>> really. >> i would have expected more of a selling presence today it's just not happening. i think that's good. >> oil above 54. >> diamond back energy >> good stuff. thanks power lunch starts now here's what's on the menu. investors reacting to new headlines coming out of d.c. what happens if we don't get the tax plan many are hoping for this comes as we gear up for the biggest week of the year for the american economy we'll break it all down straight ahead. developing news at this hour on president trump's former campaign chief paul manafort set to be arraigned. minutes away "power lunch" starts right now

good afternoon, everybody. welcome to "power lunch. nasdaq hit new highs yerlearlie today. the dow and s&p 500 under pressure merck a big reason for the dow's decline. shares down about 6% shaving 20 points off the dow merck is down 13% in the past week the number one health care analyst will join us to take part in merck's woes. what's working check out amazon, apple and facebook all three hitting new highs. check out some other movers. amd down downgrade there. the stock down 20% in a week in arising market. lennar taking a hit on its deal to buy calatlantic soaring by contrast more than 20%, almost 22

ge just keep moving lower down 2% >> when you have two jets that's what happens investors getting a little nervous. reports that the corporate tax rate changes would be phased in over time rather than implemented all at once. as soon as these headlines crossed the dow turned 60 to 70 points down right now. >> the corporate rate wouldn't get to 20% until 2022 under this proposal the report does caution this is an idea that's still under discussion nothing is final yet i've heard speculation about this for several weeks i asked how ways and means chairman about it directly, recently, he said he wants to get to the parts of the tax plan that drives growth be market views this as a negative it's not immediately clear to me that businesses would all be against this if they can be assured that the rate would be

permanent. that could be a trade they be willing to make. there's debate on a how a phase in would impact economic growth. some models show a minimal effect on investment you get to save a lot of revenue. that's why this is so appealing to republicans they are boxed into a $1.5 trillion tax cut by these procedural rules cutting the corporate rate alone could eat up all of this if republicans can't find enough loopholes to close back over to you >> thanks very much. let's get to the new york stock exchange with more on the market reaction to this news. we saw an immediate reaction the markets more particular. >> we have been saying for months nowthere is a mental premium in the market for the concept of tax cuts. we just saw it take a look at the s&p 500 i think we have a circle around where the news came out. that was about 11:15 or so there it is and there's you

reaction it's been struggling russell 2000 small caps would benefit more from a tax cut. this is the etf around russell 2000 that also dropped. that dropped as well bond yields move to the downside a little bit and all the regional banks were weak we had a break out in oil on the talk that russians and saudi arabians support an extension of their cuts finally, the retailers having a horrible day jc penney down 10% we have breaking news on sprint shares of sprint are halted on a

volatility trading curb. they were down about 5.5%. this is on the heels of some headlines out of nikkei, a japanese news organization saying that softbank is now calling off talks to merge sprint and t-mobile together that's the reason why those particular headlines are moving these stocks sprint still halted. we'll bring you more details this is according to a nikkei report we'll keep an eye on those shares we'll watch sprint reopen when they do. >> verizon and at&t moved sharply lower on the back of this news. it was some thinking it was consolidation here we're also seeing a huge spike in shares of dish and we could pull that up that's higher by about 3% right now.

directly in the back of this news this is an interesting story that we'll see play out here >> absolutely. >> this telecom sector has been lagging overall. as we watch some of these consolidation plays out it will be a key thing to watch. there was already regulatory scrutiny over this we had seen attempts to merge some of these guys in the past it's a wonder whether or not investors were handicapping a big move with a consolidation play with t-mobile an sprint >> thank you very much one last quick thing if we could take a full screen here no disrespect to my mug, the drop in the stocks is pretty unbelievable t-mobile fell 3 bucks in the matter of seconds. you can see the drop for sprint and t-mobile when you have a deal and the buyer selpulls out and the sellr

pulls out, this is a sign that the market wanted this deal. >> pretty clearly. >> all right the drops here pretty incredible >> we had the volatility halt. it would halt the stock for five minutes if it drops 10% or more. it just reopened down $9.73 these volatility halts don't happen that often because we've had quiet trading. >> i'm sure we'll hear a lot more about vicinity and t-mobile right now let's get back to what was your top story in tax reform which marks only part of what makes this a huge week for your

money. you have another big week for earnings we have seen how those results can move markets on wednesday we get the fed rate decision on thursday we expect to hear who the president will nominate as his next potential head of the fed. you have your monthly jobs numbers coming out steve, is it hyperbole, is it fake news to say this may be the most important week for the stock market, economy and the political economy? >> i like to quote tyler, it will be cable history. it's a big week. a lot going on we created a special color coded graphic to highlight all the stuff that's happening as you can see here, if it's green, it's supposed to be good and go up. if it's red, it's going down if it's purple, it will be unchanged in white day one is tomorrow.

the decision comes wednesday vehicle sales will come down job less unchanged you look at it is it working for you? >> it's bending around >> big surge is coming in productivity then there's the big -- we've been able to confirm nbc thursday is the day that the president will announce his nominee for the new fed chair. here's the details on the payroll numbers that you're looking for. 200,000 expected on adp. look at the nonfarm payroll number 314 after the minus 33 that's all hurricane distortion. you'll get the story in the jobs market unemployment rate unchanged. average earnings, nobody expected that big number to continue let me show you what's going on with the fourth quarter growth

what we have q 11.2. look, we're tracking right now folks about 2.9% big story there, the good growth from the past two quarters is expected to continue a little bit more from the consumer a little bit less hurricane distortion we'll be watching whether or not business investment along with trade continues in the quarter >> you didn't include, i suppose intentionally, the release of the details of the tax bill on wednesday. >> that's not my department. i would get angry calls. i didn't have room >> stick around. joe is a chief economist of the

americas he's a cnbc contributor. maybe you would be willing to do what steve would not do which is wade in to that thursday fed decision do you believe that could be, out of everything he listed, the biggest market mover of all or is it something else >> only if it's a surprise if it's a surprise, yes the markets move i'm going to say the tax bill, the isms, the payroll data, those things are more important. >> joe, where are you on the fourth quarter do you see the numbers we've been having continuing >> i do. i looked at the last five u.s. natural disaster not a very friendly topic but what i found so you're looking at katrina and earthquake north

ridge back in '94, hurricane andrew and the quarter after the event takes place, growth is up about a point. it does. the fed is moving in december almost regardless of the data. they effectively precommitted to do so. it's priced into the markets it could take some extraordinary event from left field to get the fed not to move in december. the issue will be do you get tax reform where tax cuts, what does it look like who is running the fed and who do they do in response do they let things run hot or preemptively heighten? >> i want to make an idea in theory the market is reacting in the

wrong way to this news that tax cut will be phased in. exhibit a is the work we did last week that shows the market is not pricing in tax cuts opinion i think it's been a non-believer if this number were 100, the high tax would be equally the market it's been underperforming the market that's exhibit a exhibit b is you say we're going to phase this in i think what they had been proposing was as i just showed you was not believed by the market it makes me actually happen. >> if 20% is the end game. >> end game. >> i would agree with you. keep in mind we lost five handles on the s&p 500 it's not like we completely rolled over out of bed on these headlin headlines. it was a measured reaction to these headlines. >> i agree it wasn't all that much priced

in >> do you think it's a fore gone conclusion that the fed path will go continued or do you think there's any alteration of the plan because of a potential passenger of aage of tax reform? >> my guess is it will be a continuum of yelling i'm not sure he's going to hike anywhere theer as much as markets might think. numerous times he said the economy could have grown a lot faster if the right policy was in place he'll likely accelerate the

appreciation and hay nmay not b hawkish as the market believes >> thank you let's move on to the markets they are lower at this hour. it's been a stellar couple of months this is one of the rougher phases but 5% gains. is it too late to buy in you both heard the conversation about sort of the forecast i'm just going to ask simple questions to both you have what should i do with my money now? >> i think it makes sense to take money off the table we've had a terrific run technology stocks are leading this market. i think they can do a bit better because they are taking market

share in the cloud and taking revenues given the year we've had no one can criticize anyone for taking money off the table. >> michael, what should i do >> when you see stocks making all time highs it's a good time to visit your asset allocation and make sure the stock portion of your portfolio hasn't crept up while i'm always cautious i reminded my father, who is 92 years old today, tell me to stay with the long term focus and stay with the market >> implicit in what you say is if your assert allocation have crept up in equities above the levels that make you comfortable, implicit would be an agreement with kirk is it

wouldn't be a bad idea to pull back a little bit if that has happened >> no question about it. certainly the numbers depends and argue for what kirk is saying at times when the market gets expensive like this, it's so easy to be emotional when you get emotional is when you make mistakes. look at the discipline if you're allocation is to be 70% invested this stocks and with stocks up 15%, you're looking at an 80% allocation, yes. take some off the table. try to be tax sensitive and deliberate don't make an emotional decision but be disciplined about it and take some off. >> if we reduce the corporate tax rate to 20 but eliminate a lot of deductions, most companies pay about 20 right now on a net effective after deductions that about the corporate tax rate in the united states some pay much more some pay much less why do you think the market seems to be so reliant on this

corporate tax cut. >> i think the thought is that there could be a lot more money in the system and it's clear lly st stimulatory. what will be interesting is if tax cuts go through. you'll have larger deficit i think the fed will continue to raise rates and that will slow things down. it will be interesting how it plays out. >> thanks very much. now we move on to the developing news out of d.c just a few minutes from now president trump's former campaign chairman, however brief he was that, paul manafort, will be arraigned on money laundering an other charges >> that's right. we're expecting to see paul

manafort along with his lobbying partner, rick gates. this judge will read the charges against them they will have the opportunity to issue a plea. we'll see where things go from there. that's expected in about ten minutes time we're also learning more details today about another figure who we weren't expecting to necessarily be the focus of the headlines today. that a man named george papadopolous he's a trump advisor who has been indicted. arrested in july, secretly that indictment just unsealed today revealing to the world that he may have been cooperating for several months time with the special counsel all this while here is what we know about george papadopolous and his story. he met with the fbi on january 27th and lied to them during the course of that meeting that's why he's facing charges today. he met this london with a professor and russian female, who is not identified in these

government documents he was told that russian female was a relative of vladmir putin. that appears to not have been true he told the campaign, papadopolous, did, he could arrange a meeting between putin and trump at the campaign headquarters this new york in 2016 in april of 2016 this professor in london told papadopolous that the russians had dirt on hillary clinton and had thousands of e-mails from hillary clinton that leave a lot of questions unanswered what did other officials inside the trump campaign know, if anything apparently papadopolous has been cooperating with the fbi for some period of time now. he signed this agreement with the fbi on october 5th

we're just learning about all this today a lot of new news unfolding in this investigation today >> thanks very much. the stock is down 22% in the past few months. we'll talk to number one rated analyst after this break while we're comparing, take a look at merck. the dow is up 7% what is wronwig th merck power lunch will be right back [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs.

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shares of amd getting crushed today after a bearish call from morgan stanley chip stocks in general are having a good year vaneck is up 40% should you be buying into the chip stocks? joining us on the phone is the number one ranked analyst. great to have you with us. >> good to be here thank you. >> are things as bad for amd your note indicates there's good and bad. a big driver of growth had been the belief that amd was going to drive the craze. that seems to be fading at this point. >> 24 months ago is primary

controversy was are they going bankrupt or not. i think it's come a long way investors are realizing the journey they have in front of them is rough. they need to spend extra money to get where they are going. because of that they are not showing the real inflection in what investors were looking for with the stock of 15 it's been under pressure since the report it was good but not good enough. >> we oit liut lined some of the stellar performances intel is not in the category is it time to go into intel on the catch up premise >> it's hurting.

the report was okay. the data center business should be what people care about is still te pid i think the structural case is still there. i see no reason to back off of it for the longer term i'm willing to admit it could go higher than lower at the moment. what's your top pick >> i like broadcom it's unperformed a bit people have gotten just a blow out. at the same time i see a number of attractive catalysts. i think they h raise the d dividends and pick their hamargn topics up.

the other happen is going to go and get returned either. >> thanks for joining us >> thank you up next, why one of the world's biggest pharmaceutical companies has lost over 10% of its value in just six trading days story behind merck, next another day at the office. why do you put up with it? believe it or not you actually like what you do. even love it. and today, you can do things you never could before. you're working in millions of places at once with iot sensors. analyzing social data on the cloud to create new designs. and using blockchain to help prevent fraud. so get back to it and do the best work of your life. and using blockchain to help prevent fraud. ray's always been different.

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taking 20 points off the index today. on pace for its sixth straight down day we have more on merck's big move down >> that's right. today's move lower comes after a pretty bad day for merck on friday all this has to do with two announcements the company made about its key oncology drug. the company said a key clinical trial in lung cancer, the results would be delayed out until 2019 so they could a measure as overall survivasurvil that's a delay for that. three downgrades of the stock today. analysts bringing down their growth estimates saying this

opens up the market in lung cancer which is a huge market, potentially $15 billion per year weighing those in tandem all this leading to disappoin m disappointmen disappointments. >> thank you very much >> for more on where merck goes from here, number one analyst in specialty pharmaceuticals. great to have you with us. >> thanks for having me. how do you gauge this reaction this is a pretty dramatic decline we have seen in the past ten sessions or so >> i think the volatility in the large cap space.

you can start to appreciate why that's happening and how jittery investors are,0 now >> give me an overview of how the investors you speak to are gauging all this there's one point when they could do no right and then it could do no wrong this year. now it seems like investors have a hair trigger you mentioned when they reported earnings and now this. >> sure. when you have a very, very high quality, high growth name go through a couple hiccups like it did, i think that's what causes much more -- that's what caused investors to be much more jittery. that's contributing to the move we're seeing the update on merck that we saw, they're pulling a filing in europe that clearly matters there's read across to an

ongoing pivotal thing. that's what causes more volatility that you would expect >> is the move overdone? >> i believe so. here's the deal. investors are looking at merck merck notification they are withdrawing their filing perhaps they looked into that trial and there's some issue with that trial. i don't think that's the case. there's actually a notification from the european regulators that talks about some very specific issues and neither allude to going beyond phase three. i think it's unaffected by these updates and we actually do get interim data by mid 2018 which is not when they are talking

about. >> what's the chance they reapply in europe? >> i think 100%. >> why is it reacting this way if it's delayed a year out i get it does that merit 12% of value being lost in the company? >> you have to look at it in the context of two things. a, it will be $10 million sales and lung kans cancer is the big for ketruda. investors assume there's a problem or hiccup with the ongoing phase three. i tend to think there is no problem. the biggest contributor and kwou pull your filing

i think there isn't. the reason to pull the filing had more to do with europeans being very careful with subgroup analysis and the type of indication they wanted to give them versus simply some issues with the ongoing trial in phase three. >> thanks a lot for phoning in president trump's former campaign chairman paul manafort turning himself into the fbi this morning minutes from now he's expected to be arraigned on several charges including money laundering we're following the money next on "power lunch.

not rebalancing your portfolio. pursuing your passion, not reacting to market downturns. focused on what you love, not how your money will last through retirement. let us help you with those decisions, and get on with your life. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise

here is your cnbc update for this hour. the sentences phase in the court-martial of u.s. army sergeant beau bergdahl continuing for a fourth day. a military judge ruling he will not dismiss the charges based on comments ahead by president trump. this follows defense attorneys arguing that trump's attitude toward bergdahl may have tainted the case disturbing news from the u.n.'s agency said the amount of

carbon dioxide in the atmosphere grew at a record rate last year. >> we have been break iing -- recording the greenhouse gases you have growth of carbon dio , dioxide in one year has been record breaking. >> a 2000 bm once owned by steve jobs will be auctioned off in new york on december 6th it features a 400 horsepower v8 engine with a top speed of 186 miles an hour. the car costs about 128,000 new. it is expected to sell for perhaps up to $400,000 you're up to date. that's news update back to you.

thank you very much. we are waiting on the arraignment of paul manafort joining us to go through the charges is jacob. >> on the manafort case. there is one component there's two prongs to the mandate to the special counsel one is looking into the investigation which really is the papadopolous case. the second is much more broad which is anything that may come to the attention of the special

prosecutor during the investigation. this falls squarely within that second prong which is permitted under the statute that has the special prosecutor that is this over broad element of the special prosecutor's mandate is either over broad, ambiguous or unconstitutional. that will be the first challenge we'll see. >> in other words, just to dumb it down for me, the idea is that the special prosecutor or the counsel here has a mandate to look into russian meddling in the u.s. elections and if he finds in the course of that investigation other things related or unrelated that he believes are criminal he can indict have i got it right? >> that's exactly what deputies attorney general rosenstein's

order says those are the two prongs and this falls within number two >> how relevant is it that the papadopolous plea anonouncement came, it came today on the day the indictment came out which is done to serve up a big fat message to somebody. >> not only that october 5th was the date of the plea it was seal and release today. 25 days later. you're dead on in the timing if you think about it, the papadopolous plea as a stand alone charge, would have garnered a lot of attention. it goes to the guts of the issues i think the message is a different one which is if you plead guilty, if you cooperate, this is in the plea agreement, you are in a position to get six months and probation if you don't cooperate, regardless of the charges because they may be unrelated entirely to the russia investigation then you then are

potentially facing using the doub federal sentencing guidelines, this could be up to 20, 25 years. we're talking about $18 million money laundering allegations, you're looking at 9 to 12 years. >> what the administration to the or the government may have gotten for that money. doesn't look like they got much. that said, i want to get personal for a bit we read the indictment we were sending out the stuff that manafort was buying he had four properties he bought properties cashed and refi and used the homes as the laundry machine for the money. spent hundreds of thousands of dollars on clothes, a million on an teagtique rugs what can you garner from the man

based on out landish, is the word, i can think of, spending habits >> the thing about the point you made is the psychologist is the fact they did not charge bank fraud even though if you read into the indictment the allegation is they were defrauding the banks for the purpose of the loans as well if i may, i think in part of that answer to your question includes some of the other charges. to me really addresses the relevance to us here at cnbc in terms of business network. it often takes a case like this to big a focus onto statutes such as anti-money laundering and the bank accounts regulations on tax forms these are all things that are being brought into focus here no different than the days of enron

when you start looking at the corporate boardroom and prosecutions based on a services frauds despite what happened at the supreme court. bringing all that back to your question, what it really does for me is it shows that there are people in play in this international sphere who based on these allegations can see the opportunity to touch large sums of money and use them for personal excess abuse and ignore obligations under u.s. law to disclose everywhere they are supposed to. i think it's a broader sense, sends a much broader message if you read it literally, it says nothing about the trump campaign you read it in connection with the papadopolous charges, there it talks about other senior officials campaign officials with whom papadopolous communicated and now it ties it back to why manafort may be

incentivized to cop a plea >> we appreciate it. shares of vicinity and t-mobile rgr ing on reports that thei meer talks have been called off. we'll get the latest

another day, another milestone for oil. brent crude is passing $60 let's get somebody's take who literally just got back from saudi arabia as well you were there you we you spent a lot of time there recently what are the saudis saying about production and prices? >> 6 $60 is the sweet spot for saudi arabia

>> they're happy >> they are feeling good in this price environment. they believe the opec cuts are working. that was my big take away. everyone is feeling very comfortable extending the cuts into 2018. i think they are feeling good. importantly, when you look at their budget for next year, the saudis are spending again. >> we should look at their budget and assume because they are spending more, they've got an inherent bullishness on prices which means they will have to keep prices slightly up. >> when the crown prince says wear for 2018, he's the man in charge >> 60 will be the price that will dominate the market until this thing goes public is that the thinking >> what i have been told is 60 was the magic number for what they needed to get to for that

ipo. again, it's 60 everyone feels comfortable i don't think they want to push it too far too fast. they don't want to bring back all of u.s. production this is a sweet spot for them. is this the upper band of impro fundamental picture. >> it is demand. >> it is demand and also compression and supply >> it is demand and the willingness to extend the cuts well into '18. there is a lot of skepticism at the meeting when they went into nine months. when you have vladimir putin out there saying we'll give you more than 18. the u.s. for the first time at least a long time is starting to sell oil directly into asia. >> we are crowding out on saudi's market share is that going to set off any kind of price war or the demand to meet the supply

>> they are looking at the us export number as something to feel good about. do i think that the discussion of private placement and chinese is also about making sure you lock in the market >> it is always great seeing you. >> thank you for having me t-mobile is unngplgi on reports that merger talks are off, we'll get the latest next just like some people like banging their head on a low ceiling. drinking spoiled milk. camping in poison ivy. getting a papercut. and having their arm trapped in a vending machine. but for everyone else, there's directv. for #1 rated customer satisfaction over cable switch to directv. call 1-800-directv.

more details brought you new reports of a sprint/t-mobile merger is off. >> brian, this is interesting, i have been speaking to people on both sides and i can tell you what was originally reported out of the nikkei out in japan tomorrow according to this report, soft bank would make it clear to t-mobile it was withdrawing from these talks to get from sprint and t-mobile together i am told that's not true. there is not a plan to withdraw from the merger talks tomorrow the same sources indicated that a board meeting took place on frid

friday, it was made clear by board members that there were some concerns of the overall idea of sprint and no longer controlling of their own destiny in the united states we have explained many times that it is currently and has been negotiated previously, t-mobile parents would be the controlling shareholder of any combination between the two companies and therefore would have more rights than governance than would sprint would be a minority investor. they knew that going in. there does appears to be on the soft bank side more concerns of giving up its ability to pursue what's still a much strategic focus for soft bank namely of the telecommunication market worldwide and in the u.s >> whether or not issues of governance and rise remaining clear. people close to t-mobile indicated it is all of a surprise for them and having

talks on the counter talks about getting this deal done and there is an expectation that is this would be the week. and price certainly places an important role on this t-mobile has been conning to do its due diligence and unclear of where it is going to be a ratio of sprint shares to be exchanged for t-mobile share that was expected and still is according and to be a big key part of this week of the idea being once you are agreed to that, that a deal is forthcoming. a lot of cross current right now involving both at seen on the soft bank side concerns about that and a combination and certainly price on the t-mobile side and what in fact they would be paying for sprint, is it all enough to tank this potential deal certainly what i am hearing is different than what i am hearing

last week and which is not positive as i am hearing prior to that. you can make your own judgment at this point. it does get awfully complicated. back to you. >> david fabers, still working on the phones, thank you very much >> some other movers, take a look at american tower and crown castle, they make the towers sharp viewpoint and they are moving up. i guess there is an assumption if there is two mayplayers they build bigger ones ft lets move to the country's biggest home builder, the ceo will join us and bit coin is rising to a new ubrs today and despite all the dote and anywnay sayers

"power lunch" will wureturn in just a moment. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. throughout my career, i've been fortunate enough to travel to many interesting places. i've always wanted to create those experiences for others. with my advisor's help along the way, it's finally my turn to be the host. when you have the right financial advisor, life can be brilliant. ameriprise that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen.

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you bail on apple? and lennar creating america's biggest home builder lennar's ceo will join us to lay out his plans. and another down day for the record following today be 's big downgrade there. not all retails. we'll tell you what area is still feeling the love hour two of "power lunch" starts right now. >> and lets get you caught up on the markets now. >> the dow and s&p 500 is lower today. the nasdaq is down by 15 points. big cap tech is leading once again today. apple, amazon and facebook are trending an all time high. lennar is moving lower right now after acquiring rival cal atlantic group of a deal of $5 billion

>> retailers are all moving lower after a couple of big downgrades and after a massive drop of last week, mattel is leading today. brian. all right, melissa, thank you. president trump's former campaign paul manafort arraigned moments ago. eamon javers is at the courthouse >> reporter: the former trump chairman and his lobbying partner who were on indictment this morning of money laundering and financing deals relating to a ukrainian client simultaneously, we got sarah sanders at the white house briefing reporters just a few moments ago getting some questions of george

papadopoulos he's been cooperating with the fbi for some period of months now, sarah huckabee sanders saying he's a simply a minor figure and none of this had anything to do with the trump campaign but deklaining to take any steps ruling in or out of the idea that the president may fire robert mueller. we have a statement here who said the white house continues to fully cooperate with the special council regardless of indictment and one other thing that sarah huckabee sanders said that is that the white house have indications she says that the special council investigation will be wrapping up soon. she did not say when pressed by reporters how she knows that or what those indications are the white house continues to believe that this investigation is almost over we'll wait and see what if

anything the special counsel's office had anything to say and we'll get a new statement from paul manafort and rick gates guys, back tow >> eamon javers thank you. apple hits new time high josh lipton in san francisco with more on this. >> melissa, apple here is on a roll it is on its three-day gain of 2017 there is going to be more news and reviews of the iphone 10 is expected to reveal soon and price tag of $999. >> the buyer stevie levy was impressed by the larger screen >> if you ever bought it, boy, i

paid a thousand dollars on a phone, every time i look at it, you will say that you paid for something. >> supplies are limited. ups have 28 million iphone models available how long before they are eased >> back to you >> thanks so much. tech is hit more of a 17-year high are there still buying opportunities for this segment lets bring in our kim forest and mike jeffery >> mike, i will start off with you, can we lean on anything right now from what the lead times are and what it head been initially with preorders >> there is a huge demand either

way, we are looking at multiple weak lead time we know what's happening with iphone 8, there is a short term paying for a long-term gain here where iphone 8 potential buyers are waiting for the ten and they want to see it and get it in their hands and the long-term will be likely higher iphone sales and a higher asp and met better mix for apple >> in terms of the lead times, are you confident that the lead time have stabilized enough that you have the phone books for edr the quarter? >> it is too early to know in general, i would say if you look at how earnings is going to shake up here. september quarters is probably fine because the company knew the inventory and the timing of these devices would be for the december quarter, i would expect that overall guidance may end up slightly below consensus, that really is

built in street senators at this point. >> the track technology, highest since march 29th, 2000, are you concern about evaluations here does this make you nervous >> in some evaluations yes and others, not so much. if i want to put money to work together, what i would do is look in more of the business oriented technology and not consumer oriented. i think the consumer oriented technology has really risen far and fast this year, if you are concerned about evaluations, that's where i would look. why would i look there well, it is because cap ex is starting to take off at businesses and technology is one of those categories that is included in cap ex >> apple is more of a consumer oriented tech stock, is that a value that concerns you even though it has a tremendous amount of cash per share >> it is a consumer oriented

technology and it does not look like people are going to go to whatever is next because there is nothing at cap next the iphone 10 is next. we'll see what happens in january. >> mike, can you think of any other company, any industry that sells more of the more expensive things than the cheaper things i was thinking about that today and that's pure business magic that's when you become king. >> yeah. i cannot i think we are going to see a high likelihood of the mix of apple unit or iphone units continuing to shift towards iphone 10 as we go through the year likely, street asp, average selling prices are still too low. if that's the case, there is only good news for earnings throughout the year.

>> guys, we'll leave it there. kim and michael, good to see you. >> thanks. >> lennar became the largest home builder in the united states the company will buy rival cal atlantic in a $9.3 billion deal. >> shares of lennar is lower joining to discuss the deal, gentlemen, i want to get to your view on the tax bill income that's out this week lets begin with this exciting deal that you struck with cal what scale allowed you to do that you could not before? >> well, look, this transaction is a really interesting transaction for the industry it is all about scale but concentrated scale if you look at the way that the two companies are configured, we

are in the same markets and basically the same product offerings. this is about building scales and localized markets. these are markets and products that we know and the ability to drive efficiency in local markets by creating scale and using that to your benefit in terms of cost and over head is an ability to really create an efficient model. that's what this bill is really all about. >> so some hard numbers on those efficiency and where mostly do they come from is it purchasining and being abe to get better terms and how much savings do youexpect to accrue because of it? >> it is a combination of both labor and materials savings. when you buy more products and build more homes, you command cheaper prices in the market and

labor on material side we build similar homes and we had an opportunity to drill down on the cost side, we anticipate about $155 million in cost savings and 2019 aggregate savings including sg&a of $250 million. these are tangible line by line pure direct cost savings >> they endure they are not just one offs they endure and presumably grow overtime stuart, take me through a couple of numbers, how many home lots are you adding here? how many will you have when this deal cloeses next year? how many markets will you be comparing today? >> draw some comparisons, of old and new. lets start with markets. we are expanding into two additional markets

they are indianapolis and utah this is a direct over land and we think it is a distinct positive >> we'll have about 240,000 homesi homesites and that gives us a lot of runway to grow our business next year and putting those cost savings to go use >> i want to get your reaction to the provisions of the presumed provisions of the tax bill that'll be announced on we understand the national association of home builders have said of the information that i got is they'll oppose it because of the provisions that have to do with restricting or eliminating the market and interest deduction and the possibility that not everybody will be able to deduct their state's taxes or property

taxes, what's your reaction and w what's your take at it >> it has been emblemmatic on homeowner ship and of course, we believe in homeowner ship, that's our business, we think it is one of the virtues o f the way that the american economy has developed over the years so we think that it is very important that commitment to homeowner ship remain in place with that said, the end ains ans of the tax law proposals have to be refined or defined. we have to look at the a aggregate because this tax adjustment is about generating growth ans and jobs in the coun. so net, with el have to wait and see how the tax law evolves and what its impact is or likely to be on our industry >> how about this guy, rick and

i ask you this if the other provision they talked about of the elimination of state and local taxes from your federal income tax and in blue states, new jersey and new york and connecticut and california and massachusetts, very important, have you guys done internal work where you have said if that passes, the value of the lennar home is going to drop by x because it will make the house less affordable >> well, as you look at those states, they are highly desirable states where people want to live >> property values of the state maybe impacted by the elimination of deductions. as we look at it, there is not a lot of inventory available in the market it is a pretty interesting environment to be looking at that type of situation >> and lets remember that those marks are very desirable markets for people to live in. if there is an incentive for

them to leave those markets and they'll act on it, people are going to be moving to markets where we have a substantial position as well >> while california could see a loss in value, it would be lennar to the benefits of places like las vegas or texas market like wise from the northeast down to florida. we think it is a zero some gain at the end of the day >> stuart and rick, thank you for joining us here is what's coming up at "power lunch." retail rolling over again. what's exactly future for retail markets. >> bit coin is finding a new way for investors to bet on encrypto currency it is been five years since eyout lucas films.

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retail is rolling over again at least in the eyes of some macy macy's downgrading from a neutral to a sale. analysts say macy's cannot make any money as retailer and jc penney wells fargo's security says the legacy of retails verses amazon,

it does not mean there is not opportunity out there. our managing director at wells fargo security, he joins us now, ike, there is so much negative in retail, lets flip it because it is monday and it is a nice fall day lets highlight some of the positives. you guys do some really unique and p work there is more loved brands than skcech skcechers. what they they doing well. there is more growth for the brands because there is cold fronts over seas this ties into amazon. amazon is not a bad guy if you are a brand. it is an opportunity to grow it is an incremental chatham so

you compare that to the small base they are different animals that's why we favor the brands over the boxes for the last three or six months and that's kind of the way stocks have worked verses the brick and mor mortor appears >> nike, do you think tomorrow we have under armor, it is been a disaster of a stock last year. do you think they're going to cut their guidance >> so our team, we have an under performer on under armour, we think there is some bad news that comes out there what we are trying to say and put it all together is the athletic space so i guess that includes nike and lulu and under armour i think ill see more deflation of the space going forward

>> so while athletics have issues, we think hahn bandbags e getting better we talked about michael kors being a better story than in years and we think of the coach brand is a good multi story right now. >> so if you are not as optimistic of the athletic brand, if you take a look at the declines, you mentioned the add advantage that brands have over sort of the distribution points, is the pain going to continue for the likes of finish line and foot locker much more than the decline that we have seen in under armour >> right, i think evaluation matters, what is important of foot locker, nike, they talk about focusing on their key partners and they engsed 40 partners off of a base of 20,000 right now. foot locker is one of those

partners our team is not recommending that stock right now when you think oaf things like that and how it will be overtime, that does become a little more interesting. >> we are going to leave it there. ike, thanks. >> thanks so much. as bit coin blast passed $6,000, the community is kpo responding >> we'll break down the risks and the reward and five years ago today, disney bought lucas' film two star wars fiz star war films could this be the best investment that disney ever made "power lunch" is back in two ♪

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warnings from major markets diamond. seema mody is joining us now >> they have a total asset of under management of $2.3 billion >> now, autonomous research found out 32% of crypto fund,

10% explicitly using artificial intelligent and trading. investors based on high networks of individuals and many made their money riding bit coin surge and capital names bike bessemer and horowitz. still, experts advised investor to be caution of smaller funds run by younger investors between the ages of 20 and 35. >> what advantage does these hedge funds have and aside from deciding the allocations between light coin and bit coin, what else sort of an advantage? >> a lot of these funds will tell you they have strategies like trading bit coin. others are trying to implement

artificial intelligence and quantitative trading >> are we seeing situations, seema, i don't want to put you in the spot where literally you can be a company there is a company that added bit coin in its name and the stocks -- >> skyrocketed >> or during the dot-com bubble, right? it is a hot market thing >> it is absolutely is, you have to be careful and meticulous of where you put your money if you are trying to get exposure to not just bit coins >> so if you will just call me bit coin >> for bit coin maybe. >> seema, thank you. >> these themes are after the engine, we'll take you on a ride

along, that's head on power. and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.

hi everybody, i am sue herrera. here is your cnbc news update at this hour. a federal court in washington is

barring president trump of transgender people. military forces pushing towards iraq where they hope to clear out the last isis forces in the country iraq they have two choices, surrender or die he did not say if anyone would be arrested immediately and those charges carry a maximum sentence of 51 years and the food and drug administrations have moved to revoke the rights of company to say soy products protect the hearts, regulators say there is not enough evidence to prove the link between the two if the rule is finalized, it would be the first time the fda has revoked on a claim back to you, sue herrera

jackie deangelis >> that's right, crude prices are higher and showing no signs of giving up the recent support. today's close is over 54 a barrel over the week, saudi crown prince reiterate in the country of the supporting the extension of the out put cut that extension may not come at the november opec meeting. either way, the market does not think opec is going to dispoi disappoint it is not just that either, traders are worry of supplies from iraq and iran all of these what if circumstances, still, if there is risk in the market is reflected in the future's price. >> jp morgan signaling there is confidence in this recent run, guys >> jackie deangelis. lets take a check on our markets right now. >> right now it is down 10 points

dow is off by almost 80 and s&p 500 is down from 9 points. lets get down to bob pisani at the stock market exchange. >> that report trial balloon of facing tax cuts did not go well. we did stop going down take a look at the s & p, i circled where you can see when the news first came out. we recovered a little bit but still at the bottom. sarah sanders, a while ago, the president's plan did not faze into tax cuts. >> that's down and really has not moved up much at all we see some of the regional banks and we saw bonn yields moving to the downside and regional banks suffering noticeably on that and they have not rallied much at all. you heard jackie talking about oil being up today on saudi

arabia supporting the extension of production cuts and we had good volume of a number of big and importance of etf around energy and they are moving to the upside nothing is moving at all of retailers and downgrading macy's and jc penney. jc penney was down 10% at one point. >> guys back to you. >> the market has made a report run, don't have to tell you, there is still time to get in on this buying boom lets bring in our eric marshal, with hodges, small cap gentlem gentlemen, welcome, it is good to have you here what does 2018 looks like to you. could it be the year that tighter market policies begin to pinch equitieequities >> the key piece of data that i am looking for and the feds is looking for is inflation

i think that as we start to approach the end of a business cycle, when we start running out of capacity, we are going to start the see prices rise. but, even though we have a nine year recovery, it is been the shallowest recovery on record. we suspect there is another four quarters left before inflation pops up, the central banks go after inflation and risk taking pulls back in the second half of next year. >> eric, jack is paying a good picture for the next twelve months or so >> we are relatively constructive we think that the market is still a lot of pessimistis out there. we'll have to see much higher interest rates in order to get us to change our minds on domestic equities right now.

so eric, do you see value or equities, which sectors are named? >> the market has not had a 5% or 10% correction so long, you need to focus on evaluations here two that we like, our companies and the materials space like eel materials which does cement and we see good pricing and better ea ear earnings and we like areas of technology, semiconductors and idti, is in an early stages of a pretty good growth cycle in that industry >> jack, similar question to you, do you see the market leaders changing and if so, from what to what >> if we get a roll over in growth, i would say we are going to continue to see the large cap

growth names lead, that's where generally it goes. if we cannot get a ramp up in growth and it appears either through the tax programs and other stimulus and we'll see that we'll get a leg up in growth then investors will go a little more tavarris morris riss so we can get a tax pact and investors do think we'll get a leg up and growth. >> eric, i want to turn to a topic that's a little off topic, one where i am interested to hear your perspective as a mutual fund. morning star ratings of mutual funds, including yours i don't know how many stars gt,t i want to get your reaction to

that story or whether you believe that the star ratings are predictable or are not how do you as a company use those star ratings to attract money and promote your funds >> well, i think advisers invest in mutual funds all use the star ratings differently. i am not for sure if morning star is really trying to sell it as being predictive of the future there is no way to predict the future the methodology is backward looking and you know i will leave it like that we don't really use it to manage our funds or manage a star rating at any way. >> so you don't license these stars in your advertising, some funds company do >> we have in the past, and obviously, if you have a high star rating like a five star or four star, you may do that >> alreadl right, eric, thank yu

very much. >> tyler, let me weigh in on that first of all, i think that in general managers due diligence especially and u.s. large caps and a lot of u.s. is a sham and so while i think the one star are preditive and five stars are not. they put in the spider of s&p 500, all of these strategies would have five star ratings into the future. >> gentlemen, thank you very much interesting perspective from both of you, jack. >> eric marshal, thank you as well pirates are making a come back but not in the way you may think. >> marinas and boat dealers everywhere a new brew of thieves are popping up >> contessa brewer is here for

you. >> the top targeted state only had a 36% recovery rate you may imagine why engines are easier to steal and hide thieves love yamaha engines. in florida, we have seen engine thefts skyrocketed in recent years. >> but, investigators are trying to tackle the trend and take down those power boat pirates. >> reporter: we are there when a team of miami date officers show up unannounce tod boat repair sp >> one of them is a yamaha >> this engine does not have any number, the number seems to be on liberating. >> police removed the boat and

two engines for further investigation. the owner of the yamaha engine shows up he told cnbc he pays $3,500 from a local repair shop. >> i am not worried because i did not do anything wrong. i just pay a person. if you go to e-bay, you don't know who the person is and you buy something. >> those used engines sells for thousands of dollars police had a tough time cracking down because of no national database of engine staffs. these thieves are using similar mos from state to state. they load the engines on the truck. it is easy to alter the identification on the motors and so if you do think if you find a suspected stolen engine, can you tell >> why are yamahas are so in

demand >> they are reliable and they get service easily >> south america, network for yaum yamaha engines are widespread there. >> they went straight for the high end vietnyamahas. they would rather unboat them from the boat and take those yamahas. >> yamahas, we get stolen the most >> it could be a selling point, right? >> yamahas also sell a deterrence device, it is like a key fault that you can -- >> it is a dog >> no, it is not a doverman. >> remotely, you can turn it af. costs between 700 and a thousand bucks. >> i would imagine that we have to be close to the engine as well for your car keys to work

>> anywhere. >> like on star. if your engine is gone and you hut it down. shut it down >> take that >> five years ago today disney bought a galaxy far, far away into the magic kingdom how has the deal worked out? we'll bring you the numbers, that's ahead on "power lunch." this is electricity. ♪ this is a power plant. this is tim barckholtz. that's me!

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it is the five year anniversary of lucas film of its star wars property how is the deal playing out? julia boorstin is joining us from los angeles >> reporter: it is hard to think of what disney could have done the acquisition he calls a home run. now since 2012, "the force awaken" and "rogue 1."

has grossed $3 billion >> the last jet i is scheduled to launch in december. >> it could dprgrow as much as $2 billion worldwide >> mcquery research products over $5 million interacting of immediate sales this year. >> lucas film produces more videos for disney's apps in 2019 disney is spending a billion dollars on each star wars pituitary glaland is set to open 2019. disney also owns "indiana jones. >> julia boorstin in los angeles. for more, lets bring in barry

sign, barry, good to see you >> thank you >> when do you think the star wars, lucas's films will peek? >> have we seen the best of it >> new york city the studio profit have quite quadrupled and consumer sales and their product doubles and the same thing of theme parks. going ahead, the movie that comes out of december, we got a lot movie in the ninth part series coming out of 2019, we got the theme park and we got consumer products on top of that that's what they just announced. this franchise could take a much further. >> we got a push/pull here we got the benefit of the lucas film and the pull of the concern of court cutting and espn declines >> right >> how do you weigh it out

the stock are range bounce in the past two years >> over the last five years, i gave you the numbers for the other segments includes espn and revenues are down and 17% and operating comes down 2%. i think this is more than offsetting that and remember the star wars franchise is going to be a big part of disney's over the top product that's coming out in 2019. they don't know the customer's names or whether you go to the theater. they can really drive the revenue. >> what about its impact of the parks. >> what i mean by this, so i have got a boy and a girl. disney world, i find that disney may disagree with me star wars, it is going to help

rejuvenate from the boy's interests. we need to get more 7 earlier boys who nag their parents to come to the park >> absolutely. >> it is a virtous to 7-year-old and 8-year-old boys. you do have some attractions they do have a pretty interesting "star wars" attraction but it's a one off. having two billion-dollar "star war" -- >> i like the race cars, the boys very quickly of lucas films, what is for disney the most valuable part of that annuity? is it the merch, upfront box office, downstream >> i wouldn't say it's the single most valuable part, it's the sum of parts in way disney is able to sinn jaznsinergize.

>> barry, thanks barry sine, drexel hamilton. >> thank you. all right. oil rising over 4% in just the past week. here's the question. what energy stocks might benefit from higher oil and gas prices u ghre paying more to get gas. yoout to make some money we're going to try to help you coming up on "trading nation." where's gary? 'saved money on motorcycle insurance with geico. goin' up the country. later, gary' i have a motorcycle! wonderful. ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪

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energy rallying today along with crude oil by the way, if you haven't been paying attention, oil hitting its highest levels since march let's try to figure out how to make money on all this, shall we, with your trading nation team boris, max wolf with disruptive technology advisers. max, first to you, is there a name out there in the oil, gas, energy universe, that you think will particularly benefit from the move that we have seen >> yes, so ironically, i think maybe an exxonmobil. we like the low cost capital, we think the dividend play is exciting it allows people to take a little bit of a foot, shove it deeper in this water, make sure that this time it's for real because there's been a lot of false starts and still get paid the dividend and be in a some quha defensive name. on the balance, we think it's an interesting space, but there's a lot of opacity, lot of political risk, so hard to get super

excited about joining the bandwagon now even though it looks like there's a little further to go. >> boris, we begged you for a stock pick, said give us a stock pick, all you wrote back is it's a sucker's pick, you hate oil. why can't you play along >> i don't hate oil. i'm skeptical of the rally, really due to the weaker dollar and the fact the saudis are trying to ramp it up above 50 in order to get their ipo done. i think overall -- i think it's very much an alternative energy trade in a sense that oil is getting shoved out of the equation more and more as we go forward. in the near term, yes, it's going to hold to 50. exxonmobil is a decent play in the midterm. i'm september call of any sustained rally. i think 60 caps this move. i don't think we see anything further beyond that. >> fair enough he says exxon mobile, low cost to capital could be a good play. thank you. we do two additional segments everybody day, folks, at our website, tradingnation.cnbc.com. "check please" is next

please >> and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> short selling can help you profit from a stock's decline. however, because it involves unlimited risk, you must have a plan first, screen for poorly rated stocks showing weakness versus the broad markets. second, look for the stocks with the poorest technicals in that group. and finally, incorporate risk management techniques into your order to limit potential losses. so what else is new? how's your mother?

umm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

check please >> all righty, we're going to tell you that in the field of selfless self-promotion, this is the week to watch cnbc, because it is a busy week for economic news fed meeting, tax bill will be released probably the name of the new fed chair and vice chair will be released and a jobs report friday what am i leaving out here a lot. >> the world series. if we have two more games like last night, i ain't going to make it. i watched that game until the end. i was on twitter, like p 1:30 in the morning, they've got to start -- first, i think it may go down as the best world series of all-time. congratulations to both sides. >> compelling stuff. >> man, i'm pooped. >> apple and facebook earnings this week. >> walking share of dunkin brands shares up 6% report is that jeb holdings could be interested in taking this company private remember, amongst its stable of brands, panera, green mountain,

krispy kreme, pete's coffee. it would make sense synergistically for this to happen >> by the way, is tim seymour on "fast money" tonight because mattel, only s&p stock up double digits right now. >> after losing 10% last week. thanks for watching "power lunch. >> and "closing bell" starts right now. >> michelle was supposed to say that hi, everybody, welcome to "the closing bell," i'm kelly evans at the new york stock exchange. >> i'm wilfred frost in for bill griffe griffeth sources telling cnbc a bit of a story, though, david faber has details coming your way. >> he'll join us in a couple moments. meanti meantime, an industry with talk of consolidation, the food space, hershey's ceo will join us in cnbc exclusive on its busiest day of the year, the day before