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tv   Power Lunch  CNBC  April 22, 2019 2:00pm-3:00pm EDT

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exchange." thanks for joining me. i'll join melissa for "power lunch" which begins right now. and thank you, kelly we'll see you in just a minute i'm melissa lee. elon musk set to meet investors at this hour to show off tesla future and the stock is sliding right now. oil meantime is soaring. president trump taking aim at iran's exports are prices headed higher from here bad blood elizabeth holmes back in the spotlight headed to court accused of massive fraud. "power lunch" starts right now and let's get a quick check on the markets right now we have a mixed trading session here with the dow just in the red slightly and the s&p 500 and nasdaq eking out slight gains with just over a week to go, the major average is still on track for solid gains for the month of april. energy is the best performing sector today
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and check out the consumer staples. that sector hitting new 52-week highs. kimberly-clark driving those gains. kelly? >> we begin with tesla elon musk meeting with investors this hour to lay out his vision for tesla's future not the only news for the stock and the shares are down today by nearly 3%. they're, in fact, down more than 20% so far this year phil lebeau joins us with a round up of the latest. >> we're watching to see when that event starts and any headlines that come from tesla, we'll pass them along immediately. here's what you can expect from the autonomy day based on what we heard from people with what might be presented today by elon musk and tesla. they'll show off the latest technology he's been talking about the fact that tesla autopilot and navigate technology has improved i had a chance to drive it, it has improved over the last year. do they have enough advancements
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to outline plans for an autonomous ride sharing service. many people believe that is one thing we might hear about today. evercore dropping it down to underperform and also cutting the price target from $330 down to $240 and that's the reason that shares of tesla and one reason why they're under pressure also you have the video coming out of china over the weekend of a tesla model s parked in a garage in china that appears to just burst into flames now, we haven't been able to independently verify what happened with this model s and a lot of people are on social media saying, this doesn't look entirely right until we get some confirmation and tesla is investigating it. this is the video that gets passed around and continues to get passed around on twitter and social media take a look at shares of tesla and all a lead of up of the big news after the close of trading, that's when we get the first quarter earnings of tesla.
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>> phil, stick around. here to break all of this down paul, great to speak with you. phil did a very nice job outlining all of the news surrounding tesla right now. for you, what is the main focus at this point? >> well, you know, the tesla mantra can be this, when you have problems with the present, focus on the future. you have financial results coming out wednesday they're going to be disappointing. probably a loss is what is expected on wall street. you also have production problems continuing with the model 3, which is a reason for that loss that is expected you have a board room sort of in a lot of change or upheaval perhaps with four long-term directors leaving the board and not being replaced then you have this thing in china and i think phil was absolutely correct to really caution against jumping to any
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conclusions here the point is that the tesla playbook is that, you know, gee, when things aren't quite going right and you're operating system and your execution and that sort of thing, let's roll out the vision and that's what they're doing. >> the problem with that tesla playbook and, phil, i'm sure you can speak to it. it doesn't seem to be working that much any ore. each time it pulls out that playbook, phil, you know, the stock doesn't really react >> right less and less. in part because -- >>getting a little jaded >> and paul's right. people are getting a little jaded and there is also an element of people saying, give me something that i can hold on to and i can say, okay here is the forecast whether it's model 3 sales or overall sales, whether it's when we're going to see certain technology rolling out i think the market to a certain extent and inesthavers increasingly are saying, i want more certainty cannot just be we have great things coming. nobody doubts that elon musk is a visionary. what people increasingly are
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doubting is when they can deliver with consistency what they're saying they're going to deliver. >> paul, i actually wonder so, we'll wait to see exactly what they say. but tesla has said, musk has said, he thinks tesla will be capable of fully autonomous driving by the end of this year. at what point do the claims mislead the public in believing that technology can do more that it can and do regulators potentially get involved >> well, that's a very, very tough but appropriate question look, misleading the public is a legal thing. and, so, i don't want to make a legal judgment here. but let's face it. you know, tesla through elon musk has a history really of promising and even though he is a visionary, the delivery really isn't always there so, the problem for the sec is, what do you do if you take this man out of the company, he is the company so, he sort of got the sec's
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hands tied, the way it looks to me >> i mean, i think that is a really interesting question. i mean, i guess the question, phil, would be, how many companies give earnings forecast and that's what they believe at that moment in time and things change and those forecasts don't come true. you know, you could have a list as long as my arm of companies even just probably in the urgencies that have done that and how can you hold tesla accountable? when they say they have a car capable of autonomy by the end of the year, is that really a high bar at this point given where the technology is because there is a big difference between a car that is capable of autonomy and a car that is commercially available with autonomy >> all in the diffnition of autonomy, melissa. tesla can do that and a number of other veeblg vehicles can d. can you take me from my driveway and home depot and mcdonald's and back home and i'm never touching the steering wheel? at this point, elon musk says
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the technology is coming along and have itby the end of the year that's not possible. he can show us something different today and say, look, we'll prove everybody wrong and it will be ready by the end of the year all comes down to your definition of ought aautonomy >> i'll bring in joe from osha i know you're more positive on the stock. it's interesting to me this issue of when you're having a big event and you're staging it and this technology is coming and it's going to be ready are drivers aware of the nuances there and is it nuances enough >> well, i think we're going to be hearing more shortly. i would say that there's pros and cons here on the pro side tesla certainly has an awful lot of data that they gathered from having auto pilot on the road. as we pointed out this morning on the con side, i'm not sure they have the capacity to spend what uber is spending and that's going to have to be something that they overcome
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>> well, when you say you don't know how much they have to spend on it. aren't they spending now on autonomous technology as we speak? or do you think it has to be even more? >> certainly they are spending. but the point is that if you look at the amount of money that, you know, you just saw toyota and softbank drop a billion dollars into uber's autonomous vehicle group i'm not sure tesla given the fact that they're spending on batteries i'm standing right next to the company. they're trying to finance a lot of things and i'm not sure they necessarily have the capacity to invest quite enough in autonomous vehicle technology to remain competitive with, again, uber >> you have a 374 price target on the stock still, is that right sphhad. >> that is correct, right. >> so, it's just interesting to me you think they're overstrapped and don't
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necessarily have the capital to back up the inesthavemevestment compete. you still think it's worth 374, why is that? >> this company brings a lot of things to the table. i'm standing outside of the semi truck right now. they deployed technology in that vehicle that literally no one else can match it's very impressive they have battery pack technology that nobody can match. the fact that the company faces challenges, which it does, does not mean it is not a buy i just think i'd much rather see them look at bringing in some outside funding to help with this vehicle autonomous spending >> those bets on trucking, as well as battery packs, paul, those are visionary sort of things that you had alluded to before but at what point do we actually need to see those things translate into profits at this company? i mean, shouldn't the focus right now be on their core vehicles, model s, model x, model 3? >> well, it's --
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>> as long as investors -- >> paul. tesla is trying to do a lot of things at once and i do sometimes think they are trying to walk and chew gum and i perhaps would rather see them focus more on the core business, which is electric vehicles but, you know, they've been very clever with how they deployed auto pilot and as elon points out, they gathered an enormous amount of data i don't think it is the case that they can't do this. i just think it's the case that they maybe need to think a little more realistically about how they're going to finance it. i would point out uber has a fair amount of money but they brought in external funding. gm brought in external funding so, i think this company would benefit from a similar approach. >> paul, your thoughts >> well, i would be really surprised, frankly, if there is a fully autonomous vehicle that is wake me up when we get there.
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i would be very surprised if that is available from tesla or anyone else by the end of this year yeah, right now i think, you know, as i said, you know, when there is problems in the present focus on the future, i think it is -- what tesla needs to do we all know there is a vision and visionary running the company. let's see some operating effectiveness. >> all right thank you very much, gentleman we appreciate it joe joe. while tesla has been tumbling, crude oil hit its high for the year targeting iran oil exports let's get to elan in washington with more. >> the trump administration will no longer provide waivers for countries that import oil from iran they'll have to stop all purchases or face sanctions. eight countries currently have waivers and that includes china and india. three of those countries have already stopped buying oil from iran and secretary of state mike
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pompeo said today that he wants to get to zero across the board. >> the goal remains simple to deprive the outlaw regime of the funds that is used to stabilize the middle east for four decades and incent vise iran to act like a normal country >> the move won't hurt global supply because saudi arabia and others such as the uae will make up the difference. in a statement saudi arabia said it will coordinate with other producers to ensure adequate supply, but no specifics on timing or on production levels another open question, guys. whether china and other oil importers will comply with the u.s.'s demands the early response from beijing, it is not pleased. officials say they will spend what they see as reasonable and legitimate business interests. >> i'm sure they're not pleased. thank you very much. coming up, the busiest week of earning season. nearly 150 companies in the s&p 500 are reporting. it will be a busy one and not all not investors need to watch
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for. the spring season for housing is under way and not off to a great start. we'll bring you those numbers when "power lunch" returns the latest innovation from xfinity
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housing and the numbers were not good diana is looking at the existing home sales for the u.s diana? >> yeah, melissa, not only were march sales disappointing, but february's big gain was revised lower. sales dropped 4.9% month to month in march and were 5.4% lower compared with a year ago that is the 13th straight month of annual declines now, weaker sales are causing home price gains to shrink, but still gaining and, in fact, march's median price was the highest ever recorded for the month. so, what is going on behind these numbers? well, sales were weakest at the very low end and the very high end. but for very different reasons at the low end, it's no supply and that's causing big prices for not a lot of house at the high end, changes to the tax laws or salt we're seeing big sales drops in the new york city area and california where prices are highest and taxes are a much bigger factor than everywhere else >> diana, i just think it's
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fascinating because it is not like it was last cycle when it was all boom and all bust. in a way, the market is weak because it's strong and then it's kind of interesting >> yeah. especially on the low end. i mean, that's what we saw last year if you look back two years ago, home sales on the high end, million dollar homes were up, even $750,000 a home, way up now you're seeing them down over 10% year over year again, because of salt >> diana, thank you. a big week for the markets kicking off today. we're talking about earnings now. the biggest week of the season and that's not all we need to watch for. bob pisani is down at the new york stock exchange. bob? >> revenue is big, as well, kelly. this is it biggest week of earning season this week includes coca-cola and procter & gamble, united technologies and boeing, caterpillar and facebook and our parent company comcast, amazon, intel, ford on thursday and the
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oil companies exxon and chevron will be reporting on friday. here's the good news very good chance we are not going to experience a negative earnings quarter for the s&p 500. no earnings recession likely right now earnings expected to be down 1.7% for the first quarter. but that has been steadily rising for the last two weeks. it was down 2.5% two weeks ago we will likely see earnings up in the very low single digits. maybe as low as 1%, but still likely up and revenues will grow about 5% now, despite higher costs and we heard this from kimberly-clark today. many are saying they are able to raise prices and that's absolutely key here. if that keeps up, we should see very little margin erosion and that's what really kills the stock market that and the fact that europe and china have stabilized with the biggest help for the market right now. the u.s. and europe is up 16% this year and china is the best performing global market up more than 30% kelly, back to you >> bob, thanks very much.
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as we gear up for that flood of earnings, major averages are set to rack up strong gains for april. only 1% from their record highs. will earnings be the catalyst to get us there barry james is portfolio management and founding partner and cio. >> hi. >> i'll mention bob summarized the issue. revenues are up and earnings are down how much longer is that likely to persist >> yeah. it looks like this quarter is probably the most heightened quarter of this margin compression that's going on. but now we're learning that next quarter analysts are expecting profits to deteriorate i think wage growth is up 3.5, 3 3.6% we have interest rates up. that is really putting a lot of
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pressure on margins. as bob said, that's really what investors are focusing on. we need to see once that gets behind us, perhaps we have a catalyst to move stocks higher >> p >> barry, with that background, why do you like a name like kroger, competitive pressures and pressure on prices because of amazon and others why do you think they can do well in this environment >> well, they're shifting their business while they're adding more stores and also going on to the internet and they are raising prices one of the guys in the office went to kroger the other day and his piece of chicken was up 29% from $1 to $1.29 so, they are able to push some of those along. >> what kind of chicken is he getting for $1.29. >> a piece we're out here in the midwest. you have to remember things are cheaper out here. but, anyways, we're looking at this whole earning situation that exists. right now it's kind of like
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popcorn. the first one to come out with lousy earnings the popcorn goes out of the pan and also it almost gets a little stinky like the microwave popcorn i make getting overcooked most of it is already in there almost all the companies reporting higher than expected earnings, even though they're not very good earnings so, i think that we're kind of past that as far as the price movement in the market >> talk about power lunch, expensive chicken and smelly popcorn. we have it all here. jack, i want to ask you in terms of spike in oil prices saudi arabia, united arab emirates would pick up any shortfall. do you believe this spike in oil prices is an investable one? the energy sector, for instance, which is up 2% today that could stand to benefit. >> i think so. you know, we have to keep in mind now that we're no longer
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the largest importer of crude. in fact, one of the largest producers of crude that the s&p 500 is actually positively correlated to oil prices these days and remarkably, oil is up at least brent oil the last time i checked was up 38% year to date. so, i do think that these higher oil prices are sustainable at these levels i think it also suggests that there's a little more global growth than we originally feared earlier this year. so, i think the best way to play it energy sector and also one of the biggest beneficiaries is emerging market stocks that's something that i think could continue to benefit if oil prices stay where they are at this level >> jack, i want to ask you more about the premise that, you know, the s&p 500 is positively correlated to oil prices i understand that. oil prices should be a barometer for global growth. but if you get a spike like this on the back of just supply and demand dynamics, is that really
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supportive of the global growth picture? do you see that, as hey, we should go higher now on the s&p 500? >> well, i think because if you believe it's a supply shortage, you know, that's a different matter but i don't think it's a supply shortage i think it's really a balance of supply and demand and i think demand is pretty strong. so, given that, you know, we're among the high-cost producers here at home having that high oil price is really a nice lever for the oil belt here in the u.s >> and, barry, you actually have a pick in that space it's conoco phillips, right? >> that's right. they're more oil than they are gas. but, nonetheless, the higher oil prices exactly as jack said are very beneficial to them and they have good coverage in terms of the reserves and so forth that they have. so, i think there are real good opportunities in the energy
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patch and conoco phillips is one of those one we like in our mutual fund the golden rainbow >> barry, don't you have a microwave setting for popcorn? it's a preset thing now, right mine is pretty good. >> mine is, too. >> it stops, it doesn't burn modern age, barry. >> i don't allow, i don't allow microwave popcorn in our office. >> it's banned >> guys, thanks very much. all right, facebook, twitter, snap all reporting results this week. how to trade those social stocks before they report and facebook under fire in sri lanka as the site is shut down to prevent the spread of fake news after the bombing there. what signal is this sending when it comes to regulation we'll take a closer look
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welcome back to "power lunch. the social media stocks and twitter and snap report tomorrow and facebook rounds it out on wednesday. matt and chad join us now. welcome, guys. want to talk a little bit about how you like these names going into the earnings. chad, because you're looking at this as the communication
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services sector as a whole, you want exposure to this or not >> no. and now etf strategies that focus on sectors, we would avoid this altogether. in fact, because of the concentration risk, about 40% of this sector is based off of two companies and the other top ten is basically 70% so, we would express the global growth backdrop and the positive earnings backdrop with revenues on those growth companies and we would look at iwf as a whole >> if you had a different point of view and you wanted that exposure than an obvious way to get it >> yeah, we do absolutely right but our view point is that the social media companies, as well as some of the such companies are overstretched at this inflection point >> matt, what do you think based on their reading of the technical performance. snap has doubled this year >> yeah. it's -- the one thing i get a little bored about because even
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though snap and facebook have seen a series of higher highs and lower lows, they are getting very extended and very overbought hodly enough, the one that probably has the most upside potential is twitter it has been stuck in a sideways range for six months now and you have to go back to june before it was rallying in any significant way. now, we have to be careful because it is the upper end of that range and if the earnings are poor, the stock will get clobbered. but it can be a catalyst out of that range, that will attract the kind of momentum money hasn't seen in 10 to 12 months that could be very positive. we have to wait for those earnings >> good stuff. guys, thank you both appreciate it. for more "trading nation" head to the website or follow them on twitter on "trading nation." in the wake of sunday's terrorist attacks, will this lead to renewed calls for tech regulation elizabeth warren wants college to be free her plan to have the rich pay
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for it elizabeth is heading to court. all this when "power lunch" returns. now, the latest from trading nation.cnbc.com and a word from our sponsor. if you're an active trader sitting on the sideline can be difficult, but it's important to resist the temptation to overtrade. in times of high volatility, you may want to consider trading less or reducing the size of your trades. and when things really get crazy, well, sometimes the best trade to make is no trade at all. i'm joanna and schwab is the better place for traders
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i'm courtney reagan and here is your cnbc news update herman cain and 2020 presidential candidate withdrawing for consideration for the federal reserve board according to a tweet from president donald trump a houston cancer center ousting three of five scientists identified by federal authorities of being involved in chinese efforts to steal research last summer the fbi warned texas academic and medical institutions of the threat of intellectual property theft from insiders. the latest measles outbreak in the u.s. are approaching
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levels not seen in 25 years. health officials say 71 new cases have been reported since just last week six of those coming from new york state alone that puts this year's total at 626 cases. and notre dame's smallest residents, some 180,000 bees survived the blaze that destroyed the cathedral's roof they were part of a city-wide initiative to boost declining numbers and they have their own beekeeper and they survived that blaze because of where they were located in the roof area that is the news this half hour. back over to you >> thank you the oil market is closing for the day. let's head over to dom chu >> what we have right now is six-month highs. that's what we're seeing in crude oil prices prices currently at $65.66 up 2.5% and brent crude is up nearly 3%, as well the upside move being propelled by the trump administration
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decision to stop granting waivers to certain countries to allow them to buy iranian oil. the waivers from the u.s. allowed eight countries to buy a million dollars from iran without fear of sanction cordinated partner cuts and the trump administration says it will work with saudi arabia and the united arab emirates to try to fill any supply voids due to that new policy. upside oil is the theme of day back over to you. china's rival to starbucks goes viral here in the united states lu luckin coffee. >> the second largest coffee chain in china and is on a quest to surpass starbucks with a little cash from an ipo. a mobile app which has made the chain cashless and cashierless and 91% of its stores are pickup with minimal real estate footprint. you would think luckin's costs
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are low, but, actually sky high relative to revenue. the company is losing nearly double the amount of money it made in 2018, but the company was just this month valued at nearly $3 billion in a private fund-raising round led by black rock it's actually not even the only chinese unicorn that revealed perspe douyu international a continue to see these ipos trickle out, guys. >> exciting times. thank you. the death toll rising from those easter terrorist attacks in sri lanka over the weekend. about 290 people have now been killed roughly 500 wounded. the attacks forcing sri lankan
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to stop social media joining us now director of social media master program at the university of florida and our own julia boorstin is with us, as well. julia, i want to start with you to set the table how unusual is this shut down given the time the sri lankan government shut down the social media sites it wasn't proven, it wasn't even known at the time who was behind the attacks using social media to instigate? >> the shut down was about the sri lankan government looking to prevent spread of misinformation after the attack or any more violence in the wake of the attack what this really speaks to is a growing mistrust for the role that facebook and whatsapp can play especially in countries like sri lanka and india and asia this is not the first time the government has shut down access to social media. we saw the indian government do
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this in 2012 because of the spread of misinformation that was spreading violence this is preemppreempitivereempt. there was not information spreading, but they were afraid of information spreading and concern around the world for the role that facebook can play. >> we saw the shut down on social media also more recently in new zealand when there were violent videos being circulated almost immediately after those attacks. doesn't this underscore the heightened regulatory environment that all these companies face not only here in the united states, but everywhere else in the world where it operates? >> the big thing that will affect these companies if they don't move to regulate themselves, then you'll see government overreach kind of regulate these platforms, just as we're seeing in sri lanka sri lanka has a history of doing this and other countries have blocked social media sites before this is something we'll continue to see if the platforms themselves don't start to address these issues >> this is a very slippery
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slope, andrew. i would imagine, i mean, one day the sri lanka government is doing this preemptatively and another day a larger country is doing it as well, preemptively under the guise of preventing the spread of misinformation i would imagine that would be a concern for you. >> it is i mean, at the same time, there are ways, obviously, to get around it using vpns, but at the same time, when you have governments that are basically not trusting the social media platforms and concerned about them causing and leading to violence, you can definitely see where we might see more censorship on the part of governments to try to combat this issue >> julia, oddly, these platforms could be the first, best place to get information about some kind of impending issue. but are these countries, china, of course, is a completely different story. are other countries, do they have the resources to be able or for the companies themselves to report this kind of activity even here in the u.s are they sophisticated enough to spot things like this before they happen? >> well, i think there are a
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couple of things at play here, kelly. it was only a few years ago that companies such as twitter and facebook were credited for arab spring giving people a voice. the value of that open exchange of ideas and now the narrative has really shifted and much more concern about how that opening exchange of ideas means the spread of misinformation and also incitement of violence so, i think a couple different things at play here and i think we'll see both the rise of facebook and these other platforms trying to regulate themselves and try to do this very delicate dance about what is allowed in each of these different countries. and it's not just about fake news it's also about violent and offensive content and also increasingly hearing this drum beat that these companies shed have to pay if they don't do a better job at taking all this bad content down. >> if they have to spend resources to self police and spend money to comply with regulation, are we now creating
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an environment in which new social medias, social media companies will be harder for them to break through and compete against the likes of a facebook or a google or some of these giants that exist already. >> well, i think it was already going to be difficult for any new company to come along because of the fact that companies like facebook already have so much information and data from us and it's not transferable to another platform but facebook is going to face problems because of the fact that while they're very good in english-speaking countries and dealing with cultures and so forth that kind of relate to where the platform is, they struggle a lot more in countries that aren't speaking english or have a different culture, which is essentially where the market is going to be for these platforms for growth outside the united states. >> so, challenge in the growth markets for facebook guys, thank you so much for the discussion we appreciate it our own julia boorstin and andrew to the bond market now rick santelli is standing by with all the action at the cme >> hi, kelly you know, a lot of action and
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most of it actually is steepening you will be able to see it look at the one-week chart see the two year it moved higher and it's kind of just going sideways. unchanged, i might add look at one week up right at these levels just around $2.60 if you open the chart up to november 1st you can see what i'm talking about. tens minus twos. the ceiling is right around 20 hovering right there granted it isn't a huge steepner but it doesn't matter. takes all the pressure that we're worried about more flatteners and three months is not inverted any more either a month to date, that's hovering around 2.56. we have been talking about that. a lot of room to talk about a widening and gain on booms which are quagmire in monetary issues.
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elizabeth warren has a plan to solve the student debt crisis we'll tell you who is going to pay for it, though plus, elizabeth holmes due in court today we'll talk to the man who broke the story about the company's allege fraud straight ahead [leaf blower]
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presidential candidate elizabeth warren has another plan, this one is to solve the student loan crisis and to do so, she wants to place a wealth tax on the richest americans and use that money to wipe out college debt john harwood joins us from washington john >> hi, kelly, this is a situation where elizabeth warren has a plan attack one problem facing more than 45 million americans. it is to wipe out student debt let's look at the details of her plan first of all, she would wipe up out to $50,000 in student debt for 42 million americans all those with incomes under $100,000 secondly, she would use money to wipe out tuition at public colleges and universities. third, she would put a bunch of money into pell grants to cover nontuition expenses and,
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finally, a fund to finance assistant financing historically black colleges total cost $1.25 trillion. how does she pay for her agenda? she has that $2.7 trillion wealth tax 2% on wealth of $50 million and an additional 1% on wealth above $1 billion she has got a real corporate tax, 7% on corporate profits exceeding $100 million higher estate taxes. total tax bill for what she wants to bring in, $4.1 trillion over ten years and she hasn't even spent all that money yet, kelly, in the program she has proposed so far. >> i think it's one thing to say we want to elimflainate the coso it going forecast and another thing to say, we're going to use this to pay off existing debts >> we will see this is something that she is billing. remember, the democratic primary is very largely influenced by
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african-american and latino students she says this will narrow the wealth gap because those people have low incomes and carry an awful lot of debt and she's making the argument they're going to be pleased with this. obviously, a lot of people not pleased with it. >> thanks very much, john harwood in washington. it was the corporate scandal that rocked wall street and silicon valley mawho first broke the story who led to the company's collapse joins us next ssing nats unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.
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in less than two hours elizabeth holmes, founder of the now defunct blood testing startup theranos is due in federal court. holmes along with the company's ceo sunny belwani are facing charges they defrauded doctors, patients at one point theranos was valued at -- john carriereu broke the
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story. he's author of "bad blood. which were chatting in the break has spawned basically a theranos empire featuring podcasts and documentaries and movies it's great to have you here. what are we expecting? are we expecting elizabeth and sunny to serve prison time >> they're charged with wire fraud. 11 counts of wire fraud and conspiracy to commit wire fraud. and the maximum time they could spend in prison if convicted by a jury is 20 years so the pro spektive prison time is very real what we're waiting to hear today is whether the judge is going to finally set a trial date because remember those two were indicted in june of last year. it's been almost ten months. for a while the defense was arguing that it needed more time that there were delays in the
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discovery. now in the latest joint briefing by the government and the defense the government is saying we're ready to go to trial and they want the judge to set a trial date while the defense says it needs more time. >> so we're waiting to hear on a trial date we are talking about two individuals who used to be romantically involved, by the way who no longer are. elizabeth holmes is now engaged totally separately from all of this but also the thing about that she seems to be acting as if nothing's wrong. and is there a risk that depgd on how the trial date's set, depending on on how the government makes its case she's kind of able to move forward and live her life while this whole thing plays out in limbo >> it's true that she's been seen gallivanting around san francisco and silicon valley going to dinner parties with her fiance, a guy who's ten years younger. and by the way, she went from sunny, the ex number two of ther anos who's almost 20 years older
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than she was, to now being engaged to a guy who's 30 years younger, and that's a 30-year pivot. and yeah, she was with this guy billy evans and their dog balto. >> which is a fake wolf. >> right a husky. they were seen going to burning man on the day that the company dissolved. so you know, clearly she is behaving like nothing is wrong and she's kind of happy go lucy. that's not i don't think how most people in this predicament would behave i think most people would be baying low on the other hand, this is how the justice system works she did pay a $500,000 bail to be out on bail until the trial starts same with sunny. he's out on bail too and they are about to go about their lives until the trial starts >> in delving into this whole story you've gotten to know sort of the personalities involved pretty well, john. i would imagine. so when you see elizabeth holmes
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g galavanting around town like nothing has changed does that fit with the personality you've come to know >> it doesn't surprise me at all. i think that she is someone who again and again has shown an inability to have qualms, to display regret or even feel like she com pitted any wrongdoing. i think the most that she's allowed in conversations with friends and family is that mistakes were committed by the company. but she's not necessarily copping to the mistakes herself and she's certainly not accepting of the fact that you know, anything wrong was done by her. at no point did she apologize to patients or to investors or to the public about the false claims that were made and the unreliable blood tests that were returned to patients and doctors. and so you know, to see -- to witness this is how she's now behaving, having been indicted, is not overly surprising to me
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>> in the meantime, what's happened to the board pebz this was such a star-studded cast and crew, everybody from george schultz's grandson featured prominently as a whistleblower, it led to a falling out, henry kissinger and others was there any recourse >> right, so tyler schultz shultz, who was one of my confidential sources and who has seen gone on the record, is known to be one of the big whistleblowers, has actually started his own company and gotten it funded and he seems to be doing well. erika chung, another whistleblower-s heaved an incubator, a startup incubator in hong kong she's doing well too as for the board, timer's grandfather george, the former secretary of state, has made amends and admitted that he was wrong and apologized to tyler and pretty much called him a hero in front of the whole family and then the other ex-board members are really laying low. jim mattis hasn't said anything
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about thera nos since stepping down as secretary of defense haven't heard anything from henry kissinger, dick koefs vick, all these luminaries of the government and business world. i think they're just sort of hoping everyone forgets about this >> we won't. john, thank you so much. john creou otharyrf e "wall street journal." >> check please is after this. 300 miles an hour, that's where i feel normal. having an annuity tells me my retirement is protected. learn more at retire your risk dot org. frstill, we never stoppedss wmaking it stronger.e.
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we're going to see it at the pump >> prices are already high because of the ethanol shortage. thanks for watch "power lunch. >> "closing bell" starts right now. it is the final hour of trade. happy monday i'm sara eisen >> tesla showcasing its autonomous driver technology we'll bring you the latest updates. >> oil prices surging as the trump administration looks to stop other countries from buying iranian oil. we'll look at how long that spike could last >> and samsung is delaying the release of its galaxy fold phone. will this black eye for samsung be an opportunity for other smartphone makers? that story of course unfolded on the show last week "closing bell" starts right now.

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