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tv   Power Lunch  CNBC  June 11, 2019 2:00pm-3:01pm EDT

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well respected and surprised to see that jolie was stepping down wasn't, however, surprised to see that corie berry would be promoted because she's very well respected. >> has been best buy for investors. thank you very much. that does it for "the exchange." i'll join tyler and melissa in a minute on "power lunch" which begins right now >> juwe'll see you in just a moment tech on a tear best stocks in seven years but one major overhang hearings on capitol hill this hour into big tech's dominance elon musk, the stock soaring this month but hovering at four year lows. the tesla trade coming up and kevin durant's brutal injury, one of the most significant in nba history. the big money at risk. "power lunch" starts right now
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in the green, dow up 185 points earlier. seventh straight day of gains. hanging in the balance up by 16 points and up by 8 and energy and communication services, best performing sectors at this hour happening right now in washington, the house judiciary committee holding a hearing on the dominance of big tech. ylan mui with that story for us. ylan >> reporter: this is the first of the anti-trust investigation. how far will they go i spoke earlier today with the chairman of the house democratic caucus of new york and he told me that subpoenas are not off the table. >> to the extent that we don't receive full and comprehensive cooperation from the big tech companies, then the subpoenas are one tool at our disposal that we may be compelled to use. >> reporter: but a word of
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caution from the ranking republican on the committee, congressman doug collins will say in the hearing today that big is not necessarily bad and proposals to break up big tech risk throwing the baby out with the bath water so the hearing today is focused specifically on the way that online platforms have changed the landscape for local news media. so they're at least starting on an issue in which there's plenty of common ground back to you. >> ylan, thank you, ylan mui in washington for us. the trade war in the american economy, joining us is national economic council director and cnbc friend, larry kudlow, always a pleasure to speak with you. >> thanks, melissa appreciate it. thanks for having me. >> i want to ask you about what the president said earlier, and that's because he believes china wants to make a deal but it's got to be a great deal do you view this as a pivotal time for the u.s. economy, given what has happened in term of the slight downturn we saw in the
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latest reading >> actually, i think the u.s. economy is very strong and i wouldn't put my stock in one month's jobs number. there's, you know, lots of other evidence on jobs and wages and nfib and ism reports 3% growth this year. on the china point, the president said a couple of times in recent days the g-20 meeting in japan, i'll be there, looking forward to it and see if we can make further progress, but that phrase, it has to be a great deal for the u.s. look, we were about 90% home on what we thought was a very promising potential deal this was now almost a month ago
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when the chinese shocked everybody and started pulling back and reneging and before you know it, we didn't have a deal anymore. so i'm hoping and i think that's what president trump is suggesting, that in japan, at the g-20, when he and president xi meet, we can pick up where we left off on achieving a really good deal, go back to that 90% or whatever you want to say, and build on that for the final strokes, but if failing that, if failing that, president trump is not going to accept it, nor should he in my view. >> he and the administration made abundantly clear that would be the case, larry, but what impact would that have on the forecast and economists on wall street make all sort of forecasts for the end of the year and all the forecasts have an asterisk. if there's a trade deal reached with china, what sort of asterisk is on that forecast of yours? >> well, look, i don't want to
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speculate what's going to happen between now and the end of the year. >> you're making a prediction of 3% growth for the end of the year >> right and i'm just going to use that or keep that as our baseline that 3% number is not contingent on a china deal that might not be satisfactory for american economic interests i mean, anything that works has got to be good for our farmers and ranchers and blue collar workers and so forth but look, in our view, and you've heard me say this before, what has changed is lower tax rates, particularly, the business tax cuts, massive across the board deregulation, opening up the energy sector and various trade reforms. i mean, look, let me give you something that i think is more important than china vis-a-vis the economy. that's usmca we have passed a very good deal with our friends in canada and
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mexico and their governments have signed off on it our administration has signed off on it. we are hoping that the congress will sign off on it. now, the estimates on that could be as much as a half a percent of additional real gdp per year, okay, and on top of that, the possibility of 180,000 additional jobs per year mexico, canada and mexico are gigantic trading partners and i think in economic terms, that's probably more important than the china story. however, that china story is going to turn out. so my sense is we could add half a point if we get usmca but there's no reason for us to give up our baseline of 3% because we're not changing our tax and regulatory policies. >> larry, hey, listen, there is a trade team the treasury secretary, bob lighthizer, and many others, but
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the president, about an hour ago, an impromptu press conference in the white house lawn said i'm holding up the china deal literally, he said i'm the one that's holding up the deal what exactly, maybe china is watching this right now, what does he want that will get a deal done? >> look, the president is the leader he's the final decision maker. that's an easy one what does he want? i think ewe'd like to go back, mentioned earlier, to where we were a month ago, where we had a very good basis. we had progress, not completion, mind you, not completion, but we had good progress on ip theft and ownership of companies and forced transfers of technology and agriculture, tariff and non-tariff barriers coming down, non-farm barriers coming down, cyber space, hacking, and perhaps most importantly, enforcement. that was not a completed deal.
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there was more work to be done, but it seemed like good enough beginnings so as you recall, the president was going to suspend tariffs on the $200 billion. when that fell apart and the chinese walked away, then we had to make our views known by moving back to 25% so look, i can't predict precisely, sully, but what i think the president will do, go back to where we left off, as a decent, not perfect, but as a decent base and then build on that base. that agreement wasn't completed, maybe never get completed, but that certainly is where we want to start now we have to see if the chinese are willing to go back to that and build on that base i don't know the absolutely to that i don't think anybody knows the answer to that just yet. >> larry, i want to get your take on what wall street says about whether or not the fed will cut rates it seems like wall street is
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coming around to the thinking of the administration that the fed should in fact cut rates and that pivot seemed to happen after the most recent weaker than expected jobs report. the odds of a rate cut in june went up. the odds of a rate cut in july went up. wall street seeing at least two cuts by the end of the year, and that's because a weaker economic data you said we're killing it on the economy. the economy remains strong, despite that one weak data point. what is wall street missing here because they are seeing the fed cutting rates but on economic weakness >> are you sure, melissa >> on which point? i'm sure of all of it. but i'm open to criticism here >> oh, good. well, i wouldn't dare criticize. i would just suggest to you, in the spirit of having some fun, that the real issue here is the low virtually no inflation rate, which is what fed people have been talking about the fed sin dependent. we have our point of view.
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they have their viewpoint. the two are merging, actually. i think the message of the bond market in recent weeks, by the way, not just from the jobs number but recent weeks, secretary mnuchin said this on cnbc a couple of days ago. the bond market message is that the fed went too far last autumn and now people expect markets can change their mind, but they expect to see the target rate come down. once, twice, three times, depending on how you look at it. what i'm saying is a little bit of pushback in the spirit of respect is that i don't think it has to do with the economy i think it has much more to do with the absence of any inflation, which the fed has been concerned about second point is, you know, we can think about insurance policies again, this is our view. i'm respecting the fed's independence if they're going to act, they're going to act on their own time
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no pressure here but you asked the question globally, interest rates are very low so we might want to write a bit of an insurance policy on that the u.s. economy is in good shape. i'll maintain that view but i don't know why the fed has to go as far as they went last, let's say in the fourth quarter. i think they moved too far too fast that's my view that's president trump's view. i think increasingly, that's the bond market view and i'm not impinging on fed independence. they'll do what they want to do on their own timetable but that's my reading of the market. >> in the spirit of respect and friendship, i do remember a fine gentleman talking about king dollar and the president tweeting out, the president tweeting out that the europe and quote, other currencies are being devalued in that it's unfair to the u.s. is the president calling for a weaker u.s. dollar, larry?
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>> i think the president is very comfortable with a stable dollar king dollar is my phrase it's still my phrase but again, i think the president is reasonably comfortable there too. i think he's making a different point and that is, we need to have some assurance. you have g-20 coming up and g-7 after that, of world currency stability, that bigger policies using money, valuing currencies, not a good policy, for any of these countries. it can hurt, help, go up and down a million different ways. how much of this is market forces how much of it is deliberately policy changes that's an interesting discussion and one that needs to be parsed through at another time. >> in the spirit of friendship though, larry, what's the difference between the ecb continuing to cut rates and keeping their euro, quote
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unquote, undervalid vued, even f it's for an insurance reason and the dollar >> the eu didn't jack up rates that's one difference right there. so if the fed, look, let me just phrase it to you this way. if the bond market is correct in forecasting some reduction rates, i think you'll see some kind of modest adjustment in the currency world market forces will deliver that. look, europe, the eu and so forth, they've tried easy money for years. what you really need over there are some old fashioned supply side, incentive oriented tax rate reduction and other ways of deregulating labor markets and economies. a lot of talk about that in
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these countries. not much action. i think that's the biggest problem in europe right now. and i don't think more and more easy money is going to solve anything that's just my editorial we've done it right here in the u.s. maybe not perfect, i get that. but, you know, we've reasserted a mile of growth and reward success, we will not punish it that's what the lower tax rates and deregulation and trade reform is all about and i dare say it is working. the results have been pretty darn good. not perfect but pretty darn good i wish the europeans and others would follow us. >> larry, always great to speak with you thank you for your time. >> thank you appreciate it. >> larry kudlow. >> let's get reaction now. joining us is nisha patel and michael pagino with permanent portfolio family of funds. nis nisha, do we need a rate cut >> so here's, i think, the tricky situation with the fed. markets have priced this in.
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and if the fed decides and they have to decide very soon, is the china trade deal going to get done what type of pressure does that even bring to the market but if they decide not to bring on any rate cuts, if they think the economy is in a good place, they have to very artfully craft their language, over the next few meetings, to backtrack both markets to now price in no rate cuts when you've had that priced in for quite some time now. >> what is the risk though, misreading the bond market you guys talk a lot about it on fast money if you looked at yields, you'd say the bond market is pricing in the potential for a slowdown, but with the negative yield on german debt, i also wonder, is there just a huge amount of buying u.s. treasuries, not because we're slowing but because there's no place else in the world to get any kind of return >> which is true you look at our 10 year yields it's very comparable to the 10 year italian debt yields now, in a lot of the negative yield situations with sovereign
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debt, a lot of central banks have to buy debt of other countries, a lot of pension funds, insurance companies they're forced to buy these. you don't have retail clients with negative yielding debt but you're right when you compare u.s. rates, they look fairly attractive compared to other developed nations yields. >> there had been a long standing belief amongst investors that this is the stock market president that would step in and not let the stock market slip too much. given what you heard from larry kudlow and the president yesterday on squawk box, i'm wondering, do you still believe that is the case or if they're going to go full steam ahead in terms of taking a more aggressive stance with china and perhaps not getting that deal that the market is so hoping for? >> it's a great question, melissa. i think he is the stock market president in that they understand the stock market and how to use it and i would take a brighter view of this.
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the u.s. economy is in good shape. that's what they represented it and confirms that, at least for the most part. as long as that continues. the lack of inflation, the reason you might be able to cut rates in this environment and that may be true, our inflation studies would indicate that it's probably a little understated, and i'd be careful with that argument but i get it. the issue though, i see a lot of the trump bashing and the fed almost a negotiating ploy with respect to what's going on with our various status of trade negotiations all over the world. specifically, china, and easily apply it to other regions as well europe, england, and even the u.s./canada and mexico i see it as a larger picture here and while trump may want lower rates, what president doesn't want lower rates and that's generally good for the stock markets, so that's kind of
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a generic sort of wish list, if you want i see it at a level that's more playing into or intersecting with the ongoing trade negotiations >> mnisha, is it possible as a fund manager to measure or value the effect of a prolonged, let's say we don't get a deal, a prolonged deal with china valuations >> i think the impact on the municipal bond, how does it impact in the long run some rely on imports from china. if that starts becoming a case where companies can't absorb the cost, they can't pass it on to the consumers, you start to see increased layoffs and overall less tax collections over the longer time period and that's going to negatively impact these local credits and these states california's economy certainly very cyclical, decent amount of reliance on imports.
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i know mexico is out of the equation for now, but you had a lot of states in the long run that can be affected by this we're taking this into account with the fixed income and specifically, the side >> thank you guys, very much. >> thanks, guys. coming up, a huge rally for tech stocks up 9% in a week. that group's best performance in eight years but a major overhang that's posing a huge risk and tesla up 20% this month. meeting shareholders today will he say someing atthth kills this rebound "power lunch" will be right back it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.
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the best buy day of run in more than seven years. almost all of the faiang stocks are posting double digit gains lawmakers holding a hearing on capitol hill right now into anti-competitive behavior of big tech let's take a closer look at what's ahead for the sector. rbc capital analyst mark and then a former trial attorney for the doj's anti-trust division. great to have you. i want to start off with you wall street seems to be discounting largely the possibility that big tech could be broken up i'm wondering how high of a bar do you see that happening? >> thank you for having me it's a pleasure to be here i think the investigations that are rumored to be going on b the doj and the federal trade commission, i think if they are real investigations, if these
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aren't just search and avoid missions but looking for anti-competitive conduct, i think there's a lot of evidence out there that could support a case that could ultimately lead to breaking up some of the companies. so if you kind of think about this the way a regulator would think about it, there are two big buckets of anti-trust law they'll be looking at and the first one has to do with acquisitions, buying up competitors. and then the second one has to do with anti-competitive conduct and if we look at some of these companies, acquisitions starting there. facebook buying instagram, google buying waze, amazon buying companies like zappos, diapers.com. these are acquisitions of direct competitors and broad consensus that's the sort of thing that can violate anti-trust law and then anti-competitive conduct. same thing facebook is cutting off competitor's access like vine's access to facebook apis, google's manipulating search results, at least according to the eu regulatory commission
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over there and amazon is doing things like predatory pricing, at least allegedly disabling buy it now buttons all of these are things not designed to help consumers they're not designed to make markets work better. they're just designed to disadvantage competitors and actually harm competition. >> not designed to help consumers and in the end, it seems like consumers are in fact benefitting from lot of these companies, buying other companies and these practices. mark, i'm wondering where you stand on this and where you see the worst case scenario being. there's an interesting note out today on alphabet saying even if the doj breaking it up, there could be 50% upside for investors. that could actually unlock a sort of some of the parts, sort of worth more than it is whole >> a couple of points. look, i think the market consensus is that google is the one most at risk seems reasonable to me and defer to john on the legal stuff but two simple points.
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i think the consumer value proposition of these companies is absolutely compelling you look at customer satisfaction surveys, especially of amazon, it's higher than just about any company in the country. probably in the world. the value that they've created for consumers, i think, is really emphatically clear, and look at amazon and its business. they account for less than 50% of online retail and i don't know why we should use that as the mark total retail sales, if you want to bust up amazon, probably bust up walmart first and a cloud computing with a 6 year lead. they practically invented the industry you've got two dramatically large competitors aggressive competitors coming after them with google and microsoft. so it's hard for me to see how amazon is competitively dominating any of its segments facebook is in the middle. just recently met and talked with snapchat's snap about them. i don't think, i'm not hearing snap saying they think they've been closed off by facebook. there's been a lot of really good product innovation at that
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company so it brings me back to google and i think google has done things that have been pretty impressive and correctly, in my limited opinion here, limited legal opinion, correctly fined in the past. i think this is probably the company you most need to monitor. >> here are four very real headlines and i want you to respond with a question i'll ask you at the end justice department preparing anti-trust invasion of google. ftc with facebook probe and u.s. justice department considering apple probe. those headlines in the last two weeks. if you were running any of those agencies, which one of the four companies deserves the most scrutiny and most likely to face a real investigation >> that's a hot seat to be in right now but i'll try to imagine it you know, i think to me, the easier thing to do is look and see which is the least worth pursuing to me, that's apple. i think you've seen less anti-competitive acquisitions by
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apple and less behavior that's attracting scrutiny from other regulators i would kind of discount apple i think i would focus more on the facebook and the googles of the world since it seems like there you have this history of repeated acquisitions that are snapping up rivals and got conduct that like mark said, is already attracted scrutiny from other regulators suggested there's something there. >> mark, in terms of the discount embedded in these na s names, which is the biggest discount embedded because of regulatory overhang? >> it has to be google and maybe second with facebook both of those now darn close to market multiples for what is pretty clearly emphatically consistently premium growth. that's a concern, one of the reasons, by the way, and particularly facebook, i can buy it at a market multiple and a lot is priced in by the decent sense that i don't think there's going to be a major regulatory
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action taken against facebook and i think they've got a nice portfolio of global assets that can continue unusually robust top line growth, 30% for multiple years and the two biggest discount names, facebook and google and investors an opportunity, particularly with facebook. >> thank you, beoth. now to michael santoli for "trading nation." >> tesla on watch ahead of the shareholder meeting this afternoon. the stock picking up speed in june tracking for its best month since october. blue line futures and erin gibbs, your "trading nation" team bill, start with you it's popped back above the bottom of the old trading range around 250 so where do you see the stock from here? >> called 180 the buy area 2.5% but up to here, a lot of this is short covering ahead of this investor meeting.
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elon musk to boost the stock the best he can. there's still fundamental challenges i look at 250 area, 245 as being an area to look to sell this as long as it stays contained through the investor meeting, i think you'll have a sure opportunity. >> erin, you know, bill mentioned fundamentally, did this decline in the stock, give fundamental investors an opportunity here or not? >> because we're still seeing revisions downwards. i do see this ahead of the shareholder meeting. it's a great opportunity for musk to promise a unicorn with wings, reinsure investors for a couple of weeks but then reality hits negative from europe if he misses on cars or profits, it's constantly being revised down and don't see a bottom yet. >> all right we will listen for what the company has to say later erin, bill, thank you very much. for more "trading nation," head to our web site or follow us on twitter @tradingnation
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melissa, back to you. >> michael santoli, thank you. ahead on "power lunch," an exclusive interview with the ceo of duke energy plus, renovation reversal is a major slowdown for the crucial home improvement market and pain in the paint what kevin durant's injury means for him and the nba. all this when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> one mistake that many traders make is trying to pick the perfect enterprise for a stock they'd like to own here's something to consider why not just buy part of the position you'd like to have? that way, if the stock goes down, you'll have an opportunity to get added additional shares at a local price and improve your overall cost basis. i'm randy frederick and schwab is the better place for traders.
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i'm sue herera here's your cnbc news update at this hour. a key meeting among catholic leaders is under way in baltimore. it's being led by cardinal daniel denardo with the goal of increasing accountability of bishops in response to sex abuse cases. a brawl breaks out in hong kong after the president of the legislative council which is
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aligned with the chinese government proposed an extradition bill that would allow people from hong kong to be sent to china to stand trial. pro democratic lawmakers are up in arms over the proposal which has plunged that city into a political crisis. investigators are on the scene after a commuter train in boston derailed during rush hour this morning it's still not clear what caused the train to jump the tracks luckily, no one was injured. and a new major league baseball record. 13 home runs hit in one game last night between the philadelphia phillies and the arizona diamondbacks among those 13, the first three batters of the night for arizona, all went yard arizona won the game 13-8. you're up to date. that's the news update this hour back to you. >> move those fences back, sue >> yes >> thank you very much >> you got it. a big check now on the energy space natural gas down 9% over the
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last month and we're seeing record breaking temperatures across the west coast into the summer months and pretty much rain, well, every single day here in new jersey so what does that mean for the power and utilities companies? a "power lunch" exclusive. lynn good, ceo of duke energy. lynn, there was a story in the financial times today, i don't know if you saw it, about extreme weather and power usage and we can moan and groan about the weather all we want but you know how bad it's been it's been weird everywhere how much is that really impacting demand and duke's business >> brian, thank you for that question we serve the carolinas and florida, so we're very familiar with hurricane and hurricane season in fact, last year, our customers were impacted last year by hurricane florence and hurricane michael. what i would tell you is that we're very focused on making sure we have the investments and our delivery system. our grid, our systems, our processes to make sure we can restore power quickly as possible and meet the needs of our
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customers. so it is top of mind for us, and as we enter hurricane season again here in 201, it will be a -- 2019, it will be all hands on deck to meet our customers needs. >> particularly, solar, there was a deal in colorado and tennessee as well. you've been aggressively pursuing that angle. which is good from the climate perspective but how does it impact the reliability of power production an enemy to solar is rain and wind and enemy to wind is non-wind things that are happening in climate. how can we guarantee production and utility scale availability with such crazy weather? >> i would say to you, brian, our job is not just to produce power with a certain resource but rather, to find that balance between environmental stewardship, reliability and affordability. and that's been our assignment for decades and particularly our
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assignment today as we go through this period of transformation we have states where we included solar energy, we have wind resources, we have nuclear, we have hydro and balancing customer generation with rooftop, energy efficiency and all of that with a very keen eye toward reliability and the important thing there is to ensure that we keep investing in the infrastructure that makes reliability possible, so that's the deliver system that we all count on for 100% reliability every day. so at duke and throughout the industry, we're really focused on making sure that we are investing in that infrastructure to continue to meet the needs of transformation and meet the needs of a changing climate. >> you're building out pipelines there in the review process right now, lynn, are you confident those will be approved >> we're committed to atlantic coast pipeline, brian. building infrastructure is a challenging assignment for anyone we are in the courts at this point and are working in a clear way to resolve those
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uncertainties and it's important to recognize that this infrastructure, atlanta coast pipeline in particular, is extraordinarily important for our customers in eastern north carolina, not only our gas customers but those who count on us for electricity as well we're moving forward and committed to a successful completion of that project >> there are a lot of demands on the grid these days and so many people plugging in virtually everything, including their cars now and i wonder how you see demand growing in the next, say, ten years and there's increased adoption for evs, electric vehicles >> i think lek tre lelectrifica important. the electric industry produces more carbon and electric vehicles represent an opportunity to continue to make progress so we are investing in infrastructure around our areas
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that we serve to provide a baseline of foundational charging stations so our customers as they begin to adopt, they can have the confidence that the infrastructure is there. we're also working with cities, we're working with school bus companies, with metro transportati transportation this brave new technology to provide electric vehicles for their consumers and we'd love to be a part of that. >> you know, lynn, on the board of boeing and 737 max, you may not touch it but we'll ask regardless what is the timetable of the max return to skies? do you think it could be sooner than people expect >> brian, the first thing i would say is the focus at boeing is to get this right, own this issue, and to really meet the needs of our customers i have such an incredible amount of empathy and sympathy for the families that have been impacted by the accidents and the legacy of safety at boeing has been a
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long standing legacy and the ownership right now is on getting it right and moving forward. it's stoubtubject to a great de regulatory oversight and boeing making sure we underpin trust and confidence and rebuild trust and confidence has been impacted by these events. >> lynn, ceo of duke energy. we do appreciate your time today on "power lunch. thank you. expected to boost the housing market but one area of weakness and did kevin durant cost himself millions of dollars by playing hurt? what was supposed to be a very lucrative summer "power lunch" will be right back ♪
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mortgage rates are dropping but there is a potential head wind for a major part of the housing market according to a new harvard university study
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spending on remodelling expected to slow this year in nearly half of the major metro areas banker of remodelling research at harvard, chief economist with the american institute of architects great to have you with us. >> great to be here with you >> i was surprised this was a fact that i didn't know the new construction market has been slowing for over a year and that means that usually remodelling slows as well. how deep of a slowdown should we be expecting >> you know, i think the slowdown will be fairly modest it's been modest on the new construction side and we're still expecting expecting 4% orh it's been high digits for the entire expansion, a strong market so i think it's really coming back to earth and more traditional levels. >> is this surprising given where mortgage rates are right now and the ability of the consumer to actually borrow some money pretty cheaply >> well, lower mortgage rates certainly are helping growing
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equity and home prices are helping too. but i think there's a lot of markets that are just kind of getting priced out of most people's ranges. people are nervous about investing too much of their money into home remodelling, if we may see a slowdown coming. >> our audience is thinking, oh, this sounds like bad news for the likes of the home depot or lowe's i'm wondering if which markets do you see remodelling slowing the most >> well, there's really two categories, i think, melissa number one, there are markets that are have sort of traditionally challenged economic bases cities like buffalo and rochester, new york, memphis, tennessee, new orleans and we're also seeing a new group of markets beginning to slow down, and these are markets that traditionally have been very strong and seen strong growth in house prices so those are markets like boston and washington, dc, portland, oregon, and san diego. markets that we think probably
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households are just like i say, getting priced out they're paying so much for homes that they just don't have enough resources left to undertake a big remodelling project. >> what does it tell you about the overall health of the housing market and where prices should go next >> prices are clearly slowing. i think that's good. house prices have been growing significantly faster than income for many years now and that's why we have an affordability crisis but as we say, it's hitting different sorts of markets. some are feeling it right away and some are strong enough that it doesn't seem to have slowed it down enough yet. >> are there certain types of projects you see cut back on is it big ticket projects or small ones as well >> it's the discretionary category so it would be high end kitchen bathroom models, major room additions and things like that where we would see the slowdown begin to hit first you know, we continue to see spending on what we call replacement projects, roofing siding, hvac, electrical
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upgrades those probably won't slow much, at least they haven't in previous cycles. >> is it because it's harder to get money or because people can't afford to take out the loans because that jump in home prices versus income you referred to? >> i think it's less, brian, less so they can't get money i think they're kind of tapped out, kind of extending themselves to buy a home in these overpriced markets, number one. and number two, i think it's nervousness about what's the pay going to be. if prices will stabilize in the market that i'm living in, do i want to really reinvest and get ahead of myself and get ahead of myself in terms of the neighborhood i live in i think it's a bit of caution of maybe i'll sit tight for a while, see what prices do and the economy does before i jump into the market. >> thank you for your insights we appreciate it, kermit kermit baker the big story everybody is talking about. the big sports and money story did kevin durant cost himself the chance at hundreds of
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millions of dollars by playing inre the economic side, very tough story next on "power lunch."
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the video game industry's biggest event under way right
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now in los angeles, and so josh lipton wrapping up an interview with one of the industry's biggest names as well, strauss zellic of take two josh >> so brian, here at e-3 one big theme this year is these new video game streaming services. so technology that's going to allow gamers to stream these complex high-level graphics-rich games over the internet into your mobile device that's a big deal. it means you can enjoy these games anytime, anywhere. no need for that pc or game console. microsoft, google, reportedly amazon too all pursuing this market i did catch up with take two's strauss zellnik. he does see potential in this market by also has questions take a listen. >> we have to see what the experience is like, what the business model is like but anything that broadens the market, anything that brings more opportunities to consumers will be a good thing for the industry >> another theme at e-3, those free to play games so fortnite and apex legends
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the fortnite rival from electronic arts. here at e-3, ea did say the next season of apex legends will debut on july 2nd. guys, back to you. zblrpt josh lipton, thank you very much. well, kevin durant's horrible injury last night may end up being one of the most significant in nba history it certainly is to him what about the league? and other teams. e eyarth at risk we'll talk about it more next on "power lunch." it all started under this buttonwood tree. twenty-four people came together to sign an agreement
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we started the show with a really interesting interview with n.e.c. director larry kudlow and we asked him specifically what he saw for the economy the remainder of the year and he answered very vigorously 3% growth. and i asked him specifically if that was contingent on reaching a deal with china because that's what most of wall street's saying we need to see a deal china in order for any of these targets that we're issuing right now to be reached and he said no, it's not contingent with china. 3% is baseline we can get half a percent if we pass usmca >> which is still in flux. looks like it will be done of course the deal with mexico, the president at the top of the 1:00 hour was sort of waving that paper around saying this is -- mexico said there's no secret deal. what the president said on this piece of paper that's what it was. i thought what's interesting with larry too is to try to pin him down on the currencies because the president clearly thinks the u.s. dollar is overvalued against the euro and other currencies because larry's been a big pro poentd of a strong dollar or a king dollar as he would say. >> for anybody who's seen larry on our air --
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>> check please -- by the way, it's great to be back. i'm really tired but it's great to be back opec here's the thing the opec meeting is scheduled for june 25th and 26th but guess what they keep trying to change the dates. it's two weeks away. it's multihundreds of people coming from multicountries and they still have not finalized the date >> are you serious >> it's on the calendar but they've been trying to change it apparently one of the problems is they can't reach venezuela, who's the rotating president >> they can't reach venezuela. >> awful news coming from last night's nba finals game. kevin durant forced to leave the court after suffering an apparent achilles injury durant scheduled to have an mri today. the injury shifts the entire free agency dynamics in the lead kevin durant was expected to be the centerpiece, the league's second season. and really the only hope for the woebegone new york knicks. all that's in flux joining us is nba insider at sny. first off, ian, you hate to see
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kevin go down like that. he clearly wasn't ready to play. what do we know about his injury, how severe it may be and also assuming it is an achilles, how does that complete ly change the entire nba free agency structure right now >> right so first off, we're going to find out more about that injury, the severity of it, later today. durant is scheduled to have an mri at some point today. so we should learn shortly if he has a full tear, if it's a partial tear, and how long he's expected to be out and that's going to factor into how much this impacts free agency you really can't understate, though, how much this injury has thrown things into flux because now you don't know if durant is going to opt into this final year of his contract and not become a free agent and if he does start free agency the teams that have planned for months and months and months to put themselves in position to try to sign kevin durant are going to have to ask themselves, are we comfortable in offering him a
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contract in the middle of this injury do we have confidence he can come back from this injury at age 32 and be the player we hope he can be? there's a lot of unanswered questions right now in nba front offices, particularly the knicks, the nets, and the l.a. clippers, the three teams this were going to go hardest after kevin durant >> we just don't know, and hopefully kevin durant, the injury won't be as severe as some think and if he appears fine then that may be reshifted back toward durant right now, though, from what we know you've got to assume he'd take that 31 1/2 million dollar player option to remain with the warriors to get the guaranteed money. but what does this say to other -- if you're a free agent or going to be a free agent this year or next year, ian and you're a little sore but your team is in the playoffs, this may teach you. don't go out don't play don't push it. because you could cost yourself 50 or 100 million dollars. >> there's no doubt players are going to be pointing to this and thinking about this. if they're faced with the same
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scenario because clearly kevin was not fully ready to play. clearly he was compromised and we all saw what happened in the second quarter and what we think of his achilles and a terrible injury. certainly players are going to err on the side of caution, especially those that are going into their free agent summer you've got to give kevin durant a lot of credit for wanting to get on the court despite those circumstances and wanting to put himself out there to help his team and it's just sad to see that this is the way it ended up but there's no question this is going to factor into players' decisions going forward as to whether they should play or sit out. and thinking about the big picture, particularly, again, those who are looking at free agency >> these are difficult scenes. a lot of people in this building that are knicks fanatics that suffered for about 20 years. you might abe knicks fan as well we hope kevin durant as well because a lot of people want to see him certainly come east. ian begley of sny nba insider. thank you. we certainly appreciate that >> thank you >> here's the question, mels
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papp is today going toned the seven-day win streak for the dow? what are you talking about on "fast money" >> we're hanging in the balance right now. we shall see the vix remains elevated that's been a tell on the markets recently >> look forward to watching and listening. >> thank you for watching "power lunch. great to have you here, brian. >> we'll see you tomorrow at 5:00 a.m "closing bell" starts right now. a very good afternoon to you. welcome to "the closing bell." i'm wilfred frost live from the stock exchange where the dow could break its six-day win streak markets have lost steam today. all four of the major indices pointing lower we have 59 minutes left to trade, and everything you need to know as an investor coming up >> i'm sara eisen. welcome, everyone. here's what's driving the action right now on wall street rally fatigue after six straight days of gains. anything can happen in this last hour uncertainty over a potential china trade deal and energy is one of the leading sectors in the market right now. joining us for the hour to break down the action,

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