a look at financials we have been talking about the snapback rally
we are in the green across the board. wiped out yesterday's losses but the financials still in the hole down 1.4% on the week this has been ground zero for the italian turmoil. we'll continue to watch the sector all right. thanks for watching "power lunch. >> "closing bell" starts right now. this is "the closing bell. i'm wilfred frost at the new york stock exchange. stocks bounce back after yesterday's big fall can this jump reignite confidence in a bull market? i'm steve leisman at cnbc global headquarters. big news from the fed on several fronts today we're asking the question, when it comes to interest rates, is it one and done for the fed for the rest of the year in seattle, i'm aditi roy. jeff bezos addressing shareholders at the company's annual conference. one hot topic? splitting chairman and ceo roles. i'm leslie picker. how corporations are taking extra steps in the m