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tv   Power Lunch  CNBC  March 7, 2019 2:00pm-3:00pm EST

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one type of addiction to another type of addiction? secondly, there's a brand issue as well associated with it, but it's a possibility if the safety concerns are not as bad as everybody feared. >> ana, great to see you ana gupte, thank you that does it for "the exchange." time to join tyler and melissa for "power lunch." >> see you in just a moment. i'm melissa lee with tyler mathisen new concerns about global economic weakness. the ceo of american airlines, his stock down 40 plus percent in the last year can he turn things around? the latest on trade. the china deal and new nafta from a congressman who met with robert lighthizer today. "power lunch" starts right now >> hey, everybody. how are you? welcome to "power lunch. down day for stocks. off the worst level of the day,
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we should point out. fears about a global economic slowdown that is the predicate today for why stocks are lower biotech defense, banks, all headed for their worst week of the year so far. but utilities in real estate, the defensive sectors, still riding winning streaks right now, as you see there. investors on edge, kelly >> yes, they are, ty fears of a global slowdown are growing. you can hang today's concerns on mario dragi and the ecb. the floor of the new york stock exchange with more bob? >> hello, kelly. will the central banks cop to the -- come to the rescue of the markets? we had a fed pivot to a dovish stance today, we have theecb pivot. ecb chief mario dragi leaving rates changed in europe as expected but dramatically downgrading to 1.1% from 1.7% and launching another lending program offering cheap money to the banks.
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in the meantime, the usual market leaders are weak. we heard from tyler, banks and industrials, for example, weak but the defensive names are back up and this suggests rotation indeed that has been the pattern of the last two weeks as the market leaders we keep talking about like the russell 2000, more defensive names like reits and utilities, on the flattish side. nothing more than modest profit taking and overbought sectors. what we need, kelly, is more growth out of europe and china and that would reverse the downward earnings revisions that we've been seeing. back to you. >> all righty, thank you very much robert is that global economic weakness creating a road block for stocks head wind, choose your cliche, folks. transports down 10th straight date for that. that hasn't happened in 20 years. european stocks taking a hit today. euro stock 600
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gruden capital and kumar, of kumar. you both name your companies after yourselves >> when you get to a certain point, you just do that. >> and the head of liesman capital, steve liesman >> liesman global services >> i'll get to you, donald, in just a minute. stay there like, patiently wait what do you think? are we heading into a recession? is that what the market is telling us it feels to me as though the market is sort of sucking wind >> the market is sucking wind but you have been leading on to a recession for some time. i think we had it postponed by the fed pivot that i'm sure steve will also talk about december to january, they made a dramatic change. that change is the trajectory for the stock market but it does not forestall a recession happening. >> the effect of the pivot,
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steve, has it run its course >> in the stock market >> yes yes. >> it depends always on whether or not the change in policy is equal to the change in the outlook. and i think for the initial round of weakness, i think the policy was well suited if we do take another leg down here, i think the fed pivot is not going to be enough and what was interesting in listening to dragi this morning, i don't know whether or not what's happening in europe is europe's problem or a problem of what's happening in the globe and something that keeps coming up that we're maybe not paying enough attention to is the slowdown in global trade to the extent to which some of this caused by the tariffs and retaliatory tariffs and you might have had some of that going on ahead of time, some of that was happening there were two studies out on the impact of tariffs on the economy. one of them talked about if current tariffs were in place
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next year, $165 billion worth of trade is going to have to find another route. dislocated supply chains there are effects that go beyond the pure percentage point gdp. i'm really focused on this issue. europe's problems europe's own or part of a global, a bigger global problem that we have to think about that begins with global trade and i want to thank carl weinberger who talked a lot about that. >> tyler, along the lines that steve talked about, i think europe has clearly problems of its own, which we have seen for some time in in terms of >> recession, germany may be. >> and the recession, that's what the ecb was referring to but going with what steve said, it's being compounded by this slowdown in global, because europe is much more export dependent than the united states in germany, 41% of gdp from exports in the united states is 13%. >> let me ask you this though.
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do you believe there will be a china trade deal yes or no? >> i believe this will be. >> the chinese government is embarking on a massive wave of stimulus as they outlined just this week as the people's national congress. if we are to believe that china is doing everything it can to lift its own economy, doesn't that also help europe in the end? so therefore, stave off the worst brunt of the european slowdown >> it will, with the chinese stimulus actually going to help push up the chinese growth i don't think it will. it will only slow down the rate at which the growth is falling off. they have just projected that the gdp growth will now be in the sixth percent, 6.5 or 6.7 and if you look really at the statistics that matter, railroad traffic, electricity consumption, consumption taxes going to the government. they tell you a very different story. the economy is going very
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sharply and china not going to turn around quickly. >> speaking of that, listen to what we just heard wilbur ross sat down with jeremy grantham here's his takes on u.s. stocking right now. >> you can't get blood out of a stone. with these prices. even the bulls and everyone in between at gmo agree over a long horizon like 20 years, u.s. market will deliver 2% or 3% real and for the last 100 years, we are used to delivering perhaps 6% rails so it's not the end of the world but going to break a lot of hearts when we're right. >> they've been bearish for a while. do you think the 2% or 3% real returns is something you're forecasting for the stock market or would you think it can do better than that as it has for the past decade? >> 2% or 3% more likely for the decade to come, kelly, because
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we have had a one-decade where you have immense amount of monetary stimulus which i think we had a tailwind. you can do that only once. that story is long over and now we are talking about technological changes and i think you are looking for slower economic growth and therefore, slower real rate of return both on the fixed income and equity side. >> sri thank you, sri kumar and steve liesman at liesman global services worst losing streak in years. the managing partner at brottn capital. when you're tracking air freight in particular, it seems to attract along with pmis and the pmis in china, in europe, they have been falling and so we have seen that in turn in air freight traffic. >> exactly you think about it, you air freight chips. computer chips and so what happens is you're
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basically moving 1% of the value of the tangible goods flow but 15% of the, i'm sorry, 1% of the weight, 15% of the value so it is literally the tail that whips the dog in telling us what's happening with overall manufacturers. >> this is the global story. in terms of what's happening with the u.s. when it comes to transports, are things looking okay >> looking great the industrial economy is robust and realtime data, what's happening with trucking, the economy continues to be robust and the consumer side continues to grow. >> what's going on with the transports what do you make of in this >> fedex warned. >> airlines today. >> passenger airlines is a different story but people who move freight or goods, that's the predictive value of the dow transports that predict. the airlines are --
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>> not telling us the tleading edge of the economy. the dow transport theory back tested becomes even tighter if you take passenger airlines out. >> tighter correlation should we take them out of the picture? >> fedex is an indication of what's happening with e-commerce but globally. >> fedex are the stocks struggling because of amazon and changes and parcel delivery and if not, they are telling us something quite cautious about the economy, right >> they're telling us europe, as we just discussed, on the verge of recession in bound, down 15% for to 30%. >> not a u.s. story. it's the international >> that's what's happening the xpo and also a great opportunity because you're buying high quality deliverers of e-commerce at a discounted price. >> the shanghai inbound freight so much. the chinese economy is slowing so much? the demand >> look at an iphone
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$350 worth of parts and pieces china runs as surplus with us but a deficit with the rest of asia the processer, the lens, the glass, all comes in as parts and pieces and it comes out if i want to know what overall is going to be, outbound is going to be, see what the inbound is when the inbound coming in is down 15 or 30 plus percent >> this is all apple's fault the smartphone maturing. >> apple is just what you and i ready identify with. there are plenty of other technological things that get assembled but you're right >> that's a different story than a cyclical one which is why it's interesting to say, how much is because the market is stagnating and real weakness? >> that's part of it and we need to get a trade deal. i disagree with the 2% or 3% terminal rates of growth
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this is an amazing country with amazing amounts of technology and innovation we can blow way past that rate of growth if we, if people aren't continuing to steal our intellectual property. >> invest in transports, more to the u.s. or global >> we like domestically based and ooere-commerce based and pe like echo, global logistics. we're having a change in the eld rule coming up in december, an additional change that's going to lead to a lot of disruption and a real opportunity for anybody. >> is that a trucking thing? >> yes, the eld rule said the big class 8s had adopted electronic logging device. there's an additional rule and everybody was worrying about it. like y2k calamity, as it seldom is, this is what we're talking about and then not only a revamping upgrade of what the class 8 big heavy duties do but inclusion of the class 3 through
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7. the fedex, ups, amazon delivery trucks, the local cable utility trucks all had to have elds and if that need isn't met, they've got a problem and nobody is worried about it yet that could become very disruptive zdisrup disruptive. >> great to see you. dollar tree is higher after announcing it will close 390 family dollar stores a wave of closures changing the retail straight ahead american airlines ceo ugdo parker that's all ahead on "power lunch. this isn't just any moving day.
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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. up nearly 2% and the announcement closing 390 family dollar stores. it is just the latest of retail closures across the country. courtney reagan with a look at that for us. court? >> the trend we're seeing, in 2018, fewer store closures than 2017 but 2019 is starting out to be another year for major retail closures year-to-date, at least 5,163 store closures announced compared to 5500 but in all of 2018, to be fair, when you net out the closings with announced new store openings, you get a net 3577 store closures announced so far this year compared to 3,075 in all of
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2018 some of the closures are from bankruptcies or liquidations but others just underperforming stores in a more typical pruning that does often happen after the holiday season so payless is closing all 2100 stores left over gymboree, charlotte russe. liquidated after failed bankruptcy renegotiations. asina retail lane bryant, justice, maurice's and catherine's, close 400 collectively and dollar tree closing 390 family dollar stores gap inc going to close 320 gap brand stores 117. a lot more but those are just. >> what's this going to do to that real estate how is it going to get reused and what's the knock on to the real estate companies that own these? >> it depends. not all of these are necessarily
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mall-based sol in strip centers so free standing or strip centers, sometimes, you can put in a dental office, you can put in a planet fitness, put in something else a little different. that is starting to happen in the malls as well. it's a little easier in the strip centers because the way the co-tenant agreements of what's allowed and not allowed to be sort of around those stores but it's interesting as we have been following the mall occupancy rates and they haven't dropped that much but the mall itself is starting to look different. more food places, more services, less apparel stores, far, far fewer than they used to be in the malls. so you have to really dig in beyond the numbers the occupancy doesn't tell the story. >> lived in my town more than 30 years and when i moved there, there were a lot of retail shops there. now, practically everything is service. it's either a gym or a yoga place. i was going to say a massage parlor, but i don't want to say that, yoga but spas, day spas, things like
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that. >> can't get a massage on amazon, not yet. >> not on amazon not yet but it is changing drastically and the stocks higher because, you know, we've got 390 stores pretty underperforming and if you're an investor, you don't want to keep stores open that are not making money. >> not great for jobs and the communities always but if you're an investor, you don't want your store open losing money. >> booming restaurants in our town for more on the state of retail, tory burch tomorrow at 7:20 eastern. giving us the time specific, very specific time you can set your dvrs. ahead, an exclusive interview with doug parker whether he's seeing slowing global growth and why more premium economy seats than ever. "power lunch" is back in two
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you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley. welcome back to "power lunch. i'm michael santoli. it is time for "trading nation." this weekend marks the ten week anniversary of the s&p 500 financial crisis low while stocks bounced hard off those debts, out in the group. bank of america and morgan stanley, among those stocks
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sharply off the pre-crisis peaks well before that 2009 low. frank kapalari we're talking about big important stocks on a basis are down in a bull market, any of them here worth betting on >> hi, mike. i like morgan stanley but if you go back to the march high of last year, stocks down 40% down trend the entire time really nothing to like about that, but the stock has been through this before. a chart, from '09 to 2012, down 70%. 2015 to 2016, another 50%. both times, able to make higher lows and then those rallies with a wealth of strength the financial sector etf i think now, stocks are about to test that line again if it could bounce, it could trigger a rally that could play out on a relative basis. >> the fundamental case for morgan stanley, for example, given where we are in the cycle
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and all the disruption parts of the business >> they can't. i mean, the banks don't excite me because it's tough to make money with a flat yield curve so with morgan stanley, you know, we have a company that has exposure, which is good. and in this slow growth economy, where companies are in acquisition growth, it's good so beyond that and we would expect an increase in volatility through the eighth and ninth innings of this bull market. and as that happens, active management is going to benefit versus passive management and morgan stanley's revenues, a ni diversification and then no exposure there and able to avoid the lending with a company like morgan stanley. >> both sides of the story from morgan stanley there still down from 2006 frank and mark, thank you very much for more, go to our web site or
2:25 pm airline shares hitting turbulence after a strong economy. robust travel demand and airlines increasing seats and routes let's get to philip lebeau with doug parker, the ceo of american airlines phil >> thank you, tyler. let me bring in doug we just came off the aviation summit doug, let me ask you the question on the minds of a lot of investors it's been ten day where is the airline stocks have been beaten up are investors getting a little too worked up about the state of the business >> it feels that way to us we don't see anything to justify the existing levels themselves and going even further down, there's no news i know that would justify that. >> let's talk about the specifics. there's a concern, a global economy slowing down therefore, you'll see fewer people traveling are you noting that on a global basis? >> not at all. strong globally, domestically. everything we've seen, our visibility is not the greatest
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people book 30 days in advance but continues to be very strong. no shortage of demand. >> when you look at it domestically, you have got airfares, traditionally going up in the springtime but pricing power as an industry this year do you think that happens or do you think the fares remain relatively suppressed? >> there's good values out there for everybody. but levels with the existing demand the increase a little bit more >> the transports under pressure, this concern that margins are going to start to be squeezed a little bit here you're not seeing that though, correct? >> not seeing that at all. the eps up 40% year over year we're, you know, they could obviously change as actuals come in but everything we see looks great. >> are we getting into one of those phases likewe were talking about backstage, as an
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investment community, people may watch cnbc or investors, talking ourselves into expecting bad news >> i don't know. i hope not again, all we can do is look to what we see. what we see is strong demand in travel and i think that's true across the entire group. so, you know, and i don't see anything to make that change. >> doug parker, chair and ceo of american airlines. we're going to send it back to you guys wolf has a question. go ahead >> he's not here i'll take it i've got a question for doug parker nice to see you. the notion that people don't generally book flights more than 30 days in advance but you're in the business of forecasting as well for investors, so typically what do you look at? we had a guest on who follows a transport sector and while it's different, air freight and moving people around, air freight typically tracks pmis very closely with the drop in pmis, a drop in air freights
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are there certain indicators you're look at right now >> we are a cyclical business that does move swhat with the economy and generally look to gdp and gdp forecast, which, again, everything we see is pretty good. >> do you think the forecast meaning for the united states but in terms of global demand, what are you taking a look at? >> yeah. same sort of thing by country, and then again, more importantly, what we're actually seeing in the marketplace. but as we try to make the forecast, we generally do it based on global economic demand. >> all right doug, thank you very much. we appreciate it philip lebeau, we thank you. appreciate your time today melissa. ahead on "power lunch," talking trade, a host of lawmakers discussing trade wit robert lighthizer today. republican congressman tom reed was at the meeting and he'll join us today. the heiress of disney sounding off on ceo pay and then one key
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focus, bob's paycheck. all that next on "power lunch." >> the latest from and a word from our sponsor. >> there's a classic investment thesis called the dow theory that says transportation stocks can either confirm or deny a broader market trend it's important to remember the transports can be sensitive to changes in oil prices and other market influences. so don't rely exclusively on veme theory when making an instnt decision. i'm randy frederick and schwab is the better place for traders.
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hello, everybody i'm sue herera here's your cnbc news update at this hour. speaker nancy pelosi says the house will vote on a resolution condemning anti-semitism, islamophobia, white supremacy and other forms of hate. this after freshman represe representative omar's comments sparked turmoil among democrats. will not mention omar by name. >> i don't think that the congresswoman is perhaps appreciating the full weight of how it's heard by other people
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although, congress it was intended in the anti-semitic way but the fact is if that's how it was interpreted, we have to remove all doubt. >> michael cohen filing a lawsuit against the trump organization for not paying legal fees he alleges he was owed as a result for the company. unreimbursed legal fees from the mueller investigation. on a happy note, look at that little one. a rare baby roth child giraffe was born at a zoo in england one of the most endangered mammals with fewer than 2600 remaining. no word yet on a name. that's the news update this hour melissa, back to you >> thank you, sue, sue herera. let's take a check of the markets right now. dow down and s&p down by 25 and nasdaq off by 87 or 1.1% tyler? >> thank you very much, melissa.
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the oil market closing for the day. let's go to leslie >> a slightly better day than the equity market. wti crude up about 0.7 and then 0.4% and then gas, 0.7%. the energy sector down with some of the other industries by 2/3 of a percent today and then volatile section when it surged beyond analyst expectations. crude up by about 25% today guys. >> thank you, leslie. the house bipartisan problems caucus met with robert lighthizer, the main topic of the meeting not really the trade deal with china but the new nafta, the usmca representative tom reed is a republican from new york and co-chair of the problem solver's congress congressman, welcome
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>> great to be with you. >> you're welcome. >> everyone kind of wanted to talk more about the mexico-canada agreement. what were the hot issues this morning? >> definitely. we spent about an hour with the trade ambassador and the message he delivered is one, the priority with mexico/canada done we have to pass this updated agreement. $1.3 trillion of economic activity and if we don't pass it, not only hurt american industry but canada and mexico we'll be at a significant impact potentially with recession type of results. >> and you have a district in upstate new york and i know reasonably well, not far away, there's a lot of farmers, a lot of dairy farmers out there how would they benefit from this disagreement >> the value added dairy products, being exported to canada is critical and would also stabilize the market access to mexico and canada and sets the platform this negotiated agreement in my opinion has gold standard type
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of language then deployed with china, with japan, with the eu so getting this on the books is really critical for the future trade negotiation for america. >> what if it doesn't happen and what about the tariffs part of a lot of these negotiations? is that having a negative effect for now that might sour people off of these kinds of agreements before they even really see them going into force >> that was absolutely part of the conversation today is that a lot of members and industries are seeing the impacts of the tariffs and how do we take care of the tariffs, while we get these agreements on the books and so we're in a competitive position and at the end of the day, we'll thread this needle and the tariffs be something we can take care of and move forward from. >> investors, congressman, would like to see the finish line when it comes to these various negotiations that we have going on with various countries. but at the same time, there are reports about the new administration of mexico, writing a product list of a whole new product list of goods
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to put tariffs on and the looming potential european auto tariffs. can you give us a sense whether or not once we cross the finish line on a new nafta or china trade deal, there aren't more trades or skirmishes on the horizon? >> i think it's fair to say, on the horizon, we'll always be dealing with enforcement of these new trade agreements and that is why the chinese front, part of the conversation today making sure we have the structures in place under the negotiated trade results with china so we can enforce the provisions to me, that's a critical update in the existing agreements and relationships. >> i was surprised you didn't support amazon's hq2, ill fated, in queens. when new yorkers as a whole were polled about this and not just in new york city, but the state did break in support for it, and not by a huge margin but it was there. why were you not in favor of it? >> it wasn't that i want the jobs or amazon to come but when you give away $3 billion to one
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company, i want to be a voice for those existing businesses of new york and existing residents of new york who have been there for decades and say let's stand with them before we move to outsiders coming to the state. they've demonstrated the ability to thrive in new york. >> but as you know very well now, i mean, anyone who didn't know before knows the nitty-gritty now that the 3 billion was in large part incentives and a third incentives that currently exist for anybody who would, expand in that district. they are available >> earmarked for amazon and my whole point on this. >> they would have been the bigger user of them yet. >> new york needs to wake up the the residents in new york need to change the tax and spend culture. i think new york is at the precipice of a larry hogan republican rebirth and the governor's office, stay tuned, i think that's a possibility >> congressman reed, i want to change the subject a little bit. unpack your thinking on your vote, against the resolution to oppose the president's
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declaration of an emergency with respect to spending on wall. it's been pointed out that emergency powers been evoked many times, not quite in a circumstance like this one that directly challenges the congress'spower of the purse i know you come from a district that voted for president trump and you've supported him i want to get your thoughts about whether the declaration of a national emergency in this case is a threat to the congressional prerogative to control taxing and spending. how do you think that through? >> you think it through this way. congress delegated this authority to the president, to the executive branch for decades. so it's not true to say this is the first time this occurred 31 emergency declarations on the books from carter's administration what i was proposing is look, i recognize the emergency at the border, but we need to curtail the president's power and reform the national emergencies act so congress has to vote on these situations each and every time rather than what we see with what they pick or choose for
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political purposes congress needs to do its job going forward. >> before we go, we learned last hour by accident, restaurants were left off a big tax benefit in the latest bill could be solved in 15 minutes. can you make it happen >> we're working on it well aware of the improvements and bipartisan support for reforms on that technical correction that needs to happen and stay tuned but there's a lot of us here and it's about, do they want to legislate on the other side to solve problems for the american people and businesses or do they want to have a fight and blame people such as republicans in this circumstance that i anticipate coming down the typelinpipeline >> thank you, representative tom reed of new york >> rick santelli tracks the action at the cme. >> i can't contain myself. so let's get the first chart out of the way an 8 day chart and ten year note rate like a mountain, we went up the mountain couldn't quite take out three quarters and down in the low 60s
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but the big story today. the dollar index on fire, like that old commercial. zoom, zoom, zoom look at the interdate chart. as i'm speaking, blowing through what was the high for the last 20 months. established in 2018. november to be exact 97-5 97.54. show that chart back in november and zoom it back to june of 2017 because that is the last time we closed here. let's go back farther to january of '17 because there's a lot of room here. you could see the way the market reacted when it established this level originally so thank mario dragi, the sliding euro the biggest component of the dollar index but it is a huge dollar day melissa lee, back to you. >> thank you, rick santelli. disney shareholders meeting wrapped up a short time ago. not as focus on captain marvel
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disney shareholder meeting wrapped up as the company plans to launch another streaming service celebrating. julia boorstin with the latest. >> they approved bob sige rerksrerkssiger's compensation plan. this is a reversal from last year when 52% of shareholders rejected the compensation plan since then, disney raised for iger to have bonuses here's what disney heiress said if overpaid. >> if your ceo salary is at the 700, 600, times your median workers pay, nobody on earth
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jesus christ himself isn't worth 500 times his median worth >> biggest news out of the meeting is iger announced the "star wars" will open. one ride and then a second big attraction opening later in the year back to you. >> julia, thank you very much. disney making provocative comments this morning about raising taxes on the rich. what did she say i'm interesting. we had that cheiron that said jesus christ is not worth that >> less religious but equally provocative. of the democratic proposals, none has mentioned the tax that's most important to the wealthy, and that, of course, the capital gains tax but abigail disney made a case for that this morning. >> if i'm paying a lower effective rate than any assistant is, something needs to
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be fundamentally not right should my effort of holding and owning stocks and making my capital gains off buying and selling those be taxed a thet a lower rate than somebody going to a coal mine every day >> the reason she pays less and lower rate because the capital gains tax is 20% while the ordinary income rate, those who worked for a wage is 67% billgate come out in favor of the cap gains tax to help reduce inquality. >> she was born wealthy, never had to work for a living and she's going to tell us what should or shouldn't happen how does she have any idea for the right incentive structure for people to drag themselves up by the bootstraps? >> it's a good point with the patriotic calling for increased taxes on the wealthy, many inherited their wealth and, you know. >> easy for them to say.
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and you know, volunteers a group to say everyone fortunate enough in our position, we feel one way but nothing to do with everyone else. >> heidi heyidi on our show ands if you want to go to a tax that really just hits the wealthy and doesn't hit work, the capital gains tax is the tax >> so it only applies to the wealthy or just going to disensent vise people. >> 75% of capital gains goes to the top 1% >> the ones who achieved it. she became the top 1% by virtue of her birth most other people are getting to the top 1% by virtue of climbing up there. >> we shouldn't discredit the message because of the messenger. bill gates made it on his own and is for this. the estate tax, raising the income tax nobody talked about the capital gains. >> the other argument is that,
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to me, all income ought to be taxed equally. >> that's gates' point >> i don't see one form of income >> it's taxed at the corporate level and distributed. >> that's why i say, income should be taxed once wherever it is earned. >> that's right. >> and that the rate on income that arrived by dividends or selling stocks >> before you put that money >> yes, on the income i used to acquire that asset that's my argument or feeling that tax the same. >> interesting to be with marco rubio, have them taxed to zero and now one of the people, actually, buybacks should be taxed with income so this argument keeps shifting so swiftly from one side of the boat to the other and i thought that's what's interesting about her talking about this this morning. we're going into 2020 and you can feel the pendulum already shooting to the other side.
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>> wealth will be the referendum for this next election and taxes are going to be front and center and eventually, one of the candidates will come out right now, it's abigail disney and bill gates and those are the only two they're talking about >> is she going to run for president? >> i doubt it. >> thanks. can disney learn to content like netflix before netflix learns to create content like disney? the answer will decide who controls the industry. we'll dig deeper next on "power lunch. got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪
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a key issue facing disney is content wars with netflix. jpmorgan saying the streaming service could exceed netflix subscribers and shares of disney up 4% compared to netflix up 30%. there's a strong buy on disney, a buy on netflix the preference to disney do you believe the number of subscribers to the new streaming service could exceed that of netflix's? >> i think there's a possibility of that. i think the question is when clearly, to us there's a huge addressable market for this
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product. and i think it's fair to say that we are still barely in the early innings of this. so disney jumping in to this market i think really is going to reset the bar everyone has to bring their a-game including netflix but i would bet that both netflix and disney will be left standing when all is said and done. >> a lot of people like to do disney versus netflix but both can win to your point. at the same time there's a streaming service out there, some form of entertainment that loses out, eyeballs or wallet. what is your guess on where the subscribers are coming from? >> well, my guess of where the subscribers are coming from really is continuation of the secular trend that we are seeing for the past, you know, several years which is essentially the cord cutting of traditional paid television the good news is for the entire
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ecosystem the gains in the kind of digital subscribers are starting to offset those declines so company like disney jumping in i think will really kind of set the tone in terms of how big that market can get, especially with the content that they're bringing to the table, including the fox assets, as well. >> what is your sense on what the streaming service will actually look like or when we'll get a sense of what it has >> you know, i think bob iger's been telegraphing for quite sometime in terms of the plans they have for the service, not just the television but film side so we know it's extremely robust they are not withholding anything at all on that platform we're seeing captain marvel, for example, is the first film that disney will withhold from its outpet deal and today i think he alluded to the fact that the movie library is available on
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the streaming service including the classics so that's a huge development right there showing they're pulling out the stops to make sure that nothing -- no stone is left unturned here. >> here this is about cannibalism in your opinion, tuna >> thus far there is some cannibalization to be sure but the concerns have been mitigated by the kind of exponential growth so far that we are seeing over the top video landscape consider cbs, for example, espn getting to 2 million subscribers, cbs also doubling their own outlook and netflix continuing that robust growth trajectory and that points to a very, very promising outlook ahead. >> all right tuna, thanks a lot for your time and check please is next
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focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. check please. >> as we sit at session lows right now, we are headed for the worst market week of the year in one surprising underperformer is health care. health care has really been under fire this week down about 4%. >> talking with mr. bruten, i forget who asked the question,
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why are the transports doing so poorly really tanking here. he sees no real reason in the u.s. economy for that. >> maybe it's an issue for the problem solvers caucus to tackle. >> how many have they solved >> i'm sure many, ma. >> many, many, many. >> we want the answers. >> they'll solve some problems right now on "closing bell." ♪ welcome to "closing bell." i'm sara ieisen. >> i'm wilfred frost we have investor jerami grantham in a rare and exclusive interview to react to the news and tell us which areas of the market he likes and hates. >> dow is down, 1% decline stocks continuing selloff mode s&p 500 down 1%. the russell 2000 unlik


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