salesforce, trading at 139 all-time high of 142 very easily and quietly. >> it's headed there right now. >> good call. >> bold. >> what is that, half a percent away >> it's identifying something. >> miracle on ice. >> good to be back with you and all of you as well "power lunch" starts right now. >> i'm melissa lee the trade war is now real. first wave of chinese tariffs on u.s. goods go into effect tomorrow what's coming, how we got here and which american companies will be impacted the most. plus big call on the stheet saying this historical run isn't about to end any time soon the details and why you should keep buying on the dips, straight ahead. and these are the most dangerous jobs in the world. new cnbc series you have to see. today a hair-raising job that comes with unrivals views from the big apple. "power lunch" starts now.

>> welcome to "power lunch." i'm courtney reagan. the dow up 193 points at the session highs. weekly loss, intel, merck, p & g. tech the best performing sector again. telecom, utilities the biggest l laggards and tivo ceo is leaving. board member will take over temporarily. >> i'm tyler mathisen. welcome to "power lunch. new read on the american job market ahead of tomorrow's big employment report. the u.s. economy adding 177,000 new private sector jobs in june. that does fall short of the consensus estimate of 185,000, but just by a little bit one of the main reasons businesses are struggling, they say, to find qualified workers

netflix premiering its first original series in india, raising the stakes in its streaming battle of amazon for a chunk of the country's more than billion viewers. and customers keep clucking about chick-fil-a. still america's favorite fast food chain by a wide margin. panera bread came in second. melissa? let's cut straight to the trading action, stocks are higher but well off their highs. bob pisani, strange market day with leadership in technology and consumer staples. >> yeah. very odd and we're still not getting any real help from industrials and some of the other laggards like bank stocks. a lot of those names are down 10% in the last two weeks. consumer stapleses, health care defensive. and banks not doing much another oversold group that's not rallying appreciatively.

those adp numbers didn't help this morning intel, semi helping out. johnson & johnson, defensive, merck, procter & gamble. that's fine but what happened to all those names we use as proxies for global growth in the trade war issues, boeing is doing nothing. the financials are doing nothing. travelers is down today. goldman sachs is basically flat. you see what i mean. those trade names, those concerns about yield curve stories, all weighing on the markets. you want to look at another global growth dollar story, look what's been going on with the agricultural stocks. metal commodities, dbb is what you want to look at here, near a 52-week low. an even worse one, dba basket of agricultural it's been trading ten years. i don't think it's ever been at 17 and change.

maybe once, but you get the point here it's really weighing on things where are we it's been defensive. we're in a trading range, 2700 to 2750. it's been choppy, uneven a lot of intraday reversals the last few weeks utilities and reits as your leadership group, we don't want that better balance in industrials and banks. semis a little bit better today. melissa is right, it's choppy and very uneven. back to you. >> thank you very much, bob. appreciate it. citi making a bold call, saying this historic global market rally isn't close to ending and investors should keep buying on the dips fair market checklist suggesting 3 of 18 red flags have actually been raised and it still sees 9% rally in stocks worldwide over the next 12 months citi expects tech to do well and emerging markets remain its value trade. should you keep riding this run? is citi going to be right in the end? let's bring in asset management

and richard weiss, chief investment officer with american century investment margie, let's start with you just start with citigroup's thesis do you think that this bull market run can continue, or are these new trade fears going to give you pause going forward >> no, i think the trade fears are a minor issue. i think that people are underestimating the very strong, sustainable growth here in the u.s. economy and a lot of the countries worldwide. and i think they won't be derailed by a small interest rate going up. i think it's really going to be a lull and then have a very strong finish. i think a lot of investors are underinvested in the equity market, looking for that big correction i just don't think we're going to get it. >> margie, forgive me. it's margie and not margie

richard shall do you think we're going to continue to run higher? >> we're taking the underside of that trade with economic growth decelera decelerating, that doesn't mean we're going into a recession, but decelerating economic growth, rising interest rates, the specter of inflation this is not a recipe for a bull market and the citigroup report, buying on the dips is not what we're doing. if you're wrong on the timing of that, you're likely to catch a falling knife, okay? and i think that they undermine their thesis, right in the first paragraph. it is true and we agree that later cycle bull markets tend to narrow focus on growth and momentum and that's exactly what the markets have been doing for the past year or so. this bull market, kind of like a fine wine or maybe an aged arminac is great but it's not getting better. >> margie, are you concerned that gains, such as there have

been gains in the u.s. markets the past six months, have been attributed to five or six stocks it's so concentrated there and if it starts to unwind there, there's not much standing behind it. >> if you look at other market rallies, often a handful of stocks, half a dozen or a dozen stocks really dominate the big move up and everybody else is sort of second tier. i think it's more or less typical of a cycle and i think those industries really represent the strongest factors in the economy that will keep on moving ahead if you look at equities and say what's the alternative, treasuries are 2.5, 3%, junk bonds are 5.5, 6% it doesn't take much for equities to do better than that. >> let's ask richard you're underweight stocks. what are your alternatives and what are you in right now if you're not market weight even stocks >> market neutral funds, shorter term bond funds. we're definitely defensive,

especially for very risk intolerant investors, retirees near retirees. anything that's not dependent on market data at this point within our stock portfolios, we've written that growth bull for some time. we're likely to be shifting gears here, rotating into possibly consumer staples, other defensive sectors, protecting on the downside much better valuations here if, indeed, this bull market is running out of steam. >> appreciate the viewpoints from you both. of course, time will tell. thank you very much. european automakers, meantime, sharply higher on president trump maybe changing his tune on tariffs against them phil lebeau with that. phil >> in terms of the world of auto s, auto tariffs is a big part of the story. when we talk about auto tariffs and the european automakers. the u.s., according to a report

out of jrmny, has apparentgermay offered to go with 0% tariffs, a report out of germany. how would that change things in the eu right now, current tariffs are 10%. for vehicles we send there vehicles sent here are 2.5%. essentially, that would drop everything down to zero. we know that the european automakers have indicated that they would like to do this let's see if this is perhaps an indication of where the two sides are going. how many vehicles are we buying here in the united states? they come from europe about 6.7% of the 17 million vehicles sold last year came from european assembly lines so, that would be a huge change in terms of dropping those tariffs completely and the european automakers have indicated in the past they're open to this that's the reason you see shares of bmw, daimler, volkswagen. they're all sharply higher and want to protect the trade

surplus, guys f there's no tariff, they don't mind that they just don't want to hurt their imports coming into the united states. >> while we have you, phil, let's talk tesla we have breaking news -- meaning b-r-a-k-e, brake. >> it's not allegedly. the company has confirmed they have eliminated the brake and roll test as they were ramping up production of the model 3 the brake and roll test is a test that's done at the end of the assembly line by all the auto manufacturers where they are essentially check alignments of the wheels, vehicles are put up on a dimamometer. they believe that the test is redundant with the test they do on the braking and those features when they drive the vehicles before delivery and from tesla's perspective, it's redundant if we can speed up the

manufacturing process, we're not compromising safety. that's why we made this decision there was never anything in what we reported and what others reported suggesting that the safety of the tesla model 3s has been jeopardized, that the brakes are not working what was reported was they eliminated this. that's part of the changes that they made as far as the manufacturing. and, remember, guys, these reports all have to do with the ramp up in production of the model 3 and how they were able to make the numbers for the model 3. that's why there is interest in the brake and roll test being eliminated tesla said to us on tuesday and said again today, they test all their vehicles they are safe. they meet all their criteria they put them through a battery of tests when they drive them on the test track before delivery. >> let's talk elon musk as well, phil the stock was down 7% on this report elon musk has taken to twitter once again, lashing out at both reporters and analysts remember not too long ago, he warned short sellers about their

shorts exploding the stock is actually down pretty significantly since that tweet. >> right we've seen this. >> yeah. >> this is not new from elon musk if he feels that his company is not being portrayed accurately, he will go after the media publications, tv programs, networks, whatever it is if he feels that it's not being accurately portrayed, his company is not being accurately portrayed, he will go on the offensive. and that flares up, especially on twitter he will put it out there on twitter. then you have people coming out and saying, is this true why aren't you -- guy guys reporting this about tesla we should point out we have repeatedly asked tesla and their pr representatives to have elon musk come on our air this say regular q if there's something being inaccurately portrayed or is wrong, by any means, call in today we would be happy to put you on the air. any time people say how come you're not putting out what elon

musk is saying that's not true. we report what elon musk tells us and basically every day practically, we are calling in and putting in requests to do interviews with either elon musk or executives at tesla. >> open invitation thank you, phil. phil lebeau. >> opec telling the president to reduce tweeting. what it means for oil prices ahead. one prominent billionaire hedge fund manager and why investors are losing faith. one of the world's most dangerous jobs, harness, paint and world nerves of steel. what it takes to be a bridge painter on "power lunch. stick around my family's in there.

oh! how did you get in the building? jumped off a super crane. what? whoa!

skyscraper. can't fix it with duct tape, then you ain't using enough duct tape. rated pg-13. president trump is turning up the heat on opec, telling the group to reduce pricing now. opec governor saying your tweets have increased the prices at least $10. please stop this method. rising oil prices, first, opec can't increase production without breaking the deal it already made and opec numbers simply can't raise output. plus, libyan output is causing concerns canadian output is down as well and pipelines are slowing production what does this mean?

rcb capital markets, great to have you with us this is a strange brew you have to figure out. >> yes. >> what does this mean in the short term for oil prices? is the path of least resistance higher or lower at this point? >> i think the path of least resistance is higher, simply because this market is tightening president trump continues to tweet. there's really not a will the that opec can do in terms of putting additional barrels on the market rapidly saudis and iraq have pledged to put more on the market again, that's going to take some time as you pointed out, libya is now down by 850,000 barrels because of problems with their eastern ports. we have venezuelan production continuing to drop and we haven't even had the iran energy sanctions kick back in yet. so, this market has significant supply disruptions and it's a real question of who can put barrels on the market right now. >> when is sin crude supposed to get back online and can that provide some relief, even at the

margins, to oil prices here? >> we're looking at a potential, you know, some time a restart over the late summer the problem is that that's 360,000 barrels. compare that, again, to what we're seeing in libya, we're potentially looking at by the fourth quarter of this year, you know, being down 700,000 to 1 million iranian barrels with these sanctions kicking in yes, that would help but these other outages are so large it will still be a tight market again, i don't really see what opec can do to help out at this point. >> the president blames opec, says the monopoly must remain that gas prices are up and they're doing very little to help if anything, they're driving prices higher. he continues by saying reduce pricing now. does he fundamentally missna understand the nature of markets that they're set by supply and demand and the issue is really supply >> what he may not be understanding is that the opec countries that can do more have promised to do more but they

can't rapidly turn this on it's not like flipping a light switch as long as venezuela continues to drop and as long as he is still intent on imposing such large sanctions on iran and really trying to take iran out of this market, this market will be tight there's just not a lot of extra barrels out there to deal with these supply disruptions and demand -- the demand outlook remains strong we are fundamentally in a tight market now, he could put efforts on resolving the libyan conflict. that would be significant. or he could issue waivers on iran sanctions and slow walk the implementation of those sanctions. if he's going to try to take iran out of this market, there's no way around to having potential prices. >> we hear about bottlenecks or the inability to transport out of the permean to end users. how intractable and long term of a problem is that or can it be solved relatively quickly? do you expect it to get better

>> we're expecting relief at the end of 2019. so, again, this is not going to solve anything in the near term. that's why we think as we get closer to the mid terms we could be looking at relief from the petroleum reserve. that is what trump will have to turn to if he wants to shift sentiment. there will be fundamental issues with that, in terms of the type of crude rates in the spr. if you really want some type of sentiment shift going into mid term elections. >> do you think the president would look at tapping the spr in a much quicker fashion than perhaps other administrations? that's a pretty serious thing to consider. >> it's a very serious thing to consider technically, you're only supposed to use the spr if there's interruption to u.s. refinery, not to bring down prices as long as he continues to see this as a very big issue for himself in terms of gas prices and if opec can't put additional

barrels on the market, spr may be something he turns to quicker than other administrations just for psychological reasons, trying to get the prices lower in a temporary fashion. >> a lot to watch here in the market thank you very much. appreciate you joining us today. >> coming up, investors bailing out of david einhorn's hedge fund what's behind the exodus and is it going to get worse?

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investors are jumping ship what's going on here >> has einhorn gotten redemptions? absolutely will those redemptions continue? most likely until he begins to really turn things around. let me give you some examples, take, for example, june. down 7.7%. a year from june, they were down 18%, dramatic underperformance relative to the s&p 500 over those timeframes and green light benchmarked that between 2015 and 2016 that has made einhorn the subject of several profiles in recent weeks, most recently on the cover of today's wall street journal. for investors, patience wears thin with that type of underperformance

einhorn has addressed performance in the past, that they could not replace lost capital, that they could do fine without it he has attributed those losses to this idea that growth has done better than value in this environment. he is a well-known value investor a real culprit is his so-called bubble basket of shorts with names like netflix that have soared this really gets at the heart of his investing style. >> what i don't understand is if you're down 19% year to date, why aren't all your investors leaving? that is not great. >> that is a key part of this. the provisions by which these investors signed into the fund they are locked up for a long amount of time three years for most of them and even after that three-year period has happened, you can only redeem about once a year. so, if you're a large pension fund -- this is one of the things that you see time and time again with these star hedge fund managers. if you're a pension fund you have to go through so many

bureaucratic steps to invest in these guys and it's kind of an easier sell to make to your board if you're a star, to invest in them when it comes time to redeem, especially after years of underperformance you hope that maybe there will be, you know, the pendulum will swing back the other way and they'll start to outperform. >> he has, what, $5.5 billion right now? we don't know how much is outside money. the bulk of it, we would think, is his own money, green light capital and the balance -- right. and the balance is outside investors. there may not be too many left. >> exactly. >> in reality. >> he does have the permanent capital vehicle with the reassurance, thanks to the reinsurance vehicle that green light has. you're right there may not be too many investors that are are outside left but those that are are pretty much saying it's because -- >> are those performance numbers we saw net of fees and what are his fees >> i don't know his fees --

>> convention to -- >> closer to the convention 2 and 20. >> any pressure to reduce those? >> that's absolutely the case. as he said in the past, he is not that interested in replacing capital. this is a common theme we've seen with ackman where they realize that their star power has gotten them to these acid gatherers. when you compile all these assets it really chips away at the opportunity set you have for investing because you have so much money, so much in the way of asset undermanagement if you're smaller, more nimble, you have more opportunities to invest and could produce, in theory, more alpha. >> in theory. >> in theory. >> the war of words in the trade war and those caught in between. next our interview with a pig farmer, praising himself for what is to come. the latest in the race against time to rescue the thai soccer team, stranded in a flooded 'rli ithca wee ven ailand, next i'm april kennedy and i'm an arborist

with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.

president trump will discuss russia's, quote, malign activity and then he will follow up on his russians meetings with president putin on july 16th in helsinki russia categorically denies any kind of involvement in both nerve agent poisonings in britain. it was described as part of british efforts to tarnish the russia-hosted world cup. britain's minister accused russia of turning uk into a dumping ground for poison. bill shine will join the white house staff as assistant to the president and deputy of communications he served as co-president previously of the fox news channel. hollywood is on pace for its most ticket sales in five years.

between april and june it enjoyed its most successful quarter in history with $3 billion in ticket sales, according to the box office mojo leading the way? "jura is sic world: fallen kingdom. just saw that the other day. it was really good courtney, i'll send it back to you. >> haven't seen that one yet maybe i need to get there. big swings today, dow rallying triple digits again, after losing the biggest part of its gains, dow up almost 200 points. all three major averages erasing their losses for the week. best performing s&p sectors, nasdaq leading the way when it comes to major indexes melissa? the trade war getting more real in less than 4 hours, u.s. tariffs against china will go into effect. eunice yoon is live there and seema mody is here at

headquarters eunice, let's start with you. >> reporter: thank you, mel issa it's less than 11 hours. they plan to impose the tariffs midnight friday heefr in china to match the u.s.'s start time of 12:01 a.m then because of the time difference, the chinese government decided to change that, delaying their tariffs until immediately after the americans impose theirs. that means china will end up imposing the tariffs noontime here in beijing, a bit unusual for china. it shows how sensitive beijing is to appearing like it's the aggressor. it wants to make sure it looks like the innocent party, the good guy in this fight with president trump. and just a couple of moments ago, a new editorial saying that beijing would not give in to blackmail and falter from its staunch defense of free trade. tariffs on up to 25% for $34 billion worth of goods the u.s. will punish

chinese-made high tech china will strike back at farm goods, targeting president trump's political base as for american companies, china warned u.s. companies could suffer because it believed that the tariffs were going to wreak havoc on international supply chains the commerce ministry today said that foreign firms account for $20 billion. it's about two-thirds of the exports from china subject to the tariffs with many of them american in fact the ministry said today that the u.s. is firing shots at the entire world, including itself melissa? >> all right eunice, thank you. let's check in with seema mody with how we got to this point. seema? >> hey, melissa. the trade fight began in earnest in april when the trump administration's tariffs on steel and aluminum imports went into effect. and that prompted a number of key trading partners to retaliate.

first, china, imposing tariffs on steel and fruit and mexico took aim at pork, cheese, steel, among other u.s. items european union targeting bourbon, orange juice and motor bikes, which led harley davidson to move some of its production out of the u.s canada responding, as it was the hardest hit by the steel tariffs, $12.6 billion on steel, whiskey, condiments among other items. some of the major items. overall there are hundreds of individual u.s. products being subject to these tariffs and this conflict is about to enter a new phase tomorrow as eunice was just pointing out the u.s. readying $32 billion in chinese imports as punishment for theft on intellectual property they could follow up with another $16 billion on u.s.

tariffs. potential targets. >> seema, thank you very much. china expected to respond immediately to those tariffs set by the trump administration, as eunice reported, u.s. hog producers are anticipating a major hit to their bottom line the owner of the mashoff, third largest pork producer in the country. ken, welcome good to have you with us. >> thank you, tyler. >> how much, if these tariffs all do go into effect, how much will it cost your business this year >> well, for our company, the tariffs, the china tariffses, the earlier 232s along with these 301s, it's estimated it will cost, on average, $18 a head our business produces 5.3, 5.4 million head a year. so you can do the math it's $100 million. we're all talking about harley

davidson a lot one individual pork producer who is affected as much or more than harley davidson as a whole. >> it's going to cost you $100 million in lost sales. will that drive your business into the red >> oh, definitely, yeah. we anticipated in 18-19 of some profits and those clearly have went away. this is not just for our operation. for the industry as a whole we're talking billions of dollars of losses. pork, as you know, is a large component of the offset of the trade imbalance, as is all of agriculture. so we figured we would be targeted in this dispute, and we clearly have been. and it's going to be very, very tough for many and my fellow producers across the country. >> how much of your operation -- and you have something like 550 farms that you work with, in addition to your own, wholly

owned production how much of that production was going to china and when these tariffs kick in and they will be something like 81% when you include that, how much -- will it knock it completely off you won't sell any in? >> most of the projections are that we'll have zero movement of pork going into china once this next round kicks in. you mentioned the value add tax. add the collective tax that goes in, retaliatory tariffs on the 323 along with this 301. most economists are saying we'll go to zero >> so you'll go to zero. >> mexico was our largest. where will these little piggies go >> it will be tough to say obviously, with what's going on with mexico, we had 10% announced on june 6th. i believe the other 10% goes into effect today, july 5th. we have 20% with mexico. that's 40% of our total trade.

we've got to get these things resolved and i'm hopeful that we do and i understand what's going on we're kind of a pawn in all of this, an unintended victim we knew ag richltculture as a whole would be hit unfortunately it looks like it's being done in a big way. >> ken, there are 550,000 jobs in the pork industry at what point do you think jobs will start to be cut and at what point will u.s. consumers start paying more for pork >> well, the latter part of that question, melissa, i'm not sure who i'm speaking with, but is that will come later you'll actually have more pork on the marketplace, short term although many of these countries, mexico in particular, and china -- china really in particular, buying products that americans don't eat. it won't have as much effect short term, but long term, producers will exit the business and be forced out of business, that will result in higher

consumer prices, i would anticipate. >> ken, thank you very much. and good luck with your business and with those wonderful animals that we can hear in the background. >> yeah. well, thank you. you know what? if we just knock down trade doors and trade opportunities for american agriculture and pork in particular, it's a great way to offset the imbalance of trade. so we implore the administration continue to solicit new free trade agreements when we have an fta in place, they work. it's when we don't have one that we're in trouble. >> ken, thank you very much. we appreciate your time today. >> thank you bond market, rick santelli is tracking the action at the cme in another part of illinois. hi, rick. >> hi. yield curves are wild today. i have four charts, all starting in june, of major yield curve observations and it all points

toward flatter 10s minus 2s flattest since august of '07 10s minus 5s, trading around 10 basis points, flattest since july of '07. 30s minus 5s, a whisker above 21, flattest since, you guessed it, july of '07 and finally 30s minus 10s, around 11 plus, july 2007 you know, even 7s to 10s hovering around three basis points what does all this mean? investors will have to let us know through their trading activities most investors think you see inversions, you'll start to see a recession at some point. the debate is how long is that accurate i can't tell you there have been times in the past where it was. those times didn't include balance sheets of other reserve shocked full of securities we'll be very patient monitoring these very large moves back to you. >> thank you very much, rick santelli

coming up, a look at one of america's most dangerous jobs. what it takes to be a bridge painter. that's coming up next. you always pay your insurance on time.

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at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. welcome back to "power lunch. we take a look at the most dangerous jobs first up, a bridge painter overlooking new york city. >> bridge painters, part of a brave crew that works year round to ensure this $610 million per year money maker is operational at all times. >> some people just say we're crazy. >> a little crazy may be part of the job requirement. every day, these guys weave in and out of steel mazes, climbing, scraping and painting the rusted steel, all while

hundreds of feet in the air. >> the margin for error is very small. this bridge is heartless and unforgiving. >> reporter: todd whitehill is the bridge crew boss and has been helping to maintain this structure for 22 years. >> if thank you ink about it, there's an element of danger in almost every trade we do for us, the prospect of something catastrophic, life is not without risk. >> reporter: why did todd accept a job that puts his life at risk his answer is pretty simple. >> the job was available it was steady work, good paying. i wanted a house and i wanted to get my daughter through college. >> reporter: the average bridge painter starts at about $31,000 per year and tops out at about $71,000. with more than 9 million square feet of paintable surface and a crew of only 16, you could say these guys have the ultimate job security. >> it literally is never ending. >> this bridge isn't going to lay you off. there's always something to do here. >> reporter: getting used to the conditions up here is certainly not for the faint of heart. >> not too many people can do

this job and us that do it, we take a lot of pride in it. >> reporter: that's why applicants who want to join this dream team must prove they have nerves of steel first. >> you want to make sure that you're qualified to handle the heights. we can't teach that. >> reporter: step one, a freight elevator ride to the peak of the tower. step two, a stomach churning walk over the see-through grates with traffic whizzing below, which leads candidates to the final test, something like walking the plank. >> start at that side and then walk across the six-inch beam to the other side. >> reporter: this is what they see from up there, a sight that would paralyze most people with fear. >> no crying, yet. no throwing up, yet. there's a few people that just barely make it out of the elevator. >> reporter: if you can get past the fear, one thing is for certain, even the plushest corner offices don't have a view like this. >> i've got the most beautiful office in the world, jersey on

one side, new york on the other. it never gets old. >> morgan brennan, cnbc. >> some of our guys went up there and shot that. >> i was going to say, how about our cameramen? how brave they must be stomach-churning stuff. >> morgan used the phrase traffic whizzing by below. the traffic doesn't usually whiz it creeps along beneath there. but, boy, i would never do that. >> 31,000 to 71,000, that's the range. >> i cannot handle those heights. any how, which ceo or company has the best reputation? we'll give you the resultsf oa new survey, coming up next to yo? well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light.

♪ you're not gonna say it are you?

my familyoh!in there. how did you get in the building? jumped off a super crane. what?

whoa! skyscraper. can't fix it with duct tape, then you ain't using enough duct tape. rated pg-13. and welcome back to power lunch. the race to rescue a teenage soccer team stranded in a flooded cave in thailand continues. the options to get them out are few. and all are quite risky. nbc's janice macke freyer is live with the latest janice >> this is a critical 24-hour period with heavy rain in the forecast the pumps have been going here 24/7 trying to get millions of

gallons of water out of the cave system so the evacuation of the boys and their coach can begin we're told the water levels now are at the point where roughly a third of the nearly 3 mile journey they would have to make is good. it's walkable. the chambers are dry there are other parts where the boys could float with the help of navy divers but it's the sections that are deep and narrow and twisting where the boys have to dive. and this of course is a huge risk because none of them knows how to swim. and there is the risk of panic the water levels have been going down roughly a half inch every hour once the rains come -- and it's inevitable they will come. this is the monsoon season here -- they could be rising five times faster. that's why they know they have a limited window of opportunity here and some very tough calculations made tonight, including the order of the evacuation. do they send out the strongest

first, the youngest, the weakest? we know from the governor of the province that there are at least three bays and the coach still not so strong. they've been underground 12 days now, malnourished, exhausted near in the sure they're in the best shape to make this sort of escape so decisions are being made hour by hour. behind me they've been preciping hoses to take into the cave system to pump fresh air for when the evacuation may get under way. >> all right thank you very much, janice. we appreciate the report from the scene. really a terrible story there. and the fact is they can't get through some of the corners and the twists and turns with diving gear on apparently or makes it difficult to do so you have to be a very skilled specialized kind of diver to do it. >> right and it sounds like the boys can't swim. >> amazing. we have halfway through 2018 we have seen sweet pr cries and involving companies from intel

and nike to united and banners and noble. but a new report out today shows americans are feeling better about ceo leadership nationwide. let's bring in cnn poll sister, i have to say when i saw the results i was surprised that americans are feeling better about ceos in light of those scandals that we mentioned and more so why. why do we feel better. >> the scandals are few and far between. when you look at the collective basis of the opinions on correspondent america. they are stepping into a void of leadership that represents grid lock in american government today. sort of an interestingspective in our view is the reason that crows are rising up is they are taking more active social positions, trying to solve problems in society that aren't necessarily political. they're a little bit more focused on things we can agree upon. >> things that cnbc viewers care about, if the ceo has a good reputation by american standards do the stock prices go up as a

result. >> i don't know if i can clarify that this data is focused on americans. this is what main street values. >> okay. >> really focus on when they think about ceos it's a different approach the way they designed this. >> it cuts both ways in terms of being a ceo on the forefront of social issues. what struck me on the top five is that they aren't necessarily outspoken about social issues per se they may tackle a problem in shoet, which are two very different things. >> absolutely. absolutely different this is a focus on taking a sliver of a problem in society, again most of us we agree upon that aren't political. you have microsoft highly performing they focused on dlifrpg rural broad band to over 25 million americans. >> do people know that though? do people taking the survey know that. >> they have strong feelings of reputation when you think about microsoft there is the lingering effect of bell gates and a lot of interest as well. >> and i noticed the number of

companies private not public tharp six of them out of the top 20 chick fillet aldi heb, publix. patagonia. and others associated with charismatic. like apple, microsoft. amazon >> we were fascinatewood that for several reasons. someone like warren buffett sort of the alexander hamilton in our data people love him. but he is focused on american infrastructure you are right to point out the fact that many companies and ceos were focused on home and hearth this is the year when we wanted to escape the headlines and wanted to seed back into the communities. you see supermarkets in the mix. lots of companies focused on home improvement, home entertainment. sort of bedrock american main street values. >> kwhoe ywhen you poll americai

across the demographics. we hear a lot about millennials caring about social nish he was. >> we cut across the demographics and we can pull it apart to look at millennials we this is all american data what we thought is that there are companies with convictions but different politics i wouldn't see patagonia and chick fillet at a correspondent picnic but they walk their talk and stand up for what they believe in. >> how has the list change over the years. >> it's changed fundamentally in one way. it used to be large company, frrn 100, fortune 500. now they've become small are more intimate companies. the slogan on that is scale is fail size especially with millennials and again z doesn't equate to trust. they want to see the ceos more intimate shrink down the size of the company a relate to people on individual bases. >> let's follow up and see with it looks like next year.

thanks so much ceo of the harris poll. we are standing by the n't st fid minute. dogo anywhere. power lunch will be right back

"pow moments away from the fed's latest minutes of the june meeting getting a check on the

markets off the session lows the dow still up by .6 pch s&p higher by ..7. nasdaq up by .9. %. zbloorm they are higher by a quarter% and quick check on treasuries be as we have the yields sitting up firm at 2.836% if the fed minutes hits check in for the details diana. >> there was a lot of trade tok. fomc members expressing concerns over tariffs and other trade restrictions in u.s. and broad pan how they could affect investment activity. the incertainties in risksy intensifies noticing indications of pullback in capital spending because of the uncertaintity specifically steel and aluminum streeted were cited higher prices without expansion they also noted supply constraints if in the construction sector you notice the meeting took place curing volatility relating to trouble in european economies and

emerging markets and members did see some downside risk because of that. otherwise members agree that the labor market continues to strengthen with economic activity rising at a some i had rate in the u.s. they pointed to favorable economic factors above trend gdp growth, a strong labor market federal tax stimulus and accommodating financial conditions as well as high consumer confidence and a pick up in household spending but some members raised concern that a pro longed period of the economy really cranking above the poepgs could increase the risk of inflation and eventually lead to a significant kpk downturn there was skulgs of the labor shortage which we saw on jobs showing job openings more than workers to fill the openings as for inflation they noted prices move closer to that 2% goal they also said they could move slightly higher temporarily but most members again brought up the risks associated with trade policy that said they had

intensified and could event sli negative effects on business sentiment and investment spending they did argue a bit over the flattening of the yield curve and the importance of it as an indicator of recession some arguing other factors could mitigate the relevance as a predictor. once again they revisited the idea of changing the language in the staumts on policy from come kative to neutral. so you can bet that's likely coming up back to you. >> thank you, diana olick with the fomc minute. the rebecca pat certifies a contributor. gus foe shay is the analyst with pnc financial services it seems the fed is increasingly could go nizant of the trade wars and emerging markets and potentially europe >> yes and obviously it's a very difficult situation for the fed. they're not sure what's happening with the proposed u.s. tariffs with proposed

retaliation by the trading partners they have to make a decision about something that may happen. i think they are baseline is like ours, that we get away without having too much -- too much trouble in the global trading system but certainly the fed needs to be prepared for that downside risk. >> it sounds like they are on the path to possible rate hikes but do you think they could pause and put growth sort of in the driver's seat when it comes to the decision as to whether or not to proceed as planned as opposed to the inflationary pressures they see and the inflaegsary pressures that may come because of tariffs? >> i mean, certainly that's a concern. i think that they may be watching what's going on with trade. they may say that's a downside risk and therefore they're going to pause that being said, i think that their baseline is probably that there isn't much impact on trade. that they are concerned about inflation moving consistently above the it% so that we'll see rate increasing in 2018 and then in 2019.

>> what's your take, rebecca, a slight tick higher in the markets? >> um-hum. what they're facing we're all face, the dual reality that the defect economy in the u.s. is very strong and in and of itself argues for a continuation of hikes. right now we have kind of 1.5ish priced in between now and year end. however the trade risk is large and fwroeing we could get another step forward on that tonight. worst case for the fed is stag flags where you get higher prices but slowdown in growth what does the fed do if they raise rates in that environment because of the inflation part of the mandate it tips us over into a recession potentially and if they don't, and inflation gets ahead of them, the fed always worries about inflas getting ahead of them sflo rebecca, i hear a lot of folks on wall street and around the country saying well we sort of thing we're going to skirt the worst of this and investors seem to be acting that way. on a in other words there is no panic in the market. but what is the way out of these trade issues

and does it require one side or the other just to fold >> i think someone -- fold may be too strong a word. >> yeah and neither of -- certainly not china, certainly not the white house. >> yeah. >> are. >> right. >> are historically folders. >> i think going into the midterm election if this is a topic that plays he will with some segment of the republican population and voters president trump is incentivized to keep it going. he needs a win big enough that he can show that to his voters as i got you this. but even then is he going to end it >> is there a possibility that there is -- -- did we see a sliver of light toward the win when it appears that some european car makers say we are in favor of eliminating tariffs on all cars? >> i thought it was fascinating that this was led by corporations rather than the government. >> yes. >> angela merkel right now, justin trudeau, president xi they need to show the populations they're being strong and not being bullied.

but the companies are saying we have shareholders. we need to do the right thing for them we need a deal you maybe you can get it led by companies rather than governments. >> that's a win. >> possibly. >> for president trump seems to me. >> i know you'll have a guest on later who has done trade negotiations this is so complicated bus of wto rules. if you cut tariffs for one country threw wto you may have to cut them for all? how doable is that in it's so complicated. >> gus, rebecca mentioned stag flags how likely a scenario is that in your view? >> it's becoming more and more plausible process. the tariffs would add to consumer rots that would drive up inflation and then slower growth i think the fed has to be prepared for that eventlety. i don't think it happens but it's more plausible as we see more rhetoric heating up. >> gus, what do you think about the labor market, the fed saying the labor market is strengthening but we know it's getting tighter and harder for

employers to find qualified employees to fill the open roles, to the extent that they exist. how does that play into inflation if we see wage inflation going higher because that's what has to happen to fill the roles >> that's right. and we expect to see stronger wage growth through 2018 into 2019 that's the primary impetus for the ted continuing to raise rates. they are concerned about labor cost pressuring building they're concerned about the potential for the rate to that result in higher inflation they want to let the labor market improve but take pressure off so by the time we get to mid-2019 we're in a good situation, the labor market we have solid job growth. we have an unemployment rate that's a little bit below 4% but the labor pressures are easing off a bit instead of building. >> then if we keep going down that path as the fed mentioned in the minutes we are probably also talking about a yield curve that goes flat to inverted while that certainly doesn't

necessarily create a recession it is a aentment indicator that gets more and more focused. >> we're basically one hike away from an inversion of the yield curve. so thin in terms of the it 2s and 10s. in terms of valuation of the markets are markets correctly valued at 16 times forward when you have the risk of stagnant inflation? should there be a discount. >> i think that 16 times is reflecting to a dreg the trade war risk. >> okay. >> so i think getting the valuations down a little bit -- we are anticipating some of that head wind in terms of a yeemd inversion end of the cycle risks. one of the ways we positioned clients for that is to get overweight energy equities which did last year and added to the position in jrn. both hard commodities energy, brent and equity and that's a hedge against inflation going higher than we expect. >> nice trade. >> so far. >> so good. >> skill, luck i'll take them both. >> and you also like tech you're

talking tech little bit later. >> yes. >> thank you, gus. we appreciate it. >> more on the market reabsenting from bob pisani joining from us the new york stock exchange. >> good afternoon. the markets are little change i think with good reason the market is focusing on the positive compensatary on growth in the united states, focusing on gradual approach to raising rates. that's the magic word in here. real gdp appears to be raising at ale so i had ray rate longer run inflation expectations still unchanged -- little change wagon the word they used. that's the right focus i would note a slight intensefy indication about the concerns of trade wars and tare i was. in sentence is important contacts in some districts that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade. this is the second time they've done this. now, remember in the previous minutes on may 1st there was a flurriy when noted here and came out and said in a number of

districts contacts expressed concerns about the possible adverse effects of tariffs and pulling back and capital spending appearen noted potential for higher kmienz tare i was on key agricultural products could hurt u.s. competitiveness. they are leahy intensified and said some capital spending maybe pulled back. this is not going away there is obviously concerned they mentioned on steel and aluminum process we also heard about trade risks intensifying in general. so yes the market listens to what it wants to hear on growth and on rates still gradual path for hiking rates but i think the rhetoric and the compensatary is little more intense about tariffs and trade wars and remember what the market cares about is the impact that they may have -- that may have on earnings in third and fourth quarter as you now i'd say the market is still very much undecided on what that's going to be back to you. >> robert thank you. and here's what's coming up on thesecond hour of power lunch.

the tech sector up more than 10% this year. can they keep leading the markets or are their road blocks. >> and the controversy over drug pricing cooled off for now plus elon musk lashing out at media are the markets paying attention to his twitter feed or the company's fundamentals we will trade the stock, all that and more coming up on "power." let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks,

$0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. my familyoh!in there. how did you get in the building? jumped off a super crane. what? whoa! skyscraper. can't fix it with duct tape, then you ain't using enough duct tape. rated pg-13.

my familyoh!in there. how did you get in the building? jumped off a super crane. what? whoa! skyscraper. can't fix it with duct tape, then you ain't using enough duct tape. rated pg-13.

unchts welcome back to power lunch. we have a news alert op the saudi aramco ipo. >> the headline is this. preparations for the ipo have stalled according to dow jones that doubts are growing that the aramco ipo will ever move forward. remember two years of work and preparation here it could have been the largest ipo ever could raise about $100 billion but also bringing unprecedented scrutiny to saudi aramco something the kingdom may not necessary bely ready for a quote from a sunier executive at aramco saying that everyone is almost certain it's not happening. a spokesman for aramco declined to comment guys. >> all right jak thank you very much. tech is one of the best performing sector today helping to push markets higher the index up more than 10% technology that is is there more than room to do go for tech in the second half in dan ivesgbh head of technology research and rebecca paterson still with us. welcome to both of you

what say you i mean so much of the market's gains overall this year have been in a narrow sliver of the tech sector. does it endure dan? >> look, i mean our opinion, the themes will play out in the second half. all of our checks show both on the consumer side and on the enterprise specifically the big data cybersecurity, those are names we think they could beat earnings 10, 10% multipling continue to expand. the growth continues there when you look at fang names this is a sem nol earnings for amaze eamazoning with, netflix you have seen massive running and with significant raises on the horizon. we see it as a strong fwreen light to own these. >> rebecca, how about you? is worrisome that so much of the market performance is tied to a narrow number of stocks >> we share a lot of the same views. we have been overweight tech for some time now. obvious list that's been helpful for us

what's interesting is tech historically wasn't a cycle sector now you see cap x is a spch. software, cloud, you name it, cyber. when we get to the inverted curve and the the recession you are seeing a lot of profit taking on these names. now that could be a year or two years away but it's such a crowded trade today. and it's going to pull the whole market with it however, if you believe in the structural story, it's also an amazing opportunity for people who like to own stocks like amazon or apple or goingle but get in at a better level you are getting a washout at some point it will pull the mechanic, to your question, but that's a buy in opportunity in our view >> what names do you like particularly in tech we are talking broad tech by which names. >> netflix we continue to view as a table pounder i think that's going to 500 over the next three to six months when contents, king, the lieu look at subscriber growth.

internationally going from 68 to 100py by 2020. amazon we talked about you look at cybersecurity. palo alto. from going 5% to budgets to 10% in cybersecurity. >> is there political risk because president trump keeps putting it in his cross hairs? the postal service contract, the department of defense contract,ible. concerning. >> i think, look, it's been a head wind. you've seen him and the stock react especially every time there a twet i think the market is more immune the big things is the jedi contract coming up this is an aws story can they be successful on the account, the billion dollar plus opportunity for amazon that's really something that's going to be front and center do they win that deal? does aws cloud ramp? i think regulatory, you look at post office -- we talked about minimal fundamental risk you look at anti-trust issues.

i think the bark is worse than the bite but every time there are the events the stock gets hit. that's the opportunities just given ultimately i think it's a air skierier head wind than the reality. >> must be hard to keep tech as overweight as a percentage within the portfolio within technology, you mu must be more favorable less favorable that certain subsectors to make the trims to keep the allocation where it should be. >> that's a god point. we are definitely focused on cloud, software to services. cyberdefinitely a growing area we are looking at. artificial intelligence. we try to find companies that don't have too much cyclical sensitivity but that's harder to do troying to find low use of debt in the companies there are certain companies we find meet more cite as we filter threw the stocks i'd add tech isn't just the tech secret anymore pretty much every secret has a tech element whether talking about retail and omni channel shopping or talking about health care and biotech

so financial -- i mean, tech block chain. so i think we're taking a holistic view not just the secret but saying how can we find companies that keep a moet, keep a agree market share with technology that won't be disrupted. >> that's a great point. bus every company is a digital company, a digital company. >> dominos pizza for one. >> kmkt if you don't have a digital strategy you're toast. are there areas of tech that you don't like that are -- that are worrisome to you and what if anything causes you to change your relatively sang win view of the secret. >> dan you first are there areas you don't like. >> for me it's really those companies not exposed to the cloud. when i look at companies that -- or maybe were caught on the other side of tech spending. what worries you look at synamet pch the fork in the record situation on can they be

successful on cloud with ibf you look at oracle how are they folksed on the cloud kind of what rebecca was saying you when you look at secular themes who is on the wrong side and can he win ultimately m and a how they the get the st. azbleets we looking at companies with good return on investment if they're not able to grow make money on the money they invested we don't want to go there. >> that's a good. >> common sense. >> rule of thumb thank you. >> dan always good to have you with us. >> every business needs good workers. but they're getting harder to find labor force will be a big factor in the top state ranking more on that when power lunch comes back hawaii is the first state in the u.s. to have 100% renewable energy goal. we're a very small electric utility. but, if we don't make this move

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we are just days away from the reveal of america's top state for business in 2018 one of the most important components is quality of the state's work force can the companies find skilled labor? scott joins with us more. >> this has become the battleground for the last four years in the top states study. it's why the workforce is once again at the topof the list in terms of the way we wake the categories it turns out 8 3% of the

respondents in the latest cnbc latest survey said that they are having trouble finding skilled workers, have trouble finding people to filled skilled positions in the last year it's also what the states are selling in the economic development marketing. that's what we base the weighting of the category on we use the pitches to decide the weights for the 10 categories of competitiveness. the more states are talking about a category like workforce, the more weight it carries in the study. we put the states through the paces with 64 metrics for a total of 2,500 points and the state with the most points is where i will be come monday when we start the coverage of the america's top states for business for 2018. now we wanted to know from the cfos they why they feel it's so hard to fill the skilled positions. they can pick -- all of these that apply two thirds says it's basic sflie and demand unemployment is low.

half said the education system 39% blame the immigration crackdown and 11% said location factors more about our study you'll be age to see where your state stacks up next we can at top states cnbc.com. >> how many yeerps has it been. >> this is the 12th year we started it in2007. >> it comes around so quickly. it seemed last year that -- last week rather that you were there doing this. >> you know, this happens tyler, right. >> yeah, the older i goat the sooner it comes. >> they come faster and faster. >> scott, thanks very much scott cohn we'll be watching. >> for more on labor shortage fears we are reaching a critical point in it hid over to cnbc.com up next, oil's recently run hitting a road brock you can see on the chart a drop at 10:00 this morning. there you see it boom. the news behind that above and the trade tensions between u.s. anchd ina about to go from

simmer to boil tariff concern return. power lunch after this

hello everyone i'm sue her aire here is the cnbc news update the uk counterterrorism police tweeting out they know the

patients exposed to nerve agent poisoneding handled a contaminated item. they said meticulous and systematic severance are under way at a number of sites in amesbury and salisbury a building at the john hops kins hospital complex evacuated because of possible tb exposure. emergency crews have been called in some people were exposed and they are being sheltered in place. a car crashed into a motel in tampa, florida. before going up in flames this morning. the driver lost control of the vehicle after making an improper lane change and hitting another car. both drivers though are expected to be okay and this video of a world war ii veteran is going viral after he threw out the first pitch before a memphis red birds baseball game. the team invited frank anderson to toss out the pitch. the red birds are the triple a affiliate of the st. louis cardinals. congratulations to him that is the news update this

hour courtney i'll send it back to you. >> he looks like he has a number of years left in in him. that was great. >> poom. wild day on wall street stocks losing big gains following the release of the minutes of the fed meeting. the latest minutes showing the gdp outlook lowered slightly for the second half. and the uncertainty over risks for tariffs is growing tech best performing sector at 1% up. amd leading that sector higher you can see s&p higher by more than a%. the oil market is closing for the day. let's get over to jackie deangelis. >> welled crude provides falling after a surprise build this morning. a small bid but not in line with seasonal trends you expect to see this time of year. traders looked for crude to fall after the 4th which was the peak of the driving season. that's tuesday before the holiday, remember we hit that $75 market that's when the selling started into the close some profit taking after a big move, sure and that continued in trade

today. finalry, the president tweeting that opec's driving prices higher with a call to reduce pricing that iranian responding say the president himself will cause oil to go to $100 a barrel with supply disruption that is he is causing, guys. jackie thank you when the clock strikes midnight in washington the u.s. will impose tare ifts on $34well of chinese goods and beijing is expected to strike back immediately. is a trade war impossible to avoid? and what comes next? let's bring in gregory docka the economist for. and gregory gold a former assist deputy u.s. trade negotiator for north america. matthew i'll start with you. are we past the point of no return >> to a great degree we are. president trump has really left no exit ramps here except trump himself uni laterally withdrawing the steel aluminum tariffs and uni laterally withdrawing the tariffs against

china until the wto approves them which could take years. if trump doesn't do that we are in a downward spiral because the steel and lump newholm tariffs were done in a way inconsistent with wto rules and this retesla inconsistent with wto rules. the countries involved can't negotiate. the only option is to retaliate. >> when when you said no of as oh ramps typically what's put in place to avoid this situation and how is this different? >> well, the typical off ramps would involve countries getting together behind closed doors and coming up with creative solutions. and it would involve the country that wants the duties to be dropped by the united states making some concessions to the united states. related or sometimes not related to the original duties but these countries really can't negotiate. they can't simply come in and give us concessions because what we threatened to do or with what we have done with the steel and aluminum tariffs and realtry tariffs on china are not

consistent with wto rules. when we threaten to do wt oh illegal actions or take wto illegal axes that's something other countries won't negotiate with they'll put their foot down and relet talt. >> regular gregory let me get your reaction to he just said. are there off ramps you see in and secondly is a trade war ever really winnable? >> well, i think that's a big myth in terms of the -- of the stance of the administration right now is that you can actually win these types of negotiations as was recently pointed out, the way these negotiations generally unfold is over communication and what we haven't seen really is communication, especially over the last couple of weeks. and that has really led to an intensefy indication of tensions between china and the u.s. as well as between other trading partners, canada, europe and i think the big risk is that we escalate the tensions and that as the u.s. imposes these additional tariffs on $50

billion of imports from china, china will retaliate it said it will with equal intensity. and that risk further escalating tensions and weighing on growth around the world >> when you think about the impact to the u.s. economy, so many market participants appear economists for that matter, gregory, just take the compact dollar amount in tariffs and impute that on the economy i mean aren't there wider effects? what is your basic assessment on how this could impact the economy, particularly when china could do things like we could do the same for that matter, slow down supply chains things sort of soft countermeasures not necessarily tariffs. >> that's right. it's possible to model the tariffs and we come up with estimates about 0.1% off gdp in both the u.s. appear china if there were $50 billion of tariffs imposed on both sides. that being said, those are probably underestimating the true risk to the economy if we think about supply chain disruptions, think about stock

market effects business uncertainty, reduced private sector confidence, all of these are already having an effect on the economy and are already weighing on economic poemt up we have to thanksgiving more broadly in terms of just the simple macroeconomic shocks. that's where the real risks are. we start to see businesses putting some plans onto the sidelines, deciding not to invest and that will weigh on the economy at a time when global growth is slowing. that's a big, big point to make, is that u.s. activity is probably peaking in the second quarter. and we're in an environment of slowing economic momentum in which the tariffs will have an outright larger impact on th economy. >> now, i know it's hard to predict what anyone will do let alone our president. but isn't it possible that his point was madeat some point he calls it off and backs back down i mean what move do we make next if you're president trump in the administration. >> well trump threatened to commit another serious o series of retaliations to respond to the other country's retaliations

to us. and i fear that he might well do that i don't think he is going to back down. i think he is going to dig this dangerous hole deeper. but the only or possible solution is that other countries get in a room and they offer him some face-saving successions concessions that are not real but provide face saving to set sell that to the base when he got a victory and he didn't. i don't think it's going to fli. i don't think that happens but that is the only thing that could happen other than the hole getting deeper >> the president by reputation, gregory, is an able negotiator he certainly in this case seems to be playing hard ball. what are the odds that he gets at least partly a win and what he wants maybe -- maybe tactically this is the way even though it's different from the way it's been done in the past, maybe this is the way to get results and get the attention of the alleged offenders in trade >> well i think that's perhaps

the paradox in u.s. trade policy is that trump did have negotiators at the negotiating table. but then he threatened and imposed tariffs. i think he went a stept too far and other countries are saying we are not going to negotiate under the circumstances outside of the premises of the wto we are not going to negotiate with a knife to our throat and i think it's very hard to see really how this situation could evolve it could evolve in different ways we could see a escalation of tensions especially with europe. because europe has to negotiate trade policy as a whole and can't do it just with germany orp france and as a result you might say further escalation of the trade tensions in the next few weeks sfl interesting conversation, gentlemen. thank you both of you we'll have you back gregory, matthew thank you. >> thanks. >> the president said drug companies were getting away with murder then he said he -- they'd make massive price cuts what happens if they don't why the drug price debate could heat up again isth month and that's next on "power lunch.

the debate over drug prices could heat up again this month as july, a popular month for drug companies to update prices, meg joins with us the details. >> july appears to be a popular month for increasing drug prices

at least according to data from wells fargo which tracked 104 price hikes on medicines in the first two days of the month. the increasing range from a little more than 1% to more than doubling of the price of one drug and followed increases on 63 medicines in june. not all increase result in massive changes in the price of the drugs of course. many of them are relatively inexpensive generic. but a 33% increase in the price of imatina bichlt p taken by the north star rx. and large well-known companies took increasing. fies he were took increasing by as much as 9%. the company points out it lowered the price of five drugs by 44% in this political climate many drug companies doesn't appear to be reading the room. wells fargo david marris notes given the social sensitivity regarding the cost of the health care price hikes at rate the multiple of rate of inflation seem indifferent to the

environment. as mid-terms heat up we figure out if this continuing the public shaming drug companies and whether it's more of a risk if it hasn't already will anything change? >> you never know. >> meg, thank you. how would increased scrutiny of drug prices increase stocks. michael great to have you with us. >> thank you. >> are the midterm elections on p.m.'s radar when it comes to biotech stocks >> yeah. i think that's a great question. i think it is the number one thing on a portfolio manager radar at leasts as it relates to biotech stocks obviously and i think given the way stocks reacted over the past couple of years on political rhetoric it's natural and expected that you know what somebody says could keep someone at bay or keep someone from buying the stocks i think that the results of the midterm elections absolutely could define at least in the short to medium term what the biotech stocks do. >> it's on the radar in the

results of the election matter it's not the run up to this is not seen by investors as sort of a campaign issue, something that can garner bipartisan support >> well, i think that the way investors are thinking about it and certainly the which we are telling people to think about it is that over the past couple of years i think investors have been a bit jaded by i think -- a bit fatigued by it if you recall the trump blueprint that came out a month or two aig stocks went up a couple% on that. and i think that what people are worried about is will these stocks basically do nothing up until the midterm election sns will they go down? or could they rally 15% -- which is our call, because a lot of this has been priced in and our call is that we might actually see grid lock. and lid grid lock at least in our world is a positive since nothing in terms of drug price legislation would get done that's our call. i think it's on the people's

radars we could actually see stocks rise in mid- >> biotech stock is grid electric on capitol hill which individual stocks do you forecast have the most upside? >> yeah. our three stock picks are one gilead they will puppet up a good earnings print in july. and the stocks will move up through that and for phase three data after that from nash vertex is a dop o top idea bill big gems on the siftic fibrosis and 13 played is celgene if they put up a good quarter and that could move up 10, 15% by the end of the year. >> anything about the investing environment in general that you think favors biotechs whether it be investor tensions technology at large i mean are generalists getting back into the sector >> yeah, i think the key is that

while people are i thinking a lot with drug pricing and how it's been bad for biotech stocks, i would point out the fact that the ibb index has base che hit an all-time high and that's basically because a lot of the mid-cap biotech stocks other than the big five have all done phenomenally g net gene therapy stocks. you've had a couple of m. and a acquisitions in the past i would just remind people that the good news is that generalist investors are putting money to work there has been an appear at this time for smaller and mid-cap stocks and that's where all the innovation is. and those stocks have done phenomenally well all is not bad in the biotech sector we have been directing people to may more attention to the mid-caps. >> xbi on the basis than than ibb which is heavily waited to the larger stocks. >> direct. >> we'll leave it arthro. >> thanks so much. >> shares tesla down more than

10% in the last woke meanwhile elon musk is lashing out at media can you separate musk the man from tlaes the stock in trading nation is up next. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

time now for trading nation. let's look at tesla. seeing a bumpy few sessions. the stock down around 12% in the past week nearing bear market territory. is this a buying tune or a name that's too volatile to anne. miller tai back with bk asset management so matt how does the chart look? because we focus a lot on the price action way about the levels >> well it's -- it's funny because the last week or so as you said it's down so to 12% back two weeks it's down about 17, 18% thp. that's a second yellow flag for the stock since the beginning of the year the first kwam in the first quarter when is it broke down below the multiyear trend line going back to 2012 when that's the move started and bureau below that line and rallied back and saw a nice rally early june back up to the trend line again hoping to break above but

failed not only did it failed but failed miserable down 17, 18% that tells me some of the true believers are losing a little bit of faith however, i will say the two yellow flags are not red yet the red is down in the $250 level. you yet. you get below that, near term trend line going back to 2016 but the lows from march 2017 and this year are at that 250 level. that would give it a lower low and that's the line in the sand. >> so what do you do with that yellow flag? you just sit and wait until it becomes green or becomes red >> i still want to be taking off a little -- >> what do you think a name like tesla? there's some sex appeal to that? it's this hot stock, you've got this flashy founder.

>> tesla is a colt stock, and therefore it doesn't get evaluated by any real metrics. ford makes 7,000 cars in four hours. the critical thing is for a colt stock is, is it losing its cool. that's why musk is so upset. because he understands if he loses his pr level, he loses his company at this point. safety problems, production problems all of that could weigh on the brand and once the public decides it's no longer cool to own tesla, that's it. >> with the ending of the brake test and all these different headlines that have come out to move the stock lower, so what is your position then is it over that's what makes us nervous is is it done >> i think it's just beginning

i think if this thing unwinds it's going to be the harvard business case for the ages because outs really going to be a case how you don't go down market when you don't for your production facilities ready. that's going to be the lesson for this stock >> we know we're going to pay attention to this one. we will continue to wash shares of tesla stock for more of our market insights make sure to head to our website. follow us on twitter @trading nation as well stick around, though check please coming up next. and now your trading nation stocks of the day and a word from our sponsor >> using limit orders will ensure you don't pay too much for the stocks you buy or get too little for the ones you sell markets tend to gap up or wndo at the open more frequent during volatile markets and limit orders is the best way

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a check on the markets of the foc minutes. pretty close to session highs right now with the dow up about 0.5% and we've got risk appetite as displayed by the bid technology higher than 1.25%. also the second highest sector up today by about 1%

you might remember the story about a week agoul about the bourbon house in kentucky that partially collapsed. the rest of the structure fell apart yesterday sending the remaining 10,000 barrels of bourbon stored there tumbling to the ground no injuries were reported but nearby residents say the air smells like whiskey. >> sounds like a country song. >> the air smells like whiskey it looks like amazon is taking a page out of toys-r-us' play book. and amazon reportedly planning to mail holiday toy catalogs to millions of american homes they sill it'll also be distributed at whole food stores at least according to this one report amazon has published a digital toy catalog for the pastdecade but this would be the first time that it's going to apparently

distribute those actual mailers. target does it, wal-mart does it many of them have interactive futures. many of them have ar components. kids like that physical copy of the list to circle and show mom and dad. >> when my nieces were really small they would take those toys-r-us fliers and say i have to do my reading for christmas >> time for check please it was july fourth, independence holiday yesterday wrovg. and every year it's the coney island hot deog eating contest. joey chestnut is the winner. they actually miscounted the hot dogs initially they said he ate 64. eventually it was increased because they missed two plates

filled with hot dogs he ha eaten. so now they're saying in the future maybe they should employ more technology to help them keep tabs. >> but the real question is would any of you go on a dinner date with a guy like -- >> if he pays. >> but the eating, imagine the eating >> oh, the eating. got it >> well, perry ellis may not go to the founder or maybe it will go to the founder. shares are lower today because the perry ellis' committee said you know what, we actually prefer the founders bid. they say there's a number of things to look at that determine the shareholder value including termination fees, additional risks to closing, lack of appraisal rates for shareholders so a lot of things to look at. but it may or may not go to the founder even though that appraisal is higher. >> you talk about hot dogs i want to go back to pork and

continue that theme. he said his business out in illinois stands to lose $100 million in revenue and run in the red for the first time i believe in 34, 37 years his company has been in business as a result of the tariffs should they all come to pass as planned. and so this just shows you that tariffs are really a job story cheese is another area that is being affected heavily a lot of american milk products, overseas we send a lot of cheese, prove loan sartori says they stand to lose $40 million in business from tariffs that have been put in place by mexico and now presumably by china as well. so these are really job stories once you get right down to it and a lot of these jobs happen to be in areas that were key trump corners. >> his base -- when those job cuts are hitting his base, you've got to see what the

appetite is for this trade war if it comes to that. >> they're hitting it where it hurts because we're sort of this pawn in a political game >> price of cheddar cheese now at its lowest since 2009 you know how much a barrel of cheese weighs? 500 pounds that's a lot of cheddar, baby. >> thank you for watching power lunch. >> "closing bell" right now. it's time for the closing bell i'm wilford frost. a potential break through in the tariff war, lifting stocks today. cnbc headquarters, hedge fund manager is catching heat as investors reportedly jump ship from his fund. president trump sending another warning to opec as oil prices rise. but will his strategy actually help ease prices at the pump in for