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tv   Power Lunch  CNBC  November 30, 2018 1:00pm-3:00pm EST

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>> farmer jim. >> cat is anticipated something good coming out of this weekend's. cat's the name. >> lulu wear it well, gentlemen. >> its been good having you. we'll have you back. thanks so much forwatching. have a great weekend "power lunch" starts now. i'm melissa lee president trump meeting world leaders in argentina but it is his showdown with china's president xi tomorrow that wall street is focusing on. will they strike a trade deal and what's at stake for investors? marriott's massive hack attack. names, phone numbers, email address, passport numbers and more and the breach goes back years. we've got the fallout straight ahead. and check out this mystery chart this sector having its best week in two years. it is also the best performing sector this month and this year by a long shot of the why it could be a healthy bet for 2019? "power lunch" starts right now.
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♪ who knows? it is songs from the big judiciary. i'm brian sullivan. the dow is lower at this hour but happy friday any way. the dow is still aiming for its best week in two years. you got better than expected manufacturing data that is helping the broader markets and barring any kind of major selloff over the next few hours, the dow is set to end higher for november. the nasdaq hovering around bake even. it has the shot at breaking two month losing streak. oil sliding again. watch out. crude oil headed back toward that $50 a barrel mark and check out three stock movers right now. you got delta, under armor and eco lab all rallying hitting new highs. >> we want to get straight to
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the big story that's driving the market today and that is the g20 summit our eamon javers is live in argentina. steve liesman on why the fed is almost twice as worried about trade and tariffs than they were just six weeks ago. we begin with eamon at the g20. >> reporter: i want to bring you more clarity now on this muhammad bin salman/donald trump meeting that you heard the president being asked by reporters what he discussed during his meeting with muhammad bin salman. reporters were asking that based on a saudi media report that suggested that the president actually met with muhammad bin salman even though there's been this controversy over the killing of jamal khashoggi that the president has said that he finds deeply unpleasant. the president said, we didn't have a discussion, we didn't have a discussion. we might in conversations with those reporters, but white house official tells noibds hallie jackson that the two leaders exchanged pleasantries at the
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leader's session as he did with nearly every leader in attendance. white house official confirming that president trump did exchange pleasantries with muhammad bin salman, the saudi crown prince, but we have not seen that yet on camera and, of course, the president suggesting that he didn't have a discussion with him. the white house clearly wanting to minimize the interaction between the two men and we've also seen the president engaged in bilateral and trilateral sessions throughout the afternoon. a meeting with the indians, the japanese and others and so negotiations here continue but, of course the big question is, what happens at that china/u.s. dinner tomorrow night and that is still an unknown. my sense isthat the president is handling this negotiation on a very close hold basis. they're aren't a whole lot of people in argentina who can tell you a whole lot about what's likely to happen tomorrow because the president is making these decisions himself and he'll make them over the next 24 hours. >> who do we know is at the
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diner and who will not >> reporter: so there's some real question about that. wilbur ross we don't believe is here. we did see peter navarro here. the president singled him out by name in his earlier remarks as one of the key figures who's present. he will be attending the dinner tomorrow night. he's viewed as the biggest china hawk we have. officials here suggesting to me that this is intentional bill the president of the united states. he wants to go into that dinner showing the chinese that peter navarro his toughest china critic is right by his side so its a projection of strength, if you will, going into that dinner by the president to show the chinese side that he's willing to go face-to-face but he's also going to have his biggest china critic at the dinner table with him. some gamesmanship perhaps but officials say the president is a
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very good negotiator and knows what he's doing in terms of getting leverage. >> little more intrigue there, palace intrigue, literally. thank you very much. now let's get to bob pisani who is of course watching everything happening in the market and what does it look like for the new york stock exchange. pretty good week >>. >> reporter: yes. its the tariff issue that matters for the 2019 earnings. let's look at sectors here. transports having its best month since going back to july. airlines at new highs. banks marginally higher. that energy, what a difficult time its been. let me show you energy stocks and oil. energy's down about 3.5% this month. look at that oil down 20%. hard to believe. this rarely happens this kind of divergence and its happening because of the reason we're getting this is just the difference here between demand and supply. the supply issue is the reason that oil's -- if we thought
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global demand was down dramatically, well, believe me, energy stocks would be a lot lower. they'd be down 15% easily. overall for the month, let's just say there's a more defense posture. health care was a big start. people took money out of technology and put it into health care stocks, communication services but that's because facebook, twitter, netflix is in that group. those were the ones that dragged that sector down here. the reason we've been so rocky in november is because its been really hard to figure out the optics for 2019 earnings. the fed tightening, its a little clearer after the -- the big wild card is still tariffs. global growth, tariffs is part of that global growth issue. trade clarity would help that. we had higher input costs. that's partly trade again. not completely but clarity -- you see how much is dependent on resolving the whole tariff issue, just the cease-fire, the market would consider a victory.
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here's your earnings situation. we're expecting 8% to 10% earnings growth in 2019. the number are all over. after a 23% increase in 2018, that's quite a drop. do remember about 10% of that 23%, that's the tax cut. so realistically, without the tax cuts its about 13% this year and the question is, what does it look like for 2019? back to you. >> thanks. what should we expect from the rest of today's g20 meeting and we will get a trade deal with china joining us now is bill richardson. thanks both for being here. bill i have start with you. its an interesting set-up. we already have the president making some comment saying there's positive signs with china, the trade representative saying he would be surprised if the dinner with xi on saturday wasn't a success and at the same time you got peter navarro at the dinner table so a little bit of a push/pull. how would you game out this meeting? >> well, i would say that it
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would be a plus if we simply if the chinese stop any additional tariffs, stop the trade war and find a path to negotiation, maybe not have an agreement at the dinner, but a path where we're negotiating a cooling off period because i think the chinese economy, the american economy, they're the leading economies in the world. we need some relief there. i think this trade war has been a mistake, but its happened, but let's find a way to, at least, lower the temperature, to set a negotiating path to redo all of these tariffs and very negative signals that are being sent to the international community. >> sure. >> i think the president already has scored a plus in an agreement with canada, mexico and the u.s. that's a plus. i wish he'd met putin to be stronger with putin but if he pulls off this -- >> we've got to chime in here. we've got president trump at the
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g20 with the prime minister of australia scott marorrison. let's listen in. >> i know you've done a fantastic job in a very short period of time. you've done a lot of the things that they wanted and that's why you're sitting here. i congratulate you. we will be with australia and you all the way. >> thank you very much. australia and united states have always been the greatest of friends not just in cooperation but economically in the people to people relationships, there's none better. >> thank you very much, everybody. thank you. >> thank you. >> we'll be talking. >> thank you. >> mr. president -- >> thank you so much. >> let's go. we're moving.
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let's go. >> bye, guys. >> thank you. that was president trump meeting with australia prime minister. we want to go back to talk about the meeting with xi. governor, sorry to interrupt you. you were discussing that cooler heads need to perfect vail. >> well, yea. i hope we set a path to negotiation with the chinese obviously this meeting with australia's important, an important defense ally and trade ally especially in agriculture. we had a rocky start to that relationship when president trump came on, so that's good. my concern is russia. i just wish the president had agreed to stay on with putin, be
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tough on him on election tampering, on ukraine, on syria. you think its a missed opportunity but i know this mueller stuff, the russia collusion thing is hanging over and when you have a summit meeting, you want your boss, the president, to look good, to look like a statesman. i think the plus has been the mexico agreement michelle knows a lot about that. canada, although it'll have some problems in the u.s. congress, if he gets this trade relationship with china on the right track at least talking instead of more tariffs that's going to be a plus. >> bringing the temperature down. you put peter navarro in the room, the temperature goes up 10 degrees. >> i don't see it that way. putting peter in the room is just president trump wanting to send a signal of strength and to say -- he wants his attack dog there. this is the most pug lististic guy in the administration.
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president trump thinks he's never going to listen to peter again, as a tactic you put him in the room. >> its the bad cop. >> let's just say two people are having a dispute and you're trying to mediate that dispute, michelle, and one of you walks in with your attorney. that's sending a signal and all of a sudden the other person's going to be whoa, hey, what's going on here. >> i'm not saying its my style. that's trump's style. does it surprise you that he would want to walk in with the attorney at all times? of course he wants peter there. the markets are set up. if you read the papers today, there have been enough leaks, right, where clearly the message has been we're coming forward with a framework. cease-fire on tariffs as long as you guys agree to some negotiation about the bigger issues. >> its asymmetric in terms of how many leaks there are. >> so what's the strategy? is the strategy that's actually really going to happen and you can see a nice rally on monday because you see uncertainty
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playing out today in the markets or is it -- it fails and they can say, we brought this to the chinese and they don't want -- they don't want to tackle the hard issues. >> governor, i guess the question we're discussing and maybe you know this is, we know the chinese respect power, but will this set them on their heels and sort of embarrass them where they back off or will they appreciate that show of strength, if you will, from trump? >> well, the first point i want to make is the president makes up his own mind. he usually doesn't listen to his people. he has a strategy. that's number one. number two, i think the chinese, they respect power. they know what the president is up to and xi, the chinese, you know, they haven't made their major move in retaliation yet. i think the president needs a big victory here, especially in foreign policy and he can get it by just having a path to a negotiated settlement maybe down the road. so i think he's going to be
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opting for that triumph and i'm positive about the final outcome at this dinner. that's it. having navarro there, yea, it'll irritate the chinese a bit. he's also got his trade negotiator. he's got some of his foreign policy people there, so, you know, this is gamesmanship but in the end he decides -- he doesn't listen to anybody. i think we've found that out. >> would the path forward really be regarded as a victory in the markets it would be. but to trump's base it may not be if he doesn't look tough walking away and doesn't look like he's making some progress when it comes to the core issue of intellectual property -- exactly. >> state enterprises being deeply involved in businesses, stealing of company's products here and, et cetera. yes, you could have a short-term quote/unquote, victory, some kind of path to a negotiated settlement, but ultimately there's a lot of people within the cabinet who would be upset if they don't get to all these core issues that we just talked
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about. >> michelle, let's not forget new president taking over in mexico tomorrow. amlo as he's known. a lot of concern. markets have not been good. >> andres manuel lopez obrador, you can call him amlo, he ran as a centrist. when he ran as a hard leftist, he lost. so this time around he was far more centrist. -- >> his message was centrist, is he more centrist >> no. since he's been elected, he has articulated things that are just classic leftist positions and he's done things and there's capital flight out of mexico. people are worried. its why mexican bonds are doing poorly. we should be very concerned about that. you don't want a deteriorating economy on the southern border. if you're worried about immigration issues now what drives immigration issues, weak economies. why do we see so many central american coming? because of the weak economy
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there. if mexico takes a big step backward, you just have a larger problem at the border. >> all right. >> i beg to differ with michelle here. i think this guy is pragmatic. he's run for president three times, he's finally won. he has a sensible immigration approach, which is basically i want to develop economic development zones in central america at the border so that immigrants don't leave mexico, don't leave central america. no mexican president has ever done that. yes, michelle's right. he sent bad signals to the market, but i think a pragmatic president is going to show up. the fact that he left the nafta negotiations, nafta, too, to his predecessor, now there's an agreement which is good for canada, good for us, good for mexico. he stayed away from it. now it has to pass the u.s. congress. i think he knows that he recognizes he needs the united states. he needs u.s. investment.
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the transition is six months and his congress has caused him a lot of problems, his supporters because the congress takes power before he did. they already are in power, so they were making all these statements that were very corrosive and negative. so i'd give this guy a chance. he's not president yet. >> we'll have to give -- >> i'll be there tomorrow -- okay. i hope -- i hope -- >> you're going to the inauguration. >> yes, i'm going to be there. i'll see you there, michelle >> no. >> her invite was lost in the mail, governor. its shocking. >> thank you, michelle. investors are not the only ones watching the g20 summit. why the feds fears on trade are also growing we'll hit on that straight ahead. and audi unveiling its answer to tesla's model s.
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and xi. the fed is a lot more worried about trade and tariffs than it was just a few weeks ago. steve liesman is taking a closer look. >> thanks. tariffs and trade tensions have quickly become one of the most troubling issues for the fed. yesterday's minutes mentioned tariff and trade 12 times, almost double the number, that means they may be twice as worried from the april meeting. >> china's a big uncertainty. its very hard for us to game out what does a trade war look like, how does it end up manifesting itself either in the stock market or in investment with businesses. that's the thing that's very hard for us. in my district we're seeing a lot of ag sectors under a lot of pressure. the tariffs are making it worse for many of the farmers. that's something that i hear realtime in my district. >> trouble with tariffs, here's two things from the minutes. they said, contact indicated
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that input costs had risen and increased tariffs were raising costs. the potential for an escalation in tariffs or trade tensions could slow economic growth more than expected. higher inflation, slower growth. those are chronicled in the beige book. we chronicled the number of times tariff was mentioned and its gone from zero at the beginning of year to 51. what's it all mean for policy given the uncertainty about the effects, it looks for now to be something that if its slowing down fed rate hikes until its clear, if the inflationary part of tariffs beats out the offsets or offsets the slower growth side of it or if the president is able to ease trade trenensio think the fed would be very happy with that. >> its interesting, i remember, i think it was late september, beginning of octoberish we were having discussions about tariffs and whether or not they would
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really be an impact and a lot of economists we talked to on air and i remember being on "squawk box" with you for some reason saying that the media -- we're fixated about tariffs and the impact on earnings. we're picking it up from conference calls and company guidance and here we are the fed in early november coming around to that thinking that maybe tariffs have a bigger impact. the fed has met with the markets -- >> you're saying the fed watched you and steve on "squawk box"? >> no, no. >> she's saying she changed the fed thinking. >> he's joking melissa. >> i know. >> i think that's right. i think the way the fed and the economists -- look, the initial estimates from economist were very muted impacts and they sort of remain that way, although i will say this next round will probably up those estimates for the impacts. what economists and policy makers want to be careful about
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is let's say big company x comes out with something that says we're really worried about trade, but it really only affects big company x, it doesn't -- so i think what they've done is they've waited until it started to permeate and seep through and become a macro story not an individual story, and that's why you'll find the fed and policy maker behind the markets in a lot of situations and why the markets can be wrong about some of the big headlines that are out there. >> companies will put the word tariff in, even if they don't know the impact yet because they're going to have to. >> or they're asked. >> or they're asked about it. >> we counted that as well and we found that 35% of companies in their earnings calls mentioned tariffs 19% in a negative way. its out there. >> steven, thank you. the market had a big move this week when the fed chairman
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said that we are close to neutral, just below on interest rates. we'll lay positive outcome for the g20 be another positive. joining us rich wise. and john tooey head of equities at usaa. john, how important is the g20 to you and your clients? >> we at usaa think its very important. it was a positive development as you mentioned when with the fed language changing in owell's speech this week, but the other big overhang on that wall of worry is trade and tariff. we need a positive development if we're going to reignite a bull market. >> okay. so what would a positive development mean to you? a handshake? a hug? smiles >> a framework is positive and the market will go up with that but you're going to need more
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data points and more details in a firm agreement, otherwise there's still going to be uncertainty that makes the company management's cautious and inn making investments and you have risks if you don't have details what's going to happen to global supply chains, which if you have to adjust those, that's going to lead to higher prices. >> we're entering what could be a very eventful week. not only we got the g20, we've got a fed meeting and opec meeting. in one week do you think your view of the market will be significantly different from what it is today >> no. >> why not >> because its pretty much baked in the cake the fed is going to make another move at this december meeting and be data dependent as they tend to be. they're on a course toward stabilization and whether it happens december or the next meeting, it really doesn't matter for the longer term investment strategies we employ.
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earnings are decelerating. they're still positive but decelerating. global economic growth decelerating into 2019. the rotation in stocks, i think, was a real good look at what's going to happen in the markets this coming year. i was in the office late last night trying to find a good reason to plow more money into equity markets both here and international little and we're hard put to find it. and even with the positive outcome from the g20 talks or the fed maybe taking a breather, the course of this economic cycle is set and its going to be very difficult to turn it around in a heartbeat. >> do you have more cash than normal, rich, just quickly >> we have definitely taken money out of stocks. we've removed any overweights. we have been fairly defensive and in our fixed income propo l philosophies we're fairly short. 20 minutes after the kids open the new presents, they're moving
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on. its very short-lived. >> all ight. thank you, both. appreciate it. emerging markets have been crushed by the super strong dollar but that may be changing. we take you on an investing trip around the world. get your passport, bankbook, "power lunch" is back in two. my digestive system used to make me feel sluggish but now, i take metamucil every day. it traps and removes the waste that weighs me down, so i feel lighter.
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are emerging markets poised for a comeback one of the etf that tracks emerging market gained 6%. the bear market is mostly complete for em. take a look at this. brazil, india, turkey and russia brick tee all posting a significant bounce off their 52 week lows. let's talk more about this with mark of the ftse russell and director of the information services group and bringing back in our friend michelle caruso cabrera. what do you think. i hate to say emerging markets its like the rest of the world. its such a big thing. but on a macro level, do you see that rising tide in all boats? >> i'm not sure, but we have got some big changes coming up in emerging markets. if you think about china and china opening up, particularly
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with the trade talks, good possibly start. you'll see in the largest part of china, suddenly you're going to start to build momentum and china will represent almost 50% of that emerging market portfolio. >> if china's slowing, the flip side to that is, that's an impact that's a drag on the emerging markets as well and that's what we've seen. >> for sure. its crucial what does it say to the china economy and u.s. interest rates. u.s. interest rates really drive em in a big way in terms of what people are willing to pay for the multiples overseas and this pull back in rates that we see, the ten threatening to go below
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3% is also helpful for emerging markets. >> its been a big driver in that recent performance. the fed's got their issue. its almost like goldilocks. they mustn't go too fast or too slow, if they can get the pace right -- that is going to help emerging markets because people want a more cautious approach to the investment way. >> when you take a look at these markets, there's a slowdown in global growth and then you have the fed and because -- partly because of that they're slowing down their pace of interest rate hikes, so what wins out at the end of the day >> good question. >> its the differential of what you've seen of the now, i think you're starting to see, yes, global growth is calling but there's the expectation that
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u.s. growth will begin to cool next year after this tax rise impetus. >> what do you do with brazil and mexico right now the consensus on mexico is very negative and the consensus on brazil is very, very positive, however the brazilian market has rallied like crazy and the mexican market has fallen. do you run the contrary on both of those >> aren't you supposed to buy? >> exactly. you're supposed to buy when everyone else is worried and they're worried because your buddy amlo is taken over this weekend and he was a communist and now he's not. >> the way i would turn that around is to say the expectations for him are low, so its easy for him to beat them and the expectations for the market is very high and its easy for him to disappoint them. >> china will drive emerging markets. you're still heavily exposed to
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china. china's going to drive emerging markets. >> especially that eem. its nine asian stocks and a south african gold country. its a proxy on china and korea. >> again, however you look at emerging markets, that china -- and that's where the news today really we're looking for g20 to start the process of those trade talks. if that happens, that's going to be -- >> if there's a deal, do you think there's a big rally on em? >> i think we'll see the beginning of a rally. >> mark and michelle, thank you. >> thank you. after a rocky november for the s&p, health care emerging as the top performer up 6% for the month. we'll tell you what's keeping it hardy.
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welcome back to "power lunch." i'm sue herera. here's your cnbc news update. a 7.0 magnitude earthquake has rocked buildings in anchorage.
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the u.s. geological survey says the quake was centered seven miles north of anchorage and a tsunami warning it s in effect. house democrats debuted their newly elected leadership team with nancy pelosi delayering let the new administration begin. >> make no mistake, oversight is a congressional responsibility. the administration may try to say oversight is investigation. no, oversight is our responsibility. article 1, the first branch of government, a check on the other two. and a new study of patients across the country says 60 to 80% of them say they have lied to their doctor. more than a third reported not speaking up when they disagreed with the doctor's recommendation. the biggest reason for lying
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being embarrassed to tell the truth. you are up to date. back to you. >> thank you. look out elon, there's someone else catching up in the rear-view mirror. audi unveiling its answer to the tesla model s. phil lebeau has all the details. >> reporter: when you take a look at this audi car, its a concept car and a concept car that, yea, it might be built by 2021 but i've heard this before from other automakers. so the audi etron gt it may arrive in 2021 with an estimated price some where in that north of 70,000 range so it would compete with the model s. this is the beginning or really its the midst of what we'll see from other premium automakers. you got the porsche one coming next year, austin martin and the
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jaguars ipace, the sales of that vehicle began in september. we're just starting to begin the start of premium electric vehicles hitting the market. this is a drop in the bucket. look at this. worldwide less than 800,000 premium evs were sold in 2017 and we're only going to be up about 5 million by 2023. that's in a market where the world will sell maybe 99, 100 million vehicles. did you take a look at shares of tesla, the thing to keep in mind is tesla by far is the leading manufacturer of electric vehicles in the world. the expectation is that that changes, guys, come 2021, 2022. you have a lot of planned possible electric vehicles very few that we can definitively say at this point, yea that's in the market and that will be a threat to tesla. >> phil, there was a story on
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electric earlier today citing an email that musk sent to his employees. that could be a big milestone for cost efficiencies. >> reporter: as they increase model 3 production there's no doubt this is driving down the cost of the production of these vehicles. one thing to keep in mind with these reports when they come out, production of the model 3 and a number of these tesla vehicles, has been lumpy from week to week. there will be weeks where you see a surge in production and other weeks where it pulls back. that's not uncommon. let's see how it extrap lates over the course of a quarter or two quarters. >> phil, thanks. >> you bet. marriott hit with what may be or could end up being one of
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the biggest corporate hacks of all time potentially up to a half a billion customer data exposed. we'll let you know what was likely stolen when "power lunch" returns after this. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create,
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figure marriott announcing that up to 500 million guests with reservations at starwood properties could have had their data compromised including passport information and that its potentially been going on for four years and the company says, for 327 million of those guests, the hackers had access to some combination of personal information including names, addresses, passport numbers, dates of birth and details about their reservations. some also had their payment card information stolen but its unclear whether the hackers had the encryption information needed to use those cards. the unauthorized access began in 2014. you remember that marriott acquired starwood back in 2016 in a statement marriott's president and ceo saying, we fell short of what our guests deserve and what we expect of ourselves. upon the news, the attorneys general for new york, maryland and illinois are launching investigations and we've heard from a lot of analysts as well who have come out with short
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notes while many of them agree there will be short-term repercussions, they say its too early to say what the long-term implications will be. back to you. >> thank you. the marriott breach is the second biggest in history behind only the hacking of 3 billion yahoo accounts in 2013. under armor, equifax and target. how vulnerable are consumers let's bring in dave weinstein and kate fazini. kate, when i was reading the story i was shocked at how much information marriott had and as somebody who just traveled to canada and handed my passport over to a starwood employee, i was really concerned. i didn't realize they kept that. >> >> the passport numbers are one piece of identifying information that give me pause. it took place over the course of four years, so there's going to
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be a lot of questions for marriott on how did they not catch it earlier and how it they not catch it at the time they were merging with starwood. >> dave, when you take a listen to all the piece of information that may have been compromised, what do you think is at risk the most what can you piece together if you're the hacker with these little pieces of information you've gotten? >> this is the concern is how you piece together these different identifiers to ultimately compromise individuals down the line and that's one of the things that i think is getting too much attention in this story, which is how hackers can use this information to then individually target folks for spear phishing emails for subsequent operations down the line. its not just a compromise of a single identifier, obviously, the deterioration of unique identifiers, such as the social security number and passport numbers is a problem, but its piecing together multiple identities. >> what does it tell you, dave, that this went on for four
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years? 48 months either without marriott knowing or without marriott doing anything. >> it tells you that you have a pretty sophisticated actor here and its unclear at this point if this activity is linked as kate said to the activity that was reported before the merger involving just starwood. so more details will likely emerge, but persistence is a major indicator of sophistication, right? most of the time when we talk about advanced persistent threats we're talking about nation states but given the types of data that were caught up -- >> this data could be on the darkweb right now up for sale for all we know. kate, when analysts come out and say the impact on the company is marginal, there is the gdpr in europe and you got to wonder if
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this company is going to fall under the scrutiny of european regulators because maybe they didn't meet the standard in terms of notifying customers they knew of this data breach sometime in september and then they wanted to they wanted to figure out what was breached and that brought us to november 19th. >> yes as you know with gdp r there is a 72-hour waiting period before you have no notify it saps subpoenas september 18th is when they had the trip wire, the first time in the four years they saw data being taken out. you raise an important question, which is as far as a financial impact, gdp r is definitely the biggest regulatory piece of information that we'll have yet to see. >> all right we'll leave it there, guys great discussion thank you. dave weinstein with clarity. and kate fizini.
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i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. health care is your pest performing sector in month up 6% in the etf tracking the
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names. the xlv on pace for the best month since november 2016. for what is driving the ganes rs gains it's bring in the senior analyst at leering fwloo thank you melissa. >> we have had nice gains as we said, recently went to united health investor day. and you came away thinking this name has more room to run. what's the catalyst here >> i think there is going to be a lot of earnings upside, 2019 is poised to be a banner year for revisions, cost trend is moderated, pricing looks really solid with medicare as well as now in the employer markets. they shall see membership growth as well from privatization in medicare we have tax policy and rate policy that's favorable. and then multiple expansion. the names are not that rich. we have a spectrum of multiples from roe dibl digits for cigna to high teens for united and a
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bit higher for humana. but they are trading keeper than device stocks for example which is another place investors are hiding if you will in the late cycle economy. but the risks are perceived to be a lot less. we have had elections with divided governments. exchanges are fine drug pricing with cms and hhs is not as die bolically fearful as everybody thought it would be. amazon as you recall in january was a big risk and threat. but we have some visibility into what they are doing with pill pack and this new medical record initiative united is well ahead of amazon it's taking a long time for them to catch up. there are hunl barriers to entry. and health care is generally defensive. i think there is more room to go. >> aside from unh what other names in your universe do you like. >> i think managed care is a group call it depends on your risk appetite, names like united and
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humana have lower risk but then the multiples are richer i still like anthem, more a reasonably growth price name, mid-teens. again earnings upside and room for the multiple to increase cigna looks interesting to me here, the deal is about to close. by the end of the year it's tradingat 12 times on pe basis for a post express scripps number, we should have the number sfangs and a better accretion then they are guiding to health care has sold off tremendously it it's hard to understand if there is anything fundamental. it's a good time to step in. and i'm positive on hca if you don't want to just be in managed care you should find a quality hospital name. >> anna thank you, good seeing you. >> all right today and this weekend your
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money all about the g20. will the u.s. and china strike any kind of trade deal we ask the ceo of altech hand picked by trump in a trade team involved in the negotiations over the weekend. you need to hear what he has to say. just when you naught g.e. couldn't get lower wow, shares down 6.5%. $7.50. we will talk about this former giant of dow second hour of power begins second hour of power begins after the break. like schwab does. guarantee? ♪ carl, can you remind me what you've invested my money in. itated. are you asking enough questions about how your wealth is being managed? if not, talk to schwab. a modern approach to wealth management.
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the menu it could be a make or break weekend for the markets. president trump sitting down with china as president. what happens if the meeting falls flat is speaking of we speak with one ceo who has the ear of the president when it comes to trade. what is he advising them to do with china and a market moving call of the day? cover your eyes. g.e. down again. deutsche bank cutting target by 36%. that analyst joins us. and the sector you may overlook that could benefit big from the holiday rush i'm brian sullivan, second half of power lunch begins right now.
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and welcome to "power lunch" i'm melissa lee happy friday markets higher at this hour nearing session highs for the dow sells the s&p 500. the dow on pace for the best week in two years. the s&p its best week since 2013 s&p up by 11.5 the utilities and health care best performer communication services lagging goldman sachs, the worst dow performer after a downgrade at bank of america. game stop is lower by a 7.5% after cutting the full year outlook. and under armour up 2.7 is seven% on the upgrade. the kre and kbe both on pace for the best months since january. take a check on marriott the store we were talking about announcing a massive data breech we'll have more on the story straight ahead the stock down 6%. >> that's a big story. but we begin with the event that
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wall street and the world is watching closely today and over the week the meeting of the g20 leaders are in argentina president trump has arrived for his first day of meetings in what could be high stakes showdowns left and right eamon javers live in buenos aires with the latest on what we can and maybe can't expect eamon. >> brian, that's right i want to bring you new intelligence on the lay of the land here in buenos aires. i just wrapped up a meeting with a senior administration official traveling with the president here in buenos aires this official said a couple of things worth noting. one is about the president in terms of whether we are getting a deal or not a deal tomorrow. the official said, he doesn't feel pressure to make a deal, just for the sake of a deal, he has more time. so the official indicating that the president is not feeling rushed here to make a deal this week also saying that the president has been getting information from advisers that the economy continues to show resilience and strength despite the equity
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markets. so despite what we have seen in the stock market, the underlying economic fundamentals here are very strong. the president feels confident about that and this official also suggesting that the president mentioning peter navarro by name at the u.s. mca event is an indication that the president is including him in the china dinner deliberately,right. there is so much reading of the tea leaves of on navarro's attendance this official feels it's a deliberate message to the chinese on bringing his china hawk to the din we are xi jinping. that's what the official had to say. where does that leave us in terms of some analysis of where we are likely to go tomorrow it's all -- it's very clear here that the president himself is making the decisions and those decisions can change right up until the last minute it's clear there is nothing in stone at this point. there is no predetermined outcome here but you do get a sense that one option anyway that people ought
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to be thinking about is an option -- a scenario in which the officials leave the dinner tomorrow night and sort of have a squishy positive outcome, which is they say nice things about each other and both sides, suggest they continue to have dialogue and perhaps say that the united states might even hold off on the tariff increases which are now scheduled on january 1st in order to continue that dialogue. but we don't get any real specific announcement of deal terms in terms of this a soybeans to be purchased, that number of vehicles sent and that sort of thing. the idea that we could get a grand bargain deal here, you get a sense that officials are perhaps steering us away from a that and more to the idea we could get a positive outcome in terms of the rhetoric but not in terms of specific deal announcements tomorrow that's my sense of the lay of the land here in buenos aires now, brian but, again all this could change it's very much a moving target as we have seen throughout the course of the day.
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even the schedule of the meetings who the president is meeting with changed during the course of the day. we are continuing to fl this and bring you everything we can, brian, as we get it from officials and folks in buenos aires. >> eamon javers in buenos aires. eamon wewill see you in a bit. soon thank you very much. well the market is moving high ner the last half hour. dow and s&p closing at session highs. let's check with bob at the new york stock exchange and the headlines seem to coincide with the announcements from the chinese officials. the chinese officials are kind of positive. >> i'll tell you, the chinese officials moved the market not president trump. look at the s&p 500. melissa is right 12 points in the last 309, 40 the minutes. reports from chinese officials, the consensus is schedulely increasing in talks with the united states but differences remain that -- we were flat when the announcement came up we see we are up 12 points who knows this is all part of
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that process of creating a truce. let's be blunt about that's what the market is looking for. you see how the markets react to any news of a truce. here is sectors for the day, banks strong towards the end terrible performance in the early part of the month. better towards the end of the month. health care is the number one performer. money out of tech into health care is the big story for november and energy, what can i tell you just a mess as a sector only down 4% with oil down 20 health care the high list is all health care stocks pfiz pfizer meerk abyes anting pep downgrade from bank of america from goldman sachs goldman sachs new 52-week low and oil service -- oil service stocks i know some down 25%, 30% overall in the last two months so hal burton, doesn't matter. it's generically awful for the energy stocks. we'll see how we go into the
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close. >> we will two hours left thanks. the markets of course will be watching president trump's meeting with china's leader xi tomorrow tomorrow night in argentina. they are two hours ahead of eastern standard time here the big question, will there be a trade deal with china and if so how might it look in lee styslinger is the chairman and ceo of al tech and he cult consult was the president on trade. mr. styslinger thank you for joining us what kind of advice and tone or whatever did you suggest to the president if any before he went to buenos aires? >> well, i think you have to begin with the big win that we all experienced and this morning with the signing of the usmca agreement. this is ground breaking on so many fronts, and has a huge implication for china u.s. negotiations >> why kous that what was so big
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about it the market is not reacting. >> the market is positive. as you heard it just turned and is turning positive. it's a huge win because there are 11 million jobs at stake in north america. sol 11 million jbs aobs tide to new agreement. with that as a framework, working with the president, working with ambassador lighthizer that is the framework we'll be able to use going forward with u.s. chf negotiations >> how is that a framework, lee, aren't the issues completely different? >> they're very different issues but very similar in some ways. you have the issue first and foremost of intellectual property huge intellectual property issues, much larger, broader trade deficit issue to address and you also have the issue of market access. where companies like ourselves and many others have difficulty with free access to the chinese market similar in many ways to some of
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the issues we were addressing with the u.s. mca agreement. >> in terms of the company -- your company's access to the chinese market i'm curious if for you perhaps not only is the china trade issue a big one for you, a potential barrier, but also the u.s. calling on its allies to ban huawei equipment how does that factor into this i would imagine that tan tensionally plays an impact on how your company is perceived in china. >> well our company is focused as many other companies- dsh member companies brt, nam, other companies are focused on making sure that intellectual property is addressed that is 100 to $$500 billion annual issue for u.s. companies. a very real issue. the second is intellectual transfer and intellectual property so there is very difficult stipulations in order to operate
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within china today that do not make it a fair and level playing field for american companies, companies from around the world these negotiations -- these negotiations >> you won't get pushback from many parts of the world on that. it's been clear with the ip story. however you are a business owner, a ceo >> yes. >> the president of the united states and congress cansay things we want you to do this but ultimately unless it's in the law it is up to you whether or not you want to do that president xi jinping, similar story, more stop down. he can say don't steal intellectual property. but it's thousands or tens of thousands of companies that ultimately make the determination. are we placing too much weight on the power of xi even in in re government. >> that's a great point. this is a complicated issue and not easy to address, particularly when talking about 1.2 plus billion people. but having the agreement in principle or the agreement between our two countries to say
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we are having mechanism for enforcement. that's what we are focused on. i know that's what the president and the ambassador are focused on in making sure we do have good enforcement, and a mechanism in place to address the huge issue of intellectual property and market access >> lee styslinger, chairman and ceo of alltech a real pleasure to have you on cnbc have a frustrate weekend. >> thank you. >> well it's a call that everyone is talking on the street today deutsche bank cut the general electric price target by 36% hi, there. >> you can't have -- that was -- you should have moved your lips. >> the ratings -- the ratings spiked in that 4 seconds. >> because of. >> you yeah i was on camera. >> did i seem skeptical just now. >> you did. >> because i was the call on g.e. that's what everybody is talking about take a look at jern electric slide right now down by 6.25%. let's bring in the deutsche bank analyst lowering the price
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target by 36%, the lead analyst for u.s. multiindustry and equipment at deutsche bank thanks for being here. >> thanks. >> we have seen this slide and slide. and at the core of the slide i think is investor's worst fear and that is a liquidity crisis in the next couple years you say that's not happening you're officially taking that off the table in your view. >> that's right. we decided to publish a bear case analysis looking at what free cash flow could loobl in the worst case stoer we assumed a modest recession and maximum drag from contract assets, progress payments and kind of came to a number that g.e. will have about $5 billion of cash by to 21 which is wrp they are today in that scenario because of all the asset sales they announced are offsetting the froh cash flow drag we project. >> you said a modest economic recession. in this note it says the economic downturn don't happen
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through 2021 what are you forecasting you know when people talk about potential recession scenarios, they are talking about 2020, 2021 i would imagine that that is an important part of that model in terms of saying there will be no liquidity crisis. >> right that's right basically we have two cases we laid out a base case and a bear case. the base case is the $7 price target is based on that assumes we have a low single digit decline in most of the businesses outside of power which seems to be finding a bottom in the bear case we assume a high to mid-single digit decline across the businesses that's the difference. >> are you seeing- you know at cocktail parties people focus on the price. at $7 it has to be cheap he ethey don't realize it has 8.7 billion shares outstanding and gobs of debt i mean a classic value trap wanna be.
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>> it appears that way to be talking to equity investors there doesn't seem to be an appetite for work on the stock that comes to lack of management and the lack of insight from management and it feels too early for a lot of investors. >> i'm curious, nicole, do you think the street is ahead of or more bearish or bullish than some of the credit analysts? i asked you this because nicole -- g.e.'s debt is two notches above junk if it becomes a fallenual, that could be a dire circumstance for the company. >> yeah, i mean i could speak to that i'm close with our credit analyst. and his commentary is that his credit clients or the guys that own g.e. debt are worried about liquidity. he is having a lot of conversations about that our view as a firm and see g.e. debt can remain investment grade based on our own analysis of g.e. capital and g.e. industrial over the next several years.
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>> nicole, thank you nicole deblaze of deutsche bank. >> thank you. >> sheryl sand berpg reportedly telling staff at facebook to research george soros. the question is, is that a big deal or simply becoming one because they didn't disclose it sooner the latest headache to be facebook and the potential fallout. and more on marriott owes massive data breech was your information, passport number, bank book, exposed how big of a problem could this be for marriott? and one way that you can benefit from the holiday shopping rush that does not involve retail stocks -- that's right -- we are breangut tki ohe yuell log on power lunch. still november stick around place, the xfinity xfi gateway.
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welcome back to power lunch. here a facebook up nearly 1% today despite another negative headline sheryl sandberg reportedly told facebook staff to investigate george soros julia boorstin live in los angeles with the latest. >> melissa, that's right "the new york times" reporting that facebook ceo sheryl sandberg asked the communications staff to look into whether george soros had a financial interest in facebook after soros called facebook and google at a for number january sandberg reportedly send an email to her staff asking if soros shorted the stock.
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this piece raises concerns that facebook has not been forthcoming, this after the company drew criticism for use of controversial d.c. research firm definers which circulated information about soros backing graups critical much facebook, including a group called freedom from facebook. facebook responding mr. soros is a prominent investor when we looked into investments and trading activity related to facebook that research was already under way when sheryl sent an email asking if mr. soros shorted facebook stock sheryl never directed research on freedom from facebook but as she said before she takes full responsibility for any activity that happened on her watch. as you mention, melissa, facebook shares are up today but worth noting they are down nearly 35% from a peak in july back to you. >> julia, thank you. julia boorstin in los angeles. all right coming up shares of under amor having a good day. actually on track for the fourth straight month of gains with a
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winning streak under armour under armour trading nation knows chantix, along with support, helps you quit smoking. it reduced my urge to smoke to the point that i could stop. when you try to quit smoking, with or without chantix, and it is next you may have nicotine withdrawal symptoms. some people had changes in behavior or thinking, aggression, hostility, agitation, depressed mood, or suicidal thoughts or actions with chantix. serious side effects may include seizures, new or worse heart or blood vessel problems, sleepwalking or allergic and skin reactions which can be life-threatening. stop chantix and get help right away if you have any of these. tell your healthcare provider if you've had depression or other mental health problems. decrease alcohol use while taking chantix. use caution when driving or operating machinery. the most common side effect is nausea. my favorite role so far? being a non-smoker. no question about it. talk to your doctor about chantix.
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welcome back to "power lunch. i'm mike santoli time for trading nation under armer is bulging up.
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the at leisure player rallying after the a rating from wells fargo. the best win streak since 2014 piperafterry and boris is here craig over the longer term this stock has been all over the map. half the current price a year ago but twice the price three years ago. how does the setup look to you now. >> mike the setup on under armour looks great on the charts a longer term bottoming formation setting up technicians call it inverted head and shoulders bottom. when you measure from the head to neckline suggests a measured price objective up in high 30s we'd be a buyer here when you look at the bottom part of the chart i put out i put a short interest ratio it's declining since march so it's not only the short covering here but there is some meaningful buying coming into in this you hear upgrades from the
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fundamental analysts >> boris, that high short interest in the stock of a few months age ago and a couple years ago really seemed to represent the fact that it's never been an inexpensive stock. it's always looked overvalued then became a horse race between nike and under armour and adidas how do the fundamentals look. >> i grow. it's a great buy at this point it was left for dead basically but came back. it's turning cash flow positive for the first time since 2014. they righted the business. the cowas trying to get back the distribution channel and they seem to be doing that. the brand has always been strong and hount they got tremendous amount of pr out of the curry girls sneaker story which could create a brand of loyalty for them as far as the market. overall, i think the stock is doing a lot very positive. which is why you see almost everybody on wall street upgrade the stock and look for better growth going forward if there is any correction it's
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myren. overall it looks like under armour is here to stay for the time being. >> add leisure here to stay. what can't steph do? he can help $10 billion company in addition to everything else on court boris and craig thank you. for for more trading nation head to the website or follow us on twitter back to you brian. i want to see the trading nation team in at leisure that's a segment i would wind chill coming up forget the retailers. the big winners this holiday season might be the payment stocks look at some names that could move higher has shoppers make the way to the cashier and will the president be the santa clause bringing this market and your money a rally? how do you play into year end? a lot of questions we have answers after the break. >> announcer: now the latest from trading >> traders short stock when they think they're going lower. the number of shares sold short is called short interest short interest is often used to
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gauge market sentiment a rising short interest can mean investors are becoming more bearish on a company however, when short interest reaches extreme levels it can be a contrary indicator because traders are oftefoedn rc to buy back short stock and that can drive the stock much higher. if these packs have the same number of bladder leak pads, i bet you think bigger is better. actually, it's bulkier. always discreet quickly turns liquid to gel, for drier protection that's a lot less bulky. always discreet.
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hello, everyone i'm sue herera here is the cnbc news update a massive 7.02 magnitude earthquake has rocked anchorage prompting people to run out of homes and seek shelter the geological survey says the quake was 7 miles north of anchorage. a tsunami warning ha has been cancelled. central americaen migrants waiting to plead their case in the u.s. launched a hunger strike u.s. border officials say they may have to stay put for months before they can petition authorities. a water tower and smoke stack were imploded on a historic military site in new jersey the twin structures were taken down at the former military ocean terminal with explosives
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to make way for a logistics center and you think you have air travel problems. well a plane carrying angela merkel to the g20 was forced to make an unscheduled landing thursday night in western germany then then a military plane flew her to madrid where she took a commercial flight hopefully there by dinner time that's the news update this hour flying commercial is so much fun, brian. >> well, okay. i mean here is the thing our producer this fine hour abc christina is a german american. >> exactly. >> she is intently watching this on flight tracker. she has -- ms. merkel has an hour and 45 minutes to go and somebody sitting in business class -- look at this. a picture. you know you are trying to take a picture but not let them know you're taking a picture. >> yes. >> there you go. america zblool there is a look. >> we've been there. it's a long flight. >> yes, we have. and basically the delegation has
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to be smaller because there isn't as much room, correct. >> her husband had to stay behind. >> yes. >> and apparently a plane or their version of air force one which i'm told is call the conrad adenau the er. >> you did very well at least to me i don't know check with christina. >> she said i did very good. danke. >> thank you let's get a check of markets we did see stocks turn positive in the past hour the dow on pace for the best week in two years. the s&p 500 in six years we are at session highs right now. dow up by 86 points. s&p 500 at 2750. at up 13 points. and nasdaq up 24 we are watching airline sexton stocks the etf tracking sector. xal on pace for the best month since 2014 because of the shopper drop in oil provides among the names posting notable gains, jet blue, united and american they are all up more than 10%
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this month brian. >> good gains there. all right well speaking of gains or not, the oil market is closing for the day. when with we say gains, jackie we are not talking about oil. >> we are not. and actually it was a coincidence i wore red crude negative on the session. but pairg the losses before the week dropping under $50 a barrel again. but not closing under $50 that's showing the market isn't sure what's coming. and it's difficult to speculate with the opec meeting next thursday these things have a funny way of playing out as we have seen in the past of course this meeting, the tensions, dynamics, competing interests, all quite dramatic. the session low was $49.65 a close under $50 traders will be sure we are headed in the other direction. wti was down 30% quarter to date 22% over the course of the last month, guys. >> all right, jackie, thank you very much. tough week there. well despite oil's slide
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stocks overall turning high are. investors focusing on the g20 meeting. of course that summit, a major test for the world's top economies as news comes out of the meetings, what's the potential for yes a santa clause rally? look at that bring in katy nixon chief investment officers wealth management trust and ron a cnbc contributor and lee ona ceo will ljpr financial advisers. katie, i get it. it's the time to be thankful thankful for friends like melissa. historically it's a good period for the market don't of give me that look. >> i roled my eyes sorry. >> famous eye roll but nothing normal about in time ever in history whether it's the trade fight, the fed delevering brexit how much does history matter right now >> well, i mean i think we entered this year with a major tailwind and a couple of headwinds. the tailwind of the tax reform
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propelling earnings and headwind around valuations and now on the move we end with the tailwind dissipating and additional headwinds we have the fed on the move at a slower pace and the fed walked back to the where the market is. but earnings growth is dissipating. and now the big trade issue, a gigantic overhang for the market and sentiment. for a santa clause rally to happen with sustain ability we have to see a partial resolution of the trade issue. >> didn't jay powell tell us that the fed had our back when it comes to the impact on trade and trafrs etariffs? steve lightsman mentioned that the trade was mentioned a dozen times in the minutes than a month before hand. >> and he the risk of higher interest rates which for the federal reserve chairman telling you the interest rates are a headwind.
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he said they have achieved the goal and now what they are trying to do with deference to you sully. is to land the plane in sully event that has been elusive in the past that's. >> they're calling this the chesley sullenberger market or the ron howard market. >> perhaps. >> what are you watching lee on, the g20 is getting all the attention. but it's going to come and go we have the fed, brexit what's most important. >> well it's christmas time i'm thinking about the elves i think about the elves in d.c. and down in argentina right now and the elves at the fed he will of jerome has what he wants to do next year with the interest rates he softened his tones. the two big he will ofs in the g20 have the choice of removing tariffs. if you think about it this is a presidential cycle as they went on one which they can go off the other way.
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you can see an impasse and that's good for the markets. same for the elves in washington have the ability to give additional tax reform. we could get a little bit more tailwind wush push with the retirement changes and technical corrections. so i've got a slight level of optimism that the elves might deliver. it could be foggy christmas eve but could get through the 20th and somebody someone may light the slay we are looking for a impasse from argentina, a distinct hold on the fed obviously get our increase in december but probably a hold for next year, which would be great for the market we might delay the well waited recession. might be something we see later rather than sooner that's what i'm hoping for i'm hoping for the christmas present. >> there are two things i watch closely. we are not getting a deal out of the g20. the deal we get would be a suspension of future tariffs and the agreement to discuss more with the chinese come the start of next year. >> isn't that good.
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>> it's good as far as. >> because it may not get worse. >> right there will be some relief in that regard. i would also note the "washington post" this morning identified president trump as a prime suspect in the mueller investigation. now markets haven't responded to that nor have they through the process. but he is individual number one after mr. cohen pled guilty yesterday about lying to congress this may be ratcheted up, not discounting the possibility of a santa clause rally because these have some seasonal push. but injury the mueller investigation is in a matter of weeks more important than it's been so far along the way. >> i mean, the thinking there- just to connect the dots you think the president actually gets named, that there is some constitutional crisis involved because that's when the markets care we have been down this road as you pointed out many times, right in the past year or so markets don't care >> yeah, markets. >> until they do. >> well, yes. >> they've been able to look through the political noise. we have gotten used to it, the
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comfortably numb aroundthe stuff that coming out of washington and a firm focus on the fundamentals where the political situation impacts the fundamentals is where the market cares then it comes back to the g20 and trade. and i agree with you a best case scenario for the market would be a deal to make a deal. i think a no-deal exit from g20 is a bad outcome for the market. i think having a deal to put together a framework, that deals with the existing tariffs and sets the stage for pennsylvania constructive discussion are not just the future tariffs but the bigger issues around intellectual property theft and ip transfer. you are right if we reach any constitutional crisis we will have volatility in the market but it won't have staying power unless it impacts the economy. >> right lee on, let's say you get the christmas present do you invest for the present. >> yeah. >> or is it worth doing that or is that such a long shot that you are looking through that. >> i'm an old time asset the
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aloindicator we are looking at rebalance, giving us the opportunity to go in that direction and take it to the upside if you are in partially in and partially out you're always participating. i would say there is substantial room the real area to look at is china. there is probably a rally out of china with a deal to make a deal you might want to look at chinese stocks as well because they get a rally pretty big. >> katie what are you doing right now. >> we're neutral risk in the tactical portfolio as we chatted fair the tales are fatter. the uncertainty is broader the risk return tradeoff suggests the middle. we like high-yield bonds especially with the high selloff recently. >> you don't worry about the fact that energy -- i mean if oil keeps falling there is a lot -- i think a technical term, a lot of debt attached to the oil and gas firms. >> in high-yield. >> here is the thing
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i agree. i would never predict short-term price volatility but the uncertainty is priced in already. and unlike, the prior cycle where with had the terrible downdraft and energy we didn't see the overbuilding and overleveraging and capacity that we had last time we haven't seen that the risks are a bit lower. and the lower risks are priced into the bond prices >> yeah. >> yeah the problem with some of the oil high-yield is it's heavily weighted in the high-yield index and other areas that it prompts investors to sell what they can if they can't tell what they own the investment grade top traufrmg would be interesting going forward if we don't have a meaningful slowdown and theed fed stops raising rates. >> and it's over 4% in the yield. >> katie nixon of northern trust wealth management. and lee onof lpjr.
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>> another data breech, coming up, another 500 million marriott customers could be impacted, including passport information how bad could it get for marriott that's next. look at the map we are at teilr,bmndghs right now. carpla i a intel leading the way. stay tuned here at snowfest... for your worst sore throat pain, try new vicks vapocool drops. it's not candy. it's powerful relief. ♪ ahhhhhhhhhhhh vaporize sore throat pain with new vicks vapocool drops.
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marriott, disclosing that the personal information of up to 500 million guests -- you heard that right -- staying at starwood hoe he wills were in a massive data breech dating back to 2014. the stock down on the headlines as you might imagine what impact could this half on the stock in the long run? rich this has to make your job marred as a data analyst there are so many things we don't know. >> there is a lot we don't know. it was a little bit of unexpected news this morning as i came in on the train and i think, you know, the approach we took to sort of figure out what this means for investors is going back and looking at a little bit of history, looking at the reference universe for similar public company incidents in the
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past and what it meant for stock performance and what it meant in terms of the financial impact. in this case, you know, look, i would expect -- let's assume a worst-case scenario where you have a several hundred million dollar or even north of that impact to marriott that's roughly a dollar $2 per share at the high end of the estimate when i see the stock down 5% or more on the news alone, i get the sense that it's a little bit oversold at this point without -- without further information. and we have been defending the stock so far today >> rich, when you tack about the impact to eps are you including the potential impact of a gdpr fine >> it's sort of an all-inclusive number. >> have you done the back of the envelope in terms of if they incur the maximum fine gdpr, let's say for not notifying the customers of the data breech fast enough because according to
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the gdpr they have 72 hours. it's been more what would it cost. >> that much is unclear. the only thing i've seen today on that is from the insurance ration which of course i'm not insurance expert but they are insured for this and if it is in the several hundred million dollar range or more, be this is a company with 350 million shares outstanding 3 plus billion dollars of free cash flow every year predictably. i think at the end of the day -- i don't want to underplay the severity of it but i think at the end of the day it's probably less impactful. and the i think is discounting at the moment. but there is a lot we don't know i talked to the company this morning. you know, they made it clear that they have done everything that they believe was in their power to do at every juncture along the way. and this is where we are at the moment i expect more news on this over the ensuing months but, again, as of currently right now, i do think it's a little bit oversold.
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and, again, let's go back and look at history. you know, in the reference cases that i have looked at this morning it's about 15 companies that went true this. >> we appreciate that but the reference cases they didn't have gdpr in effect. >> fair point. >> and there wasn't the sort of real scrutiny when it comes to data privacy here in the united states either. >> right. >> in terms of regulatory overhang. >> that's a fair point and the only thing i can say on that right now is this is going to be a fact of life not only for marriott but for every other competitor in the space and every company outside of -- every customer facing a business that i can think of. but it's a fair point. >> the stock is down 15% this year >> yes. >> and so it's already been sort of on the decline prior to the data breech, rich. there is a recent note from goldman sachs about hedge fund positions and this had been one of the most popular hedge fund stocks became a fallen star are you the getting a sense that the hedge funds are flush out of
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this and that trade is over there and at least maybe the stock finds a there were >> great question. you know, look, we often pair the lodging c corp.s against the longing reits. and of course there was a trade on that flip flopped earlier this year. when you look at price and volume and technical symbioticers -- and of course we talk to clients all the time on the long only side, hedge fund side i do get the sense the short has been crowded the last few months you know we took a positive view heading into earnings. assume that the outlook for 2019 -- and marriott put out the outlow back for 2019, the preliminary outlook. assuming we are not in recession the next 12 months i think the suffolk can do okay and you could see short covering maybe subsequent to what we are experiencing today. >> okay. rich, thank you. >> thank you. >> rich high tower of isi. coming up the best stocking
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stuffing for portfolio why credit card stocks could flush this season. and low back at the s&p 500 heat camp stocks are gaining steam entering this everyone a's trade. the s&p up by 13 points. industrials, health care, utilities leading the way. utilities leading the way. stay tuned sore throat pain with new vicks vapocool drops.
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the kountd count down is on. all of this as credit card stocks continue to out perform american express hit an all time high this week our credit card stocks another way to bet on the consumer this holiday season robert is partnering great to have you with us. >> thank you for having me >> these have been pretty good performers so far this year. what are the drivers of that growth >> well, the drivers of that growth, it is really a multi-decade from cash and checks there's a long way to go and business payments, 20 trillion markets. it is driven by the consumers
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shifting to electronic payments and now other forms, businesses starting to cut out cash and checks as well >> what are the revenues you're talking about? >> it is relatively flew it has been going on for decades businesses paying other businesses a 20 trillion market as much as 100 trillion market over time. it is probably 20 trillion that could be addressed today businesses paying their accounts payable or getting accounts receivable really the technology has gotten to the point where it is very efficient for businesses to pay electronically you would be surprised how many businesses still primarily pay by check >> aside from the payment processes when you take a look at some of the credit card issuers, the capital ones of the world what are you seeing in
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terms of the reads on the u.s. c consumer are defaults coming up what are the trends there? >> well, the consumer in the u.s. is very very healthy. the best way to think about credit trends is to look at the unemployment claims. unemployment claims are pretty much at the lowest point per capita in my lifetime. it has gone up from all time lows and shows signs of stability. >> they have gone up modestly and have been limiting their exposure to sub prime lending.
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until the last recession compared to where they were with a prior ten years or 20 years if you would. it is at some of the credit card companies but not much maybe taking down credit lines a little bit in some cases others are expandsing credit lines. i think american express who has the best credit quality along with discover, you know, pretty close by, they have actually expanded their credit lines a little bit >> all right thank you for your time. >> thank you >> robert and william blare. >> all right just over an hour to go for the trading week and trading month. let's get a market flash on what is taking us higher. >> all right so a broad based afternoon rally on wall street with major averages once again moving towards the best levels of the
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session at this point in the afternoon we have industrials, health care, all financials all leading this kind of recent push to the upside. among the individual stocks we are caterpillar as they continue to digest headlines. it is the best performer and dow together with home depot, suppose account for nearly half of the dow's gains you also have american airlines another stock building on the gains from this month amid the sharp decline. i would also point it if you include visa along with home depot and of course what we just mentioned those five stocks represent the entirety of the dow's gains so far this afternoon. back over to you >> great stuff as always check please is next let's begin. yes or no? do you want the same tools and seamless experience
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here at snowfest... for your worst sore throat pain, try new vicks vapocool drops. it's not candy. it's powerful relief. ♪ ahhhhhhhhhhhh vaporize sore throat pain with new vicks vapocool drops. so, they say that ai is the building block of the future. super. but today you're building wind turbines.
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morning sir. chief, the blade isn't passing quality gate. that's why you work with watson. i detect frictional loss on the midspan. it can detect the tiniest defects from just a few images to help production stay on time and on budget. i optimized the fiberglass finish to reduce frictional loss and maximize airflow. i was also part of the maximizing. for ai that can do more with your data, choose watson. hello. the best ai for the job. it's not just lower gas prices, remember, 240 billion maturing in the oil and gas industry according to s and p. >> that is a lot >> that is a lot some say between 35 and 40 could be a paying point for some of these. >> depending how much they borrowed, yeah >> want to talk about ge they cut our price target to 7 bucks a share.
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ge's debt a $20 billion credit facility comes due in 2020 that is the key thing to watch let's hope there's no economic slowdown >> price doesn't matter as much as shares outstanding. >> thanks for watching >> closing bell starts right now. it's time for the closing bell stocks finding a little bit to close out what has been a volatile month >> executives with big business riding on the outcome. >> a massive data breach leaving half a billion customers exposed. we'll take a look at a previous hack attack and how companies faired in th


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