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tv   Power Lunch  CNBC  May 21, 2019 2:00pm-3:01pm EDT

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house? >> no. >> reporter: it's impossible to put an exact price tag on what it takes to fortify your home but $3,000 to $5,000 would go a long way to getting to those standards and kelly, first named storm today, andrea. >> that money goes a long way with 7% more as well great stuff. thanks very much that does it for "the exchange." i'll join melissa for "power lunch" which begins right now. thank you, kelly see you in a moment. tyler mathisen with the healthy returns conference, join us in a moment new at 2:00, the smart money betting the sell-off is over and the correction has run its course are the hedge funds right and what do you do from here china digging in to heels on trade talks signaling a long road ahead plus the new risk emerging in this trade war and tesla at $10, a new call on the worst-case scenario. that stock down 40% this year at the lowest level in 2.5 years. where's it go from here and when
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the margin calls begin to hit elon musk. "power lunch" starts right now let's get a check on the markets at this hour nice gains on wall street. the major averages up for the first time in three sessions dow up 195 at the highs and 174 right now and s&p 500 up 26. almost a percent apple one of the stocks fueling this market but investors still getting more defensive the dow utilities set yet another record intraday high kelly? >> let's get to team coverage at the nyse china's xi is turning up the heat on trade talks signaling we have to start all over again kayla tausche with the story and steve liesman with the new risk in the trade war let's begin with bob down at the new york stock exchange. bob? >> reporter: kelly, we've been emphasizing that china trade is the marginal mover of the markets and again, that's the story here as we got an
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extension on the huawei here and all the large cap china tech names. everything up 2%, 3% or 4% here in the united states steel stocks, often proxies for global trade and had a horrible month overall but all these stocks, rarely you see up 3% in a single day and moving to the upside and we talk about what we call the huawei-related chip names that get a substantial amount of the revenue from doing business from huawei and all of them are trading to the upside other names don't get a lot of attention but they also get significant amount of revenues from either china or china-related companies there. micron, for example, significant. qorvo and significant part of theirs as well back to you. >> thanks very much. bob pisani. president xi ramping up, saying china won't trade anytime soon on trade. kayla tausche in washington with more on that kayla? >> reporter: an event commemorating the country's 1930s civil war known as the
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long march, president xi jinping told a cheering crowd, reportedly, we're embarking on a new long march and we must start all over again the company's top trade adviser, a company that produces rare earth materials, next front in the trade war. go into electronics and automobiles produced here in the u.s. and the stock of the company that xi toured rose on a signal that china would move to protect those domestic companies. meanwhile, president trump at a rally last night reiterated his belief tariffs work and his respect for president xi said on may 9th he expected to have a call with his chinese counterpart. no word on whether that has taken place. but the u.s. is moving to help tech firms and farmers affected by these tensions. the commerce department rolling out a 90-day grace period for the huawei ban and then there are reports of a new package of aid to u.s. farmers that could be rolled out this week. deirdre with the details on
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that, available at a later date. >> thank you, kayla tausche in washington the fed weighing in on the effect of the trade war and a new risk emerging in the battle with china our own steve liesman is here to explain. steve? >> melissa, thanks boston eric rosen, voter this year weighing in on the trade fights saying he's optimistic a trade agreement will be reached but warns that trade is a prominent downside risk and more tariffs would threaten a worse market reaction, bigger effect on consumers and slower growth most of the talk is about the large u.s. china trade deficit, another part no one is talking about. hundreds of billions of dollars of u.s. company sales inside china with stuff made in china these sales as of two years ago, the latest is available, almost double what u.s.companies export to china at $343 billion and exports $170 billion but not part of the trade numbers because this is stuff u.s. companies make and provide over there. it's also almost as large as the
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trade deficit itself dan ikenson says when we talk about u.s./china trade, it's a missing number lots of shops set up closer to markets. these are the sales of companies like starbucks, general motors, mcdonald's, and the $343 billion u.s. companies sell their dwarves to $35 billion chinese companies make and sell here in the u.s. the numbers show why markets are so sensitive to the trade war. the possibility that china could retaliate doing business in china, u.s. companies are $26 billion in china and 2016. it's a small percentage, but it is a figure, guys, going on average, by double digits. what i did is took that number out of our earnings abroad, exchina, u.s. foreign earnings abroad are falling this number, china growth, 10.6% on average over the last few
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years. the other, our access and whether or not is exactly as melissa framed it, is it a potential new battle on the trade front and there's a lot at stake here. >> thanks, steve. >> pleasure. >> the markets green for the first time in three days hedge funds are betting the sell-off is done, are they right and how to position your portfolio? jack and evan brown with u.s. asset management jack, look, there's still risks. starbucks is a perfect example of what steve is talking about can they take for granted china is their second home market. >> i think part and parcel with that assumption is that there will be a resolution of this trade dispute by the end of the year and i don't think that's necessarily the case as we just heard from steve and we heard from others is that this relationship is much more complex. this is not necessarily a trade
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negotiation. this is a fight for global dominance in technology and in health care and not something resolved quickly and not with just a couple of trade agreements and handshakes. >> i guess the question, evan, what's priced into the stocks now and should investors discount the possibility of that lessening lessening or say look at what happened with huawei, maybe we'll come to a deal here? >> we had this unstable equilibrium where the markets think president trump will cave or we don't want to see too far pain in the stock market, but the more that this stock market holds up and the more the u.s. economy holds up, the more emboldened president trump will be to push and he's not incentivized to deescalate until that happens but our bias is actually that he will push and president xi will push until something breaks, especially, and maybe there will be enough pain to bring both sides together >> much sharper market sell-off
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but he barely reacted to the one we've seen so far, the president. >> yeah, so there's an interesting debate going on the president's incentives and is he focusing less on the stock market and more on, i want to be the one who's tough on china he's focusing on joe biden and joe biden's popular in the rust belt, but also being tough on china is popular in the rust belt so maybe de-emphasizing the stock market, reemphasizing that being tough on china and that could lead him to have a little bit more of a downside before he actually caves on trade, essentially. >> jack, we're thinking about s&p 500 and where it's going to get its growth where the companies will get their growth from and thinking today, at least, that china's going to be a big growth market for a lot of sectors out there, particularly technology. should we then think, maybe this is a long-term question, not a tomorrow question, but should we think about a cap on valuations because maybe the growth won't be as blue sky as we all thought
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because of what's going on with the trade war. >> i think the growth will be there. it's really just the processes, the mechanism for that growth. you know, here's, if you take technology, even large industrials, here's a group of companies that essentially optimized their global supply chain based on how the cards have been dealt for the last 40 years and now they're seeing an abrupt reversal. so the question is, all right, how are they going to adapt? how will they pivot? and you're right, getting boxed out of china is going to hurt but i do think they can continue forward with, you know, production and so forth, but they're going to likely, if these trade negotiations don't go well, they're going to need to shift and whether that comes back home to the u.s., which is certainly one possibility or some other country in the region, remains to be seen. >> guys, if i can pivot and ask you about some of the events in the uk evan, i know you were an fx guy
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in your past the british pound pop today, theresa may might put this to a second referendum. businesses are concerned about brexit, already don't know what to do about this what do you make of this twist >> you know, we had a pop in sterling when she mentioned the second referendum but then said, only if you vote for my deal will there be a second referendum, a last minute ploy for her to get her deal for the fourth time over the hump in parliament sterling came back down. >> rival labour party saying they're not going to back this looks like no deal for the fourth time. she's going to be gone and then what they just crash out of the eu and? >> i wouldn't say that there's a lot of things that have to happen between now and then what will likely happen is prime minister may is likely to resign and then we get a more pro-brexit, tougher leader in the uk possibly boris johnson and then go down a path of confrontation once again with the eu and heading into this
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october 31st deadline, it's not necessarily that we do crash out of the eu, but the chances of a no-deal brexit are certainly rising >> jack, to kind of tie a bow on this, does it seem like they're leaving now, it's going to be harder line to probably not going to be any deal, right? i mean, that's what business needs to know? >> that's best case. best case is no deal i don't think many investors were impressed by prime minister may's hail mary here i think that it sounds like, as evan mentioned, they're just like floating toward this no deal brexit and it's going to be ugly i mean, i would love to see a new referendum i think it would give uk another chance to perhaps, now that they've seen kind of behind the door here, maybe just a fresh look at it. >> we'll see it's been almost three years and counting and still no deal. thank you both, appreciate it. evan brown and jack ablin.
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shares of tesla turning higher after falling 200 a share. is the bottom in we'll ask one of the few bullish analysts remaining and then the liveeah re cfe hltcaonrence. much more from healthy returns coming up on "power lunch. let's build a better world for investing. let's create jobs, build bridges, insure prosperity. as investment management professionals, let's measure up. cfa institute. what do you look for i want free access to research. yep, td ameritrade's 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.
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do any of you know captand here we go. [ "good to be alive" by andy grammer ] it's snowtime baby. [ screaming ] oh, snowball. uh, is he ok? not in any way no. take that ok. you were just beaten by a rabbit. you don't even know it. [ ding ] oh, my pizza rolls. the hits keep coming from tesla. adam jonas, a long time tesla bull out with the new note saying shares could drop to $10
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in a worst case scenario after web bush said tesla is facing a code red tesla stock turning around, down 40% this year. should the bulls start worrying? joining us now is joe osha at jmp securities and philip lebeau with us. phil, sort i'll go to you firstr sort of a scene setter this company promise add huge ramp- ramp-up and autonomous taxi fleet. what happened? >> they've clearly lost momentum and started when they said, look, we're not going to be profitable every quarter starting in the fourth quarter on first quarter reported a lost, we may not be profitable until the end of this year, people really took a hard look at what's happening both in terms of production and in terms of demand out there and when you look at demand, this is what gets at the heart of the note from adam jonas.
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is there enough model 3 demand to get what they're expecting for the remainder of the year until they get to next year when they expect china to have the new shanghai plant and won't have to deal with tariffs from vehicles shipped to the united states you add that along with everything else that happened, whether or not it's the robo taxi fleet and people scratch their heads, saying you'll have a million of these on the street and have the fcc situation with elon musk, by the way, he's not tweeting we haven't heard from him in a long time about tesla and i think that has a lot of people saying, in the past, you'd hear from him by now, you would have heard from him repeatedly. here's what's happening, here's what's coming, have faith in us. >> jeff, it is amazing how the concerns have turned on a dime in terms of before, it used to be concerns of the factory wouldn't be able to ramp up to meet demand and now real concerns about demand itself what are you seeing that convinces you to stick with your buy rating
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>> look, i think there's a lot of things to point out here. for starters, i note that this conversation very quickly turned into a referendum on elon. i've said before that i think his management style and his way of communicating is a problem. i'll say i agree with one point that phil made it's all about volume. we do a lot of work and i know other people do, adam does and got a good look now at what april looked like. it wasn't that far off of march in terms of volume for model 3 cars and typically back and loaded to be honest, at this point, i know sentiment is, and i think it's maybe fair, but hard to see how they don't shift 90,000 units in the second quarter, if you take a hard look at what's going on out there. >> talking to the multiple with $369 price target, that's a 57 multiple for tesla that seems pretty lofty given the demand concerns we're talking about. even if they could hit those
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numbers you're saying. what's a more realistic figure >> well, remember, i valued this company in 2020 and i think you have to because they're growing into their operating costs people like to make the point that it's valued expensively for an auto company but most grow up 1 or 2% but this grows 15% 15 multiple for next year. discounted back, actually pretty high, applying a pretty high risk multiple to that number so i think i'm still being pretty reasonable but it's a high growth company and when people get worried about high growth companies, the multiple gets cut and that's what's going on today. >> the market environment overall is not favorable to these sorts of companies joe, at the same time, are we at a point where the tesla stock performance is going to bear its brunt on how the company operates if you look at the bonds, 2025 bonds sent new lows after the capital rate should we be concerned this is a never ending cycle of the stock
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going down and bonds poorly and just creates a vicious sort of vortex for tesla >> two points, if i may. remember, they just raised $2.4 billion. go talk to any converts person and they'll tell you they could refinance the next convert that's coming too. i don't think there's a question about this company being able to raise money. second point, if i may, a friend of mine once said the analysis, i do the work on this company, i look at the volumes, i analyze the cash flow. if it makes sense, i buy the stock and try not to get too rattled by what the stock is doing on any particular day. i've been at this game almost 30 years and learned especially in times like this, you've really got to stick to the fundamentals i see a company to shift 90,000 units in the second quarter and if i think that, the stock is going back up. >> phil, i think joe is in the minority at this point in terms of the 90k >> joe, i'd be curious what's the next catalyst to
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stabilize the stocks and give the bulls the sense, okay, things are not as bad as we think they are is it going to be the annual meeting in early june? what do you see the next catalyst >> that's a great question the q2 unit numbers. remember they announced the unit numbers before they announced the financials, so i think when we get a look at what those second quarter unit numbers look like, that's going to be a big deal. >> that's five weeks out, joe. a long time for tesla investors. >> it's a long time to wait. i will tell you, there's some very good people out there that roll out registration data if we get to early june and we've got two good months of u.s. registration data, i think that will help also. >> all right we're going to leave it there. gentlemen, thank you joseph osha and our own philip lebeau by the way, tesla is crushing noah syndergaard, bring team thor's hammer into last place
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but teams that took a safer approach like bobby's bulls in the negative bobby flay himself will join us in the second half of the show to talk stock draft and much more. >> looking forward to that first, ylan mui with one manufacturer crying foul over the tariffs on chinese goods ylan >> reporter: kelly, i am surrounded by baby furniture that is made by a company called delta children it is the largest baby products manufacturer in the country and i'll tell you why it's getting rattled t tdearcong next.ra w, mi i'm working to keep the fire going for another 150 years. ♪ for beauty that begins with nature. ♪ to make connections of a different kind. at adp we're designing a better way to work, so you can achieve what you're working for. why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. we're the tenney's and we're usaa members for life. call usaa to start saving on insurance today.
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further into the 2020s, we think this manufacturing will ultimately be the largest source of revenue for therapeutics and the reason for that, melissa, the unmet need is so huge. there's a million people in the u.s. that die of organ disease and only about 10,000 transplants of lungs, hearts and livers are done each year. only addressing 1% of the need and if we can bump that up to 5% or 10%, that's an enormous amount for patients and their
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families and enormous amount of business for united therapeut s therapeutics >> that was ceo mark and saying manufactured organs, yes, manufactured organs will be a key driver of future growth and by manufactured, she means either reviving dead discarded lungs in fda approved sri va machine, happening now already and gentlemen net if ietically s so they won't be rejected by pashs. i spoke to her at the health returns conference where the top executives and technologists are gathering. tyler mathisen is there too in new york city, been tracking the action emceeing the event, emcee extraordinaire, tyler, what did i miss since we left >> reporter: i don't know how you got back to englewood cliffs from here as quickly as you did. it's been a really interesting day. right now, david favor is on stage talking deals with among
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others pete of lasard and individuals from the private firm from silicon valley and the private equity and kkr and a lot of deals happening, $30 billion in the first quarter. nothing more fascinating though, frankly, than your conversation on stage and on air with martin rothblad as she described how they are reclaiming otherwise discarded organs, lungs in particular and basically reclaiming and bringing back to life for implantation for people who need them and she came to this passion in a very private and personal way because her daughter suffered from a very severe pulmonary condition and this was what sparked her interest in that and it is a growth business. >> she is talking about turning moon shots into earth shots and the next moon shot, she's working on is taking the tobacco plants, tinkering with it to grow human collagen and then 3d printing that human collagen
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into structure, so cells can grow on them and create new organs so this is just the tip of the iceberg in terms of the fascinating stuff we've heard about at healthy returns, ty >> reporter: yeah, it really is. and you sit there and think, these are audacious big ideas and that's what really is fueling growth in health care among many other things, but it is certainly one of the reasons why it is attracting so much, so much capital these days including from some of the individuals on stage now and i'll be back in about 15 minutes with david favor we'll recap his discussion on stage about investing in health care we'll see you then. >> look forward to that. tyler, thanks. tyler mathisen with healthy returns conference in new york city now get over to michael santoli for "trading nation. mike >> thank you, melissa. the retail wreck continuing with kohl's crashing after earnings, that stock down over 15% for the year dragging on the rest. so what does this mean for the
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other department store names matt maley and gina sanchez of santika global matt, what would you say to an investor trying to survey the landscape here >> well, it certainly is a tough one. for many years, we'd worry about amazon and now worry about maybe the impact tariffs may have. but one getting quite oversold and looks like it might be ready for a bounce is nordstrom. jwm. if you look at the weekly chart, rsi getting down to levels to bounce in the past when i say bounce, the bounces have been anywhere from 33% to 70% the last couple of years i don't know if it will be that much this time but getting right down to its 2016 lows and 36, 37 level. with the oversold condition, testing key support, if it can bounce off the level, it can be a much bigger bounce than a lot
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of people think is possible. it's for people willing to take risks because if you break below 36, it's going to be katie bar the door but usually see decent bounces. >> earnings on the way too from that one gina, so these stocks have been looking cheap for a while. the market is not rewarded that cheapness to kind of walking them down. would you be tempted at all? >> well, you heard the death of e-commerce and that's seeing itself play out. store closure after store closure. who's getting their online kind of store in order? macy's is actually really starting to get their online story in order and they're looking probably, you know, better than they were before i think the whole space is a challenge. you've got challenging elements in front of it and that doesn't end. so you have to pick and choose your stores here
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>> if you were in the market in the group that would benefit from any positive news of no more tariffs, maybe this would b one of those follow us on twitter @tradingnation >> ahead on "power lunch," trade turmoils rattles the baby industry why tariffs could cost parents a pretty penny plus, celebrity chef bobby flay to talk the meatless craze, stock draft picks and more this trending app, could be serious. we'll explain when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> different sectors tend to do well during different periods of the economic cycle when the economy is expanding, industrial and technology stocks have historically outperformed the market however, when the economy is
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i think we're done here. expect more from ai. ibm watson. is this ride safe? i assembled it myself last night. i think i did an ok job. just ok? what if something bad happens? we just move to the next town. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing. now this is training. keeping my reflexes sharp. ha, oh! you were just beaten by a rabbit. you don't even know it. [ ding ] oh, my pizza rolls.
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i'm sue herera and here's your cnbc news update for this hour shanahan said iran threats are on hold. he made that following the meeting at the pentagon. >> what i would say about the department, it was extremely responsive and i think our steps were very prudent. and we put on hold the potential for tax on americans >> argentina's former president christina per naan desehernanden court. she listened to the charges against her while she sat at the defendant's bench. online art publication art net unmasked the buyer of jeff coons rabbit piece to steve cohen. it was sold for a record $91 million. the winning bid came from art dealer bob mnuchin, the father
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of steven mnuchin and made the purchase on behalf of a client that is the news update this hour, guys, back to you, melissa? >> thank you, sue herera about 90 minutes to go until the closing bell rings a check of the markets right now. still in the green here. the dow going back up towards session highs. we're up by 185 points or about 3/4 of a percent here and s&p 500 up and nasdaq up by 137.3%. tariffs hitting home for many at home, especially in the nursery. baby products on the tariff list ylan mui with the impact on one big manufacturer yl ylan >> these are stocked with baby furniture made by delta children gliders, a changing table. they're a major supplier to retailers like amazon, walmart, target, pottery barn and almost everything you see here comes from china and that means that the prices for these goods could go up as
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these tariffs start to take hold already, seeing tariffs on the cribs and on the gliders go from 10% to 25%, all the rest of your baby essentials, your strollers, highchairs, walkers, that could get hit in the next round of tariffs and company president joe chamois told me there's no escape. >> moving production out of china is not likely because the safety, making sure these cribs are safe, not just for the first child but for the second and the third child. >> reporter: now, delta says that it is negotiating prices with retailers right now and could go from $50 to more than $100 than it was before and some are holding off as they wait out the trade war. the company is hoping to expand its space here in this warehouse.
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got almost 60 containers schedule frd delivery through the fall and could get hit by tariffs. bottom line, this is just a tax on babies. back over to you >> if you tax something, you get less of them, i guess. >> babies? one way to do population control, i guess >> that's the last thing we need right now. thanks, ylan ylan mui. there is at least one group of people cheering the president's tariffs. u.s. garlic growers. shares of california garlic ar soaring as tariffs make cheaper chinese competitors more expensive. mccormick, the big spice company saying it needs chinese garlic telling reuters the two garlics are not interchangeable. so much for substitution when it comes to garlic. to the bond market now i don't know how we make that transition rick santelli is tracking the action at the cme. >> reporter: transitions into treasury listen, eight sessions ago, friday the 10th. this chart starts on that day for 10 year note yields.
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should we close here would be the best and everything behind it on the curve 2s through 10s 30 year bonds. 284, equal the highest close from last week if we look at what's going on with respect to the dollar index, only up about a sixth of a cent but still an important gain as you see on this chart which begins in may of 2010 or excuse me, may 10 of, i'm sorry. may of 2017, how's that? 24 month high and we're only about a fifth of a cent away from it. i can't tell you how steady eddie this dollar has been trading and finally, the midwest, commodities and a lot of rain. here's the one year chart of corn hovering under $4 definitely the best level in a year but when you zoom it back ten years, nowhere near the best level and continues to underscore the changing dynamics between weather and trade regarding some of the midwest commodities. melissa lee, back to you. >> rick santelli, thank you.
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well, the nixon william son but so far bobby flay is conservative stock draft strategy seems to be working we'll ask about that and the impact of tariffs on food prices and the meatless craze bobby flay joining us right after this
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the meatless mania continues. beyond meat the most successful ip oorks this year and foods announced the first meatless sausage for little caesar's pizza and not a moment too soon considering meat prices are going up as promised celebrity chef bobby flay joining all of this as well as his standing in the stock draft. we'll get to this in the cnbc stock draft in a moment, bobby but i want to talk to you about alt meat and if you've ever worked with it or offer in your restaurants. >> i actually, sure, have definitely, when you say i've worked with it, i've certainly tried it and i've definitely kicked it around in my restaurants here and there bobby's burger pals is a fast casual restaurant or check
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averages around $11. so costs obviously are coming into play in food and basically everything because the check average has a ceiling. from a regular burger, so to speak, and something like the impossible burger. it's about 3 times the cost. to us, and then obviously, we'd have to pass that along to our customers. so at this point, it's not something i have in my restaurants. i know that for sure, it's something that's definitely caught the attention of a lot of people people are eating in a much more sort of healthier way, vegetable driven, menu items whether it's burgers or even in my restaurants, i can tell people
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are gravitating towards vegetables, but at the same time, it's tons of meat eaters. >> meat substitute but only as far as people are willing to pay more for the substitute, at least now at this current price point. >> yeah, i think that's exactly right. i think what they've done is they've created something that's not a veggie burger, so to speak. we have veggie burgers with like chickpeas and beans and grains, whatnot, but this is actually, i think their intention is trying to emulate what a burger would look or taste like, except that it's plant-based so at this point, because of the newer or sort of first to the market, the cost so far is a tiny bit prohibitive for my fast food restaurants. >> bobby, do you see what happened with jamie oliver's restaurants over in the uk i guess they have a ton of restaurants, too many, but
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almost all of the locations are collapsing hard to believe. what about here in the u.s.? do you think we'll face a similar problem? >> i can't comment on what happened with jamie because i don't know enough about it as you said, it's overseas like any business, the restaurant business always faces tough hurdles, whether it's labor or occupancy or food costs and good operators have to be creative and we have to sort of get in front of those winds and i think that's where we are at this point but look, here's the thing that somebody told me a long time ago. the one thing you can guarantee is everybody gets up in the morning and has to eat and the restauranteur, i continue to service people who want to eat out and i think that's the case. >> that's all well and good, but we've got to talk some msg you still feeling good with that
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pick >> listen, we didn't get the first pick but i still have hopes that this is going to be a trade between new orleans and the knicks and we'll get -- >> come on what did you think i don't want to say screwed, but it doesn't look good >> listen, it's not over yet and also, i think we'll pick up big time free agents in the off-season here. i have very high hopes on my knicks and of course, that will translate into a much higher mseg stock we're just getting going. >> you're not supposed to fall in love with your stocks, bobby. >> too late. >> bobby, by the way, you're number four in the draft so not too bad four out of ten with a lot of year to go >> love it. >> always great to speak with you. bobby flay. still coming up on "power lunch," going back to the healthy returns conference we'll check in with letyr and david favor to break down the big headlines this hour. don't go anywhere.
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welcome back, everybody, to "power lunch" and to healthy returns. cnbc's annual conference, where we explore innovation in the health care business across all its forms from financing to
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ethics to all of the things that are happening in the health care space. david just came off stage where you moderated a panel of three investors. one from sort of traditional investment banking and one from the world of private equity kkr and the world of silicon equit the world of silicon valley venture capital. >> yeah. >> where's the money going and are the most exciting things happening not in the m&a space but earlier? >> the earlier investments, which are obviously important. and there's a good amount of capital. and jason horowitz, jorge cande our guests there, they're investing with literally a couple of guys in lab coats. they could go that small but those kinds of entrepreneurs now have opportunities to begin companies in part because of shared work shais and the ability stort of do things that might have not been possible even a few years ago because of advance that's have been made in technology and the way you can go about creating a company in
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life sciences or biotechnology kkr surprisingly, this is not really a private equity effort as in buying out a company as much as it's -- >> strategic investment. >> yeah, strategic investment along the way. not quite as early as jason horowitz but not typically what we'd expect from a large private equity firm. though they still do those types of deals talked to us more about what they're looking for. and as you might expect, tyler, data's becoming so important and data analytics but still about finding innovation where they think they can and then advancing it along to the point where either you're going to become a large company or you're going to sell. mr. orzag of course would be potentially happy to do that for you in terms of finding a larger buyer because so many of these large companies now, what we call the big drug companies, rely on their innovation to a certainly extent by buying smaller guys >> and you talked earlier today, it's not to say there aren't
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classic m&a deals or purchases as there was today with merck and peloton, which is not the bike company, another company. so those kinds of deals are happening. but they may not be where the big -- where the real early stage action is. >> no. they're a little bit later when at least the companies to a certain extent believe that there is actually a viable therapy of some kind although typically we do see them prior to sales. you know, it could be a lot of the science is done but not actually hitting the market or they're done at very high multiples. but there are shots the mercks of the world can take and if they pay off they pay off big. >> one of the things you mentioned a moment ago, has certainly been one the subtheme here today, and that is the intersection, the growing intersection of data science and medical science. in other words, clinical outcomes depend -- can be fueled by the computing power, a.i., machine learning, the ability to collect and process massive amounts of data, and the companies that are there, and a
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lot of them are the big guys like google -- who knew microsoft has a health care arm? they do. >> of course they do a.i.'s fueling a lot of that as you say. and then there's the software side of that with crispr and their ability to edit genes, which is kind of frightening in some ways but also potentially very positive in others. i did ask orszagh, because he talks about vertical integration, talks about in terms of care out of the hospital, data analytics, and yet i asked him when are we going to start to see it because i'm still showing -- i don't know about you this is somebody who helped create, was part of the aca, the obama administration, which he does believe has led to a lot of innovation to a certain extent i know some people will debate that but telling us that soon we will start to see more of some of this innovation that they're talking about in these structural changes to the business >> one of these days i will
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bring in the grocery cart filled with my eob xlengs of benefits that i get from our carrier for our family it is a stack this thick over the past couple of years it's really crazy. i know you weren't here in the morning but we had a physician who supervisors 23,000 physicians with the kaiser permanente group across the entire country and he talked about the phenomenon -- this is kind of a left turn from what we were just talking about. the phenomenon of doctor burnout. and i was stunned to learn that physicians have the highest suicide rate of any profession in the united states and on average one doctor a day takes his or her own life because the stress is so high, the business is so demanding, and in many ways the business has become harder and maybe less satisfying to them. all kinds of very interesting learnings here today at healthy returns. david, good to see you >> tyler, nice to see you. >> nice to be with you in the afternoon. >> very nice to see you. beautiful pink tie
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>> that will kind of wrap my part here for "power lunch" at the healthy returns conference later in the afternoon meg tirrell will be talking with alex goreski of johnson & johnson. if there's any news hits that come out of that we'll get them on cnbc. meantime, melissa and kelly, back to you. >> excellent tyler, thanks. david, thanks as well. up next the app you may not have heard of but facebook and snap sure have. that story plus "check please" on "power lunch. measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see.
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you may not have heard of the app tiktok but your kids probably have and now the company behind it is making an even bigger run at facebook and snapchat julia boorstin has more. julia? >> kelly, that's right the company behind tiktok that's the popular video editing and sharing app is a chinese company called bite dance. and now it's launching a new threat to facebook and snapchat. softbank backed bite dance just launched a mobile messaging platform called flip chat in china. it's limited to china for now and remember facebook and snap don't currently operate in china but flip chat could easily expand to the other markets around the world where bite dance's tiktok has been thriving including the u.s. tiktok has been downloaded nearly 1.2 billion times it's the number one downloaded app worldwide in the apple app store for five straight quarters according to center tower topping youtube, instagram and whatsapp bite dance's big move into messaging comes after facebook
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has committed to focusing on private messaging rather than more public sharing in the news feed and it's yet another challenge for snap private messaging, just like snap flip chat's messages also include different filters and the ability to mark up photos now, it's not just messaging and video chat that bite dance is jumping into the chinese tech giant is also reportedly working to launch a music streaming service which could potentially rival the likes of spotify and apple music. >> julia boorstin in los angeles. time now for "check please." >> the ceo of united therapeutics at the healthy returns conference a couple of other tidbits. she already has a remarkable story. just with the oregon stuff she's also the founder and ceo of sirius xm satellite she literally discovered the technology, created a company and -- and she's also a
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transgender woman. she used to be a man so she's remarkable on many, many, many levels. >> i was trying to find -- i hope they make it a little easier i know they can't post all the stuff or people won't pay to go. but your interview with her i'd like to watch. there's a few other things tyler and david were talking about there's a website. but i want the content >> a lot of great stuff at healthy returns. thanks for watching "power lunch. >> "closing bell" starts right now. welcome to "closing bell." i'm sara eisen >> and i'm wilfred frost here's what's moving in the final hour of trade. not too far from the highs of the session. also not too far from where we opened it's been a pretty steady day of gains and broad as well. 10 out of 11 sectors higher. only really staples, which is in the red. and that's down to some individual earnings earnings movers >> individual names making some big moves, kohl's getting crushed after its earnings report this morning. we've got someone who says this could be a buying opportunity. >> chip stocks making a bit of a comeback after the u.s. grant aid temporary reprieve from the huawei ban

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