tv Power Lunch CNBC March 27, 2019 2:00pm-3:00pm EDT
beginning to come in and so kelly, it's really, it's you know, the global world outside the u.s. is -- every country is different so based on the situation, like australia doing okay >> well that's good to hear. we'll see if the u.s. can hold up this year, but appreciate your taking us around the world telling us what's going on and join iing me here. >> pleasure indeed >> that does it for us i'll join tyler for "power lunch" which starts now. >> thank you very much and we will see you in just a moment welcome, everybody, to "power lunch. new at 2:00 today boeing unveils a fix for its 737 max jet at this hour m we'll take you there for that president trump's fed nominee calling for an immediate half a percent rate cut is he right? and mortgage rates dropping. mortgage applications soar iings you might expect housing, is it going to rescue the u.s. from an economic slowdown stocks are in the red as you see
there. the industrials off about 58 points, but well off their e lows of the session. the dow was at one point, down more than 230 points we begin however this hour with breaking news from boeing out in seattle where we find phil lebeau hi, phil >> we're talking about changes to the 737 max, a fleet thads that has been grounded for more than two weeks they're primarily software rela relaltlated. this is essentially what they're be changing within the plane and what the pilots see in the cockpit. first of all, the plane will now be receiving input from two angled of attack sensors the sensors that tell the pilot if the plane is going to be stalling going into a pitch that's too high. if those sensors disagree by more than 5.5 degrees, the mcas system, the system that pushes the nose down, it will be disabled there's also going to be an indicator light for the pilots
that previously was something that airlines would have to pay extra for. that will be offered standard free of charge to air lips all along, the crew will maintain control so they can disable the mcas software. they can also take control of the plane if there seems to be b some issues there. in addition, boeing is also going to be enhancing 737 max pilot training they outlined that for us today. here's the vice president of boeing talking about the importance of making these changes public as they push for getting the grounding lifted >> we're working with customers and regulators around the world to restore faith in our industry and also to reaffirm our commitment to safety and to e n earning the trust of the flying public >> question is whether or not these changes will earn the trust of investors citi out with a note tote reiterating its buy rating on shares of boeing and guys, what citi said today, look this could take another six to 12 weeks for
the faa to sign off then lift the grounding by recertifying these planes then you've got to have the foreign regulators do it but they're not likely to lose orders they're saying look, as much boeing is in the headlines, it will ultimately fly out of this. >> let me ask you a question you may or may not know the answer to some of the stories this week indicateded the pilots of i believe it was the lion air jet, had a very, very short window in which to correct the problem does this, do these fixes then, can they be effectuated within that kind of short window? are they easier to do and perform in a crisis? >> it's another layer of enhanced alerts and safety and hopefully disabling that mcas system so while we don't know for sure what would happen, we do know that there were pilots over the weekend and there are pilots today out here at boeing's
facilities who are testing out these software changes and they're running through the scenarios a that the pilots of the lion aircraft were believed to have faced. in order, okay, if you were faced with these same questions, these same challenges, how would you respond? how would the system respond and would the pilots be able to make these corrections quick enough and is it easy enough for them to understand. >> all right great, phil, thank you very much phil ha blebeau in seattle. >> shares up they've turned around from earlier losses and tha taking the stock market up. the s&p down b about ten points. we're coming off the lows we saw while ago and in about an hour from now, a senate committee is holding a hearing into airline safety elon is covering that from washington >> we got an early copy of the testimony. he's going to push back again against -- certifying their own
self-safety. he'll say they retain strict oversight authority, but the delegation allows it to federal leverage resources today, transportation secretary took some heat from lawmakers during her own hearing in the senate >> i am of course concerned about any allegations of coziness with any company, manufacturer, whatever we should have absolute confidence in the regulators, that they are certifying properly >> they both defended the time it took to ground the planes they say they needed to get more detailed satellite images, evidence from the ground, information from the black box, but guys, i expect that lawmakers are going to press for a more detailed account of that decision back to you. >> thank you very much and here what we should expect at the hearing and reaction to the boeing headlines so far is allen deal, a former ntsb investigator and former faa scientist and jim
corridor is a boeing analyst at cfra research. alan, let me begin with you. and my broad overall question is you know, the flying public really doesn't have that many choices in which kind of aircraft they're going to get on it's either for most, an airbus or boeing manufactured plane obviously m brar and bombarde have entries many the smaller jet market is boeing permanently damaged or tarred because of these two crashes and the way they reacted? >> no, i don't think so. obviously, the oversight in designing the aircraft that are now being addressed with this latest software and training changes will go along way, but i suspect this is a temporary setback. tragic though it is the loss of over 300 people and two aircraft i think boeing will recoverme one of the things though that may be a factor in the long run
is there are boeing's anticip e anticipated launching of a 757 replacement that's supposed the take place later this year hopefully, the faa will review carefully what boeing has proposed and go to the other regulatory agencies around the world. that's going to be critical because if the faa unilaterally restores the aircraft to flying status, that may hurt boeing, so boeing, the faa needs to ensure that the rest of the world concurs with their assessment and that hopefully will help boeing to be able to launch this new aircraft, the so-called 737 replacement. >> a lot of issues have risen as we've learned r more about the lion air and the ethiopian air incidents, but one of them ties back to the question of whether aircraft are overly automated and rely too much on sensors and systems that rely on sensors
than they do on the individual pilots flying the aircraft your thoughts there. >> that's a fair assessment. ironically, when i was a young scientist at fa headquarters, the administrator called me this was back in 1980 when we saw these automated aircraft in design his question was is automation safe it's a complicated question and needs to be carefully study ied from both the ergonomic and human factor standpoint and of course, i would have to add that the airbuses are even more automated than the boeings and we've lost airbuses due to automation failures or sensor failures much like happened apparently in those ethiopia and indonesia. >> did the rush to get this plane to market play a factor here >> well i suspect it does. that's what these hearings and veinvestigations are probably
going to reveal, but it looks like the marketeers overruled the engineer the other thing is understand the faa is underresource ed to its mission. this is a die nynamic changing environment. this industry is evolving. and i don't think the faa was ever given enough resources to do what congress wanted it to. >> thank you very much appreciate it. >> shares of boeing did turn around as we mentioned on that news they're up about 1% still. it's unveiled a fix for the 737 max. let's take a closer look at the stock with jim an analyst at cfra research. jim, welcome >> thanks for having me. >> so phil was earlier saying the most significant issue were boeing was whether the affects their production schedule. do you see any sign of that for now? >> as phil laid out earlier in your show, there's some positive news the pilots are testing the new system the first step to the planes
getting recertified. so that's positive news. if you look at what's going on in the faa hearings today, it seems like they're going to push back against the notion that boeing and the faa are close together so things are move iing slowly d steadily towards a resolution of this horrible incident >> has there been a revenue or earnings hit yet for boeing if you can tell >> there will be hasn't been quantified yet planes are being grounded. boeing's going to have to rekm pound airlines but that's a near term thing a six month to a 2019 story. we think that is still great any sign they're losing out to airbus we've seen some chinese orders for airbus over the weekend. couple of cancellations. i believe out of indonesia for boing. any sign there's a competitive threat where airbus is going to
win at boeing's expense? >> certainly, there is an opportunity for airbus here to come in and say our planes are safer. we haven't had the same kind of incident the china order that you just mentioned is one chink in boeing's armor for sure. but we think number one, demand for aerospace is so strong that boeing and airbus both are going to be needed to fill those orders and that there's going to be plenty of orders for boeing over the coming years. >> finally, you cover southwest. you mention it might have to recompense airlines. lost about $150 million as a result of this is that going to come out of boeing's pocket? >> they said an $150 million impact, but onethird i estimat is from the boeing 737 the rest is from the mechanic issue. i would expect boeing to have to recompense a good portion of that that's a much smaller number than many were think iing. >> shares both higher this morning. jim, thanks so much. >> thank you >> boeing help iing the dow boue
back this hour let's duoto bob pisani at the new york stock exchange. hey, bob >> thehello there. lower bond yield and growth are still the main concerns out there. they took a leg down around 11:30 eastern time that's when we dropped below this 2800 level. they've been lagging on the day. that's not a lot of surprise there. there is some sus spence left in the day. no head lalines from robert lighthizer and steve mnuchin they should be on their way to china soon we're waiting to hear what they have to say. there's also vague reports that may could be willing to step down if a brexit vote is delivered. things could change before the close. however, the main motif is still if place for stocks to really break out. we need bond yields to stop polling and global growth day to get better right now, we're not getting
levels hit 235. now around 2.38% and comments from steven moore is sparking treasury moves he said the fed should cut rates by half a point. joining us to talk b about that, steve liesman and rick santelli. good to have you both here steve, well, actually sh, rick, i'm going to ask you this first. the bond market was reacting to the steve moore interview? >> it depends on how wide a definition of reacting you want to get traders down here really for the last week and a half have been quite trigger sensitive. so i can't tell you somebody did or didn't. you may be more aggressive of a buyer, but i think to attribute anything much more than that to those comments, i would find kind of crazy. >> steve, are people acting as if he's likely to be on the fed board and therefore have a voice in actually pushing for a rate cut? >> i think people are thinking about the possibility of it.
i don't know how much it's priced in. i agree with rick. there's so much going on in terms of global rates, global economic issues. that it's hard to pick any one thing. it did seem that this announcement of this appointment was a catalyst for the recent downdraft in rates i hardly think the bond market is so uninformed ed to think on person on the fed going to mean a change in rates. >> one american who might be in the minority but it was a kaplin this morning who was saying it's unlikely we'll need a rate cut. >> so this is interesting. given the market has drifted towards rate cut in the september and on ward fed futures sh, a couple of comments from some presidents and the possibility of rate cuts, i'm sort of expectingi ining now fo center to resy certificate itself we had comments from kaplin.
comments tomorrow from vice chair in the morning tomorrow to see if that comes up i think the fed's express intent to be neutral and to the extent the market leans too far one way towards lower yields, i think they're going to want to reassert the new challenges there. >> what does that look like? >> it's open mouth operations. open mouth operations. it's -- don't go too far here and bank on this i don't know, rick has a better idea of what animates the markets from minute to minute or tick to thick than i will, but i do think the market got carried away with itself >> you know, let me tell you, when you wake up and read first thing in the morning when you're an interest rate guy, that a boone auction ended up with negative yield, shouldn't have been shocking considering the market, the secondary market did that last week those are compelling stories, so if people want to pin the tail on the motive, what's making
markets move, there's really big, big things out there and don't dismismithe notion of how this feeds on itself, but i'll caution a little patience. on monday, we had a low in terms of 237 we settled at 240. today, we had a low of 235 i really think that even though today has a squeamish feel to it, there's a whole lot more back and forth trade than over the previous five sessions and i think that others iffor a little stability. bob has it nailed. that we don't need rates to move up we need them to be more calm with respect to sideways >> i don't have a problem with a hard money problem b with a guy like moore i have a problem with an inconsistent guy who was
screaming about hyper inflation back in '09. >> come on you go by that, every fed chairman is squeamish who's been wronged. >> let me finish if you want a hard money guy for the fed, pick a consistent hard money guy like rick. >> you have kept to your principles on this issue my concern are those that have not remained and cha changed their views because of the politics >> what about inflation? >> where is inflation? >> at target within .2. as close as you're ever going to put the arrow of a $20 trillion economy. >> now, steve, i take your
komplmekomp compliment i really do. that's a nice thing you said but i think you're being hard on steve. what i would be hard on steve on is talking and considering the federal reserve. what you're going to do is come out of tsaying you'd cut at 50 s points now that i can -- >> h religion to keep your mouth shut when you're nominated that's something i've followed over 20 years. as a reporter, i'm in favor of more disclosure rather than less if that's the way he feels, weshld know that >> so he doesn't really want to be on the board. >> thank you, guys that leaves the opening for mr. santelli thank you both appreciate it very much. >> let's follow along with that discussion as we look at dropping yields. on track for its best quarter since 2009, so who do you trust? stocks or bonds? let''s bring in amanda, strategist with pnc group and
julian emanuel, managing director and dreftives strategist you got to shorten your titles can't get through them too dog gone much. ammaanda, if falling yields were really signalling an imminent recession or o dramatic slowdown, wouldn't you expect to see junk bond yields going up and they're not. >> yes, absolutely much more confusion around messaging coming out of the fed and the fact that swiss and german and japanese yields are sitting firmly in negative territory. the signs of stress would really show up in credit markets and the high yield index, i think the yield is down about 150 basis points year to date and even investment grade spreads are out there lows for
the year >> that are these telling you? >> they're tell iing me confusin about sort of where we go from here these are definitely not normal. if not whacky times. for bond investors i think the messaging has swung for almost extreme hawk niche the fall to too dovish in the springtime e we get a little stability in terms of messaging i think that will go a long way. >> a fix on the point steve was making that maybe the fed will step in and do the open mouth maneuvers and take it away don't go too far here. >> the fed has made it very clear it wants more inflation. so steve made the point that the a few moments ago that it's very near it's target of 2%, but it's
also just said it's likely to tolerate inflation over 2% and so from that point of view, the surprise dovishness of last week is really not a surprise and maybe there is more dovish talk to come because clearly, german yields turning negative has spooked our bond market and as pointed out earlier, we're in a zone where perception is not likely to become reality, but it could. >> do you think rate cuts are comeing? >> it's possible it is possible i mean, the issue -- >> spring is coming. >> spring is definitely coming >> going to be 70 degrees in new york on saturday but the point being is that this pursuit of inflation perhaps above target, there are a limited amount of tools that fed has to allow that to happen and the balance sheet stopping the roll up early certainly is one of them.
we'll have to see. that's correct right. zpl amanda, until the past few days, equities have been performing very well are you comfortable remaining overweight eck quities? specifically u.s. equities given what you've u seen >> well, no question that the market has been off to the races this year. it's really gotten a shot in the arm from three really powerful catalysts. the fed paused better headlines out of trade and certainly better results coming out of q4 earnings than expected i think the challenge going forward is yes, there are a number of positive catalysts ahead. but how powerful are there to what we've experienced so far? we aren't making material changes to our positioning in equities we think there's still opportunity ahead. but we're mindful that the market really needs to take a breather if not a pause and that there is likely to be some choppyness ahead >> thank you very much
thanks >> now with falling rates are going to boost the housing market, does that now make the time to buy home builders? also lyft and uber are hitting the ipo markets. we will talk to a man who says private equity firms are paying more than the public market. find out why that's ahead on "power lunch."
this is decision tech. it's screening technology that helps you find a stock based on what's trending or an investing goal. it's real-time insights and information, in your own customized view of the market. it's smarter trading technology, for smarter trading decisions. and it's only from fidelity. open an account with no minimums today. and it's only from fidelity. sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪
- anncr: as you grow older, -your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.
s&p home builders on track for its best quarter since 2012. up over 18%. should you stick with these stocks matt and michael are your trading neigh team today so matt, it's been a good run for the homebuilder etfs whether it's the itv, but still fighting against a pretty significant pique last year. >> it's interesting because we had this battle going on between the fundamentals and technicals. the strategists has me concerned about the housing starts number from the other day if that continues to fall, we've got a problem paubecause every e you see a sustained decline,
it's followed by a recession going back to the 1960s. on the technical side, it looks good during november and december when the rest of the market was getting clobbered, the home construction etf was stabilizing. it's rallied since then. broken above its trend line. it's made a couple of higher lows and higher highs. if we take it one step further and get above the february highs, it's going to be quite bullish and show the trend has changed in the group so there's a battle going on, but technicals look good >> michael, i guess if you're talking about the inputs for the fundamentals for these companies b, obviously interest rates are dragging mortgage rates very low now and you have good employment wage gains, so will this be an area you would emphasize >> we're putting it on pause so many variable ts come into play there are mortgage rates, home pricing, real estate environment. the one thing that really concerns me is that new housing numbers. they were down 8% in february,
which is the worst it's been in eight months so we're taking our profits in this space it's run up roughly 30% in the last quarter and annually, so i would just take our profits. sit back, wait until the summer shakes out then see what happens in the fall. >> not too bullish on the spring thanks a lot for more, head to our website or follow us on twitter back to you. >> thank you very much ahead on "power lunch," bye bye ipos why our next guest thinks more companies could stay private or sell to pe companies plus, mortgage rates are plunging, but applications are soaring. will howe housing boost the economy? and we continue to watch the markets. the dow bouncing back off way its lows of 232 points in the red right now. the dow is down just 17. (client's voice) remember that degree you got in taxation?
now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.
here's your b cnbc news update president trump welcoming the wife of venezuela opposition leader to the white house. the u.s. and 50 other nations recognize her husband as venezuela's interim president. >> we are with venezuela we are with your husband as you know and with the people that he represents, which is a big, big majority of the country. what's happening there should not happen and be allowed to happen anywhere. >> facebook announcing a ban on praise, support and representation of white nationalism and accesepratism. the bans will be enforced next week and the fda is imposing
rules to notify women if they have dense breast tissue several other states have similar laws, but the agency proposing a national guideline doctors say tumors are more difficult to detect in mammogram images of dense breast tissue. that's the update this hour. back to you. >> thank you very much about 90 minutes of trading left today let's get a check of the markets. dow's down about 42 points it's helped by the swing in boeing this afternoon. the company unveiling fixes softwarewise to the 737 max. boeing has turned positive they're the best performing relatively speaking. s&p down half a percent. nasdaq down b about 49 points or two-thirds of a percent and oil market close, crude ending down about 1% just over $59 a barrel >> thank you another company may be joining the recent wave of ipos. it's the mattress retailer,
casper and it is reportedly hiring underwriters for a public offering our newest member of the cnbc family joins us with the details. welcome, nice to have you with us >> thank you let's talk mattresses. >> going to try to sleep >> got to wait and see the company is said to be looking for underwriters in april at a later doate. founded in 2014, casper was last valued about 120 million in 2017 the company premiered online only mattress sales then last year, moveded into the brick and mortar space their first location in new york city they planned 200 showrooms in the next few years now showrooms are risky. mattress r firm, the country's largest chain, just emerge d frm bankruptcy protection and will close as many as 700 stores. investors include target as well as some a listers. le nar doe decap row and 50 cent so traditional brands like sleep
number, serta note still account for 70% of the market. and there's plenty of bed in a box competition. amazon, walmart and others like purple are gaining traction. while caspers are sold online, they are also sold in certain targets, west elm, nordstrom's and amazon when the ceo spoke with cnbc in 2017, they had an ipo on their minds. >> we're a young company, but we're going of big markets and we have markets that haven't seen a lot of change in a long time and we think we can continue to accelerate what we're doing and that will give us the option to be public when we like. >> so important to note here, according to an estimate, about 20% of mattresses are sold online, so tyler and kelly, we were just talking about this, i don't know if you are in the market for a mattress, but there are two locations in new york city if the whole bed in a box thing isn't.
>> i'm actually not. it's a company that went from zero to $900 million in market >> very quickly. >> i wish i could do something like that. >> but then you wouldn't be sitting here with kelly and i. >> that has a market value beyond 900 million welcome again. >> thank you >> i own the sheets in fact. they're comfortable. >> casper's price d? >> they have three models. one is about $500. one more on the expensive side one that's more reasonable they have three mattresses, the thing they sell is that they are very comfortable i think most mattress companies would say that though. the millennials, we can go click and have it show up. i recommend the old school way something to be said for it. >> go bounce on the mat rescue great to have you. ipo market is booming but
our next guest thinks it may want last. with us now u, the chairman and founder of triago, a private equity advisory firm welcome back good to see you. there is no shortage of money going into private equity. some of the funds, i guess they're running at record intake levels this year so that poses the question, do those private equity firms pose competition for the public market in such way that the ipo pipeline will be narrower, less robust than it otherwise would be because the pe players are in there and ready to pay prices. >> yeah, you're right, tyler well this is at least what's happening now, there is a lot of money in private eck quity. some feel there's too much money. we'll see what if they're right or wrong pe used to be nothing. 25 years ago like $25 billion of assets under management today, it's about 5 trillion and
a lot of this money is going after the same kind of companies. which means prices going up. and sometimes, even higher than on the public side >> let me ask the question if i'm in the position of a private company like casper mattress we just talked about, what would be my inseptembcentive to sell to a private equity company apart from a higher price as opposed to taking it public b and selling to the b public where if i wanted to retain voting control, i might have an easier time doing that than private equity where those companies want to have -- or do i have it wrong? >> well i think that you know, pe players can basically structure for whole parties including management that's the name of the game, right?
so my feeling is that either way, they could either go for public or private and that in both cases, they could retain management maybe control and have a better liquidity if it's done by a private equity prck wii player. >> we have this boom in ipos now, but you're saying or implying these companies should be looking to exit in private eck quity. they're outside of the glare and the work that comes with being publicly listed and there's so much dry poud ir in prooifwder w wiity. why aren't those two coming together, looking to private equity as an exit? >> i think i'm not saying one is better than the other. i'm say iing that side now is a
option and make sense to many. the main reason is that a lot of funds have a lot of money under management right now and can do very large transactions. you think think about the front, the vision fund. it's $1100 billion large so these guys, they're not looking at toidoing many, many deals. it's a few huge ones and of course these companies choose the private rather than the public if they can >> let me ask you, you split your time between new york and paris most especially. how do you look at brexit in terms of what opportunities might come online? in other words, is it going to be a time when private equity or strategic buyers are going to be able to come in and buy u.k. based companies at disstressed
prices >> yeah, first of all, i would love to know what brexit really means. and it looks like every day has its surprises and no one really knows what's going to happen really as far as private equity, i can tell you nothing has really changeded. firms still get raised pe funds in the u.k. still invest in companies at good conditions investors outside the u.k. also look at this area as a good one. so it looks like the private equity people don't seem to be that interested by what brexit really means >> all right always good to see you thank you for your time today. >> thank you very much >> coming up, potential good news for homeowners. worth more than $5 million we'll explain after this
see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade takes more mathan just investment advice. from insurance to savings to retirement, it takes someone with experience and knowledge who can help me build a complete plan. brian, my certified financial planner™ professional, is committed to working in my best interest. i call it my "comfortable future plan," and it's all possible with a cfp® professional.
bond yields falling again. ten-year at its lowest in more than a year and the hope for lower mortgage rate ss part of what is boosting homebuilder stocks the etf attracts that group is up nearly 20% so far this year and diana oleic has more >> rates are continuing to fall today. edging close to the 3% range on the 30-year fixed. an average 4.03 now for loans with 20% down payments, so some are in the threes. mortgage applications jumped nearly 9% according to the mortgage bankers association refis were the lead jumping 12 ferris for the lead for the last two years, volume just plungedment now clearly you're
seeing a turn around all because rates have been dropping you can see the sharp plunge after the announcement last wednesday that it would not raise rates anymore. anymore this year. mortgage applications to buy a home also rose 6% for the week, although just 4% higher than a year ago and on that note, once again, the average loan size hit a new record this is likely because when rates drop, people with bigger mortgages benefit more from a refinance. and on the buy side, lower rates of course help people afford more home. back to you. >> thanks. moving to the higher end of the real estate market, the controversial taxd homes in newk looks like it's in jeopardy. >> we will translate that for those. sources telling cnbc that that tax, it's way of saying the annual tax on second homes in new york valued at more than $5 million is unlikely to passed as proposed real estate lobby has been fighting hard xwens the law.
it would have required the city to overhaul its system, especially co-ops. some say the politicians finally woke up to the damage it would cause the mark, but the bill's main sponsorhoylman tweeted yesterday the real estate lobbyists who say that the rich won't buy apartments with a pied-a-terre tax deserve an oscar. he's not buying it so this will be a one-time tax when you buy a property, not an annual tax on the ownership. transfer tax hike as it's proposed now would raise around $300 million a year. that's less than half of the what the pied-a-terre tax would have raised but at least they're getting something. >> robert frank, thank you. after the break, one company off to a running start that would be lulu lemon
pied-a-terre lulu lemon they have the investment expertise to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you, at therightquestion.org people know aflac... aflac! ...but not what they do. so we're answering their questions. aflac is auto insurance, right? no. uh uh. is it homeowner's insurance? no... uhuhuhuh!
is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com. does your wealth a cfa charterholder does. they have the investment expertise you need for the ambitions you have for your wealth. learn what a cfa charterholder can do for you, at therightquestion.org
85% over the past one year wall street is still bullish on lulu 60% of analysts have a buy rating what should we look for in the latest round of earnings let's ask dana telsey of the telsey advisory group. do you think it could hit 190? >> i do. when companies nut loyalty programs it drives repeat business from existing customers and new ones also. >> around 195 right now. we were talking about the men's business last hour, dana how much more runway do they have this is starting to be a common site, at least in the office, with a lot of guys who are aware about the pants like them. is this already priced into the stock? >> i think there's more to go. keep in mind, 2020 targets have already met or exceeded.
they'll lay out on april 24th their new five-year targets. when you think about the men's business, while they have active, look what they've been doing with casual wear, too. it's first becoming more worn by more men in more categories. >> how have they turned it around, dana it's not that long ago that this was a struggling stock. >> you're right. they brought in new product advisers and sun has been managing, doing a terrific job outside their core with fabric fabric and functionality makes the difference and people will pay for it it looks good, feels good and it lasts. it's quality and that's what people are looking for. >> what's the breakdown these days between women's and men's, revenue wise >> you still have women's that's just around 80% of the business. you have men's that's growing certainly at a faster rate because it's smaller but i think you'll get to a mix that will certainly never be
50/50, but at least 30 or 40% of the business over time. >> let me put this out there i went shopping at lulu last weekend to buy pants for my son, who is 13. they haven't really broken into youth yet. and yet he loved the pants we got for him because they're comfortable, they move and he's an active kid. is youth an opportunity for them >> they have a little girl's line called aviva. >> didn't know. >> they used to have separate girls' stores. now they sell aviva online they haven't done it with boys yet. you know what? they've done men's so you think boys could be in the future. right now it's getting little girls right online and expanding men's so that they know exactly what to make for boys when the time comes i believe it will come. >> very good dana, thanks very much dana telsey from telsey advisory group. >> i just reminded myself, i
you do not check your phone all that much. neither do i. >> correct but we're not on social media. >> meyer fingers don't itch. >> i'll know there are articles piling up but i can always push those off till later thanks for watching "power lunch. >> thanks. and you know what's coming up next "closing bell. >> what was that oh, sorry. hbo brain drain could affect apple. and lulu lemon, will it derail the rally? "closing bell" starts right now.